HomeMy WebLinkAboutRFP 2026131-02 Professional Audit Services Attachment B Franklin County Financial Statements2025
BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
DECEMBER 31, 2025
(With Independent Auditor's Report Thereon)
COUNTY OF FRANKLIN, PENNSYLVANIA
TABLE OF CONTENTS
DECEMBER 31,2025
INDEPENDENT AUDITOR’S REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 4
BASIC FINANCIAL STATEMENTS:
GOVERNMENT-WIDE FINANCIAL STATEMENTS:
Statement of Net Position 17
Statement of Activities 18
FUND FINANCIAL STATEMENTS:
Balance Sheet – Governmental Funds 19
Statement of Revenues, Expenditures, and
Changes in Fund Balances – Governmental Funds 20
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances of
Governmental Funds to the Statement of Activities 21
Statement of Net Position – Proprietary Funds 22
Statement of Revenues, Expenses, and Changes
in Net Position – Proprietary Funds 23
Statement of Cash Flows – Proprietary Funds 24
Statement of Fiduciary Net Position – Fiduciary Funds 25
Statement of Changes in Fiduciary Net Position
– Fiduciary Funds 26
DISCRETELY PRESENTED COMPONENT UNITS
Statement of Net Position 27
Statement of Activities 28
NOTES TO BASIC FINANCIAL STATEMENTS 30
(see additional table of contents related to footnote disclosures)
OTHER SUPPLEMENTARY INFORMATION:
Non-Major Governmental Funds – Special
Revenue Funds:
Description of Funds 120
Combining Balance Sheet 121
Combining Schedule of Revenues,
Expenditures, and Changes in Fund
Balances 122
Internal Service Funds:
Description of Funds 123
Combining Statement of Net Position 124
Combining Statement of Revenues,
Expenses, and Changes in Net Position 125
Combining Statement of Cash Flows 126
Trust Funds:
Description of Funds 127
Combining Statement of Fiduciary
Net Position 128
Combining Statement of Changes in
Fiduciary Net Position 129
Budgetary Comparison Schedules:
Capital Projects 130
Debt Service 131
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Changes in the Net Pension
Liability and Related Ratios 107
Schedule of Employer Contributions to
Pension Plan 108
Schedule of Investment Returns in
Pension Plan 109
Schedule of Changes in the Net OPEB
Liability and Related Ratios 110
Schedule of Employer Contributions
to OPEB Plan 111
Schedule of Investment Returns in
OPEB Plan 112
Budgetary Comparison Schedules:
General Fund 113
Children and Youth 114
Special Revenue Trust 115
Mental Health/Intellectual Disabilities 116
Emergency 911 System 117
Notes to Budgetary Comparison
Schedules 118
TABLE
OF
CONTENTS
INDEPENDENT AUDITOR’S REPORT
Commissioners of Franklin County
Chambersburg, Pennsylvania
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the aggregate discretely presented
component units, each major fund, and the aggregate remaining fund information of the County of Franklin,
Pennsylvania (the “County”), as of and for the year ended December 31, 2025, and the related notes to the financial
statements, which collectively comprise the County’s basic financial statements as listed in the table of contents.
In our opinion, based on our audit and the reports of the other auditors, the accompanying financial statements
present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information of the
County, as of December 31, 2025, and the respective changes in financial position and where applicable, cash
flows, for the year then ended in accordance with accounting principles generally accepted in the United States of
America.
We did not audit the discretely presented component units’ financial statements of the Tuscarora Managed Care
Alliance, the Franklin County Redevelopment Authority, the Letterkenny Industrial Development Authority, the
Franklin County Conservation District, and the Franklin County Industrial Development Authority, which represent
100% of the assets, net position, and revenues, of the aggregate discretely presented component units. Those
financial statements were audited by other auditors whose reports thereon have been furnished to us, and our
opinion, insofar as it relates to the amounts included for those aggregate discretely presented component units, is
based solely on the reports 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 (GAS), issued
by the Comptroller General of the United States. Our responsibilities under those standards are further described
in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to
be independent of the County 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
The County’s 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 County’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.
Page 1
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 GAS 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 GAS, 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 County’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 County’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.
Adoption of Governmental Accounting Standards Board Pronouncements
As described in Note 1 to the financial statements, in 2025 the County adopted the provisions of GASB Statement
No. 102, “Certain Risk Disclosures”. Our opinion is not modified with respect to these matters.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion
and analysis, schedule of changes in the net pension liability and related ratios, schedule of employer contributions
to pension plan – last ten years, schedule of investment returns in pension plan, schedule of changes in the net
OPEB liability and related ratios, schedule of employer contributions to OPEB plan – last ten years, schedule of
investment returns in OPEB plan, and the required budgetary comparison schedules, on pages 4 through 16, and
107 through 118, be presented to supplement the basic financial statements. Such information is the responsibility
of management, although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board and 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 auditing standards generally accepted in
the United States of America, 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.
Page 2
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
County’s basic financial statements. The combining nonmajor fund financial statements, combining internal service
fund statements, combining trust fund statements, and budgetary comparison schedules for Capital Projects and
Debt Service (“supplementary information”) are presented for purposes of additional analysis and are not a required
part of the basic financial statements.
The supplementary 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 auditing standards generally accepted in the United States of
America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the
basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated July 31, 2026 on our
consideration of the County’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 internal control over financial reporting or on
compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards
in considering the County’s internal control over financial reporting and compliance.
ZELENKOFSKE AXELROD LLC
Harrisburg, Pennsylvania
July 31, 2026
Page 3
Governmental Component
Cash and cash equivalents 10,985,927$31,721,963$
Investments 21,197,282 12,113,487
Receivables (net of allowance
for uncollectibles)10,683,582 6,130,479
Intergovernmental receivable 7,433,383 1,678,888
Prepaid items 998,787 45,788
Other assets 105,072 -
Restricted assets:
Cash and cash equivalents 16,270,491 15,893,493
Investments 15,423,022 -
OPEB asset 5,345,403 -
Lease rentals receivable -3,901,031
Loan receivable -6,715,204
Capital assets (net of accumulated
depreciation/amortization):
Non-depreciable assets 17,429,388 18,678,534
Depreciable assets 98,712,985 7,269,679
Depreciable leased assets 5,202,848 133,794
Depreciable subscription assets 636,871 -
Total net capital assets 121,982,092 26,082,007
Total assets 210,425,041 104,282,340
Pension 1,972,400 -
Total deferred outflows of resources 1,972,400 -
Accounts payable and other
accrued expenses 8,007,979$5,495,964$
Accrued interest payable 519,499 -
Due to other governments 3,212,780 -
Unearned revenue 1,239,380 3,970,848
Noncurrent liabilities:
Due within one year 4,684,270 18,857
Due in more than one year 85,028,694 2,308
Total liabilities 102,692,602 9,487,977
DEFERRED INFLOWS OF RESOURCES
Pension 7,047,481 -
OPEB 940,931 -
From leases 496,452 3,633,145
Total deferred inflows of resources 8,484,864 3,633,145
Total liabilities and deferred inflows 111,177,466 13,121,122
Net investment in capital assets 36,701,147 25,656,582
Restricted 34,845,533 24,343,502
Unrestricted 29,673,295 41,161,134
Total net position 101,219,975 91,161,218
COUNTY OF FRANKLIN, PENNSYLVANIA
ASSETS
LIABILITIES
NET POSITION
Primary
Government
December 31, 2025
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement. 17 .
Primary
Government
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
and
Contributions
Governmental
Activities
Component
Units
Governmental activities:
General government - administrative 16,267,587$2,287,131$760,861$1,998,055$(11,221,540)$
General government - judicial 13,433,109 2,505,793 1,772,142 32,243 (9,122,931)
Public safety 27,506,263 1,584,182 4,910,885 649,633 (20,361,563)
Public works 676,941 8,150 1,015,664 9,730 356,603
Culture and recreation 141,609 -181,401 303,338 343,130
Human services 37,317,754 1,636,423 30,803,745 171,318 (4,706,268)
Community and economic development 5,351,467 118,274 2,298,741 -(2,934,452)
Conservation and other 179,873 ---(179,873)
Interest on long-term debt 3,099,971 ---(3,099,971)
Total primary government 103,974,574$8,139,953$41,743,439$3,164,317$(50,926,865)
63,275,479$56,794,150$5,735,879$527,866$(217,584)$
General revenues:
Change in net position 1,501,394 (631,467)
Net Position - beginning 99,718,581 91,792,685
Net Position - ending 101,219,975$91,161,218$
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Activities
Program Revenues
For the Year Ended December 31, 2025
Net (Expense) Revenue and
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement. 18 .
General Children & Youth
Mental Health/
Intellectual
Disabilities Capital Projects
Emergency 911
System Debt Service
Special Revenue
Trusts
Non Major
Governmental
Funds
Total
Governmental
Funds
Cash and cash equivalents 10,985,927$-$-$-$-$-$-$-$10,985,927$
Investments 21,197,282 -------21,197,282Receivables (net of allowance for uncollectibles)
for uncollectibles)3,791,285 -19,807 --311,529 6,094,227 265,625 10,482,473
Intergovernmental receivable 793,720 3,336,866 414,346 -951,076 --1,937,375 7,433,383
Due from other funds 4,601,488 -1,499,496 3,224,265 -1,434,463 3,620,188 2,436,479 16,816,379
Prepaid items 657,732 ---23,377 5,495 1,530 -688,134
Other assets 105,072 -------105,072
Restricted assets:
Cash and cash equivalents 7,828,700 --1,924,974 --2,237,668 1,845,019 13,836,361
Investments 6,107,446 -----255,480 4,784,913 11,147,839
Total assets 56,068,652$3,336,866$1,933,649$5,149,239$974,453$1,751,487$12,209,093$11,269,411$92,692,850$
Accounts payable 1,547,557$1,164,077$872,989$377,215$81,133$136$1,613$1,083,181$5,127,901$Accrued expenses 2,068,693 -------2,068,693
Due to other funds 12,489,312 1,840,039 --893,320 --560,247 15,782,918
Due to other governments 2,152,120 -1,060,660 -----3,212,780
Unearned other 160,032 332,750 ----95,000 398,872 986,654
Total liabilities 18,417,714 3,336,866 1,933,649 377,215 974,453 136 96,613 2,042,300 27,178,946
Unavailable revenue - taxes 1,393,565 ----226,684 --1,620,249Unavailable revenue - leases 496,452 -------496,452
Unavailable revenue - other ------6,078,987 -6,078,987
Total deferred inflows of resources 1,890,017 ----226,684 6,078,987 -8,195,688
Nonspendable 762,804 ---23,377 5,495 1,530 -793,206
Restricted 1,662,042 --1,552,409 -1,519,172 6,031,963 9,227,111 19,992,697
Committed 240,508 --3,219,615 ----3,460,123
Assigned 9,574,938 -------9,574,938
Unassigned 23,520,629 ---(23,377)---23,497,252
Total fund balances 35,760,921 --4,772,024 -1,524,667 6,033,493 9,227,111 57,318,216
56,068,652$3,336,866$1,933,649$5,149,239$974,453$1,751,487$12,209,093$11,269,411$
Amounts reported for governmental activities in the statement of net
position are different because:
Net position of governmental activities
COUNTY OF FRANKLIN, PENNSYLVANIA
Balance Sheet
December 31, 2025
ASSETS
LIABILITIES
DEFERRED INFLOWS OF RESOURCES
FUND BALANCES
Total liabilities, deferred inflows and
fund balances
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 19 .
General
Children &
Mental Health/
Intellectual Emergency 911
Non Major
Governmental
Total
Governmental
REVENUES
Taxes:
Property 41,308,016$-$-$-$-$6,774,450$-$-$48,082,466$
Hotel -------1,560,781 1,560,781
Intergovernmental 3,891,189 15,081,005 8,576,076 -4,307,911 -181,401 9,705,857 41,743,439
Charges for services 9,571,780 146,359 25,035 ---818,489 647,054 11,208,717
Investment earnings 1,687,173 -92,788 136,651 -142,155 254,997 385,334 2,699,098
Contributions and other 1,605,440 5,101 1,294 -23,173 -11,599 100,253 1,746,860
Total revenues 58,063,598 15,232,465 8,695,193 136,651 4,331,084 6,916,605 1,266,486 12,399,279 107,041,361
Current:
General government - administrative 12,269,249 ----2,000 --12,271,249
General government - judicial 12,021,570 ------2,253,909 14,275,479
Public safety 22,417,877 ---4,173,901 ---26,591,778
Public works 65,041 ------337,220 402,261
Human service 2,277,120 18,901,180 8,979,007 ---22,365 8,664,522 38,844,194
Culture and recreation 76,150 -----65,155 -141,305
Community and economic development 3,162,727 -----211,955 1,972,362 5,347,044
Other 216,000 --30,032 ----246,032
Debt service:
Principal 408,464 12,523 2,057 -114,296 3,540,191 -46,190 4,123,721
Interest 119,006 756 124 -38,146 3,148,843 -10,320 3,317,195
Capital outlay 1,528,787 --1,516,943 41,734 -963,439 181,351 4,232,254
Total expenditures 54,561,991 18,914,459 8,981,188 1,546,975 4,368,077 6,691,034 1,262,914 13,465,874 109,792,512
Excess (deficiency) of revenues
over (under) expenditures 3,501,607 (3,681,994)(285,995)(1,410,324)(36,993)225,571 3,572 (1,066,595)(2,751,151)
Proceeds from sale of property ---1,423,374 ----1,423,374
Proceeds from lease issuance 392,230 ---4,111 --2,681 399,022
Transfers in 290,414 3,681,994 285,995 12,498 32,882 -150,000 1,769,904 6,223,687
Transfers out (5,021,629)-----(555,415)(611,935)(6,188,979)Total other financing sources and (uses)(4,338,985)3,681,994 285,995 1,435,872 36,993 -(405,415)1,160,650 1,857,104
Net change in fund balances (837,378)--25,548 -225,571 (401,843)94,055 (894,047)
Fund balance, beginning of year 36,598,299 --4,746,476 -1,299,096 6,435,336 9,133,056 58,212,263
Fund balances - ending 35,760,921$-$-$4,772,024$-$1,524,667$6,033,493$9,227,111$57,318,216$
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2025
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 20 .
Net change in fund balances - total governmental funds (894,047)$
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
depreciation of $6,639,933 and loss on disposal of $103,055 exceeds capital
outlay of $4,232,254.(2,510,734)
COUNTY OF FRANKLIN, PENNSYLVANIA
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances of Governmental Funds
To the Statement of Activities
For the Year Ended December 31, 2025
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement 21 .
Governmental
Activities
Current assets:
Accounts receivable (net of allowance
for uncollectibles)201,109$
Due from other funds 274,420
Prepaid items 310,653
Total current assets 786,182
Noncurrent assets:
Total assets 9,081,149$
LIABILITIES
Noncurrent liabilities:
Total liabilities 3,159,363
NET POSITION
Restricted 5,921,786
Total net position 5,921,786
Total liabilities and net position 9,081,149$
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Net Position
Proprietary Funds
December 31, 2025
Internal Service
Funds
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 22 .
Governmental
Activities
Charges for sales and services 13,320,704$
Intergovernmental 10,832
Contributions and other 805,446
Total operating revenues 14,136,982
Operating expenses:
Cost of service 7,860,566
Administration 7,236,879
Total operating expenses 15,613,550
Operating income (loss)(1,476,568)
Nonoperating revenues (expenses):
Investment earnings/(loss)318,437
Interest expense (3,362)
Total nonoperating revenue (expenses)315,075
(1,161,493)
Other financing sources(uses):
Transfers in 88,874
Transfers out (123,582)
Total other financing sources (uses)(34,708)
Change in net position (1,196,201)
Total net position - beginning 7,117,987
Total net position - ending 5,921,786$
Income (loss) before transfers
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2025
Internal Service
Funds
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 23 .
Governmental
Activities
Receipts from users 14,005,510$
Payments to suppliers (9,490,212)
Payments to employees (4,249,589)
Payments for interfund services used (1,229,221)
Net cash provided/(used) by operating activities (963,512)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Net transfer in (out) from other funds (34,708)
Subsidy from grants 10,832
Net cash provided/(used) by noncapital and
related financing activities (23,876)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchases of capital assets (239,505)
Lease/Installment purchase payments (444,811)
Interest paid on capital debt (3,362)
Loss on sales of capital assets (41,830)
Net cash provided/(used) by capital and related
financing activities (729,508)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Investments 927,257
Interest and dividends received 318,437
Net cash provided/(used) by investing activities 1,245,694
Net increase (decrease) in cash and cash equivalents (471,202)
Reconciliation of operating income (loss) to net
cash provided (used) by operating activities:
Non-Cash transactions Noncapital financing activities
Assets and liabilities transferred to other funds 34,708$
Total Non-Cash transactions Noncapital financing activities 34,708$
CASH FLOWS FROM OPERATING ACTIVITIES
Cash and cash equivalents December 31 ($2,434,130 reported
in restricted accounts)
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2025
Internal Service
Funds
Cash and cash equivalents January 1 ($2,905,332 reported
in restricted accounts)
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement 24 .
Component Unit
Trust Funds Funds Total
ASSETS
LIABILITIES
NET POSITION
other post-employment benefits 213,095,987 -213,095,987
organizations -3,571,883 3,571,883
COUNTY OF FRANKLIN, PENNSYLVANIA
December 31, 2025
Fiduciary Funds
Statement of Fiduciary Net Position
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 25 .
Component Unit
Trust Funds Custodial Funds
Contributions:
Plan members/participants 3,593,015$-$
County 2,761,430 -
Other 73,863 -
Collections for other governmental entities -35,355,513
Collections for other non-governmental entities -6,736,650
Total additions 6,428,308 42,092,163
Investment income:
Net appreciation in fair value of investments 20,917,362 -
Interest 1,025,744 71
Dividends 3,758,783 -
Net investment appreciation before investment expense 25,701,889 71
Net investment income (loss)25,391,398 71
Total additions 31,819,706 42,092,234
DEDUCTIONS
Change in net position 18,620,639 (14,179)
Net position - beginning 194,475,348 3,586,062
Net position - ending 213,095,987$3,571,883$
For the Year Ended December 31, 2025
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
COUNTY OF FRANKLIN, PENNSYLVANIA
______________________________________________________________________________
The notes to the financial statements are an integral oart of this statement 26 .
Franklin County
Conservation
District
Letterkenny
Industrial
Development
Authority
Industrial
Development
Authority
Redevelopment
Authority
Tuscarora
Alliance Total
Cash and cash equivalents 7,056,616$18,701,875$148,868$299,443$5,515,161$31,721,963$
Investments -12,113,487 ---12,113,487
ASO receivable ----3,048,948 3,048,948
Receivables (net of allowance
for uncollectibles)-1,706,814 --1,374,717 3,081,531
Intergovernmental receivable 1,678,888 ----1,678,888
Prepaid items ----45,788 45,788
Restricted assets:
Cash and cash equivalents ----15,893,493 15,893,493
Lease rentals receivable -3,901,031 ---3,901,031
Loan receivable -6,507,875 -207,329 -6,715,204
Capital assets (net of accumulated
depreciation/amortization):
Non-depreciable assets -18,678,534 ---18,678,534
Depreciable assets 152,530 7,117,149 ---7,269,679
Lease assets 124,167 ---9,627 133,794
Total net capital assets 276,697 25,795,683 --9,627 26,082,007
Total assets 9,012,201$68,726,765$148,868$506,772$25,887,734$104,282,340$
Accounts payable and other
accrued expenses 1,027,409$773,251$-$11,931$3,683,373$5,495,964$
Unearned revenue 3,932,084 38,764 ---3,970,848
Noncurrent liabilities:
Due within one year 9,230 ---9,627 18,857
Due in more than one year 2,308 ----2,308
Total liabilities 4,971,031 812,015 -11,931 3,693,000 9,487,977
From leases -3,633,145 ---3,633,145
Total deferred inflows of resources -3,633,145 ---3,633,145
Total liabilities and deferred inflows 4,971,031 4,445,160 -11,931 3,693,000 13,121,122
Net investment in capital assets 276,697 25,379,885 ---25,656,582
Restricted - grant and reinvestment 2,434,684 ---21,908,818 24,343,502
Unrestricted 1,329,789 38,901,720 148,868 494,841 285,916 41,161,134
Total net position 4,041,170 64,281,605 148,868 494,841 22,194,734 91,161,218
Total liabilities, deferred inflows, and net position 9,012,201$68,726,765$148,868$506,772$25,887,734$104,282,340$
LIABILITIES
NET POSITION
COUNTY OF FRANKLIN, PENNSYLVANIA
Statement of Net Position
December 31, 2025
ASSETS
Component Units
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement. 27 .
Expenses
Charges for
Operating
Grants and and
Franklin
County
Conservation
Letterkenny
Industrial
Development
Franklin
County
Industrial
Development
Franklin County
Redevolopment
Tuscarora
Franklin County Conservation District 6,130,407$630,394$5,719,909$-$219,896$-$-$-$-$219,896$
Letterkenny Industrial
Development Authority 6,576,543 5,655,304 -527,866 -(393,373)---(393,373)
Franklin County Industrial Development Authority 67,508 61,266 ----(6,242)--(6,242)
44,853 -15,970 ----(28,883)-(28,883)
Tuscarora Managed Care Alliance 50,456,168 50,447,186 ------(8,982)(8,982)
Total component units 63,275,479$56,794,150$5,735,879$527,866$219,896$(393,373)$(6,242)$(28,883)$(8,982)$(217,584)$
General revenues:
Change in net position 533,598 (1,718,913)(2,930)27,486 529,292 (631,467)
Net position - beginning, as previously reported 3,598,922 66,000,518 151,798 467,355 21,665,442 91,884,035
Restatement for error correction - component unit note 1 (91,350)----(91,350)
Net position - beginning as restated 3,507,572 66,000,518 151,798 467,355 21,665,442 91,792,685
Net position - ending 4,041,170$64,281,605$148,868$494,841$22,194,734$91,161,218$
Franklin County Redevelopment Authority
COUNTY OF FRANKLIN, PENNSYLVANIA
For the Year Ended December 31, 2025
Component Units
Statement of Activities
______________________________________________________________________________
The notes to the financial statements are an integral part of this statement 28 .
COUNTY OF FRANKLIN, PENNSYLVANIA
TABLE OF CONTENTS
DECEMBER 31,2025
(1)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 30
(2)DEPOSITS AND INVESTMENTS 43
(3)PROPERTY TAXES 48
(4)RECEIVABLES AND INTERGOVERNMENTAL RECEIVABLES 49
(5)CAPITAL ASSETS 50
(6)INTERFUND RECEIVABLES,PAYABLES,
AND TRANSFERS 51
(7)LONG-TERM LIABILITIES 52
(8)RESTRICTED ASSETS 55
(9)RISK MANAGEMENT 55
(10)COMMITMENTS AND CONTINGENT LIABILITIES 57
(11)OTHER POSTEMPLOYMENT BENEFITS
(OPEB)57
(12)EMPLOYEE RETIREMENT PLAN
(PENSION TRUST FUND)61
(13)SUBSEQUENT EVENTS 65
DISCRETELY PRESENTED COMPONENT UNIT NOTES
(1) FRANKLIN COUNTY CONSERVATION DISTRICT 66
(2) FRANKLIN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY 76
(3) FRANKLIN COUNTY REDEVELOPMENT AUTHORITY 79
(4)LETTERKENNY INDUSTRIAL DEVELOPMENT AUTHORITY 86
(5) TUSCARORA MANAGE CARE ALLIANCE 99
NOTES TO BASIC
FINANCIAL
STATEMENTS
TABLE OF CONTENTS
NOTES TO BASIC FINANCIA
30
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL DECEMBER 31,2025
(1)SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying basic financial statements of the County of Franklin (the County) have been prepared in conformity
with U.S. generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards
Board (GASB).
REPORTING ENTITY
The County of Franklin (primary government) is located in south central Pennsylvania. It is a county of the
fourth class and operates under an elected three-member Board of Commissioners. The County provides
services to its residents in many areas, including various general government services, court system, public
safety, health and welfare, and community enrichment programs.
Consistent with the guidance contained in Governmental Accounting Standards Board (GASB) Statement No.
61,The Financial Reporting Entity: Omnibusan amendment of GASB Statements No. 14 The Financial Reporting
Entity, and No. 34 Basic Financial Statements and Management’s Discussion and Analysis for State and Local
Governments, as well as No. 39,Determining Whether Certain Organizations Are Component Units, also an
amendment of GASB Statement No. 14, the criteria used by the County to evaluate the possible inclusion of
related entities (Authorities, Boards, Councils, etc.) within its reporting entity are financial accountability and
the nature and significance of the relationship. In determining financial accountability in a given case, the
County reviews the applicability of certain criteria.
The County is financially accountable for:
§Organizations that make up the legal County entity.
§Legally separate organizations.
If County officials appoint a voting majority of the organizations' governing body and the County
is able to impose its will on the organization or if there is a potential for the organization to
provide specific financial benefits to, or impose specific financial burdens on, the County as
defined below.
Impose Its Will – Exists if the County can significantly influence the programs, projects, or
activities of, or the level of services performed or provided by, the organization.
Financial Benefit or Burden – Exists if the County (1) is entitled to the organization’s resources
or (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of,
or provide support to, the organization or (3) is obligated in some manner for the debt of the
organization.
§Organizations that are fiscally dependent on the County. Fiscal dependency is established if the
organization is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt
without approval by the County.
Based on the foregoing criteria, the reporting entity has been defined to include all the funds for which the
County is financially accountable or for which there is a significant relationship. Specific information on the
nature of the various potential component units and a description of how the aforementioned criteria have
been considered in determining whether or not to include or exclude such units in the County’s financial
statements are provided in the following paragraphs.
31
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
BLENDED COMPONENT UNIT
Blended component units, although legally separate entities, are, in substance, part of the government’s
operations. Data from these units are combined with data from the primary government. The County had
no blended component units at December 31, 2025.
DISCRETELY PRESENTED COMPONENT UNITS
Component units that are not blended as part of the primary government are discretely presented, which
entails reporting component unit financial data in a column separate from the financial data of the primary
government. The discretely presented component units are reported in a single column in the government-
wide financial statements in order to emphasize that it is legally separate from the government. The
component units have separately published audit reports, which are available for public inspection in the
County Fiscal Office at 272 North Second Street, Chambersburg, Pennsylvania. The component units
presented in this way are the following:
The Franklin County Conservation District (District) was formed by the County Commissioners in 1956
pursuant to the Conservation District Law (Law). The seven-member board is made up of one County
Commissioner and six members appointed by the Commissioners from a list of nominees received from
organizations approved by the Commonwealth of Pennsylvania. The District was formed to manage the
conservation of natural resources in the County. The Law gives the Commonwealth certain powers to
supervise and direct the operations of the District. The Law also gives the Commissioners the ability to
unilaterally disband the District if they believe a substantial portion of landowners desire such action. The
District has a calendar year reporting period (December 31).
The Letterkenny Industrial Development Authority (LIDA or the Authority) was formed in 1997 to implement
redevelopment activities for the reuse of the Letterkenny Army Depot, as a Business Park, which includes
leasing or selling land, facilities, or equipment to industrial or commercial firms. The Authority has a
calendar year reporting period (December 31).
The Franklin County Industrial Development Authority (FCIDA) was established under the Industrial and
Commercial Development Authority Law of the Commonwealth of Pennsylvania to provide a means for
developers within the County to obtain funds through the issuance of tax-exempt Industrial Development
obligations. The County Commissioners must approve all bond issues but the County has no ongoing liability
for these bond issues. A five-member board, appointed by the County Commissioners, administers FCIDA.
Revenues are primarily from application and servicing fees received from developers seeking to issue tax
exempt obligations. The activities of FCIDA are conducted within the geographic boundaries of the County
primarily for the benefit of County residents through the creation of employment opportunities. FCIDA has
a calendar year reporting period (December 31).
The Franklin County Redevelopment Authority (FCRDA)was formed in August 2010 by the Franklin County
Board of Commissioners under the provisions of the Commonwealth of Pennsylvania Urban Redevelopment
Law of 1945, as amended for the purpose of providing redevelopment and other related activities. The
purpose of the FCRDA is the promotion of health, safety and welfare of the residents of Franklin County;
the elimination of blighted areas through economically and socially sound redevelopment for residential,
recreational, commercial, industrial, or other purposes; and the encouragement of the provision of
healthful homes, a decent living environment, and adequate places of employment. The authority can
access a myriad of redevelopment assistance programs designed to revitalize the aging downtowns and/or
blighted industrial areas, turning them into viable economic engines that will provide an expanded tax base
and needed jobs to support citizens. FCRDA has a calendar year reporting period (December 31).
32
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Tuscarora Managed Care Alliance (TMCA) was formed by an intergovernmental agreement between
Franklin and Fulton Counties to administer and oversee the Behavioral HealthChoices Program
(HealthChoices) of these two counties. As such, TMCA has contracted with Pennsylvania Department of
Human Services (DHS) to deliver and administer the behavioral health services to eligible individuals
through a capitated system that passes the risk of providing these services to TMCA. TMCA has a calendar
year reporting period (December 31).
FIDUCIARY COMPONENT UNITS
The County’s Employee Retirement System and OPEB Plan (the “Plans”) were established to provide
retirement, disability, death benefits, and health insurance benefits to eligible retirees of the County. The
Plans are included in the financial reporting entity as fiduciary component units because the Plans are (1)
considered to be separate legal entities, (2) the County’s Board of Commissioners functions as the governing
board of the plans, and (3) the plans impose a financial burden on the County as it is legally obligated to
make contributions to the Plans.
RELATED ORGANIZATIONS
The County Commissioners appoint a voting majority of other organizations’ Boards of Directors, but
accountability does not extend beyond appointment and the organizations are not included in the County’s
financial statements. The organizations are as follows:
The South Central Employment Corporation is a nonprofit corporation that serves the general governing
bodies of the participating units of general local government as their joint agency in workforce investments
activities that increase the employment, retention, and earnings of participants, and increase occupation
skill attainment by participants. As a result, they improve the quality of the workforce, reduce welfare
dependency, and enhance productivity and competitiveness by administering activities of economic
development together with employment and training initiatives and implementing a comprehensive
strategic plan.
The Franklin County Library System was formed pursuant to the Library Code. The Library System’s Board
of Directors consists of nine members, which are appointed by the Library System Board of Directors. Four
shall be appointed each year; the one remaining director, being a County Commissioner, shall be appointed
whenever there is a change in the members of the Commission. The County collects a special voter-
approved 1.05-millage rate that is directly contributed to the library system. The Library Board decides
through its budgeting process, guided by the appropriate state regulations, how the funds will be allocated
to the various libraries that serve the citizens of Franklin County. The Library Board is an autonomous
countywide organization that oversees the library system and receives no oversight from the County
Commissioners.
The Franklin County Visitors’ Bureau is a nonprofit corporation that serves the Franklin County community
and its businesses to promote, advertise and educate the general public on the natural, historic,
recreational, cultural, and hospitality value of the county. Fifteen of its board members, including one
County Commissioner, are appointed by the County Commissioners with the advice and recommendations
of the board members.
The County Commissioners are responsible for appointing members to and/or serving on several other
commissions, committees, or boards including the following:
§Franklin County Agricultural Land Preservation Board
§Franklin County Children and Youth Services Advisory Board
§Franklin/Fulton MH/IDD/EI Advisory Board
33
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
§Franklin County Housing Authority
§Franklin County Local Emergency Planning Committee
§Emergency Services Alliance Committee
§Franklin County Planning Commission
§Franklin County Prison Board
§Blighted Property Review Committee
§Metropolitan Planning Organization
§Franklin County Drug and Alcohol Advisory Board
§Criminal Justice Advisory Board
GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non-fiduciary activities of the primary government and its
component units. The focus of the government-wide financial statements is more on sustainability of the
County as an entity and the change in aggregate financial position resulting from activities of the fiscal
period. The effect of interfund activity has been removed from these statements. The County does not
allocate indirect costs on the statement of activities. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type activities that rely
to a significant extent on fees and charges for support. Likewise, the primary government is reported
separately from certain legally separate component units for which the primary government is financially
accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment, and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual proprietary funds are reported as separate columns in the fund
financial statements.
MEASUREMENT FOCUS,BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund and fiduciary 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
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been
met.
34
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
General capital asset acquisitions, including entering into contracts giving the County the right to use leased
assets, are reported as expenditures in governmental funds. Issuance of long-term debt and financing
through leases are reported as other financing sources.
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
government considers revenues to be available if they are collected within 60 days of the end of the current
fiscal period for property taxes and collected within 180 days for other revenues. Property taxes due but
not collected within 60 days after year end are reflected as deferred inflows of resources. Property taxes,
grants, and interest associated with the current fiscal period are all considered to be susceptible to accrual
and so have been recognized as revenues of the current fiscal period to the extent available. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due and payable.
The County 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. For financial statement presentation the hazardous materials fund and the equipment
reserve and replacement fund are included in the general fund.
§The children and youth fund accounts for revenues received from various federal, state, and
local sources that are restricted for the provision of specified child welfare services to eligible
county residents.
§The mental health/intellectual disabilities fund accounts for revenues received from various
federal, state, and local sources that are restricted for the provision of specified mental health
and intellectual and developmental disabilities services to eligible county residents.
§The capital projects fund accounts for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by proprietary funds).
§The emergency 911 system fund accounts for the operations of the 911 communication
system.
§The debt service fund accounts for the resources accumulated and payments made for
principal and interest on long-term general obligation debt of governmental funds.
§The special revenue trusts fund accounts for the resources received from various federal,
state, and local sources that are restricted for the provision of agricultural preservation,
veterans affairs, housing, tourism, quality of life, opioid treatment, and other various
programs to benefit county residents.
35
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The County reports the following proprietary funds:
§Internal service funds are used to account for the financing of goods or services provided by
one department or agency to other departments or agencies of the County, or to other
governments, on a cost reimbursement basis. Internal service funds are used to account for
the operation of the General Support Services fund, which includes the Fiscal, Information
Services, Procurement, Human Resources and Risk Management Departments, and the
Human Services Administration fund, which provide fiscal and administrative services to the
various human service agencies. The Human Services Building (HSB) fund accounts for the
costs of the respective building. Those costs will be reimbursed by the County agencies that
use the services and building. Additionally, the Workers’ Compensation fund and Self-Funded
Employee Benefits fund accounts for the cost of benefits provided throughout the County.
Internal service funds are included in governmental activities for government-wide reporting
purposes.
The County reports the following fiduciary funds:
§The component unit trust funds are comprised of the County’s pension and OPEB trust funds
and account for the activities of the Employees Retirement System and Other
Postemployment Benefits (OPEB) plan, which accumulates resources for benefit payments to
qualified County employees.
§The custodial funds account for the activities of the County elected row offices, magisterial
district justices, jail, and various human service agencies, who collect and disburse monies in
an agent capacity to citizens, other governments, and the County.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements.
ASSETS,LIABILITIES, AND NET POSITION OR FUND BALANCE
CASH AND CASH EQUIVALENTS AND INVESTMENTS
Certain cash and temporary investment balances are pooled by the County. Balances are segregated by
fund but accounted for centrally for receipt and disbursement purposes. Interest on investments is
allocated to the funds based on their equity (or deficit) in pooled cash and temporary investments.
For purposes of the statement of cash flows (Enterprise Funds), the County considers all highly liquid
investments with an original maturity of three months or less when purchased to be cash equivalents.
Investments are stated at fair value, cost, or amortized cost. Securities traded on a national or international
exchange are valued at the last reported sales price at current exchange rates. Investments in collateralized
mortgage obligations are valued on the basis of future principal and interest payments and are discounted
at prevailing interest rates for similar instruments. 2a-7 like investments are reported at amortized cost,
which approximates fair value. Certain nonparticipating contracts such as nonnegotiable certificates of
deposit and repurchase agreements are reported at cost.
RECEIVABLES AND PAYABLES
Activities between funds that are representative of lending/borrowing arrangements outstanding at the
end of the fiscal year are referred to as “due to/from other funds”. Any residual balances outstanding
between the governmental activities and business type activities are reported in the government-wide
financial statements as “internal balances.”
All trade and property tax receivables are shown net of an allowance for uncollectable amounts.
36
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements.
RESTRICTED ASSETS
Certain resources are classified as restricted assets on the Statement of Net Position and Governmental
Funds Balance Sheet because their use is limited externally by creditors, grantors, contributors, or laws and
regulations of other governments.
CAPITAL ASSETS
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., bridges), are
reported in the governmental activities column in the government-wide financial statements. Capital assets
are defined by the government as assets with an estimated useful life in excess of one year and an initial,
individual cost of more than $5,000 for property, plant, equipment and vehicles, $25,000 for land
improvements, $50,000 for buildings and building improvements and $250,000 for infrastructure. Such
assets are recorded at historical cost or estimated historical cost if purchased or constructed (except for
intangible right-to-use assets which are discussed below). Intangible assets with an indefinite life (e.g.
agricultural easements) are not subject to depreciation. Donated capital assets are recorded at acquisition
cost at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant, and equipment of the primary government are depreciated using the straight-line
method over the following estimated useful lives:
Assets Years
Buildings and building improvements 20 to 40
Improvements other than buildings 20 to 25
Movable machinery and equipment 3 to 20
Fixed machinery and equipment 5 to 20
Infrastructure 40 to 50
LEASES
The County routinely engages in lease agreements to meet operational needs. Lease agreements generally
relate to certain land, buildings, and equipment. Leases with a maximum possible non-cancelable term of
12 months or less are considered short-term leases. Payments made or received under short-term leases
are recognized as expense or revenue based on the provisions of the lease contract. Lease contracts that
transfer ownership of the leased asset are recorded as a financed purchase of the asset by the lessee or a
sale of the asset by the lessor.
For all other lease contracts in which the County is the lessee, a lease liability and an intangible right-to-use
lease asset is recognized and measured based on the present value of expected future lease payments. The
asset measurement is increased for any lease payments made prior to lease commencement and initial
direct costs. In the statement of net position, lease assets are reported with capital assets and lease
liabilities as long-term debt. In subsequent financial reporting periods, the lease asset, as well as any related
asset improvements capitalized, are amortized on the straight line basis over the shorter of the lease term
37
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
or useful life of the lease asset and the liability discount is amortized and recognized as interest expense.
Under the current financial resources measurement focus used for governmental fund accounting, a capital
expenditure and other financing source are reported upon recognition of the lease and measured based on
the lease liability. Lease payments are recorded as debt service payments on long-term debt, including
principal and interest.
On a limited basis, the County is a lessor of certain County-owned buildings and land. A lease receivable
and deferred inflow of resources are measured at lease inception and represent the present value of lease
payments expected to be received based on the lease agreement terms and conditions reduced by any
provision for estimated uncollectible amounts. The lease receivable is amortized over the life of the lease
resulting in the recognition of interest income. The inflow of resources is recognized in a systematic and
rational manner over the term of the lease. Initial direct costs of the lease incurred prior to lease inception
are considered current period outflows of resources.
Lease liabilities and receivables are measured or discounted using stated interest rates, if available. In the
absence of stated interest rates, the County’s incremental borrowing rate based on the most recent general
obligation bond issue is applied. Certain variable payments and payments based on future performance are
not included in the measurement of the lease liability or lease receivable but are recognized as expense or
revenue in the period incurred. Residual value guarantees and exercise options are included in
measurement if they are reasonably certain to be paid or exercised. Remeasurement of the lease liability
or lease receivable is considered for changes in terms that individually, or in the aggregate, would have a
significant impact on the lease liability or receivable since the previous measurement.
Minimum value dollar thresholds were established for lease reporting as follows:
Minimum annual lease payments – all leases $ 5,000
Minimum present value of lease payments – all leases $50,000
SUBSCRIPTION-BASED INFORMATION TECHNOLOGY AGREEMENTS
The County routinely enters into subscription-based agreements to use vendor-provided information
technology to meet operational needs. Subscription agreements convey the right to use vendor software
and associated tangible capital assets without granting perpetual license or ownership. Subscription
agreements with a maximum possible non-cancelable term of 12 months or less are considered short-term
and payments made are recognized as expense based on the provisions of the contract. Contracts that
transfer ownership of the assets are recorded as a financed purchase.
For all other subscription contracts, a subscription liability and an intangible right-to-use asset are
recognized and measured based on the present value of future expected subscription payments and
contract components. The asset measurement is increased for any subscription payments made upon
subscription commencement and initial capitalizable implementation costs. In the statement of net
position, subscription assets are reported with capital assets and subscription liabilities as long-term debt.
In subsequent financial reporting periods, the assets are amortized on the straight line basis over the
shorter of the subscription term or useful life of the asset and the liability discount is amortized and
recognized as interest expense. Under the current financial resources measurement focus used for
governmental fund accounting, a capital expenditure and other financing source, measured based on the
subscription liability, are recognized upon recognition of the subscription. Subscription payments are
recorded as debt service payments on long-term debt, including principal and interest.
38
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Subscription liabilities are measured or discounted using stated interest rates, if available. In the absence
of stated interest rates, the County’s incremental borrowing rate based on the most recent general
obligation bond issue is applied. Certain variable payments are not included in the measurement of the
subscription liability but are recognized as expense in the period incurred. Modifications to the contract
may result in remeasurement of the subscription liability or an additional contract based on the nature of
the modifications.
Minimum value dollar thresholds were established for reporting as follows:
Minimum annual payments $ 5,000
Minimum present value of payments $50,000
COMPENSATED ABSENCES
It is the government’s policy to permit full-time employees to carry over a maximum of 75 / 80 hours (two
weeks) of unused Paid Time Off (PTO) from one calendar year to the next. At the end of the calendar year,
any hours in excess of the maximum established level will automatically be placed in the employee’s Sick
Leave Reserve Account, up to the account maximum. No additional carryover is typically permitted.
Sick Leave Reserve balance may not exceed 640 hours; any hours in excess of the maximum will be lost.
When an employee’s Sick Leave Reserve balance reaches 440 hours, he/she has the option to sell back
hours at a buyback rate of 35% for hours falling within the 440-499 increment or 40% for hours falling within
the 500-640 increment.
Since the government does not have a policy to pay any amounts when employees separate from service
with the government, there is no liability for unpaid accumulated sick leave other than the potential buyout
and a portion of the accumulated balances based on average annual usage.
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, or proprietary fund type statement of net position. Bond premiums and discounts are deferred
and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of
the applicable bond premium or discount. Bond issuance costs are reported as current period costs.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well
as debt issuance costs, during the current period. The face amount of debt issued is reported as other
financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
UNEARNED REVENUES
Revenues that are received but not earned are recorded as unearned revenue in the County’s financial
statements. In the County’s governmental funds, unearned revenues arise when potential revenue does
not meet both the “measurable” and “available” criteria for recognition in the current period. Unearned
revenues also arise when resources are received by the government before it has a legal claim to them, as
when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods,
when both revenue recognition criteria are met, or when the County has a legal claim to the resources, the
liability for unearned revenue is removed from the governmental funds’ balance sheet and revenue is
recognized.
39
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
DEFERRED INFLOWS/OUTFLOWS OF RESOURCES
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/expenditure) until then. Under the accrual basis of accounting, the
government-wide statement of net position reports pension deferred outflows of resources.
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 an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. Under the modified accrual basis of accounting, the
governmental funds report unavailable revenue from property taxes, leases, and opioid settlement (other)
as deferred inflows of resources. Under the accrual basis of accounting the government-wide statement of
net position reports a deferred inflow of resources for pensions, OPEB, and unavailable revenues from
leases.
FUND BALANCE/NET POSITION
At the fund level, governmental financial statements present fund balances associated with classifications
that comprise a hierarchy that is determined by the extent to which the County is bound to honor
constraints on the specific purposes for which amounts in the respective governmental funds can be spent.
The classifications used in the governmental fund financial statements are as follows:
§Non-spendable Fund Balance: Amounts that cannot be spent because they are either (a) not in
spendable form or (b) legally or contractually required to be maintained intact.
§Restricted Fund Balance: Amounts for which constraint placed on the use of resources are either (a)
externally imposed by creditors (such as through debt covenants), grantors, contributors, laws or
regulations of other governments or (b) imposed by law through constitutional provisions or enabling
legislation.
§Committed Fund Balance: Amounts that can only be used for specific purposes pursuant to constraints
imposed by formal action of the Board of Commissioners. Amounts cannot be used for any other
purpose unless the Board of Commissioners remove or change the specified use by taking the same
type of action (resolution) employed when the funds were initially committed.
§Assigned Fund Balance: Amounts that are constrained by the County’s intent to be used for a specific
purpose but neither restricted nor committed. The Board of Commissioners delegated the
responsibility to approve or remove assigned fund balance that reflects the Commissioner’s intended
use of the resources to the County Administrator.
§Unassigned Fund Balance: Residual/remaining balance for the General Fund. It reflects resources not
classified in any other category and are available for further appropriation and expenditure for general
purposes.
Unless otherwise specified by the Board of Commissioners, the order of spending when more than one
category is available is as follows:
Restricted Fund Balance
Committed Fund Balance
Assigned Fund Balance
Unassigned Fund Balance
40
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The County’s policy is to maintain an unrestricted fund balance in the General Fund of no less than two
months (60 days) of General Fund operating expenditures. The term Unrestricted Fund Balance is meant to
include Committed, Assigned, and Unassigned Fund Balance categories.
As of December 31, 2025, Governmental fund balance is as follows:
Nonspendable
Prepaid Items/Other Assets 793,206$
Restricted
Debt Service 1,519,172
Capital Projects 1,552,409
Liquid Fuels Tax 5,264,064
Domestic Relations 3,083,034
Aging 521,501
Drug and Alcohol 358,512
Land Preservation 1,727,395
Housing Trust Fund 538,346
Marcellus Shale Legacy Fund 898,958
Veterans Outreach 290,456
Opioid Settlement 2,576,808
Court imposed Judicial Initiatives 1,662,042
19,992,697
Committed
Capital Projects 3,219,615
Solid Waste / Recycling 216,939
Others 23,569
Assigned
Next Year's Budgeted Deficit 5,227,120
500,000
Other 3,847,818
9,574,938
Unassigned 23,497,252
Total Fund Balance 57,318,216$
In the government-wide financial statements and proprietary fund financial statements, the net position
classifications are as follows:
§Net Investment in Capital Asset: Consists of capital assets net of accumulated depreciation and reduced
by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable
to the acquisition, construction, or improvement of those assets.
§Restricted: Constraints are either externally imposed by creditors (such as through debt covenants),
grantors, contributors, or laws or regulations of other governments or imposed by law through
constitutional provisions or enabling legislation.
Restricted net position at year-end is as follows:
41
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Governmental Activities
Debt Service 1,519,172$
Liquid Fuels Tax 5,264,064
Domestic Relations 3,083,034
Land Preservation 1,727,395
Housing Trust Fund 538,346
Marcellus Shale Legacy Fund 898,958
Veterans' Outreach 290,456
Area on Aging 521,501
Drug and Alcohol 358,512
Court Imposed Judicial Initiatives 1,662,042
OPEB 4,404,472
Opioid Settlement 8,655,795
Human Services Administration (Internal Service Fund)51,652
Workers' Compensation (Internal Service Fund)5,757,823
Self Funded Employee Benefits (Internal Service Fund)112,311
Total Restricted Net Position 34,845,533$
Unrestricted: Consists of net position that does not meet the definition of “restricted” or “net
investment in capital assets.”
When both restricted and unrestricted resources are available for use, it is the County’s policy to use
restricted resources first, then unrestricted resources as they are needed.
INTERGOVERNMENTAL REVENUES
Intergovernmental revenues represent revenues received from the Commonwealth of Pennsylvania and
federal agencies generally to fund specific programs. Awards made on the basis of entitlement periods are
recorded as intergovernmental revenues when entitlement occurs. Reimbursement type grants are
recorded as revenues when the related expenditures are incurred. In the governmental funds’ financial
statements, grants are recorded when revenues are also measurable and available.
HOTEL ROOM RENTAL TAX
The County of Franklin receives a 5% hotel room rental tax from the operators of each hotel within Franklin
County. The County retains a 4% administration fee prior to monthly distribution of funds to the Franklin
County Visitors Bureau to promote tourism in Franklin County. Under an agreement between Franklin
County and the Franklin County Visitors Bureau, 20% of the distributed amount is returned to the County
for board initiatives related to tourism and tourism promotion. The TQLEG Program awards grants to help
fund projects in Franklin County that promote tourism and quality of life of residents and visitors. The
revenue from this tax is recognized when assessed for the government-wide financial statements and when
measurable and available in the governmental funds.
42
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
The preparation of the financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts reported in the financial
statements and related notes. Actual results could differ from those estimates.
ADOPTION OF GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENTS
In December 2023, the GASB issued Statement No. 102, “Certain Risk Disclosures”. The County is required
to adopt Statement No. 102 for its calendar year 2025 financial statements. The adoption of this GASB
Statement had no effect on previously reported amounts.
PENDING CHANGES IN ACCOUNTING PRINCIPLES
In April 2024, the GASB issued Statement No. 103, “Financial Reporting Model Improvements”. The County
is required to adopt Statement No. 103 for its calendar year 2026 financial statements.
In December 2025, the GASB issued Statement No. 105, “Subsequent Events”. The County is required to
adopt Statement No. 105 for its calendar year 2027 financial statements.
The County has not yet completed the various analysis required to estimate the financial statement impact
of these new pronouncements.
43
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(2)DEPOSITS AND INVESTMENTS
POLICIES
Policies – non-pension and non-OPEB deposits and investments – Deposits and investments for the primary
government and its discretely presented component units are governed by Pennsylvania law (County Code,
Section 1706). Pennsylvania law provides for investment of governmental funds into certain authorized
investment types including U.S. Treasury bills, other short-term U.S., other U.S. and Pennsylvania
government obligations, and insured or collateralized savings and time deposits and certificates of deposit.
The statutes do not prescribe regulations related to demand deposits; however, they do allow the pooling
of governmental funds for investment purposes.
In April 2018, and revised August 2023, the Franklin County Board of Commissioners adopted an investment
policy which applies to the investment of all funds, excluding the investment of employees' pension funds
and other post-employment benefits (OPEB), which are covered in separate policies. In conformity with
Section 1706 of The County Code, as amended, this policy is extended to include investments of other
elected officials authorized to make investments of the funds they collect, administer, and disburse.
The investment program shall be operated in conformance with Section 1706 of The County Code, as
amended, as well as federal, state, and other legal requirements.
The primary objectives, in priority order, of investment activities shall be safety, liquidity, and yield.
Consistent with The County Code, the following investments will be permitted by this policy:
·U.S. Treasury Obligations
·U.S. Federal Agencies
·Repurchase Agreements
·Deposits, including Certificates of Deposit
·Obligations of the Commonwealth of Pennsylvania or any Political Subdivision
thereof
·Shares of Investment Company
·Commercial Paper
·Local Government Investment Pool
·Bankers’ Acceptance
·Negotiable Certificates of Deposit
Investment in derivatives of the above instruments shall require additional authorization by the Board of
Commissioners.
Proceeds from certain bond issues, as well as separate foundation or endowment assets, if applicable, are
covered by a separate policy.
44
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Policies – pension investments and OPEB investments – The County Retirement Board, which according to
law consists of the three Commissioners, Controller, and Treasurer, manages the investments of the
pension trust fund in a fiduciary capacity. The OPEB Board, which consists of the Board of Commissioners
of the County of Franklin, PA, manages the investments of the OPEB trust fund in a fiduciary capacity.
In June 2011, the Pension and OPEB Boards adopted respective revised investment policies that govern the
investments of respective trust funds. The policies were most recently amended in 2024. Both Policies
establish that while the respective Boards have the ultimate responsibility for the investment of assets
within the respective Plans, the Boards have delegated the responsibilities of investment management and
operation of the investment program to the Deposit Administrators.
The Board/Trustees may set asset allocation ranges for individual Deposit Administrators different from
ranges for the Funds. The Pension Policy and the OPEB Policy direct asset mix for the respective Funds. For
investment asset mix, see Footnotes 11 and 12 for OPEB and Pension, respectively.
The Pension and OPEB Policies state that emphasis shall be placed on providing adequate and timely cash
flow to permit benefit payments from the respective Pension and OPEB Plans when due and that respective
Pension and OPEB fund investments must be diversified broadly to minimize the risk of substantial loss.
In addition to the investments authorized for governmental funds, fiduciary fund investments may also be
made in corporate stocks and bonds, real estate, and other investments consistent with sound business
practice.
The Pension and OPEB Policies’ general guidelines prohibit the Deposit Administrators from engaging in
short sales, margin transactions, futures, certain options, certain leveraged securities, or other specialized
investment activities that may subject the assets to undue risk.
The Pension and OPEB Policies also establish specific requirements for fixed income investments.
PARTICIPATION IN EXTERNAL INVESTMENT POOLS
The County’s cash and cash equivalents include $14,276,274 invested with Pennsylvania Local Government
Investment Trust (“PLGIT”) which is a 2a7-like external investment pool. PLGIT Class is a money market
fund; PLGIT Prime is a variable rate investment portfolio limiting redemptions or exchanges to two per
calendar month. There is no minimum investment period for non-fixed term investment options. The
County’s investments include $25,164,456 invested in various PLGIT Term investments, a fixed term
investment portfolio with original maturity dates of up to one year. Accrued interest on Term investments
was $548,652 at December 31, 2025. The County’s investments in PLGIT are measured at amortized cost,
which approximates fair value. The County has no regulatory oversight for PLGIT, which is governed by a
Board of Trustees and is administered by PFM Asset Management, LLC. PLGIT is audited annually by Ernst
& Young LLP. The pool was rated AAAm by Standard & Poors as of December 31, 2025. Separately issued
financial statements of PLGIT are available at www.plgit.com.
RISKS
Custodial Credit Risk.For deposits and investments, custodial credit risk is the risk that in the event of the
failure of a depository bank or an investment counterparty, the County will not be able to recover the value
of its deposits or investments or collateral securities that are in the possession of an outside party. At
December 31, 2025, $9,593,536 of the County’s deposits were exposed to custodial credit risk; $9,584,794
were collateralized with securities held by the pledging financial institution and uninsured; and $8,742 were
uncollateralized and uninsured. None of the County’s investments were exposed to custodial credit risk at
December 31, 2025.
45
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment.Debt securities with interest rates that are fixed for longer periods are likely to be
subject to more variability in their fair values as a result of future changes in interest rates.
Interest Rate Risk – pension – As of December 31, 2025, the County had the following debt investments
and maturities within its pension accounts:
Market Less More
Investment Type Value Than 1 1-5 6-10 Than 10
Cash Equivalents 1,882,018$1,882,018$-$-$-$
Certificates of Deposit 639,736 -639,736 --
Fixed Income Mutual Funds 40,891,697 1,721,685 17,554,480 10,627,600 10,987,932
U.S. Government Agency 4,719,695 131 100,334 1,016,694 3,602,536
U.S. Government Treasury 5,189,296 -2,245,895 1,258,177 1,685,224
Corporate and Foreign Bonds 4,181,002 -2,004,604 1,057,213 1,119,185
Private Credit 6,054,024 31,967 2,871,551 3,150,506 -
Total 63,557,468$3,635,801$25,416,600$17,110,190$17,394,877$
Investment Maturities (in Years)
As a means of limiting its exposure to fair value losses arising from rising interest rates, the County’s Pension
Policy states the effective duration of fixed income securities shall be no more than 25% greater or less
than the effective duration of the policy benchmark.
The terms of callable debt securities may cause their fair value to be highly sensitive to interest rate
changes. At December 31, 2025, the County held, in the pension accounts, $4,431,893 of callable debt
securities that are considered to be highly sensitive to interest rate changes.
Interest Rate Risk – OPEB – As of December 31, 2025, the County had the following debt investments and
maturities within its OPEB Trust account:
Market Less More
Investment Type Value Than 1 1-5 6-10 Than 10
Cash Equivalents 213,159$213,159$-$-$-$
Fixed Income Mutual Funds 5,784,620 --5,784,620 -
Total 5,997,779$213,159$-$5,784,620$-$
Investment Maturities (in Years)
Interest Rate Risk – non-pension and non-OPEB – As of December 31, 2025, the County had the following
non-pension and non-OPEB investments and maturities within its remaining accounts:
Market Less More
Investment Type Value Than 1 1-5 6-10 Than 10
External Investment Pool
Cash Equivalents 14,276,274$14,276,274$-$-$-$
Term Investments 25,164,456 25,164,456 ---
Negotiable Certificates of Deposit 7,180,664 3,245,747 3,716,557 218,360 -
Cash Equivalents 1,486,269 1,486,269 ---
U.S. Government Treasury
Bonds 4,275,183 1,507,265 2,767,918 --
Total 52,382,846$45,680,011$6,484,475$218,360$-$
46
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Credit Risk.Credit risk is the risk that an issuer of debt securities will not fulfill its obligations. The Pension
Policy states that managers may invest in U.S. Treasury Bills, U.S. Government Agency Bonds, mortgage-
backed, asset-backed, private credit, agency and corporate fixed income securities, as well as closed-end
funds. The Pension Policy also establishes limits on fixed income securities ratings by Moody’s, Standard
and Poor’s, or Fitch.
Credit Risk – pension – As of December 31, 2025, the County’s pension investments were rated by Moody’s
or other ratings agencies as follows:
Cash Equivalents $1,882,018 Aaa
Certificate of Deposit $639,736 Aaa
U.S. Treasury Bonds $299,690 (6%) Aaa $4,889,606 (94%) Aa1
U.S. Government Agencies $954,346 (20%) Aaa $3,761,181 (80%) Aa1 $4,168 (0%) not rated
Corporate Bonds and Notes $516,333 (12%) Aaa $327,454 (8%) Aa2 $442,405 (10%) Aa3
Credit Risk – OPEB – As of December 31, 2025, the holdings in the County’s OPEB Trust investments in fixed
income mutual funds were rated by Moody’s or other ratings agencies as follows: $2,878,689 (50%) Aa2
and $2,905,931 (50%) A1. The County’s OPEB Trust investments in cash equivalents of $213,159 were rated
Aaa-mf by Moody’s.
Credit Risk – non-pension and non-OPEB - As of December 31, 2025, the County’s non-pension, non-OPEB
investments were rated by Moody’s or other ratings agencies as follows:
Cash Equivalents $1,486,269 Aaa-mf
U.S. Treasury Bonds $4,275,183 Aa1
External Investment Pool
Cash Equivalents $14,276,274 AAAm
Term Investments $25,164,456 not rated
Concentration of Credit Risk.Concentration of credit risk is the risk of loss that is attributed to the
magnitude of the County’s investments in the debt securities of a single issuer. At December 31, 2025, no
investment exceeded 5% of pension investments; 100% of the debt investments in the Workers
Compensation fund were invested in U.S. Treasury Bonds; and the OPEB Trust did not directly hold debt
securities.
FAIR VALUE
The County categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. This hierarchy is based on the valuation inputs used to measure the fair
value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
Debt and equity securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in
active markets for those securities. Debt and equity securities classified in Level 2 of the fair value hierarchy
47
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’
relationship to benchmark quoted prices. Other mutual funds classified as level 3 are valued using
discounted cash flows and comparable sales.
Fair Value – pension –The County has the following recurring fair value measurements for its pension
accounts as of December 31, 2025:
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
(Level 1)(Level 2)(Level 3)
Investments by Fair Value Level
Debt Securities
U.S. Government Agencies 4,719,695 -4,719,695 -
Certificate of Deposit 639,736 -639,736 -
Corporate and Foreign Bonds 4,181,002 -4,181,002 -
Total Debt Securities 55,621,426 40,891,697 14,729,729 -
Equity Securities
Total Equity Securities 100,451,240 98,569,222 1,882,018 -
Other Mutual Funds (Real Estate/Alternative)
Real Estate 12,495,017 --12,495,017
Infrastructure 9,393,315 --9,393,315
Private Credit 6,054,024 --6,054,024
Private Equity 9,536,313 --9,536,313
Total Investments by Fair Value Level 193,551,335$139,460,919$16,611,747$37,478,669$
December 31, 2025
Fair Value – OPEB –The County has the following recurring fair value measurements for its OPEB Trust
accounts as of December 31, 2025:
Quoted Prices in
Active Markets for
Identical Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
(Level 1)(Level 2)(Level 3)
Investments by Fair Value Level
Fixed Income Mutual Funds 5,784,620$5,784,620$-$-$
Equity Securities
Equity Mutual Funds 6,231,368 6,231,368 --
Other Mutual Funds - Real Estate 1,310,578 --1,310,578
December 31,
2025
48
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Fair Value – non-pension and non-OPEB –The County has the following recurring fair value measurements
for its non-pension and non-OPEB investments as of December 31, 2025:
Quoted Prices in Active
Markets for Identical
Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
Investments by Fair Value Level
Debt Securities
U.S. Government Treasury 4,275,183$-$4,275,183$-$
Negotiable Certificates of Deposit 7,180,664 -7,180,664 -
Total Debt Securities 11,455,847 -11,455,847 -
December 31,
2025
Cash equivalents held in U.S. Government money market funds ($1,486,269), external investment pool cash
equivalents ($14,276,274), and external investment pool term investments ($25,164,456) are 2a7-like
investments and measured at cost or amortized cost, which approximates fair value, and excluded from fair
value measurement.
(3)PROPERTY TAXES
Property taxes attach as an enforceable lien on property as of January 1 and are levied and recorded as a
receivable March 1. Taxes are collected at a 2% discount until April 30, at their face amount from May 1 until
June 30, and at a 10% penalty thereafter. Taxes are collected by elected tax collectors through December and
are turned over to the County as delinquent in January of the following year. The third and fourth Interim and
Supplemental levies are turned over as delinquent the following January. The County collects delinquent taxes
on behalf of itself and other taxing authorities.
The County is permitted by the County Code of the Commonwealth of Pennsylvania to levy property taxes up
to 25 mills on every dollar of adjusted valuation for general County purposes exclusive of the requirements for
the payment of interest and principal on funded debt. The property tax rates for 2025 were 25 mills for general
purposes, 4.1 mills for debt service, and 1.3 mills pertaining to a dedicated library tax. The library tax is not
levied in the following jurisdictions: Mercersburg Borough, Orrstown Borough, Southampton Township, and
West End Shippensburg Borough.
The County recorded an allowance for uncollectible taxes of $127,239 as of December 31, 2025. This represents
the County’s estimate of taxes earned but ultimately expected not to be collected.
49
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(4)RECEIVABLES AND INTERGOVERNMENTAL RECEIVABLE
Receivables as of year-end for the government’s individual major funds and non-major, and internal service funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Children Capital 911
General and Youth Projects System
Receivables
Taxes 2,080,978$-$-$-$-$
Accounts 828,581 -19,807 --
Leases 496,452 ----
Interest 495,121 ----
Gross receivables 3,901,132 -19,807 --
Less allowance for
uncollectibles - taxes (109,847)----
Net receivables 3,791,285$-$19,807$-$-$
Special Governmental Internal
Mental Health/
Intellectual
Disabilities
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds report unearned
revenue in connection with resources that have been received but not yet earned. At the end of the current fiscal
year the following unavailable revenue amounts were reported in the governmental funds:
Delinquent property taxes receivable (General Fund)1,393,565$
50
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(5)CAPITAL ASSETS
PRIMARY GOVERNMENT
Capital asset activity for the year ended December 31, 2025 was as follows:
Beginning Ending
Total capital assets, not being depreciated 17,465,380 2,177,110 (2,213,102)17,429,388
Total capital assets, being depreciated 185,159,057 5,393,708 (4,888,149)185,664,616
Less accumulated depreciation & amortization for:
Total accumulated depreciation (78,780,861)(7,156,039)4,824,986 (81,111,914)
Total capital assets, being depreciated, net 106,378,196 (1,762,331)(63,163)104,552,702
Governmental activities capital assets, net 123,843,576$414,779$(2,276,265)$121,982,090$
51
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:Capital Assets Lease Assets Assets Total
Total depreciation expense – governmental activities 6,262,946$560,436$332,657$7,156,039$
Capital assets held by the government’s internal service
funds are charged to the various functions based on their
usage of the assets
(6)INTERFUND RECEIVABLES,PAYABLES, AND TRANSFERS
The composition of interfund balances as of December 31, 2025 is as follows:
Receivable Payable
Governmental Funds
General fund 4,601,488$12,489,312$
16,816,379 15,782,918
17,090,799$17,090,799$
Interfund balances are all a result of the general fund investing cash of the individual funds and financing
temporary cash flow deficits of programs.
52
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The composition of interfund transfers for the year ended December 31, 2025 is as follows:
Transfers in Transfers out
Governmental Funds
General fund 290,414$5,021,629$
Children and youth 3,681,994 -
Mental health/intellectual disabilities 285,995 -
Capital projects 12,498 -
Emergency 911 system 32,882 -
Special revenue trusts 150,000 555,415
Nonmajor governmental funds 1,769,904 611,935
6,223,687 6,188,979
Proprietary Funds
Internal service funds 88,874 123,582
6,312,561$6,312,561$
General fund transfers are made to fund the matching requirements from grants for the governmental funds.
(7)LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended December 31, 2025:
Balance at 1/1/25 Additions Reductions
Balance at
12/31/25
Due Within One
Year
Lease obligations, compensated absences, liability for pension benefits, and the liability for self-insurance claims
are liquidated by the general fund, children & youth, mental health/intellectual disabilities, emergency 911 system,
and certain other governmental funds. General obligation debt is liquidated through the debt service and general
funds.
Compensated absences are shown at net change.
53
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The government issues general obligation debt to provide funds for the acquisition and construction of major
capital facilities and equipment. General obligation debt currently outstanding is as follows:
Governmental Activities
General
Obligation Debt
Tax Revenues)
at annual rates ranging from 4% to 5%. Principal due in annual installments beginning November 1, 2025
ranging from $30,000 to $ 6,430,000 in 2041. $ 9,840,000
at annual rates ranging from 4% to 5%. Principal due in annual installments on November 1 increasing
from $5,000 in 2023 to$ 3,275,000 in 2040.9,950,000
at a rate of 3%. Principal due in annual installments on November 1 increasing from $5,000 in 2022 to
$2,650,000 in 2039.6,700,000
in 2019 to $4,910,000 in 2038.51,230,000
Annual debt service requirements to maturity for the year ending December 31 are as follows:
Principal Interest Total
2026 3,150,000$2,994,325$6,144,325$
2027 3,325,000 2,868,675 6,193,675
2028 3,690,000 2,735,925 6,425,925
2029 4,095,000 2,591,025 6,686,025
2030 4,255,000 2,430,425 6,685,425
2031-2035 23,920,000 9,512,325 33,432,325
2036-2040 28,855,000 4,578,350 33,433,350
2041 6,430,000 257,200 6,687,200
Total 77,720,000$27,968,250$105,688,250$
Governmental activities
The County routinely leases various facilities and equipment instead of purchasing assets. Pertinent information
regarding leases at December 31, 2025 is presented below.
The County has entered into long-term lease agreements for various buildings, machinery, and equipment with a
January 1, 2025 balance of $5,388,526. Additional lease liability was added during 2025 totaling $338,351. The
County is required to make monthly or semi-annual principal and interest payments ranging from $1,000 to
$23,375 and lease periods ranging from 3 to 25 years. The County utilizes an incremental borrowing rate based
on applicable general obligation bonds; this rate ranged from 3% to 3.9753%. As of December 31, 2025, the
outstanding lease liability for various buildings, machinery, and equipment is $5,107,809.
54
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The County has entered into long-term agreements for various subscription-based information technology
arrangements with a January 1, 2025 balance of $91,703. Additional subscription-based liability was added during
2025 totaling $804,168. The County is required to make monthly, quarterly, or yearly principal and interest
payments ranging from $819 to $230,135 with terms ranging from 3 to 5 years. The County utilizes an incremental
borrowing rate based on applicable general obligation bonds; this rate ranged from 3% to 3.706947% on current
outstanding agreements. As of December 31, 2025, the outstanding liability for various subscription-based
information technology arrangements is $578,589.
In addition, the government has acquired certain capital assets using an installment purchase arrangement.
In January 2021, the County entered into a financed purchase with Motorola for Radio Equipment with a purchase
price of $2,775,026. Principal and interest payments of $493,064 are due annually on January 15 of each year. The
debt bears a fixed interest rate of 2.14% per annum during the term of the agreement. Installment Purchase
expires on 1/15/27. As of December 31, 2025, the outstanding liability for the installment purchase is $955,353.
The following is a schedule by fiscal year of future minimum payments due for installment purchases, leases, and
subscription-based agreements together with the present value of the net minimum payments as of December
31, 2025.
Installment Purchase Liabilities Lease Liabilities SBITA Liabilities
Principal Interest Principal Interest Principal Interest
2026 472,619$20,445$534,401$159,135$307,217$21,122$
2027 482,734 10,331 482,765 141,890 271,372 10,060
2028 --915,571 119,425 --
2029 --321,590 99,269 --
2030 --284,416 89,519 --
2031-2035 --1,242,066 315,400 --
2036-2040 --670,432 154,688 --
2041-2045 --389,780 75,213
2046-2049 --266,788 17,661 --
Total 955,353$30,775$5,107,809$1,172,200$578,589$31,182$
The County, as the lessor, leases various building space and land to its vendors. As of January 1, 2025, the General
Fund had a lease receivable in the amount of $101,854. Additional lease receivable was added during 2025
totaling $534,705. There was no additional revenue for variable and other payments included in the measurement
of the lease receivable. As of December 31, 2025, the value of the lease receivable is $496,453 and the related
deferred inflow for future payments expected to be collected on the lease is $496,452. The payment amounts are
fixed monthly payments ranging from $1,650 to $8,747 with lease periods ranging from 3 years to 5 years. The
current outstanding leases have an interest rate ranging from 3% to 3.7069. The County recognized lease revenue
and interest of $140,106 and $8,881, respectively, for the calendar year.
The County’s remaining obligation of $ 48,605 on the LIDA loan was released and discharged effective December
31, 2025.
55
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(8)RESTRICTED ASSETS
The balances and restrictions of the restricted asset accounts in the following funds are as follows:
General Fund:
Restricted for Program Purposes 13,936,146$
Capital projects – debt issue proceeds 1,924,974
Special Revenue Trusts 2,493,148
Internal Service Fund - Self Funded Employee Benefits 697,861
Total 37,038,916$
(9)RISK MANAGEMENT
The County is exposed to various risks of loss in relation to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters for which the government carries commercial insurance. Settlements
have not exceeded coverage for each of the last three fiscal years and there has been no significant change in
coverage.
WORKERS’COMPENSATION
The County self-insures risk of loss related to workers’ compensation. Large claims are limited by a self-insured
retention under Excess Workers’ Compensation coverage. Premiums are paid into a Workers’ Compensation Trust
Account (reported in the workers’ compensation internal service fund) by all other operations/funds and are
available to pay claims, maintain claim reserves, offset administrative costs, and reduce the frequency and severity
of workers’ compensation incidents through risk management techniques. These interfund premiums/rates are
determined on the loss experience for the applicable workers’ compensation classification(s) of each operation.
The funds maintained in the Workers’ Compensation Trust Account are used to minimize potential claims
expenditures reported in the general fund.
Liabilities of the workers’ compensation fund are reported when it is probable that a loss has occurred and the
amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred
but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it
depends on many complex factors, such as inflation, changes in legal doctrine, and damage awards. Accordingly,
claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including
frequency and amount of pay-outs), and other economic and social factors. The estimate of the claims liability
also includes other claim adjustment expenses regardless of whether such expenses are allocated to specific
claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims
liability estimate. The liability is allocated to governmental activities based on salary expenses. An excess coverage
56
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
insurance policy covers individual claims in excess of $600,000 or $650,000 depending on employee classification.
Changes in the balance of workers’ compensation claims liabilities during the past two years are as follows:
2025 2024
Balance as of January 1 157,891$255,015$
Add: Incurred claims relating to:
Prior years 9,195 (42,473)
Current year 49,352 78,984
58,547 36,511
Less: Payment of claims relating to:
Prior years (90,600)(121,563)
Current year (3,533)(12,072)
(94,133)(133,635)
Balance as of December 31 122,305$157,891$
Year ended December 31
HEALTH CARE SELF INSURANCE
In 2018 the County became self-funded for Employee dental plans. In 2021 the County became self-funded for
Employee medical and prescription plans. These changes were made to help control health care cost for the
County. A self-funded plan is when an employer assumes the financial risk for providing health care benefits to
its employees. Rather than paying fixed premiums to an insurance carrier, who in turn assumes the financial risk,
an employer will only fund the actual claims incurred by their employees. The County carries stop-loss insurance
that provides protection for medical and prescription claims exceeding $195,000 for an individual. The County
estimates year-end claim liabilities based on an actuarially determined IBNR report. Changes in the balance of self-
funded employee benefit liabilities during the past two years are as follows:
2025 2024
Balance as of January 1 284,000$201,000$
Add: Incurred claims relating to:
Prior years 163,000 3,000
Current year 6,632,000 4,777,000
6,795,000 4,780,000
Less: Payment of claims relating to:
Prior years (446,832)(204,000)
Current year (6,456,000)(4,493,000)
(6,902,832)(4,697,000)
Balance as of December 31 176,168$284,000$
Year ended December 31
UNEMPLOYMENT COMPENSATION
The County participates in a claims servicing public entity risk pool (the Pool) for unemployment compensation.
Under an agreement with the Pool, the County pays a monthly premium to the Pool based on past loss experience.
Any surplus (deficiency) based on current-year loss experience is then refunded to (paid by) the County. Based on
the County’s favorable loss experience in 2025, no liability has been recorded for claims incurred but not paid as
of December 31, 2025.
57
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(10)COMMITMENTS AND CONTINGENT LIABILITIES
GRANT FUNDS
Amounts received or receivable from grant 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 that may be disallowed by the
grantor cannot be determined at this time, although the County expects such amounts, if any, to be immaterial.
LAWSUITS
The County is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently
determinable, in the opinion of the County’s counsel, the resolution of these matters will not have a material
adverse effect on the financial condition of the County.
(11)OTHER POSTEMPLOYMENT BENEFITS (OPEB)
PLAN DESCRIPTION
The County maintains a single-employer defined benefit post-employment benefits other than pensions (OPEB)
plan (the Plan) that is used to provide OPEB for eligible retirees. The Plan is reported as an OPEB Trust fund in the
accompanying financial statements and does not issue stand-alone statements.
Plan administration.The Franklin County Board of Commissioners administers the Plan. The plan is governed by
a resolution passed on December 18, 2001 by the Franklin County Board of Commissioners in accordance with the
Commonwealth of Pennsylvania County Pension Law, Act 96, Section 19 (16 PS 11669) providing the authority
under which benefit provisions for the Plan were established and may be amended.
Management of the Plan is vested in the Board of Commissioners, which consists of the three elected County
Commissioners.
Plan membership.At December 31, 2025, the Plan’s membership consisted of the following:
Inactive plan members or beneficiaries currently receiving benefit payments 165
Inactive plan members entitled to but not yet receiving benefit payments 232
Active plan members 65
Total 462
Employees hired after January 1, 2002 are not eligible to participate in the Plan, except certain correctional officers
hired prior to January 1, 2020.
Benefits provided.The Plan provides healthcare benefits to eligible retirees and their spouses. Benefits are
provided through a third-party insurer and vary depending upon years of service of the retiree.
Contributions.The Board of Commissioners have the authority to establish and amend the contribution
requirements of the County and Plan members. The Board of Commissioners establishes rates based on an
actuarially determined rate. For the year ended December 31, 2025, the County did not make contributions to
the Plan. The Plan currently does not require any contributions from Plan members.
58
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
INVESTMENTS
Investment policy.The Plan’s policy regarding the allocation of invested assets is established and may be amended
by the Board of Commissioners, by a majority vote. It is the policy of the Board of Commissioners to pursue an
investment strategy that reduces risk though the prudent diversification of the portfolio across a broad selection
of distinct asset classes. The following is the Plan’s asset allocation policy as of December 31, 2025:
Asset Class
Target
Allocation
Domestic equity 40%
International equity 15%
Real estate/alternative 10%
Infrastructure 5%
Fixed income 29%
Cash 1%
Rate of return.For the year ended December 31, 2025, the annual money-weighted rate of return on investments,
net of investment expense, was 14.1%. The money-weighted rate of return expresses investment performance,
net of investment expense, adjusted for the changing amounts actually invested.
Additional information on the Plan’s investments can be found in Note 2 of the financial statements.
NET OPEB LIABILITY (ASSET) OF THE COUNTY
The components of the net OPEB liability (asset) of the County at December 31, 2025, were as follows:
Total OPEB liability $ 13,968,575
Plan fiduciary net position 19,313,978
County’s net OPEB liability (asset) $ (5,345,403)
Plan fiduciary net position as a percentage
of the total OPEB liability (asset)138.30%
Actuarial assumptions.The total OPEB liability was determined by an actuarial valuation as of January 1, 2025,
and update procedures were used to roll forward the total net OPEB liability to December 31, 2025 using the
following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.6 percent
Salary increases 4.5 percent, average, including inflation
Investment rate of return 7.25 percent
Healthcare cost trend rates 7.75 percent for 2025 decreasing to an ultimate rate
of 4.50 percent in year 15
Mortality rates were updated to the Pub-2010 General Employees and Retirees Headcount-Weighted table
projected fully generationally using MP-2021 improvement scale.
Certain actuarial assumptions used in the January 1, 2025 valuation were based on the results of an experience
study.
59
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The long-term expected rate of return on OPEB plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns before inflation, net of
OPEB plan investment expense) are developed for each major asset class. These ranges are combined to produce
the long-term expected rate of return by weighting the expected future rates of return by the target asset
allocation percentage. The County’s expected future real rates of return by asset class is as shown below.
Best estimates of arithmetical real rates of return for each major asset class included in the OPEB plan’s target
asset allocation are summarized in the following table:
Asset Class
Long-Term Expected
Real Rate of Return
Domestic equity 5.29%
International equity 5.39%
Fixed income 2.94%
Real estate/alternative 4.12%
Infrastructure 4.61%
Cash 0.29%
Single Discount rate. The single discount rate used to measure the total OPEB liability was 7.25%. The
determination of the discount rate considers the ability of the Plan to meet benefit obligations in the future. To
make this determination, employer and employee contributions, benefit payments, expense, and investment
returns are projected into the future. Based on the assumptions, it was determined the Plan’s future net position
(assets) are projected to be sufficient to meet future Plan obligations. Therefore, the long-term expected rate of
return on Plan investments was applied to all periods of projected benefit payments to determine the total OPEB
liability.
Changes in the County’s net OPEB liability for the plan for the year ended December 31, 2025 were as follows:
Total OPEB
Liability Net Position Liability/(asset)
Balances as of 12/31/2025 13,968,575$19,313,978$(5,345,403)$
60
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The December 31, 2025 measurement date reflects a change in the healthcare trend rate.
Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability
of the County, as well as what the County’s net OPEB liability would be if it were calculated using a discount rate
that is 1-percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current discount rate:
Current Discount
1% Decrease Rate 1% Increase
(6.25%)(7.25%)(8.25%)
County’s net OPEB liability (asset)$(3,476,594)$(5,345,403)$(6,888,277)
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net
OPEB liability of the County, as well as what the County’s net OPEB liability would be if it were calculated using
healthcare cost trend rates that are 1-percentage-point lower (6.75% decreasing to 3.5%) or 1-percentage-point
higher (8.75% decreasing to 5.5%) than the current healthcare cost trend rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
(6.75% decreasing (7.75% decreasing (8.75% decreasing
to 3.50%)to 4.50%)to 5.50%)
County’s net OPEB liability (asset)$(7,030,686)$(5,345,403)$(3,296,762)
OPEB EXPENSE AND DEFERRED INFLOWS OF RESOURCES RELATED TO OPEB
For the year ended December 31, 2025, the County recognized OPEB expense of $(3,106,275). At December 31,
2025, the County reported deferred outflows of resources and deferred inflows of resources related to OPEB from
the following sources:
Outflow (Inflow)
Differences between expected and actual experience -$-$
Total -$940,931$
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be
recognized in OPEB expense as follows:
Year Ended
December 31:
2026 136,469$
61
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(12)EMPLOYEE RETIREMENT PLAN (PENSION TRUST FUND)
PLAN DESCRIPTION
The County maintains a single-employer defined benefit pension plan (the Plan) that covers all employees of the
County. The Plan is reported as a Pension Trust fund in the accompanying financial statements and does not issue
stand-alone statements.
Plan administration.The Retirement Board administers the Franklin County Employees Pension Plan. The plan is
governed by the 1971 County Pension Law, Act 96, of the General Assembly of the Commonwealth of
Pennsylvania, as amended (the “Act”). Benefit and contribution provisions of the Plan are established and can be
amended as provided by the Act.
Management of the Plan is vested in the Retirement Board, which consists of five members – three elected County
Commissioners, the County Controller, and the County Treasurer.
Plan membership.Membership in the plan is mandatory for all full-time County employees. At December 31,
2025, the Plan’s membership consisted of the following:
Inactive plan members and beneficiaries currently receiving benefits 605
Inactive plan members entitled to but not receiving benefits 187
Active plan members 582
Total 1,374
Benefits provided.The Plan provides retirement, disability, and death benefits. Retirement benefits for plan
members are calculated as a percent of the member’s highest 3-year average salary times the member’s years of
service depending on class basis. Plan members with 20 years of service are eligible to retire at age 55. Plan
members that have attained age 60 are eligible to retire. Plan members who are under the age of 55 and have
obtained 20 years of service are eligible to select an early retirement. All plan members are eligible for disability
benefits after 5 years of service if disabled while in service and unable to continue as a county employee. Disability
retirement benefits are equal to 25% of highest average salary at time of retirement.Death benefits for a member
who dies with 10 years of service or age 60 prior to retirement is the total present value of member’s retirement
paid in a lump sum. A plan member who leaves County service with less than 5 years of service may withdraw his
or her contributions, plus any accumulated interest.
Contributions.The Retirement Board establishes contribution rates based on an actuarially determined
contribution recommended by an independent actuary. The actuarially determined rate is the estimated amount
necessary to finance the costs of benefits earned by plan members during the year, with an additional amount to
finance any unfunded accrued liability. For the year ended December 31, 2025, the minimum required active
member contribution rate was 9.0 percent of annual pay. The County’s average contribution rate was 7.74 percent
of annual payroll. Employees have the option to contribute up to an additional 10 percent of gross pay. Employee
contributions are recorded in an individually identified account that is also credited with interest, calculated to
yield 4.0 percent compounded annually on December 31, 2025.
Substantially all of the administrative costs of the Plan are financed through investment earnings. The Act makes
no provisions for termination of the Plan.
62
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
LEGALLY REQUIRED RESERVES
At December 31, 2025, the County has a balance of $41,545,032 of the active and terminated vested members of
the retirement system and the IRC 414(h)(2) pickup contributions, together with the interest additions as of
December 31, 2025. Since those accumulations represent the present value, as of December 31, 2025, of future
benefits, the reserve balance and liability are equal and this reserve is fully funded.
The County has a balance of $9,439,270 in the County Annuity Reserve Account as of December 31, 2025. This
balance and the amounts expected to be credited in the future, plus investment earnings thereon, represent the
reserves set aside for the payment of the County’s share of the retirement allowances.
When a County annuity is scheduled to commence for a particular member, sufficient monies are transferred from
the County Annuity Reserve Account to the Retired Members’ Reserve Account to provide for such County
annuities actually entered upon. Thus, this reserve is always fully funded.
The Retired Members’ Reserve Account is the account out of which monthly retirement allowances, including
cost-of-living increases and death benefits, are paid. The balance in this account was $101,399,069 as of December
31, 2025.
PLAN REPORTING
Net pension liability of the County.The total pension liability was based on an actuarial valuation dated January 1,
2025 and updated procedures were used to roll forward the total pension liability to the December 31, 2025
measurement date. The components of the net pension liability of the County at December 31, 2025, were as
follows:
Total pension liability $ 195,638,695
Plan fiduciary net position 193,782,009
County’s net pension liability/(asset)
Plan fiduciary net position as a percentage
of the total pension liability
63
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Changes in the County’s net pension liability/(asset) for the plan for the year ended December 31, 2025 were as
follows:
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(asset)
Balances as of 12/31/2024 191,003,576$176,845,153$14,158,423$
Balances as of 12/31/2025 195,638,695$193,782,009$1,856,686$
Increase (Decrease)
Deferred inflows and outflows of resources. The total pension expense recognized in 2025 for the pension plan
was $3,207,525. At December 31, 2025, the County reported deferred inflows and outflows of resources related
to the pension plan from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between actual and expected experience 1,972,400$552,146$
Net difference between projected and actual
earnings on pension plan investments -6,495,335
Total 1,972,400$7,047,481$
64
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The deferred outflows and inflows of resources will be recognized in pension expense as follows:
Year Ended
December 31:
2026 3,367,020$
Total (5,075,081)$
PLAN ACTUARIAL METHODS AND ASSUMPTIONS
The total pension liability was measured as of December 31, 2025 and determined by rolling forward the liability
from an actuarial valuation as of January 1, 2025, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation 3.0 percent
Salary increases 4.5 percent, average including inflation
Investment rate of return 7.0 percent, net of pension plan investment expense,
including inflation
Mortality rates were based on the PubG-2010 Mortality Table for males and females set forward one year with
generational mortality improvement using MP-2020.
The actuarial assumptions used in the January 1, 2025 valuation were based on past experience under the plan
and reasonable future expectations which represent the best estimate of anticipated experience under the Plan.
An actuarial experience study was performed during 2016; however, no modifications were made as a result.
Under the Act, cost-of-living adjustments to each member’s retirement allowance shall be reviewed at least once
every three years subsequent to the member’s retirement date. The adjustment, should the County elect to give
one, is a percentage of the change in the Consumer Price Index for All Urban Consumers (CPI-U) for the
Pennsylvania, New Jersey, Delaware and Maryland area for the 12-month period ending August 31. The plan did
not include an assumption for projected ad hoc postemployment benefit changes as they are not considered to
be substantively automatic.
Investment policy.The Plan’s policy in regard to the allocation of invested assets is established and may be
amended by the Retirement Board by a majority vote of its members. It is the policy of the Retirement Board to
pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad
selection of distinct asset classes.
The long-term expected rate of return on pension plan investments 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 weighting the expected future real rates of return by the target
asset allocation percentage and by adding expected inflation.
65
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target
asset allocation and the Retirement Board’s asset allocation policy as of December 31, 2025 are summarized in
the following table:
Asset Class
Target
Allocation
Long-term Expected
Real Rate of Return
Domestic equity 27-37%5.13%
International equity 10-20%5.93%
Fixed income 24-34%2.74%
Real Estate/Alternative 18-28%5.68%
Cash 0-5%0.94%
Single Discount rate.The single discount rate used to measure the total pension liability was 7.00%. The projection
of cash flows used to determine the single discount rate assumed that plan member and County contributions will
be made at the current contribution rate and that County contributions will be made at the current contribution
rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make
all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability.
Sensitivity of the net pension liability to changes in the discount rate.The following presents the net pension
liability of the County, calculated using the discount rate of 7.00%, as well as what the County’s net pension liability
would be if it were calculated using a discount rate that is 1-percentage-point lower (6.00 percent) or 1-
percentage-point higher (8.00 percent) than the current rate:
1% Decrease Current Discount Rate 1% Increase
(6.00%)(7.00%)(8.00%)
County’s net pension liability $23,216,605 $1,856,686 $(15,997,047)
Rate of return.For the year ended December 31, 2025, the annual money-weighted rate of return on pension plan
investments, net of pension plan investment expense, was 13.20%. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
(13)SUBSEQUENT EVENTS
The County has evaluated all subsequent events through report issue date noting that no events have taken place
that affect the financial statement or required disclosure.
66
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
DISCRETELY PRESENTED COMPONENT UNIT NOTES
(1)FRANKLIN COUNTY CONSERVATION DISTRICT –COMPONENT UNIT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The Franklin County Conservation District (District) was formed on February 14, 1956 under Pennsylvania Act
217. The purpose of the District is the development, improvement, and conservation of the County’s soil, water,
and related resources as well as educating the community in various conservation and environmental practices
and methods. This service is performed by obtaining funds from several sources. They include, but are not
limited to, state growing greener grants, federal section 319 growing greener grants, dirt, gravel, and low-
volume road grant, Chesapeake Bay watershed grants, countywide action plan implementation grant, various
reimbursements from the Pennsylvania Department of Environmental Protection and Franklin County, and in-
house generated revenue through review of development plans. Some of the grant money is obtained by the
District and passed on to other entities to be used for the upgrade and upkeep of watershed areas in the county.
REPORTING ENTITY
The Governmental Accounting Standards Board (GASB) defines the criteria used to determine the composition
of the reporting entity. This standard requires that the reporting entity include (a) the primary government, (b)
organizations for which the primary government is financially accountable, (c) organizations that are fiscally
dependent on the primary government and a financial benefit or burden exists, and (d) other organizations for
which the nature and significance of their relationship with the primary government are such that exclusion
would cause the reporting entity’s financial statements to be misleading or incomplete.
The Franklin County Conservation District is considered a component unit of Franklin County. The seven-
member board is made up of one County Commissioner and six members appointed by the Commissioners from
a list of nominees received from organizations approved by the Commonwealth of Pennsylvania. The District
was formed to manage the conservation of natural resources in the County. The Law gives the Commonwealth
certain powers to supervise and direct the operations of the District. The Law also gives the Commissioners the
ability to unilaterally disband the District if they believe a substantial portion of landowners desire such action.
FUND ACCOUNTING
The District uses funds, each of which is considered a separate accounting entity. The operations of each fund
are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of
resources, liabilities, deferred inflows of resources, fund balance, revenue, and expenditures. The District is
currently only utilizing a general fund, which is categorized as a governmental fund.
GOVERNMENTAL FUNDS
Governmental Funds are those through which most governmental functions of the District are financed. The
measurement focus is on the flow of expendable resources rather than on net earnings determination.
67
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The District reports the following major governmental fund:
GENERAL FUND
The General Fund is the general operating fund of the District. This fund is used to account for all
financial transactions except those required to be accounted for in another fund. This is a budgeted
fund, and any unassigned fund balances are considered as resources available for use.
BASIS OF PRESENTATION
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The statement of net position and the statement of activities display information about the District as
a whole. These statements include the financial activities of the primary government.
The government-wide statements are prepared using the economic resources measurement focus.
This is the same approach used in the preparation of proprietary fund financials but differs from the
manner in which governmental fund financials are prepared. Governmental fund financials therefore
include a reconciliation with brief explanations to better identify the relationship between the
government-wide statements and statements for governmental funds.
The government-wide statement of activities presents a comparison between direct expenses and
program revenues for each function or program of the District’s governmental activities. Direct
expenses are those that are specifically associated with a service, program, or department and
therefore clearly identifiable to a particular function. Program revenues include charges paid by the
recipient for the goods or services offered by the program and grants and contributions that are
restricted to meeting the operation or capital requirements of a particular program. Revenues which
are not classified as program revenues are presented as general revenues of the District, with certain
limited exceptions. The comparison of direct expenses and program revenues identifies the extent to
which each governmental function is self-financing or draws from the general revenues of the District.
FUND FINANCIAL STATEMENTS
Fund financial statements report detailed information about the District. The focus of the
governmental fund financial statements is on major funds rather than reporting funds by type. Each
major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single
column (at December 31, 2025 the District had no nonmajor funds).
The accounting and financial reporting treatment applied to a fund is determined by its measurement
focus. All governmental fund types are accounted for using a flow of current financial resources
measurement focus. The financial statements for governmental funds are a balance sheet, which
generally includes only current assets and current liabilities, and a statement of revenues,
expenditures, and change in fund balances, which reports on the sources (i.e., revenues and other
financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability
is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as
soon as all eligibility requirements imposed by the provider have been met. Net position (total assets and
deferred outflows of resources less total liabilities and deferred inflows of resources) is used as a practical
measure of economic resources and the operating statement includes all transactions and events that increased
or decreased net position. Depreciation is charged as expense against current operations and accumulated
depreciation is reported on the statement of net position.
The 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. Revenue from federal, state, and other
grants designated for payment of specific District expenditures is recognized when the related expenditures are
incurred; accordingly, when such funds are received, they are recorded as unearned revenues until earned. If
time eligibility requirements are not met, a deferred inflow of resources would be recorded. For this purpose,
the District considers grant revenue to be available if collected within 90 days of the end of the calendar year.
Grants receivable are recorded for all grant amounts owed to the District as of December 31, 2025. The District
has extended the available period from 60 to 90 days to ensure that the grant revenue received is included in
the applicable fiscal year. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, expenditures related to compensated absences and claims and judgments are recorded
only when payment is due.
CAPITAL ASSETS
These assets result from expenditures in the governmental funds and are reported in the governmental activities
column of the government-wide statement of net position but are not reported as assets in the fund financial
statements.
All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements
during the year. Donated capital assets are recorded at their acquisition value as of the date received. The
District maintains a capitalization threshold of $5,000. Improvements are capitalized; the costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are
expensed. Interest incurred during the construction of capital assets is not capitalized.
All reported capital assets are depreciated. Improvements are depreciated over the remaining useful lives of
the related capital assets. Depreciation is computed using the straight-line method over the following useful
lives:
Governmental
Activities
Buildings and Structures 20-50 years
Vehicles 4-15 years
Office Equipment 3-25 years
Infrastructure 20-100 years
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
COMPENSATED ABSENCES
Effective January 1, 2024, the District implemented Governmental Accounting Standards Board (GASB)
Statement No. 101 –Compensated Absences. This Statement establishes uniform recognition and measurement
criteria for all types of compensated absences, including vacation, sick, and other forms of paid time off that are
attributed to services already rendered and are more likely than not to be used or otherwise paid.
In accordance with GASB 101, the District recognizes a liability for compensated absences based on the pay
rates in effect as of the financial statement date, including applicable salary-related payments such as payroll
taxes. The liability is remeasured at each reporting date.
As part of the implementation, the District adopted a last-in, first-out (LIFO) flow assumption for the use of leave
balances. Under this approach, the most recently earned leave is assumed to be used first. This assumption
aligns with the District’s administrative practice and provides a more accurate reflection of the expected
settlement value of compensated absences.
Under terms of the District’s employment agreements, employees are granted vacation and sick leave in varying
amounts. Thirty-two vacation hours may be carried over from one year to the next and upon termination, the
balance of vacation is paid to the employees provided a two-week notice is given. This represents the liability
for compensated absences at year-end. Employees are permitted to accumulate 60 sick days, which are not paid
upon termination of the employee.
LEASES
The District is a lessee for a noncancellable building lease. The District recognizes an intangible right-to-use asset
(lease asset) in the government-wide financial statements.
At the commencement of the lease, the District prepaid the entire lease liability, therefore, no related lease
liability is recorded in the government-wide financial statements. The total lease amount is $300,000. The lease
asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or
before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized
on a straight-line basis over 30 years, resulting in annual amortization expense of $10,000.
BUDGETS
Cash basis budgets are adopted at the beginning of the year for most programs and activities within the general
fund.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
In addition to assets, the statement of financial position or balance sheet may report a separate section for
deferred outflows of resources. This separate financial statement element,deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as an
outflow of resources (expense/expenditure) until then. The District does not currently report any items that
qualify for reporting in this category.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
In addition to liabilities, the statement of financial position or balance sheet may report a separate section for
deferred inflows of resources. This separate financial statement element,deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an
inflow of resources (revenue) until that time. The District reports unavailable grant revenue as a deferred inflow
of resources in the governmental funds balance sheet.
NET POSITION –GOVERNMENT-WIDE FINANCIAL STATEMENTS
In the government-wide financial statements, net position is classified in the following components:
NET INVESTMENT IN CAPITAL ASSETS
This component consists of capital assets, net of accumulated depreciation and reduced by the
outstanding balances of any bonds, mortgages, notes, accounts payable, or other borrowings that are
attributable to the acquisition, construction, or improvement of those capital assets. If there are
significant unspent related debt proceeds at year-end, the portion of the debt attributable to the
unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that
portion of the debt is included in the same net position component as the unspent proceeds.
Deferred outflows of resources and deferred inflows of resources that are attributable to the
acquisition, construction, or improvement of those assets or related debt are also included in this
component of net position.
RESTRICTED
This component of net position consists of restricted assets and deferred outflows of resources reduced
by liabilities and deferred inflows of resources related to those assets. These restrictions could include
constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or
regulations of other governments or constraints imposed by law through constitutional provisions or
enabling legislation. The following details restricted net position:
Restricted for specific grants 227,489$
Restricted for E+S/NPDES activities 2,207,195
2,434,684$
UNRESTRICTED
This component of net position is the net amount of assets, deferred outflows of resources, liabilities,
and deferred inflows of resources that are not included in the determination of net investment in
capital assets or the restricted component of net position.
NET POSITION FLOW ASSUMPTION
Sometimes the government 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, 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-net position to have been
depleted before unrestricted-net position is applied.
FUND BALANCE –GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental funds classify fund balance based on the relative strength of the spending constraints placed on
the purpose for which resources can be used. The classifications are as follows:
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
NONSPENDABLE
This classification includes amounts that cannot be spent because they are either (1) not in spendable
form or (2) legally or contractually required to be maintained intact. This classification includes items
such as prepaid amounts, inventories, and long-term portion of loans and notes receivable. This
includes the corpus (or principal) of permanent funds.
RESTRICTED
This classification includes amounts where the constraints placed on the use of resources are either (1)
externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or
regulations of other governments; or (2) imposed by law through constitutional provisions or enabling
legislation. Enabling legislation authorizes the government to assess, levy, charge, or mandate payment
and includes legally enforceable requirement of the use of the funds. The following details restricted
fund balance:
Restricted for specific grants 140,832$
Restricted for E+S/NPDES activities 2,207,195
2,348,027$
COMMITTED
This classification includes amounts that can only be used for specific purposes pursuant to constraints
imposed by formal action of the District’s highest level of decision-making authority. Once an amount
is committed, it cannot be used for any other purpose unless changed by the same type of formal action
used to initially constrain the funds.
ASSIGNED
This classification includes amounts that are intended to be used for a specific purpose. The intent can
be expressed by the governing body or by an official or body to which the governing body delegates
the authority. As detailed in its Fund Balance Policy, the District has authorized the District Manager to
make assignments of fund balance.
UNASSIGNED
This classification represents the portion of spendable fund balance that has not been categorized as
restricted, committed, or assigned.
POLICY REGARDING ORDER OF SPENDING
When fund balance resources are available for a specific purpose in multiple classifications, the District’s policy
is to use restricted resources first and then apply unrestricted resources in the following order: unassigned,
assigned, and committed. Assigned or committed resources would be used upon specific authorization by the
Board or District Manager in the case of assigned fund balance.
CASH AND CASH EQUIVALENTS
The District is not limited or restricted to specific investments by state law. However, the District has adopted
an investment policy that permits the District to invest funds in United States treasury bills; short-term
obligations of the United States Government or its agencies or instrumentalities; deposits in savings accounts,
time deposits, or share accounts of institutions insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund to the extent that such accounts are also so insured and for any
amounts above the insured maximum, those amounts shall be secured by collateral pledged by the depository
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
pursuant to Act 72 of 1971; obligations of the United States of America, the Commonwealth of Pennsylvania or
any political subdivision of the Commonwealth of Pennsylvania, or any of their agencies or instrumentalities
backed by the full faith and credit of these government units; Pennsylvania Treasurer’s INVEST program for Local
Governments and Non Profits; and Pennsylvania Local Government Investment Trust (PLGIT).
CUSTODIAL CREDIT RISK –DEPOSITS
Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be returned to
it. The District does not have a written policy for custodial credit risk. As of December 31, 2025, $4,070,352 of
the District’s bank balance of $5,274,512 is exposed to custodial credit risk. This balance is uninsured with
collateral held by the pledging bank’s trust department, not in the District’s name, in accordance with the
provisions of Pennsylvania Act 72.
Pennsylvania Act 72 of 1971, as amended, is an act standardizing the procedures for pledges of assets to secure
deposits of public funds with banking institutions pursuant to other laws; establishing a standard rule for the
types, amounts and valuations of assets eligible to be used as collateral for deposits of public funds; permitting
assets to be pledged against deposits on a pooled basis; and authorizing the appointment of custodians to act
as the pledger of the assets.
INVESTMENTS
As of December 31, 2025, the District’s investments were as follows:
Investment Type Fair Value
Credit Quality
Rating
PLGIT/PLGIT Prime $1,802,243 AAAm
PLGIT/PLGIT Class 196 AAAm
The pooled investments in the Pennsylvania Local Government Investment Trust (PLGIT) of $1,802,439 detailed
above are included in cash and cash equivalents on the balance sheet. PLGIT deposits are invested by PLGIT
directly in a portfolio of securities which are held by a third-party custodian.
Investments in PLGIT are subject to income, market, and credit risk related to the potential for decline in current
income, the potential for a decline in market value, and the potential that an issuer of securities held in the
investment portfolios of the fund would fail to make timely payments of principal and interest payments,
respectively.
CREDIT RISK
The District does not have a formal written investment policy that limits its investment choices to certain credit
ratings. As of December 31, 2025, the District’s investments in PLGIT were rated as noted in the above table.
INTEREST RATE RISK
The District does not have any investment subject to interest rate risk at December 31, 2025.
The District does not have a formal investment policy that limits investment maturities as a means of managing
its exposure to fair value losses arising from increasing interest rates.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
POLICIES FOLLOWED BY PLGIT
REGULATORY OVERSIGHT
Pennsylvania Local Government Investment Trust (PLGIT) was organized under an instrument of trust
on February 1, 1981. An elected board of Trustees is responsible for the overall management of the
Trust, including formation and implementation of its investments and operating strategies. The Trust
is a non-taxable investment fund established for local governments and school districts in Pennsylvania
under provisions of the Pennsylvania Intergovernmental Cooperation Act and related statutes.
The District has no limitations or restrictions on withdrawals on accounts held at PLGIT.
VALUATION OF INVESTMENTS AT PLGIT
In accordance with the Governmental Accounting Standards Board, portfolio securities are valued at
amortized cost, which approximates market value. The amortized cost method involves valuing a
security at its cost on the date of purchase and recording a constant amortization or accretion to
maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the
market values of the investment.
CAPITAL ASSETS
Capital asset activity for the District consists of the following as of and for the year ended December 31, 2025:
Beginning
Balance Additions Retirements
Ending
Balance
Governmental Activities
Cost
Vehicles 236,030$-$-$236,030$
Field equipment 71,897 --71,897
Office equipment 116,365 -(5,136)111,229
Right-to-use asset - building 164,167 --164,167
Total cost 588,459 -(5,136)583,323
Less accumulated depreciation/amortization:
Vehicles (126,113)(20,888)-(147,001)
Field equipment (31,091)(6,013)-(37,104)
Office equipment (77,384)(9,004)3,867 (82,521)
Right-to-use asset - building (30,000)(10,000)-(40,000)
Total accumulated depreciation/amortization (264,588)(45,905)3,867 (306,626)
Capital assets, net 323,871$(45,905)$(1,269)$276,697$
Depreciation/amortization expense is allocated to the governmental expense functions as follows:
General government 36,402$
Erosion and sediment / NPDES 9,503
45,905$
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
LONG-TERM LIABILITIES
Long-term liabilities consist of the following at December 31, 2025:
Beginning Ending Current Long-term
Balance Reductions*Balance Portion Portion
Governmental Activities
Compensated absences 12,062$(524)$11,538$9,230$2,308$
Total long-term liabilities 12,062$(524)$11,538$9,230$2,308$
* The change in the compensated absences liability is presented as a net change.
PENSION PLAN
The District has adopted a Simplified Employee Pension Plan (SEP). Employees meeting certain qualifying criteria
are eligible to participate. The District matches employee contributions up to 3% of eligible wages. Total
contributions by the District to the pension plan for 2025 were $18,920.
RISK MANAGEMENT
Franklin County Conservation District 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 District purchases
commercial insurance coverage for these types of losses, including workers compensation and employee health
and accident insurance. For these insured programs, there have been no significant reductions of insurance
coverage during the current year or two prior years.
RELATED PARTIES
The Franklin County Conservation District is deemed to be a related party to Franklin County by virtue of the
fact that the District is a component unit of the County under the guidelines of the Governmental Accounting
Standards Board.
The County provides a portion of the District’s operating budget on a year to year basis. The shortfall in the
budget is determined by the District, and then presented to the County. If the funding amount is approved, it
is subsequently paid on a monthly basis. Total operating subsidy to the District by the County for the year ended
December 31, 2025 was $70,000.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
RESTATEMENT
During the year ended December 31, 2025, the District has a restatement for a correction due to an error in
recording grants receivable in the prior year. The error resulted in an overstatement of grants receivable in the
Statement of Net Position and Balance Sheet - Governmental Funds, as well as an overstatement of revenues,
including General Government Operating Grants and Contributions on the Statement of Activities and DEP
payroll reimbursements on the Statement of Revenues, Expenditures, and Changes in Fund Balance.
Accordingly, beginning fund balance and net position as of January 1, 2025 was restated to correct the error.
Government
Wide
Net position, as previously reported, December 31, 2024 3,598,922$
Error correction (91,350)
Net position, as restated, December 31, 2024 3,507,572$
Change in net position, as previously reported, December 31, 2024 551,030$
Error correction (91,350)
Change in net position, as restated, December 31, 2024 459,680$
General Fund
Fund balance, as previously reported, December 31, 2024 3,219,027$
Error correction (91,350)
Fund balance, as restated, December 31, 2024 3,127,677$
Change in fund balance, as previously reported, December 31, 2024 1,478,962$
Change in fund balance, as restated, December 31, 2024 1,387,612$
76
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(2)FRANKLIN COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY –COMPONENT UNIT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PURPOSE AND REPORTING METHOD
The Franklin County Industrial Development Authority (the “Authority”) engages in arranging financing for
industrial and commercial projects by assisting private-sector and non-profit entities in obtaining financing for
the acquisition and construction of industrial and commercial facilities. The borrowers are entities located in
the Franklin County area, which pay an annual administrative fee to the Authority as part of the financing
arrangements.
REPORTING ENTITY
The Authority is a component unit of Franklin County (Pennsylvania) and was created under the Industrial and
Commercial Development Authority Law of the Commonwealth of Pennsylvania. The Franklin County
Commissioners appoint the board members and approve any debt offering of the Authority.
BASIS OF ACCOUNTING
The Authority reports on the accrual basis of accounting using the principles of proprietary fund accounting
applicable to governmental entities.
BASIS OF PRESENTATION
The proprietary fund is accounted for on a flow of economic resources measurement focus. With this
measurement focus, all assets and liabilities associated with the operation of these funds are included on the
statements of net position. The statements of revenues, expenses, and changes in net position present
increases (i.e., revenues) and decreases (i.e., expenses) in net total position. The statements of cash flows
provide information about how the Authority finances and meets its cash flow needs.
NET POSITION
Net position is classified in the following components:
NET INVESTMENT IN CAPITAL ASSETS
This component consists of capital assets, net of accumulated depreciation and reduced by any
outstanding balances of any bonds, mortgages, notes, accounts payable, or other borrowings that are
attributable to the acquisition, construction, or improvement of those capital assets. Deferred
outflows of resources and deferred inflows of resources that are attributable to the acquisition,
construction, or improvement of those assets or related debt also should be included in this component
of net position.
RESTRICTED
This component of net position consists of restricted assets reduced by liabilities and deferred inflows
of resources related to those assets. Generally, a liability relates to restricted assets if the asset results
from a resource flow that also results in the recognition of a liability or if the liability will be liquidated
with the restricted assets reported.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
UNRESTRICTED
This component of net position is the net amount of the assets, deferred outflows of resources,
liabilities, and deferred inflows of resources that are not included in the determination of net
investment in capital assets or the restricted component of net position.
All of the Authority’s net position is unrestricted.
STATEMENTS OF CASH FLOWS
For purposes of the statements of cash flows, cash includes all demand deposits, petty cash, savings, money
market accounts, and certificates of deposit with original maturities of three months or less.
CLASSIFICATION OF REVENUES
The Authority has classified its revenues as either operating or non-operating revenues according to the
following criteria:
OPERATING REVENUES
Operating revenues include activities that have the characteristics of exchange transactions, such as
(1) sales and service of the Authority, (2) most federal, state, and local grants, and (3) nongovernmental
grants and contracts.
NONOPERATING REVENUES
Nonoperating revenues include activities that have the characteristics of non-exchange transactions
(in which the Authority receives value without directly giving equal value in return), such as gifts and
contributions, and other revenues that are defined as nonoperating revenues by Governmental
Accounting Standards Board (GASB).
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
CASH AND CASH EQUIVALENTS
Pursuant to the Pennsylvania Industrial Development Authority Act, the Authority is authorized to deposit funds
in:
1.Banks or bank and trust companies
2.Special accounts or under savings contracts in savings associations in one or more special accounts.
3.Each of such special accounts to the extent the same is not insured shall be continuously secured by a
pledge of direct obligations of the United States of America or of the Commonwealth, having an aggregate
market value, exclusive of accrued interest, at all times at least equal to the balance on deposit in such
account.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Cash and cash equivalents consist of cash deposited in financial institutions and one certificate of deposit. All
funds were insured by the FDIC at December 31, 2025 and 2024.
Carrying Value Bank Balance Carrying Value Bank Balance
Insured (FDIC)148,868$148,868$151,798$151,798$
CONDUIT DEBT
To further industrial development in the County, the Authority has assisted certain private-sector and non-profit
entities in obtaining debt arrangements. In other instances, the Authority has issued bonds that provide
financing to private-sector and non-profit entities for the acquisition and construction of industrial and
commercial facilities. The properties financed, which are owned by the other entities, are pledged as collateral,
and the notes and bonds are payable solely from payments received from the private-sector and non-profit
entities on the underlying bonds or promissory notes. In addition, no commitments beyond the collateral, the
payments from the private-sector and non-profit entities, and maintenance of the tax-exempt status of the
conduit debt obligations were extended by the Authority for any of the notes or bonds.
At December 31, the notes and bonds have an aggregate outstanding principal payable as follows:
2025 2024
Outstanding principal amount payable 118,323,956$129,539,896$
RELATED PARTIES
The following organizations are related to Franklin County Industrial Development Authority through common
management:
Chambersburg Area Development Corporation
Greater Chambersburg Chamber of Commerce
Administrative expenses of $42,929 and $49,216 for 2025 and 2024, respectively, were paid to the
aforementioned related parties.
RISK MANAGEMENT
The Authority is exposed to various risks of loss related to torts; error and omissions; and natural disasters. The
Authority utilizes commercial insurance to manage its risk. For the insured programs there have been no
significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for
the current or three prior years.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(3)FRANKLIN COUNTY REDEVELOPMENT AUTHORITY –COMPONENT UNIT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The Franklin County Redevelopment Authority was formed in August 2010 by the Franklin County Board of
Commissioners under the provisions of the Commonwealth of Pennsylvania Urban Redevelopment law of 1945, as
amended for the purpose of providing redevelopment and other related activities. The purpose of the Authority is
the promotion of health, safety, and welfare of the residents of Franklin County; the elimination of blighted areas
through economically and socially sound redevelopment for residential, recreational, commercial, industrial, or
other purposes; and the encouragement of the provision of healthful homes, a decent living environment, and
adequate places of employment. The Authority can access a myriad of redevelopment assistance programs
designed to revitalize the aging downtown and/or blighted industrial areas, turning them into viable economic
engines that will provide an expanded tax base and needed jobs to support our citizens.
The Franklin County Redevelopment Authority utilizes the Franklin County Area Development Corporation for
administrative services and currently has no employees.
REPORTING ENTITY
The Governmental Accounting Standards Board (GASB) defines the criteria used to determine the composition of
the reporting entity. It requires that the reporting entity include (a) the primary government, (b) organizations for
which the primary government is financially accountable and (c) other organizations for which the nature and
significance of their relationship with the primary government are such that exclusion would cause the reporting
entity’s financial statements to be misleading or incomplete.
The Franklin County Redevelopment Authority is considered a component unit of Franklin County. The board
members of the Authority are appointed by the Franklin County Board of Commissioners. Although the Authority
is legally separate from the County, the Authority is a reportable component unit of the County because its sole
purpose is to maintain and oversee the redevelopment activity of the County. There are no entities that are
considered component units of the Redevelopment Authority.
FUND ACCOUNTING
The Authority uses funds, each of which is considered a separate accounting entity. The operations of each fund
are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance,
revenue, and expenditures. The Authority is currently only utilizing a general fund, which is categorized as a
governmental fund.
GOVERNMENTAL FUNDS
Governmental Funds are those through which most governmental functions of the Authority are financed. The
measurement focus is on the flow of expendable resources, rather than on net earnings determination. The
Authority reports the following major governmental fund:
GENERAL FUND
The General Fund is the general operating fund of the Authority. This fund is used to account for all financial
transactions except those required to be accounted for in another fund. Any unrestricted fund balances are
considered as resources available for use.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
BASIS OF PRESENTATION
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The statement of net position and the statement of activities display information about the Authority as a whole.
These statements include the financial activities of the primary government.
The government-wide statements are prepared using the economic resources measurement focus. This differs
from the manner in which governmental fund financials are prepared. Governmental fund financial statements
therefore include a reconciliation with brief explanations to better identify the relationship between the
government-wide statements and statements for governmental funds.
The government-wide statement of activities presents a comparison between direct expenses and program
revenues for each function or program of the Authority’s governmental activities. Direct expenses are those
that are specifically associated with a service, program, or department and therefore clearly identifiable to a
particular function. Program revenues include charges paid by the recipient for the goods or services offered by
the program and grants and contributions that are restricted to meeting the operation or capital requirements
of a particular program. Revenues which are not classified as program revenues are presented as general
revenues of the Authority, with certain limited exceptions. The comparison of direct expenses and program
revenues identifies the extent to which each governmental function is self-financing or draws from the general
revenues of the Authority.
FUND FINANCIAL STATEMENTS
Fund financial statements report detailed information about the Authority. The focus of the governmental fund
financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a
separate column. Nonmajor funds, if any, are aggregated and presented in a single column. The General Fund
is always considered a major fund.
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All
governmental fund types are accounted for using a flow of current financial resources measurement focus. The
financial statements for governmental funds are a balance sheet, which generally includes only current assets
and current liabilities, and a statement of revenues, expenditures, and changes in fund balances, which reports
on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses)
of current financial resources.
BASIS OF ACCOUNTING
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provider have been met. Net position (total assets less total liabilities)
is used as a practical measure of economic resources and the operating statement includes all transactions and
events that change net position.
The 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. Revenues from federal, state, and other grants designated
for payment of specific Authority expenditures are recognized when the related expenditures are incurred;
accordingly, when such funds are received, they are recorded as unearned revenues until earned. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
BUDGETARY ACCOUNTING
A budget was prepared on a basis consistent with generally accepted accounting principles (GAAP) for the General
Fund. The operating budget includes proposed expenditures and the means of financing them. The budget may
be modified during the year as approved by the Authority Members, although there were no amendments made
during 2025.
CASH,CASH EQUIVALENTS, AND INVESTMENTS
Cash includes all demand deposits, petty cash, savings, money market accounts, and certificates of deposit with
original maturities of three months or less.
PROPERTY AND EQUIPMENT
Property and equipment acquired or constructed is recorded at cost. The Authority maintains a capitalization
threshold of $1,500. Depreciation is calculated using the straight-line method, thereby relating the cost of the
depreciable assets to operations over the assets’ estimated service lives of 3 to 30 years. The Authority has no
property and equipment at December 31, 2025.
NET POSITION –GOVERNMENT-WIDE
In the government-wide financial statements, net position is classified in the following components:
NET INVESTMENT IN CAPITAL ASSETS
This component consists of capital assets, net of accumulated depreciation and reduced by any outstanding
balances of any bonds, mortgages, notes, accounts payable, or other borrowings that are attributable to the
acquisition, construction, or improvement of those capital assets. If there are significant unspent related debt
proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the
calculation of net investment in capital assets. Rather, that portion of debt is included in the same net position
component as the unspent proceeds. Deferred outflows of resources and deferred inflows of resources that are
attributable to the acquisition, construction, or improvement of those assets or related debt also should be
included in this component of net position.
RESTRICTED
This component of net position consists of restricted assets reduced by liabilities and deferred inflows of
resources related to those assets. Generally, a liability relates to restricted assets if the asset results from a
resource flow that also results in the recognition of a liability or if the liability will be liquidated with the restricted
assets reported.
UNRESTRICTED
This component of net position is the net amount of the assets, deferred outflows of resources, liabilities, and
deferred inflows of resources that are not included in the determination of net investment in capital assets or
the restricted component of net position.
NET POSITION FLOW ASSUMPTION
Sometimes the government 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 government-wide 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-
net position to have been depleted before unrestricted-net position is applied.
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FUND BALANCE-GOVERNMENTAL FUNDS
Governmental funds classify fund balance based on the relative strength of the spending constraints placed on the
purpose for which resources can be used. The classifications are as follows:
NONSPENDABLE
This classification includes amounts that cannot be spent because they are either (1) not in spendable form or
(2) legally or contractually required to be maintained intact. This classification includes items such as long-term
amount of loan and notes receivable, prepaid amounts, and inventories. This also includes the corpus (or
principal) of permanent funds. The Authority’s nonspendable fund balance consists of long-term loan
receivables.
RESTRICTED
This classification includes amounts where the constraints placed on the use of resources are either (1)
externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations
of other governments; or (2) imposed by law through constitutional provisions or enabling legislation. Enabling
legislation authorizes the government to assess, levy, charge, or mandate payment and includes a legally
enforceable requirement on the use of these funds.
COMMITTED
This classification includes amounts that can only be used for specific purposes pursuant to constraints imposed
by formal action of the Authority’s highest level of decision-making authority. This formal action is in the form
of a resolution which is made by the Authority Members. Once an amount is committed, it cannot be used for
any other purpose unless changed by the same type of formal action used to initially constrain the funds.
ASSIGNED
This classification includes spendable amounts that are reported in the General Fund that are intended to be
used for a specific purpose. The intent of an assigned fund balance should be expressed by either the Authority
Members, or a governing body delegate to the Authority, such as the executive director, that is authorized to
assign amounts to be used for specific purposes. The assignment of fund balance cannot result in a negative
unassigned fund balance.
UNASSIGNED
This classification represents the portion of spendable fund balance that has not been categorized as restricted,
committed, or assigned. A negative unassigned fund balance may occur in any fund when there is an over
expenditure of restricted or committed fund balance. In this case, any assigned fund balance (and unassigned
fund balance) would be eliminated prior to reporting a negative unassigned fund balance.
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.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
CUSTODIAL CREDIT RISK
Section 7.1 of the Pennsylvania Municipal Authorities Act and Act 10 of 2016 defines allowable investments
for authorities, which are summarized as follows:
·U.S. Treasury Bills.
·Short-term obligations of the U.S. Government and federal agencies.
·Deposits in savings accounts or time deposits or share accounts of institutions insured by the Federal
Deposit Insurance Corporation or the National Credit Union Share Insurance Fund to the extent that such
accounts are so insured, and, for any amounts above the insured maximum, provided that approved
collateral as provided by law therefore shall be pledged by the depository.
·Obligations of the United States of America or any of its agencies or instrumentalities backed by the full
faith and credit of the respective governmental entity.
·Shares of an investment company restricted under the Investment Company Act of 1940.
·Obligations, participations, or other instruments of any Federal agency, instrumentality, or United States
government-sponsored enterprise if the debt obligations are rated at least “A” or its equivalent.
·Commercial paper issued by corporations or other business entities organized in accordance with federal
or state law, with a maturity not to exceed 270 days.
·Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers’
acceptances, if the bankers’ acceptances do not exceed 180 days maturity.
·Negotiable certificates of deposit or other evidences of deposit, with a remaining maturity of three months
or less.
CUSTODIAL CREDIT RISK –DEPOSITS
Custodial credit risk is the risk that in the event of bank failure, the Authority’s deposits may not be returned to
it. The Authority does not have a written policy of custodial credit risk. At December 31, 2025, the Authority had
deposit balances in the amount of $302,943, of which $250,000 was insured by FDIC and $52,943 was
collateralized under Act No. 72 of the 1971 Session of the Pennsylvania General Assembly. Under this law,
financial institutions were granted the authority to secure deposits of public bodies by pledging a pool of assets,
as defined in the Act, to cover all public funds deposited in excess of Federal Depository Insurance limits. The
Authority is exposed to custodial credit risk because the collateral securities held by the bank’s agents are not
in the Authority’s name.
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LOAN RECEIVABLE
Changes in the loan receivable during the year were as follows:
Beginning
Balance Additions Reductions Balance Portion Portion
(A) Capitol Theatre Center Foundation 24,614$-$(2,285)$22,329$1,996$20,333$
(B) Mainstreet Waynesboro, Inc.60,000 --60,000 4,399 55,601
(C) Luminest, Inc.125,000 --125,000 -125,000
209,614$-$(2,285)$207,329$6,395$200,934$
(A)The Authority has entered into a promissory loan receivable with the Capitol Theatre Center
Foundation for the renovation of the Ludwig Building in the amount of $40,000. The loan was
entered into on April 12, 2016 and requires monthly payments of $193 from June 1, 2016 through
May 2036, including interest at 1.5%.
(B)The Authority has entered into a mortgage loan receivable with Mainstreet Waynesboro, Inc. for
Phase 1 of their redevelopment project in the amount of $60,000. The loan was entered into on
March 31, 2017 and amended on June 1, 2018, April 4, 2019, April 1, 2020, and April 1, 2021, April
1, 2023, and April 1, 2024. The loan requires interest only payments at 1% beginning on May 1,
2018 through March 31, 2026.Beginning April 1, 2026 through April 1, 2031, the loan requires
monthly payments of $532, including interest at 1%. Beginning April 1, 2031 through April 1, 2036
interest is at 2%.
(C)The Authority has entered into a promissory loan receivable with Luminest, Inc. for their residential
redevelopment project in the amount of $125,000. The loan was entered into on December 29,
2020, amended on November 17, 2021, November 3, 2022, September 26, 2023, and February 24,
2026. The loan requires interest only payments of $208 beginning on January 1, 2021 through
January 1, 2028.Beginning January 1, 2028 through November 1, 2036, the loan requires monthly
payments of $632, including interest at 2%.At December 1, 2036, the loan shall fully mature and
be owed in full with a balloon payment consisting of any unpaid and accrued principal and interest.
Future collections of the loan receivable are as follows:
Year(s)Principal Interest Total
2026 6,395$3,414$9,809$
2027 7,876 3,328 11,204
2028 13,312 3,238 16,550
2029 13,301 2,991 16,292
2030 13,499 2,793 16,292
2031-2035 69,205 11,721 80,926
2036 83,741 1,571 85,312
207,329$29,056$236,385$
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
RELATED PARTIES/CONCENTRATIONS
The Franklin County Redevelopment Authority is deemed to be a related party to Franklin County by virtue of
the fact that the Authority is a component unit of the County under the guidelines of the Governmental
Accounting Standards Board. See Summary of Significant Accounting Policies – Reporting Entity.
The County provided a significant portion of the Authority’s operating funding in 2025. Total operating subsidy
from the County for the year ended December 31, 2025 was $50,000. Total Impact Grant from the County
recognized during the year ended December 31, 2025 was $15,966.
CONTRACTED SERVICES
The Franklin County Redevelopment Authority utilizes the Franklin County Area Development Corporation for
administrative services which amounted to $2,400 in 2025.
RISK MANAGEMENT
The Franklin County Redevelopment Authority is exposed to various risks of losses to torts; thefts of, damage
to, and destruction of assets; errors and omissions; and natural disasters. The Authority utilizes commercial
insurance to manage its risk.
PASS-THROUGH GRANT AGREEMENTS
As of December 31, 2025, the Franklin County Redevelopment Authority’s application with the Commonwealth
of Pennsylvania related to a Redevelopment Assistance Capital Program (RACP) grant in the amount of
$2,000,000 was approved. This application was submitted on behalf of Manitowoc Crane Group. As of December
31, 2025, the project has been delayed until 2026, and no funds have been disbursed. The Authority’s
involvement is to act as a pass-through public applicant.
As of December 31, 2025, the Franklin County Redevelopment Authority’s application with the Commonwealth
of Pennsylvania related to a Redevelopment Assistance Capital Program (RACP) grant in the amount of
$1,000,000 was approved. This application was submitted on behalf of Live & Work @ Central, LLC. As of
December 31, 2025, no funds have been disbursed. The Authority’s involvement is to act as a pass-through
public applicant.
As of December 31, 2025, the Franklin County Redevelopment Authority’s application with the Commonwealth
of Pennsylvania related to an Industrial Sites Reuse Program (ISRP) grant in the amount of $157,500 was
approved. This application was submitted on behalf of the Borough of Waynesboro. The Authority is the grantee
of the ISRP grant; however, reimbursements are being handled through a third-party administrator through the
Borough of Waynesboro. As of December 31, 2025, no funds have been disbursed. The Authority’s involvement
is to act as a pass-through public applicant.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(4)LETTERKENNY INDUSTRIAL DEVELOPMENT AUTHORITY–COMPONENT UNIT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Letterkenny Industrial Development Authority (LIDA or the Authority) was formed in August 1997 to implement
redevelopment activities for the reuse of the Letterkenny Army Depot (Depot) as a Business Park, which includes
leasing or selling land, facilities, or equipment to industrial or commercial firms.
The financial statements of the Authority have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is
the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the government’s accounting policies are described below.
REPORTING ENTITY
The Governmental Accounting Standards Board (GASB) Statements define the criteria used to determine the
composition of the reporting entity. These standards require that the reporting entity include (1) the primary
government, (2) organizations for which the primary government is financially accountable, (3) organizations
that are fiscally dependent on the primary government and a financial benefit or burden exists, and (4) other
organizations for which the nature and significance of their relationship with the primary government are such
that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The
Authority has no component units but is a component unit of Franklin County (Pennsylvania) as the Franklin
County Commissioners appoint the board members and the Authority exists for the sole benefit of the County.
The financial statements of Franklin County are prepared separately.
The following organizations are considered to be affiliated with LIDA through oversight or common
management, but are not component units:
Cumberland Valley Business Park Association, Inc. (CVBP)
FUND ACCOUNTING
LIDA uses funds to maintain its financial records during the fiscal year. 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 defined as a fiscal and accounting entity with a self-balancing set
of accounts. The various funds of the Authority are grouped into the categories of governmental and
proprietary.
GOVERNMENTAL FUNDS
Governmental funds are those through which most activities of the Authority are financed. The
measurement focus is on the flow of expendable resources, rather than on net earnings determination.
The Authority reports the following major governmental fund:
GENERAL FUND
The General Fund is used to account for all or most of the Authority’s general activities, the
acquisition or construction of fixed assets, and servicing of any long-term debt. The General
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Fund is used to account for all activities of the general government not accounted for in some
other fund.
PROPRIETARY FUNDS
Proprietary Funds are used to account for the Authority’s ongoing activities which are similar to those
often found in the private sector. The focus of proprietary funds is on the determination of net earnings
and capital maintenance. The following fund is utilized:
ELECTRIC FUND
LIDA is operating the electric distribution system on the Depot’s property. This fund accounts
for all the revenues and expenses associated with providing electric to customers in the
Business Park. The Authority sold its electric system during the year and transferred all capital
assets to the purchasing company and all residual cash reserves, including the sale proceeds,
were transferred to the General Fund. See further description in Special Item – Sale of Electric
Distribution System and Closure of Proprietary Fund.
CLASSIFICATION OF REVENUES
For the proprietary fund, LIDA has classified its revenues as either operating or nonoperating
revenues according to the following criteria:
·Operating Revenues – Operating revenues include activities that have the characteristics
of exchange transactions, such as (1) utility billings; (2) penalties and late charges; and (3)
other miscellaneous sales.
·Nonoperating Revenues – Nonoperating revenues include activities that have the
characteristics of non-exchange transactions (in which LIDA receives value without
directly giving equal value in return), such as contributions and grants, and other revenues
that are defined as nonoperating revenues, such as investment earnings.
BASIS OF PRESENTATION
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The statement of net position and the statement of activities display information about the Authority
as a whole. The statements distinguish between those activities of the Authority that are governmental
and those that are considered business-type activities.
The government-wide statements are prepared using the economic resources measurement focus.
This is the same approach used in the preparation of the proprietary fund financial statements but
differs from the manner in which governmental fund financial statements are prepared. Governmental
fund financial statements therefore include a reconciliation with brief explanations to better identify
the relationship between the government-wide statements and the statements for governmental
funds.
The government-wide statement of activities presents a comparison between direct expenses and
program revenues for each segment of the business-type activities of the Authority, and for each
function or program of the Authority’s governmental activities. Direct expenses are those that are
specifically associated with a service, program, or department and therefore clearly identifiable to a
particular function. Program revenues include charges paid by the recipient of the goods or services
offered by the program and grants and contributions that are restricted to meeting the operational or
capital requirements of a particular program. Revenues which are not classified as program revenues
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
are presented as general revenues of the Authority, with certain limited exceptions. The comparison
of direct expenses with program revenues identifies the extent to which each business segment or
governmental function is self-financing or draws form the general revenues of the Authority.
FUND FINANCIAL STATEMENTS
Fund financial statements report detailed information about the Authority. The focus of governmental
and proprietary fund financial statements is on major funds rather than reporting funds by type. Each
major fund is presented in a separate column. There are no non-major funds.
The accounting and financial reporting treatment applied to a fund is determined by its measurement
focus. All governmental fund types are accounted for using a flow of current financial resources
measurement focus. The financial statements for governmental funds are a balance sheet, which
generally includes only current assets and current liabilities, and a statement of revenues,
expenditures, and changes in fund balances, which reports on the sources (i.e., revenues and other
financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources.
All proprietary funds are accounted for on a flow of economic resources measurement focus. With this
measurement focus, all assets and all liabilities associated with the operation of these funds are
included on the statement of net position. The statement of changes in fund net position presents
increases (i.e., revenues) and decreases (i.e., expenses) in net total position. The statement of cash
flows provides information about how the Authority finances and meets the cash flow needs of its
proprietary activities.
BASIS OF ACCOUNTING
The government-wide and proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Net
position (total assets less total liabilities) is used as a practical measure of economic resources and the operating
statement includes all transactions and events that increased or decreased net position. Depreciation is charged
as expense against current operations and accumulated depreciation is reported on the statement of net
position.
The 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. Available is typically defined to be a
period within 60 days of the end of the fiscal year. Revenue from federal, state, and other grants designated
for payment of specific Authority expenditures is recognized when the related expenditures are incurred;
accordingly, when such funds are received, they are recorded as liabilities until earned. If time eligibility
requirements are not met, a deferred inflow of resources would be recorded. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only when payment
is due.
CAPITAL ASSETS
General capital assets are those assets not specifically related to activities reported in the proprietary funds and
generally result from expenditures in the governmental funds. These assets are reported in the governmental
activities column of the government-wide statement of net position but are not reported in the fund financial
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
statements. Capital assets utilized by the proprietary fund are reported both in the business-type activities
column of the government-wide statement of net position and in the respective fund.
All capital assets are reported at cost (or estimated historical cost) and updated for additions and retirements
during the year. Donated capital assets are valued at their acquisition values as of the date received. These
estimates are significant due to the fact that LIDA receives a majority of its property as a donation/transfer from
the U.S. Army. The Authority maintains a capitalization threshold of $3,500. Improvements are capitalized; the
costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s
life are expensed.
LIDA is actively selling the property that is transferred from the Army. These buildings and land are considered
held for sale, and accordingly, are not depreciated on the government-wide statements. However, some of this
property is currently being leased and used by tenants. These leased assets are being depreciated over their
estimated useful lives. All other furniture, equipment, and assets are being depreciated over their estimated
useful lives. Depreciation expense is computed using the straight-line method over the following useful lives:
Governmental
Activities
Business-Type
Activities
Roads 10 years N/A
Stormwater system 40 years N/A
Furniture and equipment 5 years N/A
Buildings 20 years N/A
Electric system N/A 20-40 years
DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
In addition to assets, the statement of net position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element,deferred outflows of resources, represents a
consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then. The Authority does not have any items that qualify for reporting
in this category.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element,deferred inflows of resources, represents an
acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time. The Authority’s deferred inflows of resources consist of future revenues
related to leases.
NET POSITION –GOVERNMENT-WIDE /PROPRIETARY FUNDS
In the government-wide financial statements and proprietary fund financial statements, net position is classified
in the following components:
NET INVESTMENT IN CAPITAL ASSETS
This component of net position consists of capital assets, net of accumulated depreciation and reduced
by any outstanding balances of any bonds, mortgages, notes, accounts payable, or other borrowings
that are attributable to the acquisition, construction, or improvement of those capital assets. If there
are significant unspent related debt proceeds at year-end, the portion of debt attributable to the
unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
portion of debt is included in the same net position component as the unspent proceeds. Deferred
outflows of resources and deferred inflows of resources that are attributable to the acquisition,
construction, or improvement of those assets or related debt also should be included in this component
of net position.
RESTRICTED
This component of net position consists of restricted assets and deferred outflows of resources reduced
by liabilities and deferred inflows of resources related to those assets. Generally, a liability relates to
restricted assets if the asset results from a resource flow that also results in the recognition of a liability
or if the liability will be liquidated with the restricted assets reported.
UNRESTRICTED
This component of net position is the net amount of the assets, deferred outflows of resources,
liabilities, and deferred inflows of resources that are not included in the determination of net
investment in capital assets or the restricted component of net position.
NET POSITION FLOW ASSUMPTION
Sometimes the government 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 government-wide financial statements, a flow assumption must be
made about the order in which the resources are considered to be applied. It is the Authority’s policy to consider
restricted-net position to have been depleted before unrestricted-net position is applied.
FUND BALANCE –GOVERNMENTAL FUND FINANCIAL STATEMENTS
Governmental funds classify fund balance based on the relative strength of the spending constraints placed on
the purpose for which resources can be used. The classifications are as follows:
NONSPENDABLE
This classification includes amounts that cannot be spent because they are either (1) not in spendable
form or (2) legally or contractually required to be maintained intact. This classification includes items
such as prepaid amounts, inventories, and long-term amount of loans and notes receivable. This also
includes the corpus (or principal) of permanent funds.
RESTRICTED
This classification includes amounts where the constraints placed on the use of resources are either (1)
externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or
regulations of other governments; or (2) imposed by law through constitutional provisions or enabling
legislation. Enabling legislation authorizes the government to assess, levy, charge, or mandate
payment and includes a legally enforceable requirement on the use of these funds.
COMMITTED
This classification includes amounts that can only be used for specific purposes pursuant to constraints
imposed by formal action of the Authority’s highest level of decision-making authority. This formal
action is in the form of a resolution which is made by the Authority Board. Once an amount is
committed, it cannot be used for any other purpose unless changed by the same type of formal action
used to initially constrain the funds.
.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
ASSIGNED
This classification includes spendable amounts that are reported in governmental funds other than the
General Fund, that are neither restricted nor committed, and amounts in the General Fund that are
intended to be used for a specific purpose. The intent of an assigned fund balance should be expressed
by either the Authority Board, or a subordinate high-level body, such as the Executive Director that is
authorized to assign amounts to be used for specific purposes. The Authority has not authorized
anyone aside from the Board to make assignments. The assignment of fund balance cannot result in a
negative unassigned fund balance.
UNASSIGNED
This classification represents the portion of spendable fund balance that has not been categorized as
restricted, committed, or assigned. The general fund is the only fund which would include a positive
unassigned fund balance as all other fund types must categorize amounts within the other
classifications. A negative unassigned fund balance may occur in any fund when there is an over
expenditure of restricted or committed fund balance. In this case, any assigned fund balance (and
unassigned fund balance in the general fund) would be eliminated prior to reporting a negative
unassigned fund balance.
FUND BALANCE FLOW ASSUMPTIONS
Sometimes LIDA 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 LIDA’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.
INTERFUND ACTIVITY
Advances between funds are accounted for in the appropriate interfund receivable and payable accounts.
Advances between funds which are not expected to be repaid are accounted for as transfers. Interfund balances
and transactions are eliminated in the government-wide financial statements.
Exchange transactions, if any, between funds are reported as revenues in the seller funds and as
expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without any
requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other
financing sources/uses in governmental funds and as nonoperating revenues/expenses in proprietary funds.
BUDGETS
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of
America. Annual appropriated budgets are adopted for the general fund and proprietary fund. All annual
appropriations lapse at year end and must be reappropriated. Budgets are revised during the year.
Encumbrance accounting is not utilized. During 2025, no budget revisions were made and therefore original
and final budgets are the same.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of the contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are defined as short-term, highly liquid investments that are readily convertible to
known amounts of cash and include investments with original maturities of three months or less.
STATEMENT OF CASH FLOWS –PROPRIETARY FUND TYPE
For purposes of the statement of cash flows, cash and cash equivalents include amounts deposited in financial
institutions. The Authority considers all highly liquid assets with original maturities of three months or less when
purchased to be cash equivalents.
LONG-TERM OBLIGATIONS
In the government-wide financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental or business-type activity columns in the statement of net position. This
same treatment applies to proprietary fund financial statements.
COMPENSATED ABSENCES
Liability for compensated absences is accounted for in accordance with the provisions of the GASB, which
require entities to accrue for employees’ rights to receive compensation for sick leave, as such benefits are
earned, and payment becomes probable.
Under the terms of LIDA’s employment agreements, employees are granted vacation and sick leave in varying
amounts. Vacation and sick leave days not used by the end of the Authority’s fiscal year are lost unless otherwise
approved. Compensated absences are therefore expensed when paid.
ACCOUNTS RECEIVABLE
Accounts receivable are recorded in proprietary funds (the electric fund) when invoices are issued and are
presented in the statement of net position net of an allowance for doubtful accounts, if applicable. Receivables
are considered past due based upon the timing of when payments are received.
Management considers accounts receivable to be fully collectible based on an evaluation of specific receivables,
LIDA’s historical losses, and the existing local economic conditions. Accordingly, no allowance for doubtful
accounts is deemed necessary by management at December 31, 2025. If amounts become uncollectible, they
will be charged to operations when that determination is made. It is at least reasonably possible that the
estimate used for collectability of receivables will change in the near term.
NOTES RECEIVABLE
At December 31, 2025, LIDA had notes receivable in connection with land sales. Only the amounts received are
reflected as revenues in the governmental fund statements under the modified accrual basis of accounting. In
the government-wide statements, the notes receivable are recorded in full. See Notes Receivable for further
details.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
LEASES
The Authority is a lessor of various land and building leases. The Authority recognizes lease receivable, interest
income, and deferred inflows of resources in the financial statements for long term leases.
At the commencement of the lease, the Authority initially measures the lease receivable at the present value of
payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the
principal portion of lease payments received. The deferred inflow of resources is initially measured at the initial
amount of the lease receivable, adjusted for lease payments received at or before the lease commencement
date. Subsequently, the deferred inflow of resources is recognized over the life of the lease term.
Key estimates and judgments related to leases include how the Authority determines (1) the discount rate it
uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
·The Authority uses its estimated incremental borrowing rate as the discount rate for leases.
·The lease term includes the noncancellable period of the lease. Lease receipts included in the
measurement of the lease receivable are composed of fixed payments from the lease.
The Authority monitors changes in circumstances that would require a remeasurement of its lease and will
remeasure the lease receivable and deferred inflow of resources if certain changes occur that are expected to
significantly affect the amount of the lease receivable.
CONCENTRATIONS OF CREDIT RISK
For the year ended December 31, 2025, 51% of the Authority’s electric operating revenues came from one
customer, the U.S. Army. In addition, at year end, 81% of electric accounts receivable were from the U.S. Army.
CASH AND INVESTMENTS
Pursuant to the Pennsylvania Industrial Development Authority Act, the Authority is authorized to deposit funds
in:
1.Banks or bank and trust companies
2.Special accounts or under savings contracts in savings associations in one or more special accounts
3.Each of such special accounts to the extent the same is not insured shall be continuously secured by a
pledge of direct obligations of the United States of America or of the Commonwealth, having an aggregate
market value, exclusive of accrued interest, at all times at least equal to the balance on deposit in such
account.
Custodial credit risk is the risk that in the event of bank failure, the Authority’s deposits may not be returned to
it. The Authority does not have a written policy for custodial credit risk. As of December 31, 2025, $2,512,211
of the Authority’s bank balance of $22,961,406 was exposed to custodial credit risk. The $2,512,211 is
collateralized with securities held by the pledging financial institution in the Authority’s name. These deposits
included certificates of deposit of $4,250,000 which are classified as investments on the Statement of Net
Position.
CREDIT RISK –INVESTMENTS
Credit risk is the risk that an issuer of debt securities or other counterparty to an investment will not fulfill its
obligations.
INTEREST RATE RISK –INVESTMENTS
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The Authority has the following fixed income investments and associated credit risk and interest rate risk as of
December 31, 2025:
Fair Value
Less than 1
year 1 to 5 6 to 10
S&P Credit
Rating
Government Agency Bonds
Federal Farm Credit Bank 500,858$-$500,858$-$AA+/A-1+
Federal Home Loan Bank 2,511,622 -2,005,650 505,972 AA+
Federal Home Loan Mortgage Company 748,692 -498,609 250,083 AA+
Federal Agricultural Mortgage Corp 251,737 -251,737 -Not rated
Federal National Mortgage Association 503,004 -251,114 251,890 AA+
US Treasury Bonds 2,779,712 -2,779,712 -AA+
Corporate Bonds 567,862 -76,901 490,961 A/BBB+
7,863,487$-$6,364,581$1,498,906$
Investment Maturities (in years)
INVESTMENTS –FAIR VALUE MEASUREMENTS
The Authority categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value
of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant
other observable inputs; and Level 3 inputs are significant unobservable inputs.
The Authority has the following recurring fair value measurements as of December 31, 2025:
·Government agency bonds are valued at the most recent price of equivalent quoted yields for such
securities, or those of comparable maturity, quality, and type. Such investments are classified as Level
2 in the valuation hierarchy.
·US treasury bonds are valued using quoted prices in active markets for identical assets. Such
investments are classified as Level 1 of the valuation hierarchy.
·Corporate bonds are valued using a combination of discounted cash flow and market-based pricing.
Such investments are classified as Level 2 of the valuation hierarchy.
NOTES RECEIVABLE
As of December 31, 2025, LIDA has several notes receivable in connection with land sales and demand notes to
tenants. The following is a summary of the details of these notes at December 31, 2025:
Borrower
Interest
Rate
Beginning
Balance Additions Deletions
Ending
Balance Current Long-Term
Governmental Activities:
(1) Franklin County 4.20%111,079$-$(111,079)$-$-$-$
(2) PA Southern 4.00%90,716 (21,363)69,353 22,217 47,136
(3) PA Southern 5.50%668,662 -(30,010)638,652 31,703 606,949
(4) LK 29 LLC 4.00%2,086,837 -(958,803)1,128,034 83,966 1,044,068
(5) PA Southern (Rail System)5.00%4,751,715 -(79,879)4,671,836 122,023 4,549,813
7,709,009$-$(1,201,134)$6,507,875$259,909$6,247,966$
Terms:
Note (1)is payable over 20 years at a fixed interest rate of 4.20%. Interest and principal are due on the
first day of the month beginning October 1, 2006 and ending on September 1, 2026. This note
is for an infrastructure improvement agreement where, in conjunction with the purchase of
property, Franklin County agreed to reimburse LIDA for utility improvements necessary to
extend to the purchased property. In the fund financial statements, the principal received
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
from Franklin County on the above note is shown as sale of property revenue and the interest
received is shown as interest income and finance charges. This note was deemed satisfied
during the year ended December 31, 2025.
Note (2)is payable over 7 years at a fixed rate of 4.00%. Interest and principal are due annually, April
1 of each year, beginning April 1, 2022 and ending on April 1, 2028. This note is for a property
sale agreement. In the fund financials statements, the principal received from Pennsylvania
& Southern Railway, LLC on the above note is shown as sale of property revenue and the
interest received is shown as interest income and finance charges.
Note (3)is payable over 10 years at a fixed rate of 5.50%. Interest and principal are due on the first
day of the month beginning November 1, 2019 and ending on October 1, 2029. This note is
for a property sale agreement. In the fund financial statements, the principal received from
Pennsylvania & Southern Railway, LLC on the above note is shown as sale of property revenue
and the interest received is shown as interest income and finance charges.
Note (4)is payable over 10 years at a fixed rate of 4.00%. Interest and principal are due on the first day
of the month beginning September 1, 2022 and ending on August 1, 2032. This note is for a
property sale agreement. In the fund financial statements, the principal received from LK29
LLC on the above note is shown as sale of property revenue and the interest received is shown
as interest income and finance charges. A balloon payment was received in 2025 in the
amount of $850,000, in addition to normal monthly payments.
Note (5)is payable over 15 years at a fixed rate of 5.00%. Interest and principal are due on the first day
of the month beginning January 1, 2023 and ending on December 1, 2037. This note is for a
rail system sale agreement. In the fund financial statements, the principal received from PA &
Southern Railway on the above note is shown as sale of property revenue and the interest
received is shown as interest income and finance charges.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
CAPITAL ASSETS
Capital asset activity for the Authority consists of the following as of and for the year ended December 31, 2025:
Beginning
Balance Additions Retirements Ending Balance
Governmental Activities
Cost:
Capital assets not being depreciated
Land held for sale 12,936,713$-$-$12,936,713$
Permanent easements 1,545,548 -(1,545,548)-
Buildings held for sale 1,451,054 --1,451,054
Construction in progress -4,290,767 -4,290,767
Capital assets being depreciated
Roads 520,142 --520,142
Furniture and equipment 118,907 --118,907
Stormwater system 189,375 --189,375
Buildings 12,428,502 --12,428,502
Total Cost 29,190,241 4,290,767 (1,545,548)31,935,460
Less accumulated depreciation
Roads (397,767)(6,320)-(404,087)
Furniture and equipment (109,261)(7,765)-(117,026)
Stormwater system (91,223)(4,734)-(95,957)
Buildings (5,131,163)(391,544)-(5,522,707)
Total accumulated depreciation (5,729,414)(410,363)-(6,139,777)
Capital assets, net 23,460,827$3,880,404$(1,545,548)$25,795,683$
Business-Type Activities
Cost
Electric system 17,867,342$152,229$(18,019,571)$-$
Construction in progress -450,943 (450,943)-
Total Cost 17,867,342 603,172 (18,470,514)-
Less accumulated depreciation
Electric system (10,467,123)(476,657)10,943,780 -$
Capital assets, net 7,400,219$126,515$(7,526,734)$-$
Depreciation expense for 2025 was charged as follows:
Governmental Activities
Administrative 7,765$
General government 6,320
Property sales and leases 396,278
410,363$
Business-type Activities
Electric 476,658$
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
PENSION PLAN
LIDA has a Simplified Employee Pension (SEP) plan covering substantially all employees. Under the plan, LIDA is
required to contribute 15% of gross eligible compensation to each employee’s Individual Retirement Account
(IRA). Total pension expense for the year ended December 31, 2025 was $44,956.
RELATED PARTIES
LIDA received $20,000 for administrative fees from, and paid $21,201 in maintenance fees to, Cumberland
Valley Business Park Association, Inc. (CVBP).
LEASES RECEIVABLE
The Authority currently has multiple long term lease agreements in which it leases land and buildings for periods
of 2-10 years and charges interest rates ranging from 1.97% to 5.00%.
The current year lease revenue associated with long term leases and future minimum lease payments receivable
as of December 31, 2025 are as follows:
2025
Long term lease revenue
Land 107,305$
Building 702,291
Total long term lease revenue 809,596
Interest revenue 180,835
Total 990,431$
Principal Interest Total Receipts
2026 775,818$151,145$926,963$
2027 489,634 132,876 622,510
2028 189,766 121,408 311,174
2029 98,094 115,154 213,248
2030 97,688 110,560 208,248
2031-2035 584,888 475,280 1,060,168
2036-2040 907,871 300,265 1,208,136
2041-2044 757,272 58,112 815,384
3,901,031$1,464,800$5,365,831$
RISK MANAGEMENT/CONTINGENCIES
LIDA is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors
and omissions; injuries to employees; and natural disasters. LIDA utilizes commercial insurance to manage its
risk. For the insured programs there have been no significant reductions in insurance coverage. Settlement
amounts have not exceeded insurance coverage for the current year or three prior years.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
The Authority is involved with various lawsuits in the normal course of operations. In most cases, management
cannot predict the outcome of the lawsuits or estimate the amount of any loss that may result. Management
believes that losses resulting from these matters, if any, would be substantially covered under the Authority’s
professional liability insurance policy and would not have a material effect on the financial position of the
Authority.
SPECIAL ITEM – SALE OF ELECTRIC DISTRIBUTION SYSTEM AND CLOSURE OF PROPRIETARY FUND
During the year ended December 31, 2025, the Letterkenny Industrial Development Authority (the “Authority”)
sold all assets of its electric distribution system to a third-party purchaser. As a result of this transaction, the
Authority ceased electric operations during December 2025. In connection with the sale, all capital assets
related to the electric system were transferred to the buyer, and the Authority recognized a loss on the sale of
capital assets. Upon completion of the transaction and the cessation of electric operation, all remaining assets
and liabilities of the Electric Fund, including residual cash balances, investments, accounts receivable and
accounts payable, were transferred to the General Fund. All interfund balances associated with the Electric Fund
were eliminated in the Government-wide Financial Statements. As of December 31, 2025, the Electric Fund has
no remaining assets, liabilities, or net position and is presented in the accompanying financial statements solely
for comparative and disclosure purposes related to the year’s activity. This transaction is shown as a special
item throughout the financial statements and resulted in an overall loss on sale of $2,519,126 as reflected in
the Government-wide Statement of Activities and a transfer of $29,728,488, including cash and investments of
$28,978,444, from the Electric Fund to the General Fund.
COMMITMENTS
At December 31, 2025, the Authority was engaged in a construction project that remained open at year-end.
The total authorized commitment for the project was $5,740,840, of which $4,290,768 had been incurred as of
December 31, 2025. The remaining commitment of $1,450,072 is expected to be completed and funded in the
subsequent fiscal year.
99
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
(5)TUSCARORA MANAGED CARE ALLIANCE –COMPONENT UNIT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF ACTIVITIES
Tuscarora Managed Care Alliance (TMCA) was formed by an intergovernmental agreement between Franklin and
Fulton Counties to administer and oversee the Behavioral HealthChoices Program (HealthChoices) of these two
counties. As such, TMCA has contracted with Pennsylvania Department of Human Services (DHS) to deliver and
administer the behavioral health services to eligible individuals through a capitated system that passes the risk of
providing these services to TMCA.
COMPONENT UNIT
A component unit is a legally separate entity that satisfies at least one of the following criteria: 1) elected officials
of a primary government are financially accountable for the entity, or 2) the nature and significance of the
relationship between the entity and primary government are such that to exclude the entity from the financial
reporting entity would render the financial statements misleading or incomplete. TMCA is a component unit of
Franklin County, Pennsylvania.
MEASUREMENT FOCUS,BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The financial statements are reported using the economic resources measurement focus and the accrual basis of
accounting in accordance with accounting principles generally accepted in the United States of America, as
prescribed by the Governmental Accounting Standards Board (GASB). Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of timing of related cash flows.
Operating revenues and expenses are distinguished from nonoperating items in the statement of revenues,
expenses, and changes in net position. Operating revenues and expenses generally result from providing services
in connection with TMCA’s principal ongoing operations. The principal operating revenues of TMCA are capitated
charges to deliver behavioral health services to eligible individuals. Operating expenses include the cost of
administering these services, comprised of medical and administrative expenses. All revenue and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is TMCA’s policy to use restricted
resources first, then unrestricted resources as they are needed.
CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, TMCA considers all highly liquid instruments with original
maturities of three months or less to be cash equivalents. TMCA reports on the cash flow statements all cash and
cash equivalents regardless of restriction. Cash and cash equivalents with purpose or board restrictions are shown
as non-current assets on the balance sheets unless those funds are expected to be liquidated within one year of
the balance sheet date. Cash held by TMCA in the risk and contingency, reinvestment, and equity accounts is
restricted for use in the HealthChoices Program.
ACCOUNTS RECEIVABLE
TMCA considers its receivables to be fully collectible; accordingly, no allowance for doubtful accounts is required.
If amounts become uncollectible, they will be charged to operations when that determination is made. The
balance of accounts receivable at December 31, 2025 is comprised of a DHS capitation payment for the month of
December in the amount of $4,239,366, offset by funds provided to TMCA by DHS to cover future managed care
100
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
organization (MCO) assessment tax payments in the amount of $2,864,649. This amount will be recaptured by
DHS in capitation payments subsequent to year-end.
CAPITAL ASSETS
TMCA follows the practice of capitalizing, at cost (except for the intangible right-of-use lease assets, the
measurement of which is discussed under the ‘Leases’ note), all expenditures for property and equipment in
excess of $5,000.
Depreciation and amortization were calculated on the straight-line method using the following useful lives for the
year ended December 31, 2025:
Estimated
Useful Lives
Right-of-use leased space 5 years
Intangible asset (office lease) and accumulated amortization activity for the year ending December 31, 2025 is as
follows:
Intangible assets, beginning of period 127,099$
Additions -
Disposals -
Intangible assets, end of period 127,099$
Accumulated amortization, beginning of period 89,647$
Amortization expense 27,824
Disposals -
Accumulated amortization, end of period 117,471$
NET POSITION
Net position is classified in the following categories:
Restricted Net Position
This category represents external restrictions imposed by creditors, grantors, contributors, or laws or
regulations of other governments and restrictions imposed by law through constitutional provisions or
enabling legislation. The restricted net assets of TMCA are restricted specific to the requirements of the
HealthChoices Program.
Unrestricted Net Position
This category represents the net position of TMCA that is not restricted for any project or other purpose.
REVENUE
TMCA receives a monthly capitation payment from DHS to administer and execute the HealthChoices contract of
Franklin and Fulton Counties. All monthly capitation revenue received, or expected to be received, for the
HealthChoices Program year ended December 31, 2025, is presented as operating revenues for that period.
Revenue funding from government sources is subject to subsequent contravention of eligibility requirements or
purpose restrictions. Management has presented these statements based upon their understanding and
interpretation of eligibility and purpose restrictions on the revenues recognized.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results could differ from those estimates.
CONCENTRATIONS
TMCA receives a substantial amount of its support from DHS. A significant reduction in the levels of this support,
if this were to occur, could have an adverse effect on the operations of TMCA.
RISKS AND UNCERTAINTIES
The current state of the federal government presents significant uncertainties that may impact the operations and
financial stability of TMCA. A substantial portion of TMCA’s funding is derived from Medicaid. Recent discussions
within the federal government suggest potential reductions in Medicaid funding. Should these proposed cuts be
enacted, TMCA may experience a material decrease in funding, which could adversely affect its ability to deliver
services to its beneficiaries. TMCA is actively monitoring legislative developments.
PENDING PRONOUNCEMENTS
GASB has issued statements that will become effective in future years including Statement Nos. 103 (Financial
Reporting Model Improvements), 104 (Disclosure of Certain Capital Assets), and 105 (Subsequent Events).
Management has not yet determined the impact of these statements on the financial statements.
SUBSEQUENT EVENTS
Subsequent events have been evaluated through the Independent Auditor’s Report date, which is the date the
financial statements were available to be issued.
DEPOSITS WITH FINANCIAL INSTITUTIONS
TMCA’s investment policy includes establishing at the Board of Directors level the decision-making authority over
the investment activities of the organization.
TMCA’s cash and cash equivalents consist mainly of interest-bearing cash deposit accounts. Cash and cash
equivalents are subject to concentration of credit risk, as TMCA maintains significant holdings in one financial
institution. This concentration of cash precludes TMCA from availing itself of complete Federal Deposit Insurance
coverage on all of its cash and cash equivalents. Custodial credit risk is the risk that, in the event of a bank failure,
cash deposits will not be recovered. TMCA’s policy does not directly address mitigation of custodial credit risk. As
of December 31, 2025, TMCA’s deposits were insured in the amount of $250,000. The remaining uninsured
balances were collateralized by the financial institution in accordance with Act 72 of the Commonwealth of
Pennsylvania.
HEALTHCHOICES DISBURSEMENTS
TMCA generally receives each month’s capitation revenue during the subsequent month after the month earned.
TMCA distributes these amounts to various parties within the HealthChoices Program. A portion of the monthly
capitation revenue is remitted to the Department of Revenue as MCO assessment tax.
In 2015, the General Assembly enacted legislation authorizing DHS to impose an annual monetary assessment on
MCO’s, known as the MCO assessment tax. For the year-ended December 31, 2025, the fixed fee for each
unduplicated member was $30.47.
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COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
For the year-ended December 31, 2025, the MCO assessment tax totaled $11,627,300, and was based on
approximately 377,016 unduplicated member months.
SIGNIFICANT CONTRACTUAL AGREEMENTS
As part of the mandatory behavioral health managed care program for medical assistance recipients of the state,
TMCA had contracted with CBHNP Services, Inc. (CSI), who has subcontracted nearly all program related duties to
its parent, Community Behavioral Healthcare Network of Pennsylvania (CBHNP). The agreement with CSI
disseminated certain financial risks to CSI. For these services, TMCA paid a contractual percentage of capitation
revenue net of the gross receipts tax (“net capitation revenue”) to CSI.
Effective July 1, 2011, TMCA entered into an Administrative Service Organization (ASO) Agreement with CBHNP,
which superseded the previous contract. Under the terms of the new contract, CBHNP still remains responsible
for most of the day-to-day activities of the programs. However, TMCA will be wholly responsible for the financial
risks related to the program. Effective October 1, 2013, CBHNP began doing business as PerformCare. This
contract extends through December 31, 2026.
As part of the contracts, PerformCare shall have the opportunity, on an annual basis, to earn Incentives based on
the accomplishments and outcomes of DHS’s Initiatives and Programs set forth in the DHS Agreement as follows:
VALUE BASED PURCHASING INCENTIVE
DHS has implemented an initiative to transition providers from volume to value payment models for the delivery
of services (the “VBP Initiative”). As a result of the payment strategies that include Shared Savings, Shared Risk,
and Bundled Payments. Medical Costs savings may be generated as a result of the VBP Initiative (“VBP Savings”).
Based on the outcomes and accomplishments of the planned objectives, a portion of the VBP Savings shall be
shared with the Network Providers. The remaining portion shall be retained by TMCA (“TMCA VBP Savings”). To
the extent that there are VBP Savings in a Program Year, and only if PerformCare’s administration of the VBP
Initiative in a Program Year has been a meaningful contribution to meeting the goals and the VBP Initiative, TMCA
agrees to pay PerformCare twenty percent (20%) of the TMCA VBP Savings. TMCA shall make such payment to
PerformCare within thirty (30) days of the final annual reconciliation of payments to Providers.
PAY FOR PERFORMANCE INTEGRATED CARE PROGRAM
DHS implemented a Pay for Performance (“P4P”) Program as part of an Integrated Care Plan Program (the “P4P-
ICP Program”). DHS allocated funding for payment of performance incentives. To the extent that TMCA receives
any funds for the payment of the performance incentive by DHS as a result of the P4P-ICP Program during a
Program Year (the “P4P-ICP Program Reward”), TMCA agrees to pay PerformCare forty percent (40%) of the P4P-
ICP Program Reward as recognition of its administration of the P4P-ICP Program and case management of
Members selected through the stratification process who will use behavioral health and physical health services.
TMCA agrees to pay PerformCare its earned portion no later than thirty (30) days of TMCA’s receipt of the P4P-
ICP Program Reward. Following each Program Year, TMCA shall re-evaluate, and if appropriate, shall adjust as
necessary, the payment terms for the P4P-ICP Program set forth herein based on information from the previous
Program Year. TMCA received $61,185 of funds from the P4P-ICP Program. Amounts disbursed to PerformCare
totaled $12,236.
PAY FOR PERFORMANCE BEHAVIORAL HEALTH PROGRAM
DHS implemented a Pay for Performance Program for behavioral health performance measures (“P4P-BH
Program”), commencing January 1, 2023. DHS allocates funding for payment of P4P-BH Program as an incentive
for meeting specific performance measures. To the extent that TMCA receives any funds for the payment of the
performance incentive by DHS as a result of the P4P-ICP Program during a Program Year (the “P4P-ICP Program
103
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
Reward”), TMCA agrees to pay PerformCare twenty percent (20%) of the P4P-ICP Program Reward as recognition
of its administration of the P4P-ICP Program and case management of Members selected through the stratification
process who will use behavioral health and physical health services. TMCA agrees to pay PerformCare its earned
portion no later than thirty (30) days of TMCA’s receipt of the P4P-ICP Program Award. Following each Program
Year, TMCA shall re-evaluate, and if appropriate, shall adjust as necessary, the payment terms for the P4P-BH
Program set forth herein based on information from the previous Program Year.
During the year ended December 31, 2025, PerformCare did not earn an incentive payment.
The VBP incentive requires the calculation of VBP savings. As of the date of the independent auditor’s report, the
2025 VBP savings is not expected to be material.
All administrative funds that TMCA distributes or expects to distribute to PerformCare or CSI for the periods under
audit are recorded as expenses on TMCA’s financial statements, regardless of whether the capitation revenue has
been received by TMCA from DHS. TMCA recognizes medical expenses to the extent of the medical claims that
PerformCare has paid, or expects to pay, on TMCA’s behalf, regardless of the amount of cash distributed.
LINE OF CREDIT
TMCA maintains a $2,000,000 revolving line of credit agreement with a local financial institution. The line of credit
bears interest at the bank’s prime rate which was 6.75% at December 31, 2025. The line of credit is due on demand
and is subject to an annual review by the financial institution. The line of credit is secured by TMCA’s accounts
receivable and deposit accounts. There is no outstanding balance on the line of credit at December 31, 2025.
COMMITMENTS AND CONTINGENCIES
The contract between DHS and TMCA transfers the risk that the cost of behavioral health care services for eligible
enrollees under the contract and certain administrative expenses will exceed capitation revenue paid to TMCA by
DHS. While TMCA believes that its management processes and controls are sufficient to allow it to effectively
manage behavioral health care expenses in the future, it has the option of terminating its HealthChoices contract
with DHS upon one hundred eighty (180) days’ notice.
ACCRUED LIABILITIES
Accrued liabilities at December 31, 2025 consist of the following:
Medical claims liability 3,821,281$
ASO administration expense 328,255
Other accrued expenses 173,667
Total accrued liabilities 4,323,203$
RELATED PARTY TRANSACTIONS
As discussed in Note 1, TMCA is an entity that was created by an intergovernmental agreement between Franklin
and Fulton Counties for certain occupancy and oversight fees. During the year ending December 31, 2025, TMCA
recorded expenses amounting to approximately $889,680 to Franklin County and $32,268 to Fulton County. At
December 31, 2025, TMCA included in accrued expenses approximately $111,595 to Franklin County and $8,067
to Fulton County.
104
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
LEASES
TMCA is a lessee for a noncancellable lease of office space. TMCA recognizes a lease liability and an intangible
right-to-use lease asset (lease asset) in the financial statements.
At the commencement of a lease, TMCA initially measures the lease liability at the present value of payments
expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of
lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for
lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently,
the lease asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how TMCA determines (1) the discount rate it uses to
discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
·TMCA uses the interest rate charged by the lessor as the discount rate. When the interest rate charged
by the lessor is not provided, TMCA generally uses its estimated incremental borrowing rate as the
discount rate for the lease.
·The lease term includes the non-cancellable period of the lease. Lease payments included in the
measurement of the lease liability are composed of fixed payments and purchase option price that TMCA
is reasonably certain to exercise.
TMCA monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the
lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease
liability.
Lease assets are reported in property and equipment on the statement of net position.
The office lease has a term of 60 months, beginning April 1, 2021. Prior to the adoption of GASB No. 87, TMCA
classified this lease as an operating lease. TMCA used its incremental borrowing rate of 5.63% to calculate the
lease liability. The rent paid for the year ended December 31, 2025, was $36,812.
Future lease payments to be paid under the lease terms along with associated interest are as follows:
2026 9,965$
Total lease payment 9,965
Less amount representing interest 338
Lease liability 9,627
Current portion of lease liability 9,627
Total -$
105
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31,2025
HEALTHCHOICES PROGRAM
TMCA is required as part of its contract with DHS to submit examined HealthChoices financial schedules on an
annual basis. The basis of accounting used in preparing those schedules differs from generally accepted
accounting principles. The following table represents reconciliation between the amounts reported on TMCA’s
year ended December 31, 2025 examined HealthChoices financial schedules and the amounts reported in TMCA’s
audited financial statements for the same period:
Change in Net Position per Audited Financial Statements 529,292$
Reconciling Items With Different Accounting Treatments:
Net ICP P4P amounts (48,951)
Change in prior year MCO tax expense (10,138)
Change in subsequent reinsurance recoveries (184,117)
Reinvestment interest (189,814)
Reinvestment expenses 409,993
Excess capitation funds by program year
per HealthChoices examinations 506,265$
TMCA is also required by the HealthChoices contract to allocate excess capitation funds as held for reinvestment,
held for risk and contingency, or held to satisfy the program’s minimum equity reserve requirement. The following
represents the allocation of restricted net position as of December 31, 2025:
Unallocated excess funds 6,018,392$
Risk and contingency 7,756,006
Reinvestment 6,172,063 *
Equity reserve 1,962,357
Restricted net position 21,908,818$
Unrestricted net position 285,916
Total net position 22,194,734$
* Reinvestment net assets differ from the DHS examination schedules for the year ended December 31, 2025, by
$3,067 due to timing in expense recognition.
Required
Supplementary
Information
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Total pension liability
Service Cost 4,469,625$4,311,621$4,050,696$3,790,007$3,735,453$3,642,543$4,036,077$3,874,935$4,385,364$4,090,191$
Interest 13,207,446 12,743,730 12,086,909 11,345,701 11,170,556 10,641,045 9,686,936 9,195,497 8,630,923 8,393,612
Changes of benefit terms -1,492,980 2,833,049 -244,235 -854,118 652,040 113,964 -
Differences between expected and actual experience (756,644)3,262,038 2,029,308 (108,911)1,000,408 786,228 290,009 132,876 (1,980,888)64,462Changes of assumptions ---2,063,268 -6,908,554 --2,588,290 -Benefit payments, including refunds of employee contributions (12,285,308)(10,396,984)(10,161,820)(9,194,685)(8,630,043)(8,015,781)(7,717,732)(7,480,861)(6,426,349)(6,223,333)Net change in total pension liability 4,635,119 11,413,385 10,838,142 7,895,380 7,520,609 13,962,589 7,149,408 6,374,487 7,311,304 6,324,932
Total pension liability - beginning 191,003,576 179,590,191 168,752,049 160,856,669 153,336,060 139,373,471 132,224,063 125,849,576 118,538,272 112,213,340
Total pension liability - ending (a)195,638,695$191,003,576$179,590,191$168,752,049$160,856,669$153,336,060$139,373,471$132,224,063$125,849,576$118,538,272$
Plan fiduciary net position
Contributions - employer 2,761,430$2,759,230$2,147,364$1,020,250$1,457,296$1,676,193$2,432,241$1,972,487$1,964,434$2,199,898$
Contributions - employee 3,593,015 3,607,001 3,440,383 3,341,451 3,163,855 3,129,612 3,060,163 2,926,355 2,832,112 2,745,870
Net investment income 22,666,391 13,793,600 18,475,192 (19,847,903)23,714,972 17,371,054 23,821,347 (5,718,495)17,018,477 7,819,036
Benefit payments, including refunds of employee contributions (12,285,308)(10,396,984)(10,161,820)(9,194,685)(8,630,043)(8,015,781)(7,717,732)(7,480,861)(6,426,349)(6,223,333)Administrative expense (160,231)(181,405)(167,490)(159,119)(206,930)(96,964)(92,818)(103,010)(93,941)(118,377)Other 361,559 717,223 6,370 12,220 (9,064)6,288 6,122 (19,992)(127,529)3,912Net change in plan fiduciary position 16,936,856 10,298,665 13,739,999 (24,827,786)19,490,086 14,070,402 21,509,323 (8,423,516)15,167,204 6,427,006
Plan fiduciary net position - beginning 176,845,153 166,546,488 152,806,489 177,634,275 158,144,189 144,073,787 122,564,464 130,987,980 115,820,776 109,393,770
Plan fiduciary net position - ending (b)193,782,009$176,845,153$166,546,488$152,806,489$177,634,275$158,144,189$144,073,787$122,564,464$130,987,980$115,820,776$
County's net pension liability - ending (a) - (b)1,856,686$14,158,423$13,043,703$15,945,560$(16,777,606)$(4,808,129)$(4,700,316)$9,659,599$(5,138,404)$2,717,496$
Plan fiduciary net position as a percentage of the totalpension liability 99.05%92.59%92.74%90.55%110.43%103.14%103.37%92.69%104.08%97.71%
Covered payroll 35,681,070$34,273,131$33,675,747$31,841,655$32,062,982$31,367,225$30,592,362$29,471,727$28,262,407$26,519,542$
County net pension liability as a percentage of covered
payroll 5.20%41.31%38.73%50.08%-52.33%-15.33%-15.36%32.78%-18.18%10.25%
Note to Schedule
Other Information:
The December 31, 2017 measurement date reflects a change in assumption related to a reduction in the discount rate from 7.5% to 7.25%.
There was a one-time ad hoc COLA given to retired members as of January 1, 2018.
The December 31, 2019 measurement date reflects a change in benefit terms. The Retirement Board approved a cost of living increase totaling $854,118.
The December 31, 2020 measurement date reflects a change in assumption related to the change to the PubG-2010 mortality table for males and females with generational mortality improvement using MP19.The December 31, 2022 measurement date reflects a change in assumption related to the change to the PubG-2010 mortality table for males and females with generational mortality improvement using MP20.
Last 10 Years
Schedule of Changes in the Net Pension Liability and Related Ratios
Required Supplementary Information
COUNTY OF FRANKLIN, PENNSYLVANIA
______________________________________________________________________________
107 .
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Actuarially determined employer contributions 2,761,430$2,759,230$2,147,364$1,020,250$1,457,296$1,676,193$2,432,241$1,972,487$1,964,434$2,199,898$
Contributions in relation to the actuarially
determined employer contribution 2,761,430 2,759,230 2,147,364 1,020,250 1,457,296 1,676,193 2,432,241 1,972,487 1,964,434 2,199,898Employer contributions deficiency (excess)-$-$-$-$-$-$-$-$-$-$
Covered payroll 35,681,070$34,273,131$33,675,747$31,841,655$32,062,982$31,367,225$30,592,362$29,471,727$28,262,407$26,519,542$
Employer contributions as a percentage of
covered payroll 7.74%8.05%6.38%3.20%4.55%5.34%7.95%6.69%6.95%8.30%
Notes to Schedule
Valuation date:January 1, 2025 January 1, 2024 January 1, 2023 January 1, 2022 January 1, 2021 January 1, 2020 January 1, 2019 January 1, 2018 January 1, 2017
Actuarially determined contribution rates are calculated as of January 1, one year prior to the end of the fiscal year in which contributions are reported
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level dollar
Remaining amortization period 18 years
Asset valuation method Market value adjusted for unrecognized gains and losses from prior years
Inflation 3.0%
Salary increases 4.5%, average, including inflation
Investment rate of return 7%, net of pension plan investment expense, including inflation
Retirement age Age 60 or 55 with 20 years' serviceMortalityPubG-2010 Mortality Table for males and females set forward one year with generational mortality improvement using MP-2020
Schedule of Employer Contributions to Pension Plan - Last 10 Years
Required Supplementary Information
COUNTY OF FRANKLIN, PENNSYLVANIA
______________________________________________________________________________
108 .
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Annual money-weighted rate of return, net of investment expense 13.2%8.8%12.7%-12.1%16.5%12.6%20.4%-3.9%15.3%7.8%
Last 10 Years
Schedule of Investment Returns in Pension Plan
Required Supplementary Information
COUNTY OF FRANKLIN, PENNSYLVANIA
______________________________________________________________________________
109 .
2025 2024 2023 2022 2021 2020 2019 2018 2017
Total OPEB liabilityService Cost 40,890$62,717$96,194$103,871$128,584$73,165$73,875$78,776$166,834$
Interest 1,129,821 1,129,746 1,151,919 1,152,538 1,077,531 926,444 817,247 741,127 705,149
Changes of benefit terms ---------
Differences between expected and actual experience (2,774,587)(472,600)(805,582)(141,521)(1,399,780)741,378 962,351 --
Changes of assumptions 391,430 -(61,463)(483,068)1,860,401 892,210 221,729 748,046 -
Benefit payments, including refunds of employee contributions (723,667)(658,804)(648,228)(617,669)(597,554)(611,539)(526,601)(500,074)(417,695)Net change in total OPEB liability (1,936,113)61,059 (267,160)14,151 1,069,182 2,021,658 1,548,601 1,067,875 454,288
Total OPEB liability - beginning 15,904,688 15,843,629 16,110,789 16,096,638 15,027,456 13,005,798 11,457,197 10,389,322 9,935,034
Total OPEB liability - ending (a)13,968,575$15,904,688$15,843,629$16,110,789$16,096,638$15,027,456$13,005,798$11,457,197$10,389,322$
Plan fiduciary net position
Contributions - employer -$-$-$-$-$-$-$-$-$
Contributions - employee ---------
Net investment income 2,437,311 1,683,945 1,915,634 (1,915,123)2,559,690 1,620,155 2,624,218 (542,660)2,032,275
Benefit payments, including refunds of employee contributions (723,667)(658,804)(648,228)(617,669)(597,554)(611,539)(526,601)(500,074)(417,695)
Administrative expense (29,861)(35,101)(27,505)(25,514)(37,420)(32,754)(26,447)(25,959)(29,170)
Other ---------
Net change in plan fiduciary position 1,683,783 990,040 1,239,901 (2,558,306)1,924,716 975,862 2,071,170 (1,068,693)1,585,410
Plan fiduciary net position - beginning 17,630,195 16,640,155 15,400,254 17,958,560 16,033,844 15,057,982 12,986,812 14,055,505 12,470,095Plan fiduciary net position - ending (b)19,313,978$17,630,195$16,640,155$15,400,254$17,958,560$16,033,844$15,057,982$12,986,812$14,055,505$
County's net OPEB liability - ending (a) - (b)(5,345,403)$(1,725,507)$(796,526)$710,535$(1,861,922)$(1,006,388)$(2,052,184)$(1,529,615)$(3,666,183)$
Plan fiduciary net position as a percentage of the total
OPEB liability 138.30%110.80%105.00%95.60%111.60%106.70%115.80%113.40%135.30%
Covered payroll 4,538,769$5,891,402$6,327,313$6,765,153$7,265,171$8,496,897$9,485,500$6,497,323$28,262,407$
County net OPEB liability as a percentage of covered
payroll -117.77%-29.29%-12.59%10.50%-25.63%-11.84%-21.63%-23.54%-12.97%
Note to Schedule
The December 31, 2020 measurement date reflects a change in the healthcare cost trend rate.
The December 31, 2021 measurement date reflects a change in the healthcare cost trend rate as well as the mortality rates were updated to Pub-2010 General Employees, and Retirees
Headcount-Weighted table projected fully generationally using MP-2019
The December 31, 2023 measurement date reflects a change in the healthcare cost trend rate as well as the mortality rates were updated to Pub-2010 General Employees, and Retirees Headcount-Weighted table projected fully generationally using MP-2021
The December 31, 2025 measurement date reflects a change in the healthcare cost trend rate assumptions
The County adopted GASB 74 on a prospective basis in 2017: therefore only nine years are presented on the above schedule.
The December 31, 2019 measurement date reflects a change in the healthcare cost trend rate.
COUNTY OF FRANKLIN, PENNSYLVANIA
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last 10 Years
______________________________________________________________________________ 110 .
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Actuarially determined employer contributions -$-$182,417$-$33,035$99,851$54,140$-$-$-$
Contributions in relation to the actuarially
determined employer contribution ----------
Employer contributions deficiency (excess)-$-$182,417$-$33,035$99,851$54,140$-$-$-$
Covered payroll 4,538,769$5,891,402$6,327,313$6,765,153$7,265,171$8,496,897$9,485,500$6,497,323$28,262,407$26,519,542$
Employer contributions as a percentage of
covered payroll 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Valuation date:January 1, 2025 January 1, 2023 January 1, 2023 January 1, 2021 January 1, 2021 January 1, 2019 January 1, 2019 January 1, 2017 January 1, 2017 January 1, 2016
Actuarially determined contribution rates are calculated as of January 1, one year prior to the end of the fiscal year in which contributions are reported
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age
Amortization method Level dollar
Remaining amortization period 13 years
Asset valuation method Market Value
Inflation 2.6%
Salary increases 4.50%
Investment rate of return 7.25%
Retirement age Experience-based table of rates that are specific to the type of eligibility conditionMortalityMortality rates were based on the Pub-2010 General Employees and Retirees Headcount-Weighted table projected fully generationally using MP-2021
Other Information:
The December 31, 2018 measurement date reflects a change in assumption related to a change in actuarial cost methods.
The December 31, 2020 measurement date reflects a change in the healtchcare cost trend rate.
The December 31, 2019 measurement date reflects a change in the healthcare cost trend rate.
Schedule of Employer Contributions to OPEB Plan - Last 10 Years
Required Supplementary Information
COUNTY OF FRANKLIN, PENNSYLVANIA
______________________________________________________________________________
111 .
2025 2024 2023 2022 2021 2020 2019 2018 2017
Annual money-weighted rate of return, net of investment expense 14.1%10.6%14.6%-12.6%17.1%11.1%20.7%5.8%16.9%
Note to Schedule:
COUNTY OF FRANKLIN, PENNSYLVANIA
Required Supplementary Information
Schedule of Investment Returns in OPEB Plan
Last 10 Years
The county adopted GASB 74 on a prospective basis in 2017; therefore only nine years are presented on the above schedule.
______________________________________________________________________________
112 .
Original Final Actual Amounts
Revenues
Taxes:
Property 40,947,750$40,947,750$41,308,016$360,266$
Total revenues 56,586,703 56,768,028 58,063,598 1,295,570
Expenditures
Current:
General government - administrative:
Administrative 4,985,179 5,235,055 4,437,014 798,041
Voter services 759,432 759,173 800,931 (41,758)
Financial administration 3,464,272 3,470,739 3,283,903 186,836
Law - related 289,390 289,390 222,612 66,778
Central administrative services 4,292,485 4,012,737 3,524,789 487,948
Total general government - administrative 13,790,758 13,767,094 12,269,249 1,497,845
General government - judicial:
Judicial administration 6,039,064 6,086,798 5,457,770 629,028
Court support services 7,010,805 7,292,482 6,563,800 728,682
Total general government - judicial 13,049,869 13,379,280 12,021,570 1,357,710
Public safety - corrections:
Other protective services 809,431 758,871 773,094 (14,223)
Total public safety - corrections 23,563,634 23,634,910 22,417,877 1,217,033
Human services 2,509,788 2,508,619 2,277,120 231,499
Debt service:
OTHER FINANCING SOURCES (USES)
Net change in fund balance (8,530,689)$(8,644,235)$(837,378)$7,806,857$
Budgeted Amounts
COUNTY OF FRANKLIN, PENNSYLVANIA
For the Year Ended December 31, 2025
Variance with
Final Budget -
Positive
(Negative)
Required Supplementary Information
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 113 .
Variance with
Final Budget -
Original Final Amounts (Negative)
Intergovernmental 14,985,753$15,508,753$15,081,005$(427,748)$
Charges for service 155,000 155,000 146,359 (8,641)
Contributions and other 4,000 4,000 5,101 1,101
Total revenues 15,144,753 15,667,753 15,232,465 (435,288)
Expenditures:
Current:
Human Services 18,421,750 18,944,750 18,901,180 43,570
Debt service:
Principal --12,523 (12,523)
Interest --756 (756)
Total expenditures 18,421,750 18,944,750 18,914,459 30,291
(3,276,997)(3,276,997)(3,681,994)(404,997)
Other financing sources:
3,276,997 3,276,997 3,681,994 404,997
Total other financing sources 3,276,997 3,276,997 3,681,994 404,997
COUNTY OF FRANKLIN, PENNSYLVANIA
Children & Youth
Budgetary Comparison Schedule
Year Ended December 31, 2025
Budgeted Amounts
Required Supplementary Information
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 114 .
Variance with
Final Budget -
Original Final Amounts (Negative)
Intergovernmental 195,000$195,000$181,401$(13,599)$
Charges for service 1,415,000 1,415,000 818,489 (596,511)
Investment earnings 148,300 148,300 254,997 106,697
Contributions and other 95,000 95,000 11,599 (83,401)
Total revenues 1,853,300 1,853,300 1,266,486 (586,814)
Expenditures:
Current:
Human Services 121,900 121,900 22,365 99,535
Culture and recreation 2,279,000 1,315,561 65,155 1,250,406
Community and economic development 417,000 417,000 211,955 205,045
Capital Outlay -963,439 963,439 -
Total expenditures 2,817,900 2,817,900 1,262,914 1,554,986
expenditures (964,600)(964,600)3,572 968,172
Other financing sources:
Transfers in 200,000 200,000 150,000 (50,000)
Transfers out (815,000)(815,000)(555,415)259,585
(615,000)(615,000)(405,415)209,585
Budgeted Amounts
COUNTY OF FRANKLIN, PENNSYLVANIA
Required Supplementary Information
Special Revenue Trusts
Budgetary Comparison Schedule
Year Ended December 31, 2025
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 115 .
Variance with
Final Budget -
Original Final Amounts (Negative)
Intergovernmental 9,206,266$9,506,266$8,576,076$(930,190)$
Charges for service 30,000 30,500 25,035 (5,465)
Investment earnings 162,350 162,350 92,788 (69,562)
Contributions and other 1,500 1,500 1,294 (206)
Total revenues 9,400,116 9,700,616 8,695,193 (1,005,423)
Expenditures:
Current:
Human Services 9,711,116 10,011,616 8,979,007 1,032,609
Debt service:
Principal --2,057 (2,057)
Interest --124 (124)
Total expenditures 9,711,116 10,011,616 8,981,188 1,030,428
(under) expenditures (311,000)(311,000)(285,995)25,005
Other financing sources:
Transfers in 311,000 311,000 285,995 (25,005)
311,000 311,000 285,995 (25,005)
Year Ended December 31, 2025
Mental Health/Intellectual Disabilities
COUNTY OF FRANKLIN, PENNSYLVANIA
Budgetary Comparison Schedule
Budgeted Amounts
Required Supplementary Information
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 116 .
Original Final Actual Amounts
Intergovernmental 4,339,693$4,243,004$4,307,911$64,907$
Contributions and other --23,173 23,173
Total revenues 4,339,693 4,243,004 4,331,084 88,080
Expenditures:
Current:
Human Services 4,572,636 4,414,947 4,173,901 241,046
Capital outlay -41,734 41,734 -
Debt service:
Principal --114,296 (114,296)
Interest --38,146 (38,146)
Total expenditures 4,572,636 4,456,681 4,368,077 88,604
(232,943)(213,677)(36,993)176,684
Other financing sources:
Proceeds from lease issuance -4,111 4,111 -
232,943 209,566 32,882 (176,684)
Total other financing sources 232,943 213,677 36,993 (176,684)
COUNTY OF FRANKLIN, PENNSYLVANIA
Emergency 911 System
Budgetary Comparison Schedule
For the Year Ended December 31, 2025
Budgeted Amounts Final Budget -
Positive
(Negative)
Required Supplementary Information
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 117 .
118
COUNTY OF FRANKLIN, PENNSYLVANIA
NOTES TO BUDGETARY COMPARISON SCHEDULES DECEMBER 31,2025
BUDGETS AND BUDGETARY ACCOUNTING
Formal budgetary accounting in accordance with U.S. generally accepted accounting principles is employed as a
management control in the County. Annual operating budgets are adopted each year for all non-agency funds.
This includes all governmental funds (general, debt service, and capital) and all proprietary funds. The passage of
an annual budget ordinance is required under County Code. The County follows these procedures in establishing
the budgetary data:
1. During August and September, department leaders use current financial status reports to develop financial
projections for their departments or programs for the ensuing year and review those projections with budget staff.
2. The Commissioners and/or Administration may interview department leaders to discuss their budgets as
submitted and allow them to substantiate projected expenditures at public hearings.
3. Upon consolidation of the department and agency expenditure projections, the Commissioners ascertain the most
viable method of financing.
4. Subsequently, the Fiscal Office and County Administrator assemble the preliminary projections of revenues and
expenditures into a final budget incorporating any revisions or adjustments resulting from the aforementioned
Commissioners’ review.
5. By early December, the proposed budget is presented to the Commissioners. Pursuant to budgetary requirements
as set forth in the County Code, public notice is given that the final budget is available for inspection for a period
of 20 days.
6. After the 20-day inspection period, and on or before December 31, the County Commissioners adopt the final
budget by enacting an appropriate resolution.
The Commissioners may at any time, by resolution, make supplemental appropriations for any lawful purpose
from any funds on hand or estimated to be received within the fiscal year and not otherwise appropriated,
including the proceeds of any borrowing authorized by law. The Commissioners may authorize the transfer of any
unencumbered balance of any appropriation item or any portion thereof.
Actual expenditures may not legally exceed budget appropriations at the individual fund level. Budgetary control
is maintained at the fund level. Budget transfers not affecting the total approved budget may be made by
department directors/elected officials. Revisions to state mandated budgets may be made provided there is no
overall change to the county budget. Occasions that require adjustments to the total adopted county budget
require action by the Board of Commissioners.
The County employs encumbrance accounting. Encumbrances (e.g., purchase orders, contracts) outstanding at
year-end do not constitute expenditures or liabilities and must be reappropriated for the subsequent year. All
unencumbered budget appropriations lapse at the end of the year.
Other
Supplementary
Information
-
-
-
-
County of Franklin, Pennsylvania
Nonmajor Governmental Funds - Special Revenue Funds
Description of Funds
Special revenue funds are used to account for specific revenues (other than major capital projects) that are legally
restricted to expenditures for specific purposes. The following are used to account for those financial activities:
restricted and for the provision of specified social services to eligible County residents:
program used to improve public facilities and services.
Franklin County.
________________________________________________________________________________________
120 .
COUNTY OF FRANKLIN, PENNSYLVANIA
Liquid Fuels Tax
Community
Development
Block Grant Hotel Tax
Domestic
Relations on Aging
Community
Services
Dept.
Drug and
Alcohol
categorical
Human
Services Total
ASSETS
Receivables (net of allowance for
uncollectibles)54,575$-$113,281$-$90,717$-$6,606$446$265,625$
Total assets 5,433,176$21$208,656$3,546,535$989,716$226,326$768,908$96,073$11,269,411$
LIABILITIES
Accounts payable 169,112$21$200,347$2,409$263,692$58,618$383,755$5,227$1,083,181$
Due to other funds --8,309 461,092 ---90,846 560,247
Other unearned revenue ----204,523 167,708 26,641 -398,872
Total liabilities 169,112 21 208,656 463,501 468,215 226,326 410,396 96,073 2,042,300
FUND BALANCE
Total liabilities and fund balances 5,433,176$21$208,656$3,546,535$989,716$226,326$768,908$96,073$11,269,411$
December 31, 2025
______________________________________________________________________________
121 .
Liquid Fuels
Community
Development Domestic Community Drug and
categorical
Human
Revenues:
Hotel Taxes -$-$1,560,781$-$-$-$-$-$1,560,781$
Intergovernmental 968,179 415,314 -1,246,966 3,735,875 666,239 2,166,091 507,193 9,705,857
Charges for services 8,150 --7,929 456,239 -120,918 53,818 647,054
Investment earnings 211,678 -3,777 144,577 17,854 4,913 2,535 -385,334
Contributions and other 7,700 ---21,276 31,597 39,080 600 100,253
Total revenues 1,195,707 415,314 1,564,558 1,399,472 4,231,244 702,749 2,328,624 561,611 12,399,279
Current:
General government - judicial ---2,253,909 ----2,253,909
Public works 337,220 -------337,220
Human services ----4,736,588 595,194 2,651,382 681,358 8,664,522
Community and economic development -411,581 1,560,781 -----1,972,362
Debt service:
Principal ---7,175 34,411 -1,677 2,927 46,190
Interest ---447 9,595 -101 177 10,320
Capital outlay 178,670 --2,681 ----181,351
Total expenditures 515,890 411,581 1,560,781 2,264,212 4,780,594 595,194 2,653,160 684,462 13,465,874
679,817 3,733 3,777 (864,740)(549,350)107,555 (324,536)(122,851)(1,066,595)
Proceeds from lease issuance ---2,681 ----2,681
Transfers - in ---470,768 443,016 131,773 601,496 122,851 1,769,904
Transfers - out -(3,733)(3,777)-(109,928)(239,328)(255,169)-(611,935)
Total other financing sources and (uses)-(3,733)(3,777)473,449 333,088 (107,555)346,327 122,851 1,160,650
Net change in fund balances 679,817 --(391,291)(216,262)-21,791 -94,055
Fund balance, beginning of year 4,584,247 --3,474,325 737,763 -336,721 -9,133,056
Fund balances, end of year 5,264,064$-$-$3,083,034$521,501$-$358,512$-$9,227,111$
Excess (deficiency) of revenues over (under) expenditures
COUNTY OF FRANKLIN, PENNSYLVANIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended December 31, 2025
______________________________________________________________________________
122 .
County of Franklin, Pennsylvania
Internal Service Funds
Description of Funds
The General Support Services fund provides accounting, human resources, information technology, and program
management support for all operations of County government, including human service programs.
Workers' Compensation
workplace injuries.
Human Services Building
Human Services Administration
Self Funded Employee Benefits
________________________________________________________________________________________
123 .
ASSETS
General Support
Services
Workers'
Compensation
Human Services
Building
Human Services
Administration
Self Funded
Employee
Benefits Total
Current assets:
uncollectible)-$50,377$-$-$150,732$201,109$
Due from other funds ---5,088 269,332 274,420
Prepaid items 296,947 13,706 ---310,653
Total current assets 296,947 64,083 -5,088 420,064 786,182
Cash and cash equivalents - restricted -1,736,269 --697,861 2,434,130
-4,275,183 ---4,275,183
Capital assets:
Construction in progress ------
Building and system --1,719,151 --1,719,151
Total capital assets (net of
Total noncurrent assets 1,064,758 6,011,452 516,928 3,968 697,861 8,294,967
LIABILITIES
Current liabilities:
Accounts payable 43,761$8,497$4,480$97$578,382$635,217$
Due to other funds 660,175 186,910 460,796 --1,307,881
Unearned revenue ---1,662 251,064 252,726
Accrued interest payable ------
Lease payable - current 7,940 --2,885 -10,825
Claims payable - current -30,833 --176,168 207,001
Noncurrent liabilities:
Compensated absences 105,845 --3,184 -109,029
Lease liability 3,379 --1,228 -4,607
Subscription-based software liability 251,743 ----251,743
Claims payable -91,472 ---91,472
Total noncurrent liabilities 360,967 91,472 -4,412 -456,851
Total Liabilities 1,361,705 317,712 465,276 9,056 1,005,614 3,159,363
NET POSITION
Restricted for benefits -5,757,823 51,652 -112,311 5,921,786
Total net position -5,757,823 51,652 -112,311 5,921,786
COUNTY OF FRANKLIN, PENNSYLVANIA
Combing Statement of Net Position
Internal Service Funds
December 31, 2025
Governmental Activities
______________________________________________________________________________
124 .
General
Support
Services
Workers'
Compensation
Human
Services
Building Administration
Self Funded
Employee
Benefits Total
Operating revenues:
Intergovernmental -10,832 ---10,832
Operating expenses:
Nonoperating income (expense)
Other financing sources(uses):
COUNTY OF FRANKLIN, PENNSYLVANIA
Combining Statement of Revenues, Expenses, and Changes in Net Position
Internal Service Funds
For the Year Ended December 31, 2025
Governmental Activities
______________________________________________________________________________
125 .
Totals
CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of investments -(272,743)--1,200,000 927,257
Investment earnings -265,393 --53,044 318,437
Net cash provided/(used) by investing activities -(7,350)--1,253,044 1,245,694
Net increase (decrease) in cash and cash equivalents -(419,616)--(51,586)(471,202)
Cash and cash equivalents January 1 -2,155,885 --749,447 2,905,332
Cash and cash equivalents December 31 -$1,736,269$-$-$697,861$2,434,130$
Reconciliation of operating income (loss) to net cash
provided by operating activities:
COUNTY OF FRANKLIN, PENNSYLVANIA
General Support
Services Building
cash provided by operating activities:
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended December 31, 2025
Human Services
Administration
Worker's
Compensation
Self Funded
Employee
Benefits
Governmental Activities
______________________________________________________________________________
126 .
County of Franklin, Pennsylvania
Trust Funds
Description of Funds
The Pension Trust Fund accounts for the activities of the Employees Retirement System, which accumulates resources for
pension benefit payments to qualified County employees.
OPEB Trust Fund
behalf of qualified retirees.
________________________________________________________________________________________
127 .
Pension Trust
Fund Fund Total
Cash and cash equivalents 1,967,831$213,159$2,180,990$
Accounts receivable 128,445 -128,445
Prepaid items 16,416 -16,416
Investments at fair value:
Short-term investments 639,736 623 640,359
Mutual funds - equity 48,614,639 6,231,368 54,846,007
Mutual funds - fixed income 40,891,697 5,784,620 46,676,317
Mutual funds - global and international 49,954,583 5,802,105 55,756,688
U.S. government securities - agency 4,719,695 -4,719,695
U.S. government securities - treasury 5,189,296 -5,189,296
Corporate and foreign bonds 4,181,002 -4,181,002
Infrastructure funds 9,393,315 -9,393,315
Private equity funds 9,536,313 -9,536,313
Private credit funds 6,054,024 -6,054,024
Real estate 12,495,017 1,310,578 13,805,595
LIABILITIES
Total liabilities -28,475 28,475
NET POSITION
other post-employment benefits 193,782,009 19,313,978 213,095,987
COUNTY OF FRANKLIN, PENNSYLVANIA
Combining Statement of Fiduciary Net Position
Trust Funds
December 31, 2025
Fiduciary Component Units
______________________________________________________________________________
128 .
Pension Trust
Fund Fund Totals
Contributions:
Plan members/participants 3,593,015$-$3,593,015$
County 2,761,430 -2,761,430
Other 73,863 -73,863
Total contributions 6,428,308 -6,428,308
Investment income:
Net appreciation (depreciation) in fair value of investments 18,913,184 2,004,178 20,917,362
Interest 592,611 433,133 1,025,744
Dividends 3,758,783 -3,758,783
Net investment appreciation (depreciation) before investment expense 23,264,578 2,437,311 25,701,889
Less investment expense (310,491)-(310,491)
Net investment income (loss)22,954,087 2,437,311 25,391,398
Total additions 29,382,395 2,437,311 31,819,706
DEDUCTIONS
Benefits 10,664,635 723,667 11,388,302
Refunds of contributions 1,620,673 -1,620,673
Administrative expense 160,231 29,861 190,092
Total deductions 12,445,539 753,528 13,199,067
Change in net position 16,936,856 1,683,783 18,620,639
Net position restricted for pension and OPEB benefits - beginning 176,845,153 17,630,195 194,475,348
Net position restricted for pension and OPEB benefits - ending 193,782,009$19,313,978$213,095,987$
COUNTY OF FRANKLIN, PENNSYLVANIA
Combining Statement of Changes in Fiduciary Net Position
Trust Funds
For the Year Ended December 31, 2025
Fiduciary Component Units
______________________________________________________________________________
129 .
Variance with
Final Budget -
Original Final Amounts (Negative)
Intergovernmental 500,000$500,000$-$(500,000)$
Investment earnings --136,651 136,651
Total revenues 500,000 500,000 136,651 (363,349)
Expenditures:
Current:
Other -30,032 30,032 -
Capital outlay 5,805,000 5,774,968 1,516,943 4,258,025
Total expenditures 5,805,000 5,805,000 1,546,975 4,258,025
Deficiency of revenues under
(5,305,000)(5,305,000)(1,410,324)3,894,676
Other financing sources (uses):
Proceeds from sale of property --1,423,374 1,423,374
2,130,000 2,130,000 12,498 (2,117,502)
Total other financing sources (uses)2,130,000 2,130,000 1,435,872 (694,128)
Year Ended December 31, 2025
COUNTY OF FRANKLIN, PENSYLVANIA
Capital Projects
Budgetary Comparison Schedule
Budgeted Amounts
______________________________________________________________ ________________
See Notes to Budgetary Comparison Schedules.130 .
Variance with
Final Budget -
Original Final Amounts (Negative)
Property Taxes 6,666,760$6,666,760$6,774,450$107,690$
Investment earnings 25,000 25,000 142,155 117,155
Total revenues 6,691,760 6,691,760 6,916,605 224,845
Expenditures:
Current:
General government - administrative 5,000 5,000 2,000 3,000
Debt service:
Principal 3,541,000 3,541,000 3,540,191 809
Interest 3,152,000 3,152,000 3,148,843 3,157
Total expenditures 6,698,000 6,698,000 6,691,034 6,966
Excess (Deficiency) of revenues
(6,240)(6,240)225,571 231,811
Year Ended December 31, 2025
COUNTY OF FRANKLIN, PENNSYLVANIA
Debt Service
Budgetary Comparison Schedule
Budgeted Amounts
______________________________________________________________________________
See Notes to Budgetary Comparison Schedules. 131 .