CITY OF BARTLETT TENNESSEE A. Keith McDonald, Mayor Prepared by the City of Bartlett Finance Department CITY OF BARTLETT, TENNESSEE TABLE OF CONTENTS Page INTRODUCTORY SECTION (UNAUDITED) Letter of Transmittal 1 GFOA Certificate of Achievement for Excellence in Financial Reporting 6 Organization Chart 7 City and Board of Education Officials 8 FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 9 MANAGEMENT’S DISCUSSION AND ANALYSIS 12 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Position 24 Statement of Activities 25 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet 26 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position 27 Statement of Revenues, Expenditures, and Changes in Fund Balances 28 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 29 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund 30 – General Purpose School Fund 41 Proprietary Fund Financial Statements Statement of Net Position 46 Statement of Revenues, Expenses, and Changes in Net Position 47 Statement of Cash Flows 48 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position 49 Statement of Changes in Fiduciary Net Position 50 Notes to Financial Statements 51 CITY OF BARTLETT, TENNESSEE TABLE OF CONTENTS (CONTINUED) Page REQUIRED SUPPLEMENTARY INFORMATION Employee Pension Plan – Schedule of Changes in Net Pension Liability and Related Ratios 89 – Schedule of Contributions 90 Employee Cash Balance Plan – Schedule of Changes in Net Pension Liability and Related Ratios 91 – Schedule of Contributions 92 – Schedule of Money-Weighted Rate of Return 93 Bartlett City Board of Education – Legacy Public Employee Retirement Plan of TCRS – Schedule of Changes in Net Pension Liability (Asset) and Related Ratios 94 – Schedule of Contributions 95 Bartlett City Board of Education – Hybrid Public Employee Retirement Plan of TCRS – Schedule of Changes in Net Pension Liability (Asset) and Related Ratios 96 – Schedule of Contributions 97 Bartlett City Board of Education – Teacher Legacy Pension Plan of TCRS – Schedule of Proportionate Share of the Net Pension Liability (Asset) 98 – Schedule of Contributions 99 Bartlett City Board of Education – Teacher Retirement Pension Plan of TCRS – Schedule of Proportionate Share of the Net Pension Liability (Asset) 100 – Schedule of Contributions 101 City Other Postemployment Benefits Plan – Schedule of Changes in Net OPEB Liability and Related Ratios 102 – Schedule of Contributions 103 – Schedule of Money-Weighted Rate of Return 104 School Other Postemployment Benefits Plan – Schedule of Changes in Net OPEB Liability and Related Ratios 105 – Schedule of Contributions 106 – Schedule of Money-Weighted Rate of Return 107 CITY OF BARTLETT, TENNESSEE TABLE OF CONTENTS (CONTINUED) Page SUPPLEMENTARY INFORMATION COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Nonmajor Governmental Fund Combining Financial Statements Combining Balance Sheet 108 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 110 Governmental Individual Fund Schedules: Special Revenue Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – State Street Aid Fund 112 – Solid Waste Control Fund 113 – General Improvement Fund 114 – Drug Enforcement Fund 115 – Drainage Control Fund 116 – DEA Task Force Fund 117 – Grants Fund 118 – Federal Projects Fund 119 – School Nutrition Fund 120 – Discretionary Grants Fund 121 Capital Projects Funds – Capital Projects Fund 122 – Education Capital Fund 124 Debt Service Fund – Debt Service Fund 125 Internal Service Fund Combining Financial Statements Combining Statement of Net Position 126 Combining Statement of Revenues, Expenses, and Changes in Net Position 127 Combining Statement of Cash Flows 128 Fiduciary Funds Combining Financial Statements Combining Statement of Fiduciary Net Position – Fiduciary Funds 129 Combining Statement of Changes in Fiduciary Net Position – Fiduciary Funds 130 Combining Balance Sheet – Agency Funds 131 Combining Schedule of Changes in Assets and Liabilities – Agency Funds 132 SUPPORTING SCHEDULES (UNAUDITED) Schedule of Principal and Interest Requirements Bonds and Notes Payable – Governmental Funds 133 Capital Outlay Notes – Governmental Funds 135 Bartlett City Board of Education Long-Term Debt – Governmental Funds 136 Bonds and Notes Payable – Water and Sewer Fund 137 Schedule of Changes in Property Taxes Receivable – By Levy Year 139 Schedule of Bonds of Principal Officials 140 Schedule of Utility Rates 141 Schedule of Unaccounted for Water 142 CITY OF BARTLETT, TENNESSEE TABLE OF CONTENTS (CONTINUED) Page STATISTICAL INFORMATION SECTION (UNAUDITED) Financial Trends: Net Position by Component 145 Changes in Net Position 146 Fund Balances of Governmental Funds 148 Changes in Fund Balances of Governmental Funds 149 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property 151 Direct and Overlapping Property Tax Rates 152 Principal Property Tax Payers 153 Property Tax Levies and Collections 154 Taxable Sales by Category 155 Direct and Overlapping Sales Tax Rates 156 Local Sales Tax Revenue by Industry 157 Debt Capacity: Ratios of Outstanding Debt by Type 158 Ratios of General Bonded Debt Outstanding 159 Direct and Overlapping Governmental Activities Debt 160 Statement of Debt 161 Water and Sewer Revenue Coverage 162 Demographic and Economic Information: Demographics and Economic Statistics 163 Principal Employers 164 Operating Information: Other Revenue Sources 165 Full-time Equivalent City Government Employees by Function 166 Operating Indicators by Function/Program 167 Capital Assets Statistics by Function/Program 168 GOVERNMENT AUDITING STANDARDS SECTION Schedule of Expenditures of Federal Awards and State Financial Assistance 169 Notes to the Schedule of Expenditures of Federal Awards and State Financial Assistance 172 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 173 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required By the Uniform Guidance 175 Schedule of Findings and Questioned Costs 177 Summary of Prior Year Audit Findings 179 INTRODUCTORY SECTION December 21, 2018 To the Honorable Mayor, Members of the Board of Mayor and Aldermen, and Citizens of the City of Bartlett, Tennessee: The Comprehensive Annual Financial Report, (CAFR) of the City of Bartlett, Tennessee (The City) for the fiscal year ended June 30, 2018, is hereby submitted as required by state statutes. These statutes require that all general purpose local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) as set forth by the Government Accounting Standards Board (GASB) and have been audited by a firm of certified public accountants in accordance with the generally accepted government auditing standards. This report consists of management’s representations concerning the finances of the City of Bartlett. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Bartlett’s financial statements in conformity with GAAP. Additionally, the City has adopted written Internal Control Manual as required by the State of Tennessee. Because the cost of internal controls should not outweigh their benefits, the City of Bartlett’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City’s financial statements have been audited by Watkins Uiberall, PLLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2018 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor has issued an unmodified (“clean”) opinion on the City of Bartlett’s financial statements for the fiscal year ended June 30, 2018. The independent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City of Bartlett was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation