ADDENDUM NO 1.pdf

CITY OF MCDONOUGH

ADDENDUM MEMORANDUM

ADDENDUM No. 1 – Issued May 18, 2026

Addendum No. 1 – MCD-FIN-RFP-FY26-001 Page 1 of 2

Solicitation Number: MCD-FIN-RFP-FY26-001

Solicitation Title: Independent Financial Audit Services for the City of McDonough, GA

Original Proposal Due Date: June 2, 2026

Revised Proposal Due Date (If Applicable): NOT APPLICABLE

PURPOSE OF ADDENDUM

This Addendum forms a part of the solicitation documents and modifies the original solicitation and any previously issued addenda. Proposers shall acknowledge receipt of this Addendum in their proposal submission.

CLARIFICATIONS / REVISIONS

1. Clarification

The City of McDonough is providing the Fiscal Year 2024 Annual Comprehensive Financial Report / Annual

Financial Audit Report for informational purposes to assist proposers in preparing their proposals.

At the time of issuance of this Addendum, the Fiscal Year 2025 audit has not been finalized and is therefore not available for distribution. Once finalized, the Fiscal Year 2025 audit report will be made publicly available on the

City of McDonough’s website. The FY2024 audit report is attached to this Addendum and shall be considered part of the solicitation documents.

2. Revision to Solicitation

The following document is hereby incorporated into the solicitation package:

FY2024 Annual Financial Audit Report

Georgia Security and Immigration Compliance Act Contractor Affidavit

Drug-Free Workplace Certification

Proposers shall review, complete, execute, and submit all applicable forms with their proposal submission as required by the solicitation documents.

No other changes to the solicitation requirements, scope of services, evaluation criteria, or proposal due date are made as part of this Addendum.

ATTACHMENTS

The following documents are included as part of this Addendum:

Attachment A – FY 2024 Annual Financial Audit Report

Attachment B – Georgia Security and Immigration Compliance Act Contractor Affidavit

Attachment C – Drug Free Workplace Certification

ACKNOWLEDGEMENT

Proposers are responsible for reviewing and acknowledging all addenda issued for this solicitation prior to submission.

Failure to acknowledge issued addenda may result in the proposal being deemed non-responsive.

I

I

CITY OF McDONOUGH, GEORGIA

FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2024

FINANCIAL SECTION

Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements:

TABLE OF CONTENTS

Government-Wide Financial Statements:

Statement of Net Position Statement of Activities

Fund Financial Statements:

Balance Sheet Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds

To the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances-Govenunental Funds Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund

Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - ARPA Fund

Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Hotel / Motel Tax Fund

Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in

Fund Net Position - Proprietary Funds Statement of Cash Flows - Proprietaiy Funds

Notes to the Financial Statements Required Supplementmy Info1mation:

Pension Related Schedules and Notes Combining Fund Statements:

Combining Balance Sheet - Non-major Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Non-major Governmental Funds Individual Fund Financial Statements:

Confiscated Assets Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual RedSpeed Special Revenue Fund

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

Special Events Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

Page

FINANCIAL REPORT

FOR THE YEAR ENDED JUNE 30, 2024

TABLE OF CONTENTS

FINANCIAL SECTION - Continued Individual Fund Financial Statements - Continued:

T-SPLOST Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund

Balances - Project Length Budget and Actual SPLOST IV Capital Projects Fund

Schedule of Revenues, Expenditures and Changes in Fund Balances - Project Length Budget and Actual

SPLOST V Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund

Balances - Project Length Budget and Actual Development Impact Fee Capital Project Fund

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

Urban Redevelopment Authority Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

COMPLIANCE SECTION

State of Georgia Requirements - Schedule of Projects Financed With T-SPLOST Proceeds Schedule of Projects Financed With Special Sales Tax IV Proceeds Schedule of Projects Financed With Special Sales Tax V Proceeds Schedule of Development Impact Fees

Single Audit Section - Independent Auditor's Report On Internal Control Over Financial

Reporting and on Compliance and Other Matters Based on an Audit of Financial Statement Perfonned in Accordance with Government Auditing Standards

Independent Auditor's Report On Compliance For Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance

Schedule of Expenditures of Federal Awards Notes to Schedule of Federal Awards Schedule of Findings and Questioned Cost Schedule of Prior Audit Findings

Page

71-72

77-78 79-80

81-82

83-85

88-94 95-96

Member of The American Institute of

Certified Public Accountants

JAMIE~ l. Wll=ll~uA~{IEIPJ~ !PJ'.;c Ce1iified Public Accountant

2295 Henry Clower Blvd., Suite 205 Snellville, Georgia 30078 Telephone: 678-205-4438

Fax: 678-205-4449

INDEPENDENT AUDITOR'S REPORT

The Honorable Mayor and Members of City Council City of McDonough, Georgia

Opinions

Member of Georgia Society of

Certified Public Accountants

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of McDonough, Georgia, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City of McDonough, Georgia's basic financial statements as listed in the table of contents.

In our opinion, the fmancial,.statements refeJTed to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of McDonough, Georgia, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetaiy comparison for the General Fund, ARPA Fund and the Hotel/ Motel Tax Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with 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. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of om report. We are required to be independent of the City of McDonough, Georgia and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the fmancial statements in accordance with accounting generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of fmancial statements that are free from material misstatement, whether due to fraud or e1TOr.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of McDonough, Georgia's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known info1mation that may raise substantial doubt shortly thereafter.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from eITor, as fraud may involve collusion, forge1y, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:

0 Exercise professional judgment and maintain professional skepticism throughout the audit.

0 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or e1rnr, and design and perfonn audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of McDonough, Georgia's internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the fmancial statements.

• Conclude whether, in our judgn1ent, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of McDonough, Georgia's ability to continue as a going concern for a reasonable period of time.

We are required to cmmnunicate with those charged with governance regarding, among other matters, the planned scope and tin1ing of the audit, significant audit fmdings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the Schedule of Changes in the Pension Liability and Related Ratios information on pages 4-13 and 61-63 be presented to supplement the basic fmancial statements. Such infmmation is the responsibility of management and, although not a patt of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential patt of fmancial repo1ting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementmy infomrntion 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 infonnation for consistency with management's responses to our inquires, 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 inf01mation because the linlited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of McDonough, Georgia's basic financial statements. The accompanying combining and individual fund financial statements and budgetary schedules, schedules of projects financed with transportation and regular special purpose option sales tax proceeds, schedules of development impact fees and the schedule of expenditures of federal awards, as required by Title 2 U.S. code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirement for Federal Awards ( collectively, "the supplementary info1mation") are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The infonnation has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our repmt dated June 26, 2025, on our consideration of the City of McDonough, Georgia's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of om testing of internal control over financial repmting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of McDonough, Georgia's internal control over financial reporting or on compliance. That repmt is an integral part of an audit perfmmed in accordance with Government Auditing Standards in considering City of McDonough, Georgia's internal control over financial reporting and compliance.

Snellville, Georgia June 26, 2025

CITY OF McDONOUGH

MANAGEMENT'S DISCUSSION AND ANALYSIS

As management of the City of McDonough, we offer readers of the City of McDonough 's financial statements this natTative overview and analysis of the financial activities of the City of McDonough for the year ended June 30, 2024, (the ctment period). We encourage readers to consider the information presented here in conjunction with their review of the financial statements.

Financial Highlights

• Assets and defetTed outflows of the City of McDonough (Primaty Government) exceeded its liabilities and defe1Ted inflows at June 30, 2024, by $138,524,421 Of this amount, umestricted net position of $30,534,857 may be used to meet the government's ongoing obligations to citizens and creditors.

0 Total net position of the Primary Government increased by $16,991,824. Of this amount, a net increase of $16,224,683 was associated with governmental activities and an increase of $767,141 was associated with business-type activities.

0 The total net position of the Downtown Development Authority (Component Unit) of $153,747 may be used to meet the Authority's ongoing obligations to its citizens and creditors.

0 As of the close of the current period, the City ofMcDonough's governmental funds reported combined ending fund balances of$65,642,860, an increase of$14,054,226 in comparison with the prior period. Of this amount

$23,879,490 is unassigned, $36,926,083 is restricted for capital projects and other specific future uses, $577,317 is assigned for the FY 2025 budget, $1,130,895 is nonspendable for such amounts as prepaid items of $953,295, and the cemete1y trust corpus of $177,600, $42,784 is restricted for the Cemete1y, $693,986 for police activities, $262,119 for ARPA projects, $357,676 for economic development, and $1,712,131 is committed for the stabilization reserve, and $60,379 for special events.

" At the end of the CU!Tent year, unassigned fund balance for the general fund was $23,879,490 or 114.9 percent of total general fund expenditures.

0 The millage rate was unchanged from FY 2023 at 3.0330.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the City of McDonough's basic financial statements.

The City of McDonough's basic financial statements are comprised of three components: I) government-wide financial statements, 2) fund fmancial statements, and 3) notes to the financial statements. This repmt also contains other supplementaiy infonnation in addition to the basic financial statements themselves.

Government-wide financial statements (Primary Government). The government-wide financial statements are designed to provide readers with a broad overview of the City ofMcDonough's finances, in a mam1er similar to a private-sector business.

The statement of net position presents infonnation on all of the city 's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents infmmation showing how the government's net position changed during the most recent fiscal year. All changes in net position are repo1ted as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are repo1ted in this statement for some items that will only result in cash flows in future fiscal periods.

City of McDonough

Government-wide financial statements (Primary Government) (Continued). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant po1tion of their costs through user fees and charges (business-type activities). The governmental activities of the City ofMcDonough include general government, public safety and courts, highways and streets, parks and recreation, cemetery, community development, economic development, and code enforcement. The business-type activities of the City are water and sewer, solid waste, stonn water management, and the cemete1y enterprise fund. The activities of the Downtown Development Authority (Component Unit) are shown separately in the Gove1mnent-wide financial statements.

Fund financial statements. A fund is a grouping ofrelated accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of McDonough can be divided into two categories: governmental funds and proprietaiy funds.

Governmental funds. Governmental funds are used to account for essentially the same functions rep01ted as governmental activities in the goverrunent-wide financial statements. However, unlike the government-wide financial statements, govenunental fund financial statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the infonnation presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-tenn impact of the govenunent's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement ofrevenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between the two.

The City maintains six major goverrunental funds. The City's major governmental funds are the General Fund, two special revenue funds (1) the ARPA Fund and (2) the Hotel/Motel Tax Fund, the T-SPLOST Capital Projects Fund, and two SPLOST Capital Project Funds. Information is presented separately in the goverrunental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for al1 major funds.

The City of McDonough adopts an annual budget for all of its Govenunental Funds. Budgetary comparison statements have been provided for the General Fund beginning on page 22 to demonstrate compliance with the FY 2024 budget. A project length budget bas been adopted for each Capital Projects Fund and is presented in the individual fund financial statements.

Non-major special revenue funds, the Development Impact Fee Fund, and Urban Redevelopment Agency with budget comparisons are also presented in the individual fund financial statements.

Proprietary funds. Enterprise funds (a component of proprietaiy funds) are used to repott the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water and Sewer Fund, its Solid Waste Management Fund, its Storm Water Management Fund and its Cemetery Enterprise Fund. All of the City's enterprise funds are considered by the City to be major funds.

Proprietaiy funds provide the same type of information as government-wide financial statements, only in more detail. The proprieta1y fund financial statements provide separate information for each of the City's major funds.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

Other information. In addition to the basic financial statement and accompanying notes, this report also presents certain other supplementaiy infonnation which consists of Combining Statements for Non-major Governmental Fund and Various Fund Budget Schedules.

Government-wide financial analysis (Continued)

As noted earlier, net position may serve over time as a useful indicator of a government's financial position. At June 30, 2024, the City's net position amounted to $138,524,421. The City's net position reflects its investment in capital assets $69, 176,418 (49.94 percent), less any related debt used to acquire those assets that is still outstanding. Capital assets are used to provide services to citizens and they are not available for future spending. Although the investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Of the total net position, $38,813,146 (28.02 percent) is restricted for capital projects and other specified activities and $30,534,857 (22.04 percent) is umestricted and may be used to meet the government's ongoing obligations to citizens and creditors.

The comparative primary government-wide information for the years ended June 30, 2024 and June 30, 2023 is as follows:

City of McDonough's Net Position

Governmental Activities Business-type Activities Total 2024 2023 2024 2023 2024 2023

Ctl!Tent and other assets Capital assets

$ 74,352,988 $ 61,836,816 $ 12,580,934 $ 13,352,066 $ 86,933,922 $ 75,188,882

Deferred outflows

Total assets and defe1Ted outflows

Cun-ent liabilities Long-term liabilities DefeJTed inflows

Total liabilities and deferred inflows

Net position:

Net investment in capital assets

Resh·icted

Unrestricted

Total net position

49,997,467 47,522,532 27,672,740 22,873,281 77,670,207 70,395,813 2,506,347 2,768,581 626,587 692,144 3,132,934 3,460,725

126,856,802 112,127,929 40,880,261 36,917,491 167,737,063 149,045,420

8,273,592 10,130,246 3,700,439 1,968,139 11,974,03 1 12,098,385 10,958,977 10,708,952 5,396,490 3,893,51 1 16,355,467 14,602,463

767,302 656,483 115,842 155,492 883,144 8 11 ,975

19,999,871 21,495,681 9,212,771 6,017,142 29,212,642 27,512,823

45,701,046 43,008,070 23,475,372 20,085, I 95 69,176,418 63,093,265

38,460,248 27,500, I 05 352,898 352,898 38,813,146 27,853,003

22,695,637 20,124,073 7,839,220 10,462,256 30,534,857 30,586,329

$ 106,856,931 $ 90,632,248 $ 31,667,490 $ 30,900,349 $ 138,524,421 $ 121,532,597

A portion of the net position, 28.02 percent, represents resources that are subject to external restrictions on how they may be used. The remaining balance of $30,534,857 is umestricted and may be used to meet the government's ongoing obligations to citizens and creditors.

Governmental Activities:

For the year ended June 30, 2024, an increase in net position of $16,224,683 was repo1ied in Governmental Activities thereby accounting for 95.48 percent of the total increase in the net position of the City of McDonough. Key elements of this increase are as follows:

Revenues:

Program Revenues Charges for services Operating grants and contnbutions Capital grants and contributions

General Revenues Property taxes Sales taxes

Other taxes Interest Other

Expenses:

General government Public safety and courts

Public Works Cemetery Parks and recreation Community Development Economic development Code enforcement Interest on long-tenn debt Water Sewer

Solid waste Sto1mwater

Increase (decrease) in net assets before transfers

Transfers

I ncreasc (decrease) in net position

Net position - beginning of year, adjusted

Net position - end of year

City of M cDonough's Change in Net Position For The Years Ended June 30, 2024 and 2023

Governmental Activities Busincss-typ:_ Activities

2024 2023 2024 2023

3,449,830 $ 3,397,717 $ 10,647,250 $ 10,153,119

1,682,018 34,379 14,367,447 17,302,401 742,492 I, 121,327

6,668,394 5,599,541 6,957,838 6,274,893 8,667,287 8,407,013 1,696,336 979,018 274,170 160,965

208 441 360 193 613

43,697,591 42,355,155 11,663,912 11,436,024

4,881,671 3,958,298 14,287,514 12,788,360 2,844,058 3,138,571

46,232 40,697 708,472 705,533

1,113,258 963,370 1,820,132 1,489,470

409,142 370,355 131,317 150,879

3,716,148 3,371,292 2,237,566 2,163,430 4,952,749 3,461,109 1,221,420 I, 150,249

26,241,796 23,605,533 12,127,883 10,146,080

17,455,795 18,749,622 (463,971) 1,289,944

(1,231, 112) (957,488) 1,231, 112 957,488

16,224,683 17,792,134 767,141 2,247,432

90,632,248 72,840,114 30,900,349 28,652,917

$106,856,931 $ 90,632,248 $ 31,667,490 $ 30,900,349

Total

2024 2023

$ 14,097,080 $ 13,550,836

1,682,018 34,379 15, 109,939 18,423,728

6,668,394 5,599,541 6,957,838 6,274,893 8,667,287 8,407,013 1,970,506 I , 139,983

208,44 1 360,806

55,361,503 53,791,179

4,881,671 3,958,298 14,287,514 12,788,360 2,844,058 3, 138,571

46,232 40,697 708,472 705,533

I, 113,258 963,370 1,820, 132 1,489,470

409,142 370,355 131,3 17 150,879

3,716,148 3,371,292 2,237,566 2,163,430 4,952,749 3,461,109 1,221,420 1,150,249

38,369,679 33,751,613

16,991,824 20,039,566

16,991,824 20,039,566

121,532,597 101,493,031

$ 138,524,42 1 $121,532,597

• Overall, revenues from governmental activities increased by $1,342,436 or 3.17% over 2023. The increase was due in large pait from increases in property taxes of $1,068,853 (I 9.1 %), local option sales taxes of $682,945 (10.9%), interest income of$717,318 (73.3%), less decreases in combined T-SPLOST, SPLOST, and ARPA Grants and Contributions of$1,287,315 (7.43%).

• Expenditures for governmental activities for 2023 increased by $2,636,263 or 11.2% over 2023. The increase was due in large pa1t from increases in General Government expenditures of $923,373 (23.3%), Public Safety of $1,499,154 (11.7%), Community Development of$149,888 (15.6%), and Economic Development of $330,662 (22.2%). Overall, 2023 departmental expenditures remained consistent with the prior year. The increase in expenditmes was mainly due to increases in ARP A Grant expenditures, Development Impact Fee expenditures, SPLOST and T-SPLOST expenditures.

$16,000,000.00

$14,000,000.00

$12,000,000.00

$10,000,000.00

$8,000,000.00

$6,000,000.00

$4,000,000.00

$2,000,000.00

CITY OF MCDONOUGH

GOVERNMENTAL PROGRAM REVENUES AND EXPENDITURES

- .. ...I ~ ..

~-\ .;,::.o<::- fl.,~ q} ~...., ~ fl.,><:; Q ,(,0 ~fl., 0--s 'l.,'I, -~-\ (;fl.,(:' ◊ ~ ~~ (,fl., ~Q; ~"' ~o ~o<:

'-,~ '<f '<? fl.,'-, e,0(:- fl.,<:

<.:" ~f' ,~

<l'I, e,0

■ Revenues ■ Expenditures

CITY OF MCDONOUGH

REVENUE BY SOURCE - GOVERMENTAL ACTIVITIES

Other Operating grants &r Investment earnings 1%....., contributions 4%

Fines & other police \ ~" 4% services '-..

5% \

Other service charges J 1%

Other taxes 20%

Planning & Zoning fees 1%

Business-type activities. Business-type activities increased the City's net position by $767,141 of which an increase of $920,584 was from Water and Sewer activities, a decrease of ($16,202) was from Solid Waste Management Activities, and a decrease of ($137,241) was from Storm Water Management Activities.

The City uses an outside contractor to perform most of its solid waste services. The Solid Waste Management Fund rep01ted a decrease in net position for the year of ($16,202) decreasing net position at the end of the year to a deficit of ($22,178).

The Storm Water Management Fund was created to account for activities related to solving existing flooding problems and prevent flood damage, maintaining and improving the system of stonn water management infrastructure and preserving and protecting the beneficial functions of natural drainage systems. Stom1 Water activities are funded through fees assessed on the square footage of impervious property. The fees are collected by the Henry County Tax Commissioner and remitted to the City.

CITY OF MCDONOUGH

EXPENSES AND PROGRAM REVENUE-BUSINESS-TYPE ACTIVITIES

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

Water Sewer Stormwater Solid Waste Management

■ Revenues ■ Expenses

Financial Analysis of the Government's Funds

As noted earlier, the City of McDonough uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Governmental Funds. The purpose of the City's governmental fund financial statements is to provide infonnation on near te1m inflows, outflows, and balances of spendable resources. Such info1mation is useful in assessing the city 's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

At June 30, 2024, the city's govemmental funds repmied combined ending fund balances of $65,642,860 an increase of $14,054,226 in comparison to the prior period. Of this amount, $23,879,490 (36.4 percent) is unassigned fund balance. A portion of fund balance is restricted to indicate that it is to be used for specified purposes: 1) to pay for capital items most of which is funded by the proceeds of the Special Purpose Local Option Sales Tax and Development Impact Fees, $36,926,083;

2) for Perpetual Care of the City's cemete1y, $42,784; 3) for Police Activities, $693,986; 4) ARPA projects, $262,1 19; 5) nonspendable amounts for prepaid items that are not available for current government's spending discretion, $953,295; 6) Cemetery Trust Corpus of $177,600; 7) budget appropriation for fiscal year 2025, $577,317; 8) the Stabilization Reserve of $1,712.131; (9) Economic Development of $357,676; and (10) Special Events of $60,379.

The General Fund is the City's chief operating fund. At the end of the current fiscal year, unassigned fund balance of the general fund was $23,879,490 while the total fund balance amounted to $27,479,909. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures.

Unassigned fund balance represents 114.9 percent of the total general fund expenditures, while total fund balance represents

132.2 percent of that same amount.

During the current fiscal year, the fund balance of the City's General Fund increased by $3,391,380. General Fund revenues . increased by $2,251,430 or 10.2 percent. The increase in revenue was primarily the result of an increase in taxes, and interest income. General Fund expenditures increased by $1 ,061,315 or 5.4 percent. The increase in expenditures was primarily the result of an increase in Public Safety combined with a decrease in Capital Outlay.

Amounts received in ARPA proceeds are not recognized as revenues until they are spent, which is when they are considered earned. The City received ARPA proceeds in the amounts of $4,998,072 and $4,998,072 during FY 2022 and FY 2023, respectively. During the cun ent year ARPA proceeds of$1,964,677 were recognized as revenue.

The City received $2,468,331 in Hotel/Motel Tax revenues during FY 2024 and disbursed $1,079,895 to the McDonough Hospitality and Tourism Board, $1,083,436 to the City's general fund for product development and other purposes, and $305,000 to the Special Events Fund.

The City of McDonough received $6,563,729 in Special Purpose Local Option Sales Taxes (SPLOST V) during FY 2024 compared to $6,595,542 in FY 2023. During FY 2024, the City received funds from the Transportation SPLOST in the amount of $6,410,791. During FY 2024, SPLOST and T-SPLOST funds of $2,083,357 were used for road, bridges, and sidewalks, $180,664 for cultural and recreation facilities, and $631,865 for public safety facilities and equipment.

The City also received Development Impact Fees during the year totaling $577,695. These funds can only be expended for the category of system improvements (public safety and parks). During FY 2024 this fund expended $693,605 for public safety, and $452,331 for parks. The fund balance of this fund at June 30, 2024 amounted to $2,556,875.

Proprietary funds. The City 's proprietary funds provide the same type ofinfonnation found in the government-wide financial statements, but in more detail.

Unrestricted net position (deficit) of the proprietary funds at the end of the year was $7,839,220 of which the Water and Sewer Fund had $5,612,939, Solid Waste Management Fund had ($60,393), the Storm Water Management Fund had $2,286,674, and the Cemetery Enterprise Fund had $0.

General Fund Budgetary Highlights

The original general fund budgeted expenditures of$27,883,167 were amended to a total of$27,817,167 a decrease of$66,000.

However, the actual expenditures for the General Fund amounted to $21,805,279 resulting in a positive budget variance of $6,011,888.

Capital Asset and Debt Administration

Capital assets. The City's investment in capital assets for its governmental and business-type activities at June 30, 2024, amounted to $77,670,207 net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements, construction in progress, automobiles and equipment, sidewali<s, bridges and roads, and capitalized leases and subscriptions.

Major capital asset events during the cmTent fiscal year included the following:

Land $ 2,075,915

Buildings and Improvements $ 300,050

Machinery & Equipment $ 1,139,972

Lease and Subscription Assets $ 416,540

Vehicles and Equipment $ 989,861

Road Construction in Progress $ 1,308,045 Water Plant Upgrade Construction in Progress $ 4,668,927

Additional information on the City's capital assets can be found in note 7.

Long-term debt. As of June 30, 2024, the City had $8,957,971 in outstanding debt consisting of the following:

Governmental Activities

Accrued compensated absences

Bonds payable, net

Leases payable

Subscriptions payable

Business-Type Activities

Revenue Bonds

GEF A notes payable

Total

$ 464,182

3,153,604

103,058

1,039,759

617,000

3,580,368

$ 8,957,971

The City's total long-term debt increased by a net of$1,264,259 during the year ended June 30, 2024.

Additional information on the City's long-term debt can be found in note 9.

In addition to the above debt, the City also had other long-tem1 obligations as of June 30, 2024, which consisted of a net pension liability of$7,747,968. This obligation is discussed in note 16.

Status of the City of McDonough's Economy o The City's financial position improved during FY 2024 and will begin FY 2025 in a strong financial position.

° Collections of Local Option Sales Taxes and Property Taxes should remain strong during FY 2025.

o The City adopted House Bills 581 and 92 that will limit increases in 2025 property tax assessments for qualified residential prope1ties.

o Expenditures under SPLOST and T-SPLOST are expected to increase during FY 2025.

o The City plans to maintain its millage rate at 3.033 for FY 2025 o The City will continue to expend its Arnerican Rescue Plan Act funds during FY 2025.

Requests for Information

This financial report is designed to provide a general overview of the City of McDonough's finances, comply with finance related laws and regulations, and demonstrate the City's commitment to public accow1tability. Questions concerning this repmt or requests for additional information can be obtained by contacting the City at (770) 957-3915 or at the following address:

City of McDonough Finance Department

136 Keys Feny Street McDonough, Georgia 30253

Assets and Deferred Outflows

Assets Cash and cash equivalents Investments Receivables, net

Taxes Fines Accounts Intergovernmental Lease Other

Internal balances Prepaid items Restricted assets

Cash Investments

Leased assets, net Subscription assets, net Non-depreciable capital assets Depreciable capital assets, net

Total Assets

Deferred Outflows Defe1Ted pension outflows

Total Assets and Deferred Outflows

CITY OF McDONOUGH, GEORGIA

STATEMENT OF NET POSITION

JUNE 30, 2024

Primary Government

Governmental Activities

$ 730,308 25,634,642

1,008,068 219,259

1,952,917 303,933

33,460

953,295

43,000,629 515,627 118,129

1,224,543 18,016,666 30,638,129

124,350,455

2,506,347

126,856,802

Business Type

Activities

932,004 9,555,387

1,686,468

(33,460) 87,637

352,898

10,753,886 16,918,854

40,253,674

626,587

40,880,261

See accompanying notes to the basic fmancial statements.

Total

1,662,312 35,190,029

1,008,068 219,259

1,686,468 1,952,917

303,933

1,040,932

43,353,527 515,627 118,129

1,224,543 28,770,552 47,556,983

164,604,129

3,132,934

167,737,063

Component Unit

Downtown Development

Authority

$ 165,672

165,672

165,672

Continued

STATEMENT OF NET POSITION

JUNE 30, 2024

Component

Primary Government Unit Business- Downtown

Governmental Type Development Activities Activities Total Authority

LIABILITES AND DEFERRED INFLOWS

Liabilities Accounts payable $ 1,274,258 $ 2,532,145 $ 3,806,403 $ 11,925

Accrned liabilities Salaries 341,324 60,083 40),407

Compensated absences 69,709 69,709 Customer deposits 676,851 676,851

Accrued interest 18,121 18,121

Other 62,668 62,668

Unearned revenues 6,577,221 6,577,221

Liabilities payable from restricted assets Revenue bonds 202,000 202,000

Notes payable 148,471 148,471

Accrued interest 11,180 11 ,180

Long-term obligations Debt due within one year 666,826 . 666,826

Debt due in more than one year 4,093,777 3,846,897 7,940,674

Net pension liability 6,198,374 1,549,593 7,747,967

Total Liabilities 19,232,569 9,096,929 28,329,498 11,925

Deferred Inflows Deferred lease inflows 303,933 303,933 Deferred pension inflows 463,369 115,842 579,211

Total Liabilities and Deferred Inflows 19,999,871 9,212,771 29,212,642 11,925

NET POSITION

Net investment in capital assets 45,701,046 23,475,372 69, 176,418

Restricted for Pe1petual care

Expendable 42,784 42,784

Nonexpendable 177,600 177,600

Police activities 693,986 693 ,986

ARPA projects 262,119 262,119

Capital projects 36,926,083 36,926,083

Promotional activities 357,676 357,676

Debt covenants 352,898 352,898

Unrestricted 22,695,637 7,839,220 30,534,857 153,747

Total Net Position $ 106,856,931 $ 31,667,490 $ 138,524,421 $ 153,747

See accompanying notes to the basic financial statements.

Concluded

STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2024

Program Revenues Operating

Grants and Capital

Grants and Functions/Programs Expenses

Charges for

Services Contributions Contributions

Governmental Activities General Government Public Safety and Courts Public Works Cemete1y Parks and Recreation Community Development Economic Development Code Enforcement Interest Bond issuance costs and fees

Total Governmental Activities

Business-Type Activities Water Sewer Cemete1y Enterprise Solid Waste Management Storm Water Management

Total Business-Type Activities

Total Government

Component Unit:

Downtown Development Authority

4,881,671 14,287,514 2,844,058

46,232 708,472

1,113,258 1,820,132

409,142 131,317

26,241,796

3,716,148 2,237,566

4,952,749 1,221,420

12,127,883

38,369,679

97,839

See accompanying notes to the basic financial statements.

$ 356,285 $ 2,364,959

87,067 4,600

611,224 25,695

3,449,830

3,483,340 2,881,035

3,255,435 1,027,440

10,647,250

14,097,080

$ 146,500 $

General Revenues Taxes

Property Franchise Local option sales Occupational Insurance premium Alcohol beverage Hotel/motel Other

Intergovernmental Investment earnings Other

Transfers

706,704 $

828,814

146,500

1,682,018

1,682,018

Total General Revenues and Transfers

Change in Net Position Net Position - BegiJming of Year

Net Position - End of Year

2,034,128 10,711,375

751,753 870,191

14,367,447

451,760 290,732

742,492

15,109,939

Net (Expense) Revenue and Changes in Net Position Component Unit

Business- Downtown Governmental Type Development

Activities Activities Total Authority

$ (3,818,682) $ $ (3,818,682) $ (9,888,427) (9,888,427) 8,783,198 8,783,198

(41,632) (41,632) 43,281 43,281

368,157 368,157 (1,647,937) (1,647,937)

(409,142) (409,142) (131,317) (131,3 17)

(6,742,501) (6,742,501)

218,952 218,952 934,201 934,201

(1,697,3 14) (1,697,3 14) (193,980) {193,980)

(738,141) (738,141)

(6,742,501) (738,141) (7,480,642)

48,661

6,668,394 6,668,394 1,789,427 1,789,427 6,957,838 6,957,838

890,648 890,648 2,578,125 2,578,125

616,217 616,217 2,468,331 2,468,331

324,539 324,539

1,696,336 274,170 1,970,506 2 208,441 208,441

(1,231,112) 1,23 1,112

22,967,184 1,505,282 24,472,466 2

16,224,683 767, 141 16,991,824 48,663 90,632,248 30,900,349 121,532,597 105,084

$ 106,856,93 1 $ 31,667,490 $ 138,524,421 $ 153,747

BALANCE SHEET

GOVERNMENTAL FUNDS

JUNE 30, 2024

HOTEL /

GENERAL ARPA MOTEL TAX

ASSETS

Cash and cash equivalents $ 730,308 $ 6,840,010 $ 96,807 Investments 25,634,642 Receivables

Taxes 791,206 216,862 Intergovernmental 11,925 Fines 171,728 Other 304,783

Due from other funds 730,901 Prepaid items 953,295

Total Assets $ 29,328,788 $ 6,840,010 $ 313,669

LIABILITIES

Accom1ts payable $ 990,230 $ 15,765 $ 191,684 Accrued expenditures

Payroll 341,324 ComtBonds 12,462 Other 50,206

Unearned revenues 6,562, 126 Due to other funds 121,985

Total Liabilities 1,394,222 6,577,891 313,669

DEFERRED INFLOWS

Lease revenues 303,933 Unavailable revenues 150,724

Total Deferred Inflows 454,657

FUND BALANCE

Nonspendable -

Prepaid items 953,295 Cemete1y corpus

Restricted - Capital projects Cemete1y ARP A projects 262, 119 Police activities Economic development 357,676

Committed - Stabilization reserve 1,712, 131 Special events

Assigned - Appropriated for next year's budget 577,317

Unassigned 23,879,490

Total Fund Balance 27,479,909 262,119

Total Liabilities, Defened Inflows and Fund Balance $ 29,024,855 $ 6,840,010 $ 313,669

See accompanying notes to the financial statements.

OTHER

GOVERNMENTAL

SPLOSTIV SPLOSTV T-SPLOST FUNDS TOTAL

$ 1,474,988 $ 19,541 ,934 $ 11,962,770 $ 3,084,120 $ 43,730,937 515,627 26,150,269

1,008,068 864,697 1,076,295 1,952,917

47,531 219,259 304,783 730,901 953,295

$ 1,474,988 $ 20,406,631 $ 13,039,065 $ 3,647,278 $ 75,050,429

$ $ 24,325 $ 18,151 $ 34,103 $ 1,274,258

341,324 12,462 50,206

15,095 6,577,221 344,000 165,000 66,456 697,441

368,325 183,151 115,654 8,952,912

303,933 150,724

454,657

953,295 177,600 177,600

1,474,988 20,038,306 12,855,914 2,556,875 36,926,083 42,784 42,784

262,119 693,986 693,986

357,676

1,712,131 60,379 60,379

577,3 17 23,879,490

1,474,988 20,038,306 12,855,914 3,531,624 65,642,860

$ 1,474,988 $ 20,406,631 $ 13,039,065 $ 3,647,278 $ 75,050,429

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION

JUNE 30, 2024

Amounts repo1ted for governmental activities in the statement of net position are different because:

Total fund balances -- total governmental funds

Capital and subscription assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.

Other long-tenn assets are not available to pay for cun-ent period expenditures and, therefore, are deferred in the funds:

Unavailable revenues

Defened inflows and outflows related to the net pension liability is not a current asset or liability:

Deferred outflows Defened inflows

Long-te1m liabilities are not due and payable in the current period and therefore are not reported in the funds:

Long-te1m portion of compensated absences Bonds payable Unammtized bond premium Net pension liability Lease and subscriptions payable Accrued interest payable

Net position of governmental activities.

The accompanying notes are an integral pa1t of these financial statements.

$ 65,642,860

49,997,467

150,724

2,506,347 (463,369)

(464,182) (3,040,000)

(113,604) (6,198,374) (1,142,817)

(18,121)

$ 106,856,931

THIS PAGE INTENTIONALLY LEFT BLANK

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

FOR THE YEAR ENDED JUNE 30, 2024

HOTEL/

GENERAL ARPA MOTEL TAX

REVENUES

Taxes $ 19,814,238 $ $ 2,468,331 Licenses and pennits

Business license 287,986 Building permits and fees 484,162

Intergovenunental 40,553 1,964,677 Charges for services 139,874 Fines and forfeitures 1,603,520 Interest 1,538,694 146,113 Miscellaneous 380,171

Total Revenues 24,289,198 2,1 10,790 2,468,331

EXPENDITURES

Current

Governing Body 398,191 586,374 General Administration 2,979,482 Municipal Court 1,142,25 1 Probation 269,871 Public Safety 11,103,613 99,977 Highways & Streets 1,752,868 1,003,885 Cemetery 41,273 Health and Human Services 171,2 13 Parks and Recreation 270,866 24,941 Community Development 896,394 Economic Development 402,082 146,500 1,079,895 Code Enforcement 375,464

Debt service Principal 337,516 103,000 Interest 33,898

Capital outlay 612,647

Total Expenditures 20,787,629 1,964,677 1,079,895

See accompanying notes to the financial statements.

OTHER

GOVERNMENTAL

SPLOSTIV SPLOSTV T-SPLOST FUNDS TOTAL

$ $ $ $ $ 22,282,569

287,986 484,162

6,872,575 6,410,791 67,500 15,356,096 577,695 717,569 723,440 2,326,960 27,204 1,712,011

380,171

6,872,575 6,410,791 1,395,839 43,547,524

984,565 33,502 3,012,984

1,142,251 269,871

335,978 11,539,568 2,756,753

41,273 171,213 295,807

244,62 1 1,141,015 1,628,477

375,464

165,000 605,516 109,444 143,342

884,102 1,169,901 841,883 1,145,936 4,654,469

884,102 1,169,901 841,883 2,034,481 28,762,568

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

FOR THE YEAR ENDED JUNE 30, 2024

Excess Revenues Over (Under) Expenditures Before Other Financing Sources (Uses)

Other Financing Sources (Uses) Proceeds from debt issue Proceeds from disposition of capital asset Bond issuance Bond premiwn Transfers

Total Other Financing Sow-ces (Uses)

Net Change in Fw1d Balance

FW1d Balance - Beginning of Year

FW1d Balance - End of Year

See accompanying notes to the financial statements.

GENERAL

3,501,569

395,890 104,492

(610,571)

(110,189)

3,391,380

24,088,529

27,479,909

ARPA

146,113

146,113

116,006

262,119

HOTEL /

MOTEL TAX

1,388,436

(1,388,436)

(1,388,436)

SPLOSTIV

(884,102) $

(884,102)

2,359,090

1,474,988 $

SPLOSTV

5,702,674 $

5,702,674

14,335,632

20,038,306 $

T-SPLOST

OTHER

GOVERNMENT AL

FUNDS TOTAL

5,568,908 $ (638,642) _;._$ __ 1_4-'----, 7_84__,_,9_5_6

5,568,908

7,287,006

12,855,914 $

767,895

767,895

129,253

3,402,371

395,890 104,492

(1,231 ,112)

(730,730)

14,054,226

51,588,634

3,53 1,624 ,;.$==6.,;.5~,6=42~,8=6=0

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2024

Net change in fund balances -- total governmental funds

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and rep011ed as depreciation expense:

Capital outlay Depreciation and amortization

The net effect of other miscellaneous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to decrease net position. This is the net amount of capital assets donated and wdtten off:

Donated capital assets Transfer of asset to the Water & Sewer Enterprise Fund Other dispositions of capital assets

Revenues in the statement of activities that do not provide cunent financial resomces are not rep011ed as revenues in the funds. This is the difference between the beginning and ending unavailable revenue balances related to timing differences.

Proceeds from long-term debt obligations provide current :financial resources to governmental funds, but issuing debt increases long-te1m liabilities in the statement of net position.