Comprehensive annual financial report for the fiscal year ended June 30, 2002

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2002

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT For The Fiscal Year Ended June 30, 2002
Prepared By: Finance and Administration Department

GEORGIA REGIONAL TRANSPORTATION AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2002
TABLE OF CONTENTS
INTRODUCTORY SECTION Letter of Transmittal .........................................................................................................3 Organizational Chart ........................................................................................................ 11 List of Principal Officials................................................................................................. 12 List of Staff Members of Finance and Administration Department ................................ 13 Vicinity Map of Metro Atlanta Nonattainment Area....................................................... 14
FINANCIAL SECTION Independent Auditor's Report.......................................................................................... 17 Management's Discussion and Analysis ......................................................................... 19 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets .......................................................................................32 Statement of Activities .........................................................................................33 Fund Financial Statements: Balance Sheet - Governmental Funds .................................................................34 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ..........................................................35 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........ .36 Statement of Net Assets -Proprietary Fund ....................................................... .37 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Fund ............................................................. .38 Statement of Cash Flows - Proprietary Fund ..................................................... .39 Notes to the Financial Statements ............................................................................. .40 Combining Fund Statements and Schedules: Combining Balance Sheet-Nonmajor Governmental Funds ...................................59 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ...............................................60 Capital Assets Used in the Operation of Governmental Funds: Comparative Schedules By Source ......................................................................62 Schedule By Function ..........................................................................................63 Schedule of Changes By Function and Asset Classification ...............................64 Schedule of Expenditures By Object and FunctionGovernmental Activities ......................................................................................65
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2002
TABLE OF CONTENTS
STATISTICAL SECTION Government-wide Information: Government-wide Expenses By Function .................................................................68 Government-wide Revenues ......................................................................................69 Fund Information: General Governmental Expenditures By Classification ............................................70 General Governmental Revenues By Source.............................................................71 Demographic Information: Population Growth of Counties in Nonattainment Ara Comparison of 2000 and 1990 Census Data........................................................72 Member Counties ofthe Atlanta Regional Commission (ARC)Calculation of Population Density (Persons Per Acre)Comparison of2000 and 1990 Data ..............................................................73 Atlanta Metropolitan Area Miscellaneous Transportation Statistics ..............................................................74
COMPLIANCE SECTION Report on Compliance and On Internal Control Over Financial Reporting Based Upon An Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...................................................77
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INTRODUCTORY SECTION
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(.~--AGeo,g;a Regfonal TransportaUon AuthorHy
November 6, 2002
Mr. Walter M. "Sonny" Derise, Chairman, Members of the Board of Directors, And the Citizens of the State of Georgia
Ladies and Gentlemen:
The Georgia Regional Transportation Authority's enabling legislation, Senate Bill 57, requires that it issue annually a report on its financial position and activity. That statute also contains a requirement that this report be audited by an independent auditing firm selected by the Board of Directors on or about the end of the State of Georgia's fiscal year. Pursuant to those statutory requirements, we are pleased to present the Comprehensive Annual Financial Report of the Georgia Regional Transportation Authority (Authority/ GRTA) for its fiscal year ended June 30, 2002.
This report consists of management's representations concerning the finances of the Georgia Regional Transportation Authority. Consequently, management assumes full responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures. To provide a reasonable basis for making these representations, management of the Authority has established a comprehensive internal control network that is designed both to protect its assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Georgia Regional Transportation Authority's financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the Georgia Regional Transportation Authority's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert, that to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The Georgia Regional Transportation Authority's financial statements have been audited by the Georgia Department of Audits and Accounts. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Georgia Regional Transportation Authority for the fiscal year ended June 30, 2002, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Georgia Regional Transportation
245 Peachtree Center Avenue, NE Suite 900
Atlanta, Georgia 30303-1223 404-463-3000
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Authority's financial statements for the fiscal year ended June 30, 2002, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report.
The independent audit of the financial statements of the Authority was part of a broader, federally mandated "Single Audit" designed to meet .the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports can be found in the "Single Audit Report ofthe State ofGeorgia".
GAAP require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the contents of the MD&A and thus should be read in conjunction with it. The Georgia Regional Transportation Authority's MD&A can be found immediately following the report of the independent auditors.
OVERVIEW OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
This Comprehensive Annual Financial Report (CAFR) is prepared such that it can be used and understood by a broad array of people. Toward that end, this report is presented in four sections: Introductory, Financial, Statistical and Compliance.
1. The Introductory Section - The purpose of this section, which is unaudited, is to introduce the reader to the repo_rt and provide some general information about the operations of the GRTA. Included in this part of the CAFR are this transmittal letter, a vicinity map, an organization chart and list of the principal officials.
2. The Financial Section - This section provides all of the financial information about the Authority. It contains the independent auditors' report; management's discussion and analysis; basic financial statements, and the combining statements for nonmajor funds. The reader will also find other schedules that provide detail information relative to the basic financial statements.
3. The Statistical Section - The statistical section provides selective financial, economic and demographic information about the State of Georgia and the ambient air quality nonattainment area for which the Georgia Regional Transportation Authority is responsible. This information provides the user with relevant historical operating data and identifiable trends that can be extrapolated over future periods.
4. The Compliance Section - This last section primarily relates to the federal grant monies that are received by GRTA. The Single Audit Act requires that the independent auditor report on the government's system of internal controls and its compliance with the legal requirements set forth by the various grantor agencies. The required report from the auditors is found in this section.
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PROFILE OF THE GEORGIA REGIONAL TRANSPORTATION AUTHORITY
The Georgia Regional Transportation Authority was created in March 1999, under the auspices of Senate Bill 57 and given the power to establish new transportation services, control regionally significant private and public developments, and review transportation planning in the region. In June 1999, the Governor appointed the initial 15 member board of directors and GRTA began operating as a new entity. Under its enabling legislation, the Georgia Regional Transportation Authority has the authority to manage, or cause to be managed, transportation and air quality in areas of Georgia that are in nonattainment of federal air quality standards. Currently, that area includes the following 13 counties located in the Metropolitan Atlanta region: Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding, and Rockdale.
The Georgia Regional Transportation Authority is an instrumentality of the State of Georgia and is a body corporate and politic. The overall management of the business and affairs of the Authority is vested in a Board of Directors. The fifteen members that comprise the Board serve on a part-time basis and are appointed by the Governor for specific periods of time with the terms of appointment being staggered. The Board of Directors appoints an Executive Director who is responsible for the day-to-day operations of the Authority.
MAJOR INITIATIVES OF THE AUTHORITY
Due to unprecedented growth, the lack of regional planning and inadequate funding in the past, the Atlanta region finds its roads stretched beyond their capacity. An undesirable byproduct of those congested roadways has been the failure of the area to attain compliance with the ambient air quality standards established by the federal government. As a result of that failure, Federal transportation funding for the region was withheld in 1997 because the region could not win Federal approval of a transportation program that could conform to the air quality requirements of the Clean Air Act.
In an attempt to quickly address this financial and environmental crisis, Governor Roy E. Barnes called on the State Legislature during their 1999 session to create the Georgia Regional Transportation Authority and they responded accordingly. In the executive order appointing the Board of Directors in June 1999, Governor Barnes indicated that the purpose of GRTA was "to address in a comprehensive manner the coordination, planning, construction and operation of transportation systems and facilities in federal nonattainment areas or this State with the goal of improving quality of life in the 21 st century by increasing the efficiency of transportation systems and reducing overall vehicle emissions."
In the three short years since its inception, the Georgia Regional Transportation Authority has quickly begun to tackle Atlanta's transportation problems and address the air quality issue. Several of the major initiatives that were undertaken during the Authority's fiscal year ended June 30, 2002 are identified individually in the discussion that follows. As you will see from some of the projects that were initiated during the year, a great deal of effort is being spent to provide an overall framework for transportation systems in the Atlanta area and to identify the best possible solutions for the citizens of Georgia.
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Clayton County Bus Service (C-Tran)
A 12-year drought of new mass transit service for Metropolitan Atlanta ended on October 1, 2001, when 12 clean-fuel buses began rolling in Clayton County as the new GRTA-provided C-Tran bus service began operations. Only fourteen months after Clayton County voters said that they wanted local bus service, the Georgia Regional Transportation Authority responded to the Clayton County Board of Commissioners' request by purchasing the initial bus fleet and contracting with the Metropolitan Atlanta Rapid Transit Authority (MARTA) for drivers and bus maintenance facilities.
The initial C-Tran fleet includes 12 ADA-compliant, 43-passenger buses which serve two regular routes. Both routes connect to the MARTA rail system at the Atlanta Hartsfield International Airport. Over the first year of operation, ridership has been more than twice as much as the initial projections. And during the next three years, the fleet is programmed to grow to 36 buses with three additional routes being added. An express bus route to downtown Atlanta is also being studied as one possible option.
QuickLink Bus Service
One month after introducing C-Tran, the Georgia Regional Transportation Authority responded with another program to provide congestion relief for the busy Interstate 75 corridor. An innovative private/public partnership between GRTA and Greyhound Lines, Inc., called QuickLink, provides commuter bus service between the cities of Macon and Atlanta.
The QuickLink commuter bus service runs between Macon and Atlanta with two stops in Henry County and one in the City of Forsyth. QuickLink provides four buses with eight weekday travel options, giving middle-Georgians a transportation alternative for their long commutes. The Greyhound buses include comfortable upgrades with added legroom, seat trays and cup holders. Riders also receive complimentary newspapers and all buses are wheelchair accessible.
Northwest Corridor Connectivity Study
Tremendous growth along the 1-75 and 1-575 corridors northwest of Atlanta continues to drive the need for alternative transportation to serve the activity centers at Cumberland, Marietta and Town Center. A transit line connecting to the MARTA rail line at the Arts Center station in the Midtown area will provide the much needed non-highway link to this important sector of the reg10n.
In August of 2001, GRTA awarded a contract to a consulting firm to perform an in-depth transportation study of the Northwest corridor that will take about two years to complete. The Northwest Connectivity Study will determine a preferred alignment of this new transit service and recommend the appropriate technology, such as light rail or bus rapid transit, to meet the transportation needs of this corridor. As a way of expediting the project, GRTA has also contracted with the consultants to assist with the preliminary environmental impact studies that are required by the federal government.
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Northern Sub-Area Study & Ga 400 Corridor Analysis
In concert with the vision of the Northwest Connectivity Study, GRTA, in cooperation with the Georgia Department of Transportation, began in 2001 one of the most comprehensive land-use and transportation studies ever conducted of the Atlanta region. The Northern SubArea Study & Ga 400 Corridor Analysis features a "micro" study of transportation alternatives for the Ga 400 corridor and a "macro" study of the larger North Atlanta region, called the subarea. This area is a fan-shaped section that extends three miles west of I-75 to three miles beyond I-85 on the east and from three miles beyond Ga 20 on the north to I-285 on the south.
The principal purposes for conducting this study were to evaluate transportation, land use, economic growth and air quality issues in the study area; fulfill the requirements of the Georgians for Transportation Alternatives V. Shackleford legal agreement; and provide recommendations for the Transportation Improvement Program and Regional Development Plan. The final recommendations from the study are expected in early 2003.
Regional Transit Action Plan (RTAP)
In order to develop a seamless regional transportation network, there needs to be a comprehensive, integrated plan for the region. The development of such a blueprint is the intent of the Regional Transit Action Plan. In December of 2001, GRTA selected consultants to perform a two-year long study that will culminate in recommendations for an Atlanta regional transportation network. Representatives from public transportation providers in the region, the Atlanta Regional Commission, the Federal Transit Administration, the Metro Counties and other transportation experts are all serving on a steering committee to help guide the study.
When completed, the Regional Transit Action Plan study will produce an implementation plan for the express bus system. Additional elements include a short-range transit action plan through the year 2010, a long-range plan covering this period through 2025, a recommended regional fare collection strategy, and a framework for integrating transit services into a seamless regional system.
Perimeter Connectivity Study
One of the key activity centers in Metro Atlanta is the Perimeter Center area in north DeKalb County. This center is home to one of the largest concentration of Fortune 500 companies in the Southeast and lies at a major transportation crossroads of Interstate 285, Ga 400 and the MARTA North Springs line. Being centered around a large, regional shopping mall and having a heavy concentration of office buildings, hotels and restaurants, this area also experiences a great deal of traffic congestion.
In 2002, a consultant was selected to perform the Perimeter Connectivity Study. This study will evaluate fixed guide-way and bus alternatives to provide vital connecting links between MARTA stations and local trip generators within the Perimeter Center Major Activity Area. The consultant's work includes a detailed assessment of the transportation alternatives and their costs as well as an environmental assessment of the selected alternatives.
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FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Georgia Regional Transportation Authority operates. Some of the more significant environmental factors that have the potential to impact the Authority's ability to obtain funding to carry out its mission in the future are discussed below.
State of Georgia's Economy
Like the rest of the nation, the State of Georgia has been experiencing the effects of the prevailing unfavorable economic conditions. Based on the revenue numbers recently reported by the Georgia Department of Revenue, the State of Georgia's revenue collections for the fiscal year ended June 30, 2002 was about $686 million or 5% less than the previous period. In terms of dollar amounts, the largest revenue decreases for the most recent fiscal year were in the "Individual Income Tax" category (down $438 million or 6.3%), the "Corporate Income Tax" category (down $136 million or 18.8%) and the "Sales and Use Tax" category (down $100 million or 2.0%).
With the resulting imbalance in State government revenues and expenditures, the Governor's Office of Planning and Budget has been forced into making some budget reductions in State supported programs. Fortunately, the State has accumulated "rainy day" funds of about $1.5 billion that represents an existing $735 million budgetary reserve fund and another $815 million in surplus collections from the 2001 fiscal year. The availability of these funds is critical to the State's ability to reduce the impact of a sour economy on its operating budget. However with much of this financial cushion possibly evaporating during the 2003 fiscal year, budget cuts could become much more severe in subsequent fiscal years.
In the first quarter's edition of the newsletter, Georgia Business and Economic Conditions, Mr. Jeffrey Humphrey, the Director of Economic Forecasting for the University of Georgia's Terry College of Business, provided his economic forecast for the 2002 year. His prediction back in March was that the economy of the State of Georgia would continue to experience a synchronous recession with the rest of the nation. In addition, he felt like the recession would continue for a relatively long period of time but would be shallow in nature.
Mr. Humphrey is of the opinion that the underlying forces of recession in Georgia and the nation are basically the same. Some of those causes include the purging of structural imbalances (i.e., excesses in business investment and staffing, bubbles in the equities market) and the collapse of consumers' and businesses' confidence. In addition, the unique characteristics of this recession are viewed as working against the State's economy. It is felt that Georgia's unusually large air transportation, hospitality and information technology clusters are certain to face difficult market conditions in the coming months.
In terms of significant economic trends for the 2002 year, the Real Gross State Product is projected to decrease by about 0.9%. The unemployment rate for the State is expected to increase from 4.2% to 6.1 % by the end of the year. And with fewer jobs available, real personal
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income is expected to decrease by an estimated 0.4% and housing permits are projected to drop significantly by 11.4% compared to the previous year.
Metropolitan Atlanta's Economy
Within the context of the current economic conditions, the Atlanta area's technologydriven economy is particularly at a disadvantage. The region is expected to lose about 22,200 jobs by the end of 2002 which represents a decrease of about 1% compared to the previous year's total. It is anticipated that job losses will be concentrated in the high tech, air transportation and hospitality industries. And when compared to recent years, construction activity is also expected to decline sharply.
Irrespective of the current economic conditions, the Metropolitan Atlanta region ranks high on the list of the nation's best locations for business. The large pool of talented workers, the industrial diversity and the growth of several major research universities combine to foster economic prosperity for the immediate area. And historically, transportation has been the linchpin for the region's growth. Hartsfield Atlanta International is the second busiest passenger airport in the world, and its extensive schedule of daily flights to domestic and international destinations makes Atlanta a prime location for headquarters operations, foreign direct investment, trade shows and conventions. The convergence of major fiber optic trunk lines here also attracts telecom and IT firms, which increasingly power the economy for the Atlanta region.
Cash Management Policies and Practices
Cash temporarily idle during the year was invested in the State Investment Pool which is operated by the Office of Treasury and Fiscal Services. The State Investment Pool (Georgia Fund 1) is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. The State of Georgia's Office of Treasury and Fiscal Services (OTFS) manages Georgia Fund 1 in accordance with policies and procedures established by State law and the State Depository Board, the oversight Board of OTFS. Investments of Georgia Fund 1 are generally comprised of federally backed securities with maturities of less than 90 days. The Authority can access these funds as they are needed with just cine day's notification to the fund manager.
Risk Management
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for the risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks.
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The Authority is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the finance and administration department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report..Credit also must be given to the Chairman and the entire Board of Directors for their unfailing support for maintaining the highest standards of professionalism in the management of the Georgia Regional Transportation Authority's finances.

Respectfully Submitted,
{2~/12'5
Dr. Catherine L. Ross Executive Director

~1H~~, JT
f Emory McHugh, III, CPA
Director of Finance and Administration

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY ORGANIZATIONAL CHART

BOARD OF
DIRECTORS

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EXECUTIVE DIRECTOR CATHERINE L. ROSS, Ph.D.

Board Secretary Deborah Johannes

Director of External Affairs Robert B. Alexander

Deputy Director James M. Ritchey

Chief Legal Counsel Kirk R. Fjelstul

Director of Finance and Administration Emory L. McHugh, Ill

Transit Director Jerome Parker

Engineering and Project Director Marvin Woodward

Transportation Planning Manager
Dania Aponte

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY LIST OF PRINCIPAL OFFICIALS JUNE 30, 2002
Board of Directors Chairman....................................................................Walter M. "Sonny" Deriso Vice Chair ..................................................................Sharon A. Gay Director ......................................................................Andrella Baylis Director ......................................................................Steven F. Bruning, PE Director ......................................................................Tim Connolly Director ......................................................................Eric R. Hovdesven Director ......................................................................Shi Shailendra Director ........................................... ."..........................John A. Sibley, III Director ..................................................................... .James E. Stephenson Director ......................................................................Ken F. Thigpen Director ......................................................................Richard L. Tucker Director ......................................................................Michael Tyler Director ......................................................................Carolyn Williams Director ......................................................................John Williams
Appointed Officials Executive Director .....................................................Catherine L. Ross, PhD Deputy Director .........................................................James M. Ritchey Chief Legal Counsel ..................................................Kirk R. Fjelstul Director of External Affairs .......................................Robert B. Alexander Director of Finance and Administration ....................Emory L. McHugh, III, CPA Projects Manager .......................................................Marvin Woodward Transit Manager .........................................................Jerome Parker Passenger Rail Manager.............................................Crew Heimer Planning Manager .......................................................Dania Aponte Communications Manager .........................................William Mecke Information Technology Manager .............................Charles Fleming
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY FINANCE AND ADMINISTRATION DEPARTMENT STAFF MEMBERS JUNE 30, 2002
Director ......................................................................Emory L. McHugh, III, CPA Accounting Manager..................................................Kathryn Huger Budget Officer ...........................................................Paul B. Williams Procurement and Contracts Manager. ........................Laurie Heinze Human Resources Manager .......................................Renee' Wheeler Information Technology Manager .............................Charles Fleming Network Administrator ..............................................John McMahan Receptionist. ........................ :......................................Wanda Van Zandt
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY VICINITY MAP OF METRO ATLANTA NONATTAINMENT AREA
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FINANCIAL SECTION
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w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
November 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Georgia Regional Transportation Authority
and Honorable Catherine L. Ross, Executive Director

INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS ACCOMPANIED BY REQUIRED SUPPLEMENTARY INFORMATION AND SUPPLEMENTARY INFORMATION

Ladies and Gentlemen:

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Georgia Regional Transportation Authority, a component unit of the State of Georgia, as of and for the year ended June 30, 2002, which collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Authority's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the Georgia Regional Transportation Authority, as of June 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
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As discussed in Note 5 to the basic financial statements, the Georgia Regional Transportation Authority adopted Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments; Statement No. 37, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments: Omnibus; and Statement No. 38, Certain Financial Statement Note Disclosures, as of June 30, 2002.
In accordance with Government Auditing Standards, we have also issued a report dated November 6, 2002, on our consideration of the Georgia Regional Transportation Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
The management's discussion and analysis on pages 19 through 30 is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Georgia Regional Transportation Authority's basic financial statements. The introductory section, combining fund statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.
Respectfully submitted,
~~w~ ~ell W. Hmton, CPA, CGFM State Auditor
RWH:rgs
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

As management of the Georgia Regional Transportation Authority (Authority, or GRTA), we offer our readers and the various users of the Authority's financial statements this narrative overview and analysis of the financial activities of the Georgia Regional Transportation Authority for the fiscal year ended June 30, 2002. We encourage readers of our financial statements to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal that can be found earlier in the Introductory Section of this report and the basic financial statements that immediately follow.

FINANCIAL HIGHLIGHTS .



The assets of the Georgia Regional Transportation Authority exceeded its

liabilities at the close of the most recent fiscal year by $15,175,265.61 (net

assets). Of this amount, $4,482,245.32 (unrestricted net assets) may be used to

rrieet the Authority's ongoing obligations to citizens and creditors.



The Authority's total net assets at June 30, 2002 increased by $2,335,883.01 or

about 18.2% over the previous year's balance. The largest single, contributing

factor to this increase in net assets was the purchase of the new buses and support

vehicles for the Clayton County Bus Service.



As of the close of the current fiscal year, the Georgia Regional Transportation

Authority's governmental funds reported combined ending fund balances of

$10,570,915.36, a decrease of $2,096,411.07 in comparison to the prior fiscal

year. Approximately 82.6% of this total amount, $8,734,879.70, is available for

spending at the Authority's discretion (unreservedfund balance).



At the end of the current fiscal year, unreserved fund balance for the General

Fund was $1,499,858.37. This level of unreserved fund balance represents about

29 percent of total general fund expenditures for the current fiscal year and thus

provides working capital coverage for a period of about 15 weeks in the event that

it is needed.



At no time during the current fiscal year did the Georgia Regional Transportation

Authority incur any outstanding debt.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the Georgia Regional Transportation Authority's basic financial statements. The Authority's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

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Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the Georgia Regional Transportation Authority's finances, in a manner similar to a private-sector business.
The Statement ofNet Assets presents information on all of the Georgia Regional Transportation Authority's assets and liabilities, with the difference between the two reported as Net Assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Georgia Regional Transportation Authority is improving or deteriorating.
The Statement ofActivities presents information showing how the Authority's net assets have changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., earned but unused vacation leave).
;
Both of the government-wide financial statements distinguish functions of the Georgia Regional Transportation Authority that are principally supported by taxes paid to the State and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Georgia Regional Transportation Authority are limited to providing transportation related services. The business-type activity of the Georgia Regional Transportation Authority is represented by the operation of a van pool program that is actually being initiated during the first quarter of the 2003 fiscal year.
The government-wide financial statements only include the operations of the Georgia Regional Transportation Authority. The Authority is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of GRTA's legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Georgia Regional Transportation Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Georgia Regional Transportation Authority can be classified into one of two categories: governmental funds or proprietary funds.
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Governmental Funds. Governmentalfunds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances ofspendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the governmentwide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Authority's near term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances provides a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Georgia Regional Transportation Authority maintains ten individual governmental funds. Information is presented separately in the governmental fund "Balance Sheet" and in the governmental fund "Statement of Revenues, Expenditures and Changes in Fund Balances" for the General Fund, Clayton County Bus Special Revenue Fund and the Restricted Income Special Revenue Fund; each of which are considered to be major funds. Data from the other seven governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.
The Finance staff of the Georgia Regional Transportation Authority prepares an annual budget for the General Fund to monitor the status of its results of operations during each fiscal year. However, this internal budget is for management purposes only and is not subject to review or approval by the Legislature of the State of Georgia, and therefore, is a nonappropriated budget. Accordingly, there is no need to provide a budgetary comparison statement to demonstrate compliance with this internal budget. As an administrative control, GRTA's Board of Directors is provided with budget-to-actual comparison information on a monthly basis.
Because of the very nature (i.e., transportation type projects) of GRTA's Special Revenue Funds, many of the expenditure plans will take place over multiple fiscal periods. For example, some transportation studies may take as many as three years to complete and the expenditures related to that study could occur in four different fiscal years. Again as an internal administrative control, a project-length financial plan is programmed for each of those Special Revenue Funds falling into this category to track the cumulative activity over the length of the project.
Proprietary Funds. The Georgia Regional Transportation Authority only maintains one of the two different types of proprietary funds. The type used by the
- 21 -

Authority, Enterprise Funds, is used to report the same functions as those presented as business-type activities in the government-wide financial statements. The Georgia Regional Transportation Authority will be using an enterprise fund to account for the operation of its van pool program that will be initiated in the 2003 fiscal year.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide information for the Van Pool Program and since there is only one fund in this category, it is considered to be a major fund of the Georgia Regional Transportation Authority.
Notes To The Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found in the Basic Financial Statements section of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary information concerning the Georgia Regional Transportation Authority. The combining statements referred to earlier in connection with nonmajor governmental funds are presented as supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. The reader can think of the Georgia Regional Transportation Authority's net assets as the difference between its assets (i.e., what the Authority owns) and its liabilities (i.e., what the Authority owes) at the end of a fiscal year. This balance represents one way to measure the Authority's financial health or its financial position. In the case of the Georgia Regional Transportation Authority, assets exceeded liabilities by $15,175,265.61 at the close of the most recent fiscal year.
To better understand the Authority's actual financial position and ability to deliver services in future periods, the reader will also need to review the various . components of the net asset category. For example, the vast majority of the Georgia Regional Transportation Authority's net assets ($11,717,266.65 or approximately 77 percent of the total) reflect financial resources that are available for the provision of transportation services in the ensuing fiscal year. Generally, those financial resources are in the form of either readily available cash or receivables due from other government agencies (e.g., Federal Transit Administration, Georgia Department of Transportation, etc.). In the majority of instances, these intergovernmental receivables represent the reimbursement of expenditures already incurred by the Authority on various transportation projects for which those agencies have agreed to provide funding.
In further refining the availability of $11,717,266.65 in net assets to provide future transportation services, $7,235,021.33 or about 61.7% of the available financial
-22 -

resources actually represent financial resources that are subject to external restrictions on how they can be used. The remaining balance of unrestricted net assets ($4,482,245.32) may be used to meet the Authority's ongoing obligations to citizens and creditors.

The remaining 23 percent of net assets represents the Authority's investment in capital assets (e.g., buses, automobiles, and computer equipment). The Georgia Regional Transportation Authority uses these capital assets to provide services to those citizens served by the Authority. Because of the very nature and on-going.use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is not available for future spending.
The tabular information below provides a comparison of the Georgia Regional Transportation Authority's net assets at June 30, 2002 and 2001. The schedule provides comparative information for both the governmental and business-type activities. For presentation purposes, the amounts shown have been rounded to the nearest dollar.

Comparative Schedule OfGRTA's Net Assets

Current Assets: Cash and Cash Equivalents Receivables
Capital Assets Total Assets

Governmental

Activities

FY2002

FY 2001

Business-Type Activities
FY 2002 FY 2001

Total

FY 2002

FY 2001

$ 8,686,208 3,484,679 3,457,999
~15,628,886

$10,194,661 3,013,590 172,056
$13,380,307

$1,250,000 $
-
~1,250,000 $

- $ 9,936,208 $10,194,661

- 3,484,679 3,013,590

- 3,457,999

172,056

- $16,878,886 $13,380,307

Noncurrent Liabilities Current Liabilities
Total Liabilities

$ 103,648 1,599,972
~1,703,620

$ 48,444 $ 492,480 $540,924 $

-$ -$

- $ 103,648
- 1,599,972
- H,703,620

$ 48,444 492,480 $540,924

Net Assets: Invested in Capital Assets Restricted Unrestricted Total Net Assets

$ 3,457,999 $ 172,056 $ 7,235,022 7,958,369

-$ -

3,232,245 4,708,958 1,250,000

$13,925,266 $12,839,383 $1,250,000 $

- $ 3,457,999 $ 172,056

- 7,235,022 7,958,369

- 4,482,245

4,708,958

- $15,175,266 $12,839,383

At the end of the current fiscal year, the Georgia Regional Transportation Authority is able to report positive balances in all three categories of net assets, both for the Authority as a whole, as well as for its separate governmental and business-type activities. Net assets for governmental activities were also positive for the prior fiscal year. The current fiscal year represents the initial year of the van pool program which is shown as a business-type activity.
The following table provides a comparison of the changes in the Georgia Regional Transportation Authority's net assets for the fiscal years ended June 30, 2002 and 2001. The schedule provides comparative information for both the governmental and business-type activities. For presentation purposes, the amounts shown have been rounded to the nearest dollar.

- 23 -

Comparative Schedule Of Changes In GRTA's Net Assets

Revenues: Program Revenues: Charges For Services Operating Grants And Contributions Capital Grants and Contributions General Revenues: State Appropriations Investment Earnings Total Revenues

Governmental

Activities

FY 2002

FY 2001

$ 457,235 $

-

9,088,279 2,964,506

200,000
-

4,518,807 301,405
$17,330,232

8,777,338 620,642
$9,597,980

Business-Type Activities
FY 2002 FY 2001

Total

FY 2002

FY 2001

$

-$

- $ 457,235 $

-

-

- 9,088,279

200,000

-

- 2,964,506

-

-

- 4,518,807 8,777,338

-

-

301,405

620,642

$

-$

- $17,330,232 $9,597,980

Expenses: Transportation Van Pool Operations Total Expenses

$14,994,349 $4,630,173 $

-

-

$14,994,349 $4,630,173 $

-$
-
-$

- $14,994,349

-

-

- $14,994,349

$4,630,173 -
$4,630,173

Increase in Net Assets Before Transfers
Transfers Increase in Net Assets
Net Assets - Beginning

$ 2,335,883 $4,967,807 $

-$

-1,250,000

- 1,250,000

$ 1,085,883 $4,967,807 $1,250,000 $

12,839,383 7,871,576

-

- $2,335,883 $4,967,807

-

-

-

- $ 2,335,883 $4,967,807

- 12,839,383 7,871,576

Net Assets - Ending

$13,225,266 $12,832,383 $1,250,000 $

- $15,125,266 $12,832,383

As indicated in the "FY 2002 Total" column above, the Authority's net assets increased by $2,335,883.01 during the current fiscal year. The principal factor in this increase for FY 2002 was the acquisition of buses and support vehicles that were required for GRTA to begin operating the Clayton County bus service during the period. The financial impact of this particular transaction on net assets is that the Authority was reimbursed by the Federal Transit Administration and the Clayton County Board of Commissioners for ninety-percent of the cost of these capital assets.

Governmental Activities
In comparing the net assets of the governmental activities for the last two fiscal years, the most significant change represents the Authority's investment in capital assets. As additional transit services such as the Clayton County bus service come on line in the future, a corresponding increase in this component of net assets is anticipated.
Governmental activities increased the Georgia Regional Transportation Authority's net assets by $1,085,883.01, thereby accounting for about 47 percent of the total growth in net assets of the Georgia Regional Transportation Authority. The key elements of this increase include the following items:

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Capital Grants and Contributions from the Federal Transit Administration in the

amount of $2,946,505.85 were used to purchase buses and support vehicles for

the Clayton County Bus Service.



Operating Grants and Contributions increased by $8,888,278.96 as a result of

GRTA's ability to initiate several transportation studies and the Clayton County

bus service during the 2002 fiscal year. These program revenues were used to

help offset the increase of $10,364,176.65 in expenses compared to the previous

fiscal year.



Charges For Services revenues, such as farebox collections from the Clayton

County bus operations, in the amount of $457,235.29 were collected for the first

time in the 2002 fiscal year.



Investment Earnings in the amount of $301,405.23 provided additional General

Revenues to support governmental activities.

The chart below provides a comparison of the major categories of revenues of governmental activities for the fiscal years ended June 30, 2001 and 2002. The significant increase in grant related revenues when compared to the previous period clearly demonstrates the level of expenditure activity resulting from the federally funded projects that were initiated during the current year. The additional State Appropriations that occurred in FY 2001 primarily represent local matching funds that were advanced for some of these federally funded projects. The decline in Investment Earnings is a direct result of lower interest rates during the current period.

COMPARISON OF REVENUES BY CATEGORY - GOVERNMENTAL ACTIVITIES

$10,000,000

$9,000,000

$8,000,000

$7,000,000

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0-!!!2:E:i!!-!!I!!!~~

Charges for

Operating

Services

Grants

Capital Grants

State

Investment

Appropriations Earnings

FY 2001 laFY2002

The following chart is provided to illustrate the primary reason behind the significant increase in expenses for the 2002 fiscal year when compared to the previous period. The Georgia Regional Transportation Authority only came into existence in 1999 with FY 2000 being its first year of actual operations. As one might expect, it has taken an extended period of time to get the organization up and running, to determine

- 25-

what needs to be done to effectively address the traffic congestion problem and to lay all of the necessary groundwork for the implementation of those solutions that have been identified.

COMPARISON OF EXPENSES - GOVERNMENTAL ACTIVITIES

$7,000,000

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0

~ ~
.s -~
13..J Q) Cl)
5 ti) 0::,
co

ti)
co C: ::,
0
>,.2;-
-ro c:::,
(.) 0 (.)

e? ~

Q) C:

C: Q)

u::.,

(!)

l FY 2001 l!IFY 2002 1

In the fiscal year ended June 30, 2002, the Georgia Regional Transportation Authority was able to get several large transportation studies underway. They include the Northern Sub-Area Study & Ga 400 Corridor Analysis, the Northwest Connectivity Study, and the Regional Transit Action Plan Study. Two new bus services, the Clayton County system and QuickLink, were also started during the current fiscal year.
Business-Type Activities
Business-type activities increased the Georgia Regional Transportation Authority's net assets by $1,250,000.00, accounting for approximately 53 percent of the total growth in the Authority's net assets. This increase was the result of a transfer from the General Fund to provide the working capital that was needed to get the van pool program initiated.
FINANCIAL ANALYSIS OF THE AUTHORITY'S FUNDS
As noted earlier, the Georgia Regional Transportation Authority uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Much of the financial activity of GRTA represents grants that are received from other governmental agencies with the expending of those monies being restricted to specific transportation-related purposes.

- 26-

Governmental Funds
The focus of the Georgia Regional Transportation Authority's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Authority's financing requirements. In particular, unreserved fund balance may serve as a useful measure of the Authority's net resources available for spending at the end of the fiscal year.
. At the end of the current fiscal year, the Georgia Regional Transportation Authority's governmental funds reported combined ending fund balances of $10,570,915.36. This represents a decrease of $2,096,411.07 or about 16.5% less than the prior year's total of $12,667,326.43. This decline in the total fund balance from the prior year was fully anticipated by management as the local share of funding received in previous fiscal years is being expended on the federally funded projects as they are initiated.
$8,734,879.70 or approximately 82.6 percent of this year's ending fund balance amount constitutes unreserved fund balance, which is available for spending at the Authority's discretion. The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed to liquidate contracts and purchase orders of the prior period.
General Fund. The General Fund is the chief operating fund of the Georgia Regional Transportation Authority. At the end of the current fiscal year, unreserved fund balance of the General Fund was $1,499,858.37, while the total fund balance was $3,335,894.03. As a measure of the General Fund's liquidity, it may be useful for the reader to compare both unreserved fund balance and total fund balance to total General Fund expenditures for the previous fiscal year. Using that comparison, unreserved fund balance represents roughly 29 percent of total General Fund expenditures, while the total fund balance represents about 64.4 percent of that same amount. To put those percentages in perspective, the unreserved fund balance provides working capital to the Authority and is sufficient to cover an average amount of expenditures over a 15 week period should the need arise.
The fund balance of the Georgia Regional Transportation Authority's General Fund decreased by $1,373,063.75 or about 29 percent during the current fiscal year. The key factor to this decrease was the transfer of $1,250,000.00 to the Enterprise Fund to provide the necessary working capital to get the Van Pool Program started.
Special Revenue Funds. The Special Revenue Funds of the Georgia Regional Transportation Authority are used to account for the proceeds of specific revenue sources, other than those provided for major capital projects, that are legally restricted to expenditures for specified purposes. By accounting for the restricted revenues and associated expenditures in a separate Special Revenue Fund, the Authority is better able to ensure that it remains in compliance with the grantors' requirements or restrictions on the use of these revenues.
- 27-

The aggregate of the fund balances of the Georgia Regional Transportation Authority's Special Revenue Funds decreased by $723,347.32 or about 9 percent during the current fiscal year. As discussed earlier, this decrease in fund balance coincides with the expending of the local match that has been programmed for those projects funded by federal grants.
Proprietary Fund
The Georgia Regional Transportation Authority's Proprietary Fund provides the same type of information found in the government-wide financial statements, but in more detail.
Unrestricted assets of the Van Pool Operations Enterprise Fund at the end of the fiscal year amounted to $1,250,000.00. Because all of these assets represented the transfer of working capital from the General Fund at the end of FY 2002, there are no valid comparisons to be made since this is the first year for reporting this fund.

CAPITAL ASSETS
The Georgia Regional Transportation Authority's net investment in capital assets for its governmental activities as of June 30, 2002, represents a total of $3,457,998.96. That net investment represents acquisition costs of $3,938,948.47 less accumulated depreciation of $480,949.51. This investment in capital assets includes machinery and equipment (e.g., buses, automobiles, computer equipment, etc.,) and improvements other than buildings (e.g., bus shelters). The total increase in the Georgia Regional Transportation Authority's net investment in capital assets was $3,285,942.79 or about 1,910 percent more than the previous year's total of$172,056.l 7. The primary reason for this significant increase was the purchase of the buses and support vehicles needed to provide Clayton County with bus service.
The following table provides a comparison of acquisition costs and accumulated depreciation of capital assets as of June 30, 2002 and 2001.

SCHEDULE OF GRTA'S CAPITAL ASSETS

Improvements Other Than Buildings Machinery and Equipment
Total Capital Assets

AcQuisition Costs

2002

2001

$ 40,406.85 $

-

3,898,541.62 200,945.44

$3,238,248.41 $2QQ,245.44

Accumulated Denreciation

2002 $( 3,244.69) (477,704.82)

2001

$(

-)

(28,889.27)

$(480,242.51 l $(28,882.21)

ECONOMIC FACTORS AND NEXT YEAR'S FINANCIAL ACTIVITY
Economic Factors
As in the case with the rest of the nation, the State of Georgia is also suffering from the effects of the prevailing unfavorable economic conditions. Total revenues for

-28-

the State for the 2002 fiscal year were down 5 percent compared to the previous period. This has forced the State's Office of Planning and Budget to begin reducing the budgets of the various government agencies.

Some of the more significant economic indicators and conditions that could possibly impact GRTA's operations over the short-term include the following:



The State of Georgia's September 2002 unemployment rate was 4.8 percent.

While this most recent rate is higher than the 4.2 percent from one year ago, it is

lower than the 5.2% that was reported back in June of this year. Georgia's

unemployment rate compares favorably with the national average of 5.7 percent.



The total employment numbers for the Metro-Atlanta region indicate that there

are currently 2.13 million jobs. While this number is down about 60,000 from

one year ago, the good news is that 4,300 new jobs were added in the month of

September 2002.



The Georgia Department of Labor's Index of Leading Economic Indicators (LEI)

has begun an upward trend that now covers the most recent three month period.



Inflationary trends in the region compare favorably to the national indices. For

the twelve-month period ending in June, the Consumer Price Index for all Urban

Consumers in Atlanta increased only 0. 7 percent.

Next Year's Financial Activity

As most observers will admit, part of the Atlanta region's transportation problems resulted from a lack of funding. On June 28, 2001, Governor Roy E. Barnes announced an eight-billion dollar program, the Transportation Choices Initiative (TCI}, to meet Georgia's current transportation needs. About half of the total program represents an investment in the transportation infrastructure of Metro-Atlanta.

The Governor has proposed to use revenue bonds to expedite many road and transit projects that are currently programmed for completion at least five or ten years down the road. By pledging future revenues that the State expects to receive from the Federal Highway Administration (FHWA) to pay off the debt, the bond proceeds that will be generated from the revenue bonds will allow for the completion of transportation projects much earlier than could be accomplished under the existing pay-as-you-go method. The two main benefits identified with this innovative program are that it will serve to improve congestion and the local economy in the short-term.

Much of the 2002 fiscal year has been spent trying to put the bond financing program together and coordinating the various transportation components of the TCI. Beginning with the 2003 fiscal year, GRTA's management expects to see a great deal more financial activity occurring as the State begins to implement this program. Funding has been designated in the Governor's program to make significant improvements in the region's arterial roads; to construct the Northwest Corridor Transit Line; to implement commuter rail in the region; to initiate express bus service and a regional van pool program; and to develop circulator systems for the major activity centers.

-29-

REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Georgia Regional Transportation Authority's finances for all those individuals having an interest in the Authority's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Georgia Regional Transportation Authority, Director of Finance and Administration, 245 Peachtree Center Avenue, Suite 900, Atlanta, Georgia 30303-1223.
-30-

BASIC FINANCIAL STATEMENTS
- 31 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF NET ASSETS JUNE 30, 2002

ASSETS Cash And Cash Equivalents Accounts Receivable: Intergovernmental Other Capital Assets: Improvements Other Than Buildings Machinery And Equipment Accumulated Depreciation

Governmental Activities

Business-Type Activities

Total

$ 8,686,207.65 $ 1,250,000.00 $ 9,936,207.65

3,441,710.42 42,969.09
40,406.85 3,898,541.62
(480,949.51)

3,441,710.42 42,969.09
40,406.85 3,898,541.62 (480,949.51)

Total Assets

$ 15,628,886.12 $ 1,250,000.00 $ 16,878,886.12

LIABILITIES Accounts Payable Payroll Withholdings Noncurrent Liabilities: Compensated Absences Accrued FICA Payable
Total Liabilities

$ 1,599,190.86 $ 780.94
96,283.06 7,365.65
$ 1,703,620.51 $

$ 1,599,190.86 780.94
96,283.06 7,365.65
$ 1,703,620.51

NET ASSETS Invested in Capital Assets Restricted for: Clayton County Bus Service Planning Studies Van Pool Program Other Purposes Unrestricted
Total Net Assets

$ 3,457,998.96 $

$ 3,457,998.96

803,259.28 1,770,842.70 1,200,000.00 3,460,919.35 .3,232,245.32

1,250,000.00

803,259.28 1,770,842.70 1,200,000.00 3,460,919.35 4,482,245.32

$ 13,925,265.61 $1,250,000.00 $15,175,265.61

The notes to the financial statements are an integral part of this statement.

-32-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Functions / Programs Governmental Activity: Transportation

Expenses

Charges For Services

Program Revenues

Operating

Capital

Grants And

Grants And

Contributions Contributions

$14,994,349.32 $457,235.29 $ 9,088,278.96 $ 2,964,505.85

Business-Type Activity: Van Pool

Ne_t (Expense) Revenue And

Changes In Net Assets

Governmental Business-Type

Activities

Activities

Total

$ (2,484,329.22) $

$ (2,484,329.22)

Total Activities

$14,994,349.32 $ 457,235.29 $ 9,088,278.96 $ 2,964,505.85 $ (2,484,329.22) $

$ (2,484,329.22)

General Revenues: State Appropriations Unrestricted Investment Earnings
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

$ 4,518,807.00 $

$ 4,518,807.00

301,405.23

301,405.23

(1,250,000.00) 1,250,000.00

$ 3,570,212.23 $ 1,250,000.00 $ 4,820,212.23

$ 1,085,883.01 $ 1,250,000.00 $ 2,335,883.01

12,839,382.60

12,839,382.60

$ 13,925,265.61 $ 1,250,000.00 $ 15,175,265.61

The notes to the financial statements are an integral part of this statement.

GEORGIA REGIONAL TRANSPORTATION AUTHORITY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2002

ASSETS Cash And Cash Equivalents Receivables: Intergovernmental Other Due From Other Funds

General

Clayton Countx: Bus

Restricted Income

Other Governmental
Funds

Total Governmental
Funds

$2,337,905.25 $ 847,754.05 $3,460,919.35 $2,039,629.00 $ 8,686,207.65

42,969.09 1,000,817.32

276,011.00

3,165,699.42

3,441,710.42 42,969.09
1,000,817.32

Total Assets

$3,381,691.66 $1,123,765.05 $3,460,919.35 $5,205,328.42 $13,171,704.48

LIABILITIES AND FUND BALANCES

Liab ii ities:

Accounts Payable

$

Payroll Withholdings

Due To Other Funds

Total Liabilities

$

45,016.69 $ 320,505.77 $ 780.94
45,797.63 $ 320,505.77 $

$ 1,233,668.40 $ 1,599, 190.86

780.94

1,000,817.32

1,000,817.32

$2,234,485.72 $ 2,600,789.12

Fund Balances: Reserved For: Encumbrances Rail Passenger Program Unreserved, Reported In: General Fund Special Revenue Funds
Total Fund Balances

$ 894,491.97 $

$

$

$ 894,491.97

941,543.69

941,543.69

1,499,858.37

803,259.28 3,460,919.35 2,970,842.70

1,499,858.37 7,235,021.33

$ 3,335,894.03 $ 803,259.28 $3,460,919.35 $2,970,842.70 $ 10,570,915.36

Total Liablities and Fund Balances

$3,381,691.66 $ 1,123,765.05 $3,460,919.35 $5,205,328.42

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Long-term liabilities, including Compensated Absences, are not due and payable in the current period and therefore are not reported in the funds.
Net Assets of Governmental Activities

3,457,998.96
(103,648.71) $ 13,925,265.61

The notes to the financial statements are an integral part of this statement.

-34-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

REVENUES Intergovernmental Charges For Services Investment Earnings Contributions and Donations Other Revenues
Total Revenues

General

Clayton County Bus

Restricted Income

Other Governmental
Funds

Total Governmental
Funds

$ 5,050,489.74 $ 5,113,739.00 $

$ 6,402,363.07 $16,566,591.81

456,031.89

456,031.89

301,405.23

301,405.23

5,000.00

5,000.00

1,203.40

1,203.40

$ 5,056,693.14 $ 5,569,770.89 $ 301,405.23 $ 6,402,363.07 $17,330,232.33

EXPENDITURES Current: Transportation Capital Outlay: Transportation
Total Expenditures

$ 5,143,362.71 $ 2,097,243.61 $

$ 7,198,034.05 $14,438,640.37

36,394.18 3,685,517.00

16,091.85 3,738,003.03

~ - - - - $ 5,179,756.89 $ 5,782,760.61 $

$ 7,214,125.90 $18,176,643.40

Excess (Deficiency) of Revenues Over (Under) Expenditures $ (123,063.75) $ (212,989.72) $ 301,405.23 $ (811,762.83) $ (846,411.07)

OTHER FINANCING SOURCES (USES)

Transfers In

$

$

$ 2,411,266.00 $

$ 2,411,266.00

Transfers Out

(1,250,000.00) (2,051,266.00)

(360,000.00) (3,661,266.00)

Total Other Financing Sources and Uses

$ (1,250,000.00) $ (2,051,266.00) $ 2,411,266.00 $ (360,000.00) $ (1,250,000.00)

Net Change In Fund Balances $ (1,373,063.75) $ (2,264,255.72) $2,712,671.23 $ (1,171,762.83) $ (2,096,411.07)

FUND BALANCES - BEGINNING

4,708,957.78 3,067,515.00 . 748,248.12 4, 142,605.53 12,667,326.43

FUND BALANCES - ENDING

$ 3,335,894.03 $ 803,259.28 $3,460,919.35 $ 2,970,842.70 $10,570,915.36

The notes to the financial statements are an integral part of this statement.

-35-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Amounts reported for governmental activities in the Statement of Activities (page 33) are different because:

Net change in fund balances - total Governmental Funds (page 35)

$ (2,096,411.07)

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

3,285,942.79

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 ~<?_vernmental funds.

(103,648.71)

Change in net assets of governmental activities (page 33)

$ 1,085,883.01

The notes to the financial statements are an integral part of this statement.

-36-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF NET ASSETS PROPRIETARY FUND JUNE 30, 2002

ASSETS Current Assets: Cash and Cash Equivalents
LIABILITIES Current Liabilities: Accounts Payable

Business-Type Activity -

Enterprise Fund

Van Pool

Van Pool

Current Year

Prior Year

$ 1,250,000.00 -$ - - - - -

$

$

NET ASSETS Unrestricted

$ 1,250,000.00 ~ $ = = ~ = =

The notes to the financial statements are an integral part of this statement.

- 37-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Operating Revenues: Charges for Sales and Services: Passenger Fees
Operating Expenses: Costs of Sales and Services Administration Depreciation Total Operating Expenses
Operating Income
Nonoperating Expenses: Interest Expense
Income Before Transfers
Transfers In
Change In Net Assets
Total Net Assets - Beginning
Total Net Assets - Ending

Business-Type Activity -

Enterprise Fund

Van Pool

Van Pool

Current Year

Prior Year

$

$

$

$

$

$

$

$

$

$

1,250,000.00

$ 1,250,000.00 $

$ 1,250,000.00 $

The notes to the financial statements are an integral part of this statement.

- 38-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF CASH FLOWS PROPRIETARY FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2002

CASH FLOWS FROM OPERATING ACTIVITIES Receipts From Customers and -Users
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer From General Fund
CASH FLOWS FROM INVESTING ACTIVITIES Interest Received
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents, July 1
Cash and Cash Equivalents, June 30
Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income
Adjustments to Reconcile Operating Income to Net Cash Provided Used by Operating Activities: Depreciation Expense
Net Cash Provided by Operating Activities

Business-Type Activity -

Enterprise Fund

Van Pool

Van Pool

Current Year

Prior Year

$

$

$ 1,250,000.00 -$ - - - - -

$

$

$ 1,250,000.00 $

$ 1,250,000.00 $ ======

$

$

$

$

The notes to the financial statements are an integral part of this statement.

-39-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Georgia Regional Transportation Authority (Authority) is an instrumentality of the State of Georgia and a public corporation. The Authority was created by an Act of the General Assembly of the State of Georgia for the purposes of managing or .causing to be managed land transportation and air quality within certain areas of the State of Georgia.
The overall management of the business and affairs of the Authority is vested in a Board of Directors. The fifteen members that comprise the Board serve on a part-time basis and are appointed by the Governor for specific periods of time. The Board of Directors appoints an Executive Director who is responsible for the day-to-day operations of the Authority.
The Georgia Regional Transportation Authority is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. There are no component units of the Authority included in the accompanying financial statements. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statements of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the Authority. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, and the proprietary fund. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. State appropriatiof!S, grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Interest income associated with the current fiscal period is considered to be susceptible to accrual and so has been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Authority.
The Georgia Regional Transportation Authority reports the following major governmental funds:
The General Fund is the Authority's primary operating fund. It accounts for all financial resources of the general government, except those that are required to be accounted for in another fund.
The Clayton County Bus Service Special Revenue Fund accounts for all financial resources that have been designated for the purpose of initiating and operating bus services in Clayton County.
The Restricted Income Special Revenue Fund accounts for those financial resources whose use is specifically restricted by statute to appropriation by the Authority. Interest income is the primary source of revenue and these monies are generally held in reserve to provide additional financial capacity if needed to supplement the funding of the numerous grant programs.
The Authority reports the following major proprietary fund:
The Van Pool Operations Proprietary Fund accounts for the operating activities of the van pool program.
- 41 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Authority has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. The only exception to this general rule are in those instances where the elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, the annual appropriations received from the State of Georgia are included in the general revenues category.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Authority's enterprise fund are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Authority's policy to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
J. Deposits and Investments
The Authority's Cash and Cash Equivalents are considered to be cash on hand, demand deposits with banks and other financial institutions, and the State investment pool that has the general characteristics of demand deposit accounts in that the Authority may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
The State investment pool (Georgia Fund 1) is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. The State of Georgia's Office of Treasury and Fiscal Services (OTFS) manages Georgia Fund 1 in accordance with policies and procedures established by State law and the State Depository Board, the oversight Board of OTFS. This investment is valued at the pool's share price, $1.00 per share.
-42 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
The Authority does not have any risk exposure related to investments in derivatives or similar investments in Georgia Fund 1 as the investment policy of OTFS does not provide for investments in derivatives or similar investments through the Georgia Fund 1.
The Authority is authorized to invest in the following: (1) Bonds or obligations of the State of Georgia or obligations guaranteed by the State; (2) Bonds or obligations issued by the United States government or subsidiary corporations
of the United States government fully guaranteed by such government; (3) Obligations of agencies of the United States government issued by the Federal Land
Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank and the Bank for Cooperatives; (4) Bonds or obligations issued by any public housing authority or municipality in the United States fully secured by a pledge of annual contributions under an annual contributions contract or contracts with the United States fully secured by requisition, loan, or payment agreement with the United States government; (5) Certificates of deposit issued by financial institutions located within the State of Georgia and insured by the Federal Deposit Insurance Corporation or any Georgia deposit insurance corporation; (6) Interest-bearing time deposits, repurchase agreements, reverse repurchase agreements, rate guarantee agreements, or similar banking arrangements within guidelines defined by statute; and (7) State operated investment pools.
At June 30, 2002, the Authority had no securities with a maturity of more than three months from the date of acquisition.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
3. Inventories and Prepaid Items
Even though the governmental funds had some expendable supplies (e.g., office and computer supplies) on hand at June 30, 2002, the quantities and dollar values were not material.
- 43 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

Accordingly, none are shown on the balance sheet at that date. The costs of such supplies are recorded as an expenditure at the time that the individual items are purchased.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

4.

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or businesstype activities columns in the government-wide financial statements. Capital assets are generally defined by the Authority as being those assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical costs or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the Authority is depreciated using the straight line method over the following estimated useful lives:

General Classification of Assets Improvements Other Than Buildings Vehicles Office Equipment Computer Equipment

Years 7
5-7 5 - 10 3-5

5. Compensated Absences

It is the Authority's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the government does not have a policy to pay any amounts when employees separate from service with the government. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

6. Long-term Obligations

In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the

-44-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
applicable governmental activities, business-type activities, or proprietary fund type statement of net assets.
7. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change.
8. Comparative Data I Reclassifications
Comparative total data for the prior year have been presented only for individual enterprise funds in the fund financial statements in order to provide an understanding of the changes in the financial position and operations of those funds. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation.

NOTE II: RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

A. Explanation of certain Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Assets

The governmental fund balance sheet includes a reconciliation between Jund balance - total governmental funds and net assets - governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "long-term liabilities, including compensated absences, are not due and payable in the current period and therefore are not reported in the funds." The details of this $103,648.71 difference are as follows:

Compensated Absences Accrued FICA Payable

$96,283.06 7,365.65

Net Adjustment to reduce Jund balance - total governmental

funds to arrive at net assets - governmental activities

$103,648.71

B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances and the Government-Wide Statement of Activities

The governmental fund statement of revenues, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances - total governmental funds and changes in net assets ofgovernmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is

-45-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

allocated over their estimated useful lives and reported as depreciation expense." The details of this $3,285,942.79 difference are as follows:

Capital Outlay Depreciation Expense

$3,738,003.03 (452,060.24)

Net Adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net assets of governmental activities

$3,285,942.79

Another element of that reconciliation states that "Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of this $103,648.71 difference are as follows:

Compensated Absences Accrued FICA Payable

$96,283.06 7,365.65

Net Adjustment to decrease net changes in fund balance - total governmental funds to arrive at changes in net assets of governmental activities

$103,648.71

NOTE III: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
An internal operations budget for the General Fund is prepared by the Authority for management purposes. The budget is not subject to review or approval by the Legislature of the State of Georgia and, therefore, is a nonappropriated budget. For each of the Special Revenue Funds, except for the Restricted Income Special Revenue Fund, a project-length budget is prepared for managementcontrol purposes.
B. Encumbrance Recognition
Encumbrance accounting is employed in the governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as reservations of fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent fiscal year.
NOTE IV: DETAILED NOTES ON ALL FUNDS
A. Deposits and Investments
1. State ofGeorgia Collateralization Statutes and Policies

-46-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated (OCGA) Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, pills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the OCGA Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia the option of exempting demand deposits from the collateral requirements.
In addition, laws governing the Authority require the portion of certificates of deposits invested in excess of Federal or State insurance to be secured by deposit of securities with the Federal Reserve Bank of Atlanta, or national or state bank located within the State of Georgia, in an aggregate principal.amount equal at least to the amount of such excess. Allowable securities are those as defined in Note I: D. 1. Deposits and Investments, items 1 through 4, and direct and general obligations of any county or municipality in the State of Georgia.
2. Demand Deposit Balances
At year end, the Authority's carrying amount of deposits was $949,862.82 and the bank balance was $2,833,795.53. Of the bank balance, $100,000.00 was covered by federal depository insurance. The remaining balance of $2,733,795.53 was collateralized with securities held by the pledging financial institution's trust department or agent, but not in the Authority's name.
-47-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

3. Investment Balances

The carrying amount of the investment balance as of June 30, 2002 shown below is maintained

in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk

categorization.

Fair Value/

Type of Investment

Carrying Amount

State Investment Pool

$8,986,244.83

. B. Receivables

Receivables as of year end for the Authority's individual major funds and nonmajor funds in the aggregate are as follows:

Receivables: Intergovernmental: Georgia Department of Transportation Federal Transit Administration State Road and Tollway Authority Total Intergovernmental Receivables
Other
Total Receivables

General

Clayton County Bus

Nonmajor Funds

Total

$

-$

$1,142,717.38 $1,142,717.38

276,011.00 1,917,095.00 2,193,106.00

105,887.04

105,887.04

$

- $276,011.00 $3,165,699.42 $3,441,710.42

42,969.09

42,969.09

$42,269.02 $216,Qll ,00 $3,165,692.42 $3,484,672.51

C. Capital Assets

Capital Asset activity for the fiscal year ended June 30, 2002 was as follows:

Governmental Activities: Capital Assets, Being Depreciated:
Improvements Other Than Buildings Machinery and Equipment Total Capital Assets Being Depreciated
Less: Accumulated Depreciation For: Improvements Other Than Buildings Machinery and Equipment
Total Accumulated Depreciation
Governmental Activities Capital Assets, Net

Beginning Balance

Increases Decreases

Ending Balance

$

$ 40,406.85 $

200,945.44 3,697,596.18

$200,945.44 $3,738,003.03 $

$ 40,406.85 3,898,541.62
$3,938,948.47

$

- $ (3,244.69)

(28,889.27) (448,815.55)

lli8,889.27) $(452,060.24)

$112,Q56, 17 $3,285,942.72

$

- $ (3,244.69)

(477,704.82)

~$_ _ $(480,949.51)

$

$3.45:Z,998,26

-48-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

Depreciation expense for the fiscal year ended June 30, 2002 was $452,060.24 and the total amount was charged to the Transportation function of the Authority.

D. Interfund Receivables, Payables and Transfers

The composition of interfund balances as of June 30, 2002, is as follows: Due To / From Other Funds:

Receivable Fund General

Payable Fund
Nonrnajor Fund: Northwest Connectivity Study Nonrnajor Fund: Northern Sub-Area Study Nonrnajor Fund: QuickLink Bus Service

Amount
$182,045.84 729,470.34 89,301.14

Total Due To/ From Other Funds

$1.000,817.32

Interfund Transfers:
Transfers Out: General Fund Clayton County Bus Nonmajor Fund: Northwest Connectivity Study
Total Transfers Out

Restricted Income
$ 2,051,266.00

Transfers In:
Van Pool $1,250,000.00

Total Transfers In $1,250,000.00 2,051,266.00

360,000.00 $2.411.266.00

360,000.00 $1,250,000.00 $3.661.266.00

E. Operating Leases

The Authority has entered into certain agreements to lease real property and equipment that are classified as operating leases. These leases generally contain provisions that, at the expiration date of the original term of the lease, the Authority has the option of renewing the lease on a year-to-year basis. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised. The future minimum commitments for operating leases as of June 30, 2002, are listed below.

Fiscal Year Ending June 30 2003 2004 2005 2006
Total Operating Lease Payments

Amount $ 347,240.09
372,729.78 383,861.86 327,929.80
$1,431,761.53

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 2002, totaled $377,666.40.

F. Long-Term Debt

At the present time, the only noncurrent liability reported by the Authority relates to compensated absences. Compensated absences represent obligations of the Authority relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual and compensatory leave in which payment is probable and can be reasonably estimated.

Changes in Long-Term Liabilities

Long-term liability activity for the fiscal year ended June 30, 2002, was as follows:

Governmental Activities: Compensated Absences Accrued FICA Payable
Governmental Activity Long-Term Liabilities

Beginning Balance

Additions Reductions

Ending Balance

Due Within One Year

$73,275.71 $68,009.57 $45,002.22 $96,283.06 $48,883.36

5,605.60

5,202.73

3,442.68

7,365.65

3,739.58

$78,881.31 $73,212.30 $48,444.20 $1Q3,648.:Zl $52,622.24

NOTE V: OTHER INFORMATION
A. Public Entity Risk Pool
The Department of Community Health administered for the State of Georgia a program of health benefits during fiscal year 2002 for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.
B. Other Risk Management
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for the risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers'

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks.
The Authority is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
C. Contingent Liabilities
Amounts received or receivable from grant agencies are subject to audit and adjustments by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the Authority expects such amounts, if any, to be immaterial.
Litigation, claims and assessments filed against the Authority, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2002. Although the outcome of these lawsuits is not presently determinable, in the opinion of the Authority's counsel the resolution of these matters will not have a material adverse effect on the financial condition of the Authority.
D. Post Employment Benefits
In addition to the pension benefits described in Note V: E. that follows, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to OCGA Section 45-18. An individual eligible for these benefits must have been a full time employee at the time of retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the ERS or a county employees' retirement system.
The State Heath Benefit Plan (Plan) is a public entity risk pool funded by employee and employer contributions. Employees and retirees subject to the Plan. contribute amounts determined by the Department of Community Health for various health insurance plans. The various agencies of the State contribute to the health insurance fund based upon amounts recommended by the Department on Community Health and set forth in the State of Georgia's Appropriations Act. The Plan is funded on a "pay-as-you-go" basis. Expenses of the Plan include provisions for incurred but not reported claims. The portion of the employer contributions and expenses attributable to postretirement health care benefits cannot be reasonably estimated.
- 51 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
E. Employee Retirement Systems and Pension Plans
1. Employees' Retirement System Of Georgia
Plan Description
The Authority participates in the Employees' Retirement System of Georgia ("ERS"), a singleemployer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.
Under both the old plan and the new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. 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.
In addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The ERS issues a separate stand alone financial audit report and a copy can be obtained through the Georgia Department of Audits and Accounts.
Funding Policy
As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Authority's payroll for the year ended June 30, 2002, for employees covered by ERS was $1,846,633.54. The Authority's total payroll for all employees was $2,109,918.01.
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002

Under the old plan, member contributions consist of 4% of annual compensation up to $4,200.00 and 6% of annual compensation in excess of $4,200.00. Of these member contributions, the employee pays the first 1.25% and the employer pays the remainder on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Authority also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2002, the ERS employer contribution rate for the Authority amounted to 10.75% of covered payroll and included the amounts contributed on behalf of the employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.

Total contributions to the plan made during fiscal year 2002 amounted to $226,175.53, of which $198,474.93 was made by the Authority and $27,700.60 was made by employees. These contributions met the requirements of the plan. There is no net pension obligation for the plan. Employer contributions (annual pension cost) for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
2002 2001 2000

Annual Pension Cost {APC}
$198,474.93 220,599.81 106,884.12

Percentage OfAPC
Contributed
100.00% 100.00% 100.00%

Net Pension Obligation
NIA NIA NIA

Actuarial and Trend Information
Actuarial and historical trend information is presented in the ERS June 30, 2002, financial audit report which may be obtained through the Georgia Department of Audits and Accounts.
2. Teachers Retirement System Of Georgia
Plan Description
The Authority also participates in the Teachers Retirement System of Georgia (TRS), a costsharing multiple-employer defined benefit pension plan established by the general Assembly of Georgia for the purpose of providing retirement allowances and other ben.efits for teachers of the State of Georgia. TRS provides service retirement and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS . JUNE 30, 2002

Funding Policy

Employees of the Authority who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Authority makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary.

For fiscal year 2002, the employer contribution rate is 9.24% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year 2002 2001 2000

Percentage Contributed
100.00% 100.00% 100.00%

Required Contribution
$16,471.24 $19,019.72 $12,419.04

F. Leave Policies

Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.

Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment.

Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.

G. Change in Accounting Pronouncements

In fiscal year 2002, the Authority implemented the following new accounting standards issued by the Governmental Accounting Standards Board (GASB):

Statement 34, "Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments";



Statement 37, "Basic Financial Statements - and Management's Discussion and Analysis

- for State and Local Governments: Omnibus"; and

Statement 38, "Certain Financial Statement Note Disclosures".

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2002
Statement 34, as amended by Statement 37, establishes new financial reporting requirements for state and local governments. It requires new information and restructures much of the information that governments have presented in the past. Comparability with reports issued in prior years is affected. Statement 38 requires certain note disclosures when Statement 34 is implemented.
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COMBINING FUND STATEMENTS
AND SCHEDULES
- 57-

NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes.
Northern Sub-Area Study Fund - This fund is used to account for the two federal grants that are restricted to conducting a comprehensive land-use and transportation study of the north Atlanta area and more specifically the Ga 400 Corridor.
Northwest Connectivity Study Fund - This fund is used to account for the federal grant and the local match that are restricted to conducting a study to determine the preferred alignment and appropriate technology for providing transit service in Atlanta's northwest corridor.
Regional Van Pool Fund - This fund is used to account for the local match and federal grant monies that will be used to market the van pool program and to provide fare incentives to the private van pool operators.
Perimeter Circulator System Fund - This fund is used to account for the federal grant and the local match that are restricted to conducting a study to evaluate fixed guideway and bus alternatives to provide vital connecting links between MARTA stations and local trip generators within the Perimeter activity area.
Regional Transit Study Fund - This fund is used to account for the federal grant and the local match that are restricted to conducting a study to determine how best to connect the current and future rail and bus transit systems in metro Atlanta into a seamless regional transportation network.
SMARTRAQ Project Fund - This fund is used to account for the federal grant and the local match that are restricted to conducting a study to obtain a better understanding of the relationship between land use and transportation. QuickLink Bus Service Fund - This fund is used to account for those funds which are restricted to help fund the pilot project of providing commuter bus service between Macon and Atlanta through a public/private partnership with Greyhound Lines, Inc.
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2002

ASSETS Cash And Cash Equivalents Receivables: Intergovernmental

Northern Sub-Area
Study

Northwest Connectivity
Study

Special Revenue Funds

Regional Van Pool

Perimeter Circulator
System

Regional Transit Study

SMARTRAQ Project

Quicklink Bus
Service

Total
Nonmajor Governmental
Funds

$

$

$1,200,000.00 $400,000.00 $ 390,231.87 $ 49,397.13 $

$2,039,629.00

902,465.38 1,288, 111.00

628,984.00 240,252.00 105,887.04 3,165,699.42

Total Assets
I
Ul \0

$902,465.38 $1,288,111.00 $1,200,000.00 $400,000.00 $1,019,215.87 $289,649.13 $105,887.04 $5,205,328.42

LIABILITIES AND FUND BALANCES

Liabilities:

Accounts Payable

$172,995.04 $ 388,092.88 $

Due To Other Funds

729,470.34 182,045.84

$

$ 540,179.91 $115,814.67 $ 16,585.90 $1,233,668.40

89,301.14 1,000,817.32

Total Liabilities

$902,465.38 $ 570,138.72 $

$

$ 540,179.91 $115,814.67 $105,887.04 $2,234,485.72

Fund Balances: Unreserved, Undesignated

717,972.28 1,200,000.00 400,000.00 479,035.96 173,834.46

2,970,842.70

Total Liablities and Fund Balances

$902,465.38 $1,288,111.00 $1,200,000.00 $400,000.00 $1,019,215.87 $289,649.13 $105,887.04 $5,205,328.42

GEORGIA REGIONAL TRANSPORTATION AUTHORITY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

REVENUES Intergovernmental
Total Revenues

Northern Sub-Area
Stud:t

Northwest Connectivity
Stud:t

Special Revenue Funds

Regional Van Pool

Perimeter Circulator S:tstem

Regional Transit Stud:t

SMARTRAQ Project

Quicklink Bus
Service

Total
Nonmajor Governmental
Funds

$ 2,865,882.11 $ 1,288, 111.00 $ $ 2,865,882.11 $1,288,111.00 $

$

$ 963,858.00 $ 1,024,657.00 $ 259,854.96 $ 6,402,363.07

$

$ 963,858.00 $1,024,657.00 $ 259,854.96 $ 6,402,363.07

EXPENDITURES

Current:

Transportation

Capital Outlay:

I

Transportation

0\

0

Total Expenditures

$ 2,865,882.11 $1,610,138.72 $ $ 2,865,882.11 $1,610,138.72 $

$

$1,204,822.04 $ 1,273,428.07 $ 243,763.11 $ 7, 198,034.05

16,091.85

16,091.85

$

$1,204,822.04 $ 1,273,428.07 $ 259,854.96 $ 7,214,125.90

Deficiency of Revenues Under Expenditures $
OTHER FINANCING USES Transfers Out

$ (322,027.72) $ (360,000.00)

$

$ (240,964.04) $ (248,771.07) $

$ (811,762.83)

(360,000.00)

Net Change In Fund

Balances

$

FUND BALANCES - BEGINNING

$ (682,027.72) $

$

$ (240,964.04) $ (248,771.07) $

1,400,000.00 1,200,000.00 400,000.00

720,000.00

422,605.53

$ (1,171,762.83) 4,142,605.53

FUND BALANCES - ENDING

$

$ 717,972.28 $ 1,200,000.00 $400,000.00 $ 479,035.96 $ 173,834.46 $

$ 2,970,842.70

CAPITAL ASSETS USED IN THE OPERATION OF
GOVERNMENTAL FUNDS
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
COMPARATIVE SCHEDULES BY SOURCE JUNE 30, 2002 AND 2001

Governmental Funds Capital Assets: Improvements Other Than Buildings Machinery and Equipment
Total Governmental Funds Capital Assets

June 30, 2002 June 30, 2001

$ 40,406.85 $

3,898,541.62

200,945.44

$ 3,938,948.47 $ 200,945.44

Investments in Governmental Funds Capital Assets by Source: General Fund Special Revenue Funds

$ 237,339.62 $ 3,701,608.85

200,945.44

Total Governmental Funds Capital Assets

$ 3,938,948.47 $ 200,945.44

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION JUNE 30, 2002

Function Transportation

Improvements Other Than Buildings

Machinery And
Egui12ment

Total

$ 40,406.85 $ 3,898,541.62 $ 3,938,948.47

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ASSET CLASSIFICATION FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Governmental Funds Capital Assets: Transportation Improvements Other Than Buildings Machinery and Equipment

Governmental Funds Capital
Assets Jul~ 1, 2001
$
200,945.44

Additions
$ 40,406.85
3,697,596.18

Deletions
$

Governmental Funds Capital
Assets June 30, 2002
$ 40,406.85
3,898,541.62

Total Governmental Funds Capital Assets $ 200,945.44 $ 3,738,003.03 $

$ 3,938,948.47

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY SCHEDULE OF EXPENDITURES BY OBJECT AND FUNCTION
GOVERNMENTAL ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2002

TRANSPORTATION Current: Personal Services: Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Personal Tort Liability Total Personal Services
Regular Operating Expenses: Motor Vehicle Expenses Printing, Publications and Media Supplies and Materials Repairs and Maintenance Accountable Equipment Rents (Other Than Real Estate) Other Operating Expenses Total Regular Operating Expenses
Travel Expenses
Real Estate Rentals
Per Diem, Fees and Contracts Per Diem and Fees Reimburseable Expenses Contracts Total Per Diem, Fees and Contracts
Software
Telecommunications

GENERAL FUND

SPECIAL REVENUE
FUNDS

TOTAL

$ 2,057,996.75 $
141,250.39 214,208.60 273,866.73
624.00 10,764.00 9,922.00 $ 2,708,632.47 $

6,919.04 $ 2,064,915.79

529.31

141,779.70

737.57 941.68

214,946.17 274,808.41
624.00

10,764.00 9,922.00

9,127.60 $ 2,717,760.07

$ 2,434.28 $ 42,522.69 76,472.43 19,591.72 46,012.76 32,154.16 89,070.69
$ 308,258.73 $
$ 52,511.42 $
$ 354,193.55 $

572.01 $ 1,397.98 3,834.96 48,876.96 12,486.39 10,910.00 134,634.92 212,713.22 $
252.10 $
$

3,006.29 43,920.67 80,307.39 68,468.68 58,499.15 43,064.16 223,705.61 520,971.95
52,763.52
354,193.55

$ 1,560,898.89 $ 8,755.64
$ 1,569,654.53 $ $ 85,228.94 $ $ 64,883.07 $

6,398,359.24
2,674,825.50 9,073,184.74

$ 7,959,258.13 8,755.64
2,674,825.50
$ 10,642,839.27

$ 85,228.94

$ 64,883.07

Total Current Expenditures
Capital Outlay: Computer Equipment Motor Vehicles Improvements Other Than Buildings Total Capital Outlay

$ 5,143,362.71 $
$ 14,235.18 $ 22,159.00
$ 36,394.18 $

9,295,277.66 $ 14,438,640.37

3,661,202.00 40,406.85
3,701,608.85

$ 14,235.18 3,683,361.00 40,406.85
$ 3,738,003.03

Total Expenditures $ 5,179,756.89 $ 12,996,886.51 $ 18, 176,643.40

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STATISTICAL SECTION
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GEORGIA REGIONAL TRANSPORTATION AUTHORITY GOVERNMENT-WIDE EXPENSES BY FUNCTION LAST THREE FISCAL YEARS (NOTE 1 )

Fiscal Year
2000 2001 2002

T ransi;2ortation
$ 2,619,273.34 $
4,887,567.14 , 14,994,349.32

Van Pool

Total Exi;2enses
$ 2,619,273.34
4,887,567.14 14,994,349.32

TOTAL GOVERNMENT-WIDE EXPENSES

FY 2000

FY 2001

FY 2002

Note 1: The 2000 fiscal year was the first year of operations for the Georgia Regional Transportation Authority.

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY GOVERNMENT-WIDE REVENUES
LAST THREE FISCAL YEARS (NOTE 1)

Fiscal Year
2000 2001 2002

PROGRAM REVENUES

Operating

Capital

Charges

Grants

Grants

For

And

And

Services Contributions Contributions

GENERAL REVENUES

Unrestricted

State

Investment

AQQrOQriations

Earnings

Total Revenues

$

$

$

$10,307,139.00 $ 127,606.35 $ 10,434,745.35

200,000.00

8,777,338.00

620,641.77

9,597,979.77

457,235.29 9,088,278.96 2,964,505.85

4,518,807.00 301,405.23 17,330,232.33

GOVERNMENT-WIDE REVENUES BY TYPE

$18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000
$8,000,000 $6,000,000 $4,000,000 $2,000,000
$0

FY 2000

FY 2001

FY 2002

Investment Earnings GI State Appropriations Capital Grants l!l Operating Grants rnJ Charges For Services

Note 1:

The 2000 fiscal year was the first year of operations for the Georgia Regional Transportation Authority.

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY GENERAL GOVERNMENTAL EXPENDITURES BY CLASSIFICATION
LAST THREE FISCAL YEARS (NOTE 1 )

Fiscal Year

Transportation

Capital Outlay

Total Expenditures

2000 2001 2002

$ 2,554,101.87 $ 86,715.39 $ 2,640,817.26

4,608,552.91

116,028.52

4,724,581.43

14,438,640.37 3,738,003.03 18,176,643.40

TOTAL GOVERNMENTAL EXPENDITURES BY CLASSIFICATION

$20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000
$8,000,000 $6,000,000 $4,000,000 $2,000,000
$0

FY 2000

FY 2001

FY 2002

l!J Capital Outlay Im Transportation

Note 1: The 2000 fiscal year was the first year of operations for the Georgia Regional Transportation Authority.

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY GENERAL GOVERNMENTAL REVENUES BY SOURCE
LAST THREE FISCAL YEARS (NOTE 1)

Fiscal Year

Intergovernmental

Charges For
Services

Interest Earned

Other Revenues

Total Revenues

2000 2001 2002

$ 10,307,139.00 $

$ 127,606.35 $

8,977,338.00

620,641.77

16,566,591.81 456,031.89

301,405.23

$ 6,203.40

10,434,745.35 9,597,979.77
17,330,232.33

GENERAL GOVERNMENTAL REVENUES BY SOURCE

$18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000
$8,000,000 $6,000,000 $4,000,000 $2,000,000
$0

FY 2000

FY 2001

FY 2002

Other Revenues Interest Earned El Charges For Services l!I Intergovernmental

Note 1:

The 2000 fiscal year was the first year of operations for the Georgia Regional Transportation Authority.

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY POPULATION GROWTH OF COUNTIES IN NONATTAINMENT AREA
COMPARISON OF 2000 AND 1990 CENSUS DATA

Name Of Nonattainment
Jurisdiction
Cherokee County Clayton County Cobb County Coweta County DeKalb County Douglas County Fayette County Forsyth County Fulton County Gwinnett County Henry County Paulding County Rockdale County
Total Population of Nonattainment Area

Poeulation Per Census Data

2000

1990

141,903 236,517 607,751
89,215 . 665,865
92,174 91,263 98,407 816,006 588,448 119,341 81,678 70,111

90,204 181,436 447,745
53,853 546,174
71,120 62,415 44,083 648,776 352,910 58,741 41,611 54,091

Percent Change Over Period
57.31% 30.36% 35.74% 65.66% 21.91% 29.60% 46.22% 123.23% 25.78% 66.74% 103.16% 96.29% 29.62%

I 3,698,679

I 2,653,159

39.41%1

Data Source: Bureau of the Census

-72 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY MEMBER COUNTIES OF THE ATLANTA REGIONAL COMMISSION (ARC)
CALCULATION OF POPULATION DENSITY (PERSONS PER ACRE) COMPARISON OF 2000 AND 1990 DATA

Name Of ARC Member
Jurisdiction
Atlanta Region
Cherokee County Clayton County Cobb County DeKalb County Douglas County Fayette Gou nty Fulton County Gwinnett County Henry County Rockdale County

Land Area (Number of Acres)

2000

I I

1990

Density

Density

Estimated (Persons Estimated (Persons

Population Per Acre) Population Per Acre)

1,911,396
271,200 91,294
217,741 171,700 127,560 126,333 338,364 277,032 206,522
83,645

3,304,000
143,500 224,400 585,800 622,300
96,100 94,700 798,300 549,800 120,000 69,100

1.73
0.53 2.46 2.69 3.62 0.75 0.75 2.36 1.98 0.58 0.83

2,557,800
91,000 184,100 453,400 553,800
71,700 62,800 670,800 356,500 59,200 54,500

1.34
0.34 2.02 2.08 3.23 . 0.56 0.50 1.98 1.29 0.29 0.65

Data Source: Atlanta Regional Commission

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GEORGIA REGIONAL TRANSPORTATION AUTHORITY ATLANTA METROPOLITAN AREA
MISCELLANEOUS TRANSPORTATION STATISTICS JUNE 30, 2002

Average Number of Vehicles Per Household Average Commute Time In Minutes Fatal Accidents Per 100,000 Persons Daily Miles Driven Per Person (DVMT} Amount of Congested Travel (Percent of Peak Vehicle Miles Traveled) Percent of Commuters Using Transit Percent of Commuters Walking To Work Average Annual Traffic Delay In Minutes

1.81 31.31 35.51 33.80 79.00% 3.92% 1.31% 32.69

Data Source: The Sprawl Index Fact Sheet - Rutgers and Cornell Universities

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COMPLIANCE SECTION
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w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
November 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Georgia Regional Transportation Authority
and Honorable Catherine L. Ross, Executive Director
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the Georgia Regional Transportation Authority, a component unit of the State of Georgia, as ofand for the year ended June 30, 2002, and have issued our report thereon dated November 6, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance As part of obtaining reasonable assurance about whether the Georgia Regional Transportation Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting In planning and performing our audit, we considered the Georgia Regional Transportation Authority's internal control over financial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be material

- 77-

weaknesses. A material weakness is a condition in which the design or operation ofone or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in. the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the audit committee, management, members of the Authority, management of the State of Georgia, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
----Respectfully submitted,

RWH:rgs

Ru ell W. Hinton, CPA, CGFM Sta e Auditor

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