State Road and Tollway Authority (a component unit of the state of Georgia), financial report for the fiscal year ended 2023 June 30

ANNUAL FINANCIAL REPORT FISCAL YEAR ENDING JUNE 30, 2023
State Road and Tollway Authority
A Component Unit of the State of Georgia
Including Independent Auditor's Reports
Greg S. Griffin I State Auditor

State Road and Tollway Authority

Table of Contents

Section I

Financial

Independent Auditor's Report

1

Management's Discussion and Analysis

4

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Position

14

Statement of Activities

15

Fund Financial Statements

Balance Sheet

16

Reconciliation of the Governmental Funds Balance Sheet to the

Government-Wide Statement of Net Position

17

Statement of Revenues, Expenditures and Changes in Fund Balance

18

Reconciliation of the Statement of Revenues, Expenditures and Changes in

Fund Balances of Governmental Funds to the Statement of Activities

19

Proprietary Financial Statements

Statement of Net Position

20

Statement of Revenues, Expenses and Changes in Net Position

21

Statement of Cash Flows.

22

Notes to the Financial Statements

Notes to the Financial Statements Index

25

Notes to the Financial Statements

26

Required Supplementary Information

Schedule of Proportionate Share of the Net Pension Liability

71

Schedule of Contributions ERS

72

Notes to Required Supplementary Information Methods and Assumptions ERS 73

Schedule of Proportionate Share of the Net OPEB Liability

74

Schedule of Contributions State OPEB Fund

75

Schedule of Proportionate Share of the Net SEAD-OPEB Liability (Asset)

76

Notes to the Required Supplementary Information Methods and Assumptions

State OPEB and SEAD-OPEB Funds

77

State Road and Tollway Authority

Table of Contents

Section II

Compliance and Internal Control Reports

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

79

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S REPORT
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the Board of Directors of the State Road and Tollway Authority
and Ms. Jannine Miller, Executive Director
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, business-type activities, and each major fund of the State Road and Tollway Authority (Authority), a component unit of the State of Georgia, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, and each major fund of the Authority as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof 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 (GAAS) 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 our report.
We are required to be independent of the Authority 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 financial statements in accordance with accounting principles 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 financial statements that are free from material misstatement, whether due to fraud or error.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

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 Authority's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information 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 GAAS 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 error, as fraud may involve collusion, forgery, 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 GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform 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 Authority'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 financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, 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 required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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 appropriate 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 our report dated December 27, 2023 on our consideration of the Authority'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 our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
Greg S. Griffin State Auditor
December 27, 2023

STATE ROAD AND TOLLWAY AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Introduction
The Management's Discussion and Analysis (MD&A) of the State Road and Tollway Authority ("SRTA" or "the Authority") presents an overview and analysis of the Authority's financial activities for the fiscal year ended June 30, 2023. Comparative data is provided for fiscal year 2022. The MD&A should be read in conjunction with the Authority's financial statements, including the notes to the financial statements, which are an integral part of the statements that follow this narrative. The Authority is a public corporation and body corporate responsible for financing transportation projects and operating toll facilities in the State of Georgia. As of June 30, 2023, the Authority's proprietary statements consist of the Tolling System Fund, which accounts for tolling activities related to the I-85 Express Lanes, I-85 Extension Express Lanes, I-75 Northwest Corridor Project Express Lanes, and the I-75 South Express Lanes. The Tolling System Fund also includes tolling activities related to the State's Major Mobility Investment Program (MMIP). Five (5) tolling facilities are under planning as part of that program.
As of June 30, 2023, the Authority's governmental statements include the general fund activities of the Authority, management of a bond financing program (debt service) and administration of the Georgia Transportation Infrastructure Bank (GTIB) program.
Financial Highlights
Like many households in Georgia and around the country, SRTA truly began to hit its stride in the post-pandemic environment in fiscal year 2023. The fiscal year brought yet another record-breaking year of toll revenue collections, as Georgia's residents and visitors in began to settle into their post-pandemic commute and travel routines. SRTA also continued is long-lasting partnerships with the Georgia Department of Transportation (GDOT) and local governments by continuing to service innovative financing solutions through public-private partnerships and the GTIB program.
Tolling revenue increased by $11.0 million year-over-year, signifying growing adoption of the SRTA Peach Pass network and the maturation of its roadway system(s), along with a continuation of strong commuter response post-pandemic.
Governmental funds continued to serve their respective purposes, with debt principal on non-tolling road and bridge projects being reduced by $60.5 million during the fiscal year. Payments toward non-tolling projects totaled $209.3 million on the I-285 at SR 400 Interchange, I-16 at I-95 Interchange, and I-20 East Interchange projects. The Georgia Transportation Infrastructure Bank (GTIB) disbursed $10.2 million in grants to local governments for roadway projects during the fiscal year. Most of SRTA's Governmental activities are completed in partnership with the Governor's Office of Planning and Budget, Georgia General Assembly and GDOT through the State's annual Appropriations Act and funded with intergovernmental revenue.
Overview of the Financial Statements
The financial section of this report includes three parts: (1) management's discussion and analysis, (2) basic financial statements, and (3) required supplementary information. The Basic Financial Statements consist of three components: (1) government-wide financial statements, (2) fund financial statements, and (3) notes to the financial statements.
4

STATE ROAD AND TOLLWAY AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Government-Wide Financial Statements Reporting the Authority as a Whole The Authority is considered a blended component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the State. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards.
Governmental Activities. The Authority's basic services fall under this activity, including services related to general government, debt service, and the Georgia Transportation Infrastructure Bank (GTIB). Intergovernmental revenue is the major funding source for these programs. o SRTA's governmental funds include a general fund, a special revenue fund for the GTIB program, and a debt service fund. o The general fund is utilized mostly to facilitate contractual commitments and payments related to the State's Major Mobility Investment Program (MMIP) on non-tolling projects, along with facilitating other non-tolling Authority business processes related to the GO! Transit Program and payments between SRTA and the Atlanta-region Transit Link Authority, which share administrative services. o The GTIB fund is utilized to facilitate grant and loan activity between SRTA and local governments for transportation projects. SRTA operates the GTIB program and reviews applications from across the state annually for grant and loan funding, contingent upon State appropriations. o The debt service fund facilitates debt servicing on non-tolling debt held by SRTA for state road and bridge projects. This fund is financed in cooperation with GDOT via intergovernmental revenues.
Business-Type Activities. The Authority operates tolling activities similar to private-sector businesses by charging fees to customers to recover all or a significant portion of their costs of providing goods and services. Operations falling under business-type activities are primarily funded by toll revenues. o SRTA's proprietary fund includes the Tolling System Fund. o The Tolling System Fund accounts for all activity related to SRTA's Managed Lane System: I-85 Express Lanes, I-85 Extension Express Lanes, I-75 Northwest Corridor Project Express Lanes, and I-75 South Express Lanes. Violations revenue, violations processing, tolling capital expenses, and debt servicing activity related to SRTA tolling projects are also accounted for in the Tolling System Fund.
Reconciliation Between Government-Wide and Fund Statements This report also includes two schedules that reconcile and explain the differences between the amounts reported for the governmental activities on the government-wide statements (full-accrual accounting, long-term focus) with the amounts reported on the governmental fund statements (modified accrual accounting, short-term focus). The schedules are in the Basic Financial Statements Fund Financial Statements Governmental Funds section. The following explanations represent some of the reporting differences between the two statements:
Capital outlays result in capital assets on the government-wide statements but are reported as expenditures in the governmental fund financial statements.
Bond proceeds are recorded as long-term debt on the government-wide statements but are listed as current financial resources on the governmental fund statements.
5

STATE ROAD AND TOLLWAY AUTHORITY

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)

Notes to the Financial Statements
The Notes to the Financial Statements located at the end of the Basic Financial Statements section provide additional information essential to a complete understanding of the financial statements. The notes are applicable to both the government-wide financial statements and the fund financial statements.
Required Supplementary Information
In addition to this MD&A, the Basic Financial Statements are followed by a section containing required supplementary information which further explains and supports the information in the financial statements. This section of the report includes: (1) information on the Authority's defined benefit pension liability and contributions, and (2) information on the Authority's other postemployment benefit plans (OPEB) and State Employee Assurance Department (SEAD).
Government-Wide Financial Analysis
Net Position

State Road and Tollway Authority Statement of Net Position

Governmental

Activities

2023

2022

Business-Type

Activities

2023

2022

2023

Total

2022

Cash and Investments Receivables Other Assets Capital Assets
Total Assets

$ 790,678,486 $ 105,060,499 63,660 105,046,506
1,000,849,151

921,152,453 $ 106,402,659
120,938 101,138,605 1,128,814,655

272,654,475 $ 1,095,307 828,482
50,545,337 325,123,601

238,599,011 $ 1,146,338 1,147,616
46,147,420 287,040,385

1,063,332,961 $ 106,155,806 892,142 155,591,843
1,325,972,752

1,159,751,464 107,548,997 1,268,554 147,286,025
1,415,855,040

Deferred Outflows of Resources

784,924

554,034

10,749,716

10,909,543

11,534,640

11,463,577

Other Liabilities Long-Term Liabilities
Total Liabilities

187,578,586 516,645,407 704,223,993

283,945,416 593,943,274 877,888,690

32,523,736 452,737,678 485,261,414

31,664,241 440,591,759 472,256,000

220,102,322 969,383,085 1,189,485,407

315,609,657 1,034,535,033 1,350,144,690

Deferred Inflows of Resources

328,207

1,332,229

1,815,400

8,490,889

2,143,607

9,823,118

Net Position: Net Investment in Capital Assets Restricted Unrestricted (Deficit)

105,046,506 610,620,710 (418,585,341)

101,138,605 682,379,849 (533,370,684)

23,743,798 34,896,655 (209,843,950)

29,817,726 26,350,140 (238,964,827)

128,790,304 645,517,365 (628,429,291)

130,956,331 708,729,989 (772,335,511)

Total Net Position

$ 297,081,875 $ 250,147,770 $ (151,203,497) $ (182,796,961) $ 145,878,378 $

67,350,809

Total cash and investments decreased by $96.4 million year over year. This is mostly due to spend-down on prefunded governmental activities related to GDOT non-tolling and debt service projects in partnership with GDOT.
Overall, assets decreased by $89.9 million. This amount nearly matches the cash outflows mentioned above, which were a result of governmental activity on non-tolling roadway projects.
Liabilities decreased by $160.7 million. Much of this is the result of decreased noncurrent liabilities, as the Authority eliminated $65.2 million in fiscal year 2023. Contributing heavily to this amount was the decrease in governmental bonds payable with an overall reduction of $60.5 million in principal, and $17.7 million in premiums. Unearned revenue also was reduced in governmental funds by $72.1 million, as pre-funded non-tolling roadway projects earned expenses and subsequent revenue recognition. Business-type activities' liabilities increased slightly, which can be attributed to an increase in pension liabilities and the implementation of GASB No. 96 (Subscription Based Information Technology Arrangements) subscription liabilities.

6

STATE ROAD AND TOLLWAY AUTHORITY

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)

In total, net position increased by $78.5 million in fiscal year 2023. This increase is the result of larger cash holdings in business-type activities due to revenue growth and interest earnings, along with the aforementioned liabilities reduction in governmental funds.
Statement of Activities

The Statement of Activities details the revenue/expense and the change in Net Position for SRTA. A breakdown of this activity and requisite highlights is detailed below.

State Road and Tollway Authority Statement of Activities

Governmental

Activities

2023

2022 (1)

Revenues:

General Government

$ 21,602,754 $ 10,825,140 $

Roadway Improvements per GDOT MOU

209,316,667

129,470,602

Infrastructure Loans and Grants Disbursed

12,999,055

12,999,055

Interest on Long-Term Debt

24,151,300

27,057,175

Tolling Operations

-

-

Total Revenues

268,069,776

180,351,972

Business-Type

Activities

2023

2022

2023

Total 2022 (1)

- $ - - - 73,375,226 73,375,226

- $ - - - 62,027,592 62,027,592

21,602,754 $ 209,316,667
12,999,055 24,151,300 73,375,226 341,445,002

10,825,140 129,470,602
12,999,055 27,057,175 62,027,592 242,379,564

Expenses: General Government Roadway Improvements per GDOT MOU Infrastructure Loans and Grants Disbursed Interest on Long-Term Debt Tolling Operations
Total Expenses

21,665,911 209,316,667
10,163,856 5,827,978 -
246,974,412

49,905,286 102,186,670
- 8,235,981
- 160,327,937

- - - - 55,874,944 55,874,944

- - - - 56,490,092 56,490,092

21,665,911 209,316,667
10,163,856 5,827,978
55,874,944 302,849,356

49,905,286 102,186,670
- 8,235,981 56,490,092 216,818,029

General Revenues:

25,838,741

1,539,250

14,093,182

742,738

39,931,923

2,281,988

Beginning of Year

250,147,770

228,584,485

(182,796,961)

(189,077,199)

67,350,809

39,507,286

End of Year

$ 297,081,875 $ 250,147,770 $ (151,203,497) $ (182,796,961) $ 145,878,378 $ 67,350,809

(1) Fiscal year 2022 governmental activities revenue presentation was adjusted to match current year reporting.

Total program revenues increased by $99.1 million in fiscal year 2023. This is due to several factors, most of which is a result of increased governmental transaction activity between SRTA and project partners on non-tolling projects. Non-tolling MMIP expense activity increased $107.1 million year-over-year, which also triggers an increase in earned revenue received by SRTA via GDOT. Revenues in tolling operations also increased by $11.3 million in fiscal year 2023, further contributing to the increase.

Total expenses increased by $86.0 million in fiscal year 2023. As mentioned above, this is largely the product of a higher level of expense activity related to GDOT non-tolling projects in comparison to the prior year, with those projects demonstrating a $107.1 million increase.

Management does not believe that Governmental Activities and Business-Type Activities are comparable for analytical purposes. While the combined schedules show a total picture of SRTA responsibilities, the two activities should be viewed in their respective parts. This is due to the variety of funding sources and business activity that each side represents accordingly.

7

STATE ROAD AND TOLLWAY AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Financial Analysis of Business-Type Activities
The following table and highlights below show the results of operations for the last two years. State Road and Tollway Authority Business Type Activities

Revenues: Toll Revenues Other
Total Revenues

2023
$ 73,077,238 $ 327,785
73,405,023

2022
61,956,133 71,459
62,027,592

Operating expenses: Personal Services Other
Total Expenses

10,683,297 31,802,146 42,485,443

7,567,008 35,364,713 42,931,721

Nonoperating revenues/(expenses): Interest and Investment Revenue Interest Expense Transfers In
Total Nonoperating

11,900,559 (13,389,501)
2,162,826 673,884

742,738 (13,558,371)
- (12,815,633)

Net position - Beginning Net position - Ending

(182,796,961)

(189,077,199)

$ (151,203,497) $ (182,796,961)

The Tolling System Fund is the sole business-type activity fund for the Authority. Transactions within this fund capture all tolling-related activities of the authority. Highlights for fiscal year 2023 include:
Fiscal year 2023 showed another year-over-year increase in toll revenue of $11.0 million. Toll Revenues, as described here, includes revenues collected from both customers and violators.
Increase in Interest and Investment Revenue of $11.2 million. The increase in interest is partly a result of the United States' monetary policy during the fiscal year, as interest rates were increased seven times from July 1, 2022 to June 30, 2023. The increase can also be attributed to larger cash holdings of the Authority related to increased toll revenues and proceeds held by the authority on its SRTA's Series 2021AB Guaranteed Revenue Bonds.
Decrease in operating expenses of $446 thousand. Operating expenses mostly remained flat in fiscal year 2023. The increase in personal services expense is the result of higher pension expense in fiscal year 2023 resulting in a year-over-year increase of $1.2 million. Regular personnel expenses also increased by $500 thousand to coincide with a statewide pay increase recommended by Governor Brian Kemp, which SRTA adopted.
Overall, SRTA Tolling activities ended fiscal year 2023 with an operating gain of $30.9 million. This was due to the strong performance of tolling revenue and a measured increase in expenses as revenue began to climb.
Contributing to the nonoperating expenses were bond and lease interest expenses. As mentioned above, interest and investment income mostly counterbalanced interest expense.
Adding in nonoperating costs, SRTA ended the year with a net gain of $31.6 million in net position.

8

STATE ROAD AND TOLLWAY AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Financial Analysis of Governmental Funds
The following table and highlights below detail the revenues and expenditures in the governmental funds for the past two fiscal years.
State Road and Tollway Authority Governmental Activities

Revenues: Intergovernmental Revenue Other
Total Revenues

2023

2022

$ 316,392,826 $ 227,091,832

28,001,567

1,539,283

344,394,393

228,631,115

Operating expenses: Roadway Improvements per GDOT MOU Debt Service Infrastructure Loans and Grants Disbursed Payments to GDOT per Project Requisition Other
Total Expenses

209,316,667 84,611,300 10,163,856 75,875,923 9,499,831
389,467,577

112,723,018 84,622,175 4,605,721 29,884,143 8,766,136
240,601,193

Nonoperating revenues/(expenses):

Transfers Out

(2,162,826)

-

Total Nonoperating

(2,162,826)

-

Net position - Beginning

725,068,311

737,038,389

Net position - Ending

$ 677,832,301 $ 725,068,311

As stated, SRTA maintains three governmental funds. This includes the general fund, which mostly accounts for intergovernmental activity unrelated to debt service; the GTIB Fund, which accounts for grants and loans to local governments; and the debt service fund, which captures transactions as it relates to non-tolling debt held by SRTA for State road and bridge projects. Highlights for fiscal year 2023 include:

Increase in total revenue of $115.8 million. This increase can be attributed to a higher volume of activity between GDOT and SRTA on non-tolling projects in the general fund. GDOT provides revenue to SRTA to pay selected contractors on said projects, and SRTA recognizes revenue as being earned once payments have been made.

Increase in "Other" Revenue is mostly due to increased interest earnings on SRTA bank accounts, along with interest paid by GTIB loan holders. Interest proceeds grew from $1.4 million in fiscal year 2022 to $27.8 million in fiscal year 2023.

Increase in total expense of $148.9 million.
o As mentioned above, this increase in activity on non-tolling projects in the general fund also contributes to the overall increase in expenses in governmental activities in fiscal year 2023. The Roadway Improvements per GDOT MOU increased by $96.6 million, which makes up a significant portion of the $148.9 million increase in expenses.

9

STATE ROAD AND TOLLWAY AUTHORITY

MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)

o Also contributing to the increase in expense was intergovernmental contract payments made to GDOT related to debt proceeds held by SRTA. This payment activity accounted for $75.9 million in expense activity in fiscal year 2023, a year-over-year increase of $46.0 million.
Capital Assets and Debt Administration

Capital Assets
The Authority's capital assets increased by $2.7 million during the fiscal year. The sole contributor to this increase was Construction in Progress, which had a net change of $9.8 million during the fiscal year. Ongoing projects related to Park and Ride transit facilities in governmental activities and customer back-office implementation in businesstype activities contributed to this increase.
Beyond construction in progress, assets held by the authority had a net change in book value of $7.2 million during the fiscal year, with machinery and equipment in Business-Type Activities making up the majority of this change. This depreciation is assigned to tolling equipment on SRTA's roadway facilities.

State Road and Tollway Authority Capital and Right to Use Assets (does not include subscriptions)

Governmental

Activities

2023

2022

Business-Type

Activities

2023

2022

2023

Total 2022

Land

$

Construction in Progress

Buildings

Machinery and Equipment

Infrastructure

Lease Asset

22,839,218 $ 20,508,996 10,141,009 37,971,560 13,585,723
-

22,839,218 $ 17,258,399 10,407,178 36,767,573 13,866,237
-

- $ 27,891,236
- 8,259,362
- 7,859,573

- $ 21,296,171
- 16,110,229
- 8,741,020

22,839,218 $ 48,400,232 10,141,009 46,230,922 13,585,723
7,859,573

22,839,218 38,554,570 10,407,178 52,877,802 13,866,237
8,741,020

Total

$ 105,046,506 $ 101,138,605 $ 44,010,171 $ 46,147,420 $ 149,056,677 $ 147,286,025

Additional information on the Authority's capital assets can be found in Note 8 Capital Assets of the Notes to the Financial Statements section of this report.

Of note, the implementation of GASB 96 Subscription Based Information Technology Arrangements is not included in the above table. The Authority implemented GASB 96 to comply with its effective date of fiscal year 2022 and as such, recorded entries to reflect $3,754,922 in depreciable subscription assets as a beginning balance and current year additions of $4,274,104, with $1,493,860 in accumulated amortization for the year. This left a grand total of $6,535,166 in Right-to-Use SBITA Assets at year end. The Authority intends to display subscriptions in the table above in future financial statements once two fiscal years of comparative data can be referenced.

Debt Administration

The Authority's GARVEE debt is secured by Federal Highway Grant Revenues and Federal Highway Reimbursement Revenues. The Authority's non-tolling GRB and GRRB bonds are primarily secured by state motor fuel funds.

At the end of the fiscal year, the Authority had $434.1 million in total outstanding governmental bonded debt and $367.4 million in outstanding business-type bonded debt.

Total governmental bonds payable, including premiums, decreased $78.2 million.

10

STATE ROAD AND TOLLWAY AUTHORITY
MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Total business-type activity bonds and notes payable, including premium and discount activity, decreased $2.7 million. The small decrease is a result of premium and discount activity, as principal payments on the SRTA Series 2021AB Guaranteed Revenue Bonds do not begin until 2030. Additional information on the Authority's long-term debt can be found in Note 9 Long-Term Liabilities of the Notes to the Financial Statements section of this report.
Economic Factors Impacting SRTA
During fiscal year 2023, the State of Georgia experienced another year of economic success. With record unemployment and another year of distance from the COVID-19 pandemic, SRTA experienced similar success to the State of Georgia, exceeding revenue estimates once again. Commuter habits and travel patterns have mostly returned if not exceeded pre-pandemic trends, albeit with a different cadence due to the post-pandemic work environment. Also contributing to the Authority's growth in fiscal year 2023 was another year of maturity added to SRTA's roadways, as peach pass customer accounts experienced another year of growth, increasing from 682,048 accounts in fiscal year 2022 to 757,104 accounts in fiscal year 2023. Highlights of the fiscal year include:
Year-over-year toll revenue growth of $11.0 million
Year-over-year trip growth of 2.8 million
Year-over-year operating expense growth of $86.0 million across governmental and business-type activities.
As the nation and State of Georgia continue to navigate post-pandemic inflationary pressures and uncertainties, SRTA will remain vigilant of customer habits and will continue to ensure proper safeguards are in place for future. The authority will continue its commitment to a robust renewal and replacement fund, along with conservative budgeting principles for its debt servicing and operating expenses.
Future Initiatives
Partnering with GDOT, SRTA continues to plan for future Express Lanes on planned MMIP projects, including the SR-400 Express Lanes and I-285 Top End Express Lanes. The SR-400 Express Lanes project is currently in the procurement phase and the I-285 Top End Express Lanes project is currently in the development stage. GDOT, SRTA, and other stakeholders evaluate various methods of project and operational delivery of the roadways. Once complete, these roadways will utilize the existing SRTA Peach Pass network for tolling operations and revenue collection. Regarding Governmental Activities, SRTA will continue its support of GDOT's MMIP program and its associated non-tolling projects through GRB and GARVEE debt servicing and Public-Private Partnership agreements, along with offering unique funding solutions to high-performing and innovative transportation projects across the State via the GTIB program.
11

STATE ROAD AND TOLLWAY AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)
Requests for Information
This financial report is designed to provide a general overview of the Authority's finances for all those individuals having an interest in the Authority's finances. This financial report seeks to demonstrate the Authority's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to: State Road and Tollway Authority, 245 Peachtree Center Avenue NE, Suite 2200, Atlanta, Georgia 30303.
12

FINANCIAL SECTION

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2023

ASSETS Current Assets:
Cash and Cash Equivalents Restricted Cash and Cash Equivalents Restricted Investments Receivables, Net Loans Receivable, Net - Restricted Inventories Intergovernmental Receivables Other Assets
Total Current Assets
Noncurrent Assets: Long Term Receivable - GDOT Long Term Loan Receivable, Net - Restricted Net OPEB Asset Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) Right-to-Use Leased Assets, Amortizable (Net of Accumulated Amortization) Right-to-Use Subscription Assets, Amortizable (Net of Accumulated Amortization) Total Noncurrent Assets Total Assets
DEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plan Related to Defined Benefit OPEB and SEAD Plans Deferred Loss from Refunding of Debt
Total Deferred Outflows of Resources
LIABILITIES Current Liabilities:
Accounts Payable - GDOT Accounts Payable and Accrued Liabilities Accrued Interest Payable Contracts Payable Funds Held for Others Unearned Revenue
Total Current Liabilities
Noncurrent Liabilities: Net Pension Liability Net OPEB Liability Due within one year Due in more than one year Total Noncurrent Liabilities Total Liabilities
DEFERRED INFLOWS OF RESOURCES Related to Defined Benefit Pension Plan Related to Defined Benefit OPEB and SEAD Plans Deferred Gain on Refunding Debt
Total Deferred Inflows of Resources
NET POSITION Net Investment in Capital Assets Restricted for:
Bond Covenants/Debt Service Capital and Transportation Projects Loan and Grant Programs Nonexpendable: Other Benefits Unrestricted (Deficit)
Total Net Position

Governmental Activities

Primary Government Business-Type Activities

$

26,950,971 $

47,625,049 $

763,727,515

221,504,636

-

3,524,790

354,162

1,077,807

1,874,504

-

869

212,809

24,172,752

17,500

-

2,214

817,080,773

273,964,805

56,160,000 22,499,081
62,791 43,348,214 61,698,292
183,768,378 1,000,849,151

613,459 27,891,236 8,259,362 7,859,573 6,535,166 51,158,796 325,123,601

625,555 159,369
784,924

6,111,565 1,557,005 3,081,146 10,749,716

23,862,612 3,057,519 1,968,421 41,459,131 -
117,230,903 187,578,586

7,853,166 5,880,049
698,108 18,092,413 32,523,736

1,478,967 124,801
74,839,696 440,201,943 516,645,407 704,223,993

14,449,239 1,219,279 6,476,414 430,592,746 452,737,678 485,261,414

47,296 138,522 142,389 328,207

462,069 1,353,331
1,815,400

105,046,506

23,743,798

2,554,144 517,652,612
90,338,731

34,162,157 -

75,224 (418,585,342)

734,498 (209,843,950)

$

297,081,875 $

(151,203,497) $

Total
74,576,020 985,232,151
3,524,790 1,431,969 1,874,504
213,678 24,190,252
2,214 1,091,045,578
56,160,000 22,499,081
676,250 71,239,450 69,957,654
7,859,573 6,535,166 234,927,174 1,325,972,752
6,737,120 1,716,374 3,081,146 11,534,640
23,862,612 10,910,685
7,848,470 41,459,131
698,108 135,323,316 220,102,322
15,928,206 1,344,080
81,316,110 870,794,689 969,383,085 1,189,485,407
509,365 1,491,853
142,389 2,143,607
128,790,304
36,716,301 517,652,612
90,338,731
809,722 (628,429,292)
145,878,378

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

- 14 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF ACTIVITIES FOR FISCAL YEAR ENDED JUNE 30, 2023

Program Revenues

Net (Expense) Revenue and Changes in Net Position

Functions/Programs

Governmental Activities:

General Government

$

Roadway Improvements per GDOT MOU

Infrastructure Loans and Grants Disbursed

Interest and Other Charges on Long-Term Debt

Total Governmental Activities

Expenses

Charges for Services

Operating Grants and Contributions

Capital Grants and Contributions

Governmental Business-Type

Activities

Activities

21,665,911 $

- $ 1,081,968 $ 20,520,786 $

(63,157) $

- $

209,316,667

-

- 209,316,667

-

-

10,163,856

-

-

12,999,055

2,835,199

-

5,827,978

-

-

24,151,300

18,323,322

-

246,974,412

-

1,081,968 266,987,808

21,095,364

-

Total
(63,157) -
2,835,199 18,323,322 21,095,364

Business-type Activities: Tolling

55,874,944 73,077,238

297,988

-

-

17,500,282

17,500,282

Total

$ 302,849,356 $ 73,077,238 $ 1,379,956 $ 266,987,808

21,095,364

17,500,282

38,595,646

General Revenues: Unrestricted Investment Income/(Loss) Other Transfers In Transfers Out Total General Revenues
Change in Net Position Net Position - Beginning of Year

27,767,172 234,395 -
(2,162,826) 25,838,741 46,934,105 250,147,770

11,900,559 29,797
2,162,826 -
14,093,182 31,593,464 (182,796,961)

39,667,731 264,192
2,162,826 (2,162,826) 39,931,923 78,527,569 67,350,809

Net Position - End of Year

$ 297,081,875 $ (151,203,497) $ 145,878,378

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

- 15 -

STATE ROAD AND TOLLWAY AUTHORITY
BALANCE SHEET GOVERNMENTAL FUNDS
JUNE 30, 2023

ASSETS Current Assets: Cash and Cash Equivalents Accounts Receivable, Net Loans Receivable, Net - Restricted Intergovernmental Receivables Inventories Restricted Assets: Cash and Cash Equivalents Noncurrent Assets: Loans Receivable, Net - Restricted
Total Assets
LIABILITIES: Liabilities: Cash Overdraft Accounts Payable and Other Accruals Intergovernmental Payable Contracts Payable Unearned Revenue Total Liabilities
FUND BALANCES Restricted: Loans and Grant Programs & Receivables Debt Service Capital and Transportation Projects Unrestricted Assigned Unassigned Total Fund Balances
Total Liabilities and Fund Balances

General Fund

GTIB Fund

Debt Service Governmental

Fund

Funds

$ 25,017,020 $ 1,939,501 $

263,687

-

-

1,874,504

24,172,752

-

869

-

- $ 90,475
-

692,024,360 67,123,126 4,580,029

- 22,499,081

-

26,956,521 354,162
1,874,504 24,172,752
869 -
763,727,515 -
22,499,081

$ 741,478,688 $ 93,436,212 $ 4,670,504 $ 839,585,404

$

- $

971,216

2,080,473

41,459,131

117,230,903

161,741,723

- $ 5,830
5,830

5,550 $ -
5,550

5,550 977,046 2,080,473 41,459,131 117,230,903 161,753,103

517,652,612

90,338,731 -

4,664,954
-

90,338,731 4,664,954
517,652,612

8,220,465 53,863,888 579,736,965

3,091,651 -
93,430,382

4,664,954

11,312,116 53,863,888 677,832,301

$ 741,478,688 $ 93,436,212 $ 4,670,504 $ 839,585,404

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

- 16 -

STATE ROAD AND TOLLWAY AUTHORITY
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION JUNE 30, 2023

Total Governmental Fund Balances

$

Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Cost of capital assets Accumulated depreciation Other long-term assets and accounts payable are not available to pay for current period expenditures and, therefore, are not reported in the funds. Certain liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Long-term liabilities Compensated absences Net pension and OPEB liabilities/assets Accrued interest payable Deferred inflows of resources are not available to pay for current period expenditures and, therefore, are not reported in the funds. These deferred inflows of resources consist of pension related experience differences, and assumption changes.

Net position of governmental activities

$

677,832,301
197,283,318 (92,236,812) 32,297,388 (514,933,567)
(108,072) (1,540,977) (1,968,421)
456,717 297,081,875

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

- 17 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

REVENUES Intergovernmental Income Interest and Other Investment Income Other Total Revenues

General Fund

GTIB Fund

Debt Service Fund

Total Governmental
Funds

$ 218,782,471 $ 12,999,055 $ 84,611,300 $

24,369,169

3,099,782

298,221

200,395

34,000

-

243,352,035 16,132,837 84,909,521

316,392,826 27,767,172 234,395
344,394,393

EXPENDITURES General Government Infrastructure Grants Disbursed Roadway Improvements per GDOT MOU Debt Service: Principal Interest Total Expenditures

81,258,035 -
209,316,667
290,574,702

297,745 10,163,856
-
10,461,601

3,819,974 -
60,460,000 24,151,300 88,431,274

85,375,754 10,163,856 209,316,667
60,460,000 24,151,300 389,467,577

Other Financing Uses Transfers Out

(2,162,826)

-

-

(2,162,826)

Net Change in Fund Balances

(49,385,493) 5,671,236

(3,521,753)

(47,236,010)

Fund Balances, Beginning of Year Fund Balances, End of Year

629,122,458 87,759,146 $ 579,736,965 $ 93,430,382 $

8,186,707 4,664,954 $

725,068,311 677,832,301

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

- 18 -

STATE ROAD AND TOLLWAY AUTHORITY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Total Net Change in Fund Balances - Governmental Funds

$ (47,236,010)

Amounts reported for governmental activities in the statement of activities are different because:
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 reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period.
Total depreciation

(8,229,049)

The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations, transfers to enterprise funds) is to decrease net position.

12,136,950

Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces longterm liabilities in the Statement of Net Position. In the current year, these amounts consist of:
Bonds Principal Retirement Debt Service Receivable/Payable (GDOT) Adjustment

60,460,000 11,351,040

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. The adjustments for these items are as follows:

Amortization of Deferral of Gain on Refunding of Bonds Amortization of Premium Accrued interest on debt (Increase) Decrease in Compensated Absences Net (Increase) Decrease in Pension and OPEB Expense

142,389 17,745,266
435,667 (32,263) 160,115

Change in Net Position - Governmental Activities

$ 46,934,105

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

- 19 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2023

Current Assets: Cash and Cash Equivalents Accounts Receivable, Net Inventories Other Assets Restricted Assets: Cash and Cash Equivalents Investments Total Current Assets
Noncurrent Assets: Net OPEB Asset Capital Assets: Nondepreciable Capital Assets Depreciable Capital Assets, net Right-to-Use Leased Assets, net Right-to-Use Subscription Assets, net Total Noncurrent Assets Total Assets
Related to Defined Benefit Pension Plan Related to Defined Benefit OPEB and SEAD Plans Deferred Loss from Refunding of Debt
Total Deferred Outflows of Resources
Current Liabilities: Accounts Payable and Other Accruals Unearned Revenue Compensated Absences Payable Lease Liability Subscription Liability Funds Held for Others Accrued Interest Payable Bonds premium amortized within one year Bonds discount amortized within one year Total Current Liabilities
Noncurrent Liabilities: Compensated Absences Payable Lease Liability Subscription Liability Revenue Bonds Payable Bonds premium amortized in more than one year Bonds discount amortized in more than one year Net OPEB Liability Net Pension Liability Total Noncurrent Liabilities Total Liabilities
Related to Defined Benefit Pension Plan Related to Defined Benefit OPEB and SEAD Plans
Total Deferred Inflows of Resources
Net Investment in Capital Assets Restricted for:
Bond Covenants/Debt Service Other Benefits Unrestricted (Deficit)
Total Net Position

ASSETS
DEFERRED OUTFLOWS OF RESOURCES LIABILITIES
DEFERRED INFLOWS OF RESOURCES NET POSITION

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

Tolling System Fund

$

47,625,049

1,095,307

212,809

2,214

221,504,636 3,524,790
273,964,805

613,459
27,891,236 8,259,362 7,859,573 6,535,166
51,158,796 325,123,601

6,111,565 1,557,005 3,081,146 10,749,716

7,853,166 18,092,413
786,442 708,928 2,274,766 698,108 5,880,049 2,710,365
(4,087) 39,000,150

138,087 7,562,813 3,470,943 367,380,000 52,074,938
(34,035) 1,219,279 14,449,239 446,261,264 485,261,414

462,069 1,353,331 1,815,400

23,743,798

34,162,157 734,498
(209,843,950)

$

(151,203,497)

- 20 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Operating Revenues: Electronic Tolls Intergovernmental Revenues Violation Administration Fees Other Total Operating Revenues
Operating Expenses: Personal Services Services and Supplies Utilities, Rents, Insurance Contracts Software/Telecom Depreciation Lease Amortization Subscription Amortization Total Operating Expenses Operating Income (Loss)
Nonoperating Revenues (Expenses): Interest and Other Investment Income Interest Expense Total Nonoperating Revenues (Expenses) Income (Loss) Before Contributions and Transfers
Transfers: Transfers In Net Transfers
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year

Tolling System Fund

$

63,689,715

297,988

9,387,523

29,797

73,405,023

10,683,297 3,269,201 715,219
13,540,486 2,900,552 9,001,381 881,447 1,493,860
42,485,443 30,919,580

11,900,559 (13,389,501) (1,488,942) 29,430,638

2,162,826 2,162,826 31,593,464 (182,796,961) $ (151,203,497)

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

- 21 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash received from intergovernmental agencies Cash paid to vendors Cash paid to employees Net cash provided by (used in) operating activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds
Net cash provided by (used in) noncapital financing activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Lease Principal Paid Lease Interest Paid Bond Interest expense
Net cash used in capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of investments Interest received Net cash provided by investing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents: Beginning of year
End of year

Tolling System Fund $ 74,128,629
617,636 (20,952,509) (10,408,575) 43,385,181
2,162,826 2,162,826
(7,745,579) (2,944,799)
(1,885) (12,700,839) (23,393,102)
8,019,786 11,900,559 19,920,345 42,075,250
227,054,435 $ 269,129,685

- 22 -

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
(Continued) Reconciliation of operating income (loss) to net cash provided by (used in) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:
Depreciation Amortization Changes in assets and liabilities: Receivables, Net Inventories Net OPEB/SEAD Asset Intergovernmental Payable Deferred Outflows of Resources Unearned Revenues Accounts Payable Accrued Liabilities Other Assets Compensated Absences Net Pension Liability Net OPEB liability Deferred Inflows of Resources
Net cash provided by (used in) operating activities
Noncash capital and related financing activities: Subscription liability added due to implementation of GASB No. 96 Subscription asset acquired by incurring debt
Net noncash capital and related financing activities

$ 30,919,580

9,001,381 2,375,307
51,031 (48,739) 359,563
(3,177,322) 1,240,128 (408,715)
(27,824) 8,310 6,523
9,275,052 486,395
(6,675,489) $ 43,385,181

$

3,754,922

4,274,104

$

8,029,026

- 23 -

NOTES TO THE FINANCIAL STATEMENTS INDEX NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ......................................... 26 NOTE 2 CHANGES IN FINANCIAL ACCOUNTING AND REPORTING ................................. 38 NOTE 3 BUDGET ...................................................................................................................... 39 NOTE 4 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ...................................... 39 NOTE 5 DEPOSITS AND INVESTMENTS................................................................................ 40 NOTE 6 RECEIVABLES............................................................................................................. 42 NOTE 7 INTERFUND BALANCES ............................................................................................ 43 NOTE 8 CAPITAL ASSETS........................................................................................................ 44 NOTE 9 LONG-TERM LIABILITIES......................................................................................... 46 NOTE 10 LEASES ....................................................................................................................... 51 NOTE 11 RETIREMENT SYSTEMS..............................................................................................52 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS ................................................................ 58 NOTE 13 RISK MANAGEMENT................................................................................................ 66 NOTE 14 LITIGATION, CONTINGENCIES AND COMMITMENTS ........................................ 67 NOTE 15 SUBSEQUENT EVENTS................................................................................................69
25

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Authority is an instrumentality of the State of Georgia and a public corporation created to construct, operate, and manage a system of roads, bridges and tunnels and facilities related thereto. The Authority's board consists of five (5) members: The Governor, Commissioner of the Georgia Department of Transportation (GDOT), Director of the Office of Planning and Budget, Appointee of Lieutenant Governor and Appointee of Speaker of the House. The Authority is considered a blended component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
B. Basis of Presentation
The Authority's financial statements have been prepared in conformity with GAAP as prescribed by the GASB. Preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Authority's fiscal year end is June 30.
The Authority's basic financial statements consist of government-wide statements, including a statement of net position, a statement of activities and fund financial statements. This combination is designed to accomplish two goals: (1) to provide information using the economic resources measurement focus and the accrual basis of accounting and (2) to provide net cost information by function for governmental activities.
C. Government-Wide and Fund Financial Statements
Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the Authority. These statements include the financial activities of the overall Authority. Eliminations have been made to minimize the double counting of internal activities. Governmental activities, which normally are financed through intergovernmental revenues, and other non-exchange revenues, are reported separately from business-type activities, which are financed in whole or in part by fees charged to external parties for goods or services.
26

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Statement of Net Position presents the Authority's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Net position is reported in three categories:
Net Investment in Capital Assets consists of capital assets, net of accumulated amortization/ depreciation and reduced by outstanding balances for bonds, notes and other debt that are attributed to the acquisition, construction or improvement of those assets. In addition, deferred outflows/ inflows of resources that are attributable to the acquisition, construction or improvement of capital assets or related debt are included in Net Investment in Capital Assets. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount are not included.
Restricted net position results when constraints are placed on net position use either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation.
Unrestricted net position consists of net position that does not meet the definition of the two preceding categories. Unrestricted net position often is designated, indicating it is not available for general operations. Such designations have internally imposed constraints on resources but can be removed or modified.
When both restricted and unrestricted resources are available for use, generally it is the Authority's policy to use restricted resources first. The Statement of Activities demonstrates the degree to which the direct expense of a given function is offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues include (a) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Items not meeting the definition of program revenues are reported as general revenues.
Fund Financial Statements
Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual proprietary funds are reported as separate columns in the fund financial statements. The Authority did not have any non-major funds in fiscal year 2023.
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to timing of the measurements made, regardless of the measurements focus applied.
27

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The government-wide financial statements and the proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows. Grants and similar items are recognized as revenues in the fiscal year in which eligibility requirements imposed by the provider have been met. Unearned revenue is recorded when cash or other assets are received prior to being earned. Additionally, long-term assets and liabilities, such as capital assets and long-term debt, are included on the financial statements.
Governmental Funds
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they become both measurable and available. Revenues are considered to be "measurable" when the amount of the transaction can be determined and "available" when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers other revenues to be available if the revenues are collected within 30 days after fiscal year end. An exception to this policy is federal grant revenues, which generally are considered to be available if collection is expected within 12 months after year-end. All unearned revenues reported represent transactions for which assets have been received, but for which not all earnings criteria have been met. Capital purchases are recorded as expenditures and neither capital assets nor long-term liabilities, such as long-term debt, are reflected on the balance sheet. Major revenue sources susceptible to accrual include interest and other investment income.
Expenditures are generally recorded when the related fund liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments, and other long-term liabilities, are recorded only when payment is due or (for debt service expenditures), when amounts have been accumulated in the debt service fund for payments to be made early in the subsequent fiscal year. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the governmental fund statements.
The Authority reports the following major governmental funds:
General Fund The principal operating fund of the Authority which accounts for all financial resources of the general government, except those required to be accounted for in another fund. This includes strategic business development, the activity related to non-Tolling Major Mobility and Investment Program (MMIP) projects, capital assets owned by the Authority not accounted for in another fund, as well as general governmental activities.
Debt Service Fund Accounts for the accumulation of financial resources used to pay the principal and interest on long-term obligations.
28

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Georgia Transportation Infrastructure Bank (GTIB) Fund a special revenue fund used to account for grants and low interest loans to local governments for transportation infrastructure purposes.
Proprietary Funds
Proprietary fund reporting focuses on the determination of operating income, changes in net position, financial position and cash flows. Proprietary funds are classified as enterprise funds and distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
The Authority's proprietary funds follow all GASB pronouncements, (including all National Council on Governmental Accounting (NCGA) Statements and Interpretations currently in effect).
The Authority reports the following major proprietary fund:
Tolling System Fund Accounts for the activities for which tolls and fees are charged to the users of the I-85 Express Lanes, the I-85 Extension Express Lanes, the I-75 Northwest Corridor Express Lanes, the I-75 South Metro Express Lanes, and the toll facilities under planning for the Major Mobility Investment Program (MMIP).
E. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position/Fund Balances
Cash and Cash Equivalents
Cash and cash equivalents include currency on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments with maturity dates within three months of the date acquired, such as certificates of deposit, money market certificates and repurchase agreements. Cash and cash equivalents also include the holdings of Georgia Fund 1, the state investment pool that has the general characteristics of demand deposit accounts in that the Authority may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
The State of Georgia's Office of the State Treasurer (OST) manages the Georgia Fund 1 in accordance with policies and procedures established by state law and the State Depository Board, the oversight Board for OST. This investment is valued at the pool's share price, $1.00 per share, which approximates fair value.
The Authority does not have any risk exposure related to investments in derivatives or similar investments in Georgia Fund 1, as the investment policy of OST does not provide for investments in derivatives or similar investments through the Georgia Fund 1.
29

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments
Investments include financial instruments with terms in excess of three months from the date of purchase and certain securities held for the production of revenue. Investments are presented at fair value. Accounting principles generally accepted in the United States require that investments be reported at fair value; however, the variance in amortized cost and fair value is deemed immaterial to the financial statements for the majority of the Authority's investments. Any variances in amortized cost and fair value deemed material to the financial statements were reported at fair value.
The state investment pool (Georgia Fund 1 or the Primary Liquidity Portfolio) is an external investment pool that is not registered with the Securities and Exchange Commission (SEC), and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. All investments except repurchase agreements, non-negotiable certificates of deposit ("CD"), direct-issued commercial paper, and other such nonparticipating investments are priced at fair value. Repurchase agreements, non-negotiable CD's, direct-issued commercial paper, and other such nonparticipating investments are carried at cost because they are nonparticipating contracts that do not capture interest rate changes in their value. Security transactions are accounted for on a trade date basis which means that the purchases and sales of securities are recorded on the day the trade takes place with a corresponding payable or receivable.
The Georgia Fund 1 primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal. The Pool operates and reports to participants on an amortized cost basis. The income, gains and losses, net of administration fees of the pool is allocated to participants monthly on the ratio of the participant's share of the total funds in the pool based on the participant's average daily balance. This method differs from the fair value method used to value investments in these financial statements because the amortized cost method is not designed to distribute to participants all unrealized gains and losses in the fair values of the pool's investments. Investments in the pool are reported as cash and cash equivalents on the financial statements.
The Authority may invest regular funds in such securities and in such manner as it determines to be in its best interest as follows:
1) Obligations issued by the United States government; 2) Obligations of any corporation of the United States government fully guaranteed by the United
States government; 3) Obligations of the Federal Land Bank, the Federal Home Loan Bank, Federal Intermediate Credit
Bank or the Central Bank for Cooperatives; and 4) Repurchase Agreements.
In addition, certain revenue bonds issued by the Authority include covenants which restrict the Authority to investments in the state investment pool or to the following forms of investments:
1) The Local Government Investment Pool; 2) Government Obligations; 3) Certificates of Deposit;
30

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4) Repurchase Agreements; 5) Investment Agreements or Guaranteed Investment Contracts; and 6) Money Market Funds. Accounts Receivable Receivables consist primarily of amounts due from local governments for loans made under the GTIB program, intergovernmental agreements and toll patrons. Receivables are recorded, net of allowances for uncollectible accounts, when either the asset or revenue recognition criteria have been met. Receivables from GTIB are reasonably assured; an allowance for uncollectible accounts is not typically established for these receivables. In the governmental fund financial statements, the portion considered "available" is recorded as revenue; the remainder, if any, is recorded as a deferred inflow of resourcesunavailable. Inventories Inventory, which is comprised of transponders used in electronic toll collection, is determined by physical count and is valued at cost, using the first-in, first-out method. The Authority utilizes the consumption method to recognize inventory usage. Under the consumption method, inventories are recorded as expenses when consumed rather than when purchased. The fund balance of governmental funds is reported as nonspendable for inventory and prepaid items to indicate that these amounts do not represent expendable available financial resources. Restricted Assets Certain cash and cash equivalents, investments, and other assets are classified as restricted assets on the Balance Sheet and/or Statement of Net Position because their use is limited by applicable bond covenants, escrow arrangements or other regulations. This classification includes certain toll revenue collections and other resources that will be used for debt service because their use is limited by applicable bond covenants. Amounts also include customer deposits paid to the Authority, and amounts received from other intergovernmental sources to be used solely for disbursement by the Debt Service fund, GTIB fund, and contract commitments for capital construction.
31

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Capital Assets
Capital assets of governmental funds are recorded as expenditures at the time of purchase and capitalized in the governmental activities column of the government-wide Statement of Net Position. Capital assets of the Authority's proprietary funds are capitalized in the fund in which they are utilized. Capital assets, which include property, machinery and equipment, and computer software, are reported at historical cost. Donated capital assets are stated at acquisition value at the time of donation and disposals are deleted at recorded cost. Assets that are transferred from other state agencies or authorities are recorded at actual cost and the associated accumulated depreciation is also recorded. For donated assets that are not fully depreciated, the Authority recognizes donated capital contributions equal to the net book value of the donated asset.
Land and non-depreciable land improvements are capitalized regardless of cost. Amounts for other asset categories are capitalized when the cost or value equals or exceeds the following thresholds. Items acquired through capital leases or donations are subject to these capitalization thresholds, using the classifications most closely related to the leased or donated assets.

Asset Category Infrastructure other than bridges and roadways Software Intangible assets, other than software Buildings and building improvements Improvements other than buildings Machinery and equipment

Threshold

$ 1,000,000

$ 1,000,000

$ 100,000

$ 100,000

$ 100,000

$

5,000

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives is not capitalized. Major outlays for construction of toll facilities are capitalized as projects are constructed. Interest incurred during construction is not capitalized in governmental funds or proprietary funds.

Capital assets are depreciated over their useful lives using the straight-line depreciation method. The government-wide and proprietary fund financial statements report depreciation expense.

Capital assets without indefinite or inexhaustible useful lives are amortized or depreciated on the straight-line basis over the following useful lives:

Asset Category Infrastructure other than bridges and roadways Software Intangible assets, other than software Buildings and building improvements Improvements other than buildings Machinery and equipment

Years 10 -100
3 - 10 20
5 - 60 15 - 50
3 - 20

32

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible Right-To-Use Assets
Leases, as a lessee, are included as intangible right-to-use assets and lease obligations on the Statement of Net Position. Subscription-based information technology arrangements (SBITAs) result in an intangible right-to-use subscription asset and a subscription liability on the Statement of Net Position.
An intangible right-to-use asset represents the Authority's right to use an underlying asset for the lease or subscription term. Lease and subscription obligations represent the Authority's liability to make lease and subscription payments arising from the lease or subscription agreement. Intangible right-to-use assets and lease obligations and subscription liabilities are recognized based on the present value of lease or subscription payments over the lease term, where the initial term exceeds 12 months. Residual value guarantees and the value of an option to extend or terminate a lease or subscription are reflected to the extent it is reasonably certain to be paid or exercised. Variable payments based on future performance or usage are not included in the measurement of the lease or subscription liability. Intangible right-touse assets are amortized using a straight-line basis over the shorter of the lease or subscription term or useful life of the underlying asset. Prepayments made before the commencement of the lease or subscription are reported as intangible right-to-use assets-in-progress.
Leases as Lessee
The Authority is a lessee for a noncancellable lease of certain space within a building owned by a third party.
At the commencement of a lease, the Authority initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The right-to-use lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on the straight-line basis over the shorter of the useful life of the asset or the lease term.
Key estimates and judgments related to leases include how the Authority determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments:
The lease agreement entered into by the Authority as lessee does not contain a stated interest rate. Therefore, the Authority has used its estimated incremental borrowing rate as the discount rate for the lease. The Authority has estimated this incremental borrowing rate to be 3.24% for the lease in which the Authority is currently involved as the lessee.
The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments the Authority will make over the lease term.
33

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Authority monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and lease liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with current and longterm debt on the statement of net position.
Deferred Outflows of Resources
In addition to assets, the government-wide and fund financial statements will sometimes report a separate section of deferred outflows of resources. This separate financial statement element represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources expense or expenditure until that time. This classification includes debt refunding gains and losses that are deferred and amortized over the shorter of the life of the refunding debt (new debt) and the refunded debt (old debt). Also included are amounts for defined benefit pension plan activity and defined OPEB/SEAD plan activity.
Unearned Revenue
Unearned Revenue is primarily composed of prepaid tolls collected from Peach Pass customers (Proprietary Fund) and funds received from GDOT (Governmental Fund).
For prepaid tolls, revenue is recognized when Peach Pass customers use a toll facility, and a toll is applied to their account.
GDOT provides roadway improvement revenue for non-tolling projects throughout a fiscal year for anticipated project costs. Revenue received from GDOT is recognized as expenses are incurred and paid to vendors. Unspent funds are available for use in a future period and therefore recognized as unearned.
Compensated Absences
Employees earn annual leave ranging from 10 to 14 hours each month depending upon the employees' length of continuous State service with a maximum accumulation of 360 hours. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. Funds are budgeted and allocated each fiscal year to cover the cost of annual leave of terminated employees. The obligation for accumulated unpaid annual leave is reported as a liability in the government-wide and proprietary fund financial statements based on current rates of pay in effect at the end of the reporting period.
Employees earn 10 hours of sick leave each month with a maximum accumulation of 720 hours. Sick leave does not vest with the employee. Unused accumulated sick leave is forfeited upon retirement or termination of employment. However, certain employees who retire with 960 hours or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System. No liability is recorded for rights to receive sick pay benefits.
Certain non-exempt employees working over 40 hours per week accrue compensatory time at the rate of 1.5 times the overage hours.
34

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
All compensated absence liabilities (compensatory time) include salary related payments, where applicable. At the end of the year, all compensatory time not taken is recorded as a liability at the current salary rates and applicable social security, Medicare and health care costs. The current portion of compensated absence liabilities is calculated as a three-year average of annual reductions. The total compensated absences liability is reported on the government-wide and proprietary fund financial statements.
Accrued Liabilities and Long-Term Obligations
Long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities column or business-type activities column on the government-wide Statement of Net Position and on the proprietary fund Statement of Net Position in the fund financial statements. Prepaid bond insurance, bond discounts and premiums are deferred and amortized over the life of the bonds using the effective interest method or the straight-line method. Bonds payable are reported net of the unamortized bond premium or discount, while prepaid bond insurance is reported as an asset. Bond issuance costs are recognized during the current period.
In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
The Tax Reform Act of 1986 requires governmental organizations issuing tax-exempt bonds to refund to the U.S. Treasury, interest earnings on bond proceeds in excess of the yield on those bonds. Governmental organizations must comply with arbitrage rebate requirements in order for their bonds to maintain tax-exempt status. Organizations are required to remit arbitrage rebate payments for nonpurpose interest to the federal government at least once every five years over the life of the bonds. Arbitrage liability is treated as an expense in the government-wide statements when the liability is recognized. In the fund financial statements, governmental funds report arbitrage (other debt service) expenditures when the liability is due. The Authority did not have any arbitrage rebate payments for the year ended June 30, 2023.
Deferred Inflows of Resources
In addition to liabilities, the government-wide and fund financial statements will sometimes report a separate section of deferred inflows of resources. This separate financial statement element represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. This classification includes amounts related to defined benefit pension plan activity and defined OPEB/SEAD plan activity.
35

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Employees' Retirement System (ERS) and additions to/deductions from ERS's fiduciary net position have been determined on the same basis as they are reported by ERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Other Post-Employment Benefits (OPEB)
For purposes of measuring both the net OPEB liability and net OPEB/SEAD asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia State Employees Post-employment Benefit Fund (State OPEB Fund) and additions to/deductions from State OPEB Fund fiduciary net position have been determined on the same basis as they are reported by State OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Net Position
The difference between assets, deferred outflows of resources, liabilities and deferred inflows of resources is "Net Position" on the government-wide and proprietary fund financial statements.
Net position is reported as net investment in capital assets, restricted or unrestricted. "Net Investment in Capital Assets" consists of capital assets, net of accumulated amortization/depreciation, reduced by the outstanding balances for bonds, notes and other debt that are attributed to the acquisition, construction or improvement of those assets. In addition, deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction or improvement of those assets or related debt are included in Net Investment in Capital Assets. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount are not included.
Restricted net position results when constraints placed on net position are either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation.
Unrestricted net position consists of net position that does not meet the definition of the two preceding categories. Unrestricted net position is often designated, indicating it is not available for general operations. Such designations have internally imposed constraints on resources, but can be removed or modified.
When both restricted and unrestricted resources are available for use, generally it is the Authority's policy to use restricted resources first.
36

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fund Balances
Generally, fund balance represents the difference between the assets, deferred outflows of resources, liabilities and deferred inflows of resources under the current financial resources measurement focus of accounting. In the fund financial statements, governmental funds report fund balance classifications that comprise a hierarchy based primarily on the extent to which the Authority is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Fund balances are classified as follows:
Nonspendable Fund balances are reported as nonspendable when amounts cannot be spent because they are either (a) not in spendable form (i.e., items that are not expected to be converted into cash) or (b) legally or contractually required to be maintained intact, such as inventory, prepaid items, and the principal in a permanent fund.
Restricted Fund balances are reported as restricted when there are limitations imposed on their use either through constitutional provisions or the enabling legislation adopted by the Authority or through external restrictions imposed by creditors, grantors or law or regulations of other governments.
Committed Fund balances are reported as committed when they can be used only for specific purposes pursuant to constraints imposed by formal action of the governing board of the Authority through the adoption of a resolution. Only the governing board of the Authority may modify or rescind the commitment by taking the same type of action it employed to previously commit the amounts (e.g., legislation).
Assigned Fund balances are reported as assigned when amounts are constrained by the Authority's intent to be used for specific purposes, but they are neither restricted nor committed. Assignments may be made under statutory authority of management. Through resolution, the governing board of the Authority has authorized the Authority's Executive Director to declare funds as assigned.
Unassigned The residual amount of fund balance is reported as unassigned for balances that do not meet the above constraints. The Authority reports positive unassigned fund balance only in the general fund. Negative unassigned fund balances may be reported in all funds.
Committed, assigned and unassigned fund balances are collectively considered to be unrestricted funds.
As with net position, when both restricted and unrestricted resources are available for use, generally it is the Authority's policy to use restricted resources first.
37

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Interfund Activity and Balances
Offsetting asset and liability accounts (due from/to other funds) are used to account for amounts owed to a particular fund by another fund for obligations on goods sold or services rendered.
In the fund financial statements, transfers represent flows of assets without equivalent flows of assets in return or requirements for repayment. In addition, transfers are recorded when a fund receiving revenue provides it to the fund which expends the resources. Transfers of balances between funds are made to accomplish various provisions of law. Interfund transfers are reported as other financing sources/uses. Interfund transfers have been eliminated from the Statement of Net Position.
NOTE 2 CHANGES IN FINANCIAL ACCOUNTING AND REPORTING
A. Implementation of New Accounting Standards
In fiscal year 2023, the Authority implemented the following GASB Statements:
GASB Statement No. 94, "Public-Private and Public-Public Partnerships and Availability Payment Arrangements"
The primary objective of this statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs), and to provide guidance for accounting and financial reporting for availability payment arrangements (APAs). A PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. An APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction. This statement is not applicable to the Authority in fiscal year 2023.
GASB Statement No. 96, "Subscription Based Information Technology Arrangements (SBITA)"
This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset-- an intangible asset--and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. Additional information on changes to the financial statements related to the implementation of this statement can be found in Note 8 and Note 10.
38

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 3 BUDGET
Legal adoption of The Authority budget is not required for the General Fund; however, the Authority Board of Directors approves an operating budget for management purposes. The operating budget is not subject to review or approval by the Legislature of the State of Georgia, except for those limited portions that consist of appropriated funds received indirectly from other State entities. Operating budgets are adopted on the cash basis of accounting. The Authority's Board approves the operating budget annually in the spring for the following fiscal year.
NOTE 4 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Compliance with Bond Covenants
The Authority is subject to certain covenants with regard to the issuance of the aggregation of its revenue bonds issued and outstanding as of June 30, 2023.
Funds of the State of Georgia cannot be placed in a depository paying interest longer than 10 days without the depository providing a surety bond to the state. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated (O.C.G.A.) Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or the State of Georgia;
(2) Bonds, bills, certificates or indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia;
(3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, the bonds have been duly validated and they are not in default;
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia;
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association; and
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
O.C.G.A. Section 45-8-11 provides that the Authority may waive the requirements for security in the case of operating funds placed in demand deposit checking accounts.
39

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 4 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (CONTINUED)
The Authority's bond funds are properly collateralized in accordance with the terms of the applicable indentures.
Pledged Revenue
The net toll revenue derived from the operation of the Managed Lane System secure the Managed Lane System State of Georgia Guaranteed Revenue Bonds Series 2021A and 2021B. The bond indenture requires the Authority to establish, charge, and collect tolls for the privilege of traveling on the Managed Lane System at rates sufficient to produce net revenues in each fiscal year that are at least one hundred fifty percent (150%) of the Annual Debt Service with respect to all outstanding bonds for such fiscal year. Net revenues are defined and set forth in the Flow of Funds.
NOTE 5 DEPOSITS AND INVESTMENTS
Cash and cash equivalents and investments as of June 30, 2023, are classified in the accompanying financial statements as follows:

Cash and Cash Equivalents Restricted Assets
Cash and Cash Equivalents Investments
Total

Governmental Activities

Proprietary Funds

Total

$

26,950,971 $

47,625,049 $

74,576,020

763,727,515 -

221,504,636 3,524,790

985,232,151 3,524,790

$ 790,678,486 $ 272,654,475 $ 1,063,332,961

Cash on hand, deposits, and investments as of June 30, 2023, consist of the following:

Governmental Activities

Proprietary Funds

Total

Cash on Hand

$

Deposits with Financial Institutions

Investments

Investments with Georgia Fund 1

150 $

875 $

10,815,705

577,336

542,711,078

112,674,637

237,151,553

159,401,627

1,025 11,393,041 655,385,715 396,553,180

Total

$ 790,678,486 $ 272,654,475 $ 1,063,332,961

Deposits include demand deposit accounts, including certain interest-bearing demand deposit accounts. Funds belonging to the State of Georgia (and thus the Authority) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the securities numerated in the official code of Georgia Annotated (O.C.G. A.) 50-17-59.
40

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 5 DEPOSITS AND INVESTMENTS (CONTINUED)
The Authority participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered Deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to amount of up to 125% if economic or financial conditions warrants. The program lists the type of eligible collateral. The OST approves authorized custodian.

In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully insured.

Categorization of Cash Equivalents. The Authority reported investments of $396,553,180 in Georgia Fund 1, a local government investment pool, which is included in the cash balances reported. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Fitch. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1, was 28 days. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr.

Categorization of Investments. At June 30, 2023, the Authority had the following investments:

Investment Type

Cost-Based

Investment Maturity Less Than 1 Year

Debt Securities

U.S. Treasuries $ 3,524,790 $

3,524,790

Fair Value of Investments. Investments are measured at fair value on a recurring basis and the Authority categorizes its fair value measurements within the fair value hierarchy established by GASB Statement No. 72 and Generally Accepted Accounting Principles (GAAP). The hierarchy is based on the inputs used in valuation and gives the highest priority to unadjusted quoted prices in active markets and requires that observable inputs be used in the valuation when available. The disclosure of fair value

41

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 5 DEPOSITS AND INVESTMENTS (CONTINUED)

estimates in the hierarchy is based on whether the significant inputs into valuations are observable. In determining the level of the hierarchy, in which the estimate is disclosed, the highest level, Level 1, is given to unadjusted quoted prices in active markets and the lowest level, Level 3, to unobservable inputs.
Level 1: Quoted prices for identical investments in active markets;
Level 2: Observable inputs other than quoted market prices; and,
Level 3: Unobservable inputs.
The Authority has the following recurring fair value measurements as of June 30, 2023: Money Market Mutual Funds of $651,860,925 are valued using quoted market prices (Level 1 inputs).
Custodial Credit Risk - Deposits. The custodial credit risk for deposits is the risk that, in the event of a bank failure, the Authority's deposits may not be recovered. The OST Investment Policy specifies safety of capital as the first priority in investing funds and liquidity as the second priority, followed by investment return and diversification. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S government, or bonds of public authorities, counties, or municipalities. As of June 30, 2023, the Authority's cash and deposit bank balances totaled $11.4 million. Of these deposits, none were exposed to custodial credit risk.
NOTE 6 RECEIVABLES
Receivables at June 30, 2023 consisted of the following:

Governmental Activities General fund GTIB Debt Service Total - Governmental Funds

Notes and Loans

$

- $

24,373,585

-

24,373,585

Other

Intergovernmental Receivables

Total Receivables

263,687 $ -
90,475 354,162

24,172,752 $ -
24,172,752

24,436,439 24,373,585
90,475 48,900,499

Long-Term Receivable from GDOT Total - Governmental Activities $

24,373,585 $

354,162 $

56,160,000 80,332,752 $

56,160,000 105,060,499

Business-Type Activities

Tolling System

$

- $

1,077,807 $

17,500 $

1,095,307

42

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 7 INTERFUND BALANCES Interfund Transfers Interfund transfers for the fiscal year ended June 30, 2023 consist of the following:

Funds
General Fund Tolling System Fund

Transfer In

Transfer Out

$

- $ (2,162,826) $

2,162,826

-

Total
(2,162,826) 2,162,826

Total

$

2,162,826 $ (2,162,826) $

-

In fiscal year 2023, the Authority elected to transfer cash held in the General Fund of the Authority to the Tolling System Fund. This cash was related to an imprest account the Authority maintains in its main operating account. Since the Authority's main day-to-day operations reside in the Tolling System Fund, along with the composition of account deposits being tolling funds, management made the decision to move imprest funds into the account where the activity is more likely classified.

43

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 8 CAPITAL ASSETS

Capital Asset Activity

Capital asset activity for the fiscal year ended June 30, 2023 was as follows:

Governmental Activities: Capital Assets Not Being Depreciated:
Land Construction in Progress Total Capital Assets Not Being Depreciated

Beginning Balance

Increases

Decreases

Ending Balance

$ 22,839,218 $ 17,258,399 40,097,617

- $ 8,997,084 8,997,084

- $ (5,746,487) (5,746,487)

22,839,218 20,508,996 43,348,214

Capital Assets Being Depreciated: Buildings Machinery and Equipment Infrastructure
Total Capital Assets Being Depreciated

11,799,637 104,356,129
29,665,788 145,821,554

8,792,420
93,933 8,886,353

(772,803)
(772,803)

11,799,637 112,375,746
29,759,721 153,935,104

Less Accumulated Depreciation: Buildings Machinery and Equipment Infrastructure
Total Accumulated Depreciation

(1,392,459) (67,588,556) (15,799,551) (84,780,566)

(266,169) (7,588,433)
(374,447) (8,229,049)

772,803
772,803

(1,658,628) (74,404,186) (16,173,998) (92,236,812)

Total Capital Assets Being Depreciated, Net

61,040,988

657,304

-

61,698,292

Total Governmental Activities Capital Assets

$ 101,138,605 $

9,654,388 $

(5,746,487) $ 105,046,506

Business-Type Activities: Capital Assets Not Being Depreciated:
Construction in Progress

$ 21,296,171 $

7,091,174 $

(496,109) $ 27,891,236

Capital Assets Being Depreciated: Machinery and Equipment Computer Software
Total Capital Assets Being Depreciated

79,396,227 8,610,898
88,007,125

1,150,514 -
1,150,514

-

80,546,741

-

8,610,898

-

89,157,639

Less Accumulated Depreciation For: Machinery and Equipment Computer Software
Total Accumulated Depreciation

(63,285,998) (8,610,898)
(71,896,896)

(9,001,381) -
(9,001,381)

-

(72,287,379)

-

(8,610,898)

-

(80,898,277)

Total Capital Assets Being Depreciated, Net

16,110,229

(7,850,867)

-

8,259,362

Total Business-Type Activities Capital Assets

$ 37,406,400 $

(759,693) $

(496,109) $ 36,150,598

44

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 8 CAPITAL ASSETS (CONTINUED)

Depreciation expense for the fiscal year ended June 30, 2023 was $8,229,049 and $9,001,381 respectively for Governmental Activities and Business-type Activities. The total of depreciation expense in Governmental Activities was charged to the General Government function of the Authority. The total of depreciation expense in Business-type Activities was charged to the Tolling function of the Authority.

Lease Asset Activity

Lease asset activity, as a result of the implementation of GASB 87, for the fiscal year ended June 30, 2023

was as follows:

Beginning Balance

Increases

Decreases

Ending Balance

Business-Type Activities: Right-to-Use Leased Assets - Building $

9,475,559 $

- $

- $

9,475,559

Less: Accumulated Amortization Right-to-Use Leased Assets - Building

(734,539)

(881,447)

-

(1,615,986)

Total Leased Assets, Net

$

8,741,020 $

(881,447) $

- $

7,859,573

The total amortization expense of $881,447 was charged to the Tolling function of the Authority.

Subscription Asset Activity

Subscription asset activity, as a result of the implementation of GASB No. 96, for the fiscal year ended

June 30, 2023 was as follows:

Beginning

GASB No. 96

Balance

Implementation

Increases

Decreases

Ending Balance

Business-Type Activities: Right-to-Use Leased Assets - SBITA $

- $

3,754,922 $

4,274,104 $

- $

8,029,026

Less: Accumulated Amortization

Right-to-Use Leased Assets - SBITA

-

-

(1,493,860)

-

(1,493,860)

Total Leased Assets, Net

$

- $

3,754,922 $

2,780,244 $

- $

6,535,166

The total amortization expense of $1,493,860 was charged to the Tolling function of the Authority.

45

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 9 LONG-TERM LIABILITIES

Changes in long-term liabilities for the fiscal year ended June 30, 2023 are as follows:

Governmental Activities

Revenue Bonds Payable

$

GARVEE Bonds Payable

Deferred Amounts:

Net Unamortized Premiums

Total Bonds Payable

Net OPEB liability

Net Pension Liability

Compensated Absences

Governmental Activity

Long-Term Liabilities

$

Beginning Balance

GASB No. 96 Implementation

41,915,000 $

- $

452,655,000

-

98,568,833

-

593,138,833

-

90,432

-

638,427

-

75,809

-

593,943,501 $

- $

Additions

Reductions

Ending Balance

Due Within One Year

- $ (22,650,000) $ 19,265,000 $ 19,265,000

-

(37,810,000)

414,845,000

39,715,000

34,369 840,540 32,263

(17,745,266) (78,205,266)
-

80,823,567 514,933,567
124,801 1,478,967
108,072

15,767,766 74,747,766
91,930

907,172 $ (78,205,266) $ 516,645,407 $ 74,839,696

Business-Type Activities

Revenue Bonds Payable

$

Deferred Amounts:

Net Unamortized Premiums

Net Unamortized Discount

Total Bonds Payable

Net OPEB Liability

Net Pension Liability

Compensated Absences

Leased Liabilities

Subscription Obligations

Business-Type Activity

Long-Term Liabilities

$

367,380,000 $
57,495,668 (42,209)
424,833,459 732,884
5,174,187 918,006
8,933,223 -
440,591,759 $

- $

- $

3,754,922

486,395 9,275,052 6,523 4,274,104

3,754,922 $ 14,042,074 $

- $ 367,380,000 $

(2,710,365) 4,087
(2,706,278) -
(661,482) (2,283,317)

54,785,303 (38,122)
422,127,181 1,219,279
14,449,239 924,529
8,271,741 5,745,709

(5,651,077) $ 452,737,678 $

-
2,710,365 (4,087)
2,706,278 -
786,442 708,928 2,274,766
6,476,414

46

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 9 LONG-TERM LIABILITIES (CONTINUED)
Revenue Bonds
Governmental Activities
State of Georgia Guaranteed Revenue Refunding Bonds, Series 2016. On July 28, 2016, the Authority issued $19,265,000 of State of Georgia Guaranteed Revenue Refunding Bonds, Series 2016. Including bond premiums in the amount of $5,123,912, the bond proceeds amounted to $24,388,912. The bonds were issued for the purposes of (1) refunding $23,810,000 in outstanding principal of the State of Georgia Guaranteed Revenue Bonds, Series 2003 and (2) to pay a portion of the costs of issuance of the bonds. Interest on these bonds is payable semiannually on April 1 and October 1 of each year with an interest rate of 5%. These bonds mature on October 1, 2023. As of June 30, 2023, the outstanding principal balance is $19,265,000. These bonds are secured by the amount of net proceeds of transportation funds provided for in a joint resolution of the Georgia State Transportation Board and the Authority. Further, the State of Georgia has guaranteed the full payment of the bonds and the interest thereon in accordance with the Constitution of the State of Georgia and has reserved $24,889,188 in the State of Georgia Guaranteed Revenue Debt Common Reserve Fund that is on deposit at the OST.
State of Georgia Guaranteed Revenue Refunding Bonds, Series 2011B. On March 31, 2011, the Authority issued $153,085,000 of State of Georgia Guaranteed Revenue Refunding Bonds, series 2011B. Including bond premiums in the amount of $26,561,505, the bond proceeds amounted to $179,646,505. The bonds were issued for the purposes of (1) refunding $162,370,000 of the $233,165,000 in outstanding principal of the State of Georgia Guaranteed Revenue Bonds, Series 2003 and (2) to pay a portion of the costs of issuance of the bonds. Interest on these bonds was payable semiannually on April 1 and October 1 of each year with an interest rate of 5%. These bonds matured on October 1, 2022. As of June 30, 2023, the outstanding principal balance is $0.
Federal Highway Grant Anticipation Revenue Bonds Series 2017A and Federal Reimbursement Revenue Bonds Series 2017A. On August 1, 2017, the Authority issued Federal Highway Grant Anticipation Revenue Bonds Series 2017A and Federal Highway Reimbursement Revenue Bonds Series 2017A in the amounts of $51,005,000 and $12,845,000, respectively. The bonds were issued for the purpose of providing funds to finance a portion of: (1) the cost of the planning, design, engineering, acquisition and construction of two express lanes for certain segments of Interstate Highway 285 ("I-285") in the State of Georgia, particularly, the right-of-way acquisition associated therewith, and (2) paying the costs of issuance of the bonds. Interest on these bonds is payable semiannually on June 1 and December 1 of each year, commencing on December 1, 2017 with interest rates ranging from 4.00% to 5.00%. Principal on these bonds is payable on June 1, of each year, commencing on June 1, 2018 and maturing on June 1, 2029. As of June 30, 2023, the outstanding principal balances for the Series 2017A Grant Anticipation Revenue Bonds and the Series 2017A Reimbursement Revenue Bonds are $29,505,000 and $7,390,000 respectively. These bonds are pledged and payable solely from grant and reimbursement revenues received from the Federal Highway Administration. These bonds do not constitute a pledge of the faith and credit of the Authority or the State of Georgia.
47

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 9 LONG-TERM LIABILITIES (CONTINUED)
Grant Anticipation Revenue Bonds Series 2020 and Federal R e i m b u r s e m e n t Revenue Bonds Series 2020. On December 22, 2020, the Authority issued Federal Highway Grant Anticipation Revenue Bonds Series 2020 and Federal Highway Reimbursement Revenue Bonds Series 2020 in the amounts of $387,355,000 and $96,805,000, respectively. The bonds were issued for the purpose of providing funds to finance a portion of: (1) the cost of the planning, design, engineering, acquisition, and construction of express lanes for certain segments of Interstate Highway 285 ("I-285") and State Route 400 in the State of Georgia, particularly, the right-of-way acquisition associated therewith, and (2) paying the costs of issuance of the bonds. Interest on these bonds is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2021, with a n interest rate of 5.00%. Principal on these bonds is payable on June 1, of each year, commencing on June 1, 2021, and maturing on June 1, 2032. As of June 30, 2023, the outstanding principal balances for the Series 2020 Grant Anticipation Revenue Bonds and the Series 2020 Federal Reimbursement Revenue Bonds are $302,380,000 and $75,570,000 respectively. These bonds are pledged and payable solely from grant and reimbursement revenues received from the Federal Highway Administration. These bonds do not constitute a pledge of the faith and credit of the Authority or the State of Georgia.
Business-Type Activities
Managed Lane System State of Georgia Guaranteed Revenue Bonds, Series 2021AB On July 1, 2021, the Authority issued Managed Lane System State of Georgia Guaranteed Revenue Bonds, Series 2021A (Full Faith and Credit) and Series 2021B (Full Faith and Credit, Federally Taxable) in the amounts of $330,160,000 and $37,220,000, respectively. The bonds were issued for the purposes of 1) to repay in-full the remaining debt on the TIFIA loan related to the I-75 Northwest Corridor Express Lanes project; 2) defeasance of outstanding I-75 South Toll Revenue Bonds; 3) pay the costs of certain tolling infrastructure related to the existing managed lane system; 4) pay the costs of certain tolling infrastructure related to certain future tolling facilities planned in the State's Major Mobility Investment Program; 5) to fund capitalized interest on the 2021A Bonds; and 6) to pay a portion of the costs of issuance of the bonds. The Series 2021A bonds mature on July 15, 2051 and the Series 2021B bonds mature on July 15, 2034. As of June 30, 2023, the outstanding principal balance in total is $367,380,000. These bonds are secured by the net toll revenue derived from the operation of the Managed Lane System. Further, the State of Georgia has guaranteed the full payment of the bonds and the interest thereon in accordance with the Constitution of the State of Georgia and has reserved $26,079,017 in the State of Georgia Guaranteed Revenue Debt Common Reserve Fund that is on deposit at the OST.
Prior Year Defeasement of Debt In fiscal year 2022, the Authority defeased the Series 2014 A&B outstanding Toll Revenue Bonds by placing the proceeds of the Series 2021B Guaranteed Revenue Bond in an irrevocable trust to provide for all future debt service payments on the Series 2014 A&B bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Authority's basic financial statements. Annually from June 2022 to June 2024, funds will flow from the trust to redeem the full amount of outstanding debt on the Series 2014 A&B bonds. On June 1, 2023, a portion of the bonds were redeemed,
48

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 9 LONG-TERM LIABILITIES (CONTINUED)
totaling an outflow from the trust of $2,049,876. At June 30, 2023, the Series 2014 A&B bonds outstanding are considered defeased, with a remaining $46,133,941 due to outflow from the trust June 1, 2024.
Summary of Long-Term Debt

Revenue bonds outstanding as of June 30, 2023 are as follows:

Governmental Activities: Guaranteed Revenue Refunding Bonds, Series 2016

Refunding of Guaranteed Revenue Bonds, Series 2003

5.00%

19,265,000

Grant Anticipation Revenue Bonds, Series 2017A

Improvement of roads and bridges

5.00%

29,505,000

Reimbursement Revenue Bonds, Series 2017A

Improvement of roads and bridges

4.00 - 5.00%

7,390,000

Grant Anticipation Revenue Bonds, Series 2020

Improvement of roads and bridges

5.00%

302,380,000

Reimbursement Revenue Bonds, Series 2020

Improvement of roads and bridges

5.00%

75,570,000

Total Governmental Activities

$ 434,110,000

Business-Type Activities: Guaranteed Revenue Bonds, Series 2021A

Defeasance of TIFIA debt; Tolling Capital Infrastucture 3.00 - 4.00% $

330,160,000

Guaranteed Revenue Bonds, Series 2021B

Defeasance of I-75S TRB debt

1.70- 1.90%

37,220,000

Total Business-Type Activities

$ 367,380,000

49

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 9 LONG-TERM LIABILITIES (CONTINUED)

Debt Service Requirements

Governmental Activities

Revenue and GARVEE bonds

Annual debt service requirements to maturity for revenue bonds and GARVEE bonds are as follows as of June 30, 2023:

Revenue Fiscal Year Payable

Total

Principal

Interest

2024

$ 19,746,625 $ 19,265,000 $

481,625

GARVEE Fiscal Year Payable

Total

Principal

2024 2025 2026 2027 2028 2029-2032

$ 60,446,300 $ 39,715,000 $

60,441,500

41,685,000

60,442,250

43,770,000

60,438,750

45,955,000

60,436,000

48,250,000

219,959,250

195,470,000

Interest
20,731,300 18,756,500 16,672,250 14,483,750 12,186,000 24,489,250

$ 522,164,050 $ 414,845,000 $ 107,319,050

50

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 9 LONG-TERM LIABILITIES (CONTINUED)

Business-Type Activities
State Road and Tollway Authority Managed Lane System Guaranteed Revenue Bonds, Series 2021AB
Annual debt service requirements to maturity for the SRTA Managed Lane System GRB, Series 2021AB is as follows as of June 30, 2023:

Revenue Fiscal Year Payable

Total

Principal

Interest

2024 2025 2026 2027 2028 2029-2033 2034-2038 2039-2043 2044-2048 2049-2052

$ 12,700,840 $

-

$ 12,700,840

12,700,840

-

12,700,840

12,700,840

-

12,700,840

12,700,840

-

12,700,840

12,700,840

-

12,700,840

82,555,698

19,485,000

63,070,698

124,267,268

67,240,000

57,027,268

125,972,350

83,805,000

42,167,350

125,718,175

101,960,000

23,758,175

100,688,700

94,890,000

5,798,700

$ 622,706,391 $ 367,380,000 $ 255,326,391

NOTE 10 LEASES

In December 2016, the Authority executed an agreement to lease office space. As of June 30, 2023, the value of the lease liability was $8,271,741. The Authority is required to make monthly payments that include principal and interest. As the lease does not contain a specific interest rate, the Authority has used its incremental borrowing rate of 3.42% as the discount rate for the lease. The right-to-use lease asset as of the end of the current fiscal year was $9,475,559 and had accumulated amortization of $1,615,986.

Debt service to maturity on the Authority's outstanding lease is as follows:

Fiscal Year Payable

Total

Principal

Interest

2024

$

2025

2026

2027

2028

2029 - 2033

$

980,809 $ 1,005,315 1,030,563 1,056,231 1,082,676 4,506,343
9,661,937 $
51

708,928 $ 758,449 810,446 864,675 921,577 4,207,666
8,271,741 $

271,881 246,866 220,117 191,556 161,099 298,677
1,390,196

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 10 LEASES (CONTINUED)
The Authority has entered into subscription-based information technology arrangements (SBITAs) covering periods ranging from 2 to 5 years. Through these SBITAs, the Authority acquired the right to use the following vendor-provided software as of July 1, 2022: workforce management software, various desktop and server software cybersecurity software. The Authority also has acquired the maintenance and hosting services for its toll service integrator and customer back office system(s).
The total of the Authority's subscription assets recorded at cost as of June 30, 2023 was $8,029,026, less accumulated amortization of $1,493,860. Future subscription payments under SBITAs are as follows:

Fiscal Year Payable

2024

$

2025

2026

2027

$

Total
2,336,512 $ 1,788,018 1,146,176
669,802
5,940,508 $

Principal
2,274,766 $ 1,709,575 1,106,369
654,999
5,745,709 $

Interest
61,746 78,443 39,807 14,803
194,799

NOTE 11 RETIREMENT SYSTEMS Defined Benefit Plans

Substantially all of the Authority employees participate in various retirement plans administered by the State of Georgia under the ERS. This system issues a separate, publicly available financial report that includes applicable financial statements and required supplementary information. The report may be obtained by visiting www.ers.ga.gov.
The significant retirement plans that the Authority participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by state law.

Employees' Retirement System of Georgia

Plan Description
ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.

52

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 11 RETIREMENT SYSTEMS (CONTINUED)
Benefits Provided
The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through the ERS plan.
Contributions
Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Authority's total required contribution rate for the year ended June 30, 2023 was 31.01% of annual covered payroll for old plan members and new plan members and 27.47% for GSEPS members. The rates include the annual actuarially determined employer contribution rate of 24.67% of annual covered payroll for old and new plan members and 21.59% for GSEPS members, plus a 6.34% adjustment to the old and new plan and a 5.88% adjustment to the GSEPS plan for the commencement of COLA prefunding for certain retired ERS members. The Authority's contributions to ERS totaled $2,020,822 for the year ended June 30, 2023. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
53

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 11 RETIREMENT SYSTEMS (CONTINUED)

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2023, the Authority reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 was determined using standard roll-forward techniques. The Authority's proportion of the net pension liability was based on contributions to ERS during the fiscal year ended June 30, 2022. At June 30, 2022, the Authority's proportion was 0.238501%, which was a decrease of 0.010008% from its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Authority recognized pension expense of $3,549,822. At

June 30, 2023, the Authority reported deferred outflows of resources and deferred inflows of resources

related to pensions from the following sources:

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual experience

$

Changes of assumptions

Net difference between projected and actual earnings

on pension plan investments

Changes in proportion and differences between Employer

contributions and proportionate share of contributions

Employer contributions subsequent to the measurement date

34,208 $ 2,831,396
1,850,694
2,020,822

144,467 -
-
364,898 -

Total

$ 6,737,120 $ 509,365

Authority contributions subsequent to the measurement date of $2,020,822 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, 2024. 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 30:

2024

$

2025

$

2026

$

2027

$

2,102,274 635,239 46,148
1,423,272

54

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 11 RETIREMENT SYSTEMS (CONTINUED)
Actuarial Assumptions The total pension liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

2.50%

Salary increases

3.00% - 6.75%, including inflation

Investment Rate of Return

7.00%, net of pension plan investment expense, including inflation

Mortality rates are as follows:

The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service.
The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows:

Participant Type

Membership Table

Service Retirees Disability Retirees Beneficiaries

General Healthy Annuitant General Disabled General Contingent Survivors

Set Forward (+) / Setback (-)

Male: +1; Male: -3; Male: +2;

Female: +1 Female: 0 Female: +2

Adjustment to Rates

Male: 105%; Male: 103%; Male: 106%;

Female: 108% Female: 106% Female: 105%

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.

The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

55

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 11 RETIREMENT SYSTEMS (CONTINUED)

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class

Target allocation

Long-term expected real rate of return*

Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative

30.00% 46.30%
1.20% 12.30%
5.20% 5.00%

0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

Total

100.00%

* Rates shown are net of inlation

Discount Rate
The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. 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.

Sensitivity of the Authority's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the Authority's proportionate share of the net pension liability calculated using the discount rate of 7.00%, as well as what the Authority's proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) than the current rate:

Employees' Retirement System: Authority's proportionate share of the net pension liability

1% Decrease (6.00%)

Current Discount Rate (7.00%)

$

21,203,390 $

15,928,206 $

1% Increase (8.00%)
11,492,183

Pension Plan Fiduciary Net Position

Detailed information about the pension plan's fiduciary net position is available in the separately issued ERS financial report which is publicly available at www.ers.ga.gov/financials.

56

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 11 RETIREMENT SYSTEMS (CONTINUED)

GSEPS 401(k) Defined Contribution Component of ERS
In addition to the ERS defined benefit pensions described above, GSEPS members may also participate in the Peach State Reserves 401(k) defined contribution plan and receive an employer matching contribution. The 401(k) plan is administered by the System and was established by the Georgia Employee Benefit Plan Council in accordance with State law and Section 401(k) of the IRC. The GSEPS segment of the 401(k) plans were established by State law effective January 1, 2009. Plan provisions and contribution requirements specific to GSEPS can be amended by State law. Other general 401(k) plan provisions can be amended by the ERS Board of Trustees as required by changes in federal tax law or for administrative purposes. The Authority was not required to make significant contributions to the 401(k) plans prior to GSEPS because most members under other segments of the plan either were not State employees or were not eligible to receive an employer match on their contributions.

The GSEPS plan includes automatic enrollment in the 401(k) plans at a contribution rate of 5% of salary unless the participating member elects otherwise. The member may change such level of participation at any time. In addition, the member may make such additional contributions as he or she desires, subject to limitations imposed by federal law. The State will match 100% of the employee's contribution up to 5% of employee salary. Therefore, the State will match 5% of salary when an employee contributes at least 5% to the 401(k) plans. GSEPS members with at least six years of service, and who are contributing at least 5% will get an additional half percent employer match for every full year of service in excess of five years, up to a maximum match of 9%.

GSEPS employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all State service. Vesting is determined based on the table below:

GSEPS Employer Contribution Vesting:
Years of Service Less than 1 year
1 year 2 years 3 years 4 years 5 or more years

% Vested 0% 20% 40% 60% 80%
100%

Employee contributions and earnings thereon are 100% vested at all times. The 401(k) plans also allow participants to roll over amounts from other qualified plans to their respective account in the 401(k) plans on approval of the 401(k)-plan administrator. Such rollovers are 100% vested at the time of transfer. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.

The participants may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or 30 days after retirement or other termination of service (employer contributions are only eligible for distribution upon separation from service). Upon the death of a participant, his or
57

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 11 RETIREMENT SYSTEMS (CONTINUED)
her beneficiary shall be entitled to the vested value of his or her accounts. Employees who die while actively employed and eligible for 401(k) employer matching contributions become fully vested in employer contributions upon death. Distributions are made in installments or in a lump sum.
NOTE 12 OTHER POST-EMPLOYMENT BENEFITS
The Authority participates in the following State of Georgia other post-employment benefit (OPEB) plans: Administered by Department of Community Health (DCH): Georgia State Employees Post-Employment Health Benefit Fund (State OPEB Fund) Administered by the Employees' Retirement System of Georgia: For retired and vested inactive (SEAD-OPEB)
Georgia State Employees Post-Employment Health Benefit Fund (State OPEB Fund)
Plan Description
Employees of State organizations as defined in 45-18-25 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the State OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 45 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided
The State OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for employees of State organizations (including technical colleges) and other entities authorized by law to contract with DCH for inclusion in the plan. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public-School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. NonMedicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The State OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the State OPEB Fund is permitted.
Contributions
As established by the Board, the State OPEB Fund is substantially funded on a pay-as-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the State OPEB Fund from the Authority were $472,512 for the year ended June 30, 2023. Active employees are not required to contribute to the State OPEB Fund.
58

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2023, the Authority reported a liability of $1,344,080 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2022. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2021. An expected total OPEB liability as of June 30, 2022 was determined using standard roll-forward techniques. The Authority's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2022. At June 30, 2022, the Authority's proportion was 0.299138%. This was a decrease of 0.000407% from its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Authority recognized OPEB expense of ($740,706). At June 30, 2023, the Authority reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on OPEB plan investments Changes in proportion and differences between Employer contributions and proportionate share of contributions Employer contributions subsequent to the measurement date

$

42,248 $

1,306,920

24,015

165,427

487,602

-

541,177 472,512

4,157 -

Total

$ 1,567,554 $

1,476,504

The Authority's contributions subsequent to the measurement date of $472,512 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year Ended June 30:

2024 2025 2026 2027

$

(345,391)

$

(191,527)

$

(8,798)

$

164,254

59

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Actuarial Assumptions

The total OPEB liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2021:

Inflation Salary increases Long-term expected rate of return
Healthcare cost trend rate Pre-Medicare Eligible Medicare Eligible
Ultimate trend rate Pre-Medicare Eligible Medicare Eligible
Year of Ultimate trend rate Pre-Medicare Eligible Medicare Eligible

2.50% 3.00% - 6.75%, including inflation 7.00%, compounded annually, net of investment expense, and including inflation
6.50% 5.00%
4.50% 4.50%
2029 2023

Pre-retirement mortality rates were based on the Pub-2010 General Employee Mortality Table, with no adjustment, with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for service retirements were based on the Pub-2010 General Healthy Annuitant Mortality Table (ages set forward one year and adjusted 105% for males and 108% for females) with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for disability retirements were based on the Pub-2010 General Disabled Mortality Table (ages set back three years for males and adjusted 103% for males and 106% for females) with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for beneficiaries were based on the Pub-2010 General Contingent Survivor Mortality Table (ages set forward two years and adjusted 106% for males and 105% for females) with the MP-2019 Projection scale applied generationally.
The actuarial assumptions used in the June 30, 2022 valuation are based on the results of the most recent actuarial experience studies for the pension systems, which covered the five-year period ending June 30, 2019 and adopted by the pension Board on December 17, 2020.
The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2022 valuation were based on a review of recent plan experience done concurrently with the June 30, 2022 valuation.

60

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Projection 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 calculation.

The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed 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:

Asset class
Fixed income Equities

Target allocation
30.00% 70.00%

Long-Term Expected Real Rate of Return*
2.00% 9.40%

Total

100.00%

*Net of Inflation
Discount Rate
In order to measure the total OPEB liability, as of June 30, 2022, for the State OPEB fund, a single equivalent interest rate of 7.00% was used, the same as last year's rate. The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Based on those assumptions, the 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 investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Projected future benefit payments for all current plan members were projected through 2120.

61

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)
Sensitivity of the Authority's Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate:
The following presents the Authority's proportionate share of the net OPEB liability calculated using the discount rate of 7.00%, as well as what the Authority's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is one-percentage-point lower (6.00%) or onepercentage-point higher (8.00%) than the current discount rate:

1% Decrease (6.00%)

Current Discount Rate (7.00%)

1% Increase (8.00%)

Employer's proportionate share of the Net OPEB liability $

1,974,561 $

1,344,080 $

799,136

Sensitivity of the Authority's Proportionate Share of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates:
The following presents the Authority's proportionate share of the net OPEB liability, as well as what the Authority's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

Employer's proportionate share of the Net OPEB liability

1% Decrease

Current Healthcare Cost Trend Rate

1% Increase

$

708,194 $

1,344,080 $ 2,089,148

OPEB Plan Fiduciary Net Position Detailed information about the OPEB plan's fiduciary net position is available in the Annual Comprehensive Financial Report (ACFR) which is publicly available at https://sao.georgia.gov/swar/acfr. Georgia State Employees Post-Employment Health Benefit Fund (SEAD-OPEB Fund) Plan Description

SEAD-OPEB was created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., relating to retirement, so as to establish a fund for the provision of term life insurance to retired and vested inactive members of the Employees' Retirement System of Georgia (ERS), the Legislative Retirement System (LRS), and the Georgia Judicial Retirement System (GJRS). The plan is a costsharing multiple-employer defined benefit other postemployment benefit plan as defined in Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment Benefit Plans other than OPEB Plans. The SEAD-OPEB trust fund accumulates the premiums received from the aforementioned retirement plans, including interest earned on deposits and investments of such payments.

62

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Benefits Provided
The amount of insurance for a retiree with creditable service prior to April 1, 1964 is the full amount of insurance in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964 is 70% of the amount of insurance in effect at age 60 or at termination, if earlier. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the retiree.

Contributions

Georgia law provides that employee contributions to the plan shall be in an amount established by the Board of Trustees not to exceed one-half of one percent of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2023.

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

At June 30, 2023, the Authority reported an asset of $676,250 for its proportionate share of the net OPEB asset. The net OPEB asset was measured as of June 30, 2022. The total OPEB asset used to calculate the net OPEB asset was based on an actuarial valuation as of June 30, 2021. An expected total OPEB asset as of June 30, 2022 was determined using standard roll-forward techniques. The Authority's proportion of the net OPEB asset was based on actual member salaries reported to the SEAD-OPEB plan during the fiscal year ended June 30, 2022. At June 30, 2022, the Employer's proportion was 0.183970%, which was an increase of 0.006471% from its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Authority recognized OPEB expense of ($71,650). At

June 30, 2023, the Authority reported deferred outflows of resources and deferred inflows of resources

related to OPEB from the following sources:

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual experience

$

3,104 $

Changes of assumptions

-

Net difference between projected and actual earnings

on OPEB plan investments

140,969

Changes in proportion and differences between Employer

contributions and proportionate share of contributions

4,747

206 3,210
-
11,933

Total

$

148,820 $

15,349

63

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30:

2024 2025 2026 2027

$

8,683

$

13,844

$

5,276

$

105,668

Actuarial Assumptions

The total OPEB asset as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement:

Inflation Salary increases: ERS GJRS LRS Investment rate of return
Healthcare cost trend rate

2.50%
3.00% - 6.75% 3.75% N/A 7.00%, net of OPEB plan investment expense, including inflation N/A

Mortality rates are as follows:
The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service.
The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows:

Participant Type

Membership Table

Service Retirees Disability Retirees Beneficiaries

General Healthy Annuitant General Disabled General Contingent Survivors

Set Forward (+) / Setback (-)

Male: +1; Male: -3; Male: +2;

Female: +1 Female: 0 Female: +2

Adjustment to Rates

Male: 105%; Male: 103%; Male: 106%;

Female: 108% Female: 106% Female: 105%

64

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Actuarial Assumptions

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.
The long-term expected rate of return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed 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 asset allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class
Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative

Target allocation
30.00% 46.30%
1.20% 12.30%
5.20% 5.00%

Long-term expected real rate of return*
0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

Total

100.00%

* Rates shown are net of inlation
Discount Rate:
The discount rate used to measure the total OPEB liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the OPEB 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 OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

65

STATE ROAD AND TOLLWAY AUTHORITY

NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 12 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Sensitivity of the Authority's Proportionate Share of the Net OPEB Asset to Changes in the Discount Rate: The following presents the Authority's proportionate share of the net OPEB asset calculated using the discount rate of 7.00%, as well as what the Authority's proportionate share of the net OPEB asset would be if it were calculated using a discount rate that is one-percentage-point lower (6.00%) or one-percentage-point higher (8.00%) than the current rate:

1% Decrease (6.00%)

Current Discount Rate (7.00%)

1% Increase (8.00%)

Employer's proportionate share of the Net OPEB asset $

(436,506) $

(676,250) $

(872,586)

SEAD-OPEB Plan Fiduciary Net Position: Detailed information about the OPEB plan's fiduciary net position is available in the separately issued ERS comprehensive annual financial report which is publicly available at www.ers.ga.gov/financials.
NOTE 13 RISK MANAGEMENT

Public Entity Risk Pool
For its employee health insurance coverage, the Authority is a participant in the State of Georgia's Health Benefit Plan (SHBP), a public entity risk pool operated by the Department of Community Health (DCH) for the benefit of employees of the State of Georgia (O.C.G.A. Section 45-18-2), county governments and local education agencies located within the state. The SHBP is primarily a self-insured, self-funded plan that pays benefits out of the money contributed from members (through monthly premiums) and from monthly contributions from the employers that offer the Plan (e.g., state, county and local educational agencies). The SHBP acts as the Plan Administrator of health insurance coverage for approximately 460 organizations (state employees, teachers, school system employees and retirees who continued coverage (including annuitants and former employees on extended coverage), and covered dependents. An employee may withdraw from the plan if they become eligible for coverage under the aged program of the Social Security Administration (O.C.G.A. 45-18-17). SHBP accepts all risk of insuring its employees.

Other Risk Management
The Authority is exposed to various risks of loss related to torts: theft of, damage to and destruction of assets; errors and omissions; and injuries to employees. The State of Georgia utilizes self-insurance programs established by individual agreement, statute or administrative action to provide property insurance covering fire and extended coverage and automobile insurance and to pay losses that might occur from such causes; liability insurance for employees against personal liability for damages arising out of performance of their duties; cyber insurance for losses and out of pocket expenses incurred as a result of damage to data, systems or income defense and liability incurred as a result of employee's actions; survivors' benefits for eligible members of the Employee's Retirement System; consolidating processing of unemployment compensation claims against state agencies and the payment of sums due to the Department of Labor; and worker's compensation statutes of the State of Georgia. These self-
66

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023

NOTE 13 RISK MANAGEMENT (CONTINUED)
insurance funds are accounted for as internal service funds of the State of Georgia where assets are set aside for claim settlements. The majority of the risk management programs are funded by assessments charged to participating organizations. A limited amount of commercial insurance is purchased by the self-insurance funds applicable to property, employee and automobile liability, fidelity, and certain other risks to limit the exposure to catastrophic losses. Otherwise, the risk management programs service all claims against the State and/or Authority for injuries and property damage.
Financial information relative to self-insurance funds is presented in the financial reports of the Department of Administrative Services and the ERS for the year ended June 30, 2023.
NOTE 14 LITIGATION, CONTINGENCIES AND COMMITMENTS

Grants and Contracts
The amounts received or receivable from grantor agencies are subject to audit and review by grantor agencies, principally the federal government. This could result in a request for reimbursement by the grantor agency for any expenditures which are disallowed under grant terms.
Litigation
The Authority had no litigation, claims or assessments filed against it for the year ended June 30, 2023.

Contractual Commitments

The Georgia Constitution permits State organizations to enter into contractual commitments. Commitments are defined as "existing arrangements to enter into future transactions or events, such as long-term contractual obligations with suppliers for future purchases at specified prices and sometimes at specified quantities." As of June 30, 2023, the Authority had remaining contractual commitments for transportation, tolling, and other construction projects as detailed below:

Remaining Contractual Commitments I - 285 at SR 400 Interchange Reconstruction Project I - 16 at I - 95 Interchange and I - 95 to I - 516 Reconstruction Project I - 20 East Interchange Reconstruction Project Total Remaining Contractual Commitments
I-285 at SR 400 Interchange Reconstruction Project

Amounts $ 48,202,293 $ 61,497,257 $ 562,256,780 $ 671,956,330

The I-285 at SR 400 Reconstruction Project is a design-build-finance project being jointly delivered by GDOT and the Authority and will not be tolled upon completion. The Authority entered into an agreement with North Perimeter Contractors to engage the developer for the completion of project work. Additionally, the Authority has entered into intergovernmental agreements with GDOT, designating GDOT as the project manager of the project and detailing how GDOT makes funds available to SRTA to fulfill SRTA's payment obligations as detailed within the DBFA. The GDOT owns the asset and records construction in progress (CIP) based upon current year expenditures. As of June 30, 2023, the total contractual commitment for the project was $547,265,013, with $48,202,293 remaining to be paid out.
67

STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE FINANCIAL STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2023
NOTE 14 LITIGATION, CONTINGENCIES AND COMMITMENTS (CONTINUED)
I-16 at I-95 Interchange and I-16 Widening from I-95 to I-516 Reconstruction Project
The I-16 at I-95 Interchange and I-16 Widening from I-95 to I-516 Project is a design-build project being jointly delivered by GDOT and the Authority and will not be tolled upon completion. In 2018, the Authority entered into an agreement with Savannah Mobility Contractors to engage the developer for the completion of project work. Additionally, the Authority has entered into intergovernmental agreements with GDOT, designating GDOT as the project manager of the project and detailing how GDOT makes funds available to SRTA to fulfill SRTA's payment obligations as detailed within the Design-Build Agreement. The GDOT owns the asset and records construction in progress (CIP) based upon current year expenditures. As of June 30, 2023, the total contractual commitment for the project was $266,373,759 with $61,497,257 remaining to be paid out.
I-20 East Interchange Reconstruction Project
The I-285 / I-20 East Interchange Project is a design-build-finance project being jointly delivered by GDOT and the Authority and will not be tolled upon completion. In June 2022, the Authority entered into an agreement with East Interchange Builders, LLC, to engage the developer for the completion of project work. Additionally, the Authority has entered into intergovernmental agreements with GDOT, designating GDOT as the project manager of the project and detailing how GDOT makes funds available to SRTA to fulfill SRTA's payment obligations as detailed within the Design, Build, and Finance Agreement. As of June 30, 2023, the total contractual commitment for the project was $697,144,112, with $562,256,780 remaining to be paid out.
Other Financing Commitments
Georgia Transportation Infrastructure Bank (GTIB)
Pursuant to the Georgia Transportation Infrastructure Bank Act, O.C.G.A 32-10-120 et seq, the State Road and Tollway Authority has been authorized to create and operate the GTIB. Modeled after programs used in 32 other states, the GTIB was developed as a revolving infrastructure fund to provide grants and low- interest loans for local government transportation projects. Since its inception in 2010, the GTIB has provided over $200 million in grants and loans to highly competitive transportation projects that have enhanced mobility in local communities throughout Georgia. Funding for the GTIB comes from state motor fuel fund and transportation fee sources appropriated in the State of Georgia budget.
In fiscal year 2023, the GTIB received $12,999,055 through the annual appropriations process. In addition, $3,363,462 in grants and $13,944,432 in loans were awarded to local governments in the tenth round of GTIB awards. These awards will be disbursed in future periods as the awardees request reimbursement for the approved projects.
GO! Transit Capital Program
During the 2015 Legislative Session, the Georgia General Assembly appropriated $75 million in General Obligation bond funds for the program to the Authority. The GO! Transit Capital Program is a competitive funding program designed to address some of the critical capital-related public transit needs throughout Georgia. Existing public transit operators that are government units such as local, regional, and state
68

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023 NOTE 14 LITIGATION, CONTINGENCIES AND COMMITMENTS (CONTINUED) government units, including Community Improvement Districts, were all eligible to apply for the GO! Transit Capital Program. These bond funds can only be used for public transit capital projects with a useful life of at least 10 years, allowing the Authority to have legally sufficient ownership interest, and be operated by an existing public transit operator. During fiscal year 2016, the Authority worked with the Georgia Regional Transportation Authority (GRTA) to establish an application process and administer the $75.0 million transit bond program. Eleven awards were made to nine transit entities across the state of Georgia. During fiscal year 2023, $8,383,836 was dispersed to awardees. NOTE 15 SUBSEQUENT EVENTS In July 2020, the Authority became a member of the E-ZPass Interagency Group, which is the largest multi-state electronic tolling system, serving 19 states and 43 tolling systems. SRTA implemented the system functionality to become interoperable with the eight states in the E-ZPass network in July 2023 and will be fully interoperable with the E-ZPass network by December 31, 2023. The window for the eleventh (11th) round of GTIB applications was opened on November 1, 2023, and applications will be accepted by the Authority through January 25, 2024. Awards are expected to occur in the spring of 2024 and will be a combination of loans and grants. The amount of awards available for this round will be up to $15,000,000.
69

REQUIRED SUPPLEMENTARY INFORMATION

STATE ROAD AND TOLLWAY AUTHORITY
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITIY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA FOR THE YEAR ENDED JUNE 30, 2023

2023

2022

2021

2020

2019

2018

2017

2016

2015

Authority's proportion of the net pension liability 0.238501% 0.248509% 0.270664% 0.257580% 0.238991% 0.229695% 0.243532% 0.140406% 0.143948%

Authority's proportionate share of net pension liability

$ 15,928,206 $ 5,812,387 $ 11,408,371 $ 10,629,119 $ 9,824,999 $ 9,328,683 $ 11,520,087 $ 5,688,406 $ 5,398,940

Authority's covered-employee payroll

6,399,967 6,534,673 7,423,558 7,040,308 6,548,444 6,014,727 3,451,110 3,413,651 3,489,093

Authority's proportionate share of the net pension liability as a percentage of its coveredemployee payroll

248.88%

88.95%

153.68%

150.98%

150.04%

155.10%

333.81% 166.64% 154.74%

Plan fiduciary net position as a percentage of the total pension liability

67.44%

87.62%

76.21%

76.74%

76.68%

76.33%

72.34%

76.20%

77.99%

Note: Schedule is intended to show information for the last 10 fiscal years Additional years will be displayed as they become available

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STATE ROAD AND TOLLWAY AUTHORITY
SCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2023

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

Statutorily required contribution

$ 2,020,822 $ 1,490,116 $ 1,468,948 $ 1,682,855 $ 1,608,919 $ 1,512,384 $ 1,397,816 $ 808,022 $ 704,959 $ 598,341

Contributions in relation to the statutorily required contribution

2,020,822 1,490,116 1,468,948 1,682,855 1,608,919 1,512,384 1,397,816

808,022

704,959

598,341

Contribution deficiency (excess)

-

-

-

-

-

-

-

-

-

-

Covered employee payroll

7,262,303 6,399,967 6,534,673 7,423,558 7,040,308 6,548,444 6,014,727 3,451,110 3,413,651 3,489,093

Contributions as a percentage of covered employee payroll

27.83%

23.28%

22.48%

22.67%

22.85%

23.10%

23.24%

23.41%

20.65%

17.15%

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available.

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STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION - METHODS AND ASSUMPTIONS
FOR THE YEAR ENDED JUNE 30, 2023
EMPLOYEES' RETIREMENT SYSTEM Changes of assumptions: On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal, and salary increases. The expectation of retired life mortality was changed from the RP-2000 Mortality Tables to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward 2 years for both males and females). A new funding policy was initially adopted by the Board on March 15, 2018, and most recently amended on June 18, 2020. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation. On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability. On April 21, 2022, the Board adopted a new funding policy which, in part, provides that the Actuarial Accrued Liability and Normal Cost of the System will include a prefunded variable Cost-of-Living Adjustment (COLA) for eligible retirees and beneficiaries of the System. Under the new policy, future COLAs are provided through a profit-sharing mechanism using the System's asset performance. After studying the parameters of this new policy, the assumption for future COLAs was set at 1.05%. Previously, no future COLAs were assumed. In addition, the funding policy set the assumed rate of return at 7.20% for the June 30, 2021 valuation and established a new Transitional Unfunded Actuarial Accrued Liability as of June 30, 2021 which will be amortized over a closed 20-year period.
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STATE ROAD AND TOLLWAY AUTHORITY
SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITIY STATE OPEB FUND
FOR THE YEAR ENDED JUNE 30, 2023

2023

2022

2021

2020

2019

2018

Authority's proportion of the collective net OPEB liability

0.299138% 0.299545% 0.268979% 0.254316% 0.228825% 0.212634%

Authority's proportionate share of the net OPEB liability

$ 1,344,080 $ 823,316 $ 3,027,084 $ 3,156,868 $ 5,985,117 $ 8,663,146

Authority's covered-employee payroll for the measurement period

6,718,644 6,534,481 7,399,219 7,040,308 6,548,444 5,961,670

Authority's proportionate share of the net OPEB liability as a percentage of its covered payroll

20.01%

12.60%

40.91%

44.84%

91.40%

145.31%

Plan fiduciary net position as a percentage of the net OPEB liability

80.03%

87.58%

59.71%

56.57%

31.48%

17.34%

Note: Schedule is intended to show information for the last 10 fiscal years Additional years will be displayed as they become available.

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STATE ROAD AND TOLLWAY AUTHORITY
SCHEDULE OF CONTRIBUTIONS STATE OPEB FUND
FOR THE YEAR ENDED JUNE 30, 2023

Statutorily required contribution Contributions in relation to the statutorily required contribution Contribution deficiency (excess) State's covered payroll Contributions as a percentage of covered-employee payroll

2023

2022

2021

2020

2019

2018

$ 472,512 $ 483,686 $ 454,468 $ 404,784 $ 1,359,758 $ 1,147,728

472,512

483,686

454,468

404,784 1,359,758

1,147,728

-

-

-

-

-

-

7,349,481 6,718,644 6,534,481 7,399,219 7,040,308

6,548,444

6.43%

7.20%

6.95%

5.47%

19.31%

17.53%

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available.

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STATE ROAD AND TOLLWAY AUTHORITY
SCHEDULE OF PROPORTIONATE SHARE OF THE NET SEAD OPEB LIABILITIY STATE SEAD-OPEB FUND
FOR THE YEAR ENDED JUNE 30, 2023

2023

2022

2021

2020

2019

2018

Authority's proportion of the net OPEB liability (asset)

0.183970% 0.177499% 0.212293% 0.197387% 0.178996% 0.196848%

Authority's proportionate share of the net OPEB liability (asset)

$ (676,250) $ (1,093,085) $ (602,950) $ (558,141) $ (484,446) $ (511,618)

Authority's covered-employee payroll for the measurement period

1,884,417 1,924,086 2,529,568 2,517,615 2,477,963 2,866,622

Authority's proportionate share of the net OPEB liability (asset) as a percentage of its covered payroll

(35.89%)

(56.81%)

(23.84%)

(22.17%)

(19.55%)

(17.85%)

Plan fiduciary net position as a percentage of the net OPEB liability

138.03%

164.76%

129.20%

129.73%

129.46%

130.17%

Note: Schedule is intended to show information for the last 10 fiscal years Additional years will be displayed as they become available.

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STATE ROAD AND TOLLWAY AUTHORITY
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION - METHODS AND ASSUMPTIONS FOR THE YEAR ENDED JUNE 30, 2023
State OPEB Fund
Changes of benefit terms: There have been no changes in benefit terms.
Changes in assumptions: June 30, 2020 valuation: Decremental assumptions were changed to reflect the Employees' Retirement Systems experience study. June 30, 2019 valuation: The inflation assumption was lowered from 2.75% to 2.50% in anticipation of the upcoming ERS Experience Study. Additionally, decremental assumptions were changed to reflect the Teachers Retirement Systems experience study. Approximately 6.0% of employees are members of the Teachers Retirement System. June 30, 2017 valuation: The participation assumption, tobacco use assumption and morbidity factors were revised. June 30, 2015 valuation: Decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies. June 30, 2012 valuation: A data audit was performed and data collection procedures and assumptions were changed. The discount rate was updated from 3.09% as of June 30, 2016 to 3.60% as of June 30, 2017; to 5.22% as of June 30, 2018; to 7.30% as of June 30, 2019; to 7.06% as of June 30, 2020; and to 7.00% as of June 30, 2021.
SEAD-OPEB
Changes of assumptions: On December 17, 2015, the Board of Trustees adopted recommended changes to the economic and demographic assumptions utilized by the Plan. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward 2 years for both males and females).
A new funding policy was initially adopted by the Board on March 15, 2018. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation.
On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the Systems based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total OPEB Liability.
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COMPLIANCE SECTION

Greg S. Griffin State Auditor
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
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the Board of Directors of the State Road and Tollway Authority
and Ms. Jannine Miller, Executive Director
We have audited the financial statements of the governmental activities, business-type activities, and each major fund of the State Road and Tollway Authority (Authority), a component unit of the State of Georgia, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated December 27, 2023. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Authority's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
Greg S. Griffin State Auditor
December 27, 2023