Cherokee County School District, comprehensive annual financial report for the fiscal year ended June 30, 2019, Canton, Georgia

CHEROKEE COUNTY SCHOOL DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2019 CANTON, GEORGIA

COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
CANTON, GEORGIA
PREPARED BY: CHEROKEE COUNTY SCHOOL DISTRICT DIVISION OF FINANCIAL MANAGEMENT KENNETH OWEN, CHIEF FINANCIAL OFFICER

Introductory Section

Cherokee County School District Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019

TABLE OF CONTENTS

Introductory Section

Table of Contents

i-iii

Letter of Transmittal

iv-ix

Board Members

x

Organizational Chart

xi

Financial Section

Independent Auditor's Report Management's Discussion and Analysis
Basic Financial Statements: Government-wide Financial Statements:
Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet Governmental Funds Reconciliation of the Governmental Balance Sheet to the
Statement of Net Position Statement of Revenues, Expenditures, and Changes in
Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Statement of Activities General Fund Statement of Revenues, Expenditures,
and Changes in Fund Balance Budget to Actual Capital Projects Fund Statement of Revenues, Expenditures,
and Changes in Fund Balance Budget to Actual Debt Service Fund Statement of Revenues, Expenditures,
and Changes in Fund Balance Budget to Actual Statement of Fiduciary Assets and Liabilities Agency Fund Notes to the Basic Financial Statements

1-3 4-14
15 16
17
18
19
20
21
22
23 24 25-54

Required Supplementary Information:

Schedule of Proportionate Share of Net Pension Liability

Teachers Retirement System of Georgia

55

Schedule of Contributions Teachers Retirement System of Georgia 56

Schedule of Proportionate Share of Net Pension Liability

Employees' Retirement System of Georgia

57

Schedule of Contributions Employees' Retirement System of Georgia 58

Schedule of Proportionate Share of Net Pension Liability

Public School Employees Retirement System of Georgia

59

i

Cherokee County School District Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019

Schedule of Proportionate Share of Net Pension Liability

School OPEB Fund

60

Schedule of Contributions School OPEB Fund

61

Notes to the Required Supplementary Information

62

Combining and Individual Fund Financial Statements and Schedules

Statement of Changes in Fiduciary Assets and Liabilities

Agency Fund

63

Special Reports Section:

Schedule of Expenditures of Educational Local Option Sales Tax

Proceeds

64

Statistical Section

Financial Trends These schedules contain trend information to help the reader understand how the Board's financial performance and well-being have changed over time.

Net Position by Component

65

Changes in Net Position

66

Fund Balances Governmental Funds

67

Changes in Fund Balances Governmental Funds

68

Revenue Capacity These schedules contain information to help the reader access the Board's most significant local revenue source, property tax.

Assessed Value and Estimated Actual Value of Property by Type

69

Property Tax Rates Direct and Overlapping Governments

70

Principal Property Taxpayers

71

Property Tax Levies and Collections

72

Debt Capacity These schedules present information to help the reader assess the affordability of the Board's current levels of outstanding debt and the Board's ability to issue additional debt in the future.

Ratios of Total Debt Outstanding by Type

73

Ratios of General Bonded Debt Outstanding

74

Direct and Overlapping Governmental Activities Debt

75

Legal Debt Margin

76

ii

Cherokee County School District Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019

Economic & Demographic These schedules offer demographic and economic indicators to help the reader understand the environment within which the Board's financial activities take place.

Demographic and Economic Statistics

77

Principal Employers

78

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Board's financial report related to the services the Board provides and the activities it performs.

Employees by Function Teacher Salary Schedule School Building Capacity Number of Personnel and Ratio of Pupils to Professional Personnel Operating Statistics

79 80 81-82 83 84

Compliance Section

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

85-86

Independent Auditor's Report on Compliance for Each Major Federal Program

and on Internal Control Over Compliance Required by the Uniform

Guidance

87-88

Schedule of Expenditures of Federal Awards

89-90

Schedule of Findings and Questioned Costs

91-92

iii

iv

v

vi

vii

viii

ix

SCHOOL BOARD MEMBERS
Front row, from left, Vice-Chair, Kelly Poole (District 1), Chair, Kyla Cromer and Patsy Jordan (District 2). Back row from right, Superintendent Dr. Brian Hightower, Robert Rechsteiner (District 4), Mike Chapman (District 6), John Harmon (District 3) and Clark Menard (District 5).
Kyla Cromer, School Board Chair Kelly Poole, School Board Vice-Chair
Mike Chapman John Harmon Patsy Jordan Clark Menard Robert Rechsteiner
x

CCSD Organizational Chart of Divisions - - SY 2017-18 and SY 2018-19
CHEROKEE COUNTY CITIZENS
BOARD OF EDUCATION
Superintendent of Schools/ Chief Executive Officer DR. BRIAN V. HIGHTOWER

Chief of Staff
MIKE MCGOWAN

Technology and Information Services
Division

Support Services Division

Chi ef I nform ation
Offi cer
BOBBY BLOUNT

Chief Support Services Officer
BILL SEBRING

Communications Division
Chief Communic
ations Officer BARBARA JACOBY

Deputy Superintendent/ Chief Operations
Officer
TREY OLSON

School Operations
Division

Safety and Security
Division

Chief of Police MARK KISSEL
xi

Human Resources
Division
Chief Human Resource Officer RICK BEAULIEU

Financial Man agement
Division

Curriculum and Instruction
Division

Chief Financial Officer
KENNETH OWEN

Chief Academic
Officer
DR. NICOLE HOLMES

Financial Section

1

2

3

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Introduction
The discussion and analysis of the Cherokee County School District's (the "School District") financial performance provides an overview of the School District's financial activities for the fiscal years ended June 30, 2019 and June 30, 2018. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2019 are as follows:
Total revenue increased from $468.5 million in 2018 to $496.4 million in 2019, an increase of $27.9 million, or 6.0%. The revenue increase was primarily from higher state funding and increased property and sales taxes.
Total Fund Balance increased from $151.1 million in 2018 to $154.7 million in 2019, an increase of $3.5 million, or 2.3%. The increase is largely due to the property and sales tax revenue increases and to lower debt service costs in the Debt Service fund, which increased fund balance from $50.7 million in 2018 to $72.9 million in 2019, an increase of 43.5%. These increases were offset by a decrease in the Capital Projects' fund balance of $25.3 million primarily due to capital expenditures of $28.6 million in fiscal year 2019. The General Fund's fund balance increased by $6.7 million.
Total net position changed from negative $357.4 million in 2018 to negative $327.3 million in 2019, an increase of $30.2 million, or an improvement of net position of 8.4%, which is primarily due to principal payments of $9.4 million and amortization of bond premiums of $6.8 million on General Obligation bonds during fiscal year 2019. The changes in balances related to state administered pension and other postemployment benefits (OPEB) plans in which the School District participates for the benefit of its employees also resulted in an increase to net position of $7.8 million during fiscal year 2019.
Overview of the Financial Statements
This annual report consists of three parts; management's discussion and analysis, the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the Government-wide and fund financial statements.
The Government-wide financial statements include the Statement of Net Position and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the overall financial status.
The fund financial statements focus on individual parts, reporting the School District's operation in more detail. The Governmental Funds statements disclose how basic services are financed in
4

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
the short-term as well as what remains for future spending. The Fiduciary Funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others.
The fund financial statements reflect the School District's most significant funds. For the years ending June 30, 2019 and 2018, the General Fund, the Capital Projects Fund, and the Debt Service Fund represent the most significant funds.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is presented that further supplements understanding of the financial statements.
Government-wide Statements
The government-wide financial statements provide readers with a broad overview of the School District's finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the School District's assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating.
The Statement of Activities presents information showing how the School District's net position changed during the most recent fiscal year. Changes in net position appear as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses appear in this statement for some items that will result in future fiscal period's cash flows (e.g., uncollected taxes and earned but unused vacation leave).
The Statement of Net Position and the Statement of Activities reflect the School District's governmental activities.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The School District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. School District funds are comprised of governmental funds and fiduciary funds.
Governmental Funds
Most of the School District's activities are reported in governmental funds. The governmental fund statements focus on how money flows in and out of those funds and the balances left at year-end that are available for spending in future periods. These funds are reported using the modified accrual basis of accounting which measures cash and all other financial assets that can readily be converted to cash. These statements also provide a detailed short-term view of the School
5

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The School District maintains numerous governmental funds with the majority of activities occurring in the General Fund. The differences between governmental activities (reported in Statement of Net Position and Statement of Activities) and governmental funds are reconciled in the financial statements.
Fiduciary Funds
The School District is the trustee, or fiduciary, for assets that belong to others. The School District's fiduciary funds include the clubs and organizations within the Student Activity Fund. The School District is responsible for ensuring that the assets in this fund are used exclusively for their intended purposes for the benefit of those to whom the assets belong. The School District excludes this fund from the government-wide financial statements because it cannot use the assets to finance its operations.
Financial Analysis of the School District as a Whole
Recall that the Statement of Net Position provided the perspective of the School District as a whole. The graph and table below provide a summary of the School District's net position as of June 30, 2019 and 2018.
FY 2019 Net Position (amounts expressed in millions)

$(600.0) $(400.0) $(200.0) $-

$200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0

Unrestricted

Restricted

Deferred Outflows of Resources Deferred Inflows of Resources

Current Liabilities

Capital Assets, Net

Net Investment in Capital Assets Long-Term Liabilities Current and Other Assets

6

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis
For the Year ended June 30, 2019

Net Position

Governmental Activities

June 30, 2019

June 30, 2018

Change 2018-2019

Assets Current and Other Assets Capital Assets, Net Total Assets

$

198,787,415 $

194,155,577

579,441,720

576,125,423

$

778,229,135 $

770,281,000

2.4% 0.6% 1.0%

Deferred Outflows of Resources $

107,575,797 $

86,899,622

23.8%

Liabilities Current Liabilities Long-Term Liabilities Total Liabilities

$

51,658,186 $

49,708,993

1,096,063,167

1,136,281,960

$

1,147,721,353 $

1,185,990,953

3.9% -3.5% -3.2%

Deferred Inflows of Resources

$

Net Position

Invested in Capital Assets

$

Restricted

Unrestricted

Total Net Position

$

65,326,054 $
114,343,646 $ 87,138,047
(528,724,168) (327,242,475) $

28,627,544
110,975,930 90,376,401
(558,790,206) (357,437,875)

128.2%
3.0% -3.6% -5.4% 8.4%

Governmental accounting standards require the School District to report its proportional liability of state administered pension and OPEB plans in which the School District participates for the benefit of its employees. The long-term liabilities related to Pension and OPEB at June 30, 2019 or $639.7 million decreased by 3.5%, or $23.5 million from June 30, 2018. Deferred Outflows of Resources reflected an increase of 23.8% and Deferred Inflows of Resources increased 128.2%, due to this reporting. Although the resulting negative net position of this reporting causes a deficit balance in unrestricted net position, it should not be considered a financial weakness as the pension and OPEB costs are spread out over multiple years well into the future.

7

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
The graph and table below show the Changes in Net Position for fiscal years ending June 30, 2019 and June 30, 2018.

$400.0 $300.0 $200.0 $100.0
$-

Program Revenues and Expenses
(amounts expressed in millions)

Fiscal Year 2018 Fiscal Year 2019

Changes in Net Position

Revenues Program Revenues Charges for Services Operating grants and Contributions Capital Grants and Contributions General Revenues Taxes Other Total Revenues

Governmental Activities Fiscal Year 2019 Fiscal Year 2018

$

21,246,091 $ 19,786,586

241,765,291

233,948,283

7,441,006

4,600,742

$ 223,069,354 $ 208,156,705

2,918,238

2,036,919

$ 496,439,980 $ 468,529,235

Expenses Instructional Services Pupil and Instructional Services School and Administrative Services Student Transportation Services Maintenance and Operation Support Services - Central School Nutrition Community Service Operations Interest on Long-term Debt Total Expenses

$ 299,191,976 $ 307,545,475

39,280,213

37,478,527

32,778,524

32,718,111

28,050,941

24,470,133

26,885,475

25,712,187

4,844,465

5,144,624

16,652,579

16,709,035

2,003,057

2,133,240

16,557,350

14,683,311

$ 466,244,580 $ 466,594,643

Increase (Dec) in Net Position Beginning Net Position Ending Net Position

$ 30,195,400 $

1,934,592

(357,437,875)

(359,372,467)

$ (327,242,475) $ (357,437,875)

Change 2018-2019
7.4% 3.3% 61.7%
7.2% 43.3%
6.0%
-2.7% 4.8% 0.2% 14.6% 4.6% -5.8% -0.3% -6.1% 12.8% -0.1%
1460.8% -0.5% 8.4%

8

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Revenues In 2019, the School District's total revenues increased 6.0%, or $27.9 million, over the prior year due primarily to an increase in state funding and increased tax revenue.
Operating Grants and Contributions increased 3.3%, or $7.8 million, over the prior year due to an increase in state instructional program revenue.
Capital Grants and Contributions increased 61.7%, or $2.8 million, over the prior year due to increased state reimbursements to offset certain construction projects and increased investment earnings.
General Revenues - Taxes increased 7.2%, or $14.9 million, over the prior year due to a 6.1% increase in real property tax values and a 9.9% increase in sales taxes within the School District's county during the year ended June 30, 2019.
Expenses In 2019, the School District's total expenses decreased 0.1%, or $0.35 million, over the prior year due primarily to an increase in salaries and benefits, offset by decreases in postemployment expenses of state administered pension and OPEB plans and in instructional operating costs.
The School District added 55 teachers in fiscal year 2019 to address student population growth and to further reduce Districtwide class sizes.
Initiatives to attract and retain the best teachers, principals and support staff in fiscal year 2019 included providing a 1% cost-of-living raise and an annual longevity-step increase for all eligible employees.
Increased required employer contributions to State Health Benefit Plan of $99 per month per participating employee, and to Teacher Retirement System for rates 24.3% higher than prior year resulted in higher employee benefit costs in fiscal year 2019.
Increased School District retirement and OPEB contributions subsequent to the measurement date reduced expense.
Instructional operating costs decreased due to a reduction in textbook adoption costs and small equipment purchases during fiscal year 2019.
9

300.0 250.0 200.0 150.0 100.0
50.0 -
(50.0)

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Total and Net Cost
(amounts expressed in millions)
Total Cost Net Cost

Cost of Services

Total Cost of Services

2019

2018

Instructional Services

$

Support Services

Pupil Services

Improvement of Instructional Services

Educational Media Services

General Administration

School Administration

Support Services - Business

Maintenance and Operation

Student Tranportation Services

Central Support Services

Operations and Noninstructional Services

Community Service Operations

School Nutrition

Interest on Long-term Debt

Total

$

299,191,976
19,698,979 14,989,865
4,591,369 4,716,707 24,991,512 3,070,305 26,885,475 28,050,941 4,844,465
2,003,057 16,652,579 16,557,350 466,244,580

$ 307,545,475
18,963,817 13,800,487
4,714,223 4,665,197 25,260,871 2,792,043 25,712,187 24,470,133 5,144,624
2,133,240 16,709,035 14,683,311 $ 466,594,643

Net Cost of Services

2019

2018

$ 92,336,625 $ 108,138,220

14,601,443 12,045,882
(27,125) 121,326 16,954,951 3,044,046 15,937,328 24,351,552 4,796,492

11,984,638 8,870,266 153,339 3,873,134
17,368,488 2,746,189
14,808,969 21,571,473
5,103,729

2,003,017

2,133,193

(1,454,625)

(224,699)

11,081,280

11,732,093

$ 195,792,192 $ 208,259,032

The Cost of Services table above shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity (42.0% overall for the year ended June 30, 2019).

10

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Financial Analysis of the School District's Funds The School District ended fiscal year 2019 with a positive fund balance in its governmental funds. The combined balance of all governmental funds, at $154.7 million, was 2.3% higher than 2018's ending balance of $151.1 million. The General Fund's fund balance increased by $6.7 million, or 11.0%. This level achieves the Board Policy goal of the School District achieving and maintaining an unassigned fund balance in the General Fund at fiscal year-end of not less than 12.0-15.0% of prior year general fund budgeted expenditures. Capital Projects fund decreased its fund balance by $25.3 million, a decrease of 64.0%, due to capital expenditures made during fiscal year 2019 of $28.6 million. Debt Service increased its fund balance by $22.1 million, an increase of 43.5%. General Fund Budgeting Highlights The most significant fund for the School District is the General Fund, funded primarily through state revenue and local property tax revenue. The State of Georgia is required to maintain a balanced budget (a constitutional requirement in Georgia), as are all state-funded school districts. For the General Fund, actual revenues of $440.9 million were 99.7% of the final budgeted amount of $442.1 million. The final actual expenditures of $434.2 million were 98.4% of the final budgeted amount of $441.3 million. While budgeted revenues exceeded budgeted expenditures by $0.8 million, actual results for the fiscal year show that expenditures were under revenues by $6.7 million. General Fund Balance As the operating fund of the School District, General Fund revenue from state and federal sources accounted for 54.4% of revenue. The other 45.6% is from local sources, primarily ad valorem taxes. In fiscal year 2019, state and federal funding increased by $7.0 million, due to increased state funding for student enrollment growth and increased employee benefit costs, and due to the elimination of the austerity reduction. Local revenues increased by $13.6 million. This is a result of 6.1% growth in the property tax digest over prior year. The School District's maintenance and operation millage rate is 18.95 mills, which remained the same as fiscal year 2018.
11

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Capital Assets and Debt Administration
Capital Assets
As of June 30, 2019 and June 30, 2018, the School District had $579.4 million and $576.1 million, respectively, invested in a broad range of capital assets, including land, buildings, and furniture and equipment for its governmental activities.
FY 2019 Capital Assets

Land

Construction in Progress Building and Improvements Land Improvements Equipment

The table below summarizes and compares the capital assets for 2019 and 2018, breaking down the asset balances, by class, net of accumulated depreciation.

Capital Assets (Net of Accumulated Depreciation)

Governmental Activities Fiscal Year 2019 Fiscal Year 2018

Land Construction in Progress Building and Improvements Land Improvements Equipment

$ 33,975,645 $ 6,531,152
510,910,043 14,660,400 13,364,480

31,248,204 2,116,527
522,816,869 10,371,969 9,571,854

Total

$ 579,441,720 $ 576,125,423

12

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Long-Term Obligations
As of June 30, 2019, the School District had $413.1 million in general obligation and qualified school construction bonds outstanding with $16.1 million due within one year. On November 8, 2016, the citizens of Cherokee County approved a referendum to collect a one cent Education Special Purpose Local Option Sales Tax (Ed SPLOST) for five years beginning January 1, 2018 and ending December 31, 2022. The bonds will be repaid from sales tax proceeds of this continuing Ed SPLOST and from mill of ad valorem property tax.
FY 19 Long-term Liabilities

Bonds Payable Bond Premium Compensated Absences Net Pension Liability Net OPEB Liability
The table below summarizes and compares the School District's liabilities for 2019 and 2018.

Long-term Liabilities at June 30

Governmental Activities Fiscal Year 2019 Fiscal Year 2018

Bonds Payable Bond Premium Compensated Absences Net Pension Liability Net OPEB Liability

$ 413,085,000 $ 41,788,073 1,537,230
359,724,288 279,928,576

422,505,000 48,598,225 1,545,657
356,740,189 306,413,183

Total

$ 1,096,063,167 $ 1,135,802,254

At June 30, 2019, the School District's assigned long-term bond ratings were Aa2 Stable and AA Stable as determined by Moody's Investor Services, Inc. and Standard and Poor's Rating Services, respectively.
Additional information on the School District's capital assets and long-term obligations can be found in Note 5 and Note 7, respectively, on pages 36 through 39 of this report.

13

CHEROKEE COUNTY SCHOOL DISTRICT Management's Discussion and Analysis For the Year ended June 30, 2019
Factors Affecting the School District's Future
The fiscal year 2020 budget was presented to the public and tentatively adopted by the Board of Education on May 16, 2019 with the final adoption on June 20, 2019. The budget represents an investment plan for the School District, its students, employees, and the communities as a whole. The budget is tied directly to the strategic vision and direction of the Board of Education. The budget for the General Fund for fiscal year 2020 is $481.2 million, representing an increase of 5.9% from the fiscal year 2019 General Fund budget. This increase allows several budgetary enhancements including filling 30 new teacher positions.
The fiscal year 2020 millage rate is 19.45 mills, with 18.45 mills to support the School District's operating budget (Maintenance and Operations) and 1.0 mills for bond debt service. This rate shifts 0.5 mills from the fiscal year 2019 millage rate of 18.95 mills operating budget to bond debt service. Doing so allows the School District to utilize funds provided by the 2016 Education Special Purpose Local Option Sales Tax for Education to fund current needs as it relates to technology, repairs/maintenance and other voter-approved capital outlay projects.
Positively impacting revenue estimates is projected growth in the local property tax digest. The value of the ad valorem tax digest increased by 9.5% in fiscal year 2018 and 6.1% in fiscal year 2019. The tax digest is projected to increase by 4.1% in fiscal year 2020. This indicates that existing property values have stabilized, and new construction is being added to the digest.
The School District plans capital improvements as future capital needs arise due to increased student population, facility repair, and maintenance needs. Specific capital expenditure plans are formalized in conjunction with individual general obligation bond issues, collections from Education Special Purpose Local Options Sales Tax (Ed SPLOST), and anticipated annual receipts of capital outlay funds from the State of Georgia Department of Education. The School District regularly monitors anticipated capital outlay needs.
Contacting the School District's Office of Financial Management
This financial report is designed to provide a general overview of the Cherokee County School District's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of Financial Management, Cherokee County School District, P.O. Box 769, Canton, Georgia, 30169.
14

Basic Financial Statements

CHEROKEE COUNTY SCHOOL DISTRICT Statement of Net Position June 30, 2019

Assets Cash and Cash Equivalents Investments Receivables
Taxes State Government Federal Government Interest Other Inventory Capital Assets, Nondepreciable Capital Assets, Net
Total Assets
Deferred Outflow of Resources Related to Defined Pension Plans (Contributions) Related to Other Post-Employment Benefits (OPEB Contributions) Deferred Charges
Total Deferred Outflows of Resources
Total Assets and Deferred Outflows of Resources
Liabilities Accounts Payable Salaries and Benefits Payable Interest Payable Other Current Liabilities Long-term Liabilities
Due Within One Year Due in More Than One Year Net Pension Liability Net Other Post-Employment Benefits (OPEB)
Total Liabilities
Deferred Inflows of Resources Related to Defined Benefit Pension Plan Related to Other Post-Employment Benefits
Total Deferred Inflows of Resources
Total Liabilities and Deferred Inflows of Resources
Net Position Net Investment In Capital Assets Restricted For:
Capital Projects Debt Service Unrestricted
Total Net Position
The accompanying notes are an integral part of this financial statement.
15

Governmental Activities
$ 133,834,277 18,083,359
8,695,459 31,178,171
4,360,916 332,333
1,658,476 644,424
40,506,797 538,934,923 778,229,135
83,750,605 20,064,839
3,760,353 107,575,797
885,804,932
3,190,000 38,150,464
8,799,529 1,518,193
23,703,590 432,706,713 359,724,288 279,928,576 1,147,721,353
11,537,534 53,788,520 65,326,054
1,213,047,407
114,343,646
14,263,183 72,874,864 (528,724,168) $ (327,242,475)

CHEROKEE COUNTY SCHOOL DISTRICT Statement of Activities
For the Fiscal Year Ended June 30, 2019

Functions/Programs

Expenses

Program Revenues

Charges for Services

Operating Grants and Contributions

Capital Grants and Contributions

Net (Expense) Revenue and Changes in Net Position

Governmental Activities :

Instructional Services

$ 299,191,977 $ 13,543,252 $ 190,923,772 $

Support Services

Pupil Services

19,698,979

-

5,097,536

Improvement of Instructional Services

14,989,865

-

2,943,983

Educational Media Services

4,591,369

-

4,618,494

General Administration

4,716,707

-

4,478,197

School Administration

24,991,511

-

7,983,108

Support Services - Business

3,070,305

-

21,593

Maintenance and Operation

26,885,475

253,023

10,653,669

Student Transportation Services

28,050,941

-

3,068,448

Support Services - Central

4,844,465

-

47,973

Other Support Services

-

-

-

Operations of Noninstructional Services

Community Services

2,003,057

-

40

School Nutrition

16,652,579

7,449,816

10,651,630

Interest on Long-term Debt

16,557,350

-

1,276,848

Total Governmental Activities

$ 466,244,580 $ 21,246,091 $ 241,765,291 $

2,388,327 $
117,184 53,453 4,666 41,455 630,941 -
5,758 4,199,222 7,441,006 $

(92,336,626)
(14,601,443) (12,045,882)
27,125 (121,326) (16,954,950) (3,044,046) (15,937,328) (24,351,552) (4,796,492)
-
(2,003,017) 1,454,625 (11,081,280) (195,792,192)

General Revenues: Taxes:
Property Tax, Levied for General Purposes Property Tax, Levied for Debt Service Educational Local Option Sales Tax Other Tax Miscellaneous Unrestricted Investment Earnings
Total General Revenues
Change in Net Position Net Position - Beginning of Year
Net Position - End of Year

$

169,863,066

4,504,024

42,354,080

6,348,184

1,785,756

1,132,482

225,987,592

30,195,400

(357,437,875)

$ (327,242,475)

The accompanying notes are an integral part of these financial statements. 16

CHEROKEE COUNTY SCHOOL DISTRICT Balance Sheet
Governmental Funds June 30, 2019

Assets Cash and Cash Equivalents Investments Receivables
Taxes State Government Federal Government Interest Other Inventories
Total Assets
Liabilities and Fund Balance
Liabilities Accounts Payable Salaries and Benefits Payable Intergovernmental Payable Contracts Payable Retainage Payable
Total Liabilities

General Fund

District-Wide Capital Projects

Debt Service

Total Governmental
Funds

$

68,803,326 $

65,316

4,965,170 31,178,171
4,360,916 -
421,549 644,424 $ 110,438,872 $

15,473,679 $ -
15,473,679 $

49,557,272 $ 18,018,043
3,730,289 -
332,333 1,236,927
72,874,864 $

133,834,277 18,083,359
8,695,459 31,178,171
4,360,916 332,333
1,658,476 644,424
198,787,415

$

3,036,874 $

38,150,464

-

-

-

41,187,338

153,126 $ -
331,687 725,683 1,210,496

- $ -

3,190,000 38,150,464
331,687 725,683 42,397,834

Deferred Inflows of Resources Deferred Revenue
Total Deferred Inflows of Resources

1,696,225 1,696,225

-

39,331

1,735,556

-

39,331

1,735,556

Fund Balances Nonspendable
Inventory Restricted
Debt Service Capital Projects Committed School Food Services School Activities Unassigned
Total Fund Balances

644,424
-
6,765,373 5,372,084 54,773,428 67,555,309

-
14,263,183
14,263,183

-
72,835,533 -
72,835,533

644,424
72,835,533 14,263,183
6,765,373 5,372,084 54,773,428 154,654,025

Total Liabilities, Deferred Inflows of Resources,

and Fund Balances

$

110,438,872 $

15,473,679 $

72,874,864 $ 198,787,415

The accompanying notes are an integral part of this financial statement. 17

CHEROKEE COUNTY SCHOOL DISTRICT Reconciliation of the Governmental Funds
Balance Sheet to the Statement of Net Position June 30, 2019

Total Fund Balances Governmental Funds
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 Less Accumulated Depreciation
Some liabilites are not due and payable in the current period and, therefore, are not reported in the funds.
Claims Payable Interest Payable
Taxes that are not available to pay for current period expenditures are deferred in the governmental funds.
Property Taxes
Deferred charges or credits on debt refundings are applicable to future periods and are therefore not reported in the funds and are amortized over the life of the new debt.
Loss on Bond Refundings
Deferred Ouflows and Inflows of Resources and the net pension liability related to the District's pension plan are applicable to future periods and, therefore, are not reported in the governmental funds.
Net Pension Liability Deferred Outflows of Resouces - Pension Related Items Deferred Inflows of Resources - Pension Related Items
Deferred Ouflows and Inflows of Resources and the net OPEB liability related to the District's pension plan are applicable to future periods and, therefore, are not reported in the governmental funds.
Net Other Post-Employment Benefits Liability Deferred Outflows of Resources - OPEB Related Items
Deferred Inflows of Resources - OPEB Related Items
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.
Bonds Payable Bond Premium, Net of Amortization
Compensated Absences
Net Position Of Governmental Activities

$ 154,654,025

845,451,704 (266,009,984)

579,441,720

(460,823) (8,799,529)

(9,260,352)

1,735,556 3,760,353

(359,724,288) 83,750,605 (11,537,534)

(287,511,217)

(279,928,576) 20,064,839 (53,788,520)

(313,652,257)

(413,085,000) (41,788,073) (1,537,230)

(456,410,303) $ (327,242,475)

The accompanying notes are an integral part of this financial statement. 18

CHEROKEE COUNTY SCHOOL DISTRICT Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds For the Year Ended June 30, 2019

General Fund

District-Wide Capital Projects

Debt Service

Total
Governmental Funds

Revenues Local Sources State Funds Federal Funds Investment Earnings Miscellaneous
Total Revenues

$

198,807,171 $

216,141,964

23,857,002

1,132,482

914,724

440,853,343

483,592 $ 2,070,168
708,295
3,262,055

46,858,104 $ -
1,276,848 4,199,222 52,334,174

246,148,867 218,212,132
23,857,002 3,117,625 5,113,946
496,449,572

Expenditures Current
Instructional Services Support Services:
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services Community Services School Nutrition Capital Outlay Debt Services Principal Retirement Interest and Fees
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures

286,615,881
20,221,099 15,341,099
4,718,229 3,978,982 25,338,378 3,100,280 26,735,820 24,233,655 4,907,557
2,003,057 16,587,199
340,061
60,247 434,181,544
6,671,799

4,193,535
2,607,635 21,789,396
28,590,566
(25,328,511)

-
-
9,420,000 20,820,155 30,240,155
22,094,019

290,809,416
20,221,099 15,341,099
4,718,229 3,978,982 25,338,378 3,100,280 26,735,820 26,841,290 4,907,557
2,003,057 16,587,199 22,129,457
9,420,000 20,880,402 493,012,265
3,437,307

Other Financing Sources (Uses)

Proceeds from Sale of Capital Assets

70,300

-

-

70,300

Transfers In

-

-

-

-

Transfers Out

-

-

-

-

Total Other Financing Sources (Uses)

70,300

-

-

70,300

Net Change in Fund Balances Fund Balances - Beginning Fund Balances - Ending

6,742,099

(25,328,511)

22,094,019

3,507,607

60,813,210

39,591,694

50,741,514

151,146,418

$

67,555,309 $

14,263,183 $

72,835,533 $

154,654,025

The accompanying notes are an integral part of this financial statement. 19

CHEROKEE COUNTY SCHOOL DISTRICT Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities For the Year Ended June 30, 2019

Net Change in Fund Balances - Total Governmental Funds
Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The amount by which capital outlays exceeded depreciation expense is as follows:
Capital Outlay Depreciation Expense
The net effect of various miscellaneous transactions involving capital assets during the fiscal year decreased net position.
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.
Property Taxes
District pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities.
Pension expense OPEB expense
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.
Principal Payments - Bonds
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 the governmental funds.
Amortization of Bond Premium Amortization of Deferred Charge on Refunding
Change in Claims Payable Change in Compensated Absences
Change in Accrued Interest
Change in Net Position of Governmental Activities

$ 3,507,607

22,129,457 (18,731,493)

3,397,964 (81,667)

(70,418)

11,065,006 (1,393,454)

9,420,000

6,810,152 (2,193,379)
18,883 8,427
(293,721)

4,350,362 $ 30,195,400

The accompanying notes are an integral part of this financial statements. 20

CHEROKEE COUNTY SCHOOL DISTRICT General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual For the Fiscal Year Ended June 30, 2019

Revenues Local Sources State Funds Federal Funds Investment Earnings Miscellaneous
Total Revenues
Expenditures Instructional Services Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services Community Services School Nutrition Capital Outlay Debt Service Principal Retirement Interest and Fees
Total Expenditures
Excess (Deficiency) of Revenues over (under) Expenditures
Other Financing Sources Proceeds from Sale of Capital Assets Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

Original Budget

Final Budget

Actual

Variance With Final Budget

$ 196,605,253 $ 196,605,253 $ 198,807,171 $

218,318,211

219,037,411

216,141,964

23,860,840

26,441,504

23,857,002

-

-

1,132,482

-

-

914,724

438,784,304

442,084,168

440,853,343

2,201,918 (2,895,447) (2,584,502) 1,132,482
914,724 (1,230,825)

283,384,037
18,392,239 14,995,902
4,924,608 3,881,814 24,715,279 3,054,565 28,503,735 21,736,159 5,183,799
17,267,536 475,000
11,532,623 438,047,296

280,147,815
20,352,704 16,245,921
4,778,506 4,237,460 25,305,279 3,254,565 28,503,735 23,774,323 5,384,421
17,277,381 475,000
11,532,623 441,269,733

286,615,881
20,221,099 15,341,099
4,718,229 3,978,982 25,338,378 3,100,280 26,735,820 24,233,655 4,907,557
2,003,057 16,587,199
340,061
60,247 434,181,544

(6,468,066)
131,605 904,822
60,277 258,478 (33,099) 154,285 1,767,915 (459,332) 476,864
(2,003,057)
690,182 134,939
11,472,376
7,088,189

737,008

814,435

6,671,799

5,857,364

-

-

70,300

-

-

-

-

-

70,300

737,008

814,435

6,742,099

60,813,210

60,813,210

60,813,210

$ 61,550,218 $ 61,627,645 $ 67,555,309 $

70,300 -
70,300
5,927,664
-
5,927,664

The accompanying notes are an integral part of this financial statement. 21

CHEROKEE COUNTY SCHOOL DISTRICT District-Wide Capital Projects
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual For the Fiscal Year Ended June 30, 2019

Revenues Local Sources State Funds Federal Funds Investment Earnings Miscellaneous
Total Revenues
Expenditures Instructional Services Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services Community Services School Nutrition Capital Outlay Debt Service Principal Retirement Interest and Fees
Total Expenditures
Excess (Deficiency) of Revenues over (under) Expenditures
Other Financing Sources Proceeds from Sale of Capital Assets Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

Original Budget

Final Budget

Actual

Variance With Final Budget

$

467,385 $

467,385 $

483,592 $

877,500

1,188,411

2,070,168

-

-

-

-

-

708,295

-

-

-

1,344,885

1,655,796

3,262,055

16,207 881,757
708,295
1,606,259

4,500,000
2,700,000 20,873,600
28,073,600

4,500,000
2,700,000 21,184,511
28,384,511

4,193,535
2,607,635 21,789,396
28,590,566

306,465
92,365 (604,885)
(206,055)

(26,728,715)

(26,728,715)

(25,328,511)

1,400,204

-

-

-

-

-

-

-

-

-

(26,728,715)

(26,728,715)

(25,328,511)

39,591,694

39,591,694

39,591,694

$ 12,862,979 $ 12,862,979 $ 14,263,183 $

-
1,400,204
-
1,400,204

The accompanying notes are an integral part of this financial statement. 22

CHEROKEE COUNTY SCHOOL DISTRICT Debt Service
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual For the Fiscal Year Ended June 30, 2019

Revenues Local Sources State Funds Federal Funds Investment Earnings Miscellaneous
Total Revenues
Expenditures Instructional Services Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services Community Services School Nutrition Capital Outlay Debt Service Principal Retirement Interest and Fees
Total Expenditures
Excess (Deficiency) of Revenues over (under) Expenditures
Other Financing Sources Proceeds from Sale of Capital Assets Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

Original Budget

Final Budget

Actual

Variance With Final Budget

$ 37,937,283 $ 37,937,283 $ 46,858,104 $

-

-

-

2,936,977

2,936,977

-

699,551

699,551

1,276,848

-

-

4,199,222

41,573,811

41,573,811

52,334,174

8,920,821 -
(2,936,977) 577,297
4,199,222 10,760,363

-
-
9,420,000 19,415,094 28,835,094

-
-
9,420,000 19,415,094 28,835,094

-
-
9,420,000 20,820,155 30,240,155

-
-
(1,405,061) (1,405,061)

12,738,717

12,738,717

22,094,019

9,355,302

-

-

-

-

-

-

-

-

-

12,738,717

12,738,717

22,094,019

50,741,514

50,741,514

50,741,514

$ 63,480,231 $ 63,480,231 $ 72,835,533 $

-
9,355,302
-
9,355,302

The accompanying notes are an integral part of this financial statement. 23

CHEROKEE COUNTY SCHOOL DISTRICT Statement of Fiduciary Assets and Liabilities
Agency Funds June 30, 2019

Assets Cash and Cash Equivalents Total Assets
Liabilities Due To Others Total Liabilities

Agency Fund

$

543,621

$

543,621

$

543,621

$

543,621

The accompanying notes are an integral part of this financial statement.
24

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Cherokee County School District (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below.
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the governmentwide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness.
Government-wide Statements:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows:
1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.
2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation.
3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net position often has constraints on resources imposed by management which can be removed or modified.
25

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements:
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (property and sales) legally restricted for the payment of general long-term principal and interest.
The School District reports the following fiduciary fund type:
Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes and grants. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal
26

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
year in which the underlying transaction (sale) takes place. Revenue from grants is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within six months after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations. This statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this statement. The adoption of this statement does not have a significant impact on the School District's financial statement.
In fiscal year 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The primary objective of this statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. The adoption of this statement does not have a significant impact on the School District's financial statement.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial
27

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
institutions. Official Code of Georgia Annotated (O.C.G.A.) 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENTS
The School District can invest its funds as permitted by O.C.G.A. 36-83-4. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity.
Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. All other investments are reported at fair value.
For accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
Due to other funds and due from other funds consist of activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year.
INVENTORIES
Food Inventories: On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (calculated on the first-in first-out (FIFO) basis). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
Supplies/Equipment Inventories: On the basic financial statements, inventories of stored supplies and equipment are reported at cost using the first-in, first-out method. The School District uses the consumption method to account for the inventories whereby items are recorded as an asset when purchased and expenses are recorded when the item is put into use.
PREPAID ITEMS
Payments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements.
28

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

CAPITAL ASSETS

On the government-wide financial statements, capital assets are recorded at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at the acquisition value on the date donated. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. The School District does not capitalize book collections or works of art.

Capital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities' column in the government-wide financial statements.

Depreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives.

Capitalization thresholds and estimated useful lives of capital assets reported in the governmentwide statements are as follows:

Description

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings Equipment

Any Amount $10,000 $10,000 $10,000

N/A 20 Years 20-50 Years 5-10 Years

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and, therefore, will not be recognized as an inflow of resources (revenue) until that time.
COMPENSATED ABSENCES
Compensated absences payable consists of vacation leave employees earned based on services already rendered.
Vacation leave of 12 days is awarded on a fiscal year basis to all full-time personnel employed on a twelve-month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 45 days. Vacation leave of 20 days is awarded on a fiscal year basis to the Superintendent and there are no limits on the amount that may be carried over. Upon

29

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal-year end.
Members of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements.
LONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS
In the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.
In the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures.
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 pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. 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.
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Postemployment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School 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.
FUND BALANCES
Fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
30

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
The School District's fund balances are classified as follows:
Nonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted consists of resources that can be used only for specific purposes pursuant to constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.
Committed consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned consists of resources constrained by the School District's intent to be used for specific purposes but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.
Unassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.
When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
It is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 12% of prior year general fund budgeted expenditures, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with O.C.G.A. 20-2-167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
PROPERTY TAXES
The Cherokee Board of Commissioners adopted the property tax levy for the 2018 tax digest year (calendar year) on July 19, 2018 (levy date) based on property values as of January 1, 2018. Taxes were due on Nov 15, 2018 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2018 tax digest are reported as revenue in the governmental
31

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
funds for fiscal year 2019. The Cherokee Board of Commissioners bills and collects the property taxes for the School District, withholds 2.00% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2019, for maintenance and operations amounted to $156,015,175 and for school bonds amounted to $4,137,871.
Tax millage rates levied for the 2018 tax year (calendar year) for the School District were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

18.95 mills 0.50 mills
19.45 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $14,116,968 during fiscal year ended June 30, 2019.
SALES TAXES
Education Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year ended June 30, 2019 amounted to $42,354,080 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
Note 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was not prepared in accordance with accounting principles generally accepted in the United States of America.
After the Board has tentatively adopted the budget, the budget is advertised at least once in the local newspaper of general circulation. At the next regularly scheduled meeting after advertisement, the Board receives comments, makes revisions as necessary, and adopts the final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 202-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Superintendent is authorized by the Board to approve adjustments of no more than 5% of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board no later than the next regular meeting of the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 5% of the budgeted amount, the Superintendent shall request Board approval for the budget amendment.

32

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

See the General Fund, Debt Service and Capital Projects Statement of Revenues, Expenditures and Changes in Fund Balances Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review.

BUDGETARY/GAAP BASIS RECONCILIATION

In the general fund, accounting principles used in developing budgets on a budgetary basis differ from those used in preparing financial statements in conformity with generally accepted accounting principles (GAAP).

The primary differences between the budget basis and GAAP basis are:

1. Payments made by the State of Georgia for School District employee benefits are recognized as revenues and expenditures under GAAP and are not recognized on the budget basis.
2. Proceeds and repayments of tax anticipation notes are budgeted by the School District as revenues and expenditures of the general fund. Under generally accepted accounting principles, a tax anticipation note is considered a short-term debt issuance.

Thus, there is an accounting basis difference between the budget and actual Statement of

Revenues, Expenditures and Changes in Fund Balances in the general fund that is reconciled as

follows:

Actual Revenues, GAAP Basis

$ 440,853,343

TAN Proceeds

11,500,000

On-Behalf Benefit Contribution

(691,820)

Actual Revenues, Budgetary Basis

$ 451,661,523

Actual Expenditures, GAAP Basis Payback of TAN Principal On-Behalf Benefits Expenditure Actual Expenditures, Budgetary Basis

$ 434,181,544 11,500,000 (691,820) $ 444,989,724

Other Financing Sources (Uses) - Net

$

70,300

Revenues Over Expenditures and Other Financing Sources (Uses), Budgetary Basis

$

6,742,099

Revenues Over Expenditures and Other Financing Sources (Uses), GAAP Basis

$

6,742,099

Note 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
O.C.G.A. 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110% of the public funds

33

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110% of the daily pool balance. As of June 30, 2019, the School District's deposits were secured by surety bond, insurance, or collateral.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) 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,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, 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 Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a formal deposit policy for managing custodial credit risk. At June 30, 2019, the School District had deposits with a carrying amount of $48,169,324, which includes $65,316 in Certificates of Deposit that are recorded as investments. Bank balances at June 30, 2019 were $49,811,475. The bank balances insured by Federal depository insurance were $7,036,011 and the bank balances collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name were $42,775,464.
CATEGORIZATION OF CASH EQUIVALENTS
The School District reported cash equivalents of $85,730,269 in Georgia Fund 1, a local government investment pool, which is included in the cash balances above. 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 Standard and Poor's. The weighted average maturity of Georgia
34

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2019, was 39 days.

Georgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html.

CATEGORIZATION OF INVESTMENTS

The School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows:

Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs

At June 30, 2019, the School District had the following investments by fair value level:

Investments by fair value level:

Fair Value

Maturity

Fair Value Level

Repurchase Agreements

$ 18,018,043 Less than 1 year Level 1

Investments not subject to level disclosure: Certificates of Deposit

65,316

Total investments by fair value level

$ 18,083,359

The Repurchase Agreements in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for these investments. Certificates of deposit are reported at cost.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
At June 30, 2019, $18,083,359 of the School District's applicable investments were insured or registered, with securities held by the entity or its agent, in the School District's name.

35

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
Credit Quality Risk
Credit quality risk is the risk that an issuer of other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed by O.C.G.A. 36-83-4. The School District does not have a formal policy for managing credit quality risk.
The investments subject to credit quality risk are reflected below:

Investment Type

Fair Value

Unrated

Repurchase Agreements $

18,018,043 $

18,018,043

$

18,018,043 $

18,018,043

Note 5: CAPITAL ASSETS
The following is a summary of changes in the capital assets for governmental activities during the fiscal year:

Balances July 1, 2018

Increases

Decreases

Transfers

Balances June 30, 2019

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

$ 31,248,204 $ 2,727,441 $

2,116,527

4,936,911

- $

- $ 33,975,645

-

(522,286)

6,531,152

Total Capital Assets Not Being Depreciated

33,364,731

7,664,352

-

(522,286)

40,506,797

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

721,093,860 45,214,030 24,773,933

3,283,625 6,451,219 4,730,261

198,276,991 35,642,176 14,401,964

15,190,451 2,576,926 964,116

1,124,307
-
1,042,640
-

522,286
-

724,377,485 50,540,942 30,026,480
213,467,442 37,176,462 15,366,080

Total Capital Assets, Being Depreciated, Net

542,760,692

(4,266,388)

81,667

522,286

538,934,923

Governmental Activities Capital Assets - Net $ 576,125,423 $ 3,397,964 $

81,667 $

- $ 579,441,720

36

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Current year depreciation expense by function is as follows:

Instructional Services Support Services
General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services School Nutrition

$ 790,018 360,360 31,454 279,479
1,130,043

$ 16,101,320
2,591,354 38,819
$ 18,731,493

Note 6: SHORT-TERM DEBT

The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its general fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75% of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes $

- $ 11,500,000 $ 11,500,000 $

-

Note 7: LONG-TERM LIABILITIES

The changes in long-term liabilities during the fiscal year for governmental activities were as

follows:

Governmental Activities

Balance

Balance

Due Within

July 1, 2018

Additions

Deductions

June 30, 2019

One Year

General Obligation (G.O.) Bonds $ Unamortized Bond Premiums Qualified School Construction Bonds Compensated Absences

382,450,000 $ 48,598,225 40,055,000 1,545,657

- $ 977,754

9,420,000 $ 6,810,152
986,181

373,030,000 $ 41,788,073 40,055,000 1,537,230

16,110,000 6,489,699 1,103,891

$ 472,648,882 $

977,754 $ 17,216,333 $ 456,410,303 $ 23,703,590

GENERAL OBLIGATION DEBT OUTSTANDING
The School District's bonded debt consists of various issues of general obligation bonds that are generally callable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. Bonds have also been issued to advance-refund previously

37

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

issued bonds. The School District repays general obligation bonds from voter-approved property taxes and sales taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District.
Voters have authorized $75,315,000 in general obligation debt for capital outlay projects and the costs of issuing and paying capitalized interest which was not issued as of June 30, 2019.

General Obligation Bonds currently outstanding are as follows:

Description

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

2009A Series

4.00-5.00%

2009B Series

5.87%

2012 Series

5.00%

2014A Series

5.00%

2014B Series

3.75-5.00%

2015 Series

4.00-5.00%

2016 Series

5.00%

2017 Series

3.00-5.00%

2018 Series

5.00%

Total General Obligation Bonds

6/18/2009 6/18/2009 11/1/2012
2/6/2014 2/6/2014 2/15/2015 5/19/2016 5/9/2017 5/3/2018

8/1/2019 8/1/2028 8/1/2033 8/1/2033 8/1/2025 2/1/2033 8/1/2023 2/1/2033 8/1/2033

$ 52,880,000 48,375,000 35,930,000 46,885,000 34,430,000
108,960,000 42,685,000 18,175,000 39,685,000
$ 428,005,000

$ 8,000,000 48,375,000 34,085,000 40,970,000 34,430,000
106,625,000 42,685,000 18,175,000 39,685,000
$ 373,030,000

At June 30, 2019, principal and interest payments due by fiscal year for general obligation bonds are as follows:

Payments Due in Fiscal Year Ending June 30

Principal

Interest

Amortization of Bond Premium

2020 2021 2022 2023 2024 2025-2029 2030-2034 Total

$

16,110,000 $ 18,486,350 $

21,270,000

17,611,825

25,100,000

16,509,950

27,105,000

15,228,325

29,285,000

13,844,950

165,015,000

42,753,332

89,145,000

11,158,513

$ 373,030,000 $ 135,593,245 $

6,489,699 6,014,519 5,364,333 4,618,161 3,811,513 12,259,528 3,230,320 41,788,073

QUALIFIED SCHOOL CONSTRUCTION BONDS (QSCB)
Section 1521 of the American Recovery and Reinvestment Act (ARRA) of 2009 provides for a source of capital at no or nominal interest rates for costs incurred by School Districts in connection with the construction, rehabilitation or repair of a public school facility or for the acquisition of land where a school will be built. Investors receive Federal income tax credits at prescribed tax credit

38

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

rates in lieu of interest, which essentially allows School Districts to borrow without incurring interest costs.

When the stated interest rate on the QSCB results in interest payments that exceed the supplemental interest payments discussed in the preceding paragraph, the School District may apply for a direct cash subsidy payment from the U.S. Treasury which is intended to reduce the stated interest rate to a nominal percentage. To qualify for this subsidy, the School District is required to periodically file appropriate documents with the Internal Revenue Service. These subsidy payments do not include the amount of any supplemental interest paid on a QSCB. The interest subsidy received by the School District in fiscal year 2019 was $2,014,670, which funded all but $238,824 of interest expense due on the QSCB.

Debt currently outstanding under Qualified School Construction Bonds is as follows:

Description

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

2010B Series

5.63%

11/11/2010

8/1/2028 $ 40,055,000 $ 40,055,000

The following is a schedule of total Qualified School Construction Bond payments:

Fiscal Year Ended June 30:

Principal

Interest

2020 2021 2022 2023 2024 2025 - 2029
Total

$

-

-

-

-

-

40,055,000

$ 40,055,000

$

2,253,494

2,253,494

2,253,494

2,253,494

2,253,494

9,075,160

$ 20,342,630

COMPENSATED ABSENCES
Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.
Note 8: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors or omissions; job related illness or injuries to employees; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceed commercial insurance coverage in any of the past three fiscal years.

39

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

The School District is self-insured for workers' compensation, unemployment claims, and dental claims. The School District purchases commercial insurance for all other risks of loss. Settled claims have not exceeded purchased commercial insurance coverage in any of the past three years.

WORKERS' COMPENSATION

The School District has established a limited risk management program for workers' compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $400,000 loss per occurrence, up to the statutory limit.

Changes in the workers' compensation claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in
Estimates

Claims Paid

End of Year Liability

2018 $ 2019 $

610,163

$

479,706

$

406,007

$

976,419

$

536,464

$

995,302

$

479,706 460,823

UNEMPLOYMENT COMPENSATION

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. There was no liability reported for unemployment compensation claims during the last two fiscal years.

DENTAL CLAIMS

The School District is self-insured with regard to dental claims. The School District accounts for dental claims expenditures and liability in the general fund when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated.

Changes in the dental claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in
Estimates

Claims Paid

End of Year Liability

2018 $ 2019 $

35,449

$ 2,845,551

$

2,842,572

$

38,428

$ 2,834,219

$

2,853,102

$

38,428 19,545

40

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

SURETY BOND The School District purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Chief Financial Officer School Principals

$

100,000

$

100,000

$

10,000

Note 9: SIGNIFICANT COMMITMENTS
The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2019, together with funding available:

Project Mill Creek MS Addition Synthetic Turf Fields

Unearned Executed Contracts1
$ 1,763,116
2,701,651 $ 4,464,767

Payments Through June 30, 20192

$

5,659,384

2,234,937

$

7,894,321

Funding Available From State1
$ 1,759,257
$ 1,759,257

1 The amounts described in this note are not reflected in the basic financial statements. 2 Payments include contracts and retainages payable at year-end.

Note 10: OPERATING LEASES

The Cherokee County School District has entered into various lease agreements as lessee for office equipment. These leases are considered for accounting purposes to be operating leases. Rental expenditures under the terms of the operating leases totaled $309,712 for the year ended June 30, 2019. The following future minimum lease payments were required under operating leases at June 30, 2019:

Year Ending

Lease Payments

2020 2021 2022

Total

$

309,172 309,172
25,764
644,108

Note 11: SIGNIFICANT CONTINGENT LIABILITIES
FEDERAL GRANTS
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. Any disallowances resulting from the

41

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position.
LITIGATION
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable but is not believed to have a material adverse effect on the financial condition of the School District.
Note 12: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School 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 20 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 School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. 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. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.
Contributions: As established by the Board, the School 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 School OPEB Fund from the School District were $12,015,177 for the year ended June 30, 2019. Active employees are not required to contribute to the School OPEB Fund.
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2019, the School District reported a liability of $279,928,576 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2018. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2017. An expected total OPEB liability as of June 30, 2018 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30,
42

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

2018. At June 30, 2018, the School District's proportion was 2.2025%, which was an increase of 0.0216% from its proportion measured as of June 30, 2017.

For the year ended June 30, 2019, the School District recognized OPEB expense of $13,408,631. At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual

experience

$

- $ 6,367,273

Changes of assumptions

-

47,421,247

Net difference between projected and

actual earnings on OPEB plan investments

378,742

-

Changes in proportion and differences

between School District contributions and

proportionate share of contributions

7,670,920

-

School District contributions subsequent to

the measurement date

12,015,177

-

Total

$ 20,064,839 $ 53,788,520

School District contributions subsequent to the measurement date 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, 2020. 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:

OPEB

2020 2021 2022 2023 2024 Thereafter

$ (8,793,850) $ (8,793,850) $ (8,793,850) $ (8,816,478) $ (7,502,849) $ (3,037,981)

43

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
Actuarial assumptions: The total OPEB liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017 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, 2018:

OPEB:
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

2.75% 3.25% - 9.00%, including inflation 7.30%, compounded annually, net of investment expense, and including inflation
7.50% 5.50%
4.75% 4.75%
2028 2022

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows:
For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection scale BB (set forward 1 year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement.
For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward 5 years for both males and females) is used for the period after disability retirement.
The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014.
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, 2017 valuation were based on a review of recent plan experience done concurrently with the June 30, 2017 valuation.
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

44

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

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. During fiscal year 2018, the School OPEB fund updated their investment strategy to a more long-term approach. 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 Domestic Stocks -- Large Cap Domestic Stocks -- Mid Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives
Total

Target allocation
30.00% 37.20%
3.40% 1.40% 17.80% 5.20% 5.00%
100.00%

Long-Term Expected Real Rate of Return*
(0.50)% 9.00%
12.00% 13.50%
8.00% 12.00% 10.50%

*Net of Inflation
Discount rate: The discount rate has changed since the prior measurement date from 3.58% to 3.87%. In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.87% was used as the discount rate. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.87% per the Bond Buyers Index). 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. Projected future benefit payments for all current plan members were projected through 2118. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2018. Therefore, the calculated discount rate of 3.87% was applied to all periods of projected benefit payments to determine the total OPEB liability.

45

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Sensitivity of the District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.87%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87%) or 1-percentage-point higher (4.87%) than the current discount rate:

School District's proportionate share of the Net OPEB Liability

1% Decrease (2.87%)

Current Discount Rate (3.87%)

1% Increase (4.87%)

$ 326,868,806 $

279,928,576 $ 242,076,192

Sensitivity of the District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District'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:

School District's proportionate share of the Net OPEB Liability

1% Decrease

Current Healthcare Cost Trend Rate

1% Increase

$ 235,338,207 $

279,928,576 $ 336,913,424

OPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR) which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports.
Note 13: RETIREMENT PLANS
The School District participates in various retirement plans administered by the State of Georgia, as further explained below.
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by O.C.G.A. 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial report that can be obtained at www.trsga.com/publications.

Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount

46

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. 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. Employees were required to contribute 6.00% of their annual pay during fiscal year 2019. The School District's contractually required contribution rate for the year ended June 30, 2019 was 20.90% of annual School District payroll, of which 20.84% of payroll was required from the School District and .06% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $49,737,547 and $157,222 from the School District and the State, respectively.
EMPLOYEES' RETIREMENT SYSTEM
Plan description: The Employees' Retirement System of Georgia (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.
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 ERS.
47

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019
Contributions: 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 School District's required contribution rate for the year ended June 30, 2019 was 24.78% of annual covered payroll for old and new plan members and 21.78% for GSEPS members. The rates include the annual actuarially determined employer contributions rate of 24.66% of annual covered payroll of new and old plan members and 21.66% of GSEPS members, plus a 0.12% adjustment for the HB 751 one-time benefit adjustment of 3% to retired state employees. 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. There were no employer contributions to the pension plan for the current fiscal year.
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)
Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.
Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $15, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 474-29(a) and 60(b). 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.
Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $534,598.
48

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2019, the School District reported a liability of $359,724,288 for its proportionate share of the net pension liability for TRS.

The TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows:

School District's proportionate share of the net pension liability

$

359,724,288

State of Georgia's proportionate share of the net pension liability associated with the School District

1,186,863

Total

$

360,911,151

The net pension liability for TRS and ERS was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2018.
At June 30, 2018, the School District's TRS proportion was 1.94%, which was an increase of 0.02% from its proportion measured as of June 30, 2017. At June 30, 2018, the School District's ERS proportion was 0.00%, which was a decrease of 0.002774% from its proportion measured as of June 30, 2017.
At June 30, 2019, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $3,228,085.
The PSERS net pension liability was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2018.
For the year ended June 30, 2019, the School District recognized pension expense of $38,710,118 for TRS, ($7,406) for ERS and $747,419 for PSERS and revenue of ($5,228) for TRS and $747,419 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel.

49

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

ERS

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual

experience

$ 23,814,256 $ 741,400

$

- $

-

Changes of assumptions

5,428,109

-

-

-

Net difference between projected and actual earnings on pension plan investments

-

9,835,560

Changes in proportion and differences between School District contributions and proportionate share of contributions

4,769,788

891,988

School District contributions subsequent to

the measurement date

49,737,547

-

Total

$ 83,749,700 $ 11,468,948

$

-

-

905

68,586

905 $

68,586

The School District contributions subsequent to the measurement date for TRS 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, 2020. 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:

TRS

ERS

2020 2021 2022 2023 2024 Thereafter

$ 20,388,363 $ (41,962)

$ 10,358,039 $ (25,719)

$ (9,090,383) $

-

$

481,111 $

-

$

406,075 $

-

$

- $

-

50

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Actuarial assumptions: The total pension liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers Retirement System:

Inflation Salary increases Investment rate of return

2.75%
3.25% 9.00%, average, including inflation
7.50%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014.

Employees' Retirement System:

Inflation

2.75%

Salary increases

3.25% - 7.00%, including inflation

Investment rate of return

7.30%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 2 years for both males and females for service retirements and dependent beneficiaries. The RP- 2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014.

51

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

Public School Employees Retirement System:

Inflation

2.75%

Salary increases

N/A

Investment rate of return

7.30%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014.

The long-term expected rate of return on TRS, ERS and PSERS 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 best 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 mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative
Total
* Rates shown are net of the 2.75% assumed rate of inflation

TRS Target allocation
30.00% 39.80%
3.70% 1.50% 19.40% 5.60%
-
100.00%

ERS/PSERS Target
allocation
30.00% 37.20%
3.40% 1.40% 17.80% 5.20% 5.00%
100.00%

Long-term expected real rate of return*
(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50%

Discount rate: The discount rate used to measure the total TRS pension liability was 7.50%. The discount rate used to measure the total ERS and PSERS pension liability was 7.30%. 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

52

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS and PSERS 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 School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50% and 7.30%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50% and 6.30%) or 1-percentage-point higher (8.50% and 8.30%) than the current rate:

Teachers Retirement System:

1% Decrease 6.50%

Current Rate 7.50%

1% Increase 8.50%

School District's Proportionate Share of the Net Pension Liability

$ 600,482,839 $ 359,724,288 $ 161,326,989

Employees' Retirement System:
School District's Proportionate Share of the Net Pension Liability

1% Decrease 6.30%

$

-

Current Rate 7.30%

$

-

1% Increase 8.30%

$

-

Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS, ERS and PSERS financial report which is publicly available at www.trsga.com/publications and http://www.ers.ga.gov/financials.
Payables to the pension plan: At June 30, 2019, the School District reported a payable in the amount of $5,365,329 to the TRS plan for the employee and employer contributions attributable to June of 2019.
DEFINED CONTRIBUTION PLAN
In August 2001, Cherokee County Board of Education adopted the CCSD 403(b) pension plan for the group of employees covered under the Public School Employees' Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement savings of this group.
The Board selected VALIC as the provider of the CCSD 403(b) plan. For each employee covered under PSERS, the Board began contributing to the plan an amount equal to $.50 for each $1.00 of employee contributions up to four percent of the employee's regular earnings.
An employee becomes vested in employer contributions in accordance with the following schedule:

53

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Basic Financial Statements June 30, 2019

0-35 months of service: 36-47 months of service: 48-59 months of service: 60+ months of service:

0% 50% 75% 100%

Employees who have already completed five years of service at the time of enrollment are immediately vested upon enrollment. Employees at all times are 100% vested in employee contributions.

Funds accumulated through employer contributions are only available to the employee upon termination of employment or by achieving normal retirement age as determined by the Internal Revenue Service. If an employee terminates employment prior to achieving vested status, funds contributed by CCSD on behalf of the non-vested employee are credited back to the Board.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
2019 2018 2017

Percentage Contributed
100% 100% 100%

Required Contribution
$ 215,560 190,396 176,384

Note 14: PRIOR YEAR DEFEASEMENT OF DEBT
In prior years, the School District defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's basic financial statements. At June 30, 2019, $44,880,000 of bonds outstanding are considered defeased.
Note 15: TAX ABATEMENTS
The public purpose of the Cherokee County Development Authority is promoting and expanding for the public good and welfare, industry and trade within Cherokee County and reducing unemployment to the greatest extent possible. The Cherokee County Development Authority, in coordination with Cherokee County government, provide a tax incentive program for qualified industries locating/located in Cherokee County. The purpose of this program is to encourage additional investment from new and existing industries to grow and diversify the tax base and local economy. Eligibility for the tax abatement program is based off the number and quality of jobs created as well as the amount of capital investment. There are claw-back provisions should the recently located company not meet their committed jobs and capital investment numbers.
For the fiscal year ended June 30, 2019, the Cherokee County Development Authority abated property taxes due to the School District that were levied on July 19, 2018 and due on November 15, 2018 totaling $1,735,733.

54

Required Supplementary Information

CHEROKEE COUNTY SCHOOL DISTRICT Required Supplementary Information
Schedule of Proportionate Share of Net Pension Liability Teachers Retirement System of Georgia For Years Ended June 30

Year Ended

School District's proportion of the
net pension liability

School District's proportionate
share of the net pension liability

State of Georgia's proportionate
share of the net pension liability associated with the School District

2019 2018 2017 2016 2015

1.94% $ 359,724,288 $

1.92%

356,627,528

1.93%

397,351,768

1.92%

291,638,386

1.88%

237,742,125

1,186,863 1,429,396 1,736,108 1,357,677 1,057,565

Total

School District's covered payroll

School District's proportionate
share of the net pension liability as a percentage of its
covered payroll

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

360,911,151 358,056,924 399,087,876 292,996,063 238,799,690

$ 231,484,139 221,443,384 212,135,952 203,096,846 192,776,926

155.40% 161.05% 187.31% 143.60% 123.32%

80.27% 79.33% 76.06% 81.44% 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 55

CHEROKEE COUNTY SCHOOL DISTRICT Schedule of Contributions - Teachers Retirement System of Georgia
For the Fiscal Years Ended June 30

Year Ended

Contractually required contribution

Contributions in relation to the contractually required
contribution

2019 $ 2018 2017 2016 2015 2014

49,737,547 $ 38,784,465 32,062,007 30,323,698 26,600,262 23,551,556

49,737,547 38,784,465 32,062,007 30,323,698 26,600,262 23,551,556

Contribution deficiency (excess)
-

School District's covered payroll
$ 238,692,053 231,484,139 221,443,384 212,135,952 203,096,846 192,776,926

Contribution as a percentage of covered
payroll
20.84% 16.75% 14.48% 14.29% 13.10% 12.22%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 56

CHEROKEE COUNTY SCHOOL DISTRICT Required Supplementary Information
Schedule of Proportionate Share of Net Pension Liability Employees' Retirement System of Georgia For the Fiscal Years Ended June 30

Year Ended
2019 2018 2017 2016 2015

School District's proportion of the
net pension liability
0.00% 0.00% 0.00% 0.00% 0.00%

School District's proportionate
share of the net pension liability

$

-

112,661

126,823

-

-

School District's covered payroll

$

-

68,045

60,972

-

-

School District's proportionate share of
the net pension liability as a
percentage of covered payroll
0.00% 165.57% 208.00%
0.00% 0.00%

Plan fiduciary net position as a percentage of
total net pension liability
76.68% 76.33% 72.34%
0.00% 0.00%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 57

CHEROKEE COUNTY SCHOOL DISTRICT Schedule of Contributions - Employees' Retirement System of Georgia
For the Fiscal Years Ended June 30

Year Ended

Contractually required contribution

2019 $ 2018 2017

16,882

Contributions in relation to the contractually required contribution

$

-

-

16,882

Contribution deficiency (excess)

$

-

-

-

School District's covered payroll

$

-

-

68,045

Contribution as a percentage of covered
payroll
0.00% 0.00% 24.81%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 58

CHEROKEE COUNT SCHOOL DISTRICT Schedule of Proportionate Share of Net Pension Liability Public School Employees Retirement System of Georgia
For the Fiscal Years Ended June 30

Year Ended
2019 2018 2017 2016 2015

School District's proportion of the
net pension liability
0.00% 0.00% 0.00% 0.00% 0.00%

School District's proportionate
share of the net pension liability
-

State of Georgia's proportionate share of the net pension liability associated
with the School District

$

3,228,085

2,850,834

3,719,948

2,375,349

1,997,884

Total
3,228,085 2,850,834 3,719,948 2,375,349 1,997,884

School District's covered payroll
$ 9,967,544 10,091,040 8,638,876 8,399,160 8,408,080

School District's proportionate share of the net pension
liability as a percentage of its covered payroll

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

N/A

85.26%

N/A

85.69%

N/A

81.00%

N/A

87.00%

N/A

88.29%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 59

CHEROKEE COUNTY SCHOOL DISTRICT Required Supplementary Information
Schedule of Proportionate Share of Net Pension Liability School OPEB Fund
For the Years Ended June 30

Year Ended
2019 2018

School District's proportion of the net OPEB liability
2.20% 2.18%

School District's proportionate
share of the net OPEB liability
(asset)
$ 279,928,576 306,413,183

State of Georgia's proportionate share
of the net OPEB liability associated
with the School District

$

-

-

Total
279,928,576 306,413,183

School District's covered payroll
$ 201,098,305 153,601,363

School District's proportionate share
of the net OPEB liability as a
percentage of its covered payroll
N/A N/A

Plan fiduciary net position as a percentage
of the total OPEB liability
2.93% 1.61%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 60

CHEROKEE COUNTY SCHOOL DISTRICT Required Supplementary Information
Schedule of Contributions - School OPEB Fund For the Years Ended June 30

Year Contractually required

Ended

contribution

Contributions in relation to the contractually required contribution

2019 $ 2018

12,015,177 11,415,245

12,015,177 11,415,245

Contribution deficiency (excess)
-

School District's covered payroll
$ 201,721,966 201,098,305

Contribution as a percentage of covered
payroll
5.96% 5.68%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 61

CHEROKEE COUNTY SCHOOL DISTRICT Notes to the Required Supplementary Information
For the Fiscal Year Ended June 30, 2019

Teachers Retirement System

Changes of assumptions: On November 18, 2015, the TRS Board adopted recommended changes to the econ-omic 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 to RP 2000

White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection

scale BB (set forward one year for males).



In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.

Employees' Retirement System
Changes of assumptions: On March 15, 2018, the PSERS Board adopted a new funding policy. 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. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.
On December 17, 2015, the PSERS 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.

Public School Employees Retirement System
Changes of assumptions: On March 15, 2018, the PSERS Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.

On December 17, 2015, the PSERS Board adopted recom-mended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The

expectation of retired life mortality was changed to the RP 2000 Blue Collar Mortality Table projected to 2025 with projection

scale BB (set forward 3 years for males and 2 years for females).

-

In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience.

School OPEB Fund
Changes of benefit terms: In June 30, 2010 actuarial valuation, there was a change of benefit terms to require Medicareeligible recipients to enroll in a Medicare Advantage plan to receive the State subsidy.
Changes in assumptions: In the revised June 30, 2017 actuarial valuation, there was a change relating to employee allocation. Employees were previously allocated based on their Retirement System membership, and currently employees are allocated based on their current employer payroll location. Additionally, there were changes to the discount rate and an increase in the investment rate of return due to a longer term investment strategy.
In the June 30, 2015 actuarial valuation, decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies.
In the June 30, 2012 actuarial valuation, a data audit was performed and data collection procedures and assumptions were changed.

62

Combining and Individual Fund Financial Statements and Schedules

CHEROKEE COUNTY SCHOOL DISTRICT Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds June 30, 2019

Assets - Cash Liabilities - due to others

Balance July 1, 2018

Additions

$

494,428 $

1,130,422 $

Deletions

Balance June 30, 2019

1,081,229 $

543,621

$

494,428 $

1,130,422 $

1,081,229 $

543,621

The accompanying notes are an integral part of this financial statement. 63

Special Reports Section

CHEROKEE COUNTY SCHOOL DISTRICT Schedule of Expenditures of Educational Local Option Sales Tax Proceeds For the Fiscal Year Ended June 30, 2019

2017 ELOST PROJECT

ORIGINAL
ESTIMATED COST (1)

CURRENT
ESTIMATED COSTS (2)

AMOUNT
EXPENDED
IN CURRENT YEAR (3)

AMOUNT
EXPENDED
IN PRIOR YEARS (3)

TOTAL COMPLETION
COST

ESTIMATED COMPLETION
DATE

Payment of a portion of the principal and interest on the Series 2009, Series 2010, Series 2012, Series 2014, Series 2015, Series 2016 and Series 2017 General Obligation Bonds previously issued along with acquiring, constructing, and equipping new school, adminstrative, athletic and other buildings and facilities; adding to, renovating, repairing, improving and equipping existing school, administrative, atheltic and other buildings and facilities; acquiring, installing, and equipping portable classrooms; acquiring buses and other vehicles; acquiring, installing, and implementing system-wide technology improvements; acquiring land; and acquiring any property useful or desirable both real and personal.
$

210,000,000 $

210,000,000 $ 28,726,047 $ 16,236,111 $

44,962,158

Totals

$ 210,000,000 $ 210,000,000 $ 28,726,047 $ 16,236,111 $ 44,962,158

Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Cherokee County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these
projects may include sales tax proceeds, state and local property taxes and/or other funds over the life of the projects. This schedule is prepared on the modified accrual basis of accounting.

64

Statistical Section

CHEROKEE COUNTY SCHOOL DISTRICT Net Position By Component Last Ten Fiscal Years (Accrual Basis of Accounting)

2010

2011

2012

2013

Governmental Activities

Net Investment in Capital Assets $ 167,841,613 $ 250,543,819 $ 198,889,424 $ 209,490,954 $

Restricted

104,524,173

27,577,489

69,142,615

24,271,421

Unrestricted

34,976,202

38,480,335

28,229,850

36,878,982

Total Governmental Activities

Net Position

$ 307,341,988 $ 316,601,643 $ 296,261,889 $ 270,641,357 $

2014

2015

2016

2017

2018

2019

171,145,712 37,776,874 38,528,714

$ 175,561,454 $ 135,165,188 $ 144,651,983 $ 110,975,930 $

84,492,945

58,795,136

52,384,239

90,376,401

(306,529,001) (226,709,526) (251,624,907) (558,790,206)

114,343,646 87,138,047
(528,724,168)

247,451,300 $ (46,474,602) $ (32,749,202) $ (54,588,685) $ (357,437,875) $ (327,242,475)

65

CHEROKEE COUNTY SCHOOL DISTRICT Changes In Net Position Last Ten Fiscal Years
(Accrual Basis of Accounting)

Expenses Governmental Activities:
Instructional Services Support Services:
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services Operations of Noninstructional Services: Community Service Operations School Nutrition Facilities Acquisition and Construction Interest on Long-term Debt
Total Governmental Activities Expenses

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

$ 244,240,005 $ 229,912,480 $ 224,253,725 $ 255,242,260 $ 250,405,679 $ 263,918,820 $ 268,277,389 $ 304,154,371 $ 307,545,475 $ 299,191,976

12,383,247 6,273,468 5,636,537 3,186,746
18,214,381 1,959,238
22,886,999 16,357,565
3,895,301 2,489,980

12,614,695 18,128,121
4,701,743 3,062,324 20,872,771 1,949,435 24,283,934 17,779,976 3,256,299 3,613,012

12,632,830 17,786,353
4,952,041 3,968,602 19,865,744 1,873,681 31,471,536 17,516,187 3,176,410 4,246,668

13,016,180 7,113,092 4,428,764 6,541,184
19,650,890 2,173,043
21,532,537 16,780,714
3,239,231 279,915

14,141,755 8,055,042 4,349,943 4,256,475
19,786,635 3,082,503
24,186,081 17,938,166
3,346,549 330,053

15,035,928 8,139,358 4,349,249 4,625,077
18,605,572 2,173,419
19,651,349 17,972,099
3,691,062 295,785

15,585,477 10,728,571
4,223,845 4,417,958 20,992,806 2,307,908 24,048,694 18,706,517 4,192,381
326,095

18,457,952 12,314,950
4,341,011 4,639,969 22,616,547 3,596,089 25,171,126 22,969,715 4,228,809
58,350

18,963,817 13,800,487
4,714,223 4,665,197 25,260,871 2,792,043 25,712,187 24,470,133 5,144,624
-

19,698,979 14,989,865
4,591,369 4,716,707 24,991,512 3,070,305 26,885,475 28,050,941 4,844,465
-

1,788,949 13,842,322 24,976,907 18,495,387

1,784,746 14,351,126
17,633,165

1,890,012 15,726,874
14,370,208

1,886,019 15,467,829
15,992,704

24,802 15,310,576
17,569,037

23,820 16,012,913
17,687,324

1,974,761 16,221,840
19,922,135

2,001,908 16,377,079
22,271,369

2,133,240 16,709,035
14,683,311

2,003,057 16,652,579
16,557,350

$ 396,627,032 $ 373,943,827 $ 373,730,871 $ 383,344,362 $ 382,783,296 $ 392,181,775 $ 411,926,377 $ 463,199,245 $ 466,594,643 $ 466,244,580

Program Revenues Governmental Activities:
Charges for Services: Instructional Services General Administration Support Services - Business Maintenance and Operation Community Service Operations School Nutrition
Operating Grants and Contributions Capital Grants and Contributions

$ 13,412,695 $ 10,970,071 $ 10,424,061 $ 11,092,020 $ 11,665,861 $ 11,699,841 $ 12,482,920 $ 13,209,819 $ 12,515,944 $ 13,543,252

-

-

18,995

-

24,473

61,156

67,686

55,650

-

-

-

-

416,051

3,868,800

512,126

282,082

177,618

155,831

-

-

-

-

-

-

-

-

-

-

227,793

253,023

-

-

-

2,412,222

-

-

-

-

-

-

6,996,515

6,641,791

6,639,408

6,439,499

6,190,901

6,284,294

6,544,616

7,135,331

7,042,849

7,449,816

176,815,801 832,886

194,856,735 5,869,397

178,815,914 4,733,176

185,238,986 14,623,703

182,302,687 4,914,187

206,318,462 10,288,788

213,577,923 8,650,087

221,016,968 2,079,785

233,948,283 4,600,742

241,765,291 7,441,006

Total Governmental Activities Program Revenues $ 198,057,897 $ 218,337,994 $ 201,047,605 $ 223,675,230 $ 205,610,235 $ 234,934,623 $ 241,500,850 $ 243,653,384 $ 258,335,611 $ 270,452,388

Total Governmental Activities Net (Expense)

$ (198,569,135) $ (155,605,833) $ (172,683,266) $ (159,669,132) $ (177,173,061) $ (157,247,152) $ (170,425,527) $ (219,545,861) $ (208,259,032) $ (195,792,192)

General Revenues and Other Changes in Net Position

Governmental Activities:

Taxes:

Property, Levied for General Purposes

$ 139,983,508 $ 132,517,956 $ 125,631,535 $ 119,504,969 $ 115,437,762 $ 128,425,998 $ 143,581,684 $ 156,267,252 $ 158,505,094 $ 169,863,066

Property, Levied for Debt Service

2,981,836

2,760,023

2,530,486

2,413,668

2,440,652

277,364

266,606

288,004

4,120,032

4,504,024

Educational Local Option Sales Tax

28,374,227

25,865,204

30,332,685

30,330,461

31,148,497

33,612,150

34,898,795

36,129,915

38,528,529

42,354,080

Other Tax

90,905

111,564

55,369

-

3,795,929

4,625,155

-

-

7,003,050

6,348,184

Unrestricted Grants and Contributions

-

-

837,491

151,814

-

969,255

4,492,797

4,153,299

-

-

Restricted Investment Earnings

-

-

144,910

166,183

379,995

431,733

555,927

623,996

945,547

-

Unrestricted Investment Earnings

378,568

105,477

-

-

14,958

27,131

82,046

183,067

467,627

1,132,482

Miscellaneous

1,262,619

744,811

-

-

1,472,405

-

-

-

1,492,706

1,785,756

Gain(Loss) on Asset Disposal

253,631

-

-

62,175

8,912

(243,336)

273,072

60,845

(868,961)

-

Total Governmental Activities

$ 173,325,294 $ 162,105,035 $ 159,532,476 $ 152,629,270 $ 154,699,110 $ 168,125,450 $ 184,150,927 $ 197,706,378 $ 210,193,624 $ 225,987,592

Change in Net Position Total Governmental Activities

$ (25,243,841) $

6,499,202 $ (13,150,790) $

Note: Governmental Activities are the only activities of the Primary Government

(7,039,862) $ (22,473,951) $ 10,878,298 $ 13,725,400 $ (21,839,483) $

1,934,592 $ 30,195,400

66

CHEROKEE COUNTY SCHOOL DISTRICT Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

General Fund Nonspendable Restricted Committed Assigned Unassigned Reserved Unreserved
Total General Fund

2010

$

-

-

-

-

-

518,503

33,590,487

$ 34,108,990

2011
$ 401,447 -
4,205,106 30,770,934
-
$ 35,377,487

2012
$ 304,618 -
26,470,133 -
$ 26,774,751

2013

$

-

-

-

-

28,089,633

-

-

$ 28,089,633

2014
$ 272,721 -
25,467,356 -
$ 25,740,077

2015
$ 716,582 948,100
8,075,632 -
39,209,291 -
$ 48,949,605

2016
$ 730,560 -
8,622,378 -
44,671,277 -
$ 54,024,215

2017
$ 797,246 -
9,248,303 -
46,279,801 -
$ 56,325,350

2018
$ 750,379 -
9,596,893 -
50,465,938 -
$ 60,813,210

2019
$ 644,424 -
12,137,457 -
54,773,428 -
$ 67,555,309

All Other Governmental Funds Nonspendable Restricted Committed Unassigned Reserved Unreserved

$

-

-

-

-

104,880,553

3,842,359

Total All Other Governmental Funds $ 108,722,912

$ 344,312 104,858,111 7,023,643 (116,216) -
$ 112,226,066

$ 299,790 69,142,615 7,283,442 -
$ 76,725,847

$ 337,702 68,433,335 7,024,264 -
$ 75,795,301

$ 329,765 67,584,818 7,757,858 -
$ 75,672,441

$

-

83,544,845

-

-

-

-

$ 83,544,845

$

-

58,788,413

-

-

-

-

$ 58,788,413

$

-

52,384,239

-

-

-

-

$ 52,384,239

$

-

90,333,208

-

-

-

-

$ 90,333,208

$

-

87,098,716

-

-

-

-

$ 87,098,716

67

CHEROKEE COUNTY SCHOOL DISTRICT Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting)

Revenues
Local Sources State Funds Federal Funds Investment Earnings Miscellaneous Total Revenues
Expenditures
Instructional Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Community Services School Nutrition Program Other Support Services
Facilities Acquisition and Construction Debt Service
Principal Retirement Interest and Fees Issuance Costs Total Expenditures
Excess of Revenues Over (Under) Expenditures
Other Financing Sources (Uses) Transfers In Transfers Out Bond Issuance Bond Premium Proceeds From Sale of Capital Assets Payment to Bond Escrow Agent
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Non-Capital Expenditures Capitalized Expenditures Total Expenditures
Debt Service as a Percentage of Non-Capitalized Expenditures

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

$ 186,313,132 138,740,801 37,105,970 378,568 6,996,515
369,534,986

$ 164,872,023 183,088,305 34,643,647 789,490 -
383,393,465

$ 186,715,705 153,824,014 21,599,195 221,796 -
362,360,710

$ 175,240,513 177,263,453 22,065,148 241,262 -
374,810,376

$ 174,908,700 160,644,859 23,850,274 394,952 2,873,240
362,672,025

$ 187,039,576 190,486,206 27,145,626 458,864 -
405,130,272

$ 199,359,911 198,705,638 26,442,730 637,972 -
425,146,251

$ 214,388,005 199,131,369 24,215,467 807,064 2,948,053
441,489,958

$ 228,385,473 211,496,126 23,111,998 1,413,174 3,915,065
468,321,836

$ 246,148,867 218,212,132 23,857,002 3,117,625 5,113,946
496,449,572

230,430,068 12,380,477 6,271,686 5,634,983 2,674,002 18,179,357 1,934,625 22,743,806 13,506,867 1,788,456 13,822,742 31,720,753 48,498,809
13,156,279 16,844,973
439,587,883
(70,052,897)

211,396,899 12,614,695 18,128,121 4,701,743 2,369,849 20,829,774 1,905,287 24,149,353 14,954,266 1,784,746 14,335,400 6,869,311 46,941,008
14,781,853 16,788,011
521,415 413,071,731
(29,678,266)

220,448,351 12,632,830 17,786,353 4,952,041 2,243,598 19,807,593 1,829,533 22,015,748 14,511,835 1,890,012 15,716,145 7,423,078 32,343,332
17,505,000 15,336,985
406,442,434
(44,081,724)

236,435,348 13,016,180 7,113,092 4,428,764 5,962,426 19,590,374 2,128,895 26,509,286 14,365,864 1,886,019 15,457,698 3,519,146 23,791,145
19,770,000 15,870,743
409,844,980
(35,034,604)

236,061,634 14,151,619 8,063,646 4,350,082 3,816,469 19,695,117 2,015,498 24,789,844 15,788,454 26,684 15,320,006 3,678,212 30,417,113
16,150,000 18,073,797
712,137 413,110,312
(50,438,287)

257,718,118 15,512,529 8,395,425 4,508,107 4,036,345 19,263,667 2,204,431 19,691,594 16,999,251 26,043 16,018,774 4,068,800 32,819,163
16,230,000 19,183,376
974,949 437,650,572
(32,520,300)

261,187,809 16,038,553 11,042,810 4,363,287 3,735,252 21,604,006 2,337,761 24,044,944 18,467,658 1,974,761 16,274,962 4,589,366 21,055,286
17,635,000 20,673,022
512,472 445,536,949
(20,390,698)

279,380,706 17,874,635 11,957,788 4,192,494 3,844,437 22,387,656 2,716,300 24,881,022 21,380,221 2,001,908 16,263,629 4,139,123 17,862,414
19,210,000 19,437,238
325,591 467,855,162
(26,365,204)

284,762,125 18,577,288 13,570,161 4,616,997 3,823,016 24,482,989 2,688,671 25,345,889 22,805,197 2,133,240 16,261,941 5,108,539 8,718,559
21,575,000 19,925,553
448,703 474,843,868
(6,522,032)

290,809,416 20,221,099 15,341,099 4,718,229 3,978,982 25,338,378 3,100,280 26,735,820 26,841,290 2,003,057 16,587,199 4,907,557 22,129,457
9,420,000 20,880,402
493,012,265
3,437,307

415,364 (415,364) 101,255,000 4,098,874 262,530 (615,395)
105,001,009

298,570 (298,570) 43,525,000 285,248
49,400 (3,715,362)
40,144,286

1,628,680 (1,628,680)
94,985 -
94,985

2,589,783 (2,589,783) 35,930,000 7,461,201
62,175 -
43,453,376

335,661 (335,661) 81,315,000 13,311,060 226,518 (40,703,827)
54,148,751

18,150,889 (18,150,889) 108,960,000 23,515,260
38,144 (70,387,328)
62,126,076

138,578 (138,578) 42,685,000 8,766,142 196,403 (50,938,669)
708,876

13,421 (13,421) 18,175,000 4,023,835 63,330
-
22,262,165

5,889,760 (5,889,760) 39,685,000 6,663,214 2,610,647
-
48,958,861

70,300 -
70,300

$ 34,948,112 $ 10,466,020 $ (43,986,739) $ 8,418,772 $ 3,710,464 $ 29,605,776 $ (19,681,822) $ (4,103,039) $ 42,436,829 $ 3,507,607

333,444,796 106,143,087 439,587,883

370,965,744 42,105,987
413,071,731

374,099,102 32,343,332
406,442,434

386,053,835 23,791,145
409,844,980

379,433,643 33,676,669
413,110,312

401,748,228 35,902,344
437,650,572

423,147,045 22,389,904
445,536,949

449,992,748 17,862,414
467,855,162

466,125,309 8,718,559
474,843,868

470,882,808 22,129,457
493,012,265

9.0%

8.7%

8.8%

9.2%

9.2%

9.1%

9.2%

8.7%

9.0%

6.4%

68

CHEROKEE COUNTY SCHOOL DISTRICT Assessed Value and Estimated Actual Value
Last Ten Fiscal Years

Fiscal Year3

Residential Property

Commercial Property

Industrial Property

Agricultural Property

Preferential & Conservation Use Property

Utility Property

Motor Vehicles and
Mobile Homes1

Other Property

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

5,168,810,680 4,747,831,128 4,461,226,249 4,069,650,746 4,199,340,719 4,832,876,519 5,396,734,955 5,983,542,756 6,603,865,308 7,187,264,153

1,224,749,686 1,148,108,530 1,084,627,347 1,068,209,415 1,064,149,402 1,216,647,055 1,266,253,828 1,359,167,290 1,541,757,711 1,651,560,421

241,412,998 222,552,172 207,025,618 197,280,131 196,788,435 205,104,883 211,917,799 236,563,490 267,734,818 304,008,121

1,203,570,512 1,088,036,429 1,003,201,600
869,750,160 872,496,502 918,398,745 1,008,183,024 1,060,893,640 1,200,231,760 1,240,959,696

348,822,160 309,113,640 276,210,080 227,143,440 219,791,440 231,497,160 260,445,760 269,460,760 297,671,080 302,943,520

151,363,240 146,101,478 146,613,177 137,171,378 157,632,680 154,919,480 155,810,960 158,606,240 158,861,840 161,694,720

662,781,240 581,685,690 578,431,040 625,032,150 655,289,690 544,063,160 407,304,844 314,363,550 235,689,450 183,755,428

279,810 3,123,326 2,679,521 2,091,836 2,679,124 3,336,647 2,520,952 2,401,230 2,777,488 6,273,203

Source: State of Georgia Department of Revenue, Tax Digest Consolidation Summary, School, https://apps.dor.ga.gov/digestconsolidation/default.aspx

Less: Tax Exempt Property
1,469,174,114 1,448,932,993 1,439,817,130 1,369,698,949 1,431,414,715 1,623,570,343 1,866,128,237 2,070,919,374 2,318,265,927 2,559,918,061

Total Taxable Assessed Value

Total Direct
Tax Rate2

7,532,616,212 6,797,619,400 6,320,197,502 5,826,630,307 5,936,753,277 6,483,273,306 6,843,043,885 7,314,079,582 7,990,323,528 8,478,541,201

1.89% 1.99% 1.99% 1.99% 1.99% 1.95% 1.95% 1.95% 1.95% 1.95%

Estimated Actual Taxable Value

Annual Percentage
Change

18,831,540,530 16,994,048,500 15,800,493,755 14,566,575,768 14,841,883,193 16,208,183,265 17,107,609,713 18,285,198,955 19,975,808,820 21,196,353,003

-3.77% -9.76% -7.02% -7.81% 1.89% 9.21% 5.55% 6.88% 9.25% 6.11%

Property in Cherokee County is reassessed annually. The county assesses property at 40 percent of actual value for all types of real and personal property. Estimated actual value is calculated by dividing the assessed value by this percentage.
1 As of March 1, 2013, only motor vehicles titles prior to March 1, 2013 are subject to ad valorem tax. Motor vehicles titles after that date are subject instead to a one-time state and local title fee. As a result of this change in law, the assessed value of motor vehicles subject to ad valorem tax decreased by approximately $247.6 million from 2013 to 2015, and the District expects the assessed value of motor vehicles to continue to decrease in future years as motor vehicles subject to ad valorem tax come out of service.
2 Per $1,000 of assessed value.
3 The tax year is one year prior to the fiscal year.

69

CHEROKEE COUNTY SCHOOL DISTRICT Direct and Overlapping Property Tax Rates2
Last Ten Fiscal Years (rate per $1,000 of assessed taxable value)

Direct-School District: Maintenance and operations3 Debt service

2010

2011

2012

2013

2014

2015

2016

2017

18.450 0.400

19.450 0.400

19.450 0.400

19.450 0.400

19.450 0.400

19.450 0.000

19.450 0.000

19.450 0.000

Total Direct-School District

18.850

19.850

19.850

19.850

19.850

19.450

19.450

19.450

Overlapping:1 Cherokee County Fire District Parks State of Georgia

4.381 2.742 0.580 0.250

4.720 2.950 0.628 0.250

5.365 3.129 0.641 0.250

5.825 3.394 0.780 0.200

5.798 3.373 0.776 0.150

5.728 3.436 0.744 0.100

5.728 3.436 0.744 0.050

5.680 3.374 0.609 0.000

Total Overlapping

7.953

8.548

9.385

10.199

10.097

10.008

9.958

9.663

Additional Overlapping Rates:1 City of Ball Ground City of Canton City of Holly Springs City of Mountain Park City of Nelson City of Waleska City of Woodstock

5.194 6.800 7.607 11.780 1.546 0.000 6.530

5.194 6.800 8.098 11.780 1.538 0.000 7.016

5.194 6.800 8.598 10.780 1.538 3.983 7.292

5.194 6.800 9.449 10.780 1.546 4.278 7.889

6.000 6.800 9.373 10.780 1.250 3.550 7.889

5.375 6.196 8.936 13.330 1.124 4.250 7.250

5.139 5.850 8.751 13.220 1.085 4.250 6.992

4.916 5.600 8.460 12.900 1.289 4.285 6.992

1 Overlapping rates are those of governments that overlap the School District's geographic boundaries. 2 The tax year is one year prior to the fiscal year. 3 The legal limit is 20 mills.

Source: Cherokee County Tax Commissioner (Cherokee County Board of Commissioners FY18 CAFR), Georgia Department of Revenue

2018
18.950 0.500
19.450
5.483 3.298 0.581 0.000
9.362
8.037 5.400 8.148 12.880 4.256 4.220 6.808

2019
18.950 0.500
19.450
5.366 3.269 0.503 0.000
9.138
8.269 5.400 7.999 8.320 4.178 3.655 6.720

70

CHEROKEE COUNTY SCHOOL DISTRICT Principal Property Taxpayers Current and Nine Years Ago

Taxpayer
Georgia Power Atlanta Gas Light Company Cobb EMC Bll Fund V Woodstock LLC Universal Alloy Corporation Cole Mountain Market Place MP The Palmer, LLC Georgia Transmission SOF Park 9 Owner LP Laurelwood Drive Owner Bell South Telecom AllTel Canton Marketplace, LLC CH Realty IV / Woodstock, LLC DDRM Riverstone Plaza LLC Forestar Real Estate Group, Inc.
Totals

December 31, 2018

Percentage of

Taxable

Total Taxable

Assessed

Assessed

Value

Rank

Value

December 31, 2009

Percentage of

Taxable

Total Taxable

Assessed

Assessed

Value

Rank

Value

$

55,026,649 1

36,345,444 2

23,958,829 3

21,180,320 4

21,180,025 5

21,105,200 6

19,045,000 7

17,811,660 8

15,226,520 9

15,041,600 10

$ 245,921,247

0.65% 0.43% 0.28% 0.25% 0.25% 0.25% 0.22% 0.21% 0.18% 0.18%
2.90%

$

33,676,224 1

30,289,795 2

21,781,325 3

14,270,668 6
13,492,798 9 16,082,581 5 14,157,840 7 16,651,200 4 13,575,200 8 11,828,120 10
$ 185,805,751

0.45% 0.40% 0.29%
0.19%
0.18% 0.21% 0.19% 0.22% 0.18% 0.16%
2.47%

Information is available only by calendar year; therefore, data reported is for December 31, 2018 and December 31, 2009 Source: Cherokee County Tax Commissioner

71

CHEROKEE COUNTY SCHOOL DISTRICT Property Tax Levies and Collections of Property by Type
Last Ten Fiscal Years

Fiscal Year

Taxes Levied1

Collected Within the Fiscal Year of the Levy2

Amount1

Percentage of Levy

Collections In Subsequent
Years3

Total Collections to Date

Amount1

Percentage of Levy

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

142,018,249 129,519,549 125,172,134 115,386,331 117,580,492 125,807,610 132,824,435 141,975,756 155,152,909 164,622,834

128,153,706 125,668,016 114,358,307 105,622,442 105,808,883 114,268,043 123,875,257 135,094,205 146,572,095 159,028,319

90.24% 97.03% 91.36% 91.54% 89.99% 90.83% 93.26% 95.15% 94.47% 96.60%

10,323,243 2,662,361 2,666,370 2,252,645 1,456,169 1,645,769 1,301,749 1,207,535 1,802,704 723,376

138,476,949 128,330,377 117,024,677 107,875,087 107,265,052 115,913,812 125,177,006 136,301,740 148,374,799 159,751,695

97.51% 99.08% 93.49% 93.49% 91.23% 92.14% 94.24% 96.00% 95.63% 97.04%

Source: Cherokee County Tax Commissioner

1 Relates to preceding calendar year tax digest. 2 Amounts shown are net of collection fees of 2.50% paid to Cherokee County for fiscal years 2009 through 2013, 2.30% paid
to Cherokee County for fiscal year 2014, 2.10% paid to Cherokee County for fiscal year 2015, and 2.00% paid to Cherokee County for fiscal years 2016 through 2018. 3 2019 Collections are through November 30, 2019.

72

CHEROKEE COUNTY SCHOOL DISTRICT Ratios of Total Debt Outstanding By Type Last Ten Fiscal Years

Fiscal Year
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Governmental Activities

General Obligation
Bonds

Bond Premiums

Capital Leases

342,380,000 375,503,204 350,705,000 366,865,000 396,530,000 425,260,000 405,430,000 404,395,000 422,505,000 413,085,000

4,831,204 -
7,998,523 14,505,760 25,594,630 45,515,819 49,308,763 48,463,109 48,598,225 41,788,073

1,095,099 558,246 -

Total Primary Government
348,306,303 376,061,450 358,703,523 381,370,760 422,124,630 470,775,819 454,738,763 452,858,109 471,103,225 454,873,073

Annual Personal Income (thousands)1

Estimated Population

Debt as a Percentage of Personal
Income

Total Debt Per
Capita

7,621,819 7,822,541 8,369,366 8,907,672 9,132,064 9,855,842 10,709,537 11,548,667 12,147,718 12,996,343

212,232 215,189 217,820 220,773 224,487 230,396 235,424 241,600 247,573 254,149

4.57% $ 4.81% $ 4.29% $ 4.28% $ 4.62% $ 4.78% $ 4.25% $ 3.92% $ 3.88% $ 3.50% $

1,641 1,748 1,647 1,727 1,880 2,043 1,932 1,874 1,903 1,790

Note: Details regarding the Board's outstanding debt can be found in the notes to the financial statements. 1 Information obtained from the U.S. Bureau of Economic Analysis

73

CHEROKEE COUNTY SCHOOL DISTRICT Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years

Fiscal Year

Estimated Population1

Estimated Actual Value

General Obligation
Bonds

Percentage of Estimated
Actual Taxable Value of Property

Net General Bonded Debt Per
Capita

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

212,232 215,189 217,820 220,773 224,487 230,396 235,424 241,600 247,573 254,149

18,831,540,530 16,994,048,500 15,800,493,755 14,566,575,768 14,841,883,193 16,208,183,265 17,107,609,713 18,285,198,955 19,975,808,820 21,196,353,003

347,211,204 375,503,204 358,703,523 381,370,760 422,124,630 470,775,819 454,738,763 452,858,109 471,103,225 454,873,073

1.84% 2.21% 2.27% 2.62% 2.84% 2.90% 2.66% 2.48% 2.36% 2.15%

1,636.00 1,744.99 1,646.79 1,727.43 1,880.40 2,043.33 1,931.57 1,874.41 1,902.89 1,789.79

Note: Details about the School Board's outstanding debt can be found in the notes to the financial statements.

1 Population data can be found in the Schedule of Demographic and Economic Statistics table

74

CHEROKEE COUNTY SCHOOL DISTRICT Direct and Overlapping Governmental Activities Debt
As of June 30, 2019

Governmental Unit

Amount of Outstanding Debt

Direct General Obligation Debt: Cherokee County Board of Education
General Obligation Bonds2

$

454,873,073

Overlapping General Obligation Debt: Cherokee County, Georgia
General Obligation Bonds Resources Recovery
Development Authority of Cherokee County (securing its Solid Waste Disposal Revenue Bonds)3

62,034,037 10,693,205

Estimated Percentage Applicable1
100%
100%
100%

Estimated Share of Overlapping
Debt

$

454,873,073

62,034,037 10,693,205

Total Direct and Overlapping Debt

$

527,600,315

$

527,600,315

Sources: Assessed value data used to estimate applicable percentages provided by the Cherokee County Tax Commissioner. All amounts shown were obtained as of September 30, 2018 unless indicated otherwise.
1 The percentage of each overlapping entity's outstanding debt chargeable to property in the District is calculated by dividing the gross assessed valuation of property in the District by the gross assessed valuation of property on the overlapping entity. 2 As of June 30, 2019 3 Cherokee County's obligation to levy ad valorem tax to make payments to the Resource Recovery Development Authority of Cherokee County is limited by law to one mill a year.

75

CHEROKEE COUNTY SCHOOL DISTRICT Legal Debt Margin
Last Ten Fiscal Years

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Assessed Value Debt Limit1

$ 7,532,616,212 $ 6,797,619,400 $ 6,320,197,502 $ 5,826,630,307 $ 5,936,753,277 $ 6,483,273,306 $ 6,843,043,885 $ 7,314,079,582 $ 7,990,323,528 $ 8,478,541,201 $ 753,261,621 $ 679,761,940 $ 632,019,750 $ 582,663,031 $ 593,675,328 $ 648,327,331 $ 684,304,389 $ 731,407,958 $ 799,032,353 $ 847,854,120

Total Net Debt Applicable to Limit: General Obligation Bonds

342,380,000

375,503,204

350,705,000

366,865,000

396,530,000

425,260,000

405,430,000

404,395,000

422,505,000

413,085,000

Legal Debt Margin

$ 410,881,621 $ 304,258,736 $ 281,314,750 $ 215,798,031 $ 197,145,328 $ 223,067,331 $ 278,874,389 $ 327,012,958 $ 376,527,353 $ 434,769,120

Total Net Debt Applicable to the Limit as a Percentage of Debt Limit

45.45%

55.24%

55.49%

62.96%

66.79%

65.59%

59.25%

55.29%

52.88%

48.72%

Source: Cherokee County Tax Commissioner, District Records (Assessed Value Statistical table)
1 Under Article 9, Section 5, Paragraph 1 of the State of Georgia Constitution, the School District's outstanding general obligation debt should not exceed 10% of the assessed value of the taxable property located within the School District.

76

CHEROKEE COUNTY SCHOOL DISTRICT Demographic and Economic Statistics Last Ten Fiscal Years

Calendar Year Population1*

Personal Income (thousands)1*

Per Capita Income1*

Median Age2*

School Enrollment3

Unemployment Rate4*

2009

212,232

7,621,819

35,913

35.3

38,225

8.9%

2010

215,189

7,822,541

36,352

36.4

38,636

8.8%

2011

217,820

8,369,366

38,423

36.7

38,761

8.2%

2012

220,773

8,907,672

40,344

37.0

39,222

7.1%

2013

224,487

9,132,064

40,680

37.3

39,644

6.1%

2014

230,396

9,855,842

42,778

37.2

40,517

5.5%

2015

235,424

10,709,537

45,490

37.7

41,169

4.7%

2016

241,600

11,548,667

47,801

38.7

41,769

4.2%

2017

247,573

12,147,718

49,067

39.6

42,148

3.7%

2018

254,149

12,996,343

51,137

38.6

42,277

3.1%

Note: Student Enrollment is based on the data for the 20 day count for the school year (July through June) which occurs within the calendar year.

* County-wide data

1 Information obtained from the U.S. Bureau of Economic Analysis
2 Information obtained from the United States Census Bureau, data.census.gov 3 Annual 20 day report for School Enrollment record
4 Information obtained from the United States Department of Labor, Bureau of Labor Statistics

77

CHEROKEE COUNTY SCHOOL DISTRICT Principal Employers
Current and Nine Years Ago

Employer
Cherokee County School District Northside Hospital-Cherokee Cherokee County Government Publix Supermarkets Inalfa Roof System Wal-Mart Associates, Inc. Pilgrim's Pride Corporation Chart Industries, Inc. Home Depot Universal Alloy Corporation Piolax Corporation Meyn America, LLC Reinhardt College City of Woodstock

December 31, 2018

Employees

Rank

Percentage of Total County Employment

4,865

1

2,700

2

1,523

3

1,248

4

929

5

900

6

835

7

650

8

546

9

450 10

3.7% 2.0% 1.2% 0.9% 0.7% 0.7% 0.6% 0.5% 0.4% 0.3%

Totals

$

14,646

11.0%

December 31, 2009

Employees Rank

Percentage of Total County Employment

4,549

1

1,304

2

700

4

4.2%
1.2% 0.6%

850

3

313

5

245

6

186

9

218

7

178 10

195

8

0.8% 0.3%
0.2% 0.2% 0.2% 0.2% 0.2%

$

8,738

8.0%

Information is available only by calendar year; therefore, data reported is for December 31, 2018 and December 31, 2009. Principal Employers within the county provided by the 2018 and 2009 Cherokee County Government CAFRs.
Source: Cherokee County Government

78

CHEROKEE COUNTY SCHOOL DISTRICT Employees by Function Last Ten Fiscal Years

Function


2010

2011

2012

2013

2014

Instructional Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services - Business Maintenance and Operation Student Transportation Services Support Services - Central Other Support Services School Nutrition Facilities Acquisition and Construction

2,809 144 84 41 10 316 32 303 448 27 312 -

2,813 150 83 49 11 307 27 299 452 22 311 -

2,757 165 87 50 11 309 27 301 446 22 300 -

2,688 174 84 49 11 290 27 297 441 22 294 -

2,726 177 86 49 11 275 26 58 435 21 289 -

Total

4,526

4,524

4,475

4,377

4,153

Percentage Change from Prior Fiscal Year

0.00%

-0.04%

-1.08%

-2.19%

-5.12%

Source: Cherokee County School District Payroll historical records as of the end of the fiscal year.

2015
2,889 178 96 49 11 283 26 58 445 21 292 -
4,348
4.70%

2016
3,003 203 97 48 11 289 26 65 467 25 294 -
4,528
4.14%

2017
3,163 184 118 46 11 287 29 66 489 27 291 -
4,711
4.04%

2018
3,184 200 120 46 12 302 30 69 507 28 291 -
4,789
1.66%

2019
3,289 207 125 42 10 289 30 73 524 21 293 -
4,903
2.38%

79

CHEROKEE COUNTY SCHOOL DISTRICT Teacher Salary Schedule Last Ten Fiscal Years

Fiscal Year

School District's Minimum Salary1

School
Minimum District's % of State Salary2,3 State Minimum3

School District's Maximum Salary1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

35,145 35,145 35,145 35,145 35,145 35,496 35,496 35,496 36,222 36,586

31,586 31,586 31,586 31,586 31,586 31,586 31,586 31,586 32,217 32,217

111% 111% 111% 111% 111% 112% 112% 112% 112% 114%

86,669 86,669 86,669 86,669 86,669 89,254 89,254 90,146 91,960 92,887

Data Source: 1 Annual CCSD Salary Handbooks 2 Georgia Department of Education
3 Georgia Governor's Office of Student Achievement, K-12 Public Schools Report Card

School District's Average Salary1
60,907 60,907 60,907 60,907 60,907 62,375 62,375 62,821 64,091 64,737

State-wide Average3

School District's % of
State Average3

52,823 52,871 53,002 52,956 52,973 53,424 54,215 55,537 56,342 57,072

115% 115% 115% 115% 115% 117% 115% 113% 114% 113%

80

CHEROKEE COUNTY SCHOOL DISTRICT School Buildings Capacity Last Ten Fiscal Years

School Name

2010

Arnold Mill ES Capacity Enrollment
Avery ES Capacity Enrollment
Ball Ground ES Capacity Enrollment
Bascomb ES Capacity Enrollment
Boston ES Capacity Enrollment
Canton ES Capacity Enrollment
Carmel ES Capacity Enrollment
Clark Creek ES Capacity Enrollment
Clayton ES Capacity Enrollment
Free Home ES Capacity Enrollment
Hasty ES Capacity Enrollment
Hickory Flat ES Capacity Enrollment
Holly Springs ES Capacity Enrollment
Indian Knoll ES Capacity Enrollment
Johnston ES Capacity Enrollment
Knox ES Capacity Enrollment
Liberty ES Capacity Enrollment
Little River ES Capacity Enrollment
Macedonia ES Capacity Enrollment
Mountain Road ES Capacity Enrollment

1,138 1,035
1,137 1,147
488 423
1,175 1,124
938 846
1,138 830
1,425 1,269
-
588 418
312 303
1,138 678
1,125 993
1,418 1,225
-
1,025 988
1,175 798
1,556 1,400
1,162 1,166
850 809
637 550

2011
1,113 846
1,137 1,175
488 417
1,175 1,036
938 888
1,150 843
1,325 1,274
-
663 352
312 299
1,156 720
1,050 954
1,412 1,266
-
1,000 890
1,175 847
1,556 1,391
1,143 1,099
838 822
643 555

2012
1,118 820
1,143 1,152
488 400
1,188 989
938 841
1,168 866
1,300 1,269
-
663 326
306 334
1,150 750
1,063 586
1,418 979
1,150 907
1,000 572
1,162 823
1,538 1,343
1,168 1,169
850 846
643 556

2013
1,156 835
1,143 1,110
1,175 529
1,188 926
925 500
1,168 854
1,300 1,226
1,200 905
650 314
306 311
1,156 809
895 551
1,418 990
1,150 1,007
1,006 543
1,168 831
1,538 1,332
1,143 1,236
850 799
637 463

2014
1,131 830
1,143 1,061
1,200 520
1,231 1,082
883 590
1,168 885
1,325 1,208
1,175 948
663 296
306 330
1,156 846
895 539
1,418 967
1,156 1,052
750 550
1,168 847
1,550 1,281
1,137 1,335
850 795
637 569

2015
1,137 851
1,150 1,034
1,188 559
1,231 1,013
887 599
1,175 755
1,337 1,179
1,175 952
462 226
356 328
1,181 858
913 545
1,438 953
1,162 1,094
763 566
1,143 749
1,562 1,252
1,143 1,369
856 760
643 561

2016
1,062 781
1,150 983
1,163 500
1,237 1,016
887 615
1,163 820
1,275 1,061
1,175 1,011
462 246
350 307
1,193 891
913 522
1,406 938
1,150 1,130
643 571
1,143 773
1,562 1,234
1,509 1,361
862 774
631 537

2017
1,113 788
1,175 1,015
1,175 508
1,263 981
891 617
1,163 826
1,287 1,020
1,200 1,082
456 232
362 314
1,187 907
925 473
1,250 805
1,193 991
875 570
1,193 741
1,575 1,207
1,512 1,338
862 770
713 419

2018
1,100 783
1,150 1,011
1,163 524
1,250 943
883 593
1,150 767
1,275 1,041
1,193 1,159
462 227
362 325
1,163 882
918 513
1,187 754
1,187 931
687 584
1,187 781
1,575 1,196
1,506 1,324
862 785
687 429

2019
1,100 788
1,150 1,034
1,137 552
1,237 902
912 582
-
1,275 981
1,175 1,208
462 257
362 327
1,150 911
918 595
1,187 738
1,193 922
687 578
1,187 993
1,575 1,090
1,506 1,358
862 744
687 441

81

CHEROKEE COUNTY SCHOOL DISTRICT School Buildings Capacity Last Ten Fiscal Years

School Name
Oak Grove ES Capacity Enrollment
R. M. Moore ES Capacity Enrollment
Sixes ES Capacity Enrollment
Woodstock ES Capacity Enrollment
Chapman IS Capacity Enrollment
Creekland MS Capacity Enrollment
Dean Rusk MS Capacity Enrollment
E. T. Booth MS Capacity Enrollment
Freedom MS Capacity Enrollment
Mill Creek MS Capacity Enrollment
Teasley MS Capacity Enrollment
Woodstock MS Capacity Enrollment
Cherokee HS Capacity Enrollment
Creekview HS Capacity Enrollment
Etowah HS Capacity Enrollment
River Ridge HS Capacity Enrollment
Sequoyah HS Capacity Enrollment
Woodstock HS Capacity Enrollment

2010
862 793
725 581
1,018 1,053
1,187 988
1,018 1,205
1,275 1,278
900 789
1,131 1,168
1,163 1,009
1,163 1,019
1,012 745
968 1,025
2,075 2,072
1,775 1,645
2,506 2,132
-
1,731 1,760
2,262 2,141

2011
868 787
1,063 604
1,025 1,010
1,187 1,005
988 1,215
1,275 1,305
912 834
1,062 1,165
1,175 1,068
1,163 1,117
912 787
1,113 1,048
2,093 2,041
1,775 1,730
2,500 2,116
2,013 705
1,725 1,699
2,100 1,992

2012
862 808
1,075 615
1,025 872
1,187 1,004
1,000 1,125
1,275 1,385
918 838
1,062 1,199
1,175 1,138
1,175 1,152
912 801
1,125 1,081
2,093 2,031
1,800 1,700
2,488 2,211
2,000 1,081
1,725 1,560
2,100 1,927

2013
862 455
1,075 574
1,038 820
1,193 1,023
975 921
1,263 1,393
918 836
1,062 1,191
1,150 1,173
1,175 1,160
912 828
1,125 1,096
2,081 2,051
1,825 1,732
2,488 2,285
1,975 1,425
1,725 1,521
2,100 1,851

2014
883 533
1,075 546
1,038 774
1,213 1,100
-
1,306 1,420
925 861
1,631 1,634
1,150 1,174
1,175 1,216
912 870
1,125 1,116
2,063 2,080
1,813 1,745
2,363 2,374
1,975 1,502
1,725 1,593
1,862 1,949

2015
891 563
1,062 417
1,050 768
1,231 1,111
-
1,281 1,392
925 894
1,650 1,679
1,187 1,114
1,187 1,286
1,525 1,399
1,131 1,178
2,087 2,293
1,838 1,818
3,175 2,356
2,025 1,567
1,688 1,644
1,900 2,108

2016
793 575
1,062 397
879 724
10,231 1,138
-
1,287 1,456
925 927
1,650 1,688
1,125 1,163
1,250 1,437
1,538 1,388
1,125 1,124
2,163 2,465
1,900 1,873
3,150 2,377
2,025 1,658
1,650 1,765
1,962 2,208

2017
775 512
1,062 420
883 684
1,237 1,176
-
1,287 1,494
1,600 1,479
1,663 1,763
1,187 1,165
1,293 1,416
1,550 1,418
1,088 1,157
2,387 2,589
1,925 1,993
3,175 2,381
2,050 1,725
1,737 1,848
2,413 2,274

2018
687 466
1,062 384
883 716
1,200 1,163
-
1,287 1,543
1,650 1,522
1,650 1,786
1,187 1,163
1,287 1,414
1,518 1,522
1,075 1,193
2,512 2,647
1,975 1,995
3,175 2,421
2,025 1,809
2,375 1,912
2,393 2,308

2019
687 449
1,050 872
879 733
1,181 1,151
-
1,362 1,532
1,650 1,546
1,650 1,821
1,187 1,133
1,287 1,410
1,525 1,582
1,075 1,224
3,440 2,689
1,950 2,001
3,175 2,384
2,025 1,868
2,375 1,941
2,387 2,228

Source: Cherokee County School District available records (Planning and Facilities, Division of Support Services) and annual 20day enrollment report. Capacity schedule does not include information on preschools and center locations within the school district.

82

CHEROKEE COUNTY SCHOOL DISTRICT Number of Personnel and Ratio of Pupils to Professional Personnel
Last Ten Fiscal Years

Professional Personnel1

Other Operating Personnel2

Service Personnel3

Total Personnel

Student Enrollment4

Ratio of Pupils to Professional
Personnel

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2,795 2,727 2,666 2,676 2,811 2,963 3,097 3,172 3,231 3,246

697

999

4,491

38,225

13.7 to 1

764

1,001

4,492

38,636

14.2

752

1,010

4,428

38,761

14.5

733

938

4,347

39,222

14.7

763

748

4,322

39,644

14.1

791

776

4,530

40,517

13.7

851

749

4,697

41,169

13.3

838

765

4,775

41,769

13.2

841

779

4,851

42,148

13.0

815

822

4,883

42,277

13.0

Source: Historical personnel records from Human Resource Department as of the beginning of the fiscal year.
1 Professional personnel consists of all certified personnel including teachers, librarians, counselors, supervisors, consultants, coordinators, principals, assistant principals and other leadership personnel. 2 Other Operating personnel includes non-certified leadership personnel, classroom aides, secretarial and clerical employees, and other technicians. 3 Service personnel includes food service personnel, custodial employees, bus drivers and maintenance/warehouse employees. 4 Annual 20 day report for School Enrollment record

83

CHEROKEE COUNTY SCHOOL DISTRICT Operating Statistics Last Ten Fiscal Years

Fiscal Year
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Expenditures1

Daily Enrollment2

396,627,032 373,943,827 373,730,871 383,344,362 382,783,296 392,181,775 411,926,377 463,199,245 466,594,643 466,244,580

38,225 38,636 38,761 39,222 39,644 40,517 41,169 41,769 42,148 42,277

Cost per Pupil Enrolled
10,376 9,679 9,642 9,774 9,656 9,679
10,006 11,090 11,070 11,028

Percentage of Change
-2.17% -6.72% -0.38% 1.37% -1.21% 0.25% 3.37% 10.83% -0.17% -0.38%

1 Changes in Net Position statistical table 2 Annual 20 day report for School Enrollment record

84

Compliance Section

85

86

87

88

CHEROKEE COUNTY SCHOOL DISTRICT Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2019

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program1 After School Snack School Lunch Equipment

10.553
10.555 10.555 10.579

Total Child Nutrition Cluster

Total U. S. Department of Agriculture

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education High Cost Fund Pool Flow Through Flow Through Preschool Grants

84.027 84.027 84.027 84.173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Program Improvement Career and Technical Education - Basic Grants to States Arts in Education - Model Development and Dissemination Grants Program Title IV, Part A Student Support and Academic Enrichment Title IV, Part A Student Support and Academic Enrichment Title III, Part A Language Instruction for English Learners Title III, Part A Language Instruction for English Learners Title III, Part A Language Instruction for Immigrant Students Title II, Improving Teacher Quality State Grants Title II, Improving Teacher Quality State Grants Title II, Advance Placement Title I, Improving the Academic Achievement of the Disadvantaged Title I, Improving the Academic Achievement of the Disadvantaged

84.048 84.048 84.351 84.424 84.424 84.365 84.365 84.365 84.367 84.367 84.367 84.010 84.010

Total Other Programs

Total U. S. Department of Education

Health and Human Services, U. S. Department of Child Care and Development Fund Cluster Pass-Through From Bright From the Start: Georgia Department of Early Care and Learning Child Care and Development Block Grant Pass-Through from Ninth District Opportunity, Inc.: Georgia Prekindergarten Transition Program

93.600 93.575

Total Child Care and Development Fund Cluster

Total U. S. Department of Health and Human Services

Defense, U. S. Department of Direct Department of the Air Force R.O.T.C. Program

12.000

Total U. S. Department of Defense

PASSTHROUGH ENTITY ID NUMBER

EXPENDITURES IN PERIOD

195GA324N1099 $
195GA324N1099 195GA324N1099 185GA350N8103

1,673,532 8,204,830
110,552 46,724
10,035,638
10,035,638

H027A180073 H027A170073 H027A180073 H173A180081
V048A150010 V048A180010
S424A170011 S424A180011 S365A170010 S365A180010 S365A180010 S367A170001 S367A180001 S367A180001 S010A170010 S010A180010

110,137 453,112 5,648,111 200,402
6,411,762
228,898 23,254
256,515 46,612
177,242 17,525
333,865 27,395
240,727 411,459
4,500 214,766 4,314,066
6,296,824
12,708,586

392,796 143,717 536,513 536,513
396,259 396,259

Total Expenditures of Federal Awards

$

23,676,996

89

CHEROKEE COUNTY SCHOOL DISTRICT Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2019
Notes to the Schedule of Expenditures of Federal Awards Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Cherokee County Board of Education (the "Board") under programs of the federal government for the year ended June 30, 2018. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. Note 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards , wherein certain types of expenditures are not allowable or are limited as to reimbursement. The School District has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School District did not provide federal assistance to any subrecipient. Total federal revenues presented in the Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds differ from the total federal expenditures presented in this schedule due to federal payments received that were not associated with a specific federal program. Those differences totaled $180,006. 1 Includes the federally assigned value of donated commodities for the Food Donation Program in the amount of $1,773,662.
90

91

92

CHEROKEE COUNTY SCHOOL DISTRICT DR. BRIAN V. HIGHTOWER
SUPERINTENDENT OF SCHOOLS
SCHOOL BOARD MEMBERS
Kyla Cromer, School Board Chair Kelly Poole, School Board Vice-Chair
Mike Chapman John Harmon Patsy Jordan Clark Menard Robert Rechsteiner