DOAA 2019 Governmental Accounting and Reporting Issues Seminar Georgia Center for Continuing Education Athens GA Tyler Reinagel PhD Director DCA Office of Planning and Research September 23 2019 ID: 786188
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Reporting Requirements and DCA Resources DOAA 2019 Governmental Accounting and Reporting Issues SeminarGeorgia Center for Continuing EducationAthens, GA
Tyler Reinagel, Ph.D. Director, DCA Office of Planning and Research
September 23, 2019
Slide2AgendaFinancial Reporting RequirementsReport of Local Government Finance (RLGF)Debt IssuanceHotel-Motel Excise TaxLocal Government Authorities (AARF)Tax Exempt Bond Allocation ProgramGrant Programs and ApplicationsUniform Chart of Accounts (UCOA) Update
Slide3DCA Office of Research
Office of Research
Slide4Role of the DCA Office of Research
Slide5Office of Research ResponsibilitiesMaintain Local Government and Authority Contact InformationBuild user-friendly government reporting systems for seven reports/surveys used by 1,935 jurisdictions/authoritiesManagement-oriented and financial-orientedTrack compliance, but not enforcementExplanation of legal requirements
, but not interpretationRemind local governments and authorities of report due dates and requirementsServe as state repository
for data and reports
Dissemination
of reported data
Slide6Slide7Reporting Requirements: Local Governments (Cities, Counties, Cons.)
Slide8Georgia’s Local Governments
Number of Chartered
Counties
151
Number of Chartered
Cities
530
Number of
Consolidated Governments
8
Total Local Governments in Georgia
689
As of September 2019
Slide9Local Government Annual Financial Reporting Responsibilities
Slide10Report of Local Government Finances (RLGF)Annual report of all revenues, expenditures, assets, and debts of all funds and agencies of the local governmentMandated in 1985 for all local governmentsOCGA 36-81-8(b)(1)(a)To be submitted within six months of local government’s FYERevised for FY2016 to better meet stakeholder needs and more closely conform with the Uniform Chart of Accounts
All local governments (689) are required to have submissions for the most recent three (3) fiscal yearsWithout the three most recent RLGF submissions, a local government is ineligible for state or federal grant/loan funding administered by DCA
Slide11Local Government Fiscal Years
FYE
Total LGs (689)
RLGF Due Date
January
2
July 31
February
2
August 31
March
2
September 30
April
5
October 31
May
3
November 30
June
270
December 31
July
6
January 31
(following calendar year)
August
10
February 28/29
(following calendar year)
September
58
March 31
(following calendar year)
October
3
April 30
(following calendar year)
November
2
May 31
(following calendar year)
December
326
June 30
(following calendar year)
Slide12Slide13RLGF Audited Financial StatementsAudited figures not required for RLGF submissionStarting in 2016, the RLGF captures audited/unaudited statusMany jurisdictions prefer to have an audit, but it does not change deadlineGeorgia DOAA exempts certain local governments from audit requirements, so not all 689 jurisdictions will have audited figuresIf a local government has less than $300K of expenditures, it is not required to submit an auditIn their most recent filings, 128 local governments (18.6%, all cities) are under $300K
If an audit is completed after the six month window, local governments may submit corrections to the RLGF if appropriate
Slide14Tax and Expenditure Data Center (TED)
Slide15Local Government Annual Financial Reporting Responsibilities
Slide16Debt Issuance ReportEach local government that issues debt in excess of $1,000,000 is required to report that issuance to the Office of Research;“A political subdivision which issues general obligation bonds, revenue bonds, or any other bonds, notes, certificates of participation, or other such obligations of that political subdivision in an amount exceeding $1 million, shall file a report with the Department of Community Affairs…” OCGA 36-82-10(b) The same section applies to local authoritiesThe due date for debt issuance reports is within 60 days of debt issuance
Slide17Slide18Debt Issuance Annual Report
Slide19Local Government Annual Financial Reporting Responsibilities
Slide20The Lodging Receipt
LOST
SPLOST
E-LOST
MARTA
TSPLOST
MOST
4% State
HOST
Slide21Changes to HMT AuthorizationsIn 2008, HB 1168 reduced the number of authorizations for newly adopted HMT or changes in existing
HMT to three (3) options
1-3%
5
%
6-8
%
Slide22“Grandfathered” Authorization Paragraph Jurisdictions
As of May 2019
Slide23Mechanics of Restricted Spending
Slide24Defining the Spending Restrictions - PurposeDepending on the authorization paragraph used to impose the HMT, a percentage of revenue goes toward restricted spendingAlways a percentage, never a flat/fixed amountTourism, Conventions, and Trade Shows (TCT)
“Planning, conducting, or participating in programs of information and publicity designed to attract or advertise tourism, conventions, or trade shows.”Expended by the Destination Marketing Organization (DMO)O.C.G.A. § 48-13-50.2
Slide25Defining the Spending Restrictions - RecipientFor TCT spending, the Destination Marketing Organization (DMO)“A private sector non-profit organization or other private entity which is exempt…under Section 501(c)(6) of the IRS Code of 1986”Primary responsibilities are to “encourage travelers to visit their destinations, encourage meetings and expositions in the area, and provide visitor assistance and support as needed.”
Can be a Chamber of Commerce, CVB, Regional Travel Association, or other private group, so long as it is a tax-exempt 501(c)(6)Also, any recreation Authority or CVB created by General Assembly or the State, a Department of State Government, or State Authority
For TPD spending,
any municipal, county, or consolidated government
O.C.G.A. § 48-13-50.2
Slide26How about DDAs, Main Street?
DDAs, Tourism Authorities, and other Local Authorities
Main Street 1
Organization
Local Authority created by General Statute, Local Law, or Local Constitutional Amendment
Department
within local government, or
Stand-alone non-profit organization, or
Component of Chamber of Commerce
Flexibility from DCA ODD
Structure and Restrictions
As defined by OCGA 36-42
If
City department, defined by Mayor/Council;
If non-profit/Chamber component, as defined by bylaws
Relationship with City
“Creature” of city government
If
department, part of city government; if non-profit/Chamber, contractual relationship with city
Hotel-Motel Tax Revenue
No. Local Authorities in Georgia are inherently
public
entities
and not eligible.
It
depends.
If the
Main Street
program is a city department, it is a public entity and
not
eligible. If the
Main Street
program is a stand-alone 501(c)6 non-profit, it is eligible.
Slide27Non-Profit Status – (c)3 versus (c)6
501(c)3501(c)6
Hotel-Motel Tax Revenue
Not
eligible to receive
Eligible
to receive
Purpose
Charitable Organization
Business/Membership Organization
Donation
Tax deductible for donor
Not
tax deductible
Lobbying
Prohibited from political
activity
Political activity permitted, but taxable
Social Activities
Social activities must be “insubstantial”
Social activities permissible,
not “primary”
Examples
Charitable foundations, universities, churches, charitable
support groups
Business league, Chamber
of Commerce, CVB
Main Street
programs in Georgia are largely self-determined. For those that are stand-alone non-profits, some have status as 501(c)3 and some as 501(c)6. Always confirm the tax-exempt status of a DMO receiving/potentially receiving Hotel-Motel Tax revenue restricted to TCT
Slide28So, how can we use TCT restricted funds?Generally*…Community-wide tourism advertisingSocial media and internet marketing campaignsRadio and Television CommercialsSoliciting convention or trade show contractsSupporting/operating a convention facility**
*Be sure to consult with city/county/consolidated government attorney **Only in certain situations and under certain authorization paragraphs, consult attorney
Slide29So, how can’t we use TCT restricted funds?FireworksNot “programs of information and publicity” or an advertisement for an eventThey are the event
Slide30Defining the Spending Restrictions - PurposeDepending on the authorization paragraph used to impose the HMT, a percentage of revenue goes toward restricted spendingAlways a percentage, never a flat/fixed amountTourism Product Development (TPD)
“Creation or expansion of physical attractions which are available and open to the public and which improve destination appeal to visitors, support visitors' experience, and are used by visitors. Such expenditures may include capital costs and operating expenses.”Project should be identified as TPD in jurisdiction’s annual budget
Must involve physical renovation of existing tourism facility, or construction of a new tourism facility
Expended directly by LG or entity
other than DMO
O.C.G.A. § 48-13-50.2
Slide31What qualifies as TPD?As identified in O.C.G.A. § 48-13-50.2(6)(A-P), Tourism Product Development may include
Information Centers
Hunting Preserves
Wayfinding Signs
Golf Courses
Sightseeing Planes and Helicopters
Performing Arts Facilities
Meeting/Convention Facility
Amusement Parks
Auto Racetracks
RV/Trailer/Camper Sites
Exhibit Hall
Sports Stadium
Arenas
Fishing Preserves
Parks and Trails
Drag Strips
Permanent Carnivals
Sightseeing Boats
Campsites
Zoos
Aquariums
Museums
Slide32What qualifies as TPD?And other “creation or expansion of physical attractions which are available and open to the public and which improve destination appeal to visitors, support visitors’ experience, and are used by visitors.”
Slide33Understanding Restricted Spending
Slide34O.C.G.A. § 48-13-51(a)(1) – 1-3%
Slide35O.C.G.A. § 48-13-51(a)(3) – 5%
Slide36O.C.G.A. § 48-13-51(b) – 6%
Slide37O.C.G.A. § 48-13-51(b) – 7%
Slide38O.C.G.A. § 48-13-51(b) – 8%
Slide39After the Fiscal Year…
Slide40Local Government RequirementsState-mandated Audit to DOAADetermination of compliance with authorization paragraph’s expenditure requirementsIdentification of any non-complianceAmount of HMT receipts during fiscal yearExpenditures, as a percentage of tax receiptsO.C.G.A. § 48-13-51(a)(9)(B)State-required Reporting to
DCAVerify authorization paragraph and rateUnique form for each authorization paragraphReport HMT revenues received
Project Contractor Information Schedule (PCIS)
O.C.G.A. § 48-13-56
Tourism Product Development (TPD) List
If under Paragraph 51(b)
O.C.G.A. § 48-13-50.2
Slide41Reporting to DCA Office of ResearchWithin six (6) months of the end of the fiscal year, each jurisdiction imposing a HMT is responsible for completing an online Hotel Motel Tax Report with DCA
Slide42Reporting to DCA Office of ResearchWithin six (6) months of the end of the fiscal year, each jurisdiction imposing a HMT is responsible for completing an online Hotel Motel Tax Report with DCA
Slide43Project-Contractor Information ScheduleMaintain open communication with your Chamber, CVB, or other 501(c)(6) (DMO) receiving restricted HMT fundsRemember restricted spending is percentage based, regardless of authorization paragraph – not a fixed dollar amountHave an established mutual agreement on how restricted HMT funds will be expended – additional funds can go to the DMO, but PCIS form to DCA focuses
only on restricted fundsHave contracting entity (DMO) complete PCIS and submit to local government for review and upload to HMT Report
Slide44Local Government Reporting Guidance
Slide45Reporting Requirements: Local Government Authorities
Slide46Georgia’s Local Authorities
Authority Type
#
of Authorities
Authority Type
#
of Authorities
Airport
45
Public Transit
4
Building
38
Recreation
22
Development
205
Regional Jail
3
Downtown
Development
225
Residential Care of the Elderly
9
Hospital
107
Resource Recovery
4
Housing
179
Solid Waste Management
26
Industrial Development
81
Stadium and Coliseum
6
Joint Development
74
Tourism
22
Land
Bank
12
Urban Redevelopment
41
Parking
3
Water and Sewer
63
Public Facilities
44
E-911
6
Public Service
7
Other
20
As of August 2019
Total Local Authorities
1,246
Slide47HB257 – Combined ReportingHB257 combines Registration and Financial Reporting into a single reportDue within six months of Authority FYE
“Annual Authority Registration and Finance Report,” or AARFBeginning with FY18
Slide48Report of Authority Finances (RAF)Since 1985, each authority is required to submit an annual financial report;“(2) Each local independent authority shall submit an annual report of indebtedness to the Department of Community Affairs. Such report shall include the revenues, expenditures, assets, and debts of all funds of the local independent authority and shall describe any actions taken by such local independent authority to incur indebtedness.” (OCGA 36-81-8(b)(2))Annual report of all revenues, expenditures, assets, and debts of the local authorityOCGA does not dictate a timeline, but rather says they “shall be submitted within the requested time periods established by the department” (OCGA 36-81-8(b)(3))
The current requirement is 6 months from the end of the authority’s fiscal yearLike RLGF, audited figures are preferred but not requiredSubmitted online with authority User ID and Password from Office of Research
All authorities are required to have submissions for the most recent 3 fiscal years
Slide49Slide50Slide51Local Authority Annual Reporting Responsibilities
Slide52Debt Issuance ReportEach authority that issues debt in excess of $1,000,000 is required to report that issuance to the Office of Research;“A political subdivision which issues general obligation bonds, revenue bonds, or any other bonds, notes, certificates of participation, or other such obligations of that political subdivision in an amount exceeding $1 million, shall file a report with the Department of Community Affairs…” OCGA 36-82-10(b) The same section applies to cities, counties, and consolidated governments issuing debt.The longstanding due date for debt issuance reports has been within 60 days of debt issuanceSame 2-page .XLS form as local governments, combined annual reporting on DCA website
Slide53Tax Exempt Bond Allocations
Slide54Bond Allocation Program BackgroundLocal & state governments/authorities may apply to issue "private activity tax exempt bonds“Tax Exempt Bond Allocations are not cash changing hands or the state issuing debtAllows for lower than normal financing costs, resulting in the creation or retention of jobs and expansion of affordable housing.Fund-able projects include traditional industrial development bond (IDB) for manufacturing concerns and mortgage revenue bonds (MRB) for single family mortgages to bonds for multi-family housing development and exempt facility bonds.
To receive an allocation, the local issuing authorities must approve the project, hold a public hearing, have local government approval, and general financing in place.
Slide552019 Tax Exempt Bond Allocation Formula
State Population
10,519,475
($105
Per)
$1,104,544,875
Economic Development
Period #1
1/1/19-3/31/19
$187,772,629
Period #2
4/1/19-6/30/19
$187,772,629
Period #3
7/1/19-9/30/19
$93,886,314
$469,431,572
Housing
GHFA Reservation
1/1/19-9/30/19
$291,047,575
URFA
Reservation
1/1/19-9/30/19
$89,191,999
Local Reservation
1/1/19-9/30/19
$89,191,999
$469,431,573
Flexible Share
1/1/19-12/31/19
$165,681,731
$165,681,731
Total State Cap
$1,104,544,875
Slide56Bond Allocation ApplicationsInducement ResolutionPublisher’s Affidavit (TEFRA)Public notice published at least 14 days prior to public hearingPublic Official’s Approval of TEFRAState Law/Legal Counsel OpinionFinancial Commitment LetterApplication Fee
Slide57Slide58Inducement Resolution
Slide59TEFRA Documentation
Slide60Slide61Slide62Slide63Bond Allocation Fee ScheduleBond Application Fee: $250.00Bond Carryforward Fee: $250.00Bond Adjustment (change in amount of allocation or one -time 30 day extension) Fee: $100.00Bond Issuance Fee: 1/10 of 1% (0.001)$20,000 on a $20M allocation
Slide64Slide65Economic Development ShareMust create/retain one permanent job for each $125K in allocation sought“Flex Share” funds can be used at the discretion of the Commissioner with/without jobs requirementApplicant must provide a “but for” statement as a part of the “Jobs Test” portion of applicationAfter nine months (September 30), all unused Economic Development share and Housing share are transferred to “Flex Share” for the duration of the calendar year
Slide66Grant Programs and Applications
Slide67DCA Community and Economic Development ProgramsFunding ProgramsAppalachian Regional Commission Economic Development Grant Program Community Development Block Grant (CDBG) Downtown Development Revolving Loan Fund (DDRLF) Neighborhood Stabilization ProgramOneGeorgia Programs (EDGE and Equity)
Regional Economic Business Assistance (REBA) Program State Small Business Credit Initiative (SSBCI)
Incentive Programs
Enterprise Zones
Georgia Agribusiness and Rural Jobs Act (GARJA)
Georgia Tourism Development Act
Job Tax Credits
Military Zones
Opportunity Zones (State)
Opportunity Zones (Federal)
Regional Economic Assistant Program (REAP)
Rural Zones
Slide68Compliance and Funding/Program EligibilityFor many funding/incentive programs, permitting, and community designations, certain compliance requirements exist…QLG Status – Comprehensive Plan/Plan Update, E-VerifyService Delivery Strategy (County and Resident Cities)Local Governments (all municipalities, counties, and consolidated governments) must have the three most recent years of GOMI and RLGF submissions on file with DCA to be eligible for any state/federal funding (i.e. CDBG) or permits administered by DCA
Compliance listing is available at https://apps.dca.ga.gov/LocalGovStatus/planning.aspQuestions regarding QLG Status and SDS should be emailed to pemd.opqga@dca.ga.gov
Questions regarding reporting requirements should be emailed to
Research@dca.ga.gov
Slide692019 UCOA Update
Slide70Background on UCOAThe UCOA was established by the General Assembly (HB491) during the 1997-1998 legislative sessionThe Georgia Department of Community Affairs (DCA) was to develop and maintain a uniform chart of financial accounts to be used by all local governments in Georgia
The UCOA was developed with input from local government finance stakeholders, and
implemented by cities, counties, and consolidated governments beginning in 2001
Slide71Slide72Slide73Slide74Slide75Slide76UCOA>>RLGFBeginning in FY2016, the Report of Local Government Finances (RLGF) - required by all cities, counties, and consolidated governments within six months of the conclusion of their fiscal year – was reflective of the UCOA
Slide772019 UCOA UpdateLocal government is ever-changing, so it’s necessary that the UCOA be a “living document” — adaptable to the new needs and challenges of local government finance managers, accountants and auditors
The current version of UCOA was released in December 2013
This is an opportunity to update the document to better meet the current needs of local government finance
Slide782019 UCOA UpdateWorkshop at DCA Office in Atlanta on Thursday, November 7Representatives from:Georgia Department of Community AffairsGeorgia Department of Audits and Accounts (DOAA)Carl Vinson Institute of Government/University of GeorgiaGeorgia Municipal Association (GMA)
Association County Commissioners of Georgia (ACCG)Revisions will be presented to the DCA Board and State Auditor for approval
4
th
Edition should be released in
2Q 2020
Slide79Providing Feedback for UCOA Update
Slide80UCOA Update – Providing FeedbackOption 1: Feedback FormA hard-copy feedback form is availableCan be returned to DCA in person, by email, or via USPSShould be received by October 15, 2019 for full consideration
Slide81UCOA Update – Providing FeedbackOption 2: Web-Based Form
Slide82Slide83Slide84UCOA Update – Providing FeedbackOption : EmailEmail feedback, questions, or concerns to UCOA.Update@dca.ga.govEmail by October 15, 2019 for full consideration
Slide85Additional Questions and AssistanceFor report system log-in, PCIS form, ordinance requirements, sample ordinances, and other information on the hotel-motel tax in Georgia, visit:https://www.dca.ga.gov/local-government-assistance/research-surveys/hotel-motel-excise-taxDCA cannot provide legal interpretations or opinions, but if you have a question specific to your jurisdiction, or something unaddressed on the DCA website, please contact:
Tyler Reinagel, Ph.D.
Director,
Office of Planning and Research
404.679.4996
tyler.reinagel@dca.ga.gov
Slide86