MANAGEMENT’S DISCUSSION AND ANALYSIS

TABLE 5 – Capital Assets, Net of Accumulated Depreciation

Debt

The City reported outstanding debt of $28,845,792 as of July 31, 2021. Debt for the business-type activities relates to the Water and Sewerage Revenue Bonds that were issued in FY 2019 to refinance the cost of the 2013 Water and Sewerage Revenue Bonds, the Water and Sewer Fund’s allocated portion of the net pension liability, and Water and Sewerage issuance of Georgia Environmental Finance Authority (“GEFA”) note payable in FY 2017 and FY 2019 to make improvements to the City’s stormwater infrastructure. The amount of outstanding debt in Governmental Activities includes Certificates of Participation (“COPS”) with Georgia Municipal Association (“GMA”), revenue bonds, compensated absences, capital leases, net pension liability, and notes payable totaling $38,089,253. This amount increased due to actuarial assumptions changing for the City’s pension plan. Table 6

Outstanding Long-Term Liabilities reflects information provided in Note 8.

Current Issues

Economic Factors and Next Years Budget and Rates

The City revenues continued to be steady in most areas. Some of the areas affected by the pandemic have started to normalize back in line where they were prior to the start of the pandemic. Items like Hotel/Motel taxes, Excise taxes on rental cars, court related revenues are among those that took the biggest hits recently, but have rebounded nicely. The inclusion of internet sales on our Local Option Sales Tax and our SPLOST have increased to levels we have not collected before which will help with expected increases in expenditures over the coming years.

Our operating expenses in salaries, contract services, general supplies, and capital outlay continue to increase. The City will enter into a contract for a Pay and Class Study to make sure we are providing adequate pay and benefits to all employees no matter where they work in the City. Based on the large turn-over of employees in the Public Safety departments, we do expect to see an increase in salary related expenses in the up-coming budgets. Increases are also expected in insurance cost for health insurance as well as general liability insurance. The City will continue to see our debt service expenses increase over the coming years due to the construction of a new City Center Project which includes an approximately 10-acre park and a new City Hall, and continued required pension liabilities being added to our financial statements.

Staff developed a ten-year plan that includes workload indicators and trend analysis to assist the City in long-range financial planning and forecasting. The City is currently in the middle of the 10-year plan, and items that could affect the plan for FY 2022 are as follows:

• Renegotiations of Local Options Sales Tax with the County and other City’s within Fayette County

• Renegotiations of Special Purpose Local Options Sales Tax

• Renegotiation of the Service Delivery Strategy, which looks to create efficient government activity within the local governments within the County

These renegotiations can affect revenues that are received by the City and can also affect the expenditures related to services provided by the City. This 10-year plan was developed with input from each department and is updated annually to reflect any changing needs. This plan is a very conservative forecast of the City’s financial resources and departmental needs to maintain our existing service levels to the community. The Mayor and Council and staff will need to continue to closely evaluate the service and staffing levels on an ongoing basis to ensure that adequate personnel resources and financial resources are available to achieve the desired service levels.

Contacting the City’s Financial Management

This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, please contact Mike Bush, Director of Finance and Administrative Services, City of Fayetteville, 210 Stonewall West Fayetteville, Georgia 30214, 770-461-6029, or mbush@fayetteville-ga.gov