1688-2023-c-gallatin-rpt-cpa811-12-21-23.txt
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City of Gallatin, Tennessee
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2023
Prepared by the City of Gallatin Finance Director
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City of Gallatin, Tennessee
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2023
Contents
Introductory Section
Letter of Transmittal i
Directory v
Financial Section
Independent Auditor's Report 1
Management's Discussion and Analysis (Unaudited) 4
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 12
Statement of Activities 14
Fund Financial Statements
Balance Sheet - Governmental Funds 15
Reconciliation of Balance Sheet to Statement of Net Position - Governmental Funds 17
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 18
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities 19
Statement of Fund Net Position - Proprietary Funds 20
Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 22
Statement of Cash Flows - Proprietary Funds 23
Statement of Revenues, Expenditures, and Changes in Fund
Balance - Budget (GAAP Basis) and Actual - General Fund 25
Statement of Fiduciary Net Position - Pension Trust Fund - Electric Department 35
Statement of Changes in Fiduciary Net Position - Pension Trust Fund - Electric Department 36
Notes to the Financial Statements 37
Required Supplementary Information
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on
Participation in the Public Employee Hybrid Pension Plan of the TCRS 77
Schedule of Contributions Based on Participation in the Public Employee Hybrid
Pension Plan of the TCRS 78
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on
Participation in the Gallatin Electric Department Employee Pension Plan 79
Schedule of Contributions Based on Participation in the Gallatin Electric
Department Employee Pension Plan 80
Schedule of Investment Returns Based on Participation in the Gallatin Electric
Department Employee Pension Plan 81
Schedule of Changes in Total OPEB Liability and Related Ratios - Electric Department 82
Schedule of Contributions Based on Participation and Schedule of Investment Returns
in the Gallatin Electric Department OPEB Plan 83
Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds 84
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds 85
Schedules of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
Special Services Fund 86
Drug Fund 87
Environmental Services Fund 88
Stormwater Utility Fund 89
Industrial Development Board 90
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City of Gallatin, Tennessee
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2023
Contents
Financial Section
Supplementary Information
Supplementary Schedules
Schedule of Expenditures of Federal Awards and State Financial Assistance 91
Schedule of Changes in Long-term Debt by Individual Issue 93
Schedule of Long-term Debt, Principal, and Interest Requirements -
Governmental Activities, by Fiscal Year 94
Schedule of Long-term Debt, Principal, and Interest Requirements -
Business-type Activities, by Fiscal Year 95
Schedule of Changes in Lease Obligations 96
Schedule of Lease Obligations, Principal, and Interest Requirements by Fiscal Year 97
Schedule of Electric Rates in Force - Unaudited 98
Schedule of Water and Sewer Rates in Force - Unaudited 100
Schedule of Gas Rates in Force - Unaudited 101
Statistical Section
Financial Trends Information
Net Position by Component - Last Ten Fiscal Years 102
Changes in Net Position - Last Ten Fiscal Years 103
Fund Balances of Governmental Funds - Last Ten Fiscal Years 105
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 106
Revenue Capacity Information
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Tax Years 107
Principal Property Taxpayers - Current Year and Nine Years Ago 108
Property Tax Levies and Collections - Last Ten Fiscal Years 109
Debt Capacity Information
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 110
Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years 111
Pledged Revenue Coverage - Last Ten Fiscal Years 112
Demographic and Economic Information
Demographic and Economic Statistics - Last Ten Fiscal Years 113
Principal Employers - Current Year and Nine Years Ago 114
Operating Information
Full-Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years 115
Operating Indicators by Function/Program - Last Ten Fiscal Years 116
Capital Asset Statistics by Function/Program - Last Ten Fiscal Years 117
Internal Control and Compliance Section
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 118
Independent Auditor's Report on Compliance for Each Major Federal Program
and on Internal Control over Compliance Required by the Uniform Guidance 120
Schedule of Findings and Questioned Costs 123
Summary Schedule of Prior Year Findings 124
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Introductory Section
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City of Gallatin
Finance Department
December 18, 2023
Honorable Mayor, City Council, and Citizens of the City of Gallatin,
State law requires that every general-purpose government publish a complete set of audited
financial statements within six months of the close of each fiscal year. This report is published to
fulfill that requirement for the fiscal year ended June 30, 2023. This report consists of
management's representations concerning the finances of the City of Gallatin. To provide a
reasonable basis for making these representations, management of the City of Gallatin has
established a comprehensive internal control framework that is designed both to protect the city's
assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation
of the City of Gallatin's financial statements in conformity with GAAP. Because the cost of internal
controls should not outweigh their benefits, the City of Gallatin'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. Management assumes full
responsibility for the completeness and reliability of all the information presented in this report.
The City of Gallatin’s financial statements have been audited by Blankenship CPA Group, PLLC, a
firm of licensed certified public accountants. The goal of the independent audit was to provide
reasonable assurance that the financial statements of the City of Gallatin, for the fiscal year ended
June 30, 2023, are presented fairly in all material aspects. 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
unmodified opinion that the City of Gallatin’s financial statements, for the fiscal year ended June
30, 2023, are fairly presented in all material aspects in conformity with GAAP. The independent
auditor’s report is presented as the first component of the financial section of this report. GAAP
requires 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 MD&A and should be read in conjunction with
it. The City of Gallatin’s MD&A can be found beginning on page 3, immediately following the
report of the independent auditors.
PROFILE OF THE CITY OF GALLATIN
The City of Gallatin, population of 51,653, is located in Sumner County, Tennessee and is the
county seat for Sumner County. It is approximately 30 miles northeast of downtown Nashville, and
is served by numerous major highways including U.S. 31-E, State Route 386, State Route 109, and
State Route 25. The City of Gallatin was founded in 1802, incorporated in 1954, and operates
under the City Mayor/City Council form of government. The Municipality’s legislative body is a
seven-member City Council that is elected, one each for 5 council districts and two at-large
132 West Main Street, Room 106 Gallatin, TN 37066-3244 www.gallatinonthemove.com
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members. Each Councilmember is elected to a four-year alternating term with elections conducted
every two years. The Mayor is chief administrative officer of the Municipality and presides at
meetings of the Council.
The City of Gallatin provides a wide range of services which include police and fire protection, the
construction and maintenance of highways, streets, and other infrastructure, sanitation services,
recreational and cultural services, planning and zoning, and general administrative services.
Additionally, the City owns and operates its water, wastewater, natural gas, and electric systems.
For small, outlying populations, White House Utility District and Castalian Springs Bethpage Utility
District provide water service.
All of the City’s Governmental funds are annually appropriated. The City Council is required to
adopt a final budget by no later than the close of the fiscal year. This annual budget serves as the
foundation for the City’s financial planning and control. In February of each year, Department
Heads submit their budget requests to the Mayor and Finance Director. The Mayor conducts
departmental meetings in March of each year, and the Finance Director makes revenue estimates
for the upcoming year. The budget is submitted to City Council in April. First reading of the
Budget is usually in May, second reading is usually in May/June but no later than June 30, the
close of the City’s fiscal year. The budget is prepared by fund (i.e. general) and department (i.e.
police). Department heads are authorized to expend funds within total departmental
appropriations. However, amendments to the budget that change departmental and/or total
appropriations require the adoption of an ordinance by the City Council. Budget transfers
between departments require approval of the City Council. Budget to actual comparisons are
provided in this report for each governmental fund for which an appropriated annual budget has
been adopted.
LOCAL ECONOMY
The City of Gallatin continues its strong growth trajectory in both the business and
residential sectors, benefitting from our close proximity to Nashville. National realty
groups ranked Gallatin in the top 20 “hottest zip codes” in the U.S. early this year because
of maintaining “a small town feel while close to a bustling downtown”. The city’s
population has now surpassed the 51,000 mark, and our trade area population exceeds
167,700. Household income averages $99,618 with median household income at $75,298.
This growth has generated increased property tax and sales tax collections for the city
with sales tax collections exceeding $1 million for 31 consecutive months. In the industrial
sector, a Belgian company chose Gallatin for its first U.S. manufacturing facility, bringing
additional foreign direct investment to Gallatin. Several other existing industries are
expanding, adding jobs and more than $110 million in Capital Expenditures. In the
commercial sector, Gallatin is adding retail and restaurants at a rapid pace to meet
demands of the expanding population.
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LONG-TERM FINANCIAL PLANNING
In 2018, the City began developing a comprehensive long-range plan, Plan Gallatin, for future
growth and development of the city. The city’s Planning Commission and City Council have
formally adopted the plan. Additionally, a formalized Capital Improvement Plan was adopted
during the 2022 fiscal year with department heads projecting major needs for the upcoming 10
years. The plan is updated at least annually, if not more frequently, with new information on
previously submitted projects and the addition of new future projects. The CIP is used to plan for
long-term capital funding, whether it be pay-as-you-go or debt issues.
The City has numerous capital projects currently funded and under construction. Included are
city-wide infrastructure projects such as roads, streets, sidewalks, greenways, water lines, sewer
lines, and gas lines. Many of these projects are being funded wholly or in part by Federal and
State grants. Capital projects underway include: regional collaborative water lines for north and
northeast Sumner County residents; signal grant for synchronized signalization along major
thoroughfares; various roadway improvements; purchase of heavy equipment for Streets and
Environmental Services departments; miscellaneous roadway and drainage projects; new utility
line installation and existing line rehabilitation; new park facilities and park upgrades; partnership
with Sumner County government for a downtown parking structure; and numerous greenway and
multimodal paths.
FINANCIAL POLICIES
The City is committed to protecting its taxpayers’ funds. Management continues to take a very
conservative approach to budgeting and spending in order to lessen the chance of a revenue
shortage and mid-year program cuts. This approach will help finance contingencies and
unforeseen budget amendments. The City of Gallatin recognizes the importance of a diversified
revenue system, and strives to not rely too heavily on one source. Currently the city general fund
revenue sources are approximately one-third sales tax, one-third property tax, and one-third all
other revenues. The City routinely reviews its various rates and fees and considers inflation and
current market rates. The City Council has formally adopted Fund Balance Policies for the General
Fund and for the enterprise funds which indicate that they will maintain a minimum unassigned
fund balance of 25% of the operating expenditures in each of those funds. Additionally, the City
has a formally adopted Capital Improvement Plan, Purchasing Policy, Internal Financial Controls
Policy, Debt Management Policy, Investment Policy, Grant Policy, and Contract Administration
Policy, all of which are updated periodically and which serve to further strengthen its overall
fiduciary duties to the citizens of Gallatin.
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AWARDS AND ACKNOWLEDGEMENTS
The preparation of this report on a timely basis could not have been accomplished without the
dedicated services of the Finance department staff of the City of Gallatin. Credit must also be
given to the City Mayor and City Council for their support of excellence in financial reporting
and fiscal integrity. Also, the City is grateful to the staffs of Blankenship CPA Group, PLLC for
their invaluable guidance and assistance.
Respectfully Submitted,
Rachel Nichols
Rachel Nichols
Director of Finance
City of Gallatin | 132 West Main Street | Gallatin, TN 37066 | 615.451.5963
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City of Gallatin, Tennessee
Directory
June 30, 2023
ELECTED OFFICIALS
Paige Brown, Mayor
Lynda Love, Council Member, Vice Mayor
William C. Hayes, Council Member
Steve Fann, Council Member
Steven Carter, Council Member
Pascal Jouvence, Council Member
Eileen George, Council Member
Shawn Fennell, Council Member
Connie Kittrell, Recorder
MANAGEMENT TEAM
Rachel Nichols, Director of Finance, CMFO
Richard Depriest, Superintendent of Public Works
David Kellogg, Superintendent of Public Utilities
Donald Bandy, Chief of Police
Jeff Beaman, Fire Chief
Charles Stuart, Director of Codes
William McCord, Director of Planning
David Brown, Director of Parks and Recreation
Courtney Russell, Director of Human Resources
James Fenton, Director of Economic Development
Nick Tuttle, City Engineer
Jennifer Lefevre, Director of Information Technology
Jeff Hentschel, Communications Director
Mark Kimbell, Electric Department Manager
COUNSEL
Susan High-McAuley
City Attorney
Gallatin, Tennessee
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Financial Section
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Independent Auditor’s Report
Honorable Paige Brown, Mayor, and Members of the City Council
City of Gallatin, Tennessee
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Gallatin, Tennessee (the City), as of
and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise
the City’s basic financial statements as listed in the table of contents.
In our opinion, based on our audit and the report of the other auditors, the accompanying financial statements
referred to above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City,
as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof and
the respective budgetary comparison for the general fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
We did not audit the financial statements of the Department of Electricity (Electric Department), which represent
25%, 24%, and 67%, respectively, of the assets, net position, and revenues of the business-type activities as of June
30, 2023. Those statements were audited by other auditors whose report has been furnished to us, and our opinions,
insofar as they relate to the amounts included for the Electric Department, are based solely on the report of the
other auditors.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
(GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of
our report. We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for
twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Brentwood • Goodlettsville • Murfreesboro
Nashville • Mt. Juliet • Dickson • Columbia TN www.bcpas.com
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee
that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the City’s internal control. Accordingly, no such opinion is expressed,
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control–related matters that we
identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s Discussion
and Analysis on pages 4-11 and the pension and OPEB Information on pages 77-83 be presented to supplement
the basic financial statements. Such information is the responsibility of management and, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing
the information and comparing the information for consistency with management’s responses to our inquiries, the
basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We
do not express an opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City’s basic financial statements. The combining and individual nonmajor fund financial statements and
schedules on pages 84-90 and the supplementary information on pages 91-97 (including the schedule of
expenditures of federal awards and state financial assistance, as required by Title 2 US Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, on pages 91-92) are presented for purposes of additional analysis and are not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and relates directly
to the underlying accounting and other records used to prepare the basic financial statements. The information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with GAAS. In our opinion, the combining and individual nonmajor
fund financial statements and schedules on pages 84-90 and the supplementary information on pages 91-97 are
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises
the introductory section, and the statistical section, and other schedules on pages 98-101, but does not include the
basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not
cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial statements,
or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude
that an uncorrected material misstatement of the other information exists; we are required to describe it in our
report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2023 on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is
solely to describe the scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering City’s internal control over financial reporting and compliance.
Blankenship CPA Group, PLLC
Goodlettsville, Tennessee
December 18, 2023
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City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
As management of the City of Gallatin, Tennessee, we offer readers of the City's financial statements this narrative
overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. The analysis
focuses on significant financial position, budget changes and specific issues related to funds and economic
factors affecting the City. It also focuses on current year activities and the resulting changes.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City exceed its liabilities and deferred inflows of
resources at the close of the fiscal year by $442.64 million as compared to $414.65 million in the prior year.
Of the amounts, $105.07 million (unrestricted net position) as compared to $103.59 million in the prior
year may be used to meet the City’s ongoing obligations to citizens and creditors.
• The government’s total net position increased by $27.99 million in 2023, compared to an increase of $52.34
million in 2022.
• As of the close of the current fiscal year, the City’s governmental funds reported ending fund balances of
$68.89 million, an increase of $11.72 million from the prior year. Approximately $53.75 million of that total
is available for spending at the government’s discretion.
• At the end of the current fiscal year, unassigned fund balance of the General Fund was $53.75 million, or
108.48% of the total general fund expenditures as compared to $43.46 million the prior year.
• The City’s debt obligations decreased by approximately $5.18 million during the current fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The
City’s basic financial statements are compromised of the following components:
1. Government-wide financial statements,
2. Fund financial statements, and
3. Notes to the financial statements.
4. This report also contains required supplementary information and supplementary and other information
in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s
finances, in a manner similar to a private-sector business.
• The Statement of Net Position presents information on all of the City’s assets, liabilities and deferred
inflows/outflows of resources, with the net difference reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.
• The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported when the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported
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City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected
taxes, compensated absences, etc.).
Both of the government-wide financial statements distinguish functions of the City that are principally supported
by taxes 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 City include general government, public safety, highways and streets,
sanitation, economic development, and cultural and recreation. The business-type activities of the City are made
up of Water and Sewer, Natural Gas, and Electric Power services. The government-wide financial statements can be
found on pages 12-14 of this report.
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 City, 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 City can be divided
into two categories: governmental funds and proprietary funds.
Governmental Funds
Governmental funds 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, the focus
is on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources at
the end of the fiscal year. Such information may be useful in evaluating the government's near-term financing
requirements.
Because the focus of governmental funds is narrower than that of government-wide 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 City's near-term financing decisions. Both the Balance Sheet - Governmental
Funds and the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds
provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The governmental fund financial statements and reconciliations can be found on pages 15-19 of this report.
The City maintains nine governmental funds. Information is presented separately in the Balance Sheet -
Governmental Funds and in the Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds for the General Fund and Capital Projects Fund, 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
beginning on page 84.
The City adopts an annual appropriated budget for the General Fund and the special revenue funds. Budgetary
comparison statements have been provided on pages 25-34 and pages 86-90 of this report.
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City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
Proprietary Funds
There are two different types of proprietary funds.
• Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The City uses enterprise funds to account for the Board of Public
Utilities Electric, Water and Sewer, and Gas Funds.
• Internal service funds are an accounting device used to accumulate and allocate costs internally among a
government’s various functions. The City currently has no internal service funds.
Proprietary funds provide the same type of information as the government-wide financial statements, only in
more detail. The proprietary fund financial statements provide separate information for the Water and Sewer,
Natural Gas, and Electric Power operations which are considered to be major funds of the City. The basic
proprietary fund financial statements can be found on pages 20-24 of this report.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are
not reflected in the government-wide financial statements because the resources of those funds are not available
to support the City of Gallatin’s own programs. The Fiduciary Fund reported is for the Electric Department Pension
Trust Fund. The accounting used for fiduciary funds is much like that used for proprietary funds. Individual fund
data for the fiduciary funds is provided in the form of combined statements which can be found on pages 35-36 of
this report.
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 on pages 37-
76 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City’s and Utility’s schedules of funding progress for their respective
pension plans and other post-employment benefits.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of Net Position
As noted earlier, net position may serve over time as a useful indicator of exceeded liabilities and deferred inflows
of resources by $442.64 million at the close of the most recent fiscal year, as compared to $414.65 million at the
close of the previous year.
By far the largest portion of the City’s net position (73.15%) reflects its net investment in capital assets (e.g., land,
buildings, machinery, equipment, and infrastructure). The City uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the City’s investment in its
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City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City’s net position $13.79 million (3.11%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of net position representing unrestricted
net position $105.07 million (23.74%) may be used to meet the City’s ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net
position, both for the City as a whole, as well as for its total governmental and total business-type activities.
Comparisons with the prior year data are presented below.
Primary Government (in thousands)
Governmental Business-Type
Activities Activities Total
2023 2022 2023 2022 2023 2022
Assets
Current and other assets $ 91,933 $ 86,403 $ 74,350 $ 79,893 $ 166,283 $ 166,296
Capital assets 174,986 162,610 220,653 211,531 395,639 374,141
Total Assets 266,919 249,013 295,003 291,424 561,922 540,437
Deferred Outflows of Resources
Deferred outflows 661 427 6,026 4,028 6,687 4,455
Liabilities
Other liabilities 11,673 12,586 28,572 26,199 40,245 38,785
Long-term liabilities 24,735 26,343 45,743 48,519 70,478 74,862
Total Liabilities 36,408 38,929 74,315 74,718 110,723 113,647
Deferred Inflows of Resources
Deferred inflows 15,015 14,663 228 1,934 15,243 16,597
Net Position
Net investment in
capital assets 148,607 133,282 175,182 161,498 323,789 294,780
Restricted 13,571 13,222 215 3,056 13,786 16,278
Unrestricted 53,979 49,344 51,089 54,246 105,068 103,590
Total Net Position $ 216,157 $ 195,848 $ 226,486 $ 218,800 $ 442,643 $ 414,648
The government’s total assets increased significantly due to the capital projects that were completed during the
current fiscal year. Long-term liabilities decreased due to payments being made on debt for these projects during
the current fiscal year.
7
[[page 18]]
City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
Statement of Activities
Expenses in the governmental activities exceeded program revenues by $23.90 million. In the business-type
activities program revenues exceed expenses by $8.48 million. General government revenues and transfers of
$44.21 million offset the governmental activities deficit resulting in a positive change of net position of
$20.31 million. Other business-type revenues of $827 thousand and transfers of ($1.62) million reduced
income in the business type activities leaving a positive change in net position of $7.69 million.
Primary Government (in thousands)
Governmental Business-Type
Activities Activities Total
2023 2022 2023 2022 2023 2022
Program Revenues
Charges for services $ 12,938 $ 12,276 $ 115,696 108,491 $ 128,634 $ 120,767
Operating grants and contributions 3,896 4,390 - - 3,896 4,390
Capital grants and contributions 8,346 15,384 6,412 8,438 14,758 23,822
General Revenues
Property taxes 14,215 13,503 - - 14,215 13,503
Other taxes 26,304 24,592 - - 26,304 24,592
Other sources 2,062 10,771 827 352 2,889 11,123
Total Revenues 67,761 80,916 122,935 117,281 190,696 198,197
Expenses
General Government 11,492 10,679 - - 11,492 10,679
Public Safety 21,446 19,887 - - 21,446 19,887
Engineering 3,045 2,112 - - 3,045 2,112
Environmental Services 3,500 3,265 - - 3,500 3,265
Public Works 816 827 - - 816 827
Highways and Streets 1,701 1,501 - - 1,701 1,501
Vehicle Maintenance 416 638 - - 416 638
Parks and Recreation 5,580 5,761 - - 5,580 5,761
Economic Development 478 556 - - 478 556
Interest on long-term debt 603 640 - - 603 640
Electric - - 77,786 67,412 77,786 67,412
Water and Sewer - - 16,837 15,121 16,837 15,121
Gas - - 19,001 17,460 19,001 17,460
Total Expenses 49,077 45,866 113,624 99,993 162,701 145,859
Increase (Decrease) in net position
before transfers 18,684 35,050 9,311 17,288 27,995 52,338
Transfers 1,625 1,872 (1,625) (1,872) - -
Increase (Decrease) in net position 20,309 36,922 7,686 15,416 27,995 52,338
Net Position - Beginning 195,848 158,926 218,800 203,384 414,648 362,310
Net Position - Ending $ 216,157 $ 195,848 $ 226,486 $ 218,800 $ 442,643 $ 414,648
In governmental activities, charges for services increased $662 thousand in 2023. Operating grants and
contributions decreased by $494 thousand. Capital grants and contributions decreased $7.04 million. In the
business type activities, charges for services increased by $7.21 million and costs of sales and service increased
by $10.37 million due to increased sales during the year driven mainly by growth and a harsh cold snap in
December 2022.
8
[[page 19]]
City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
Governmental policy continues to recognize that local revenue sources must be the foundation for providing basic
public services rather than depending on uncertain Federal and State sources. To this end, it is vitally important to
continue efforts to seek balanced diversity, equity, and efficiency in local revenue systems to better accommodate
future change.
Overall expenses for 2023 were more than expenses in 2022 in the governmental activities by $3.21 million. For
departments with increases, the increases were mainly due to capital projects and grant activities. All
departments worked diligently to keep operational and capital spending to a minimum for the fiscal year due to
continued uncertainties regarding potential negative economic impacts of supply chain issues and inflation
concerns.
FINANICIAL ANALYSIS OF THE GOVERNMENT’S FUNDS
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unassigned fund balance may serve as a useful measure of a government's net resources available for spending
at the end of the fiscal year. Based on the statements and discussion, the overall financial position of the City has
improved during the period.
The General Fund is the chief operation fund of the City. At the end of the current fiscal year, the unassigned
fund balance of the general fund was $53.75 million while total fund balance was $56.15 million. As a measure
of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance
to total fund expenditures. Unassigned fund balance represents 108.48% of the total general fund expenditures in
2023 as compared to 97.55% in 2022.
The fund balance of the City’s general fund increased by $11.76 million during the current fiscal year. Key factors
in this increase were the significant increase of local tax revenues and intergovernmental revenues and decreases
of accounts payables.
Proprietary Funds
The City's proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. Proprietary funds are considered business-type activities and are operated
similarly. Net position of the proprietary funds increased by $7.69 million in 2023 as compared to $15.42 million
in 2022.
Unrestricted net position of the proprietary funds amounted to $51.09 million as compared to $54.25 million
in the prior year. The change in net position of the individual proprietary funds were as follows:
• Water and Sewer Fund - $4.61 million in 2023 compared to $7.16 million in 2022
• Natural Gas Fund - $24 thousand in 2023 compared to $3.17 million in 2022
• Electric Fund - $3.06 million in 2023 compared to $5.09 million in 2022
9
[[page 20]]
City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
General Fund Budgetary Highlights
The City made revisions to the original appropriations approved by the City Council. Overall these changes
resulted in a $29.21 million increase in budgeted expenditures and transfers out from the original budget. The
increase of approximately 58.1% was mainly for new and ongoing capital expenditures.
Budgeted revenues exceeded actual amounts by $5.83 million. The largest variances were related to
intergovernmental revenues (delayed grant activities) and local taxes.
Actual expenditures and transfers out were under budget by $19.14 million, partially due to department heads
holding spending and partially due to large projects that were budgeted for this year that will continue into next
year.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of Fiscal Year 2023 the City had invested $395.64 million net of accumulated depreciation in land,
buildings, improvements, machinery and equipment, park facilities, roads, highways, bridges, and utility systems.
The total increase in the City’s investment in capital assets for the current fiscal year was 5.7%. Additional
information on the City’s capital assets can be found in Note 1 on page 41 and Note 6, beginning on page 53 of this
report.
Long-term Debt
At the end of the current fiscal year, the City had long-term debt outstanding of $73.63 million as compared to
$78.81 million at the end of the prior fiscal year. Of this amount, $24.36 million represents debt backed by the full
faith and credit of the City. The remainder of the City’s debt represents bonds secured by specific revenue
sources (i.e. revenue and tax bonds) of the various enterprise funds. Information on the City’s long-term debt
can be found in Note 7 beginning on page 56 of this report.
The City of Gallatin maintains a “AA+” rating from Standards and Poors for general obligation debt. Also, the City
rating from Moody’s has been recalibrated to “Aa2”.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
General Fund Revenue
Most general revenue taxes and charges for services showed modest-to-moderate growth. Grants and
contributions decreased in 2023 as did Other Revenue Sources with the biggest contributing factor being federal
American Rescue Plan Act (ARPA) Revenue received in 2022.
General Fund Expenditures and Capital Outlay
Departments were encouraged to be prudent and frugal with spending due to uncertainty regarding supply
chain issues and inflation concerns . Most capital funding was to complete existing, ongoing projects, to
purchase critical equipment, or for grant funded projects.
10
[[page 21]]
City of Gallatin, Tennessee
Management’s Discussion and Analysis (Unaudited)
June 30, 2023
General Fund Balance
At the end of the current fiscal year, unassigned fund balance in the general fund was $53.75 million. The increase
from the previous year was related to better than anticipated revenue collections, delayed capital expenditures
and conservative operating expenditures. Departments city-wide are implementing various changes to function
more efficiently and more economically.
Next Year’s Budget and Rates
The City has no plans to increase the property tax rate paid by citizens in the next fiscal year. While preparing
the next budget in the midst of the inflation uncertainty, management took a conservative approach to
revenue projections. Spending increases were focused on employee retention measures and new capital
to keep pace with the needs and wants of a rapidly growing population. The City will continue to watch the
national and world economic factors that could influence the local economy and will make any necessary mid-
year adjustments to operate within available revenues.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Gallatin's finances for citizens,
taxpayers, customers, investors, creditors and all others with an interest in the City's finances. Questions concerning
any of the information provided in this report or requests for additional financial information should be addressed
to the Department of Finance, City of Gallatin, 132 West Main Street, Gallatin, TN, 37066.
11
[[page 22]]
City of Gallatin, Tennessee
Statement of Net Position
June 30, 2023
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents $ 54,379,311 $ 49,749,098 $ 104,128,409
Certificates of deposit 9,505,150 5,328,776 14,833,926
Investments 21,025 - 21,025
Receivables, net of allowance for uncollectibles 21,632,963 10,222,113 31,855,076
Inventories 68,043 8,038,260 8,106,303
Prepaid items and other assets 11,102 114,871 125,973
Restricted assets
Cash and cash equivalents 5,229,345 641,155 5,870,500
TCRS Stabilization Fund 1,086,305 254,852 1,341,157
Capital assets
Land and construction in progress 13,780,889 5,971,219 19,752,108
Other capital assets, net of accumulated depreciation 161,205,587 214,682,229 375,887,816
Total assets 266,919,720 295,002,573 561,922,293
Deferred Outflows of Resources
Deferred charge on refunding - 2,444,656 2,444,656
Deferred outflows related to pensions 660,931 3,581,789 4,242,720
Deferred outflows related to OPEB - - -
Total deferred outflows of resources 660,931 6,026,445 6,687,376
Total assets and deferred outflows
of resources $ 267,580,651 $ 301,029,018 $ 568,609,669
Continued
See notes to financial statements 12
[[page 23]]
City of Gallatin, Tennessee
Statement of Net Position
June 30, 2023
Governmental Business-type
Activities Activities Total
Liabilities
Accounts payable and accrued expenses $ 2,320,682 $ 13,686,006 $ 16,006,688
Unearned revenues 115,514 - 115,514
Accrued interest 419,827 - 419,827
Deposits held - 5,787,182 5,787,182
Other deposits 5,010,655 - 5,010,655
Aid to construction - 5,206,874 5,206,874
Other liabilities - 1,579 1,579
Long-term debt, current portion 2,093,501 3,198,478 5,291,979
Long-term lease liabilities, current portion - 1,299 1,299
Other long-term liabilities, current portion 1,712,715 690,768 2,403,483
Long-term debt, net of current portion 24,062,458 44,272,296 68,334,754
Other long- term liabilities, net of current portion 478,527 390,227 868,754
OPEB liability - 526,990 526,990
Net pension liability 194,396 553,494 747,890
Total liabilities 36,408,275 74,315,193 110,723,468
Deferred Inflows of Resources
Deferred current property taxes 14,979,744 - 14,979,744
Deferred inflows related to pensions 35,235 228,120 263,355
Deferred inflows related to OPEB - - -
Total deferred inflows of resources 15,014,979 228,120 15,243,099
Net Position
Net investment in capital assets 148,606,993 175,181,523 323,788,516
Restricted for:
Pension benefits 891,909 207,036 1,098,945
Capital projects 6,782,529 - 6,782,529
Funds held in trust 444,634 - 444,634
Environmental services 1,988,232 - 1,988,232
Drug enforcement 224,920 - 224,920
Stormwater 3,201,198 - 3,201,198
Other purposes - 7,810 7,810
Perpetual care
Expendable 16,653 - 16,653
Nonexpendable 21,025 - 21,025
Unrestricted 53,979,304 51,089,336 105,068,640
Total net position 216,157,397 226,485,705 442,643,102
Total liabilities, deferred inflows of
resources, and net position $ 267,580,651 $ 301,029,018 $ 568,609,669
See notes to financial statements 13
[[page 24]]
City of Gallatin, Tennessee
Statement of Activities
For the Fiscal Year Ended June 30, 2023
Net (Expenses) Revenues
Program Revenues and Changes in Net Position
Operating Capital Primary Government
Charges for Grants and Grants and Governmental Business-type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Primary Government
Governmental Activities
Administrative and general $ 11,491,711 $ 6,252,744 $ 1,546,858 $ - $ (3,692,109) $ - $ (3,692,109)
Public safety 21,445,885 823,041 571,070 - (20,051,774) - (20,051,774)
Engineering 3,045,455 - 17,500 - (3,027,955) - (3,027,955)
Environmental 3,499,967 3,269,469 45,203 - (185,295) - (185,295)
Public works 815,980 - 9,375 - (806,605) - (806,605)
Highways and streets 1,700,671 - 1,672,656 8,345,507 8,317,492 - 8,317,492
Vehicle maintenance 415,838 45,799 12,500 - (357,539) - (357,539)
Recreation 5,579,699 2,547,386 13,000 - (3,019,313) - (3,019,313)
Economic development 477,555 - 7,500 - (470,055) - (470,055)
Interest on long-term debt 602,819 - - - (602,819) - (602,819)
Total governmental activities 49,075,580 12,938,439 3,895,662 8,345,507 (23,895,972) - (23,895,972)
Business-type Activities
Electric 77,786,114 77,406,019 - 4,158,400 - 3,778,305 3,778,305
Water and sewer 16,836,539 19,126,293 - 2,253,812 - 4,543,566 4,543,566
Gas 19,001,406 19,163,841 - - - 162,435 162,435
Total business-type activities 113,624,059 115,696,153 - 6,412,212 - 8,484,306 8,484,306
Total primary government $ 162,699,639 $ 128,634,592 $ 3,895,662 $ 14,757,719 (23,895,972) 8,484,306 (15,411,666)
General Revenues
Taxes
Property taxes, levied for general government 14,214,670 - 14,214,670
In lieu of taxes, other governments 716,406 - 716,406
Sales taxes 20,594,060 - 20,594,060
Franchise taxes 397,976 - 397,976
Alcoholic beverage taxes 2,137,608 - 2,137,608
Business taxes 2,315,524 - 2,315,524
Income taxes 755 - 755
Miscellaneous state taxes 141,567 - 141,567
Other sources 720,038 - 720,038
Unrestricted investment earnings 847,158 886,820 1,733,978
Gain (loss) on sales of assets 494,844 (60,207) 434,637
Transfers, net 1,624,804 (1,624,804) -
Total general revenues, contributions, and transfers 44,205,410 (798,191) 43,407,219
Change in net position 20,309,438 7,686,115 27,995,553
Net position, beginning of year 195,847,959 218,799,590 414,647,549
Net position, end of year $ 216,157,397 $ 226,485,705 $ 442,643,102
See notes to financial statements 14
[[page 25]]
City of Gallatin, Tennessee
Balance Sheet
Governmental Funds
June 30, 2023
Other Total
Capital Governmental Governmental
General Fund Projects Fund Funds Funds
Assets
Cash and cash equivalents $ 41,845,952 $ 7,006,053 $ 5,527,306 $ 54,379,311
Certificates of deposit 9,505,150 - - 9,505,150
Investments - - 21,025 21,025
Receivables
Interest 333,946 - - 333,946
Taxes (net of allowance of $273,992) 14,645,799 - - 14,645,799
Accounts (net of allowance of
$20,937) 564,480 - 524,185 1,088,665
Fines (net of allowance of
$2,231,602) 7,522 - - 7,522
Grants 841,155 - - 841,155
Intergovernmental 4,131,475 - - 4,131,475
Inventories 51,333 - 16,710 68,043
Prepaid expense - - 11,102 11,102
Restricted assets
Cash and cash equivalents 5,229,345 - - 5,229,345
TCRS Stabilization Fund 1,031,697 - 54,608 1,086,305
Total assets $ 78,187,854 $ 7,006,053 $ 6,154,936 $ 91,348,843
Liabilities
Accounts payable $ 1,238,721 $ 223,524 $ 132,265 $ 1,594,510
Retainage payable - - - -
Accrued expenses 726,172 - - 726,172
Unearned revenues 77,520 - - 77,520
Unearned evidence funds - - 65,006 65,006
Performance deposits 5,010,655 - - 5,010,655
Total liabilities 7,053,068 223,524 197,271 7,473,863
Deferred Inflows of Resources
Unavailable revenues, property tax 14,979,744 - - 14,979,744
Unavailable revenues, court fines 7,521 - - 7,521
Total deferred inflows of resources 14,987,265 - - 14,987,265
Continued
See notes to financial statements 15
[[page 26]]
City of Gallatin, Tennessee
Balance Sheet
Governmental Funds
June 30, 2023
Other Total
Capital Governmental Governmental
General Fund Projects Fund Funds Funds
Fund Balances
Nonspendable
Prepaid items - - 11,102 11,102
Funds held in trust - - 21,025 21,025
Inventories 51,333 - 16,710 68,043
Restricted for
Capital projects - 6,782,529 - 6,782,529
Funds held in trust - - 444,634 444,634
Environmental services - - 1,988,232 1,988,232
Drug enforcement - - 160,170 160,170
Economic development - - - -
Stormwater - - 3,201,198 3,201,198
Hybrid Retirement Stabilization Funds 1,031,697 - 54,608 1,086,305
Committed for
Economic development 273,799 - - 273,799
Occupancy tax 1,041,177 1,041,177
Assigned for
Capital projects - - - -
Police special projects - - 43,333 43,333
Cemetery - - 16,653 16,653
Unassigned 53,749,515 - - 53,749,515
Total fund balances 56,147,521 6,782,529 5,957,665 68,887,715
Total liabilities, deferred inflows of
resources, and fund balance $ 78,187,854 $ 7,006,053 $ 6,154,936 $ 91,348,843
See notes to financial statements 16
[[page 27]]
City of Gallatin, Tennessee
Reconciliation of Balance Sheet to Statement of Net Position
Governmental Funds
June 30, 2023
Amounts reported for fund balance, total governmental funds $ 68,887,715
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds. 174,986,476
Amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be amortized and
recognized as components of the related expense in future years. 625,696
Net pension assets and liabilities are not due in the current period
and, therefore, are not reported in the funds. (194,396)
Receivables are not available to pay for current period expenditures
and, therefore, are deferred or not reported in the funds. 618,935
Long-term liabilities, including bonds payable, are not due and payable
in the current period and, therefore, are not recorded in the funds. (28,767,029)
Net position of governmental activities $ 216,157,397
See notes to financial statements 17
[[page 28]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Fiscal Year Ended June 30, 2023
Other Total
Capital Governmental Governmental
General Fund Projects Fund Funds Funds
Revenues
Local taxes $ 34,020,171 $ - $ - $ 34,020,171
Licenses and permits 3,694,996 - - 3,694,996
Intergovernmental revenues 16,130,376 916,536 - 17,046,912
Charges for services 3,148,588 - 5,271,814 8,420,402
Fines 748,936 - 74,105 823,041
Other 1,988,248 597,100 245,970 2,831,318
Total revenues 59,731,315 1,513,636 5,591,889 66,836,840
Expenditures
Current
General government 9,634,216 - - 9,634,216
Public safety 23,403,783 - 127,553 23,531,336
Engineering 2,857,815 - - 2,857,815
Environmental services - - 3,295,676 3,295,676
Public works 3,056,827 - - 3,056,827
Highways and streets 1,437,998 - - 1,437,998
Vehicle maintenance 429,544 - - 429,544
Parks and recreation 5,527,163 - - 5,527,163
Economic development 506,618 - - 506,618
Debt service
Principal 1,780,000 - - 1,780,000
Interest 911,850 - - 911,850
Other debt service expense 1,253 - - 1,253
Capital outlay - 2,793,524 827,182 3,620,706
Total expenditures 49,547,067 2,793,524 4,250,411 56,591,002
Excess (deficiency) of revenues
over expenditures 10,184,248 (1,279,888) 1,341,478 10,245,838
Other financing sources (uses)
Transfers in, in lieu of taxes 1,824,463 - - 1,824,463
Transfers in/(out) (247,088) - (98,236) (345,324)
Total other financing sources
(uses) 1,577,375 - (98,236) 1,479,139
Change in fund balance 11,761,623 (1,279,888) 1,243,242 11,724,977
Fund balance, beginning of year 44,385,898 8,062,417 4,714,423 57,162,738
Fund balance, end of year $ 56,147,521 $ 6,782,529 $ 5,957,665 $ 68,887,715
See notes to financial statements 18
[[page 29]]
City of Gallatin, Tennessee
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance
of Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2023
Net change in fund balance, total governmental funds $ 11,724,977
Amounts reported for governmental activities in the
statement of activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets is allocated
over their estimated useful lives and reported as depreciation expense.
Depreciation expense 7,828,471
The net effect of various transactions involving capital assets (i.e., sales,
trade-ins, and contributed assets) is to increase net position 6,777,589
Revenues in the statement of activities that do not provide current financial
financial resources are not reported as revenues in the funds, and revenues
received in the current year that were accrued in the statement of activities
in prior years are reported as revenues in the funds. (5,708,550)
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt
consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also, governmental funds
report the effects of premiums, discounts, losses on refunding's, and similar
items when debt is first issued, whereas these amounts are deferred and
amortized in the statement of activities. This amount is the net effect of these
differences in the treatment of long-term debt and related items. 2,057,666
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. Other items such as contributions to pension funds are
expensed in the funds while an actuarially determined expense amount is
included in the statement of activities. (2,370,715)
Change in net position of governmental activities $ 20,309,438
See notes to financial statements 19
[[page 30]]
City of Gallatin, Tennessee
Statement of Net Position
Proprietary Funds
June 30, 2023
Electric Water and Gas
Department Sewer Dept Department Total
Assets
Current assets
Cash and cash equivalents, general $ 17,520,849 $ 24,864,170 $ 7,364,079 $ 49,749,098
Cash and cash equivalents, restricted 7,810 510,359 122,986 641,155
Certificates of deposit 5,328,776 - - 5,328,776
Accounts receivable, trade, net of
allowance for doubtful accounts 7,163,136 1,748,351 1,204,285 10,115,772
Prepayments and other current
assets 114,871 - - 114,871
Materials and supplies 3,505,364 1,173,287 3,359,609 8,038,260
Non-current receivables, current
portion 840 - - 840
Total current assets 33,641,646 28,296,167 12,050,959 73,988,772
Other assets
Other receivables 104,915 - - 104,915
TCRS Stabilization Fund - 187,457 67,395 254,852
TVA contracts receivables,
home weatherization 1,426 - - 1,426
Less: amount due within one year (840) - - (840)
Total other assets 105,501 187,457 67,395 360,353
Capital assets
Land 2,885,957 1,736,014 231,447 4,853,418
Construction in progress 1,117,801 - - 1,117,801
Other capital assets, net
of depreciation
Transmission plant 968,615 - - 968,615
Distribution plant 32,274,494 108,039,273 44,062,055 184,375,822
General plant 3,011,319 - - 3,011,319
General plant, right to use
leased equipment 1,143 - - 1,143
Buildings - 23,832,769 1,527,971 25,360,740
Operating equipment - 428,857 103,442 532,299
Rolling stock - 338,439 72,009 410,448
Office furniture and equipment - (3,646) 25,489 21,843
Total capital assets 40,259,329 134,371,706 46,022,413 220,653,448
Total assets 74,006,476 162,855,330 58,140,767 295,002,573
Deferred Outflows of Resources
Deferred charge on bond refunding - 2,444,656 - 2,444,656
Deferred outflows related to pensions 3,423,069 118,670 40,050 3,581,789
Deferred outflows related to OPEB - - - -
Total deferred outflows of resources 3,423,069 2,563,326 40,050 6,026,445
Total assets and deferred outflows
of resources $ 77,429,545 $ 165,418,656 $ 58,180,817 $ 301,029,018
Continued
See notes to financial statements 20
[[page 31]]
City of Gallatin, Tennessee
Statement of Net Position
Proprietary Funds
June 30, 2023
Electric Water and Gas
Department Sewer Dept Department Total
Liabilities
Current liabilities
Accounts payable $ 11,480,556 $ 324,663 $ 881,756 $ 12,686,975
Retainage payable - 510,359 122,986 633,345
Other accrued expenses 363,510 370 1,806 365,686
Customers' deposits 4,977,876 527,514 281,792 5,787,182
Accrued leave 289,110 339,721 61,937 690,768
Lease liabilities, current portion 1,299 - - 1,299
Long-term debt, current portion 2,139 2,960,079 236,260 3,198,478
Total current liabilities 17,114,490 4,662,706 1,586,537 23,363,733
Long-term liabilities
Bonds payable (less current
maturities) - 36,605,000 4,515,000 41,120,000
Accrued leave 171,378 155,221 63,628 390,227
TVA advances payable,
home weatherization 1,579 - - 1,579
Aid to construction 5,206,874 - - 5,206,874
Net pension liability 505,678 35,564 12,252 553,494
OPEB liability 526,990 - - 526,990
Bond premiums - 2,884,806 267,490 3,152,296
Total long-term liabilities 6,412,499 39,680,591 4,858,370 50,951,460
Total liabilities 23,526,989 44,343,297 6,444,907 74,315,193
Deferred Inflows of Resources
Deferred inflows related to pensions 220,491 5,984 1,645 228,120
Total liabilities and deferred inflows
of resources 23,747,480 44,349,281 6,446,552 74,543,313
Net Position
Net investment in capital assets 40,258,030 94,258,677 40,664,816 175,181,523
Restricted for:
Workers' compensation adjustment 7,810 - - 7,810
Pension benefits - 151,893 55,143 207,036
Unrestricted 13,416,225 26,658,805 11,014,306 51,089,336
Total net position 53,682,065 121,069,375 51,734,265 226,485,705
Total liabilities, deferred inflows of
resources, and net position $ 77,429,545 $ 165,418,656 $ 58,180,817 $ 301,029,018
See notes to financial statements 21
[[page 32]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Electric Water and Gas
Department Sewer Dept Department Total
Operating Revenues
Charges for sales and service $ 76,292,985 $ 18,723,929 $ 18,846,525 $ 113,863,439
Fines and forfeitures 292,406 128,457 - 420,863
Other operating revenue 820,628 273,907 317,316 1,411,851
Total operating revenues 77,406,019 19,126,293 19,163,841 115,696,153
Operating Expenses
Cost of sales and service 64,561,537 - 15,627,368 80,188,905
Water treatment and pumping - 2,729,294 - 2,729,294
Transmission and distribution 5,771,380 2,477,257 630,964 8,879,601
Customer service and collection 956,731 779,212 734,945 2,470,888
General administration 2,549,194 1,444,118 519,245 4,512,557
Sewer collection - 1,216,513 - 1,216,513
Sewer system rehab - 521,631 - 521,631
Sewer treatment and disposal - 1,799,249 - 1,799,249
Sewer pretreatment - 101,138 - 101,138
Maintenance 1,654,192 - - 1,654,192
Customer deposit interest 46,751 - - 46,751
Amortization, acquisition adjustment 3,347 - - 3,347
Provision for depreciation 2,242,982 4,783,198 1,345,378 8,371,558
Total operating expenses 77,786,114 15,851,610 18,857,900 112,495,624
Operating income (loss) (380,095) 3,274,683 305,941 3,200,529
Non-operating revenues (expenses)
Interest and other income 320,998 306,916 258,906 886,820
Tap fees - 722,672 - 722,672
Amortization of bond premiums - 365,733 - 365,733
Interest and other expense - (1,350,662) (143,506) (1,494,168)
Other gains and losses - (60,591) 384 (60,207)
Total non-operating revenues
(expenses) 320,998 (15,932) 115,784 420,850
Income before contributions and
transfers (59,097) 3,258,751 421,725 3,621,379
Capital contributions 4,158,400 1,531,140 - 5,689,540
Transfers in ARPA fund - 178,579 21,080 199,659
Transfers out, in lieu of taxes (1,043,191) (362,330) (418,942) (1,824,463)
Change in net position 3,056,112 4,606,140 23,863 7,686,115
Net position, beginning of year 50,625,953 116,463,235 51,710,402 218,799,590
Net position, end of year $ 53,682,065 $ 121,069,375 $ 51,734,265 $ 226,485,705
See notes to financial statements 22
[[page 33]]
City of Gallatin, Tennessee
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Electric Water and Gas
Department Sewer Dept Department Total
Cash flows from operating activities
Cash received from customers $ 78,191,430 $ 19,083,221 $ 19,268,066 $ 116,542,717
Cash payments to suppliers for
goods and services (73,869,795) (5,900,263) (18,417,487) (98,187,545)
Cash payments to employees for
services (3,823,310) (4,904,613) (1,683,418) (10,411,341)
Interest payments on customer
deposits (25,385) - - (25,385)
Net decrease in TVA loan funds
receivable 3,931 - - 3,931
Net decrease in TVA loan funds
payable (4,495) - - (4,495)
Net cash provided (used) by
operating activities 472,376 8,278,345 (832,839) 7,917,882
Cash flows from noncapital financing activities
Transfers out (1,043,191) (362,330) (418,942) (1,824,463)
Transfers in - 178,579 21,080 199,659
Net cash provided (used) by
noncapital financing activities (1,043,191) (183,751) (397,862) (1,624,804)
Cash flows from capital and related financing activities
Capital contributions by customers
and grants 4,158,400 - - 4,158,400
Proceeds from tap fees - 722,672 - 722,672
Principal paid on debt - (2,480,000) (210,000) (2,690,000)
Interest paid on bonds, notes,
and leases - (1,797,002) (316,335) (2,113,337)
Construction and acquisition of plant (3,881,798) (3,432,116) (5,115,644) (12,429,558)
Plant removal cost (122,237) - - (122,237)
Salvage 581,788 - - 581,788
Other - (60,591) 384 (60,207)
Net cash provided (used) by
capital and related financing
activities 736,153 (7,047,037) (5,641,595) (11,952,479)
Cash flows from investing activities
Purchase of certificates of deposit (564,600) - - (564,600)
Interest and other income 316,019 306,916 258,906 881,841
Net cash provided (used) by
investing activities (248,581) 306,916 258,906 317,241
Net change in cash and cash
equivalents (83,243) 1,354,473 (6,613,390) (5,342,160)
Cash and cash equivalents,
beginning of year 17,611,902 24,020,056 14,100,455 55,732,413
Cash and cash equivalents,
end of year $ 17,528,659 $ 25,374,529 $ 7,487,065 $ 50,390,253
Cash and Cash Equivalents
Unrestricted cash and cash
equivalents on deposit $ 17,520,849 $ 24,864,170 $ 7,364,079 $ 49,749,098
Restricted cash and cash equivalents
on deposit 7,810 510,359 122,986 641,155
Total cash and cash equivalents $ 17,528,659 $ 25,374,529 $ 7,487,065 $ 50,390,253
See notes to financial statements 23
[[page 34]]
City of Gallatin, Tennessee
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Electric Water and Gas
Department Sewer Dept Department Total
Reconciliation of operating income
to net cash provided (used) by
operating activities
Operating income (loss) $ (380,095) $ 3,274,683 $ 305,941 $ 3,200,529
Adjustments to reconcile
operating income to net cash
provided (used) by operating
activities
Depreciation and amortization
of acquisition costs 2,430,468 4,783,198 1,345,378 8,559,044
Recovery of bad debt - 9,436 4,812 14,248
Change in:
Accounts receivable 785,411 (58,846) 95,970 822,535
Materials and supplies (1,217,112) (205,548) (1,456,443) (2,879,103)
Prepayments and other
current assets (23,390) - 39,467 16,077
TVA contracts receivable 3,931 - - 3,931
Deferred outflows of
resources (2,119,060) (40,617) (13,446) (2,173,123)
TCRS stabilization fund - (37,454) (17,025) (54,479)
Pension asset - 12,550 3,677 16,227
Accounts payable (587,836) 418,021 (1,167,718) (1,337,533)
Other accrued expenses 78,414 - 16 78,430
Customers' deposits (129,540) 15,774 8,255 (105,511)
Accrued leave 70,752 102,091 16,123 188,966
Lease liability (3,710) - - (3,710)
TVA contracts payable (4,495) - - (4,495)
Pension liability 3,336,689 35,564 12,252 3,384,505
OPEB liability (103,255) - - (103,255)
Deferred inflows of resources (1,664,796) (30,507) (10,098) (1,705,401)
Net cash provided (used) by
operating activities $ 472,376 $ 8,278,345 $ (832,839) $ 7,917,882
Supplemental disclosure of noncash
capital and related financing
activities
Utility plant additions financed
accounts payable $ - $ 6,277 $ 383,919 $ 390,196
Utility plant additions financed by
retainage payable - 510,359 122,986 633,345
Developer contributions of systems - 1,531,140 - 1,531,140
$ - $ 2,047,776 $ 506,905 $ 2,554,681
See notes to financial statements 24
[[page 35]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Revenues
Local taxes
Property taxes, current $ 13,512,000 $ 13,559,250 $ 13,948,371 389,121
Property taxes, delinquent 150,000 150,000 214,361 64,361
Property taxes, penalty and interest 60,000 60,000 51,938 (8,062)
Local sales taxes 13,750,000 14,050,000 15,289,504 1,239,504
Local beer taxes 1,228,000 1,228,000 1,193,410 (34,590)
Local liquor taxes 557,000 557,000 609,087 52,087
Business taxes 1,198,000 1,198,000 1,883,802 685,802
Privilege taxes 28,000 28,000 33,432 5,432
Cable taxes 465,000 465,000 397,976 (67,024)
Occupancy taxes 309,000 309,000 393,171 84,171
Special assessments 5,000 5,000 5,119 119
Total local taxes 31,262,000 31,609,250 34,020,171 2,410,921
Licenses and permits
Beer licenses 5,000 5,000 8,150 3,150
Building permits 875,000 875,000 1,087,640 212,640
Plumbing permits 225,000 225,000 304,539 79,539
Planning fees 325,000 325,000 442,793 117,793
Other mechanical permits 350,000 350,000 409,250 59,250
Other permits 1,290,000 1,290,000 1,442,624 152,624
Total licenses and permits 3,070,000 3,070,000 3,694,996 624,996
Fines and forfeitures
Fines and forfeitures 334,250 434,250 553,687 119,437
ACES red light revenue 120,000 120,000 169,031 49,031
Drug fines 19,500 19,500 26,218 6,718
Total fines and forfeitures 473,750 573,750 748,936 175,186
Intergovernmental revenues
In lieu of tax, housing authority 3,600 3,600 3,672 72
In lieu of tax, industry 161,000 161,000 178,528 17,528
State sales tax 4,884,000 4,884,000 5,304,556 420,556
State income tax - - 755 755
State beer tax 20,500 20,500 20,288 (212)
State mixed drink tax 225,000 225,000 314,823 89,823
State gas and motor fuel tax 1,584,000 1,584,000 1,543,508 (40,492)
State petroleum special 80,500 80,500 81,398 898
State telecomm - - 18 18
State TVA in lieu of tax 462,000 462,000 534,206 72,206
State excise tax 115,000 115,000 141,549 26,549
State salary supplements - 128,000 128,000 -
Other federal grants 747,766 16,421,918 7,505,566 (8,916,352)
Sidewalk grant - 1,255,947 75,519 (1,180,428)
Government highway safety grant - - - -
Other state grants 4,500 504,500 297,990 (206,510)
Total intergovernmental revenues 8,287,866 25,845,965 16,130,376 (9,715,589)
Continued
See notes to financial statements 25
[[page 36]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Revenues
Charges for services
Admin and management services 180,000 180,000 245,001 65,001
Accounting and management
services 95,766 95,766 95,766 -
Personnel services 50,629 50,629 50,629 -
Other legal services 108,361 108,361 108,361 -
Miscellaneous 23,000 23,000 6,946 (16,054)
Vehicle maintenance charges 220,000 220,000 45,799 (174,201)
Rent 35,000 35,000 48,700 13,700
Golf course revenue 866,000 1,041,000 1,556,540 515,540
Civic center revenue 779,800 779,800 990,846 211,046
Total charges for services 2,358,556 2,533,556 3,148,588 615,032
Miscellaneous revenues
Miscellaneous 71,000 1,050,920 160,474 (890,446)
Sale of cemetery lots 500 500 - (500)
Sale of materials 2,000 2,000 15,837 13,837
Sale of equipment 30,000 145,460 179,502 34,042
Donations 475,000 477,141 519,327 42,186
Insurance recoveries - 97,421 283,782 186,361
Interest 50,000 160,000 829,326 669,326
Total miscellaneous revenues 628,500 1,933,442 1,988,248 54,806
Total revenues 46,080,672 65,565,963 59,731,315 (5,834,648)
Expenditures
General government
Mayor's office
Salaries 290,939 290,939 286,162 4,777
Employee benefits and taxes 74,464 74,464 75,817 (1,353)
Official fees 48,650 48,650 37,308 11,342
Printing and publications 8,800 8,800 11,276 (2,476)
Membership fees 52,000 52,000 51,558 442
Utilities 3,000 3,000 828 2,172
Other professional services 115,000 115,000 318,237 (203,237)
Travel and meals 17,500 17,500 13,114 4,386
Mayor's expenses 5,000 5,000 4,330 670
Council expenses 14,000 14,000 5,658 8,342
Office supplies 6,850 6,850 2,332 4,518
Repairs and maintenance 20,000 20,000 - 20,000
Payments in lieu of tax 209,000 209,000 208,638 362
County portion of liquor tax 120,000 120,000 184,702 (64,702)
Discounts on taxes 14,000 14,000 12,368 1,632
Grants and donations 6,000 6,000 3,681 2,319
RTA program 55,597 55,597 55,597 -
Prizes and awards 16,000 16,000 13,253 2,747
Miscellaneous 41,850 41,850 (189,605) 231,455
Capital outlay 109,500 3,075,925 23,466 3,052,459
Total mayor's office 1,228,150 4,194,575 1,118,720 3,075,855
Continued
See notes to financial statements 26
[[page 37]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
General government
Finance department
Salaries 551,930 551,930 470,514 81,416
Employee benefits and taxes 148,956 148,956 119,760 29,196
Postage 4,000 4,000 2,210 1,790
Printing and publications 3,750 3,750 2,721 1,029
Membership fees 1,000 1,000 310 690
Utilities 870 870 700 170
Accounting services 80,000 80,000 80,750 (750)
Repairs and maintenance 1,000 1,000 753 247
Training 2,000 2,000 790 1,210
Operating supplies 4,750 4,750 4,063 687
Miscellaneous 1,700 1,700 (7,411) 9,111
Capital outlay 3,500 69,500 - 69,500
Total finance department 803,456 869,456 675,160 194,296
City recorder
Salaries 345,311 345,311 250,987 94,324
Employee benefits and taxes 128,865 128,865 88,007 40,858
Postage 16,000 16,000 16,188 (188)
Printing and publications 600 600 765 (165)
Membership fees 3,000 3,000 598 2,402
Utilities - - 452 (452)
Data processing services 20,000 20,000 - 20,000
Other professional services 206,000 311,577 583 310,994
Travel 1,500 1,500 - 1,500
Other contractual services 5,000 5,000 3,457 1,543
Office supplies 4,000 4,000 3,783 217
Miscellaneous 12,250 12,250 16,543 (4,293)
Capital outlay - - - -
Total city recorder 742,526 848,103 381,363 466,740
Risk management
HRA expense 200,000 200,000 170,939 29,061
Workers compensation 350,000 442,250 456,322 (14,072)
ADA transition plan - - - -
Building insurance 125,000 125,000 90,976 34,024
General liability 400,000 400,000 390,658 9,342
Total risk management 1,075,000 1,167,250 1,108,895 58,355
Continued
See notes to financial statements 27
[[page 38]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
General government
Attorney
Salaries 389,448 390,685 382,970 7,715
Employee benefits and taxes 98,901 99,107 91,845 7,262
Printing and publications 2,800 2,800 2,444 356
Licenses 650 650 - 650
Tax law and other publications 11,000 11,000 12,426 (1,426)
Membership fees 3,000 3,000 3,486 (486)
Utilities 1,400 1,400 1,024 376
Legal services 35,000 70,000 93,951 (23,951)
Other professional services 10,000 10,000 325 9,675
Travel and meals 4,250 4,250 4,814 (564)
Training 3,500 3,500 3,212 288
Office supplies 650 650 256 394
Educational supplies 39,974 39,974 (4,182) 44,156
Miscellaneous 8,200 8,200 1,372 6,828
Capital outlay - 368 - 368
Total attorney 608,773 645,584 593,943 51,641
Information technology
Salaries 590,223 590,223 577,308 12,915
Employee benefits and taxes 182,628 182,628 176,004 6,624
Copier expense 250 250 230 20
Membership fees 500 500 - 500
Utilities 5,000 5,000 4,441 559
Other professional services 635,886 660,886 123,038 537,848
Other contractual services 863,737 863,737 841,260 22,477
Office supplies 1,500 1,500 2,208 (708)
Operating supplies 8,000 8,000 6,768 1,232
Miscellaneous 2,400 2,400 5,373 (2,973)
Capital outlay 610,406 633,862 360,605 273,257
Total information technology 2,900,530 2,948,986 2,097,235 851,751
Personnel
Salaries 313,185 313,185 294,048 19,137
Employee benefits and taxes 118,231 118,231 88,437 29,794
Printing and publications 3,000 3,000 1,717 1,283
Utilities 625 625 521 104
Physicals 500 500 88 412
Professional services 11,625 11,625 - 11,625
Training 4,000 4,000 2,200 1,800
Office supplies 2,900 2,900 1,853 1,047
Operating supplies 500 500 2,489 (1,989)
Miscellaneous 7,650 7,650 5,913 1,737
Repairs and maintenance - - 1,970 (1,970)
Capital outlay 1,000 1,000 1,371 (371)
Total personnel 463,216 463,216 400,607 62,609
Continued
See notes to financial statements 28
[[page 39]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
General government
City planner
Salaries 592,867 595,639 595,658 (19)
Employee benefits and taxes 199,567 200,028 189,900 10,128
Planning commission 18,000 18,000 18,175 (175)
Postage 1,000 1,000 271 729
Printing and publications 4,000 4,000 2,074 1,926
Membership fees 3,000 3,000 1,579 1,421
Utilities 4,000 4,000 2,781 1,219
Repairs and maintenance 1,700 1,700 79 1,621
Office supplies 4,300 4,300 2,128 2,172
Gas, oil, diesel, etc. 800 800 975 (175)
Miscellaneous 28,150 28,150 9,620 18,530
Capital outlay 3,200 6,700 3,442 3,258
Total city planner 860,584 867,317 826,682 40,635
Buildings
Salaries 280,714 283,485 253,927 29,558
Employee benefits and taxes 101,458 101,919 84,354 17,565
Utilities 80,456 80,456 72,811 7,645
Repairs and maintenance 27,500 27,500 27,797 (297)
Other contractual services 18,000 18,000 43,904 (25,904)
Small equipment 2,000 2,000 1,396 604
Operating supplies 3,000 3,000 2,307 693
Janitorial supplies 7,000 7,000 8,080 (1,080)
Gas, oil, diesel, etc. 5,000 5,000 2,594 2,406
Miscellaneous 4,200 4,200 2,399 1,801
Capital outlay 15,000 116,670 11,817 104,853
Total buildings 544,328 649,230 511,386 137,844
Codes
Salaries 1,164,661 1,164,661 1,070,924 93,737
Employee benefits and taxes 432,396 432,396 356,615 75,781
Postage 720 720 200 520
Printing and publications 10,800 10,800 2,829 7,971
Membership fees 5,000 5,000 3,201 1,799
Utilities 22,000 22,000 13,437 8,563
Repairs and maintenance 4,000 4,000 1,922 2,078
Other professional services 18,000 18,000 5,702 12,298
Office supplies 4,000 4,000 1,637 2,363
Gas, oil, diesel, etc. 15,500 15,500 17,883 (2,383)
Miscellaneous 60,800 60,800 86,128 (25,328)
Capital outlay 2,000 73,350 72,702 648
Total codes 1,739,877 1,811,227 1,633,180 178,047
Community services
July 4th celebration 23,500 23,500 11,575 11,925
Appropriations to non-profits 275,470 275,470 275,470 -
Total community services 298,970 298,970 287,045 11,925
Total general government 11,265,410 14,763,914 9,634,216 5,129,698
Continued
See notes to financial statements 29
[[page 40]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
Public safety
Police
Salaries 6,190,005 6,244,405 6,126,575 117,830
Employee benefits and taxes 2,565,506 2,567,791 2,101,332 466,459
Postage 3,000 3,000 3,257 (257)
Printing and publications 24,400 24,400 20,347 4,053
Membership fees 5,500 5,500 3,515 1,985
Public relations 1,500 1,500 1,356 144
Utilities 91,955 91,955 94,554 (2,599)
Physicals 12,000 12,000 16,142 (4,142)
Data processing services 25,000 25,000 20,658 4,342
Repairs and maintenance 148,500 148,500 221,819 (73,319)
Travel 25,000 35,206 18,044 17,162
Other contractual services 90,000 542,927 333,138 209,789
Inmate crew expense 1,200 1,200 - 1,200
Reserve officers expense 15,000 330,000 40,563 289,437
Office supplies 5,100 16,135 4,769 11,366
Small office equipment 3,000 19,501 13,749 5,752
Operating supplies 32,000 272,000 37,996 234,004
Janitorial supplies 1,500 1,500 3,419 (1,919)
Clothing and uniforms 45,000 45,000 82,029 (37,029)
Fire arm supplies 35,000 35,305 30,268 5,037
Other operating supplies 3,000 3,000 2,876 124
Gas, oil, diesel, etc. 165,500 165,500 267,740 (102,240)
Other supplies 3,000 3,000 1,680 1,320
Traffic light camera expense 110,000 110,000 86,934 23,066
Other grants and donations 1,025,462 1,025,462 1,410,484 (385,022)
Professional Services - 26,410 26,410 -
Capital outlay 630,000 767,275 752,629 14,646
Total police 11,257,128 12,523,472 11,722,283 801,189
Fire
Salaries 6,006,732 6,114,146 5,956,422 157,724
Employee benefits and taxes 2,368,738 2,373,106 2,080,896 292,210
Printing and publications 2,000 2,000 710 1,290
Membership fees 8,000 8,000 6,142 1,858
Utilities 88,805 88,805 80,380 8,425
Physicals 50,500 50,500 57,575 (7,075)
Repairs and maintenance 207,500 238,092 207,501 30,591
Travel 30,000 30,000 26,605 3,395
Other contractual services 49,000 49,000 32,655 16,345
Training 75,000 75,000 74,400 600
Office supplies 2,500 2,500 2,515 (15)
Small office equipment 500 500 571 (71)
Operating supplies 20,000 20,000 17,171 2,829
Janitorial supplies 12,000 12,000 11,374 626
Clothing and uniforms 50,000 50,000 47,520 2,480
Fire prevention supplies 8,000 8,000 7,853 147
Gas, oil, diesel, etc. 95,000 113,000 129,296 (16,296)
Miscellaneous 29,150 29,150 23,730 5,420
Capital outlay 2,232,000 3,572,842 2,918,184 654,658
Total fire 11,335,425 12,836,641 11,681,500 1,155,141
Total public safety 22,592,553 25,360,113 23,403,783 1,956,330
Continued
See notes to financial statements 30
[[page 41]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
Engineering
Salaries 581,945 650,784 565,674 85,110
Employee benefits and taxes 202,120 213,581 183,261 30,320
Printing 3,000 3,000 2,487 513
Licenses 1,500 1,500 2,445 (945)
Membership fees 1,785 1,785 680 1,105
Utilities 11,600 11,600 10,351 1,249
Professional services 325,000 370,158 26,138 344,020
Repairs and maintenance 24,000 24,000 19,846 4,154
Office supplies 2,000 2,000 1,604 396
Operating supplies 3,800 3,800 1,853 1,947
Gas, oil, diesel, etc. 4,000 4,000 3,757 243
Miscellaneous 4,750 4,750 1,417 3,333
Capital outlay 2,155,000 6,813,017 2,038,302 4,774,715
Total engineering 3,320,500 8,103,975 2,857,815 5,246,160
Public works
Salaries 316,441 320,531 321,858 (1,327)
Employee benefits and taxes 113,306 113,987 103,969 10,018
Utilities 1,800 1,800 1,850 (50)
Repairs and maintenance 15,700 16,650 16,371 279
Gas, oil, diesel, etc. 24,000 24,000 18,887 5,113
Miscellaneous 413,950 435,548 354,691 80,857
Capital outlay 1,200,266 6,771,026 2,239,201 4,531,825
Total public works 2,085,463 7,683,542 3,056,827 4,626,715
Highways and streets
Salaries 979,742 979,742 706,287 273,455
Employee benefits and taxes 547,322 547,322 261,352 285,970
Utilities 10,650 10,650 9,708 942
Physicals 1,000 1,000 2,653 (1,653)
Repairs and maintenance 162,000 165,000 131,601 33,399
Travel 1,000 1,000 1,120 (120)
Other contractual services 10,000 10,000 3,202 6,798
Operating supplies 2,500 2,500 2,320 180
Agricultural and horticultural supplies 4,000 4,000 7,906 (3,906)
Janitorial supplies 800 800 507 293
Clothing and uniforms 7,000 7,000 4,311 2,689
Other operating supplies 1,500 1,500 2,017 (517)
Gas, oil, diesel, etc. 63,000 63,000 61,284 1,716
Consumable tools 3,500 3,500 3,187 313
Sign parts and supplies 15,000 15,000 17,564 (2,564)
Demolition and mowing 20,000 20,000 6,396 13,604
Other supplies 1,500 1,500 633 867
Salt 40,000 40,000 37,741 2,259
Drainage materials - - - -
Inmate crew expense 10,000 10,000 6,472 3,528
Miscellaneous 16,800 35,800 10,465 25,335
Capital outlay 232,500 448,248 161,272 286,976
Total highways and streets 2,129,814 2,367,562 1,437,998 929,564
Continued
See notes to financial statements 31
[[page 42]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
Vehicle maintenance
Salaries 275,196 275,196 269,554 5,642
Employee benefits and taxes 121,299 121,299 91,667 29,632
Utilities 12,650 12,650 11,616 1,034
Repairs and maintenance 259,000 259,000 37,174 221,826
Operating supplies 1,500 1,500 2,247 (747)
Clothing and uniforms 1,000 1,000 1,106 (106)
Maintenance supplies 500 500 - 500
Gas, oil, diesel, etc. 4,500 4,500 3,366 1,134
Miscellaneous 4,100 4,100 620 3,480
Capital Outlay 15,500 17,380 12,194 5,186
Total vehicle maintenance 695,245 697,125 429,544 267,581
Parks and recreation
Civic center
Salaries 784,882 839,316 834,962 4,354
Employee benefits and taxes 166,507 175,570 173,057 2,513
Postage 1,500 1,500 1,500 -
Printing and publications 4,500 4,500 4,543 (43)
Utilities 213,500 213,500 253,417 (39,917)
Employee physicals 1,500 1,500 2,501 (1,001)
Repairs and maintenance 33,000 36,209 28,269 7,940
Other contractual services 125,000 125,000 116,635 8,365
Operating supplies 95,000 94,700 90,803 3,897
Food 60,000 60,000 58,957 1,043
Janitorial supplies 15,000 23,380 21,375 2,005
Miscellaneous 26,500 30,500 30,546 (46)
Capital outlay 65,000 215,000 49,688 165,312
Total civic center 1,591,889 1,820,675 1,666,253 154,422
Golf course
Salaries 584,401 599,290 603,884 (4,594)
Employee benefits and taxes 186,867 189,346 170,943 18,403
Printing and publications 150 150 318 (168)
Membership fees 1,400 1,400 2,040 (640)
Utilities 44,200 44,200 42,750 1,450
Physicals 200 200 920 (720)
Repairs and maintenance 10,000 18,676 9,256 9,420
Other contractual services 12,000 12,000 15,017 (3,017)
Items for resale 10,000 75,000 45,173 29,827
Operating supplies 20,000 20,000 26,840 (6,840)
Agricultural and horticultural
supplies 55,000 55,000 54,235 765
Food 30,000 45,000 56,062 (11,062)
Clothing and uniforms 1,200 1,200 182 1,018
Gas, oil, diesel, etc. 14,500 14,500 16,701 (2,201)
Other equipment parts 25,000 25,000 26,783 (1,783)
Repair parts for water/sewer lines 1,000 1,000 589 411
Beer for resale 15,000 25,000 23,399 1,601
Discount credit card 22,000 42,000 45,331 (3,331)
Miscellaneous 7,050 7,050 9,138 (2,088)
Capital outlay 353,000 470,150 335,318 134,832
Total golf course 1,392,968 1,646,162 1,484,879 161,283
Continued
See notes to financial statements 32
[[page 43]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
Parks
Salaries 882,079 884,680 895,553 (10,873)
Employee benefits and taxes 568,562 568,995 492,236 76,759
Printing and publications 1,500 1,500 1,312 188
Memberships 2,000 2,000 5,221 (3,221)
Public relations 10,000 10,000 6,419 3,581
Utilities 118,000 149,000 167,544 (18,544)
Repairs and maintenance 70,000 91,709 86,002 5,707
Travel 4,000 4,000 1,508 2,492
Other contractual services 55,000 85,000 85,444 (444)
Inmate crew meals 6,000 6,000 2,593 3,407
Small equipment 7,000 7,000 6,131 869
Operating supplies 75,000 96,734 81,031 15,703
Agricultural and horticultural supplies 25,000 25,000 16,320 8,680
Food - - 584 (584)
Gas, oil, diesel, etc. 60,000 60,000 76,110 (16,110)
Miscellaneous 3,400 3,400 4,504 (1,104)
Capital outlay 125,000 513,520 447,519 66,001
Total parks 2,012,541 2,508,538 2,376,031 132,507
Total parks and recreation 4,997,398 5,975,375 5,527,163 448,212
Economic development
Economic development agency
Salaries 257,882 263,814 259,232 4,582
Employee benefits and taxes 90,548 91,536 74,892 16,644
Printing and publications 5,000 7,900 8,017 (117)
Membership fees 13,000 13,000 31,043 (18,043)
Public relations 27,000 27,000 32,750 (5,750)
Utilities 1,800 1,800 1,443 357
Repairs and maintenance 500 1,500 2,156 (656)
Professional services 17,000 21,200 26,463 (5,263)
Travel 6,000 6,000 6,154 (154)
Office supplies 2,250 2,250 4,236 (1,986)
Gas, oil, diesel, etc. 1,250 1,250 647 603
Miscellaneous 20,600 30,600 20,182 10,418
Total economic development
agency 442,830 467,850 467,215 635
Economic development utility
Professional services 30,000 30,000 12,000 18,000
Repairs and maintenance 15,000 15,000 - 15,000
Grants and donations 7,500 7,500 - 7,500
Capital outlay 22,500 522,500 27,403 495,097
Total economic development
utility 75,000 575,000 39,403 535,597
Total economic development 517,830 1,042,850 506,618 536,232
Continued
See notes to financial statements 33
[[page 44]]
City of Gallatin, Tennessee
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts Actual Variance with
Original Final amounts final budget
Expenditures
Debt service
Principal 1,780,000 1,780,000 1,780,000 -
Interest 911,850 911,850 911,850 -
Bond fees 1,600 1,600 1,253 347
Total debt service 2,693,450 2,693,450 2,693,103 347
Total expenditures 50,297,663 68,687,906 49,547,067 19,140,839
Excess (deficiency) of revenues
over (under) expenditures (4,216,991) (3,121,943) 10,184,248 13,306,191
Other financing sources (uses)
In lieu of payment, utility 1,905,000 1,905,000 1,824,463 (80,537)
Transfers from the other funds - - 10,576,303 10,576,303
Transfers to the other funds - (10,823,391) (10,823,391) -
Total other financing sources (uses) 1,905,000 (8,918,391) 1,577,375 10,495,766
Net change in fund balance (2,311,991) (12,040,334) 11,761,623 23,801,957
Fund balance, beginning of year 44,385,898 44,385,898 44,385,898 -
Fund balance, end of year of year $ 42,073,907 $ 32,345,564 $ 56,147,521 $ 23,801,957
See notes to financial statements 34
[[page 45]]
City of Gallatin, Tennessee
Statement of Fiduciary Net Position - Fiduciary Funds
Electric Department
June 30, 2023
Electric Dept Electric Dept
Pension Trust OPEB Trust
Assets
Cash and cash equivalents $ 420,020 $ 58,239
Receivables
Employee contributions 4,450 -
Employer contributions - -
Investment income 29,886 278
Investments
Mutual funds 2,028,396 225,102
US government and municipal obligations 1,533,115 -
Corporate bonds and debentures 4,021,205 -
Common stocks 5,087,639 235,228
Preferred stocks 37,500 -
Total assets $ 13,162,211 $ 518,847
Liabilities and Net Position
Liabilities
Payables
Benefits payable to plan sponsor $ - $ 21,933
Trustee/Custody fees 766 33
Investment management fees 15,428 609
Total liabilities 16,194 22,575
Net position
Restricted for pension and OPEB benefits 13,146,017 496,272
Total liabilities and net position $ 13,162,211 $ 518,847
See notes to financial statements 35
[[page 46]]
City of Gallatin, Tennessee
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
Electric Department
For the Fiscal Year Ended June 30, 2023
Electric Dept Electric Dept
Pension Trust OPEB Trust
Additions
Contributions
Employees $ 59,943 $ -
Employer 600,000 485,000
Total contributions 659,943 485,000
Investment income
Net appreciation (depreciation) in fair value of investments (1,691,167) 25,952
Interest and dividends 275,580 9,523
(1,415,587) 35,475
Less: investment fees (77,848) (2,270)
Net investment gain (1,493,435) 33,205
Total additions (833,492) 518,205
Deductions
Benefit payments 627,700 21,933
Change in net position (1,461,192) 496,272
Net position, beginning of year 14,607,209 -
Net position, end of year $ 13,146,017 $ 496,272
See notes to financial statements 36
[[page 47]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
The City of Gallatin’s financial statements are prepared in accordance with accounting principles generally accepted
in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for
establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations).
The more significant accounting policies established in GAAP and used by the City of Gallatin are discussed below.
Reporting Entity
The City of Gallatin, Tennessee (the City) operates under a Mayor-Alderman form of government and provides the
following services as authorized by its charter: public safety (police and fire), street maintenance, sanitation
collection and disposal, stormwater, recreation, water and sewer, electricity, gas, and general administrative services.
As required by GAAP, these financial statements present the government and its component units, entities for which
the City is considered to be financially accountable. Blended component units, although legally separate entities,
are, in substance, part of the City’s operations.
Related Organizations
The City’s officials are also responsible for appointing the members of the Board of Gallatin Housing Authority (the
Housing Authority) and the Industrial Development Board of Gallatin, Tennessee (the IDB), but the City’s
accountability for these organizations does not extend beyond making the appointments. Board members of the
Housing Authority and the IDB are appointed by the Mayor, but the City does not provide funding, has no obligation
for the debt issued by the Housing Authority and the IDB, and cannot impose its will upon the operations of the
Housing Authority and the IDB. Accordingly, the Housing Authority have not been included in the reporting entity.
Joint Venture
The City is a participant in the Sumner County Resource Authority (the Resource Authority), a joint venture, in which
it retains an ongoing financial interest. The Resource Authority is a joint venture of Sumner County and the Cities of
Gallatin and Hendersonville, and operates a solid waste energy recovery plant. The City has no equity interest in the
Resource Authority. Complete financial statements of the Resource Authority are available from the City Finance
Director.
Government-wide and Fund Financial Statements
Government-wide Financial Statements
The government-wide financial statements (the statement of net position and the statement of activities) report
information on all of the activities of the City. As a rule, the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are payments-in-lieu-of-taxes and other
charges between the government’s utilities and various other functions of the government. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions concerned.
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 program are offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given program, and 2) operating or capital grants and contributions that are restricted to
meeting the operational or capital requirements of a particular program. Taxes and other items not included among
program revenues are reported instead as general revenues.
37
[[page 48]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Government-wide and Fund Financial Statements
Government-wide Financial Statements
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
Fund Financial Statements
The government uses funds to report on its financial position and the results of its operations. Fund accounting is
designed to demonstrate legal compliance and to aid financial management by segregating transactions related to
certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of
accounts.
The City has its funds classified into two categories: governmental and proprietary. Each category, in turn, is divided
into separate “fund types.”
Governmental funds are used to account for all or most of a government’s general activities including the
collection and disbursement of earmarked monies (special revenue funds) and the acquisition or construction of
general fixed assets (capital projects funds). The General Fund is used to account for all activities of the general
government not accounted for in some other fund.
Proprietary funds are used to account for activities similar to those found in the private sector, where the
determination of net income is necessary or useful to sound financial administration. Goods or services from such
activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily
within the government (internal service funds).
The City reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund. The General Fund also includes the
accounting for all solid waste revenues and expenditures.
The Capital Projects Fund focuses on project-to-date costs for many projects within the City. It accounts for and
reports financial resources that are restricted, committed, or assigned to expenditure for capital outlays of
governmental fund types including the acquisition and construction of capital facilities and other capital assets.
The City reports the following major proprietary funds:
The Gallatin Department of Electricity (Electric Department Fund) accounts for the activities of the government’s
electric distribution operations.
The Water and Sewer Department Fund accounts for the activities associated with the water distribution system,
the sewage treatment plant, sewage pumping stations, and sewage collection system.
The Gas Department Fund accounts for the activities of the government’s gas distribution operations.
38
[[page 49]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Government-wide and Fund Financial Statements
Fund Financial Statements
Additionally, the City reports the following fiduciary fund:
The Electric Department’s pension trust fund is used to account for assets held for benefits related to the Gallatin
Department of Electricity Employees’ Pension Plan.
Measurement Focus and Basis of Accounting
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. Property taxes
are recognized as revenues in the year for which they are assessed. Grants and similar items are recognized as
revenues 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 City considers all revenues to be
available in the period for which levied if they are collected within 60 days of the end of the current fiscal period.
Those revenues susceptible to accrual are property taxes, franchise taxes, special assessments, licenses, interest
income, and charges for services. Fines, permits, and parking meter revenues are not susceptible to accrual because,
generally, they are not measurable until received in cash. Expenditures are recorded when the related fund liability
is incurred. Principal and interest on long-term debt are recorded as fund liabilities when due or when amounts
have been accumulated in the debt service fund for payments to be made early in the following year. Operating
statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e.,
expenditures and other financing uses) in net current assets.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. Operating expenses for the proprietary funds include the necessary
costs to provide the services including the cost of personal and contractual services, supplies, and depreciation on
capital assets. Charges for sales and services are reported net of discounts and allowances of $8,069. All revenues
and expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources
first, then unrestricted resources as they are needed.
Cash and Cash Equivalents
The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
investments with maturities of three months or less from the date of acquisition. State statutes authorize the City
to invest in certificates of deposit, obligations of the US Treasury agencies and instrumentalities, obligations
guaranteed by the US government or its agencies, repurchase agreements, and the state’s investment pool.
39
[[page 50]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Cash and Cash Equivalents
Investments for the City are reported at fair value. The State Local Government Investment Pool is operated in
accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value
of the pool of shares.
Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for goods provided or
services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds”
on the balance sheet.
Property tax receivables are shown net of an allowance for uncollectibles. The allowance is recorded based on the
past history of collections. Court fines receivable are also shown net of an allowance for uncollectibles. The allowance
is recorded based on management’s estimate of what portion of the outstanding receivable will be collected in the
future.
The allowances for uncollectible customer accounts recorded in the proprietary funds are based on past history of
uncollectible accounts and management’s analysis of current accounts.
Property taxes are levied annually and notices are mailed on October 1. The taxes are due and payable from October
through February of the next year. An unperfected lien attaches by statute to property on January 1 for unpaid taxes
from the prior year’s levy. Taxes uncollected by March 1 the year after due may be submitted to the Chancery Court
for collection. Tax liens become perfected at the time the court enters judgment.
Inventories and Prepaid Items
Inventories of the Water and Sewer, and Gas Funds are valued at average cost. Inventory of the Electric system is
stated at average cost as determined by the moving average inventory method. Inventory of the General Fund
consists of expendable supplies held for consumption. Governmental fund inventories are recorded at cost under
the consumption method.
Restricted Assets
The City elects to use restricted assets before unrestricted assets when situations arise where either can be used.
The TCRS Stabilization Fund consists of amounts held in a pension stabilization trust by the Tennessee Consolidated
Retirement System (TCRS) for the benefit of the City’s TCRS Hybrid Plan. The purpose of this trust is to accumulate
funds to provide stabilization (smoothing) of retirement costs to the City in times of fluctuating investment returns
and market downturns. These funds are held and invested by TCRS pursuant to an irrevocable agreement and may
only be used for the benefit of the City to fund retirement benefits upon approval of the TCRS Board of Directors.
To date, the City has not withdrawn any funds from the trust to pay pension costs. Trust documents provide that
the funds are not subject to the claims of general creditors of the City.
40
[[page 51]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Capital Assets
Capital assets, including property, plant, and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks,
and similar items) are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. Capital assets are defined by the government as assets with an initial
individual cost of more than $75,000 for buildings and improvements other than buildings, and $25,000 for the
remaining capital assets categories, and estimated useful life in excess of two years. Land, construction in progress,
and works of art are included in the thresholds. The electric fund uses a capitalization threshold of $2,000; water
and sewer, and gas funds use a threshold of $25,000; and all three funds use an estimated useful life in excess of
two years. Such assets are recorded at historical cost 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 assets or materially extend assets’
lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed.
Capital assets of the City are depreciated using the straight-line method using the following useful lives:
Buildings and improvements 25 – 50 years
Transmission and distribution systems 10 – 50 years
General plant 10 – 50 years
Machinery, equipment, and rolling stock 3 – 10 years
Office furniture and equipment 3 – 10 years
Improvements other than buildings 50 years
Leased assets include copier rentals. Amortization is provided over the lives of the leases, which are three years.
Total depreciation expense for proprietary funds amounted to $8,371,558 for the year ended June 30, 2023. Some
of this depreciation was charged to expense accounts other than the depreciation accounts in the Electric Fund.
Depreciation accounted for in this manner results in a difference between depreciation reported in the
accompanying statement of revenues, expenses, and changes in net position and the amount reported in the
footnotes. A reconciliation of this difference is provided below:
Total
Proprietary
funds
Depreciation and amortization expense reported in note 6 $ 8,555,698
Provision for depreciation on statement of revenues,
expenses, and changes in net position (8,371,558)
Difference (depreciation charged to other operating expense accounts) $ 184,140
41
[[page 52]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Compensated Absences
Vacation leave is accumulated by classified full-time employees according to the following schedule:
Years of Service Annual Vacation Leave
0 – 4 years 10 days
5 – 9 years 16 days
10 – 14 years 17 days
15 – 18 years 19 days
19 or more years 21 days
Vacation leave for designated Department heads/Assistant DH, the City Attorney, the Executive Director of Economic
Development, Mayor, and City Recorder shall be sixteen (16) business days each year for the first four (4) years of
service, and thereafter increasing to twenty-one (21) business days.
Sick leave is accumulated at the rate of one day per month. At retirement, an employee will be paid accumulated
sick leave ranging from 20% - 50%, based on either their age or years of service on effective date of retirement.
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 applicable governmental activities, business-
type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the
applicable bond premium or discount. Bond issuance costs are expensed as incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financial sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows
of resources. The separate financial statement element “deferred outflows of resources” represents a consumption
of net position that applies to a future period and so will not be recognized as an outflow of resources
(expense/expenditure) until then.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element “deferred inflows of resources” represents acquisition
of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time.
The City reports unavailable property taxes, unavailable court fines revenues, and public safety revenues as deferred
inflows of resources in the governmental fund balance sheet. In the statement of net position, unavailable property taxes
related to the subsequent tax year and held evidence funds are reported. The City reports loss on bond refunding as a
deferred inflow of resources in the statement of net position as well.
42
[[page 53]]
City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Regulatory Accounting
The City’s proprietary fund follows the principles of proprietary fund accounting in accordance with Government
Accounting Standards Board (GASB) pronouncements. Proprietary fund accounting is used to report business-type
activities, as contrasted with tax-supported governmental activities.
The City’s proprietary fund also complies with policies and practices prescribed by the City’s governing body and
with practices common in the utility industry. As the City’s governing body has the authority to set rates, the City’s
proprietary fund follows the regulatory accounting guidance of GASB Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, which
provides for the reporting of assets and liabilities consistent with the economic effect of the rate structure.
Regulatory assets are recorded to reflect probable future revenues associated with certain costs that are expected
to be recovered from customers through the rate-making process. Regulatory liabilities are recorded to reflect
probable future reduction in revenues associated with amounts that are expected to be credited to customers in
the rate-making process.
Fund Balance
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily
on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the
funds can be spent. Fund balance for governmental funds can consist of the following:
Nonspendable Fund Balance
This classification includes amounts that are restricted for specific purposes stipulated by external resource
providers, constitutionally, or through enabling legislation. Restrictions may effectively be changed or lifted with the
consent of resource providers. This classification also includes amounts that cannot be spent because they are not
in spendable form (such as inventory or prepaid items).
Restricted Fund Balance
This classification includes amounts that are: (a) not in spendable form, or (b) legally or contractually required to be
maintained intact. The “not in spendable form” criterion includes terms that are not expected to be converted to
cash, for example: inventories, prepaid amounts, and long-term notes receivable.
Committed Fund Balance
This classification includes amounts that can only be used for the specific purposes determined by the City’s highest
level of decision-making authority (the City Council) and the highest form of authority (ordinances). Commitments
may be changed or lifted only by the City taking the same formal action that imposed the constraint originally (for
example: ordinance). The ordinance must be either approved or rescinded, as applicable, prior to the last day of the
fiscal year for which the commitment is made. If the actual amount of the commitment is not available by June 30th,
the ordinance must state the process of formula necessary to calculate the actual amount as soon as information is
available.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Fund Balance
Assigned Fund Balance
This classification includes amounts intended to be used by the City for specific purposes that are neither restricted
nor committed. The City Council and its designee, the Finance Director, have the authority to assign amounts to be
used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except for
the General Fund and also negative amounts) that are not classified as nonspendable, restricted, or committed. Any
funds assigned must be reported to the Council at the next regular meeting and recorded in the minutes. The
Council has the authority to assign funds or to remove or change the assignments of the Finance Director with a
simple majority vote. Upon passage of a budget ordinance where fund balance is used as the source to balance the
budget, the Finance Director shall record the amount as assigned fund balance.
Unassigned Fund Balance
This fund balance is the residual classification for the General Fund. It is also used to report negative fund balances
in other governmental funds.
The City will maintain a minimum unassigned fund balance in the General Fund equivalent to 25% of that fiscal
year’s operating expenses, excluding any capital purchases. The minimum unassigned fund balance is established
to protect against cash flow shortfalls related to timing of project revenue receipts and to maintain a budget
stabilization commitment. In any fiscal year, it shall take the affirmative action of five or more City Council members
to approve an appropriation of funds that result in the minimum unassigned general fund balance to drop below
25%. In the event the balance drops below the minimum level, the City Council will develop a plan to replenish the
fund balance to the minimum level within two years. The deficiency will be funded by reducing recurring
expenditures, increasing revenues, or pursuing other fund sources, or a combination of the two.
Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted
resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to
report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial
statements, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the government’s policy to consider restricted fund balance to have been depleted before using any of the
components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used
for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned
fund balance is applied last.
Net Position
Restricted net position is net position less related liabilities reported in the government-wide statement of net
position that have limitations imposed on their use through constitutional provisions, enabling legislation or
external restrictions imposed by creditors, grantors, contributors, legislation, or other governments.
When both restricted and unrestricted funds are available for expenditure, restricted funds should be spent first
unless legal requirements disallow it.
Net investment in capital assets consists of capital assets, net of accumulated depreciation, and reduced by
outstanding balances of debt issued to finance the acquisition, improvement, or construction of those assets.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant
proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and
unrestricted – net position in the financial statements, a flow assumption must be made about the order in which
the resources are considered to be applied. It is the City’s policy to consider restricted – net position to have been
depleted before unrestricted – net position is applied.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results
may differ from those estimates.
Leases
The City determines if an arrangement is or contains a lease at contract inception and recognizes an intangible right
of use asset and a lease liability at the lease commencement date. Subsequently, the intangible right of use asset is
amortized on a straight-line basis over its useful life. The City also enters into agreements, as lessor, to lease office
space or property, recognizing a lease receivable and a deferred inflow of resources. The lease term includes the
noncancelable period of the lease plus an additional period covered by either an option to extend or not to
terminate the lease that the lessee is reasonably certain to exercise, or an option to extend or not to terminate the
lease controlled by the lessor. The City uses its estimated incremental borrowing rate as the discount rate for leases.
The City monitors for events or changes in circumstances that require a reassessment of its leases. When a
reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying
amount of the intangible right of use asset.
Pensions
City Funds
For purposes of measuring the net pension liability (asset), deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the City’s
participation in the Public Employee Retirement Plan of the Tennessee Consolidated Retirement System (TCRS), and
additions to/deductions from the City’s fiduciary net position have been determined on the same basis as they are
reported by the TCRS for the Public Employee Retirement Plan. For this purpose, benefits (including refunds of
employee contributions) are recognized when due and payable in accordance with the benefit terms of the Public
Employee Retirement Plan of the TCRS. Investments are reported at fair value.
Gallatin Department of Electricity
The net pension liability (asset) for the department was measured as of June 30, 2022 pursuant to GASB 68, which
allows for a measurement date no earlier than the end of the employer's prior fiscal year, consistently applied from
period to period. The requirement establishes standards for calculating and reporting the net pension liability (asset)
and pension expense in the financial statements of the employer. The data necessary to comply with the new
standards presents challenges to reporting the net pension liability (asset) and pension expense on a current basis
while still adhering to the deadlines for financial reporting to different agencies. The net pension liability (asset)
reported at June 30, 2023 is the net pension liability (asset) determined at June 30, 2022 and the pension expense
reflects the activity for fiscal year 2022.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 1. Summary of Significant Account Policies
Other Post-employment Benefit (OPEB) Plan
Gallatin Department of Electricity
The net OPEB (Other Post-employment Benefit) liability for the department was measured as of June 30, 2022
pursuant to GASB 75, which allows for a measurement date no earlier than the end of the employer's prior fiscal
year, consistently applied from period to period. The requirement establishes standards for calculating and reporting
the net OPEB liability and OPEB expense in the financial statements of the employer. The data necessary to comply
with the new standards presents challenges to reporting the net OPEB liability and OPEB expense on a current basis
while still adhering to the deadlines for financial reporting to different agencies. Accordingly, with this
implementation, the net OPEB liability reported at June 30, 2023 is the net OPEB liability determined at June 30,
2022 and the OPEB expense reflects the activity for fiscal year 2022.
Reclassifications
Certain reclassifications have been made in the 2022 financial statements to make them comparable to the 2023
financial statement presentation.
Note 2. Reconciliation of Government-wide and Fund Financial Statements
Explanation of Certain Differences Between the Balance Sheet of Governmental Funds and the Government-wide
Statement of Net Position
The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds
and net position – governmental activities as reported in the government-wide statement of net position. One
element of the reconciliation explains that “receivables are not available to pay for current expenditures and,
therefore, are deferred in the funds.” The details of the difference are as follows:
Unavailable property taxes $ 611,414
Unavailable court fines 7,521
Net adjustments $ 618,935
The reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds
to the statement of activities includes reconciliation between net changes in fund balances – total government funds
and changes in net position of governmental 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 allocated over their estimated useful lives and
reported as depreciation expense in the current period.” The details of the difference are as follows:
Capital outlay $ 13,075,819
Depreciation expense (5,247,348)
Net adjustment $ 7,828,471
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 3. Stewardship, Compliance, and Accountability
Budgetary Information
Annual budgets are adopted on a basis consistent with GAAP for the General Fund and special revenue funds,
excluding the Capital Projects fund. The City follows these procedures in establishing the budgetary data reflected
in the financial statements:
1. Prior to year-end, the Director of Finance and the Mayor submit to the City Council a proposed operating
budget for the fiscal year commencing the following July 1st. The operating budget includes proposed
expenditures and the means of financing them.
2. Public meetings are conducted to obtain taxpayer comments on the budget.
3. Prior to June 30, the budget is legally enacted through passage of an ordinance.
4. The Department Heads are authorized to transfer budgeted amounts within their departments; however,
any revisions that alter the total expenditures of any department function or fund must be approved by the
City Council.
5. Formal budgetary integration is employed as a management control device during the year for all funds
excluding the Electric fund.
6. Budgeted amounts are as originally adopted, or as amended by the City Council. Budget appropriations
lapse at year-end.
As an extension of the formal budgetary process, the City Council may transfer or appropriate additional funds for
expenditures not anticipated at the time of budget adoption. The City’s policy is to not allow expenditures to exceed
budgetary amounts at the total fund expenditure level without obtaining additional appropriation approval from
the Council.
Note 4. Deposits and Investments
General Information
As of June 30, 2023, the City of Gallatin, Tennessee’s Electric Department had $5,328,776 and the General Fund had
$9,505,150 in certificates of deposit with local financial institutions.
As of June 30, 2023, the cemetery trust fund had $21,025 in unrated stock investments with no maturities. These
investments are reported at fair value and are categorized for fair value measurement within the fair value hierarchy
established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the asset and
give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets that can be accessed at the
measurement date.
Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets
or liabilities in markets that are not active; assets or liabilities that have a bid-ask spread price in an inactive dealer
market, brokered market, or principal-to-principal market; and Level 1 assets or liabilities that are adjusted.
Level 3 - Valuations derived from valuation techniques in which significant inputs are unobservable.
The investments of the cemetery trust fund have been classified as Level 1.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 4. Deposits and Investments
General Information
Deposits and Investments
In accordance with its formal investment policy, the City manages its exposure to declines in fair values by limiting
its investments to certificates of deposit with local financial institutions.
Custodial Credit Risk
The City’s policies limit deposits and investments to those instruments allowed by applicable state laws and
described in note 1. State statutes require that all deposits with financial institutions must be collateralized by
securities whose market value is equal to 105% of the value of uninsured deposits. The deposits must be
collateralized by federal depository insurance, by the Tennessee Bank Collateral Pool, by collateral held by the City’s
agent in the City’s name, or by the Federal Reserve Banks acting as third party agents. State statutes also authorize
the City to invest in bonds, notes, or treasury bills of the United States or any of its agencies, certificates of deposit
at Tennessee state chartered banks and savings and loan associations, repurchase agreements utilizing obligations
of the United States or its agencies as the underlying securities, and the state pooled investment fund. Statutes also
require that securities underlying repurchase agreements must have a market value of at least equal to the amount
of funds invested in the repurchase transaction. As of June 30, 2023, all bank deposits were fully collateralized or
insured.
TCRS Stabilization Trust, City Funds
Legal Provisions
The City is a member of the TCRS Stabilization Reserve Trust (the Trust). The City has placed funds into the
irrevocable trust as authorized by statute under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS
Board of Trustees is responsible for the proper operation and administration of the trust. Funds of trust members
are held by and invested in the name of the trust for the benefit of each member. Each member’s funds are restricted
for the payment of retirement benefits of that member’s employees. Trust funds are not subject to the claims of
general creditors of the City.
The trust is authorized to make investments as directed by the TCRS Board of Trustees. The City may not impose
any restrictions on investments placed by the trust on its behalf. It is the intent of the plan trustees to allocate these
funds in the future to offset pension costs.
Investment Balances
Assets of the TCRS, including the Stabilization Reserve Trust, are invested in the Tennessee Retiree Group Trust
(TRGT). The TRGT is not registered with the Securities and Exchange Commission (SEC) as an investment company.
The State of Tennessee has not obtained a credit quality rating for the TRGT from a nationally recognized credit
rating agency. The fair value of investment positions in the TRGT is determined daily, based on the fair value of the
pool’s underlying portfolio. Furthermore, TCRS had not obtained or provided any legally binding guarantees to
support the value of participant shares during the fiscal year. There are no restrictions on the sale or redemption of
shares.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 4. Deposits and Investments
TCRS Stabilization Trust, City Funds
Investment Balances
Investments are reported at fair value. Securities traded on a national exchange are valued at the last reported sales
price. Investment income consists of realized and unrealized appreciation (depreciation) in the fair value of
investments and interest and dividend income. Interest income is recognized when earned. Securities and securities
transactions are recorded in the financial statements on a trade-date basis. The fair value of assets of the TRGT held
at June 30, 2023 represents the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. Assets held are categorized for fair value measurement within the fair
value hierarchy established by GAAP as described above.
Investments using the Net Asset Value (NAV) per share have no readily determinable fair value and have been
determined using amortized cost, which approximates fair value.
Where inputs used in the measurement of fair value fall into different levels of the hierarchy, fair value of the
instrument in its entirety is categorized based on the lowest level input that is significant to the valuation. This
assessment requires professional judgment and, as such, management of the TRGT has developed a fair value
committee that worked in conjunction with the plan’s custodian and investment professionals to make these
valuations. All assets held were valued individually and aggregated into classes to be represented in the following
tables.
Short-term securities generally include investments in money market-type securities, reported at cost plus accrued
interest.
Equity and equity derivative securities classified in Level 1 are valued using last reported sales prices quoted in active
markets that can be accessed at the measurement date. Equity and equity derivative securities classified in Level 2
are securities whose values are derived daily from associated traded securities. Equity securities classified in Level 3
are valued with the last trade data, having limited trading volume.
US Treasury bills, bonds, notes, and futures classified in Level 1 are valued using last reported sales prices quoted in
active markets that can be accessed at the measurement date. Debt and debt derivative securities classified in Level
2 are valued using a bid-ask spread price from multiple independent brokers, dealers, or market principals, which
are known to be actively involved in the market. Level 3 debt securities are valued using proprietary information, a
single pricing source, or other unobservable inputs related to similar assets or liabilities.
Real estate investments classified in Level 3 are valued using the last valuations provided by external investment
advisors or independent external appraisers. Generally, all direct real estate investments are appraised by a qualified
independent appraiser(s) with the professional designation of Member of the Appraisal Institute (MAI), or its
equivalent, every three years beginning from the acquisition date of the property. The appraisals are performed
using generally accepted valuation approaches applicable to the property type.
For investments in private mutual funds, traditional private equity funds, strategic lending funds, and real estate
funds that report using GAAP, the fair values, as well as the unfunded commitments, were determined using the
prior quarter’s NAV, as reported by the fund managers, plus the current cash flows. These assets were then
categorized by investment strategy. In instances where the fund investment reported using non-GAAP standards,
the investment was valued using the same method, but was classified in Level 3.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 4. Deposits and Investments
TCRS Stabilization Trust, City Funds
Investment Balances
At June 30, 2023, the City had the following investments held by the Trust on its behalf. These funds are recognized
as restricted assets in the General Fund, Other Governmental Funds, the Water and Sewer Fund, and the Gas Fund
of the City.
Weighted
average days to
maturity Maturities Fair value
Investments at fair value
US equity N/A N/A $ 415,758
Developed market international equity N/A N/A 187,762
Emerging market international equity N/A N/A 53,644
US fixed income N/A N/A 268,231
Real estate N/A N/A 134,115
Short-term securities N/A N/A 13,416
NAV, private equity, and strategic lending N/A N/A 268,231
$ 1,341,157
A summary of investment values by fair value level at June 30, 2023 is as follows:
Fair Value
June 30,
2023 Level 1 Level 2 Level 3 NAV
US equity $ 415,758 $ 415,758 $ - $ - $ -
Developed market
international equity 187,762 187,762 - - -
Emerging market
international equity 53,644 53,644 - - -
US fixed income 268,231 - 268,231 - -
Real estate 134,115 - - 134,115 -
Short-term securities 13,416 - 13,416 - -
NAV, private equity,
and strategic lending 268,231 - - - 268,231
$ 1,341,157 $ 657,164 $ 281,647 $ 134,115 $ 268,231
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 4. Deposits and Investments
TCRS Stabilization Trust, City Funds
Risks and Uncertainties
The Trust’s investments include various types of investment funds, which in turn invest in any combination of stock,
bonds, and other investments exposed to various risks, such as interest rate, credit, and market risk. Due to the level
of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect the amounts reported
for Trust investments.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The
City does not have the ability to limit trust investment maturities as a means of managing its exposure to fair value
losses arising from increasing interest rates.
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The City
does not have the ability to limit the credit ratings of individual investments made by the Trust.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City’s investment in a single issuer.
The City places no limit on the amount that may be invested in one issuer.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the
City will not be able to recover the value of its investments or collateral securities that are in the possession of an
outside party. Pursuant to the Trust agreement, investments are held in the name of the Trust for the benefit of the
City to pay retirement benefits of its employees.
For further information concerning the legal provisions, investment policies, investment types, and credit risks of
the City’s investments with the TCRS Stabilization Reserve Trust, audited financial statements of the TCRS may be
obtained at https://comptroller.tn.gov/content/dam/cot/sa/advanced-search/disclaimer/2022/ag21066.pdf
Electric Department Pension Investments
Information regarding investments of the Gallatin Department of Electricity Employee’s Pension Plan may be
obtained from a separate financial report. The report may be obtained by contacting the City’s Finance Director.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 5. Receivables
Receivables as of the year-end for the government’s individual major funds and non-major and fiduciary funds in the aggregate, including the
applicable allowances for uncollectible accounts, are as follows:
Non-major
Water and and other
General Fund Electric Fund Sewer Fund Gas Fund Funds Total
Receivables
Property taxes $ 14,919,791 $ - $ - $ - $ - $14,919,791
Interest 333,946 - - - - 333,946
Accounts 566,803 7,163,136 1,788,800 1,388,876 542,799 11,450,414
Fines 2,239,124 - - - - 2,239,124
Grants 841,155 - - - - 841,155
Intergovernmental 4,131,475 - - - - 4,131,475
Other - 106,341 - - - 106,341
Less allowance for
doubtful accounts (2,507,917) - (40,449) (184,591) (18,614) ($2,751,571)
Receivables, net $ 20,524,377 $ 7,163,136 $ 1,748,351 $ 1,204,285 $ 524,185 $ 31,270,675
Governmental funds report unavailable revenues in connection with receivables for revenues that are not considered to be available to liquidate
liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received but not yet
earned (unearned revenues). At the end of the current fiscal year, various components of unavailable revenues reported in the governmental funds
were as follows:
Unavailable Unearned
Interest and penalty on property taxes receivable $ 300,551 $ -
2023 property tax assessment 14,679,193 -
Other revenues collected in advance - 77,520
Drug fund revenues held - 65,006
Court fines 7,521 -
Total unavailable revenues for fund financial statements $ 14,987,265 $ 142,526
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 6. Capital Assets
Capital assets activity for the year ended June 30, 2023 was as follows:
Balance Balance
June 30, 2022 Additions Disposals Transfers June 30, 2023
Governmental activities
Capital assets not
being depreciated
Land $ 13,409,022 $ 57,940 $ - $ - $ 13,466,962
Construction in
progress 21,711 292,216 - - 313,927
Total capital assets
not being
depreciated 13,430,733 350,156 - - 13,780,889
Capital assets being
depreciated
Buildings 24,257,729 1,206,522 - - 25,464,251
Improvements other
than buildings 150,912,098 9,729,531 - - 160,641,629
Vehicles 17,705,161 4,628,347 (70,474) - 22,263,034
Office equipment 2,858,993 98,352 - - 2,957,345
Equipment 9,463,085 1,610,781 - - 11,073,866
Total capital assets
being depreciated 205,197,066 17,273,533 (70,474) - 222,400,125
Accumulated
depreciation
Buildings 9,894,199 565,902 - - 10,460,101
Improvements other
than buildings 22,132,485 2,451,136 - - 24,583,621
Vehicles 16,067,384 1,585,213 (70,474) - 17,582,123
Office equipment 2,697,978 76,467 - - 2,774,445
Equipment 5,225,618 568,630 - - 5,794,248
Total accumulated
depreciation 56,017,664 5,247,348 (70,474) - 61,194,538
Total capital assets
being depreciated,
net 149,179,402 12,026,185 - - 161,205,587
Total governmental
capital assets, net $162,610,135 $ 12,376,341 $ - $ - $174,986,476
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 6. Capital Assets
Balance Balance
June 30, 2022 Additions Disposals Transfers June 30, 2023
Business-type activities
Capital assets not
being depreciated
Land $ 4,284,181 $ 569,237 $ - $ - 4,853,418
Construction in
progress (435,965) 3,652,235 - (2,098,469) 1,117,801
Total capital assets
not being
depreciated 3,848,216 4,221,472 - (2,098,469) 5,971,219
Capital assets being
depreciated
Transmission plant 1,437,843 - - - 1,437,843
Distribution plant 282,983,121 11,826,281 (163,401) 2,098,469 296,744,470
General plant 5,555,475 1,079,613 - - 6,635,088
Buildings 43,109,224 1,013,706 - - 44,122,930
Operating
equipment 3,242,993 - - - 3,242,993
Rolling stock 4,248,550 - - - 4,248,550
Office furniture
and equipment 705,929 - - - 705,929
Total capital assets
being depreciated 341,283,135 13,919,600 (163,401) 2,098,469 357,137,803
Accumulated
depreciation
Transmission plant 424,524 44,704 - - 469,228
Distribution plant 105,288,001 7,366,285 (285,638) - 112,368,648
General plant 3,272,384 350,242 - - 3,622,626
Buildings 17,737,269 1,024,921 - - 18,762,190
Operating
equipment 2,448,356 262,338 - - 2,710,694
Rolling stock 3,756,381 81,721 - - 3,838,102
Office furniture
and equipment 673,466 10,620 - - 684,086
Total accumulated
depreciation 133,600,381 9,140,831 (285,638) - 142,455,574
Total capital assets
being depreciated
net 207,682,754 4,778,769 122,237 2,098,469 214,682,229
Total business-type
capital assets, net $211,530,970 $ 9,000,241 $ 122,237 $ - $220,653,448
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 6. Capital Assets
Included in the additions for the governmental activities is $9,040,398 in donated infrastructure from developers.
Included in the additions for the business-type activities is $1,531,140 in donated utility lines from developers.
For the year ended June 30, 2023, increases to accumulated depreciation totaled $14,388,179. This amount includes
depreciation and amortization of $14,388,179, and an increase of $581,786 for salvage value of depreciable utility
plant. Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities
General government $ 2,178,157
Public safety 1,386,123
Environmental services 202,648
Stormwater 156,218
Highways and streets 428,233
Parks and recreation 895,969
Total depreciation expense, governmental activities $ 5,247,348
Business-type Activities
Electric (see note 1) $ 2,427,122
Water and sewer 4,783,198
Gas 1,345,378
Total depreciation expense 8,555,698
Amortization of right-to-use assets 3,347
Total depreciation and amortization expenses
business-type activities $ 8,559,045
Gallatin Department of Electricity
Construction Work in Progress:
The policy for the department has been to collect as Aid-to-Construction a portion of the costs to be incurred during the
new construction process. Due to the volume of requests for new construction, the length of time to acquire the necessary
materials once ordered, and the labor/time required to complete the projects, the Department had a negative balance in
construction work in progress at June 30, 2022, due to advance payments being credited to the work order process upon
receipt. The Department follows this method of accounting for Construction Work in Progress based on FERC guidance
as well as from the Electric Department’s regulator, the Tennessee Valley Authority (TVA).
For the Electric department, right to use tangible lease activity for the year ended June 30, 2023 is as follows:
July 1, 2022 Additions Reductions June 30, 2023
Leased equipment $ 20,468 $ - $ - $ 20,468
Less: accumulated amortization 15,978 3,347 - 19,325
$ 4,490 $ (3,347) $ - $ 1,143
Amortization expense for the year was charged to the business-type function in the amount of $3,347.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 7. Long-term Debt
Governmental activities debt at June 30, 2023 is comprised of the following:
General Obligation Improvement Bonds, Series 2014, due in annual
installments from $375,000 to $1,090,000, through January 2034,
interest at 2.00% to 5.00% $ 7,575,000
General Obligation Improvement Bonds, Series 2016, due in annual
installments from $430,000 to $700,000, through January 2036,
interest at 2.00% to 5.00% 7,710,000
General Obligation Improvement Bonds, Series 2021, due in annual
installments from $325,000 to $630,000, through January 2041,
interest at 2.00% to 5.00% 9,070,000
Total bonds payable $ 24,355,000
The aforementioned bonds are secured by the full faith and credit of the City. During 2023, debt service for the
aforementioned debt was provided by the City’s General Fund.
Business-type activities debt at June 30, 2023 is comprised of the following:
Water and Sewer Revenue Bonds, Series 2015, due in annual
installments from $500,000 to $1,825,000, through July 2040, interest
at 3.00% to 5.00% $ 4,500,000
Water and Sewer Revenue Refunding and Improvement Bonds, Series
2014, due in annual installments from $265,000 to $570,000, through
July 2029, interest at 2.00% to 5.00% 2,405,000
Water and Sewer Revenue Refunding and Improvement Bonds, Series
2011, due in annual installments from $25,000 to $635,000, through
July 2032, interest at 2.00% to 3.625% 5,475,000
Gas Revenue Bonds, Series 2019, due in annual installments from
$190,000 to $380,000, through January 2039, interest at 3.00% to
5.00% 4,730,000
Water and Sewer Revenue Improvement Bonds, Series 2021A, due in
annual installments from $325,000 to $775,000, through July 2046,
interest at 3.00% to 4.00% 13,075,000
Water and Sewer Revenue Refunding Bonds, Series 2021B, due in
annual installments from $125,000 to $1,840,000, through July 2038,
interest at 0.51% to 2.75% 13,745,000
Total bonds payable $ 43,930,000
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 7. Long-term Debt
The aforementioned bonds are secured by revenue streams of the Gas and Water and Sewer funds. During 2023,
debt service for the aforementioned debt was provided solely by the City’s Proprietary Funds.
The annual requirements, by type of issue, to amortize all long-term debt outstanding at June 30, 2023 are as
follows:
Governmental Activities Business-type Activities
Year Ended
June 30, General Obligation Bonds Revenue Bonds Totals
Principal Interest Principal Interest Principal Interest
2024 $ 1,835,000 $ 846,600 $ 2,810,000 $ 1,304,311 $ 4,645,000 $ 2,150,911
2025 1,895,000 754,850 2,925,000 1,201,666 4,820,000 1,956,516
2026 1,965,000 670,200 3,010,000 1,096,530 4,975,000 1,766,730
2027 2,035,000 582,450 3,125,000 982,418 5,160,000 1,564,868
2028 1,430,000 507,900 3,215,000 901,639 4,645,000 1,409,539
2029 – 2033 7,920,000 1,667,269 16,250,000 3,177,044 24,170,000 4,844,313
2034 – 2038 5,425,000 499,013 5,405,000 1,582,048 10,830,000 2,081,061
2039 – 2043 1,850,000 74,500 4,220,000 739,387 6,070,000 813,887
2044 – 2047 - - 2,970,000 181,500 2,970,000 181,500
$ 24,355,000 $ 5,602,782 $ 43,930,000 $ 11,166,453 $ 68,285,000 $ 16,769,325
The City complied with all significant debt covenants and restrictions as set forth in the bond agreements. The above
bonds and notes payable contain provisions that in the event of default, the lenders can exercise one or more of
the following options:
1) make the outstanding bond and/or note payable with accrued interest due and payable,
2) use remedies allowed by state or federal law.
Governmental Activities
Long-term liability activity for the year ended June 30, 2023 was as follows:
Beginning Ending Due within
balance Additions Reductions balance one year
General obligation
bonds $26,135,000 $ - $ (1,780,000) $ 24,355,000 $ 1,835,000
Premium on
bond issue 2,078,000 - (277,666) 1,800,959 258,501
Total long-term
debt $ 28,213,000 $ - $ (2,057,666) $ 26,155,959 $ 2,093,501
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 7. Long-term Debt
Governmental Activities
Other long-term obligations activity for the year ended June 30, 2023 was as follows:
Beginning Ending Due within
balance Additions Reductions balance one year
Compensated
absences $ 1,885,189 $ 1,712,715 $ (1,406,662) $ 2,191,242 $ 1,712,715
Net pension liability - 194,396 - 194,396 -
Total other
long-term
obligations $ 1,885,189 $ 1,907,111 $ (1,406,662) $ 2,385,638 $ 1,712,715
Business-type Activities
Long-term liability activity for the year ended June 30, 2023 was as follows:
Beginning Ending Due within
balance Additions Reductions balance one year
Revenue and tax
bonds $ 46,620,000 $ - $ (2,690,000) $ 43,930,000 $ 2,810,000
Premium on
bond issue 3,977,028 - (438,394) 3,538,635 386,339
TVA Winterization
Contracts 6,074 - (4,495) 1,579 864
Lease liability 5,009 - (3,710) 1,299 1,299
Total long-term
debt $50,608,111 $ - $ (3,136,599) $ 47,471,513 $ 3,198,502
Other long-term obligations activity for the year ended June 30, 2023 was as follows:
Beginning Ending Due within
balance Additions Reductions balance one year
Compensated
absences $ 894,168 $ 659,388 $ (472,561) $ 1,080,995 $ 690,768
Net pension liability - 553,494 - 553,494 -
OPEB liability 630,245 - (103,255) 526,990 -
Total other
long-term
obligations $ 1,524,413 $ 1,212,882 $ (575,816) $ 2,161,479 $ 690,768
Within the City’s governmental activities, compensated absences are generally liquidated by the General Fund. The
City complied with all significant debt covenants and restrictions as set forth in the bond agreements across all
systems.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 7. Long-term Debt
Business-type Activities
The water and sewer department and gas department funds issue revenue bonds, which are collateralized by the
revenues of the respective departments. The bonds payable for all systems contain provisions that, in the event of
default, the lender can exercise one or more of the following options: (1) Make all or any of the outstanding bonds
payable balance immediately due and accrued interest at highest post maturity interest rate, (2) Use any remedy
allowed by state or federal law.
Issuance of Long-term Debt
In November 2021, the City issued $13,400,000 in Water and Sewer Revenue Improvement Bonds, Series 2021A
(Series 2021A Bonds) for the purpose of providing funds to (i) finance extensions and improvements to the System
and (ii) pay costs of issuance. The Series 2021A bonds are issued as fully registered bonds, in denominations of
$5,000, and are payable solely from and secured by a lien on the revenues of the City’s water and sewer system (the
System), after payment of operating expenses, on a parity of lien with the City’s outstanding Water and Sewer
Revenue Refunding and Improvement Bonds, Series 2011, its Water and Sewer Revenue Refunding and
Improvement Bonds, Series 2014 and Water and Sewer Revenue Refunding and Improvement Bonds, Series 2015
and any obligations hereafter issued on parity therewith. The Series 2021A bonds carry fixed interest rates ranging
from 3.0% to 4.0% and mature between July 1, 2022 and July 1, 2046. Interest is payable semi-annually on July 1
and January 1. Series 2021A bonds maturing on July 1, 2032, and thereafter, are subject to redemption prior to
maturity at the option of the City, on or after July 1, 2031, as a whole or in part, at a redemption price equal to 100%
of the principal amount plus accrued interest to the redemption date.
In November 2021, the City issued $13,965,000 in Water and Sewer Revenue Refunding Bonds, Series 2021B (Series
2021B) to refund $12,435,000 of its outstanding Water and Sewer System Revenue and Improvement Bonds, Series
2015, dated May 19, 2015, (the Outstanding Bonds). The Outstanding Bonds were called for redemption in
November 2021, and were redeemed at a redemption price of par plus accrued interest. The estimated economic
gain from the refunding was approximately $1.2 million.
The Series 2021B bonds are issued as fully registered bonds, in denominations of $5,000, and are payable solely
from and secured by a lien on the revenues of the System, after payment of operating expenses, on a parity of lien
with the City’s outstanding Water and Sewer Revenue Refunding and Improvement Bonds, Series 2011, its Water
and Sewer Revenue Refunding and Improvement Bonds, Series 2014 and Water and Sewer Revenue Refunding and
Improvement Bonds, Series 2015 and any obligations hereafter issued on parity therewith. The Series 2021B bonds
carry fixed interest rates ranging from 0.51% to 2.75% and mature between July 1, 2022 and July 1, 2037. Interest is
payable semi-annually on July 1 and January 1. Series 2021B bonds maturing on July 1, 2032 and thereafter are
subject to redemption prior to maturity at the option of the City, on or after July 1, 2031, as a whole or in part, at a
redemption price equal to 100% of the principal amount plus accrued interest to the redemption date.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 7. Long-term Debt
Advance Refunding of Bonds
In prior years, the City has defeased certain bonds by placing the proceeds of new bonds in irrevocable trusts to
provide for all future debt service requirements on the retired bonds. Accordingly, the trust account assets and the
liability for the defeased bonds are not included in the City’s financial statements. As of June 30, 2023, outstanding
bonds considered as defeased were as follows:
General Obligation Public Improvements Bonds – Series 2007 $ 2,510,000
Water and Sewer Revenue and Tax Bonds – Series 2008 14,835,000
$ 17,345,000
Note 8. Lease Liabilities
The Electric Department entered into a 61-month lease agreement in March 2018 for 3 copy machines. The Electric
Department entered into a 60-month lease agreement in June of 2019 for a large engineering printer. At the time
of the initial agreements, there was no interest rate specified in the lease agreement, nor were there any values
assigned to the equipment. The Department used a borrowing rate of 2.2672%, which was available during the year
of implementation through the issuance of a bond, to calculate the present value to place on the equipment, and
to establish the lease liability.
The amount of payments made during the year applied to the lease liabilities totaled $3,710.
Principal and interest requirements on these leases are as follows:
Year ending
June 30, Principal Interest Total
2024 $ 1,299 $ 16 $ 1,315
Note 9. Interfund Balances and Transfers
There were no interfund balances at June 30, 2023. The following is a summary of transfers during the year ended
June 30, 2023:
Transfers from Transfers to Amount
Electric fund General fund $ 1,043,191
Water and sewer fund General fund 362,330
Gas fund General fund 418,942
1,824,463
Less: governmental fund activities
eliminated ( $1,824,463)
Total government-wide transfers $ -
The transfers between the proprietary funds and the general fund are for the purpose of transferring in-lieu-of-tax
payments.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
General Information about the Pension Plan
Plan Description
Employees of the City are provided a defined benefit hybrid pension plan through the Public Employee Retirement
Plan, an agent multiple-employer pension plan administered by the TCRS. The TCRS was created by state statute
under Tennessee Code Annotated (TCA), Title 8, Chapters 34-37. The TCRS Board of Trustees is responsible for the
proper operation and administration of the TCRS. The Tennessee Treasury Department, an agency in the legislative
branch of state government, administers the plans of the TCRS. The TCRS issues a publicly available financial report
that can be obtained at https://treasury.tn.gov/Retirement/Boards-and-Governance/Reporting-and-Investment-
Policies.
Benefits Provided
Tennessee Code Annotated, Title 8, Chapters 34-37, establishes the benefit terms and can be amended only by the
Tennessee General Assembly. The chief legislative body may adopt the benefit terms permitted by statute. Members
are eligible to retire with an unreduced benefit at age 65 with 5 years of service credit or pursuant to the rule of 90
in which the member’s age and service credit total 90. Benefits are determined by a formula using the member’s
highest five consecutive years average compensation and the member’s service credit. Reduced benefits for early
retirement are available at age 60 and vested or pursuant to the rule of 80 in which the member’s age and service
credit total 80. Members vest with five years of years of service credit. Service-related disability benefits are provided
regardless of length of service. Five years of service is required for nonservice-related disability eligibility. The
service-related and nonservice-related disability benefits are determined in the same manner as a service retirement
benefit but are reduced 10% and include projected service credits. A variety of death benefits are available under
various eligibility criteria.
Member and beneficiary annuitants are entitled to automatic cost of living adjustments (COLAs) after retirement. A
COLA is granted each July for annuitants retired prior to the 2nd of July of the previous year. The COLA is based on
the change in the consumer price index (CPI) during the prior calendar year, capped at 3%, and applied to the
current benefit. No COLA is granted if the change in the CPI is less than 0.5%. A 1% percent COLA is granted if the
CPI change is between 0.5% and 1%. A member who leaves employment may withdraw their employee
contributions, plus any accumulated interest. Moreover, there are defined cost controls and unfunded liability
controls that provide for the adjustment of benefit terms and conditions on an automatic basis.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
General Information about the Pension Plan
Employees Covered by Benefit Terms
At the measurement date of June 30, 2022, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits -
Inactive employees entitled to but not yet receiving benefits 119
Active employees 262
381
Contributions
Contributions for employees are established in the statutes governing the TCRS and may only be changed by the
Tennessee General Assembly. Employees contribute 5% of salary. The City makes employer contributions at the rate
set by the Board of Trustees as determined by an actuarial valuation. For the year ended June 30, 2023, the employer
contributions by the City were $374,974, based on a rate of 4% of covered payroll. By law, employer contributions
are required to be paid. The TCRS may intercept the City’s state shared taxes if required employer contributions are
not remitted. The employer’s actuarially determined contribution (ADC) and member contributions are expected to
finance the costs of benefits earned by members during the year, the cost of administration, as well as an amortized
portion of any unfunded liability.
Net Pension Liability (Asset)
Pension Liabilities (Assets)
The City’s net pension liability (asset) was measured as of June 30, 2022, and the total pension liability used to
calculate net pension liability (asset) was determined by an actuarial valuation as of that date.
Actuarial Assumptions
The total pension liability as of the June 30, 2022 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation 2.25%
Salary increases Graded salary ranges from 8.72% to 3.44% based on age, including
inflation, averaging 4.00%
Investment rate of return 6.75%, net of pension plan investment expenses, including inflation
Cost-of-living adjustment 2.125%,
Mortality rates were based on actual experience including an adjustment for some anticipated improvement.
The actuarial assumptions used in the June 30, 2022 actuarial valuation were based on the results of an actuarial
experience study performed for the period July 1, 2016 through June 30, 2020. The demographic assumptions were
adjusted to more closely reflect actual and expected future experience.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
Net Pension Liability (Asset)
Actuarial Assumptions
The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees
in conjunction with the June 30, 2020 actuarial experience study. A blend of future capital market projections and
historical market returns was used in a building-block method in which a best estimate of expected future real rates
of return (expected returns, net of pension plan investment expense and inflation) is developed for each major asset
class. These best estimates are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected inflation of
2.25%. The best estimates of geometric real rates of return and the TCRS investment policy target asset allocation
for each major asset class are summarized in the following table:
Long-term
expected real
Asset class rate of return Target allocation
US equity 4.88% 31%
Developed market international equity 5.37% 14%
Emerging market international equity 6.09% 4%
Private equity and strategic lending 6.57% 20%
US fixed income 1.20% 20%
Real estate 4.38% 10%
Short-term securities 0.00% 1%
100%
The long-term expected rate of return on pension plan investments was established by the TCRS Board of Trustees
as 6.75% based on a blending of the factors described above.
Discount Rate
The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the current rate and that
contributions from the City will be made at the actuarially determined contribution rate pursuant to an actuarial
valuation in accordance with the funding policy of the TCRS Board of Trustees and as required to be paid by state
statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make
projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate
of return on pension plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
Changes in the Net Pension Liability (Asset)
Total pension Plan fiduciary Net pension
liability net position liability (asset)
(a) (b) (a)-(b)
Balance, June 30, 2021 $ 2,140,677 $ 2,239,470 $ (98,793)
Service cost 778,219 - 778,219
Interest 195,733 - 195,733
Changes of benefit terms - - -
Differences between expected and
actual experience 136,142 - 136,142
Changes in assumptions - - -
Contributions, employer - 247,676 (247,676)
Contributions, employees - 648,370 (648,370)
Net investment income - (101,596) 101,596
Benefit payments, including refunds
of employee contributions (38,297) (38,297) -
Administrative expenses - (25,361) 25,361
Other changes - - -
Net change 1,071,797 730,792 341,005
Balance, June 30, 2022 $ 3,212,474 $ 2,970,262 $ 242,212
Sensitivity of the Net Pension Liability (Asset) to Changes in the Discount Rate
The following presents the net pension liability (asset) of the City calculated using the discount rate of 6.75%, as
well as what the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-
point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
1% Decrease Current rate 1% Increase
(5.75%) (6.75%) (7.75%)
Net pension liability (asset) $ 1,027,978 $ 242,212 $ (357,152)
Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
Pension Expense (Negative Pension Expense)
For the year ended June 30, 2023, the City recognized pension expense (negative pension expense) of $211,913.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
Pension Expense (Negative Pension Expense) and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
Deferred Outflows of Resources and Deferred Inflows of Resources
For the year ended June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
outflows of inflows of
resources resources
Difference between expected and actual experience $ 240,660 $ 42,864
Net difference between expected and actual earnings on
pension plan investments 65,265 -
Changes in assumptions 138,752 -
Contributions made subsequent to measurement date of June 30,
2023 374,974 -
$ 819,651 $ 42,864
The amount shown above for “Contributions subsequent to the measurement date of June 30, 2023” will be
recognized as a reduction (increase) to net pension liability (asset) in the following measurement period.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ending
June 30,
2024 $ 40,227
2025 40,309
2026 36,804
2027 92,252
2028 36,081
Thereafter 156,137
In the table shown above, positive amounts will increase pension expense while negative amounts will decrease
pension expense.
Payable to the Pension Plan
At June 30, 2023, City of Gallatin reported a payable of $164,861 for the outstanding amount of contributions to
the pension plan required at the year ended June 30, 2023.
Defined Contribution Plans
The City has two defined contribution plans. One is the State of Tennessee Deferred Compensation Plan II – 401(k)
(the Hybrid Plan) which was adopted by the City in 2018. The other plan is the State of Tennessee 401(k) plan (the
former plan), which was in existence prior to 2018. When the City joined the Hybrid Plan, existing employees were
given the option to stay on the former plan or move to the Hybrid plan.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
Defined Contribution Plans
Several employees chose to stay on the former plan. The City has determined that none of its defined contribution
pension plans are fiduciary component units or fiduciary activities of the government.
State of Tennessee 401(k) Plan
Plan Description
The City (exclusive of the electric utility) participates in the State of Tennessee 401(k) plan (the Plan) with a Roth
option. Employees of the City’s Municipal Service departments, Water and Sewer Utility Fund, and Natural Gas Utility
Fund are eligible to participate in the Plan. The Plan assets are not held by the City and the City does not exercise a
trustee responsibility over such assets nor does the City actively participate in the Plan’s management or
administration, which is delegated to the City of Gallatin Pension Committee. The Pension Committee has
designated Retire Ready TN as a third-party administrator. Accordingly, the City does not meet the criteria necessary
for presentation of the Plan as a fiduciary fund of the City.
Funding Policy
The City’s Plan allows employees to make tax deferred contributions into self-directed investments of as much as
allowable under the Internal Revenue Code. During the fiscal year, the City contributed 5% of the employees’ annual
compensation and matched up to an additional 4% of the employees’ contributions. The plan is closed to new
entrants. The vesting of employer contributions increases from 20% in year one, with 20% annual increases until
contributions are 100% vested after 5 years in the plan. If an employee leaves employment before the vesting period
is complete, the forfeiture is put into a forfeiture account that can be used to pay expenses related to the plan. The
City had no forfeitures in 2023. At calendar year-end, any unused forfeitures are held and can be used to offset
future employer match requirements.
Annual Contributions
The City’s maximum contribution to the Plan is defined as up to 9% of an eligible employee’s annual compensation.
The City contributed $890,632 on behalf of the employees for the fiscal year ended June 30, 2023.
State of Tennessee Deferred Compensation Plan II – 401(k)
Plan Description
The Hybrid Plan is a combination of the defined benefit plan (Public Employment Retirement Plan described in
General Information about the Pension Plan above) and a defined contribution plan (a 401(k) plan). Employees of
the City hired after October 1, 2018 working more than 30 hours per week, and any existing City employee working
more than 30 hours per week who chooses to join the TCRS Hybrid Plan are eligible for the plan. The Chair of the
TCRS may amend the Hybrid Plan on behalf of all employers. The Chair also has the sole and exclusive authority to
interpret the Hybrid Plan and decide all claims and appeals for the Hybrid Plan benefits.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 10. Pension Plans – City Funds
State of Tennessee Deferred Compensation Plan II – 401(k)
Funding Policy
Employers contribute 4% of payroll to the defined benefit component (as noted in General Information about the
Pension Plan above), and 5% of payroll to the defined contribution component, for an aggregate employer
contribution of 9%. Employees may elect to defer a percentage of their salary into the plan. Defined contribution
plan amounts are deposited into the State’s 401(k) plan with Great West Financial, where the employee manages
the investments. Employees immediately vest in both the employee and employer contributions to the defined
contribution plan.
Annual Contributions
The City contributed $776,984 on behalf of the employees for the fiscal year ended June 30, 2023.
Note 11. Pension Plan – Gallatin Department of Electricity
General Information about the Pension Plan
Plan Description
The Gallatin Department of Electricity Employee’s Pension Plan (the Electric Plan) is a single-employer defined
benefit pension plan administered by the Gallatin Electric Power Board. The Electric Plan provides retirement,
disability, and death benefits to the Electric Plan members and their beneficiaries. While the Electric Plan covers
substantially all Department employees, it was closed to new entrants effective March 1, 2016. The authority to
establish and amend benefit provisions of the Electric Plan is assigned to the Gallatin Electric Power Board. The
Electric Plan issues a separate financial report that includes financial statements and required supplementary
information. That report may be obtained by writing to Gallatin Department of Electricity, P.O. Box 1555, Gallatin,
TN 37066 or by calling 615-452-5152.
For pension benefits, employees with 20 or more years of credited service are entitled to monthly pension benefits
upon attainment of early retirement at age 55. The plan’s normal retirement age is 65.
Inactive employees or beneficiaries currently receiving benefits 21
Inactive employees entitled to but not yet receiving benefits 3
Active employees 19
43
Contribution Requirements
The contribution requirements of the Electric Plan members and the department are established and may be
amended by the Gallatin Electric Power Board. Electric Plan members are required to contribute 3% of their annual
covered salary. The Department is required to contribute at an actuarially determined rate. The rate used in FY 2023
was 10.01% of annual covered payroll. The Department contributed $600,000 for the year ended June 30, 2023.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 11. Pension Plan – Gallatin Department of Electricity
Net Pension Liability
The Electric Department’s net pension liability was measured as of June 30, 2022, and the total pension liability used
to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021.
Actuarial Assumptions
The total pension liability as of the June 30, 2022 actuarial valuation was determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Salary increases 4.00% per year
Investment rate of return 6.00%, compounded annually
Cost-of-living adjustment 1.50% per year of original benefit amount
Mortality rates were based on the SOA RP-2014 Total Data Set Mortality with Scale MP-2021.
Actuarial Assumptions
The long-term expected rate of return on pension plan investment was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. These ranges are combined to produce
the long-term expected rate of return by weighing the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real
rates of return for each major asset class are summarized in the following table:
Long-term
expected real
Asset class rate of return Target allocation
US equity – large cap 5.24% 57.00%
US equity – small/mid cap 6.37% 3.00%
Fixed income 6.07% 40.00%
100%
Discount Rate
The discount rate used to measure the total pension liability was 6.00%. The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the current contribution rate and
that the Department contributions will be made at rates equal to the difference between actuarially determined
contribution rates and the employee rate.
Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all
projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate
of return on pension plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 11. Pension Plan – Gallatin Department of Electricity
Changes in Net Pension Liability
Total pension Plan fiduciary Net pension
liability net position liability (asset)
(a) (b) (a)-(b)
Balance, June 30, 2021 $ 11,776,198 $ 14,607,209 $ (2,831,011)
Service cost 217,805 - 217,805
Interest 817,982 - 817,982
Differences between expected and
actual experience - - -
Contributions, employer - 600,000 (600,000)
Contributions, employees - 59,943 (59,943)
Net investment income - (1,415,589) 1,415,589
Benefits paid, including refunds
and contributions (627,700) (627,700) -
Changes in assumptions 1,467,410 - 1,467,410
Administrative expenses - (77,846) 77,846
Net change 1,875,497 (1,461,192) 3,336,689
Balance, June 30, 2022 $ 13,651,695 $ 13,146,017 $ 505,678
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Department, calculated using the discount rate of 6.00%, as
well as what the Department’s net pension liability would be if it were calculated using a discount rate that is 1%
lower (5.00%) or 1% higher (7.00%) than the current rate:
1% Decrease Current rate 1% Increase
(5.00%) (6.00%) (7.00%)
Total pension liability $ 15,405,145 $ 13,651,695 $ 12,184,285
Plan fiduciary net pension 13,146,017 13,146,017 13,146,017
Net pension liability (asset) $ 2,259,128 $ 505,678 $ (961,732)
For the year ended June 30, 2023, the Department recognized pension expense as follows:
Components of pension expense
Service cost $ 217,805
Interest on total pension liability 817,982
Differences between expected and actual experience 30,313
Changes in assumptions 377,392
Employee contributions (59,943)
Projected earnings on assets (1,020,936)
Differences between expected and actual earnings 98,074
Pension plan administrative expense 77,846
Total expense $ 538,533
69
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 11. Pension Plan – Gallatin Department of Electricity
Deferred Outflows of Resources and Deferred Inflows of Resources
For the year ended June 30, 2023, the Department reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Deferred
outflows of inflows of
resources resources
Differences between expected and actual experience $ 180,253 $ 43,005
Changes in assumptions 1,324,924 71,732
Net difference between expected and actual earnings on
pension plan investments 724,068 -
Contributions made subsequent to measurement date of June 30,
2023 600,000 -
$ 2,829,245 $ 114,737
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ending
June 30,
2024 $ 564,921
2025 606,562
2026 461,160
2027 481,865
2028 -
Thereafter -
70
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 12. Pension Plan Reconciliation
Reconciliation of both pension plans to the amounts presented on the Statement of Net Position:
Governmental Business-type
activities activities Total
Net pension liability
Public employee retirement plan $ 194,396 $ 47,816 $ 242,212
Gallatin Department of Electricity
Employee pension plan - 505,678 505,678
Total net pension liability $ 194,396 $ 553,494 $ 747,890
Deferred outflows related to pensions
Public employee retirement plan $ 660,931 $ 158,720 $ 819,651
Gallatin Department of Electricity
Employee pension plan - 3,423,069 3,423,069
Total deferred outflows related to
pensions $ 660,931 $ 3,581,789 $ 4,242,720
Deferred inflows related to pension
Public employee retirement plan $ 35,235 $ 7,629 $ 42,864
Gallatin Department of Electricity
Employee pension plan - 220,491 220,491
Total deferred inflows related to
pensions $ 35,235 $ 228,120 $ 263,355
Pension expense
Public employee retirement plan $ 172,114 $ 39,799 $ 211,913
Gallatin Department of Electricity
Employee pension plan - 538,533 538,533
Total pension expense $ 172,144 $ 578,332 $ 750,446
Note 13. Other Post-Employment Benefits – Gallatin Department of Electricity
General Information about the OPEB Plan
Plan Description
The Electric Department Post-Retirement Medical Plan (PRMP) is a single-employer defined benefit plan
administered by the Gallatin Electric Power Board. There are no assets accumulating in a trust that meet the
requirements of GASB Statement No. 75, as amended. The Plan provides supplemental health insurance premium
reimbursements to eligible retirees. The criteria to determine eligibility includes years of services and employee age
at date of retirement. Eligible retirees may receive up to $150 per month for reimbursement of their supplemental
health insurance premiums. The plan was closed to new entrants effective March 1, 2016. Authority to establish and
amend benefit provisions is assigned to the Gallatin Electric Power Board.
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 13. Other Post-Employment Benefits – Gallatin Department of Electricity
General Information about the OPEB Plan
Employees Covered by Benefit Terms
At the measurement date of June 30, 2022, the following participants were covered by the benefit terms:
Inactive employees currently receiving benefits 16
Active employees 19
35
Total OPEB Liability
The Electric Department’s total OPEB liability of $526,990 was measured as of June 30, 2022.
Actuarial Assumptions
The total OPEB liability in the July 1, 2022 actuarial valuation was determined using the following actuarial
assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.00%
Salary increases 2.50%
Discount rate 3.54% as of June 30, 2022
Healthcare cost trend rate None assumed
Participation rate 100% assumed
The discount rate was based on the Bond Buyer’s 20-year Bond Index.
Mortality rates were based on the RPH-2014 headcount-weighted total dataset fully generational table with
projection scale MP-2020.
Changes in Total OPEB Liability
Liability
Balance, June 30, 2021 $ 630,245
Service cost 6,359
Interest 13,500
Differences between expected and
actual experience (1,985)
Changes in assumptions and other inputs (98,281)
Benefit payments (22,848)
Net change (103,255)
Balance, June 30, 2022 $ 526,990
72
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 13. Other Post-Employment Benefits – Gallatin Department of Electricity
Changes in Total OPEB Liability
Changes in assumptions and other inputs reflect a change in the discount rate from 2.16% as of June 30, 2021 to
3.54% as of June 30, 2022.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the Department, as well as what the Department’s total OPEB
liability would be if it were calculated using a discount rate that is 1% lower (2.54%) or 1% higher (4.54%) than the
current discount rate:
1% Decrease Current rate 1% Increase
(2.54%) (3.54%) (4.54%)
Total OPEB liability $ 595,528 $ 526,990 $ 470,187
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
OPEB Expense
For the year ended June 30, 2022, the Department recognized OPEB expense of $17,977.
Deferred Outflows of Resources and Deferred Inflows of Resources
At June 30, 2023, the Department reported deferred outflows of resources and deferred inflows of resources related
to OPEB from the following sources:
Deferred Deferred
outflows of inflows of
resources resources
Differences between expected and actual experience $ 23,289 $ 4,964
Changes in assumptions 63,602 100,790
Total to be amortized 86,891 105,754
Contributions made subsequent to measurement date 506,933 -
$ 593,824 $ 105,754
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be
recognized in OPEB expense as follows:
Year ending
June 30,
2024 $ (1,882)
2025 (1,882)
2026 2,733
2027 1,461
2028 (16,221)
Thereafter (3,072)
73
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 14. Defined Contribution Plan – Gallatin Department of Electricity
General Information about the Defined Contribution Plan
Plan Description
The Electric Department entered into an agreement with the State of Tennessee to participate in the State of
Tennessee Deferred Compensation Plan II – 401(k) Defined Contribution Plan with a Roth option, effective March 1,
2016. The Plan will be administered by the Treasurer for the State of Tennessee, which has an agreement with
Empower Retirement for the enrollment, deferrals, advisory services, and many other administrative aspects. The
Plan assets are not held by the Department and the Department does not exercise a trustee responsibility over such
assets. This will be the only plan offered to employees of the Department hired after March 1, 2016 and will also be
available to those employees hired before March 1, 2016 on a voluntary basis.
Funding Policy
The Plan allows employees to make tax deferred contributions into self-directed investments as much as allowable
under the Internal Revenue Code. For employees hired after March 1, 2016, the Department will match 200% of
participant elective deferrals of up to 5% of compensation. The vested interest of each participant, with respect to
matching contributions, will be as follows:
Percentage
Years of service vested
1 20%
2 40%
3 60%
4 80%
5 100%
Any forfeitures will be used first to reduce the employer’s matching contributions and then to offset Plan expenses.
As of June 30, 2022, there has been one forfeiture in the amount of $2,076. For employees hired before March 1,
2016, they can make elective deferrals into the plan with no matching contribution from the Department.
Annual Cost
The Department’s maximum contribution to the Plan is defined as up to 10% of an eligible employee’s annual
compensation. The Department contributed $153,374 on behalf of the eligible employees during the fiscal year
ended June 30, 2023. There were no outstanding contributions at June 30, 2023.
74
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 15. Other Information
Risk Management
City of Gallatin
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and
omissions; injuries to employees; and natural disasters. The City decided it was more economically feasible to join a
public entity risk pool than purchase commercial insurance for certain general liability, auto liability, errors and
omissions, workers’ compensation, and physical damage coverages. The City joined the Tennessee Municipal League
Risk Pool (the Pool), which is a public entity risk pool established in 1979 by the Tennessee Municipal League. The
City pays annual premiums to the Pool for its general, auto, and errors and omissions policies. The Pool provides
the specified coverage and pays all claims from its member premiums charged or through its reinsurance policies.
The City’s premiums are calculated based on its prior claims history. It is the policy of the City to purchase
commercial insurance for the risk of employee dishonesty and law enforcement professional liability. Settled claims
have not exceeded the commercial coverage or the coverage provided by the Pool in any of the past three years.
Gallatin Department of Electricity
It is the policy of the Gallatin Electric Department to purchase commercial insurance for the risks of loss to which it
is exposed. These risks include general liability, property and casualty, worker’s compensation, employee health, and
accident. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years and there
has been no significant reduction in the amount of coverage.
Commitments
The City purchases natural gas under various contracts requiring the purchase of minimum quantities of natural gas
from suppliers at cost based upon national index prices. Natural gas purchases exceeding the specified minimum
quantities are made at the going market value. City management believes any risk associated with the minimum
purchase quantities as specified in the aforementioned contracts to be minimal. Further, the City is committed under
various natural gas transportation agreements requiring specified minimum transmission capacities.
As of June 30, 2023, the City entered into multiple construction contracts related to road, water, and sewer
construction projects of approximately $23,700,000 and has spent approximately $23,600,000 of committed funds,
with a remaining balance of approximately $100,000 in outstanding commitments at June 30, 2023.
The City has entered into an agreement with the Sumner County Resource Authority (the Resource Authority), a
joint venture between the City, Sumner County, and the City of Hendersonville, TN, which provides that, in the event
the Resource Authority’s revenues are insufficient to cover the costs of operation and debt retirement, the County
and Cities shall pay such deficit in the proportions of 3/7, 2/7, and 2/7, respectively. These same entities have
executed a “contract in Lieu of Performance Bond” with the State of Tennessee for financial assurance of the closure
and post-closure costs of the landfill, should the Resource Authority be unable to do so.
The Resource Authority operates primarily as a solid waste transfer station. The City utilizes the Resource Authority
for solid waste disposal purposes at essentially the same cost per ton as in prior years. There is uncertainty as to the
future operations of the Resource Authority, as well as the costs relative to the change in operations or possible
dissolution.
75
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City of Gallatin, Tennessee
Notes to Financial Statements
For the Fiscal Year Ended June 30, 2023
Note 15. Other Information
Commitments
The Resource Authority, as of June 30, 2023, which is the latest available financial statement date, has net investment
in capital assets in the amount of $2,524,886 and an unrestricted net position of $5,716,940, as compared to
2,198,393 and $3,870,287, respectively, for 2022. During 2023, the City paid the Resource Authority $880,683 in
tipping fees for solid waste.
Contingent Liabilities
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal and state governments. Any disallowed claims, including amounts already collected, may
constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the
grantors cannot be determined at this time; however, the City’s management expects such amounts, if any, to be
immaterial.
The City is a defendant in various lawsuits; however, the outcome of these lawsuits is not presently determinable,
though legal counsel does not expect any possible liability to exceed the City’s limits of insurance.
Power Contract
The Utility has a power contract with the TVA whereby the electric system purchases all of its electric power from
the TVA and is subject to certain restrictions and conditions as provided for in the power contract. Such restrictions
include, but are not limited to, prohibitions against furnishing, advancing, lending, pledging, or otherwise diverting
System funds, revenues, or property to other operations of the County and the purchase or payment of or providing
security for indebtedness on other obligations applicable to such other operations.
Note 16. TVA Advances Payable
Advances payable are made up of advances to the Electric Department from TVA for home weatherization loans
and interest. The TVA loans are paid in monthly installments as the Electric Department is paid by the customers.
These advances bear interest at either 6% or 8%. They are secured by UCC-1s on the customer’s heating and air
units. At June 30, 2023, outstanding funds advanced by TVA totaled $1,579.
Note 17. Subsequent Events
Management has evaluated subsequent events through December 18, 2023, the date on which the financial
statements were available for issuance.
76
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Required Supplementary Information
[[page 88]]
City of Gallatin, Tennessee
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation
in the Public Employee Hybrid Pension Plan of the TCRS
Last Ten Fiscal Years
2022 2021 2020 2019
Total Pension Liability
Service cost $ 778,219 $ 666,354 $ 575,836 $ -
Interest 195,733 137,048 72,620 -
Changes in benefit terms - - - 426,349
Differences between actual and
expected experience 136,142 (52,390) 153,571 -
Changes of assumptions - 169,586 - -
Benefit payments, including refunds
of employee contributions (38,297) (7,761) - (536)
Net change in total OPEB liability 1,071,797 912,837 802,027 425,813
Total pension liability, beginning of year 2,140,677 1,227,840 425,813 -
Total pension liability, end of year (a) 3,212,474 2,140,677 1,227,840 425,813
Plan Fiduciary Net Position
Contributions, employer 247,676 190,332 170,527 107,409
Contributions, employee 648,370 556,528 513,637 323,520
Net investment income (101,596) 385,616 37,963 15,540
Benefit payments, including refunds
of employee contributions (38,297) (7,761) - (536)
Administrative expenses (25,361) (21,022) (19,265) (13,018)
Other - - - -
Net change in plan fiduciary net position 730,792 1,103,693 702,862 432,915
Plan fiduciary net position, beginning 2,239,470 1,135,777 432,915 -
Plan fiduciary net position, ending (b) 2,970,262 2,239,470 1,135,777 432,915
Net pension liability (asset), ending (a)-(b) $ 242,212 $ (98,793) $ 92,063 $ (7,102)
Plan fiduciary net position as a percentage
of total pension liability 92.46% 104.62% 92.50% 101.67%
Covered payroll $ 12,967,349 $ 11,130,541 $ 10,274,439 $ 6,470,377
Net pension liability (asset) as a percentage of
covered payroll 1.87% -0.89% 0.90% -0.11%
Notes to Schedule
Changes of Assumptions
In 2021, amounts reported as changes of assumptions resulted from changes to the inflation rate, investment rate of return, cost-of-living
adjustment, and mortality improvements. In 2017, amounts reported as changes of assumptions resulted from changes to the inflation rate,
investment rate of return, cost-of-living adjustment, salary growth, and mortality improvements.
GASB 68 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 68 . The information in this
schedule is not required to be presented retroactively prior to the implementation date. Please refer to previously supplied data from TCRS
GASB website for prior years’ data, if needed.
See independent auditor's report 77
[[page 89]]
City of Gallatin, Tennessee
Schedule of Contributions Based on Participation in the Public Employee Hybrid Pension Plan of the TCRS
Last Ten Fiscal Years
2023 2022 2021 2020 2019
Actuarially determined contribution $ 374,974 $ 247,676 $ 190,332 $ 170,527 $ 107,409
Contributions in relation to the
actuarially determined contribution 374,974 247,676 190,332 170,527 107,409
Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered-employee payroll $ 15,488,930 $ 12,962,273 $ 11,130,541 $ 10,274,439 $ 6,470,377
Contributions as a percentage of
covered-employee payroll 2.42% 1.91% 1.71% 1.66% 1.66%
Notes to Schedule
GASB 68 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 68 . The information in this
schedule is not required to be presented retroactively prior to the implementation date. Please refer to previously supplied data from TCRS
GASB website for prior years’ data, if
Beginning in FY 2019, the City placed the actuarially determined contribution rate of covered payroll in the pension plan and placed the
remainder of the 4% contractually required contribution into the Pension Stabilization Reserve Trust (SRT).
2019: Pension - 1.66%, SRT - 2.34%
2020: Pension - 1.66%, SRT - 2.34%
2021: Pension - 1.71%, SRT - 2.29%
2022: Pension - 1.91%, SRT - 2.09%
2023: Pension - 2.42%, SRT - 1.58%
Valuation Date
Actuarially determined contribution rates for fiscal year 2023 were calculated based on the June 30, 2021 actuarial valuation.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal
Amortization method Level dollar, closed (not to exceed 20 years)
Amortization period Varies by year
Asset valuation 10-year smoothed within a 20% corridor to market value
Inflation 2.25%
Salary increases Graded salary ranges from 8.72 to 3.44% based on age, inflation, averaging 4.00%
Investment rate of return 6.75%, net of investment expense, including inflation
Retirement age Pattern of retirement determined by experience study
Mortality Customized table based on actual experience including an adjustment for some anticpated improvement
Cost of living adjustment 2.13%
Changes of Assumptions
In 2021, the following assumptions were changed: decreased inflation rate from 2.50% to 2.25%; decreased the investment rate of return from 7.25% to
6.75%; decreased the cost-of-living adjustment from 2.25% to 2.125%; and modified mortality assumptions. In 2017, the following assumptions were
changed: decreased inflation rate from 3.00% to 2.50%; decreased the investment rate of return from 7.50% to 7.25%; decreased the cost-of-living
adjustment from 2.50% to 2.25%; and decreased salary growth graded ranges from an average of 4.25% to an average of 4.00%.
See independent auditor's report 78
[[page 90]]
City of Gallatin, Tennessee
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios Based on Participation
in the Gallatin Electric Department Employee Pension Plan
Last 10 Fiscal Years
2022 2021 2020 2019 2018 2017 2016 2015 2014
Total Pension Liability
Service cost $ 217,805 $ 254,942 $ 255,677 $ 183,037 $ 185,023 $ 177,907 $ 165,004 $ 160,612 $ 136,831
Interest 817,982 794,550 771,299 723,598 691,268 685,170 659,028 652,294 559,812
Changes in benefit terms - - - - - - - - -
Differences between expected and
actual experience - 26,471 (1) 324,343 115,214 (295,965) - - 22,888
Changes in assumptions 1,467,410 (45,689) (38,813) (28,647) - - (468,590) - 989,264
Benefit payments, including refunds of
employee contributions (627,700) (688,070) (623,543) (564,525) (492,024) (482,369) (445,233) (403,705) (496,184)
Net change in total pension liability 1,875,497 342,204 364,619 637,806 499,481 84,743 (89,791) 409,201 1,212,611
Total pension liability, beginning 11,776,198 11,433,994 11,069,375 10,431,569 9,932,088 9,847,345 9,937,136 9,527,935 8,315,324
Total pension liability, ending (a) 13,651,695 11,776,198 11,433,994 11,069,375 10,431,569 9,932,088 9,847,345 9,937,136 9,527,935
Plan Fiduciary Net Position
Contributions, employer 600,000 750,000 1,050,000 1,200,000 800,000 1,040,000 666,994 385,256 257,050
Contributions, employee 59,943 59,095 59,546 61,115 62,396 62,487 65,855 61,065 57,685
Net investment income (1,415,589) 3,077,505 408,674 685,759 610,970 663,332 185,887 118,498 644,573
Benefit payments, including refunds
of employee contributions (627,700) (688,070) (623,543) (564,525) (492,024) (482,369) (445,233) (403,705) (496,184)
Administrative expenses (77,846) (72,959) (57,274) (49,663) (45,318) (39,030) (34,134) (32,684) (31,671)
Other - - - - - - - - -
Net change in plan fiduciary net position (1,461,192) 3,125,571 837,403 1,332,686 936,024 1,244,420 439,369 128,430 431,453
Plan fiduciary net position, beginning 14,607,209 11,481,638 10,644,235 9,311,549 8,375,525 7,131,105 6,691,736 6,563,306 6,131,853
Plan fiduciary net position, ending (b) 13,146,017 14,607,209 11,481,638 10,644,235 9,311,549 8,375,525 7,131,105 6,691,736 6,563,306
Net pension liability (asset), ending (a - b) $ 505,678 $ (2,831,011) $ (47,644) $ 425,140 $ 1,120,020 $ 1,556,563 $ 2,716,240 $ 3,245,400 $ 2,964,629
Plan fiduciary net position as a percentage
of total pension liability 96.30% 124.04% 100.42% 96.16% 89.26% 84.33% 72.42% 67.34% 68.88%
Covered payroll $ 1,991,942 $ 1,991,942 $ 2,085,475 $ 2,085,475 $ 1,958,148 $ 2,043,550 $ 2,030,845 $ 1,952,736 $ 1,934,194
Net pension liability (asset) as a percentage of
covered payroll 25.39% -142.12% -2.28% 20.39% 57.20% 76.17% 133.75% 166.20% 153.27%
Notes to Schedule
GASB 68 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 68 . The information in this schedule is not required to be presented retroactively prior to the
implementation date. Please refer to previously supplied data from TCRS GASB website for prior years’ data, if needed.
79
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City of Gallatin, Tennessee
Schedule of Contributions Based on Participation in the Gallatin Electric Department Employee Pension Plan
Last Ten Fiscal Years
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Actuarially determined contribution $ 211,462 $ 200,921 $ 332,078 $ 342,422 $ 342,422 $ 417,159 $ 417,159 $ 385,256 $ 385,256 $ 253,122
Contributions in relation to the
actuarially determined contribution 600,000 600,000 750,000 1,050,000 1,200,000 800,000 1,040,000 666,994 381,950 459,410
Contribution deficiency (excess) $ (388,538) $ (399,079) $ (417,922) $ (707,578) $ (857,578) $ (382,841) $ (622,841) $ (281,738) $ 3,306 $ (206,288)
Covered-employee payroll $ 1,945,783 $ 1,991,942 $ 1,991,942 $ 2,085,475 $ 2,085,475 $ 1,958,148 $ 2,043,550 $ 2,030,845 $ 1,952,736 $ 1,934,194
Contributions as a percentage of
covered-employee payroll 30.84% 30.12% 37.65% 50.35% 57.54% 40.85% 50.89% 32.84% 19.56% 23.75%
Notes to Schedule
GASB 68 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 68 . The information in this schedule is not required to be presented retroactively prior to
the implementation date. Please refer to previously supplied data from TCRS GASB website for prior years’ data, if needed.
Methods and assumptions used to determine contribution rates:
Valuation date Actuarially determined contribution rates for the year ended June 30, 2023 were calculated based on the June
30, 2021 actuarial valuation.
Actuarial cost method Entry age normal, level percentage of pay
Amortization method Level dollar
Remaining amortization period Initial amortization period: 30 years as of 2014
Asset valuation Market value of plan assets
Cost-of-living adjustments 1.50%
Salary increases 4.00%
Investment rate of return 6.00%
Retirement age 65
Mortality SOA RP-2014 Total Dataset Mortality Scale MP-2021
Disabled mortality 1965 Railroad Board Disability Annuity Mortality
See independent auditor's report 80
[[page 92]]
City of Gallatin, Tennessee
Schedule of Investment Returns Based on Participation in the Gallatin Electric Department Employee Pension Plan
Last Ten Fiscal Years
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Annual money-weighted rate of
return, net of investment expense 9.97% -10.54% 26.42% 3.84% 7.09% 7.11% 9.04% 1.75% 1.82% 11.00%
Notes to Schedule
GASB 68 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 68 . The information in this schedule is not required to be presented retroactively prior to the
implementation date. Please refer to previously supplied data from TCRS GASB website for prior years’ data, if needed.
See independent auditor's report 81
[[page 93]]
City of Gallatin, Tennessee
Schedule of Changes in Total OPEB Liability and Related Ratios - Electric Department
Last Ten Fiscal Years
2023 2022 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost $ 10,377 $ 6,359 $ 9,116 $ 6,250 $ 6,485 $ 7,587 $ 9,220
Interest 18,974 13,500 13,904 18,985 18,085 16,911 14,641
Changes of benefit terms 11,914 - - - - - -
Differences between actual and
expected experience (10,450) (1,985) (4,878) 34,352 - 7,940 3,563
Changes in assumptions (135,116) (98,281) 4,124 89,394 22,113 (16,731) (46,674)
Benefit payments, net (21,933) (22,848) (23,975) (20,354) (15,783) (15,914) (25,113)
Net change in total OPEB liability (126,234) (103,255) (1,709) 128,627 30,900 (207) (44,363)
Total OPEB liability, beginning of year 526,990 630,245 631,954 503,327 472,427 472,634 516,997
Total OPEB liability, end of year (a) $ 400,756 $ 526,990 $ 630,245 $ 631,954 $ 503,327 $ 472,427 $ 472,634
Covered-employee payroll $ 2,165,686 $ 2,165,686 $ 2,165,686 $ 2,085,475 $ 2,005,264 $ 1,958,148 $ 2,043,550
Net OPEB liability as a percentage of
covered-employee payroll 18.50% 24.33% 29.10% 30.30% 25.10% 24.13% 23.13%
Notes to Schedule
GASB 75 requires a 10-year schedule for this data to be presented starting with the implementation of GASB 75 . The information in this schedule is not
required to be presented retroactively prior to the implementation date.
There are no assets accumulating in a trust related to this OPEB plan that meet the criteria in paragraph 4 of GASB 75.
Changes in assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the
discount rates used in each period:
2017 3.58%
2018 3.87%
2019 3.50%
2020 2.21%
2021 2.16%
2022 3.54%
2023 6.17%
There were no benefit changes during the measurement period.
See independent auditor's report 82
[[page 94]]
City of Gallatin, Tennessee
Schedule of Contributions Based on Participation and Schedule of Investment Returns
in the Gallatin Electric Department OPEB Plan
Last Ten Fiscal Years
Schedule of Contributions
2023
Actuarially determined contribution $ 27,266
Contributions in relation to the
actuarially determined contribution 485,000
Contribution deficiency (excess) $ (457,734)
Covered-employee payroll Not available
Contributions as a percentage of
covered-employee payroll Not available
Notes to Schedule
Actuarially determined contribution rates are calculated as of June 30, two years prior
to the end of the fiscal year in which
Methods and assumptions used to determine contribution rates:
Actuarial cost method Individual entry age normal
Amortization method Level dollar
Amortization period 30 years
Asset valuation method Market value of plan assets
Salary increases 2.50%
Inflation rate 2.00%
Discount rate 6.17%
Retirement age 65
Mortality RPH-2014 Headcount-weighted
total dataset table with
projection scale MP-2020
Disabled mortality 1965 Railroad Board Disability
Annuity Mortality
Schedule of Investment Returns
2023
Annual money-weighted rate of
return, net of investment expense 6.56%
See independent auditor's report 83
[[page 95]]
Supplementary Information
[[page 96]]
Nonmajor Governmental Funds
Special Revenue Funds:
Special Revenue Funds account for specific revenues that are legally restricted to specific
expenditure purposes. The Special Revenue Funds are:
Special Services Fund – To account for sex offender registry payments that are used for
specific purposes and private donations to be used for the “Shop with a Cop” Christmas
program.
Drug Fund – To account for the resources used in the City’s drug enforcement and
education programs.
Environmental Services Fund – To account for the resources used for the City’s garbage
collection activities.
Stormwater Fund – To account for the stormwater fee that is used for stormwater
maintenance and repairs throughout the City.
Industrial Development Board – To account for activities by the City to encourage
economic development.
Permanent Funds:
Permanent Funds account for specific revenues for which the corpus of the donation is restricted
by external donors. The Permanent Funds are:
Witherspoon Loan Fund – To account for a donation that was received for the purpose of
making loans to graduating seniors to be used for college expenses.
Cemetery Trust Fund – To account for donations that have been received to maintain the
cemetery in perpetuity.
[[page 97]]
City of Gallatin, Tennessee
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds Permanent Funds
Industrial Total Total Nonmajor
Special Drug Environmental Stormwater Development Total Special Witherspoon Cemetery Permanent Governmental
Services Fund Fund Services Fund Utility Fund Fund Revenue Funds Loan Fund Trust Fund Funds Funds
Assets
Cash $ 109,324 $ 160,170 $ 1,831,943 $ 3,099,103 $ - $ 5,200,540 $ 310,113 $ 16,653 $ 326,766 $ 5,527,306
Investments - - - - - - - 21,025 21,025 21,025
Receivables, net - - 264,513 125,151 - 389,664 134,521 - 134,521 524,185
Inventory - - 16,710 - - 16,710 - - - 16,710
Other assets - - - - - - 11,102 - 11,102 11,102
Restricted assets, -
TCRS Stabilization Fund - - 32,373 22,235 - 54,608 - - - 54,608
Total assets $ 109,324 $ 160,170 $ 2,145,539 $ 3,246,489 $ - $ 5,661,522 $ 455,736 $ 37,678 $ 493,414 $ 6,154,936
Liabilities and Fund Balances
Liabilities
Accounts payable $ 985 $ - $ 108,224 $ 23,056 $ - $ 132,265 $ - $ - $ - $ 132,265
Performance deposits - - - - - - - - - -
Unearned Evidence Funds 65,006 - - - - 65,006 - - - 65,006
Total liabilities 65,991 - 108,224 23,056 - 197,271 - - - 197,271
Fund balances
Nonspendable
Prepaid Items - - - - - - 11,102 - 11,102 11,102
Perpetual Care - - - - - - - 21,025 21,025 21,025
Inventory - - 16,710 - - 16,710 - - - 16,710
Restricted for
Funds held in trust - - - - - - 444,634 - 444,634 444,634
Environmental services - - 1,988,232 - - 1,988,232 - - - 1,988,232
Drug enforcement - 160,170 - - - 160,170 - - - 160,170
Stormwater - - - 3,201,198 - 3,201,198 - - - 3,201,198
Hybrid Retirement
Stabilization Funds - - 32,373 22,235 - 54,608 - - - 54,608
Assigned to
Police Special Projects 43,333 - - - - 43,333 - - - 43,333
Cemetery Use - - - - - - - 16,653 16,653 16,653
Total fund balances 43,333 160,170 2,037,315 3,223,433 - 5,464,251 455,736 37,678 493,414 5,957,665
Total liabilities and fund balances $ 109,324 $ 160,170 $ 2,145,539 $ 3,246,489 $ - $ 5,661,522 $ 455,736 $ 37,678 $ 493,414 $ 6,154,936
84
[[page 98]]
City of Gallatin, Tennessee
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
Special Revenue Funds Permanent Funds
Industrial Total Total Nonmajor
Special Drug Environmental Stormwater Development Total Special Witherspoon Cemetery Permanent Governmental
Services Fund Fund Services Fund Utility Fund Fund Revenue Funds Loan Fund Trust Fund Funds Funds
Revenues
Charges for services $ - $ - $ 3,269,469 $ 2,002,345 $ - $ 5,271,814 $ - $ - $ - $ 5,271,814
Fines and forfeitures 5,400 68,705 - - - 74,105 - - - 74,105
Other revenue 56,597 28,987 104,496 47,736 - 237,816 6,777 1,377 8,154 245,970
Total revenues 61,997 97,692 3,373,965 2,050,081 - 5,583,735 6,777 1,377 8,154 5,591,889
Expenditures
Current
Public safety 74,140 53,413 - - - 127,553 - - - 127,553
Environmental services - - 2,426,279 869,397 - 3,295,676 - - - 3,295,676
Economic development - - - - - - - - - -
Capital outlay - 64,750 684,847 77,585 - 827,182 - - - 827,182
Total expenditures 74,140 118,163 3,111,126 946,982 - 4,250,411 - - - 4,250,411
Excess of revenues
over expenditures (12,143) (20,471) 262,839 1,103,099 - 1,333,324 6,777 1,377 8,154 1,341,478
Other financing sources
Transfers in - - 31,088 16,340 47,428 - - - 47,428
Transfer to other funds - - - - (145,664) (145,664) - - - (145,664)
Fund balances, beginning of year 55,476 180,641 1,743,388 2,103,994 145,664 4,229,163 448,959 36,301 485,260 4,714,423
Fund balances, end of year $ 43,333 $ 160,170 $ 2,037,315 $ 3,223,433 $ - $ 5,464,251 $ 455,736 $ 37,678 $ 493,414 $ 5,957,665
85
[[page 99]]
City of Gallatin, Tennessee
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
Special Services Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts
Actual Variance with
Original Final amounts final budget
Revenues
Fines and forfeitures
Sex offender registry $ 5,000 $ 5,000 $ 5,400 $ 400
Other
Donations 50,000 50,000 56,550 6,550
Interest - - 47 47
Total revenues 55,000 55,000 61,997 6,997
Expenditures
Current
Public Safety, Police
Office supplies 5,000 5,000 99 4,901
Grants and donation 50,000 85,000 74,041 10,959
Total expenditures 55,000 90,000 74,140 15,860
Excess of revenues over
(under) expenditures - (35,000) (12,143) 22,857
Fund balance, beginning of year 55,476 55,476 55,476 -
Fund balance, end of year $ 55,476 $ 20,476 $ 43,333 $ 22,857
86
[[page 100]]
City of Gallatin, Tennessee
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
Drug Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts
Actual Variance with
Original Final amounts final budget
Revenues
Fines and forfeitures $ 90,000 $ 90,000 $ 68,705 $ (21,295)
Sale of equipment - 24,285 28,987 4,702
Total revenues 90,000 114,285 97,692 (16,593)
Expenditures
Current
Public Safety, Police
Office supplies 25,000 54,285 53,413 872
Capital outlay 65,000 65,000 64,750 250
Total expenditures 90,000 119,285 118,163 1,122
Excess of revenues over
(under) expenditures - (5,000) (20,471) (15,471)
Fund balance, beginning of year 180,641 180,641 180,641 -
Fund balance, end of year $ 180,641 $ 175,641 $ 160,170 $ (15,471)
87
[[page 101]]
City of Gallatin, Tennessee
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
Environmental Services Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts
Actual Variance with
Original Final amounts final budget
Revenues
Charges for services $ 3,072,000 $ 3,072,000 $ 3,269,469 $ 197,469
Other
Sale of supplies 60,000 60,000 98,470 38,470
Miscellaneous - - 6,026 6,026
Total revenues 3,132,000 3,132,000 3,373,965 241,965
Expenditures
Current
Environmental services
Salaries 803,356 803,356 769,511 33,845
Employee benefit and taxes 351,793 351,793 297,186 54,607
Insurance 38,000 38,000 37,338 662
Utilities 19,931 19,931 16,672 3,259
Repairs and maintenance 85,000 85,000 79,339 5,661
Other contractual services 1,015,000 1,017,141 857,589 159,552
Supplies 9,000 9,000 8,398 602
Gas, oil, diesel, etc. 130,000 130,000 158,262 (28,262)
Supplies for resale 80,000 80,000 80,005 (5)
Natural materials 100,000 100,000 55,664 44,336
Professional services 65,826 65,826 65,826 -
Miscellaneous 3,450 3,450 489 2,961
Capital outlay 516,000 1,046,956 684,847 362,109
Total expenditures 3,217,356 3,750,453 3,111,126 639,327
Excess of revenues over
(under) expenditures (85,356) (618,453) 262,839 (881,292)
Other financing sources
Transfers in - - 31,088 (31,088)
Excess of revenues and other sources
over expenditures and other uses (85,356) (618,453) 293,927 (912,380)
Fund balance, beginning of year 1,743,388 1,743,388 1,743,388 -
Fund balance, end of year $ 1,658,032 $ 1,124,935 $ 2,037,315 $ (912,380)
88
[[page 102]]
City of Gallatin, Tennessee
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
Stormwater Utility Fund
For the Fiscal Year Ended June 30, 2023
Budgeted amounts
Actual Variance with
Original Final amounts final budget
Revenues
Charges for services $ 1,900,000 $ 1,900,000 $ 2,002,345 $ 102,345
Other
Donations - 47,736 47,736 -
Total revenues 1,900,000 1,947,736 2,050,081 102,345
Expenditures
Current
Environmental services
Salaries 656,352 656,352 482,804 173,548
Employee benefit and taxes 301,006 301,006 169,958 131,048
Insurance - - 23,112 (23,112)
Printing and publications - - 110 (110)
Utilities 6,800 6,800 5,474 1,326
Repairs and maintenance 15,000 15,000 15,997 (997)
Supplies 4,900 7,400 2,879 4,521
Gas, oil, diesel, etc. 19,500 19,500 23,848 (4,348)
Professional services 539,279 673,542 85,075 588,467
Miscellaneous 176,820 176,820 60,140 116,680
Capital outlay 705,500 1,397,236 77,585 1,319,651
Total expenditures 2,425,157 3,253,656 946,982 2,306,674
Excess of revenues over
(under) expenditures (525,157) (1,305,920) 1,103,099 (2,409,019)
Other financing sources
Transfers in - - 16,340 (16,340)
Excess of revenues and other sources
over expenditures and other uses (525,157) (1,305,920) 1,119,439 (2,425,359)
Fund balance, beginning of year 2,103,994 2,103,994 2,103,994 -
Fund balance, end of year $ 1,578,837 $ 798,074 $ 3,223,433 $ (2,425,359)
89
[[page 103]]
City of Gallatin, Tennessee
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget (GAAP Basis) and Actual
Industrial Development Board
For the Fiscal Year Ended June 30, 2023
Budgeted amounts
Actual Variance with
Original Final amounts final budget
Revenues
Other
Payment in lieu from industry $ - $ - $ - $ -
Application fee - - - -
Interest - - - -
Total revenues - - - -
Expenditures
Current
Economic Development - - - -
Excess of revenues over
(under) expenditures - - - -
Other financing sources
Transfers to other funds - - (145,664) 145,664
Fund balance, beginning of year 145,664 145,664 145,664 -
Fund balance, end of year $ 145,664 $ 145,664 $ - $ 145,664
90
[[page 104]]
City of Gallatin, Tennessee
Schedule of Expenditures of Federal Awards and State Financial Assistance
For the Fiscal Year Ended June 30, 2023
Passed
Assistance Contract through to
Grantor / Pass-through Grantor Program name listing number Expenditures subrecipients
Federal Awards
US Department of Homeland Security,
TN Highway Safey Office Police Traffic Services State & Community Highway Safety Projects (THSO) 20.600 Z23THS103 $ 19,136 $ -
Total US Department of Safety and Homeland Security 19,136 -
US Department of Justice, Bureau of
Justice Assistance
Federal Bureau of Investigation FBI Violent Crimes Task Force Reimbursement 16.U01 MOU 10,786 -
Office of Justice Programs Bulletproof Vest Program, Justice Assistance Grants 16.607 2020-BUBX-2002-3062 3,040 -
Justice Mental Health Collaboration Program, Embedded Clinician 16.745 2020-MO-BX-0030 41,545 -
Comprehensive Opioid, Stimulant, and Substance Abuse Program 16.838 2020-AR-BX-0053 82,880 -
Total US Department of Justice - BJA 138,251 -
US Department of Transportation
TN Department of Transportation Highway Planning and Construction Cluster
Highway Planning and Construction (Federal-Aid Highway Program) 20.205 STP-M-8300(70) 444,048 -
Highway Planning and Construction (Federal-Aid Highway Program) 20.205 EM-NH-6(130)/
83LPLM-F3-122 727,172 -
Highway Planning and Construction (Federal-Aid Highway Program) 20.205 SRTS-4569(10)/83LPLM 14,593 -
Highway Planning and Construction (Federal-Aid Highway Program) 20.205 83PLM-F3-110/
CM-9306(21) 868,824 -
Total Highway Planning and Construction Cluster 2,054,637 -
Total US Department of Transportation 2,054,637 -
US Department of Treasury
TN Department of Finance and Administration COVID-19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 30,000 -
Total US Department of The Treasury 30,000
Total federal awards 2,242,024 -
Continued
91
[[page 105]]
City of Gallatin, Tennessee
Schedule of Expenditures of Federal Awards and State Financial Assistance
For the Fiscal Year Ended June 30, 2023
Passed
Assistance Contract through to
Grantor / Pass-through Grantor Program name listing number Expenditures subrecipients
State Financial Assistance
Total state financial assistance - -
Total federal awards and state financial assistance $ 2,242,024 $ -
Note 1. Basis of Presentation
This schedule of expenditures of federal awards and state financial assistance summarizes the expenditures of the City under programs of the federal and state governments for the
year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the City, it is
not intended to and does not present the financial position, change in net position, or cash flows of the City. Expenditures reported on the schedule are reported on the accrual basis of
accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited
as to reimbursement.
Note 2. Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the
Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments
or credits made in the normal course of business to amounts reported as expenditures in prior years. The City has elected to use the 10-percent de minimis indirect cost rate as
allowed under the Uniform Guidance.
Note 3. Indirect Cost Rate
The City has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
92
[[page 106]]
City of Gallatin, Tennessee
Schedule of Changes in Long-term Debt by Individual Issue
For the Fiscal Year Ended June 30, 2023
Paid and/or
Original Date Last Issued matured Refunded
amount Interest of maturity Outstanding during during during Outstanding
Description of Indebtedness of issue rate issue date July 1, 2022 period period period June 30, 2023
Governmental Activities
Bonds payable
Payable through General Fund
GO improvement bonds, Series 2014 $ 14,185,000 2.00%-5.00% 8/18/14 1/1/34 $ 8,525,000 $ - $ 950,000 $ - $ 7,575,000
GO bonds, Series 2016 $ 11,040,000 2.00%-5.00% 1/20/16 1/1/36 8,210,000 - 500,000 - 7,710,000
GO bonds, Series 2021 $ 9,725,000 2.00%-5.00% 9/28/11 1/1/41 9,400,000 - 330,000 - 9,070,000
Total long-term debt of
governmental activities $ 26,135,000 $ - $ 1,780,000 $ - $ 24,355,000
Business-type Activities
Bonds payable
Payable through Water and Sewer Department
Water and Sewer Revenue Bonds,
Series 2015 $ 25,000,000 3.00%-5.00% 5/19/15 7/1/40 $ 5,700,000 $ - $ 1,200,000 $ - $ 4,500,000
Water and Sewer Revenue Bonds,
Series 2014 $ 14,185,000 2.00%-5.00% 8/20/14 7/1/29 2,690,000 - 285,000 - 2,405,000
Water and Sewer Revenue Bonds,
Series 2011 $ 8,955,000 2.00%-3.625% 12/28/11 7/1/32 5,925,000 - 450,000 - 5,475,000
Gas System Revenue Bonds, Series 2019 $ 5,570,000 3.00%-5.00% 4/9/19 1/1/39 4,940,000 - 210,000 - 4,730,000
Water and Sewer Revenue Improvement
Bonds, Series 2021A $ 13,400,000 3.00%-4.00% 11/17/21 7/1/46 13,400,000 - 325,000 13,075,000
Water and Sewer Revenue Refunding
Bonds, Series 2021B $ 13,965,000 0.510%-2.750% 11/17/21 7/1/37 13,965,000 - 220,000 - 13,745,000
Total long-term debt of
business type activities $ 46,620,000 $ - $ 2,690,000 $ - $ 43,930,000
93
[[page 107]]
City of Gallatin, Tennessee
Schedule of Long-term Debt, Principal, and Interest Requirements
Governmental Activities, by Fiscal Year
June 30, 2023
General Obligation
Fiscal year Improvement Bonds, General Obligation General Obligation
ending Series 2014 Bonds, Series 2016 Bonds, Series 2021 Total
June 30, Principal Interest Principal Interest Principal Interest Principal Interest
2024 $ 975,000 $ 270,000 $ 510,000 $ 285,000 $ 350,000 $ 291,600 $ 1,835,000 $ 846,600
2025 1,010,000 221,250 520,000 259,500 365,000 274,100 1,895,000 754,850
2026 1,050,000 180,850 530,000 233,500 385,000 255,850 1,965,000 670,200
2027 1,090,000 138,850 540,000 207,000 405,000 236,600 2,035,000 582,450
2028 450,000 106,150 555,000 185,400 425,000 216,350 1,430,000 507,900
2029 460,000 92,650 570,000 163,200 445,000 195,100 1,475,000 450,950
2030 475,000 78,850 585,000 140,400 465,000 172,850 1,525,000 392,100
2031 490,000 64,600 600,000 117,000 490,000 149,600 1,580,000 331,200
2032 505,000 49,900 620,000 99,000 515,000 125,100 1,640,000 274,000
2033 525,000 34,119 640,000 80,400 535,000 104,500 1,700,000 219,019
2034 545,000 17,713 660,000 61,200 545,000 93,800 1,750,000 172,713
2035 - - 680,000 41,400 555,000 82,900 1,235,000 124,300
2036 - - 700,000 21,000 570,000 71,800 1,270,000 92,800
2037 - - - - 580,000 60,400 580,000 60,400
2038 - - - - 590,000 48,800 590,000 48,800
2039 - - - - 605,000 37,000 605,000 37,000
2040 - - - - 615,000 24,900 615,000 24,900
2041 - - - - 630,000 12,600 630,000 12,600
Total $ 7,575,000 $ 1,254,932 $ 7,710,000 $ 1,894,000 $ 9,070,000 $ 2,453,850 $ 24,355,000 $ 5,602,782
94
[[page 108]]
City of Gallatin, Tennessee
Schedule of Long-term Debt, Principal, and Interest Requirements
Business-type Activities, by Fiscal Year
June 30, 2023
Water and Sewer Water and Sewer
Fiscal year Water and Sewer Water and Sewer Water and Sewer Gas System Revenue Improvement Revenue Refunding
ending Revenue Bonds, Series 2011 Revenue Bonds, Series 2014 Revenue Bonds, Series 2015 Revenue Bonds, Series 2019 Bonds, Series 2021A Bonds, Series 2021B Total
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest
2024 $ 460,000 $ 169,848 $ 315,000 $ 80,375 $ 1,255,000 $ 171,038 $ 215,000 $ 174,538 $ 340,000 $ 448,100 $ 225,000 $ 260,412 $ 2,810,000 $ 1,304,311
2025 490,000 155,598 325,000 64,375 1,305,000 120,838 225,000 168,088 355,000 434,200 225,000 258,567 2,925,000 1,201,666
2026 505,000 141,304 330,000 49,650 1,350,000 68,638 230,000 161,338 370,000 419,700 225,000 255,900 3,010,000 1,096,530
2027 520,000 126,560 340,000 37,950 - 21,388 240,000 149,838 385,000 404,600 1,640,000 242,082 3,125,000 982,418
2028 535,000 110,401 355,000 27,525 - 21,388 255,000 137,838 400,000 388,900 1,670,000 215,587 3,215,000 901,639
2029 555,000 93,023 365,000 16,725 - 21,388 265,000 125,088 415,000 372,600 1,700,000 186,092 3,300,000 814,916
2030 570,000 74,599 375,000 5,625 - 21,388 280,000 111,838 430,000 355,700 1,730,000 154,357 3,385,000 723,507
2031 590,000 54,869 - - - 21,388 290,000 100,638 450,000 338,100 1,765,000 120,272 3,095,000 635,267
2032 615,000 33,781 - - - 21,388 305,000 89,038 470,000 319,700 1,800,000 83,902 3,190,000 547,809
2033 635,000 11,509 - - - 21,388 315,000 76,838 490,000 300,500 1,840,000 45,310 3,280,000 455,545
2034 - - - - - 21,388 325,000 64,238 510,000 280,500 175,000 23,031 1,010,000 389,157
2035 - - - - - 21,388 335,000 54,488 530,000 259,700 180,000 18,150 1,045,000 353,726
2036 - - - - - 21,388 345,000 44,438 550,000 238,100 185,000 13,131 1,080,000 317,057
2037 - - - - - 21,388 355,000 34,088 570,000 215,700 190,000 7,975 1,115,000 279,151
2038 - - - - - 21,388 370,000 23,438 590,000 195,450 195,000 2,681 1,155,000 242,957
2039 - - - - 290,000 21,387 380,000 11,875 610,000 177,450 - - 1,280,000 210,712
2040 - - - - 300,000 10,875 - - 630,000 158,850 - - 930,000 169,725
2041 - - - - - - - - 650,000 139,650 - - 650,000 139,650
2042 - - - - - - - - 670,000 119,850 - - 670,000 119,850
2043 - - - - - - - - 690,000 99,450 - - 690,000 99,450
2044 - - - - - - - - 710,000 78,450 - - 710,000 78,450
2045 - - - - - - - - 730,000 56,850 - - 730,000 56,850
2046 - - - - - - - - 755,000 34,575 - - 755,000 34,575
2047 - - - - - - - - 775,000 11,625 - - 775,000 11,625
Total $ 5,475,000 $ 971,492 $ 2,405,000 $ 282,225 $ 4,500,000 $ 649,432 $ 4,730,000 $ 1,527,645 $ 13,075,000 $ 5,848,300 $ 13,745,000 $ 1,887,449 $ 43,930,000 $ 11,166,543
95
[[page 109]]
City of Gallatin, Tennessee
Schedule of Changes in Lease Obligations
For the Fiscal Year Ended June 30, 2023
Paid and/or
Original Date Issued matured
amount Interest of Maturity Outstanding during during Remeasure- Outstanding
Description of Indebtedness of issue rate issue date July 1, 2022 period period ments June 30, 2023
Business-type Activities
Leases Payable Through Electric Fund
RJ Young - Copiers $ 14,233 2.26% 3/15/18 4/15/23 $ 2,435 $ - $ 2,435 $ - $ -
RJ Young - Printer $ 6,235 2.26% 6/17/19 6/17/24 2,574 - 1,275 - 1,299
Total leases payable - Business-type Activities $ 5,009 $ - $ 3,710 $ - $ 1,299
96
[[page 110]]
City of Gallatin, Tennessee
Schedule of Lease Obligations, Principal, and Interest Requirements by Fiscal Year
June 30, 2023
Fiscal year Equipment Lease
ending RJ Young - Printer
June 30, Principal Interest Total
2024 1,299 16 1,315
Total $ 1,299 $ 16 $ 1,315
97
[[page 111]]
City of Gallatin, Tennessee
Schedule of Electric Rates in Force (Unaudited)
June 30, 2023
Residential Rate
Customer charge per month $ 16.55
Energy charge
Per KwH per month 0.09772
General Power Rate
GSA (Demand 0 - 5,000 kW)
Customer charge per month $ 19.60
Less than 50 kW and not more than 1500 kWh
All kWh per kWh 0.11029
Between 51 and 1,000 kW with energy usage over 15000 kWh
Customer charge per month $ 60.00
0 to 50 kW No charge
More than 50 to 1,000 kW $ 10.65
First 15,000 kWh per month 0.10287
Additional kWh per month 0.07206
Between 1,001 and 5,000 kW
Customer charge per month $ 200.00
0 to 1,000 kW $ 10.70
More than 1,000 kW $ 14.87
All kWh per kWh 0.07199
GSB (Demand from 5,001 to 15,000 kW)
Customer charge per month $ 1,500
Demand charge
Onpeak demand $10.87 per kW
Max demand $5.21 per kW
Offpeak excess of contract demand $10.87 per kW
Energy charge
Onpeak kWh 0.08891
Offpeak kWh first 200 HUD 0.06400
Offpeak kWh next 200 HUD 0.02942
Additional HUD 0.02601
MSB
Customer charge per month $ 1,500
Demand charge
Onpeak demand $10.24 per kW
Max demand $2.26 per kW
Offpeak excess of contract demand $10.24 per kW
Energy charge
Onpeak kWh 0.08139
Offpeak kWh first 200 HUD 0.05639
Offpeak kWh next 200 HUD 0.02670
Additional HUD 0.02415
Continued
See independent auditor's report 98
[[page 112]]
City of Gallatin, Tennessee
Schedule of Electric Rates in Force (Unaudited)
June 30, 2023
General Power Rate
MSD (Demand over 25,000 kW)
Customer charge per month $ 1,500
Demand charge
Onpeak demand $10.24 per kW
Max demand $1.64 per kW
Offpeak excess of contract demand $10.24 per kW
Energy charge
Onpeak kWh 0.07800
Offpeak kWh first 200 HUD 0.05299
Offpeak kWh next 200 HUD 0.02642
Additional HUD 0.02583
Outdoor lighting (including pole)
73 LED $ 10.97
113 LED $ 15.99
100 Watt HPS $ 9.36
150 Watt HPS $ 12.45
175 Watt HPS $ 9.95
250 Watt HPS $ 15.73
400 Watt HPS $ 20.19
Outdoor lighting kWh 0.07425
Number of Customers at Year End
Residential 21,549
Commercial 3,238
Street and athletic fields 59
Individually billed outdoor lighting 29
24,875
See independent auditor's report 99
[[page 113]]
City of Gallatin, Tennessee
Schedule of Water and Sewer Rates in Force (Unaudited)
June 30, 2023
Water Department
Inside city limits
All customers $11.92 for first 250 cubic feet
$3.25 per 100 cubic feet in excess of 250 cubic feet
Outside city limits
All customers $17.80 for first 250 cubic feet
$4.88 per 100 cubic feet in excess of 250 cubic feet
Sewer Department
Inside city limits
All customers $11.92 for first 250 cubic feet
$3.25 per 100 cubic feet in excess of 250 cubic feet
Outside city limits
All customers $17.80 for first 250 cubic feet
$4.88 per 100 cubic feet in excess of 250 cubic feet
Water and Sewer
Number of customers 17,055
See independent auditor's report 100
[[page 114]]
City of Gallatin, Tennessee
Schedule of Gas Rates in Force (Unaudited)
June 30, 2023
Residential and Commercial, Inside City
First 200 cubic $ 3.50
All usage over 200 cubic feet, per ccf 0.79
Residential and Commercial, Outside City
First 200 cubic $ 3.85
All usage over 200 cubic feet, per ccf 0.87
Industrial
All usage, per ccf $ 0.79
Preferred interruptible
All usage, per ccf $ 0.49
Interruptible
First 100,000 cubic feet $ 0.40
All usage over 100,000 cubic, per ccf 0.35
Number of Customers
Residential 13,059
Commercial 798
Industrial 29
Interruptible 4
13,890
See independent auditor's report 101
[[page 115]]
Statistical Section
[[page 116]]
City of Gallatin, Tennessee
Statistical Section Summary Page
June 30, 2023
This part of the City of Gallatin, Tennessee’s Annual Comprehensive Financial Report presents detailed
information as a context for understanding what the information in the financial statements, the note disclosures,
and the required supplementary information says about the City’s overall financial health.
Page
Financial Trends Information 102-106
These schedules contain trend information to help the reader understand how the government's
financial performance and well-being have changed over time.
Revenue Capacity Information 107-109
These schedules contain information to help the reader assess the government's most significant
local revenue source, the property tax.
Debt Capacity Information
These schedules present information to help the reader assess the affordability of the 110-112
government's current level of outstanding debt and the government's ability to issue additional
debt in the future.
Demographic and Economic Information 113-114
These schedules present information to help the reader understand the environment within which
the government's financial activities take place.
Operating Information 115-117
These schedules contain service and infrastructure data to help the reader understand how the
information in the government's financial report relates to the services the government provides
and the activities it performs.
Sources: Except where noted, the information in these schedules is derived from the City’s Annual
Comprehensive Financial Reports for the relevant years.
[[page 117]]
City of Gallatin, Tennessee
Financial Trends Information
Net Position by Component - Last Ten Fiscal Years
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Governmental Activities
Net investment in capital assets 148,606,993 $ 133,281,647 $ 106,414,737 $ 108,846,455 $ 89,932,089 $ 75,402,931 $ 67,569,997 $ 58,836,309 $ 54,468,094 $ 48,317,805
Restricted 13,571,100 13,222,353 12,609,720 1,512,468 1,325,054 1,298,730 1,205,180 593,324 535,180 615,631
Unrestricted 53,979,304 49,343,959 39,901,584 24,032,975 17,563,265 17,336,772 17,025,218 15,409,177 13,898,373 14,232,475
Total net position $ 216,157,397 $ 195,847,959 $ 158,926,041 $ 134,391,898 $ 108,820,408 94,038,433 85,800,395 $ 74,838,810 $ 68,901,647 $ 63,165,911
Business-type Activities
Net investment in capital assets $ 175,181,523 $ 161,498,167 157,292,864 $ 142,206,982 $ 136,551,453 $ 127,605,680 $ 120,808,485 $ 119,097,460 $ 112,025,506 $ 107,506,931
Restricted 214,846 3,055,394 195,257 7,729 7,702 7,675 7,648 7,621 7,572 7,522
Unrestricted 51,089,336 54,246,029 45,895,729 47,714,045 37,092,490 35,652,720 37,926,071 31,826,566 35,009,804 32,232,921
Total net position $ 226,485,705 $ 218,799,590 $ 203,383,850 $ 189,928,756 $ 173,651,645 $ 163,266,075 $ 158,742,204 $ 150,931,647 $ 147,042,882 $ 139,747,374
Primary Government
Net investment in capital assets $ 323,788,516 $ 294,779,814 $ 263,707,601 $ 251,053,437 $ 226,483,542 $ 203,008,611 $ 188,378,482 $ 177,933,769 $ 166,493,600 $ 155,824,736
Restricted 13,785,946 16,277,747 12,804,977 1,520,197 1,332,756 1,306,405 1,212,828 600,945 542,752 623,153
Unrestricted 105,068,640 103,589,988 85,797,313 71,747,020 54,655,755 52,989,492 54,951,289 47,235,743 48,908,177 46,465,396
Total net position $ 442,643,102 $ 414,647,549 $ 362,309,891 $ 324,320,654 $ 282,472,053 $ 257,304,508 $ 244,542,599 $ 225,770,457 $ 215,944,529 $ 202,913,285
See independent auditor's report 102
[[page 118]]
City of Gallatin, Tennessee
Financial Trend Information
Change in Net Position - Last Ten Fiscal Years
(Prepared using the accrual basis of accounting)
Governmental activities: 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Revenues:
Program revenues:
Charges for services $ 12,938,439 $ 12,275,819 $ 10,289,687 $ 8,977,852 $ 8,356,873 $ 7,863,631 $ 7,418,973 $ 6,069,552 $ 5,538,642 $ 6,526,770
Operating grants & contributions 3,895,662 4,389,561 2,421,030 2,923,203 2,616,883 1,865,673 1,275,976 1,064,123 1,234,427 1,527,429
Capital grants & contributions 8,345,507 15,384,481 12,482,796 20,335,480 12,308,868 6,010,371 8,921,557 4,790,834 10,285,239 3,533,738
General revenues:
Property taxes 14,214,670 13,503,462 12,917,220 12,215,190 11,906,890 11,235,726 11,367,951 10,878,306 10,273,533 9,930,089
Sales taxes 20,594,060 19,014,773 15,317,664 12,826,752 12,145,080 11,516,561 11,064,266 10,074,289 9,330,486 8,661,499
Franchise taxes 397,976 451,706 507,514 465,305 487,103 468,690 466,766 448,730 421,534 385,802
Alcoholic beverage taxes 2,137,608 2,099,402 1,965,642 1,766,980 1,563,354 1,522,812 1,509,842 1,260,296 1,251,420 1,165,299
Business taxes 2,315,524 2,008,558 1,404,790 1,127,484 1,014,325 949,546 936,708 818,811 756,560 680,446
Income taxes 755 355,086 414,371 778,118 565,252 439,386 662,104 946,308 913,636 793,306
Other sources 1,356,449 10,807,740 3,512,304 375,946 1,354,312 540,551 480,686 226,818 230,319 240,216
Unrestricted interest income 847,158 81,819 240,425 313,968 298,873 303,527 246,354 115,184 68,994 79,958
In lieu of taxes and transfers 2,341,210 2,416,007 2,505,134 1,971,409 1,610,234 1,635,255 1,699,195 1,640,386 1,545,670 1,448,787
Total revenues 69,385,018 82,788,414 63,978,577 64,077,687 54,228,047 44,351,729 46,050,378 38,333,637 41,850,460 34,973,339
Expenses:
General government 11,491,711 10,679,488 9,568,230 12,362,858 10,194,485 8,545,515 7,930,678 7,186,551 6,432,191 5,147,411
Public safety 21,445,885 19,887,020 17,489,772 15,280,509 15,685,627 14,939,109 14,842,150 12,701,861 12,139,618 11,778,255
Engineering 3,045,455 2,112,141 638,392 622,525 2,300,750 1,907,119 2,224,831 1,643,277 1,611,956 1,412,832
Environmental services 3,499,967 3,264,572 3,125,244 2,796,681 2,194,040 2,109,615 1,788,412 1,701,497 1,682,507 1,779,918
Animal control - - - - - - - - 123,665 113,487
Public works 815,980 826,884 774,681 674,693 585,600 705,505 568,139 552,190 362,748 1,163,412
Highways, streets, and roadways 1,700,671 1,500,643 1,405,170 1,136,264 1,252,628 1,556,403 1,174,314 1,359,004 1,457,922 1,403,207
Vehicle maintenance 415,838 638,291 589,459 617,315 612,519 562,563 549,748 459,858 418,068 420,964
Parks and recreation 5,579,699 5,760,606 4,950,915 3,787,643 4,286,418 4,302,313 4,639,151 4,361,499 4,265,685 4,043,815
Economic development 477,555 556,451 528,172 572,306 816,593 615,343 448,174 1,622,199 6,770,860 444,972
Tourism - - - 57,039 123,052 - - - - -
Interest on debt 602,819 640,400 374,399 598,364 702,384 765,919 923,196 808,538 653,094 481,455
Total expenses 49,075,580 45,866,496 39,444,434 38,506,197 38,754,096 36,009,404 35,088,793 32,396,474 35,918,314 28,189,728
Change in net position $ 20,309,438 $ 36,921,918 $ 24,534,143 $ 25,571,490 $ 15,473,951 $ 8,342,325 $ 10,961,585 $ 5,937,163 $ 5,932,146 $ 6,783,611
See independent auditor's report 103
[[page 119]]
City of Gallatin, Tennessee
Financial Trend Information
Change in Net Position - Last Ten Fiscal Years
(Prepared using the accrual basis of accounting)
Business-type activities: 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Revenues:
Program revenues:
Charges for services $ 115,696,153 $ 108,490,786 $ 95,741,011 $ 96,304,597 $ 104,274,429 $ 102,309,298 $ 99,131,412 $ 94,763,804 $ 98,670,740 $ 100,225,082
Capital grants & contributions 6,412,212 8,438,231 6,341,397 10,898,190 4,907,752 5,623,904 3,508,042 2,490,314 1,485,205 2,317,854
General revenues:
Other sources 384 171,323 105,925 - - - 147 10,000 - 487
Unrestricted interest income 886,820 180,733 316,711 328,769 229,021 197,243 134,055 142,192 108,911 95,539
Total revenues 122,995,569 117,281,073 102,505,044 107,531,556 109,411,202 108,130,445 102,773,656 97,406,310 100,264,856 102,638,962
Expenses:
Electric 77,786,114 67,411,765 61,466,937 64,715,592 70,565,030 68,464,520 68,658,346 66,077,111 65,953,465 65,344,259
Gas 19,001,406 17,460,412 12,390,484 14,208,176 13,612,534 13,482,880 12,817,606 12,360,729 14,620,277 16,443,781
Water & Sewer 16,897,130 15,120,466 13,300,552 10,525,253 13,321,850 13,115,652 11,787,952 12,582,400 10,769,977 11,170,248
In lieu of taxes - transfer 1,624,804 1,872,093 1,891,977 1,805,424 1,610,234 1,635,255 1,699,195 1,640,386 1,545,670 1,448,787
Total expenses 115,309,454 101,864,736 89,049,950 91,254,445 99,109,648 96,698,307 94,963,099 92,660,626 92,889,389 94,407,075
Change in net position 7,686,115 15,416,337 13,455,094 16,277,111 10,301,554 11,432,138 7,810,557 4,745,684 7,375,467 8,231,887
Total change in net position $ 27,995,553 $ 52,338,255 $ 37,989,237 $ 41,848,601 $ 25,775,505 $ 19,774,463 $ 18,772,142 $ 10,682,847 $ 13,307,613 $ 15,015,498
See independent auditor's report 104
[[page 120]]
City of Gallatin, Tennessee
Financial Trend Information
Fund Balances of Governmental Funds - Last Ten Fiscal Years
(Prepared using the accrual basis of accounting)
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Governmental Funds
(Post-GASB 54)
Nonspendable $ 100,170 $ 99,135 $ 85,469 $ 82,177 $ 674,250 $ 1,169,853 $ 1,612,302 $ 1,065,869 $ 173,269 $ 86,851
Restricted 13,663,068 13,103,487 12,647,277 6,877,193 1,289,029 1,366,992 1,176,985 583,621 531,907 579,606
Committed 1,314,976 98,506 89,508 103,873 156,408 156,408 284,987 209,987 205,085 205,085
Assigned 59,986 400,089 2,810,969 58,712 7,400,387 11,899,028 12,626,737 16,335,657 8,011,003 2,734,115
Unassigned 53,749,515 43,461,521 29,343,786 18,722,398 16,287,472 17,248,650 17,730,397 16,180,042 13,232,920 11,455,850
$ 68,887,715 $ 57,162,738 $ 44,977,009 $ 25,844,353 $ 25,807,546 $ 31,840,931 $ 33,431,408 $ 34,375,176 $ 22,154,184 $ 15,061,507
See independent auditor's report 105
[[page 121]]
City of Gallatin, Tennessee
Financial Trend Information
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years
(Prepared using the accrual basis of accounting)
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Revenues
Taxes $ 34,020,171 $ 31,828,287 $ 28,148,675 $ 24,907,697 $ 23,082,274 $ 22,304,176 $ 21,677,227 $ 20,117,243 $ 18,988,744 $ 18,393,292
Licenses and permits 3,694,996 3,633,533 3,247,237 2,279,208 2,146,030 2,542,185 2,187,478 1,093,853 760,459 467,638
Fines and penalties 823,041 658,741 673,966 691,541 737,197 785,160 922,423 983,427 1,051,142 2,556,501
Charges for services 8,420,402 7,978,910 6,285,822 6,005,756 5,476,634 4,534,678 4,302,069 3,984,098 3,739,436 3,481,559
Intergovernmental 17,046,912 19,963,272 16,201,370 14,437,262 10,628,819 6,717,563 6,616,702 10,457,840 14,007,953 8,668,804
Other 2,831,318 3,288,678 4,479,403 2,683,304 2,371,227 1,315,537 884,022 414,025 575,308 708,339
Total revenues 66,836,840 67,351,421 59,036,473 51,004,768 44,442,181 38,199,299 36,589,921 37,050,486 39,123,042 34,276,133
Expenditures
General government 9,634,216 8,648,829 7,717,866 7,687,329 8,486,465 7,609,102 6,723,566 5,932,888 5,471,142 4,825,287
Public safety 23,531,336 18,697,042 15,764,227 15,439,576 15,118,065 14,447,340 14,122,444 12,181,199 11,707,728 11,452,818
Engineering 2,857,815 2,114,553 638,392 621,511 2,140,367 1,902,729 2,219,984 1,643,528 1,611,956 1,353,632
Environmental Services 3,295,676 3,087,746 2,819,961 2,783,382 1,993,528 1,921,514 1,788,412 1,707,426 1,704,725 1,641,126
Animal control - - - - - - - - 123,665 113,487
Public Works 3,056,827 827,963 765,125 670,407 358,438 429,269 330,388 294,737 360,112 453,374
Highway and streets 1,437,998 1,127,266 1,045,433 1,137,622 1,248,681 1,559,615 1,168,778 1,227,048 1,254,942 1,374,830
Vehicle maintenance 429,544 639,633 585,193 614,540 558,341 558,653 551,334 496,426 418,068 418,626
Parks and recreation 5,527,163 4,982,212 4,188,436 3,786,654 4,258,583 4,292,539 4,309,104 4,014,097 3,936,723 3,763,086
Economic development agency 506,618 557,630 521,733 557,726 813,666 743,864 445,448 1,622,169 6,769,860 444,972
Tourism - - - 57,039 123,052 - - - - -
Debt Service:
Principal 1,780,000 1,745,000 1,395,000 1,355,000 1,795,000 1,839,745 1,754,475 1,205,000 1,385,000 860,000
Interest 911,850 970,589 796,360 738,850 808,775 862,768 892,232 572,156 245,373 403,564
Other 1,253 1,400 - - - - - - - -
Capital outlay 3,620,706 13,637,922 16,670,921 17,324,244 13,586,576 5,257,893 4,926,719 7,385,042 7,610,707 4,787,847
Total expenditures 56,591,002 57,037,785 52,908,647 52,773,880 51,289,537 41,425,031 39,232,884 38,281,716 42,600,001 31,892,649
Excess(deficiency) of revenues
over (under) expenditures 10,245,838 10,313,636 6,127,826 (1,769,112) (6,847,356) (3,225,732) (2,642,963) (1,231,230) (3,476,959) 2,383,484
Other financing sources (uses)
Premiums on bonds issued - - 1,387,853 - - - - 1,163,285 884,045 -
Proceeds of long-term debt - - 9,725,000 - - - - 11,040,000 14,185,000 -
Bond issuance cost - - - - - - - (121,358) (155,986) -
Repayment from debt refunding - - - - - - - - (6,098,495) -
In lieu of tax payments from utility 1,824,463 1,872,093 1,891,977 1,805,919 1,610,234 1,635,255 1,699,195 1,640,386 1,545,670 1,448,787
Operating transfers in - - - - - - - - - 2,183,420
Operating transfers out (345,324) - - - - - - - - (2,183,420)
Total other financing sources (uses) 1,479,139 1,872,093 13,004,830 1,805,919 1,610,234 1,635,255 1,699,195 13,722,313 10,360,234 1,448,787
Net changes in fund balances $ 11,724,977 12,185,729 $ 19,132,656 $ 36,807 $ (5,237,122) $ (1,590,477) $ (943,768) $ 12,491,083 $ 6,883,275 $ 3,832,271
Debt service as a percentage of
non-capital expenditures 5.35% 6.67% 6.44% 6.28% 7.42% 8.08% 8.36% 6.10% 4.89% 4.89%
See independent auditor's report 106
[[page 122]]
City of Gallatin, Tennessee
Revenue Capacity Information
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Tax Years
Appraised Value
Assessed Total
Total Taxable Value as a Direct
Tax Assessed Estimated Actual Percentage of Tax
Year Value Taxable Value Actual Value Rate*
2023 $ 1,835,956,847 $ 6,536,211,546 28.09% $ 0.80
2022 $ 1,749,990,933 $ 6,184,000,396 28.30% $ 0.80
2021 $ 1,639,821,560 $ 5,804,981,995 28.25% $ 0.80
2020 $ 1,568,403,152 $ 5,505,851,345 28.49% $ 0.80
2019 $ 1,379,876,000 $ 5,345,047,430 25.82% $ 0.80
2018 $ 1,085,548,889 $ 3,758,217,774 28.88% $ 0.99
2017 $ 1,063,378,081 $ 3,688,978,706 28.83% $ 0.99
2016 $ 1,030,640,007 $ 3,498,839,903 29.46% $ 0.99
2015 $ 970,755,253 $ 3,050,696,936 31.82% $ 0.99
2014 $ 973,251,111 $ 3,032,204,783 32.10% $ 0.99
* Per $100 of assessed valuation.
Note - Property of the City is reappraised periodically. For this reason, appraised value is considered
All information was pulled from the tax levies by the year noted.
See independent auditor's report 107
[[page 123]]
City of Gallatin, Tennessee
Revenue Capacity Information
Principal Property Tax Payers - Current Year and Nine Years Ago
2023 2014
Percent Percent
Assessed of Total Assessed of Total
Taxpayer Valuation Valuation Valuation Valuation
Sumner Regional Medical Ctr $ 89,320,700 4.87% $ 83,926,200 8.62%
Revere At Hidden Creek LLC $ 62,333,700 3.40% $ - 0.00%
GAP INC $ 52,583,300 2.86% $ 7,541,448 0.77%
Green Lea Prop LLC $ 42,608,700 2.32% $ - 0.00%
Wellington Farms Holdings DE LLC $ 37,142,900 2.02% $ 31,800,000 3.27%
SP RGA Stoneridge LP $ 36,696,400 2.00% $ - 0.00%
KJPL Gallatin LLC $ 33,376,500 1.82% $ - 0.00%
Vintage Foxland Harbor LLC $ 28,994,900 1.58% $ - 0.00%
WMCI Nasvhille VI LLC $ 28,079,300 1.53% $ - 0.00%
Salga Plastics INC $ 11,206,269 0.61% $ - 0.00%
Sumner Regional Medical Center $ 20,565,714 1.12% $ 5,106,627 0.52%
MAA Brik LLC $ 25,523,900 1.39% $ 23,513,500 2.42%
Trails at Hunter Point LLC $ 25,221,700 1.37% $ - 0.00%
Foxland Crossing LLC $ 24,956,300 1.36% $ - 0.00%
Hoeganes Corp $ 9,686,734 0.53% $ 15,181,627 1.56%
Total $ 528,297,017 28.78% $ 167,069,402 17.17%
Information was obtained from the property tax rolls for the years noted.
See independent auditor's report 108
[[page 124]]
City of Gallatin, Tennessee
Revenue Capacity Information
Property Tax Levies and Collections - Last Ten Fiscal Years
Total
Collections Collections as
Fiscal Assessed Total Tax Percentage in Subsequent Total Percentage of
Year Valuation Levy Amount of Levy Years Collections Total Levy
2023 $ 1,835,956,847 $ 14,679,193 $ 13,940,753 94.97% $ 78,915 $ 14,019,668 95.51%
2022 $ 1,835,956,847 $ 14,038,125 $ 13,127,681 93.51% $ 100,687 $ 13,228,368 94.23%
2021 $ 1,749,990,933 $ 12,917,234 $ 12,578,223 97.38% $ 196,398 $ 12,774,621 98.90%
2020 $ 1,639,821,560 $ 12,158,928 $ 12,061,074 99.20% $ - $ 12,061,074 99.20%
2019 $ 1,568,403,152 $ 11,039,008 $ 10,962,352 99.31% $ 62,482 $ 11,024,834 99.87%
2018 $ 1,379,876,000 $ 10,746,934 $ 10,482,842 97.54% $ 104,110 $ 10,586,952 98.51%
2017 $ 1,085,548,889 $ 10,527,443 $ 10,151,671 96.43% $ 892,798 $ 11,044,469 104.91%
2016 $ 1,063,378,081 $ 10,203,336 $ 9,756,265 95.62% $ 368,379 $ 10,124,644 99.23%
2015 $ 1,030,640,007 $ 9,610,477 $ 9,447,813 98.31% $ 257,653 $ 9,705,466 100.99%
2014 $ 970,755,253 $ 9,635,186 $ 9,401,063 97.57% $ 343,744 $ 9,744,807 101.14%
Assessed valuation amount was taken from the property tax levy for the year noted.
See independent auditor's report 109
[[page 125]]
City of Gallatin, Tennessee
Debt Capacity Information
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years
Governmental Activities Business-type Activities
Per Capita General Total Total Percentage
Fiscal Personal Obligation Total Revenue & Business- type Primary Debt Per of personal
Year Population* Income** Bonds Notes Governmental Tax Bonds Notes Activities Government Capita income
2023 51,653 $ 34,822 $ 24,355,000 $ - $ 24,355,000 $ 43,930,000 $ - $ 43,930,000 $ 68,285,000 1,321.99 3.80%
2022 50,160 $ 32,912 $ 26,135,000 $ - $ 26,135,000 $ 46,620,000 $ - $ 46,620,000 $ 72,755,000 1,450.46 4.41%
2021 44,431 $ 32,996 $ 27,880,000 $ - $ 27,880,000 $ 33,765,000 $ - $ 33,765,000 $ 61,645,000 1,387.43 4.20%
2020 42,918 $ 30,203 $ 19,550,000 $ - $ 19,550,000 $ 35,780,000 $ - $ 35,780,000 $ 55,330,000 1,289.20 4.27%
2019 40,457 $ 28,945 $ 20,905,000 $ - $ 20,905,000 $ 37,795,000 $ - $ 37,795,000 $ 58,700,000 1,450.92 5.01%
2018 37,351 $ 26,544 $ 22,240,000 $ 549,745 $ 22,789,745 $ 33,955,000 $ - $ 33,955,000 $ 56,744,745 1,519.23 5.72%
2017 35,734 $ 26,450 $ 24,805,000 $ 1,310,000 $ 26,115,000 $ 37,560,000 $ 57,667 $ 37,617,667 $ 63,732,667 1,783.53 6.74%
2016 34,473 $ 26,708 $ 14,570,000 $ 1,710,000 $ 16,280,000 $ 38,890,000 $ 219,944 $ 39,109,944 $ 55,389,944 1,606.76 6.02%
2015 33,347 $ 26,596 $ 6,985,000 $ 2,090,000 $ 9,075,000 $ 33,185,000 $ 382,221 $ 33,567,221 $ 42,642,221 1,278.74 4.81%
2014 32,307 $ 25,534 $ 7,480,000 $ 2,455,000 $ 9,935,000 $ 34,465,000 $ 544,498 $ 35,009,498 $ 44,944,498 1,391.17 5.45%
* Source for population: U.S. Census Bureau
** Personal income amounts were obtained from State estimates.
See independent auditor's report 110
[[page 126]]
City of Gallatin, Tennessee
Debt Capacity Information
Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years
Governmental Activities
Ratio of
General
Obligation Net General
General Business-type Total Debt to Obligation
Fiscal Obligation Total Activities Primary Appraised Debt per
Year Population* Bonds Notes Governmental Notes Government Assessed Value Value Capita
2023 51,653 $ 24,355,000 $ - $ 24,355,000 $ - $ 24,355,000 $ 1,835,956,847 1.33% $ 471.51
2022 50,160 $ 26,135,000 $ - $ 26,135,000 $ - $ 26,135,000 $ 1,749,990,933 1.49% $ 521.03
2021 44,431 $ 27,880,000 $ - $ 27,880,000 $ - $ 27,880,000 $ 1,639,821,560 1.70% $ 627.49
2020 42,918 $ 19,550,000 $ - $ 19,550,000 $ - $ 19,550,000 $ 1,568,403,152 1.25% $ 455.52
2019 40,457 $ 20,905,000 $ - $ 20,905,000 $ - $ 20,905,000 $ 1,379,876,000 1.51% $ 516.72
2018 37,351 $ 22,240,000 $ 549,745 $ 22,789,745 $ - $ 22,789,745 $ 1,085,548,889 2.10% $ 610.15
2017 35,734 $ 24,805,000 $ 1,310,000 $ 26,115,000 $ 57,667 $ 26,172,667 $ 1,063,378,081 2.46% $ 732.43
2016 34,473 $ 14,570,000 $ 1,710,000 $ 16,280,000 $ 219,944 $ 16,499,944 $ 1,030,640,007 1.60% $ 478.63
2015 33,347 $ 6,985,000 $ 2,090,000 $ 9,075,000 $ 382,221 $ 9,457,221 $ 970,755,253 0.97% $ 283.60
2014 32,307 $ 7,480,000 $ 2,455,000 $ 9,935,000 $ 544,498 $ 10,479,498 $ 973,251,111 1.08% $ 324.37
* Source for population: U.S. Census Bureau
** Personal income amounts were obtained from State estimates.
See independent auditor's report 111
[[page 127]]
City of Gallatin, Tennessee
Debt Capacity Information
Pledged Revenue Coverage - Last Ten Fiscal Years
Net Revenue
Utility Less: Available
Service Operating For Debt Percent of
Fiscal Year Charges Expenses Service Principal Interest Total Coverage
2023 $ 38,290,134 $ 34,709,510 $ 3,580,624 $ 2,690,000 $ 1,494,168 $ 4,184,168 85.58%
2022 $ 38,560,935 $ 31,115,155 $ 7,445,780 $ 2,075,000 $ 1,340,498 $ 3,415,498 218.00%
2021 $ 31,047,874 $ 19,860,727 $ 11,187,147 $ 2,015,000 $ 1,410,424 $ 3,425,424 326.59%
2020 $ 28,473,862 $ 17,853,481 $ 10,620,381 $ 1,775,000 $ 1,268,910 $ 3,043,910 348.91%
2019 $ 30,554,008 $ 20,257,578 $ 10,296,430 $ 2,015,000 $ 1,418,722 $ 3,433,722 299.86%
2018 $ 14,593,834 $ 8,546,734 $ 6,047,100 $ 1,730,000 $ 1,326,336 $ 3,056,336 197.85%
2017 $ 14,190,626 $ 7,221,685 $ 6,968,941 $ 1,830,000 $ 1,403,935 $ 3,233,935 215.49%
2016 $ 13,525,181 $ 7,389,032 $ 6,136,149 $ 1,775,000 $ 1,460,061 $ 3,235,061 189.68%
2015 $ 12,112,544 $ 6,651,379 $ 5,461,165 $ 1,330,000 $ 1,101,320 $ 2,431,320 224.62%
2014 $ 12,259,008 $ 6,548,582 $ 5,710,426 $ 1,280,000 $ 1,420,441 $ 2,700,441 211.46%
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include
interest, depreciation, or amortization expenses. Sales tax increment bonds are backed by the sales tax revenue produced by the sales tax rate
in effect when the bonds were issued (2.5%) applied to the increase in retail sales in the Commons shopping area since the time.
See independent auditor's report 112
[[page 128]]
City of Gallatin, Tennessee
Demographic and Economic Information
Demographic and Economic Statistics - Last Ten Fiscal Years
Per Capita County County
Fiscal City County Personal Personal Median School Unemployment
Year Population* Population* Income** Income** Age* Enrollment*** Rate****
2023 51,653 203,858 $ 62,881 $ 34,822 38.4 30,685 2.90%
2022 50,160 200,557 $ 60,930 $ 32,912 38.4 30,512 3.00%
2021 44,431 196,281 $ 59,745 $ 32,996 39.1 30,425 4.50%
2020 42,918 191,283 $ 55,825 $ 30,203 37.9 29,540 7.50%
2019 40,457 187,149 $ 53,794 $ 28,945 37.6 29,400 3.20%
2018 37,351 183,545 $ 49,041 $ 26,544 37.2 29,196 2.80%
2017 35,734 180,063 $ 47,957 $ 26,450 36.0 29,059 2.30%
2016 34,473 175,989 $ 46,441 $ 26,708 37.0 29,060 4.10%
2015 33,347 172,706 $ 46,102 $ 26,596 37.0 28,715 4.70%
2014 32,307 168,888 $ 45,603 $ 25,534 37.4 28,361 5.60%
* U.S. Census Bureau
** State Estimate
*** Sumner County School Board
**** Tennessee State Department of Labor, Statistical Services
Note: Population, median age, and education level information are based on surveys conducted during the last quarter of
the calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted
yearly average. School enrollment is based on the census at the start of the school year.
See independent auditor's report 113
[[page 129]]
City of Gallatin, Tennessee
Demographic and Economic Information
Principal Employers - Current Year and Nine Years Ago
2023 2014
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
Sumner County Government & Schools 4,675 1 21.25% 3,980 1 35.19%
Gap, Inc. 2,388 2 10.85% 850 3 7.52%
Sumner Regional Medical Center 1,075 3 4.89% 1,090 2 9.64%
ABC Technologies 785 4 3.57% 211 10 1.87%
Volunteer State Community College 753 5 3.42% N/A N/A N/A
City of Gallatin 587 6 2.67% 380 6 3.36%
Servpro Corporate Headquarters 438 7 1.99% 432 5 3.82%
YAPP USA 378 8 1.72% N/A N/A N/A
NIC Global 303 9 1.38% N/A N/A N/A
Simpson Storng Tie 240 10 1.09% N/A N/A N/A
Walmart N/A N/A N/A 450 4 3.98%
YSF Automotive Systems N/A N/A N/A 353 7 3.12%
Hoeganaes N/A N/A N/A 243 8 2.15%
R.R. Donnelley & Sons N/A N/A N/A 225 9 1.99%
Source: Tennessee Department of Labor Workforce & Development and City of Gallatin's Economic Development
See independent auditor's report 114
[[page 130]]
City of Gallatin, Tennessee
Operating Information
Full-Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years
Function/Program 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
General Government
Mayor's Office 3 3 3 3 3 3 3 3 3 3
Planning 9 8 8 8 9 9 7 7 6 6
Finance 6 6 7 7 6 6 6 5 5 8
City Attorney 4 4 4 4 4 4 4 3 3 3
Recorder 6 7 6 6 6 7 6 6 6 7
Personnel 5 5 5 4 4 3 3 3 2 2
Codes 17 17 18 15 15 15 12 9 10 7
Economic Development Agency 3 3 3 3 3 3 3 3 2 2
Information Technology 8 8 8 8 7 7 7 6 5 0
Public Safety
Police 91 97 97 97 99 99 99 98 93 94
Fire 95 98 97 97 96 98 85 68 72 72
Public Works 50 52 49 52 48 50 47 48 47 49
Leisure Services 29 30 30 29 26 29 29 31 31 31
Engineering 15 10 10 9 9 8 7 6 7 6
Public Utilities 86 84 88 92 93 95 86 88 87 82
Golf Course - - - - - - - - - -
Total 427 432 433 434 428 436 404 384 379 372
Sources: PERSONNEL OFFICIAL
*AUDITS PRIOR YEARS
2013 numbers include 3 PPT employees. It does not include 11 unfilled positions (total authorized manning 377 as 6/30/13).
2016 numbers include 4 PPT employees. It does not include 12 unfilled positions (total authorized manning 396 as 6/30/16).
2017 numbers include 4 PPT employees. It does not include 15 unfilled positions (total authorized manning as 06/30/17).
See independent auditor's report 115
[[page 131]]
City of Gallatin, Tennessee
Operating Information
Operating Indicators by Function/Program - Last Ten Fiscal Years
Function/Program 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Police
Physical arrests 3,915 3,419 2,985 3,571 3,802 3,718 3,805 3,803 3,575 3,772
Parking violations 276 188 169 219 407 308 279 458 722 420
Traffic violations 13,826 14,847 11,720 17,065 15,334 13,436 13,824 17,393 22,643 13,231
* Red light camera citations 5,519 5,598 5,109 3,828 6,345 6,211 7,386 9,054 7,751 7,029
Fire
Emergency responses 8,114 7,729 6,854 6,228 6,048 5,636 4,192 3,917 3,390 3,120
Fires extinguished 157 148 132 115 122 113 133 144 94 120
Inspections 8,132 4,552 3,296 2,530 2,526 2,423 1,658 1,664 1,413 829
Animal Control
* * Animals Restrained 296 317 288 346 519 487 576 622 N/A 388
Highways and Streets
Street resurfacing (miles) 6.42 8.11 5.16 6.64 5.20 6.00 3.31 4.60 5.75 4.50
Potholes repaired 1,529 2,465 259 363 315 356 314 403 324 546
Other Public Works
Utility cuts repaired N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Parks and Recreation
Athletic field permits issued N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Community center admissions 150,000 150,000 150,000 150,000 270,000 270,000 270,000 240,000 240,000 230,000
Community Service
Number of organization benefited 17 17 17 21 18 14 10 12 16 16
Number of services benefited 3 3 3 3 3 3 5 6 4 4
Environmental Services
Tons hauled 18,629 20,506 18,599 17,625 16,432 16,171 16,142 12,224 11,413 11,376
Water
New connections 530 754 715 441 406 425 380 316 330 272
Water main breaks 53 58 31 45 46 37 37 37 38 40
Utility cuts repaired 78 79 54 123 83 145 100 139 138 175
Average daily consumption 8,625 7,805 7,293 7,774 7,110 7,316 6,052 6,171 5,865 5,944
(thousands of gallons)
Peak daily consumption 12,047 12,562 8,797 9,347 10,523 8,451 7,072 8,287 7,873 9,277
(thousands of gallons)
Sewer
Average daily treatment 7,556 8,077 7,785 8,911 7,010 6,282 5,902 5,808 6,435 6,992
(thousands of gallons)
Electric
Average daily consumption 2,145 2,147 2,163 2,020 2,237 2,254 2,244 2,194 2,186 2,184
(thousands of kilowatt hours)
Natural Gas
Average daily consumption:
Summer -April/October 4,064 4,059 3,587 3,623 4,920 4,810 4,656 4,937 5,550 5,117
(thousands of cubic feet)
Winter-November/March 9,029 8,335 9,124 8,211 8,507 10,445 7,454 7,644 9,078 9,660
(thousands of cubic feet)
Golf
Rounds played 45,000 44,145 44,145 44,145 45,000 45,000 45,000 45,000 35,000 45,000
Sources: Various city departments
Notes: Indicators are not available for the general government function.
See independent auditor's report 116
[[page 132]]
City of Gallatin, Tennessee
Operating Information
Capital Asset Statistics by Function/Program - Last Ten Fiscal Years
Function/Program 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Police
Stations 1 1 1 1 1 1 1 1 1 1
Zone offices 4 4 4 4 4 1 1 1 1 1
Patrol units 97 80 80 96 96 91 79 78 76 73
Fire
Stations 5 5 5 5 5 4 4 4 4 4
Fire trucks 12 11 11 11 11 9 9 9 8 8
Animal Control
Trucks 2 2 2 2 2 2 2 2 2 2
Highways and Streets
Streets (miles) 224.6 221.0 217.5 215.8 210.0 204.4 200.1 195.6 195.3 195.0
Streetlights 4,337 4,278 4,254 3,931 3,874 3,892 3,811 3,720 3,621 3,678
Traffic signals 417 438 411 411 388 380 370 362 362 354
Sidewalks (miles) 107.2 99.7 93.0 89.7 78.0 66.8 57.5 46.5 46.0 45.0
Parks and Recreation
Acreage 610 610 598 598 598 532 532 532 532 532
Playgrounds 5 5 5 5 5 5 5 4 4 4
Baseball/softball diamonds 23 23 23 23 23 23 23 23 23 23
Soccer/football fields 8 8 8 8 8 8 8 8 8 8
Community centers 2 2 2 2 2 2 2 2 2 2
Volleyball Courts 4 4 4 4 4 4 4 4 4 4
Basketball Courts 6 6 6 6 6 6 6 6 6 6
Picnic Shelters 13 13 13 13 13 13 13 13 13 13
Tennis Courts 6 6 6 6 6 6 6 6 6 6
Horseshoe Pits 5 5 5 5 5 5 5 9 9 9
Fishing Piers 2 2 2 2 2 2 2 2 2 2
Swimming Pools 2 2 2 2 1 1 1 1 1 1
Walking Trail (miles) 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0
Disc Golf (holes) 18 18 18 18 18 18 18 18 18 18
Model Airplane Strip 1 1 1 1 1 1 1 1 1 1
Skate Park 1 1 1 1 1 1 1 1 1 1
Environmental Services
Refuse Trucks 28 25 24 24 24 23 22 22 20 21
Water
Water mains (miles) 345.0 342.0 337.0 335.0 331.0 320.0 316.0 313.0 312.0 311.0
Fire hydrants 2,317 2,273 2,212 2,173 2,113 2,075 2,025 1,986 1,920 1,902
Storage capacity (thousands of gallons) 15,300 15,000 15,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000
Percent of Water Loss in System 31 35 32 25 16 16 12 13 12 15
Sewer
Sewer mains (miles) 273.0 270.0 264.0 257.0 254.0 244.0 240.0 236.0 234.0 233.0
Pump Stations 43 44 43 41 41 41 41 41 41 40
Natural Gas
Gas lines (miles) 416.0 405.0 398.0 394.0 389.0 385.0 382.0 380.0 376.0 368.0
Golf
Acres 136 136 136 136 136 136 136 136 136 136
Holes 18 18 18 18 18 18 18 18 18 18
Driving Range 1 1 1 1 1 1 1 1 1 1
Sources: Various city departments
Note: No capital asset indicators are available for the general government.
See independent auditor's report 117
[[page 133]]
Internal Control and Compliance
[[page 134]]
Independent Auditor’s Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards
Honorable Mayor and Members of the City Council
City of Gallatin, Tennessee
We have audited, in accordance with the 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 (Government Auditing Standards), the financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the City of Gallatin, Tennessee (the City), as of and for the year ended June 30, 2023, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed
in the table of contents, and have issued our report thereon dated December 18, 2023. Our report includes a
reference to other auditors who audited the financial statements of the Electric Department, as described in our
report on the City’s financial statements. This report does not include the results of the other auditors’ testing of
internal control over financial reporting or compliance and other matters that are reported on separately by those
auditors.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over
financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion
on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may
exist that were not identified.
Brentwood • Goodlettsville • Murfreesboro
Nashville • Mt. Juliet • Dickson • Columbia TN www.bcpas.com
[[page 135]]
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance
or other matters that are required to be reported under Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and
the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on
compliance. This report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
Blankenship CPA Group, PLLC
Goodlettsville, Tennessee
December 18, 2023
119
[[page 136]]
Independent Auditor’s Report on Compliance for Each Major Federal Program
and on Internal Control over Compliance Required by the Uniform Guidance
Honorable Mayor and Members of the City Council
City of Gallatin, Tennessee
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Gallatin, Tennessee’s (the City) compliance with the types of compliance
requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and
material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major
federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings
and questioned costs.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that
could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America (GAAS); the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit
requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those
standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of
Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does
not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal
programs.
Brentwood • Goodlettsville • Murfreesboro
Nashville • Mt. Juliet • Dickson • Columbia TN www.bcpas.com
[[page 137]]
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s
compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and
the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material
noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the
compliance requirements referred to above is considered material, if there is a substantial likelihood that,
individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on
compliance about the City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence
regarding the City’s compliance with the compliance requirements referred to above and performing such
other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design
audit procedures that are appropriate in the circumstances and to test and report on internal control over
compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over
compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.
A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal
control over compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in internal control
over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
121
[[page 138]]
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Blankenship CPA Group, PLLC
Goodlettsville, Tennessee
December 18, 2023
122
[[page 139]]
City of Gallatin, Tennessee
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended June 30, 2023
Section I. Summary of Auditor’s Results
Financial Statements
Type of report the auditor issued on whether the financial
statements audited were prepared in accordance with GAAP Unmodified
Internal control over financial reporting:
Material weakness identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported
Noncompliance material to financial statements noted? Yes X No
Federal Awards
Internal control over major programs:
Material weakness identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported
Type of auditor’s report issued on compliance for major
federal programs: Unmodified
Any audit findings disclosed that are required to be
reported in accordance with section 2 CFR 200.516(a)? Yes X No
Identification of major programs:
Assistance Listing
Number Name of Federal Program or Cluster
20.205 U.S. Department of Transportation/
Highway Planning and Construction Cluster
Dollar threshold used to distinguish between type A
and type B programs $ 750,000
Auditee qualified as low-risk auditee? X Yes No
123
[[page 140]]
City of Gallatin, Tennessee
Summary Schedule of Prior Year Findings
For the Fiscal Year Ended June 30, 2023
Financial Statement Findings
Finding Number Finding Title Status
2022-001 Internal Controls over City assets Corrected
Federal Award Findings and Questioned Costs
Finding Number Finding Title Status
N/A There were no prior findings reported. N/A
Compliance and Other Matters
Finding Number Finding Title Status
N/A There were no prior findings reported. N/A
124