HomeMy WebLinkAboutAnnual Financial Report - 2024-2025FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2025
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2025
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 CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
GENERAL EMPLOYEES’ PENSION PLAN .......................................................................................................................... 65
POLICE OFFICERS’ PENSION PLAN .................................................................................................................................. 67
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS...................................................................................................... 69
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ............................................................................. 70
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS ........................................................................................... 71
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS ........................................................................ 72
NOTES TO THE 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, 2025
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
– INVESTMENTS OF PUBLIC FUNDS .................................................................................................................................... 84
MANAGEMENT LETTER ....................................................................................................................................................... 85
MANAGEMENT’S RESPONSE TO FINDINGS ........................................................................................................................ 88
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, 2025, 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, 2025, 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 Matter
As described in Note 16 to the financial statements, the City made a correction to previously issued
financial statements. 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, 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 June 26, 2026, 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 2024 financial statements, and our report dated September 30,
2025, 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, 2024,
is consistent, in all material respects, with the audited financial statements from which it was derived.
June 26, 2026
Gainesville, Florida
MANAGEMENT’S DISCUSSION AND ANALYSIS
5
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
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, 2025.
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 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, 2025
(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 states and local governments, uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. All 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 which is considered to be a major fund. Data from the other 13 governmental funds
are combined into a single, aggregated presentation called Nonmajor Governmental Funds. Fund data for these
non-major 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 have 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, 2025
(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.
Changes within the Financial Reporting Entity
During the year, the City reported adjustments/restatements of beginning balances related to changes within the
financial reporting entity and the correction of errors.
The changes within the financial reporting entity resulted from certain funds being reported as major or nonmajor
funds differently than in the prior year. The correction of an error affected the beginning balance of the General
Fund. These adjustments/restatements affect beginning balances only and do not represent current-year activity.
The following table summarizes the reporting units affected and the related adjustments/restatements of
beginning balances.
American
Rescue Plan
Act Capital Non-major
General Special Projects Governmental
Fund Revenue Fund Fund Funds
9/30/2024 Fund balance, as previously reported 10,950,916 - 2,193,617 1,265,134
Correction of errors (126,178) - - -
Change from major to nonmajor fund - (2,193,617) 2,193,617
9/30/2024 Fund balance, as restated $ 10,824,738 $ 3,458,751
8
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(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 $111,609,500 at the close of the fiscal year ended
September 30, 2025.
By far the largest portion of the City’s net position, $83,101,144 (74%), 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, $5,293,993 (5%), represents resources that are subject to external restrictions
on how they may be used. The remaining balance of unrestricted net position, $23,214,363 (21%), 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
2025 2024 2025 2024 2025 2024
Current and other
assets $ 16,899,932 $ 16,574,304 $ 20,123,808 $ 20,679,596 $ 37,023,740 $ 37,253,900
Capital assets 53,385,919 52,957,713 35,793,670 34,219,376 89,179,589 87,177,089
Total assets 70,285,851 69,532,017 55,917,478 54,898,972 126,203,329 124,430,989
Deferred outflows 2,475,770 2,339,181 229,451 958,423 2,705,221 3,297,604
Current liabilities 1,585,678 2,182,565 4,613,091 4,293,103 6,198,769 6,475,668
Non-current liabilities 3,422,123 4,731,919 3,276,418 5,984,985 6,698,541 10,716,904
Total liabilities 5,007,801 6,914,484 7,889,509 10,278,088 12,897,310 17,192,572
Deferred inflows 2,754,906 390,723 1,646,834 896,897 4,401,740 1,287,620
Net position:
Net investment in
capital assets 52,356,308 51,827,703 30,744,836 27,511,646 83,101,144 79,339,349
Restricted 1,898,941 1,433,635 3,395,052 3,211,551 5,293,993 4,645,186
Unrestricted 10,743,665 11,304,653 12,470,698 13,959,213 23,214,363 25,263,866
Total net position $ 64,998,914 $ 64,565,991 $ 46,610,586 $ 44,682,410 $ 111,609,500 $ 109,248,401
9
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(Continued)
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
2025 2024 2025 2024 2025 2024
Revenues:
Program Revenues:
Charges for services $ 1,451,774 $ 1,394,190 $ 14,552,813 $ 14,123,500 $ 16,004,587 $ 15,517,690
Operating grants/contrib. 919,890 281,272 - - 919,890 281,272
Capital grants/contrib. 1,277,309 522,608 248,134 564,309 1,525,443 1,086,917
General revenues:
Property taxes - General 8,021,538 7,241,664 - - 8,021,538 7,241,664
Pub svc tax/franchise fees 2,147,351 1,975,611 - - 2,147,351 1,975,611
Transportation fuel taxes 854,185 887,117 - - 854,185 887,117
Discretionary Sales Surtax 1,300,188 1,270,973 1,300,188 1,270,973
State shared revenue 2,177,046 2,237,681 - - 2,177,046 2,237,681
Grants 66,271 1,179,539 - - 66,271 1,179,539
Other 590,364 900,086 806,621 1,134,944 1,396,985 2,035,030
Total revenues 18,805,916 17,890,741 15,607,568 15,822,753 34,413,484 33,713,494
Expenses:
Governmental activities:
General government 4,436,463 3,960,982 - - 4,436,463 3,960,982
Public safety 9,027,448 7,544,514 - - 9,027,448 7,544,514
Transportation 2,688,631 2,664,233 - - 2,688,631 2,664,233
Parks and recreation 2,043,118 1,882,586 - - 2,043,118 1,882,586
management 43,650 41,297 - - 43,650 41,297
Interest on long-term debt 32,837 35,855 - - 32,837 35,855
Business-type activities:
Utility - - 8,734,940 8,207,337 8,734,940 8,207,337
Stormwater - - 1,926,815 1,539,805 1,926,815 1,539,805
Sanitation - - 2,372,931 2,338,794 2,372,931 2,338,794
Building code enforcement - - 619,374 580,440 619,374 580,440
Total expenses 18,272,147 16,129,467 13,654,060 12,666,376 31,926,207 28,795,843
Transfers in (out) 25,332 1,493,208 (25,332) (1,493,208) - -
Change in Net Position 559,101 3,254,482 1,928,176 1,663,169 2,487,277 4,917,651
Net position - Beginning 64,439,813 61,311,509 44,682,410 43,019,241 109,122,223 104,330,750
Net position - Ending $ 64,998,914 $ 64,565,991 $ 46,610,586 $ 44,682,410 $ 111,609,500 $ 109,248,401
10
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(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
$14,955,709 an increase of $672,220 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 assigned and
unassigned fund balance was $9,265,649, which equated to 55% of total General Fund expenditures. The net
result of various revenue, expenditures and other financing sources and uses resulted in a $1,069,225 decrease
to the general fund’s total fund balance or -10% during the current fiscal year. Property tax revenues increased
by $779,874 or 11% from the previous year. This was a result of an increase in the taxable values. General Fund
incoming transfers decreased by $195,504, and outgoing transfers increased by $1,419,606. Overall, general
fund expenditures increased by $1,367,187 or 9%. This can be attributed primarily to increases in public safety
expenditures which account for approximately $925,000 of the increase with the second highest being general
government expenditures which increased by approximately $300,000.
Nonmajor governmental funds consisting of special revenue funds, debt service fund and the capital projects
fund which have a combined fund balance of $5,200,226. The net increase in fund balance, after transfers, of
the nonmajor governmental funds was $1,741,475. The increase was a result of expenditures and transfers
out being less than nonmajor governmental fund revenue and transfers in. In the prior year, nonmajor
governmental funds reported a decrease of $492,337.
• Nonmajor governmental fund revenue increased by approximately $160,870 or 6%.
• Nonmajor government fund expenditures increased by approximately $583,600 or 100%.
• Nonmajor governmental fund transfers in increased by approximately $2,047,000 or 745%.
• Nonmajor governmental fund transfers out increased by approximately $349,400 or 18%.
The changes in nonmajor governmental fund financial statement elements shown above resulted from activity
across several nonmajor governmental funds. These changes were primarily attributable to the Capital
Projects Fund and the American Rescue Plan Act Special Revenue Fund, which were reported as nonmajor
funds in the current year after being presented as major funds in the prior year.
General Fund Revenue Highlights:
• Total general fund revenues for 2025 were approximately $2,132,900 (16%) more than 2024 revenue.
Increase in intergovernmental revenue of $879,400 is the largest contributor to this increase.
Decreased investment earnings of approximately $214,000 (36%) is the only category that
experienced a year-over-year decline.
• General fund 2025 intergovernmental revenues of $3,452,888 make up 22% of general fund revenues
compared to 19% in the prior year. This is an increase of $879,400 over 2024.
• The City’s investment portfolio is valued at approximately $28,011,800 as of September 30, 2025. The
general fund’s share of investment earnings showed an decrease of approximately $214,000
compared to the prior year due to a decline in the general fund’s share of the overall City cash and
investment pool.
11
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(Continued)
• The 2025 taxable property values were about 10% higher than the 2024 values. The City Commission
voted to reduce the millage rate to 2.7499 mills, instead of keeping the prior year rate of 2.8410. The
purpose for adopting the millage rate of 2.7499 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
$2,913,053,436. Ad valorem taxes of $8,021,538 represent 41% of the General Fund revenues for
2025, as they did in prior year.
General Fund Expenditure Highlights:
• Total general fund expenditures increased in current year by approximately $1,367,200 or 9% when
compared to prior year. Capital expenditures decreased by $238,600 (16%) in 2025 compared to 2024.
Personnel related costs of the general fund increased by approximately $1,293,000 or 13% when
compared to the prior year.
■ 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 operating revenues of
$14,659,161, operating expenses of $13,457,160, net non-operating revenue of $503,373, capital contributions
and grants of $248,134 and net transfers out of $25,332. The net position in the proprietary funds increased
$1,928,176 as a result of the fiscal year’s activities compared to $1,663,169 in the prior year. The unrestricted
net position of the enterprise funds amounted to $12,470,698 at the end of fiscal year 2025 compared to
$13,959,213 at the end of the prior year.
The utility fund experienced a decline in operating income of $461,561 from $2,442,162 in the prior year to
$1,980,601 in the current year. The operating profit as a percentage of operating revenue was 23% in the prior
year and 21% in the current year. The Utility Fund reported a positive change in net position in both the current
and prior years; however, the increase declined from $2,371,162 in the prior year to $1,773,855 in the current
year, a decrease of $597,307. The decline was primarily attributable to higher operating expenses, which
increased by approximately $566,000 or 7% in 2025, mainly due to the following:
• Personnel related expenses increased by approximately $287,000 (13%) due to wage rate increases and
the addition of employees allocated to the utility fund.
• Repair and maintenance expenses increased by approximately $242,000 (48%) due to the timing of
these types of costs.
Stormwater rates stayed constant in fiscal year 2025 as there were no rate changes. The stormwater fund’s
operating revenue was approximately 56% of the total operating expenses in 2025 compared to 59% for the
prior year.
During fiscal year 2025, the sanitation fund reported an increase in net position of approximately $210,700
due to an approximate increase in operating revenue of $78,220 (3%) couple with an increase in operating
expenses of approximately $34,100 (1%).
12
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(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 $2,342,062. The actual decrease in
fund balance was $1,069,255. This resulted in a $1,272,807 positive budgetary variance. The budget was amended
during the 2025 fiscal year by increasing budgeted expenditures by $962,141. The budget amendments increased
budgeted intergovernmental revenue by $220,000 and increased budgeted transfers out by $607,000. The budget
was amended to reflect the difference between the original estimates for the year and actual expenditures
incurred.
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, 2025, amounted to $89,179,589. 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 $428,206 or 1% for governmental activities and an increase of $1,574,294 or 5% for business-type activities.
Capital asset events during the current fiscal year included the following:
▪ Governmental Activities
Buildings reflected a net decrease of $196,188 because of depreciation expense as there were no additions
to this category in 2025.
Intangible Assets reflected a net increase of $24,386 because of additions that exceeded depreciation. This
asset category includes land easements and computer software.
Improvements Other Than Buildings reflected a net increase of $2,250,575. This represents capital asset
increase of approximately $3,000,000 offset by depreciation of approximately $746,000. Totals additions
include approximately $2,905,000 of construction in progress that was completed and placed into service
during 2025.
Equipment reflected a net decrease of $139,674. This represents capital asset additions of approximately
$275,000, offset by depreciation of approximately $155,000.
Construction in progress decreased by $1,510,893 resulting from current year additions of $1,395,043 and
reductions due to projects placed into service of $2,905,936.
■ Business-type Activities
Buildings reflected a net decrease in asset value of $6,333 from depreciation.
Improvements Other Than Buildings reflected a net increase of $48,246. This represents capital asset
increases of approximately $2,125,000, offset by depreciation of approximately $2,076,000.
Equipment reflected a net decrease of $109,106. This represents capital asset increase of approximately
$263,000, offset by depreciation of approximately $155,000.
Construction in Progress had a net increase of $1,423,466 but included approximately $3,381,100 of current
year additions and reductions due to projects placed into service of approximately $1,957,600.
13
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2025
(Concluded)
Capital Assets Activity
(net of accumulated depreciation)
as of September 30,
Governmental Activities Business-type Activities Total Primary Government
2025 2024 2025 2024 2025 2024
Land $ 13,171,038 $ 13,171,038 $ 1,656,018 $ 1,656,018 $ 14,827,056 $ 14,827,056
Intangibles 111,890 87,504 212,334 212,525 324,224 300,029
Buildings 6,853,672 7,049,860 (1,219) 5,114 6,852,453 7,054,974
Improvements - Other 29,717,210 27,466,635 27,407,316 27,359,070 57,124,526 54,825,705
Equipment 719,575 859,249 691,499 582,393 1,411,074 1,441,642
Construction in progress 2,812,534 4,323,427 5,827,722 4,404,256 8,640,256 8,727,683
Total $ 53,385,919 $ 52,957,713 $ 35,793,670 $ 34,219,376 $ 89,179,589 $ 87,177,089
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 2025 fiscal year, the City had total long-term debt outstanding of $5,743,000. The amount of
$4,818,000 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 on the table below.
Long-Term Debt
as of September 30,
Governmental Activities Business-type Activities Total Primary Government
2025 2024 2025 2024 2025 2024
Governmental Activities:
Capital Impvt Rev Bonds, Series 2018 925,000 1,010,000 - - 925,000 1,010,000
Business-type Activities:
Utilities System Revenue Bond,
Series 2014 - - 1,425,000 2,815,000 1,425,000 2,815,000
Refunding Bank Loan, Series 2021 - - 3,393,000 3,854,000 3,393,000 3,854,000
Total $ 925,000 $ 1,010,000 $ 4,818,000 $ 6,669,000 $ 5,743,000 $ 7,679,000
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.
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.
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, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
Primary
Government
Governmental Business-type 2024
Activities Activities Total Totals
ASSETS
Equity in pooled cash and investments $ 5,968,095 $ 15,232,640 $ 21,200,735 $ 25,070,640
Receivables, current:
Customer accounts, net 1,490 756,515 758,005 801,036
Intergovernmental and other 1,828,101 - 1,828,101 1,355,409
Notes and leases receivable, net 760 60,783 61,543 80,797
Inventory 143,207 49,872 193,079 159,247
Prepaid expenses 66,963 - 66,963 92,628
Internal balances 286,266 (286,266) - -
Due from fiduciary component unit 2,665,907 - 2,665,907 1,056,286
Net pension assets 374,964 229,984 604,948 -
Restricted assets:
Equity in pooled cash and investments 5,562,659 3,321,138 8,883,797 7,816,412
Capital assets:
Non-depreciable 15,983,572 7,483,740 23,467,312 23,554,739
Depreciable, net 37,402,347 28,309,930 65,712,277 63,622,350
Notes and leases receivable, noncurrent 1,520 759,142 760,662 821,445
TOTAL ASSETS 70,285,851 55,917,478 126,203,329 124,430,989
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 2,426,695 211,968 2,638,663 3,147,238
Deferred outflows - loss on refunding - - - 107,944
Deferred outflows related to OPEB 49,075 17,483 66,558 42,422
TOTAL DEFERRED OUTFLOWS OF RESOURCES 2,475,770 229,451 2,705,221 3,297,604
LIABILITIES
Accounts payable and accrued expenses 1,148,820 1,633,836 2,782,656 3,045,439
Construction costs payable 104,611 230,834 335,445 266,684
Due to other governments - 75,813 75,813 84,809
Unearned revenue 296,431 - 296,431 378,003
Accrued interest payable 16,419 35,749 52,168 72,472
Customer deposits 19,397 690,041 709,438 711,839
Long-term obligations:
Due within one year 341,694 1,946,818 2,288,512 2,195,948
Due in more than one year 3,080,429 3,276,418 6,356,847 10,437,378
TOTAL LIABILITIES 5,007,801 7,889,509 12,897,310 17,192,572
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 2,589,911 839,666 3,429,577 181,876
Deferred inflows related to OPEB 164,995 58,778 223,773 284,511
Deferred inflows related to leases - 748,390 748,390 821,233
Total deferred inflows of resources 2,754,906 1,646,834 4,401,740 1,287,620
NET POSITION
Net investment in capital assets 52,356,308 30,744,836 83,101,144 79,339,349
Restricted for:
General capital projects 421,157 - 421,157 106,060
Public safety 270,165 - 270,165 215,181
Road maintenance and construction 484,994 - 484,994 454,111
Other purposes 442,961 - 442,961 460,720
Substance use prevention and awareness 279,664 - 279,664 197,563
Debt service - 156,667 156,667 146,551
Renewal and replacement - 250,000 250,000 250,000
Utility rate stabilization - 400,000 400,000 400,000
Utility system improvements - 2,495,324 2,495,324 2,319,859
Building code enforcement - 93,061 93,061 95,141
Unrestricted 10,743,665 12,470,698 23,214,363 25,263,866
TOTAL NET POSITION $ 64,998,914 $ 46,610,586 $ 111,609,500 $ 109,248,401
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
Program Revenues Net (Expense) Revenue and
Operating Capital Changes in Net Position
Charges for Grant and Grant and Governmental Business-Type 2024
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Totals
PRIMARY GOVERNMENT:
Governmental activities:
General government $ 4,436,463 $ 251,436 $ 27,650 $ 331,359 $ (3,826,018) $ - $ (3,826,018) $ (3,475,105)
Public safety 9,027,448 839,742 463,217 700,450 (7,024,039) - (7,024,039) (6,660,545)
Transportation 2,688,631 250,602 116,091 - (2,321,938) - (2,321,938) (2,038,353)
Parks and recreation 2,043,118 109,994 - 245,500 (1,687,624) - (1,687,624) (1,785,079)
Conservation and resource
management 43,650 - 312,932 - 269,282 - 269,282 63,540
Interest on long-term debt 32,837 - - - (32,837) - (32,837) (35,855)
Total governmental activities 18,272,147 1,451,774 919,890 1,277,309 (14,623,174) - (14,623,174) (13,931,397)
Business-type activities
Utility 8,734,940 10,430,228 - 128,806 - 1,824,094 1,824,094 2,659,945
Stormwater 1,926,815 1,064,078 - - - (862,737) (862,737) (594,995)
Sanitation 2,372,931 2,464,345 - 119,328 - 210,742 210,742 81,457
Building code enforcement 619,374 594,162 - - - (25,212) (25,212) (124,974)
Total business-type activities 13,654,060 14,552,813 - 248,134 - 1,146,887 1,146,887 2,021,433
TOTAL PRIMARY GOVERNMENT $ 31,926,207 $ 16,004,587 $ 919,890 $ 1,525,443 $ (14,623,174) $ 1,146,887 $ (13,476,287) $ (11,909,964)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 8,021,538 - 8,021,538 7,241,664
Public service taxes and franchise fees 2,147,351 - 2,147,351 1,975,611
Fuel taxes levied for transportation purposes 854,185 - 854,185 887,117
Discretionary Sales Surtax 1,300,188 - 1,300,188 1,270,973
State shared revenue 2,177,046 - 2,177,046 2,237,681
Grants not restricted to specific programs 66,271 - 66,271 1,179,539
Investment earnings (loss) 483,910 651,589 1,135,499 1,873,649
Miscellaneous 89,651 155,032 244,683 151,368
Gain (loss) on disposal of capital assets 16,803 - 16,803 10,013
TRANSFERS 25,332 (25,332) - -
Total general revenues and transfers 15,182,275 781,289 15,963,564 16,827,615
CHANGE IN NET POSITION 559,101 1,928,176 2,487,277 4,917,651
NET POSITION, beginning of year 64,565,991 44,682,410 109,248,401 104,330,750
Restatement (Note 15) (126,178) - (126,178) -
NET POSITION, beginning of year, as restated 64,439,813 44,682,410 109,122,223 104,330,750
NET POSITION, end of year $ 64,998,914 $ 46,610,586 $ 111,609,500 $ 109,248,401
See accompanying notes.
16
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET – GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
2025
Non-Major
General Governmental 2024
ASSETS Fund Funds Total Totals
Equity in pooled cash and investments $ 5,968,095 $ 5,562,659 $ 11,530,754 $ 13,422,421
Receivables, net
Customer accounts, net 1,490 - 1,490 1,264
Intergovernmental and other 1,435,395 392,706 1,828,101 1,355,409
Notes receivable, current 760 - 760 760
Inventory 143,207 - 143,207 109,375
Prepaid expenditures 66,963 - 66,963 92,628
Due from other funds 3,387,714 - 3,387,714 2,010,988
Notes receivable, non-current 1,520 - 1,520 1,520
TOTAL ASSETS $ 11,005,144 $ 5,955,365 $ 16,960,509 $ 16,994,365
LIABILITIES
Accounts payable and accrued liabilities 1,076,041 72,779 1,148,820 1,650,728
Construction costs payable 64,130 40,481 104,611 120,010
Due to other funds - 435,541 435,541 420,061
Deposits 16,398 2,999 19,397 15,896
Unearned revenue 93,092 203,339 296,431 378,003
TOTAL LIABILITIES 1,249,661 755,139 2,004,800 2,584,698
FUND BALANCE
Nonspendable:
Inventory 143,207 - 143,207 109,375
Prepaids 66,963 - 66,963 92,628
Restricted for:
Public safety - 270,165 270,165 215,181
Road maintenance and construction - 484,994 484,994 454,111
Capital projects - 421,157 421,157 106,060
Other purposes - 442,961 442,961 460,720
Substance use prevention and awareness 279,664 - 279,664 197,563
Committed to:
Conservation and resource management - 595,036 595,036 325,755
Assigned to:
Community redevelopment 50,000 - 50,000 50,000
Capital projects - 3,297,968 3,297,968 2,193,617
Operating reserves 5,069,108 - 5,069,108 4,674,158
Subsequent year budget 1,662,539 - 1,662,539 922,251
Unassigned 2,484,002 (312,055) 2,171,947 4,608,248
TOTAL FUND BALANCES 9,755,483 5,200,226 14,955,709 14,409,667
TOTAL LIABILITIES AND FUND BALANCES $ 11,005,144 $ 5,955,365 $ 16,960,509 $ 16,994,365
See accompanying notes.
17
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
Amounts reported for governmental activities in the statement of net position
are different because:
2025 2024
FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 14,955,709 $ 14,409,667
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 53,385,919 52,957,713
The net pension assets are not current financial resources and therefore are
not reported in the governmental funds. 374,964 -
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. 2,475,770 2,339,181
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. (2,754,906) (390,723)
Interest payable on long-term debt does not require current financial resources
and therefore, is not reported as a liability in governmental funds. (16,419) (17,928)
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 (3,422,123) (4,731,919)
NET POSITION OF GOVERNMENTAL ACTIVITIES $ 64,998,914 $ 64,565,991
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Formerly Major Formerly Major
American
Rescue Plan
Act Capital Non-major
General Special Projects Governmental 2024
Fund Revenue Fund Fund Funds Total Totals
REVENUES:
Property taxes $ 8,021,538 $ - $ 8,021,538 $ 7,241,664
Non-property taxes 1,686,733 2,154,373 3,841,106 3,363,483
Licenses and permits 1,040,959 - 1,040,959 940,102
Intergovernmental revenue 3,452,888 183,828 3,636,716 4,081,030
Charges for services 1,058,350 80,679 1,139,029 1,094,450
Fines and forfeitures 138,638 369,916 508,554 268,971
Investment earnings (loss) 373,632 110,277 483,909 803,535
Miscellaneous revenues 119,604 - 119,604 88,875
Total revenues 15,892,342 2,899,073 18,791,415 17,882,110
EXPENDITURES:
General government 4,071,909 43,651 4,115,560 3,814,274
Public safety 8,128,845 123,564 8,252,409 7,333,968
Transportation 1,935,723 - 1,935,723 1,790,336
Culture/recreation 1,601,765 - 1,601,765 1,365,731
Capital outlay 1,255,333 878,891 2,134,224 6,330,832
Debt service - 119,346 119,346 122,364
Total expenditures 16,993,575 1,165,452 18,159,027 20,757,505
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (1,101,233) 1,733,621 632,388 (2,875,395)
OTHER FINANCING SOURCES (USES)
Transfers in 1,696,932 2,322,985 4,019,917 4,898,254
Transfers (out) (1,679,454) (2,315,131) (3,994,585) (3,405,046)
Sale of general capital assets 14,500 - 14,500 8,632
TOTAL OTHER FINANCING SOURCES (USES) 31,978 7,854 39,832 1,501,840
NET CHANGE IN FUND BALANCE (1,069,255) 1,741,475 672,220 (1,373,555)
FUND BALANCE, beginning of year -
previously reported 10,950,916 - 2,193,617 1,265,134 14,409,667 15,783,222
Change within financial reporting entity -
(major to nonmajor) - - (2,193,617) 2,193,617 - -
Correction of errors (Note 16) (126,178) - - - (126,178) -
FUND BALANCE, beginning of year -
restated 10,824,738 - - 3,458,751 14,283,489 15,783,222
FUND BALANCE, end of year $ 9,755,483 $ - $ - $ 5,200,226 $ 14,955,709 $ 14,409,667
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
Amounts reported for governmental activities in the statement of net activities
are different because:
2025 2024
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 672,220 $ (1,373,555)
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. 1,808,864 6,211,453
This is the amount of depreciation recorded in the current period. (1,380,658) (1,448,273)
This is the book value of dispositions recorded in the current period. - (7,149)
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. 85,000 85,000
This is the change in accrued interest payable on long-term obligations. 1,509 1,508
This is the change in accrued compensated absences during the year. (139,252) 65,938
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. 43,852 (13,372)
This amount represents the change in deferred outflows related to OPEB. 17,935 (10,547)
This amount represents the change in the total OPEB liability. (55,484) 27,505
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. (2,408,035) 79,181
This amount represents the change in deferred outflows related to pensions. 118,654 (2,831,488)
This amount represents the change in the net pension liability(asset). 1,794,496 2,468,281
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 559,101 $ 3,254,482
See accompanying notes.
20
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Totals Totals
ASSETS
Current assets:
Equity in pooled cash and investments $ 14,494,660 $ 271,750 $ - $ 466,230 $ 15,232,640 $ 16,319,689
Accounts receivables, net 620,534 44,082 91,899 - 756,515 799,772
Leases receivable - current 60,783 - - - 60,783 80,037
Inventory 49,872 - - - 49,872 49,872
Total current assets 15,225,849 315,832 91,899 466,230 16,099,810 17,249,370
Noncurrent assets:
Net pension asset 195,326 18,905 - 15,753 229,984 -
Leases receivable - noncurrent 759,142 - - - 759,142 819,925
Restricted assets:
Equity in pooled cash and investments 3,321,138 - - - 3,321,138 3,144,942
Capital assets:
Non-depreciable 5,994,562 1,489,178 - - 7,483,740 6,060,274
Depreciable, net 22,091,061 6,113,135 96,901 8,833 28,309,930 28,159,102
Total noncurrent assets 32,361,229 7,621,218 96,901 24,586 40,103,934 38,184,243
Total assets 47,587,078 7,937,050 188,800 490,816 56,203,744 55,433,613
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 180,024 17,424 - 14,520 211,968 839,197
Deferred outflows - refunding loss - - - - - 107,944
Deferred outflows related to OPEB 12,855 2,159 - 2,469 17,483 11,282
Total deferred outflows of resources 192,879 19,583 - 16,989 229,451 958,423
Continued…
See accompanying notes.
21
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (concluded)
SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Totals Totals
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 1,346,202 $ 89,504 $ 180,231 $ 17,899 $ 1,633,836 $ 1,394,711
Construction costs payable 184,962 45,872 - - 230,834 146,674
Due to other governments 9,494 - - 66,319 75,813 84,809
Due to other funds - - 286,266 - 286,266 534,641
Compensated absences 45,696 1,790 - 4,332 51,818 65,422
Bonds and notes payable, current 1,709,750 185,250 - - 1,895,000 1,851,000
Total current liabilities 3,296,104 322,416 466,497 88,550 4,173,567 4,077,257
Noncurrent liabilities:
Liabilities payable from restricted assets:
Customer deposits 690,041 - - - 690,041 695,943
Interest payable 33,591 2,158 - - 35,749 54,544
Compensated absences 241,600 591 - 7,898 250,089 241,129
Other postemployment obligation payable 75,980 12,759 - 14,590 103,329 84,983
Net pension liability - - - - - 840,873
Bonds and notes payable, noncurrent portion 2,923,000 - - - 2,923,000 4,818,000
Total noncurrent liabilities 3,964,212 15,508 - 22,488 4,002,208 6,735,472
Total liabilities 7,260,316 337,924 466,497 111,038 8,175,775 10,812,729
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 713,127 69,021 - 57,518 839,666 -
Deferred inflows related to OPEB 43,221 7,258 - 8,299 58,778 75,664
Deferred inflows related to leases 748,390 - - - 748,390 821,233
Total deferred inflows of resources 1,504,738 76,279 - 65,817 1,646,834 896,897
NET POSITION
Net investment in capital assets 23,267,911 7,371,191 96,901 8,833 30,744,836 27,511,646
Restricted for:
Debt retirement 156,667 - - - 156,667 146,551
Renewal and replacement 250,000 - - - 250,000 250,000
Utility rate stabilization 400,000 - - - 400,000 400,000
Utility system improvements (expendable) 2,495,324 - - - 2,495,324 2,319,859
Building code enforcement - - - 93,061 93,061 95,141
Unrestricted 12,445,001 171,239 (374,598) 229,056 12,470,698 13,959,213
Total net position $ 39,014,903 $ 7,542,430 $ (277,697) $ 330,950 $ 46,610,586 $ 44,682,410
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Totals Total
OPERATING REVENUES:
Charges for services
Customer charges $ 10,381,958 $ 1,064,078 $ 2,463,931 $ 594,162 $ 14,504,129 $ 14,110,566
Miscellaneous revenues 155,032 - - - 155,032 64,829
Total operating income 10,536,990 1,064,078 2,463,931 594,162 14,659,161 14,175,395
OPERATING EXPENSES:
Personnel services 2,582,605 392,756 47,732 414,511 3,437,604 3,094,122
Contractual services 919,935 414,065 2,161,264 58,673 3,553,937 3,239,754
Supplies 532,596 44,438 - 3,446 580,480 602,007
Repairs and maintenance 751,094 111,339 5,808 29,337 897,578 545,006
Utilities 391,470 - - - 391,470 383,890
Depreciation 1,694,621 515,373 15,395 11,602 2,236,991 2,358,247
Intergovernmental charges 1,143,384 373,380 138,576 84,132 1,739,472 1,661,712
Other expenses 540,684 57,115 4,156 17,673 619,628 541,665
Total operating expenses 8,556,389 1,908,466 2,372,931 619,374 13,457,160 12,426,403
OPERATING INCOME (LOSS) 1,980,601 (844,388) 91,000 (25,212) 1,202,001 1,748,992
NONOPERATING REVENUE (EXPENSE)
Connection charges 48,270 - - - 48,270 12,595
Franchise fees - - 414 - 414 339
Investment earnings (loss) 628,645 11,414 - 11,530 651,589 1,070,115
Interest expense (183,497) (18,349) - - (201,846) (242,073)
Other, net 4,946 - - - 4,946 2,100
Total nonoperating revenues (expense) 498,364 (6,935) 414 11,530 503,373 843,076
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Totals Total
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 2,478,965 $ (851,323) $ 91,414 $ (13,682) $ 1,705,374 $ 2,592,068
CAPITAL CONTRIBUTIONS
System development charges 128,806 - - - 128,806 194,636
Capital grants and contributions - - 119,328 - 119,328 369,673
Total capital contributions 128,806 - 119,328 - 248,134 564,309
TRANSFERS
Transfers in - 579,528 - 229,056 808,584 250,296
Transfers out (833,916) - - - (833,916) (1,743,504)
Total transfers (833,916) 579,528 - 229,056 (25,332) (1,493,208)
CHANGE IN NET POSITION 1,773,855 (271,795) 210,742 215,374 1,928,176 1,663,169
NET POSITION, beginning of year 37,241,048 7,814,225 (488,439) 115,576 44,682,410 43,019,241
NET POSITION, end of year $ 39,014,903 $ 7,542,430 $ (277,697) $ 330,950 $ 46,610,586 $ 44,682,410
See accompanying notes.
24
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Total Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 10,557,846 $ 1,071,980 $ 2,479,722 $ 585,864 $ 14,695,412 $ 14,113,350
Payments to suppliers (3,798,185) (1,255,289) (2,303,192) (196,966) (7,553,632) (6,611,621)
Payments for salaries and benefits (2,216,762) (378,843) (47,897) (397,955) (3,041,457) (2,997,221)
Net cash flows from operating activities 4,542,899 (562,152) 128,633 (9,057) 4,100,323 4,504,508
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers to other funds (833,916) - - - (833,916) (1,743,504)
Transfers from other funds - 579,528 - 229,056 808,584 250,296
Cash received (paid) from/to other funds - - (248,375) - (248,375) 513,548
Connection charges received 48,270 - - - 48,270 12,595
Franchise fees received - - 414 - 414 339
Net cash flows from noncapital financing activities (785,646) 579,528 (247,961) 229,056 (225,023) (966,726)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets, net of related payables (3,546,064) (181,061) - - (3,727,125) (2,536,875)
Principal paid on notes, bonds and lease obligations (1,670,300) (180,700) - - (1,851,000) (1,815,000)
Interest paid on borrowings and other debt costs (106,276) (6,421) - - (112,697) (152,543)
Capital contributions and impact fees received,
net of change in related receivables 128,806 - 119,328 - 248,134 564,309
Net cash flows from capital and related financing activities (5,193,834) (368,182) 119,328 - (5,442,688) (3,940,109)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on invested funds 628,645 11,414 - 11,530 651,589 1,070,115
Other income 4,946 - - - 4,946 2,100
Net cash flows from investing activities 633,591 11,414 - 11,530 656,535 1,072,215
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (802,990) (339,392) - 231,529 (910,853) 669,888
CASH AND CASH EQUIVALENTS, beginning of year 18,618,788 611,142 - 234,701 19,464,631 18,794,743
CASH AND CASH EQUIVALENTS, end of year $ 17,815,798 $ 271,750 $ - $ 466,230 $ 18,553,778 $ 19,464,631
As shown in the Accompanying Financial Statements
Equity in cash and investments $ 14,494,660 $ 271,750 $ - $ 466,230 $ 15,232,640 $ 16,319,689
Restricted equity in cash and investments 3,321,138 - - - 3,321,138 3,144,942
Total cash and cash equivalents $ 17,815,798 $ 271,750 $ - $ 466,230 $ 18,553,778 $ 19,464,631
Noncash financing and investing activities:
Amortization of refunding loss $ 93,911 $ 14,033 $ - $ - $ 107,944 $ 107,942
Total noncash financing and investing activities $ 93,911 $ 14,033 $ - $ - $ 107,944 $ 107,942
Continued…
See accompanying notes.
25
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2024
Utility Stormwater Sanitation Enforcement Total Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ 1,980,601 $ (844,388) $ 91,000 $ (25,212) $ 1,202,001 $ 1,748,992
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense 1,694,621 515,373 15,395 11,602 2,236,991 2,358,247
(Increase) decrease in accounts receivable 19,564 7,902 15,791 - 43,257 19,242
(Increase) decrease in leases receivable 80,037 - - - 80,037 30,963
Increase (decrease) in lease related deferred inflows (72,843) - - - (72,843) (72,843)
(Increase) decrease in amounts due from other governments - - - (8,298) (8,298) 10,617
Increase (decrease) in accounts payable 491,170 (254,952) 6,612 (3,705) 239,125 372,143
Increase (decrease) in compensated absences 31,753 (17,798) - (9,105) 4,850 (14,737)
Increase (decrease) in amounts due to other governments (10,192) - - - (10,192) (9,730)
Increase (decrease) in customer deposits (5,902) - - - (5,902) (50,024)
(Increase) decrease in OPEB related deferred outflows (4,636) (742) - (823) (6,201) 4,256
Increase (decrease) in the total OPEB liability 14,071 2,087 - 2,188 18,346 (12,700)
Increase (decrease) in OPEB related deferred inflows (11,899) (2,244) - (2,743) (16,886) 2,803
(Increase) decrease in pension related deferred outflows 432,310 23,808 82,493 88,618 627,229 617,519
Increase (decrease) in the net pension liability (613,557) (41,314) (82,658) (103,344) (840,873) (500,240)
(Increase) decrease in the net pension asset (195,326) (18,905) - (15,753) (229,984) -
Increase (decrease) in pension related deferred inflows 713,127 69,021 - 57,518 839,666 -
Net cash flows from operating activities $ 4,542,899 $ (562,152) $ 128,633 $ (9,057) $ 4,100,323 $ 4,504,508
See accompanying notes.
26
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2024
Pension Trust
Funds
ASSETS 2025 2024
Cash and cash equivalents $ 882,562 $ 648,347
Accrued income 95,619 98,357
Investments at fair value 51,751,779 47,692,750
Total assets 52,729,960 48,439,454
LIABILITIES
Accounts payable and accrued liabilities 48,111 32,344
Due to City 2,665,907 1,056,286
Total Liabilities 2,714,018 1,088,630
NET POSITION
Restricted for pension benefits $ 50,015,942 $ 47,350,824
See accompanying notes.
27
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
Pension Trust
Funds
2025 2024
ADDITIONS
Contributions:
City $ 988,536 $ 1,140,496
Plan members 334,656 288,232
State of Florida 416,020 -
Total contributions 1,739,212 1,428,728
Investment income 4,287,628 8,709,711
Less investment expenses: (185,191) (155,193)
Net investment income 4,102,437 8,554,518
Total additions 5,841,649 9,983,246
DEDUCTIONS
Administrative expenses 223,629 132,957
Payments to retirees and participants 2,952,902 2,635,068
Total deductions 3,176,531 2,768,025
CHANGE IN NET POSITION 2,665,118 7,215,221
NET POSITION, beginning of year 47,350,824 40,135,603
NET POSITION, end of year $ 50,015,942 $ 47,350,824
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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, 2025
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 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
30
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
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, 2025
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, 2025
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, 2025
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
The City provides compensated absences to eligible employees in accordance with its personnel policies and
applicable employment agreements. Compensated absences generally include vacation leave, sick leave, or other
paid time off that accumulates and may be carried forward for use in future periods or paid upon separation from
service, subject to established limits.
In accordance with GASB Statement No. 101, Compensated Absences, the City recognizes a liability for leave that has
not been used when the leave is attributable to services already rendered, the leave accumulates, and it is more
likely than not that the leave will be used for time off or otherwise paid in cash or sett led through noncash means.
The liability is measured using the employee’s pay rate as of the financial statement date, including applicable salary -
related payments that are directly and incrementally associated with the leave.
For purposes of estimating the compensated absences liability, the City applies a last -in, first-out flow assumption.
Under this assumption, leave used by employees is presumed to come first from leave earned in the current period,
with accumulated leave balances from prior periods being used only after current-period leave has been exhausted.
Accordingly, the liability is based on accumulated leave balances that are more likely than not to be used or paid in
future periods.
Compensated absences are reported as liabilities in the government-wide financial statements. A liability is reported
in the governmental funds only to the extent the liability is normally expected to be liquidated with expendable
available financial resources.
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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
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.
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, are 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, 2024, 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, 2025, 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
35
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
•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.
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, 2025, the City implemented the provisions of GASB Statement No. 101
–Compensated Absences. The primary 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.
Implementation of this Statement had no effect on beginning net position.
Future GASB Pronouncement Implementations
The Governmental Accounting Standards Board has issued statements that will become effective in future fiscal
years, including Statement No. 103, Financial Reporting Model Improvements, Statement No. 104, Disclosure of
Certain Capital Assets, and Statement No. 105, Subsequent Events. The City is evaluating the requirements of these
statements and the related impact on its financial statements. Management does not expect implementation to
have a material effect on the City’s financial position or results of operations.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
36
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, 2025, the carrying amount of cash on hand and on deposit with banks, including interest -bearing
deposits was $2,955,260 and the related bank balance was $2,552,195. 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, 2025
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, 2025:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Accrued interest $ 253,729 $ 253,729 $ -$-$-253,729
Money market funds / cash 171,514 171,514 - - - 171,514
Corporate bonds 10,392,498 1,649,793 8,665,963 76,742 -10,392,498
U.S. Treasury Obligations and
Federal Agency Securities 17,165,340 396,585 16,435,265 333,490 -17,165,340
Florida PRIME 28,752 28,752 - - - 28,752
Total $ 28,011,833 $ 2,500,373 $ 25,101,228 $ 410,232 $ -$ 28,011,833
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, 2025, 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 September 30, 2025, are comprised of the following items:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 1.30%
Corporate Bonds Aa2 1.00%
Corporate Bonds Aa3 1.50%
Corporate Bonds A1 5.60%
Corporate Bonds A2 3.80%
Corporate Bonds A3 5.20%
Corporate Bonds Baa1 6.10%
Corporate Bonds Baa2 7.70%
Corporate Bonds Baa3 0.40%
Corporate Bonds Not Rated 5.10%
U.S. Treasury Obligations and Federal Agency Securities Aaa 43.50%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 18.80%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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,
2025:
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 $ 428,026 $ 428,026 $ -$-$-$ 428,026
Corporate bonds 2,849,489 -2,050,446 617,319 181,724 2,849,489
U.S. Treasury Obligations and
Federal Agency Securities 4,358,990 32,961 1,852,092 1,214,857 1,259,080 4,358,990
Total $ 7,636,505 $ 460,987 $ 3,902,538 $ 1,832,176 $ 1,440,804 $ 7,636,505
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 $ 290,720 $ 290,720 $ -$-$-$ 290,720
Corporate bonds 1,856,574 120,838 1,216,432 400,875 118,429 1,856,574
U.S. Treasury Obligations and
Federal Agency Securities 2,810,565 53,821 1,144,550 790,970 821,224 2,810,565
Total $ 4,957,859 $ 465,379 $ 2,360,982 $ 1,191,845 $ 939,653 $ 4,957,859
The City’s pension trust fund fixed income investment balances as of September 30, 2025, 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 0.20%
Corporate Bonds Aa2 2.10%
Corporate Bonds Aa3 1.10%
Corporate Bonds A1 7.50%
Corporate Bonds A2 5.50%
Corporate Bonds A3 5.00%
Corporate Bonds Baa1 4.40%
Corporate Bonds Baa2 9.70%
Corporate Bonds Baa3 2.70%
Corporate Bonds Not Rated 1.40%
U.S. Treasury Obligations and Federal Agency Securities AAA 33.40%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 27.00%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 0.20%
Corporate Bonds Aa2 2.10%
Corporate Bonds Aa3 1.10%
Corporate Bonds A1 7.60%
Corporate Bonds A2 5.50%
Corporate Bonds A3 5.00%
Corporate Bonds Baa1 4.50%
Corporate Bonds Baa2 9.70%
Corporate Bonds Baa3 2.70%
Corporate Bonds Not Rated 1.40%
U.S. Treasury Obligations and Federal Agency Securities Aa1 33.50%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 26.70%
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, procedur es 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, 2025
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, 202 5:
Fair Value Measurements Using
Quoted Prices in Significant Other Significant
Active Markets for Observable Unobservable Reported at
Identical Assets Inputs Inputs Net Asset
Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3) Value (NAV)
City Investments:
Accrued interest $ 253,729 $ 253,729 $ - $ - -
Money Markets 200,266 200,266 - - -
Corporate Bonds 10,392,498 - 10,392,498 - -
U.S. Treasury Obligations and -
Federal Agency Securities 17,165,340 - 17,165,340 - -
Subtotal - City Investments 28,011,833 453,995 27,557,838 - -
General Employees' Pension Plan:
Money Markets 428,026 428,026 - - -
Corporate Bonds 2,849,489 - 2,849,489 - -
U.S. Treasury Obligations and
Federal Agency Securities 4,358,990 - 4,358,990 - -
Mutual Funds - Equities 2,823,164 2,823,164 - - -
ETFs 6,384,017 6,384,017 - - -
Alternative Investments - Hedge Funds 602,061 - 602,061 - 602,061
Equities 13,871,086 13,871,086 - - -
Subtotal - General Employees' Pension Plan 31,316,833 23,506,293 7,810,540 - 602,061
Police Officers' Pension Plan:
Money Markets 290,720 290,720 - - -
Corporate Bonds 1,856,574 - 1,856,574 - -
U.S. Treasury Obligations and
Federal Agency Securities 2,810,565 - 2,810,565 - -
Mutual Funds - Equities 1,844,980 1,844,980 - - -
ETFs 4,168,896 4,168,896 - - -
Alternative Investments - Hedge Funds 394,454 - - - 394,454
Equities 9,041,309 9,041,309 - - -
ICMA Self Directed 27,448 27,448 - - -
Subtotal - Police Officers' Pension Plan 20,434,946 15,373,353 4,667,139 - 394,454
Total Investments Measured at Fair Value $ 79,763,612 $ 39,333,641 $ 40,035,517 $ - $ 996,515
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
41
NOTE 3 – RECEIVABLES
Receivables, net of the allowance for doubtful accounts on September 30, 202 5, consist of the following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General Fund $ 1,490 $ - $ 1,490
Utility Fund 1,307,398 (686,864) 620,534
Stormwater Fund 86,288 (42,206) 44,082
Sanitation Fund 159,463 (67,564) 91,899
Total $ 1,554,639 $ (796,634) $ 758,005
Included in accounts receivable are $295,882 of water and sewer revenues earned but not billed as of September
30, 2025.
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 $39,817 in lease revenue and $31,008 of interest revenue during the fiscal year related to these
two leases. On September 30, 2025, the City’s receivable for lease payments was $819,925 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, 2025, the balance of the deferred inflow of resources
was $748,390.
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
42
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2025, is as follows:
Balance Balance
October 1, September 30,
2024 Transfers Increases Decreases 2025
Governmental Activities:
Capital assets, not being depreciated:
Land $ 13,171,038 $ - $ - $ - $ 13,171,038
Construction in process 4,323,427 (2,905,936) 1,395,043 - 2,812,534
Total capital assets, not being depreciated 17,494,465 (2,905,936) 1,395,043 - 15,983,572
Capital assets, being depreciated:
Buildings 10,519,603 - - - 10,519,603
Intangible assets 574,906 - 48,225 - 623,131
Improvements other than buildings 48,757,895 2,905,936 90,639 - 51,754,470
Machinery and equipment 7,951,595 - 274,957 (239,532) 7,987,020
Total capital assets, being depreciated 67,803,999 2,905,936 413,821 (239,532) 70,884,224
Less accumulated depreciation for:
Buildings (3,469,743) - (196,188) - (3,665,931)
Intangible assets (487,402) - (23,839) - (511,241)
Improvements other than buildings (21,291,260) - (746,000) - (22,037,260)
Machinery and equipment (7,092,346) - (414,631) 239,532 (7,267,445)
Total accumulated depreciation (32,340,751) - (1,380,658) 239,532 (33,481,877)
Total capital assets being depreciated, net 35,463,248 2,905,936 (966,837) - 37,402,347
Governmental activities capital assets, net $ 52,957,713 $ - $ 428,206 $ - $ 53,385,919
Business-type activities:
Capital assets, not being depreciated:
Land $ 1,656,018 $ - $ - $ - $ 1,656,018
Construction-in-progress 4,404,256 (1,957,640) 3,381,106 - 5,827,722
Total capital assets, not being depreciated 6,060,274 (1,957,640) 3,381,106 - 7,483,740
Capital assets, being depreciated:
Buildings 4,354,563 - - - 4,354,563
Intangible assets 244,709 - - - 244,709
Improvements other than buildings 90,567,763 1,957,640 166,918 - 92,692,321
Machinery and equipment 4,266,232 - 263,261 (194,826) 4,334,667
Total capital assets, being depreciated 99,433,267 1,957,640 430,179 (194,826) 101,626,260
Less accumulated depreciation for:
Buildings (4,349,449) - (6,333) - (4,355,782)
Intangible assets (32,184) - (191) - (32,375)
Improvements other than buildings (63,208,693) - (2,076,312) - (65,285,005)
Machinery and equipment (3,683,839) - (154,155) 194,826 (3,643,168)
Total accumulated depreciation (71,274,165) - (2,236,991) 194,826 (73,316,330)
Total capital assets being depreciated, net 28,159,102 1,957,640 (1,806,812) - 28,309,930
Business-type activities capital assets, net $ 34,219,376 $ - $ 1,574,294 $ - $ 35,793,670
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
43
NOTE 5 – CAPITAL ASSETS (concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government $ 184,153
Public safety 289,963
Transportation 582,415
Parks and recreation 324,127
Total depreciation expense - governmental activities $ 1,380,658
Business-type Activities:
Utility $ 1,694,621
Stormwater 515,373
Sanitation 15,395
Building Code Enforcement 11,602
Total depreciation expense - business-type activities $ 2,236,991
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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, 2025:
Balance Balance Amounts
October 1, September 30, Due within
2024 Increases Decreases 2025 One Year
Governmental Activities:
Long-term debt:
Capital Improvement Revenue Bond, Series 2018 $ 1,010,000 $ - $ (85,000) $ 925,000 $ 90,000
Total long-term debt 1,010,000 - (85,000) 925,000 90,000
Other liabilities:
OPEB obligation 234,567 55,484 - 290,051 -
Net pension liability 2,518,699 - (1,419,532) 1,099,167 -
Compensated absences 968,653 139,252 - 1,107,905 251,694
Total other liabilities 3,721,919 194,736 (1,419,532) 2,497,123 251,694
Total long-term obligations $ 4,731,919 $ 194,736 $ (1,504,532) 3,422,123 $ 341,694
Less amounts due in one year (341,694)
Total noncurrent obligations due in more than one year $ 3,080,429
Business-type Activities:
Long-term debt:
Utility System Revenue Refunding Bond, Series 2014 $ 2,815,000 $ - $ (1,390,000) $ 1,425,000 $ 1,425,000
Refunding Bank Loan Series 2021 3,854,000 - (461,000) 3,393,000 470,000
Total bonds and notes payable 6,669,000 - (1,851,000) 4,818,000 1,895,000
Other liabilities:
OPEB obligation 84,983 18,346 - 103,329 -
Net pension liability 840,873 - (840,873) - -
Compensated absences 306,551 - (4,644) 301,907 51,818
Total other liabilities 1,232,407 18,346 (845,517) 405,236 51,818
Total long-term liabilities $ 7,901,407 $ 18,346 $ (2,696,517) 5,223,236 $ 1,946,818
Less amounts due in one year (1,946,818)
Net long-term liabilities in excess of one year $ 3,276,418
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, 2025
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 5, are
as follows:
Governmental Activities Business-type Activities
Fiscal Year Ending Principal Interest Principal Interest
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 100,000 21,300 496,000 31,050
2030 100,000 17,750 502,000 22,627
2031-2035 450,000 32,838 960,000 20,077
Total $ 925,000 $ 155,934 $ 4,818,000 $ 232,602
Interest and amortization expenses incurred during the year ended September 30, 2025, amounted to $234,683.
The City is also required to maintain certain debt service coverage ratios in accordance with bond resolutions. As of
September 30, 2025, 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, 2025
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 4. 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 total 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 5:
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 $ 1,441,601 $ 1,439,661 $ 4,352,137
Refunding Bank Loan,
Series 2021 Utility Net Revenues 2032 3,609,001 524,301 4,352,137
Total $ 5,050,602 $ 1,963,962 $ 4,352,137 221.60%
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, 2024, there
are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount
payable of $116,785,000.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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, 2025, 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' $ 27,234,843 $ (604,948) $ 557,556 $ 2,208,639 $ 1,596,669
Police Officers' 20,610,200 1,099,167 2,081,107 1,220,938 695,191
$ 47,845,043 $ 494,219 $ 2,638,663 $ 3,429,577 $ 2,291,860
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,
2024 and 2023 (latest actuarial data available), were as follows:
September 30 September 30
2024 2023
Inactive plan members or beneficiaries
currently receiving benefits 83 84
Inactive plan members entitled to but
not yet receiving benefits 5 6
Active plan members 14 15
Total 102 105
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, 2025 there were no accumulated DROP balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
48
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute an actuarially determined amount of $557,528 (47% of covered payroll) for the
year ended September 30, 2025. City contributions to the Plan were $557,556 for the year ended September 30,
2025. 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, 2024, 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 5, 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, 2025
(September 30, 2024 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 9/30/2024 $ 25,579,142 $ 23,871,925 $ 1,707,217
Changes for the year:
Service cost 202,244 - 202,244
Interest 1,676,388 - 1,676,388
Difference between actual and
expected experience 456,791 - 456,791
Change in assumptions 1,212,294 - 1,212,294
Contributions - City - 689,268 (689,268)
Contributions - employee - 72,724 (72,724)
Net investment income - 5,169,751 (5,169,751)
Benefit payments, including refunds
of employee contributions (1,892,016) (1,892,016) -
Administrative expense - (71,861) 71,861
Net changes 1,655,701 3,967,866 (2,312,165)
Reporting period ending 9/30/2025 $ 27,234,843 $ 27,839,791 $ (604,948)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 5 measurement date
were as follows:
Total pension liability $ 27,587,865
Plan fiduciary net position (28,685,224)
Net pension liability (asset) $ (1,097,359)
Plan fiduciary net position as a
percentage of the total pension liability 104%
For the year ended September 30, 2025, the City recognized a total pension expense of $1,596,669. 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
Difference between projected and
actual earnings on Plan investments $ - $ 2,208,639
City contributions subsequent to the
measurement date 557,556 -
Total $ 557,556 $ 2,208,639
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, 2026. Other amounts reported
as deferred outflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2026 $ (555,238)
2027 130,537
2028 (1,040,983)
2029 (742,955)
$ (2,208,639)
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
8.53% and 22.38% for the years ended September 30, 2025 and 2024, respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 23, rolled forward
to the measurement date of September 30, 202 4, 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: 6.25% 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 inflation of 2.40%)
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% 6.05%
Small/Mid Cap Equity 10% 5.75%
International Equities 15% 5.00%
Fixed Income (70% core/30% Short-term) 30% 1.40%
Alternatives (50% REITS/50% MLPS) 6% 5.44%
Cash and Equivalents 6% 0.80%
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 6.25%. 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 d etermined 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 (6.25%) 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, 2025
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, 2024 and the financial reporting date
of September 30, 2025.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2024 6.75% $ 2,099,666 $ (604,948) $ (2,954,441)
9/30/2025 6.25% $ 1,483,178 $ (1,097,359) $ (3,578,996)
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, 2024 and 2023 measurement dates
(latest actuarial data available), were as follows:
September 30 September 30
2024 2023
Inactive plan members or beneficiaries
currently receiving benefits 22 21
Inactive plan members entitled to but
not yet receiving benefits 5 5
Active plan members 28 25
Total 55 51
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, 2025,
Police Plan net position included $55,163 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
52
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute an actuarially determined amount of $596,113 (26.5% of covered payroll) for the
year ended September 30, 2025. The City may use State contributions to offset this required contribution. City and
State contributions to the Police Plan were $847,000 for the year ended September 30, 2025. 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, 2024, 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 5, 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,
2025 (September 30, 2024 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 9/30/2024 $ 17,916,032 $ 16,263,678 $ 1,652,354
Changes for the year:
Service cost 453,970 - 453,970
Interest 1,215,576 - 1,215,576
Difference between actual and
expected experience 705,395 - 705,395
Changes of assumptions 1,042,161 - 1,042,161
Contributions - City - 451,228 (451,228)
Contributions - employee - 215,508 (215,508)
Net investment income - 3,384,767 (3,384,767)
Benefit payments, including refunds
of employee contributions (722,934) (743,052) 20,118
Administrative expense - (61,096) 61,096
Net changes 2,694,168 3,247,355 (553,187)
Reporting period ending 9/30/2025 $ 20,610,200 $ 19,511,033 $ 1,099,167
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 5 measurement
date were as follows:
Total pension liability $ 23,158,331
Plan fiduciary net position (21,330,718)
Net pension liability (asset) $ 1,827,613
Plan fiduciary net position as a
percentage of the total pension liability 92%
For the year ended September 30, 2025, the City recognized total pension expense of $695,191. The City reported
deferred outflows of resources and deferred inflows of resources related to the Police Plan from the following
sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 517,621 $ 51,740
Change in assumptions 716,486 -
Net difference between projected and
actual earnings on Plan investments - 1,169,198
City contributions subsequent to the
measurement date 847,000 -
Total $ 2,081,107 $ 1,220,938
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, 202 6. 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
2026 $ 277,622
2027 677,215
2028 (484,390)
2029 (457,278)
$ 13,169
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 8.41% and 22.47% for the years ended September 30, 2025 and 2024,
respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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, 2023, rolled forward
to September 30, 2024, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.50% to 18.50% (including 2.50% price inflation.
Investment Rate of Return: 6.25% 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 inflation of 2.40%)
are developed for each major asset class. These ranges are combined to produce the long -term expected rate of
return by weighing the expected future real rates of return by the target asset allocation percentage and by adding
expected inflation. 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% 6.05%
Small/Mid Cap Equity 10% 5.75%
International Equities 15% 5.00%
Fixed Income (70% core/30% Short-term) 30% 1.40%
Alternatives (50% REITS/50% MLPS) 6% 5.44%
Cash and Equivalents 6% 0.80%
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 6.25%. 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 (6.25%) 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, 2025
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, 2024 and the financial reporting date
of September 30, 2025.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2024 6.75% $ 3,149,910 $ 1,099,167 $ (619,308)
9/30/2025 6.25% $ 4,481,412 $ 1,827,613 $ (479,049)
The Statements of Fiduciary Net Position for the City’s pension trust funds for the year ended September 30, 202 5
were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2025 2024
Plan Plan Totals Totals
ASSETS
Cash and cash equivalents $ - $ 882,562 $ 882,562 $ 648,347
Accrued income 58,081 37,538 95,619 98,357
Investments at fair value 31,316,833 20,434,946 51,751,779 47,692,750
Total assets 31,374,914 21,355,046 52,729,960 48,439,454
LIABILITIES
Accounts payable and accrued liabilities 23,783 24,328 48,111 32,344
Due to City 2,665,907 - 2,665,907 1,056,286
Total Liabilities 2,689,690 24,328 2,714,018 1,088,630
NET POSITION
Restricted for pension benefits $ 28,685,224 $ 21,330,718 $ 50,015,942 $ 47,350,824
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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, 2025 were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2025 2024
Plan Plan Totals Totals
ADDITIONS
Contributions:
City $ 557,556 $ 430,980 $ 988,536 $ 1,140,496
Plan members 71,537 263,119 334,656 288,232
State of Florida - 416,020 416,020 -
Total contributions 629,093 1,110,119 1,739,212 1,428,728
Investment income 2,574,016 1,713,612 4,287,628 8,709,711
Less investment expenses: (114,538) (70,653) (185,191) (155,193)
Net investment income 2,459,478 1,642,959 4,102,437 8,554,518
Total additions 3,088,571 2,753,078 5,841,649 9,983,246
DEDUCTIONS
Administrative expenses 133,183 90,446 223,629 132,957
Payments to retirees and participants 2,109,955 842,947 2,952,902 2,635,068
Total deductions 2,243,138 933,393 3,176,531 2,768,025
CHANGE IN NET POSITION 845,433 1,819,685 2,665,118 7,215,221
NET POSITION, beginning of year 27,839,791 19,511,033 47,350,824 40,135,603
NET POSITION, end of year $ 28,685,224 $ 21,330,718 $ 50,015,942 $ 47,350,824
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 durin g 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 contribu tions from
the City were $265,823 and $229,070 for the years ended September 30, 202 5 and 2024, 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, 20 23, the valuation date of the latest
actuarial valuation:
September 30,
2023
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 109
Total 110
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, 2025
58
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Actuarial Methods and Assumptions
For the September 30, 2023 actuarial valuation (used for the September 30, 2024 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: 3.81%
Investment Rate of Return: 0.0%
Salary Increases: Rates used in the October 1, 2023 actuarial valuation of the City’s pension plans.
Healthcare Cost Trend: Based on Getzen Model, with trend of 8.70% for 2024, 6.00% for 2025 and then
gradually decreasing to an ultimate trend rate of 4.00%.
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 3.81% as of September 30, 2024 (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, 2024 and was determined by an actuarial valuation
as of September 30, 2023. Changes in the Total OPEB liability were as follows:
Total
OPEB
Liability
Reporting period ending September 30, 2024 $ 319,550
Changes for the year:
Service cost 39,099
Interest 16,329
Changes of assumptions 30,328
Benefit payments (11,926)
Net changes 73,830
Reporting period ending September 30, 2025 $ 393,380
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
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 $ 435,664 $ 393,380 $ 356,821
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 $ 336,397 $ 393,380 $ 465,205
OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2025, the City recognized OPEB expense of $7,627. On September 30, 2025, 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 $ 47,886 $ 101,655
Differences between expected and
actual experience - 122,118
City contributions subsequent to the
measurement date 18,672 -
Total $ 66,558 $ 223,773
Of the total amount reported as deferred outflows of resources related to OPEB, $18,672 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 6. Other amounts reported as deferred
inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended September 30, Amount
2026 $ (45,143)
2027 (42,866)
2028 (30,625)
2029 (25,699)
2030 (19,930)
Thereafter (11,624)
Total $ (175,887)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
60
NOTE 10 – INTERFUND ACCOUNTS
Individual fund inter-fund receivables and payables on September 30, 2025, consist of the following:
Due Due
from Other to Other
Funds Funds
General Fund $ 3,387,714 $ -
Sanitation Fund - 286,266
Local Option Gas Tax Fund 387,145
Debt Service Fund - 19,848
Court cost training fund - 28,548
General Employees' Retirement Fund - 2,665,907
$ 3,387,714 $ 3,387,714
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, 2025:
Transfer In:
Community
Development Building Code
General Capital Projects Debt Service Block Grant Stormwater Enforcement
Fund Fund Fund Fund Fund Fund Total
Transfers Out:
Utility Fund $ 833,916 $ - $ - $ - $ - $ - $ 833,916
General Fund - 263,868 - 607,002 579,528 229,056 1,679,454
Parking Fund 127,452 - - - - - 127,452
Local Option Gas Tax Fund 735,564 - - - - - 735,564
ARPA Fund - 66,271 - - - - 66,271
Convention Development
Tax Fund - - 119,352 - - - 119,352
Half-cent Sales Tax Fund - 1,066,536 - 199,956 - - 1,266,492
Total $ 1,696,932 $ 1,396,675 $ 119,352 $ 806,958 $ 579,528 $ 229,056 $ 4,828,501
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.
NOTE 12 – COMMITMENTS
The City receives advanced life support and fire services from the City of Jacksonville, Florida, for residents and
businesses located within the City. The City’s previous long-term agreement for these services expired during the
fiscal year ended September 30, 2024; however, the parties continued to honor its terms while negotiating a new
agreement.
In June 2025, the City and the City of Jacksonville entered into an interim agreement reducing the annual fee for fire
and rescue services to $750,000, payable in quarterly installments beginning June 1, 2025, and ending May 31, 2026.
During the term of the interim agreement, the parties plan to develop a new long-term interlocal agreement,
informed by a third-party evaluation of the service arrangement.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2025
61
NOTE 12 – COMMITMENTS (concluded)
For the year ended September 30, 2025, the City incurred $1,183,363 for services under these agreements.
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 – DEFICIT FUND BALANCE
On September 30, 2025 the following nonmajor governmental funds reported deficit fund balance amounts as
follows:
• Local Option Gas Tax Special Revenue Fund – ($264,565)
• Court Cost Training Special Revenue Fund – ($27,648)
• Debt Service Fund – ($19,842)
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.
NOTE 16 – CORRECTION OF ERRORS
During fiscal year 2025, the City identified errors in previously issued financial statements related to revenue recognized i n
prior years in the General Fund and governmental activities. Certain revenues were recognized in prior years that did not
meet the criteria for recognition. As a result, beginning fund balance of the General Fund and beginning net position of
governmental activities have been restated as of October 1, 2024.
The effect of the correction was to decrease beginning fund balance of the general fund and beginning governmental activities
net position by $126,178.
Page Intentionally Left Blank
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, 2025
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Property taxes $ 8,001,838 $ 8,001,838 $ 8,021,538 $ 19,700
Non-property taxes 1,253,018 1,253,018 1,686,733 433,715
Licenses and permits 1,105,626 1,105,626 1,040,959 (64,667)
Intergovernmental revenue 3,934,941 4,154,941 3,452,888 (702,053)
Charges for services 702,171 702,171 1,058,350 356,179
Fines and forfeitures 151,200 151,200 138,638 (12,562)
Investment earnings (loss) 200,000 200,000 373,632 173,632
Miscellaneous revenues 19,050 19,050 119,604 100,554
Interfund charges 1,961,350 1,961,350 1,964,167 2,817
Total revenues 17,329,194 17,549,194 17,856,509 307,315
EXPENDITURES
City Administration:
City Commission 69,367 69,367 59,103 10,264
City Clerk 404,623 429,623 388,298 41,325
City Attorney 165,375 184,310 164,063 20,247
City Manager 629,416 629,411 615,783 13,628
Human resources 409,543 409,695 673,005 (263,310)
Information technology 1,000,508 1,031,646 904,502 127,144
Finance 1,469,386 1,473,083 1,475,815 (2,732)
Total City administration 4,148,218 4,227,135 4,280,569 (53,434)
Planning and zoning 476,170 583,382 599,044 (15,662)
General government 1,032,978 1,081,458 886,034 195,424
Public safety:
Police 6,418,308 6,226,106 6,558,460 (332,354)
Animal control 142,969 170,476 152,235 18,241
Fire control 1,868,739 2,533,004 2,494,146 38,858
Code enforcement 143,877 145,677 135,325 10,352
Total public safety 8,573,893 9,075,263 9,340,166 (264,903)
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, 2024
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
Public works:
Administration and streets 2,214,972 2,227,418 1,706,262 521,156
Fleet maintenance 396,690 467,518 292,870 174,648
Total public works 2,611,662 2,694,936 1,999,132 695,804
Parks and recreation
Recreation and special events 531,442 636,475 602,523 33,952
Parks maintenance 1,597,224 1,635,079 1,250,274 384,805
Total parks and recreation 2,128,666 2,271,554 1,852,797 418,757
Total expenditures 18,971,587 19,933,728 18,957,742 975,986
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (1,642,393) (2,384,534) (1,101,233) 1,283,301
OTHER FINANCING SOURCES (USES):
Transfers out (1,072,453) (1,679,453) (1,679,454) (1)
Transfers in 1,696,925 1,696,925 1,696,932 (7)
Sale of general capital assets 25,000 25,000 14,500 (10,500)
Total other financing sources (uses) 649,472 42,472 31,978 (10,508)
NET CHANGE IN FUND BALANCE $ (992,921) $ (2,342,062) $ (1,069,255) $ 1,272,807
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, 2024
Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures:
Sources/inflows of resources
Total revenue from the budgetary comparison schedule $ 17,856,509
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,964,167) (*)
Total revenues as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 15,892,342
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from the
Total expenditures from the budgetary comparison schedule $ 18,957,742
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,964,167) (*)
Total expenditures as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 16,993,575
(*) - Interfund charges by Division
City Manager $ 393,504
Finance 892,548
Public Works Admin 183,192
Fleet and Equipment Maintenance 82,795
Human Resources 102,108
Information Technology 244,968
Facility Maintenance 65,052
$ 1,964,167
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 CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2026 9/30/2025 9/29/2024 9/30/2023 9/30/2022
Measurement date 9/30/2025 9/29/2024 9/30/2023 9/30/2022 9/30/2021
Total pension liability
Service cost $ 223,819 $ 202,244 $ 214,537 $ 241,673 $ 244,995
Interest 1,650,230 1,676,388 1,670,865 1,646,364 1,633,199
Change in assumptions - 1,212,294 - - (420,148)
Change in benefit terms 773,196 - - - -
Difference between expected and actual
experience (184,268) 456,791 156,347 255,984 207,558
Benefit payments, including refunds of
of employee contributions (2,109,955) (1,892,016) (1,967,963) (1,504,566) (1,429,935)
Employee buy-back - - (35,286) - -
Net change in total pension liability 353,022 1,655,701 38,500 639,455 235,669
Total pension liability, beginning 27,234,843 25,579,142 25,540,642 24,901,187 24,665,518
Total pension liability, ending (a) $ 27,587,865 $ 27,234,843 $ 25,579,142 $ 25,540,642 $ 24,901,187
Plan fiduciary net position
Contributions - City $ 557,556 $ 689,268 $ 850,266 $ 1,099,884 $ 1,248,604
Contributions - Employee 71,537 72,724 75,784 81,830 87,209
Net investment income (loss) 2,459,478 5,169,751 2,937,968 (4,081,483) 4,891,453
Benefit payments, including refunds of
employee contributions (2,109,955) (1,892,016) (2,003,249) (1,504,566) (1,429,935)
Administrative expenses (133,183) (71,861) (36,135) (45,210) (19,631)
Net change in plan fiduciary net position 845,433 3,967,866 1,824,634 (4,449,545) 4,777,700
Plan fiduciary net position, beginning 27,839,791 23,871,925 22,047,291 26,496,836 21,719,136
Plan fiduciary net position, ending (b) $ 28,685,224 $ 27,839,791 $ 23,871,925 $ 22,047,291 $ 26,496,836
Net pension liability (asset) (a)-(b) $ (1,097,359) $ (604,948) $ 1,707,217 $ 3,493,351 $ (1,595,649)
Plan fiduciary net position as a percentage
of total pension liability 103.98% 102.22% 93.33% 86.32% 106.41%
Covered payroll $ 1,192,283 $ 1,212,067 $ 1,263,067 $ 1,363,833 $ 1,453,483
Net pension liability as a percentage of
covered payroll -92.04% -49.91% 135.16% 256.14% -109.78%
Continued…
66
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016
Total pension liability
Service cost $ 288,450 $ 332,673 $ 345,019 $ 346,460 $ 348,604
Interest 1,604,466 1,566,226 1,574,193 1,485,239 1,437,296
Change in assumptions - - 695,507 559,117 -
Change in benefit terms - - - - -
Difference between expected and actual
experience (44,031) 40,197 (473,189) 291,669 164,601
Benefit payments, including refunds of
of employee contributions (1,329,553) (1,327,161) (1,501,456) (1,319,107) (1,207,804)
Employee buy-back - - - - -
Net change in total pension liability 519,332 611,935 640,074 1,363,378 742,697
Total pension liability, beginning 24,146,186 23,534,251 22,894,177 21,530,799 20,788,102
Total pension liability, ending (a) $ 24,665,518 $ 24,146,186 $ 23,534,251 $ 22,894,177 $ 21,530,799
Plan fiduciary net position
Contributions - City $ 1,362,952 $ 1,424,479 $ 1,332,119 1,175,572 $ 1,112,344
Contributions - Employee 96,921 107,745 117,536 124,024 128,204
Net investment income (loss) 1,138,973 619,176 1,554,225 1,792,192 1,515,746
Benefit payments, including refunds Of
employee contributions (1,329,553) (1,327,161) (1,501,456) (1,319,107) (1,207,804)
Administrative expenses (48,109) (40,584) (31,261) (53,880) (32,495)
Net change in plan fiduciary net position 1,221,184 783,655 1,471,163 1,718,801 1,515,995
Plan fiduciary net position, beginning 20,497,952 19,714,297 18,243,134 16,524,333 15,008,338
Plan fiduciary net position, ending (b) $ 21,719,136 $ 20,497,952 $ 19,714,297 $ 18,243,134 $ 16,524,333
Net pension liability (asset) (a)-(b) $ 2,946,382 $ 3,648,234 $ 3,819,954 $ 4,651,043 $ 5,006,466
Plan fiduciary net position as a percentage
of total pension liability 88.05% 84.89% 83.77% 79.68% 76.75%
Covered payroll $ 1,615,350 $ 1,795,750 $ 1,958,933 $ 2,067,067 $ 2,136,733
Net pension liability as a percentage of
covered payroll 182.40% 203.16% 195.00% 225.01% 234.30%
Change of Assumptions:
For measurement date September 30, 2024:
• The assumed investment return assumption was reduced from 6.75% to 6.25%.
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.
Change in Benefit Terms:
For measurement date September 30, 2025:
• Ordinance No. 58‐24‐47 was adopted on January 13, 2025. This ordinance provided a one‐time Cost of Living Adjustment
effective as of October 1, 2024 to certain retirees and beneficiaries.
67
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2026 9/30/2025 9/29/2024 9/30/2023 9/30/2022
Measurement date 9/30/2025 9/29/2024 9/30/2023 9/30/2022 9/30/2021
Total pension liability
Service cost $ 551,695 $ 453,970 $ 426,687 $ 414,067 $ 396,817
Interest 1,296,276 1,215,576 1,164,223 1,099,655 1,090,158
Change in excess State money - - - - -
Change in benefit terms 1,097,215 - - - -
Difference between expected and actual
experience 445,892 705,395 (137,974) 195,967 (130,811)
Change of assumptions - 1,042,161 - - (478,322)
Other - - 19,500 - -
Benefit payments, including refunds of
of employee contributions (842,947) (722,934) (735,428) (815,563) (693,227)
Net change in total pension liability 2,548,131 2,694,168 737,008 894,126 184,615
Total pension liability, beginning 20,610,200 17,916,032 17,179,024 16,284,898 16,100,283
Total pension liability, ending (a) $ 23,158,331 $ 20,610,200 $ 17,916,032 $ 17,179,024 $ 16,284,898
Plan fiduciary net position
Contributions - City $ 430,980 $ 451,228 $ 558,351 $ 779,224 $ 870,477
Contributions - State of Florida 416,020 - 165,133 144,821 274,267
Contributions - Employee 263,119 215,508 215,375 177,828 168,456
Net investment income (loss) 1,642,959 3,384,767 1,742,688 (2,535,548) 2,896,388
Benefit payments, including refunds of
employee contributions (842,947) (743,052) (735,428) (815,563) (693,227)
Administrative expenses (90,446) (61,096) (26,723) (41,743) (34,284)
Other - - - - -
Net change in plan fiduciary net position 1,819,685 3,247,355 1,919,396 (2,290,981) 3,482,077
Plan fiduciary net position, beginning 19,511,033 16,263,678 14,344,282 16,635,263 13,153,186
Plan fiduciary net position, ending (b) $ 21,330,718 $ 19,511,033 $ 16,263,678 $ 14,344,282 $ 16,635,263
Net pension liability (asset) (a)-(b) $ 1,827,613 $ 1,099,167 $ 1,652,354 $ 2,834,742 $ (350,365)
Plan fiduciary net position as a percentage
of total pension liability 92.11% 94.67% 90.78% 83.50% 102.15%
Covered payroll $ 3,201,300 $ 2,660,125 $ 2,448,438 $ 2,222,850 $ 2,105,700
Net pension liability as a percentage of
covered payroll 57.09% 41.32% 67.49% 127.53% -16.64%
Continued...
68
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016
Total pension liability
Service cost $ 369,089 $ 332,419 $ 329,254 $ 335,185 $ 279,863
Interest 1,034,146 1,026,422 1,016,983 970,877 931,370
Change in excess State money - - (120,454) - -
Difference between expected and actual
experience 103,400 (351,261) (209,232) 187,216 (2,998)
Change of assumptions - - 454,983 (40,955) -
Benefit payments, including refunds of
of employee contributions (715,876) (1,143,778) (690,688) (643,872) (754,465)
Net change in total pension liability 790,759 (136,198) 780,846 808,451 453,770
Total pension liability, beginning 15,309,524 15,445,722 14,664,876 13,856,425 13,402,655
Total pension liability, ending (a) $ 16,100,283 $ 15,309,524 $ 15,445,722 $ 14,664,876 $ 13,856,425
Plan fiduciary net position
Contributions - City $ 745,022 $ 826,705 $ 854,780 $ 945,540 $ 729,483
Contributions - State of Florida 132,844 - 236,772 - 112,972
Contributions - Employee 161,166 142,024 131,498 129,552 117,274
Net investment income (loss) 607,277 307,543 853,894 950,447 804,901
Benefit payments, including refunds of
employee contributions (715,876) (1,143,777) (690,688) (643,872) (754,465)
Administrative expenses (35,623) (38,763) (25,152) (51,481) (29,933)
Net change in plan fiduciary net position 894,810 93,732 1,361,104 1,330,186 980,232
Plan fiduciary net position, beginning 12,258,376 12,164,644 10,803,540 9,473,354 8,493,122
Plan fiduciary net position, ending (b) $ 13,153,186 $ 12,258,376 $ 12,164,644 $ 10,803,540 $ 9,473,354
Net pension liability (asset) (a)-(b) $ 2,947,097 $ 3,051,148 $ 3,281,078 $ 3,861,336 $ 4,383,071
Plan fiduciary net position as a percentage
of total pension liability 81.70% 80.07% 78.76% 73.67% 68.37%
Covered payroll $ 2,014,575 $ 1,775,300 $ 1,643,725 $ 1,619,400 $ 1,465,925
Net pension liability as a percentage of
covered payroll 146.29% 171.87% 199.61% 238.44% 299.00%
Change of Assumptions:
For measurement date September 30, 2024:
• The assumed investment return assumption was reduced from 6.75% to 6.25%.
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.
Change in Benefit Terms:
For measurement date September 30, 2025:
• Ordinance No. 58‐24‐48 was adopted on January 13, 2025. This ordinance provided a one‐time Cost of Living Adjustment
effective as of October 1, 2024 to certain retirees and beneficiaries.
69
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
2025 $ 557,528 $ 557,556 $ 28 $ 1,192,283 46.76%
2024 $ 352,301 $ 689,268 $ 336,967 $ 1,212,067 56.87%
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%
Police Officers' Plan
2025 $ 596,113 $ 847,000 $ 250,887 $ 3,201,300 26.46%
2024 $ 449,957 $ 451,228 $ 1,271 $ 2,660,125 16.96%
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%
70
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, 2022. 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 - 28 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.
71
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS
Year Ended September 30,
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
General Employees' Plan
Annual money-weighted rate of return
net of investment expenses 8.53% 22.38% 14.05% -16.01% 23.65% 6.41% 4.04% 8.67% 10.92% 10.18%
Police Officers' Plan
Annual money-weighted rate of return
net of investment expenses 8.41% 22.47% 6.13% -14.98% 23.67% 6.15% 4.38% 8.26% 10.80% 9.93%
72
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Reporting date 9/30/2025 9/30/2024 9/30/2023 9/30/2022
Measurement date 9/30/2024 9/30/2023 9/30/2022 9/30/2021
Total OPEB Liability
Service cost $ 39,099 $ 36,840 $ 55,813 $ 56,159
Interest 16,329 17,072 9,684 11,124
Difference between expected
and actual experience - (73,297) - (20,135)
Changes in assumptions 30,328 (3,620) (86,543) (56,642)
Benefit payments (11,926) (17,200) (11,158) (7,902)
Net change in total OPEB Liability 73,830 (40,205) (32,204) (17,396)
Total OPEB Liability - beginning 319,550 359,755 391,959 409,355
Total OPEB Liability - ending $ 393,380 $ 319,550 $ 359,755 $ 391,959
Covered-employee payroll $ 8,911,157 $ 7,144,276 $ 8,066,712 $ 5,961,844
Total OPEB liability as a percentage
of covered-employee payroll 4.41% 4.47% 4.46% 6.57%
Reporting date 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service cost $ 55,135 $ 38,095 $ 39,404 $ 41,222
Interest 11,812 19,049 16,906 14,667
Difference between expected
and actual experience - (203,632) - -
Changes in assumptions (26,153) 78,146 (18,238) (21,261)
Benefit payments (11,666) (21,386) (23,456) (22,404)
Net change in total OPEB Liability 29,128 (89,728) 14,616 12,224
Total OPEB Liability - beginning 380,227 469,955 455,339 443,115
Total OPEB Liability - ending $ 409,355 $ 380,227 $ 469,955 $ 455,339
Covered-employee payroll $ 7,602,334 $ 5,196,501 $ 6,647,363 $ 6,272,956
Total OPEB liability as a percentage
of covered-employee payroll 5.38% 7.32% 7.07% 7.26%
Continued…
73
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
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, 2025 3.81%
September 30, 2024 4.63%
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.
Page Intentionally Left Blank
SUPPLEMENTARY INFORMATION
74
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
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 $ 598,487 $ - $ 186,822 $ 264,793 $ - $ 216,146 $ 255,892
Receivables, net
Intergovernmental and other - 122,580 34,350 224,413 900 5,643 4,720
TOTAL ASSETS $ 598,487 $ 122,580 $ 221,172 $ 489,206 $ 900 $ 221,789 $ 260,612
LIABILITIES
Accounts payable and accrued liabilities 3,451 - - - - - -
Construction costs payable - - - 4,212 - - -
Due to other funds - 387,145 - - 28,548 - -
Deposits - - - - - - -
Unearned revenue - - - - - - -
TOTAL LIABILITIES 3,451 387,145 - 4,212 28,548 - -
FUND BALANCE
Restricted for:
Public safety - - - - - - 260,612
Road maintenance and construction - - - 484,994 - - -
Other capital projects - - - - - - -
Other purposes - - 221,172 - - 221,789 -
Committed to:
Conservation and resource management 595,036 - - - - - -
Assigned to:
Capital projects - - - - - - -
Unassigned - (264,565) - - (27,648) - -
TOTAL FUND BALANCES 595,036 (264,565) 221,172 484,994 (27,648) 221,789 260,612
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 598,487 $ 122,580 $ 221,172 $ 489,206 $ 900 $ 221,789 $ 260,612
Continued…
75
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Special Revenue Funds
American
Rescue Plan Total Totals
Community Act Special Non-Major
Contraband Development Police Special Revenue Debt Capital Governmental 2024
Revenue Block Grants Grants Revenue Fund Funds Service Projects Funds Totals
ASSETS
Equity in pooled cash and investments $ 10,422 $ 490,788 $ 2,130 $ 203,339 $ 2,228,819 $ 6 $ 3,333,834 $ 5,562,659 $ 1,309,168
Receivables, net
Intergovernmental and other - 100 - - 392,706 - - 392,706 393,365
TOTAL ASSETS $ 10,422 $ 490,888 $ 2,130 $ 203,339 $ 2,621,525 $ 6 $ 3,333,834 $ 5,955,365 $ 1,702,533
LIABILITIES
Accounts payable and accrued liabilities -42,005 - - 45,456 - 27,323 72,779 6,995
Construction costs payable -27,726 - - 31,938 - 8,543 40,481 7,345
Due to other funds - - - - 415,693 19,848 -435,541 420,061
Deposits 2,999 - - - 2,999 - - 2,999 2,998
Unearned revenue - - - 203,339 203,339 - - 203,339 -
TOTAL LIABILITIES 2,999 69,731 -203,339 699,425 19,848 35,866 755,139 437,399
FUND BALANCE
Restricted for:
Public safety 7,423 -2,130 -270,165 - - 270,165 215,181
Road maintenance and construction - - - - 484,994 - - 484,994 454,111
Other capital projects -421,157 - - 421,157 - - 421,157 106,060
Other purposes - - - - 442,961 - - 442,961 460,720
Committed to:
Conservation and resource management - - - - 595,036 - - 595,036 325,755
Assigned to:
Capital projects - - - - - - 3,297,968 3,297,968 -
Unassigned - - - - (292,213) (19,842) -(312,055) (296,693)
TOTAL FUND BALANCES 7,423 421,157 2,130 -1,922,100 (19,842) 3,297,968 5,200,226 1,265,134
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 10,422 $ 490,888 $ 2,130 $ 203,339 $ 2,621,525 $ 6 $ 3,333,834 $ 5,955,365 $ 1,702,533
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
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 $ - $ 711,356 $ 142,829 $ 1,300,188 $ - $ - $ -
Intergovernmental revenue - - - - - - -
Charges for services - - - - - 80,679 -
Fines and forfeitures 312,932 - - - 9,786 - 47,198
Investment earnings (loss) - - 5,537 5,366 - - 7,452
Miscellaneous revenues - - - - - - -
Total revenues 312,932 711,356 148,366 1,305,554 9,786 80,679 54,650
EXPENDITURES:
General government 43,651 - - - - - -
Public safety - - - - 946 - -
Capital outlay - - - 8,179 - - -
Debt service - - - - - - -
Total expenditures 43,651 - - 8,179 946 - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 269,281 711,356 148,366 1,297,375 8,840 80,679 54,650
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - -
Transfers (out) - (735,564) (119,352) (1,266,492) - (127,452) -
TOTAL OTHER FINANCING SOURCES (USES) - (735,564) (119,352) (1,266,492) - (127,452) -
NET CHANGE IN FUND BALANCE 269,281 (24,208) 29,014 30,883 8,840 (46,773) 54,650
FUND BALANCE, beginning of year, as previously reported 325,755 (240,357) 192,158 454,111 (36,488) 268,562 205,962
Change within financial reporting entity (major to nonmajor) - - - - - - -
FUND BALANCE, beginning of year, as restated 325,755 (240,357) 192,158 454,111 (36,488) 268,562 205,962
FUND BALANCE, end of year $ 595,036 $ (264,565) $ 221,172 $ 484,994 $ (27,648) $ 221,789 $ 260,612
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, 2025
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2024
2025
Special Revenue Funds
American
Rescue Plan Total Totals
Community Act Special Non-Major
Contraband Development Police Special Revenue Debt Capital Governmental 2024
Revenue Block Grants Grants Revenue Fund Funds Service Projects Funds Totals
REVENUES:
Non-property taxes $ - $ -$- $-$ 2,154,373 $ -$-$ 2,154,373 $ 2,158,090
Intergovernmental revenue - - 117,557 66,271 183,828 - - 183,828 328,047
Charges for services - - - - 80,679 - - 80,679 94,491
Fines and forfeitures - - - - 369,916 - - 369,916 146,694
Investment earnings (loss) 334 - - - 18,689 - 91,588 110,277 10,506
Miscellaneous revenues - - - - - - - - 375
Total revenues 334 - 117,557 66,271 2,807,485 - 91,588 2,899,073 2,738,203
EXPENDITURES:
General government - - - - 43,651 - - 43,651 41,297
Public safety - - 56,347 - 57,293 - 66,271 123,564 31,318
Capital outlay - 491,861 61,210 - 561,250 - 317,641 878,891 386,873
Debt service - -- - - 119,346 - 119,346 122,364
Total expenditures - 491,861 117,557 - 662,194 119,346 383,912 1,165,452 581,852
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 334 (491,861) - 66,271 2,145,291 (119,346) (292,324) 1,733,621 2,156,351
OTHER FINANCING SOURCES (USES)
Transfers in - 806,958 - - 806,958 119,352 1,396,675 2,322,985 275,064
Transfers (out) - -- (66,271) (2,315,131) - - (2,315,131) (1,965,660)
TOTAL OTHER FINANCING SOURCES (USES) - 806,958 - (66,271) (1,508,173) 119,352 1,396,675 7,854 (1,690,596)
NET CHANGE IN FUND BALANCE 334 315,097 - - 637,118 6 1,104,351 1,741,475 465,755
FUND BALANCE, beginning of year, as previously reported 7,089 106,060 2,130 - 1,284,982 (19,848) - 1,265,134 799,379
Change within financial reporting entity (major to
nonmajor) - - - - - - 2,193,617 2,193,617 -
FUND BALANCE, beginning of year, as restated 7,089 106,060 2,130 - 1,284,982 (19,848) 2,193,617 3,458,751 799,379
FUND BALANCE, end of year $ 7,423 $ 421,157 $ 2,130 $ -$ 1,922,100 $ (19,842) $ 3,297,968 $ 5,200,226 $ 1,265,134
78
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2021, THROUGH SEPTEMBER 30, 2025
2025 2024 2023 2022 2021
Revenues
Operating Revenues:
Water:
Customer charges $ 3,908,209 $ 3,854,691 $ 3,978,479 $ 3,677,424 $ 3,550,004
Miscellaneous charges 155,032 42,005 75,304 68,937 43,252
Total water 4,063,241 3,896,696 4,053,783 3,746,361 3,593,256
Sewer:
Customer charges 6,473,749 6,512,565 6,444,184 6,096,086 5,750,479
Miscellaneous charges - - - 8 -
Total sewer 6,473,749 6,512,565 6,444,184 6,096,094 5,750,479
Total operating revenues 10,536,990 10,409,261 10,497,967 9,842,455 9,343,735
Non-operating revenues
Investment income (loss):
Water 350,620 546,803 232,689 (27,591) 143,198
Sewer 199,822 367,542 119,772 (22,584) 158,264
Total non-operating revenues 550,442 914,345 352,461 (50,175) 301,462
Total revenues 11,087,432 11,323,606 10,850,428 9,792,280 9,645,197
Expenses
Operating expenses:
Water 2,143,170 1,821,131 1,828,346 1,321,892 1,044,002
Sewer 3,575,214 3,258,657 3,120,083 3,100,956 2,222,833
Total operating expenses 5,718,384 5,079,788 4,948,429 4,422,848 3,266,835
Administrative, non divisional
and other
Water 530,760 453,420 453,424 584,856 642,424
Sewer 612,624 659,376 659,352 698,988 678,890
Total administrative non-
divisional and other 1,143,384 1,112,796 1,112,776 1,283,844 1,321,314
Total expenses 6,861,768 6,192,584 6,061,205 5,706,692 4,588,149
Net revenues available for
debt service 4,225,664 5,131,022 4,789,223 4,085,588 5,057,048
Non-operating income(expense)
Interest expense (89,586) (125,603) (160,740) (320,482) (344,186)
Loan amortization (93,911) (93,911) (93,911) (93,910) (93,910)
Total non-operating income
(expense) (183,497) (219,514) (254,651) (414,392) (438,096)
Change in net position before
depreciation expense and
interfund transfers $ 4,042,167 $ 4,911,508 $ 4,534,572 $ 3,671,196 $ 4,618,952
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, 2025 AND SEPTEMBER 30, 2024
2025 2024
Gross revenues:
Utility $ 10,536,990 $ 10,409,261
Connection charges 48,270 12,595
Investment income (loss) 628,645 1,030,312
Total Gross Revenues 11,213,905 11,452,168
Operating Expenses
Personnel services 2,582,605 2,295,544
Contractual services 919,935 1,131,021
Supplies 532,596 529,113
Repairs and maintenance 751,094 270,623
Utilities 391,470 383,890
Intergovernmental charges 1,143,384 1,112,796
Other expenses 540,684 469,597
Total operating expenses 6,861,768 6,192,584
Total net revenues in accordance with Bond resolutions $ 4,352,137 $ 5,259,584
Total debt service $ 1,776,576 $ 1,780,156
Debt service coverage ratio 244.97% 295.46%
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, 2021, THROUGH SEPTEMBER 30, 2025
Utility Service Tax Collections
(last five years)
Year Electricity Communications Gas Total
2025 $ 566,404 $ 609,846 $ 14,170 $ 1,190,420
2024 520,037 572,639 16,079 1,108,755
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
Ad Valorem Tax Collections
(last five years)
Year Total
2025 $ 8,021,538
2024 7,241,664
2023 7,224,605
2022 6,708,984
2021 6,341,798
OTHER STATISTICAL INFORMATION
81
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2025
(UNAUDITED)
Annual
Billings
Fleet Landing (retirement community) $ 647,319
Navy (Federal Government) 261,600
Ocean Reef 225,892
Yes Companies 203,837
Puckett Partners 141,493
John's Creek Estates (mobile home park) 149,817
City of Atlantic Beach, Florida 161,590
Hanna Park (regional park) 151,845
One Ocean 150,858
BW MAYPORT LLC 123,840
$ 2,218,091
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, 2025, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated June 26, 2026.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses . However, material
weaknesses or significant deficiencies may exist that were not identified.
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
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, non-compliance with which could have a direct and material effect on
the 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.
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.
June 26, 2026
Gainesville, Florida
84
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, 2025, 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. 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 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. 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, 2025.
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.
June 26, 2026
Gainesville, Florida
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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, 2025, and have issued our report thereon dated June 26, 2026.
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 June 26, 2026, 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 2024-001 has been corrected. Prior year findings 2024-002 (now 2025-001)
and 2024-003 (now 2025-002) have not been corrected.
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 met one or more of
the conditions described in Section 218.503(1), Florida Statutes, and to identify 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.
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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 have the following
recommendations:
2025-001 (Previously 2024-002) – General Pension Plan Pooled Cash
Condition – During the audit we noted that the general employee’s pension plan had a negative pooled
cash balance of approximately $1M. This was due to the plan using the City’s pooled cash to make benefit
payments and resulted in the Plan owing $1M to the City’s General Fund.
Recommendation – The City should monitor the cashflow needs of the General Employee’s pension plan
and liquidate investments as needed so that sufficient funds are available to pay benefits or other costs
of the pension plan.
FY 2025 Update: The City’s General Employee’s pension plan owed the City’s pooled cash 2.6 million for
FY25. Management believes this will be fixed in FY26.
2025-002 (Previously 2024-003) – Sanitation Fund Negative Net Position
Condition – The City increased sanitation rates by 16% which resulted in a positive change in income
before transfers. However, the City transferred $359,000 from the fund up from $179,000 from the prior
year, resulting in an increase of the deficit net position to $488,000.
Recommendation – We recommend that the City review the amount of monies that are being transferred
from the fund or consider arranging a temporary interfund loan.
FY2025 Update: The City increased solid waste rates and had a positive $210k increase to net position.
This decreased the negative net position from $488k to $278k in the current year. The City appears to be
on the right path to correct this in future years.
Property Assessed Clean Energy (PACE) Programs
As required by Section 10.554(1)(i)6.a., Rules of the Auditor General, the City is required to include a
statement as to whether a PACE program authorized pursuant to Section 163.081 or Section 163.082,
Florida Statutes, did/did not operate within the City’s geographical boundaries during the fiscal year under
audit. The City has not authorized the operation of a PACE program, and management is not aware of the
operation of any such program, within its geographical boundaries.
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Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
Special District Component Units
Section 10.554(1)(i)5.c., 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 fraud, waste, or abuse, that has occurred, or is likely to
have occurred, that has an effect on the financial statements that is less than material, but 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, Mayor and City Commissioners and applicable
management, and is not intended to be, and should not be, used by anyone other than these specified
parties.
June 26, 2026
Gainesville, Florida
June 25, 2026
Purvis, Gray and Company, LLP
PO Box 141270
Gainesville, FL 32614
RE: Management’s Response Letter
2025-001 (Previously 2024-002) – General Pension Plan Pooled Cash
Condition – During the audit we noted that the general employee’s pension plan had a negative
pooled cash balance of approximately $1M. This was due to the plan using the City’s pooled cash to
make benefit payments and resulted in the Plan owing $1M to the City’s Gene ral Fund.
Recommendation – The City should monitor the cashflow needs of the General Employee’s pension
plan and liquidate investments as needed so that sufficient funds are available to pay benefits or
other costs of the pension plan.
FY 2025 Update: The City’s General Employee’s pension plan owed the City’s pooled cash 2.6
million for FY25. Management believes this will be fixed in FY26.
Management Response to Comment 2025-001 (Previously 2024-002) – General Pension Plan
Pooled Cash
The Finance Department has already begun working with the Plan's investment custodians to
liquidate investments on a quarterly basis to ensure sufficient cash is available for benefit payments.
This process is expected to resolve the negative pooled cash balance during FY2026, and the
Finance Department will continue to monitor the Plan's cash flow needs.
2025-002 (Previously 2024-003) – Sanitation Fund Negative Net Position
Condition – The City increased sanitation rates by 16% which resulted in a positive change in income
before transfers. However, the City transferred $359,000 from the fund up from $179,000 from the
prior year, resulting in an increase of the deficit net position to $4 88,000.
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Recommendation – We recommend that the City review the amount of monies that are being
transferred from the fund or consider arranging a temporary interfund loan.
FY2025 Update: The City increased solid waste rates and had a positive 210k increase to net
position. This decreased the negative net position from 488k to 278k in the current year. The City
appears to be on the right path to correct this in future years.
Management Response to Comment 2024-003- Sanitation Fund Negative Net Position
The City will continue to monitor the fund's financial condition and review future transfers to ensure
they remain appropriate as the fund progresses toward restoring a positive net position.
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