Annual Financial Report - 2022-2023FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2023
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2023
INDEPENDENT AUDITOR’S REPORT ...................................................................................................................................... 1
MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................................................................... 5
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION ........................................................................................................................................... 14
STATEMENT OF ACTIVITIES ................................................................................................................................................. 15
FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS ...................................................................................................................... 16
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET
POSITION ............................................................................................................................................................................ 17
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL
FUNDS ................................................................................................................................................................................. 18
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES .................................................................... 19
STATEMENT OF NET POSITION – PROPRIETARY FUNDS ..................................................................................................... 20
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS ................................... 22
STATEMENT OF CASH FLOWS ............................................................................................................................................. 24
STATEMENT OF FIDUCIARY NET POSITION ......................................................................................................................... 26
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION .................................................................................................... 27
NOTES TO FINANCIAL STATEMENTS ..................................................................................................................................... 28
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
– GENERAL FUND ................................................................................................................................................................ 62
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – GENERAL FUND ........................................................................................................................... 64
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
– AMERICAN RESCUE PLAN ACT SPECIAL REVENUE FUND ................................................................................................. 65
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
GENERAL EMPLOYEES’ PENSION PLAN .......................................................................................................................... 66
POLICE OFFICERS’ PENSION PLAN .................................................................................................................................. 68
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS...................................................................................................... 70
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ............................................................................. 71
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS ........................................................................................... 72
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS ........................................................................ 73
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2023
SUPPLEMENTARY INFORMATION
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS ............................................................................ 74
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-
MAJOR GOVERNMENTAL FUNDS ....................................................................................................................................... 76
HISTORICAL REVENUES AND EXPENSES .............................................................................................................................. 78
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS
(WATER AND SEWER) ......................................................................................................................................................... 79
OTHER BOND COVENANT DISCLOSURES ............................................................................................................................ 80
OTHER STATISTICAL INFORMATION
MAJOR UTILITY CUSTOMERS .............................................................................................................................................. 81
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; THE
RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND OTHER CONTRACT
REQUIREMENTS
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................... 82
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH FLORIDA STATUTES SECTION 218.415
– INVESTMENT OF PUBLIC FUNDS ...................................................................................................................................... 85
INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE FOR THE U.S. TREASURY CORONAVIRUS
STATE AND LOCAL FISCAL RECOVERY FUNDS PROGRAM (CSLFRF) REQUIREMENTS FOR AN
ALTERNATIVE CSLRF COMPLIANCE EXAMINATION ENGAGEMENT .................................................................................... 86
MANAGEMENT LETTER ....................................................................................................................................................... 87
MANAGEMENT’S RESPONSE TO FINDINGS ........................................................................................................................ 89
1
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Atlantic Beach,
Florida, (the City) as of and for the year ended September 30, 2023, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City as of September 30, 2023, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of the City and to meet our other ethical responsibilities in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of a Matter
As described in Note 15 to the financial statements, in 2023, the City had a prior period adjustment related
to an error. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
2
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as
a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
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 generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if there is a substantial likelihood
that, individually or in the aggregate, they would influence the judgment made by a reasonable user based
on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
■ Exercise professional judgment and maintain professional skepticism throughout the audit.
■ Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
■ Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
■ Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
■ Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
3
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, General Fund – Budgetary to Actual Schedule and notes to the schedule, ARPA
Fund – Budgetary to Actual Schedule, and Required Pension and Other Postemployment Benefits
Schedules, as listed in the table of contents, be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The accompanying combining and individual non-major
fund financial statements, historical revenues and expenses, schedule of net revenues in accordance with
bond resolutions, and other bond covenant disclosures (supplementary information) are presented for
purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The information
has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with 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 Information
Management is responsible for the other information included in the annual report. The other
information comprises the statistical schedule but does not include the basic financial statements and our
auditor’s report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
4
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated January 10, 2025,
on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements, and other
matters. The purpose of that report is 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 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 City’s internal control over financial
reporting and compliance.
Report on Summarized Comparative Information
We have previously audited the City’s 2022 financial statements, and our report dated June 2, 2023,
expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended September 30, 2022, is consistent,
in all material respects, with the audited financial statements from which it was derived.
January 10, 2025
Gainesville, Florida
MANAGEMENT’S DISCUSSION AND ANALYSIS
5
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
As management of the City of Atlantic Beach, Florida (the City), we offer readers of our financial statements this
narrative overview and analysis for the fiscal year ended September 30, 2023.
Overview of the Financial Statements
This management’s discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements. The City’s basic financial statements are comprised of three components: 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves. The purpose
of each of the three components of the basic financial statements is described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s
finances, in a manner similar to a private sector business. They include the Statement of Net Position and the
Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources,
liabilities, and deferred inflows of resources with the difference between reported as net position. Net position is
reported as one of three categories: invested in capital assets net of related debt; restricted; or unrestricted.
Restricted net position is further classified as either net position restricted by enabling legislation or net position
that is otherwise restricted. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement
for some items that will only result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are principally supported
by taxes and intergovernmental revenues, referred to as “governmental activities,” from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges, referred to as
“business-type activities.” The governmental activities of the City include public safety, road maintenance and
construction, parks and recreation, conservation and resource management, and general government, which
include administration and other support functions. The business-type activities of the City include the utility,
comprised of the water and sewer systems, the stormwater system, the sanitation service and the building code
enforcement enterprise fund. The government-wide financial statements can be found by referencing the table
of contents of this report.
6
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(continued)
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated
for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be
categorized into either governmental funds, proprietary funds, or fiduciary funds.
■ Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements,
governmental fund financial statements focus on near-term inflows and outflows of available financial
resources, as well as on balances of available resources at the end of the fiscal year. Such information may be
useful in evaluating a City’s near-term financing requirements. Because the focus of governmental funds is
narrower than that of the government-wide financial statements, it is useful to compare the information
presented for governmental funds with similar information presented for governmental activities in the
government-wide financial statements. By doing so, readers may better understand the long-term impact of the
government’s near-term financing decisions. Reconciliations are provided between the Governmental Funds
Balance Sheet and the Statement of Net Position and the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances and Statement of Activities to facilitate this comparison between
governmental funds and governmental activities.
The City maintains 14 individual governmental funds. Information is presented separately in the Governmental
Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund
Balances for the General Fund, American Rescue Plan Act Special Revenue Fund and Capital Projects Fund which
are considered to be a major funds. Data from the other 11 governmental funds are combined into a single,
aggregated presentation called Nonmajor Governmental Funds. Fund data for these nonmajor governmental
funds is provided in the form of combining statements. These combining statements can be found by referencing
the table of contents of this report.
The City adopts an annual appropriated budget for all funds but is only required to present a budget comparison
for its special revenue funds. Budgetary comparison schedules can be found by referencing the table of contents
of this report and has been provided to demonstrate compliance with the budget.
■ Proprietary Funds
The City maintains only one type of proprietary fund and that is enterprise funds. The enterprise funds are
used to account for the activities of the water and sewer (utility), stormwat er, building code enforcement,
and sanitation activities.
The proprietary fund financial statements provide the same type of information as the government-wide
financial statements, only in more detail. Separate information of the utility, stormwater, sanitation and building
code enforcement activities can be found in the basic proprietary fund financial statements by referencing the
table of contents of this report.
7
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
Fund Financial Statements (concluded)
■ Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City (i.e., pension
beneficiaries). Fiduciary funds are not reflected in the government-wide financial statements because the
resources of those funds are not available to support the City’s own programs. The accounting used for
fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can
be found by referencing the table of contents of this report.
Notes to Financial Statements
The notes to financial statements provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes can be found by referencing the table of
contents of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City’s progress in funding its obligation to provide pension benefits to
its employees and a budgetary comparison schedule for the General Fund. Required supplementary information
can be found by referencing the table of contents of this report.
8
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City’s financial position. As can be seen in the
summarized table below, the City’s assets exceeded liabilities by $104,330,750 at the close of the fiscal year ended
September 30, 2023.
By far the largest portion of the City’s net position, $72,688,335 (70%), reflects its investment in capital assets (i.e.,
land, buildings, equipment, and infrastructure), less any related, outstanding debt used to acquire those assets. The
City uses these capital assets to provide services to citizens; consequently, these assets are not available for future
spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot
be used to liquidate these liabilities.
A portion of the City’s net position, $4,559,438 (4%), represents resources that are subject to external restrictions
on how they may be used. The remaining balance of unrestricted net position, $27,082,977 (26%), is used to meet
the government’s ongoing obligations to citizens and creditors.
Statement of Net Position (Summary)
as of September 30,
Governmental Activities Business-type Activities Total Primary Government
2023 2022 2023 2022 2023 2022
Current and other
assets $ 18,855,603 $ 22,362,795 $ 20,573,461 $ 20,899,590 $ 39,429,064 $ 43,262,385
Capital assets 48,201,682 45,473,533 33,985,024 32,755,001 82,186,706 78,228,534
Total assets 67,057,285 67,836,328 54,558,485 53,654,591 121,615,770 121,490,919
Deferred outflows 5,181,216 1,753,220 1,688,140 773,416 6,869,356 2,526,636
Current liabilities 3,091,817 5,603,453 3,889,634 1,783,045 6,981,451 7,386,498
Non-current liabilities 7,378,643 2,464,935 8,370,813 10,733,222 15,749,456 13,198,157
Total liabilities 10,470,460 8,068,388 12,260,447 12,516,267 22,730,907 20,584,655
Deferred inflows 456,532 3,562,235 966,937 1,961,871 1,423,469 5,524,106
Net position:
Net investment in
capital assets 47,062,375 44,225,260 25,625,960 22,748,281 72,688,335 66,973,541
Restricted 1,509,059 3,325,666 3,050,379 2,455,901 4,559,438 5,781,567
Unrestricted 12,740,075 10,407,999 14,342,902 14,745,687 27,082,977 25,153,686
Total net position $ 61,311,509 $ 57,958,925 $ 43,019,241 $ 39,949,869 $ 104,330,750 $ 97,908,794
9
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
As illustrated in the schedule on page 7, the City was able to report positive balances in all categories of net
position, both for the government as a whole, as well as for its separate governmental and business-type activities.
The same situation held true for the prior fiscal year.
Statement of Activities (Summary)
For the year ended September 30,
Governmental Activities Business-type Activities Total Primary Government
2023 2022 2023 2022 2023 2022
Revenues:
Program Revenues:
Charges for services $ 1,493,312 $ 1,365,143 $ 13,996,425 $ 14,001,359 $ 15,489,737 $ 15,366,502
Operating grants/contrib. 414,304 424,147 - - 414,304 424,147
Capital grants/contrib. 173,928 333,912 690,177 972,038 864,105 1,305,950
General revenues:
Property taxes - General 7,224,605 6,708,984 - - 7,224,605 6,708,984
Pub svc tax/franchise fees 2,073,377 2,085,980 - - 2,073,377 2,085,980
Transportation fuel taxes 909,382 890,413 - - 909,382 890,413
Discretionary Sales Surtax 1,241,724 1,202,628 1,241,724 1,202,628
State shared revenue 2,405,210 2,377,857 - - 2,405,210 2,377,857
Grants 2,879,280 4,619,415 - - 2,879,280 4,619,415
Other 551,609 (313,461) 487,381 (369,034) 1,038,990 (682,495)
Total revenues 19,366,731 19,695,018 15,173,983 14,604,363 34,540,714 34,299,381
Expenses:
Governmental activities:
General government 3,666,361 2,588,199 - - 3,666,361 2,588,199
Public safety 7,679,550 6,377,771 - - 7,679,550 6,377,771
Transportation 2,137,896 2,028,970 - - 2,137,896 2,028,970
Parks and recreation 1,930,725 1,579,998 - - 1,930,725 1,579,998
Conservation and resource - -
management 27,767 14,405 - - 27,767 14,405
Interest on long-term debt 38,873 41,713 - - 38,873 41,713
Business-type activities:
Utility - - 8,150,058 7,079,792 8,150,058 7,079,792
Stormwater - - 1,500,447 1,326,231 1,500,447 1,326,231
Sanitation - - 2,303,212 2,075,805 2,303,212 2,075,805
Building code enforcement - - 576,531 509,817 576,531 509,817
Total expenses 15,481,172 12,631,056 12,530,248 10,991,645 28,011,420 23,622,701
Transfers in (out) (532,975) (496,886) 532,975 496,886 - -
Change in Net Position 3,352,584 6,567,076 3,176,710 4,109,604 6,529,294 10,676,680
Net position - Beginning 57,958,925 51,391,849 39,842,531 35,840,265 97,801,456 87,232,114
Net position - Ending $ 61,311,509 $ 57,958,925 $ 43,019,241 $ 39,949,869 $ 104,330,750 $ 97,908,794
10
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. Following is a summary of fund activity financial information for the fiscal year, rounded to the
nearest thousand dollars:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of
$15,783,222 an increase of $358,245 in comparison with the prior year.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned
fund balance was $6,757,245, which equated to 46% of total General Fund expenditures. The net result of
various revenue, expenditures and other financing sources and uses resulted in a $1,412,663 increase to the
general fund’s total fund balance or 14% during the current fiscal year. Property tax revenues increased by
$515,621 or 8% from the previous year. This was a result of an increase in the taxable values. General Fund
incoming transfers decreased by $113,704, and outgoing transfers increased from zero in 2022 to $101,250 in
2023. Overall, general fund expenditures increased by $1,191,927 or 9%. This can be attributed primarily to
increases in personnel related expenditures which account for approximately $520,000 of the increase.
The City reports two additional major funds as of September 30, 2023, the American Rescue Plan Act (ARPA)
special revenue fund and the capital projects fund. The ARPA special revenue fund was established in 2022 to
report the sources, uses and residual balances of the ARPA State and Local Fiscal Recovery Funds. Revenue
recognized in the ARPA special revenue funds was $2,879,279 and was equal to the allowable costs paid with
these funds during the year. Prior to 2022 the capital projects fund was reported as a nonmajor fund and has
been accumulating resources for capital projects to the extent that this fund met the definition of a major fund
in 2022. The capital projects fund expended $2,874,438 on capital projects in 2023 and reported total assets of
$4,666,797 on September 30, 2023, which is restricted or assigned for various construction projects.
Nonmajor governmental funds consisting of special revenue funds and the debt service fund which have a
combined fund balance of $799,379. The net decrease in fund balance, after transfers, of the nonmajor
governmental funds was $492,337. The decrease was a result of expenditures and transfers out being greater
than nonmajor governmental fund revenue and was inline with 2022 when the nonmajor governmental funds
reported a decrease in fund balance totaling $466,925.
■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. During the fiscal year the proprietary funds recorded revenues of $13,984,888,
expenses of $12,255,218, net non-operating revenue of $223,888 and net capital contributions, grants and
transfers of $1,223,152. The net position in the proprietary funds increased $3,176,710 as a result of the fiscal
year’s activities compared to $4,109,604 in the prior year. The unrestricted net position of the enterprise funds
amounted to $14,342,902 at the end of fiscal year 2023 compared to $14,745,687 at the end of the prior year.
Stormwater rates stayed constant in fiscal year 2023 as there were no rate changes. The stormwater fund’s
operating revenue was approximately 61% of the total operating expenses in 2023 compared to 70% for the
prior year.
During fiscal year 2023, the Sanitation Fund netted a decrease in net position of $302,840 due to expenses
and transfer exceed revenue which is similar to the prior year when the fund reported a decrease in net
position of $349,847.
11
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
General Fund Budgetary Highlights
Net Budget
The overall net difference from the final budgeted resources (revenues and other financing sources) and adjusted
final budgeted uses (expenditures and other financing uses) was a decrease of $595,139. The actual increase in
fund balance was $1,412,663. This resulted in a $2,007,802 positive budgetary variance. The budget was amended
during the 2023 fiscal year by increasing budgeted expenditures by $445,229. The budget amendments did not
change revenue or other financing sources or uses.
Capital Assets and Debt Administration
Capital Assets―The City’s investment in capital assets, net of related depreciation, for its governmental and
business-type activities as of September 30, 2023, amounted to $82,186,706. This investment in capital assets
includes land, land improvements, land easements, buildings and infrastructure improvements, equipment, and
construction in progress.
The total change in the City’s capital assets, net of related depreciation, for the current fiscal year was an increase
of $2,728,149 or 6% for governmental activities and a increase of $1,230,023 or 4% for business-type activities.
Capital asset events during the current fiscal year included the following:
▪ Governmental Activities
Buildings reflected a net decrease of $180,612 as a result of depreciation.
Intangible Assets reflected a net decrease of $13,947 as a result of depreciation. This asset category includes
land easements and computer software.
Improvements Other Than Buildings reflected a net increase of $344,437. This represents capital asset
increase of $1,067,598 offset by depreciation of $723,161.
Equipment reflected a net decrease of $49,324. This represents capital asset increase of $591,545, offset
by depreciation of $640,869.
Construction in progress increased by $2,627,595.
■ Business-type Activities
Buildings reflected a net decrease in asset value of $4,885 from depreciation.
Improvements Other Than Buildings reflected a net decrease of $730,444. This represents capital asset
increases of $1,376,531, offset by depreciation of $2,106,975.
Equipment reflected a net decrease of $81,649. This represents capital asset increase of $199,111, offset
by depreciation of $280,760.
Construction in Progress had a net increase of $2,047,192.
12
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Continued)
Capital Assets Activity
(net of accumulated depreciation)
as of September 30,
Governmental Activities Business-type Activities Total Primary Government
2023 2022 2023 2022 2023 2022
Land $ 12,090,795 $ 12,090,795 $ 1,656,018 $ 1,656,018 $ 13,746,813 $ 13,746,813
Intangibles 56,936 70,883 212,714 212,905 269,650 283,788
Buildings 6,530,835 6,711,447 10,725 15,610 6,541,560 6,727,057
Improvements - Other 24,197,197 23,852,760 27,897,748 28,628,192 52,094,945 52,480,952
Equipment 1,008,812 1,058,136 695,060 776,709 1,703,872 1,834,845
Construction in progress 4,317,107 1,689,512 3,512,759 1,465,567 7,829,866 3,155,079
Total $ 48,201,682 $ 45,473,533 $ 33,985,024 $ 32,755,001 $ 82,186,706 $ 78,228,534
Additional information on the City’s capital assets can be found in Note 5 of the notes to the financial statements
by referencing the table of contents of this report.
Long-term Debt
At the end of the 2022 fiscal year, the City had total long-term debt outstanding of $9,579,000. The amount of
$8,484,000 represents the City’s debt related to its business type activities. This amount was comprised of debt
secured solely by specified revenue sources. A detailed listing of the City’s debt can be found in the table below.
Long-Term Debt
as of September 30,
Governmental Activities Business-type Activities Total Primary Government
2023 2022 2023 2022 2023 2022
Governmental Activities:
Capital Impvt Rev Bonds, Series 2018 1,095,000 1,175,000 - - 1,095,000 1,175,000
Business-type Activities:
Utilities System Revenue Bond, Series 2014 - - 4,175,000 5,505,000 4,175,000 5,505,000
Refunding Bank Loan, Series 2022 - - 4,309,000 4,756,000 4,309,000 4,756,000
Total $ 1,095,000 $ 1,175,000 $ 8,484,000 $ 10,261,000 $ 9,579,000 $ 11,436,000
Additional information on the City’s long-term debt can be found in Note 6 of the notes to the financial statements
by referencing the table of contents of this report.
13
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2023
(Concluded)
Revenue Highlights:
■ Total General Fund Revenues for 2023 were $995,001 (8%) higher than 2022 revenue. Increase in property
tax revenue of $515,621 is the largest contributor to this increase. Another notable increase is investment
earnings/loss that increased from a $171,235 loss in 2022 to a $263,030 gain in 2023.
■ The 2023 taxable property values were about 23% higher than the 2022 values. The City Commission voted to
reduce the millage rate to 3.1035 mills, instead of keeping the prior year rate of 3.2285. The purpose for
adopting the millage rate of 3.1035 was to offer tax relief to the citizens and maintain adequate funding for
the existing level of services at the estimated cost and continue to maintain the City’s infrastructure and
adequate reserves. The final gross taxable property value was $2,623,838,787. Ad valorem taxes of $7,224,605
represent 46% of the General Fund revenues for 2023.
■ The 2022 Intergovernmental revenues of $2,544,905 make up 18% of general fund revenues. This is a decrease
of $195,257 over 2022.
■ The City’s investment portfolio is valued at approximately $25,182,728 as of September 30, 2023. The
investments showed an increase of approximately $780,000 compared to a loss of approximately $818,000 in
the prior year.
Expenditure Highlights:
■ Total Governmental Fund Expenditures increased in current year by $2,611,412 or 16% when compared to prior
year. Capital expenditures increased from $1,469,786 (52%) in 2023 compared to 2022. This increase is due to
the City running into challenges completing, and in many instances, starting the slated projects. Personnel
related costs of the governmental funds increased by approximately $520,000 or 6% when compared to the
prior year.
Requests for Information
The financial report is designed to provide a general overview of the City’s finances for all those with an interest
in the City’s finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the City of Atlantic Beach, Finance Director, 800 Seminole
Road, Atlantic Beach, Florida 32233.
Brittany Percell
Director of Finance
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide, Fund Financial Statements
and Notes to Financial Statements
See accompanying notes.
14
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
Primary Government
Governmental Business-type 2022
Activities Activities Total Totals
ASSETS
Equity in pooled cash and investments $ 10,199,238 $ 15,911,595 $ 26,110,833 $ 22,940,515
Cash with fiscal agent - - - 1,394,133
Receivables, current:
Customer accounts, net 1,304 819,014 820,318 784,516
Intergovernmental and other 1,354,116 - 1,354,116 1,402,607
Notes and leases receivable, net 760 53,787 54,547 51,262
Inventory 94,652 49,872 144,524 136,411
Prepaid expenses 121,239 - 121,239 106,223
Internal balances 21,093 (21,093) - -
Due from fiduciary component unit - - - 255,259
Net pension assets - - - 1,946,014
Restricted assets:
Equity in pooled cash and investments 7,061,681 2,883,148 9,944,829 13,312,999
Capital assets:
Non-depreciable 16,407,902 5,168,777 21,576,679 16,901,892
Depreciable, net 31,793,780 28,816,247 60,610,027 61,326,642
Notes and leases receivable, noncurrent 1,520 877,138 878,658 932,446
TOTAL ASSETS 67,057,285 54,558,485 121,615,770 121,490,919
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 5,139,529 1,456,716 6,596,245 2,142,093
Deferred outflows - loss on refunding - 215,886 215,886 323,829
Deferred outflows related to OPEB 41,687 15,538 57,225 60,714
TOTAL DEFERRED OUTFLOWS OF RESOURCES 5,181,216 1,688,140 6,869,356 2,526,636
LIABILITIES
Accounts payable and accrued expenses 1,488,840 1,022,568 2,511,408 1,836,376
Construction costs payable 44,307 90,950 135,257 142,822
Due to other governments - 73,730 73,730 62,656
Unearned revenue 1,525,038 - 1,525,038 4,477,045
Accrued interest payable 19,436 72,956 92,392 111,829
Customer deposits 14,196 745,967 760,163 755,770
Long-term obligations:
Due within one year 267,699 1,883,463 2,151,162 2,111,593
Due in more than one year 7,110,944 8,370,813 15,481,757 11,086,564
TOTAL LIABILITIES 10,470,460 12,260,447 22,730,907 20,584,655
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 261,057 - 261,057 4,323,294
Deferred inflows related to OPEB 195,475 72,861 268,336 233,893
Deferred inflows related to leases - 894,076 894,076 966,919
Total deferred inflows of resources 456,532 966,937 1,423,469 5,524,106
NET POSITION
Net investment in capital assets 47,062,375 25,625,960 72,688,335 66,973,541
Restricted for:
General capital projects 700,811 - 700,811 371,500
Public safety 170,957 - 170,957 146,095
Road maintenance and construction 83,060 - 83,060 2,498,634
Other purposes 431,731 - 431,731 309,437
Substance use prevention and awareness 122,500 - 122,500 -
Debt service - 151,333 151,333 280,916
Renewal and replacement - 250,000 250,000 250,000
Utility rate stabilization - 400,000 400,000 400,000
Utility system improvements - 2,057,498 2,057,498 1,307,707
Building code enforcement - 191,548 191,548 217,278
Unrestricted 12,740,075 14,342,902 27,082,977 25,153,686
TOTAL NET POSITION $ 61,311,509 $ 43,019,241 $ 104,330,750 $ 97,908,794
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
Program Revenues Net (Expense) Revenue and
Operating Capital Changes in Net Position
Charges for Grant and Grant and Governmental Business-Type 2022
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Totals
PRIMARY GOVERNMENT:
Governmental activities:
General government $ 3,666,361 $ 287,166 $ 4,964 $ 3,627 $ (3,370,604) $ - $ (3,370,604) $ (1,990,674)
Public safety 7,679,550 819,720 186,780 - (6,673,050) - (6,673,050) (5,490,541)
Transportation 2,137,896 284,104 136,068 170,301 (1,547,423) - (1,547,423) (1,626,367)
Parks and recreation 1,930,725 102,322 - - (1,828,403) - (1,828,403) (1,503,985)
Conservation and resource
management 27,767 - 86,492 - 58,725 - 58,725 145,426
Interest on long-term debt 38,873 - - - (38,873) - (38,873) (41,713)
Total governmental activities 15,481,172 1,493,312 414,304 173,928 (13,399,628) - (13,399,628) (10,507,854)
Business-type activities
Utility 8,150,058 10,460,469 - 617,961 - 2,928,372 2,928,372 4,434,380
Stormwater 1,500,447 903,456 - - - (596,991) (596,991) (417,092)
Sanitation 2,303,212 2,106,488 - 72,216 - (124,508) (124,508) 408
Building code enforcement 576,531 526,012 - - - (50,519) (50,519) (35,944)
Total business-type activities 12,530,248 13,996,425 - 690,177 - 2,156,354 2,156,354 3,981,752
TOTAL PRIMARY GOVERNMENT $ 28,011,420 $ 15,489,737 $ 414,304 $ 864,105 $ (13,399,628) $ 2,156,354 $ (11,243,274) $ (6,526,102)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 7,224,605 - 7,224,605 6,708,984
Public service taxes and franchise fees 2,073,377 - 2,073,377 2,085,980
Fuel taxes levied for transportation purposes 909,382 - 909,382 890,413
Discretionary Sales Surtax 1,241,724 - 1,241,724 1,202,628
State shared revenue 2,405,210 - 2,405,210 2,377,857
Grants not restricted to specific programs 2,879,280 - 2,879,280 4,619,415
Investment earnings (loss) 367,889 412,077 779,966 (818,008)
Miscellaneous 170,123 75,304 245,427 133,859
Gain (loss) on disposal of capital assets 13,597 - 13,597 1,654
TRANSFERS (532,975) 532,975 - -
Total general revenues and transfers 16,752,212 1,020,356 17,772,568 17,202,782
CHANGE IN NET POSITION 3,352,584 3,176,710 6,529,294 10,676,680
NET POSITION, beginning of year 57,958,925 39,949,869 97,908,794 87,232,114
Restatement (Note 15) - (107,338) (107,338) -
NET POSITION, beginning of year, as restated 57,958,925 39,842,531 97,801,456 87,232,114
NET POSITION, end of year $ 61,311,509 $ 43,019,241 $ 104,330,750 $ 97,908,794
See accompanying notes.
16
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET – GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
2023
American
Rescue Plan
Act Capital Non-Major
General Special Projects Governmental 2022
ASSETS Fund Revenue Fund Fund Funds Total Totals
Equity in pooled cash and investments $ 10,199,238 $ 1,449,148 $ 4,666,797 $ 945,736 $ 17,260,919 $ 18,567,143
Receivables, net
Customer accounts, net 1,304 - - - 1,304 1,077
Intergovernmental and other 992,451 - - 361,665 1,354,116 1,402,607
Notes receivable, current 760 - - - 760 760
Inventory 94,652 - - - 94,652 86,539
Prepaid expenditures 107,590 - - 13,649 121,239 106,223
Due from other funds 495,710 - - - 495,710 1,438,661
Notes receivable, non-current 1,520 - - - 1,520 1,520
TOTAL ASSETS $ 11,893,225 $ 1,449,148 $ 4,666,797 $ 1,321,050 $ 19,330,220 $ 21,604,530
LIABILITIES
Accounts payable and accrued liabilities 624,040 - 828,090 36,710 1,488,840 1,017,764
Construction costs payable 5,436 - 31,525 7,346 44,307 73,273
Due to other funds - - - 474,617 474,617 596,956
Deposits 11,198 - - 2,998 14,196 14,515
Unearned revenue 75,890 1,449,148 - - 1,525,038 4,477,045
TOTAL LIABILITIES 716,564 1,449,148 859,615 521,671 3,546,998 6,179,553
FUND BALANCE
Nonspendable:
Inventory 94,652 - - - 94,652 86,539
Prepaids 107,590 - - 13,649 121,239 106,223
Restricted for:
Public safety - - - 170,957 170,957 146,095
Road maintenance and construction - - - 83,060 83,060 2,498,634
Capital projects - - 700,811 - 700,811 371,500
Other purposes - - - 431,731 431,731 309,437
Substance use prevention and awareness 122,500 - - - 122,500 -
Committed to:
Conservation and resource management - - - 262,215 262,215 203,490
Assigned to:
Community redevelopment 50,000 - - - 50,000 50,000
Capital projects - - 3,106,371 - 3,106,371 2,282,013
Operating reserves 3,691,854 - - - 3,691,854 4,561,860
Subsequent year budget 352,820 - - - 352,820 903,466
Unassigned 6,757,245 - - (162,233) 6,595,012 3,905,720
TOTAL FUND BALANCES 11,176,661 - 3,807,182 799,379 15,783,222 15,424,977
TOTAL LIABILITIES AND FUND BALANCES $ 11,893,225 $ 1,449,148 $ 4,666,797 $ 1,321,050 $ 19,330,220 $ 21,604,530
See accompanying notes.
17
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
Amounts reported for governmental activities in the statement of net position
are different because:
2023 2022
FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 15,783,222 $ 15,424,977
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 48,201,682 45,473,533
The net pension assets are not current financial resources and therefore are
not reported in the governmental funds. - 1,355,221
Deferred outflows of resources represent an consumption of net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. 5,181,216 1,753,220
Deferred inflows of resources represent an increase in net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. (456,532) (3,562,235)
Interest payable on long-term debt does not require current financial resources
and therefore, is not reported as a liability in governmental funds. (19,436) (20,856)
Long-term liabilities (including bonds and notes payable, compensated
absences liability, OPEB obligation, and net pension liabilities)
are not due and payable in the current period and, therefore, are not
reported in the governmental funds.
This is the amount of the long-term obligations (7,378,643) (2,464,935)
NET POSITION OF GOVERNMENTAL ACTIVITIES $ 61,311,509 $ 57,958,925
See accompanying notes.
18
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
American
Rescue Plan
Act Capital Non-major
General Special Projects Governmental 2022
Fund Revenue Fund Fund Funds Total Totals
REVENUES:
Property taxes $ 7,224,605 $ - $ - $ - $ 7,224,605 $ 6,708,984
Non-property taxes 1,308,418 - - 2,151,106 3,459,524 3,393,913
Licenses and permits 1,093,728 - - - 1,093,728 1,097,637
Intergovernmental revenue 2,544,905 2,879,279 - 170,300 5,594,484 7,470,443
Charges for services 1,059,239 - - 118,337 1,177,576 958,156
Fines and forfeitures 147,426 - - 87,128 234,554 369,346
Investment earnings (loss) 263,030 - 91,022 13,838 367,890 (370,553)
Miscellaneous revenues 176,671 - - 25,683 202,354 67,091
Total revenues 13,818,022 2,879,279 91,022 2,566,392 19,354,715 19,695,017
EXPENDITURES:
General government 3,393,168 - - 27,767 3,420,935 3,042,864
Public safety 7,304,630 - - 35,597 7,340,227 6,861,067
Transportation 1,753,398 - - - 1,753,398 1,503,867
Culture/recreation 1,529,465 - - - 1,529,465 1,491,759
Capital outlay 786,754 - 2,874,438 650,000 4,311,192 2,841,406
Debt service - - - 120,291 120,291 123,133
Total expenditures 14,767,415 - 2,874,438 833,655 18,475,508 15,864,096
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (949,393) 2,879,279 (2,783,416) 1,732,737 879,207 3,830,921
OTHER FINANCING SOURCES (USES)
Transfers in 2,451,293 - 2,221,336 221,543 4,894,172 6,727,515
Transfers (out) (101,250) (2,879,280) - (2,446,617) (5,427,147) (7,224,401)
Sale of general capital assets 12,013 - - - 12,013 -
TOTAL OTHER FINANCING SOURCES (USES) 2,362,056 (2,879,280) 2,221,336 (2,225,074) (520,962) (496,886)
NET CHANGE IN FUND BALANCE 1,412,663 (1) (562,080) (492,337) 358,245 3,334,035
FUND BALANCE, beginning of year 9,763,998 1 4,369,262 1,291,716 15,424,977 12,090,942
FUND BALANCE, end of year $ 11,176,661 $ - $ 3,807,182 $ 799,379 $ 15,783,222 $ 15,424,977
See accompanying notes.
19
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
Amounts reported for governmental activities in the statement of net activities
are different because:
2023 2022
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 358,245 $ 3,334,035
Governmental funds report capital outlay as expenditures. However,
in the statement of activities, the cost of these assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount of capital assets recorded in the current period. 4,425,192 2,878,911
This is the amount of depreciation recorded in the current period. (1,558,589) (1,603,302)
This is the book value of dispositions recorded in the current period. (138,454) (868)
Long-term obligations including bonds and notes payable, compensated absences
and other post-employment benefit obligations are reported as liabilities in the
government-wide statement of net position but are not reported as liabilities in the
governmental funds because they do not require the use of current financial resources:
This is the repayment of bond principal reported as expenditures in governmental funds. 80,000 80,000
This is the change in accrued interest payable on long-term obligations. 1,420 1,420
This is the change in accrued compensated absences during the year. (28,572) (7,455)
Other postemployment benefit (OPEB) expense is reported in the statement of activities
which differs from OPEB expenditures as report in the governmental funds:
This amount represents the change in deferred inflows related to OPEB. (26,055) (27,837)
This amount represents the change in deferred outflows related to OPEB. (2,291) (3,674)
This amount represents the change in the total OPEB liability. 21,844 7,282
Pension expense is reported in the statement of activities which differs from
pension expenditures as reported in the governmental finds:
This amount represents the change in deferred inflows related to pensions. 3,131,758 (3,168,190)
This amount represents the change in deferred outflows related to pensions. 3,430,287 (870,524)
This amount represents the change in the net pension liability(asset). (6,342,201) 5,947,278
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 3,352,584 $ 6,567,076
See accompanying notes.
20
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Totals Totals
ASSETS
Current assets:
Equity in pooled cash and investments $ 15,078,996 $ 520,357 $ - $ 312,242 $ 15,911,595 $ 14,861,302
Cash with fiscal agent - - - - - 1,394,133
Accounts receivables, net 726,446 39,553 53,015 - 819,014 783,439
Leases receivable - current 53,787 - - - 53,787 50,502
Inventory 49,872 - - - 49,872 49,872
Total current assets 15,909,101 559,910 53,015 312,242 16,834,268 17,139,248
Noncurrent assets:
Net pension asset - - - - - 590,793
Leases receivable - noncurrent 877,138 - - - 877,138 930,926
Restricted assets:
Equity in pooled cash and investments 2,883,148 - - - 2,883,148 2,825,069
Capital assets:
Non-depreciable 4,029,324 1,139,453 - - 5,168,777 3,121,585
Depreciable, net 21,555,878 7,089,437 136,132 34,800 28,816,247 29,633,416
Total noncurrent assets 29,345,488 8,228,890 136,132 34,800 37,745,310 37,101,789
Total assets 45,254,589 8,788,800 189,147 347,042 54,579,578 54,241,037
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 1,062,946 71,595 143,190 178,985 1,456,716 432,851
Deferred outflows - refunding loss 187,821 28,065 - - 215,886 323,829
Deferred outflows related to OPEB 11,249 2,077 - 2,212 15,538 16,736
Total deferred outflows of resources 1,262,016 101,737 143,190 181,197 1,688,140 773,416
Continued…
See accompanying notes.
21
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (concluded)
SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Totals Totals
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 557,467 $ 56,636 $ 389,733 $ 18,732 $ 1,022,568 $ 818,612
Construction costs payable 45,078 45,872 - - 90,950 69,549
Due to other governments 9,730 - - 64,000 73,730 62,656
Due to other funds - - 21,093 - 21,093 586,446
Compensated absences 55,913 3,350 - 9,200 68,463 61,578
Bonds and notes payable, current 1,638,200 176,800 - - 1,815,000 1,777,000
Total current liabilities 2,306,388 282,658 410,826 91,932 3,091,804 3,375,841
Noncurrent liabilities:
Liabilities payable from restricted assets:
Customer deposits 745,967 - - - 745,967 741,255
Interest payable 66,633 6,323 - - 72,956 90,973
Compensated absences 228,542 13,574 - 20,901 263,017 302,601
Other postemployment obligation payable 70,721 13,057 - 13,905 97,683 108,043
Net pension liability 978,592 65,913 131,827 164,781 1,341,113 -
Bonds and notes payable, noncurrent portion 6,303,050 365,950 - - 6,669,000 8,484,000
Total noncurrent liabilities 8,393,505 464,817 131,827 199,587 9,189,736 9,726,872
Total liabilities 10,699,893 747,475 542,653 291,519 12,281,540 13,102,713
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions - - - - - 930,479
Deferred inflows related to OPEB 52,750 9,739 - 10,372 72,861 64,473
Deferred inflows related to leases 894,076 - - - 894,076 966,919
Total deferred inflows of resources 946,826 9,739 - 10,372 966,937 1,961,871
NET POSITION
Net investment in capital assets 17,786,695 7,668,333 136,132 34,800 25,625,960 22,748,281
Restricted for:
Debt retirement 151,333 - - - 151,333 280,916
Renewal and replacement 250,000 - - - 250,000 250,000
Utility rate stabilization 400,000 - - - 400,000 400,000
Utility system improvements (expendable) 2,057,498 - - - 2,057,498 1,307,707
Building code enforcement - - - 191,548 191,548 217,278
Unrestricted 14,224,360 464,990 (346,448) - 14,342,902 14,745,687
Total net position $ 34,869,886 $ 8,133,323 $ (210,316) $ 226,348 $ 43,019,241 $ 39,949,869
See accompanying notes.
22
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Totals Total
OPERATING REVENUES:
Charges for services
Customer charges $ 10,422,663 $ 903,456 $ 2,056,806 $ 526,012 $ 13,908,937 $ 13,887,723
Franchise permits - - 647 - 647 16,500
Miscellaneous revenues 75,304 - - - 75,304 78,422
Total operating income 10,497,967 903,456 2,057,453 526,012 13,984,888 13,982,645
OPERATING EXPENSES:
Personnel services 2,217,898 350,629 57,286 355,577 2,981,390 2,333,190
Contractual services 758,088 200,669 2,081,723 87,647 3,128,127 2,356,835
Supplies 504,067 40,535 - 2,774 547,376 450,857
Repairs and maintenance 758,342 1,179 5,622 11,239 776,382 535,044
Utilities 400,159 - - - 400,159 402,707
Depreciation 1,840,502 518,923 15,451 17,935 2,392,811 2,482,375
Intergovernmental charges 1,112,776 317,767 140,921 90,518 1,661,982 1,807,939
Other expenses 309,875 44,066 2,209 10,841 366,991 307,258
Total operating expenses 7,901,707 1,473,768 2,303,212 576,531 12,255,218 10,676,205
OPERATING INCOME (LOSS) 2,596,260 (570,312) (245,759) (50,519) 1,729,670 3,306,440
NONOPERATING REVENUE (EXPENSE)
Connection charges 37,806 - - - 37,806 44,895
Franchise fees - - 49,035 - 49,035 52,241
Investment earnings (loss) 396,055 7,709 1,458 6,855 412,077 (447,456)
Interest expense (254,651) (26,679) - - (281,330) (322,465)
Other, net 6,300 - - - 6,300 7,025
Total nonoperating revenues (expense) 185,510 (18,970) 50,493 6,855 223,888 (665,760)
Continued…
See accompanying notes.
23
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Totals Total
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 2,781,770 $ (589,282) $ (195,266) $ (43,664) $ 1,953,558 $ 2,640,680
CAPITAL CONTRIBUTIONS
System development charges 168,455 - - - 168,455 931,013
Capital grants and contributions 449,506 - 72,216 - 521,722 41,025
Total capital contributions 617,961 - 72,216 - 690,177 972,038
TRANSFERS
Transfers in 1,166,664 730,012 - - 1,896,676 2,683,432
Transfers out (833,911) (350,000) (179,790) - (1,363,701) (2,186,546)
Total transfers 332,753 380,012 (179,790) - 532,975 496,886
CHANGE IN NET POSITION 3,732,484 (209,270) (302,840) (43,664) 3,176,710 4,109,604
NET POSITION, beginning of year, as previously reported 31,137,402 8,342,593 199,862 270,012 39,949,869 35,840,265
Restatement (Note 15) - - (107,338) - (107,338) -
NET POSITION, beginning of year, as restated 31,137,402 8,342,593 92,524 270,012 39,842,531 35,840,265
NET POSITION, end of year $ 34,869,886 $ 8,133,323 $ (210,316) $ 226,348 $ 43,019,241 $ 39,949,869
See accompanying notes.
24
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Total Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 10,458,258 $ 902,148 $ 2,045,267 $ 538,032 $ 13,943,705 $ 13,929,552
Payments to suppliers (3,766,164) (583,518) (2,241,967) (203,426) (6,795,075) (5,832,957)
Payments for salaries and benefits (2,206,718) (356,998) (68,649) (395,206) (3,027,571) (2,984,201)
Net cash flows from operating activities 4,485,376 (38,368) (265,349) (60,600) 4,121,059 5,112,394
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers to other funds (833,911) (350,000) (179,790) - (1,363,701) (2,186,546)
Transfers from other funds 1,166,664 730,012 - - 1,896,676 2,683,432
Cash received (paid) from/to other funds (586,446) - 21,093 - (565,353) 586,446
Connection charges received 37,806 - - - 37,806 44,895
Franchise fees received - - 49,035 - 49,035 52,241
Net cash flows from noncapital financing activities (215,887) 380,012 (109,662) - 54,463 1,180,468
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets, net of related payables (3,367,036) (20,608) (150,009) (1) (3,537,654) (1,223,486)
Principal paid on notes, bonds and lease obligations (1,604,100) (172,900) - - (1,777,000) (1,807,856)
Interest paid on borrowings and other debt costs (176,744) (14,660) - - (191,404) (231,807)
Proceeds from the sale of capital assets - - - - - 35,244
Capital contributions and impact fees received,
net of change in related receivables 617,961 - 72,216 - 690,177 1,068,611
Net cash flows from capital and related financing activities (4,529,919) (208,168) (77,793) (1) (4,815,881) (2,159,294)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on invested funds 396,055 7,709 1,458 6,855 412,077 (538,844)
Other income (57,479) - - - (57,479) 7,025
Net cash flows from investing activities 338,576 7,709 1,458 6,855 354,598 (531,819)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 78,146 141,185 (451,346) (53,746) (285,761) 3,601,749
CASH AND CASH EQUIVALENTS, beginning of year 17,883,998 379,172 451,346 365,988 19,080,504 15,478,755
CASH AND CASH EQUIVALENTS, end of year $ 17,962,144 $ 520,357 $ - $ 312,242 $ 18,794,743 $ 19,080,504
As shown in the Accompanying Financial Statements
Equity in cash and investments $ 15,078,996 $ 520,357 $ - $ 312,242 $ 15,911,595 $ 16,255,435
Restricted equity in cash and investments 2,883,148 - - - 2,883,148 2,825,069
Total cash and cash equivalents $ 17,962,144 $ 520,357 $ - $ 312,242 $ 18,794,743 $ 19,080,504
Noncash financing and investing activities:
Amortization of refunding loss $ 93,910 $ 14,033 $ - $ - $ 107,943 $ 107,944
Donated Infrastructure 63,779 - - - 63,779 -
Total noncash financing and investing activities $ 157,689 $ 14,033 $ - $ - $ 171,722 $ 107,944
Continued…
See accompanying notes.
25
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2022
Utility Stormwater Sanitation Enforcement Total Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ 2,596,260 $ (570,312) $ (245,759) $ (50,519) $ 1,729,670 $ 3,306,440
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense 1,840,502 518,923 15,451 17,935 2,392,811 2,482,375
(Increase) decrease in inventory and prepaids - - - - - 10,891
(Increase) decrease in accounts receivable (22,081) (1,308) (12,186) - (35,575) 18,999
(Increase) decrease in leases receivable 50,503 - - - 50,503 58,334
Increase (decrease) in lease related deferred inflows (72,843) - - - (72,843) (72,843)
(Increase) decrease in amounts due from other governments - - - 12,020 12,020 9,576
Increase (decrease) in accounts payable 87,819 20,698 (11,492) (407) 96,618 25,086
Increase (decrease) in compensated absences 15,443 395 - (38,807) (22,969) 36,847
Increase (decrease) in amounts due to other governments (10,676) - - - (10,676) (8,294)
Increase (decrease) in customer deposits 4,712 - - - 4,712 23,446
(Increase) decrease in OPEB related deferred outflows 860 265 - 73 1,198 2,600
Increase (decrease) in the total OPEB liability (7,454) (2,063) - (843) (10,360) (10,114)
Increase (decrease) in OPEB related deferred inflows 6,101 716 - 1,571 8,388 7,024
(Increase) decrease in pension related deferred outflows (688,548) (71,595) (143,190) (120,532) (1,023,865) 283,011
Increase (decrease) in the net pension liability 978,592 65,913 131,827 164,781 1,341,113 (1,301,422)
(Increase) decrease in the net pension asset 511,011 - - 79,782 590,793 (590,793)
Increase (decrease) in pension related deferred inflows (804,825) - - (125,654) (930,479) 921,836
Increase (decrease) in unearned revenue and other - - - - - (90,605)
Net cash flows from operating activities $ 4,485,376 $ (38,368) $ (265,349) $ (60,600) $ 4,121,059 $ 5,112,394
See accompanying notes.
26
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2022
Pension Trust
Funds
ASSETS 2023 2022
Cash and cash equivalents $ 828,906 $ 478,118
Accrued income 89,333 47,643
Investments at fair value 39,220,515 36,131,971
Total assets 40,138,754 36,657,732
LIABILITIES
Accounts payable and accrued liabilities 3,151 10,900
Due to City - 255,259
Total Liabilities 3,151 266,159
NET POSITION
Restricted for pension benefits $ 40,135,603 $ 36,391,573
See accompanying notes.
27
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
Pension Trust
Funds
2023 2022
ADDITIONS
Contributions:
City $ 1,408,617 $ 1,879,108
Plan members 291,159 259,658
State of Florida 165,133 144,821
Total contributions 1,864,909 2,283,587
Investment income 4,823,653 (6,449,213)
Less investment expenses: (142,997) (167,816)
Net investment income 4,680,656 (6,617,029)
Total additions 6,545,565 (4,333,442)
DEDUCTIONS
Administrative expenses 62,858 86,955
Payments to retirees and participants 2,738,677 2,320,129
Total deductions 2,801,535 2,407,084
CHANGE IN NET POSITION 3,744,030 (6,740,526)
NET POSITION, beginning of year 36,391,573 43,132,099
NET POSITION, end of year $ 40,135,603 $ 36,391,573
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
28
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Atlantic Beach, Florida, (the City), conform to accounting principles generally
accepted in the United States of America as applicable to governments. The following is a summary of the more
significant policies used in the preparation of these financial statements:
Reporting Entity
The City was incorporated in 1957, under a charter in accordance with the laws of the State of Florida, Florida
Statutes Section 57-1126. The City operates under a form of government, which comprises an elected City
Commission (four Commissioners and a Mayor-Commissioner) and provides, under the administration of an
appointed City Manager, the following services: public safety, public works (streets and infrastructure), recreation,
conservation and resource management, sanitation, stormwater, reuse, plann ing, zoning, water and sewer, and
general government services.
In accordance with the Codification of Governmental and Financial Reporting Standards, the financial reporting
entity consists of the primary government, organizations for which the primary government is financially
accountable, and other organizations who se exclusions would cause the reporting entity’s financial statements to
be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria for
consideration in determining financial accountability. These criteria incl ude appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that organization; or (2) the
potential for that organization to provide specific benefits to or impose specific financial burdens on the City. Other
considerations are whether the organization is legally separate, whether the City holds the corporate powers of the
organization, and whether there is fiscal dependency by the organization on the City. Based upon the application of
these criteria, the City reports the following fiduciary component units:
• General Employees’ Retirement Plan
• Police Officers’ Retirement Plan
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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 City. For the most part, the effect of inter -fund activity has
been removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent
on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.
Indirect costs are included in the program expense reported for individual functions and activities. 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 activity; and (2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or activity. 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 enterprise funds are reported as separate columns in the fund financial statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
29
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
Government-Wide Financial Statements
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 imposed by the provider have been met.
As a general rule, the effect of inter-fund activity has been eliminated from the government -wide financial
statements. The major exception to this general rule is charges between the City’s water and sewer function and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods, services, or
privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special
assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets; (2) Restricted; or (3)
Unrestricted.
Fund Financial Statements
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 sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences, other postemployment benefits, pensio n expense, and claims and
judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and permits, charges for services, 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. All other revenue items are considered to be measurable and available only when cash is
received by the City.
The City reports the following major governmental funds:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
• The American Rescue Plan Act (ARPA) Special Revenue Fund is used to account for the receipt and
expenditure of ARPA funding to support the City’s recovery from the COVID -19 pandemic.
• The Capital Projects Fund is used to account for the financial resources to be used for the acquisition or
construction of major capital facilities and improvement projects (other than those financed by proprietary
funds).
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
30
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
The City reports the following major proprietary funds:
• The Utility Fund accounts for the activities of the City’s water distribution, sewer collection and treatment
systems, and reuse system.
• The Sanitation Fund accounts for the activities of the City’s sanitation system.
• The Stormwater Fund accounts for the activities of the City’s stormwater system.
Additionally, the City reports the following fund types:
• Special Revenue Funds—The special revenue funds are used to account for the proceeds of specific revenue
sources (other than major capital projects) that are legally restricted to expenditures for specified purposes.
• Debt Service Fund – The debt service fund is used to account for the accumulation of resources for, and
payment of, general long-term debt principal, interest and related costs.
• Pension Trust Funds—These funds account for the activities of the Employees’ Retirement System, which
accumulates resources for pension benefit payments to qualified police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – non-spendable, restricted, committed, assigned, and unassigned:
• Non-Spendable Fund Balance—amounts that are not in spendable form (such as inventory) or are required
to be maintained intact.
• Restricted Fund Balance—amounts constrained to specific purposes by their providers (such as grantors,
bondholders, and higher levels of government), through constitutional provisions, or by enabling
legislation.
• Committed Fund Balance—amounts constrained to specific purposes by the City itself, using its highest
level of decision-making authority (i.e., ordinance passed by City Commission). To be reported as
committed, amounts cannot be used for any other purpose unless the City takes the same highest level
action to remove or change the constraint.
• Assigned Fund Balance—amounts the City intends to use for a specific purpose. Intent can be expressed
by the City Commission or by an official or body to which the City Commission delegates the authority.
• Unassigned Fund Balance—amounts that are available for any purpose. Positive amounts are reported
only in the General Fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
31
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (concluded)
When both restricted and unrestricted resources are available for use, it is the City’s practice to use restricted
resources first, then unrestricted resources as they are needed. When unrestricted resources (committed, assigned,
and unassigned) are available for use in any governmental fund, it is the City’s practice to use committed resources
first, then assigned, and then unassigned as needed.
The City Commission establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance.
This is typically done through adoption and amendment of the budget. A fund balance commitment is further
indicated in the budget document as a designation or commitment of the fund. Assigned fund balance is established
by City Commission through adoption or amendment of the budget as intended for specific purpose (such as the
purchase of fixed assets, construction, debt service, or for other purposes).
In the General Fund, the City strives to maintain a fund balance operating reserve of approximately 25% of the
subsequent year’s budgeted General Fund payroll and operating expenditures.
Proprietary Funds
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are
charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses.
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total appropriations
at the individual fund level.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects). The City Manager
is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that
increase the total expenditures of any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the reported budgetary data.
The budget presented in the accompanying required supplemental information is prepared in conformity with
accounting principles generally accepted in the United States of America.
Cash and Investments
Except where prohibited, cash resources of the individual funds are combined to form a pool of cash and
investments. These pooled cash, investments and related accrued investment earnings are reported in the financial
statements as “Equity in pooled cash and investments” under the City’s “pooling” concept (see Note 2). Investment
earnings and losses on the pooled cash and investments are distributed to the appropriate funds based on the
average monthly balance of investments in each fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
32
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
The proprietary funds use this pool as a demand deposit accounts, and accordingly, all amounts in the pool are
considered cash and cash equivalents for the purposes of the statement of cash flows.
Investments are valued at fair market value (see Note 2).
Receivables
Receivables are recorded at their net realizable value.
Inter-Fund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of inter -fund loans) or
“advances to/from other funds” (i.e., the non-current portion of inter-fund loans).
Inventories
Inventories consisting principally of expendable materials, supplies, and fuel are determined by physical count at the
City’s year-end on an annual basis and are valued at the lower of cost (first -in, first-out) or market. On the balance
sheet - governmental funds, the inventory balance reported is considered non-spendable fund balance, which
indicates that it does not constitute “available spendable resources” even though it is a component of net current
assets. The cost of governmental fund-type inventories is recorded as expenditure when consumed.
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to various bond indenture
agreements and City ordinances. These assets are legally restricted for specific purposes, such as debt service, new
construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City’s funds, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, drainage
improvements, sidewalks, and similar items), are reported in the applicable governmental or business -type activities
columns in the government-wide financial statements. Property, plant and equipment with initial, individual costs
that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Capital assets
are recorded at historical cost or estimated histo rical cost if purchased or constructed. Donated capital assets are
recorded at estimated acquisition value at the date of donation.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred
during the construction phase of capital assets of business-type activities is included as part of the capitalized value
of the assets constructed.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’
lives are not capitalized.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
33
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Property, plant and equipment are depreciated using the straight -line method over the following estimated useful
lives:
Assets Years
Buildings and Improvements 10-40
Improvements Other Than Buildings 10-50
Infrastructure 25-100
Machinery and Equipment 3-40
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, long -term
debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -
type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and refunding losses
are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are
expensed when incurred with the exception of bond insurance, which is amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are 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.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide and proprietary fund
financial statements.
Deferred Inflows/Outflows of Resources
Deferred inflows of resources reported on applicable governmental fund types represent revenues, which are
measurable but not available in accordance with the modified accrual basis of accounting. The deferred inflows will
be recognized as revenue in the fiscal year they are earned or become available. Deferred outflows of resources
represent consumption of net assets that is applicable to a future reporting period. Deferred outflows have a
positive effect on net position, similar to assets. Deferred inflows of resources represent the acquisition of net assets
that is applicable to a future reporting period. Deferred inflows have a negative effect on net position, similar to
liabilities.
Unamortized Refunding Loss—the difference between the net reacquisition cost of new debt and the net carrying
amount of the old debt is recorded as a deferred outflow of resources. The unamortized refunding loss is recognized
as expense over the remaining term of the new debt using the straight-line method.
Pension and OPEB Related—the difference between expected and actual experience with regard to economic or
demographic factors and changes to assumptions in the measurement of total pension and OPEB liability and the
differences between expected and actual earnings on pension plan investments, are reported as deferred inflows or
outflows of resources, to be recognized in expense in future years. Contributions made subsequent to the
measurement date, but prior to the reporting date, are reported as deferred outflows of resources.
Lease related – represents the total unrecognized revenue to be received from the City’s antenna placement leases.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements. Grant revenues are
recorded using the modified accrual basis in governmental funds and the accrual basis in the proprietary funds.
Restricted grant revenues, which are received but not expended, ar e recorded as unearned revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the Property Appraiser
and Tax Collector of the City of Jacksonville, Florida. General property taxes are recorded as received, in cash, which
approximates taxes levied less discounts for the current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the following year. Discounts
are allowed for early payment. On or prior to June 1, interest -bearing certificates are sold for all uncollected real
property taxes. Unsold certificates are held by the City of Jacksonville, Florida.
Inter-Fund Transactions
During the course of normal operations, the City has various transactions between funds to construct assets and
comply with local ordinances and other legal restrictions. These transactions are reflected as transfers. In addition,
certain transfers have been made between systems and accounts of the utility enterprise fund as required by bond
covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in total. Such information
does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting
principles. Accordingly, such information should be read in conjunction with the City’s financial statements for the
year ended September 30, 2022, from which the summarized information was derived.
Leases:
Lessee: The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-
wide financial statements when the initial value of the lease liability is deemed to be material. For the year ended
September 30, 2023, the City reports no right-to-use lease assets or lease liabilities.
At the commencement of a lease, the City 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 the City determines (1) the discount rate it uses to
discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
• The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged
by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the
discount rate for leases.
• The lease term includes the noncancellable period of the lease. Lease payments included in the
measurement of the lease liability are composed of fixed payments and purchase option price that the City
is reasonably certain to exercise.
Lease assets are reported with other capital assets and lease liabilities are reported with long‐term debt on the
statement of net position.
Lessor: The City is a lessor for several noncancellable antenna placement leases. The City recognizes a lease
receivable and a deferred inflow of resources in the business-type activities and the enterprise fund financial
statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
35
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
At the commencement of a lease, the City 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 as 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 as revenu e over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the
expected lease receipts to present value, (2) lease term, and (3) lease receipts.
• The City uses the stated interest rate in the lease agreement if available and if not, utilizes a high-quality
municipal bond rate based on the S&P Municipal Bond 20 Year High Grade Rate Index as published by S&P
Dow Jones Indices nearest to the date of lease commencement.
• 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 lessee.
The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure
the lease asset, receivable, liability and/or deferred inflows of resources if certain changes occur that are expected
to significantly affect the amount of the lease liability.
Implementation of New GASB Pronouncements
During the fiscal year ended September 30, 2023, the City implemented the provisions of GASB Statement No. 96 –
Subscription-Based Information Technology Arrangement. The objective of this Statement is to better meet the
information needs of financial statement users by establishing uniform accounting and financial reporting
requirements for subscription-based information technology arrangements (SBITAs), improving the comparability of
financial statements among governments that have entered into SBITAs and to enhance the understandability,
reliability, relevance and consistency of information about SBITAs. Under this Statement, a government generally
should recognize a subscription liability and an intangible right -to-use subscription asset. Due to the immaterial
nature of the City’s SBITAs, adoption of the new guidance had no effect on the financial statements.
Future GASB Pronouncement Implementations
The City is currently evaluating the effects that the following GASB Statements, which will be implemented in future
financial statements, will have on its financial statements for subsequent fiscal years:
• Statement No. 100, “Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62.”
The primary objective of this Statement is to enhance accounting and financial reporting requirements for
accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and
comparable information for making decisions or assessing accountability. This sta tement is effective for
accounting changes and error corrections made in fiscal years beginning after June 15, 2023.
• Statement No. 101, “Compensated Absences.”
The objective of this Statement is to better meet the information needs of financial statement users by updating
the recognition and measurement guidance for compensated absences. That objective is achieved by aligning
the recognition and measurement guidance under a unified model and by amending certain previously required
disclosures. This statement is effective for the 2025 fiscal year and will be evaluated in the future closer to the
implementation period.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
36
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
• Statement No. 102, “Certain Risk Disclosures.”
The objective of this Statement is to provide users of government financial statements with essential
information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.
This statement is effective for the 2025 fiscal year and will result in additional financial statement disclosures.
• Statement No. 103, “Financial Reporting Model Improvements.”
The objective of this Statement is to improve key components of the financial reporting model to enhance its
effectiveness in providing information that is essential for decision making and assessing a government’s
accountability. This statement is effective for the 2026 fiscal year and will be evaluated in the future closer to
the implementation period.
• Statement No. 104, “Disclosure of Certain Capital Assets.”
The objective of this Statement is to provide users of government financial statements with essential
information about certain types of capital assets. This statement is effective for the 2026 fiscal year and will
result in expanded financial statement disclosures, but the changes are not expected to be significant.
NOTE 2 – CASH AND INVESTMENTS
The City maintains a cash and investment pool that is designed for use by all funds, except for those monies which
are periodically transferred for pension investment purposes. In addition, investments are separately held and
individually accounted for where contractual arrangements and bond covenants provide for and require such
arrangements.
On September 30, 2023, the carrying amount of cash on hand and on deposit with banks, including interest -bearing
deposits was $11,701,840, and the related bank balance was $12,345,111. Monies which are placed on deposit with
financial institutions in the form of demand deposit accounts, time deposit accounts, and certificates of deposit are
defined as public deposits. All of the City’s public deposits are held in qualified public depo sitories pursuant to
Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act). Under the Act, all qualified public
depositories are required to pledge eligible collateral having a market value equal to or greater than the average
daily or monthly balance of all public deposits, times the depository’s collateral pledged level. The pledging level
may range from 25% to 125% depending upon the depository’s financial condition and establishment period. All
collateral must be deposited with an approved financial institution.
Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral
and, if necessary, assessments against other qualified public depositories of the same type as the depository in
default.
The City elected to adopt a written investment policy as authorized under Florida Statutes.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
37
NOTE 2 – CASH AND INVESTMENTS (cont…)
Under the City’s investment policies, general investments’ activities are authorized to invest in obligations of the
U.S. Treasury, demand deposits, U.S. government agency securities, certificates of deposit, U.S. government
sponsored enterprises, government and corporate fixed income mutual funds, corporate notes and bonds, and local
government investment pools. Pension trust funds can invest in the aforementioned and, additionally, authorized
investments include domestic and foreign equity securities, do mestic and foreign fixed income securities, and cash
equivalent securities.
Following are the investments, credit ratings, and maturities of the City’s governmental and business -type activities
on September 30, 2023:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Accrued interest $ 187,398 $ 187,398 $ - $ - $ - 187,398
Money market funds / cash 701,430 701,430 - - - 701,430
Corporate bonds 9,053,210 1,896,190 7,157,020 - - 9,053,210
U.S. Treasury Obligations and
Federal Agency Securities 15,214,699 1,302,195 13,912,504 - - 15,214,699
Florida PRIME 25,991 25,991 - - - 25,991
Total $ 25,182,728 $ 4,113,204 $ 21,069,524 $ - $ - $ 25,182,728
The Florida PRIME component of the cash and investments is an investment in an investment pool administered by
the State Board of Administration, under the regulatory oversight of the State of Florida. Florida PRIME meets all the
necessary criteria to report their investments at amortized cost in accordance with GASB Cod. Sec. In5. As of
September 30, 2023, there were no redemption fees, maximum transaction amounts or any other requirements
that service to limit the City’s access to one hundred percent of their account value. The fair value of the City’s
position in the pool in the same as the value of the pool shares.
The City’s fixed income investment balances as of on September 30, 2023, are comprised of the following items:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 0.38%
Corporate Bonds Aa2 0.75%
Corporate Bonds Aa3 0.52%
Corporate Bonds A1 5.71%
Corporate Bonds A2 4.31%
Corporate Bonds A3 5.23%
Corporate Bonds Baa1 5.67%
Corporate Bonds Baa2 6.33%
Corporate Bonds Baa3 0.39%
Corporate Bonds Not Rated 7.99%
U.S. Treasury Obligations and Federal Agency Securities Aaa 57.08%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 5.64%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
38
NOTE 2 – CASH AND INVESTMENTS (cont…)
Listed below are the investments, credit ratings and maturities in the City’s pension trust funds on September 30,
2023:
General Employees’ Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 254,298 $ 254,298 $ - $ - $ - $ 254,298
Corporate bonds 2,217,186 37,102 1,841,633 338,451 - 2,217,186
U.S. Treasury Obligations and
Federal Agency Securities 3,777,607 155,118 2,468,281 519,860 634,348 3,777,607
Total $ 6,249,091 $ 446,518 $ 4,309,914 $ 858,311 $ 634,348 $ 6,249,091
Police Officers Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 198,038 $ 198,038 $ - $ - $ - $ 198,038
Corporate bonds 1,351,046 21,480 1,043,102 259,900 26,564 1,351,046
U.S. Treasury Obligations and
Federal Agency Securities 2,446,132 82,309 1,567,353 434,134 362,336 2,446,132
Total $ 3,995,216 $ 301,827 $ 2,610,455 $ 694,034 $ 388,900 $ 3,995,216
The City’s pension trust fund fixed income investment balances as of September 30, 2023, are comprised of the
following items:
General Employees’ Pension Plan:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 0.00%
Corporate Bonds Aa2 0.00%
Corporate Bonds A1 11.12%
Corporate Bonds A2 3.27%
Corporate Bonds A3 5.94%
Corporate Bonds Baa1 2.13%
Corporate Bonds Baa2 12.83%
Corporate Bonds Baa3 1.70%
U.S. Treasury Obligations and Federal Agency Securities AAA 51.27%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 11.74%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
39
NOTE 2 – CASH AND INVESTMENTS (cont…)
Police Officers Pension Plan:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 0.00%
Corporate Bonds Aa2 0.00%
Corporate Bonds A1 9.49%
Corporate Bonds A2 3.19%
Corporate Bonds A3 5.73%
Corporate Bonds Baa1 2.12%
Corporate Bonds Baa2 11.99%
Corporate Bonds Baa3 3.06%
U.S. Treasury Obligations and Federal Agency Securities Aaa 54.98%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 9.44%
100.00%
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Fund’s and the City’s General
Employees’ Retirement System Trust Fund’s investment policies to, at a minimum, limit 80% of the total
fixed income portfolio to those that are rated investment grade of higher. The Police Officers’ Retirement
System Trust Fund’s investment policy defines investment grade as “BBB”, Baa”, or their equivalent.
Also, no more than 10% (at cost) of the fixed income portfolio total value can be invested in the securities
of any single corporate issuer. The maximum allocation to International Equities is 25%.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of the failure
of the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the exposure
to custodial credit risk for deposits or investments, other than the following provision for deposits: The
Finance Director may execute a third-party Custodial Safekeeping Agreement with a commercial bank
having trust powers or a trust company which is chartered by the United States government or the State
of Florida. All securities purchased and/or collateral obtained by the City shall be properly designated as
an asset of the City and held in safekeeping by the trust department or trust company, and no withdrawal
of such securities, in whole or in part, shall be made from safekeeping, except by an authorized City staff
member. The third-party Custodial Safekeeping Agreement shall include letters of authority from the City
with details as to responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure or other
unforeseen mishaps, including liability of each party.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
40
NOTE 2 – CASH AND INVESTMENTS (concluded)
Fair Value Measurements
The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels:
• Level 1 Inputs―are quoted prices (unadjusted) for identical assets or liabilities in active markets that a
government can access at the measurement date.
• Level 2 Inputs―are inputs other than quoted prices included within Level 1 that are observable for an asset
or liability, either directly or indirectly.
• Level 3 Inputs―are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price
for an identical asset or liability is not observable, a government should measure fair value using another valuation
technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The City’s investments are measured at fair value on a recurring basis. Fair value measurements are categorized
based on the valuation inputs used to measure an asset’s fair value in the hierarchy described above.
The fair value measurements for the City’s investments are as follows on September 30, 2023:
Fair Value Measurements Using
Quoted Prices in Significant Other Significant
Active Markets for Observable Unobservable
Identical Assets Inputs Inputs
Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3)
City Investments:
Accrued interest $ 187,398 $ 187,398 $ - $ -
Money Markets 727,421 727,421 - -
Corporate Bonds 9,053,150 - 9,053,150 -
U.S. Treasury Obligations and
Federal Agency Securities 15,214,699 - 15,214,699 -
Subtotal - City Investments 25,182,668 914,819 24,267,849 -
General Employees' Pension Plan:
Money Markets 254,298 254,298 - -
Corporate Bonds 2,217,186 - 2,217,186 -
U.S. Treasury Obligations and
Federal Agency Securities 3,777,607 - 3,777,607 -
Mutual Funds - Equities 2,886,596 2,886,596 - -
ETFs 3,617,546 3,617,546 - -
Equities 10,937,655 10,937,655 - -
Subtotal - General Employees' Pension Plan 23,690,888 17,696,095 5,994,793 -
Police Officers' Pension Plan:
Money Markets 198,038 198,038 - -
Corporate Bonds 1,351,046 - 1,351,046 -
U.S. Treasury Obligations and
Federal Agency Securities 2,446,132 - 2,446,132 -
Mutual Funds - Equities 2,058,065 2,058,065 - -
ETFs 2,304,788 2,304,788 - -
Equities 7,081,199 7,081,199 - -
ICMA Self Directed 90,359 90,359 - -
Subtotal - Police Officers' Pension Plan 15,529,627 11,732,449 3,797,178 -
Total Investments Measured at Fair Value $ 64,403,183 $ 30,343,363 $ 34,059,820 $ -
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
41
NOTE 3 – RECEIVABLES
Receivables, net of the allowance for doubtful accounts on September 30, 2023, consist of the following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General Fund $ 1,304 $ - $ 1,304
Utility Fund 1,263,746 (537,300) 726,446
Stormwater Fund 75,481 (35,928) 39,553
Sanitation Fund 153,125 (100,110) 53,015
Total $ 1,493,656 $ (673,338) $ 820,318
Included in accounts receivable are $310,934 of water and sewer revenues earned, but not billed as of September
30, 2023.
NOTE 4 – LEASES
Lease Receivable – The City has one reportable lease receivable related to antenna lease agreements
originally executed in 2005. The lease term includes an initial 5-year period with the option of 5 separate
5-year renewal periods thereafter. The lease term ends in 2035 and the lease payments are increased by
3.3% each year.
The City also entered into a new antenna placement lease during 2022 whose lease term includes an initial
term of 5 years with the option of 4 5-year renewal periods thereafter ending in 2046. The lease payments
are increased by 2% each year.
The City recognized $72,843 in lease revenue and $23,648 of interest revenue during the fiscal year
related to these two leases. On September 30, 2023, the City’s receivable for lease payments was
$930,925 and reported in the City’s utility enterprise fund. Also, the City has a deferred inflow of resources
associated with this lease that will be recognized as revenue over the lease term. On September 30, 2023,
the balance of the deferred inflow of resources was $894,076.
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
42
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2023, is as follows:
Balance Balance
October 1, September 30,
2022 Transfers Increases Decreases 2023
Governmental Activities:
Capital assets, not being depreciated:
Land $ 12,090,795 $ - $ - $ - $ 12,090,795
Construction in process 1,689,512 (442,563) 3,207,744 (137,586) 4,317,107
Total capital assets, not being depreciated 13,780,307 (442,563) 3,207,744 (137,586) 16,407,902
Capital assets, being depreciated:
Buildings 9,810,880 - - - 9,810,880
Intangible assets 525,445 - - - 525,445
Improvements other than buildings 43,697,295 442,563 625,903 (868) 44,764,893
Machinery and equipment 7,282,739 - 591,545 (205,860) 7,668,424
Total capital assets, being depreciated 61,316,359 442,563 1,217,448 (206,728) 62,769,642
Less accumulated depreciation for:
Buildings (3,099,433) - (180,612) - (3,280,045)
Intangible assets (454,562) - (13,947) - (468,509)
Improvements other than buildings (19,844,535) - (723,161) - (20,567,696)
Machinery and equipment (6,224,603) - (640,869) 205,860 (6,659,612)
Total accumulated depreciation (29,623,133) - (1,558,589) 205,860 (30,975,862)
Total capital assets being depreciated, net 31,693,226 442,563 (341,141) (868) 31,793,780
Governmental activities capital assets, net $ 45,473,533 $ - $ 2,866,603 $ (138,454) $ 48,201,682
Business-type activities:
Capital assets, not being depreciated:
Land $ 1,656,018 $ - $ - $ - $ 1,656,018
Construction-in-progress 1,465,567 (421,732) 2,468,924 - 3,512,759
Total capital assets, not being depreciated 3,121,585 (421,732) 2,468,924 - 5,168,777
Capital assets, being depreciated:
Buildings 4,354,563 - - - 4,354,563
Intangible assets 244,709 - - - 244,709
Improvements other than buildings 87,536,777 421,732 954,799 - 88,913,308
Machinery and equipment 4,116,732 - 199,111 (27,850) 4,287,993
Total capital assets, being depreciated 96,252,781 421,732 1,153,910 (27,850) 97,800,573
Less accumulated depreciation for:
Buildings (4,338,953) - (4,885) - (4,343,838)
Intangible assets (31,804) - (191) - (31,995)
Improvements other than buildings (58,908,585) - (2,106,975) - (61,015,560)
Machinery and equipment (3,340,023) - (280,760) 27,850 (3,592,933)
Total accumulated depreciation (66,619,365) - (2,392,811) 27,850 (68,984,326)
Total capital assets being depreciated, net 29,633,416 421,732 (1,238,901) - 28,816,247
Business-type activities capital assets, net $ 32,755,001 $ - $ 1,230,023 $ - $ 33,985,024
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
43
NOTE 5 – CAPITAL ASSETS (concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government $ 187,607
Public safety 461,739
Transportation 574,123
Parks and recreation 335,120
Total depreciation expense - governmental activities $ 1,558,589
Business-type Activities:
Utility $ 1,840,502
Stormwater 518,923
Sanitation 15,451
Building Code Enforcement 17,935
Total depreciation expense - business-type activities $ 2,392,811
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
44
NOTE 6 – LONG-TERM OBLIGATIONS
The following is a summary of the changes in long-term obligations of the City for the year ended September 30, 2023:
Balance Balance Amounts
October 1, September 30, Due within
2022 Increases Decreases 2023 One Year
Governmental Activities:
Long-term debt:
Capital Improvement Revenue Bond, Series 2018 $ 1,175,000 $ - $ (80,000) $ 1,095,000 $ 85,000
Total long-term debt 1,175,000 - (80,000) 1,095,000 85,000
Other liabilities:
OPEB obligation 283,916 - (21,844) 262,072 -
Net pension liability - 4,986,980 - 4,986,980 -
Compensated absences 1,006,019 28,572 - 1,034,591 182,699
Total other liabilities 1,289,935 5,015,552 (21,844) 6,283,643 182,699
Total long-term obligations $ 2,464,935 $ 5,015,552 $ (101,844) 7,378,643 $ 267,699
Less amounts due in one year (267,699)
Total noncurrent obligations due in more than one year $ 7,110,944
Business-type Activities:
Long-term debt:
Utility System Revenue Refunding Bond, Series 2014 $ 5,505,000 $ - $ (1,330,000) $ 4,175,000 $ 1,360,000
Refunding Bank Loan Series 2021 4,756,000 - (447,000) 4,309,000 455,000
Total bonds and notes payable 10,261,000 - (1,777,000) 8,484,000 1,815,000
Other liabilities:
OPEB obligation 108,043 - (10,360) 97,683 -
Net pension liability - 1,341,113 - 1,341,113 -
Compensated absences 364,179 - (32,699) 331,480 68,463
Total other liabilities 472,222 1,341,113 (43,059) 1,770,276 68,463
Total long-term liabilities $ 10,733,222 $ 1,341,113 $ (1,820,059) 10,254,276 $ 1,883,463
Less amounts due in one year (1,883,463)
Net long-term liabilities in excess of one year $ 8,370,813
Notes to the Long-Term Obligations Table:
Long term liabilities, including accumulated compensated absences, OPEB liability and the City’s net pension
liabilities, are typically liquidated by the individual fund to which the liability is directly associated.
All of the City’s long-term debt arose through direct borrowings or direct placements.
Governmental Activities:
• Capital Improvement Revenue Bond, Series 2019 – Payable in annual installment of principal and
semiannual installments of interest through October 1, 2033, bearing coupon rates of 3.550%, secured
solely by a pledge of non-advalorem revenues.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
45
NOTE 6 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
Business-type Activities
• Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual Installments of Principal and
Semiannual Installments of Interest Through October 1, 2025, Bearing Coupon Rates of 2.330%, Secured
Solely by a Pledge of and Lien on Net Water and Sewer System Revenues and Certain Other Revenues as
Defined in the Bond Ordinance.
• Refunding Bank Loan Series 2021 was issued on May 17, 2021 in the amount of $5,193,000 to refund the
FDEP loans #DW160710 and #WW160700. The FDEP loans were originally used for water and wastewater
system improvements. The Refunding Bank Loan Series 2021 is payable in semiannual installments of
principal and interest through May 15, 2032 with an effective interest rate of 1.69% and is secured solely
by a pledge of net water and sewer system revenues, after payment of all yearly payment obligations on
account of the senior revenue obligations, as defined in the loan agreement.
Notes to the Long-Term Obligations Table:
The annual requirements to amortize all revenue bonds and loans payable outstanding on September 30, 202 3, are
as follows:
Governmental Activities Business-type Activities
Fiscal Year Ending Principal Interest Principal Interest
2024 $ 85,000 $ 37,364 $ 1,815,000 $ 152,464
2025 85,000 34,346 1,851,000 112,696
2026 90,000 31,240 1,895,000 72,056
2027 90,000 28,045 478,000 47,463
2028 95,000 24,761 487,000 39,329
2029-2033 530,000 69,758 1,958,000 73,756
2034-2038 120,000 2,130 - -
Total $ 1,095,000 $ 227,644 $ 8,484,000 $ 497,764
Interest and amortization expenses incurred during the year ended September 30, 2023, amounted to $361,338.
The City is also required to maintain certain debt service coverage ratios in accordance with bond resolutions. As of
September 30, 2023, and during the year then ended, the City was in compliance with those ratios.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
46
NOTE 6 – LONG-TERM OBLIGATIONS (concluded)
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, 202 3. The
following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the
amounts of such revenues received in the current year, the current year principal and interest paid on the debt, the
approximate percentage of each revenue which is pledged to meet the debt obligation, and the date through which
the revenue is pledged under the debt agreement, and the tota l pledged future revenues for each debt, which is the
amount of the remaining principal and interest on the bonds and notes at September 30, 202 3:
Percentage
of Net
Revenue Total Principal Current Year Revenues to
Pledged and Interest Principal and Current Year Principal and
Description Pledged Revenue Through Outstanding Interest Paid Net Revenue Interest Paid
2014 - Utility System
Refunding Bonds Utility Net Revenues 2026 $ 4,322,431 $ 1,442,771 $ 4,870,623
Refunding Bank Loan,
Series 2021 Utility Net Revenues 2032 4,659,333 525,633 4,870,623
Total $ 8,981,764 $ 1,968,404 $ 4,870,623 247.44%
Remedies in the Event of Default
The City’s debt obligations all allow for the obligors to take whatever legal actions necessary to collect the amounts
due in the event of default.
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial assistance to private sector
entities for the acquisition and construction of health care facilities deemed to be in the public interest. These bonds
are secured by the financed property and are payable solely from the payments received on the underlying mortgage
loans.
There is no obligation on the part of the City or any political subdivision for repayment of the bonds. Accordingly,
the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2023, there
are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount
payable of $118,380,000
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
47
NOTE 7 – DEFINED BENEFIT PENSION PLANS
Plan Descriptions
The City maintains two separate single employer defined benefit pension plans, one for police officers and one for
general employees, which cover substantially all full-time City employees hired before September 1, 2008. The
general employees’ defined benefit plan is closed to new entrants. Full-time general employees hired on or after
September 1, 2008, are covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue
separate stand-alone financial statements. Combining statements are included below in NOTE 7 of the notes to
financials statements. As of, and for the year ended September 30, 2023, the two plans have the following balances
reported in the government-wide financials statements:
Net
Total pension Deferred Deferred Pension
Pension liability outflows inflows expense
Retirement Plan Liability (asset) of resources of resources (benefit)
General Employees' $ 25,540,642 $ 3,493,351 $ 3,794,473 $ - $ 800,772
Police Officers' 17,179,024 2,834,742 2,801,772 261,057 530,699
$ 42,719,666 $ 6,328,093 $ 6,596,245 $ 261,057 $ 1,331,471
Detailed disclosures for each plan follow.
General Employees’ Retirement Plan
Plan Description
The General Employees’ Retirement Plan (the Plan) provides retirement, disability, and death benefits to Plan
members and their beneficiaries. The City Commission has the authority to establish and amend the benefit
provisions of the Plan. The Plan is governed by a Retirement Plan Board appointed by the City Commission and
comprised of five members, two of which will be eligible legal residents of the City, two of which will be general
employees elected by the majority of general employees who are members of the Plan, and one of which will be
elected by the other four members. Plan membership in the General Employees’ Retirement Plan on September 30,
2022 and 2021 (latest actuarial data available), were as follows:
September 30 September 30
2022 2021
Inactive plan members or beneficiaries
currently receiving benefits 84 81
Inactive plan members entitled to but
not yet receiving benefits 6 5
Active plan members 18 22
Total 108 108
Plan Benefits
Normal retirement is available upon the attainment of age sixty and the completion of five years of credited service.
Early retirement is available with a reduced benefit upon the attainment of age fifty -five and the completion of five
years of credited service. For members hired before April 24, 2005, the normal retirement benefit shall equal 2.85%
of average final compensation for each year of credited service. For members hired on or after April 24, 2005, the
normal retirement benefit shall equal 2.50% of average final compensation for each year of credited service. The
Plan includes a deferred retirement option program (DROP) under which members eligible for normal retirement
may have their monthly pension benefit credited to an account while continu ing to be actively employed for up to
five years. As of September 30, 2023, Plan net position included $291,124 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
48
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute an actuarially determined amount of $850,266 (60% of covered payroll) for the
year ended September 30, 2023. City contributions to the Plan were $850,266 for the year ended September 30,
2023. Plan members are required to contribute 6.0% of their annual covered salary. Contribution requirements are
established by City code, which may be amended by the City Commission.
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2022, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 202 3, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Plan for the year ended September 30, 2023
(September 30, 2022 measurement date) is shown below:
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2022 $ 24,901,187 $ 26,496,836 $ (1,595,649)
Changes for the year:
Service cost 241,673 - 241,673
Interest 1,646,364 - 1,646,364
Difference between actual and
expected experience 255,984 - 255,984
Contributions - City - 1,099,884 (1,099,884)
Contributions - employee - 81,830 (81,830)
Net investment income - (4,081,483) 4,081,483
Benefit payments, including refunds
of employee contributions (1,504,566) (1,504,566) -
Administrative expense - (45,210) 45,210
Net changes 639,455 (4,449,545) 5,089,000
Reporting period ending 9/30/2023 $ 25,540,642 $ 22,047,291 $ 3,493,351
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
49
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Plan as of the September 30, 202 3 measurement date
were as follows:
Total pension liability $ 25,579,142
Plan fiduciary net position (23,871,925)
Net pension liability (asset) $ 1,707,217
Plan fiduciary net position as a
percentage of the total pension liability 93%
For the year ended September 30, 2023, the City recognized a total pension expense of $800,772. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 73,138 $ -
Change in assumptions - -
Difference between projected and
actual earnings on Plan investments 2,871,069 -
City contributions subsequent to the
measurement date 850,266 -
Total $ 3,794,473 $ -
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability (or increase in the net pension asset) in the fiscal year ended September 30, 2024. Other amounts reported
as deferred outflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2024 $ 751,749
2025 535,191
2026 485,746
2027 1,171,521
$ 2,944,207
Plan Investments
The Retirement Plan Board is responsible for establishing and amending the Plan’s investment policies. The Plan’s
current investment policy gives the Board discretion to allocate assets with assistance of the Plan’s investment
consultant. No formal targets are stated in the investment policy although the maximum allocation to international
equities is 25%. The money-weighted rate of return on Plan investments, net of investment related expenses, was
14.05% and -16.01% for the years ended September 30, 2023 and 2022, respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
50
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 20 21, rolled forward
to the measurement date of September 30, 2022, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 9.50% (including 2.50% price inflation).
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: Pub-2010 Headcount-Weighted Mortality Tables are used with mortality
improvements projected for nondisabled lives to all future years using Scale
MP-2018.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
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 of 0.50% and inflation of 2.50%) 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. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
Large Cap Equity 33% 5.82%
Small/Mid Cap Equity 10% 5.54%
International Equities 15% 4.51%
Fixed Income (70% core/30% Short-term) 30% 1.25%
Alternatives (50% REITS/50% MLPS) 6% 4.19%
Cash and Equivalents 6% 0.74%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the 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 Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
51
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the City's net pension liability
(asset) would be if it were calculated using a discount rate that is 1 -percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2022 and the financial reporting date
of September 30, 2023.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2022 6.75% $ 6,031,093 $ 3,493,351 $ 1,307,277
9/30/2023 6.75% $ 4,225,050 $ 1,707,217 $ (476,902)
Police Officers’ Retirement Plan
Plan Description
The Police Officers’ Retirement Plan (the Police Plan) provides retirement, disability, and death benefits to Police
Plan members and their beneficiaries. The Police Plan is governed by the Policemen’s Pension Board of Trustees,
although the City Commission retains the authority to establish and amend the benefit provisions of the Police Plan.
The Policemen’s Pension Board of Trustees is appointed by the City Commission and comprised of five members,
two of which will be eligible legal residents of the City, two of which will be police officers elected by the majority of
police officers who are members of the Police Plan, and one of which will be elected by the other four trustees.
Membership in the Police Officers’ Retirement Plan as of the September 30, 2022 and 2021 measurement dates
(latest actuarial data available), were as follows:
September 30 September 30
2022 2021
Inactive plan members or beneficiaries
currently receiving benefits 21 22
Inactive plan members entitled to but
not yet receiving benefits 4 4
Active plan members 26 27
Total 51 53
Plan Benefits
For members hired before January 1, 2013, normal retirement is available upon the attainment of age fifty and the
completion of twenty years of credited service, the attainment of age fifty -five and the completion of ten years of
credited service, the completion of twenty-five years of credited service regardless of age, or the attainment of age
sixty and the completion of five years of credited service. For members hired on or after January 1, 2013, normal
retirement is available upon the attainment of age fifty -five and the completion of ten years of credited service or
the attainment of age fifty-two and the completion of twenty-five years of credited service. Early retirement is
available with a reduced benefit upon the attainment of age fifty and the completion of ten years of credited service.
For members hired before January 1, 2013, the normal retirement benefit shall equal 3.00% of average final
compensation for each year of credited service. For members hired on or after January 1, 2013, the normal
retirement benefit shall equal 2.00% of average final compensation for each year of credited service. The Police Plan
includes a DROP under which members eligible for normal retirement may have their monthly pension benefit
credited to an account while continuing to be actively employed for up to five years. As of September 30, 2023,
Police Plan net position included $91,274 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
52
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute an actuarially determined amount of $483,076 (22% of covered payroll) for the
year ended September 30, 2023. The City may use State contributions to offset this required contribution. City and
State contributions to the Police Plan were $723,484 for the year ended September 30, 2023. Police Plan members
are required to contribute 8.0% of their annual covered salary. Per City Code, the City Commission may amend
established contribution requirements.
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2022, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 202 3, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Police Plan for the year ended September 30,
2023 (September 30, 2022 measurement date) is shown below:
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2022 $ 16,284,898 $ 16,635,263 $ (350,365)
Changes for the year:
Service cost 414,067 - 414,067
Interest 1,099,655 - 1,099,655
Difference between actual and
expected experience 195,967 - 195,967
Contributions - City - 779,224 (779,224)
Contributions - State - 144,821 (144,821)
Contributions - employee - 177,828 (177,828)
Net investment income - (2,535,548) 2,535,548
Benefit payments, including refunds
of employee contributions (815,563) (815,563) -
Administrative expense - (41,743) 41,743
Net changes 894,126 (2,290,981) 3,185,107
Reporting period ending 9/30/2023 $ 17,179,024 $ 14,344,282 $ 2,834,742
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
53
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Police Plan as of the September 30, 202 3 measurement
date were as follows:
Total pension liability $ 17,916,032
Plan fiduciary net position (16,263,678)
Net pension liability (asset) $ 1,652,354
Plan fiduciary net position as a
percentage of the total pension liability 91%
For the year ended September 30, 2023, the City recognized total pension expense of $530,699. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 163,299 $ 56,061
Change in assumptions - 204,996
Net difference between projected and
actual earnings on Plan investments 1,914,989 -
City contributions subsequent to the
measurement date 723,484 -
Total $ 2,801,772 $ 261,057
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability (or increase in the net pension asset) in the fiscal year ending September 30, 2024. Other amounts reported
as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2024 $ 366,713
2025 348,940
2026 368,239
2027 733,339
$ 1,817,231
Plan Investments
The Policemen’s Pension Board of Trustees is responsible for establishing and amending the Police Plan’s investment
policies. The Police Plan’s current investment policy gives the Board discretion to allocate assets with assistance of
the Police Plan’s investment consultant. No formal targets are stated in the investment policy although the
maximum allocation to international equities is 25%. The money -weighted rate of return on Plan investments, net
of investment related expenses, was 6.13% and -14.98% for the years ended September 30, 2023 and 2022,
respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
54
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 2021, rolled forward
to September 30, 2022, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 18.50% (including 2.50% price inflation.
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: Pub-2010 Headcount-Weighted Mortality Tables are used with mortality
improvements projected for nondisabled lives to all future years using Scale
MP-2018.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
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 of 0.50% and inflation of 2.50%) 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. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
Large Cap Equity 33% 5.82%
Small/Mid Cap Equity 10% 5.54%
International Equities 15% 4.51%
Fixed Income (70% core/30% Short-term) 30% 1.25%
Alternatives (50% REITS/50% MLPS) 6% 4.19%
Cash and Equivalents 6% 0.74%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the 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 Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
55
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the City's net pension liability
(asset) would be if it were calculated using a discount rate that is 1 -percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2021 and the financial reporting date
of September 30, 2022.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2022 6.75% $ 4,809,571 $ 2,834,742 $ 1,174,390
9/30/2023 6.75% $ 3,564,072 $ 1,652,354 $ 43,465
The Statements of Fiduciary Net Position for the City’s pension trust funds for the year ended September 30, 202 3
were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2023 2022
Plan Plan Totals Totals
ASSETS
Cash and cash equivalents $ 126,485 $ 702,421 $ 828,906 $ 478,118
Due from other governments - - - -
Accrued income 54,552 34,781 89,333 47,643
Investments at fair value 23,690,888 15,529,627 39,220,515 36,131,971
Total assets 23,871,925 16,266,829 40,138,754 36,657,732
LIABILITIES
Accounts payable and accrued liabilities - 3,151 3,151 10,900
Due to City - - - 255,259
Total Liabilities - 3,151 3,151 266,159
NET POSITION
Restricted for pension benefits $ 23,871,925 $ 16,263,678 $ 40,135,603 $ 36,391,573
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
56
NOTE 7 – DEFINED BENEFIT PENSION PLANS (concluded)
The Statements of Changes in Fiduciary Net Position for the City’s pension trust funds for the year ended September
30, 2023 were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2023 2022
Plan Plan Totals Totals
ADDITIONS
Contributions:
City $ 850,266 $ 558,351 $ 1,408,617 $ 1,879,108
Plan members 75,784 215,375 291,159 259,658
State of Florida - 165,133 165,133 144,821
Total contributions 926,050 938,859 1,864,909 2,283,587
Investment income 3,027,121 1,796,532 4,823,653 (6,449,213)
Less investment expenses: (89,153) (53,844) (142,997) (167,816)
Net investment income 2,937,968 1,742,688 4,680,656 (6,617,029)
Total additions 3,864,018 2,681,547 6,545,565 (4,333,442)
DEDUCTIONS
Administrative expenses 36,135 26,723 62,858 86,955
Payments to retirees and participants 2,003,249 735,428 2,738,677 2,320,129
Total deductions 2,039,384 762,151 2,801,535 2,407,084
CHANGE IN NET POSITION 1,824,634 1,919,396 3,744,030 (6,740,526)
NET POSITION, beginning of year 22,047,291 14,344,282 36,391,573 43,132,099
NET POSITION, end of year $ 23,871,925 $ 16,263,678 $ 40,135,603 $ 36,391,573
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
57
NOTE 8 – DEFINED CONTRIBUTION PLAN
The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to new entrants and
creating the City of Atlantic Beach Defined Contribution Plan. The City’s 457 defined contribution plan is
administered through ICMA, which covers all eligible employees employed with the City on or after September 1,
2008, who are not covered by the City’s Police Officers’ defined benefit plan. Under the 457 Plan, the City
contributes an employer matching contribution of up to 6% of earnings during the first ten years of service.
Following ten years of service, the City contributes an additional fixed contribution of 4% of earnings for a total of
10%. Employees have the option to voluntarily contribute to the 457 Plan. Employer matching contributions from
the City were $182,498 and $160,110 for the years ended September 30, 2023 and 2022, respectively. Under the
457 Plan, an employee is considered fully vested after 5 years of completed service.
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The City of Atlantic Beach administers a single employer defined benefit health care plan (the Plan) that provides
medical insurance benefits to its employees and their eligible dependents. In accordance with Section 112.0801 of
the Florida Statutes, because the City provides a medical plan to active employees of the City and their eligible
dependents, the City is also required to provide retirees with the opportunity to participate in this Plan. Benefit
provisions for the Plan are established by the City Commission and may be amended by the City Commission. The
City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of September 30, 2021, the valuation date of the latest
actuarial valuation:
September 30,
2021
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 103
Total 104
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission. Eligible retirees and their
covered dependents receiving benefits contribute 100% of the blended (active and retiree combined) equivalent
premium rates. While the City does not directly contribute towards the costs of retiree premiums via an explicit
subsidy, the ability of retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to be another
postemployment benefit (OPEB) obligation of the City.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
58
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Actuarial Methods and Assumptions
For the September 30, 2021 actuarial valuation (used for the September 30, 2022 measurement date), the Entry Age
Normal Actuarial Cost Method was used. This method determines a service cost rate as a fixed percentage of
compensation for each active participant. The current years’ service cost is the participant’s compensation
multiplied by the service cost rate. Under this method, service cost for each individual participant, payable from
date of employment to date of retirement, is sufficient to pay for the participant’s benefit at retirement.
Other actuarial assumptions are as follows:
Discount Rate: 4.40%
Investment Rate of Return: 0.0%
Salary Increases: Rates used in the October 1, 2021 actuarial valuation of the City’s pension plans.
Healthcare Cost Trend: Based on Getzen Model, with trend of 8.00% for 2022, 5.75% for 2023 and then
gradually decreasing to an ultimate trend rate of 3.75%.
Mortality: Mortality tables used for Regular and Special Risk Class members in the July 1, 2020 actuarial
valuation of the Florida Retirement System. These rates were taken from the adjusted Pub -2010 mortality
tables published by the Society of Actuaries with gener ational improvements using scale MP-2018. The
adjustments to the reference tables are based on the results of a statewide experience study covering the
period 2013 through 2018.
Discount Rate
The discount rate used to measure the total OPEB liability was 4.40% as of September 30, 2022 (measurement date),
which is equal to the single rate of return developed pursuant to GASB 75. The discount rate used to determine the
liabilities under GASB 75 depends on the City’s funding policy. Since the City does not prefund benefits, the discount
rate required to be used is based on the Fidelity 20-Year Municipal General Obligation AA Index. This index includes
only federally tax-exempt municipal bonds and the yield curves are constructed using option adjusted analytics of a
diverse population of over 10,000 tax exempt securities.
Annual OPEB Cost and Net OPEB Obligation
The City’s total OPEB liability was measured as of September 30, 2022 and was determined by an actuarial valuation
as of September 30, 2021. Changes in the Total OPEB liability were as follows:
Total
OPEB
Liability
Reporting period ending September 30, 2022 $ 391,959
Changes for the year:
Service cost 55,813
Interest 9,684
Changes of assumptions (86,543)
Benefit payments (11,158)
Net changes (32,204)
Reporting period ending September 30, 2023 $ 359,755
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
59
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate.
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current
discount rate:
1% Decrease Rate Assumption 1% Increase
Total OPEB liability $ 395,510 $ 359,755 $ 328,404
Sensitivity of the Total OPEB Liability to Changes in Healthcare Cost Trend Rates.
The following presents the total OPEB liability for the City, as well as what the City’s total OPEB liability would be if
it were calculated using healthcare trend rates that are 1-percentage-point lower or 1-percentage-point higher than
the current healthcare cost trend rates:
Current Healthcare
Cost Trend Rate
1% Decrease Assumption 1% Increase
Total OPEB liability $ 310,487 $ 359,755 $ 420,463
OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2023, the City recognized OPEB expense of $22,928. On September 30, 2023, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following
sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of assumptions or
other inputs $ 40,025 $ 148,639
Differences between expected and
actual experience - 119,697
City contributions subsequent to the
measurement date 17,200 -
Total $ 57,225 $ 268,336
Of the total amount reported as deferred outflows of resources related to OPEB, $11,158 resulting from estimated
benefits paid subsequent to the measurement date and before the end of the fiscal year will be included as a
reduction of the total OPEB liability in the year ended September 30, 202 3. Other amounts reported as deferred
inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended September 30, Amount
2024 $ (42,569)
2025 (42,566)
2026 (39,908)
2027 (37,631)
2028 (25,390)
Thereafter (40,247)
Total $ (228,311)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
60
NOTE 10 – INTERFUND ACCOUNTS
Individual fund inter-fund receivables and payables on September 30, 2023, consist of the following:
Due Due
from Other to Other
Funds Funds
General Fund $ 495,710 $ -
Sanitation Fund - 21,093
Local Option Gas Tax Fund 317,871
Debt Service Fund - 19,848
Court cost training fund - 39,181
Half-cent Sales Tax Fund - 97,717
$ 495,710 $ 495,710
Inter-fund receivable/payables are due to timing differences or due to deficit positions in the City’s pooled cash and
investments. The receivable/payables are expected to be received/paid within one year.
NOTE 11 – INTERFUND TRANSFERS
Transfers of resources from a fund receiving revenue to the fund through which the resources are to be expended are
recorded as transfers and are reported as other financing sources (uses) in the governmental funds and as transfers in
(out) in the proprietary funds. Following is a summary of inter-fund transfers for the year ended September 30, 2023:
Transfer In:
Community
Development
General Capital Projects Debt Service Block Grant Stormwater Utility Fund
Fund Fund Fund Fund Fund Fund Total
Transfers Out:
Utility Fund $ 833,911 $ - $ - $ - $ - $ - $ 833,911
General Fund - 50,000 - 51,250 - - 101,250
Parking Fund - - - 50,000 - - 50,000
Local Option Gas Tax Fund 324,256 488,000 - - - - 812,256
Sanitation Fund 179,790 - - - - - 179,790
ARPA Fund 1,063,336 333,336 - - 315,944 1,166,664 2,879,280
Stormwater Fund - 350,000 - - - - 350,000
Convention Development Tax Fund - - 120,293 - - - 120,293
Capital Projects Fund - - - - - - -
Half-cent Sales Tax Fund 50,000 1,000,000 - - 414,068 - 1,464,068
Total $ 2,451,293 $ 2,221,336 $ 120,293 $ 101,250 $ 730,012 $ 1,166,664 $ 6,790,848
Transfers are used to move revenues from the fund that ordinance or budget requires to collect them to the fund that
ordinance or budget requires to expend them.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
61
NOTE 12 – COMMITMENTS
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida, whereas the City of
Jacksonville will provide advanced life support and fire services to the residents and businesses located in the City.
The term of the agreement shall be from the effective date and continuing for a period of 25 years unless terminated
earlier by the parties (such parties must provide a one-year notice). For the year ended September 30, 2023, the
City incurred $1,351,082 in services under this agreement. The amount will be adjusted annually by an amount
equal to 103% of the previous year’s amount for all services provided by the City of Jacksonville.
NOTE 13 - CONTINGENCIES
The City is a defendant in several lawsuits which arose in the ordinary course of the City’s business. To the extent
the outcome of such litigation has been determined to result in probable loss to the City, an estimated loss has been
accrued in the accompanying financial statements. The outcome of the remaining claims cannot be determined at
this time.
NOTE 14 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and
omissions; and natural disasters for which the City carries commercial insurance. Insurance against losses is provided
through the Public Risk Insurance Agency and LB Bryan and Company for the following types of risk:
• Workers’ Compensation and Employer’s Liability
• Automobile Liability
• Automobile Physical Damage
• Accidental Death and Dismemberment
• General Liability
• Public Officials’ Liability
• Property Coverage
The City’s coverage for workers’ compensation is under a retrospectively rated policy. Premiums are accrued based
on the ultimate cost to-date of the City’s experience for this type of risk.
NOTE 15 - RESTATEMENT
During 2023 the City identified an error that understated 2022 sanitation expenses thereby overstating business -
type activities and sanitation fund net position on September 30, 2022. As a result, the beginning net position of the
business-type activities and sanitation fund were restated by decreasing the previously reported balance by
$107,338 to reflect the effect of these expenses on beginning net position.
NOTE 16 – SUBSEQUENT EVENT
The City Commission passed Resolution 24-25 on May 13, 2024 approving the purchase of real property for
$1,075,000 to be paid from the American Rescue Plan Act Special Revenue Fund.
NOTE 17 – DEFICIT FUND BALANCE
On September 30, 2023 the following nonmajor governmental funds reported deficit fund balance amounts as
follows:
• Local Option Gas Tax Special Revenue Fund – ($194,101)
• Court Cost Training Special Revenue Fund – ($40,694)
• Debt Service Fund – ($19,848)
These deficits were caused by expenditures paid for by the general fund to be reimbursed by these nonmajor
governmental funds as revenue is generated in future years.
REQUIRED SUPPLEMENTARY INFORMATION
62
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Property taxes $ 7,319,003 $ 7,319,003 $ 7,224,605 $ (94,398)
Non-property taxes 1,191,518 1,191,518 1,308,418 116,900
Licenses and permits 925,700 925,700 1,093,728 168,028
Intergovernmental revenue 2,716,369 2,716,369 2,544,905 (171,464)
Charges for services 920,040 920,040 1,059,239 139,199
Fines and forfeitures 51,375 51,375 147,426 96,051
Investment earnings (loss) 200,000 200,000 263,030 63,030
Miscellaneous revenues 9,525 9,525 176,671 167,146
Interfund charges 1,776,156 1,776,156 1,766,199 (9,957)
Total revenues 15,109,686 15,109,686 15,584,221 474,535
EXPENDITURES
City Administration:
City Commission 65,033 65,033 58,234 6,799
City Clerk 434,545 436,559 315,596 120,963
City Attorney 175,000 187,406 161,411 25,995
City Manager 519,168 547,734 542,567 5,167
Human resources 303,487 303,487 523,866 (220,379)
Information technology 824,535 857,607 744,854 112,753
Finance 1,437,809 1,476,333 1,429,218 47,115
Total City administration 3,759,577 3,874,159 3,775,746 98,413
Planning and zoning 625,581 630,683 375,538 255,145
General government 993,651 1,020,494 844,440 176,054
Public safety:
Police 5,832,076 5,935,554 5,721,157 214,397
Animal control 115,967 118,642 110,815 7,827
Fire control 2,330,818 2,331,061 1,691,261 639,800
Code enforcement 169,360 175,360 152,327 23,033
Total public safety 8,448,221 8,560,617 7,675,560 885,057
Continued…
63
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
Public works:
Administration and streets 1,911,007 2,008,127 1,721,388 286,739
Fleet maintenance 352,190 367,450 275,796 91,654
Total public works 2,263,197 2,375,577 1,997,184 378,393
Parks and recreation
Recreation and special events 811,936 815,519 684,528 130,991
Parks maintenance 1,443,934 1,514,277 1,180,618 333,659
Total parks and recreation 2,255,870 2,329,796 1,865,146 464,650
Total expenditures 18,346,097 18,791,326 16,533,614 2,257,712
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (3,236,411) (3,681,640) (949,393) 2,732,247
OTHER FINANCING SOURCES (USES):
Transfers out (101,250) (101,250) (101,250) -
Transfers in 3,162,751 3,162,751 2,451,293 711,458
Sale of general capital assets 25,000 25,000 12,013 (12,987)
Total other financing sources (uses) 3,086,501 3,086,501 2,362,056 698,471
NET CHANGE IN FUND BALANCE $ (149,910) $ (595,139) $ 1,412,663 $ 2,007,802
64
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL –
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures:
Sources/inflows of resources
Total revenue from the budgetary comparison schedule $ 15,584,221
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,766,199)
Total revenues as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 13,818,022
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from the
Total expenditures from the budgetary comparison schedule $ 16,533,614
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,766,199)
Total expenditures as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 14,767,415
(*) - Interfund charges by Division
City Manager $ 293,900
Finance 673,493
Public Works Admin 295,070
Fleet and Equipment Maintenance 82,998
Human Resources 69,432
Information Technology 181,507
Facility Maintenance 169,799
$ 1,766,199
Note A - Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total appropriations
at the individual fund level. Encumbrances are recorded. Unexpended items which are unencumbered at year-end
must be re-appropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects funds). The City
Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that
increase the total expenditures of any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the reported budgetary data.
The budget presented in the accompanying required supplemental information is prepared in conformity with
accounting principles generally accepted in the United States of America.
65
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – AMERICAN RESCUE
PLAN ACT SPECIAL REVENUE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2023
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Intergovernmental revenue $ 3,473,921 $ 8,947,842 $ 2,879,279 $ (6,068,563)
Total revenues 3,473,921 8,947,842 2,879,279 (6,068,563)
EXPENDITURES
None - - - -
Total expenditures - - - -
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 3,473,921 8,947,842 2,879,279 (6,068,563)
OTHER FINANCING SOURCES (USES):
Transfers out (4,318,921) (4,318,921) (2,879,280) 1,439,641
Transfers in - - - -
Total other financing sources (uses) (4,318,921) (4,318,921) (2,879,280) 1,439,641
NET CHANGE IN FUND BALANCE $ (845,000) $ 4,628,921 $ (1) $ (4,628,922)
66
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2024 9/30/2023 9/30/2022 9/30/2021 9/30/2020
Measurement date 9/30/2023 9/30/2022 9/30/2021 9/30/2020 9/30/2019
Total pension liability
Service cost $ 214,537 $ 241,673 $ 244,995 $ 288,450 $ 332,673
Interest 1,670,865 1,646,364 1,633,199 1,604,466 1,566,226
Change in assumptions - - (420,148) - -
Difference between expected and actual
experience 156,347 255,984 207,558 (44,031) 40,197
Benefit payments, including refunds of
of employee contributions (1,967,963) (1,504,566) (1,429,935) (1,329,553) (1,327,161)
Employee buy-back (35,286) - - - -
Net change in total pension liability 38,500 639,455 235,669 519,332 611,935
Total pension liability, beginning 25,540,642 24,901,187 24,665,518 24,146,186 23,534,251
Total pension liability, ending (a) $ 25,579,142 $ 25,540,642 $ 24,901,187 $ 24,665,518 $ 24,146,186
Plan fiduciary net position
Contributions - City $ 850,266 $ 1,099,884 $ 1,248,604 $ 1,362,952 $ 1,424,479
Contributions - Employee 75,784 81,830 87,209 96,921 107,745
Net investment income (loss) 2,937,968 (4,081,483) 4,891,453 1,138,973 619,176
Benefit payments, including refunds of
employee contributions (2,003,249) (1,504,566) (1,429,935) (1,329,553) (1,327,161)
Administrative expenses (36,135) (45,210) (19,631) (48,109) (40,584)
Net change in plan fiduciary net position 1,824,634 (4,449,545) 4,777,700 1,221,184 783,655
Plan fiduciary net position, beginning 22,047,291 26,496,836 21,719,136 20,497,952 19,714,297
Plan fiduciary net position, ending (b) $ 23,871,925 $ 22,047,291 $ 26,496,836 $ 21,719,136 $ 20,497,952
Net pension liability (asset) (a)-(b) $ 1,707,217 $ 3,493,351 $ (1,595,649) $ 2,946,382 $ 3,648,234
Plan fiduciary net position as a percentage
of total pension liability 93.33% 86.32% 106.41% 88.05% 84.89%
Covered payroll $ 1,263,067 $ 1,363,833 $ 1,453,483 $ 1,615,350 $ 1,795,750
Net pension liability as a percentage of
covered payroll 135.16% 256.14% -109.78% 182.40% 203.16%
Continued…
67
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 345,019 $ 346,460 $ 348,604 $ 402,093 $ 399,576
Interest 1,574,193 1,485,239 1,437,296 1,404,316 1,386,245
Change in assumptions 695,507 559,117 - - 1,814,460
Difference between expected and actual
experience (473,189) 291,669 164,601 (162,280) -
Benefit payments, including refunds of
of employee contributions (1,501,456) (1,319,107) (1,207,804) (1,031,191) (707,218)
Employee buy-back - - - - -
Net change in total pension liability 640,074 1,363,378 742,697 612,938 2,893,063
Total pension liability, beginning 22,894,177 21,530,799 20,788,102 20,175,164 17,282,101
Total pension liability, ending (a) $ 23,534,251 $ 22,894,177 $ 21,530,799 $ 20,788,102 $ 20,175,164
Plan fiduciary net position
Contributions - City $ 1,332,119 $ 1,175,572 1,112,344 $ 863,613 $ 950,980
Contributions - Employee 117,536 124,024 128,204 136,191 157,383
Net investment income (loss) 1,554,225 1,792,192 1,515,746 162,326 778,981
Benefit payments, including refunds Of
employee contributions (1,501,456) (1,319,107) (1,207,804) (1,031,191) (707,218)
Administrative expenses (31,261) (53,880) (32,495) (41,909) (31,529)
Net change in plan fiduciary net position 1,471,163 1,718,801 1,515,995 89,030 1,148,597
Plan fiduciary net position, beginning 18,243,134 16,524,333 15,008,338 14,919,308 13,770,711
Plan fiduciary net position, ending (b) $ 19,714,297 $ 18,243,134 $ 16,524,333 $ 15,008,338 $ 14,919,308
Net pension liability (asset) (a)-(b) $ 3,819,954 $ 4,651,043 $ 5,006,466 $ 5,779,764 $ 5,255,856
Plan fiduciary net position as a percentage
of total pension liability 83.77% 79.68% 76.75% 72.20% 73.95%
Covered payroll $ 1,958,933 $ 2,067,067 $ 2,136,733 $ 2,269,850 $ 2,623,050
Net pension liability as a percentage of
covered payroll 195.00% 225.01% 234.30% 254.63% 200.37%
Change of Assumptions:
For measurement date September 30, 2021:
• Reflects updated mortality tables to those used by Florida Retirement System (FRS) as mandated by Section 112.63(1)(f),
Florida Statutes.
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7 -year experience study
performed for the Plan.
68
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2024 9/30/2023 9/30/2022 9/30/2021 9/30/2020
Measurement date 9/30/2023 9/30/2022 9/30/2021 9/30/2020 9/30/2019
Total pension liability
Service cost $ 426,687 $ 414,067 $ 396,817 $ 369,089 $ 332,419
Interest 1,164,223 1,099,655 1,090,158 1,034,146 1,026,422
Change in excess State money - - - - -
Difference between expected and actual
experience (137,974) 195,967 (130,811) 103,400 (351,261)
Change of assumptions - - (478,322) - -
Other 19,500 - - - -
Benefit payments, including refunds of
of employee contributions (735,428) (815,563) (693,227) (715,876) (1,143,778)
Net change in total pension liability 737,008 894,126 184,615 790,759 (136,198)
Total pension liability, beginning 17,179,024 16,284,898 16,100,283 15,309,524 15,445,722
Total pension liability, ending (a) $ 17,916,032 $ 17,179,024 $ 16,284,898 $ 16,100,283 $ 15,309,524
Plan fiduciary net position
Contributions - City $ 558,351 $ 779,224 $ 870,477 $ 745,022 $ 826,705
Contributions - State of Florida 165,133 144,821 274,267 132,844 -
Contributions - Employee 215,375 177,828 168,456 161,166 142,024
Net investment income (loss) 1,742,688 (2,535,548) 2,896,388 607,277 307,543
Benefit payments, including refunds of
employee contributions (735,428) (815,563) (693,227) (715,876) (1,143,777)
Administrative expenses (26,723) (41,743) (34,284) (35,623) (38,763)
Other - - - - -
Net change in plan fiduciary net position 1,919,396 (2,290,981) 3,482,077 894,810 93,732
Plan fiduciary net position, beginning 14,344,282 16,635,263 13,153,186 12,258,376 12,164,644
Plan fiduciary net position, ending (b) $ 16,263,678 $ 14,344,282 $ 16,635,263 $ 13,153,186 $ 12,258,376
Net pension liability (asset) (a)-(b) $ 1,652,354 $ 2,834,742 $ (350,365) $ 2,947,097 $ 3,051,148
Plan fiduciary net position as a percentage
of total pension liability 90.78% 83.50% 102.15% 81.70% 80.07%
Covered payroll $ 2,448,438 $ 2,222,850 $ 2,105,700 $ 2,014,575 $ 1,775,300
Net pension liability as a percentage of
covered payroll 67.49% 127.53% -16.64% 146.29% 171.87%
Continued...
69
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 329,254 $ 335,185 $ 279,863 $ 291,761 $ 269,182
Interest 1,016,983 970,877 931,370 900,982 879,486
Change in excess State money (120,454) - - 120,454 -
Difference between expected and actual
experience (209,232) 187,216 (2,998) (213,426) -
Change of assumptions 454,983 (40,955) - - 1,275,669
Other - - - - -
Benefit payments, including refunds of
of employee contributions (690,688) (643,872) (754,465) (553,042) (585,616)
Net change in total pension liability 780,846 808,451 453,770 546,729 1,838,721
Total pension liability, beginning 14,664,876 13,856,425 13,402,655 12,855,926 11,017,205
Total pension liability, ending (a) $ 15,445,722 $ 14,664,876 $ 13,856,425 $ 13,402,655 $ 12,855,926
Plan fiduciary net position
Contributions - City $ 854,780 $ 945,540 $ 729,483 $ 574,014 $ 563,203
Contributions - State of Florida 236,772 - 112,972 103,528 96,217
Contributions - Employee 131,498 129,552 117,274 112,354 103,095
Net investment income (loss) 853,894 950,447 804,901 43,534 642,480
Benefit payments, including refunds of
employee contributions (690,688) (643,872) (754,465) (553,042) (585,616)
Administrative expenses (25,152) (51,481) (29,933) (35,984) (22,742)
Other (change in excess State money) - - - 120,454 -
Net change in plan fiduciary net position 1,361,104 1,330,186 980,232 364,858 796,637
Plan fiduciary net position, beginning 10,803,540 9,473,354 8,493,122 8,128,264 7,331,627
Plan fiduciary net position, ending (b) $ 12,164,644 $ 10,803,540 $ 9,473,354 $ 8,493,122 $ 8,128,264
Net pension liability (asset) (a)-(b) $ 3,281,078 $ 3,861,336 $ 4,383,071 $ 4,909,533 $ 4,727,662
Plan fiduciary net position as a percentage
of total pension liability 78.76% 73.67% 68.37% 63.37% 63.23%
Covered payroll $ 1,643,725 $ 1,619,400 $ 1,465,925 $ 1,404,425 $ 1,472,786
Net pension liability as a percentage of
covered payroll 199.61% 238.44% 299.00% 349.58% 321.00%
Change of Assumptions:
For measurement date September 30, 2021:
• Reflects updated mortality tables to those used by Florida Retirement System (FRS) as mandated by Section 112.63(1)(f),
Florida Statutes.
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7 -year experience study
performed for the Plan.
70
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Contributions
in Relation to Contributions
Year Actuarially the Actuarially Contribution as a % of
Ended Determined Determined Excess Covered Covered
September 30, Contribution Contribution (Deficiency) Payroll Payroll
General Employees' Plan
2023 $ 850,265 $ 850,266 $ 1 $ 1,263,067 67.32%
2022 $ 1,099,876 $ 1,099,884 $ 8 $ 1,363,833 80.65%
2021 $ 1,248,604 $ 1,248,604 $ - $ 1,453,483 85.90%
2020 $ 1,355,973 $ 1,362,952 $ 6,979 $ 1,615,350 84.38%
2019 $ 1,424,479 $ 1,424,479 $ - $ 1,795,750 79.33%
2018 $ 1,332,118 $ 1,332,119 $ 1 $ 1,958,933 68.00%
2017 $ 1,175,572 $ 1,175,572 $ - $ 2,067,067 56.87%
2016 $ 1,112,344 $ 1,112,344 $ - $ 2,136,733 52.06%
2015 $ 863,613 $ 863,613 $ - $ 2,269,850 38.05%
2014 $ 950,980 $ 950,980 $ - $ 2,623,050 36.25%
Police Officers' Plan
2023 $ 483,076 $ 723,484 $ 240,408 $ 2,448,438 29.55%
2022 $ 579,249 $ 924,045 $ 344,796 $ 2,222,850 41.57%
2021 $ 668,499 $ 1,144,744 $ 476,245 $ 2,105,700 54.36%
2020 $ 668,090 $ 877,866 $ 209,776 $ 2,014,575 43.58%
2019 $ 826,705 $ 826,705 $ - $ 1,775,300 46.57%
2018 $ 841,726 $ 1,091,552 $ 249,826 $ 1,643,725 66.41%
2017 $ 849,061 $ 945,540 $ 96,479 $ 1,619,400 58.39%
2016 $ 825,700 $ 842,455 $ 16,755 $ 1,465,925 57.47%
2015 $ 665,091 $ 677,542 $ 12,451 $ 1,404,425 48.24%
2014 $ 654,280 $ 659,420 $ 5,140 $ 1,472,786 44.77%
71
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Significant methods and assumptions used in calculating the actuarially determined contributions:
The following pertain to both City’s defined benefit pension plans unless separately stated.
• Valuation Date: October 1, 2021. Actuarially determined contribution rates are calculated as of September 30, two years
prior to the end of the fiscal year in which contributions are required.
• Actuarial Cost Method: Entry Age Actuarial Cost Method
• Amortization Method:
o General Employees’ Plan – Closed, Level Dollar Method
o Police Officers’ Plan - Closed, Level % of Pay Method
• Remaining Amortization Period:
o General Employees’ Plan – 10 Years.
o Police Officers’ Plan - 30 years.
• Asset Valuation Method: 4-year smoothed market value where the difference between the expected and actual return
on market value of assets is phased in over a period of four years at a rate of 25% per year.
• Inflation:2.50%
• Salary Increases:
o General Employees Plan – Age Based ranging from 9.5% at age 20 to 4.8% at age 60+ (including 2.5% price
inflation).
o Police Officers’ Plan – Age Based ranging from 18.5% at age 20 to 4.5% at age 60+ (including 2.5% price inflation).
• Payroll Growth:
o General Employees Plan – None
o Police Officers’ Plan – 3.50%
• Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses, including inflation.
• Retirement Age: Experience-based table of rates (from Experience Study dated August 9, 2017 for the period October 1,
2009 to September 30, 2016) that vary by age.
• Mortality:
o General Employees’ Plan – Pub-2010 Headcount-Weighted Mortality Tables used by the Florida Retirement
System for Regular Class members in their July 1, 2020 actuarial valuations with mortality improvements
projected for healthy lives to all future years after 2010 using Scale MP-2018.
o Police Officers’ Plan - Pub-2010 Headcount-Weighted Mortality Tables used by the Florida Retirement System for
Special Risk Class members in their July 1, 2020 actuarial valuations with mortality improvements projected for
healthy lives to all future years after 2010 using Scale MP-2018.
o Previous Mortality Tables Used: RP-2000 Combined Healthy Participant Mortality Table (for preretirement
mortality) and the RP-2000 Mortality Table for Annuitants (for postretirement mortality), with mortality
improvements projected to all future years after 2000 using Scale BB.
72
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS
Year Ended September 30,
2023 2022 2021 2020 2019 2018 2017 2016 2015
General Employees' Plan
Annual money-weighted rate of return
net of investment expenses 14.05% -16.01% 23.65% 6.41% 4.04% 8.67% 10.92% 10.18% 1.10%
Police Officers' Plan
Annual money-weighted rate of return
net of investment expenses 6.13% -14.98% 23.67% 6.15% 4.38% 8.26% 10.80% 9.93% 0.53%
73
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Reporting date 9/30/2023 9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service cost $ 55,813 $ 56,159 $ 55,135 $ 38,095 $ 39,404 $ 41,222
Interest 9,684 11,124 11,812 19,049 16,906 14,667
Difference between expected
and actual experience - (20,135) - (203,632) - -
Changes in assumptions (86,543) (56,642) (26,153) 78,146 (18,238) (21,261)
Benefit payments (11,158) (7,902) (11,666) (21,386) (23,456) (22,404)
Net change in total OPEB Liability (32,204) (17,396) 29,128 (89,728) 14,616 12,224
Total OPEB Liability - beginning 391,959 409,355 380,227 469,955 455,339 443,115
Total OPEB Liability - ending $ 359,755 $ 391,959 $ 409,355 $ 380,227 $ 469,955 $ 455,339
Covered-employee payroll $ 8,066,712 $ 5,961,844 $ 7,602,334 $ 5,196,501 $ 6,647,363 $ 6,272,956
Total OPEB liability as a percentage
of covered-employee payroll 4.46% 6.57% 5.38% 7.32% 7.07% 7.26%
Notes to Schedule:
No assets are being accumulated in a trust to pay for plan benefits.
Changes in Assumptions:
Changes in assumptions reflect the effects of changes in the discount rate of each period. The following are the
discount rates used for each measurement date.
Measurement Date Discount Rate
September 30, 2022 4.40%
September 30, 2021 2.19%
September 30, 2020 2.41%
September 30, 2019 2.75%
September 30, 2018 3.83%
September 30, 2017 3.50%
September 30, 2016 3.10%
Additional changes in assumptions for the following measurement dates:
• September 30, 2021
o Per capita costs and premiums were updated based on information provided.
o Long-term trend rates of healthcare increases were lowered from 3.99% to 3.75%.
• September 30, 2019
o Per capita costs and premiums were updated based on information provided.
o Assumed ultimate rate of inflation was revised from 2.5% to 2.25% and the healthcare cost trend
assumption was revised to reflect this change.
Additional years will be added to this schedule annually until 10 years; data is presented.
SUPPLEMENTARY INFORMATION
74
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
ASSETS
Equity in pooled cash and investments $ 262,215 $ - $ 123,005 $ - $ - $ 276,729 $ 158,322
Receivables, net
Intergovernmental and other - 123,770 10,666 214,658 825 7,682 3,964
Prepaid expenditures - - - - - 13,649 -
TOTAL ASSETS $ 262,215 $ 123,770 $ 133,671 $ 214,658 $ 825 $ 298,060 $ 162,286
LIABILITIES
Accounts payable and accrued liabilities - - - 29,669 2,338 - -
Construction costs payable - - - 4,212 - - -
Accrued payroll - - - - - - -
Accrued claims payable - - - - - - -
Due to other governments - - - - - - -
Due to other funds - 317,871 - 97,717 39,181 - -
Deposits - - - - - - -
TOTAL LIABILITIES - 317,871 - 131,598 41,519 - -
FUND BALANCE
Nonspendable:
Prepaids - - - - - 13,649 -
Restricted for:
Public safety - - - - - - 162,286
Road maintenance and construction - - - 83,060 - - -
Other capital projects - - - - - - -
Other purposes - - 133,671 - - 298,060 -
Committed to:
Conservation and resource management 262,215 - - - - - -
Unassigned - (194,101) - - (40,694) (13,649) -
TOTAL FUND BALANCES 262,215 (194,101) 133,671 83,060 (40,694) 298,060 162,286
TOTAL LIABILITIES AND FUND BALANCE $ 262,215 $ 123,770 $ 133,671 $ 214,658 $ 825 $ 298,060 $ 162,286
Continued…
75
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Governmental 2022
Revenue Block Grants Grants Funds Service Funds Totals
ASSETS
Equity in pooled cash and investments $ 9,539 $ 110,965 $ 4,961 $ 945,736 $ - $ 945,736 $ 1,328,439
Receivables, net
Intergovernmental and other - 100 - 361,665 - 361,665 443,997
Prepaid expenditures - - - 13,649 - 13,649 100,856
TOTAL ASSETS $ 9,539 $ 111,065 $ 4,961 $ 1,321,050 $ - $ 1,321,050 $ 1,873,292
LIABILITIES
Accounts payable and accrued liabilities - 1,872 2,831 36,710 - 36,710 19,574
Construction costs payable - 3,134 - 7,346 - 7,346 7,346
Accrued payroll - - - - - -
Accrued claims payable - - - - - -
Due to other governments - - - - - - -
Due to other funds - - - 454,769 19,848 474,617 552,889
Deposits 2,998 - - 2,998 - 2,998 1,767
TOTAL LIABILITIES 2,998 5,006 2,831 501,823 19,848 521,671 581,576
FUND BALANCE
Nonspendable:
Prepaids - - - 13,649 - 13,649 100,856
Restricted for:
Public safety 6,541 - 2,130 170,957 - 170,957 146,095
Road maintenance and construction - - - 83,060 - 83,060 782,885
Other capital projects - - - - - - -
Other purposes - - - 431,731 - 431,731 309,437
Committed to:
Conservation and resource management - - - 262,215 - 262,215 203,490
Unassigned - 106,059 - (142,385) (19,848) (162,233) (251,047)
TOTAL FUND BALANCES 6,541 106,059 2,130 819,227 (19,848) 799,379 1,291,716
TOTAL LIABILITIES AND FUND BALANCE $ 9,539 $ 111,065 $ 4,961 $ 1,321,050 $ - $ 1,321,050 $ 1,873,292
76
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
REVENUES:
Non-property taxes $ - $ 736,707 $ 172,675 $ 1,241,724 $ - $ - $ -
Intergovernmental revenue - - - - - - -
Charges for services - - - - - 118,337 -
Fines and forfeitures 60,809 - - - 4,600 - 21,647
Investment earnings (loss) - 1,292 1,575 7,848 (20) - 2,975
Miscellaneous revenues 25,683 - - - - - -
Total revenues 86,492 737,999 174,250 1,249,572 4,580 118,337 24,622
EXPENDITURES:
General government 27,767 - - - - - -
Public safety - - - - 35,597 - -
Capital outlay - - - 485,329 - - -
Debt service - - - - - - -
Total expenditures 27,767 - - 485,329 35,597 - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 58,725 737,999 174,250 764,243 (31,017) 118,337 24,622
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - -
Transfers (out) - (812,256) (120,293) (1,464,068) - (50,000) -
TOTAL OTHER FINANCING SOURCES (USES) - (812,256) (120,293) (1,464,068) - (50,000) -
NET CHANGE IN FUND BALANCE 58,725 (74,257) 53,957 (699,825) (31,017) 68,337 24,622
FUND BALANCE, beginning of year 203,490 (119,844) 79,714 782,885 (9,677) 229,723 137,664
FUND BALANCE, end of year $ 262,215 $ (194,101) $ 133,671 $ 83,060 $ (40,694) $ 298,060 $ 162,286
Continued…
77
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2023
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2022
2023
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Governmental 2022
Revenue Block Grants Grants Funds Service Funds Totals
REVENUES:
Non-property taxes $ - $ - $ - $ 2,151,106 $ - $ 2,151,106 $ 2,093,041
Intergovernmental revenue - 170,300 - 170,300 - 170,300 110,866
Charges for services - - - 118,337 - 118,337 110,305
Fines and forfeitures 72 - - 87,128 - 87,128 135,210
Investment earnings (loss) 168 - - 13,838 - 13,838 10,388
Miscellaneous revenues - - - 25,683 - 25,683 2,476
Total revenues 240 170,300 - 2,566,392 - 2,566,392 2,462,286
EXPENDITURES:
General government - - - 27,767 - 27,767 30,171
Public safety - - - 35,597 - 35,597 28,111
Capital outlay - 164,671 - 650,000 - 650,000 699,277
Debt service - - - - 120,291 120,291 123,133
Total expenditures - 164,671 - 713,364 120,291 833,655 880,692
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 240 5,629 - 1,853,028 (120,291) 1,732,737 1,581,594
OTHER FINANCING SOURCES (USES)
Transfers in - 101,250 - 101,250 120,293 221,543 339,800
Transfers (out) - - - (2,446,617) - (2,446,617) (2,388,319)
TOTAL OTHER FINANCING SOURCES (USES) - 101,250 - (2,345,367) 120,293 (2,225,074) (2,048,519)
NET CHANGE IN FUND BALANCE 240 106,879 - (492,339) 2 (492,337) (466,925)
FUND BALANCE, beginning of year 6,301 (820) 2,130 1,311,566 (19,850) 1,291,716 1,758,641
FUND BALANCE, end of year $ 6,541 $ 106,059 $ 2,130 $ 819,227 $ (19,848) $ 799,379 $ 1,291,716
78
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2019, THROUGH SEPTEMBER 30, 2023
2023 2022 2021 2020 2019
Revenues
Operating Revenues:
Water:
Customer charges $ 3,978,479 $ 3,677,424 $ 3,550,004 $ 3,462,039 $ 3,206,520
Miscellaneous charges 75,304 68,937 43,252 67,291 64,563
Total water 4,053,783 3,746,361 3,593,256 3,529,330 3,271,083
Sewer:
Customer charges 6,444,184 6,096,086 5,750,479 5,399,935 5,092,613
Miscellaneous charges - 8 - - -
Total sewer 6,444,184 6,096,094 5,750,479 5,399,935 5,092,613
Total operating revenues 10,497,967 9,842,455 9,343,735 8,929,265 8,363,696
Non-operating revenues
Investment income (loss):
Water 232,689 (27,591) 143,198 163,209 (7,606)
Sewer 119,772 (22,584) 158,264 115,389 (8,249)
Total non-operating revenues 352,461 (50,175) 301,462 278,598 (15,855)
Total revenues 10,850,428 9,792,280 9,645,197 9,207,863 8,347,841
Expenses
Operating expenses:
Water 1,828,346 1,321,892 1,044,002 1,299,974 1,348,985
Sewer 3,120,083 3,100,956 2,222,833 2,387,924 2,393,828
Total operating expenses 4,948,429 4,422,848 3,266,835 3,687,898 3,742,813
Administrative, non divisional
and other
Water 453,424 584,856 642,424 508,655 508,655
Sewer 659,352 698,988 678,890 624,796 624,796
Total administrative non-
divisional and other 1,112,776 1,283,844 1,321,314 1,133,451 1,133,451
Total expenses 6,061,205 5,706,692 4,588,149 4,821,349 4,876,264
Net revenues available for
debt service 4,789,223 4,085,588 5,057,048 4,386,514 3,471,577
Non-operating income(expense)
Interest expense (160,740) (320,482) (344,186) (381,546) (404,297)
Loan amortization (93,911) (93,910) (93,910) (93,910) (93,910)
Total non-operating income
(expense) (254,651) (414,392) (438,096) (475,456) (498,207)
Change in net position before
depreciation expense and
interfund transfers $ 4,534,572 $ 3,671,196 $ 4,618,952 $ 3,911,058 $ 2,973,370
79
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2023 AND SEPTEMBER 30, 2022
2023 2022
Gross revenues:
Utility $ 10,497,967 $ 10,575,661
Connection charges 37,806 44,895
Investment income (loss) 396,055 (457,602)
Total Gross Revenues 10,931,828 10,162,954
Operating Expenses
Personnel services 2,217,898 1,687,884
Contractual services 758,088 535,134
Supplies 504,067 421,328
Repairs and maintenance 758,342 471,440
Utilities 400,159 402,707
Intergovernmental charges 1,112,776 1,106,562
Other expenses 309,875 256,871
Total operating expenses 6,061,205 4,881,926
Total net revenues in accordance with Bond resolutions $ 4,870,623 $ 5,281,028
Total debt service $ 1,780,844 $ 1,815,181
Debt service coverage ratio 273.50% 290.94%
Required debt service coverage ratio 110.00% 110.00%
80
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEAR ENDED SEPTEMBER 30, 2019, THROUGH SEPTEMBER 30, 2023
Utility Service Tax Collections
(last five years)
Year Electricity Communications Gas Fuel Oil Total
2023 $ 501,495 $ 549,318 $ 12,926 $ - $ 1,063,739
2022 515,491 525,166 12,966 - 1,053,623
2021 441,950 471,029 13,068 - 926,047
2020 499,712 489,444 14,122 - 1,003,278
2019 587,563 484,505 12,518 - 1,084,586
Ad Valorem Tax Collections
(last five years)
Year Total
2023 $ 7,224,605
2022 6,708,984
2021 6,341,798
2020 5,912,053
2019 5,519,446
OTHER STATISTICAL INFORMATION
81
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2023
(UNAUDITED)
Annual
Billings
Fleet Landing (retirement community) $ 640,207
Navy (Federal Government) 254,532
Ocean Reef 225,786
PAC-2160 Mayport GP, LLC 201,140
John's Creek Estates (mobile home park) 160,317
Hanna Park (regional park) 156,836
City of Atlantic Beach, Florida 155,117
Yes Companies 146,524
BW MAYPORT LLC 136,544
Sea Turtle Inn 133,080
$ 2,210,083
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED
STATES; THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND
OTHER CONTRACT REQUIREMENTS
82
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City) as of and for the year ended September 30, 2023, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated January 10, 2025.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as described in the accompanying schedule of findings, we identified certain
deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. We
consider the deficiency described in the accompanying schedule of findings as item 2023-001 to be a
material weakness.
83
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance. We
consider the deficiency described in the accompanying schedule of findings as item 2023-002 to be a
significant deficiency.
2023-001 – Financial Close and Reporting
Condition – At commencement of final fieldwork, we noted multiple areas that were not completed or
required significant audit adjustments to complete the financial close for the year. As a result, this
resulted in a significant delay in the completion of the audit and failure to meet the statutory due date.
The following audit adjustments were material to the financial statements:
■ Reduce accounts payable and related expenditures for improperly accrued items. This resulted in a
reduction of accounts payable and related expenditures of approximately $850k.
■ Prior period correction of $107,337 in the Sanitation Fund due to unidentified invoices that should
have been accrued in a prior year.
■ Corrections to cash reconciliation due to errors related to reconciling items in the amount of
approximately $80k.
■ Corrections to correct General Pension Plan investment reconciliation issues which included a $219k
adjustment to the amortization/premium account, a net adjustment of $126k to the investment cost
account, and a net adjustment of $93k to the unrealized gain/loss account.
■ Correction to Sewer Fund accounts receivable and deferred revenue in the amount of $94k.
■ Additional accruals for state sharing and related accounts receivable and revenues in the approximate
amount of $500k.
Effect – As a result, the audit was not completed by the statutory due date of June 30, 2024, and the City’s
financial statements would have been materially misstated if adjustments noted above had not been
identified during the audit process.
Recommendation – We recommend that management reviews key financial closing processes and make
corrections as deemed necessary.
2023-002 – Timeliness and Accuracy of Bank Reconciliations
Condition – During the audit, we noted that September 2023 bank reconciliation was not completed and
reviewed until April 2024. In addition, the September 2023 bank reconciliation had multiple errors that
were corrected through audit adjustments.
Effect – Untimely and inaccurate bank reconciliations increase the likelihood of unidentified errors or
fraud.
Recommendation – We recommend that the City perform bank reconciliations in a timely manner and
ensure that the reconciliations are accurate.
84
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, non-compliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of non-compliance or other matters that are required to be
reported under Government Auditing Standards.
City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response
to the findings identified in our audit and described in the accompanying schedule of findings. The City’s
response was not subjected to the other auditing procedures applied in the audit of the financial
statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
January 10, 2025
Gainesville, Florida
85
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE
WITH FLORIDA STATUTES SECTION 218.415 – INVESTMENTS OF PUBLIC FUNDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with Section 218.415, Florida
Statutes during the period ended September 30, 2023, as required by Section 10.556(10)(a), Rules of the
Auditor General. Management is responsible for the City’s compliance with those requirements. Our
responsibility is to express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the City’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination of the City’s compliance with
specified requirements.
We are required to be independent of the City and to meet our other ethical responsibilities in accordance
with relevant ethical requirements relating to the engagement.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2023.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, federal and
other granting agencies and pass-through entities, the City, and its management, and is not intended to
be, and should not be, used by anyone other than these specified parties.
January 10, 2025
Gainesville, Florida
86
REPORT ON COMPLIANCE FOR THE U.S. TREASURY CORONAVIRUS STATE AND LOCAL FISCAL
RECOVERY FUNDS PROGRAM (CSLFRF) REQUIREMENTS FOR AN ALTERNATIVE CSLFRF COMPLIANCE
EXAMINATION ENGAGEMENT
INDEPENDENT ACCOUNTANT’S REPORT
To Honorable Mayor, City Commissioners,
and City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with the compliance
requirements “activities allowed or unallowed” and “allowable cost/cost principles” (the specified
requirements) as described in Part IV “Requirements for an Alternative Compliance Examination
Engagement for Recipients That Would Otherwise be Required to Undergo a Single Audit or Program-
Specific Audit as a Result of Receiving Coronavirus State and Local Fiscal Recovery Funds” of the CSLFRF
section of the 2023 OMB Compliance Supplement (referred to herein as “Requirements for an Alternative
CSLFRF Compliance Examination Engagement”) during the year ended September 30, 2023. Management
of the City is responsible for the City’s compliance with the specified requirements. Our responsibility is
to express an opinion on the City’s compliance with the specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants; the standards applicable to attestation engagements contained
in Government Auditing Standards, issued by the Comptroller General of the United States; and in the
Requirements for an Alternative CSLFRF Compliance Examination Engagement. Those standards require
that we plan and perform the examination to obtain reasonable assurance about whether the City
complied, in all material respects, with the specified requirements referenced above. An examination
involves performing procedures to obtain evidence about whether the City complied with the specified
requirements. The nature, timing, and extent of the procedures selected depend on our judgment,
including an assessment of the risks of material non-compliance, whether due to fraud or error. We believe
that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the examination engagement.
Our examination does not provide a legal determination on the City’s compliance with specified
requirements.
In our opinion, the City complied, in all material respects, with the specified requirements referenced
above during the year ended September 30, 2023.
January 10, 2025
Gainesville, Florida
87
MANAGEMENT LETTER
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Atlantic Beach, Florida (the City) as of and for the
year ended September 30, 2023, and have issued our report thereon dated January 10, 2025.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountant’s Report on an examination
conducted in accordance with American Institute of Certified Public Accountants Professional Standards,
AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the
Auditor General. Disclosures in those reports and schedule, which are dated January 10, 2025, should be
considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
report. The prior year finding 2022-001 has not been corrected and has been consolidated into the
current year finding 2023-001.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. This information is
included in Note 1 to the financial statements.
Financial Condition and Management
Sections 10.554(1)(i)5.(a) and 10.556(7), Rules of the Auditor General, require that we apply appropriate
procedures and report the results of our determination as to whether or not the City has met one or more
of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met. In connection with our audit, we determined that the City did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
88
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Special District Component Units
Section 10.554(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a
special district that is a component unit of a county, municipality, or special district, provided the financial
information necessary for proper reporting of the component unit, within the audited financial
statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida
Statutes. In connection with our audit, we determined that there were no special district component
units that were required to be reported in accordance with Section 218.39(3)(b), Florida Statutes.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material, but which warrants the attention
of those charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, federal and other granting agencies, and applicable management, and is not intended to be, and
should not be, used by anyone other than these specified parties.
January 10, 2025
Gainesville, Florida
89
January 10, 2025
Management’s Response Letter
Purvis, Gray and Company, LLP
P.O. Box 141270
Gainesville, FL 32614
2023-001 – Financial Close and Reporting
Condition – At commencement of final fieldwork, we noted multiple areas that were not completed
or required significant audit adjustments to complete the financial close for the year. As a result,
this resulted in a significant delay in the completion of the audit and failure to meet the statutory due
date. The following audit adjustments were material to the financial statements:
■Reduce accounts payable and related expenditures for improperly accrued items. This resulted
in a reduction of accounts payable and related expenditures of approximately $850k.
■Prior period correction of $107,337 in the Sanitation Fund due to unidentified invoices that
should have been accrued in a prior year.
■Corrections to cash reconciliation due to errors related to reconciling items in the amount of
approximately $80k.
■Corrections to correct General Pension Plan investment reconciliation issues which included a
$219k adjustment to the amortization/premium account, a net adjustment of $126k to the
investment cost account, and a net adjustment of $93k to the unrealized gain/loss account.
■Correction to Sewer Fund accounts receivable and deferred revenue in the amount of $94k.
■Additional accruals for state sharing and related accounts receivable and revenues in the
approximate amount of $500k.
Effect – As a result, the audit was not completed by the statutory due date of June 30, 2024, and the
City’s financial statements would have been materially misstated if adjustments noted above had
not been identified during the audit process.
Recommendation – We recommend that management reviews key financial closing processes and
make corrections as deemed necessary.
Management Response to Comment 2023 - 001 – Financial Close and Reporting
The City’s finance department will closely review invoices and revenues received after year end to ensure they are accrued in the proper accounting period. The finance department will also work collectively to ensure the closeout process is completed in a timely manner.
2023-002 – Timeliness and Accuracy of Bank Reconciliations
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Condition – During the audit, we noted that September 2023 bank reconciliation was not completed
and reviewed until April 2024. In addition, the September 2023 bank reconciliation had multiple
errors that were corrected through audit adjustments.
Effect – Untimely and inaccurate bank reconciliations increase the likelihood of unidentified errors
or fraud.
Recommendation – We recommend that the City perform bank reconciliations in a timely manner
and ensure that the reconciliations are accurate.
Management Response to Comment 2023 - 002 – Timeliness and Accuracy of Bank
Reconciliations
The City will reconcile all bank accounts on or before the 20th of each month and determine the
source of any material differences.