Agenda Packet 5-13-13FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2012
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2012
TABLE OF CONTENTS
Independent Auditors' Report ...................................................................................................................... i-ii
Management’s Discussion and Analysis ................................................................................................... iii-xii
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Assets ............................................................................................................................. 1
Statement of Activities .............................................................................................................................. 2
Fund Financial Statements
Balance Sheet - Governmental Funds ....................................................................................................... 3
Reconciliation of Balance Sheet of Governmental Funds to the
Statement of Net Assets ......................................................................................................................... 4
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds ............................................................................................................ 5
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ........................................................................................................................... 6
Statement of Net Assets - Proprietary Funds ......................................................................................... 7-8
Statement of Revenues, Expenses, and Changes in Net Assets -
Proprietary Funds .............................................................................................................................. 9-10
Statement of Cash Flows - Proprietary Funds ...................................................................................11-13
Statement of Net Assets - Fiduciary Funds ............................................................................................. 14
Statement of Changes in Net Assets - Fiduciary Funds ......................................................................... 15
Notes to Financial Statements ........................................................................................................ 16-37
Required Supplementary Information
Schedules of Pension Funding Progress ....................................................................................................... 38
Schedules of Contributions from Employer and Other Contributing
Entities .................................................................................................................................................39-40
Other Postemployment Benefits Plan - Schedule of Funding Progress ...................................................... 41
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund .....................................................................................................42-43
Note to Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual - General Fund ......................................................................................... 44
Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds ................................................................45-46
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Governmental Funds .........................................................................47-48
Combining Statement of Net Assets - Fiduciary Funds ............................................................................... 49
Combining Statement of Changes in Net Assets - Fiduciary Funds ........................................................... 50
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2012
TABLE OF CONTENTS
(Concluded)
Supplementary Information (Concluded)
Historical Revenues and Expenses ............................................................................................................... 51
Schedules of Net Revenues in Accordance with Bond
Resolutions - Enterprise Funds (Water and Sewer) ................................................................................ 52
Other Bond Covenant Disclosures ............................................................................................................... 53
Other Statistical Information
Major Utility Customers ............................................................................................................................... 54
Summary of Water Usage ............................................................................................................................. 55
Summary of Wastewater Treatment - Atlantic Beach Sewer
Division .................................................................................................................................................... 56
Summary of Wastewater Treatment - Outside City Sewer Division .......................................................... 57
Additional Elements of Report Prepared in Accordance
With Government Auditing Standards, Issued by the
Comptroller General of the United States; the Provisions
of the Office of Management and Budget (OMB)
Circular A-133; the Rules of the Auditor General of the State
of Florida; and Other Contract Requirements
Schedule of Expenditures of Federal Awards and State Financial
Assistance Projects ........................................................................................................................58-59
Note to Schedule of Expenditures of Federal Awards and State
Financial Assistance Projects ............................................................................................................. 60
Schedule of Findings and Questioned Costs - Federal Awards and
State Financial Assistance Projects ...............................................................................................61-62
Schedule of Source and Expenditure of the City Grant Funds ............................................................... 63
Report on Compliance with Requirements Applicable to Each
Major Program and State Project and on Internal Control Over
Compliance in Accordance with OMB Circular A-133 and Chapter
10.550, Rules of the Auditor General ........................................................................................... 64-65
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 .................................................................................................. 66-67
Management Letter ........................................................................................................................... 68-69
INDEPENDENT AUDITORS’ REPORT
i
INDEPENDENT AUDITORS' REPORT
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
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, 2012, which collectively comprise the
City’s basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City’s management. Our responsibility is to express an opinion on these financial
statements based on our audit. The prior year summarized comparative information has been derived
from the City’s 2011 financial statements and, in our report dated February 24, 2012, we expressed
unqualified opinions on the respective financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information.
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. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the basic financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the basic financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
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, 2012, and the respective
changes in financial position and cash flows, where applicable, thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated April 10, 2013,
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, 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 the internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in conjunction with this report
in considering the results of our audit.
ii
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS' REPORT
(Concluded)
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and other required supplementary information on pages iii through xii and 45
through 53 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The supplementary information on pages 45 through 53
and the other statistical information on pages 54 through 57 are presented for purposes of additional
analysis and are not a required part of the financial statements. The accompanying schedule of
expenditures of federal and state awards, is presented for the purposes of additional analysis as required
by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and
Non-Profit Organizations, and Chapter 10.550, Rules of the Auditor General and is also not a required
part of the financial statements. The supplementary information and schedule of expenditures of federal
and state awards are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the financial statements. This information has
been subjected to the auditing procedures applied in the audit of the financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the information is fairly stated in all material respects in
relation to the financial statements as a whole. The other statistical information has not been subjected to
the auditing procedures applied in the audit of the financial statements, and, accordingly, we do not
express an opinion or provide any assurance on them.
April 10, 2013
Gainesville, Florida
iii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
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, 2012.
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
Assets and the Statement of Activities.
The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets. Net assets are reported as one of three categories:
invested in capital assets - net of related debt; restricted; or unrestricted. Restricted net assets are further
classified as either net assets restricted by enabling legislation or net assets that are otherwise restricted.
Over time, increases or decreases in net assets 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 assets changed during the
most recent fiscal year. All changes in net assets 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,
physical environment (i.e., infrastructure), debt, 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 on pages 1 - 2 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of
the funds of the City can be categorized into either governmental funds, proprietary funds, or fiduciary
funds.
iv
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
Fund Financial Statements (Concluded)
■ 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 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 Assets 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 thirteen 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 eleven governmental funds are combined into a single, aggregated
presentation called Nonmajor Governmental Funds. Fund data for these nonmajor governmental
funds is provided in the form of combining statements. These combining statements can be found on
pages 45 - 48 of this report.
The City adopts an annual appropriated budget for all funds but is only required to present a budget
comparison for its General Fund. The Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual - General Fund budgetary comparison schedule on pages 42 - 43 of this
report has been provided to demonstrate compliance with this 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), stormwater, 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 on pages 7 - 13 of this report.
■ 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 on pages 14 - 15 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
begin on page 16 of this report.
v
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
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 beginning on pages 38 of this report.
Government-wide Financial Analysis
Net assets may serve over time as a useful indicator of a City’s financial position. As can be seen in
the summarized table on page v of this analysis, the City’s assets exceeded liabilities by $74,049,679
at the close of the fiscal year ended September 30, 2012.
By far the largest portion of the City’s net assets, $57,939,957 (78%), 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 assets, $5,125,649 (7%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, $10,984,083,
(15%), is used to meet the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Assets
September 30, 2012 and 2011
(In Thousands)
Governmental Business-type
Activities Activities Totals
2012 2011 2012 2011 2012 2011
Current and other assets $10,351 $9,083 $9,457 $8,541 $19,808 $17,624
Capital assets 39,786 40,661 42,413 38,577 82,199 79,238
Total Assets 50,137 49,744 51,870 47,118 102,007 96,862
Long-term liabilities
outstanding 378 516 22,656 18,703 23,034 19,219
Other liabilities 1,177 854 3,746 3,250 4,923 4,104
Total Liabilities 1,555 1,370 26,402 21,953 27,957 23,323
Net Assets:
Invested in capital assets,
net of related debt 39,649 40,460 18,291 19,043 57,940 59,503
Restricted 3,414 2,900 1,712 1,512 5,126 4,412
Unrestricted 5,519 5,014 5,465 4,610 10,984 9,624
Total Net Assets $48,582 $48,374 $25,468 $25,165 $74,050 $73,539
vi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
As illustrated in the schedule above, the City was able to report positive balances in all categories of
net assets, 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.
City of Atlantic Beach’s Change in Net Assets
For the Years Ended September 30, 2012 and 2011
(In Thousands)
Governmental Business-type
Activities Activities Totals
2012
2011
2012
2011
2012
2011
Revenues:
Program Revenues:
Charges for services $1,715 $1,798 $10,860 $11,028 $12,575 $12,826
Operating grants and
contributions 627 735 0 0 627 735
Capital grants and
contributions 736 442 165 1,225 901 1,667
General Revenues:
Property taxes 3,961 3,968 0 0 3,961 3,968
Sales taxes 1,080 1,106 0 0 1,080 1,106
Business and utility taxes 1,124 1,221 0 0 1,124 1,221
State revenue sharing 279 273 0 0 279 273
Discretionary sales surtax 648 635 0 0 648 635
Interest revenue 345 206 248 143 593 349
Miscellaneous 32 50 0 0 32 50
(Loss) gain on disposal of
fixed assets 0 0 0 0 0 0
Total Revenues 10,547 10,434 11,273 12,396 21,820 22,830
Expenses:
General government 1,846 2,137 0 0 1,846 2,137
Public safety 5,489 4,796 0 0 5,489 4,796
Road maintenance and
construction 1,937
1,821
0
0
1,937
1,821
Parks and recreation 1,376 1,215 0 0 1,376 1,215
Conservation and resource
management 0 0 0 0 0 0
Interest on long-term debt 6 9 0 0 6 9
Utility 0 0 7,668 7,763 7,668 7,763
Stormwater 0 0 1,166 1,193 1,166 1,193
Sanitation 0 0 1,551 1,500 1,551 1,500
Building code enforcement 0 0 270 302 270 302
Total Expenses 10,654 9,978 10,655 10,758 21,309 20,736
Transfers 315 1,178 (315) (1,178) 0 0
Change in net assets 208 1,634 303 460 511 2,094
Net assets-Beginning 48,374 46,740 25,165 24,705 73,539 71,445
Net assets-Ending $48,582
$48,374
$25,468
$25,165
$74,050
$73,539
vii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(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 for the fiscal year:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund
balance of $9,488,764, an increase of $806,985 in comparison with the prior year.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance was $3,235,593, which equated to 31% of total General Fund expenditures
without transfers out. The net result of various revenue and expense items resulted in an increase to
the City’s General Fund of $466,664 or 8% during the current fiscal. This increase primarily resulted
from revenues being less than budgeted by $92,996, while expenses were $855,123 less than budget
for a net positive variance of $762,127. The General Fund revenues were close to the budgeted
amount in total and were otherwise about the same as 2011. Revenues for non-property taxes and
permits were lower than expected, but were off-set by higher than expected interest revenue. The
expenditures of the General Fund were lower than expected, mostly from capital project monies not
being spent and unfilled positions. There were budget surpluses throughout all departments of the
General Fund, the largest being City Administration with a positive variance of $285,806.
Nonmajor governmental funds consisting of special revenue funds, and the debt service fund, and the
capital projects fund have a combined fund balance of $3,243,758. Of this fund balance, $75,350 is
restricted as a debt service reserve and $2,982,216 is restricted for capital projects. The net increase
in fund balance after transfers in nonmajor governmental funds was $340,321.
■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. Net assets in the proprietary funds increased $303,069 during
the fiscal year. In fiscal year 2012, a storm water rate adjustment of $1.89 per ERU was implemented to
help cover the cost of the storm water system maintenance and to allow more Gas Tax proceeds to go
towards street paving. Operating expenses, including depreciation, decreased $133,164. After non-
operating revenues and expenses are added, the income was $459,848 before transfers and capital
contributions. Deducting from this income was a decrease to net assets of $156,779 from a combination
of contributed capital and net transfers out. The total Change in Net Assets was $303,069.
The Stormwater Fund continues to be subsidized by the Local Option Gas Tax Fund to support its
operating expenses. This year’s transfer from the Local Option Gas Tax Fund was reduced to
$33,000 from $143,000 last year. This change was made possible by a $1.89 per ERU rate increase.
The $6.89 per ERU rate is approximately 64% of the total operating expenses of $1,060,604 needed
to fully fund the operation with charges for service.
During fiscal year 2012, the Sanitation Fund netted a decrease to net assets of $20,446, after having
contributed $260,095 to the General Fund. There was no rate increase for cost of living in 2012.
The unrestricted net assets of the enterprise funds amounted to $5,464,643 at the end of fiscal year
2012. The total increase in unrestricted net assets of $854,954 from 2011 was primarily due to the net
revenues of the utility fund.
viii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
General Fund Budgetary Highlights
There were no differences in the original budgeted revenues and the final amended budget. The
Expense budget included a $230,586 increase in appropriations, and a $9,934 decrease in transfers.
The portion of the increase in appropriations for the encumbrances rolling forward from 2011 were
$138,087.
Net Budget
The overall net difference from the final budgeted revenues and adjusted final budgeted expenses
was a deficit of $240,520. The actual increase in fund balance was $547,256. This resulted in a
$787,776 excess variance above what was budgeted in the General Fund.
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, 2012, amounted to $82,198,289.
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 a decrease of $874,332 (2.15%) for governmental activities and an increase of $3,834,862
(9.94%) for business-type activities.
Capital asset events during the current fiscal year included the following:
Governmental Activities
Buildings reflected a net increase of $118,390. This represented a capital asset increase of
$228,169, offset by disposed assets with a net book value of $4,327 and depreciation of
$105,452. Building improvements acquired this year were predominantly related to energy
efficiency. Electrical lighting retrofits with occupancy sensors and upgraded cooling and
heating systems installed throughout City-owned buildings were funded through energy
grants. The lifeguard station roof was replaced with funding provided through the interlocal
agreement with the City of Jacksonville.
Intangible Assets reflected a net decrease of $35,506. This asset category includes land
easements and computer software. No acquisitions were made this year, and the decrease in
asset value was attributed to depreciation.
Improvements Other Than Buildings reflected a net decrease of $157,234. This
represented a capital asset increase of $671,768, offset by a transfer to the Utility Fund of
$173,922 for the grant-funded sewer project and depreciation of $655,080. Acquisitions this
year included: the Community Development Block (CDB) grant-funded installation of a
pervious surface parking lot at Donner Park; energy-efficient, grant-funded lighting on the
baseball fields at Russell Park; and, capitalization of the Florida Inland Navigation District
(FIND) grant-funded boardwalk and kayak/canoe launch at Tideviews Park.
ix
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
Equipment assets reflected a net decrease of $113,594. This net decrease was comprised of
assets acquired for a value of $240,892, offset by disposed assets with a net book value of
$4,677 and depreciation of $349,809. Asset acquisitions of note in this category were: the
energy grant-funded, all-electric Chevy Volt vehicle, a dedicated computer server for
investigations, and a replacement copier for the Police Department; a new projector for the
Commission Chambers; a gas mule utility vehicle for the lifeguards; and, other City fleet
vehicles identified for replacement during the budget process.
Construction in progress decreased $686,598, as completed project costs were capitalized
and are described in further detail in the specific asset categories above. The remaining
balance of $4,338 in construction in progress at September 30, 2012, represents design costs
associated with the memorial garden at Veteran’s Memorial Park.
Business-type Activities
Buildings and Intangible Assets reflected a net decrease in asset value of $71,927 and $190,
respectively, from depreciation.
Improvements Other Than Buildings reflected a net increase of $9,451,885. This
represented a capital asset increase of $11,628,002 offset by depreciation of $2,176,117. The
significant increase was due to substantive completion and capitalization of the TMDL (Total
Maximum Daily Load) project-related assets, totaling $11,005,891. The TMDL project was
comprised of the installation of new sewer lines to move the flow from the Buccaneer sewer
plant and upgrades to Wastewater Treatment Plant No. 1, including sludge and odor control.
The CDB grant-funded rehabilitation of sewer lines in the Donner subdivision was also
completed this fiscal year.
Equipment assets reflected a net decrease of $95,962. This net decrease was comprised of
assets acquired for a value of $12,700, offset by depreciation of $108,662. Some of the assets
acquired in this category were: a 30-yard roll-on/off container and replacement chlorinators.
Three fully-depreciated chlorinators were disposed of during the fiscal year.
Construction in progress decreased due to the substantive completion of the TMDL project,
as described above. All TMDL-associated costs were moved to the in-service, depreciable
“Improvements” category above by fiscal-year-end. The remaining balance of $115,682 in
construction in progress at September 30, 2012 represents costs associated with the water
main improvements on 12th Street and Ocean Boulevard.
x
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
City of Atlantic Beach’s Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities Totals
2012 2011 2012 2011 2012 2011
Land $10,034 $10,034 $1,656 $1,656 $11,690 $11,690
Intangibles 41 77 215 215 256 292
Buildings 2,865 2,747 163 235 3,028 2,982
Improvements-Other 25,866 26,023 39,944 30,492 65,810 56,515
Equipment 976 1,089 318 414 1,294 1,503
Construction in Progress 4 691 116 5,565 120 6,256
Total $39,786 $40,661 $42,412 $38,577 $82,198 $79,238
Additional information on the City’s capital assets can be found in note 5 on pages 27-28 of this report.
Long-term Debt
At the end of the 2012 fiscal year, the City had total bonded debt outstanding of $24,063,620. This
amount was comprised of debt secured solely by specified revenue sources. A detailed listing of
the City’s debt can be found in the table below.
City of Atlantic Beach’s Outstanding Debt
September 30, 2012
(In Thousands)
Governmental Business-type
Activities Activities Totals
Utility System Revenue Bonds, Series 2004 $0 $13,984 $13,984
Utility System Revenue Bonds, Series 2010A-1 0 855 855
Utility System Revenue Bonds, Series 2010B 0 634 634
SunTrust Revenue Refunding Bonds, Series 1999 137 170 307
F.D.E.P. State Revolving Funds Loan, 2010 0 722 722
F.D.E.P. State Revolving Funds Loan, 2009 0 7,561 7,561
Total $137 $23,926 $24,063
The City has been able to pay for ongoing capital projects related to governmental activities since
borrowing funds in 1989 (refunded in 1999 to take advantage of reduced interest rates). Therefore, it has
a high capacity for additional debt, if needed. The only Governmental Activity Debt outstanding will be
fully paid off in fiscal year 2014.
xi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2012
(Continued)
The City has increased its total outstanding long-term debt for the purpose of upgrading the Sewer plant
to meet new standards. The project is substantively complete and the outstanding debt increase of
$4,365,669 pertains to an amount drawn down on a loan as of year-end off-set by some principal
payments. The 2011 9% utility rate increase on the sewer portion of the bill provided sufficient revenues
to meet the required coverage ratio and has positioned the utility well for the additional debt related to the
TMDL project. Debt service coverage calculations can be found on page 56. Additional information on
the City’s long-term debt can be found in note 6 on pages 28 – 31 of this report.
Economic and Budgetary Highlights
The City is faced with many of the same economic hurdles that other cities in Florida are coping with.
Decreasing revenues and increasing health insurance and pension contributions have made the budget
itself a strategic planning issue again for 2013. Some of the economic hurdles that the City must
overcome this year and into the future are highlighted below.
Revenue Highlights:
■ The 2012 taxable property values are about 3.6% lower than the 2011 values. The City Commission
voted to use the roll-back rate of 3.3285 mills resulting tax collections being almost the same in 2012
as they were in 2011. The final gross taxable value was $1,200,709,252. For 2013, the City
Commission voted to keep the millage at 3.3285 mills and the result was a decrease in budgeted
revenues of $162,104. Ad valorem taxes are estimated to represent about 35% of the General Fund
revenues for 2013.
■ State-shared revenues ended the year with a 1.35% decrease from 2011. From 2011 to 2012, the
combination of General Fund sales taxes and revenue sharing collections increased $20,442. The
projection for 2013 exhibits a trend that slightly increases these revenues by $29,327. These two
sources account for about 13.8% of the General Fund revenues.
■ In accordance with the recently modified investment policy, the City plans to continue to invest in
fixed income, short duration mutual funds until long-term rates improve.
■ In Fiscal Year 2012, the City increased the storm water rates to $6.89 per ERU. This increase
generated an additional $173,983 in revenues. The rate increase did generate the additional funds as
planned. There are no water or sewer rate increases scheduled for 2013.
■ The City continued to partially fund the Storm Water Utility with the recently increased $6.89 per
ERU charge for 2011. In 2012, the utility was also dependent on a transfer from the Gas Tax Fund to
cover a portion of its operating budget. During the 2012 Operating Budget adoption process, the City
Commission chose to increase the rate by $1.50 per ERU. This is about half of what was needed to
fully fund the Storm Water Utility with its own rates. Each dollar increase represents about $100,000
in additional revenues.
■ In 2012, the City drew down additional debt from the State Revolving loan program to complete the
TMDL project. The sewer utility 9% rate increase last year ensures that debt coverage requirements
are met and sufficient funds will be available in the future to fund maintenance of the new plant
upgrades.
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide Financial Statements, Fund Financial
Statements, and Notes to Financial Statements.
See accompanying notes.
1
Governmental Business-type 2011
Activities Activities Totals Totals
Assets
Equity in Pooled Cash and Investments 9,215,400$ 5,865,638$ 15,081,038$ 13,109,965$
Receivables - Net 7,523 613,856 621,379 698,026
Due from Other Governments 1,054,659 0 1,054,659 1,022,219
Inventories 35,566 44,683 80,249 61,403
Notes Receivable - Current 760 10,709 11,469 10,811
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 0 2,649,289 2,649,289 2,382,037
Capital Assets:
Land 10,034,337 1,656,018 11,690,355 11,690,145
Buildings 4,491,659 4,356,384 8,848,043 8,628,984
Improvements Other Than Buildings 38,755,694 76,328,842 115,084,536 102,958,688
Equipment 3,186,415 1,843,161 5,029,576 4,986,078
Intangibles-Easements and Computer Software 330,584 244,709 575,293 575,293
(Accumulated Depreciation and Amortization)(17,016,814) (42,132,720) (59,149,534) (55,856,991)
Construction in Progress 4,338 115,682 120,020 6,255,562
Prepaid Items 34,871 0 34,871 55,548
Notes Receivable - Noncurrent 2,280 83,026 85,306 79,371
Unamortized Loan Costs 0 190,405 190,405 204,660
Total Assets 50,137,272 51,869,682 102,006,954 96,861,799
LiabilitiesAccounts Payable and Other Current Liabilities 662,115 595,937 1,258,052 1,225,433
Construction Retainages Payable 0 385,117 385,117 241,532
Due to Other Governments 0 7,141 7,141 9,385
Deferred Revenue 35,233 203,243 238,476 162,864 Deposits 8,090 0 8,090 4,238 Compensated Absences - Current 470,000 126,000 596,000 579,500 Accrued Interest Payable 1,917 0 1,917 2,816 Payable from Restricted Assets:
Current Portion of Bonds Payable 0 1,012,767 1,012,767 971,270 Current Portion of Loan Payable 0 457,492 457,492 12,942 Accrued Interest Payable 0 439,420 439,420 374,280 Customer Deposits 0 518,653 518,653 519,449 Noncurrent Liabilities:
Due Within One Year 67,712 0 67,712 63,690 Due in More Than One Year 69,203 22,456,446 22,525,649 18,650,053 Compensated Absences - Noncurrent 128,925 163,501 292,426 400,849 Other Postemployment Benefits Obligation 112,021 36,342 148,363 104,351
Total Liabilities 1,555,216 26,402,059 27,957,275 23,322,652
Net Assets
Invested in Capital Assets - Net of Related Debt 39,649,298 18,290,659 57,939,957 59,502,932
Restricted for:
Renewal and Replacement 0 500,000 500,000 500,000
Debt Service 75,350 1,173,858 1,249,208 1,043,536
Public Safety 178,300 0 178,300 163,435
Road Maintenance and Construction 123,526 0 123,526 141,726
Parks and Recreation 1,194 0 1,194 4,801
Other Capital Projects 2,982,216 0 2,982,216 2,486,979
Other Purposes 52,732 0 52,732 48,652
Building Code Enforcement 0 38,463 38,463 23,565
Unrestricted 5,519,440 5,464,643 10,984,083 9,623,521
Total Net Assets 48,582,056$ 25,467,623$ 74,049,679$ 73,539,147$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
2012
See accompanying notes.
2
Operating Capital
Charges for Grants and Grants and Governmental Business-type 2011
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals Totals
Primary Government
Governmental Activities:
General Government 1,845,854$ 877,384$ 0$ 148,784$ (819,686)$ 0$ (819,686)$ (1,165,703)$
Public Safety 5,488,897 665,079 105,574 49,357 (4,668,887) 0 (4,668,887) (3,966,337)
Road Maintenance and Construction 1,937,716 106,747 521,028 13,199 (1,296,742) 0 (1,296,742) (1,156,839)
Parks and Recreation 1,375,752 63,458 0 247,360 (1,064,934) 0 (1,064,934) (706,265)
Physical Environment 0 0 0 277,183 277,183 0 277,183 0
Conservation and Resource
Management 0 2,106 0 0 2,106 0 2,106 (480)
Interest/Fiscal Charges on
Long-term Debt 6,201 0 0 0 (6,201) 0 (6,201) (8,858)
Total Governmental Activities 10,654,420 1,714,774 626,602 735,883 (7,577,161) 0 (7,577,161) (7,004,482)
Business-type Activities:
Utility 7,667,700 8,127,246 0 165,411 0 624,957 624,957 1,979,057
Stormwater 1,166,130 683,430 0 0 0 (482,700) (482,700) (683,929)
Sanitation 1,551,030 1,765,771 0 0 0 214,741 214,741 259,628
Building Code Enforcement 270,033 283,173 0 0 0 13,140 13,140 (60,014)
Total Business-type Activities 10,654,893 10,859,620 0 165,411 0 370,138 370,138 1,494,742
Total Primary Government 21,309,313$ 12,574,394$ 626,602$ 901,294$ (7,577,161) 370,138 (7,207,023) (5,509,740)
General Revenues
Property Taxes 3,961,395 0 3,961,395 3,968,233
Sales Taxes 1,080,006 0 1,080,006 1,106,329
Business and Utility Taxes 1,124,151 0 1,124,151 1,221,025
State Revenue Sharing 278,547 0 278,547 272,875
Discretionary Sales Surtax 648,258 0 648,258 635,446
Interest Revenue 345,010 248,057 593,067 349,148
Miscellaneous 32,131 0 32,131 50,348
Transfers 315,126 (315,126) 0 0
Total General Revenues, Special Item,
and Transfers 7,784,624 (67,069) 7,717,555 7,603,404
Change in Net Assets 207,463 303,069 510,532 2,093,664
Net Assets, Beginning of Year 48,374,593 25,164,554 73,539,147 71,445,483
Net Assets, End of Year 48,582,056$ 25,467,623$ 74,049,679$ 73,539,147$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
Primary Government
2012
Program Revenues Net (Expense) Revenue and Changes in Net Assets
See accompanying notes.
3
Nonmajor Totals
Governmental Governmental 2011
General Funds Funds Totals
Assets
Equity in Pooled Cash and Investments 5,999,741$ 3,215,659$ 9,215,400$ 7,984,902$
Receivables - Net 7,523 0 7,523 2,542
Due from Other Funds 213,265 0 213,265 78,053
Due from Other Governments 597,923 456,736 1,054,659 1,022,219
Inventories 35,566 0 35,566 15,212
Notes Receivable - Current 760 0 760 760
Prepaid Items 34,871 0 34,871 55,548
Notes Receivable - Noncurrent 2,280 0 2,280 2,280
Total Assets 6,891,929 3,672,395 10,564,324 9,161,516
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued Liabilities 610,463 51,652 662,115 391,974
Due to Other Funds 0 213,265 213,265 78,053
Deposits 1,750 6,340 8,090 4,238
Deferred Revenue 34,710 157,380 192,090 5,472
Total Liabilities 646,923 428,637 1,075,560 479,737
Fund Balances
Nonspendable:
Inventories 35,566 0 35,566 15,212
Prepaids 34,871 0 34,871 55,548
Restricted for:
Public Safety 19,720 158,580 178,300 163,435
Road Maintenance and Construction 0 123,526 123,526 141,726
Parks and Recreation 0 1,194 1,194 4,801
Debt Service Reserve 0 75,350 75,350 72,585
Other Capital Projects 0 2,982,216 2,982,216 2,469,621
Other Purposes 0 52,732 52,732 48,652
Committed to:0
Conservation and Resource Management 0 6,493 6,493 3,509
Assigned to:0
Re-establishment of Fire Department 300,000 0 300,000 300,000
Operating Reserves 2,619,256 0 2,619,256 2,667,660
Unassigned:3,235,593 (156,333) 3,079,260 2,739,030
Total Fund Balances 6,245,006 3,243,758 9,488,764 8,681,779
Total Liabilities and Fund Balances 6,891,929$ 3,672,395$ 10,564,324$ 9,161,516$
2012
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
See accompanying notes.
4
Total Fund Balances of Governmental Funds 9,488,764$ 8,681,779$
Amounts Reported for Governmental Activities
in the Statement of Net Assets are Different
Because:
Capital assets used in governmental activities
are not financial resources and, therefore,
are not reported in the funds:
Total Capital Assets 56,803,027$ 56,698,477$
(Accumulated Depreciation)(17,016,814) (16,037,932)
39,786,213 40,660,545
Nonexchange receivables that do not provide
current financial resources and, therefore,
are not reported revenues in the funds.156,857 2,930
Long-term liabilities are not due and payable
in the current period and, accordingly, are
not reported as fund liabilities. Interest
on long-term debt is not accrued in the
governmental funds, but rather is recognized
as an expenditure when due. All liabilities,
both current and long-term, are reported in
the statement of net assets. Long-term
liabilities at year-end consist of:
Revenue Bonds Payable 136,915 200,604
Compensated Absences 598,925 688,409
Other Postemployment Benefits
Obligation 112,021 78,832
Accrued Interest Payable 1,917 2,816
(849,778) (970,661)
Total Net Assets of Governmental Activities 48,582,056$ 48,374,593$
2012 2011
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
See accompanying notes.
5
Nonmajor Totals
Governmental Governmental 2011
General Funds Funds Totals
Revenues
Property Taxes 3,961,395$ 0$ 3,961,395$ 3,968,233$
Nonproperty Taxes 1,124,151 1,153,071 2,277,222 2,375,851
Permits, Fees and Special Assessments 858,634 0 858,634 955,141
Intergovernmental Revenues 1,492,846 587,933 2,080,779 1,948,394
Fines and Forfeitures 79,071 39,110 118,181 121,867
Charges for Services 707,835 0 707,835 697,556
Interest Income 230,979 114,030 345,009 206,303
Miscellaneous Revenues 35,922 7,848 43,770 99,576
Interfund Charges 1,556,765 0 1,556,765 1,438,862
Total Revenues 10,047,598 1,901,992 11,949,590 11,811,783
Expenditures
Current:
General Government 2,983,158 0 2,983,158 3,008,608
Public Safety 4,686,939 162,217 4,849,156 4,550,382
Road Maintenance and Construction 1,461,234 330,766 1,792,000 1,653,682
Parks and Recreation 1,069,010 59,607 1,128,617 995,245
Conservation and Resource
Management 0 0 0 480
Debt Service:
Principal 0 63,684 63,684 61,620
Interest and Other 0 7,100 7,100 9,723
Capital Outlay 220,356 613,231 833,587 1,151,032
(Total Expenditures)(10,420,697) (1,236,605) (11,657,302) (11,430,772)
(Deficiency) Excess of Revenues (Under)
Over Expenditures (373,099) 665,387 292,288 381,011
Other Financing Sources (Uses)
Transfers in 824,048 580,934 1,404,982 2,319,507
Transfers (out)(9,934) (906,000) (915,934) (1,141,500)
Sale of General Fixed Assets 25,649 0 25,649 17,310
Total Other Financing (Uses)839,763 (325,066) 514,697 1,195,317
Net Change in Fund Balances 466,664 340,321 806,985 1,576,328
Fund Balances, Beginning of Year 5,778,342 2,903,437 8,681,779 7,105,451
Fund Balances, End of Year 6,245,006$ 3,243,758$ 9,488,764$ 8,681,779$
2012
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
See accompanying notes.
6
Net Change in Fund Balances - Total Governmental Funds 806,985$ 1,576,328$
Amounts Reported for Governmental Activities in the
Statement of Activities are Different Because:
Governmental funds report capital purchases as
expenditures. However, in the statement of
activities, the cost of those assets is depreciated
over their estimated useful lives and reported as
depreciation expense:
Expenditures for Capital Assets 833,588$ 1,151,032$
(Current Year Depreciation)(1,145,847) (1,130,087)
(312,259) 20,945
Certain revenues related to the acquisition of capital
assets are not reported in governmental funds
because they do not represent current financial
resources, however, they are reported as capital
contributions in the statement of activities.0 89,346
Certain nonexchange revenues reported in the
statement of activities are not considered current
financial resources and, therefore, are not reported
as revenue in the governmental funds.153,927 (27,002)
Repayment of long-term debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the
statement of net assets.63,684 61,621
Governmental funds report sale of general fixed
assets as financial resources. The gain or loss on
disposal of general fixed assets is not reflected
in the governmental funds:
Proceeds from Sale of General Fixed Assets (Loss)(25,649) (17,309)
or Gain on Disposal of General Fixed Assets (362,498) (23,962)
(388,147) (41,271)
Some expenses/revenues reported in the statement
of activities do not require the use of or provide
current financial resources and, therefore, are not
reported as expenditures in governmental funds:
Transfer of Capital Assets (173,922)
Debt Interest Expense 899 865
Compensated Absences 89,485 (16,991)
Other Postemployment Benefits Obligation (33,189) (29,757) (116,727) (45,883)
Change in Net Assets - Governmental Activities 207,463$ 1,634,084$
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
2012 2011
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
See accompanying notes.
7
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Assets
Current Assets:
Equity in Pooled Cash and Investments 3,928,970$ 1,208,764$ 650,337$ 77,567$ 5,865,638$ 5,125,063$
Accounts Receivable - Net 497,176 45,663 71,017 0 613,856 694,826
Inventories 44,683 0 0 0 44,683 46,191
Notes Receivable - Current 10,709 0 0 0 10,709 10,709
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 2,481,394 167,895 0 0 2,649,289 2,382,037
Capital Assets:
Land 749,499 906,519 0 0 1,656,018 1,656,018
Buildings 4,356,384 0 0 0 4,356,384 4,356,384
Improvements Other Than Buildings 60,127,296 16,201,546 0 0 76,328,842 64,700,840
Equipment 1,371,302 253,482 180,877 37,500 1,843,161 1,873,696
Intangibles-Easements and Computer Software 226,394 0 0 18,315 244,709 244,709
(Accumulated Depreciation and Amortization)(34,661,197) (7,255,896) (159,882) (55,745) (42,132,720) (39,819,059)
Construction in Progress 115,682 0 0 0 115,682 5,564,626
Notes Receivable - Noncurrent 83,026 0 0 0 83,026 77,091
Unamortized Loan Costs 166,282 24,123 0 0 190,405 204,660
Total Assets 39,497,600$ 11,552,096$ 742,349$ 77,637$ 51,869,682$ 47,117,791$
Business-type Activities - Enterprise Funds
2012
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30, 2012,
See accompanying notes.
8
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Liabilities
Current Liabilities Payable from Current
Assets:
Accounts Payable and Other Current Liabilities 473,663$ 12,878$ 103,506$ 5,890$ 595,937$ 833,459$
Construction Retainages Payable 385,117 0 0 0 385,117 241,532
Due to Other Governments 7,141 0 0 0 7,141 9,385
Deferred Revenue 109,527 28,823 61,948 2,945 203,243 160,322
Compensated Absences - Current 110,000 1,000 0 15,000 126,000 127,100
Current Liabilities Payable from Restricted
Assets:
Current Portion of Bonds Payable 889,732 123,035 0 0 1,012,767 971,270
Current Portion of Loans Payable 457,492 0 0 0 457,492 12,942
Accrued Interest Payable 394,560 44,860 0 0 439,420 374,280
Customer Deposits 518,653 0 0 0 518,653 519,449
Noncurrent Liabilities:
Due in More Than One Year 20,535,818 1,920,628 0 0 22,456,446 18,513,139
Compensated Absences - Noncurrent 152,001 1,102 0 10,398 163,501 164,840
Other Postemployment Benefits Obligation 24,160 7,311 0 4,871 36,342 25,519
Total Liabilities 24,057,864 2,139,637 165,454 39,104 26,402,059 21,953,237
Net Assets
Invested in Capital Assets - Net of Related Debt 10,183,483 8,086,111 20,995 70 18,290,659 19,042,991
Restricted for:
Renewal and Replacement 500,000 0 0 0 500,000 500,000
Debt Service 1,050,823 123,035 0 0 1,173,858 970,951
Other Capital Projects 0 0 0 0 0 17,358
Building Code Enforcement 0 0 0 38,463 38,463 23,565
Unrestricted 3,705,430 1,203,313 555,900 0 5,464,643 4,609,689
Total Net Assets 15,439,736$ 9,412,459$ 576,895$ 38,533$ 25,467,623$ 25,164,554$
Business-type Activities - Enterprise Funds
(Concluded)
SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
2012
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
CITY OF ATLANTIC BEACH, FLORIDA
See accompanying notes.
9
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Operating Revenues
Charges for Services:
Customer Charges 8,078,291$ 683,430$ 1,732,590$ 283,173$ 10,777,484$ 10,934,230$
Franchise Permits 0 0 7,500 0 7,500 7,500
Miscellaneous Revenues 48,955 0 0 0 48,955 66,430
Total Operating Revenues 8,127,246 683,430 1,740,090 283,173 10,833,939 11,008,160
Operating Expenses
Personal Services 1,808,193 219,980 19,763 218,151 2,266,087 2,316,372
Contractual Services 841,708 128,789 1,328,892 279 2,299,668 2,341,871
Supplies 331,039 21,887 0 3,562 356,488 341,168
Repairs and Maintenance 123,310 20,717 6,856 6,794 157,677 183,224
Utilities 629,185 0 0 0 629,185 694,506
Depreciation 1,865,274 464,984 26,499 139 2,356,896 2,376,084
Intergovernmental Charges 1,047,909 184,113 174,830 35,325 1,442,177 1,340,881
Other Expenses 232,292 20,134 (5,810) 5,783 252,399 299,635
(Total Operating Expenses)(6,878,910) (1,060,604) (1,551,030) (270,033) (9,760,577) (9,893,741)
Operating Income (Loss)1,248,336 (377,174) 189,060 13,140 1,073,362 1,114,419
Nonoperating Revenues (Expenses)
Connection Charges 7,064 0 0 0 7,064 17,779
Franchise Fees 0 0 25,681 0 25,681 19,937
Interest Income 176,483 45,047 24,908 1,619 248,057 142,845
Interest Expense (778,080) (103,659) 0 0 (881,739) (835,531)
Gain (Loss) on Disposal of Fixed Assets 2,077 0 0 0 2,077 (1,283)
Amortization of Loan Costs (12,787) (1,867) 0 0 (14,654) (27,580)
Total Nonoperating Revenues (Expenses)(605,243) (60,479) 50,589 1,619 (613,514) (683,833)
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET ASSETS
PROPRIETARY FUNDS
2012
Business-type Activities - Enterprise Funds
See accompanying notes.
10
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Income (Loss) Before Contributions
and Transfers 643,093$ (437,653)$ 239,649$ 14,759$ 459,848$ 430,586$
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants 158,347 0 0 0 158,347 1,207,001
Transfers in 301,695 263,000 0 0 564,695 203,000
Transfers (out)(619,726) 0 (260,095) 0 (879,821) (1,381,007)
Total Capital Contributions and Grants
and Transfers (159,684) 263,000 (260,095) 0 (156,779) 28,994
Change in Net Assets 483,409 (174,653) (20,446) 14,759 303,069 459,580
Net Assets, Beginning of Year 14,956,327 9,587,112 597,341 23,774 25,164,554 24,704,974
Net Assets, End of Year 15,439,736$ 9,412,459$ 576,895$ 38,533$ 25,467,623$ 25,164,554$
Business-type Activities - Enterprise Funds
(Concluded)
CHANGES IN NET ASSETS
PROPRIETARY FUNDS
2012
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
STATEMENT OF REVENUES, EXPENSES, AND
CITY OF ATLANTIC BEACH, FLORIDA
See accompanying notes.
11
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Cash Flows from Operating Activities
Cash Received from Customers 8,262,177 673,807$ 1,728,727$ 283,173$ 10,947,884$ 10,900,255$
Cash Paid to Suppliers (2,253,427) (185,387) (1,331,435) (17,596) (3,787,845) (3,666,188)
Cash Paid to Employees (1,810,097) (219,933) (19,763) (210,125) (2,259,918) (2,285,659)
Cash Paid for Interfund Services (1,047,909) (184,113) (174,830) (35,325) (1,442,177) (1,340,881)
Net Cash Provided by (Used in) Operating
Activities 3,150,744 84,374 202,699 20,127 3,457,944 3,607,527
Cash Flows from Noncapital Financing
Activities
Connection Charges 7,064 0 0 0 7,064 17,779
Franchise Fees 0 0 25,681 0 25,681 19,937
Transfers in 127,773 263,000 0 0 390,773 203,000
Transfers (out)(619,726) 0 (260,095) 0 (879,821) (1,381,007)
Net Cash Provided by (Used in) Noncapital
Financing Activities (484,889) 263,000 (234,414) 0 (456,303) (1,140,291)
Capital and Related Financing Activities
Intergovernmental Revenues 0 0 0 0 0 248,790
Collections on Notes Receivable 0 0 0 0 0 2,447
Collections on Special Assessments 0 0 0 0 0 594
Capital Grants 158,347 0 0 0 158,347 1,207,001
Proceeds from Loan 5,332,349 0 0 0 5,332,349 4,087,474
Fixed Asset Additions (6,013,322) 0 (4,500) 0 (6,017,822) (5,895,448)
Principal Payments on Long-term Debt (882,626) (103,345) 0 0 (985,971) (1,590,424)
Interest Paid (623,964) (105,642) 0 0 (729,606) (712,058)
Net Cash Provided by (Used in) Capital
and Related Financing Activities (2,029,216) (208,987) (4,500) 0 (2,242,703) (2,651,624)
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
2012
See accompanying notes.
12
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Cash Flows from Investing Activities
Sale (Purchase) of Investments (3,385,283)$ (729,359)$ (318,404)$ (44,362)$ (4,477,408)$ 2,122,344$
Interest Received 176,483 45,047 24,909 2,449 248,888 143,085
Net Cash Provided by (Used in)
Investing Activities (3,208,800) (684,312) (293,495) (41,913) (4,228,520) 2,265,429
Net Increase (Decrease) in Cash and
Cash Equivalents (2,572,161) (545,925) (329,710) (21,786) (3,469,582) 2,081,041
Cash and Cash Equivalents, Beginning of Year 4,103,268 874,738 485,042 40,313 5,503,361 3,422,320
Cash and Cash Equivalents, End of Year 1,531,107$ 328,813$ 155,332$ 18,527$ 2,033,779$ 5,503,361$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating
Activities
Operating Income (Loss)1,248,336$ (377,174)$ 189,060$ 13,140$ 1,073,362$ 1,114,419$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
(Used in) Operating Activities:
Depreciation 1,865,274 464,984 26,499 139 2,356,896 2,376,084
Provision for Uncollectible Accounts 0 0 0 0 0 41,417
Change in Assets and Liabilities:
Accounts Receivable 111,152 (21,560) (14,556) 0 75,036 (151,365)
Inventory 1,508 0 0 0 1,508 (24,593)
Compensated Absences (1,904) 47 0 8,026 6,169 21,009
OPEB Obligation 0 0 0 0 0 9,704
Accounts Payable and Accrued Liabilities (97,401) 6,140 (1,497) (1,178) (93,936) 218,809
Customer Deposits (796) 0 0 0 (796) (3,156)
Deferred Revenue 24,575 11,937 3,193 0 39,705 5,199
Net Cash Provided by (Used in) OperatingActivities 3,150,744$ 84,374$ 202,699$ 20,127$ 3,457,944$ 3,607,527$
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
(Continued)
2012
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
See accompanying notes.
13
Building Code 2011
Utility Stormwater Sanitation Enforcement Totals Totals
Reconciliation of Cash and Cash
Equivalents to Balance Sheet
Equity in Pooled Cash and Cash
Equivalents in Current Assets 3,928,970$ 1,208,764$ 650,337$ 77,567$ 5,865,638$ 5,125,063$
Restricted Equity in Pooled Cash
and Cash Equivalents 2,481,394 167,895 0 0 2,649,289 2,382,037
Equity in Pooled Investments (4,879,257) (1,047,846) (495,005) (59,040) (6,481,148) (2,003,739)
Total Cash and Cash Equivalents 1,531,107$ 328,813$ 155,332$ 18,527$ 2,033,779$ 5,503,361$
Noncash Activity
Noncash Transfers (173,922)$ 0$ 0$ 0$ (173,922)$ 0$
Amortization of Bond Issue Costs 12,443 1,811 0 0 14,254 14,179
Amortization of Bond Discount (Premium)84,765 13,776 0 0 98,541 98,541
Amortization of Loss on Refunding 2,282 162 0 0 2,444 2,444
2012
Business-type Activities - Enterprise Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
(Concluded)
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
See accompanying notes.
14
2012 2011
Assets
Cash and Cash Equivalents 86,828$ 51,110$
Interest Receivable 28,197 38,486
Investments at Fair Value 19,832,927 16,764,501
Total Assets 19,947,952 16,854,097
Liabilities
Accounts Payable and Accrued Liabilities 424 338
Excess Premium Tax Liability 120,454 120,454
DROP Plan Payable 198,554 228,430
Total Liabilities 319,432 349,222
Total Net Assets
Held in Trust for Pension Benefits 19,628,520$ 16,504,875$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30, 2012,
See accompanying notes.
15
2012 2011
Additions
Contributions:
Employer 1,538,619$ 1,123,410$
Employees 261,992 267,604
State of Florida 88,795 86,391
Total Contributions 1,889,406 1,477,405
Net Increase (Decrease) in
Fair Value of Investments 2,218,699 (540,275)
Interest and Dividends 443,921 434,302
Total Additions 4,552,026 1,371,432
Deductions
Refunds of Contributions 12,751 12,514
Benefits 1,254,883 1,096,243
Investment Expenses 103,133 105,175
Administrative Expenses 57,614 81,389
Total Deductions 1,428,381 1,295,321
Net Increase 3,123,645 76,111
Net Assets, Beginning of Year 16,504,875 16,428,764
Net Assets, End of Year 19,628,520$ 16,504,875$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
16
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
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,
sanitation, stormwater, planning, zoning, water and sewer, and general government services.
As outlined in Governmental Accounting Standards Board (GASB) Statement No. 14, The
Reporting Entity, and GASB Statement No. 39, Determining Whether Certain Organizations
are Component Units an Amendment to GASB Statement No. 14, the financial reporting entity
consists of the primary government, organizations for which the primary government is
financially accountable, and other organizations whose exclusions would cause the reporting
entity’s financial statements to be misleading or incomplete. Each potential component unit is
individually evaluated using specific criteria outlined in GASB Statement No. 14 to determine
whether the entity is: (1) part of the primary government; (2) a component unit which should
be included in the reporting entity (blended or discreetly presented); or (3) an organization
which should be excluded from the reporting entity entirely. The principal criteria for
classifying a potential component unit include the legal separateness of the organization, the
financial accountability of the primary government for the potential component unit resulting
from either the primary government’s ability to impose its will on the potential component
unit, or the potential component unit’s fiscal dependency on the primary government. Based
upon the application of these criteria, the City has no component units.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the nonfiduciary activities of the City. For the most
part, the effect of interfund 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.
17
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Government-wide and Fund Financial Statements (Concluded)
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.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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 interfund 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 assets are reported as one of three categories: (1) invested in capital assets, net of related
debt; (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, 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.
18
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
(Concluded)
Fund Financial Statements (Concluded)
The City reports the following major governmental fund:
■ 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 and sewer
collection and treatment systems.
■ 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.
■ The Building Code Enforcement Fund accounts for the activities of the City’s Building
Department.
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 Funds—The debt service fund is used to account for the accumulation of
resources for, and the payment of, long-term general obligation debt principal, interest and
related costs other than obligations payable from the operations of the proprietary funds.
■ Capital Projects Funds—The capital projects funds are used to account for the financial
resources to be used for the acquisition or construction of major capital facilities and
improvement projects (other than those financed by proprietary funds or special revenue
funds).
■ 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 – nonspendable, restricted, committed, assigned
and unassigned:
19
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Fund Balance Classification (Concluded)
■ Nonspendable Fund Balance—amounts that are not in nonspendable 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.
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 (such as funds for the re-establishment of a Fire
Department). 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 to be used
for unanticipated emergencies of approximately 25% of the subsequent year’s budgeted
General Fund payroll and operating expenditures.
Proprietary Funds
Private sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government-wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of
GASB. Governments also have the option of following subsequent private sector guidance for
their business-type activities and enterprise funds, subject to this same limitation. The City
has elected not to follow subsequent private sector guidance.
20
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Proprietary Funds (Concluded)
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 nonoperating 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, debt service 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. Interest income earned on the pooled cash and investments is
distributed to the appropriate funds based on the average monthly balance of investments in
each fund.
Investments are valued at fair market value (see Note 2).
For the purposes of the statement of cash flows, the City’s proprietary funds consider cash and
cash equivalents to include cash and investments with an original maturity of three months or
less.
Receivables
Receivables are recorded at their net realizable value.
Interfund 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 interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of
interfund loans).
21
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
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 nonspendable 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 enterprise
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, 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 historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market 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.
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
22
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
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 assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide
and proprietary fund financial statements.
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 deferred 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.
Interfund 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.
23
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded)
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, 2011, from which the summarized information was derived
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.
At September 30, 2012, the carrying amount of cash on hand and on deposit with banks,
including interest-bearing deposits was $4,015,520, and the related bank balance was
$4,038,522. 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 depositories
pursuant to Florida Statutes Chapter 280, Florida Security for Public Deposits 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.
Under the City’s investment policies, general investments’ activities are governed by Florida
Statutes and 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 fixed income mutual funds, and local government investment pools.
Pension trust funds can invest in the aforementioned and, additionally, authorized investments
include domestic and foreign equity securities, domestic 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 at September 30, 2012:
24
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 2 - Cash and Investments (Continued)
Investment Maturities
Investment Credit Fair Less
Type Rating Value Than 1 1-5 6-10 Total
Western Asset Institutional
Cash Reserves Mutual Fund Unrated $ 1,000,654 $ 1,000,654 $ 0 0 $ 1,000,654
Alliance Limited Duration
High Income Mutual Fund Unrated 2,212,107 2,212,107 0 0 2,212,107
American Century Ginnie Mae
Mutual Fund Unrated 1,012,211 1,012,211 0 0 1,012,211
Columbia Limited Duration
Credit Class A Mutual Fund Unrated 2,114,870 2,114,870 0 0 2,114,870
Delaware Diversified Income
Class A Mutual Fund Unrated 1,683,605 1,683,605 0 0 1,683,605
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 1,660,451 1,660,451 0 0 1,660,451
Putnam Diversified Income
Class A Mutual Fund Unrated 2,033,861 2,033,861 0 0 2,033,861
Putnam Income Class A
Mutual Fund Unrated 2,079,356 2,079,356 0 0 2,079,356
Florida PRIME AAm 145 145 0 0 145
Fund B Surplus Trust Funds
Investment Pool Unrated 178 0 0 178 178
Total $ 13,797,438 $ 13,797,260 $ 0 $ 178 $13,797,438
Listed below are the investments and maturities in the City’s pension trust funds at September 30,
2012:
Investment Maturities
Investment Fair Less More
Type Value * Than 1 1-5 6-10 Than 10 Total
Cash Deposits and
Money Markets $ 920,624 $ 920,624 $ 0 $ 0 $ 0 $ 920,624
Common Stocks 11,140,706 11,140,706 0 0 0 11,140,706
Corporate Bonds 1,209,542 70,768 359,753 779,021 0 1,209,542
Mutual Funds –
Fixed Income 2,131,912 2,131,912 0 0 0 2,131,912
Government and
GSE Bonds 4,235,251 167,206 856,499 1,530,952 1,680,594 4,235,251
Municipal Bonds 24,536 0 0 0 24,536 24,536
ICMA – Self Directed 198,553 198,553 0 0 0 198,553
Total $ 19,861,124 $ 14,629,769 $ 1,216,252 $ 2,309,973 $ 1,705,130 $ 19,861,124
* Fair value balances reported include interest receivable.
25
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 2 - Cash and Investments (Continued)
The total pension investment balances of the City at September 30, 2012, are comprised of the
following items:
Moody’s Percent
Investment Credit of
Type Rating Total
Corporate Bonds A1 0.51%
Corporate Bonds A2 1.38%
Corporate Bonds A3 1.29%
Corporate Bonds AA2 0.17%
Corporate Bonds AA3- 0.17%
Corporate Bonds BAA1 0.96%
Corporate Bonds BAA2 1.27%
Corporate Bonds BAA3 0.34%
Government and GSE Bonds AAA 21.32%
Municipal Bonds AAA 0.12%
Mutual Funds – Fixed Income NR 10.73%
Stocks NR 56.09%
Cash and Money Market NR 4.64%
ICMA Self Directed NR 1.00%
Restricted cash and investments at September 30, 2012, in the enterprise funds follows:
Renewal System
Enterprise Customer and Debt Development
Funds Deposits Replacement Service Charges Totals
Utility Fund $ 531,973 $ 500,000 $ 1,432,063 $ 17,358 $ 2,481,394
Stormwater Fund $ 0 $ 0 $ 167,895 $ 0 $ 167,895
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Funds’ investment
policy to, at a minimum, limit 60% of the market value its investment in fixed income securities
to those that meet or exceed a credit rating of “A” by Moody’s or Standard & Poor’s rating
services. It is the City’s General Employees’ Retirement System Trust Funds’ investment policy
to, at a minimum, limit 45% of the total fixed income portfolio to “investment grade” or higher.
Also, no more than 5% (at cost) of the fixed income portfolio total value can be invested in the
securities of any single corporate issuer or 15% (at cost) of the plan’s total assets can be invested
in foreign securities.
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.
26
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 2 - Cash and Investments (Concluded)
The City’s investment policy does not contain legal or policy requirements that would limit the
exposure to custodial credit risk for deposits or investments, other than the following provision
for deposits: The Finance Director may execute a third party Custodial Safekeeping Agreement
with a commercial bank having trust powers or a trust company which is chartered by the United
States government or the State of Florida. All securities purchased and/or collateral obtained by
the City shall be properly designated as an asset of the City and held in safekeeping by the trust
department or trust company, and no withdrawal of such securities, in whole or in part, shall be
made from safekeeping, except by an authorized City staff member. The third party Custodial
Safekeeping Agreement shall include letters of authority from the City with details as to
responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure
or other unforeseen mishaps, including liability of each party.
Note 3 - Receivables
Receivables, net of the allowance for doubtful accounts at September 30, 2012, consist of the
following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General $ 316,757 $ (309,234) $ 7,523
Utility 535,256 (38,080) 497,176
Stormwater 50,583 (4,920) 45,663
Sanitation 83,055 (12,038) 71,017
Total $ 985,651 $ (364,272) $ 621,379
Included in accounts receivable are $213,739 of water and sewer revenues earned, but not
billed as of September 30, 2012.
Note 4 - Notes Receivable
It is the City’s policy to allow its water and sewer customers to pay connection fees over an
extended period.
Following is a summary of the outstanding balance at September 30, 2012:
Notes Receivable $ 93,735
(Current Portion) (10,709)
Total Note Receivable - Noncurrent $ 83,026
27
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 5 - Capital Assets
Capital asset activity for the fiscal year ended September 30, 2012, is as follows:
Beginning Ending
Balance Increases (Decreases) Balance
Governmental Activities
Capital Assets Not Being Depreciated:
Land $ 10,034,127 $ 210 $ 0 $ 10,034,337
Construction in Progress 690,936 0 (686,598) 4,338
Total Capital Assets Not Being
Depreciated 10,725,063 210 (686,598) 10,038,675
Capital Assets Being Depreciated:
Buildings 4,272,600 228,169 (9,110) 4,491,659
Intangible Assets 330,584 0 0 330,584
Improvements Other Than Buildings 38,257,848 671,768 (173,922) 38,755,694
Machinery and Equipment 3,112,382 240,892 (166,859) 3,186,415
Total Capital Assets Being Depreciated 45,973,414 1,140,829 (349,891) 46,764,352
Less Accumulated Depreciation for:
Buildings (1,525,785) (105,452) 4,783 (1,626,454)
Intangible Assets (253,984) (35,506) 0 (289,490)
Improvements Other Than Buildings (12,235,174) (655,080) 0 (12,890,254)
Machinery and Equipment (2,022,989) (349,809) 162,182 (2,210,616)
Total Accumulated Depreciation (16,037,932) (1,145,847) 166,965 (17,016,814)
Total Capital Assets Being Depreciated,
Net 29,935,482 (5,018) (182,926) 29,747,538
Governmental Activities Capital Assets,
Net $ 40,660,545 $ (4,808) $ (869,524) $ 39,786,213
Business-type Activities
Capital Assets Not Being Depreciated:
Land $ 1,656,018 $ 0 $ 0 $ 1,656,018
Construction in Progress 5,564,626 115,682 (5,564,626) 115,682
Total Capital Assets Not Being
Depreciated 7,220,644 115,682 (5,564,626) 1,771,700
Capital Assets Being Depreciated:
Buildings 4,356,384 0 0 4,356,384
Intangible Assets 244,709 0 0 244,709
Improvements Other Than Buildings 64,700,840 11,628,002 0 76,328,842
Machinery and Equipment 1,873,696 12,700 (43,235) 1,843,161
Total Capital Assets Being Depreciated 71,175,629 11,640,702 (43,235) 82,773,096
Less Accumulated Depreciation for:
Buildings (4,121,833) (71,927) 0 (4,193,760)
Intangible Assets (29,712) (190) 0 (29,902)
Improvements Other Than Buildings (34,208,380) (2,176,117) 0 (36,384,497)
Machinery and Equipment (1,459,134) (108,662) 43,235 (1,524,561)
Total Accumulated Depreciation (39,819,059) (2,356,896) 43,235 (42,132,720)
Total Capital Assets Being Depreciated,
Net 31,356,570 9,283,806 0 40,640,376
Business-type Activities Capital Assets,
Net $ 38,577,214 $ 9,399,488 $ (5,564,626) $ 42,412,076
28
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 5 - Capital Assets (Concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities
General Governmental $ 152,754
Public Safety 238,250
Road Maintenance and Construction 512,637
Parks and Recreation 242,206
Total Depreciation Expense - Governmental Activities $ 1,145,847
Business-type Activities
Utility $ 1,865,274
Stormwater 464,984
Sanitation 26,499
Building Code Enforcement 139
Total Depreciation Expense - Business-type Activities $ 2,356,896
Note 6 - Long-term Debt
Revenue Bonds and Loans payable are comprised of the following:
Revenue Bonds Payable
Utilities System Revenue Refunding Bonds, Series 2004, Payable
in Annual Installments of Principal and Semiannual Installments
of Interest Through October 1, 2025, Bearing Coupon Rates of
2.00% to 4.50%, Secured Solely by a Pledge of and Lien on Net
Water and Sewer System Revenues and Certain Other Revenues
as Defined in the Bond Ordinances $ 15,265,001
SunTrust Revenue Refunding Bonds, Series 1999, Payable in Annual
Installments of Principal and Semiannual Installments of Interest
at a Rate of 4.20%; the Note is Secured by the City’s Utility Service
Taxes 307,979
Utilities System Revenue Bonds, Series 2010A-1, Payable in Annual
Installments of Principal and Semiannual Installments of Interest
Through April 1, 2026, Bearing Coupon Rates of 3.59%, Secured
Solely by a Pledge of and Lien on Net Water and Sewer System
Revenues 855,290
Utilities System Revenue Refunding Bonds, Series 2010B, Payable in
Annual Installments of Principal and Semiannual Installments of
Interest Through April 1, 2026, Bearing Coupon Rates of 3.68%,
Secured Solely by a Pledge of and Lien on Net Water and Sewer
System Revenues 655,582
29
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 6 - Long-term Debt (Continued)
Loans Payable
Florida Department of Environmental Protection, Disbursements and
Capitalized Interest for a $73,030 State of Florida Revolving Loan
#DW160710, Issued to Finance the Construction Costs to Replace a
Well at Water Treatment Plant No. 1 and a Transmission Main on
Ocean Boulevard, Payable in Semiannual Installments of Principal
and Interest Through November 15, 2030, with Financing Rates of
2.71%, 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 $ 721,894
Florida Department of Environmental Protection, Disbursements, Service
Fee and Capitalized Interest for a Combined $9,368,576 State of Florida
Revolving Loan #WW160700, Issued to Finance the Construction of
Treatment and Transmission Facilities for the Buccaneer WWTP
Phaseout Improvements and TMDL Compliance Program WWTP #1,
Payable in Semiannual Installments of Principal and Interest Through
May 15, 2032, with Financing Rates of 3.14% and 2.88%, 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 7,561,361
Total Revenue Bonds and Loan Payable 25,367,107
(Unamortized Discount) (133,861)
(Unamortized Refunding Loss) (1,169,626)
Total Long-term Debt, Net $ 24,063,620
The annual requirements to amortize all revenue bonds and loan payable outstanding at
September 30, 2012, are as follows:
Governmental Activities Business-type Activities
Year Ending Long-term Debt Long-term Debt
September 30 Principal Interest Total Principal Interest Total
2013 $ 67,712 $ 4,324 $ 72,036 $ 1,470,264 $ 899,746 $ 2,370,010
2014 69,203 1,457 70,660 1,514,478 866,804 2,381,282
2015 0 0 0 1,473,719 813,855 2,287,574
2016 0 0 0 1,524,917 759,883 2,284,800
2017 0 0 0 1,581,626 704,567 2,286,193
Thereafter 0 0 0 17,665,188 4,655,957 22,321,145
Total $ 136,915 $ 5,781 $ 142,696 $ 25,230,192 $ 8,700,812 $33,931,004
Interest and amortization incurred during the year ended September 30, 2012, was $7,100 in
the debt service fund and $881,739 in the enterprise funds. Of the amount incurred in the
enterprise funds, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with
bond resolutions. As of September 30, 2012, and during the year then ended, the City was in
compliance with those ratios.
30
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 6 - Long-term Debt (Continued)
The following is a summary of the changes in long-term debt of the City for the year ended
September 30, 2012:
Balance Balance Due
October 1, September 30, Within
2011 Additions Reductions 2012 One Year
Governmental Activities
Revenue Bonds Payable $ 200,604 $ 0 $ (63,689) $ 136,915 $ 67,712
Compensated Absences 688,409 467,818 (557,302) 598,925 470,000
OPEB Obligation 78,832 33,189 0 112,021 0
Total Governmental Activities -
Long-term Liabilities $ 967,845 $ 501,007 $ (620,991) $ 847,861 $ 537,712
Business-type Activities
State Revolving Fund Loans $ 2,983,612 $ 5,332,349 $ (32,706) $ 8,283,255 $ 457,492
Total State Revolving Fund
Loans 2,983,612 5,332,349 (32,706) 8,283,255 457,492
Revenue Bonds Payable 17,918,206 0 (971,269) 16,946,937 1,012,767
Less Deferred Amounts:
For Issuance Discounts (144,158) 0 10,297 (133,861) 0
Loss on Bond Refunding (1,260,309) (22,332) 113,015 (1,169,626) 0
Total Revenue Bonds Payable 16,513,739 (22,332) (847,957) 15,643,450 1,012,767
Total Bonds/Loans Payable 19,497,351 5,310,017 (880,663) 23,926,705 1,470,259
Compensated Absences 291,940 163,475 (165,914) 289,501 126,000
OPEB Obligation 25,519 10,823 0 36,342 0
Total Business-type Activities -
Long-term Liabilities $ 19,814,810 $ 5,484,315 $ (1,046,577) $ 24,252,548 $ 1,596,259
Conduit Debt
The City has issued Health Facility Revenue 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, 2012, there were two series of Health Facility Revenue Bonds
outstanding, with an aggregate principal amount payable of $42,970,000.
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of
September 30, 2012. 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, 2012:
31
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 6 - Long-term Debt (Concluded)
Outstanding
Principal Estimated Principal
Pledged Revenue and Interest Percentage and Pledged
Description Revenue Received Paid Pledged Interest Through
1999 – Utility System Refunding Utility
Bonds Service Tax $ 475,384 $ 159,244 33.5% $ 320,984 2014
2004 – Utility System Refunding Utility
Bonds Revenues 3,298,339 1,450,774 43.68% 21,439,631 2025
2010A-1 – Utility System Revenue Utility
Bonds Revenues 3,298,339 68,652 2.08% 1,110,176 2026
2010B – Utility System Refunding Utility
Bonds Revenues 3,298,339 59,211 1.80% 839,068 2026
Florida Department of
Environmental Protection, SRF Utility
Loan Revenues 3,298,339 52,496 1.59% 922,757 2031
Florida Department of
Environmental Protection, SRF Utility
Loan Revenues 3,298,339 0 0.00% 9,441,084 2032
Note 7 - Defined Benefit Pension Plans
Plan Descriptions and Contribution Information
The City maintains two separate single-employer pension plans, one for police officers and
one for general employees, which cover substantially all full-time City employees. The
pension plans do not issue separate stand-alone financial statements. Combining statements
are included in the supplementary information to the basic financial statements. Membership
of each plan consists of the following at September 30, 2011, the date of the latest actuarial
valuation:
General
Employees Police
Retirees, Disabled Members and Beneficiaries
Receiving Benefits 47 17
Terminated Plan Members Entitled to but Not
Yet Receiving Benefits 11 5
Active Plan Members 83 26
Total 141 48
■ General Employees’ Retirement Plan
● Plan Description
The General Employees’ Retirement Plan (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.
32
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 7 - Defined Benefit Pension Plans (Continued)
Plan Descriptions and Contribution Information (Concluded)
■ General Employees’ Retirement Plan (Concluded)
● Contributions
The City is required to contribute at an actuarially determined rate (24.53% of
valuation payroll for the year ended September 30, 2012). Plan members are required
to contribute 5.0% of their annual covered salary. Contribution requirements are
established by City code, which may be amended by the City Commission.
■ Police Retirement Plan
● Plan Description
The Police Retirement Plan (Plan) provides retirement, disability and death benefits
to Plan members and their beneficiaries. The 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 Plan.
● Contributions
Plan members are required to contribute 4.815% of their annual covered salary. The
City is required to contribute at actuarially determined rates, if State of Florida
contributions are not sufficient (combined City and State contributions were 36.18%
of valuation payroll for the year ended September 30, 2012). Per City Code, the City
Commission may amend established contribution requirements.
Other Pension Plan Information
The ARC for the current year was determined as part of the September 30, 2011, actuarial
valuations for the General Employees’ and Police Retirement Plans using the entry-age
actuarial cost method. The actuarial assumptions include an 8.0% rate of return on
investments, projected salary increases of 5.0% to 23.0% per year including price inflation of
3.0% and a payroll growth assumption of 4.0%. The assumptions did not include
postretirement benefit increases.
The actuarial value of assets was determined using techniques that spread the effects of short-
term volatility in the market value of investments over a four-year period. The unfunded
actuarial accrued liabilities are being amortized over remaining amortization periods of one to
thirty years as a level percentage of active member payroll.
Three-year trend information:
Fiscal Year Ended Annual Pension Percentage of Net Pension
September 30 Cost (APC) APC Contributed Asset/(Liability)
General Employees
2010 $ 599,292 100% $ 0
2011 722,769 100% 0
2012 998,516 100% 0
Police
2010 $ 425,823 100% $ 0
2011 487,032 100% 0
2012 628,898 100% 0
33
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 7 - Defined Benefit Pension Plans (Concluded)
Funded Status and Funding Progress
The following is funded status information for each Plan as of September 30, 2011, the most
recent actuarial valuation date and is intended to help users assess (1) the Plan’s funded status
on a going concern basis, and (2) progress being made toward accumulating the assets needed
to pay benefits when due.
General Employees’ Retirement Plan
Total Actuarial Accrued Liability $ (16,053,066)
Actuarial Value of Assets (Market Value was $10,448,471) 11,119,463
Unfunded Actuarial Accrued Liability $ (4,933,603)
The General Employees’ Retirement Plan is 69.3% funded and the Unfunded Actuarial
Accrued Liability represents 132.0% of covered payroll as of September 30, 2011.
Police Retirement Plan
Total Actuarial Accrued Liability $ (10,065,007)
Actuarial Value of Assets (Market Value was $6,056,405) 6,305,176
Unfunded Actuarial Accrued Liability $ (3,759,831)
The Police Retirement Plan is 62.6% funded and the Unfunded Actuarial Accrued Liability
represents 234.1% of covered payroll as of September 30, 2011.
The schedule of funding progress, presented as RSI following the notes to the financial
statements, presents multiyear trend information about whether the actuarial value of Plan
assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
Note 8 - Postemployment Benefits Other Than Pensions
Plan Description
The City of Atlantic Beach administers a single-employer defined benefit health care plan
(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 October 1, 2009, the date of the latest
actuarial valuation:
Retirees and Beneficiaries Receiving Benefits 3
Active Plan Members 110
Total 113
34
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 8 - Postemployment Benefits Other Than Pensions (Continued)
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. The City is currently
funding this OPEB obligation on a pay-as-you-go basis. Annual required contributions (ARC)
amounted to $61,850 for the current fiscal year. The annual required contribution is based on
a rate of 1.0% of projected payroll of $5,828,329 or an average $532 per active participant.
For the year ended September 30, 2012, the City estimated it implicitly subsidized $18,147 of
health care costs for its retirees and covered dependents. This implied subsidy reduced the
annual OPEB cost to a net expense of $44,012, after interest on the Net OPEB Obligation and
adjustments to ARC.
Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover normal cost each year to amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following
table shows the components of the City’s annual OPEB cost for the year, the amount actually
contributed to the Plan, and changes in the City’s net OPEB obligation to the retiree health
plan:
Annual Required Contribution $ 61,850
Interest on Net OPEB Obligation 4,174
Adjustment to Annual Required Contribution (3,865)
Annual OPEB Cost (Expense) 62,159
Employer Contribution (18,147)
Increase in Net OPEB Obligation 44,012
Net OPEB Obligation - Beginning of Year 104,351
Net OPEB Obligation - End of Year $ 148,363
The City reflected the $44,012 increase in net OPEB obligation at September 30, 2012, by
recording an obligation of $33,189 for governmental activities and $10,823 for business-type
activities in its government-wide statement of net assets. The utility fund reported a net OPEB
obligation of $24,160, while the stormwater fund, sanitation fund, and building code
enforcement fund reported $7,311, $0, and $4,871, respectively. The OPEB obligation is a
function of annual required contributions, interest, adjustments to the annual required
contribution, annual pension costs and actual employers’ contributions made to the Plan.
No trust or agency fund has been established for the Plan.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan,
and the net OPEB obligation as of September 30, 2012, are presented on the following page.
35
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued) Note 8 - Postemployment Benefits Other Than Pensions (Concluded) Annual OPEB Cost and Net OPEB Obligation (Concluded)
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
September 30, 2010 $ 55,501 26.5% $ 64,890
September 30, 2011 58,794 32.9% 104,351
September 30, 2012 62,159 29.2% 148,363 Funded Status and Funding Progress
As of October 1, 2009, the date of the latest actuarial valuation, the unfunded actuarial accrued
liability for benefits was $497,883, all of which was unfunded. The covered payroll (annual
payroll of active employees covered by the Plan) was $5,828,329, and the ratio of the unfunded
actuarial accrued liability to the covered payroll was 8.54%. The projection of future benefit
payments for an ongoing plan involves estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the health care cost trend. Amounts
determined regarding the funded status of the Plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information following the notes to the financial statements, presents
multiyear trend information about whether the actuarial value of Plan assets is increasing or
decreasing over time, relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities, consistent with the long-term perspective of the calculations.
In the actuarial valuation as of October 1, 2009, the date of the latest actuarial valuation, the
Entry-Age Actuarial Cost Method was used, which spreads the costs evenly as a percent of
pay throughout the collective careers of those in the covered workforce. The unfunded
actuarial accrued liability is being amortized using a level (principal and interest combined)
percent of payroll over a 29-year period.
Other significant actuarial assumptions include a 4% discount rate, an annual health care cost
trend rate of 12%, followed by a 9% for the next year reduced by decrements of 0.5% each
year to the ultimate value of 5%, projected salary increases of 4% annually (including general
price inflation of 3%), and future participation rates of 15% up to Medicare eligibility with a
2% participation rate thereafter.
36
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Continued)
Note 9 - Interfund Accounts
Individual fund interfund receivables and payables at September 30, 2012, consist of the
following:
Due Due
from Other to Other
Funds Funds
General $ 213,265 $ 0
Nonmajor Governmental 0 (213,265)
Interfund receivable/payables are due to timing difference associated with grant reimbursements.
The receivable/payables are expected to be received/paid within one year.
Note 10 - 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 interfund transfers for the year ended September 30, 2012:
Transfers In
Nonmajor
Stormwater Utility General Governmental Total
Transfers Out Fund Fund Fund Funds Transfers
Nonmajor Governmental
Funds $ 263,000 $ 0 $ 72,000 $ 571,000 $ 906,000
Utility Fund 0 127,773 491,953 0 619,726
Sanitation Fund 0 0 260,095 0 260,095
General Fund 0 0 0 9,934 9,934
General Fixed Assets 0 173,922 0 0 173,922
Total Transfers $ 263,000 $ 301,695 $ 824,048 $ 580,934 $ 1,969,677
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 11 - Commitments
As of September 30, 2012, the City had outstanding commitments on contracts in progress as
follows:
Unexpended
Project Type Contract Amounts
Utility System Improvements $ 578,093
Stormwater System Improvements 60,293
General Government Improvements 3,987
37
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2012
(Concluded)
Note 11 - Commitments (Concluded)
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida,
whereas the City of Jacksonville will provide advanced life support and fire services to the
residents and businesses located in the City. The term of the agreement shall be from the
effective date and continuing for a period of 25 years unless terminated earlier by the parties
(such parties must provide a one year notice). For the year ended September 30, 2012, the
City incurred $976,050 in services under this agreement. The amount will be adjusted
annually by an amount equal to 103% of the previous year’s amount for all services provided
by the City of Jacksonville.
The City is in the final stages of making utility system improvements to the meet the Total
Maximum Daily Load (TMDL) of nitrogen being discharged into the St. Johns River. The
allowable load is allocated between the wastewater point sources and the City’s Stormwater
Systems that discharge to the river or its tributaries. The new nitrogen limit resulted in the
City having to upgrade one wastewater treatment plant and discontinue another. An
impairment loss of $2,659,110 was recorded in 2008 to account for the discontinuation of this
plant.
The Florida Department of Environmental Protection included a timeline for completing work
in an Administrative Order – begin construction by April 30, 2011, end construction by
December 31, 2012, begin operation of upgraded WWTP #1 by March 31, 2013, abandon
Buccaneer WWTP by July 31, 2013, operational level attained by October 1, 2013. All
requirements have been met to date.
Note 12 - 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 13 - 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 are provided through the Public Risk Insurance Agency
and LB Bryan and Company for the following types of risk:
■ Workers’ Compensation and Employer’s Liability ■ General Liability
■ Automobile Liability ■ Public Officials’ Liability
■ Automobile Physical Damage ■ Property Coverage
■ Accidental Death and Dismemberment
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.
REQUIRED SUPPLEMENTARY INFORMATION
38
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF PENSION FUNDING PROGRESS
SEPTEMBER 30, 2012
General Employees’ Retirement Plan
Actuarial UAAL as
Actuarial Accrued Annual Percentage
Valuation Value of Liability Unfunded Funded Covered of Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
9/30/06 $ 7,609,000 $ 10,505,000 $ 2,896,000 72.4% $ 3,195,000 90.6%
9/30/07 8,594,000 11,668,000 3,074,000 73.7% 3,476,000 88.4%
9/30/08* 9,209,000 12,624,000 3,415,000 72.9% 3,727,000 91.6%
9/30/09 9,841,000 13,682,000 3,841,000 71.9% 4,019,000 95.6%
9/30/10 10,618,000 15,180,000 4,562,000 69.9% 3,838,000 118.9%
9/30/11 11,119,000 16,053,000 4,934,000 69.3% 3,738,000 132.0%
Police Retirement Plan
Actuarial UAAL as
Actuarial Accrued Annual Percentage
Valuation Value of Liability Unfunded Funded Covered of Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
9/30/06 $ 5,175,000 $ 7,034,000 $ 1,859,000 73.6% $ 1,254,000 148.2%
9/30/07 5,663,000 7,620,000 1,957,000 74.3% 1,453,000 134.7%
9/30/08 5,764,000 8,112,000 2,348,000 71.1% 1,476,000 159.1%
9/30/09* 5,922,000 8,689,000 2,767,000 68.2% 1,697,000 163.1%
9/30/10* 6,164,000 9,449,000 3,285,000 65.2% 1,639,000 200.4%
9/30/11 6,305,000 10,065,000 3,760,000 62.6% 1,606,000 234.1%
* After changes in benefits and/or actuarial assumptions and/or actuarial cost methods.
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system’s funded status on a
going concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing
the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the
effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay
benefits when due. Generally, the smaller this percentage, the stronger the plan.
39
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
SEPTEMBER 30, 2012
General Employees’ Retirement Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed Percentage
September 30 Payroll (ARC) Contributed
2007 13.99% $ 482,364 100%
2008 13.62% 457,005 100%
2009 14.03% 528,428 100%
2010 14.84% 599,292 100%
2011 16.6% 722,769 100%
2012 24.53% 998,516 100%
The information presented in the required supplementary schedules was determined as part of the
actuarial valuation at the dates indicated. Additional information for the general employees’ retirement
plan as of the latest actuarial valuation follows:
Valuation Date September 30, 2011
Contribution Rate
Employer 26.34%
Plan Members 5.00%
Actuarial Cost Method Entry Age
Amortization Method Closed, Level % of Pay Method
Equivalent Single Amortization Period 7.23 Years
Asset Valuation Method 4-Year Smoothed
Actuarial Assumptions
Investment Rate of Return 8.0%
Projected Salary Increases 5.5% - 14.0%
Includes Price Inflation 3.0%
Cost-of-Living Adjustments None
Payroll Growth Assumption 4.0%
40
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
SEPTEMBER 30, 2012
(Concluded)
Police Retirement Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed
September 30 Payroll (ARC)
2007 25.70% $ 390,494
2008 22.80% 309,841
2009 21.93% 345,280
2010 26.62% 425,823
2011 26.49% 487,032
2012 36.18% 628,898
The information presented in the required supplementary schedules was determined as part of the
actuarial valuation at the dates indicated. Additional information for the police retirement plan as of the
latest actuarial valuation follows:
Valuation Date September 30, 2011
Contribution Rates
Employer 30.41%
Plan Members 4.815%
Actuarial Cost Method Entry Age
Amortization Method Closed, Level % of Pay Method
Equivalent Single Amortization Period 24.60 Years
Asset Valuation Method 4-Year Smoothed
Actuarial Assumptions
Investment Rate of Return 8.0%
Projected Salary Increases 5.0% - 23.0%
Includes Price Inflation 3.0%
Cost-of-Living Adjustments None
Payroll Growth Assumption 3.35%
41
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2012
Actuarial UAAL as
Actuarial Accrued Annual Percentage
Valuation Value of Liability Unfunded Funded Covered of Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
9/30/06 $ 0 $ 470,703 $ 470,703 0.0% $ 4,812,000 9.78%
10/1/09 0 497,883 497,883 0.0% 5,828,339 8.54%
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system’s funded status on a
going concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing
the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the
effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay
benefits when due. Generally, the smaller this percentage, the stronger the plan.
42
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)
Revenues
Property Taxes 3,978,820$ 3,978,820$ 3,961,395$ (17,425)$
Nonproperty Taxes 1,224,888 1,224,888 1,124,151 (100,737)
Permits, Fees and Special Assessments 950,770 950,770 858,634 (92,136)
Intergovernmental Revenues 1,515,943 1,515,943 1,492,846 (23,097)
Fines and Forfeitures 72,400 72,400 79,071 6,671
Charges for Services 730,307 730,307 707,835 (22,472)
Interest Income 100,000 100,000 230,979 130,979
Miscellaneous Revenues 21,424 21,424 35,922 14,498
Interfund Charges 1,546,042 1,546,042 1,556,765 10,723
Total Revenues 10,140,594 10,140,594 10,047,598 (92,996)
Expenditures
Governing Body:
City Commission 41,986 41,986 41,279 707
City Clerk 241,223 241,224 229,225 11,999
City Attorney 107,531 121,382 120,624 758
Total Governing Body 390,740 404,592 391,128 13,464
City Administration:
City Manager 497,181 434,529 319,682 114,847
General Government 463,867 486,861 412,240 74,621
Human Resources 217,385 248,384 248,139 245
Information Technology 526,149 527,449 455,671 71,778
Finance 1,061,621 1,083,119 1,058,804 24,315
Total City Administration 2,766,203 2,780,342 2,494,536 285,806
Planning and Zoning 200,430 288,530 137,409 151,121
Public Safety:
Police 3,475,182 3,556,901 3,376,964 179,937
School Crossing Guards 9,823 11,423 11,367 56
Animal Control 95,428 85,353 73,627 11,726
Fire 1,200,937 1,220,687 1,200,567 20,120
Code Enforcement 85,564 88,564 86,895 1,669
Total Public Safety 4,866,934 4,962,928 4,749,420 213,508
BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
AND CHANGES IN FUND BALANCES
SCHEDULE OF REVENUES, EXPENDITURES,
43
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)
Expenditures (Concluded)
Public Works:
Administration and Streets 1,333,303$ 1,341,702$ 1,218,647$ 123,055$
Fleet Maintenance 277,112 277,112 270,580 6,532
Total Public Works 1,610,415 1,618,814 1,489,227 129,587
Parks and Recreation:
Recreation and Special Events 395,206 394,207 392,553 1,654
Parks Maintenance 734,714 745,815 685,832 59,983
Total Parks and Recreation 1,129,920 1,140,022 1,078,385 61,637
(Total Expenditures)(10,964,642) (11,195,228) (10,340,105) 855,123
(Deficiency) of Revenues (Under)
Expenditures (824,048) (1,054,634) (292,507) 762,127
Other Financing Sources (Uses)
Transfers in 824,048 824,048 824,048 0
Transfers (out)0 (9,934) (9,934) 0
Sale of General Fixed Assets 0 0 25,649 25,649
Total Other Financing Sources (Uses)824,048 814,114 839,763 25,649
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses 0 (240,520) 547,256 787,776
Fund Balances, Beginning of Year 5,640,255 5,640,255 5,640,255 0
Fund Balances, End of Year 5,640,255$ 5,399,735$ 6,187,511$ 787,776$
* Actual amounts include a reversal of $138,087 prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of $57,495.
(Concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - GENERAL FUND
44
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2012
Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a
budgetary accounting system in accordance with various legal requirements which govern the City’s
operations. Budgets are monitored at varying levels of classification detail; however, expenditures cannot
legally exceed total appropriations at the individual fund level. Encumbrances are recorded. Unexpended
items which are unencumbered at year-end must be reappropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, debt service and capital
projects funds). The City Manager is authorized to transfer budgeted amounts within departments within
any fund; however, any revisions that increase the total expenditures of any department or fund must be
approved by the City Commission. All necessary supplemental appropriations are adopted by the City
Commission and are included in the reported budgetary data. The budget presented in the accompanying
required supplemental information is prepared in conformity with accounting principles generally
accepted in the United States of America.
SUPPLEMENTARY INFORMATION
45
Convention
Tree Local Option Development Half-cent Court Cost EMG - FEMA Radio
Replacement Gas Tax Tax Sales Tax Training Wind Retrofit Communication
Assets
Equity in Pooled Cash and
Investments 6,493$ 65,985$ 29,501$ 83,835$ 131,461$ 9,934$ 707$
Receivables - Net 0 0 0 0 0 0 0
Due from Other Governments 0 67,270 23,231 110,775 369 0 1,054
Total Assets 6,493 133,255 52,732 194,610 131,830 9,934 1,761
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued
Liabilities 0 9,729 0 0 0 0 1,674
Due to Other Funds 0 0 0 0 0 0 0
Deposits 0 0 0 0 0 0 0
Deferred Revenue 0 0 0 0 0 0 0
Total Liabilities 0 9,729 0 0 0 0 1,674
Fund Balances
Restricted for:
Public Safety 0 0 0 0 131,830 0 87
Road Maintenance and
Construction 0 123,526 0 0 0 0 0
Parks and Recreation 0 0 0 0 0 0 0
Debt Service Reserve 0 0 0 0 0 0 0
Other Capital Projects 0 0 0 194,610 0 9,934 0
Other Purposes 0 0 52,732 0 0 0 0
Committed:
Conservation and Resource
Management 6,493 0 0 0 0 0 0
Unassigned:0 0 0 0 0 0 0
Total Fund Balances 6,493 123,526 52,732 194,610 131,830 9,934 87
Total Liabilities and Fund
Balances 6,493$ 133,255$ 52,732$ 194,610$ 131,830$ 9,934$ 1,761$
Special Revenue Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
2012
46
Totals Totals
Community Special Nonmajor
Contraband Development Police Energy Revenues Debt Capital Governmental 2011
Forfeiture Block Grants Grants Grants Funds Service Projects Funds Totals
33,003$ 0$ 0$ 524$ 361,443$ 75,350$ 2,778,866$ 3,215,659$ 2,750,007$
0 0 0 0 0 0 0 0 2,106
0 68,960 27,697 157,380 456,736 0 0 456,736 374,911
33,003 68,960 27,697 157,904 818,179 75,350 2,778,866 3,672,395 3,127,024
0 35,542 4,707 0 51,652 0 0 51,652 139,573
0 33,418 22,990 156,857 213,265 0 0 213,265 78,053
6,340 0 0 0 6,340 0 0 6,340 2,963
0 0 0 157,380 157,380 0 0 157,380 2,998
6,340 68,960 27,697 314,237 428,637 0 0 428,637 223,587
26,663 0 0 0 158,580 0 0 158,580 163,435
0 0 0 0 123,526 0 0 123,526 141,726
0 0 0 0 0 0 1,194 1,194 4,801
0 0 0 0 0 75,350 0 75,350 72,585
0 0 0 0 204,544 0 2,777,672 2,982,216 2,469,621
0 0 0 0 52,732 0 0 52,732 48,652
0 0 0 0 6,493 0 0 6,493 3,509
0 0 0 (156,333) (156,333) 0 0 (156,333) (892)
26,663 0 0 (156,333) 389,542 75,350 2,778,866 3,243,758 2,903,437
33,003$ 68,960$ 27,697$ 157,904$ 818,179$ 75,350$ 2,778,866$ 3,672,395$ 3,127,024$
2012
Special Revenue Funds
47
Convention
Tree Local Option Development Half-cent Court Cost EMG - FEMA Radio
Replacement Gas Tax Tax Sales Tax Training Wind Retrofit Communication
Revenues
Taxes 0$ 414,225$ 90,588$ 648,258$ 0$ 0$ 0$
Other Intergovernmental
Revenues 0 0 0 0 0 0 0
Charges for Services 0 0 0 0 0 0 0
Fines and Forfeitures 2,106 0 0 0 5,682 0 18,087
Interest Income 0 5,896 398 3,257 4,940 0 246
Miscellaneous Revenues 878 0 0 0 0 0 0
Total Revenues 2,984 420,121 90,986 651,515 10,622 0 18,333
Expenditures
Current:
Culture and Recreation 0 0 0 0 0 0 0
Public Safety 0 0 0 0 10,879 0 30,001
Road Maintenance and
Construction 0 330,766 0 0 0 0 0
Conservation and Resource
Management 0 0 0 0 0 0 0
Debt Service:
Principal 0 0 0 0 0 0 0
Interest and Other 0 0 0 0 0 0 0
Capital Outlay 0 3,555 14,906 0 0 0 0
(Total Expenditures)0 (334,321) (14,906) 0 (10,879) 0 (30,001)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,984 85,800 76,080 651,515 (257) 0 (11,668)
Other Financing Sources (Uses)
Transfers in 0 0 0 0 0 9,934 0
Transfers (out)0 (104,000) (72,000) (730,000) 0 0 0
Total Other Financing
Sources (Uses)0 (104,000) (72,000) (730,000) 0 9,934 0
Net Change in Fund Balances 2,984 (18,200) 4,080 (78,485) (257) 9,934 (11,668)
Fund Balances, Beginning of Year 3,509 141,726 48,652 273,095 132,087 0 11,755
Fund Balances, End of Year 6,493$ 123,526$ 52,732$ 194,610$ 131,830$ 9,934$ 87$
2012
Special Revenue Funds
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
48
Totals Totals
Community Special Nonmajor
Contraband Development Police Energy Revenue Debt Capital Governmental 2011
Forfeiture Block Grants Grants Grants Funds Service Projects Funds Totals
0$ 0$ 0$ 0$ 1,153,071$ 0$ 0$ 1,153,071$ 1,154,826$
0 320,814 109,396 157,723 587,933 0 0 587,933 421,943
0 0 0 0 0 0 0 0 41,402
13,235 0 0 0 39,110 0 0 39,110 180
1,056 0 0 0 15,793 2,549 95,688 114,030 63,534
0 0 0 0 878 0 6,970 7,848 50,452
14,291 320,814 109,396 157,723 1,796,785 2,549 102,658 1,901,992 1,732,337
0 43,631 0 8,976 52,607 0 7,000 59,607 0
1,221 0 105,574 0 147,675 0 14,542 162,217 197,203
0 0 0 0 330,766 0 0 330,766 235,012
0 0 0 0 0 0 0 0 480
0 0 0 0 0 63,684 0 63,684 61,620
0 0 0 0 0 7,100 0 7,100 9,723
6,000 277,074 3,822 304,297 609,654 0 3,577 613,231 838,974
(7,221) (320,705) (109,396) (313,273) (1,140,702) (70,784) (25,119) (1,236,605) (1,343,012)
7,070 109 0 (155,550) 656,083 (68,235) 77,539 665,387 389,325
0 0 0 0 9,934 71,000 500,000 580,934 938,500
0 0 0 0 (906,000) 0 0 (906,000) (1,009,500)
0 0 0 0 (896,066) 71,000 500,000 (325,066) (71,000)
7,070 109 0 (155,550) (239,983) 2,765 577,539 340,321 318,325
19,593 (109) 0 (783) 629,525 72,585 2,201,327 2,903,437 2,585,112
26,663$ 0$ 0$ (156,333)$ 389,542$ 75,350$ 2,778,866$ 3,243,758$ 2,903,437$
Special Revenue Funds
2012
49
Police General
Officers'Employees'
Retirement Retirement 2012 2011
Plan Plan Totals Totals
Assets
Cash and Cash Equivalents 26,902$ 59,926$ 86,828$ 51,110$
Interest Receivable 18,265 9,932 28,197 38,486
Investments at Fair Value 7,079,149 12,753,778 19,832,927 16,764,501
Total Assets 7,124,316 12,823,636 19,947,952 16,854,097
Liabilities
Accounts Payable and Accrued Liabilities 207 217 424 338
Excess Premium Tax Liability 120,454 0 120,454 120,454
DROP Plan Payable 68,962 129,592 198,554 228,430
Total Liabilities 189,623 129,809 319,432 349,222
Total Net Assets
Held in Trust for Pension Benefits 6,934,693$ 12,693,827$ 19,628,520$ 16,504,875$
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2011
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30, 2012,
50
Police General
Officers'Employees'
Retirement Retirement 2012 2011
Plan Plan Totals Totals
Additions
Contributions:
Employer 540,103$ 998,516$ 1,538,619$ 1,123,410$
Employees 75,667 186,325 261,992 267,604
State of Florida 88,795 0 88,795 86,391
Total Contributions 704,565 1,184,841 1,889,406 1,477,405
Net (Decrease) Increase in Fair
Value of Investments 698,386 1,520,313 2,218,699 (540,275)
Interest and Dividends 144,410 299,511 443,921 434,302
Total Additions 1,547,361 3,004,665 4,552,026 1,371,432
Deductions
Refunds of Contributions 5,478 7,273 12,751 12,514
Benefits 599,459 655,424 1,254,883 1,096,243
Investment Expenses 38,225 64,908 103,133 105,175
Administrative Expenses 25,911 31,703 57,614 81,389
Total Deductions 669,073 759,308 1,428,381 1,295,321
Net Increase 878,288 2,245,357 3,123,645 76,111
Net Assets, Beginning of Year 6,056,405 10,448,470 16,504,875 16,428,764
Net Assets, End of Year 6,934,693$ 12,693,827$ 19,628,520$ 16,504,875$
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2011
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN NET ASSETS
FIDUCIARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012,
51
2008 2009 2010 2011 2012
Revenues
Operating Revenues:
Water:
Customer Charges 2,514,161$ 2,738,565$ 3,188,599$ 3,382,973$ 3,069,998$
Miscellaneous Charges 82,737 40,906 44,859 46,424 48,815
Total Water 2,596,898 2,779,471 3,233,458 3,429,397 3,118,813
Sewer:
Customer Charges 3,691,220 4,112,335 4,644,090 5,085,318 5,015,358
Miscellaneous Charges 35,336 3,769 7,528 20,006 3,303
Total Sewer 3,726,556 4,116,104 4,651,618 5,105,324 5,018,661
Total Operating Revenues 6,323,454 6,895,575 7,885,076 8,534,721 8,137,474
Nonoperating Revenues:
Interest Income:
Water 53,378 7,963 153,782 108,762 197,492
Sewer 26,901 6,886 5,361 (16,367) (21,010)
Total Nonoperating Revenues 80,279 14,849 159,143 92,395 176,482
Total Revenues 6,403,733 6,910,424 8,044,219 8,627,116 8,313,956
Expenses
Operating Expenses:
Water 1,019,907 1,087,283 1,120,172 1,292,948 1,303,708
Sewer 2,275,505 2,111,097 2,367,631 2,569,748 2,493,500
Total Operating Expenses 3,295,412 3,198,380 3,487,803 3,862,696 3,797,208
Administrative, Nondivisional
and Other:
Water 628,122 634,541 554,538 545,971 518,506
Sewer 1,071,893 1,142,214 681,893 685,074 696,922
Total Administrative, Non-
divisional and Other 1,700,015 1,776,755 1,236,431 1,231,045 1,215,428
(Total Expenses)(4,995,427) (4,975,135) (4,724,234) (5,093,741) (5,012,636)
Net Revenues Available for
Debt Service 1,408,306 1,935,289 3,319,985 3,533,375 3,301,320
Nonoperating Income (Expense)
Interest Expense (752,384) (732,939) (710,196) (726,058) (766,111)
Loan Amortization (14,730) (14,730) (14,730) (25,712) (12,787)
Total Nonoperating (Expense)(767,114) (747,669) (724,926) (751,770) (778,898)
Net Income Before Depreciation
and Operating Transfers 641,192$ 1,187,620$ 2,595,059$ 2,781,605$ 2,522,422$
FOR THE YEARS ENDED SEPTEMBER 30, 2008 THROUGH SEPTEMBER 30, 2012
HISTORICAL REVENUES AND EXPENSES
CITY OF ATLANTIC BEACH, FLORIDA
52
2012 2011
Gross Revenues
Utility 8,127,246$ 8,516,942$
Connection Charges 8,246 17,779
Interest 176,482 92,395
Total Gross Revenues 8,311,974 8,627,116
Operating Expenses
Personal Services 1,808,192 1,793,823
Contractual Services 841,708 900,056
Supplies 331,039 316,902
Repairs and Maintenance 123,310 157,409
Utilities 629,185 694,506
Intergovernmental Charges 1,047,909 972,652
Loss on Disposal of Fixed Assets 0 1,283
Other Expenses 232,292 257,110
(Total Operating Expenses)(5,013,635) (5,093,741)
Total Net Revenues in Accordance with Bond Resolutions 3,298,339 3,533,375
Total Debt Service 1,631,133$ 1,543,339$
Debt Service Coverage Ratio 202.21%228.94%
Required Debt Service Coverage Ratio 100.00%100.00%
(a) Rate Stabilization Fund:
Balance, Beginning of Year 400,000$ 400,000$
Transfer/Redeposit to Revenue Fund 0 0
Balance, End of Year 400,000$ 400,000$
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, 2012 AND SEPTEMBER 30, 2011
53
Year Electricity Communications Gas Fuel Oil Total
2008 392,842$ 612,671$ 28,758$ 33 1,034,304$
2009 430,774 600,716 25,815 18 1,057,323
2010 486,475 624,254 26,158 34 1,136,921
2011 487,585 604,567 28,062 33 1,120,247
2012 452,183 567,909 23,187 14 1,043,293
Year Total
2008 4,269,435$
2009 4,089,288
2010 4,146,432
2011 3,968,233
2012 3,961,395
Ad Valorem Tax Collections
(Last Five Years)
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2008 THROUGH SEPTEMBER 30, 2012
Utility Service Tax Collections
(Last Five Years)
OTHER STATISTICAL INFORMATION
54
Annual
Billings
Navy (Federal Government)334,093$
Fleet Landing (Retirement Community)370,464
City of Atlantic Beach, Florida 159,566
Oaks of Atlantic Beach (Mobile Home Park)167,491
Lakes of Mayport (Apartment Complex)132,880
John Creek Estate (Mobile Home Park)113,050
One Ocean Resort (Hotel)123,560
Sea Oats Plantation (Apartment Complex)122,828
Hanna Park (Regional Park)113,597
Mayport Trace (Apartment Complex)104,377
Total 1,741,906$
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
(UNAUDITED)
55
Annual Average Average
Total Percentage Demand Percentage
Year Population Change CAB BUC Total CAB BUC Total (MGD)Change
2003 23,441 -3.0%5,324 2,504 7,828 1,569 2,305 3,874 3.09 -3.38%
2004 24,007 2.4%5,222 2,593 7,815 2,006 2,281 4,287 2.93 -5.15%
2005 22,914 -4.5%5,263 2,590 7,853 2,367 1,939 4,306 2.75 -6.14%
2006 23,208 1.3%5,256 2,430 7,686 2,107 2,164 4,271 2.73 -0.73%
2007 23,151 -0.2%5,283 2,346 7,629 1,895 2,079 3,974 2.69 -1.47%
2008 23,200 0.2%5,285 2,341 7,626 2,006 2,288 4,294 2.50 -7.06%
2009 23,058 -0.6%5,166 2,342 7,508 1,917 2,159 4,076 2.30 -8.00%
2010 22,908 -0.6%5,171 2,326 7,497 1,904 2,135 4,039 2.32 0.87%
2011 21,205 -7.4%5,179 2,353 7,532 1,903 2,134 4,037 2.41 3.88%
2012 20,711 -2.3%5,195 2,107 7,302 2,318 2,130 4,448 2.74 13.69%
Atlantic Beach Division (CAB)
Buccaneer Division (BUC)
Single Unit Multi-Unit
Water System Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WATER USAGE
FOR THE YEARS ENDED SEPTEMBER 30, 2003 THROUGH SEPTEMBER 30, 2012
(UNAUDITED)
56
Annual Average Annual
Percentage Flow Percentage
Year Population Change Single Unit Multi-Unit Total (MGD)Change
2003 13,418 -2.6%4,822 1,960 6,782 1.7380 3.27%
2004 13,911 3.7%4,913 1,978 6,891 1.5980 -8.06%
2005 14,064 1.1%4,999 2,387 7,386 1.8160 13.64%
2006 14,079 0.1%5,020 2,111 7,131 1.5990 -11.95%
2007 14,015 -0.5%5,057 1,900 6,957 1.6370 2.38%
2008 13,819 -1.4%5,086 1,904 6,990 1.6380 0.06%
2009 13,819 0.0%4,997 1,903 6,900 1.5820 -3.42%
2010 13,779 -0.3%4,987 1,912 6,899 1.5190 -3.98%
2011 12,655 -8.2%5,041 1,791 6,832 1.4762 -2.82%
2012 12,718 0.5%5,166 2,117 7,283 1.5397 4.30%
(UNAUDITED)
Sewer Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
ATLANTIC BEACH SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2003 THROUGH SEPTEMBER 30, 2012
57
Annual Average Annual
Percentage Flow Percentage
Year Population Change Single Unit Multi-Unit Total (MGD)Change
2003 10,023 -3.60%2,398 2,668 5,066 0.8430 -6.85%
2004 10,096 0.70%2,504 2,497 5,001 0.8240 -2.25%
2005 8,850 -12.30%2,503 2,145 4,648 0.7460 -9.47%
2006 9,129 3.20%2,356 2,268 4,624 0.6820 -8.58%
2007 9,136 0.10%2,267 2,268 4,535 0.7120 4.40%
2008 9,381 2.70%2,263 2,482 4,745 0.7040 -1.12%
2009 9,239 -1.50%2,258 2,355 4,613 0.6510 -7.53%
2010 9,129 -1.20%2,243 2,328 4,571 0.5720 -12.14%
2011 8,550 -6.30%2,282 2,334 4,616 0.6165 7.78%
2012 7,993 -6.97%2,248 2,329 4,577 0.5088 -17.47%
(UNAUDITED)
Sewer Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
OUTSIDE CITY SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2003 THROUGH SEPTEMBER 30, 2012
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS, ISSUED BY THE
COMPTROLLER GENERAL OF THE UNITED STATES; THE
PROVISIONS OF THE OFFICE OF MANAGEMENT AND BUDGET
(OMB) CIRCULAR A-133; THE RULES OF THE AUDITOR GENERAL OF
THE STATE OF FLORIDA; AND OTHER CONTRACT REQUIREMENTS
58
CFDA Grant/Contract Contract Program Funds
Number Number Period Awards Expenditures *Received
Federal Awards
14.218 B10UC120017 / 5629-53 10/01/2011 - 9/30/2012 55,636$ 55,636$ 55,636$
14.218 B11UC1200-17 / 5629-53 10/01/2011 - 9/30/2012 92,690 91,256 22,296
148,326 146,892 77,932
14.228 5629-48 06/14/2010 - 06/14/2012 178,007 173,813 173,922
326,333 320,705 251,854
97.036 FEMA-1545-DR-FL 10/23/2008- Close-out 129,115 0 0
Disaster Grants - Public Assistance 97.036 FEMA-1561-DR-FL 10/23/2008- Close-out 40,834 0 0
Subtotal Expenditures - 97.036 169,949 0 0
Hazard Mitigation Grant Program 97.039 12HM-3G-04-26-02-005 05/24/2012 - 03/31/2014 29,802 0 0
and the Alachua, County Florida Sheriff's Office:
11.555 12-DS-8D-03-11-01-162 08/04/2011 - 06/30/2012 59,608 58,050 0
259,359 58,050 0
16.607 2010-BUBX-10053127 04/01/2010 - 08/31/2012 2,205 167 2,038
Bulletproof Vest Partnership Program 16.607 2011-BUBX-11059375 04/01/2011 - 08/31/2013 1,754 1,043 0
Subtotal Expenditures - 16.607 3,959 1,210 2,038
16.738 2011-JAGC-DUVA-1-B2-068 10/01/2010 - 09/30/2011 0 6,000 0
16.738 2012-JAGC-DUVA-5-C4-074 10/01/2011 - 09/30/2012 42,000 42,000 19,526
16.738 2012-JAGC-DUVA-4-C4-063 10/01/2011 - 09/30/2012 63,574 63,574 29,709
16.738 2012-JAGD-DUVA-2-C5-023 02/01/2012 - 03/31/2012 3,822 3,822 3,822
109,396 115,396 53,057
Total U.S. Department of Justice 113,355 116,606 55,095
and Consumer Services:
ARRA-81.041 17495 / ARS028 01/31/2011 - 04/30/2012 234,789 227,413 70,816
ARRA-81.128 5629-50 07/27/2010 - 07/26/2012 103,400 86,908 0
338,189 314,321 70,816
Total Expenditures of Federal Awards 1,037,236$ 809,682$ 377,765$
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
Community Development Block Grant (CDBG)
AND STATE FINANCIAL ASSISTANCE PROJECTS
Grantor/Pass-Through Entity
U.S Department of Housing and Urban Development
Indirect Programs:
Community Development Block Grant (CDBG)
Indirect Programs:
Passed Through City of Jacksonville, Florida:
2008 Disaster Recovery Program (CDBG)
U.S Department of Homeland Security
Total U.S. Department of Housing and Urban Development
Subtotal Expenditures - 14.218
Passed Through Florida Division of Emergency Management:
U.S. Department of Justice
Disaster Grants - Public Assistance
Passed Through Florida Division of Emergency Management
Public Safety Interoperable Communications Grant Program
Total U.S. Department of Homeland Security
Direct Programs:
State Energy Program
Edward Byrne Memorial Justice Assistance Grant Program
Edward Byrne Memorial Justice Assistance Grant Program
Indirect Programs:
Passed Through Florida Department of Law Enforcement:
U.S. Department of Energy
Indirect Programs:
Subtotal Expenditures - 16.738
Bulletproof Vest Partnership Program
Passed Through Florida Department of Agriculture
Edward Byrne Memorial Justice Assistance Grant Program
Edward Byrne Memorial Justice Assistance Grant Program
Passed Through City of Jacksonville, Florida:
Florida Energy Efficiency and Conservation Block Grant
Total U.S. Department of Energy
59
(Concluded)
CFDA Grant/Contract Contract Program Funds
Number Number Period Awards Expenditures *Received
State Financial Assistance
37.077 WW160700 N/A 10,368,576$ 4,505,940$ 5,258,757$
Total Expenditures of State Financial Assistance 10,368,576$ 4,505,940$ 5,258,757$
Total Expenditures of Federal Awards and State Financial Assistance 11,405,812$ 5,315,622$ 5,636,522$
* Includes grant expenditures only (matching funds not reported).
Florida Department of Environmental Protection:
Direct Projects:
Grantor/Pass-Through Entity
FOR THE YEAR ENDED SEPTEMBER 30, 2012
Statewide Surface Water Restoration and Wastewater Projects
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE PROJECTS
60
CITY OF ATLANTIC BEACH, FLORIDA
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE PROJECTS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards and state financial assistance
projects includes the federal and state awards activity of the City of Atlantic Beach, Florida,
under programs of the federal government and projects of the state government for the year
ended September 30, 2012. The information is presented in accordance with the requirement of
OMB Circular A-133, Audits of State and Local Governments and Non-Profit Organizations
and the State of Florida Single Audit Act. Because the schedule presents only a selected
portion of the operations of the City, it is not intended and does not present the financial
position, changes in net assets or cash flows of the City. Expenditures reported on the schedule
are presented on the accrual basis of accounting.
61
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
1. Summary of Audit Results
Financial Statements
I. Type of Audit Report Issued on Financial Statements
Unqualified Opinion
II. Material Weakness and/or Significant Deficiency in Internal Control
Audit did not disclose any material weaknesses and/or significant deficiencies in internal control
over financial reporting.
III. Noncompliance Material to Auditee Financial Statements
Audit disclosed no material instances of noncompliance.
Federal Awards and State Projects
IV. Material Weaknesses and/or Significant Deficiencies in Internal Control Over Major
Federal Programs and State Financial Assistance Projects
Audit disclosed no material weaknesses and/or significant deficiencies in internal control over
major programs or projects that are required to be reported in the schedule of findings and
questioned costs.
V. Type of Audit Report Issued on Compliance with Requirements Applicable to Major
Federal Programs and State Financial Assistance Projects
Unqualified Opinion
VI. Audit Findings Relative to Section .510(a) of OMB Circular A-133 and the State of Florida
Single Audit Act
The audit disclosed no findings required to be reported under Section .510(a) of OMB Circular
A-133 or the State of Florida Single Audit Act.
VII. The Program and Projects Tested as a Major Program Included the Following:
Federal Program CFDA No.
Department of Energy State Energy Program ARRA-81.041
State Projects CSFA No.
Wastewater Treatment Facility Construction 37.077
62
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS
FOR THE YEAR ENDED SEPTEMBER 30, 2012
(Concluded)
1. Summary of Audit Results (Concluded)
Federal Awards and State Projects (Concluded)
VIII. Dollar Threshold Used to Distinguish Between Type A and Type B Programs
$300,000
IX. Auditee Qualification as Low-Risk Auditee
The Auditee did qualify as low-risk under OMB Circular A-133.
2. Findings Related to the Financial Statements Required to be Reported Under Generally
Accepted Government Auditing Standards (GAGAS)
The audit disclosed no findings which are required to be reported under GAGAS.
3. Findings and Questioned Costs for Major Federal Programs and State Assistance Projects
Required to be Reported Under Section .510(a) of OMB Circular A-133 and the State of Florida
Single Audit Act
The audit disclosed no findings which are required to be reported under Section .510(a) or the State
Single Audit Act.
63
Source of City Funds
Fiscal Year
2011-2012
Grant No. 5629-51
Amount of Award (Per City of Jacksonville Budget Ordinance)148,326$ (A)
Actual Funds Received from City of Jacksonville in Last Audit Period 0
Actual Funds Received this Period (77,932)
Amount Earned but Not Received this Period (68,960)
Unspent Award Amount 1,434$
Expenditure of City Funds
City Fiscal Year 2011-2012 Grant #5629-51 - $0 (A)
Actual
10/1/2011 Remaining
Project / Federal Grant Number Budgeted 9/30/2012 Balance
Donner Park Improvements # 003914 / B08UC1200-17 55,636$ 55,636$ 0$
Donner Park Improvements # 004415 / B09UC1200-17 47,865 47,625 240
Donner Park Improvements # 004415 / B10UC1200-17 44,825 43,631 1,194
Total 148,326$ 146,892$ 1,434$
(A) Funding is comprised of $55,636 in unspent, carry forward funds from the prior fiscal year per Ord. # 2010-612-E,
in addition to the original budgeted appropriation of $92,690, per Ord. # 2011-549-E.
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF SOURCE AND EXPENDITURE OF THE CITY GRANT FUNDS
PER ORDINANCE CODE CHAPTER 118.301(e)
FOR FISCAL YEAR 2011-2012
Subgrant Recipient Per Interlocal Agreement
City of Jacksonville Public Service Grants Received as a
64
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND STATE PROJECT
AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
OMB CIRCULAR A-133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
Compliance
We have audited the compliance of the City of Atlantic Beach, Florida (the City) with the types of
compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement and the requirement described in the Department of Financial Services, State
Compliance Supplement, that are applicable to each of its major federal programs and state projects for the
year ended September 30, 2012. The City’s major federal programs and state projects are identified in the
summary of auditors’ results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major
federal programs and state projects is the responsibility of the City’s management. Our responsibility is to
express an opinion on the City’s compliance based on our audit.
We conducted our audit of compliance 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 OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations, and Chapter 10.550, Rules of the Auditor
General. Those standards, OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General, require
that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the
types of compliance requirements referred to above that could have a direct and material effect on a major
federal program or state project occurred. An audit includes examining, on a test basis, evidence about the
City’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination of the City’s compliance with those requirements.
In our opinion, the City, complied, in all material respects, with the requirements referred to above that are
applicable to each of its major federal programs and state projects for the year ended September 30, 2012.
Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs
and state projects. In planning and performing our audit, we considered the City’s internal control over
compliance with the requirements that could have a direct and material effect on a major federal program or
state project in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control over compliance, but not for the purpose of expressing
an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an
opinion on the effectiveness of the City’s internal control over compliance.
65
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND STATE PROJECT
AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
OMB CIRCULAR A-133 AND CHAPTER 10.550, RULES OF THE AUDITOR GENERAL
(Concluded)
Internal Control Over Compliance (Concluded)
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program or state project on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that
there is a reasonable possibility that material noncompliance with a type of compliance requirement of a
federal program or state project will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
This report is intended solely for the information and use of management, the City Commissioners, others
within the entity, the office of the Florida Auditor General, and federal and state awarding agencies and is
not intended to be and should not be used by anyone other than these specified parties.
April 10, 2013
Gainesville, Florida
66
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
Atlantic Beach, Florida
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Atlantic Beach, Florida (the
City), as of and for the year ended September 30, 2012, which collectively comprise the City’s basic
financial statements and have issued our report thereon dated April 10, 2013. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City’s internal control over financial reporting as
a basis for designing our auditing procedures 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 over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
City’s internal control over financial reporting.
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 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.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal
control that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s basic financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
67
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
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
(Concluded)
This report is intended solely for the information and use of management, the City Commissioners, others
within the entity, the office of the Florida Auditor General, and federal and state awarding agencies and is
not intended to be and should not be used by anyone other than these specified parties.
April 10, 2013
Gainesville, Florida
68
MANAGEMENT LETTER
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
We have audited the basic financial statements of the City of Atlantic Beach, Florida (the City), as of and
for the fiscal year ended September 30, 2012, and have issued our report thereon dated April 10, 2013.
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; and OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. We have issued our independent auditors’ report on
internal control over financial reporting and compliance and other matters, independent auditors’ report
on compliance with requirements applicable to each major federal program and on internal control over
compliance, and schedule of findings and questioned costs. Disclosures in those reports and schedule,
which is dated April 10, 2013, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General,
which governs the conduct of local governmental entity audits performed in the State of Florida. This
letter includes the following information, which is not included in the aforementioned auditors’ report or
schedule.
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
audit report. There were no comments made in the preceding annual financial audit report.
Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding investment of public funds. In connection with
our audit, we determined that the City complied with Section 218.415, Florida Statutes.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter
any recommendations to improve financial management. In connection with our audit, we did not have
any such recommendations.
Sections 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of
contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an
effect on the financial statements that is less than material but more than inconsequential. In connection
with the audit, we did not have any such findings.
69
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
MANAGEMENT LETTER
(Concluded)
Section 10.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional
judgment, report the following matters that have an inconsequential effect on financial statements,
considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant
agreements, fraud, illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies.
In connection with our audit, we did not have any such findings.
Section 10.554(1)(i)6., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government 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.
Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement to be included as to whether
or not the local government has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we
determined that the City does not meet any of the conditions described in Section 218.503(1), Florida
Statutes.
Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual
financial report for the City for the fiscal year ended September 30, 2012, was filed with the Florida
Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with
the annual financial audit report for the fiscal year ended September 30, 2012. In connection with our
audit, we determined that these two reports were in agreement.
Pursuant to Section 10.554(1)(i)7.c. and 10.556(7), 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.
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than the specified parties.
April 10, 2013
Gainesville, Florida
CITY OF ATLANTIC BEA CH POLICE OFFICERS’ RETIREMENT
SYSTEM
ACTUARIAL VALUATION REPORT
SEPTEMBER 30, 2012
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING
SEPTEMBER 30, 2014
March 28, 2013
The Board of Trustees
City of Atlantic Beach
Police Officers’ Retirement System
Atlantic Beach, Florida
Dear Board Members:
We are pleased to submit herein our September 30, 2012 Actuarial Valuation Report for the City of Atlantic Beach
Police Officers’ Retirement System. The contribution results apply to the City's fiscal year ending September 30,
2014.
This report was prepared at the request of the Board of Trustees and is intended for use by the Pension Plan and
those designated or approved by the Board of Trustees. This report may be provided to parties other than the
Pension Plan only in its entirety and only with the permission of the Board of Trustees.
The purpose of the valuation is to measure the Plan’s funding progress, to determine the employer contribution rate
for the fiscal years ending September 30, 2014 and to determine the actuarial information for Governmental
Accounting Standards Board (GASB) Statement No. 25 and No. 27.
This report should not be relied on for any purpose other than the purpose described above.
The developed findings included in this report consider data or other information through September 30, 2011.
Future actuarial measurements may differ significantly from the current measurements presented in this report due
to such factors as the following: plan experience differing from that anticipated by the economic or demographic
assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the
natural operation of the methodology used for these measurements (such as the end of an amortization period or
additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or
applicable law.
The calculations are based upon assumptions regarding future events, which may or may not materialize. They are
also based upon present and proposed plan provisions that are outlined in the report. If you have reason to believe
that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, or that
conditions have changed since the calculations were made, you should contact the author of this report prior to
relying on information in the report.
The valuation was based upon information furnished by the City, concerning Plan benefits, financial transactions,
plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and
year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the City.
The Board of Trustees
March 28, 2013
Page 2
Gabriel, Roeder, Smith and Company
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements
and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and
practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into account in the valuation. All known
events or trends which may require a material increase in plan costs or required contribution rates have been taken
into account in the valuation.
The signing actuaries are independent of the plan sponsor.
Gabriel, Roeder, Smith & Company will be pleased to answer questions pertaining to the valuation and to meet
with you to review this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
James J. Rizzo, ASA, MAAA
Senior Consultant & Actuary
Piotr Krekora, ASA, MAAA
Consultant & Actuary
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements
and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and
practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into account in the valuation. All known
events or trends which may require a material increase in plan costs or required contribution rates have been taken
into account in the valuation.
Signature
March 28, 2013
Date
11-03355
Enrollment Number
TABLE OF CONTENTS
SECTION TITLE PAGE
A EXECUTIVE SUMMARY A-1
B VALUATION RESULTS
1. Participant Data B-1
2. Annual Required Contribution B-2
3. Actuarial Value of Benefits and Assets B-3
4. State Premium Tax Revenues B-4
5. Financial Soundness B-5
6. Actuarial Gains and Losses B-9
7. Recent History of Valuation Results B-13
8. Recent History of Required and Actual Contributions B-15
9. Actuarial Assumptions and Cost Method B-16
C PENSION FUND INFORMA TION
1. Summary of Assets C-1
2. Summary of Fund's Income and Disbursements C-2
3. Reconciliation of DROP Accounts C-3
4. Actuarial Value of Assets C-4
5. Investment Rate of Return C-6
D FINANCIAL ACCOUNTING INFORMATION
1. FASB No. 35 D-1
2. GASB No. 25 D-2
3. GASB No. 27 D-4
E MISCELLANEOUS INFORM ATION
1. Reconciliation of Membership Data E-1
2. Statistical Data E-2
F SUMMARY OF PLAN PROVISIONS F-1
G COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
G-1
Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this communication (or any
attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose
of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) marketing or recommending to
another party any tax-related matter addressed within. Each taxpayer should seek advice based on the
individual’s circumstances from an independent tax advisor.
SECTION A
EXECUTIVE SUMMARY
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | A-1
EXECUTIVE SUMMARY
Comparison of Required Employer Contributions
The following is a comparison of required contributions developed in this year's and the last actuarial valuations:
Gross Contribution Requirement $770,313 $688,746 $81,567
As % of Expected Payroll 46.92 %40.45 %6.47 %
Expected Employee Contribution $79,058 $82,005 $(2,947)
As % of Covered Payroll 4.815 %4.815 %0.00 %
Required Employer/State Contribution $691,255 $606,741 $84,514
As % of Expected Payroll 42.10 %35.63 %6.47 %
Estimated State Contribution $88,806 $88,806 $0
As % of Covered Payroll 5.41 %5.21 %0.20 %
Required Employer Contribution
(If Made in Equal Monthly Installments)$602,449 $517,935 $84,514
As % of Covered Payroll 36.69 %30.41 %6.28 %
Required Employer Contribution
(If Made in Whole at the Beginning of the Year)$577,427 $496,423 81,004
As % of Covered Payroll 35.17 %29.15 %6.02 %
Based on 9/30/2012
(Decrease)Valuation Valuation
IncreaseBased on 9/30/2011
For FYE 9/30/2014 For FYE 9/30/2013
Minimum Required Contribution
As illustrated in the preceding chart, the contribution necessary from the City and State to support the current
benefits for the Police Officers is $691,255 for the fiscal year ending September 30, 2014. The City may be able to
use up to $88,806 of State premium tax moneys to satisfy part of that requirement, leaving the City contribution at
$602,449. However, the City may need to contribute more, should receipts from the State fall short of the
expected amount presented in the table above. In no event, the combined City and State contribution should be
less than 42.10% of the total payroll for the contribution year, unless made in full on the first day of that year.
Please note that the Required Employer Contribution for that fiscal year is assumed to be deposited in monthly
intervals throughout the year.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | A-2
Revisions in Benefits
There were no revisions in benefits for the current year.
Pending changes being considered would not have an effective date until many months following the October 1,
2012 valuation date. The current financial and actuarial effects of any such amendment, if adopted in the next few
months, would be reflected in an Actuarial Impact Statement that will be prepared shortly. Depending on the
nature of the amendment, the Minimum Required Contribution for the fiscal year ending September 30, 2014 may
change from what is described herein.
Revisions in Actuarial Assumptions or Methods
There were no revisions in actuarial assumptions or methods for the current year.
Actuarial Experience
Actuarial gains occur in a year whenever the experience of the plan is better than was assumed. For example, if
investment performance were better than the level being assumed in the actuarial valuation and costing process,
then an actuarial gain results and would have the effect of lowering the Minimum Required Contribution for the
year. Whenever more employees terminate employment than were assumed would terminate, fewer employees
are then expected to actually retire from the City, resulting in an actuarial gain for the plan.
Actuarial losses occur in a year whenever the experience of the plan is worse than was assumed. In the examples
given above, if the reverse were to occur, then actuarial losses would result. As another example, if salaries
increased in one year were higher than assumed or more new employees were hired than terminated, an actuarial
loss would occur.
The actuarial valuation cost method which determines the Minimum Required Contribution is designed to produce
contribution requirements which remain level as a percent of payroll whenever the experience of the plan matches
the actuarial assumptions used. Contribution Requirements are also level whenever actuarial losses exactly offset
actuarial gains.
Analysis of Change in Employer Contribution
The components of change in the actuarially required contribution are as follows:
Contribution rate last year 30.41%
Payment on UAAL 7.12
Experience (gain)/loss 0.26
Change in administrative expense (0.81)
Change in normal cost before expenses (0.11)
Revision in benefits 0.00
Revision in assumptions/methods 0.00
Change in State Revenue (0.18)
Contribution rate this year 36.69%
There was a net actuarial loss this year which is primarily due to a vested terminated participant who was
retroactively approved for disability retirement during the past year. This loss was partially offset by lower than
expected salary increases (-0.8% vs. 7.6% assumed).
Administrative expenses were less than the previous year by 0.81% of pay. The dollar amount of the State
Revenue is expected to remain at the same level but due to a recent payroll reduction it will represent a larger
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | A-3
percentage of the projected payroll.
There was a decrease in the 10-year average payroll growth rate (from 3.35% to 2.62%). The covered payroll is
expected to grow at the rate of 4% in the long term. However, in accordance with the requirements of Ch.
112.64 (5) (a), F.S. this assumed payroll growth used in developing the amortization payments, cannot exceed
the actual average annual payroll growth rate based on the last 10 years. This limit has been affecting
amortization amounts for the last three years. Due to a decrease in the 10-year average, the amortization
payment of the UAAL increased this year, adding to the actuarial losses described previously, which ultimately
increased the contribution.
The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous
information and statistics, and a summary of plan provisions.
SECTION B
VALUATION RESULTS
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-1
ACTIVE MEMBERS
Number 26 26
Covered Annual Payroll $1,548,109$1,605,814
Average Annual Payroll $59,543$61,762
Average Age 37.9 37.9
Average Past Service 7.9 8.1
Average Age at Hire 30.0 29.8
RETIREES, BENEFICIARIES, & DROP MEMBERS
Number 15 14
Annual Benefits $544,324$493,822
Average Annual Benefit $36,288$35,273
Average Age 60.7 60.6
DISABILITY RETIREES
Number 4 3
Annual Benefits $74,159$56,032
Average Annual Benefit $18,540$18,677
Average Age 55.1 57.9
TERMINATED VESTED MEMBERS
Number 4 5
Annual Benefits $41,865$55,564
Average Annual Benefit $10,466$11,113
Average Age 48.9 46.8
PARTICIPANT DATA
September 30, 2012 September 30, 2011
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-2
A.Valuation Date
B.ARC to Be Paid During
Fiscal Year Ending 9/30/2014 9/30/2013
C.Assumed Date(s) of Employer Contrib.Monthly Monthly
D.Annual Payment to Amortize
Unfunded Actuarial Liability
if Paid on the Valuation Date $375,564$278,845
E.Employer Normal Cost
(including Administrative Expenses)
if Paid on the Valuation 237,903 259,619
F.Annual Required Contribution (ARC)
if Paid on the Valuation Date: D+E 613,467 538,464
G.ARC Adjusted for Frequency of
Payments and Interest to Required Time
of Contribution 691,255 606,741
H.Covered Payroll for Contribution Year 1,641,918 1,703,120
I.ARC as % of Expected Covered
Payroll in the Contribution Year G ÷ H 42.10%35.63%
J.Estimate of State Revenue in
Contribution Year*88,806 88,806
K.Required Employer Contribution (REC)
in Contribution Year 602,449 517,935
L.REC as % of Covered Payroll in
Contribution Year: K ÷ J 36.69%30.41%
M.Required Employer Contribution (REC)
if Paid on the First Day of the Contribution Year 577,427 496,423
ANNUAL REQUIRED CONTRIBUTION (ARC)
September 30, 2012 September 30, 2011
* Chapter 185 Florida Statutes. The City contribution amount may need to be increased if the amount
received under the provisions of Chapter 185, Florida Statutes, is not sufficient to meet the total
employer contribution requirement. CAUTION: If the amount received under the provisions of Chapter
185, Florida Statutes, exceeds $88,806, the City may NOT use any of the excess to reduce the City
contribution shown.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-3
A.Valuation Date
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits $5,649,742 $5,958,209
b. Vesting Benefits 436,838 444,331
c. Disability Benefits 222,369 230,062
d. Preretirement Death Benefits 48,102 50,614
e. Return of Member Contributions 76,094 77,178
f. Total 6,433,145 6,760,394
2.Inactive Members
a. Service Retirees & Beneficiaries 5,799,923 5,241,594
b. Disability Retirees 757,569 541,226
c. Terminated Vested Members 194,822 216,786
d. Total 6,752,314 5,999,606
3. Total for All Members 13,185,459 12,760,000
C.Actuarial Accrued (Past Service)
Liability per GASB No. 25 10,600,187 10,065,007
D.Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 9,068,198 8,408,268
E.Plan Assets
1.Market Value 6,934,693 6,056,405
2. Actuarial Value 6,880,124 6,305,176
F.Actuarial Present Value of Projected
Covered Payroll 13,864,778 14,472,886
G.Actuarial Present Value of Projected
Member Contributions 668,282 697,593
ACTUARIAL VALUE OF BENEFITS AND ASSETS
September 30, 2012 September 30, 2011
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-4
STATE PREMIUM TAX REVENUES
A.Additional premium tax revenues
as of 9/30/2011 $ 120,454 -$
B.Chapter 185 receipts during fiscal
year ending 9/30/2012 88,795 1,240,299
C.Chapter 185 "frozen" receipts during
fiscal year ending 9/30/1998 70,289 974,785
D.Qualifying benefit improvements
since Chapter 99-1 effective date 18,517 148,136
E.Additional premium tax revenues
(Excess Premium Tax Reserves) as of
9/30/2012 [ A + B - C - D] not less
than beginning of the year.120,454
Minimum Compliance ($18,517)
A. Early retirement eligibility at 50 & 10
B.Normal retirement eligibility at 55 & 10
C.10 year certain and life normal form
Extra Benefits
A.None proposed
Potential Future Benefits
Prior Year Cumulative
Note: During the Fiscal Year ended 9/30/2012, “Chapter 185 receipts” totaled $88,795. This amount is lower
than the maximum amount of State premium tax moneys that can be used by the City to satisfy part of the
Annual Required Contribution. The current such maximum, equal $88,806, is a sum of (i) the “frozen”
amount of $70,289 and (ii) amount equal to initial annual cost of qualifying benefit improvements of $18,517.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-5
FINANCIAL SOUNDNESS
The purpose of this portion of the Report is to provide certain measures which indicate the financial soundness of
the program. These measures relate to short term solvency and long term solvency.
The various percentages listed in this Section as of a single valuation date are not that significant. What is
significant, however, is the trend of the rates over a period of years. It is also important to keep in mind that each
time benefits or assumptions are revised; actuarial liabilities are created or diminished. Any newly created
liabilities are financed systematically over a period of future years. All actuarially computed values in this analysis
are based on the actuarial assumptions utilized in the respective years' actuarial valuations.
Short Term Solvency
The ultimate test of financial soundness is the program's ability to pay all promised benefits when due. The
program's progress in accumulating assets to pay all promised benefits can be measured by comparing the market
value of assets with:
1. The actuarial present value of projected benefits payable to those already receiving benefits and to vested
terminations, and
2. The actuarial present value of accrued benefits payable to active participants. This amount is based on
benefits earned to date without future credited service or salary increases.
The total of the two items should generally be fully covered by assets. That portion of the total of the two items
covered by assets should increase over time. Often assets continue to grow beyond the actuarial present value of
these two items.
Increases in benefits will, of course, adversely affect the trend in the years when such increases are first reflected
in the actuarial values. Although different actuarial assumptions would be used in the event of a termination of the
program, this test shows how much of the benefits accrued to date might be covered by assets in the event of a plan
freeze using the valuation assumptions.
1.Accumulated Contributions
of Active Members $381,408 $333,818 $298,857
2.APV of Projected Benefits in
Pay Status and for Vested
Terminations 6,752,3145,999,6065,122,509
3.APV of Accrued Benefits for
Active Participants
(Employer Portion)1,934,476 2,074,844 2,454,890
4.Total 9,068,1988,408,2687,876,256
5.Market Value of Assets 6,934,6936,056,4056,010,877
6.Assets as % of Total 76%72%76%
Police Officers
9/30/2012 9/30/2011 9/30/2010
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-6
0%
50%
100%
150%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2009 2010 2011 2012
Ra
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Actuarial Valuation Date (September 30)
Ratio of Market Value of Assets to
Present Value of Accrued Benefits
Market Value of Assets PV Accrued Benefits Ratio
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-7
Long Term Solvency
Over the longer term, the solvency of an ongoing plan can be measured by comparing the Actuarial Value of
Assets to an amount known as the Actuarial Accrued Liability (AAL) under the Entry Age Actuarial Cost Method.
This item has often been called the "past service liability". Its derivation differs from the short term solvency value
derivation in several ways. The short term solvency liability number is based on the benefits accrued to date by the
participants while the long term solvency liability number is based on what the normal costs accrued to date by the
employer. In addition, the short term solvency asset number is the market value, while the long term asset number
is the actuarial value of assets. As in the case of the short term solvency values, the AAL is affected immediately
by any revisions in benefits or assumptions. The accumulation of assets to equal the AAL can be considered a
long range funding goal.
9/30/02 $4,230 $5,334 79 %
9/30/03*4,373 5,986 73
9/30/04 4,534 6,405 71
9/30/05 4,775 6,997 68
9/30/06 5,175 7,034 74
9/30/07*5,663 7,620 74
9/30/08 5,764 8,112 71
9/30/09*5,922 8,689 68
9/30/10*6,164 9,449 65
9/30/11 6,305 10,065 63
9/30/12 6,880 10,600 65
Valuation
Date
Actuarial Value of
Assets
(in Thousands)
Actuarial Accrued
Liability
(in Thousands)
% of AAL
Covered by
Assets
*Reflects change in benefits, actuarial assumptions and/or method.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-8
0%
50%
100%
150%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2006 2007 2008 2009 2010 2011 2012
Ra
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Actuarial Valuation Date (September 30)
Actuarial Assets Accrued Liability Ratio
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-9
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary
increases, and other factors have been based on long range trends and expectations. Actual experience can vary
from these expectations. The variance is measured by the gain and loss for the period involved. If significant long
term experience reveals consistent deviation from what has been expected and that deviation is expected to
continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as
follows:
1.Last Year's UAAL $3,759,831
2.Last Year's Employer Normal Cost 270,003
3.Last Year's Actual City Contibution 628,898
4.Interest at the assumed rate on:
a. 1 for one year 300,786
b. 2 for half a year 10,800
c. 3 from dates paid 25,156
d. a + b - c 286,430
5.This Year's Expected UAAL
1 + 2 - 3 + 4d 3,687,366
6.This Year's Actual UAAL (before any
changes in benefits or assumptions)3,720,063
7.Net Actuarial Gain (Loss): (5) - (6)(32,697)
8.Gain (Loss) due to investments 16,160
9.Gain (Loss) due to other sources (48,856)
Derivation of Experience Gain (Loss)
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-10
Net actuarial gains (losses) in previous years have been as follows:
Year Ended
9/30/1997 249,395 249,395
9/30/1998 95,019 344,414
9/30/1999 117,618 462,032
9/30/2000 (103,871) 358,161
9/30/2001 1,389 359,550
9/30/2002 (128,212) 231,338
9/30/2003 (339,563) (108,225)
9/30/2004 (207,808) (316,033)
9/30/2005 (287,225) (603,258)
9/30/2006 411,559 (191,699)
9/30/2007 (137,906) (329,604)
9/30/2008 (308,022) (637,626)
9/30/2009 (323,582) (961,208)
9/30/2010 154,731 (806,477)
9/30/2011 (451,201) (1,257,678)
9/30/2012 (32,697) (1,290,375)
Actuarial Gain (Loss)
Cumulative Gain
(Loss)
($3)
($2)
($1)
$0
$1
$2
$3
($1)
$0
$1
M
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Plan Year End
Actuarial Gain (+) or Loss (-)
Gain or Loss Cumulative
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-11
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so it is
important that they are in line with the actual experience. The following table shows the history of actuarial fund
earnings and salary increase rates compared to the assumed rates.
9/30/20022.6%8.0%7.5%6.7%
9/30/20032.2 8.0 8.8 6.5
9/30/20042.4 8.0 11.2 6.5
9/30/20054.4 8.0 15.1 6.3
9/30/20067.8 8.0 1.5 6.7
9/30/20079.4 8.0 12.8 6.6
9/30/20084.6 8.0 2.1 6.6
9/30/20093.8 8.0 11.0 6.4
9/30/20104.7 8.0 (0.0)6.4
9/30/20112.2 8.0 3.8 7.4
9/30/20127.9 8.0 (0.8)7.6
Average 4.7%---6.5%---
Assumed
Salary Increases
Actual
Investment Return
Year Ending Actuarial Assumed
The actual investment return rates shown above are based on the actuarial value of assets. The actual salary
increase rates shown above are the increases received by those active members who were included in the actuarial
valuations both at the beginning and the end of each year.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-12
-5%
0%
5%
10%
15%
-5%
0%
5%
10%
15%
Plan Year End
History of Investment Return -Actuarial Value of Assets
Actual Assumed
0%
5%
10%
15%
-5%
0%
5%
10%
15%
20%
Plan Year End Compared to Previous Year
History of Salary Increases
Actual Assumed
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B-13
Active
Members
Inactive
Members
9/30/022512 $ 1,195 $ 4,230 $ 1,104 $ 18415.44 %
9/30/03 *2215 1,129 4,373 1,613 18216.12
9/30/042716 1,360 4,534 1,871 22016.21
9/30/052618 1,402 4,775 2,222 22816.25
9/30/062419 1,254 5,175 1,859 21116.84
9/30/07 *2519 1,453 5,663 1,957 20013.74
9/30/082619 1,476 5,764 2,348 20713.99
9/30/09 *2720 1,697 5,922 2,767 24414.36
9/30/10 *2721 1,639 6,164 3,285 24715.08
9/30/112622 1,606 6,305 3,760 26016.17
9/30/1226 23 1,548 6,880 3,720 23815.37
Amount
(in Thousands)
UAAL
(in Thousands)
RECENT HISTORY OF VALUATION RESULTS
Number of Employer Normal Cost**
Valuation
Date
Reported Covered
Annual Payroll
(in Thousands)
Actuarial Value of
Assets
(in Thousands)
% of Covered
Payroll
* Reflects change in benefits, actuarial assumptions and/or method.
**For Valuations prior to 2009, Normal Cost is a mid-year amount, excluding any administrative expenses. Beginning
with 9/30/2009 valuation, Normal Cost is a beginning of the year figure, including administrative expenses. For all
years, % of Covered Payroll is Normal Cost shown expressed as a % of Covered Valuation Payroll.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-14
0
10
20
30
40
50
Actuarial Valuation Date
Recent History of Number of Members
Active Members Inactive Members
$0.0
$0.3
$0.5
$0.8
$1.0
$1.3
$1.5
$1.8
Mi
l
l
i
o
n
s
Actuarial Valuation Date
Recent History of Covered Annual Payroll
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-15
9/30/059/30/07 $390,49425.70 %$390,494
9/30/069/30/08 309,84122.80 309,842
9/30/07 *9/30/09 345,28021.93 345,280
9/30/089/30/10 425,82326.62 425,823
9/30/09 *9/30/11 487,03226.49 487,032
9/30/10 *9/30/12 628,90936.18 628,898
9/30/119/30/13 606,74135.63 ---
9/30/129/30/14 691,25542.10 ---
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
Required Contributions
Actual
Contributions
Valuation
End of Year To
Which
Valuation
Applies
Amount
% of Expected
Payroll
* Reflects change in benefits, actuarial assumptions and/or method.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-16
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - The actuarial cost method is a procedure for allocating the actuarial present value of
benefits and expenses to time periods. Normal cost and the allocation of benefit values between service
rendered before and after the valuation date were determined using the Entry-Age Actuarial Cost Method.
The entry-age actuarial cost method allocates the actuarial present value of each member's projected benefits on
a level basis over the member's pensionable compensation between the entry age of the member and the
estimated active status exit ages. The portion of the actuarial present value allocated to the valuation year is
called the normal cost. The portion of the actuarial present value not provided for by the actuarial present value
of future normal costs is called the actuarial accrued liability. Deducting accrued assets from the actuarial
accrued liability determines the unfunded actuarial accrued liability.
Financing of Unfunded Actuarial Accrued Liabilities - The unfunded actuarial accrued liability was financed
as a level percent of member payroll.
Actuarial Value of Assets - The Actuarial Value of Assets phases in the difference between the expected and
actual return on market value of assets at the rate of 25% per year. The Actuarial Value of Assets will be
further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the Market Value
of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when
investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market
Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will
tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-17
Economic Assumptions
The investment return rate assumed in the valuations is 8.00% per year, compounded annually (net of
investment expenses).
The Wage Inflation Rate assumed in this valuation was 4% per year. The Wage Inflation Rate is defined to be
the portion of total pay increases for an individual that are due to macro economic forces including
productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay changes
related to individual merit and seniority effects. The price inflation rate assumed in this valuation was 3% per
year.
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree benefits.
Ad-hoc COLA increases have been adopted in the past upon approval by the City. Most recently, such
increases have been granted in 1987, 1996 and 2001. No assumptions are made regarding future adjustments.
Any such increases will be recognized as they occur.
The payroll growth rate would be 4%, except that it is limited this year due the lower actual payroll growth
rate over the last 10 years in accordance with the requirements of Ch. 112.64 (5) (a), F.S. The rate used to
amortize the unfunded actuarial accrued liabilities is 2.62% per year.
The total rate of return is defined as earnings resulting from interest, dividends, realized gains (losses) and
unrealized appreciation (depreciation) divided by the beginning market value of the fund, adjusted for cash flow
during the year. Total rate of return is as the assumed to be 8.00% per year, net of investment-related expenses.
The rates of salary increases used in the valuation are illustrated in the following table.
Annual Rates for Salary Increase for Sample Ages
Age:2030405060
Expected Increase 23.0%9.8%6.6%5.7%5.0%
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-18
Demographic Assumptions
The mortality table is a gender specific RP-2000 Mortality Table with generational projections per the Society
of Actuaries’ Scale AA.
Ages Men Women Men Women
45 $142.54 $144.21 36.75 39.03
50 137.46 139.60 32.00 34.22
55 130.46 133.31 27.31 29.50
60 121.38 125.21 22.80 24.94
65 110.29 115.34 18.56 20.66
70 97.44 103.87 14.69 16.73
75 82.54 90.81 11.18 13.18
80 66.51 76.26 8.15 10.01
$1 Monthly for Life Expectancy (Years)
RP2000 Table Projected to Valuation Year
Value of Future Life
This assumption is used to measure the probabilities of each benefit payment being made after retirement. For
active members, the probabilities of dying before retirement were based upon the same mortality table as members
dying after retirement. All deaths before retirement are assumed to be non-service connected.
The rates of retirement used to measure the probability of eligible members retiring under normal and early
retirement eligibility during the next year were as follows:
Retirement Percent of Eligible
Ages Employees Retiring
45 40%
46 10%
47 10%
48 10%
49 40%
50 50%
51 50%
52-58 50%
59 50%
60 50%
61-64 50%
65 100%
Normal Retirement/DROP
Retirement Percent of Eligible
Ages Employees Retiring
50 10%
51 10%
52 10%
53 10%
54 10%
Early Retirement/DROP
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-19
Rates of separation from active membership were as shown below (rates do not apply to members eligible to
retire and do not include separation on account of death or disability). This assumption measures the
probabilities of members remaining in employment.
SampleYears of
AgesServiceAssumptions
ALL 0 34.00%
1 23.00%
2 16.00%
3 12.00%
4 9.00%
25 5 & Over5.88%
30 5.32%
35 4.40%
40 3.70%
45 3.20%
50 2.40%
55 1.40%
60 1.00%
Rates of Separationg from Active Employment
Rates of Disability among after members
Sample
Ages Men Women
200.14%0.14%
250.15%0.15%
300.18%0.18%
350.23%0.23%
400.30%0.30%
450.51%0.51%
501.00%1.00%
551.55%1.55%
600.00%0.00%
Percent Becoming Disabled
Within Next Year
The mortality table was set forward ten years for projecting disability costs.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-20
Miscellaneous and Technical Assumptions
Administrative & Investment
Expenses
Annual administrative expenses are assumed to be equal to the actual
expenses paid during the preceding fiscal year. Investment expenses
are offset against gross investment income. Assumed administrative
expenses are added to the Normal Cost.
Benefit Service Exact fractional service is used to determine the amount of benefit
payable.
Decrement Operation Disability and mortality decrements do not operate during the first 5
years of service. Disability and separation do not operate during
retirement eligibility.
Decrement Timing Decrements of all types are assumed to occur mid year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures Vested members who terminate with a benefit worth less than 100%
of their own accumulated contributions were assumed to forfeit their
vested benefit.
Incidence of Contributions Employer contributions are assumed to be received in 12 equal
monthly installments. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
Marriage Assumption 80% of members are assumed to be married for purposes of death-in-
service benefits. Male spouses are assumed to be three years older
than female participants and female spouses are assumed to be three
years younger than male participants for active member valuation
purposes.
Normal Form of Benefit The normal form of benefit is a life annuity with 10 year certain.
Pay Increase Timing Beginning of fiscal year. This is equivalent to assuming that reported
pays represent the actual amount paid during the previous fiscal year.
Service Credit Accruals It is assumed that members accrue one year of service credit per year.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | B-21
GLOSSARY OF TERMS
Actuarial Accrued Liability The difference between (i) the actuarial present value of future plan benefits,
and (ii) the actuarial present value of future normal cost. Sometimes referred to
as “accrued liability” or “past service liability.”
Accrued Service The service credited under the plan which was rendered before the date of the
actuarial valuation.
Actuarial Assumptions Estimates of future plan experience with respect to rates of mortality, disability,
turnover, retirement, rate or rates of investment income and salary increases.
Decrement assumptions (rates of mortality, disability, turnover and retirement)
are generally based on past experience, often modified for projected changes in
conditions. Economic assumptions (salary increases and investment income)
consist of an underlying rate in an inflation-free environment plus a provision
for a long-term average rate of inflation.
Actuarial Cost Method A mathematical budgeting procedure for allocating the dollar amount of the
“actuarial present value of future plan benefits” between the actuarial present
value of future normal cost and the actuarial accrued liability. Sometimes
referred to as the “actuarial funding method.”
Actuarial Equivalent A single amount or series of amounts of equal value to another single amount
or series of amounts, computed on the basis of the rate(s) of interest and
mortality tables used by the plan.
Actuarial Present Value The amount of funds presently required to provide a payment or series of
payments in the future. It is determined by discounting the future payments at a
predetermined rate of interest, taking into account the probability of payment.
Amortization Paying off an interest-bearing liability by means of periodic payments of
interest and principal, as opposed to paying it off with a lump sum payment.
Experience Gain (Loss) A measure of the difference between actual experience and that expected based
upon a set of actuarial assumptions during the period between two actuarial
valuation dates, in accordance with the actuarial cost method being used.
Normal Cost The annual cost assigned, under the actuarial funding method, to current and
subsequent plan years. Sometimes referred to as “current service cost.” Any
payment toward the unfunded actuarial accrued liability is not part of the
normal cost.
Reserve Account An account used to indicate that funds have been set aside for a specific
purpose and is not generally available for other uses.
Unfunded Actuarial
Accrued Liability
The difference between the actuarial accrued liability and valuation assets.
Sometimes referred to as “unfunded accrued liability.”
Valuation Assets The value of current plan assets recognized for valuation purposes. Generally
based on market value plus a portion of unrealized appreciation or depreciation.
SECTION C
PENSION FUND INFORMA TION
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-1
Cash and Securities - Market Value
Cash and Cash Equivalents $26,902 $29,766
Short Term Investments 149,346 228,286
Treasury and Agency Bonds & Notes 2,119,032 1,813,241
Corporate Bonds 1,209,542 1,377,738
Common & Preferred Stocks 3,507,733 2,614,717
Other Fixed Income 24,535 83,532
Mutual or Pooled Bond Funds 0 0
Mutual Funds 0 0
Other Securities - Participant Directed 68,961 16,316
Total 7,106,051 6,163,596
Receivables and Accruals
Member Contribution 0 0
Additional Employer Contribution 0 0
Interest and Dividends 18,265 29,883
Total 18,265 29,883
Payables
Benefits-DROP Reserve 69,169 16,620
Lump Sum Distributions 0 0
Excess Premium Tax Liability 120,454 120,454
Other 0 0
Total 189,623 137,074
Net Assets - Market Value $6,934,693 $6,056,405
SUMMARY OF ASSETS
9/30/2012 9/30/2011
Year Ending Year Ending
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-2
Market Value at Beginning of Period $6,056,405$6,010,957
Income
Member Contributions 75,667 79,200
State Contributions 88,795 86,391
Employer Contribution 540,103 400,641
Interest and Dividends 144,410 144,229
Realized and Unrealized Gain (Loss)698,385 (69,342)
Total Income 1,547,360 641,119
Disbursements
Monthly Benefit Payments 599,459 512,386
Lump Sum Distributions 0 0
Refund of Contributions 5,478 6,853
Increase in Excess Premium Tax Liability 0 0
Investment Related Expenses 38,225 37,299
Other Administrative Expenses 25,910 39,133
Insurance Premiums 0 0
Total Disbursements 669,072 595,671
Net Increase During Period $878,288 $45,448
Market Value at End of Period $6,934,693 $6,056,405
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending
9/30/2011
Year Ending
9/30/2012
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-3
DEFERRED RETIREMENT OPTION PLAN (DROP)
BENEFITS HELD IN RESERVE
State Statutes require that the value of assets be offset by the total accumulated balance of DROP payments
being held in reserve for those participating in the DROP plan. A reconciliation of the accumulated balance to
be recognized is provided in the table below.
$
+
+
-
Value at end of year
Value at beginning of year
RECONCILIATION OF DROP ACCOUNTS
Payments credited to accounts
Investment Earnings credited
Withdrawals from accounts
16,316
51,860
785
0
68,961
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-4
ACTUARIAL VALUE OF ASSETS
As of September 30, 2012
Valuation assets are calculated using a smoothed market value over a period of four (4) years, as prescribed
under Internal Revenue Procedure 2000-40. The asset value determined under this method will be adjusted to
be no greater than 120% and no less than 80% of the fair market value.
Under this method, the actuarial value of assets is equal to the market value of assets less a decreasing fraction
(1/nth per year, where n equals the number of years in the smoothing period) of the gain or loss for each of the
preceding 3 years.
Under this method, a gain or loss for a year is determined by calculating the difference between the expected
market value of the assets at the valuation date and the actual market value of the assets at the valuation date.
The expected value of the assets for the year is the market value of the assets at the valuation date for the prior
year brought forward with interest at the valuation interest rate to the valuation date for the current year plus
contributions minus disbursements (i.e., benefits paid and expenses), all adjusted with interest at the valuation
rate to the valuation date for the current year. If the expected value is less than the market value, the differen ce
is a gain. Conversely, if the expected value is greater than the market value, the difference is a loss.
Calculation of Valuation Assets is shown on the following page.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-5
2010 20112012 2013
A.Preliminary actuarial value from prior year 5,921,648$ 6,164,269$ 6,305,176$ 6,880,124$
B.Market value beginning of prior year 5,457,4796,010,9576,056,4056,934,693
C.Market value end of prior year 6,010,9576,056,4056,934,693
D.Non-investment net cash flow
[contributions-(benefits & expenses)](35,838)7,86073,718
E.Investment return
1.Actual market value return net of investment
expenses: C - B - D 589,31737,588804,570
2.Expected return of 8.00%435,165 481,191 487,461
3.Excess/(shortfall) to be phased-in: E1 - E2 154,152(443,603)317,109
F.Phased-in recognition of investment return
(4 Year Recognition)
1.Current year: 25% of E3 38,538(110,901)79,277
2.25% of excess/(shortfall) from first prior year 6,85538,538(110,901)79,277
3.25% of excess/(shortfall) from second prior year (282,636)6,85538,538(110,901)
4.25% of excess/(shortfall) from third prior year 80,537(282,636)6,85538,538
5.Total phased-in recognition of investment return (156,706)(348,144)13,769 6,914
G.Actuarial value end of year
1.Preliminary actuarial value end of year:
A + D + E2 + F5 6,164,2696,305,1766,880,124
2.Upper corridor limit: 120% of C 7,213,1497,267,6868,321,632
3.Lower corridor limit: 80% of C 4,808,7664,845,1245,547,754
4.Actuarial value end of year *6,164,2696,305,1766,880,124
H.Difference between market value and actuarial value (153,312)(248,771)54,569
I.Ratio of Funding Value to Market Value 103%104%99%
DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER 30
* Offset for DROP Reserve made prior to the calculation of valuation assets.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | C-6
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following bases:
Basis 1 - Cost Value: Interest, dividends and realized gains (losses) divided by the beginning cost value of the
fund, adjusted for cash flow during the year. Not illustrated below.
Basis 2 - Market Value: Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the beginning market value of the fund, adjusted for cash flow during the year. This figure
is normally called the Total Rate of Return.
Basis 3 - Actuarial Value: Investment earnings recognized in the Actuarial Value of Assets divided by the
weighted average of the Actuarial Value of Assets during the year.
9/30/02 (6.8) %2.6 %
9/30/03 9.5 2.2
9/30/04 6.7 2.4
9/30/05 8.5 4.4
9/30/06 8.8 7.8
9/30/07 14.2 9.4
9/30/08 (11.7) 4.6
9/30/09 8.5 3.8
9/30/10 10.8 4.7
9/30/11 1.2 2.2
9/30/12 13.9 7.9
4.1%4.6 %
6.8%4.9 %
Actuarial ValueYear Ended
Investment Rate of Return
Average Compounded
Rate of Return for
5 Years
10 Years
Market Value
SECTION D
FINANCIAL ACCOUNTING INFORMATION
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | D-1
A.Valuation Date
B.Actuarial Present Value of Accumulated
Plan Benefits
1.Vested Benefits
a.Members Currently Receiving Payments$6,557,492$5,782,820
b.Terminated Vested Members 194,822 216,786
c.Other Members 2,188,725 2,206,538
d.Total 8,941,039 8,206,144
2.Non-Vested Benefits 127,159 202,124
3.Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2 9,068,198 8,408,268
4.Accumulated Contributions of Active Members 381,408 333,818
C.Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1.Total Value at Beginning of Year 8,408,268 7,876,256
2.Increase (Decrease) During the Period
Attributable to:
a.Plan Amendment 0 0
b.Change in Actuarial Assumptions 0 0
c.Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period 1,264,867 1,051,251
d.Benefits Paid (Including DROP Reserve)(604,937)(519,239)
e.Net Increase 659,930 532,012
3.Total Value at End of Period 9,068,198 8,408,268
D.Market Value of Assets 6,934,693 6,056,405
E. Total Actuarial Present Value of Accumulated
Plan Benefits using FRS discount rate 9,311,897 8,636,760
F.Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
FASB NO. 35 INFORMATION
September 30, 2012 September 30, 2011
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SCHEDULE OF FUNDING PROGRESS
(Dollar amounts in thousands)
(GASB Statement No. 25)
9/30/2003 *$4,373 $5,986 $1,613 73.1 %$1,129 142.9 %
9/30/2004 4,534 6,405 1,871 70.81,360 137.6
9/30/2005 4,775 6,997 2,222 68.21,402 158.5
9/30/2006 5,175 7,034 1,859 73.61,254 148.2
9/30/2007 *5,663 7,620 1,957 74.31,453 134.7
9/30/2008 5,764 8,112 2,348 71.11,476 159.1
9/30/2009 *5,922 8,689 2,767 68.21,697 163.1
9/30/2010 *6,164 9,449 3,285 65.21,639 200.4
9/30/2011 6,305 10,065 3,760 62.61,606 234.1
9/30/2012 6,880 10,600 3,720 64.91,548 240.3
Actuarial Accrued
Liability (AAL) -
Entry Age
(b)
Actuarial
Valuation Date
UAAL As % of
Covered Payroll
(b - a) / c
Covered Payroll
( c )
Funded Ratio
(a) / (b)
Actuarial Value
of Assets
(a)
Unfunded AAL
(UAAL)
(b) - (a)
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | D-3
SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER
(GASB Statement No. 25)
Fiscal
Year Ending
9/30/2003 *18.05%$225,991$226,041 100%
9/30/2004 18.74 242,637 242,637 100
9/30/2005 24.31 297,361 297,361 100
9/30/2006 23.76 350,161 350,160 100
9/30/2007 *25.70 390,494 390,494 100
9/30/2008 22.80 309,841 309,842 100
9/30/2009 *21.93 345,280 345,280 100
9/30/2010 *26.62 425,823 425,823 100
9/30/2011 26.49 487,032 487,032 100
9/30/2012 36.18 628,909 628,898 100
Percentage
Contributed
Annual Required
Contribution Contribution
ActualContribution Rate
As a % of Payroll
* Reflects change in benefits, actuarial assumptions and/or method.
Note: Annual Required Contribution (if any), above, is payable by the City and
includes185/175 State Premium Tax Money up to allowable limit.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | D-4
Employer FYE September 30
A.Annual Required Contribution (ARC)628,909$ 487,032$ 425,823$
B.Interest on Net Pension Obligation (Asset) - - -
C.Adjustment to ARC - - -
D.Annual Pension Cost (APC): (A + B - C)628,909 487,032 425,823
E.Contributions made 628,898487,032425,823
F.Increase (decrease) in Net Pension Obligation(Asset): (D -E) - - -
G.Net Pension Obligation(Asset) at beginning of year - - -
H.Net Pension Obligation(Asset) at end of year: (F+ G)- - -
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
2012 2011 2010
Fiscal Annual PensionActual
Year EndingCost (APC)Contribution
9/30/2010$ 425,823$ 425,823100.0%-$
9/30/2011 487,032 487,032100.0 -
9/30/2012 628,909 628,898100.0 -
THREE YEAR TREND INFORMATION
Percentage of
APC Contributed
Net Pension
Obligation
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | D-5
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the actuarial
valuation at the dates indicated. Additional Information as of the latest actuarial valuation:
Valuation Date
Contribution Rates:
Employer
Plan Members
Actuarial Cost Method
Amortization Method
Equivalent Single Amortization Period
Asset Valuation Method
Actuarial Assumptions:
Investment rate of return
Projected salary increases
Includes price inflation
Cost-of-living adjustments
Payroll Growth Assumption
September 30, 2012
36.69%
4.815%
Entry Age
Closed, Level % of Pay Method
13.31 Years
See Section entitled “Actuarial
Value of Assets”
8.0%
5.0% - 23.0%
3.0%
None
2.62%
SECTION E
MISCELLANEOUS INFORM ATION
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | E-1
A.
1.Number Included in Last Valuation 26 27
2.New Members Included in Current Valuation 2 3
3.Non-Vested Employment Terminations (1)(2)
4.Vested Employment Terminations 0 0
5.Service Retirements 0 (1)
6.Disability Retirements 0 0
7.Deaths 0 0
8.DROP Retirement (1)(1)
9.Transfer to Another Division 0 0
10.Number Included in This Valuation 26 26
B.
1.Number Included in Last Valuation 5 6
2.Additions from Active Members 0 0
3.Lump Sum Payments/Withdrawals 0 0
4.Payments Commenced (1)0
5.Deaths 0 0
6.Other-Returned to Work 0 (1)
7.Number Included in This Valuation 4 5
C.
1.Number Included in Last Valuation 17 15
2.Additions from Active Members 0 1
3.Additions entering the DROP 1 1
4.Additions from Terminated Vested Members 1 0
5.Deaths Resulting in No Further Payments 0 0
6.Deaths Resulting in New Survivor Benefits 0 0
7.End of Certain Period - No Further Payments 0 0
8.Other -- Lump Sum Distributions 0 0
9.Number Included in This Valuation 19 17
RECONCILIATION OF MEMBERSHIP DATA
Active Members
Service Retirees, Disability Retirees, Beneficiaries & DROP
Terminated Vested Members
From 9/30/10From 9/30/11
To 9/30/11To 9/30/12
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | E-2
STATISTICAL DATA
Active Members as of September 30, 2012
Age Group 0-4 5-9 10-14 15-19 20-24 25-29 30 & Up TotalsAvg. Pay
20-24 NO.1000000139,071
25-29 NO.3100000445,654
30-34 NO.1200000349,593
35-39 NO.3421000 10 62,566
40-44 NO.1110000356,799
45-49 NO.0110100380,673
50-54 NO.0101000269,785
55-59 NO.00000000 0
60-64 NO.00000000 0
65&UP NO.00000000 0
TOT NO.9 10 42100 26 59,543
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | E-3
Active
Year Members
Ended VestedOther End of
September 30AEAEAEAEAAAEYear
2002 3400.100.100.00441.7 25
2003 3600.110.100.02351.3 22
2004 9400.300.000.02241.1 27
2005 3420.600.000.01121.9 26
2006 2411.000.000.01231.8 24
2007 4310.200.000.00221.5 25
2008 5410.100.000.00331.6 26
2009 5410.100.000.00331.6 27
2010 3300.4 1*0.000.0 1*131.4 27
2011 3421.000.000.00222.5 26
2012 2 2 1 1.0 0 0.1 0 0.0 0 1 1 2.5 26
5-yr. Totals
2008-2012 1817 52.610.100.0 12 9.5
Expected
for 2013 0.40.10.0 2.2
A Represents actual number.
E Represents expected number.
* Member retroactively approved for duty disability benefits
NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP
Number
Added Terminations During Year
Year Retirement Retirement Service Total
During Normal Disability Died-in Withdrawal
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | E-4
Year Ended
September 30 No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions
2002 9 205,162 0.1 1,960
2003 2 30,148 2 30,148 11235,310 0.1 2,072
2004 11235,310 0.2 2,683
2005 2 106,731 2 106,731 13342,041 0.2 2,933
2006 1 34,521 1 9,796 0 24,724 13366,765 0.2 3,809
2007 1 43,455 1 43,455 14410,220 0.2 3,922
2008 2 63,781 2 63,781 16474,001 0.2 4,510
2009 16474,001 0.2 5,200
2010 6,319 *1 14,935 (8,616)15465,385 0.2 5,200
2011 2 84,469 0 2 84,469 17549,854 0.2 5,200
2012 2 68,629 **0 2 68,629 19 618,483 0.3 5,761
Expected for
2013 0.2 4,950
*
**Includes member retroactively approved for duty disabililty
On-time adjustment correcting past underpayments
Retired Members and Beneficiary Data
Historical Schedule**
Expected
Added Removed Net Increase End of Year Removals
SECTION F
SUMMARY OF PLAN PROV ISIONS
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | F-1
A. Ordinances:
Plan established under the Code of Ordinances for the City of Atlantic Beach, Florida, Part II, Chapter 2,
Article VI, Division 4 and was most recently amended and restated under Ordinance No. 58-08-34 passed
and adopted on August 11, 2008. The Plan is also governed by certain provisions of Part VII, Chapter 112,
Florida Statutes (F.S.), F. S. 185 and the Internal Revenue Code.
B. Effective Date
December 22, 1975, Restated under Division 4 on July 10, 2000
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a sole employer plan.
E. Eligibility Requirements
All full time sworn City police officers, who normally work more than 1,000 hours annually and are not an
elected officials, temporary or contractual employees, or executives or departments heads who have elected
not to participate, will become members on the date of employment.
F. Credited Service
Service is measured as the total number of years and fractional parts of years, but credited to the nearest
one-twelfth (1/12) of a year. No service will be credited for any periods of employment for which the
member received a refund of their employee contributions.
G. Compensation
Base salary or wages paid for services rendered to the City including longevity pay, overtime pay, cost of
living payments, holiday and personal leave taken and incentive pay. Compensation excludes payments of
unused personal leave, uniform or equipment allowances, extra duty or special detail pay on behalf of a
second party employer, or any reimbursement of expenses.
H. Final Average Compensation (FAC)
Average monthly rate of Compensation during the highest 60 consecutive months of Credited Service out of
the last 120 months preceding the date of termination or retirement.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | F-2
I. Normal Retirement
Eligibility: A participant may retire on the first day of the month coincident with or next following the
earlier of:
(1) 25 years of Credited Service regardless of age, or
(2) age 50 with 20 years of Credited Service, or
(3) age 55 with 10 years of Credited Service, or
(4) age 60 with 5 years of Credited Service.
Benefit: 3.00% of FAC times Credited Service. Benefit is limited to 100% of FAC.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
J. Early Retirement
Eligibility: A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of
age 50 with 10 years of Credited Service.
Benefit: The Normal Retirement Benefit is actuarially reduced by 3% for each year by which the
member’s Early Retirement date precedes the member’s normal retirement age.
Normal Form
of Benefit: 10 year certain and life thereafter; other options are also available.
K. Delayed Retirement
Same as Normal Retirement taking into account compensation earned and service credited until the date of
actual employment termination.
L. Service Connected Disability
Eligibility: Any member who becomes totally and permanently disabled due to a service related injury or
illness and is deemed unable to render useful and efficient service to the City as a police officer
is eligible for a disability benefit.
Benefit: The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits. The minimum for a service connected disability benefit is 42% of FAC.
Normal Form
of Benefit: 10 year certain and life thereafter.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | F-3
M. Non-Service Connected Disability
Eligibility: Any member with 5 or more years of Credited Service who becomes totally and permanently
disabled and is deemed unable to render useful and efficient service to the City as a police
officer is eligible for a disability benefit.
Benefit: The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits. The minimum for a non-service connected disability benefit is 25% of FAC if the
member had at least 8 1/3 years of Credited Service.
Normal Form
of Benefit: 10 year certain and life thereafter.
N. Pre-Retirement Death
Eligibility: Any member with 5 or more years of Credited Service is eligible for a death benefit.
Benefit: Upon the death of a member, the designated beneficiary shall be paid an actuarially reduced
standard ten (10) year certain and life survivor pension notwithstanding that the member
may not have satisfied the conditions for retirement. If there are no beneficiaries designated
by the member, then a benefit shall be paid to the surviving spouse or, if no surviving
spouse, a reduced benefit will be paid to the member’s unmarried children.
If spouse is receiving benefits described above, no children’s benefits are payable.
If spouse is not receiving benefits, children under age 19, or age 23 if an unmarried fulltime
student, will receive equal shares of 50% of the member’s Normal Retirement Benefit under
the Life Annuity option based upon service and FAC as of the date of death.
Normal Form
of Benefit: Payable for the life of the member’s beneficiary or spouse. Children’s benefits are payable
until age 19 or age 23 if an unmarried fulltime student.
O. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
P. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are a Life
Annuity, or the 50%, 66 2/3%, 75% or 100% Joint and Survivor options. A Social Security option is also
available for members retiring prior to the time they are eligible for Social Security retirement benefits.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | F-4
Q. Vested Termination
Eligibility: A participant has earned a non-forfeitable right to Plan benefits after the completion of 5 or
more years of Credited Service.
Benefit: The benefit is the member’s vested portion of the accrued Normal Retirement Benefit as of the
date of termination. Benefit begins on the Normal Retirement date.
Normal Form
of Benefit: 10 year certain and life thereafter; other options are also available.
Member’s terminating employment with less than 5 years of Credited Service will receive a refund of their own
accumulated contributions.
R. Refunds
Eligibility: All members with less than 5 years are eligible. Optionally, vested participants may also
withdraw their contributions in lieu of the deferred benefits otherwise due. Vested members
may delay withdrawal of funds for up to five years.
Benefit: The member who terminates employment receives a lump-sum payment of their employee
contributions.
S. Member Contributions
4.815% of Compensation.
T. Premium Tax Monies
A distribution of casualty insurance premium tax monies collected by the State pursuant to Chapter 185
Florida Statutes.
U. Employer Contributions
The amount determined by the actuary to pay the normal cost and an amortization of the unfunded actuarial
accrued liabilities, along with employee contributions and Chapter 185 monies. Following are contribution
rates per recent valuations:
Plan Year
Beginning CitySec 185Member*Total
10/1/200716.27%6.53%4.82%27.62%
10/1/200816.44%5.49%4.82%26.75%
10/1/200921.07%5.55%4.815%31.44%
10/1/201021.66%4.83%4.815%31.31%
10/1/201130.46%5.21%4.815%40.49%
10/1/201236.69%5.41%4.815%46.92%
* Weighted average of member contribution rates.
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | F-5
V. Cost of Living Increases
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree
benefits.
W. Changes from Previous Valuation
See the Discussion of Valuation Results Section of this report under the Revisions in Benefits heading.
X. Gain-sharing benefits
Not applicable.
Y. Deferred Retirement Option Plan
Eligibility: Upon obtaining Normal or Early Retirement eligibility
All members must make a written election to participate in the DROP.
Benefit: The member’s Credited Service and FAC are frozen upon entry into the DROP. The monthly
retirement benefit as described under Normal Retirement is calculated based upon the frozen
Credited Service and FAC. Benefits for members entering the DROP upon Early Retirement
eligibility will be actuarially reduced as described for Early Retirement.
Maximum
DROP Period: 60 months
Interest
Credited: Earnings to the DROP account will be accordance with the self-directed options selected by
the participant.
Normal Form
of Benefit: Lump Sum or roll-over to a qualified retirement account.
SECTION G
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | G-1
A.Participant Data
Number Included:
Actives 26 26
Service Retirees & Beneficiaries 15 14
Disability Retirees 4 3
Terminated Vested Members 4 5
Total Members and Beneficiaries 49 48
Total Annual Payroll $1,548,109 $1,605,814
Expected Annual Payroll in Contribution Year 1,641,918 1,703,120
Total Annualized Benefits
Service Retirees & Beneficiaries 544,324 493,822
Disability Retirees 74,159 56,032
Terminated Vested Members 41,865 55,564
B.Assets (Market Value)
Cash and Short Term Investments 176,248 258,052
Treasury and Agency Bonds & Notes 2,119,032 1,813,241
Corporate Bonds 1,209,542 1,377,738
Common & Preferred Stocks 3,507,733 2,614,717
Mutual Fund Bonds 0 0
Mutual Fund Stocks 0 0
Other Securities 93,496 99,848
Net Receivables & Payables (171,358)(107,191)
Total 6,934,693 6,056,405
Actuarial Value 6,880,124 6,305,176
Assets include:
Accumulated active member contributions 381,408 333,818
(with interest if applicable)
C.Actuarial present value of accrued benefits
(i)Vested accrued benefits
Retired members and benefitciaries (incl DROP)6,557,492 5,782,820
Terminated members 194,822 216,786
Active members (includes non-forfeitable members
contributions of 381,408 and 333,818)2,188,725 2,206,538
Total 8,941,039 8,206,144
(ii)Non-vested accrued benefits 127,159 202,124
(iii)Total actuarial p.v. of accrued benefits 9,068,198 8,408,268
(iv)Actuarial p.v. of accrued benefits at begin. of year 8,408,268 7,876,256
(v)Changes attributable to:
Amendments none none
Assumption change none none
Operation of decrements 1,264,867 1,051,251
Benefit payments (604,937)(519,239)
Other (Method Change)0 0
(vi)Net change 659,930 532,012
(vii)Actuarial p.v. of accr. benefits at end of year 9,068,198 8,408,268
September 30, 2011September 30, 2012COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | G-2
D.Liabilities- Actuarial Present Value of Future Benefits
1. Active Members
Service Retirement Benefits $5,649,742 $5,958,209
Vesting Benefits 436,838 444,331
Disability Benefits 222,369 230,062
Preretirement Death Benefits 48,102 50,614
Return of Member Contributions 76,094 77,178
Total Actives 6,433,145 6,760,394
2. Inactive Members
Service Retirees & Beneficiaries 5,799,923 5,241,594
Disability Retirees 757,569 541,226
Terminated Vested Members 194,822 216,786
Total Inactive Members 6,752,314 5,999,606
3. Total Present Value for All Members 13,185,459 12,760,000
Total Present Value of:
Future Salaries 13,864,778 14,472,886
Future Employee Contributions 668,282 697,593
Future Contributions from Other Sources 5,637,053 5,757,231
Derivation of Current Employer
Unfunded Actuarial Accrued Liability (UAAL)
a.Total UAAL for Prior Valuation Date $3,759,831 $3,284,921
b.Employer Normal Cost for this period 270,003 257,142
c.Interest acccrued on (a) and (b)311,586 273,080
d.Contributions for this period 628,898 487,032
e.Interest accrued on (d)25,156 19,481
f.Changes due to:
Assumptions 0 0
Plan Amendment 0 0
Cost Method (Asset Method)0 0
Actuarial (Gain) Loss 32,697 451,201
g.Total Current UAAL: a+b+c-d-e+f 3,720,063 3,759,831
September 30, 2011COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2012
Present Value of Accrued Benefits
Vested 132,553 209,718
Non-Vested 9,179,344 8,427,042
Total 9,311,897 8,636,760
Market Value of Assets 6,934,693 6,056,405
Funded Ratio 74.5%70.1%
September 30, 2012Present Value of Accrued Benefits
at FRS Discount Rate September 30, 2011
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | G-3
Date
Item
Description
Years
Remaining
Amortization
Payment Original Amount
9/30/1993Original 1($9,686)
9/30/1998Experience Gain 1(17,138)(95,019)
9/30/1999Experience Gain 2(20,969)(117,618)
9/30/2000Experience Loss 317,584103,871
9/30/2001Experience Gain 4 (223)(1,389)
9/30/2002Experience Loss 519,517128,212
9/30/2003Experience Loss 649,146339,563
9/30/2004Experience Loss 728,642207,808
9/30/2005Experience Loss 837,740287,225
9/30/2006Experience Gain 9(51,597)(411,559)
9/30/2007Experience Loss 1016,507137,906
9/30/2008Experience Loss 1135,220308,022
9/30/2009Experience Loss 1233,841323,582
9/30/2010Experience Gain 13(15,421)(154,731)
9/30/2011Experience Loss 1442,453451,201
9/30/2012Experience Loss 153,04232,697
9/30/1993Benefit Changes 1166,268442,232
9/30/1994Benefit Changes 12(1,804)(12,597)
9/30/1996Benefit Changes 144,70035,914
9/30/1997Benefit Changes 151,113 8,892
9/30/2001Benefit Changes 198,54281,627
9/30/2003Benefit Changes 2112,991144,006
9/30/2007Benefit Changes 25(3,931)(49,157)
9/30/1995Assumption/Method Change1344,297323,633
9/30/1997Assumption/Method Change1529,003231,795
9/30/2009Assumption/Method Change272,89840,694
9/30/2010Assumption/Method Change2842,829630,507
TOTAL $375,564$3,167,921
(827)
88,339
260,522
11,961
254,236
32,697
572,072
(16,598)
48,216
(381,874)
431,660
$3,720,063
132,596
106,548
(56,930)
(40,895)
(17,138)
172,913
Original and Current Unfunded Actuarial Accrued Liabilities
Current Unfunded
($9,686)
50,170
304,048
171,656
311,743
311,434
654,376
43,554
(150,276)
435,546
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | G-4
E.Pension Cost
Entry Age Normal Cost for:
Service Retirement Benefits $232,620 $242,113
Vesting Benefits 22,001 23,295
Disability Benefits 14,029 14,607
Preretirement Death Benefits 2,239 2,388
Return of Member Contributions 15,711 16,460
Total Actives 286,600 298,863
Administrative Expenses 24,913 37,628
Expected Member Contributions 73,610 76,872
Total Employer Normal Cost 237,903 259,619
Payment Required to Amortize Unfunded Actuarial
Accrued Liability 375,564 278,845
Total Contribution at Valuation Date 613,467 538,464
Total Contribution Adjusted for Frequency of
Payments and Interest to Next Following Fiscal Year 691,255 606,741
% of Expected Payroll 42.10%35.63%
Amount Expected to be Contributed by Members 79,058 82,005
% of Expected Payroll 4.815%4.815%
F.Past Contributions- For the Fiscal Years Ended September 30 of 2011 and 2012:
Required Contribution Determined in the Valuation as ofSeptember 30, 2010September 30, 2009
by the Plan Sponsor $628,909 $487,032
by Members $83,708 $88,530
Actual Contribution for the Fiscal Year ended September 30, 2012September 30, 2011
by the Plan Sponsor 628,898 $487,032
by Members $75,667 $79,200
G.Net experience (gain) loss during year:$32,697 $451,201
H.1. Plan to Amortize Unfunded Actuarial Accrued Liability
20 year funding of the Original Unfunded Actuarial Accrued Liability, 15 year funding of any
Gains or Losses and 30 year of adjustments due to benefit or assumption changes.
2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (UAAL)
Year Projected UAAL
2013 $3,612,066
2014 3,455,052
2015 3,249,929
2016 3,036,290
2017 2,792,869
2022 1,626,532
2028 716,164
2030 617,335
2034 404,678
2035 357,262
3. Action taken since last actuarial valuation.
Contribution sufficient to satisfy the total required contribution.
September 30, 2011COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2012
City of Atlantic Beach Police Officers’
Retirement System
9/30/2012 Actuarial Valuation | G-5
I.1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized)
ActualAssumed
0.0%6.4%
3.8%7.4%
(0.8)%7.6%
2. Three-Year Comparison of Investment Return (Actuarial Value)
ActualAssumed
4.7%8.0%
2.2%8.0%
7.9%8.0%
3. Average Annual Growth in Covered Payroll, Last Ten Years (if applicable)
Total % Increase Last Ten Years29.55%
Annual % Increase 2.62%
Thirty-year Forecast 4.00%
J.Benefits and Expenses of Plan not Explicitly or Implicitly Provided in Valuation
NONE
K.Trends not taken into Account but which are likely to Result in Future Cost Increases
NONE
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
Year Ended
Total Covered PayrollValuation Date
9/30/2010
9/30/2011
9/30/2012
Year Ended
9/30/2010
9/30/2011
9/30/2012
9/30/2010
9/30/2011
1,254,264
9/30/2005
1,476,074
9/30/2006
1,696,746
9/30/2002 $1,194,950
1,129,034
1,360,051
1,402,444
1,639,155
1,605,814
1,548,109
9/30/2008
9/30/2007
9/30/2003
9/30/2004
1,452,926
9/30/2012
9/30/2009
CITY OF ATLANTIC BEACH GENERAL EMPLOYEES’
RETIREMENT SYSTEM
ACTUARIAL VALUATION REPORT
SEPTEMBER 30, 2012
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING
SEPTEMBER 30, 20 14
April 2, 2013
The Board of Trustees
City of Atlantic Beach
General Employee Retirement System
Atlantic Beach, Florida
Dear Board Members:
We are pleased to submit herein our September 30, 2012 Actuarial Valuation Report for the City of Atlantic Beach
General Employees’ Retirement System. The contribution results apply to the Plan Year ending September 30,
2013 and to the City's fiscal year ending September 30, 2014.
This report was prepared at the request of the Board of Trustees and is intended for use by the Pension Plan and
those designated or approved by the Board of Trustees. This report may be provided to parties other than the
Pension Plan only in its entirety and only with the permission of the Board of Trustees.
The purpose of the valuation is to measure the Plan’s funding progress, to determine the employer contribution rate
for the fiscal years ending September 30, 2014 and to determine the actuarial information for Governmental
Accounting Standards Board (GASB) Statement No. 25 and No. 27.
This report should not be relied on for any purpose other than the purpose described above.
The developed findings included in this report consider data or other information through September 30, 2012.
Future actuarial measurements may differ significantly from the current measurements presented in this report due
to such factors as the following: plan experience differing from that anticipated by the economic or demographic
assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the
natural operation of the methodology used for these measurements (such as the end of an amortization period or
additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or
applicable law.
The calculations are based upon assumptions regarding future events, which may or may not materialize. They are
also based upon current plan provisions that are outlined in the report. If you have reason to believe that the
assumptions that were used are unreasonable, that the plan provisions are incorrectly described, or that conditions
have changed since the calculations were made, you should contact the author of this report prior to relying on
information in the report.
The valuation was based upon information furnished by the City, concerning Plan benefits, financial transactions,
plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and
year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the City.
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements
The Board of Trustees
April 2, 2013
Page 2
Gabriel, Roeder, Smith and Company
and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and
practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into account in the valuation. All known
events or trends which may require a material increase in plan costs or required contribution rates have been taken
into account in the valuation.
The signing actuaries are independent of the plan sponsor.
Gabriel, Roeder, Smith & Company will be pleased to answer questions pertaining to the valuation and to meet
with you to review this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
James J. Rizzo, ASA, MAAA
Senior Consultant & Actuary
Piotr Krekora, ASA, MAAA
Senior Actuarial Analyst
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements
and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and
practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into account in the valuation. All known
events or trends which may require a material increase in plan costs or required contribution rates have been taken
into account in the valuation.
Signature
April 2, 2013
Date
11-03355
Enrollment Number
TABLE OF CONTENTS
SECTION TITLE PAGE
A EXECUTIVE SUMMARY A-1
B VAL UATION RESULTS
1. Participant Data B-1
2. Annual Required Contribution B-2
3. Actuarial Value of Benefits and Assets B-3
4. Financial Soundness B-4
5. Actuarial Gains and Losses B-8
6. Recent History of Valuation Results B-12
7. Recent History of Required and Actual Contributions B-14
8. Actuarial Assumptions and Cost Method B-15
C PENSION FUND INFORMA TION
1. Summary of Assets C-1
2. Summary of Fund's Income and Disbursements C-2
3. Reconciliation of DROP Accounts C-3
4. Actuarial Value of Assets C-4
5. Investment Rate of Return C-6
D FINANCIAL ACCOUNTING INFORMATION
1. FASB No. 35 D-1
2. GASB No. 25 D-2
3. GASB No. 27 D-4
E MISCELLANEOUS INFORM ATION
1. Reconciliation of Membership Data E-1
2. Statistical Data E-2
F SUMMARY OF PLAN PROV ISIONS F-1
G COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
G-1
Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this communication (or any
attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose
of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) marketing or recommending to
another party any tax-related matter addressed within. Each taxpayer should seek advice based on the
individual’s circumstances from an independent tax advisor.
SECTION A
EXECUTIVE SUMMARY
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | A-1
EXECUTIVE SUMMARY
Comparison of Required Employer Contributions
The following is a comparison of required contributions developed in this year's and the last actuarial valuations:
Gross Contribution Requirement $1,295,022$1,242,632$52,390
As % of Expected Payroll 32.88%31.34%1.54%
Expected Employee Contribution $196,932$198,240$(1,308)
As % of Covered Payroll 5.00%5.00%0.00%
Required Employer Contribution
(If Made in Equal Monthly Installments)$1,098,090$1,044,392$53,698
As % of Covered Payroll 27.88%26.34%1.54%
Required Employer Contribution
(If Made in Whole at the Beginning of the Year)$1,052,482 1,001,014 51,468
As % of Covered Payroll 26.72%25.25%1.47%
IncreaseBased on 9/30/11
For FYE 9/30/2014 For FYE 9/30/2013
Based on 9/30/12
(Decrease)Valuation Valuation
Minimum Required Contribution
As illustrated in the preceding chart, the City contribution necessary to support the current benefits for the General
Employees is $1,098,090 for the fiscal year ending September 30, 2014. Please note that the Required Employer
Contribution for that fiscal year is developed assuming it would be deposited in monthly intervals throughout the
year.
Revisions in Benefits
There were no revisions in benefits for the current year. Pending changes being considered would not have an
effective date until many months following the October 1, 2012 valuation date. The current financial and actuarial
effects of any such amendment, if adopted in the next few months, would be reflected in an Actuarial Impact
Statement that will be prepared shortly. Depending on the nature of the amendment, the Minimum Required
Contribution for the fiscal year ending September 30, 2014 may change from what is described herein.
Revisions in Actuarial Assumptions and Methods
There were no revisions in actuarial assumptions or methods for the current year.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | A-2
Actuarial Experience
Actuarial gains occur in a year whenever the experience of the plan is better than was assumed. For example, if
investment performance were better than the level being assumed in the actuarial valuation and costing process,
then an actuarial gain results and would have the effect of lowering the Minimum Required Contribution for the
year. Whenever more employees terminate employment than were assumed would terminate, fewer employees
are then expected to actually retire from the City, resulting in an actuarial gain for the plan.
Actuarial losses occur in a year whenever the experience of the plan is worse than was assumed. In the examples
given above, if the reverse were to occur, then actuarial losses would result. As another example, if salaries
increased in one year higher than was assumed, or more new employees were hired than terminated, an actuarial
loss would occur.
The actuarial valuation cost method which determines the Minimum Required Contribution is designed to produce
contribution requirements which remain level as a percent of payroll whenever the experience of the plan matches
the actuarial assumptions used. Contribution Requirements are also level whenever actuarial losses exactly offset
actuarial gains.
Analysis of Change in Employer Contribution
The components of change in the actuarially required contribution are as follows:
Contribution rate last year 26.34%
Payment on UAAL 3.07
Experience gain/loss (1.03)
Change in administrative expense (0.29)
Change in normal cost before expenses (0.21)
Revision in benefits 0.00
Revision in assumptions/methods 0.00
Contribution rate this year 27.88%
There was a net actuarial gain this year which is due to the lower than expected salary increases (1.2% actual vs.
5.9% assumed). Administrative expenses were less than the previous year by 0.21% of pay.
Nevertheless, the Annual Required Contribution increased this year, due to a decrease in the 10-year average
payroll growth rate (from 4.26% to 2.98%). This reduction had an increasing effect on the amount of amortization
component of the contribution. The covered payroll is assumed to grow at the rate of 4% in the long term and
this assumption has been used in the process of developing amortization payments in the past. However, in
accordance with the requirements of Ch. 112.64(5)(a), F.S. this assumption needs to be limited by the actual
average annual payroll growth based on the last 10 years. Consequently, due to a decrease in the 10-year
average, the amortization payment of the UAAL increased this year, offsetting the actuarial gains described
previously, which ultimately increased the contribution.
The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous
information and statistics, and a summary of plan provisions.
SECTION B
VALUATION RESULTS
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-1
ACTIVE MEMBERS
Number 84 83
Covered Annual Payroll (non-DROP)$3,713,609$3,738,277
Average Annual Pay $44,210$45,039
Average Age 50.7 50.9
Average Past Service 10.1 9.9
Average Age at Hire 40.7 41.0
RETIREES, BENEFICIARIES, & DROP MEMBERS
Number 47 43
Annual Benefits $629,722$552,964
Average Annual Benefit $13,398$12,860
Average Age 68.7 68.8
DISABILITY RETIREES
Number 4 4
Annual Benefits $56,377$56,377
Average Annual Benefit $14,094$14,094
Average Age 60.5 59.5
TERMINATED VESTED MEMBERS
Number 12 11
Annual Benefits $121,445$126,619
Average Annual Benefit $10,120$11,511
Average Age 52.2 52.3
PARTICIPANT DATA
September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-2
A.Valuation Date
B.ARC to Be Paid During
Fiscal Year Ending 9/30/2014 9/30/2013
C.Assumed Date(s) of Employer Contrib.Monthly Monthly
D.Annual Payment to Amortize
Unfunded Actuarial Liability
if Paid on the Valuation Date $626,814$559,924
E.Employer Normal Cost
(including Administrative Expenses)
if Paid on the Valuation Date 347,707 366,941
F.ARC if Paid on the Valuation
Date: D+E 974,521 926,865
G.ARC Adjusted for Frequency of
Payments and Interest to Required Time
of Contribution 1,098,090 1,044,392
H.Payroll Expected for Contribution Year 3,938,639 3,964,802
I.ARC as % of Covered Payroll in
Contribution Year: G ÷ H 27.88%26.34%
J.Required Employer Contribution (REC)
if Paid on the First Day of the Contribution Year 1,052,482 1,001,014
ANNUAL REQUIRED CONTRIBUTION (ARC)
September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-3
A.Valuation Date
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits $12,222,823$12,213,956
b. Vesting Benefits 339,511 347,811
c. Disability Benefits 300,331 308,879
d. Preretirement Death Benefits 297,034 299,659
e. Return of Member Contributions 107,030 99,017
f. Total 13,266,729 13,269,322
2.Inactive Members
a. Service Retirees & Beneficiaries 5,972,648 5,239,771
b. Disability Retirees 513,152 523,906
c. Terminated Vested Members 785,507 860,722
d. Total 7,271,307 6,624,399
3. Total for All Members 20,538,036 19,893,721
C.Actuarial Accrued (Past Service)
Liability per GASB No. 25 16,797,167 16,053,066
D.Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 14,281,951 13,348,960
E.Plan Assets
1.Market Value 12,693,827 10,448,470
2. Actuarial Value 12,513,031 11,119,463
F.Actuarial Present Value of Projected
Covered Payroll 29,036,614 29,390,562
G.Actuarial Present Value of Projected
Member Contributions 1,451,831 1,469,528
ACTUARIAL VALUE OF BENEFITS AND ASSETS
September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-4
FINANCIAL SOUNDNESS
The purpose of this portion of the Report is to provide certain measures which indicate the financial soundness of
the program. These measures relate to short term solvency and long term solvency.
The various percentages listed in this Section as of a single valuation date are not that significant. What is
significant, however, is the trend of the rates over a period of years. It is also important to keep in mind that each
time benefits or assumptions are revised; actuarial liabilities are created or diminished. Any newly created
liabilities are financed systematically over a period of future years. All actuarially computed values in this analysis
are based on the actuarial assumptions utilized in the respective years' actuarial valuations.
Short Term Solvency
The ultimate test of financial soundness is the program's ability to pay all promised benefits when due. The
program's progress in accumulating assets to pay all promised benefits can be measured by comparing the market
value of assets with:
1. The actuarial present value of projected benefits payable to those already receiving benefits and to vested
terminations, and
2. The actuarial present value of accrued benefits payable to active participants. This amount is based on
benefits earned to date without future credited service or salary increases.
The total of the two items should generally be fully covered by assets. That portion of the total of the two items
covered by assets should increase over time. Often assets continue to grow beyond the actuarial present value of
these two items.
Increases in benefits will, of course, adversely affect the trend in the years when such increases are first reflected
in the actuarial values. Although different actuarial assumptions would be used in the event of a termination of the
program, this test shows how much of the benefits accrued to date might be covered by assets in the event of a plan
freeze using the valuation assumptions.
1.Accumulated Contributions
of Active Members $1,296,875 $1,211,505$1,120,281
2.APV of Projected Benefits in
Pay Status and for Vested
Terminations 7,271,3076,624,3995,756,281
3.APV of Accrued Benefits for
Active Participants
(Employer Portion)5,713,769 5,513,056 5,350,971
4.Total 14,281,95113,348,96012,227,533
5.Market Value of Assets 12,693,82710,448,47010,417,807
6.Assets as % of Total 89%78%85%
General Employees
9/30/12 9/30/11 9/30/10 *
*Reflects change in benefits, methods or assumptions.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-5
0%
100%
200%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2009 2010 2011 2012
Ra
t
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Mi
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s
Actuarial Valuation Date (September 30)
Ratio of Market Value of Assets to
Present Value of Accrued Benefits
Market Value of Assets PV Accrued Benefits Ratio
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-6
Long Term Solvency
Over the longer term, the solvency of an ongoing plan can be measured by comparing the Actuarial Value of
Assets to an amount known as the Actuarial Accrued Liability (AAL) under the Entry Age Actuarial Cost Method.
This item has often been called the "past service liability". Its derivation differs from the short term solvency value
derivation in several ways. The short term solvency liability number is based on the benefits accrued to date by the
participants while the long term solvency liability number is based on what the normal costs accrued to date by the
employer. In addition, the short term solvency asset number is the market value, while the long term asset number
is the actuarial value of assets. As in the case of the short term solvency values, the AAL is affected immediately
by any revisions in benefits or assumptions. The accumulation of assets to equal the AAL can be considered a
long range funding goal.
9/30/02 5,747 7,479 77 %
9/30/03*5,951 8,186 73
9/30/04 6,273 9,005 70
9/30/05*6,802 9,822 69
9/30/06*7,609 10,505 72
9/30/07 8,594 11,668 74
9/30/08*9,209 12,624 73
9/30/09 9,841 13,682 72
9/30/10*10,618 15,180 70
9/30/11 11,119 16,053 69
9/30/12 12,513 16,797 74
Valuation
Date
Actuarial Value of
Assets
(in Thousands)
Actuarial Accrued
Liability
(in Thousands)
% of AAL
Covered by
Assets
*Reflects change in benefits, actuarial assumptions and/or asset method.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-7
0%
50%
100%
150%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
2007 2008 2009 2010 2011 2012
Ra
t
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Mi
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s
Actuarial Valuation Date (September 30)
Actuarial Assets Accrued Liability Ratio
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-8
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary
increases, and other factors have been based on long range trends and expectations. Actual experience can vary
from these expectations. The variance is measured by the gain and loss for the period involved. If significant long
term experience reveals consistent deviation from what has been expected and that deviation is expected to
continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as
follows:
1.Last Year's UAAL $4,933,603
2.Last Year's Employer Normal Cost 381,619
3.Last Year's Actual City Contibution 998,516
4.Interest at the assumed rate on:
a. 1 for one year 394,688
b. 2 half a year 15,265
c. 3 from dates paid 39,941
d. a + b - c 370,012
5.This Year's Expected UAAL
1 + 2 - 3 + 4d 4,686,718
6.This Year's Actual UAAL (before any
changes in benefits or assumptions)4,284,136
7.Net Actuarial Gain (Loss): (5) - (6)402,582
8.Gain (Loss) due to investments 52,511
9.Gain (Loss) due to other sources 350,071
10.Amortization Payment Due to Gain (Loss)36,664
Derivation of Experience Gain (Loss)
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-9
Net actuarial gains in previous years have been as follows:
Year Ended
9/30/1997 252,238 252,238
9/30/1998 58,540 310,778
9/30/1999 108,195 418,973
9/30/2000 (55,470) 363,503
9/30/2001 (18,145) 345,358
9/30/2002 (280,151) 65,207
9/30/2003 (355,383) (290,176)
9/30/2004 (395,109) (685,285)
9/30/2005 (364,305) (1,049,590)
9/30/2006 131,266 (918,324)
9/30/2007 (170,383) (1,088,707)
9/30/2008 (178,856) (1,267,563)
9/30/2009 (482,223) (1,749,785)
9/30/2010 (171,358) (1,921,143)
9/30/2011 (364,563) (2,285,706)
9/30/2012 402,582 (1,883,124)
Actuarial Gain (Loss)
Cumulative Gain
(Loss)
($3)
($2)
($1)
$0
$1
$2
$3
($3)
($2)
($1)
$0
$1
$2
$3
M
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Plan Year End
Actuarial Gain (+) or Loss (-)
Gain or Loss Cumulative
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-10
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so it is
important that they are in line with the actual experience. The following table shows the history of actuarial fund
earnings and salary increase rates compared to the assumed rates:
9/30/2002 1.5 %8.0 %4.4 %5.9 %
9/30/2003 1.7 8.0 4.5 5.9
9/30/2004 2.3 8.0 7.7 5.8
9/30/2005 4.9 8.0 10.8 5.8
9/30/2006 8.5 8.0 4.1 5.9
9/30/2007 10.0 8.0 9.8 5.9
9/30/2008 4.9 8.0 4.9 5.8
9/30/2009 4.2 8.0 6.1 5.7
9/30/2010 5.0 8.0 (0.4)6.0
9/30/2011 2.1 8.0 0.5 6.0
9/30/2012 8.0 8.0 1.2 5.9
Average 4.8 %---4.8 %---
Assumed
Salary Increases
Actual
Investment Return
Year Ending Actuarial Assumed
The actual investment return rates shown above are based on the actuarial value of assets. The actual salary
increase rates shown above are the increases received by those active members who were included in the actuarial
valuations both at the beginning and the end of each year.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-11
-5%
0%
5%
10%
15%
-5%
0%
5%
10%
15%
Plan Year End
History of Investment Return -Actuarial Value of Assets
Actual Assumed
-5%
0%
5%
10%
15%
-5%
0%
5%
10%
15%
Plan Year End Compared to Previous Year
History of Salary Increases
Actual Assumed
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|
B-12
Active
Members
Inactive
Members
9/30/02 8340 $ 2,768 $ 5,747 $ 1,732 $ 267 9.66 %
9/30/03 *8441 2,856 5,951 2,235 284 9.93
9/30/04 8642 3,051 6,273 2,732 300 9.82
9/30/05 *8245 3,182 6,802 3,020 235 7.37
9/30/06 *8148 3,195 7,609 2,896 233 7.28
9/30/07 8251 3,476 8,594 3,074 252 7.26
9/30/08 *8352 3,727 9,209 3,415 269 7.22
9/30/09 8750 4,019 9,841 3,841 314 7.82
9/30/10 *8451 3,83810,618 4,562 364 9.49
9/30/11 8358 3,73811,119 4,934 367 9.82
9/30/12 84 63 3,71412,513 4,284 348 9.36
Actuarial Value of
Assets
(in Thousands)% of Payroll
Amount
(in Thousands)
UAAL
(in Thousands)
RECENT HISTORY OF VALUATION RESULTS
Number of Employer Normal Cost
Valuation
Date
Reported Annual
Payroll
(in Thousands)
* Reflects a change in assumptions or benefits.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-13
0
25
50
75
100
125
150
Actuarial Valuation Date
Recent History of Number of Members
Active Members Inactive Members
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
Mi
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Actuarial Valuation Date
Recent History of Covered Annual Payroll
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-14
9/30/06 *9/30/08 $456,96513.62 %$457,005
9/30/079/30/09 528,42814.03 528,426
9/30/08 *9/30/10 599,29214.84 599,292
9/30/099/30/11 722,76916.60 722,769
9/30/10 *9/30/12 998,51624.53 998,516
9/30/119/30/131,044,39226.34 ---
9/30/129/30/141,098,09027.88 ---
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
Required Contributions
Actual
Contributions
Valuation
End of Year To
Which
Valuation
Applies
Amount
% of Expected
Payroll
* Reflects a change in assumptions or benefits.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-15
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - The actuarial cost method is a procedure for allocating the actuarial present value of
benefits and expenses to time periods. Normal cost and the allocation of benefit values between service
rendered before and after the valuation date were determined using the Entry-Age Actuarial Cost Method.
The entry-age actuarial cost method allocates the actuarial present value of each member's projected benefits on
a level basis over the member's pensionable compensation between the entry age of the member and the
estimated active status exit ages. The portion of the actuarial present value allocated to the valuation year is
called the normal cost. The portion of the actuarial present value not provided for by the actuarial present value
of future normal costs is called the actuarial accrued liability. Deducting accrued assets from the actuarial
accrued liability determines the unfunded actuarial accrued liability.
Financing of Unfunded Actuarial Accrued Liabilities - The unfunded actuarial accrued liability was financed
as a level percent of member payroll.
Actuarial Value of Assets - The Actuarial Value of Assets phases in the difference between the expected and
actual return on market value of assets at the rate of 25% per year. The Actuarial Value of Assets will be
further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the Market Value
of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when
investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market
Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will
tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-16
Economic Assumptions
The investment return rate assumed in the valuation is 8.0% per year, compounded annually (net of investment
expenses).
The wage inflation rate assumed in this valuation was 4.0% per year. The Wage Inflation Rate is defined to be
the portion of total pay increases for an individual that are due to macroeconomic forces including productivity,
price inflation, and labor market conditions. The wage inflation rate does not include pay changes related to
individual merit and seniority effects. The price inflation rate assumed in this valuation was 3.00% per year.
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree benefits.
Ad-hoc COLA increases have been adopted in the past upon approval by the City. Most recently, such
increases have been granted in 1987, 1996 and 2001. No assumptions are made regarding future adjustments.
Any such increases will be recognized as they occur.
The total rate of return is defined as earnings resulting from interest, dividends, realized gains (losses) and
unrealized appreciation (depreciation) less investment-related expenses, all divided by the beginning market
value of the fund, adjusted for cash flow during the year. Total rate of return is as the assumed to be 8.0% per
year, net of investment-related expenses.
The rates of salary increases used in the valuation are illustrated in the following table (rates below include 3%
price inflation).
Annual Rates for Salary Increase for Sample Ages
Age:2030405060
Expected Increase 14.0%8.7%6.5%6.0%5.5%
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-17
Demographic Assumptions
The mortality table was the RP-2000 Healthy White Collar tables for males and females, as projected from the
year 2000 using Projection Scale AA.
Ages Men Women Men Women
45 $142.54 $144.21 36.75 39.03
50 137.46 139.60 32.00 34.22
55 130.46 133.31 27.31 29.50
60 121.38 125.21 22.80 24.94
65 110.29 115.34 18.56 20.66
70 97.44 103.87 14.69 16.73
75 82.54 90.81 11.18 13.18
80 66.51 76.26 8.15 10.01
$1 Monthly for Life Expectancy (Years)
RP2000 Table Projected to Valuation Year
Value of Future Life
This assumption is used to measure the probabilities of each benefit payment being made after retirement. For
active members, the probabilities of dying before retirement were based upon the same mortality table as
members dying after retirement. All deaths before retirement are assumed to be non-service connected.
The rates of retirement used to measure the probability of eligible members retiring under normal and early
retirement eligibility during the next year were as follows:
Retirement Percent of Eligible
Ages Employees Retiring
55 15%
56 10%
57 10%
58 10%
59 10%
60 20%
61 15%
62 15%
63 15%
64 20%
65 30%
66 40%
67 50%
68 50%
69 50%
70 100%
Normal or Early Reitrement/DROP
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-18
Rates of separation from active membership were as shown below (rates do not apply to members eligible to
retire and do not include separation on account of death or disability). This assumption measures the
probabilities of members remaining in employment.
SampleYears of
AgesServiceAssumptions
ALL 0 28.61%
1 20.78%
2 16.94%
3 11.67%
4 7.41%
25 5 & Over3.70%
30 3.50%
35 3.20%
40 3.00%
45 2.70%
50 2.20%
55 2.00%
60 2.00%
Rates of Separationg from Active Employment
Rates of disability among active members (0% of disabilities are assumed to be service-connected).
Sample
AgesMenWomen
200.07%0.07%
250.09%0.09%
300.10%0.10%
350.14%0.14%
400.21%0.21%
450.32%0.32%
500.52%0.52%
550.92%0.92%
601.53%1.53%
Percent Becoming Disabled
Within Next Year
The mortality table was set forward ten years from the age at disability for projecting disability costs.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-19
Miscellaneous and Technical Assumptions
Administrative & Investment
Expenses
Annual administrative expenses are assumed to be equal to the actual
expenses paid during the preceding fiscal year. Investment expenses
are offset against gross investment income. Assumed administrative
expenses are added to the Normal Cost.
Benefit Service Exact fractional service is used to determine the amount of benefit
payable.
Decrement Operation Disability and mortality decrements do not operate during the first 5
years of service. Disability and separation do not operate during
retirement eligibility.
Decrement Timing Decrements of all types are assumed to occur at mid-year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures Vested members who terminate with a benefit worth less than 100%
of their own accumulated contributions were assumed to forfeit their
vested benefit.
Incidence of Contributions Employer contributions are assumed to be received in 12 equal
monthly installments. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
Marriage Assumption 80% of members are assumed to be married for purposes of death-in-
service benefits. Male spouses are assumed to be three years older
than female participants and female spouses are assumed to be three
years younger than male participants for active member valuation
purposes.
Normal Form of Benefit The normal form of benefit is a life annuity.
Pay Increase Timing Beginning of fiscal year. This is equivalent to assuming that reported
pays represent the actual amount paid during the previous fiscal year.
Service Credit Accruals It is assumed that members accrue one year of service credit per year.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | B-20
GLOSSARY OF TERMS
Actuarial Accrued Liability The difference between (i) the actuarial present value of future plan benefits,
and (ii) the actuarial present value of future normal cost. Sometimes referred to
as “accrued liability” or “past service liability.”
Accrued Service The service credited under the plan which was rendered before the date of the
actuarial valuation.
Actuarial Assumptions Estimates of future plan experience with respect to rates of mortality, disability,
turnover, retirement, rate or rates of investment i ncome and salary increases.
Decrement assumptions (rates of mortality, disability, turnover and retirement)
are generally based on past experience, often modified for projected changes in
conditions. Economic assumptions (salary increases and investment income)
consist of an underlying rate in an inflation-free environment plus a provision
for a long-term average rate of inflation.
Actuarial Cost Method A mathematical budgeting procedure for allocating the dollar amount of the
“actuarial present value of future plan benefits” between the actuarial present
value of future normal cost and the actuarial accrued liability. Sometimes
referred to as the “actuarial funding method.”
Actuarial Equivalent A single amount or series of amounts of equal value to another single amount
or series of amounts, computed on the basis of the rate(s) of interest and
mortality tables used by the plan.
Actuarial Present Value The amount of funds presently required to provide a payment or series of
payments in the future. It is determined by discounting the future payments at a
predetermined rate of interest, taking into account the probability of payment.
Amortization Paying off an interest-bearing liability by means of periodic payments of
interest and principal, as opposed to paying it off with a lump sum payment.
Experience Gain (Loss) A measure of the difference between actual experience and that expected based
upon a set of actuarial assumptions during the period between two actuarial
valuation dates, in accordance with the actuarial cost method being used.
Normal Cost The annual cost assigned, under the actuarial funding method, to current and
subsequent plan years. Sometimes referred to as “current service cost.” Any
payment toward the unfunded actuarial accrued liability is not part of the
normal cost.
Reserve Account An account used to indicate that funds have been set aside for a specific
purpose and is not generally available for other uses.
Unfunded Actuarial
Accrued Liability
The difference between the actuarial accrued liability and valuation assets.
Sometimes referred to as “unfunded accrued liability.”
Valuation Assets The value of current plan assets recognized for valuation purposes. Generally
based on market value plus a portion of unrealized appreciation or depreciation.
SECTION C
PENSION FUND INFORMA TION
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-1
Cash and Securities - Market Value
Cash and Cash Equivalents $59,926 $21,344
Short Term Investments 771,377 509,803
Treasury and Agency Bonds & Notes 2,090,713 2,260,875
Corporate Bonds 0 0
Common & Preferred Stocks 7,632,876 5,702,213
Pooled Equity Funds 0 0
Mutual or Pooled Bond Funds 2,131,912 0
Mutual Equity Funds 0 1,945,666
Other Securities - Participant Directed 129,591 212,114
Total 12,816,395 10,652,015
Receivables and Accruals
Member Contribution 0 0
Additional Employer Contribution 0 0
Interest and Dividends 7,241 8,603
Interest Deposit for Late Contribution 0 0
Total 7,241 8,603
Payables
Benefits-DROP Reserve 129,809 212,148
Lump Sum Distributions 0
Expenses 0 0
Other 0 0
Total 129,809 212,148
Net Assets - Market Value $12,693,827 $10,448,470
SUMMARY OF ASSETS
9/30/2012 9/30/2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-2
Market Value at Beginning of Period $10,448,470$10,417,807
Income
Member Contributions 186,326 188,403
State Contributions 0 0
Employer Contribution 998,516 722,769
Interest and Dividends 299,511 290,073
Realized and Unrealized Gain (Loss)1,520,313 (470,932)
Total Income 3,004,666 730,313
Disbursements
Monthly Benefit Payments 655,424 583,857
DROP Payments Held in Reserve 0 0
Lump Sum Distributions 0 0
Refund of Contributions 7,273 5,661
Investment Related Expenses 64,908 67,877
Other Administrative Expenses 31,704 42,255
Insurance Premiums 0 0
Total Disbursements 759,309 699,650
Net Increase During Period $2,245,357 $30,663
Market Value at End of Period $12,693,827 $10,448,470
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending
9/30/2011
Year Ending
9/30/2012
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-3
DEFERRED RETIREMENT OPTION PLAN (DROP)
BENEFITS HELD IN RESERVE
State Statutes require that the value of assets be offset by the total accumulated balance of DROP payments
being held in reserve for those participating in the DROP plan. A reconciliation of the accumulated balance to
be recognized is provided in the table below.
$212,114
+25,832
+3,821
-112,176
129,591Value at end of year
Value at beginning of year
RECONCILIATION OF DROP ACCOUNTS
Payments credited to accounts
Investment Earnings credited
Withdrawals from accounts
4
0
(3)
1
Average Monthly Benefit as of September 30, 2012 $1,350
Number exited DROP during the year
Number as of September 30, 2012
DROP PARTICIPATION ACTIVITY
Number as of September 30, 2011
Number entered DROP during the year
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-4
ACTUARIAL VALUE OF ASSETS
As of September 30, 2012
Valuation assets are calculated using a smoothed market value over a period of four (4) years, as prescribed
under Internal Revenue Procedure 2000-40. The asset value determined under this method will be adjusted to
be no greater than 120% and no less than 80% of the fair market value.
Under this method, the actuarial value of assets is equal to the market value of assets less a decreasing fraction
(1/nth per year, where n equals the number of years in the smoothing period) of the gain or loss for each of the
preceding 3 years.
Under this method, a gain or loss for a year is determined by calculating the difference between the expected
market value of the assets at the valuation date and the actual market value of the assets at the valuation date.
The expected value of the assets for the year is the market value of the assets at the valuation date for the prior
year brought forward with interest at the valuation interest rate to the valuation date for the current year plus
contributions minus disbursements (i.e., benefits paid and expenses), all adjusted with interest at the valuation
rate to the valuation date for the current year. If the expected value is less than the market value, the difference
is a gain. Conversely, if the expected value is greater than the market value, the difference is a loss.
Calculation of Valuation Assets is shown on the following page.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-5
2010 2011 2012 2013
A.Preliminary actuarial value from prior year 9,841,314$ 10,618,038$ 11,119,463$ 12,513,031$
B.Market value beginning of prior year 9,213,34810,417,80710,448,47012,693,827
C.Market value end of prior year 10,417,80710,448,47012,693,827
D.Non-investment net cash flow
[contributions-(benefits & expenses)]246,078279,399490,441
E.Investment return
1.Actual market value return net of investment
expenses: C - B - D 958,380(248,736)1,754,916
2.Expected return of 8.00%746,911 844,600 855,495
3.Excess/(shortfall) to be phased-in: E1 - E2 211,469(1,093,336)899,421
F.Phased-in recognition of investment return
(4 Year Recognition)
1.Current year: 25% of E3 52,867(273,334)224,855
2.25% of excess/(shortfall) from first prior year 43,24452,867(273,334)224,855
3.25% of excess/(shortfall) from second prior year (445,351)43,24452,867(273,334)
4.25% of excess/(shortfall) from third prior year 132,975(445,351)43,24452,867
5.Total phased-in recognition of investment return (216,265)(622,574)47,632 4,388
G.Actuarial value end of year
1.Preliminary actuarial value end of year:
A + D + E2 + F5 10,618,03811,119,46312,513,031
2.Upper corridor limit: 120% of C 12,501,36812,538,16415,232,592
3.Lower corridor limit: 80% of C 8,334,2458,358,77610,155,062
4.Actuarial value end of year *10,618,03811,119,46312,513,031
H.Difference between market value and actuarial value (200,231)(670,993)180,796
I.Ratio of Funding Value to Market Value 102%106%99%
DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER 30
* Offset for DROP Reserve made prior to the calculation of valuation assets.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | C-6
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following bases:
Basis 1 - Cost Value: Interest, dividends and realized gains (losses) divided by the beginning cost value of the
fund, adjusted for cash flow during the year.
Basis 2 - Market Value: Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the beginning market value of the fund, adjusted for cash flow during the year. This figure
is normally called the Total Rate of Return.
Basis 3 - Actuarial Value: Investment earnings recognized in the Actuarial Value of Assets divided by the
weighted average of the Actuarial Value of Assets during the year.
9/30/02 (6.7) %1.5 %
9/30/03 10.1 1.7
9/30/04 7.2 2.3
9/30/05 9.4 4.9
9/30/06 9.7 8.5
9/30/07 14.7 10.0
9/30/08 (11.9) 4.9
9/30/09 9.7 4.2
9/30/10 9.9 5.0
9/30/11 (2.4) 2.1
9/30/12 16.4 8.0
3.9 %4.8 %
7.0 %5.1 %
Actuarial ValueYear Ended
Investment Rate of Return
Average Compounded
Rate of Return for
5 Years
10 Years
Market Value
SECTION D
FINANCIAL ACCOUNTING INFORMATION
City of Atlantic Beach General Employees’
Retirement System
9/30/12 Actuarial Valuation | D-1
A.Valuation Date
B.Actuarial Present Value of Accumulated
Plan Benefits
1.Vested Benefits
a.Members Currently Receiving Payments$6,485,800$5,763,677
b.Terminated Vested Members 785,507 860,722
c.Other Members 6,694,979 6,360,869
d.Total 13,966,28612,985,268
2.Non-Vested Benefits 315,665 363,692
3.Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2 14,281,95113,348,960
4.Accumulated Contributions of Active Members 1,296,875 1,211,505
C.Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1.Total Value at Beginning of Year 13,348,96012,227,533
2.Increase (Decrease) During the Period
Attributable to:
a.Plan Amendment 0 0
b.Change in Actuarial Assumptions 0 0
c.Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period 1,595,688 1,710,945
d.Benefits Paid (Including DROP Reserve)(662,697)(589,518)
e.Net Increase 932,991 1,121,427
3.Total Value at End of Period 14,281,95113,348,960
D.Market Value of Assets 12,693,82710,448,470
E.Total Actuarial Present Value of Accumulated
Plan Benefits using FRS discount rate 14,658,79313,699,795
F.Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
FASB NO. 35 INFORMATION
September 30, 2012 September 30, 2011
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-2
SCHEDULE OF FUNDING PROGRESS
(Dollar amounts in thousands)
(GASB Statement No. 25)
9/30/2003 *$5,951 $8,186 $2,235 72.7 %$2,856 78.3 %
9/30/2004 6,273 9,005 2,732 69.73,051 89.5
9/30/2005 *6,802 9,822 3,020 69.33,182 94.9
9/30/2006 *7,609 10,505 2,896 72.43,195 90.7
9/30/2007 8,594 11,668 3,074 73.73,476 88.4
9/30/2008 *9,209 12,624 3,415 72.93,727 91.6
9/30/2009 9,841 13,682 3,841 71.94,019 95.6
9/30/2010 10,618 15,180 4,562 69.93,838 118.9
9/30/2011 11,119 16,053 4,934 69.33,738 132.0
9/30/2012 12,51316,797 4,284 74.53,714 115.4
(a)
Unfunded AAL
(UAAL)
(b) - (a)
Actuarial Accrued
Liability (AAL) -
Entry Age
(b)
Actuarial
Valuation Date
UAAL As % of
Covered Payroll
(b - a) / c
Covered Payroll
( c )
Funded Ratio
(a) / (b)
Actuarial Value
of Assets
* Reflects a change in assumptions or benefits.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | D-3
SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER
(GASB Statement No. 25)
Fiscal
Year Ending
9/30/2003 11.81 %*$315,106$315,106 100 %
9/30/2004 12.72 381,518 381,518 100
9/30/2005 15.02*464,893 464,893 100
9/30/2006 16.09 480,029 480,029 100
9/30/2007 13.99*482,364 482,363 100
9/30/2008 13.62*456,965 457,005 100
9/30/2009 14.03 528,428 528,426 100
9/30/2010 14.84 599,292 599,292 100
9/30/2011 16.60 722,769 722,769 100
9/30/2012 24.53 998,516 998,516 100
Percentage
Contributed
Annual Required
Contribution Contribution
ActualContribution Rate
As a % of Payroll
* Reflects a change in assumptions or benefits.
Note: Annual Required Contribution (if any), above, is payable by the City.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | D-4
Employer FYE September 30
A.Annual Required Contribution (ARC)998,516$ 722,769$ 599,292$
B.Interest on Net Pension Obligation (Asset) - - -
C.Adjustment to ARC - - -
D.Annual Pension Cost (APC): (A + B - C)998,516 722,769 599,292
E.Contributions made 998,516722,769599,292
F.Increase (decrease) in Net Pension Obligation(Asset)
rounded to the nearest $100: (D -E) - - -
G.Net Pension Obligation(Asset) at beginning of year - - -
H.Net Pension Obligation(Asset) at end of year: (F+ G)- - -
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
2012 2011 2010
Fiscal Annual PensionActual
Year EndingCost (APC)Contribution
9/30/2010$ 599,292$ 599,292100.0%-$
9/30/2011 722,769 722,769100.0 -
9/30/2012 998,516 998,516100.0 -
THREE YEAR TREND INFORMATION
Percentage of
APC Contributed
Net Pension
Obligation
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | D-5
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the actuarial
valuation at the dates indicated. Additional Information as of the latest actuarial valuation:
Valuation Date
Contribution Rates:
Employer
Plan Members
Actuarial Cost Method
Amortization Method
Equivalent Single Amortization Period
Asset Valuation Method
Actuarial Assumptions:
Investment rate of return
Projected salary increases
Includes price inflation
Cost-of-living adjustments
Payroll Growth Assumption
September 30, 2012
27.88%
5.00%
Entry Age
Closed, Level % of Pay Method
8.03 Years
See Section entitled “Actuarial
Value of Assets”
8.0%
5.5%-14.0%
3.0%
None
2.98%
SECTION E
MISCELLANEOUS INFORM ATION
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | E-1
A.
1.Number Included in Last Valuation 83 84
2.New Members Included in Current Valuation 8 6
3.Non-Vested Employment Terminations (2)0
4.Vested Employment Terminations (2)(1)
5.Service Retirements (2)(1)
6.Disability Retirements 0 (1)
7.Deaths (1)0
8.DROP Retirement 0 (4)
9.Transfer to Another Division 0 0
10.Number Included in This Valuation 84 83
B.
1.Number Included in Last Valuation 11 12
2.Additions from Active Members 2 1
3.Lump Sum Payments/Withdrawals 0 0
4.Payments Commenced (1)(2)
5.Deaths 0 0
6.Other 0 0
7.Number Included in This Valuation 12 11
C.
1.Number Included in Last Valuation 47 39
2.Additions from Active Members 2 2
3.Additions entering the DROP 0 4
4.Additions from Terminated Vested Members 1 2
5.Deaths Resulting in No Further Payments 0 0
6.Deaths Resulting in New Survivor Benefits 0 (1)
7.End of Certain Period - No Further Payments 0 0
8.Other -- New Survivor Payments for Death 1 1
9.Number Included in This Valuation 51 47
To 9/30/11To 9/30/12
RECONCILIATION OF MEMBERSHIP DATA
Active Members
Service Retirees, Disability Retirees, Beneficiaries & DROP
Terminated Vested Members
From9/30/10From9/30/11
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | E-2
STATISTICAL DATA
Active Members as of September 30, 2012
Age Group 0-4 5-9 10-14 15-19 20-24 25-29 30 & Up TotalsAvg. Pay
20-24 NO.1000000128,995
25-29 NO.1000000133,834
30-34 NO.2100000332,508
35-39 NO.2210000527,136
40-44 NO.3400300 10 38,303
45-49 NO.5401210 13 48,470
50-54 NO.2551002 15 45,012
55-59 NO.9723310 25 48,393
60-64 NO.2331100 10 43,874
65&UP NO.0000001180,718
TOT NO.272611 6923 84 44,210
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | E-3
Active
Year Members
Ended VestedOther End of
September 30AEAEAEAEAAAEYear
20022012 01.710.200.11 1011 9.1 83
20031211 20.800.200.109910.8 84
20041210 21.200.200.117810.0 86
20051014 20.800.200.21 1112 9.4 82
20061011 52.400.100.20668.5 81
2007 8711.810.200.21458.1 82
2008 7603.200.100.21567.8 83
2009 6203.800.100.21126.9 87
2010 4744.400.100.20336.8 84
2011 6755.310.100.31015.7 83
2012 8 7 2 4.3 0 0.2 1 0.2 2 2 4 4.8 84
5-yr. Totals
2008-2012 312911 20.910.711.1 16 32.0
Expected
for 2013 4.60.20.2 5.1
A Represents actual number.
E Represents expected number.
During Normal Disability Died-in Withdrawal
Year Retirement Retirement Service Total
NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP
Number
Added Terminations During Year
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | E-4
Year Ended
September 30 No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions
2002 323,184126,801 2 (3,617) 29 234,121 0.7 5,355
2003 232,15915,889 1 26,270 30 260,391 0.9 6,159
2004 235,900217,160 18,740 30 279,131 1.0 6,956
2005 347,50515,774 2 41,730 32 320,861 1.0 7,331
2006 682,446329,272 3 53,174 35 374,035 1.0 7,917
2007 351,425 3 51,425 38 425,460 1.1 8,798
2008 19,21719,217 38 425,460 1.3 10,328
2009 217,42425,992 11,432 38 436,892 1.3 11,534
2010 495,156313,790 1 81,366 39 518,258 1.2 11,854
2011 9105,409114,326 8 91,083 47 609,341 1.2 12,414
2012 477,3930- 477,393 51 686,734 1.2 12,623
Expected for
2013 1.3 14,605
*Includes a one-time 5.0% cost-of-living increase.
Retired Members and Beneficiary Data
Historical Schedule
Expected
Added Removed Net Increase End of Year Removals
SECTION F
SUMMARY OF PLAN PROV ISIONS
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-1
A. Ordinances:
Plan established under the Code of Ordinances for the City of Atlantic Beach, Florida, Part II, Chapter 2,
Article VI, Division 3 and was most recently amended and restated under Ordinance No. 58-08-34 passed
and adopted on August 11, 2008. The Plan is also governed by certain provisions of Part VII, Chapter 112,
Florida Statutes (F.S.) and the Internal Revenue Code.
B. Effective Date
December 22, 1975
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a sole employer plan.
E. Eligibility Requirements
All City employees, other than police officers or firefighters, who normally work more than 1,000 hours
annually and are not an elected officials, temporary or contractual employees, or executives or departments
heads who have elected not to participate, will become members on the date of employment.
F. Credited Service
Service is measured as the total number of years and fractional parts of years, but credited to the nearest
one-twelfth (1/12) of a year. No service will be credited for any periods of employment for which the
member received a refund of their employee contributions.
G. Compensation
Base salary or wages paid for services rendered to the City including longevity pay, overtime pay, cost of
living payments, holidays and personal leave taken. Compensation excludes payments of unused personal
leave, uniform or equipment allowances, or any reimbursement of expenses.
H. Final Average Compensation (FAC)
Average monthly rate of Compensation during the highest 60 consecutive months of Credited Service out of
the last 120 months preceding the date of termination or retirement.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-2
I. Normal Retirement
Eligibility: For Employees Hired Before September 1, 2008:
A participant may retire on the first day of the month coincident with or next following
age 60 with 5 or more years of Credited Service.
For Employees Hired On or After September 1, 2008:
A participant may retire on the first day of the month coincident with or next following
age 60 with 10 or more years of Credited Service.
Benefit: For employees hired before April 24, 2005:
2.85% of FAC times Credited Service. Benefit is limited to 100% of FAC.
For employees hired on or after April 24, 2005:
2.50% of FAC times Credited Service. Benefit is limited to 100% of FAC.
Normal Form
of Benefit: Life Annuity; other options are also available.
J. Early Retirement
Eligibility: For Employees Hired Before September 1, 2008:
A member may elect to retire earlier than the Normal Retirement Eligibility upon
attainment of age 55 with 5 years of Credited Service.
For Employees Hired On or After September 1, 2008:
A member may elect to retire earlier than the Normal Retirement Eligibility upon
attainment of age 55 with 10 years of Credited Service.
Benefit: The Normal Retirement Benefit is actuarially reduced for each year by which the member’s
Early Retirement date precedes age 60.
Normal Form
of Benefit: Life Annuity; other options are also available.
K. Delayed Retirement
Same as Normal Retirement taking into account compensation earned and service credited until the date of
actual employment termination.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-3
L. Service Connected Disability
Eligibility: For Employees Hired Before September 1, 2008:
Any member with 5 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
For Employees Hired On or After September 1, 2008:
Any member with 10 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
Benefit: The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits.
Normal Form
of Benefit: Life Annuity; other options are also available.
M. Non-Service Connected Disability
Eligibility: For Employees Hired Before September 1, 2008:
Any member with 5 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
For Employees Hired On or After September 1, 2008:
Any member with 10 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
Benefit: The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits.
Normal Form
of Benefit: Life Annuity; other options are also available.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-4
N. Pre-Retirement Death
Eligibility: Any member with 5 or more years of Credited Service is eligible for a death benefit.
Benefit: Upon the death of a member, the designated beneficiary shall be paid an actuarially reduced
benefit based on one hundred (100) percent survivor pension notwithstanding that the
member may not have satisfied the conditions for retirement. If there are no beneficiaries
designated by the member, then a benefit shall be paid to the surviving spouse or, if no
surviving spouse, a reduced benefit will be paid to the member’s unmarried children.
If spouse is receiving benefits described above, no children’s benefits are payable.
If spouse is not receiving benefits, children under age 19, or age 23 if a fulltime student, will
receive equal shares of 50% of the member’s Normal Retirement Benefit under the Life
Annuity option based upon service and FAC as of the date of death.
Normal Form
of Benefit: Payable for the life of the member’s beneficiary or spouse. Children’s benefits are payable
until age 19 or age 23 if a fulltime student.
O. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
P. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are the
50%, 66 2/3%, 75% or 100% Joint and Survivor options. A Social Security option is also available for
members retiring prior to the time they are eligible for Social Security retirement benefits.
Q. Vested Termination
Eligibility: For Employees Hired Before September 1, 2008:
A participant has earned a non-forfeitable right to Plan benefits after the completion of 5 or
more years of Credited Service.
For Employees Hired On or After September 1, 2008:
A participant has earned a non-forfeitable right to Plan benefits after the completion of 10 or
more years of Credited Service.
Benefit: The benefit is the member’s vested portion of the accrued Normal Retirement Benefit as of the
date of termination. Benefit begins on the Normal or Early Retirement date.
Normal Form
of Benefit: Life Annuity; other options are also available.
Member’s terminating employment with less than 5 years of Credited Service, or 10 years for those hired on or
after September 1, 2008, will receive a refund of their own accumulated contributions.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-5
R. Refunds
Eligibility: All non-vested members are eligible. Optionally, vested participants may also withdraw
their contributions in lieu of the deferred benefits otherwise due.
Benefit: The member who terminates employment receives a lump-sum payment of their employee
contributions.
S. Member Contributions
5% of Compensation
T. Employer Contributions
The amount determined by the actuary to pay the normal cost and an amortization of the unfunded actuarial
accrued liabilities, along with employee contributions. Following are contribution rates per recent
valuations:
Plan Year
Beginning CityMemberTotal
10/1/200713.62%5.000%18.62%
10/1/200814.03%5.000%19.03%
10/1/200914.84%5.000%19.84%
10/1/201016.60%5.000%21.60%
10/1/201124.53%5.000%29.53%
10/1/201227.88%5.000%32.88%
U. Cost of Living Increases
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree
benefits.
V. Changes from Previous Valuation
See the Discussion of Valuation Results Section of this report under the Revisions in Benefits heading.
W. Gain-sharing benefits
Not applicable.
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | F-6
X. Deferred Retirement Option Plan
Eligibility: For Employees Hired Before September 1, 2008:
Plan members are eligible for the DROP upon attainment of age 55 with 5 years of Credited
Service.
For Employees Hired On or After September 1, 2008:
Plan members are eligible for the DROP upon attainment of age 55 with 10 years of
Credited Service.
All members must make a written election to participate in the DROP.
Benefit: The member’s Credited Service and FAC are frozen upon entry into the DROP. The monthly
retirement benefit as described under Normal Retirement is calculated based upon the frozen
Credited Service and FAC. Benefits for members entering the DROP prior to age 60 will be
actuarially reduced for Early Retirement.
Maximum
DROP Period: 60 months
Interest
Credited: Earnings to the DROP account will be accordance with the self-directed options selected by
the participant.
Normal Form
of Benefit: Lump Sum or roll-over to a qualified retirement account.
SECTION G
COMPARATIVE SUMMARY O F PRINCIPAL
VALUATION RESULTS
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | G-1
A.Participant Data
Number Included:
Actives 84 83
Service Retirees & Beneficiaries 47 43
Disability Retirees 4 4
Terminated Vested Members 12 11
Total Members and Beneficiaries 147 141
Total Annual Payroll (Excluding DROP Participants)$3,713,609 $3,738,277
Annual Valuation Payroll 3,713,609 3,738,277
Expected Annual Payroll in Contribution Year 3,938,639 3,964,802
Total Annualized Benefits
Service Retirees & Beneficiaries 629,722 552,964
Disability Retirees 56,377 56,377
Terminated Vested Members 121,445 126,619
B.Assets (Market Value)
Cash and Short Term Investments 831,303 531,147
Treasury and Agency Bonds & Notes 2,090,713 2,260,875
Common and Preferred Stocks 7,632,876 5,702,213
Mutual or Pooled Bond Funds 2,131,912 1,945,666
Mutual Equity Funds 0 0
Other Securities 129,591 212,114
Net Receivables & Payables (122,568)(203,545)
Total 12,693,827 10,448,470
Actuarial Value 12,513,031 11,119,463
Assets include:
Accumulated active member contributions 1,296,875 1,211,505
(with interest if applicable)
C.Actuarial present value of accrued benefits
(i)Vested accrued benefits
Retired members and benefitciaries (incl DROP)6,485,800 5,763,677
Terminated members 785,507 860,722
Active members (includes non-forfeitable memebrs
contributions of 1,296,875 and 1,211,505)6,694,979 6,360,869
Total 13,966,286 12,985,268
(ii)Non-vested accrued benefits 315,665 363,692
(iii)Total actuarial p.v. of accrued benefits 14,281,951 13,348,960
(iv)Actuarial p.v. of accrued benefits at begin. of year 13,348,960 12,227,533
(v)Changes attributable to:
Amendments none none
Assumption change none none
Operation of decrements 1,595,688 1,710,945
Benefit payments (662,697)(589,518)
Other none none
(vi)Net change (PVAB measurement Method Change)932,991 1,121,427
(vii)Actuarial p.v. of accr. benefits at end of year 14,281,951 13,348,960
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | G-2
C.Liabilities- Actuarial Present Value of Future Benefits
1. Active Members
Service Retirement Benefits $12,222,823 $12,213,956
Vesting Benefits 339,511 347,811
Disability Benefits 300,331 308,879
Preretirement Death Benefits 297,034 299,659
Return of Member Contributions 107,030 99,017
Total Actives 13,266,729 13,269,322
2. Inactive Members
Service Retirees & Beneficiaries 5,972,648 5,239,771
Disability Retirees 513,152 523,906
Terminated Vested Members 785,507 860,722
Total Inactive Members 7,271,307 6,624,399
3. Total Present Value for All Members 20,538,036 19,893,721
Total Present Value of:
Future Salaries 29,036,614 29,390,562
Future Employee Contributions 1,451,831 1,469,528
Future Contributions from Other Sources 6,573,174 7,304,730
Derivation of Current Employer
Unfunded Actuarial Accrued Liability (UAAL)
a.Total UAAL for Prior Valuation Date $4,933,603 $4,561,923
b.Employer Normal Cost for this period 381,619 378,695
c.Interest acccrued on (a) and (b)409,953 380,102
d.Contributions for this period 998,516 722,769
e.Interest accrued on (d)39,941 28,911
f.Changes due to:
Plan Amendment 0 0
Assumption Changes 0 0
Asset Method 0 0
Actuarial (Gain) Loss (402,582)364,563
g.Total Current UAAL: a+b+c-d-e+f 4,284,136 4,933,603
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2012 September 30, 2011
Present Value of Accrued Benefits
Vested 324,864 374,694
Non-Vested 14,333,929 13,325,101
Total 14,658,793 13,699,795
Market Value of Assets 12,693,827 10,448,470
Funded Ratio 86.6%76.3%
Present Value of Accrued Benefits
at FRS Discount Rate September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | G-3
Date
Years
Remaining
Amortization
Payment Original Amount
9/30/1993Original 1$159,550
9/30/1998Experience Gain 1(12,029)(58,540)
9/30/1999Experience Gain 2(20,297)(108,195)
9/30/2000Experience Loss 39,647 55,470
9/30/2001Experience Loss 42,956 18,145
9/30/2002Experience Loss 543,049280,151
9/30/2003Experience Loss 651,702355,383
9/30/2004Experience Loss 754,566395,109
9/30/2005Experience Loss 847,842364,305
9/30/2006Experience Gain 9(16,413)(131,266)
9/30/2007Experience Loss 1020,302170,383
9/30/2008Experience Loss 1120,324178,856
9/30/2009Experience Loss 1251,213482,223
9/30/2010Experience Loss 1317,190171,358
9/30/2011Experience Loss 1434,220364,563
9/30/2012Experience Gain 15(36,664)(402,582)
9/30/1993Benefit Changes 1153,374358,417
9/30/1996Benefit Changes 145,374 41,503
9/30/2001Benefit Changes 1910,430101,350
9/30/2003Benefit Changes 213,429 36,516
9/30/2005Benefit Changes 23(12,788)(149,268)
9/30/1995Assumption/Method Change1362,527461,074
9/30/1997Assumption/Method Change1537,664304,637
9/30/2008Assumption/Method Change268,600115,225
9/30/2009Assumption/Method Change27(4,085)(58,002)
9/30/2010Assumption/Method Change2835,131525,869
TOTAL $626,814$3,872,683
358,157
(402,582)
27,617
11,027
196,156
276,340
(123,043)
46,627
(183,097)
(63,589)
556,613
620,745
$4,284,136
413,554
131,384
170,661
468,089
56,244
133,577
332,664
325,963
(12,029)
(39,651)
Original and Current Unfunded Actuarial Accrued Liabilities
Current Unfunded
$159,550
Item Description
165,432
178,240
479,487
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | G-4
D.Pension Cost
Entry Age Normal Cost for:
Service Retirement Benefits $427,897 $438,341
Vesting Benefits 17,782 17,676
Disability Benefits 18,631 18,615
Preretirement Death Benefits 10,504 10,672
Return of Member Contributions 31,653 31,388
Total Actives 506,466 516,693
Administrative Expenses 30,485 40,630
Expected Member Contributions 189,244 190,382
Total Employer Normal Cost 347,707 366,941
Payment Required to Amortize Unfunded Actuarial
Accrued Liability 626,814 559,924
Total Contribution at Valuation Date 974,521 926,865
Total Contribution Adjusted for Frequency of
Payments and Interest to Next Following Fiscal Year 1,098,090 1,044,392
% of Expected Payroll 27.88%26.34%
Amount Expected to be Contributed by Members Next FY 196,932 198,240
% of Expected Payroll 5.00%5.00%
E.Past Contributions- For the Fiscal Years Ended September 30 of 2011 and 2012
Required Contribution Determined in the Valuation as ofSeptember 30, 2010September 30, 2009
by the Plan Sponsor $998,516 $722,769
by Members $203,503 $217,736
Actual Contribution for the Fiscal Year ended September 30, 2011September 30, 2010
by the Plan Sponsor $998,516 722,769
by Members $186,326 188,403
F.Net experience (gain) loss during year:($402,582)$364,563
G.1. Plan to Amortize Unfunded Actuarial Accrued Liability
20 year funding of the Original Unfunded Actuarial Accrued Liability, 15 year funding of any
Gains or Losses and 30 year of adjustments due to benefit or assumption changes.
2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (UAAL)
Year Projected UAAL
2012 $4,284,136
2013 3,949,911
2014 3,732,827
2015 3,459,228
2022 1,369,040
2027 553,317
2037 210,991
2039 77,685
2041 0
3. Action taken since last actuarial valuation.
Contribution sufficient to satisfy the total required contribution.
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2012 September 30, 2011
City of Atlantic Beach General Employees’
Retirement System
9/30/2012 Actuarial Valuation | G-5
H.1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized)
ActualAssumed
1.2%5.9%
0.5 %6.0%
(0.4)%6.0%
2. Three-Year Comparison of Investment Return (Actuarial Value)
ActualAssumed
8.0%8.0%
2.1%8.0%
5.0%8.0%
3. Average Annual Growth in Payroll, Last Ten Years (if applicable)
Total % Increase Last Ten Years 34.17%
Annual % Increase 2.98%
Thirty-year Forecast 4.00%
I.Benefits and Expenses of Plan not Explicitly or Implicitly Provided in Valuation
NONE
J.Trends not taken into Account but which are likely to Result in Future Cost Increases
NONE
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
Year Ended
Total PayrollValuation Date
9/30/2012
9/30/2011
9/30/2010
Year Ended
9/30/2012
9/30/2011
9/30/2010
9/30/2010
9/30/2011
3,194,700
9/30/2005
3,726,713
9/30/2006
4,018,667
9/30/2002 $2,767,895
2,856,303
3,051,289
3,182,450
3,837,512
3,738,277
3,713,609
9/30/2008
9/30/2007
9/30/2003
9/30/2004
3,475,757
9/30/2012
9/30/2009