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GEORGETOWN COUNTY WATER AND SEWER DISTRICT
FINANCIAL REPORT
JUNE 30, 2017
GEORGETOWN COUNTY WATER AND SEWER DISTRICT INDEX YEARS ENDED JUNE 30, 2017 AND 2016 Page INTRODUCTORY SECTION PRINCIPAL OFFICIALS 1 MANAGEMENT’S DISCUSSION AND ANALYSIS 2 - 12 INDEPENDENT AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 13 - 14 FINANCIAL STATEMENTS STATEMENTS OF NET POSITION 15 - 16 STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION 17 - 19 STATEMENTS OF CASH FLOWS 20 NOTES TO FINANCIAL STATEMENTS 21 - 37 REQUIRED SUPPLEMENTARY INFORMATION OTHER POST-EMPLOYMENT BENEFITS - DEFINED BENEFIT HEALTH CARE PLAN - SCHEDULE OF FUNDING PROGRESS 38 SCHEDULE OF THE DISTRICT’S CONTRIBUTIONS 39 SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 40 OTHER SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES AND EXPENSES BY SYSTEM 41 - 44 SCHEDULE OF REVENUES AND EXPENSES BY INDIVIDUAL WATER AND WASTE WATER SYSTEM 45 - 46 SCHEDULE OF DEBT SERVICE TO MATURITY - REVENUE BONDS AND SERVICE AGREEMENT PAYABLE 47 - 48 SCHEDULE OF INSURANCE IN FORCE 49 WEST GEORGETOWN INTERCEPTOR TRUE-UP CALCULATION 50
GEORGETOWN COUNTY WATER AND SEWER DISTRICT PRINCIPAL OFFICIALS YEAR ENDED JUNE 30, 2017
BOARD OF DIRECTORS
Position Term Expires William J. Schwartzkopf Chairman 8/15/2017 Jimmy E. Rowe Vice Chairman 8/15/2019 Alice A. Barron Secretary 8/15/2017 Sean Flynn, PE Assistant Secretary 8/15/2021 Arthur H. Lachicotte, Jr. Member 8/15/2019 Richard E. Heath, CPA Member 8/15/2017 Louis R. Morant Member 8/15/2021
OTHER OFFICIALS
Raymond E. Gagnon, PE Executive Director John F. Buck, CPA Finance and Administrative Services Director Tommie Kennedy, PE Engineering Director Michael Yip Operations Director Ruth Pastula Human Resources Manager
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MANAGEMENT’S DISCUSSION AND ANALYSIS This section presents management’s analysis of the District’s financial condition and activities for the fiscal year ended June 30, 2017. This information should be read in conjunction with the financial statements.
Financial Highlights Management believes the District’s financial condition remains strong and received confirmation in July 2015 when the District received an initial rating of A-1 from Moody’s Investor Service. The District is well within its debt covenants and the more stringent financial policies and guidelines set by the Board. The following are financial highlights for Fiscal Year 2017.
Total assets at year-end is $143.1 million and exceeded liabilities by the amount of $100.6 million (net position). Compared to the year ended June 30, 2016, total assets decreased $1.2 million in Fiscal Year 2017. Net position decreased $0.6 million in the same period, while the unrestricted net position increased $0.3 million in 2017.
Debt service coverage, including capital contributions (impact fees) is 253%, exceeding the
120% required by the District’s bond covenants.
For fiscal year 2017, the District delivered 1.77 billion gallons of water and treated 1.52 billion gallons of wastewater, compared to 1.71 billion gallons of water and 1.57 billion gallons of wastewater in 2016.
Operating revenues were $15.3 million, an increase from FY2016 of $1.0 million or 7.0%.
Total operating revenues were $94,776 or 0.6% less than budget projections for 2017.
Operating expenses increased $363,035 or 2.0%, over FY2016. Depreciation increased 0.2% from the prior year.
Ratios of total operating revenues to total operating expenses (including depreciation) were
84% and 80% for 2017 and 2016, respectively.
During 2017, the District added 402 new customers. Water residential equivalent units decreased by 488 units and wastewater residential equivalent units decreased by 17 units.
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Overview of Annual Financial Report
Management’s Discussion and Analysis (MD&A) serves as an introduction to, and should be read in conjunction with, the basic audited financial statements and supplementary information. The MD&A represents management’s examination and analysis of the District’s financial condition and performance. Summary financial statement data, key financial and operational indicators used in the District’s strategic plan, budget, bond resolutions and other management tools were used for this analysis. The financial statements report information about the District using full accrual accounting methods as utilized by similar business activities in the private sector. However, rate-regulated accounting principles applicable to private sector utilities are not used by government utilities. The financial statements include a balance sheet; a statement of revenues, expenses, and changes in net position; a statement of cash flows; and notes to the financial statements. The Statement of Net Position presents the financial position of the District on a full accrual historical cost basis. The Statement of Net Position presents information on all of the District’s assets and liabilities, with the difference reported as net position. Over time, increases and decreases in net position are one indicator of whether the financial position of the District is improving or deteriorating, once the impact of recent GASB accounting standards are considered. While the Statement of Net Position provides information about the nature and amount of resources and obligations at year-end, the Statement of Revenues, Expenses, and Changes in Net Position presents the results of the business activities over the course of the fiscal year and information as to how the net position changed during the year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. This statement also provides certain information about the District’s recovery of its costs. Rate setting policies use different methods of cost recovery fully provided for by generally accepted accounting standards. The primary objectives of the rate model are to improve equity among customer classes and to ensure that capital costs are allocated based on long-term capacity needs, ensuring that growth pays for growth. The Statement of Cash Flows presents changes in cash and cash equivalents, resulting from operations, financing, and investing activities. This statement presents cash receipts and cash disbursement information, without consideration of the earnings event, when an obligation arises, or depreciation of capital assets. The Notes to the Financial Statements provide required disclosures and other information that are essential to a full understanding of material data provided in the statements. The notes present information about the District’s accounting policies, significant account balances and activities, material risks, obligations, commitments, contingencies and subsequent events, if any. Supplementary information detailing revenues and expenses by systems, debt service requirements and insurance follows the notes to the financial statements.
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The financial statements were prepared by the District’s staff from the detailed books and records of the District. The financial statements were audited and adjusted, if material, during the independent external audit process.
Summary of Organization and Business The District is a Special Purpose District created pursuant to provisions of Act 733 enacted during the 1967 Session of the General Assembly of the State of South Carolina as a body politic and corporate. The principal functions of the District are to acquire supplies of fresh water capable of being used for industrial and domestic purposes, to distribute such water for industrial and domestic use within its service area and to build, acquire, construct, operate and maintain such sewerage treatment and collection facilities as the District deems necessary. The service area of the District includes all of the area in Georgetown County except those areas within the incorporated boundaries of the Town of Andrews and the City of Georgetown. It is located in the northeastern portion of the State of South Carolina, bordered by the Atlantic Ocean, Horry, Williamsburg, Marion, and Charleston Counties. The District has no taxing power. Operational and maintenance costs are funded from customer fees and charges. The acquisition and construction of capital assets are funded by capital (cash and systems) contributions from customers, including other utilities and developers, Federal and State grants and loans, and customer revenues. The District, Town of Andrews, City of Georgetown, and Georgetown County formed and entered into the West Georgetown County Regional Wastewater Partnership in 1997. The Partnership has completed construction of a regional wastewater treatment and transmission system and has completed the eleventh year of operation of the regional wastewater collection, treatment, and disposal system serving residents, businesses and industries in the underdeveloped and predominantly rural western sector of Georgetown County. The Partnership provides the District with 4.05 million gallons per day of sewer capacity in the expanded City of Georgetown wastewater treatment plant. This additional District sewer treatment capacity and the 18-mile wastewater transmission system connecting the Town of Andrews’ system to the City of Georgetown’s system, provides the District with substantial wastewater collection and treatment capability for the County’s western area.
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Development
Development projects in various stages of the developmental process could significantly influence the District’s customer base revenue stream in the future. These development and District initiated projects include:
Water Leaf at Murrells inlet: This project consists of a 240 unit apartment complex.
Turkey Creek Resort: This project consists of 533 units.
Arbor Landing: This project consists of a 100 bed assisted living facility.
Hammock Cove at Pawleys: This project consists of 95 single-family lots.
The Palms at Waverly: This project consists of 74 single-family lots.
Grove Park: This project consist of 61 single-family lots.
Parkside: This project consists of 68 single-family units.
The Porches at Waverly: This project consists of 13 single-family lots.
Marina Village Phase I: This project consists of 10 multi-family lots.
Pawleys Plantation: This project consist of 30 single-family lots.
Georgetown County Water & Sewer District capital improvement projects planned and budgeted for FY2018 or completed in FY2017 include:
Murrells Inlet Water Tank: This project would include themodeling, design, andpermittingofawaterstoragetankfortheMurrellsInletservicearea.
Garden City Water Rehab: Thisprojectwill relocate services from2”and4” linesalongUnderwoodDr.andpartsofS.WaccamawDr.
Pump Station 216 Rehab: This project would rehabilitate a 40 year old pump station including piping, fencing, and electrical.
Fire Hydrant Replacement program: Replacement of 10 fire hydrants that have exceeded their expected life and require replacement.
Sewer Lining Projects: Lining the gravity main in several locations throughout our system. This will revitalize the portions of the sewer system as they are lined.
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The following comparative Condensed Financial Statement and other selected information serve as the key financial data and indicators for management, monitoring and planning.
CONDENSED FINANCIAL STATEMENTS
FINANCIAL ANALYSIS
CONDENSED STATEMENT OF NET POSITION
2017 2016 $ %
Current Assets and Non- Current Restricted Assets 27,650,482$ 25,967,075$ 1,683,407$ 6.5%Capital Assets Producing Assets 114,666,150 117,406,059 (2,739,909) -2.3% Construction in Progress 825,180 966,051 (140,871) -14.6% Total Assets 143,141,812$ 144,339,185$ (1,197,373)$ -0.8%
Deferred OutflowsRelated to Pensions 1,391,042$ 887,003$ 504,039$ 56.8%
Current Liabilities 3,794,893$ 3,452,384$ 342,509$ 9.9%Long Term Liabilities 39,622,703 40,129,731 (507,028) -1.3% Total Liabilities 43,417,596$ 43,582,115$ (164,519)$ -0.4%
Deferred Inflows Related toPensions and Bond Premiums 521,491$ 476,302$ 45,189$ 9.5%
Net Position: Net Invested in Capital Assets, Net of Related Debt 85,493,152$ 86,995,672$ (1,502,520)$ -1.7% Restricted for Capital Activity and Debt Service 19,869,808 19,281,308 588,500 3.1% Unrestricted (4,769,193) (5,109,208) 340,015 -6.7% Total Net Position 100,593,767$ 101,167,772$ (574,005)$ -0.6%
Total Liabilities & Net Position 144,532,854$ 145,226,189$ (693,335)$ -0.5%
VARIANCE
Increase (Decrease)
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CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
2017 2016 $ %REVENUES: Water Service Revenues 6,458,074 5,899,106 558,968 9.5% Wastewater Service Rev. 6,665,031 6,273,754 391,277 6.2% Other Revenues 2,147,259 2,102,965 44,294 2.1% Total Operating Revenues 15,270,364 14,275,825 994,539 7.0%
EXPENSES: Operating before Depr. Water Operations 4,772,963 4,566,220 206,743 4.5% Wastewater Operations 5,024,800 5,143,521 (118,721) -2.3% General, Billing & Collect. and Engineering 2,429,914 2,157,098 272,816 12.6%
Depreciation 6,022,126 6,019,928 2,198 0.0% Total Operating Expenses 18,249,803 17,886,767 363,036 2.0% Operating Income (2,979,439) (3,610,942) 631,503 -17.5%
Non-Operating Revenue (Expenses), Net (908,762) (1,160,050) 251,288 -21.7%
Income Before Contributions (3,888,201) (4,770,992) 882,791 -18.5%
Capital Contributions Government Grants 1,145,404 - 1,145,404 100.0% Customer Impact Fees 1,774,918 836,756 938,162 112.1% Assessments 3,625 84,682 (81,057) -95.7% Developer Contributions 390,248 641,915 (251,667) n/a Total Capital Contributions 3,314,195 1,563,353 1,750,842 112.0%
Increase (Decrease) in Net Position (574,006) (3,207,639) 2,633,633 -82.1%
Beginning Net Position 101,167,772 104,375,411 (3,207,639) -3.1%
Ending Net Position 100,593,766 101,167,772 (574,006) -0.6%
VARIANCE
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SELECTED DATA FOR ANALYSIS
2017 2016 Amount %
Employees at Year‐End 77 77 0 0.0%
Customers at Year‐End 23,182 22,780 402 1.8%
Water & Wastewater Residential
Equivalent Units at Year‐End
Water R.E.U.s 32,409 32,897 ‐488 ‐1.5%
Wastewater R.E.U.s 26,065 26,082 ‐17 ‐0.1%
Water Sales for Fiscal Year
(millions of gallons) 1,766 1,713 53 3.1%
Wastewater Sales for Fiscal Year
(millions of gallons) 1,516 1,570 ‐54 ‐3.4%
Per Average Employees
Total Operating Revenues 198,316$ 185,400$ $12,916 7.0%
Total Operating Expenses 237,010$ 232,296$ $4,714 2.0%
Ratio of Operating Revenue to
Operating Expenses 0.84 0.80 0.040 5.0%
Operating Expenses net
of Depreciation 1.25 1.20 0.050 4.2%
Total Assets 0.11 0.10 0.010 10.0%
Debt Related Ratios
Total Debt to Net Position 0.43 0.43 0.000 0.0%
Long‐Term Debt to
Net Position 0.39 0.40 ‐0.010 ‐2.5%
Debt Coverage Ratio 2.53 1.85 0.680 36.8%
Change
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General Trends and Significant Events Over the last 5 years, the District has experienced a customer base growth rate of 7.3%. During fiscal year 2017, the District experienced a 1.8% growth rate in new customers, a 1.5% decrease in water residential equivalent users and a 0.1% decline in sewer residential equivalent users. The volume of water sold in fiscal year 2017 was 1.77 billion gallons, an increase of 3.1% from fiscal year 2016. Retail customers purchased 92.5% of the total water sold and the bulk wholesale customers purchased 7.5%. The volume of wastewater treated decreased 54 million gallons or 3.4% in fiscal year 2017 compared to fiscal year 2016. Retail customers purchased 79.6% of the sewer services sold with bulk customers purchasing the remaining 20.4% including the Town of Andrews.
Financial Condition The District’s financial condition remained strong at year-end with adequate liquid assets, reliable plants and systems to meet demand, and a reasonable level of unrestricted net position. The current financial condition, technical support staff capabilities, and operating and expansion plans to meet anticipated customer needs, are well balanced and under control. The following charts summarize the balance sheet.
Total assets decreased $1.2 million or 0.8%. This is represented by a $1.8 million decrease in current and net capital assets and a $ 0.6 million increase in restricted assets. Net position decreased $0.6 million, with substantially all the change related to depreciation.
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Results of Operations Operating Revenues: Revenues from operations fall into three general categories: water service, wastewater service, and other revenues, which include Billing & Collection and Engineering Income. The District has three classes of water and wastewater customers: Residential, Commercial, and Bulk. The following chart depicts District revenues for the last two fiscal years.
The District made modest adjustments to the water and sewer rates during fiscal year 2017 with an increase to the average residential customer of $1.25 per month. Capital Contributions and Grants: The District collects water and wastewater capacity fees in order to ensure that current customers do not bear the burden of growth. These fees are paid by new customers and represent, on a residential equivalent unit basis, the cost of the water and/or wastewater capacity purchased by the new account. Most of these fees are paid for blocks of capacity purchased by residential and commercial Real Estate Developers.
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The District also receives additions to its collections and distribution systems from developers. Prior to GASB 34 implementation, the money and system assets received were recorded as direct contributions to the equity. GASB 34 defines these fees as non-operating revenues and requires reporting the amounts through the Statement of Revenues, Expenses and Changes in Net Position.
The following chart depicts the capital contribution activity at the District for the last two fiscal years.
Cash capital contributions (impact fees) were $1,774,918 for 2017, compared to $836,756 in 2016. Expenses: The District operates and maintains a potable water treatment and delivery system and a wastewater collection and treatment system. The bulk of the water production occurs at its 8.0 million gallon per day surface water treatment plant. Twenty (20) wells are also used for certain remote service areas, for peak management and emergency use. The wastewater system includes five (5) wastewater treatment plants that range in size from below 52,000 gallons per day to 5.5 million gallons per day, for a combined total capacity of 12.8 million gallons per day. Total operating expenses of the District increased $363,036 from fiscal year 2016, and operating revenues increased $994,539. Operating expenses including depreciation for water and wastewater operations for the last two years are listed on the following page.
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2017 % 2016 % Variance % Change
Personnel Costs 5,827,257$ 31.9% 5,605,037$ 31.3% 222,220$ 3.96%
Contractual Services 2,735,884 15.0% 3,092,228 17.3% (356,344)$ -11.52%
Supplies and Materials 3,450,160 18.9% 2,902,758 16.2% 547,402$ 18.86%
Business and Travel Expenses 195,045 1.1% 224,572 1.3% (29,527)$ -13.15%
Depreciation 6,022,126 33.0% 6,019,929 33.7% 2,197$ 0.04%
Other Expenses 19,328 0.1% 42,244 0.2% (22,916)$ -54.25%
18,249,800$ 100.0% 17,886,768$ 100.0% 363,032$ 2.03%
OPERATING EXPENSES
Personnel costs increased $222,220 or 3.96% from 2016 to 2017. Included in the increase are a 2.0% across-the-board increase in January 2017 to the 78 employees, as well as merit raises of 1.5% of the gross base salaries awarded for the most outstanding District employees. Personnel expenses were also impacted by increased contribution rates for retirement on top of accrued retirement costs required by GASB. Contractual services decreased $356,344 or 11.52%. Supplies and materials increased $547,402 or 18.86%. Depreciation and amortization are up $2,197 or 0.04% due to addition of assets during the year.
Rate Covenant In the Bond Resolution, the District covenants and agrees that it will, at all times, prescribe and maintain and thereafter collect rates and charges for the services and facilities furnished by the District, together with other income, that will yield annual Net Earnings in the fiscal year equal to at least one hundred twenty percent (120%) of the sum of the principal and interest requirements of the current fiscal year for all bonds and prior lien bonds. Net earnings for debt service are defined as the sum, which remain from the entire revenues after deduction of the cost of operating and maintaining the systems. No account is taken of the principal of and interest on long-term indebtedness or of depreciation. The rate covenant in the Bond Resolution obligates the District to levy, maintain, revise and collect such fees and changes at all times sufficient to maintain the required 120% coverage. Revenue bond debt service coverage for 2017 was 253% and 185% in 2016.
Capital Assets and Long Term Debt
The District invested $1.9 million in Plant and Equipment during FY2017. During FY2017, there was also $0.4 million in developer contributions to Capital Assets. The District issued no new long-term debt in FY2017. In August 2016, the District refunded a substantial portion of the debt held by the USDA with a present value savings of $2,326,611. Final Comments This financial report is designed to provide a general overview of the District’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Manager, LaDain Port, Georgetown County Water and Sewer District, P.O. Box 2748, Georgetown, SC 29442.
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INDEPENDENT AUDITORS' REPORT To the Board of Directors Georgetown County Water and Sewer District Georgetown, South Carolina Report on the Financial Statements We have audited the accompanying financial statements of Georgetown County Water and Sewer District (the District) as of and for the years ended June 30, 2017 and 2016, which comprise the statements of net position as of June 30, 2017 and 2016, and statements of revenue, expenses and changes in net position and cash flows for the years then ended, and the related notes to the financial statements. 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 an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statement 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 opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Georgetown County Water and Sewer District (the District) as of June 30, 2017 and 2016, and the changes in its net position and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
To the Board of Directors Georgetown County Water and Sewer District Page 2 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis on pages 2 - 12 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 operation, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated September 29, 2017, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contacts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audits. Other Matters Government Auditing Standards require that the Management’s Discussion and Analysis on pages 2 - 12 and the Schedule of Funding Progress on page 38 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 the financial reporting for placing the basis 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. Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information on pages 38 - 50 is presented for purposes of additional analysis and is not a required part of the 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 financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Columbia, South Carolina September 29, 2017
GEORGETOWN COUNTY WATER AND SEWER DISTRICTSTATEMENTS OF NET POSITIONYEARS ENDED JUNE 30, 2017 AND 2016
2017 2016ASSETS Current Assets Cash and cash equivalents 5,215,695$ 3,950,952$ Accounts receivable - customers (net) 1,823,998 1,889,260 Inventory 726,287 831,152 Prepaid expenses 14,694 14,403 Total current assets 7,780,674 6,685,767
Non-Current Assets Restricted Assets Cash and cash equivalents 12,974,093 12,811,047 Grants Receivable 708,799 - Service agreement receivable 1,841,131 1,879,551 Impact fee receivable 183,456 75,114 Assessments receivable 4,162,329 4,515,596 Total restricted assets 19,869,808 19,281,308
Capital assets Land and improvements 875,272 875,272 Buildings and improvements 3,924,381 3,924,381 Water systems 73,193,276 72,162,714 Sewer systems 133,549,169 132,211,971 Machinery, equipment and vehicles 4,826,016 4,730,651 Furniture and fixtures 761,591 814,884 Total cost 217,129,705 214,719,873 Less, accumulated depreciation 102,463,555 97,313,814 Net cost 114,666,150 117,406,059 Construction in progress 825,180 966,051 Net capital assets 115,491,330 118,372,110
Total assets 143,141,812 144,339,185
DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 1,391,042 887,003
LIABILITIESCurrent Liabilities Accounts payable 414,882 395,842 Accrued salaries and withholdings 194,051 165,721 Accrued post-employment benefits 1,051,413 887,153 Customer deposits 454,603 406,491 Current maturities of revenue bonds and service agreement 1,469,377 1,416,680 Total current liabilities 3,584,326 3,271,887
Current Liabilities Payable From Restricted Assets Construction contracts payable 115,698 80,215 Accrued interest 94,870 100,282 Total current liabilities payable from restricted assets 210,568 180,497
The accompanying notes are an integral part of the financial statements.
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LIABILITIES (CONTINUED)Non-Current Liabilities Revenue bonds and service agreement, less current maturities 30,369,933$ 31,839,310$ Accrued post-employment benefits 1,038,182 879,109 Compensation for future absences 254,411 238,187 Net pension liability 7,960,176 7,173,125 Total non-current liabilities 39,622,702 40,129,731
Total liabilities 43,417,596 43,582,115
DEFERRED INFLOWS OF RESOURCES Deferred Inflows related to pensions 86,985 12,828 Deferred Inflows related to bond premiums 434,506 463,474 Total deferred inflows of resources 521,491 476,302
NET POSITION Invested in capital assets, net of related debt 85,493,152 86,995,671 Restricted for Capital activity 12,002,604 11,277,470 Debt service 7,819,006 7,961,381 Good neighbor contributions 48,198 42,457 Unrestricted (4,769,193) (5,109,208) Total net position 100,593,767$ 101,167,771$
The accompanying notes are an integral part of the financial statements.
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2017 2016Operating Revenues Water Volume charges 4,181,782$ 3,897,492$ Availability charges 1,773,276 1,602,046 Inspection & connection fees 404,621 333,964 Administrative recoveries 98,395 65,605 Total water operating revenues 6,458,074 5,899,107
Sewer Volume charges 4,753,881 4,727,697 Availability charges 1,703,646 1,398,512 Inspection & connection fees 146,409 90,151 Administrative recoveries 61,095 57,393 Total sewer operating revenues 6,665,031 6,273,753
Billing & Collection Customer charges 1,764,479 1,717,793 Service charges & penalties 308,690 308,328 Total billing & collection operating revenues 2,073,169 2,026,121
Engineering income 74,090 76,844
Total operating revenues 15,270,364 14,275,825
Operating Expenses Water Personnel services 1,366,599 1,350,358 Contractual services 691,178 610,289 Supplies & materials 1,565,506 1,241,948 Business & travel 433 1,279 Other expenses (1,656) 2,923 Depreciation 1,999,293 2,019,644 General administrative costs allocated 1,150,902 1,359,423 Total water operating expenses 6,772,255 6,585,864
Sewer Personnel services 1,248,955 1,217,988 Contractual services 1,349,381 1,447,746 Supplies & materials 1,383,459 1,259,954 Business & travel 445 927 Other expenses (1,541) 3,619 Depreciation 3,459,902 3,454,611 General administrative costs allocated 1,044,101 1,213,287 Total sewer operating expenses 8,484,702 8,598,132
The accompanying notes are an integral part of the financial statements.
GEORGETOWN COUNTY WATER AND SEWER DISTRICTSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONYEARS ENDED JUNE 30, 2017 AND 2016
17
2017 2016
GEORGETOWN COUNTY WATER AND SEWER DISTRICTSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONYEARS ENDED JUNE 30, 2017 AND 2016
Operating Expenses (Continued) Billing & Collection Personnel services 1,096,509$ 1,014,702$ Contractual services 103,355 129,746 Supplies & materials 63,276 49,969 Business & travel 117,258 116,221 Other expenses (16) 55 General administrative costs allocated 841,680 917,449 Total billing & collection operating expenses 2,222,062 2,228,142
Engineering Personnel services 439,076 412,222 Contractual services 96,430 49,486 Supplies & materials 17,937 14,860 Business & travel 1,869 2,954 Other expenses - 74 General administrative costs allocated 334,255 377,749 Total engineering operating expenses 889,567 857,345
General Administration Personnel services 1,676,119 1,609,768 Contractual services 495,540 854,961 Supplies & materials 419,982 336,028 Business & travel 75,042 103,191 Other expenses 22,541 35,572 Depreciation 562,931 545,673 General administrative costs allocated (3,370,938) (3,867,909) Total general administration operating expenses (118,783) (382,716)
Total operating expenses 18,249,803 17,886,767
(Loss) from operations (2,979,439) (3,610,942)
Non-operating Revenues (Expenses) Interest on investments 77,244 46,311 Interest on water & sewer assessments 62,195 159,048 Net miscellaneous income 8,968 (16,811) Bond interest expense (916,749) (1,002,324) Net gain (loss) on disposal of assets (140,420) (346,274) Total non-operating revenues (expenses) (908,762) (1,160,050)
(Loss) before capital contributions (3,888,201) (4,770,992)
The accompanying notes are an integral part of the financial statements.
18
2017 2016
GEORGETOWN COUNTY WATER AND SEWER DISTRICTSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONYEARS ENDED JUNE 30, 2017 AND 2016
Capital Contributions Grants 1,145,405$ -$ Water & sewer impact fees 1,774,918 836,756 Water & sewer assessments 3,625 84,682 Developer contributions of systems 390,248 641,914 Total capital contributions 3,314,196 1,563,352
(Decrease) in net position (574,005) (3,207,640)
Net Position, Beginning of the Year 101,167,771 104,375,411
Net Position, End of the year 100,593,766$ 101,167,771$
The accompanying notes are an integral part of the financial statements.
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GEORGETOWN COUNTY WATER AND SEWER DISTRICTSTATEMENTS OF CASH FLOWSYEARS ENDED JUNE 30, 2017 AND 2016
2017 2016Cash Flows from Operating Activities Receipts from customers 15,457,828$ 14,596,391$ Payments to suppliers for goods and services (6,295,182) (6,186,245) Payments to employees for services (5,459,371) (5,230,238) Other operating revenue (74,090) 76,844 Net cash provided by operating activities 3,629,185 3,256,752
Cash Flows from Capital and Related Financing Activities Proceeds from bonds refunding - 21,050,000 Capital contributed by federal and state grants 436,606 - Acquisition and construction of capital assets (3,020,264) (1,033,930) Principal paid on refunding and capital debt (1,416,680) (22,480,404) Interest paid on capital debt (922,161) (1,047,875) Water and sewer assessments received 356,892 382,993 Water and sewer assessment interest received 62,195 159,048 Impact fees received 1,666,576 874,538 Miscellaneous 8,968 (56,008) Net cash (used in) capital and related financing activities (2,827,868) (2,151,638)
Cash Flows from Investing Activities Change of deferred outflow and inflow of resources 549,228 293,211 Interest on investments 77,244 46,311 Net cash provided by (used in) investing activities 626,472 339,522 Net increase (decrease) in cash and cash equivalents 1,427,789 1,444,636
Cash and Cash Equivalents Beginning 16,761,999 15,317,363
Ending 18,189,788 16,761,999
Reconciliation of Operating Income to Net Cash Provided by (Used in) Operating Activities Operating (loss) (2,979,439) (3,610,942) Adjustments to reconcile operating (loss) to net cash provided by (used in) operating activities Add: noncash expenses Depreciation expense 6,003,749 6,019,938 Changes in assets and liabilities (Increase) decrease in accounts receivable 65,262 322,252 (Increase) decrease in inventory 104,865 47,152 (Increase) decrease in prepaid expenses (291) 844 Increase (decrease) in accounts payable 19,040 27,560 Increase (decrease) in accrued salaries and withholdings 28,330 39,226 Increase in future absences 16,224 24,577 Increase in accrued post-employment benefits 323,333 310,997 Increase in customer deposits 48,112 75,158 Total adjustments 6,608,624 6,867,704
Net cash provided by operating activities 3,629,185$ 3,256,762$
The accompanying notes are an integral part of the financial statements.
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 1. Description of Entity
Georgetown County Water and Sewer District (District) is a political subdivision of the State of South Carolina created by Act No. 733 of the Legislature on June 22, 1967. This enabling legislation authorized the District to provide water and sewer services to generally all areas of Georgetown County with the exception of the Town of Andrews and the City of Georgetown. The District is governed by a seven-member board appointed by the governor based upon recommendations from the Georgetown County legislative delegation. The District has been deemed to not be a component unit of another governmental entity in accordance with the provisions of Statement No. 14 issued by the Governmental Accounting Standards Board because the District determines its own budget, set rates and charges without approval by another government, is responsible for any deficits and can issue bonded debt. The District has no component units within the provisions of Statement No. 14. Note 2. Summary of Significant Accounting Policies Basis of presentation and method of accounting: Georgetown County Water and Sewer District's financial statements are presented in accordance with reporting guidelines recommended for enterprise funds by the Governmental Accounting Standards Board (GASB). The District has adopted private sector standards issued prior to December 1, 1989, as long as those standards do not conflict with GASB guidance. The District's financial statements are presented on the accrual basis of accounting. Revenues are recorded in the period earned, including impact fees upon assessment, and expenses are recorded at the time liabilities are incurred. Grant revenues are recognized once the eligibility requirements imposed by the grantor are satisfied. In accordance with enterprise fund accounting guidelines, the District distinguishes between operating revenues and expenses and non-operating items. Operating revenues and expenses are typically charges for providing water and sewer services to customers and the related costs of performing those services to include depreciation. Any other revenue or expense not directly related to the principal ongoing activity is classified as non-operating.
Cash and cash equivalents: The District’s cash and cash equivalents are considered to be cash on hand, demand deposits and all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased. Investments: The District is authorized to invest funds in approved financial institutions’ investment accounts to include federally backed securities and notes. There were no investments at June 30, 2017 or at June 30, 2016. Accounts receivable – customer: Customer Receivables represent service fees earned, but not yet collected. The District records an estimate of water and sewer service provided to customers from the last meter reading date to the balance sheet date. At June 30, 2017 and 2016, unbilled estimated accounts receivable was approximately $ 313,443 and $ 347,429, respectively, and are included in accounts receivable - customers. Inventory and prepaid items: Materials and supplies inventories are stated at the lower of cost or market. Cost is determined based on a weighted average of like items representing the dollar value of quantities on hand. Certain payments to vendors (i.e. insurance) reflect costs applicable to future accounting periods and are recorded as prepaid items. Restricted assets: Restricted assets represent cash, investments and receivables maintained in accordance with bond resolutions, loan agreements, grant awards, and other resolutions or formal actions of the District for the purpose of funding certain debt service payments, depreciation and contingency activities and improvements to the system.
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 2. Summary of Significant Accounting Policies (Continued) Capital assets: Capital assets are defined by the District as those with an initial, individual cost of more than $ 750 and an estimated useful life in excess of two years. Property, equipment and construction in progress acquired by construction or purchase are stated at cost. Assets acquired through contribution from customers and land developers are capitalized at the customer or developer's cost, if available, or at the District engineer's estimated fair market value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Years Land improvements 20 Buildings and improvements 10 - 25 Water systems 40 Sewer systems 40 Machinery, equipment and vehicles 5 - 10 Furniture and fixtures 5 - 10 The cost of studies that directly result in specific construction projects are capitalized at the beginning of the construction period. Insignificant costs applicable to projects and amounts not specifically chargeable to individual projects are charged to operations. Long-term obligations and costs: Long-term obligations are reported at face value net of premiums and discounts, if any. Deferred refunding costs resulting from advance refundings is reported on the balance sheet as a deduction from bonds payable and will be charged to operations as a component of interest expense using the effective interest rate method over the remaining life of the new debt.
Compensation for future absences: It is the District's policy to permit its employees to accumulate earned but unused vacation benefits which will be paid to the employees upon separation from District service. These vacation benefits are accrued in the period earned. As of June 30, 2017 and 2016, accrued leave was $ 254,411 and $ 238,187, respectively. Capital contributions: Property and equipment contributed by customers, developers and government grants that are permanent in nature are recorded as an asset and recognized in the Statement of Revenues, Expenses and Changes in Net Position when earned. Net position: Net position represents the accumulated net earnings from operating and non-operating revenues, expenses and contributions of capital. Net position is classified in the following three categories: invested in capital assets net of related debt; restricted net position and unrestricted net position. Invested in capital assets, net of related debt consists of all capital assets, net of accumulated depreciation and reduced by outstanding liabilities that are attributable to the acquisition, construction or improvement of those assets. Debt related to other restricted cash and investments is excluded from the determination. Restricted net position are assets on which constraints have been placed by external parties such as lenders, grantors, contributors or by laws, regulations or enabling legislation including self-imposed mandates, less any related liabilities. Unrestricted position consists of all other position not included in the above categories. Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
22
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 3. Cash and Cash Equivalents At June 30, 2017 and 2016, the carrying amount of the District’s deposits was approximately $ 18,189,788 and $ 16,761,999, respectively, and the bank balance was approximately $ 13,464,123 and $ 16,961,098, respectively. The entire bank balance was covered by federal depository insurance or by collateral held by the District’s agent in the District’s name. Cash on hand at June 30, 2017 was 1,900 and 2015 was approximately $ 1,400. Investments of revenue bond proceeds are governed by the applicable bond indenture. Generally, deposits from these proceeds must be insured by the Federal Deposit Insurance Corporation. Amounts in excess of this insurance must be secured by direct obligations of the United States or any agency thereof. Note 4. Accounts Receivable – Customers (Net) Accounts receivable – customers, net at June 30, 2017 and 2016 were composed of the following:
2017 2016Billed services 1,240,049$ 1,210,317$ Meters read in June, billed in July 461,301 501,517 Estimated unread usage 313,443 347,429 Accounts receivable – financed 9,152 32,746 Less: allowance for doubtful accounts (199,947) (202,749) Totals 1,823,998$ 1,889,260$
Note 5. Assessments Receivable Front foot assessments were levied on properties abutting on new laterals in certain areas in order to provide adequate funds to construct the systems. The assessments are pledged to secure bond issues and collections as received are required to be deposited in the Current Debt Service restricted account to be used to pay bond principal and interest. The assessments may be paid in full or at each anniversary billing date at the option of the property owner. Annual installments not yet billed to property owners are presented as Assessments Receivable, a non-current restricted asset. The assessments at June 30, 2017 and 2016 are summarized as follows:
Date Original Outstanding OutstandingArea Levied Assessment June 30, 2017 June 30, 2016
Hagley Estates 10/05/95 4,841,120$ -$ 75,901$ Martin Luther King 07/11/96 1,731,139 34,657 45,855 North Causeway 09/01/03 433,221 123,422 141,987 Brock Road 03/15/05 256,665 113,301 123,553 Cherokee Drive Water 06/12/06 206,532 100,062 110,639 Beaumont Drive Water 07/14/06 95,430 44,983 52,792 South Causeway Sewer 09/01/08 1,345,690 701,949 801,606 Grinder Pump & Step Units 08/01/10 21,200 265,295 224,640 Rossdhu Sewer 04/01/10 147,331 - - Pleasant Hill Water 09/01/10 1,743,528 1,209,982 1,292,282 Plantersville Sewer 08/01/13 1,853,901 1,528,187 1,599,206 Commanche Drive Water 05/30/15 53,754 40,491 47,135 Total 12,729,511$ 4,162,329$ 4,515,596$
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 6. Service Agreement Receivable As more fully described in Note 9, the District entered into a Service Agreement with the Town of Andrews whereby the Town is to pay a debt service charge to the District for allocation of capacity of the West Georgetown County Regional Sewer Interceptor. The initial agreement calls for the Town to make 480 monthly payments of $ 10,185 including principal and interest at 4.50% beginning November 2002 plus an additional 10% bond cushion fund payment. The District recorded an initial receivable amount of $ 2,263,200. The principal balance of the receivable at June 30, 2017 and 2016 was $ 1,841,131 and $ 1,879,551 respectively. The District has pledged these receipts for debt service on the District’s 2002 Series B revenue bond. Note 7. Restricted Assets Restricted asset accounts were established to account for assets reserved for specific purposes. Revenue bond indentures require the establishment of construction accounts, current debt service accounts, future debt service accounts, contingency accounts and depreciation accounts. Deposits are made to these restricted asset accounts in amounts determined by the bond indenture or the District's board members. Developers' reservation deposits are a restricted asset account to maintain custody over funds being held for developers. Impact fees charged to new customers are to recover the costs associated with unutilized capacity in oversized facilities built to meet future needs. The impact fee is placed in a restricted asset account for use by the Board for capital improvements and debt service. The service agreement receivable has been pledged to meet the future debt service requirements on bonds issued by the District to finance the West Georgetown County Regional Interceptor Sewer System (Note 6).
2017 2016Cash and Cash Equivalents Capital renewal and replacement impact fees 6,822,967$ 6,944,007$ Current debt service accounts 1,665,461 1,416,150 Future debt service accounts - FmHA 150,084 150,084 Depreciation fund account 2,801,795 2,628,703 Economic development 500,000 500,000 Contingency fund account 800,000 959,936 Developers' reservation fees account 185,588 169,710 Good neighbor contribution 48,198 42,457 Service agreement receivable 1,841,131 1,879,551 Impact fees receivable 183,456 75,114 Grants receivable 708,799 - Assessments receivable 4,162,329 4,515,596 Total 19,869,808$ 19,281,308$
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 8. Capital Assets Capital asset activity for the year ended June 30, 2017, was as follows:
June 30, 2016 Increases Decreases Transfers June 30, 2017Capital assets not being depreciated Land 763,408$ -$ -$ -$ 763,408$ Construction in progress 966,051 2,575,181 (394,434) (2,321,618) 825,180 Total capital assets not being depreciated 1,729,459 2,575,181 (394,434) (2,321,618) 1,588,588
Capital assets being depreciated Land improvements 111,864 - - - 111,864 Buildings and improvements 3,924,381 - - - 3,924,381 Water systems 72,162,714 517,510 (204,141) 717,193 73,193,276 Sewer systems 132,211,971 263,724 (530,949) 1,604,425 133,549,171 Machinery, equipment and vehicles 4,730,651 323,016 (227,651) - 4,826,016 Furniture and fixtures 814,884 39,378 (92,671) - 761,591 Total capital assets being depreciated 213,956,465 1,143,628 (1,055,412) 2,321,618 216,366,299
Less: accumulated depreciation for Land improvements 45,315 281 - 45,596 Building and improvements 2,008,154 154,324 - - 2,162,478 Water systems 30,233,474 1,999,293 (176,068) - 32,056,699 Sewer systems 60,655,476 3,459,901 (358,391) - 63,756,986 Machinery, equipment and vehicles 3,678,850 346,669 (226,875) - 3,798,644 Furniture and fixtures 692,545 43,279 (92,670) - 643,154 Total accumulated depreciation 97,313,814 6,003,747 (854,004) - 102,463,557
Total capital assets being depreciated, net of depreciation 116,642,651 (4,860,119) (201,408) 2,321,618 113,902,742
Net capital assets 118,372,110 (2,284,938) (595,842) 0 115,491,330
Related debt (31,376,439) - 1,396,907 - (29,979,532)
Capital assets, net of related debt 86,995,671$ (2,284,938)$ 801,065$ 0$ 85,511,798$
25
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 8. Capital Assets (Continued) Capital asset activity for the year ended June 30, 2016, was as follows:
Balance at Balance atJune 30, 2015 Increases Decreases Transfers June 30, 2016
Capital assets not being depreciated Land 763,408$ -$ -$ -$ 763,408$ Construction in progress 869,604 624,635 (10,178) (518,010) 966,051 Total capital assets not being depreciated 1,633,012 624,635 (10,178) (518,010) 1,729,459
Capital assets being depreciated Land improvements 111,864 - - - 111,864 Buildings and improvements 3,924,381 - - - 3,924,381 Water systems 71,550,776 725,848 (113,910) - 72,162,714 Sewer systems 131,844,677 513,419 (664,135) 518,010 132,211,971 Machinery, equipment and vehicles 4,537,127 352,517 (158,993) - 4,730,651 Furniture and fixtures 753,242 80,608 (18,966) - 814,884 Total capital assets being depreciated 212,722,067 1,672,392 (956,004) 518,010 213,956,465
Less: accumulated depreciation for Land improvements 45,008 307 - - 45,315 Building and improvements 1,853,614 154,540 - - 2,008,154 Water systems 28,276,786 2,017,680 (60,992) - 30,233,474 Sewer systems 57,493,644 3,452,895 (291,063) - 60,655,476 Machinery, equipment and vehicles 3,476,707 361,138 (158,995) - 3,678,850 Furniture and fixtures 681,825 29,686 (18,966) - 692,545 Total accumulated depreciation 91,827,584 6,016,246 (530,016) - 97,313,814
Total capital assets being depreciated, net of depreciation 120,894,483 (4,343,854) (425,988) 518,010 116,642,651
Net capital assets 122,527,495 (3,719,219) (436,166) - 118,372,110
Related debt (32,770,110) (21,050,000) 22,443,671 - (31,376,439)
Capital assets, net of related debt 89,757,385$ (24,769,219)$ 22,007,505$ -$ 86,995,671$
Note 9. Long-Term Debt Revenue bonds: Revenue bonds are collateralized by an irrevocable pledge of income and revenues derived from the operation of the systems and a mortgage lien on the water and sewer systems. The revenues derived from the operation of the respective systems are to be used for expenses in connection with the administration and operation of the systems. The revenue bonds also require the establishment of the following restricted asset bank accounts (Note 7): (a) Construction Accounts - for construction (b) Current Debt Service Accounts (Bond and Interest Fund) - for payment of bond principal and Interest (c) Future Debt Service Accounts (Cushion Fund) - a reserve for future payment of bond principal and
interest (d) Depreciation Fund - for renewal and replacement (e) Contingency Fund - for improvements, betterments and extension of systems
26
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 9. Long-Term Debt (Continued) Revenue bonds (continued): Annual debt service requirements to maturity for revenue and revenue refunding bonds are as follows:
Year Ending June 30, Principal Interest Total
2018 1,469,377 987,852 2,457,229 2019 1,522,419 934,296 2,456,715 2020 1,580,216 870,779 2,450,995 2021 1,639,264 816,414 2,455,678
2022-2026 8,993,531 3,295,005 12,288,536 2027-2031 10,444,973 1,839,305 12,284,278 2032-2036 4,133,581 416,273 4,549,854 2037-2041 560,742 189,679 750,421 2042-2046 623,542 126,878 750,420 2047-2051 693,376 57,044 750,420 2052-2053 178,289 2,451 180,740
31,839,310$ 9,535,976$ 41,375,286$
Issuance of Series 2015 Refunding Bonds
On August 13, 2015, the District issued $ 21,050,000 Revenue Refunding Bonds Series 2015 to refund certain outstanding bonded indebtedness of the District, and to pay certain costs and expenses relating to the issuance of the Series 2015 Bonds. The Series 2015 Bonds are payable on June 1 each year The interest rates vary from 2% to 5%, and the bond will be paid off in 2033.
Obligation under service agreement: On October 30, 1997, the District entered into the West Georgetown County Regional Wastewater Treatment System Service Agreement (the “Agreement”) with the Town of Andrews, the City of Georgetown and the County of Georgetown. The parties to the agreement determined that it was mutually beneficial to join together in this wastewater transportation, treatment and disposal project rather than each constructing its own new system. The terms of the agreement are briefly outlined below: The District will: - Construct, own, operate and maintain the West Georgetown County Regional Sewer System
Interceptor (the “Interceptor”) with an initial capacity of 6.0 million gallons per day. Financing was facilitated by issuance of $ 4,526,400 in revenue bonds.
- Be responsible for paying the City a debt service charge each month based on the District’s initial allocation of the capacity of the City’s treatment facility. The current debt service charge is $ 8,336 per month.
- Be responsible for paying the City a volume charge each month based on metered volume of District sewage processed by the City’s treatment facility to cover operating costs.
- Collect debt service and volume charges from the Town of Andrews to cover the Town’s capacity and use charges of the District’s interceptor.
27
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 9. Long-Term Debt (Continued) Obligation under service agreement (continued): The City of Georgetown will: - Construct, own, operate and maintain the West Georgetown County Regional Treatment Facility (the
"Treatment Facility”) with an initial capacity of 11.9 million gallons per day. Financing will be facilitated by issuance of a $ 10,074,369 loan.
- Collect prorated debt service and volume payments from the District and the Town of Andrews monthly to recoup capacity and operating costs.
The Town of Andrews will: - Be responsible for paying the District debt service and volume charges based on capacity and use of
the interceptor (see also Note 6). - Be responsible for paying the City debt service and volume charges based on capacity and use of
the treatment facility. The County of Georgetown will: - Accept residual bio-solids from the treatment facility. The term of the service agreement contract is to continue as long as the capital facilities related to the contract remain functional. Both the District and the City have pledged that payments made to them for the purchase of wastewater capacity are intended to be part of the revenues of the interceptor and treatment facility and will be used to meet the principal and interest requirements on indebtedness incurred to acquire and construct the projects. The District originally recorded a long-term obligation to the City in the principal amount of $ 3,052,534 for its initial capacity allocation. During the year ended June 30, 2005, the City was allowed to apply unspent grant funds to reduce its outstanding debt on this project. Accordingly, the City credited the District $ 2,238,094 against the District’s portion of the debt. At June 30, 2005, the terms of the agreement call for 225 monthly payments of $ 8,336 including principal and interest at 3.50% through March 2023. On July 1, 2008, the District increased its partnership interest in the RWWTP from 30.3% to 33.7%. The outstanding principal balances of this obligation of the District at June 30, 2017 and 2015 were $ 780,496 and $ 800,269 respectively. As described in Note 6, the District recorded a receivable from the Town of Andrews. Various other stipulations, responsibilities, covenants and warranties are contained in the agreement. Additional capacity may be bought or sold by the parties in the future under certain circumstances. Obligation under Service Agreement debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total2018 24,685 30,538 55,223 2019 29,767 25,456 55,223 2020 99,425 20,722 120,147 2021- 2023 626,619 27,603 654,222 Totals 780,496$ 104,319$ 884,815$
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 9. Long-Term Debt (Continued) Revenue Bonds, notes and obligation under service agreement at June 30, 2017 and 2016, are summarized as follows:
2017 2016Revenue bonds maturing through 2053; interest rates ranging from 2.96% to 6.50%. 31,058,814$ 32,455,721$ Obligation under service agreement maturing through 2023; interest at 3.50% 780,496 800,269
31,839,310 33,255,990 Less, current portion 1,469,377 1,416,680 Total long-term debt 30,369,933$ 31,839,310$
Changes in long-term liabilities: Long-term liability activity for the year ended June 30, 2017, was as follows:
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Revenue bonds payable 32,455,721$ -$ (1,396,908)$ 31,058,813$ 1,444,692$ Obligation under service agreement 800,269 - (19,773) 780,496 24,685 Accrued post-employment benefits 1,766,262 323,333 - 2,089,595 1,051,413 Compensated absences 238,187 16,224 - 254,411 - Net pension liability 7,173,125 787,051 - 7,960,176 - Total long-term liabilities 42,433,564$ 1,126,608$ (1,416,681)$ 42,143,491$ 2,520,790$
Note 10. Lease Obligations During the year ended June 30, 2011, the District’s policy was to lease all vehicles when economically beneficial. The District changed its policy during the year ended June 30, 2012, to purchase vehicles, rather than leasing. There was no lease expense for the years ended June 30, 2017 and 2016. There are no future minimum lease payments at June 30, 2017 and 2016.
Note 11. Retirement Plan South Carolina Retirement System Plan description: The District participates in retirement plans under authorization of Title 9 of the SC Code of Laws, State of South Carolina which covers a majority of the District's full-time employees. The South Carolina Retirement System ("SCRS") is a cost-sharing multi-employer defined benefit pension plan that is administered by the South Carolina Retirement System; a division of the South Carolina State Budget and Control Board. Effective July 1, 2012, the South Carolina General Assembly transferred administration of the SCRS to the newly created South Carolina Public Employee Benefit Authority ("PEBA"). The PEBA has the authority to establish and amend benefits and funding policy. A Comprehensive Annual Financial Report containing financial statements and required supplementary information for the South Carolina Retirement System is issued and publicly available and can be obtained at www.peba.sc.gov or by writing to the South Carolina Public Employee Benefit Authority, P.O. Box 11960, Columbia, SC 29211-1960.
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GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 11. Retirement Plan (Continued) South Carolina Retirement System (Continued) Benefits provided: SCRS provides service retirement and disability benefits, cost of living adjustments on an ad-hoc basis, group life ("GL") insurance benefits and survivor benefits. Benefit terms are prescribed in Title 9 of the South Carolina Code of Laws. PEBA does not have the authority to establish or amend benefit terms without a legislative change in the code of laws. Key elements of the benefit calculation include the benefit multiplier, years of service, and average final compensation. For Class II members, benefits vest after five years of service, and vested members who retire at age sixty-five or with twenty-eight years of service at any age, receive an annual benefit, payable monthly for life. The benefit is based on the length of service and on average final compensation, an annualized average of the employee's highest twelve consecutive quarters' compensation. Reduced benefits are payable as early as age sixty.
For Class III members, benefits vest after eight years of service, and vested members who retire must be age sixty-five or meet the rule of 90 requirement (this means that the member's age plus the years of service must add up to a total of at least 90), receive an annual benefit, payable monthly for life. The benefit is based on the length of service and on average final compensation, an annualized average of the employee's highest twelve consecutive quarters' compensation. Reduced benefits are payable as early as age sixty.
Effective January 1, 2001, Section 9-1-2210 of the South Carolina Code of Laws allows employees eligible for service retirement to participate in the Teacher and Employee Retention Incentive (TERI) Program. TERI participants may retire and begin accumulating retirement benefits on a deferred basis without terminating employment for up to five years. Upon termination of employment or at the end of the TERI period, whichever is earlier, participants will begin receiving monthly service retirement benefits which will include any cost of living adjustments granted during the TERI period. Because participants are considered retired during the TERI pension, they do not earn service credit, and are ineligible to receive group life insurance benefits or disability retirement benefits. Effective July 1, 2006, TERI participants who entered the TERI program after July 1, 2005, are required to pay the same pre-tax contribution to SCRS during the TERI period, but do not earn service credit. The TERI program will end effective June 30, 2018. Contributions: Both employers and employees are required to contribute to the Plan under the authority of Title 9 of the S. C. Code of Laws. District employees are required to contribute 8.66% and 8.16% of their annual covered earnings for the years ended June 30, 2017 and 2016, respectively. The District’s contractually required contribution rate was 11.41% and 10.91% of annual payroll for fiscal the years ended June 30, 2017 and 2016, respectively, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. In addition, participating employers also contribute 0.15% of annual covered payroll for group life insurance benefits for their participants. Contributions to SCRS from the District were $ 426,830 and $ 399,139 for the fiscal years ended June 30, 2017 and 2016, respectively. Optional Retirement Program Plan description: Certain State employees may elect to participate in the Optional Retirement Program (ORP), a defined contribution plan. The ORP was established in 1987 under Title 9, Chapter 17, of the South Carolina Code of Laws. The District assumes no liability for this plan other than for payment of contributions to the retirement system. The obligation for payment of benefits resides with the insurance companies. Employees who enroll in ORP are eligible to change their election to SCRS if done before the fifth anniversary of enrollment in ORP.
ORP participation is limited to faculty and administrative staff who meet all eligibility requirements for membership in the SCRS. To elect participation in the ORP, eligible employees must irrevocably waive SCRS membership within their first thirty days of employment.
30
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 11. Retirement Plan (Continued) Optional Retirement Program (Continued) Benefits provided: The ORP provides retirement and death benefits through the purchase of individual fixed or variable annuity contracts, which are issued to, and become the property of, the participants. Contributions: Under state law, employee contributions to the ORP are required at the same rates as for the SCRS, 8.66% and 8.16% of their annual covered salary in the fiscal years ended June 30, 2017 and 2016, respectively. The District is required to contribute an actuarially determined rate. The current rate is 11.41% of annual covered earnings, of which 5.33% of the employer required contribution is remitted to the employees authorized investment providers ("AIP") and the balance is remitted to the South Carolina Retirement System. The 0.15% for group life insurance coverage is also contributed for these participants. Contributions are included in the contributions to SCRS. The District reported a liability of $ 7,960,176 and $ 7,173,125 for its proportionate share of the net pension liability for the fiscal years ended June 30, 2017 and 2016, respectively. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2016. The District’s proportion of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2017, the District’s proportion was 0.037267% percent based on the June 30, 2016, measurement date. The District recognized pension expense of $ 783,999 and $ 621,745 for the fiscal years ended June 30, 2017 and 2016, respectively. The District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: At June 30, 2017, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred DeferredOutflows Inflows
of ofResources Resources
Difference between expected and actual experience 160,857$ 86,985$
Net difference between projected and actual earnings on pension plan investments 669,706
Changes in proportion and differences between
employer contributions and proportionate share of contributions 138,968
District Contributions subsequent to the measurement date 421,511 - Total 1,391,042$ 86,985$
31
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 11. Retirement Plan (Continued) Optional Retirement Program (Continued) Contributions (continued): At June 30, 2016, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred DeferredOutflows Inflows
of ofResources Resources
Difference between expected and actual experience 488,725$ -$
Net difference between projected and actual earnings on pension plan investments - 12,828
District Contributions subsequent to the measurement date 399,139 - Total 887,864$ 12,828$
District contributions subsequent to the measurement date of $ 421,511 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 302017 259,871$ 2018 216,739 2019 258,258 2020 147,678$
Actuarial assumptions: The total pension liability as of June 30, 2017, was determined by an actuarial valuation as of June 30, 2016, using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Cost Method Entry Age Normal
Asset Valuation Method 20% difference recognition
Amortization Method Level percentage of Pay
Amortization Period 30 Years, Open
Inflation 2.75%Salary Increase 3.5% plus step-rate increases
for members with less than25 years of service
Investment rate of return 7.50%, including inflationBenefit Adjustments lesser of 1% of $500 annually
Mortality rates were based on the RP-2000 Mortality Table for Males and Females and is dependent upon the member’s job category and gender. This assumption includes base rates which are automatically adjusted for future improvement in mortality using published Scale AA projected from the year 2000.
32
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 11. Retirement Plan (Continued) Actuarial assumptions (continued): The long-term expected rate of return on pension plan investments was determined using the 30 year capital market outlook at the end of the third quarter 2013. The actuarial long-term expected rates of return represent best estimates of arithmetic real rates of return for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Long Term Expected
Asset Class Target
AllocationsExpected Real Rate of Return
Real Rate of Return
Global Equity Global Public Equity 34% 6.52% 2.22% Private Equity 9% 9.30% 0.84%Real Assets Real Estate 5% 4.32% 0.22% Commodities 3% 4.53% 0.13% Infrastructure 0% 6.26% 0.00% Other Real Assets 0% 0.00% 0.00%Opportunistic GTAA/Risk Parity 10% 3.90% 0.39% HF (Low Beta) 10% 3.87% 0.39%Diversified Credit Mixed Credit 5% 3.52% 0.17% Emerging Markets Debt 5% 4.91% 0.25% Private Debt 7% 4.47% 0.31% Other Credit 0% 0.00% 0.00%Conservative Fixed Income Core Fixed Income 10% 1.72% 0.17% Global Fixed Income 0% 0.00% 0.00% Cash and Short Duration (Net) 2% 0.71% 0.01%
Total Expected Real Return 100% 5.10%
Inflation for Acturial Purposes 2.75%Total Expected Normal Return 7.85%
Discount rate: The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made based on the actuarially determined rates based on provisions in the South Carolina State Code of Laws. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
33
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 11. Retirement Plan (Continued) Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate: The following presents the District’s proportionate share of the net pension liability calculated using the discount rate of 7.5%, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:
1% Current 1%Decrease Discount rate Increase
6.5% 7.5% 8.5%District's proportionate share of the net pension liability 9,930,102$ 7,960,176$ 6,320,287$
Pension plan fiduciary net position: Detailed information about the SCRS pension plan’s fiduciary net position administered by PEBA is available in the separately issued CAFR. Deferred compensation plan: The District offers its employees deferred compensation plans created in accordance with IRC Section 457 and Section 401(k). The Plans, available to all regular full-time and part-time employees, permits them to defer a portion of their salary either to 457 plan or 401(k) plan until future years. The deferred compensation is not available to the employee or his beneficiaries until termination, retirement, death, or an unforeseeable emergency. All amounts of compensation deferred under the Plan are held in trust for the contributing employee and are not subject to the claims of the District’s general creditors. The Plan is administered by the State of South Carolina. Note 12. Employee Benefit Plans The District has established a cafeteria plan that provides each employee the opportunity to choose from a menu of fringe benefits. Through a salary reduction agreement, the employee can make pre-tax contributions to the plan to be used for qualified benefits. The plan contributions can be used to pay for supplemental life insurance, family health insurance premiums, child care, supplemental health care benefits such as dental and eye care not covered under the District’s prevailing health insurance providers, and such other permitted benefits allowed by the Internal Revenue Code Section 125 and the designated cafeteria plan administrator. In addition, The District has established a fringe benefit program that provides each qualified employee a monthly allowance to be contributed to a deferred benefit plan offered through the South Carolina Deferred Compensation Program. The dollar value of the allowance is determined annually in conjunction with the approval of the District’s annual budget and is paid by the District on behalf of each qualified employee Note 13. Commitments and Contingencies The Grand Strand Water and Sewer Authority (the Authority) agreed to allow the District to connect to the Authority's Garden City water system for the purpose of providing stand-by water supply and pressure. The District shall pay the Authority for water delivered in accordance with the bulk water rate established by the Authority. The Authority has also agreed by contract to assume the responsibility of providing, maintaining and operating the transmission of waste water, the treatment of waste water and the disposal of treated waste water for the District. The District shall pay the Authority in accordance with the contract.
34
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 13. Commitments and Contingencies (Continued) The District has various contracts with the City of Georgetown (the City) whereby the City will treat and dispose of wastewater for the District. The District shall pay to the City a wastewater service charge as stated in the contracts. These contracts expire on May 11, 2023. In the normal course of business, the District entered into agreements with contractors for the construction and expansion of the system. At June 30, 2017, open contracts for construction totaled approximately $ 1,908,479 of which $ 1,209,098 had been expended. The District receives grant and loan monies from government agencies which are subject to audit and adjustments by those agencies. The District has never been required to refund any grant or loan money due to audit adjustments. The District is a party to various matters in litigation in the due course of business. The assertions relating to these matters, while taken seriously by management, when resolved are not expected to cause any material adverse effect on the financial position of the District. In 1995, the District and the Litchfield Plantation Company agreed that the District would credit 151 water and sewer impact fees to Litchfield Plantation Company in exchange for water and sewer infrastructure located on Litchfield Plantation Company property. Of the 151 originally assigned water and sewer impact fees, 107 remain unused. The District recognized an increase in net position at the time of the exchange and has recognized depreciation expense on the related asset each year since the exchange took place. Due to the uncertainty of the number of water and sewer impact fees that will ultimately be utilized by the Litchfield Plantation Company, the effect of those water and sewer impact fees has not been recorded, which is not expected to cause any material adverse effect on the financial position of the District. Note 14. Postemployment Benefits Other Than Pensions Plan Description. The District participates in the Employee Insurance Program (EIP) of the State Budget and Control Board (SBCB). The plan provides healthcare insurance for eligible retirees until age sixty-five and Medi-gap insurance for retirees over the age of sixty-five through the District's group health insurance plan, which covers both active and retired members. Benefit provisions are established by the District's Board of Directors. Members that wish to have other family members covered under the plan must fund any additional premium contribution. As of July 1, 2015, the measurement date of the 2017 plan year, there were 85 covered participants; 14 members are retirees receiving benefits and 71 are active participants. Funding Policy. Contribution requirements are set by the District's management. The District contributes up to 100% of the cost of current-year premiums for eligible retired plan members. For eligible retirees hired prior to January 1, 2009, the amount of health insurance benefits paid by the District is determined as follows:
Minimum Years ofAge at Service at District-Paid
Retirement Retirement Percentage58 10 - 14 50%58 15 - 19 75%58 20 or more 100%
35
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 14. Postemployment Benefits Other Than Pensions (Continued) For eligible retirees hired on or after January 1, 2009, the amount of health insurance benefits paid by the District is determined as follows:
Minimum Years ofAge at Service at District-Paid
Retirement Retirement Percentage60 15 - 24 50%60 25 or more 100%
Annual OPEB Cost and Net OPEB Obligation. The District's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. Prior to the year ended June 30, 2017, the District has elected to calculate the ARC and related information using the alternative measurement method permitted by GASB Statement No. 45 for employers in plans with fewer than one hundred total plan members. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The current ARC rate is based on a level percent of payroll increasing annually at 2.75%. Annual required contribution 310,997$
Increase in net OPEB obligation 232,045
Net OPEB obligation - beginning of year 1,455,265
Net OPEB obligation - end of year 1,687,310$
Funded Status and Funding Progress. At June 30, 2017, the actuarial accrued liability (AAL) for benefits was $ 3,873,062, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $ 3,281,986, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 118%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with 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 that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
36
GEORGETOWN COUNTY WATER AND SEWER DISTRICT YEARS ENDED JUNE 30, 2017 AND 2016 Notes to Financial Statements
Note 14. Postemployment Benefits Other Than Pensions (Continued) The District uses the Projected Unit Credit Actuarial Cost Method. The actuarial assumptions included a 4% rate of return. For eligible employees retiring before age 65, the actuarial assumptions included an initial annual healthcare cost trend rate of 6.75%. For eligible employees retiring at or after age 65, the actuarial assumptions included an initial annual healthcare cost trend rate of 5.25%. The unfunded actuarial accrued liability is being amortized as a level percentage of payroll increasing 2.75% annually. The remaining amortization period at June 30, 2017, was thirty years. Note 15. Allocation of General Administration Operating Expense The District includes in its Statement of Revenues, Expenses and Changes in Net Position an allocation of general administration operating expenses to its other cost centers. Included in this allocation are certain other income and expenses related to general administration, such as interest income, gain or loss on disposal of fixed assets, and interest expense on debt secured by general administration fixed assets. The calculation of expenses that have been allocated to other cost centers for the years ended June 30, 2017 and 2016 are disclosed below:
2017 2016
General Administration Operating Expense
Personnel services 1,676,118$ 1,609,768$
Contractual services 495,540 854,961
Supplies and materials 419,983 336,028
Business and travel 75,042 103,191
Other expenses 162,961 381,845
Depreciation 562,932 545,673
Total general administration operating expense 3,392,576 3,831,466
Other (Income) Expense Allocated
Interest income (86,212) (29,499)
Interest expense on Georgetown administration building 64,575 65,942
Net other (income) expense allocated (21,637) 36,443
Total expenses allocated 3,370,939$ 3,867,909$
Note 16. Subsequent Events The District has evaluated subsequent events through October 21, 2016, which is the date the financial statements were available to be issued. No other events have occurred through this date that would require recognition or disclosure in the financial statements.
37
GEORGETOWN COUNTY WATER AND SEWER DISTRICTOTHER POST-EMPLOYMENT BENEFITS - DEFINED BENEFIT HEALTH CARE PLANSCHEDULE OF FUNDING PROGRESSYEAR ENDED JUNE 30, 2017
Actuarial UAAL as aActuarial Accrued Unfunded Percentage
Actuarial Value of Liability AAL Funded Covered of CoveredValuation Assets (AAL) (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ((b - a) / c)
7/1/2013 -$ 3,272,791$ 3,272,791$ 0.0% 2,962,401$ 110.48%8/2/2016 - 3,873,062 3,873,062 0.0% 3,281,986 118.01%
38
GEORGETOWN COUNTY WATER AND SEWER DISTRICTREQUIRED SUPPLEMENTARY INFORMATIONSCHEDULE OF THE DISTRICT'S CONTRIBUTIONSLAST TEN FISCAL YEARS
2017 2016
SOUTH CAROLINA RETIREMENT SYSTEM PLAN
Contractually required contribution 399,139$ 386,540$
Contributions in relation to the contractually required contribution (399,139) (386,540)
Contribution deficiency (excess) -$ -$
District's covered-employee payroll 3,608,848$ 3,546,240$
Contributions as a percentage of covered-employee payroll 11.06% 10.90%
The District implemented GASB Statement 68 and GASB Statement 71 with the fiscal year beginning July 1,2015.
This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the government will present information for those years for which information is available.
39
GEORGETOWN COUNTY WATER AND SEWER DISTRICTREQUIRED SUPPLEMENTARY INFORMATIONSCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITYLAST TEN FISCAL YEARS
2017 2016
SOUTH CAROLINA RETIREMENT SYSTEM
0.037267% 0.037822%
$ 7,960,176 $ 7,173,125
$ 3,608,848 $ 3,546,240
220.57% 202.27%
52.90% 57.70%
This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full10-year trend is compiled, the governement will present information for those years for which information isavailable.
District's proportion of the net pension liability
District's proportionate share of the net pension liability
District's covered-employee payroll
District's proportionate share of the net pension liability as a
Plan fiduciary net position as a percentage of the total pension
The District implemented GASB Statement 68 and GASB Statement 71 with the fiscal year beginning July 1,2015.
40
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t em
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-
3
23
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-
-
323,
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0,99
7
Oth
er p
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ll ex
pens
es9,
744
1
1,1
31
83
,42
2
1
6,2
82
4,6
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5,25
8
127,
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-
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ota
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1
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1
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5,
827,
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7
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7
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-
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1,
326,
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Sew
er s
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es-
4
11
,59
7
-
-
-
411,
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48
7,20
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Tel
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9
51
1
65
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2
4
5,3
43
3,1
72
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5,73
7
108,
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ranc
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1
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132,
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Pro
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4
1,8
68
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2,5
29
44
,397
413,
488
Em
ploy
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nifo
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-
-
12
,92
4
8
91
6
11
14
,426
13,2
53
Ser
vice
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mai
nten
ance
148,
282
1
82
,14
3
18
6,2
43
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5,7
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78
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0
64
0,94
6
625,
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ota
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ntr
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ces
691,
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1
,34
9,3
81
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5,5
40
1
03
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96
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2,
735,
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3,09
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8
S
uppl
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ls
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d m
ater
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20,1
23
3
1,2
38
90
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9
5
,93
4
7,1
55
15
5,05
9
140,
336
Wat
er p
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ased
for
res
ale
280,
214
-
-
-
-
28
0,21
4
273,
486
42
GE
OR
GE
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R A
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om
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ativ
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ater
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aste
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Gen
eral
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erat
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s
Exp
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s (C
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S
uppl
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and
Mat
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ls (
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tinue
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lies
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-$
101,
163
1
4,5
09
4,9
81
12
0,65
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116,
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$
Prin
ting
and
offic
e su
pplie
s1,
246
5
05
1
5,8
00
34
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9
3
,77
6
55,7
06
55
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nd t
reat
men
t su
pplie
s43
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0
10
5,1
79
-
-
-
54
2,01
9
518,
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uild
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2
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72
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acili
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E
quip
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7
109,
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ehic
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-
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8
,28
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25
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ater
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43,2
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73
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2,67
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150,
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Pos
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11
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6
122,
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ploy
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108
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45
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0,4
35
32
5
1,2
75
22
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29,2
71
Mem
bers
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and
mee
tings
-
-
19
,65
7
-
5
44
20
,201
37,9
57
Boa
rd m
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mpe
nsat
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-
-
7,7
25
-
-
7,
725
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Pro
fess
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l boo
ks32
5
-
1,7
02
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-
2,
027
2,
155
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lic in
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5
10
-
7,22
5
3,23
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T
ota
l b
usi
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s an
d t
rave
l ex
pen
se43
3
44
5
75
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1
17
,25
8
1,8
69
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5,04
7
224,
574
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ses
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)
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22,5
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35
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deb
ts(1
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-
-
-
(3,1
97)
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Net
(ga
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-
14
0,4
20
-
-
14
0,42
0
346,
274
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ota
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ther
exp
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s(1
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16
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6)
-
15
9,74
8
388,
518
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epre
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1,99
9,29
3
3
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56
2,9
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-
-
6
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26
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43
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M
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D J
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tere
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S
peci
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sses
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t30
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$
74
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7$
-
$
-
$
-
$
10
5,39
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108,
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$
O
ther
369,
120
3
77
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0
64
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5
-
-
81
1,35
5
893,
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tal
deb
t s
erv
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400,
036
4
52
,13
7
64
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-
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91
6,74
8
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2,32
4
T
ota
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ire
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pe
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6,02
1,38
9
7
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2,7
38
3,4
57
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0
1
,38
0,3
82
55
5,3
12
19
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19
,235
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Allo
catio
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gen
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inis
trat
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cost
s1,
150,
902
1,0
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1
(3
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0,9
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)
84
1,6
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3
34
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-
-
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ota
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pen
ses
7,17
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8
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6,8
39
86
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2
2
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88
9,5
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19
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19
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Net
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Wes
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1,68
9,37
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344,
527
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-
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-
$
1,
255,
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$
1,
599,
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V
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s79
9,29
0
-
3,38
2,49
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181,
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3,82
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Ser
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72,5
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-
23
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-
31
1,06
6
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73
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119,
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M
eter
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s-
-
2,06
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-
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-
-
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low
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ectio
n ch
arge
997
-
90,4
94
-
91,4
91
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-
-
-
-
-
D
eman
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17,4
34
-
66
,468
-
83
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48,3
28
-
-
55
,361
-
103,
689
Im
pact
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s19
9,38
6
-
678,
047
-
877,
433
12
4,14
5
-
-
773,
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-
89
7,48
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Adm
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trat
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reco
veri
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881
-
94
,514
-
98
,395
49,3
80
-
-
11
,715
-
61,0
95
S
ewer
ser
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3,
744
-
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23
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27,2
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A
sses
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ts
In
tere
st47
,140
-
(37,
609)
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9,53
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44
,907
-
-
7,75
7
-
52
,664
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vy-
-
(37,
260)
-
(37,
260)
65
,586
-
-
(24,
701)
-
40
,885
To
tal
reve
nu
es1,
402,
441
-
5,
905,
337
-
7,30
7,77
8
1,65
4,83
0
-
-
6,
001,
235
-
7,
656,
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Exp
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s P
erso
nnel
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vice
s
S
alar
ies
and
wag
es
R
egul
ar11
7,16
4
-
260,
629
46
9,04
7
84
6,84
0
182,
249
26
,973
8,
419
355,
930
21
1,61
3
78
5,18
4
O
vert
ime
4,05
9
460
33
,368
40,6
05
78,4
92
17
,900
1,96
3
36
2
14,2
22
19
,089
53
,536
F
ICA
tax
exp
ense
8,93
9
34
21
,894
37,8
78
68,7
45
15
,772
2,11
1
70
7
26,8
29
17
,115
62
,534
P
erso
nnel
insu
ranc
e24
,882
-
55,3
49
99
,610
17
9,84
1
38,7
04
5,
728
1,78
8
75
,588
44,9
40
166,
748
Ret
irem
ent
24,1
13
97
56,0
07
10
2,72
1
18
2,93
8
42,9
03
5,
732
1,94
4
72
,627
46,6
18
169,
824
Oth
er p
ayro
ll ex
pens
es2,
520
-
4,
281
2,94
2
9,
743
7,23
7
-
-
652
3,24
0
11
,129
To
tal
per
son
nel
ser
vice
s18
1,67
7
591
43
1,52
8
752,
803
1,36
6,59
9
304,
765
42
,507
13
,220
54
5,84
8
342,
615
1,24
8,95
5
Con
trac
tual
Ser
vice
s
R
ents
and
leas
es
O
ther
-
-
-
85
85
-
-
7,11
7
-
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7,11
7
U
tiliti
es26
5,37
0
-
24,7
82
25
1,72
0
54
1,87
2
90,8
31
42
,526
57
,030
22
2,45
5
335,
170
748,
012
Sew
er s
ervi
ce c
harg
es-
-
-
-
-
-
30
2,31
7
-
-
10
9,28
0
41
1,59
7
T
elep
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-
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93
9
939
-
-
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-
51
1
511
S
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ce5,
293
43
,163
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43
83
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4,74
8
3,02
5
-
684
173,
687
182,
144
T
ota
l co
ntr
actu
al s
ervi
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270,
663
43
,163
40,6
25
33
6,72
7
69
1,17
8
95,5
79
34
7,86
8
64
,147
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3,13
9
618,
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1,34
9,38
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Sup
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s an
d M
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O
pera
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ls23
8
3,
229
93
0
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,726
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,065
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,238
Wat
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9
-
277,
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280,
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-
1,
246
1,24
6
-
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505
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ab a
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t su
pplie
s1
13,8
51
-
422,
988
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840
-
2,
236
-
-
102,
943
105,
179
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uild
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3,30
8
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-
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033
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Fac
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s81
,064
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03
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3,64
6
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944
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357
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2,49
4
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99
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09
514,
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32
8,41
0
1,
134,
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quip
men
t-
-
-
2,
998
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8
-
-
-
-
20,3
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C
onst
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l23
,039
-
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-
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45
,247
-
-
42,9
28
-
88
,175
To
tal
sup
pli
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mat
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ls10
7,02
1
97,9
08
77
2,36
7
588,
210
1,56
5,50
6
275,
574
39
,127
33
,920
56
6,54
8
468,
290
1,38
3,45
9
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t G
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44
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M
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P
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Not
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and
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& D
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tre
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.
46
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Fis
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Not
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t Lia
bilit
y In
sura
nce
$ 25
0 D
educ
tible
Pro
pert
y D
amag
eC
over
age
Lim
its: C
leric
al $
1,0
00,0
00
Cle
rical
$ 1
,000
,000
M
aint
enan
ce $
1,0
00,0
00
Dire
ctor
s $
1,00
0,00
0 O
ther
s $
1,00
0,00
0 S
ewer
bac
k-up
$ 5
,000
eac
h oc
curr
ence
Sta
te o
f Sou
th C
arol
ina
Div
isio
n of
In
sura
nce
Ser
vice
s M
1302
2021
708
/09/
1608
/08/
1723
,569
2,
548
In
land
Mar
ine
- A
gric
ultu
ral E
quip
men
tD
educ
tible
of 2
% w
ith $
500
Min
Per
Item
C
over
age
$ 1,
330,
994
- 10
$
109,
611
- 10
A
$ 7,
380
- 10
B
$ 10
,000
,000
- 1
0C
John
son
& J
ohns
on82
3768
5312
/16/
1612
/15/
1753
6
24
6
F
idel
ity B
ond
Pol
icy
- P
rofe
ssio
nal L
iabi
lity
Cov
erag
e $5
0,00
0H
artfo
rd F
ire In
sura
nce
Com
pany
22F
A02
6601
009
/15/
1609
/15/
171,
794
37
4
C
omm
erci
al C
rime
Pol
icy
Cov
erag
e $5
00,0
0019
5,23
9$
14
,694
$
Co
vera
ge
Dat
es
49
GEORGETOWN COUNTY WATER AND SEWER DISTRICTWEST GEORGETOWN INTERCEPTOR TRUE-UP CALCULATIONFOR THE YEAR ENDED JUNE 30, 2017
Interceptor Operating Expenses Personnel 10,045$ Contractual services 64,148 Maintenance and repair 33,920 Indirect cost allocation 7,974
Total operating expenses to be allocated 116,087
Flows Allocation AllocatedAllocation of Expenses to Partners (Actual Mgs) Ratio Expenses Town of Andrews 247,470,200 39.19% 45,495$ Georgetown County Water and Sewer District 383,987,280 60.81% 70,592
631,457,480 100.00% 116,087$
Calculation of Amounts due to Town of Andrews from District Actual operating expenses allocated to Town of Andrews 45,495 Less: volume charges billed to Town of Andrews (175,704) Adjustment due to Town of Andrews (130,209)$
50