North ''--N Augusta South Carolina's Riverfront CITY OF NORTH AUGUSTA COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended December 31, 2013 CITY OF NORTH AUGUSTA SOUTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31 , 2013 p Prepared by NO th Department of Finance Augusta John P. Potter, Jr. South Carolina's Rivet-front Director of Finance CITY OF NORTH AUGUSTA, SOUTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED DECEMBER 31, 2013 TABLE OF CONTENTS INTRODUCTORY SECTION Page History of North Augusta vii Profile of the City ix Letter of Transmittal xvii GFOA Certificate of Achievement xxiv City Organizational Chart xxv Finance Department Organizational Chart xxvi Principal Officials xxvii FINANCIAL SECTION Independent Auditors' Report 1 Management' s Discussion and Analysis 5 Basic Financial Statements: Government- wide Financial Statements: Statement of Net Position 16 Statement of Activities 17 Fund Financial Statements: Balance Sheet— Governmental Funds 18 Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds 19 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to Statement of Activities 20 Statement of Revenues, Expenditures and Changes in Fund Balance— Budgeted and Actual— General Fund 21 Statement of Net Position— Proprietary Funds 22 TABLE OF CONTENTS, Continued Page Statement of Revenues, Expenses and Changes in Net Position— Proprietary Funds 24 Statement of Cash Flows— Proprietary Funds 25 Notes to Financial Statements 27 Other Supplementary Information: General Fund: Comparative Balance Sheets 55 Schedule of Revenues, Expenditures and Changes in Fund Balance— Budgeted and Actual 56 Schedule of Revenues Compared with Budget 58 Schedule of Expenditures Compared with Budget 60 Sales Tax III Fund: Comparative Balance Sheets 76 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance 77 Capital Projects Fund: Comparative Balance Sheets 78 Comparative Statements of Revenues, Expenditures and Changes in Fund Balance 79 Nonmajor Governmental Funds: Combining Balance Sheet 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balance 84 Enterprise Funds: Water and Wastewater System: Comparative Statements of Net Position 88 Comparative Statements of Revenues, Expenses and Changes in Net Position 90 ii TABLE OF CONTENTS, Continued Page Comparative Statements of Cash Flows 91 Schedule of Revenues and Expenses— Budgeted and Actual 93 Schedule of Operating Expenses— Budgeted and Actual 94 Sanitation Services: Comparative Statements of Net Position 99 Comparative Statements of Revenues, Expenses and Changes in Net Position 100 Comparative Statements of Cash Flows 101 Schedule of Revenues and Expenses— Budgeted and Actual 103 Schedule of Operating Expenses— Budgeted and Actual 104 Stormwater Utility Fund: Comparative Statements of Net Position 106 Comparative Statements of Revenues, Expenses and Changes in Net Position 107 Comparative Statements of Cash Flows 108 Schedule of Revenues and Expenses— Budgeted and Actual 110 Schedule of Operating Expenses— Budgeted and Actual 111 Savannah Bluff Lock and Dam Fund: Comparative Statements of Net Position 112 Comparative Statements of Revenues, Expenses and Changes in Net Position 113 Comparative Statements of Cash Flows 114 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 116 Schedule by Function and Activity 117 iii TABLE OF CONTENTS, Continued Page Schedule of Changes by Function and Activity 118 Schedule of Fines, Assessments and Surcharges— General Fund 120 Schedule of Expenditures of Federal Awards 122 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 123 STATISTICAL SECTION Table I Net Position by Component Last Ten Fiscal Years 127 II Changes in Net Position Last Ten Fiscal Years 128 III Fund Balances, Governmental Funds Last Ten Fiscal Years 130 IV Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years 131 V Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years 132 VI Direct and Overlapping Property Tax Rates Last Ten Fiscal Years 133 VII Principal Property Taxpayers Current Year and Nine Years Ago 134 VIII Property Tax Levies and Collections Last Ten Fiscal Years 135 IX Business Licenses / Franchise Fees Last Ten Fiscal Years 136 X Number of Utility Customers Last Ten Fiscal Years 137 iv TABLE OF CONTENTS, Continued Page XI Ten Largest Water and Wastewater Customers Current Year and Nine Years Ago 138 XII Ratio of Outstanding Debt by Type Last Ten Fiscal Years 139 XIII Ratios of General Bonded Debt Outstanding Last Eight Fiscal Years 140 XIV Computation of Direct and Overlapping Debt As of December 31, 2013 141 XV Legal Debt Margin Information Last Ten Fiscal Years 142 XVI Pledged- Revenue Bond Coverage Last Ten Fiscal Years 143 XVII Economic Statistics Last Ten Calendar Years 144 XVIII Principal Employers Current Year and Nine Years Ago 145 XIX Full- Time Budget Equivalent Employees by Fund/ Function/ Department Last Ten Fiscal Years 146 XX Operating Indicators by Function/ Program Last Ten Fiscal Years 147 XXI Capital Asset Statistics by Function/ Program Last Ten Fiscal Years 148 XXII Enterprise Funds Rates and Charges Rates/ Charges in effect December 31, 2013 149 XXIII Enterprise Funds History of Rates and Charges Last Ten Fiscal Years Through December 31, 2013 150 V North itt ,,,--. Augus to South Carolina s' Riverfront vl INTRODUCTORY SECTION North , Augustag South Carolina's Riverfront HISTORY OF NORTH AUGUSTA, SOUTH CAROLINA The City of North Augusta, South Carolina was officially incorporated on April 11, 1906. The City of North Augusta is strategically centered in the Augusta-Aiken metropolitan area and River. conveniently located along the South Carolina bank of the Savannah The City is approximately 70 miles west of the South Carolina capital, Columbia, and 150 miles east of the Georgia capital, Atlanta. The City' s nearest neighbor is Augusta, Georgia, located just across the Savannah River. North Augusta offers the best of both worlds - an idyllic, small-town lifestyle amid all the benefits of big city living. North Augusta was preceded by three other towns that were located in the general area of North Augusta. The first, Savannah Town, also known as Fort Moore, was among the earliest white settlements at the head of navigation on the Savannah River. Savannah Town was located on a bluff overlooking the river near the present site of the Fifth Street Bridge. In 1716 it was one of the most important trading centers in South Carolina. It flourished as a trading post until the founding of Augusta in 1735, just across the river on the Georgia side. Campbell Town, was founded by John Hammond over 200 years ago. It was established as a trading center for furs, tobacco, and other goods. In addition to the Indian and tobacco trade, there were, between Campbell Town and the nearby mouth of Steven' s Creek, extensive and profitable shad fisheries which added to the commercial importance of the town. Campbell Town prospered for about 60 years before the lucrative tobacco market started to slip to the Georgia side of the river due to increasing competition between tobacco warehouse owners. Hamburg, South Carolina was founded by Henry Shultz in the early 1800' s when the cotton and tobacco trade was booming. Hamburg soon became the home dock of a thriving steamboat business shipping goods to Charleston. This success led to the development of the Charleston and Hamburg Railroad in 1833, which, at 136 miles, was then the longest railroad in America. Hamburg continued to thrive as the railroad's western terminus until the construction of a trestle bridge over the Savannah River into Augusta in 1853. In 1890, Augusta native James U. Jackson organized the North Augusta Land Company and purchased more than 5, 000 acres of rolling farm and woodland across the Savannah River from Augusta, Georgia. In 1891, a bridge was built from Augusta, followed closely by a trolley line. Then, in 1902, Jackson and his associates built the Hampton Terrace, a world-class, five- story hotel 540 feet above sea level overlooking the Savannah River, Augusta, and the surrounding countryside. The Hampton Terrace raised North Augusta to the rank of one of the leading winter resorts in the country and played gracious host to many of the country' s elite including President William Howard Taft, John D. Rockefeller, Harvey Firestone, and Marshal Field. Unfortunately, the hotel was destroyed by fire in 1916. The Hampton Terrace was never rebuilt and North Augusta remained a small residential town until the 1950s, when the Savannah River Plant was built by the Atomic Energy Commission. The town tripled in size and, over the next sixty years, grew into today' s thriving community of nearly 22,000 citizens. vii Because of the varying terrain in and around North Augusta, the distribution system is divided into two service levels to control pressure. The lower level, which serves the older portion of town as well as the developed area outside the eastern boundary, has a storage capacity of 1, 250,000 gallons for water pumped directly from the existing 150, 000 gallon clearwell and the newly constructed 500,000 clearwell located at the filter plant. A 1, 000,000 gallon underground storage tank is centrally located on Hampton Avenue. A 250, 000 gallon