The URL can be used to link to this page

4B - Financial Statements & Auditors ReportDRAFT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT CITY OF ATLANTIC BEACH, FLORIDA SEPTEMBER 30, 2013 AGENDA ITEM# 48 MARCH 10, 2014 FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT CITY OF ATLANTIC BEACH, FLORIDA SEPTEMBER 30, 2013 TABLE OF CONTENTS Independent Auditors’ Report ..................................................................................................................... i-iii Management’s Discussion and Analysis.................................................................................................. iv-xiii Basic Financial Statements Government-wide Financial Statements Statement of Net Position.......................................................................................................................... 1 Statement of Activities .............................................................................................................................. 2 Fund Financial Statements Balance Sheet - Governmental Funds....................................................................................................... 3 Reconciliation ofBalance Sheet of Governmental Funds to the Statement of Net Position....................................................................................................................... 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 Position - Proprietary Funds...................................................................................... 7-8 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds.............................................................................................................................. 9-10 Statement of Cash Flows - Proprietary Funds...................................................................................11-13 Statement ofNet Position - Fiduciary Funds..........................................................................................14 Statement of Changes inNet Position - Fiduciary Funds.......................................................................15 Notes to Financial Statements ........................................................................................................ 16-38 Required Supplementary Information Schedules of Pension Funding Progress.......................................................................................................39 Schedules of Contributions from Employer and Other Contributing Entities.................................................................................................................................................40-41 Other Postemployment Benefits Plan - Schedule of Funding Progress......................................................42 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund.....................................................................................................43-44 Note to Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund.........................................................................................45 Supplementary Information Combining Balance Sheet - Nonmajor Governmental Funds................................................................46-47 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds.........................................................................48-49 Combining Statement of Net Position- Fiduciary Funds.............................................................................50 Combining Statement ofChanges in Net Position- Fiduciary Funds..........................................................51 DRAFT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT CITY OF ATLANTIC BEACH, FLORIDA SEPTEMBER 30, 2013 TABLE OF CONTENTS (Concluded) Supplementary Information (Concluded) Historical Revenues and Expenses...............................................................................................................52 Schedules of Net Revenues in Accordance with Bond Resolutions - Enterprise Funds (Water and Sewer)................................................................................53 Other Bond Covenant Disclosures...............................................................................................................54 Other Statistical Information Major Utility Customers............................................................................................................................... 55 Summary of Water Usage............................................................................................................................. 56 Summary of Wastewater Treatment - Atlantic Beach Sewer Division.................................................................................................................................................... 57 Summary of Wastewater Treatment - Outside City Sewer Division.......................................................... 58 AdditionalElements of Report Prepared in AccordanceWith Government Auditing Standards,Issued by the Comptroller General of the United States; the Rules of the Auditor General of the State of Florida;and Other Contract Requirements Schedule of Expenditures of Federal Awards and State Financial Assistance Projects........................................................................................................................59-60 Note to Schedule of Expenditures of Federal Awards and State Financial Assistance Projects.............................................................................................................61 Schedule of Source and Expenditure of the City Grant Funds...............................................................62 Independent Auditors’ 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 .......................................................................................... 63-64 Management Letter............................................................................................................................ 65-66 DRAFT INDEPENDENT AUDITORS’ REPORT DRAFT i INDEPENDENT AUDITORS’ REPORT Honorable Mayor, City Commissioners and Interim 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, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. The prior year summarized comparative information has been derived from the City’s 2012 financial statements and, in our report dated April 10, 2013, 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. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. 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 whetherthe financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. DRAFT ii Honorable Mayor, City Commissioners and Interim City Manager Atlantic Beach, Florida INDEPENDENT AUDITORS’ REPORT (Continued) 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, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and other requiredinformation on pages iv–xiii and 39–45be 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, andother 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The supplementary information on pages 46- 54, the other statistical section on pages 55-58, and the schedule of expenditures of grant funds per the City of Jacksonville’s Ordinance Code Chapter 118.202(e)are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal and state awards, is presented for the purpose of additional analysis as required by the 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 requiredpart of the financial statements. The supplementary information,schedule of federal and state awards, and schedule of expenditures of grant funds per the City of Jacksonville’s Ordinance Code Chapter 118.202(e)are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information and schedule of federal and state awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The other statistical section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. DRAFT iii Honorable Mayor, City Commissioners and Interim City Manager Atlantic Beach, Florida INDEPENDENT AUDITORS’ REPORT (Concluded) Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have issued our report dated _______ on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. ______________ Gainesville, Florida DRAFT iv CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION ANDANALYSIS SEPTEMBER 30, 2013 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, 2013. Overview of the Financial Statements This management’s discussion and analysis is intended to serve as an introduction to theCity’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 othersupplementary information in addition to the basic financial statements themselves. The purpose of each of the three components of the basic financialstatements 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 privatesector business. They include the Statement of Net Position and the Statement of Activities. The Statement of Net Position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Net positionisreported as one of three categories: invested in capital assets - net of related debt; restricted; or unrestricted. Restricted net position is further classified as either net position restricted by enabling legislation or net position that isotherwise restricted. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues, referred to as “governmental activities,” from other functions that are intended to recover all or a significant portion of their costs through user fees and charges, referred to as “business-type activities.” The governmental activities of the City include public safety, road maintenance and construction, parks and recreation,conservation and resource management, 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. DRAFT v CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION ANDANALYSIS SEPTEMBER 30, 2013 (Continued) Fund Financial Statements (Concluded) Ŷ 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 Position and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances and Statement of Activities to facilitate this comparison between governmental funds and governmental activities. The City maintains fourteenindividual 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 thirteengovernmental 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 46 – 49 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 and notes on pages 43 - 45of this report has been provided to demonstrate compliance with this budget. Ŷ 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. Ŷ 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. DRAFT vi CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (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 budgetarycomparison schedule for the General Fund. Required supplementary information can be found beginning on page 39of this report. Government-wide Financial Analysis Net position may serve over time as a useful indicator of a City’s financial position. Ascan be seen in the summarized table below of this analysis, the City’s assets exceeded liabilities by $74,678,000 at the close of the fiscal year ended September 30, 2013. By far the largest portion of the City’s net position, $58,038,000 (78%), reflectsits investment in capital assets (i.e., land, buildings, equipment, and infrastructure), less any related, outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. A portion of the City’s net position, $5,434,000 (7%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $11,205,000, (15%), is used to meet the government’s ongoing obligations to citizens and creditors. City of Atlantic Beach’s Net Position September 30, 2013and 2012 (In Thousands) GovernmentalBusiness-type ActivitiesActivitiesTotals 201320122013201220132012 Current and other assets$10,853$10,350$9,235$9,457$20,088$19,807 Capital assets 39,41139,78641,08042,41380,49182,199 Total Assets 50,26450,13650,31551,870100,579102,006 Long-term liabilities outstanding57437821,56722,65622,14123,034 Other liabilities8361,1772,9243,7463,7604,923 Total Liabilities 1,4101,55524,49126,40225,90127,957 Net Position: Invested in capital assets, net of related debt39,34239,64918,69718,29158,03957,940 Restricted3,6563,4141,7781,7125,4345,126 Unrestricted5,8565,5185,3495,46511,20510,983 Total Net Position $48,854$48,581$25,824$25,468$74,678$74,049 DRAFT vii CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Continued) As illustrated in the scheduleon page vi, the City was able to report positive balances in all categories of net position, both forthe 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 Position For the Years Ended September 30, 2013and 2012 (InThousands) Governmental Business-type Activities Activities Totals 201320122013201220132012 Revenues: Program Revenues: Charges for services$1,837$1,714$11,071$10,860$12,908$12,574 Operating grantsand contributions61062700610627 Capital grants and contributions130736279165409901 General Revenues: Property taxes3,8443,961003,8443,961 Sales taxes1,1561,080001,1561,080 Business and utility taxes1,1971,124001,1971,124 State revenue sharing28327900283279 Discretionary sales surtax68464800684648 Investment Earnings(Loss)(201)345(146)248(347)593 Miscellaneous403320040332 Total Revenues 9,94310,54611,20411,27321,14721,819 Expenses: General government1,9721,846001,9721,846 Public safety5,1405,489005,1405,489 Road maintenance and construction1,8811,937001,8811,937 Parks and recreation1,2891,376001,2891,376 Interest/Fiscal Chargeson long- term debt360036 Utility007,3267,6697,3267,669 Stormwater001,1431,1661,1431,166 Sanitation001,5031,5501,5031,550 Building code enforcement00261270261270 Total Expenses 10,28510,65410,23310,65520,51821,309 Transfers 615315(615)(315)00 Change in net position 273207356303629510 Net position-Beginning 48,58148,37425,46825,16574,04973,539 Net position-Ending $48,854$48,581$25,824$25,468$74,678$74,049 DRAFT viii CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Continued) Fund Financial Analysis As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Following is a summary of fund activity financial information for the fiscal year, rounded to the nearest thousand dollars: Ŷ Governmental Funds At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $10,212,000, an increase of $724,000 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 unassignedfund balance was $3,446,000, which equated to32% 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 $333,000or 5% during the current fiscal.This increase primarily resulted from revenues being less thanbudgetedby $12,000,whileexpenses were $557,000less than budget for a net positive variance of $545,000. The General Fund revenues were close to the budgeted amountin total and increased from 2012 by $58,000.Revenues from earningson City investments was the largest item lower than expected, but was partially offset by code enforcement fines and property sales that generated $130,000, active collections of past due business tax receipts of $27,000, unanticipated sales tax revenueof $44,000, and receipts from the settlement of the Estates of Atlantic Beach lawsuitof $27,000.The expenditures of the General Fund were lower than expected, mostly from capital project monies not being spentand unfilled positions. There were budget surpluses throughout all departments of the General Fund,the largest being Public Safetywith a positive variance of $145,000. Nonmajor governmental funds consisting of special revenue funds,the debt service fund, and the capital projects fundhave a combined fund balance of $3,634,000. Of this fund balance, $73,000 is restrictedas a debt service reserveand $3,214,000 is restrictedfor capital projects. The net increase in fund balance after transfers in nonmajor governmental funds was $391,000. Ŷ 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 positionin the proprietary funds increased $356,000during the fiscal year.In fiscal year 2013,a stormwaterrate adjustment of $1.50per ERU was implemented to help cover the cost of the stormwater system maintenance and to allow more Gas Tax proceeds to go towards street paving. Operating expenses, including depreciation, decreased $687,000. After non- operating revenues and expenses are added, the incomewas$700,000before transfersand capital contributions. After capital contributions and net transfers of $270,000 and $615,000, respectively, the total change in net position was $356,000. The subsidyby the Local Option Gas Tax Fund to the Stormwater Fund to support its operating expenses was suspended this fiscal year, as a result of increased revenues from the ERU rate increases of $1.50 and $1.89 in fiscal year 2013 and 2012, respectively. The $8.39per ERU rate is approximately 82%, compared to 64% for the prior year,of the total operating expenses of $1,042,000 needed to fully fund the operation with charges for service. During fiscal year 2013, the Sanitation Fund netted an increase innet position of $13,000, after contributing $268,000 to the General Fund. The unrestricted net position of the enterprise funds amounted to $5,349,000 at the end of fiscal year 2013. The total decreasein unrestricted net position of $116,000 from 2012was primarily due to recognition of the loan origination fee expense associated with the State Revolving Loan for the TMDL sewer project. DRAFT ix CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 General FundBudgetary Highlights The $329,000 increase in the original budgeted revenues and the final amended budgetstemmed from the Riverbranch Foundation contribution for acquisition of marsh property near Dutton Island Road. The expense budget included a $583,000 increase in appropriations, and a $5,000increasein transfers. The portion of the increase in appropriations for the encumbrances rolling forward from 2012was $57,000. Net Budget The overall net difference from the final budgeted revenues and adjusted final budgeted expenses was a deficit of $227,000. The actual increase in fund balance was $309,000. This resulted in a $535,000 excess variance above what was budgeted in the General Fund. Capital Assets and Debt Administration Capital AssetsʊThe City’s investment in capital assets, net of related depreciation, for its governmental and business-type activities as of September 30, 2013, amounted to $80,491,000. 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 $375,000 (1%) for governmental activities and adecreaseof $1,332,000 (3%) for business- type activities. Capital asset events during the current fiscal year included the following: Governmental Activities Land increased $329,000 for themarsh preserve acquired through the Riverbranch Foundation contribution. Buildings,net of accumulated depreciation,decreased by $114,000through annual depreciation of the capital assets. Intangible Assets reflected a net decrease of $19,000. This asset category includes land easements and computer software. A $10,000 acquisition of enhanced computer software enabling citizen access to City documents through a web link to the record retention software was offset by a decrease in asset value of $29,000 attributed to depreciation. Improvements Other Than Buildings reflected a net decrease of $588,000. This represented a capital asset increase of $84,000, offset by depreciation of $672,000.Acquisitions this year included: installation of sidewalks on Dutton Island Road and West 9th Street; improved lighting in the parking lot servicing City Hall and Russell Park; directional road signs for Tideviews and Dutton Island Preserves; and, providing enhanced irrigation controls by zone for the medians on Atlantic Boulevard. DRAFT x CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Continued) Governmental Activities (Concluded) Equipment assets reflected a net decrease of $80,000. This net decrease was comprised of assets acquired for a value of $251,000, offset by disposed assets with a net book value of $7,000 and depreciation of $324,000. Asset acquisitions of note in this category were: the grant-funded storm shutters for City Hall and surveillance equipment for the Police Department; areplacement copier for City Hall; laptop replacements for police officers; cable fiber extensions to enhance communications between City locations; new vans for the painter and building maintenance workersand other City fleet vehicles identified for replacement during the budget process; and, a small boat for park rangers to assist with maintenance of the marsh parks. Construction in progress increased $101,000 as project costs were incurred for Rose Park design and development, and designwork on the Marsh Master Plan that is not yet complete. Business-type Activities Buildings and Intangible Assets reflected a net decrease in asset value of $69,000 from depreciation. Improvements Other Than Buildings reflected a net decrease of $1,416,000. This represented a capital asset increase of $733,000, offset by depreciation of $2,149,000. Utility projects completed in this category included: water main work on 12th street and on Ocean Boulevard; recoating of the elevated water storage tanks at WTP # 1 and 2; outfall interconnectivity; and, sewer-related cured- in-placepipe improvements. Equipment assets reflected a netincreaseof $83,000. This net increasewas comprised of assets acquired for a value of $181,000, offset by a $1,000 disposal of a computer and $98,000 of depreciation. Some of the assets acquired in this category were:a sludge truck; a generator for the Schooners Bay lift station; three 30-yardroll-on/off containers;and, areplacement chlorinator. Construction in progress increased by$70,000. All of the water main projects in the $116,000 balance from the prior fiscal year were completed and put into service. The remaining balance of $185,000in construction in progress at September 30, 2013represents engineering design and permitting costs associated with the reclaimed water plantprojectand water main replacements on Pine Street and near Finnegan Elementary School. DRAFT xi CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Continued) City of Atlantic Beach’s Capital Assets (Net of Depreciation) (In Thousands) GovernmentalBusiness-type ActivitiesActivitiesTotals 201320122013201220132012 Land $10,363$10,034$1,656$1,656$12,019$11,690 Intangibles 2241215215237256 Buildings 2,7512,865941632,8453,028 Improvements-Other25,27825,86638,52839,94463,80665,810 Equipment 8969764023181,2981,294 Construction in Progress101 4185116286120 Total $39,411$39,786$41,080$42,412$80,491$82,198 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 2013 fiscal year, the City had total bonded debt outstanding of $22,628,000. 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, 2013 (In Thousands) GovernmentalBusiness-type ActivitiesActivitiesTotals Utility System Revenue Bonds, Series 2004$0$13,238$13,238 Utility System Revenue Bonds, Series 2010A-1 0 807 807 Utility System Revenue Bonds, Series 2010B 0 601 601 SunTrust Revenue Refunding Bonds, Series 1999 69 86 155 F.D.E.P. State Revolving Funds Loan, 2010 0 691 691 F.D.E.P. State Revolving Funds Loan, 2009 0 7,136 7,136 Total $69 $22,559 $22,628 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 the first quarter of fiscal year 2014. Debt service coverage calculations can be found on page 53. Additional information on the City’s long- term debt can be found in Note 6 on pages 28 – 31 of this report. DRAFT xii CITY OF ATLANTIC BEACH, FLORIDA MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Continued) Economic and Budgetary Highlights The City has experienced the same economic downturn as other cities across the country in recent years. Most of the City’s major revenue sources have declined. While news stories indicate that the economy is starting to rebound, there is no indication of additional revenues from any of the major sources. Projections forrevenues remain essentially flat. Even though costs in some areas are expected to increase, no increase in rates were budgeted for 2014. The 25% contingency levels set by the City Commission are continuing to be maintained. Service levels have been maintained at essentially the same levels to those before the recession. Major adjustments to support theseservice levels included fewer capital projects than in past years, increased storm water fees, the elimination of capital projects from the General Fund, pension reform and health care restructuring, and increased efficiency in water and sewer operations.Some strategic planning and budgetary highlights the City expect to address in 2014 and into the future are highlighted below. Revenue Highlights: Ŷ The 2013 taxable property values are about 0.5% higherthan the 2012 values.The City Commission voted to use the same rate of 3.3285 mills, instead of the roll-back rate of 3.3156%. The purpose for adopting the millage rate of 3.3285 was to maintain a level of ad valorem tax revenue sufficient to maintain adequate funding for the existing level of services at the estimated cost and to continue to maintain the City’s infrastructure. With the slight increase of 0.39% over the roll-back rate, tax collections are budgeted to be almost the same in 2013 as they were in 2012.The finalgross taxable property value was $1,206,595,653.Ad valorem taxes are estimated to represent about 35%of the General Fund revenues for 2013. Ŷ State-shared revenues ended the year with a 5.03% increasefrom 2012.From 2012 to 2013, the combination of General Fund sales taxesand revenue sharing collectionsincreased $75,000. The projection for 2014 exhibits a trend thatslightly increases these revenues by $32,000.These two sources account for about 14.63% of the General Fund revenues. Ŷ The City modified its investment policy during the year to include corporate bond mutual funds to the portfolio. This policy change was made to enhance the fixed income, short duration mutual fund strategyand attempt to “de-risk” the portfolio, due to the volatility of the treasury market. As of September 30, 2013, the City had approximately $14,000,000invested. The investment earning loss for the year was $347,000, compared to a $593,000 gain the prior year. Over the past three years, the City has recognized an overall investment earnings gain of $595,000.With the current investment strategy, the City anticipates the loss for 2013 will be recouped in 2014. Ŷ In Fiscal Year 2013, the City increasedthe storm water rates by $1.50 from $6.89 to $8.39 per ERU. This increase generated an additional $171,000 in revenues.As a result of rate increases in 2012 and 2013,the City was able to discontinue the transfer from the Gas Tax Fund to cover a portion of its operating budget. These rate increases will only generate about half of what isneeded to fully fund the Storm Water Utility with its own rates. Each dollar increase represents about $100,000 in additional revenues.Without further rate increases, the utility continues to receive an annual transfer from the Half Cent Sales Tax Fund, $252,000 in 2013 and a budgeted $285,000 in 2014.There are no water or sewer rate increases included in the 2014 budget. DRAFT DRAFT CITY OF ATLANTIC BEACH, FWRIDA MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2013 (Concluded) Expe nditure Highlights: • Upcoming for 2014, the C ity anticipates that payroll-related costs wi ll increase about $110,000 City- wide. The 2014 annual required contributio n for the General retirement system is anticipated to decrease $93,000. However, si nce the City closed the system, the City has in cluded $48,000 in the payro ll-re lated costs for the new defined-contribution 40 I plan matching. The Police retirement system contribution is anticipated to in crease by a total of $65,000. The restructurin g of the City's heal th insurance benefit pac kage in 2013 kept those costs down, but with anticipated annual renewal increases projected , the City budgeted an add iti o nal I 0% for 2014. To reach this goal, the C ity anticipates more restru ctu ring, including additional em ployee contribution and reduced benefits. • The City ha s accumulated over $2.6 million in reserves to build a new public safety building in the Governmental Capita l Project Fund. The bui lding is to be funded partially by half-cent discretionary sales taxes and partially with debt depending on the final scope of the project. The half-cent di scretionary sales taxes wou ld be a pledged revenue source for debt serv ice if necessary. The estimated construction cost and related debt service is not included in the budget at this time. Considerable public debate o n the s ize, location and cost continu es to delay the project. In 2014, the C ity anticipates obtaining proposals from an arc hitectura l firm w h o wou ld prepare a feasibility study and assist with securing a design/build fJim. • A lso not included in the 2014 budget, estimates for landfill tipping fees that are the s ubject of differing opinions related to th e Inter-Local Agreement w ith th e C ity of Jacksonvi ll e. The C ity of Atlantic Beach has enjoyed free landfill privileges under the agreement that had a provision that would require Atlantic Beach to begin to pay tippage when Jacksonville begins to charge a uniform rate to all of its customers. The two cities disagree as to if the requirement has been met to begin billing At lanti c Beach. This w ill impact o ur Sanitation budget for providing service to the citizen s as well as the cost to dispose of the sludge from our sewer plant operation . This issue is l ikely to be resolved with Ja cksonville this year. Requests for Information The finan cial report is designed to provide a gen eral overview of the C ity's finances for a ll those with an interest in the C ity 's finances. Questions concern in g any of the information provided in this report or requests for additional financial information should be addressed to the City of Atlantic Beach, Finance Director, 800 Semino le Road, Atlantic Beach, Florida 32233. Nelson Van Liere In terim City Manager I Finance Director x iii BASIC FINANCIAL STATEMENTS These basic financial statements contain Government-wide Financial Statements, Fund Financial Statements,and Notes to Financial Statements. DRAFT See accompanying notes. 1 GovernmentalBusiness-type 2012 ActivitiesActivitiesTotalsTotals Assets Equity in Pooled Cash and Investments 9,656,124$5,506,238$15,162,362$15,079,991$ Receivables - Net 116,693615,699732,392621,379 Due from Other Governments871,1510871,1511,054,659 Inventories26,09862,87688,97480,249 Notes Receivable - Current76015,75916,51911,469 Restricted Assets: Equity in Pooled Cash and Cash Equivalents 02,544,2072,544,2072,649,289 Capital Assets: Land10,363,0021,656,01812,019,02011,690,355 Buildings 4,491,6594,356,3848,848,0438,848,043 Improvements Other Than Buildings 38,839,86377,061,749115,901,612115,084,536 Equipment 3,367,9252,023,4855,391,4105,029,576 Intangibles - Easements and Computer Software 341,079244,709585,788575,293 (Accumulated Depreciation and Amortization)(18,093,554)(44,447,284)(62,540,838)(59,149,598) Construction in Progress 101,062184,671285,733120,020 Prepaid Items 180,849181,147361,99634,871 Notes Receivable - Noncurrent 1,520 133,446 134,96685,306 Unamortized Loan Costs 0175,913175,913190,405 Total Assets 50,264,23150,315,017100,579,248102,005,843 Liabilities Accounts Payable and Other Current Liabilities622,010438,0351,060,0451,258,057 Construction Retainages Payable000385,117 Due to Other Governments 09,384 9,3847,141 Deferred Revenue 7,302182,444 189,746238,476 Deposits9,9160 9,9168,090 Compensated Absences - Current195,57681,499 277,075596,000 Accrued Interest Payable9710 9711,917 Payable from Restricted Assets: Current Portion of Bonds Payable01,050,992 1,050,9921,012,767 Current Portion of Loan Payable0164,475 164,475457,492 Accrued Interest Payable0423,372 423,372439,420 Customer Deposits0573,879 573,879518,653 Noncurrent Liabilities: Due Within One Year69,203 069,20367,712 Due in More Than One Year021,343,633 21,343,63322,525,649 Compensated Absences - Noncurrent369,224179,590 548,814292,426 Other Postemployment Benefits Obligation135,72644,072 179,798148,363 Total Liabilities 1,409,92824,491,37525,901,30327,957,280 Net Position Net Investment in Captial Assets 39,341,83318,696,54558,038,37857,939,888 Restricted for: Renewal and Replacement 0500,000500,000500,000 Debt Service 73,1131,201,0621,274,1751,249,208 Public Safety 167,967 0167,967178,300 Road Maintenance and Construction 92,254 092,254123,526 Parks and Recreation 0 0 0 1,194 Other Capital Projects 3,214,166 03,214,1662,982,216 Other Purposes 108,741 0108,74152,732 Building Code Enforcement 076,92176,92138,463 Unrestricted 5,856,2295,349,114 11,205,34310,983,036 Total Net Position 48,854,303$25,823,642$74,677,945$74,048,563$ CITY OF ATLANTIC BEACH, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2013, WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012 2013 DRAFT Se e a c c o m p a n y i n g n o t e s . 2 Oper a t i n g Ca pit a l Ch a r ges f o r G r a n t s a n d G r a n t s a n d G o v e r n m e n t a l B u s i n e s s - t yp e2012 Fu n c t i o n s / P r o g r a m s Ex p e n s e s S e r v i c e s C o n t r i b u t i o n s C o n t r i b u t io n s A c t i v i t i e s A c t i v i t i e s T o t a l s T o t a l s Pr i m a r y G o v e r n m e n t Go v e r n m e n t a l A c t i v i t i e s : Ge n e r a l G o v e r n m e n t 1 , 9 7 1 , 6 8 3 $ 8 5 0 , 1 8 7 $0 $ 1 4 , 7 3 9 $ (1, 1 0 6 , 7 5 7 )$0 $ (1,106,757)$(820,733)$ Pu b l i c S a f e t y 5, 1 3 9 , 7 3 0 8 0 3 , 7 5 2 80 , 0 7 3 2 , 7 8 6 (4, 2 5 3 , 1 1 9 ) 0(4,253,119)(4,668,887) Ro a d M a i n t e n a n c e a n d Co n s t r u c t i o n 1 , 8 8 1 , 2 6 0 1 1 5 , 5 0 1 5 3 0 , 1 0 4 2 2 , 2 9 1 (1, 2 1 3 , 3 6 4 ) 0(1,213,364)(1,296,742) Pa r k s a n d R e c r e a t i o n 1, 2 8 9 , 1 3 4 6 7 , 6 2 9 0 9 0 , 3 8 0 (1, 1 3 1 , 1 2 5 ) 0(1,131,125)(1,064,934) Ph ysi c a l E n v i r o n m e n t 0 0 0 0 0 00277,183 Co n s e r v a t i o n a n d R e s o u r c e Ma n a gem e n t 0 0 0 0 0 002,106 In t e r e s t / F i s c a l C h a r ges o n Lo n g-t e r m D e b t 3, 3 7 0 0 0 0 (3, 3 7 0 ) 0(3,370)(6,201) To t a l G o v e r n m e n t a l A c t i v i t i e s 10 , 2 8 5 , 1 7 7 1 , 8 3 7 , 0 6 9 6 1 0 , 1 7 7 1 3 0 , 1 9 6 (7, 7 0 7 , 7 3 5 ) 0(7,707,735)(7,578,208) Bu s i n e s s - t yp e A c t i v i t i e s : Ut i l i t y 7, 3 2 5 , 2 5 1 8 , 1 4 6 , 9 8 8 0 2 7 9 , 2 0 8 0 1 , 1 0 0 , 9 4 5 1 , 1 0 0 , 9 4 5 6 2 4 , 8 8 8 St o r m w a t e r 1, 1 4 3 , 2 0 4 8 5 4 , 8 1 2 0 0 0 (28 8 , 3 9 2 )(288,392)(482,700) Sa n i t a t i o n 1, 5 0 3 , 6 3 5 1 , 7 9 8 , 5 1 2 0 0 0 2 9 4 , 8 7 7 2 9 4 , 8 7 7 2 1 4 , 7 4 1 Bu i l d i n g C o d e E n f o r c e m e n t 26 0 , 8 8 5 2 7 0 , 4 1 5 0 0 0 9, 5 3 0 9,53013,140 To t a l B u s i n e s s - t yp e A c t i v i t i e s 10 , 2 3 2 , 9 7 5 1 1 , 0 7 0 , 7 2 7 0 27 9 , 2 0 8 0 1 , 1 1 6 , 9 6 0 1 , 1 1 6 , 9 6 0 3 7 0 , 0 6 9 To t a l P r i m a r y G o v e r n m e n t 20 , 5 1 8 , 1 5 2 $ 1 2 , 9 0 7 , 7 9 6 $ 6 1 0 , 1 7 7 $ 4 0 9 , 4 0 4 $ (7, 7 0 7 , 7 3 5 ) 1, 1 1 6 , 9 6 0 (6,590,775)(7,208,139) Ge n e r a l R e v e n u e s Pr o per t y T a x e s 3, 8 4 3 , 7 5 5 0 3 , 8 4 3 , 7 5 5 3 , 9 6 1 , 3 9 5 Sa l e s T a x e s 1, 1 5 6 , 1 2 9 0 1 , 1 5 6 , 1 2 9 1 , 0 8 0 , 0 0 6 Bu s i n e s s a n d U t i l i t y T a x e s 1, 1 9 7 , 3 3 7 0 1 , 1 9 7 , 3 3 7 1 , 1 2 4 , 1 5 1 St a t e R e v e n u e S h a r i n g 28 3 , 1 2 1 0283,121278,547 Di s c r e t i o n a r y S a l e s S u r t a x 68 4 , 1 8 7 0 6 8 4 , 1 8 7 6 4 8 , 2 5 8 In v e s t m e n t E a r n i n gs (Lo s s ) (20 1 , 3 2 7 )( 14 6 , 1 1 4 )(347,441)593,067 Mi s c e l l a n e o u s 40 3 , 0 6 9 0 4 0 3 , 0 6 9 3 2 , 1 3 1 Ga i n o n S a l e o f F i x e d A s s e t s 0 0 0 0 Tr a n s f e r s 61 4 , 7 5 8 ( 6 1 4 , 7 5 8 ) 0 0 To t a l G e n e r a l R e v e n u e s , S pec i a l I t e m , an d T r a n s f e r s 7, 9 8 1 , 0 2 9 (76 0 , 8 7 2 )7,220,1577,717,555 Ch a n g e i n N e t A s s e t s 27 3 , 2 9 4 3 5 6 , 0 8 8 6 2 9 , 3 8 2 5 0 9 , 4 1 6 Ne t P o s i t i o n , B e g i n n i n g o f Y e a r 48 , 5 8 1 , 0 0 9 2 5 , 4 6 7 , 5 5 4 7 4 , 0 4 8 , 5 6 3 7 3 , 5 3 9 , 1 4 7 Ne t P o s i t i o n , E n d o f Y e a r 48 , 8 5 4 , 3 0 3 $ 25 , 8 2 3 , 6 4 2 $ 74,677,945$74,048,563$ CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F A C T I V I T I E S FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 Pr i m a r y G o v e r n m e n t 20 1 3 Pr o g r a m R e v e n u e s N e t ( E x p e n s e ) R e v e n u e a n d C h a n g e s i n N e t A s s e t s DR A F T See accompanying notes. 3 NonmajorTotals GovernmentalGovernmental2012 GeneralFundsFundsTotals Assets Equity in Pooled Cash and Investments6,178,222$3,477,902$9,656,124$9,214,353$ Receivables - Net 116,693 0116,6937,523 Due from Other Funds 9,097 0 9,097213,265 Due from Other Governments 641,289229,862871,1511,054,659 Inventories 26,098 026,09835,566 Notes Receivable - Current 760 0 760 760 Prepaid Items 178,578 0178,57834,871 Notes Receivable - Noncurrent 1,520 0 1,5202,280 Total Assets 7,152,2573,707,76410,860,02110,563,277 Liabilities and Fund Balances Liabilities Accounts Payable and Accrued Liabilities 564,52357,487622,010662,115 Due to Other Funds 0 9,097 9,097213,265 Deposits 2,750 7,166 9,9168,090 Deferred Revenue 7,302 0 7,302192,090 Total Liabilities 574,57573,750648,3251,075,560 Fund Balances Nonspendable: Inventories 26,098 026,09835,566 Prepaids 178,578 0178,57834,871 Restricted for: Public Safety 28,720139,247167,967178,300 Road Maintenance and Construction 092,25492,254123,526 Parks and Recreation 0 0 01,194 Debt Service Reserve 073,11373,11375,350 Other Capital Projects 03,214,1663,214,1662,982,216 Other Purposes 0108,741108,74152,732 Committed to: Conservation and Resource Management 0 6,493 6,4936,493 Assigned to: Re-establishment of Fire Department 300,000 0300,000300,000 Operating Reserves 2,598,195 02,598,1952,619,256 Unassigned 3,446,091 03,446,0913,078,213 Total Fund Balances 6,577,6823,634,01410,211,6969,487,717 Total Liabilities and Fund Balances 7,152,257$3,707,764$10,860,021$10,563,277$ 2013 CITY OF ATLANTIC BEACH, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2013, WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012 DRAFT See accompanying notes. 4 Total Fund Balances of Governmental Funds 10,211,696$9,487,717$ 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 57,504,590$56,803,027$ (Accumulated Depreciation)(18,093,554)(17,016,814) 39,411,036 39,786,213 Nonexchange receivables that do not provide current financial resources and, therefore, are not reported revenues in the funds.0 156,857 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. Certain prepayments are not current financial resources, and are not reported in the funds. All liabilities both current and long-term, are reported in the statement of net position. Long-term liabilities (assets) at year-end consist of: Revenue Bonds Payable 69,203 136,915 Compensated Absences 564,800 598,925 Net Pension Asset (2,271)0 Other Postemployment Benefits Obligation 135,726 112,021 Accrued Interest Payable 971 1,917 (768,429)(849,778) Total Net Position of Governmental Activities 48,854,303$48,581,009$ 2013 2012 CITY OF ATLANTIC BEACH, FLORIDA RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2013, WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012 DRAFT See accompanying notes. 5 NonmajorTotals GovernmentalGovernmental2012 GeneralFunds Funds Totals Revenues Property Taxes 3,843,755$0$3,843,755$3,961,395$ Nonproperty Taxes 1,197,3361,197,7092,395,0452,277,222 Permits, Fees and Special Assessments 830,708 0830,708858,634 Intergovernmental Revenues 1,567,425275,1121,842,5372,079,732 Fines and Forfeitures 224,75830,355255,113118,181 Charges for Services 725,294 310725,604707,835 Investment Earnings (Loss)(128,430)(72,897)(201,327)345,009 Miscellaneous Revenues 409,135 0409,13543,770 Interfund Charges 1,435,569 01,435,5691,556,765 Total Revenues 10,105,5501,430,58911,536,13911,948,543 Expenditures Current: General Government 2,877,855 02,877,8552,983,158 Public Safety 4,841,216110,1044,951,3204,849,156 Road Maintenance and Construction 1,420,481305,6071,726,0881,792,000 Parks and Recreation 1,031,424 01,031,4241,128,617 Debt Service: Principal 067,71267,71263,684 Interest and Other 0 4,316 4,316 7,100 Capital Outlay 546,352221,851768,203833,587 (Total Expenditures)(10,717,328)(709,590)(11,426,918)(11,657,302) (Deficiency) Excess of Revenues (Under) Over Expenditures (611,778)720,999109,221291,241 Other Financing Sources (Uses) Transfers in 975,45471,0001,046,4541,404,982 Transfers (out)(31,000)(400,696)(431,696)(915,934) Sale of General Fixed Assets 0 0 025,649 Total Other Financing (Uses)944,454(329,696)614,758514,697 Net Change in Fund Balances 332,676391,303723,979805,938 Fund Balances, Beginning of Year 6,245,0063,242,7119,487,7178,681,779 Fund Balances, End of Year 6,577,682$3,634,014$10,211,696$9,487,717$ 2013 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 CITY OF ATLANTIC BEACH, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013, DRAFT See accompanying notes. 6 Net Change in Fund Balances - Total Governmental Funds 723,979$805,938$ 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 768,203$833,588$ (Current Year Depreciation)(1,139,045)(1,145,847) (370,842)(312,259) 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.(156,857)153,927 Certain nonexchange revenues reported in the governmental funds are not reported in the statement of activities due to the revenues being earned in prior years.0 0 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.67,712 63,684 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)0 (25,649) or Gain on Disposal of General Fixed Assets (4,335)(362,498) (4,335)(388,147) 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 0 (173,922) Debt Interest Expense 946 899 Compensated Absences 34,125 89,485 Net Pension Asset 2,271 0 Other Postemployment Benefits Obligation (23,705)(33,189) 13,637 (116,727) Change in Net Position - Governmental Activities 273,294$206,416$ CITY OF ATLANTIC BEACH, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 2013 2012 TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2013, WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 DRAFT Se e a c c o m p a n y i n g n o t e s . 7 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s As s e t s Cu r r e n t A s s e t s : Eq u i t y i n P o o l e d C a s h a n d I n v e s t m e n t s 3, 2 6 5 , 4 3 7 $ 1, 4 4 5 , 7 4 8 $ 67 9 , 4 6 0 $ 11 5 , 5 9 3 $ 5, 5 0 6 , 2 3 8 $ 5,865,638$ Ac c o u n t s R e c e i v a b l e - N e t 50 8 , 7 0 7 4 0 , 2 4 2 6 6 , 7 5 0 0 6 1 5 , 6 9 9 6 1 3 , 8 5 6 Due f rom O ther G overnments 00 0 0 0 0 Inventories 62,8760 0 0 6 2,87644,683 No t e s R e c e i v a b l e - C u r r e n t 15 , 7 5 90 0 0 1 5,75910,709 Pr e p a i d I t e m s 15 5 , 7 2 3 2 5 , 4 2 4 0 0 1 8 1 , 1 4 7 0 Re s t r i c t e d A s s e t s : Eq u i t y i n P o o l e d C a s h a n d C a s h E q u i v a l e n t s 2, 3 7 3 , 5 0 8 1 7 0 , 6 9 9 0 0 2 , 5 4 4 , 2 0 7 2 , 6 4 9 , 2 8 9 Ca p i t a l A s s e t s : La n d 74 9 , 4 9 9 9 0 6 , 5 1 9 0 0 1 , 6 5 6 , 0 1 8 1 , 6 5 6 , 0 1 8 Bu i l d i n g s 4, 3 5 6 , 3 8 4 0 0 0 4 , 3 5 6 , 3 8 4 4 , 3 5 6 , 3 8 4 Im p r o v e m e n t s O t h e r T h a n B u i l d i n g s 60 , 8 6 0 , 2 0 3 1 6 , 2 0 1 , 5 4 6 0 0 7 7 , 0 6 1 , 7 4 9 7 6 , 3 2 8 , 8 4 2 Eq u i p m e n t 1, 5 4 7 , 1 2 5 2 5 3 , 4 8 3 18 5 , 3 7 7 3 7 , 5 0 0 2 , 0 2 3 , 4 8 5 1 , 8 4 3 , 1 6 1 In t a n g i b l e s - E a s e m e n t s a n d C o m p u t e r S o f t w a r e 22 6 , 3 9 4 00 18 , 3 1 5 2 4 4 , 7 0 9 2 4 4 , 7 0 9 (A c c u m u l a t e d D e p r e c i a t i o n a n d A m o r t i z a t i o n ) ( 36 , 4 9 6 , 9 9 8 ) ( 7 , 7 1 9 , 3 6 9 ) ( 1 7 5 , 1 0 2 ) ( 55 , 8 1 5 ) ( 4 4 , 4 4 7 , 2 8 4 ) ( 4 2 , 1 3 2 , 7 8 4 ) Co n s t r u c t i o n i n P r o g r e s s 13 7 , 8 1 7 4 6 , 8 5 4 0 0 1 8 4 , 6 7 1 1 1 5 , 6 8 2 No t e s R e c e i v a b l e - N o n c u r r e n t 13 3 , 4 4 60 0 0 13 3 , 4 4 6 8 3 , 0 2 6 Un a m o r t i z e d L o a n C o s t s 15 3 , 6 3 6 2 2 , 2 7 7 0 0 1 7 5 , 9 1 3 1 9 0 , 4 0 5 To t a l A s s e t s 38 , 0 4 9 , 5 1 6 $ 11 , 3 9 3 , 4 2 3 $ 75 6 , 4 8 5 $ 11 5 , 5 9 3 $ 50 , 3 1 5 , 0 1 7 $ 51,869,618$ 20 1 3 WI T H C O M P A R A T I V E T O T A L S F O R S E P T E M B E R 3 0 , 2 0 1 2 CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F N E T P O S I T I O N PR O P R I E T A R Y F U N D S SE P T E M B E R 3 0 , 2 0 1 3 , Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s DR A F T Se e a c c o m p a n y i n g n o t e s . 8 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s Li a b i l i t i e s Cu r r e n t L i a b i l i t i e s P a y a b l e f r o m C u r r e n t As s e t s : Ac c o u n t s P a yab l e a n d O t h e r C u rr e n t L i a b il i t i e s 29 5 , 0 7 9 $ 3 2 , 3 8 3 $ 1 0 4 , 2 2 8 $ 6 , 3 4 5 $ 4 3 8 , 0 3 5 $ 5 9 5 , 9 4 2 $ Construction R e t a i n a g e s P a y a b l e 0 0 0 0 0 385,117 Du e t o O t h e r G o v e r n m e n t s 6 , 9 2 6 0 0 2 , 4 5 8 9 , 3 8 4 7 , 1 4 1 De f e r r e d R e v e n u e 9 1 , 2 2 5 2 8 , 8 5 5 6 2 , 3 6 4 0 1 8 2 , 4 4 4 2 0 3 , 2 4 3 Co m p e n s a t e d A b s e n c e s - C u r r e n t 7 2 , 0 6 9 1 , 6 9 7 0 7 , 7 3 3 8 1 , 4 9 9 1 2 6 , 0 0 0 Cu r r e n t L i a b i l i t i e s P a y a b l e f r o m R e s t r i c t e d As s e t s : Cu r r e n t P o r t i o n o f B o n d s P a ya b l e 92 3 , 1 1 4 1 2 7 , 8 7 8 0 0 1 , 0 5 0 , 9 9 2 1 , 0 1 2 , 7 6 7 Cu r r e n t P o r t i o n o f L o a n s P a y a b l e 16 4 , 4 7 5 0 0 0 1 6 4 , 4 7 5 4 5 7 , 4 9 2 Ac c r u e d I n t e r e s t P a y a b l e 38 0 , 5 5 1 4 2 , 8 2 1 0 0 4 2 3 , 3 7 2 4 3 9 , 4 2 0 Cu s t o m e r D e p o s i t s 57 3 , 8 7 9 0 0 0 5 7 3 , 8 7 9 5 1 8 , 6 5 3 No n c u r r e n t L i a b i l i t i e s : Du e i n M o r e T h a n O n e Y e a r 19 , 5 3 6 , 8 9 7 1 , 8 0 6 , 7 3 6 0 0 2 1 , 3 4 3 , 6 3 3 2 2 , 4 5 6 , 4 4 6 Co m p e n s a t e d A b s e n c e s - N o n c u r r e n t 16 2 , 5 2 9 82 7 0 1 6 , 2 3 4 1 7 9 , 5 9 0 1 6 3 , 5 0 1 Ot h e r P o s t e m p l o y m e n t B e n e f i t s O b l i g a t i o n 29 , 3 1 4 8, 8 5 6 0 5, 9 0 2 4 4 , 0 7 2 3 6 , 3 4 2 To t a l L i a b i l i t i e s 22 , 2 3 6 , 0 5 8 2 , 0 5 0 , 0 5 3 1 6 6 , 5 9 2 3 8 , 6 7 2 2 4 , 4 9 1 , 3 7 5 2 6 , 4 0 2 , 0 6 4 Ne t P o s i t i o n Ne t I n v e s t m e n t i n C a p i t a l A s s e ts 10 , 9 0 9 , 5 7 4 7 , 7 7 6 , 6 9 6 1 0 , 2 7 5 0 1 8 , 6 9 6 , 5 4 5 1 8 , 2 9 0 , 5 9 0 Re s t r i c t e d f o r : Re n e w a l a n d R e p l a c e m e n t 50 0 , 0 0 0 0 0 0 5 0 0 , 0 0 0 5 0 0 , 0 0 0 De b t S e r v i c e 1, 0 7 3 , 1 8 4 1 2 7 , 8 7 8 0 0 1 , 2 0 1 , 0 6 2 1 , 1 7 3 , 8 5 8 Other C apital P rojects 00 0 0 0 0 Bu i l d i n g C o d e E n f o r c e m e n t 0 0 0 7 6 , 9 2 1 7 6 , 9 2 1 3 8 , 4 6 3 Un r e s t r i c t e d 3, 3 3 0 , 7 0 0 1 , 4 3 8 , 79 6 5 7 9 , 6 1 8 0 5 , 3 4 9 , 1 1 4 5 , 4 6 4 , 6 4 3 To t a l N e t P o s i t i o n 15 , 8 1 3 , 4 5 8 $ 9, 3 4 3 , 3 7 0 $ 58 9 , 8 9 3 $ 76 , 9 2 1 $ 25 , 8 2 3 , 6 4 2 $ 25,467,554$ Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s (C o n c l u d e d ) SE P T E M B E R 3 0 , 2 0 1 3 , WI T H C O M P A R A T I V E T O T A L S F O R S E P T E M B E R 3 0 , 2 0 1 2 20 1 3 ST A T E M E N T O F N E T P O S I T I O N PR O P R I E T A R Y F U N D S CI T Y O F A T L A N T I C B E A C H , F L O R I D A DR A F T Se e a c c o m p a n y i n g n o t e s . 9 Bu i l d i n g C o d e 2012 Ut i l i t y St o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s Oper a t i n g R e v e n u e s Ch a r ges f o r S e r v i c e s : Cu s t o m e r C h a r ges 7, 9 5 1 , 8 7 6 $ 85 4 , 8 1 2 $ 1, 7 4 6 , 0 8 5 $ 27 0 , 4 1 5 $ 10 , 8 2 3 , 1 8 8 $ 10,777,484$ Fr a n c h i s e P e r m i t s 0 0 3, 0 0 0 0 3,0007,500 Mi s c e l l a n e o u s R e v e n u e s 19 5 , 1 1 2 0 0 0 1 9 5 , 1 1 2 4 8 , 9 5 5 To t a l O per a t i n g R e v e n u e s 8, 1 4 6 , 9 8 8 8 5 4 , 8 1 2 1 , 7 4 9 , 0 8 5 2 7 0 , 4 1 5 1 1 , 0 2 1 , 3 0 0 1 0 , 8 3 3 , 9 3 9 Op e r a t i n g E x p e n s e s Pe r s o n a l S e r v i c e s 1 , 7 6 1 , 8 0 6 20 6 , 5 4 8 1 8 , 1 8 6 2 2 0 , 4 5 8 2 , 2 0 6 , 9 9 8 2 , 2 6 6 , 0 8 7 Co n t r a c t u a l S e r v i c e s 6 5 4 , 6 0 0 1 3 4 , 07 4 1 , 3 0 4 , 3 3 9 1 , 2 6 2 2 , 0 9 4 , 2 7 5 2 , 2 9 9 , 6 6 8 Su pp li e s 33 3 , 3 8 7 2 5 , 4 0 9 0 3, 7 9 0 3 6 2 , 5 8 6 3 5 6 , 4 8 8 Re pai r s a n d M a i n t e n a n c e 10 1 , 9 2 9 1 8 , 4 0 2 6, 4 3 5 7, 0 1 4 1 3 3 , 7 8 0 1 5 7 , 6 7 7 Ut i l i t i e s 38 2 , 69 4 0 0 0 3 8 2 , 6 9 4 6 2 9 , 1 8 5 De pre c i a t i o n 1, 8 3 7 , 3 1 1 4 6 3 , 4 7 3 15 , 2 2 0 70 2 , 3 1 6 , 0 7 4 2 , 3 5 6 , 9 6 5 In t e r gov e r n m e n t a l C h a r ges 98 2 , 2 9 2 1 6 6 , 5 9 5 1 6 2 , 6 1 8 2 3 , 3 6 9 1 , 3 3 4 , 8 7 4 1 , 4 4 2 , 1 7 7 Ot h e r E x pen s e s 21 3 , 7 1 0 2 7 , 1 7 3 (3, 1 6 3 ) 4, 9 2 2 2 4 2 , 6 4 2 2 5 2 , 3 9 9 (T o t a l O p e r a t i n g E x p e n s e s ) (6 , 2 6 7 , 7 2 9 ) ( 1 , 0 4 1 , 6 7 4 ) ( 1 , 5 0 3 , 6 3 5 ) ( 2 6 0 , 8 8 5 ) ( 9 , 0 7 3 , 9 2 3 ) ( 9 , 7 6 0 , 6 4 6 ) Op e r a t i n g I n c o m e ( L o s s ) 1, 8 7 9 , 2 5 9 ( 1 8 6 , 8 6 2 ) 2 4 5 , 4 5 0 9, 5 3 0 1 , 9 4 7 , 3 7 7 1 , 0 7 3 , 2 9 3 No n o p e r a t i n g R e v e n u e s ( E x p e n s e s ) Co n n e c t i o n C h a r ges 8,5300 0 0 8 ,5307,064 Fr a n c h i s e F e e s 0 0 4 9 , 4 2 7 0 4 9 , 4 2 7 2 5 , 6 8 1 In t e r gov e r n m e n t a l R e v e n u e (Ex pen s e ) 00 0 0 0 0 In v e s t m e n t E a r n i n gs (Lo s s )( 97 , 2 9 4 )( 32 , 6 9 7 )( 13 , 9 8 1 )( 2, 1 4 2 )(146,114)248,057 In t e r e s t E x pen s e (89 6 , 5 7 1 )( 99 , 6 2 8 ) 00 (996,199)(881,739) Ga i n (Lo s s ) o n D i s posal o f F ixed A ssets 1 ,6010 0 0 1 ,6012,077 Am o r t i z a t i o n o f L o a n C o s t s (16 2 , 5 5 2 )( 1, 9 0 2 ) 00 (164,454)(14,654) To t a l N o n o p e r a t i n g Re v e n u e s ( E x p e n s e s ) (1 , 1 4 6 , 2 8 6 ) ( 1 3 4 , 2 2 7 ) 3 5 , 4 4 6 ( 2 ,1 4 2 ) ( 1 , 2 4 7 , 2 0 9 ) ( 6 1 3 , 5 1 4 ) FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F R E V E N U E S , E X P E N S E S , A N D CH A N G E S I N N E T P O S I T I O N PR O P R I E T A R Y F U N D S 20 1 3 Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 DR A F T Se e a c c o m p a n y i n g n o t e s . 10 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s In c o m e ( L o s s ) B e f o r e C o n t r i b u t i o n s a n d T r a n s f e r s 73 2 , 9 7 3 $ (3 2 1 , 0 8 9 ) $ 28 0 , 8 9 6 $ 7, 3 8 8 $ 700,168 $ 459,779$ Ca p i t a l C o n t r i b u t i o n s a n d G r a n t s an d T r a n s f e r s Ca p i t a l C o n t r i b u t i o n s a n d G r a n t s 27 0 , 6 7 8 0 0 0 2 7 0 , 6 7 8 1 5 8 , 3 4 7 Tr a n s f e r s i n 0 2 5 2 , 0 0 0 0 3 1 , 0 0 0 2 8 3 , 0 0 0 5 6 4 , 6 9 5 Tr a n s f e r s ( o u t ) (6 2 9 , 8 6 0 ) 0 ( 2 6 7 , 8 9 8 ) 0 ( 8 9 7 , 7 5 8 ) ( 8 7 9 , 8 2 1 ) To t a l C a p i t a l C o n t r i b u t i o n s a n d G r a n t s an d T r a n s f e r s (3 5 9 , 1 8 2 ) 2 5 2 , 0 0 0 ( 2 6 7 , 8 9 8 ) 3 1 , 0 0 0 ( 3 4 4 , 0 8 0 ) ( 1 5 6 , 7 7 9 ) Ch a n g e i n N e t P o s i t i o n 37 3 , 7 9 1 ( 6 9 , 0 8 9 ) 1 2 , 9 9 8 3 8 , 3 8 8 3 5 6 , 0 8 8 3 0 3 , 0 0 0 Ne t P o s i t i o n , B e g i n n i n g o f Y e a r 15 , 4 3 9 , 6 6 7 9 , 4 1 2 , 4 5 9 5 7 6 , 8 9 5 3 8 , 5 3 3 2 5 , 4 6 7 , 5 5 4 2 5 , 1 6 4 , 5 5 4 Ne t P o s i t i o n , E n d o f Y e a r 15 , 8 1 3 , 4 5 8 $ 9, 3 4 3 , 3 7 0 $ 58 9 , 8 9 3 $ 76 , 9 2 1 $ 25 , 8 2 3 , 6 4 2 $ 25,467,554$ 20 1 3 WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , ST A T E M E N T O F R E V E N U E S , E X P E N S E S , A N D CI T Y O F A T L A N T I C B E A C H , F L O R I D A Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s (C o n c l u d e d ) CH A N G E S I N N E T P O S I T I O N PR O P R I E T A R Y F U N D S DR A F T Se e a c c o m p a n y i n g n o t e s . 11 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s Totals Ca s h F l o w s f r o m O p er a t i n g A c t i v i t i e s Ca s h R e c e i v e d f r o m C u s t o m e r s 7, 9 6 1 , 4 5 8 $ 86 0 , 2 6 5 $ 1, 7 5 3 , 7 6 8 $ 27 0 , 4 1 5 $ 10 , 8 4 5 , 9 0 6 $ 10,947,884$ Ca s h P a i d t o S u p p l i e r s (2 , 4 1 7 , 7 7 5 ) ( 21 0 , 9 7 7 ) ( 1 , 3 0 6 , 8 8 9 ) ( 1 6 , 5 3 3 ) (3 , 9 5 2 , 1 7 4 ) ( 3 , 7 8 7 , 8 4 5 ) Ca s h P a i d t o E m p l o y e e s (1 , 7 8 4 , 0 5 5 ) ( 20 4 , 5 8 1 ) ( 1 8 , 1 8 6 ) ( 2 2 0 , 8 5 8 ) ( 2 , 2 2 7 , 6 8 0 ) ( 2 , 2 5 9 , 9 1 8 ) Ca s h P a i d f o r I n t e r f u n d S e r v i c e s (9 8 2 , 29 2 ) ( 1 6 6 , 5 9 5 ) ( 1 6 2 , 6 1 8 ) ( 2 3 , 36 9 ) ( 1 , 3 3 4 , 8 7 4 ) ( 1 , 4 4 2 , 1 7 7 ) Ne t C a s h P r o v i d e d b y ( U s e d i n ) O p e r a t i n g Ac t i v i t i e s 2, 7 7 7 , 3 3 6 2 7 8 , 1 1 2 2 6 6 , 0 7 5 9, 6 5 5 3 , 3 3 1 , 1 7 8 3 , 4 5 7 , 9 4 4 Ca s h F l o w s f r o m N o n c a p i t a l F i n a n c i n g Ac t i v i t i e s Co n n e c t i o n C h a r g e s 8, 5 3 0 0 49 , 4 2 7 0 57,9577,064 Fr a n c h i s e F e e s 0 0 0 0 025,681 Tr a n s f e r s i n 0 2 5 2 , 0 0 0 0 31 , 0 0 0 2 8 3 , 0 0 0 3 9 0 , 7 7 3 Tr a n s f e r s ( o u t ) (6 2 9 , 8 6 0 ) 0 ( 2 6 7 , 8 9 8 ) 0 ( 8 9 7 , 7 5 8 ) ( 8 7 9 , 8 2 1 ) Ne t C a s h P r o v i d e d b y ( U s e d i n ) N o n c a p i t a l Fi n a n c i n g A c t i v i t i e s (6 2 1 , 3 3 0 ) 2 5 2 , 0 0 0 ( 2 1 8 , 4 7 1 ) 3 1 , 0 0 0 ( 5 5 6 , 8 0 1 ) ( 4 5 6 , 3 0 3 ) Ca p i t a l a n d R e l a t e d F i n a n c i n g A c t i v i t i e s Ca p i t a l G r a n t s 27 0 , 6 7 80 0 0 270,678158,347 Pr o c e e d s f r o m L o a n 0 0 0 0 05,332,349 Fi x e d A s s e t A d d i t i o n s (9 3 1 , 6 7 3 ) (4 6 , 8 5 6 ) ( 4 , 5 0 0 ) 0 ( 9 8 3 , 0 2 9 ) ( 6 , 0 1 7 , 8 2 2 ) Pr i n c i p a l P a y m e n t s o n L o n g - t e r m De b t (1 , 3 4 5 , 9 0 6 ) ( 1 2 3 , 0 3 9 ) 0 0 ( 1 , 4 6 8 , 9 4 5 ) ( 9 8 5 , 9 7 1 ) In t e r e s t P a i d (8 2 3 , 2 3 0 ) ( 8 7 , 7 3 2 ) 0 0 ( 9 1 0 , 9 6 2 ) ( 7 2 9 , 6 0 6 ) Ne t C a s h P r o v i d e d b y ( U s e d i n ) C a p i t a l an d R e l a t e d F i n a n c i n g A c t i v i t i e s (2 , 8 3 0 , 1 3 1 ) ( 2 5 7 , 6 2 7 ) ( 4 , 5 0 0 ) 0 ( 3 , 0 9 2 , 2 5 8 ) ( 2 , 2 4 2 , 7 0 3 ) Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F C A S H F L O W S PR O P R I E T A R Y F U N D S FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 20 1 3 DR A F T Se e a c c o m p a n y i n g n o t e s . 12 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s Ca s h F l o w s f r o m I n v e s t i n g A c t i v i t i e s Sa l e ( P u r c h a s e ) o f I n v e s t m e n t s 61 5 , 8 7 2 $ (1 7 4 , 2 8 6 ) $ (1 8 , 7 0 8 ) $ (2 8 , 3 5 5 ) $ 394,523 $ (4,477,408)$ In t e r e s t R e c e i v e d (9 7 , 2 9 4 ) ( 3 2 , 69 7 ) ( 1 3 , 9 8 1 ) ( 2 , 6 2 9 ) ( 1 4 6 , 6 0 1 ) 2 4 8 , 8 8 8 Ne t C a s h P r o v i d e d b y ( U s e d i n ) In v e s t i n g A c t i v i t i e s 51 8 , 5 7 8 ( 2 0 6 , 9 8 3 ) ( 3 2 , 6 8 9 ) ( 3 0 , 9 8 4 ) 2 4 7 , 9 2 2 ( 4 , 2 2 8 , 5 2 0 ) Ne t I n c r e a s e ( D e c r e a s e ) i n C a s h a n d Ca s h E q u i v a l e n t s (1 5 5 , 5 4 7 ) 6 5 , 5 0 2 1 0 , 4 1 5 9, 6 7 1 ( 6 9 , 9 5 9 ) ( 3 , 4 6 9 , 5 8 2 ) Ca s h a n d C a s h E q u i v a l e n t s , B e g i n n i n g o f Y e a r 1, 5 3 1 , 1 0 7 3 2 8 , 8 1 3 1 5 5 , 3 3 2 1 8 , 5 2 7 2 , 0 3 3 , 7 7 9 5 , 5 0 3 , 3 6 1 Ca s h a n d C a s h E q u i v a l e n t s , E n d o f Y e a r 1, 3 7 5 , 5 6 0 $ 39 4 , 3 1 5 $ 16 5 , 7 4 7 $ 28 , 1 9 8 $ 1,963,820 $ 2,033,779$ Re c o n c i l i a t i o n o f O p e r a t i n g I n c o m e ( L o s s ) t o Ne t C a s h P r o v i d e d b y ( U s e d i n ) O p e r a t i n g Ac t i v i t i e s Op e r a t i n g I n c o m e ( L o s s ) 1, 8 7 9 , 2 5 9 $ (1 8 6 , 8 6 2 ) $ 24 5 , 4 5 0 $ 9, 5 3 0 $ 1,947,377 $ 1,073,362$ Ad j u s t m e n t s t o R e c o n c i l e O p e r a t i n g In c o m e ( L o s s ) t o N e t C a s h P r o v i d e d b y (U s e d i n ) O p e r a t i n g A c t i v i t i e s : De p r e c i a t i o n 1, 8 3 7 , 3 1 1 4 6 3 , 47 3 1 5 , 2 2 0 70 2 , 3 1 6 , 0 7 4 2 , 3 5 6 , 8 9 6 Ch a n g e i n A s s e t s a n d L i a b i l i t i e s : Ac c o u n t s R e c e i v a b l e (6 7 , 0 0 1 ) 5, 4 2 1 4, 2 6 7 0 ( 5 7 , 3 1 3 ) 7 5 , 0 3 6 In v e n t o r y (1 8 , 1 9 3 ) 0 0 0 ( 1 8 , 1 9 3 ) 1,508 Pr e p a i d s (1 5 5 , 7 2 3 ) ( 2 5 , 4 2 4 ) 0 0 ( 1 8 1 , 1 4 7 ) 0 Co m p e n s a t e d A b s e n c e s (2 7 , 4 0 3 ) 42 2 0 (1 , 4 3 1 ) ( 2 8 , 4 1 2 ) 6,169 OP E B O b l i g a t i o n 5, 1 5 4 1, 5 4 5 0 1, 0 3 1 7,7300 Ac c o u n t s P a y a b l e a n d A c c r u e d L i ab i l i t i e s ( 7 1 3 , 26 2 ) 1 9 , 5 0 5 72 2 45 5 ( 6 9 2 , 5 8 0 ) ( 9 3 , 9 3 6 ) Customer D eposits 55,2260 0 0 5 5,226(796) De f e r r e d R e v e n u e (1 8 , 0 3 2 ) 32 41 6 0 ( 1 7 , 5 8 4 ) 3 9 , 7 0 5 Ne t C a s h P r o v i d e d b y ( U s e d i n ) O p e r a t i n g Ac t i v i t i e s 2, 7 7 7 , 3 3 6 $ 27 8 , 1 1 2 $ 26 6 , 0 7 5 $ 9, 6 5 5 $ 3,331,178 $ 3,457,944$ Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F C A S H F L O W S PR O P R I E T A R Y F U N D S FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , (C o n t i n u e d ) 20 1 3 WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 DR A F T Se e a c c o m p a n y i n g n o t e s . 13 Bu i l d i n g C o d e 2012 Ut i l i t y S t o r m w a t e r S a n i t a t i o n E n f o r c e m e n t T o t a l s T o t a l s Re c o n c i l i a t i o n o f C a s h a n d C a s h Eq u i v a l e n t s t o B a l a n c e S h e e t Eq u i t y i n P o o l e d C a s h a n d C a s h Eq u i v a l e n t s i n C u r r e n t A s s e t s 3, 2 6 5 , 4 3 7 $ 1, 4 4 5 , 7 4 8 $ 67 9 , 4 6 0 $ 11 5 , 5 9 3 $ 5,506,238 $ 5,865,638$ Re s t r i c t e d E q u i t y i n P o o l e d C a s h an d C a s h E q u i v a l e n t s 2, 3 7 3 , 5 0 8 1 7 0 , 6 9 9 0 0 2 , 5 4 4 , 2 0 7 2 , 6 4 9 , 2 8 9 Eq u i t y i n P o o l e d I n v e s t m e n t s (4 , 2 6 3 , 3 8 5 ) (1 , 2 2 2 , 1 3 2 ) ( 5 1 3 , 7 1 3 ) ( 8 7 , 3 9 5 ) ( 6 , 0 8 6 , 6 2 5 ) ( 6 , 4 8 1 , 1 4 8 ) To t a l C a s h a n d C a s h E q u i v a l e n t s 1, 3 7 5 , 5 6 0 $ 39 4 , 3 1 5 $ 16 5 , 7 4 7 $ 28 , 1 9 8 $ 1,963,820 $ 2,033,779$ No n c a s h A c t i v i t y No n c a s h T r a n s f e r s 0$0$0$0$0 $ (173,922)$ Am o r t i z a t i o n o f B o n d I s s u e C o s t s 12 , 6 4 6 1, 8 4 6 0 0 1 4 , 4 9 2 1 4 , 2 5 4 Am o r t i z a t i o n o f B o n d D i s c o u n t ( P r e m i u m ) 87 , 3 5 0 1 3 , 7 7 6 0 0 1 0 1 , 1 2 6 9 8 , 5 4 1 Am o r t i z a t i o n o f L o s s o n R e f u n d i n g 1, 2 8 2 21 0 0 0 1,4922,444 20 1 3 Bu s i n e s s - t y p e A c t i v i t i e s - E n t e r p r i s e F u n d s WI T H C O M P A R A T I V E T O T A L S F O R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 2 (C o n c l u d e d ) CI T Y O F A T L A N T I C B E A C H , F L O R I D A ST A T E M E N T O F C A S H F L O W S PR O P R I E T A R Y F U N D S FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 , DR A F T See accompanying notes. 14 2013 2012 Assets Cash and Cash Equivalents 130,743$86,828$ Prepaids 5,830 0 Interest Receivable 34,097 28,197 Investments at Fair Value 21,341,30419,832,927 Total Assets 21,511,97419,947,952 Liabilities Accounts Payable and Accrued Liabilities 900 424 Excess Premium Tax Liability 120,454 120,454 DROP Plan Payable 288,280 198,554 Total Liabilities 409,634 319,432 Total Net Position Held in Trust for Pension Benefits 21,102,340$19,628,520$ -- Pension Trust Funds WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012 CITY OF ATLANTIC BEACH, FLORIDA STATEMENT OF NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2013, DRAFT See accompanying notes. 15 2013 2012 Additions Contributions: Employer 1,562,327$1,538,619$ Employees 258,156 261,992 State of Florida 91,077 88,795 Total Contributions 1,911,5601,889,406 Net (Decrease) Increase in Fair Value of Investments 729,1682,218,699 Interest and Dividends 420,837 443,921 Miscellaneous Revenue 58,206 0 Total Additions 3,119,7714,552,026 Deductions Refunds of Contributions 118,126 12,751 Benefits 1,381,3881,254,883 Investment Expenses 84,793 103,133 Administrative Expenses 61,644 57,614 Total Deductions 1,645,9511,428,381 Net Increase 1,473,8203,123,645 Net Position, Beginning of Year 19,628,52016,504,875 Net Position, End of Year 21,102,340$19,628,520$ Pension Trust Funds WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 CITY OF ATLANTIC BEACH, FLORIDA STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013, DRAFT 16 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 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. In accordance with the Codification of Governmental and Financial Reporting Standards, the financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable, and other organizations whose exclusions would cause the reporting entity’s financial statements to be misleading or incomplete. The Governmental AccountingStandards Board (GASB) has set forth criteria for consideration in determining financial accountability. These criteria include appointing a majority of an organization’s governing body and:(1) the ability of the City to impose its will on that organization; or, (2) the potential for that organization to provide specific benefits to or impose specific financial burdens on the City. Other considerations are whether the organization is legally separate, whether the City holds the corporate powers of the organization, and whether there is fiscal dependency by the organization on the City. Based upon the application of these criteria, the City has no component units. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the 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 isoffset 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. DRAFT 17 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (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 generalrule, the effect of interfund activity has been eliminated from the government-wide financial statements. The major exception to this general rule ischarges 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 revenuesinclude: (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 positionisreported as one of three categories: (1)Net Investment in Capital Assets;(2) Restricted; or (3) Unrestricted. Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, other postemployment benefits,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. DRAFT 18 CITY OFATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Fund Financial Statements (Concluded) The City reports the following major governmental fund: Ŷ 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: Ŷ The Utility Fund accounts for the activities of the City’s water distribution and sewer collection and treatment systems. Ŷ The Sanitation Fund accounts for the activities of the City’s sanitation system. Ŷ The StormwaterFund accounts for the activities of the City’s stormwater system. Ŷ The Building Code Enforcement Fund accounts for the activities of the City’sBuilding Department. Additionally, the City reports the following fund types: Ŷ 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. Ŷ 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. Ŷ 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). Ŷ 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: DRAFT 19 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Fund Balance Classification (Concluded) Ŷ Nonspendable Fund Balance—amounts that are not in spendable form (such as inventory) or are required to be maintained intact. Ŷ 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. Ŷ 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. Ŷ 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. Ŷ 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. 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 Proprietary funds distinguish operating revenues and expenses from nonoperatingitems. 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. DRAFT 20 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Budgets General governmental revenueand 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. Investment earnings and losseson the pooled cash and investments aredistributed 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 equivalentsto 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). 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 nonspendablefund 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. DRAFT 21 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) 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 usein 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 OtherThan Buildings 10– 50 Infrastructure 25– 100 Machinery and Equipment 3– 40 Long-term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums 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. DRAFT 22 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) Long-term Obligations (Concluded) In the fund financial statements, governmental fund types recognizebond 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 propertytaxes 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. 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, 2012, from which the summarized information was derived. DRAFT 23 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 1 - Summary of Significant Accounting Policies (Concluded) New Accounting Pronouncements During the year, the City implemented GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements (GASB 62). This standard incorporates into the GASB’s authoritative literature certain accounting and financial reporting guidance included in FASB pronouncements, which does not conflict with or contradict GASB pronouncements, and eliminates the criteria to apply post-November 30, 1989 pronouncements that do not conflict or contradict GASB pronouncements. During the year, the City implemented GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position (GASB 63). This standard establishes a new statement of net position format that reports separately all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position (which is the residual amount of the other elements). This Statement requires deferred outflows of resources and deferred inflows of resources to be reported separately from assets and liabilities. The financial reporting impact resulting from the implementation of GASB 63 in the City’s financial statements was the renaming of “Net Assets” to “Net Position”, including changing the name of the financial statement from “Statement of Net Assets” to “Statement of Net Position”. 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, 2013, the carrying amount of cash on hand and on deposit with banks, including interest-bearing deposits was $3,349,896, and the related bank balance was $3,536,473. 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 StatutesChapter 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. The City elected to adopt a written investment policy as authorized under Florida Statutes. DRAFT 24 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 2 - Cash and Investments (Continued) Under the City’s investment policies, general investments’ activities are authorized to invest in obligations of the U.S. Treasury, demand deposits, U.S. government agency securities, certificates of deposit, U.S. government sponsored enterprises, governmentand corporate fixed income mutual funds, corporate notes and bonds, and local government investment pools. Pension trust funds can invest in the aforementioned and, additionally, authorized investments include domestic and foreign equity securities, 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, 2013: Investment Maturities Investment Credit Fair LessThan 1-5 6-10 Type Rating Value 1 Year Years Years Total Money Market Funds: Citibank, N.A. Bank Deposit Program Unrated $ 1,003,070 $ 1,003,070 $ 0 $ 0 $ 1,003,070 Mutual Funds: Alliance Limited Duration High Income Mutual Fund Unrated 2,857,723 2,857,723 0 0 2,857,723 Guggenheim Floating Rate Strategy Class AUnrated 2,835,127 2,835,127 0 0 2,835,127 Invesco Floating Rate Class AUnrated 2,820,909 2,820,909 0 0 2,820,909 Lord Abbett Floating Rate Income Class A Unrated 1,469,807 1,469,807 0 0 1,469,807 Lord Abbett Short Duration Income Class A Mutual Fund Unrated 1,017,017 1,017,017 0 0 1,017,017 Putnam Diversified Income Trust Class A Unrated 2,483,629 2,483,629 0 0 2,483,629 Florida PRIME A-1 247 247 0 0 247 Fund B Surplus Trust Funds Investment Pool Unrated 98 0 0 98 98 Total $ 14,487,627 $ 14,487,529 $ 0 $ 98 $14,487,627 DRAFT 25 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 2 - Cash and Investments (Continued) Listed below are the investments and maturities in the City’s pension trust funds at September30, 2013: Investment Maturities Investment Fair LessThan 1-5 6-10 MoreThan Type Value* 1 Year Years Years 10Years Total Cash Depositsand Money Markets $ 1,082,227 $ 1,082,227 $ 0 $ 0 $ 0 $ 1,082,227 Common Stocks 12,315,249 12,315,249 0 0 0 12,315,249 Corporate Bonds 6,471,829 253,405 3,357,866 2,860,558 0 6,471,829 Mutual Funds – Fixed Income 426,035 426,035 0 0 0 426,035 Government and GSE Bonds 791,781 0 386,857 223,120 181,804 791,781 ICMA Self Directed 288,280 288,280 0 0 0 288,280 Total $ 21,375,401 $ 14,365,196 $ 3,744,723 $ 3,083,678 $ 181,804 $ 21,375,401 * Fair value balances reported include interest receivable. The total pension investment balances of the City at September 30, 2013, are comprised of the following items: Moody’s Percent Investment Credit of Type Rating Total Corporate Bonds A1 2.08% Corporate Bonds A2 4.34% Corporate Bonds A3 6.23% Corporate Bonds AA2 0.67% Corporate Bonds AA3- 0.75% Corporate Bonds BAA1 5.97% Corporate Bonds BAA2 8.76% Corporate Bonds BAA3 1.48% Government and GSE Bonds AAA 3.70% Mutual Funds – Fixed Income NR 1.99% Stocks NR 57.62% Cash and Money Market NR 5.06% ICMA Self Directed NR 1.35% Restricted cash and investments at September 30, 2013, in the enterprise funds follows: Renewal System Enterprise Customer and Debt Development Funds Deposits Replacement Service Charges Totals Utility Fund $ 582,889 $ 500,000 $ 1,290,619 $ 0 $ 2,373,508 Stormwater Fund $ 0 $ 0 $ 170,699 $ 0 $ 170,699 DRAFT 26 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 2 - Cash and Investments (Concluded) 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 of 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. 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 CustodialSafekeeping 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, 2013, consist of the following: Less Total Allowance Accounts Accounts for Doubtful Receivable Fund Receivable Accounts Net General $ 116,693 $ 0 $ 116,693 Utility 521,009 (12,302) 508,707 Stormwater 41,488 (1,246) 40,242 Sanitation 71,909 (5,159) 66,750 Total $ 751,099 $ (18,707) $ 732,392 Included in accounts receivable are $216,363 of water and sewer revenues earned, but not billed as of September 30, 2013. DRAFT 27 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) 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, 2013: Notes Receivable $ 149,205 (Current Portion)(15,759) Total Notes Receivable - Noncurrent $ 133,446 Note 5 - Capital Assets Capital asset activity for the fiscal year ended September 30, 2013, is as follows: Beginning Ending Balance Increases (Decreases) Balance Governmental Activities Capital Assets Not Being Depreciated: Land$ 10,034,337 $ 328,665 $ 0 $ 10,363,002 Construction in Progress4,338 101,062 (4,338) 101,062 Total Capital Assets Not Being Depreciated10,038,675 429,727 (4,338) 10,464,064 Capital Assets Being Depreciated: Buildings4,491,659 0 0 4,491,659 Intangible Assets330,584 10,495 0 341,079 Improvements Other Than Buildings38,755,694 84,169 0 38,839,863 Machinery and Equipment 3,186,415 251,009 (69,499) 3,367,925 Total Capital Assets Being Depreciated46,764,352 345,673 (69,499) 47,040,526 Less Accumulated Depreciation for: Buildings (1,626,454) (113,771) 0 (1,740,225) Intangible Assets (289,490) (29,631) 0 (319,121) Improvements Other Than Buildings (12,890,254) (671,888) 0 (13,562,142) Machinery and Equipment (2,210,616) (323,755) 62,305 (2,472,066) Total Accumulated Depreciation (17,016,814) (1,139,045) 62,305 (18,093,554) Total Capital Assets Being Depreciated,Net29,747,538 (793,372) (7,194) 28,946,972 Governmental Activities Capital Assets,Net $ 39,786,213 $ (363,645) $ (11,532) $ 39,411,036 DRAFT 28 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 5 - Capital Assets (Concluded) Beginning Ending Balance Increases (Decreases) Balance Business-type Activities Capital Assets Not Being Depreciated: Land $ 1,656,018 $ 0 $ 0 $ 1,656,018 Construction in Progress115,682 184,671 (115,682) 184,671 Total Capital Assets Not Being Depreciated1,771,700 184,671 (115,682) 1,840,689 Capital Assets Being Depreciated: Buildings4,356,384 0 0 4,356,384 Intangible Assets244,709 0 0 244,709 Improvements Other Than Buildings 76,328,842 732,907 0 77,061,749 Machinery and Equipment1,843,161 181,899 (1,575) 2,023,485 Total Capital Assets Being Depreciated 82,773,096 914,806 (1,575) 83,686,327 Less Accumulated Depreciation for: Buildings(4,193,761) (68,890) 0 (4,262,651) Intangible Assets(29,902) (190) 0 (30,092) Improvements Other Than Buildings (36,384,560) (2,148,986) 0 (38,533,546) Machinery and Equipment(1,524,562) (98,008) 1,575 (1,620,995) Total Accumulated Depreciation (42,132,785) (2,316,074) 1,575 (44,447,284) Total Capital Assets Being Depreciated, Net 40,640,311 (1,401,268) 0 39,239,043 Business-type Activities Capital Assets, Net $ 42,412,011 $ (1,216,597) $ (115,682) $ 41,079,732 Depreciation expense was charged to functions/programs as follows: Governmental Activities General Governmental$ 149,875 Public Safety216,916 Road Maintenance and Construction515,512 Parks and Recreation256,742 Total Depreciation Expense - Governmental Activities $ 1,139,045 Business-type Activities Utility$ 1,837,311 Stormwater463,473 Sanitation 15,220 Building Code Enforcement70 Total Depreciation Expense - Business-type Activities $ 2,316,074 Note 6 - Long-term Debt Revenue Bonds and Loans payable are comprised of the following: DRAFT 29 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 6 - Long-term Debt (Continued) Revenue Bonds Payable Utilities System Revenue Refunding Bonds, Series 2004, Payablein Annual Installments of Principal and Semiannual Installmentsof Interest Through October 1, 2025, Bearing Coupon Rates of2.00% to 4.50%, Secured Solely by a Pledge of and Lien on NetWater and Sewer System Revenues and Certain Other Revenuesas Defined in the Bond Ordinances$ 14,420,001 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 ServiceTaxes 155,661 Utilities System Revenue Bonds, Series 2010A-1, Payable in Annual Installments of Principal and Semiannual Installments of InterestThrough April 1, 2026, Bearing Coupon Rates of 3.59%, SecuredSolely by a Pledge of and Lien on Net Water and Sewer SystemRevenues807,202 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 Revenues620,504 Loans Payable Florida Department of Environmental Protection,Disbursements and Capitalized Interest for a $773,030State of Florida Revolving Loan #DW160710, Issued to Finance the Construction Costs to Replace a Well atWater Treatment Plant No. 1and a Transmission Main on Ocean Boulevard, Payable in Semiannual Installmentsof Principal and Interest Through November 15, 2030, with Financing Rates of 2.71%, Secured Solely by a Pledge of NetWater and Sewer System Revenues,After Payment of AllYearly Payment Obligations on Account of the Senior RevenueObligations, as Defined in the Loan Agreement 691,426 Florida Department of Environmental Protection, Disbursements, Service Fee and CapitalizedInterest for a Combined $9,368,576State of Florida Revolving Loan #WW160700, Issued to Finance the Construction of Treatment and Transmission Facilities for the Buccaneer WWTP Phaseout Improvements and TMDLCompliance Program WWTP #1, Payable in Semiannual Installments of Principaland 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 Agreement7,135,656 Total Revenue Bondsand Loans Payable 23,830,450 (Unamortized Discount) (123,564) (Unamortized Refunding Loss) (1,078,583) Total Long-term Debt, Net $ 22,628,303 DRAFT 30 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 6 - Long-term Debt (Continued) The annual requirements to amortize all revenue bonds and loans payable outstanding at September 30, 2013, are as follows: Governmental Activities Business-type Activities Year Ending Long-term Debt Long-term Debt September 30 Principal Interest Total Principal Interest Total 2014 $ 69,203 $ 1,457 $ 70,660 $ 1,219,361 $ 869,052 $ 2,088,413 2015 0 0 0 1,322,556 824,791 2,147,347 2016 0 0 0 1,369,127 777,243 2,146,370 2017 0 0 0 1,421,065 726,747 2,147,812 2018 0 0 0 1,468,290 673,204 2,141,494 Thereafter 0 0 0 16,960,848 3,424,811 20,385,659 Total $ 69,203 $ 1,457 $ 70,660 $ 23,761,247 $ 7,295,848 $31,057,095 Interest and amortization incurred during the year ended September 30, 2013, was $4,316 in the debt service fund and $996,199 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, 2013, and during the year then ended, the City was in compliance with those ratios. The following is a summary of the changes in long-term debt of the City for the year ended September 30, 2013: Balance Balance Due October 1, September 30, Within 2012 Additions Reductions 2013 One Year Governmental Activities Revenue Bonds Payable $ 136,915 $ 0 $ (67,712) $ 69,203 $ 69,203 Compensated Absences 598,925 381,453 (415,578) 564,800 195,576 OPEB Obligation 112,021 23,705 0 135,726 0 Total Governmental Activities - Long-term Liabilities $ 847,861 $ 405,158 $ (483,290) $ 769,729 $ 264,779 Business-type Activities State Revolving Fund Loans $ 8,283,255 $ 0 $ (456,173) $ 7,827,082 $ 164,475 Revenue Bonds Payable 16,946,937 0 (1,012,772) 15,934,165 1,050,992 Less Deferred Amounts: For Issuance Discounts (133,861) 0 10,297 (123,564) 0 Loss on Bond Refunding (1,169,626) 0 91,043 (1,078,583) 0 Total Revenue Bonds Payable 15,643,450 0 (911,432) 14,732,018 1,050,992 Total Bonds/Loans Payable 23,926,705 0 (1,367,605) 22,559,100 1,215,467 Compensated Absences 289,501 145,932 (174,344) 261,089 81,499 OPEB Obligation 36,342 7,730 0 44,072 0 Total Business-type Activities - Long-term Liabilities $ 24,252,548 $ 153,662 $ (1,541,949) $ 22,864,261 $ 1,296,966 DRAFT 31 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 6 - Long-term Debt (Concluded) Conduit Debt The City has issued Health Facility Revenue and Refunding Bonds to provide financial assistance to private sector entities for the acquisition and construction of health care facilities deemed to be in the public interest. These bonds are secured by the financed property and are payable solely from the payments received on the underlying mortgage loans. There is no obligation on the part of the City or any political subdivision for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2013, there was one series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount payable of $40,050,000. Pledged Revenue The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, 2013. 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, 2013: Outstanding Principal Estimated Principal Pledged Revenue and Interest Percentage and Pledged Description Revenue Received Paid Pledged Interest Through 1999– Utility System Utility Refunding Bonds Service Tax $ 480,539 $ 162,027 33.72% $ 158,939 2014 2004– Utility System Utility Refunding Bonds Revenues 3,644,174 1,448,711 39.75% 18,729,373 2025 2010A-1– Utility System Utility Revenue Bonds Revenues 3,644,174 77,930 2.14% 1,009,822 2026 2010B – Utility System Utility Refunding Bonds Revenues 3,644,174 58,558 1.61% 780,511 2026 Florida Department of Environmental Utility Protection, SRF Loan Revenues 3,644,174 49,879 1.37% 872,878 2031 Florida Department of Environmental Utility Protection, SRF Loan Revenues 3,644,174 650,358 17.85% 9,576,232 2032 DRAFT 32 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 7 - Defined Benefit Pension Plans Plan Descriptions and Contribution Information The City maintains two separate single-employer defined benefitpension plans, one for police officers and one for general employees, which cover substantially all full-time City employees hired before September 1, 2008. Full-time employees hired on or after September 1, 2008,are covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue separate stand-alone financial statements. Combining statements are included in the supplementary information to the basic financial statements. Membership of each plan consists of the following at September 30, 2013, the date of the latest actuarial valuation: General Employees Police Retirees, Disabled Members and Beneficiaries Receiving Benefits 56 20 Terminated Plan Members Entitled to but Not Yet Receiving Benefits 11 4 Active Plan Members 56 22 Total 123 46 Ŷ General Employees’ Retirement Plan Ɣ 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. Ɣ Contributions The City is required to contribute at an actuarially determined rate (26.34% of valuation payroll for the year ended September 30, 2013).Plan members are required to contribute 6.0% of their annual covered salary. Contribution requirements are established by City code, which may be amended by the City Commission. Ŷ Police Retirement Plan Ɣ 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. Ɣ Contributions Plan members are required to contribute 7.0% 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 40.86% of valuation payroll for the year ended September 30, 2013). Per City Code, the City Commission may amend established contribution requirements. Other Pension Plan Information The Annual Required Contribution (ARC) for the current year wasdetermined as part of the September 30, 2013actuarial valuationsfor the General Employees’ and Police Retirement Plans using the entry-age actuarial cost method. The actuarial assumptions include an8.0% rate of return oninvestments,projected salary increases of 5.0% to 14.0% per year including price inflation of 3.0% and a payroll growth assumption based on the level dollar method. The assumptions did not include postretirement benefit increases. DRAFT 33 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note7 - Defined Benefit Pension Plans (Concluded) Other Pension Plan Information (Concluded) 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 2011 $ 722,769 100% $ 0 2012 998,516 100% 0 2013 1,044,392 100% 0 Police 2011 $ 487,032 100% $ 0 2012 628,898 100% 0 2013 606,741 100.4% 2,271 Funded Status and Funding Progress The following is funded status information for each Plan as of September 30, 2013, 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$ (17,282,000) Actuarial Value of Assets (Market Value was $13,770,711) 13,816,000 Unfunded Actuarial Accrued Liability $ (3,466,000) The General Employees’ Retirement Plan is 79.9% funded and the Unfunded Actuarial Accrued Liability represents 126.8% of covered payroll as of September 30, 2013. Police Retirement Plan Total Actuarial Accrued Liability$ (10,895,000) Actuarial Value of Assets (Market Value was $7,331,629) 7,429,000 Unfunded Actuarial Accrued Liability $ (3,466,000) The Police Retirement Plan is 68.20% funded and the Unfunded Actuarial Accrued Liability represents 254.8% of covered payroll as of September 30, 2013. The schedule of funding progress, presented as Required Supplementary Information (RSI) following the notes to the financialstatements, 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. DRAFT 34 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 8 - Deferred Compensation Plan The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to new entrants and creating the City of Atlantic Beach Defined Contribution Plan. The City’s 457 defined contribution plan isadministered throughICMA,which coversalleligible employeesemployed with the City on or after September 1, 2008,who arenot covered by the City’s Police Officers’defined benefit plan.Under the 457 Plan, the Citycontributes an employer matching contribution of up to 6% of earnings during the first ten years of service. Following ten years of service,the City contributes a fixed contribution of 4% of earnings. Employees have the option to voluntarily contribute to the plan. Employer matching contributions from the City were $76,092 and $0 for the years ended September 30, 2013and 2012, respectively. Under the plan, an employee is considered fully vested after 5 years of completed service. Note 9 - Postemployment Benefits Other Than Pensions Plan Description The City of Atlantic Beach administers a single-employer defined benefit health care plan (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, 2012, the date of the latest actuarial valuation: Retirees and Beneficiaries Receiving Benefits 2 Active Plan Members 90 Total 92 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 isconsidered 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. ARC amounted to $43,758 for the current fiscal year. The annual required contribution is based ona rate of 1.0% of projected payroll of $4,204,177 or an average $486per active participant. For the year ended September30, 2013, the Cityestimated it implicitly subsidized $12,552 of health care costs for its retirees and covered dependents. This implied subsidy reduced the annual OPEB cost to a net expense of $31,435 after interest on the Net OPEB Obligation and adjustments to ARC. DRAFT 35 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 9 - Postemployment Benefits Other Than Pensions (Continued) 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 $ 43,758 Interest on Net OPEB Obligation 5,935 Adjustment to Annual Required Contribution (5,706) Annual OPEB Cost (Expense)43,987 Employer Contribution (12,552) Increase in Net OPEB Obligation 31,435 Net OPEB Obligation - Beginning of Year 148,363 Net OPEB Obligation - End of Year $ 179,798 The City reflected the $31,345 increase in net OPEB obligation at September 30, 2013, by recording an obligation of $23,705for governmental activities and $7,730 for business-type activities in its government-wide statement of net position. The utility fund reported a net OPEB obligation of $29,314, while the stormwater fund, sanitation fund, and building code enforcement fund reported $8,856, $0, and $5,902, 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, 2013, are presented below. Percentage Fiscal Annual of Annual Net Year OPEB OPEB Cost OPEB Ended Cost Contributed Obligation September 30, 2011 $ 58,794 32.9% $ 104,351 September 30, 2012 62,159 29.2% 148,363 September 30, 2013 43,987 28.5% 179,798 Funded Status and Funding Progress As of October 1, 2012,the date of the latest actuarial valuation, the actuarial accrued liability for benefits was $360,584, all of which was unfunded. The covered payroll (annualpayroll of active employeescovered by the Plan) was $4,204,177, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 8.58%. 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 healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to DRAFT 36 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 9 - Postemployment Benefits Other Than Pensions (Concluded) Funded Status and Funding Progress (Concluded) 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, 2012, the date of the latest actuarial valuation,the Entry-Age Normal 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 26-year period. Other significant actuarial assumptions include a 4% discount rate, an annual health care cost trend rate of -17%, followed by 11% for the next year, followed by 7.5% for the next year, reduced by decrementsof 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. Note 10 - Interfund Accounts Individual fund interfund receivables and payables at September 30, 2013, consist of the following: Due Due from Other to Other Funds Funds General $ 9,097 $ 0 Nonmajor Governmental 0 (9,097) Interfundreceivable/payables are due to timing differences associated with grant reimbursements. The receivable/payables are expected to be received/paid within one year. Note 11 - Interfund Transfers Transfers of resources from a fund receiving revenue to the fund through which the resources are to be expended are recorded as transfers and are reported as other financing sources (uses) in the governmental funds and as transfers in (out) in the proprietary funds. Following is a summary of interfund transfers for the year ended September 30, 2013: DRAFT 37 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Continued) Note 11 - Interfund Transfers (Concluded) Transfers In Nonmajor Stormwater General Building CodeGovernmental Total Transfers Out Fund Fund Fund Funds Transfers Nonmajor Governmental Funds$ 252,000 $ 77,696 $ 0 $ 71,000 $ 400,696 Utility Fund0 629,860 0 0 629,860 Sanitation Fund0 267,898 0 0 267,898 General Fund0 0 31,000 0 31,000 Total Transfers $ 252,000 $ 975,454 $ 31,000 $ 71,000 $ 1,329,454 Transfers are used to move revenues from the fund that ordinance or budget requires to collect them to the fund that ordinance or budget requires to expend them. Note 12 - Commitments As of September 30, 2013, the City had outstanding commitments on contracts in progress as follows: Unexpended Project TypeContract Amounts Utility System Improvements $ 370,830 Stormwater System Improvements 21,693 General Government Improvements 232,213 Building Code Enforcement 525 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, 2013, the City incurred $1,005,332 in services under this agreement. The amount will be adjusted annually by an amount equal to 103% of the previous year’s amount for all services provided by the City of Jacksonville. Note 13 - Contingencies The City is a defendant in several lawsuits which arose in the ordinary course of the City’s business. To the extent the outcome of such litigation has been determined to result in probable loss to the City, an estimated loss has been accrued in the accompanying financial statements. The outcome of theremaining claims cannot be determined at this time. The City of Atlantic Beach and the City of Jacksonville are currently in discussions concerning the terms of an interlocal agreement with regard to the disposal of residential waste. The agreement allows Atlantic Beach free tippage at the landfill until Jacksonville charges a uniform rate. The agreement contains certain criteria, that when met, would trigger the City to begin paying those tippage fees. Jacksonville asserts that under terms of the agreement, the City should have begun payingtipping fees beginning October 2011. The DRAFT 38 CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Concluded) Note 13 - Contingencies (Concluded) City’s position is that the criteria have not been fully met and that no tipping fees are due at this time. Annual tipping fees are estimated to be approximately $400,000. Based on the City’s position, no provision has been made in the accompanying financial statements related to this issue. Note 14 - Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the City carries commercial insurance. Insurance against losses are provided through the Public Risk Insurance Agency and LB Bryan and Company for the following types of risk: Ŷ Workers’ Compensation and Employer’s Liability Ŷ General Liability Ŷ Automobile Liability Ŷ Public Officials’ Liability Ŷ Automobile Physical Damage Ŷ Property Coverage Ŷ 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. DRAFT REQUIRED SUPPLEMENTARY INFORMATION DRAFT 39 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF PENSIONFUNDING PROGRESS SEPTEMBER 30, 2013 General Employees’Retirement Plan Actuarial UAAL as Actuarial Accrued Unfunded Annual Percentage Valuation Value of Liability AAL Funded Covered of Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll 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% 9/30/12** 12,465,000 16,599,000 4,134,000 75.1% 3,072,000 134.6% 9/30/13 13,816,000 17,282,000 3,466,000 79.9% 2,733,000 126.8% Police Retirement Plan Actuarial UAAL as Actuarial Accrued Unfunded Annual Percentage Valuation Value of Liability AAL Funded Covered of Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll 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% 9/30/12** 6,880,000 10,559,000 3,679,000 65.2% 1,548,000 237.7% 9/30/13 7,429,000 10,895,000 3,466,000 68.2% 1,360,000 254.80% *Afterchanges in benefits and/or actuarial assumptions and/or actuarial cost methods. ** Reflects the Actuarial Impact Statement for Ordinance 58-13-37. 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 percentageover 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. DRAFT 40 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER AND OTHER CONTRIBUTING ENTITIES SEPTEMBER 30, 2013 General Employees’ Retirement Plan Contribution Annual Rate as a Required Year Ended Percent of Contributed Percentage September 30 Payroll (ARC) Contributed 2008 13.62% $ 457,005100% 2009 14.03% 528,428100% 2010 14.84% 599,292100% 2011 16.6% 722,769100% 2012 24.53% 998,516100% 2013 26.34% 1,044,392100% 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, 2013 Contribution Rate Employer31.52% Plan Members6.0% Actuarial Cost Method Entry Age Amortization Method Closed, Level % of Pay Method Equivalent Single Amortization Period 10.0Years 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 None (Level Dollar Method) DRAFT 41 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER AND OTHER CONTRIBUTING ENTITIES SEPTEMBER 30, 2013 (Concluded) Police Retirement Plan Contribution Annual Rate as a Required Year Ended Percent of Contributed September 30 Payroll (ARC) 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 2013 35.63% 606,741 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, 2013 Contribution Rates Employer 40.86% PlanMembers7.0% Actuarial Cost Method Entry Age Amortization Method Closed, Level % of Pay Method Equivalent SingleAmortization Period 11.01Years 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 1.88% DRAFT 42 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENTBENEFITS PLAN SCHEDULE OF FUNDING PROGRESS SEPTEMBER 30, 2013 Actuarial UAAL as Actuarial Accrued Unfunded Annual Percentage Valuation Value of Liability AAL Funded Covered of Covered Date Assets (AAL) (UAAL) 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% 10/1/12 0 360,584 360,584 0.0% 4,204,177 8.58% 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. DRAFT 43 Variance With Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts *(Negative) Revenues Property Taxes 3,816,716$3,816,716$3,843,755$27,039$ Nonproperty Taxes 1,226,4371,226,4371,197,336(29,101) Permits, Fees and Special Assessments 871,520871,520830,708(40,812) Intergovernmental Revenues 1,520,1351,520,1351,567,42547,290 Fines and Forfeitures 79,64079,640224,758145,118 Charges for Services 747,704747,704725,294(22,410) Interest Income 75,25075,250(128,430)(203,680) Miscellaneous Revenues 15,150343,816409,13565,319 Interfund Charges 1,436,0681,436,0681,435,569 (499) Total Revenues 9,788,62010,117,28610,105,550(11,736) Expenditures Governing Body: City Commission 42,64542,64540,225 2,420 City Clerk 256,946278,410270,758 7,652 City Attorney 107,618159,918152,109 7,809 Total Governing Body 407,209480,973463,09217,881 City Administration: City Manager 266,721267,781263,366 4,415 General Government 443,723773,005751,94721,058 Human Resources 189,719188,828187,272 1,556 Information Technology 462,679485,252465,37619,876 Finance 1,066,1661,094,6501,027,89866,752 Total City Administration 2,429,0082,809,5162,695,859113,657 Planning and Zoning 178,062179,431151,76627,665 Public Safety: Police 3,560,4733,617,3643,508,384108,980 School Crossing Guards 9,700 9,80810,717 (909) Animal Control 104,637106,92793,98512,942 Fire 1,223,6871,225,1831,212,48412,699 Code Enforcement 91,71898,37987,20611,173 Total Public Safety 4,990,2155,057,6614,912,776144,885 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION AND CHANGES IN FUND BALANCES SCHEDULE OF REVENUES, EXPENDITURES, BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2013 DRAFT 44 Variance With Final Budget - Budgeted Amounts Actual Positive OriginalFinalAmounts *(Negative) Expenditures (Concluded) Public Works: Administration and Streets 1,300,173$1,321,625$1,222,945$98,680$ Fleet Maintenance 284,640284,640238,45146,189 Total Public Works 1,584,8131,606,2651,461,396144,869 Parks and Recreation: Recreation and Special Events 397,376406,151390,43615,715 Parks Maintenance 728,640758,495666,03092,465 Total Parks and Recreation 1,126,0161,164,6461,056,466108,180 (Total Expenditures)(10,715,323)(11,298,492)(10,741,355)557,137 (Deficiency) of Revenues (Under) Expenditures (926,703)(1,181,206)(635,805)545,401 Other Financing Sources (Uses) Transfers in 970,258975,454975,454 0 Transfers (out)(31,000)(31,000)(31,000)0 Sale of General Fixed Assets 10,00010,000 0(10,000) Total Other Financing Sources (Uses)949,258954,454944,454(10,000) Excess of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses 22,555(226,752)308,649535,401 Fund Balances, Beginning of Year 6,187,5116,187,5116,187,511 0 Fund Balances, End of Year 6,210,066$5,960,759$6,496,160$535,401$ * Actual amounts include a reversal of $57,495 prior year encumbrance roll-forward, plus current year encumbrance roll-forward of $81,523. BUDGET AND ACTUAL - GENERAL FUND (Concluded) FOR THE YEAR ENDED SEPTEMBER 30, 2013 CITY OF ATLANTIC BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES DRAFT 45 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, 2013 Budgets and BudgetaryAccounting 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. DRAFT SUPPLEMENTARY INFORMATION DRAFT 46 Convention TreeLocal OptionDevelopmentHalf-centCourt CostEMG - FEMARadio ReplacementGas TaxTaxSales TaxTrainingWind RetrofitCommunication Assets Equity in Pooled Cash and Investments6,493$22,554$85,148$420,413$121,770$0$2,901$ Due from Other Governments 069,70023,593117,695509 0 1,627 Total Assets 6,49392,254108,741538,108122,279 0 4,528 Liabilities and Fund Balances Liabilities Accounts Payable and Accrued Liabilities 0 0 048,172 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 0 048,172 0 0 1,674 Fund Balances Restricted for: Public Safety 0 0 0 0122,279 0 2,854 Road Maintenance and Construction 092,254 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 0489,936 0 0 0 Other Purposes 0 0108,741 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 6,49392,254108,741489,936122,279 0 2,854 Total Liabilities and Fund Balances 6,493$92,254$108,741$538,108$122,279$0$4,528$ Special Revenue Funds CITY OF ATLANTIC BEACH, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013, WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 2013 DRAFT 47 Totals Totals Community Special Nonmajor ContrabandDevelopmentPoliceEnergyRevenuesDebtCapitalGovernmental2012 ForfeitureBlock GrantsGrantsGrantsFundsServiceProjectsFundsTotals 21,280$0$0$0$680,559$73,113$2,724,230$3,477,902$3,214,612$ 07,6419,097 0229,862 0 0229,862456,736 21,2807,6419,097 0910,42173,1132,724,2303,707,7643,671,348 07,641 0 057,487 0 057,48751,652 0 09,097 09,097 0 09,097213,265 7,166 0 0 07,166 0 07,166 6,340 0 0 0 0 0 0 0 0157,380 7,1667,6419,097 0 73,750 0 073,750428,637 14,114 0 0 0139,247 0 0139,247158,580 0 0 0 092,254 0 092,254123,526 0 0 0 0 0 0 0 0 1,194 0 0 0 0 073,113 073,11375,350 0 0 0 0489,936 02,724,2303,214,1662,982,216 0 0 0 0108,741 0 0108,74152,732 0 0 0 06,493 0 06,493 6,493 0 0 0 0 0 0 0 0(157,380) 14,114 0 0 0836,67173,1132,724,2303,634,0143,242,711 21,280$7,641$9,097$0$910,421$73,113$2,724,230$3,707,764$3,671,348$ 2013 Special Revenue Funds DRAFT 48 Convention TreeLocal OptionDevelopmentHalf-centCourt Cost EMG - FEMARadio ReplacementGas TaxTaxSales TaxTrainingWind Retrofit Communication Revenues Taxes0$423,141$90,381$684,187$0$0$0$ Other Intergovernmental Revenues 0 0 0 0 014,216 0 Charges for Services 0 0 0310 0 0 0 Fines and Forfeitures 0 0 0 06,329 019,512 Investment Earnings (Loss)0(5,306)(1,482)(7,123)(2,375)0 (3) Miscellaneous Revenues 0 0 0 0 0 0 0 Total Revenues 0417,83588,899677,3743,95414,21619,509 Expenditures Current: Culture and Recreation 0 0 0 0 0 0 0 Public Safety 0 0 0 013,505 016,742 Road Maintenance and Construction 0305,607 0 0 0 0 0 Debt Service: Principal 00 00000 Interest and Other 0 0 0 0 0 0 0 Capital Outlay 0 032,890130,048 018,954 0 (Total Expenditures)0(305,607)(32,890)(130,048)(13,505)(18,954)(16,742) Excess (Deficiency) of Revenues Over (Under) Expenditures 0112,22856,009547,326(9,551)(4,738)2,767 Other Financing Sources (Uses) Transfers in 0 0 0 0 0 0 0 Transfers (out)0(143,500)0(252,000)0(5,196)0 Total Other Financing Sources (Uses)0(143,500)0(252,000)0(5,196)0 Net Change in Fund Balances 0(31,272)56,009295,326(9,551)(9,934)2,767 Fund Balances, Beginning of Year 6,493123,52652,732194,610131,8309,934 87 Fund Balances, End of Year 6,493$92,254$108,741$489,936$122,279$0$2,854$ 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, 2012 2013 Special Revenue Funds FOR THE YEAR ENDED SEPTEMBER 30, 2013, DRAFT 49 Totals Totals CommunitySpecialNonmajor ContrabandDevelopmentPoliceEnergyRevenueDebtCapitalGovernmental2012 ForfeitureBlock GrantsGrantsGrantsFundsServiceProjectsFundsTotals 0$0$0$0$1,197,709$ 0$0$1,197,709$1,153,071$ 022,29181,225157,380275,112 0 0275,112586,886 0 0 0 0310 0 0 310 0 4,514 0 0 030,355 0 030,35539,110 (763)0 0 0(17,052)(1,209)(54,636)(72,897)114,030 000000007,848 3,75122,29181,225157,3801,486,434(1,209)(54,636)1,430,5891,900,945 0000000 059,607 1,417 078,440 0110,104 0 0110,104162,217 0 0 0 0305,607 0 0305,607330,766 0000067,712067,71263,684 000004,31604,3167,100 14,88322,2912,785 0221,851 0 0221,851613,231 (16,300)(22,291)(81,225)0(637,562)(72,028)0(709,590)(1,236,605) (12,549)0 0157,380848,872(73,237)(54,636)720,999664,340 0000071,000071,000580,934 0000(400,696)0 0(400,696)(906,000) 0 0 0 0(400,696)71,000 0(329,696)(325,066) (12,549)0 0157,380448,176(2,237)(54,636)391,303339,274 26,663 0 0(157,380)388,49575,350 2,778,8663,242,7112,903,437 14,114$0$0$0$836,671$73,113$2,724,230$ 3,634,014$3,242,711$ Special Revenue Funds 2013 DRAFT 50 PoliceGeneral Officers'Employees' RetirementRetirement20132012 PlanPlanTotalsTotals Assets Cash and Cash Equivalents82,413$48,330$130,743$86,828$ Prepaids2,9152,9155,8300 Interest Receivable27,7036,39434,09728,197 Investments at Fair Value7,538,21213,803,09221,341,30419,832,927 Total Assets 7,651,24313,860,73121,511,97419,947,952 Liabilities Accounts Payable and Accrued Liabilities0900900424 Excess Premium Tax Liability120,4540 120,454120,454 DROP Plan Payable199,16089,120288,280198,554 Total Liabilities 319,61490,020409,634319,432 Total Net Position Held in Trust for Pension Benefits7,331,629$13,770,711$21,102,340$19,628,520$ WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012 Pension Trust Funds CITY OF ATLANTIC BEACH, FLORIDA COMBINING STATEMENT OF NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2013, DRAFT 51 PoliceGeneral Officers'Employees' RetirementRetirement20132012 PlanPlanTotalsTotals Additions Contributions: Employer517,935$1,044,392$1,562,327$1,538,619$ Employees77,406180,750258,156261,992 State of Florida91,077091,07788,795 Total Contributions686,4181,225,1421,911,5601,889,406 Net (Decrease) Increase in Fair Value of Investments247,703481,465729,1682,218,699 Interest and Dividends146,121274,716420,837443,921 Miscellaneous Revenue26,58731,61958,2060 Total Additions 1,106,8292,012,9423,119,7714,552,026 Deductions Refunds of Contributions0118,126118,12612,751 Benefits651,941729,4471,381,3881,254,883 Investment Expenses30,85753,93684,793103,133 Administrative Expenses27,09534,54961,64457,614 Total Deductions 709,893936,0581,645,9511,428,381 Net Increase 396,9361,076,8841,473,8203,123,645 Net Position, Beginning of Year 6,934,69312,693,82719,628,52016,504,875 Net Position, End of Year 7,331,629$13,770,711$21,102,340$19,628,520$ WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012 Pension Trust Funds CITY OF ATLANTIC BEACH, FLORIDA COMBINING STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2013, DRAFT 52 2009 2010201120122013 Revenues Operating Revenues: Water: Customer Charges 2,738,565$3,188,599$3,382,973$3,069,998$3,006,787$ Miscellaneous Charges 40,90644,85946,42448,81552,996 Total Water 2,779,4713,233,4583,429,3973,118,8133,059,783 Sewer: Customer Charges 4,112,335 4,644,0905,085,3185,015,3584,953,619 Miscellaneous Charges 3,7697,52820,0063,3031,651 Total Sewer 4,116,1044,651,6185,105,3245,018,6614,955,270 Total Operating Revenues 6,895,5757,885,0768,534,7218,137,4748,015,053 Nonoperating Revenues: Investment Income (Loss): Water 7,963153,782108,762197,492(115,023) Sewer 6,8865,361(16,367)(21,010)18,426 Total Nonoperating Revenues 14,849159,14392,395176,482(96,597) Total Revenues 6,910,4248,044,2198,627,1168,313,9567,918,456 Expenses Operating Expenses: Water 1,087,2831,120,1721,292,9481,303,7081,228,763 Sewer 2,111,0972,367,6312,569,7482,493,5002,005,653 Total Operating Expenses 3,198,3803,487,8033,862,6963,797,2083,234,416 Administrative, Nondivisional and Other: Water 634,541554,538545,971518,506521,600 Sewer 1,142,214681,893685,074696,922674,514 Total Administrative, Non- divisional and Other 1,776,7551,236,4311,231,0451,215,4281,196,114 (Total Expenses)(4,975,135)(4,724,234)(5,093,741)(5,012,636)(4,430,530) Net Revenues Available for Debt Service 1,935,2893,319,9853,533,3753,301,3203,487,926 Nonoperating Income (Expense) Interest Expense (732,939)(710,196)(726,058)(766,111)(996,199) Loan Amortization (14,730)(14,730)(25,712)(12,787)(14,654) Total Nonoperating (Expense)(747,669)(724,926)(751,770)(778,898)(1,010,853) Net Income Before Depreciation and Operating Transfers 1,187,620$2,595,059$2,781,605$2,522,422$2,477,073$ FOR THE YEARS ENDED SEPTEMBER 30, 2009 THROUGH SEPTEMBER 30, 2013 HISTORICAL REVENUES AND EXPENSES CITY OF ATLANTIC BEACH, FLORIDA DRAFT 53 2013 2012 Gross Revenues Utility 8,146,988$8,127,246$ Connection Charges 25,011 8,246 Interest (97,294)176,482 Total Gross Revenues 8,074,705 8,311,974 Operating Expenses Personal Services 1,761,806 1,808,192 Contractual Services 654,600 841,708 Supplies 333,387 331,039 Repairs and Maintenance 101,929 123,310 Utilities 382,694 629,185 Intergovernmental Charges 982,292 1,047,909 Other Expenses 213,823 232,292 (Total Operating Expenses)(4,430,531)(5,013,635) Total Net Revenues in Accordance with Bond Resolutions 3,644,174$3,298,339$ Total Debt Service 2,285,436$1,631,133$ Debt Service Coverage Ratio 159.45%202.21% 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, 2013 AND SEPTEMBER 30, 2012 DRAFT 54 YearElectricityCommunicationsGasFuel OilTotal 2009430,774$600,716$25,815$18$1,057,323$ 2010486,475624,25426,158341,136,921 2011487,585604,56728,062331,120,247 2012452,183567,90923,187141,043,293 2013459,672576,83920,849171,057,377 YearTotal 20094,089,288$ 20104,146,432 20113,968,233 20123,961,395 20133,843,755 Ad Valorem Tax Collections (Last Five Years) CITY OF ATLANTIC BEACH, FLORIDA OTHER BOND COVENANT DISCLOSURES FOR THE YEARS ENDED SEPTEMBER 30, 2009 THROUGH SEPTEMBER 30, 2013 Utility Service Tax Collections (Last Five Years) DRAFT 55 Annual Billings Fleet Landing (Retirement Community)369,808$ Navy (Federal Government)295,071 Oaks of Atlantic Beach (Mobile Home Park)137,344 City of Atlantic Beach, Florida 141,366 Sea Oats Plantation (Apartment Complex)135,001 Lakes of Mayport (Apartment Complex)131,993 John Creek Estate (Mobile Home Park)116,528 One Ocean Resort (Hotel)110,640 Mayport Trace (Apartment Complex)109,687 Hanna Park (Regional Park)103,193 Total 1,650,631$ CITY OF ATLANTIC BEACH, FLORIDA MAJOR UTILITY CUSTOMERS FOR THE YEAR ENDED SEPTEMBER 30, 2013 (UNAUDITED) DRAFT 56 An n u a l AverageAverage To t a l P e r c e n t a g e DemandPercentage Ye a r P o p u l a t i o n C h a n g e C A B B U C T o t a l C A B B U C T o t a l ( M G D ) C h a n g e 20 0 4 2 4 , 0 0 7 2 . 4 % 5 , 2 2 2 2 , 5 9 3 7 , 8 1 5 2, 0 0 6 2 , 2 8 1 4 , 2 8 7 2 . 9 3 - 5 . 1 5 % 20 0 5 2 2 , 9 1 4 - 4 . 5 % 5 , 2 6 3 2 , 5 9 0 7 , 8 5 3 2, 3 6 7 1 , 9 3 9 4 , 3 0 6 2 . 7 5 - 6 . 1 4 % 20 0 6 2 3 , 2 0 8 1 . 3 % 5 , 2 5 6 2 , 4 3 0 7 , 6 8 6 2, 1 0 7 2 , 1 6 4 4 , 2 7 1 2 . 7 3 - 0 . 7 3 % 20 0 7 2 3 , 1 5 1 - 0 . 2 % 5 , 2 8 3 2 , 3 4 6 7 , 6 2 9 1, 8 9 5 2 , 0 7 9 3 , 9 7 4 2 . 6 9 - 1 . 4 7 % 20 0 8 2 3 , 2 0 0 0 . 2 % 5 , 2 8 5 2 , 3 4 1 7 , 6 2 6 2, 0 0 6 2 , 2 8 8 4 , 2 9 4 2 . 5 0 - 7 . 0 6 % 20 0 9 2 3 , 0 5 8 - 0 . 6 % 5 , 1 6 6 2 , 3 4 2 7 , 5 0 8 1, 9 1 7 2 , 1 5 9 4 , 0 7 6 2 . 3 0 - 8 . 0 0 % 20 1 0 2 2 , 9 0 8 - 0 . 6 % 5 , 1 7 1 2 , 3 2 6 7 , 4 9 7 1 , 9 0 4 2 , 1 3 5 4 , 0 3 9 2 . 3 2 0 . 8 7 % 20 1 1 21 , 2 0 5 - 7. 4 % 5 , 1 7 9 2 , 3 5 3 7 , 5 3 2 1 , 9 0 3 2 , 1 3 4 4 , 0 3 7 2 . 4 1 3 . 8 8 % 20 1 2 20 , 9 5 2 - 1 . 2 % 5 , 1 9 5 2 , 3 1 8 7 , 5 1 3 1, 8 9 8 2 , 1 3 0 4 , 0 2 8 2 . 2 7 - 5 . 8 1 % 20 1 3 20 , 8 7 5 - 0 . 4 % 5 , 2 1 8 2 , 3 4 9 7 , 5 6 7 1 , 9 0 4 2 , 1 3 5 4 , 0 3 9 1 . 9 9 - 1 2 . 3 3 % At l a n t i c B e a c h D i v i s i o n ( C A B ) Bu c c a n e e r D i v i s i o n ( B U C ) Si n g l e U n i t Mu l t i - U n i t Wa t e r S y s t e m C u s t o m e r s CI T Y O F A T L A N T I C B E A C H , F L O R I D A SU M M A R Y O F W A T E R U S A G E FO R T H E Y E A R S E N D E D S E P T E M B E R 3 0 , 2 0 0 4 T H R O U G H S E P T E M B E R 3 0 , 2 0 1 3 (U N A U D I T E D ) DR A F T 57 An n u a l Av e r a g e Annual Pe r c e n t a g e Fl o w Percentage Ye a r Po p u l a t i o n C h a n g e S i n g l e U n i t M u l t i - U n i t To t a l (M G D ) Change 20 0 4 13 , 9 1 1 3. 7 0 % 4, 9 1 3 1, 9 7 8 6, 8 9 1 1. 5 9 8 0 -8.06% 20 0 5 14 , 0 6 4 1. 1 0 % 4, 9 9 9 2, 3 8 7 7, 3 8 6 1. 8 1 6 0 13.64% 20 0 6 14 , 0 7 9 0. 1 0 % 5, 0 2 0 2, 1 1 1 7, 1 3 1 1. 5 9 9 0 -11.95% 20 0 7 14 , 0 1 5 -0 . 5 0 % 5, 0 5 7 1, 9 0 0 6, 9 5 7 1. 6 3 7 0 2.38% 20 0 8 13 , 8 1 9 -1 . 4 0 % 5, 0 8 6 1, 9 0 4 6, 9 9 0 1. 6 3 8 0 0.06% 20 0 9 13 , 8 1 9 0. 0 0 % 4, 9 9 7 1, 9 0 3 6, 9 0 0 1. 5 8 2 0 -3.42% 20 1 0 13 , 7 7 9 -0 . 3 0 % 4, 9 8 7 1, 9 1 2 6, 8 9 9 1. 5 1 9 0 -3.98% 20 1 1 12 , 6 5 5 -8 . 2 0 % 5, 0 4 1 1, 7 9 1 6, 8 3 2 1. 4 7 6 2 -2.82% 20 1 2 12 , 7 1 8 0. 5 0 % 5, 1 6 8 1, 9 0 3 7, 0 7 1 1. 5 3 9 7 4.30% 20 1 3 12 , 6 7 0 -0 . 3 8 % 5, 2 0 0 1, 9 1 6 7, 1 1 6 1. 8 0 5 2 17.24% (U N A U D I T E D ) Se w e r C u s t o m e r s CI T Y O F A T L A N T I C B E A C H , F L O R I D A SU M M A R Y O F W A S T E W A T E R T R E A T M E N T AT L A N T I C B E A C H S E W E R D I V I S I O N FO R T H E Y E A R S E N D E D S E P T E M B E R 3 0 , 2 0 0 4 T H R O U G H S E P T E M B E R 3 0 , 2 0 1 3 DR A F T 58 An n u a l Av e r a g e Annual Pe r c e n t a g e Fl o w Percentage Ye a r P o p u l a t i o n C h a n g e S i n g l e U n i t M u l t i - U n i t To t a l (M G D ) Change 20 0 4 10 , 0 9 6 0. 7 0 % 2, 5 0 4 2, 4 9 7 5, 0 0 1 0. 8 2 4 0 -2.25% 20 0 5 8, 8 5 0 -1 2 . 3 0 % 2, 5 0 3 2, 1 4 5 4, 6 4 8 0. 7 4 6 0 -9.47% 20 0 6 9, 1 2 9 3. 2 0 % 2, 3 5 6 2, 2 6 8 4, 6 2 4 0. 6 8 2 0 -8.58% 20 0 7 9, 1 3 6 0. 1 0 % 2, 2 6 7 2, 2 6 8 4, 5 3 5 0. 7 1 2 0 4.40% 20 0 8 9, 3 8 1 2. 7 0 % 2, 2 6 3 2, 4 8 2 4, 7 4 5 0. 7 0 4 0 -1.12% 20 0 9 9, 2 3 9 -1 . 5 0 % 2, 2 5 8 2, 3 5 5 4, 6 1 3 0. 6 5 1 0 -7.53% 20 1 0 9, 1 2 9 -1 . 2 0 % 2, 2 4 3 2, 3 2 8 4, 5 7 1 0. 5 7 2 0 -12.14% 20 1 1 8, 5 5 0 -6 . 3 0 % 2, 2 8 2 2, 3 3 4 4, 6 1 6 0. 6 1 6 5 7.78% 20 1 2 8, 2 3 4 -3 . 8 4 % 2, 2 4 9 2, 3 2 9 4, 5 7 8 0. 5 0 8 8 -17.47% 20 1 3 * 8, 2 0 5 -0 . 3 5 % 2, 2 7 5 2, 3 3 3 4, 6 0 8 0. 0 0 0 0 -100.00% * A t t h e e n d o f 2 0 1 2 , t h e O u t s i d e C i t y s e w e r t r e a t m e n t p l a n t c l o s e d a n d f l o w s w e r e d i v e r t e d t o t h e i n s i d e C i t y p l a n t . (U N A U D I T E D ) Se w e r C u s t o m e r s CI T Y O F A T L A N T I C B E A C H , F L O R I D A SU M M A R Y O F W A S T E W A T E R T R E A T M E N T OU T S I D E C I T Y S E W E R D I V I S I O N FO R T H E Y E A R S E N D E D S E P T E M B E R 3 0 , 2 0 0 4 T H R O U G H S E P T E M B E R 3 0 , 2 0 1 3 DR A F T ADDITIONALELEMENTS OF REPORT PREPAREDINACCORDANCE WITH GOVERNMENT AUDITINGSTANDARDS,ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; THE RULES OF THE AUDITOR GENERAL OF THESTATE OFFLORIDA;AND OTHER CONTRACT REQUIREMENTS DRAFT 59 CF D A Gr a n t / C o n t r a c t C o n t r a c t Pr o g r a m Funds Nu m b e r Nu m b e r Pe r i o d Aw a r d s E x p e n d i t u r e s * R e c e i v e d Fe d e r a l A w a r d s 14 . 2 1 8 B 1 0 U C 1 2 0 0 1 7 / 5 6 2 9 - 5 4 1 0 / 0 1 / 2 0 1 2 - 0 9 / 3 0 / 2 0 1 3 1 , 4 3 4 $ 1 , 4 3 4 $ 1,434$ 14 . 2 1 8 B 1 1 U C 1 2 0 0 - 1 7 / 5 6 2 9 - 5 4 1 0 / 0 1 / 2 0 1 2 - 0 9 / 3 0 / 2 0 1 3 7 9 , 0 6 4 2 0 , 8 5 7 20,857 80 , 4 9 8 2 2 , 2 9 1 22,291 80 , 4 9 8 2 2 , 2 9 1 22,291 Ha z a r d M i t i g a t i o n G r a n t P r o g r a m 9 7 . 0 3 9 1 2 H M - 3 G - 0 4 - 2 6 - 0 2 - 0 0 5 05 / 2 4 / 2 0 1 2 - 0 3 / 3 1 / 2 0 1 4 2 9 , 8 0 2 1 4 , 2 1 6 14,216 97 . 0 6 7 0 3 / 0 4 / 2 0 1 3 - 6 / 3 0 / 2 0 1 3 1 , 3 5 1 1 , 3 5 1 0 31 , 1 5 3 15,567 14,216 16 . 6 0 7 2 0 1 0 - B U B X - 1 0 0 5 3 1 2 7 04 / 0 1 / 2 0 1 0 - 0 8 / 3 1 / 2 0 1 2 2 , 2 0 5 0 167 B u l l e t p r o o f V e s t P a r t n e r s h i p P r o g r a m 16 . 6 0 7 2 0 1 1 - B U B X - 1 1 0 5 9 3 7 5 0 4 / 0 1 / 2 0 1 1 - 0 8 / 3 1 / 2 0 1 3 1 , 7 5 4 710 1,043 16 . 6 0 7 2 0 1 2 - B U B X - 1 2 0 6 1 4 0 7 04 / 0 1 / 2 0 1 2 - 0 8 / 3 1 / 2 0 1 4 1 , 0 5 0 1,050 0 16 . 6 0 7 2 0 1 3 - B U B X - 1 3 0 6 9 0 2 5 04 / 0 1 / 2 0 1 3 - 0 8 / 3 1 / 2 0 1 5 2 , 3 3 3 864 0 S u b t o t a l E x p e n d i t u r e s - 1 6 . 6 0 7 7,342 2,624 1,210 16 . 7 3 8 2 0 1 3 - J A G C - D U V A - 1 - D 7 - 0 5 9 1 0 / 0 1 / 2 0 1 0 - 0 9 / 3 0 / 2 0 1 1 3 6 , 4 4 0 36,440 33,773 16 . 7 3 8 2 0 1 3 - J A G C - D U V A - 2 - D 7 - 1 0 9 10 / 0 1 / 2 0 1 1 - 0 9 / 3 0 / 2 0 1 2 4 2 , 0 0 0 42,000 35,570 16 . 7 3 8 2 0 1 3 - J A G D - D U V A - 2 - D 8 - 0 2 3 1 0 / 0 1 / 2 0 1 1 - 0 9 / 3 0 / 2 0 1 2 2 , 7 8 5 2,785 2,785 81 , 2 2 5 81,225 72,128 To t a l U . S . D e p a r t m e n t o f J u s t i c e 88 , 5 6 7 83,849 73,338 an d C o n s u m e r S e r v i c e s : AR R A - 8 1 . 0 4 1 1 7 4 9 5 / A R S 0 2 8 01 / 3 1 / 2 0 1 1 - 0 7 / 3 1 / 2 0 1 2 2 3 4 , 7 8 9 0 157,380 23 4 , 7 8 9 0 157,380 To t a l U . S . D e p a r t m e n t o f E n e r g y Di r e c t P r o g r a m s : St a t e E n e r g y P r o g r a m Ed w a r d B y r n e M e m o r i a l J u s t i c e A s s i s t a n c e G r a n t P r o g r a m In d i r e c t P r o g r a m s : Pa s s e d T h r o u g h F l o r i d a D e p a r t m e n t o f L a w E n f o r c e m e n t : U. S . D e p a r t m e n t o f E n e r g y In d i r e c t P r o g r a m s : Su b t o t a l E x p e n d i t u r e s - 1 6 . 7 3 8 Bu l l e t p r o o f V e s t P a r t n e r s h i p P r o g r a m Pa s s e d T h r o u g h F l o r i d a D e p a r t m e n t o f A g r i c u l t u r e Ed w a r d B y r n e M e m o r i a l J u s t i c e A s s i s t a n c e G r a n t P r o g r a m Ed w a r d B y r n e M e m o r i a l J u s t i c e A s s i s t a n c e G r a n t P r o g r a m Bu l l e t p r o o f V e s t P a r t n e r s h i p P r o g r a m Bu l l e t p r o o f V e s t P a r t n e r s h i p P r o g r a m Pas s e d T h r o u g h F l o r i d a D i v i s i o n o f E m e r g e n c y M a n a g e m e n t : U. S . D e p a r t m e n t o f J u s t i c e Pa s s e d T h r o u g h C i t y o f J a c k s o n v i l l e , F l o r i d a : Ur b a n A r e a S e c u r i t y I n t i a t i v e To t a l U . S . D e p a r t m e n t o f H o m e l a n d S e c u r i t y Co m m u n i t y D e v e l o p m e n t B l o c k G r a n t ( C D B G ) In d i r e c t P r o g r a m s : Pa s s e d T h r o u g h C i t y o f J a c k s o n v i l l e , F l o r i d a : U. S . D e p a r t m e n t o f H o m e l a n d S e c u r i t y To t a l U . S . D e p a r t m e n t o f H o u s i n g a n d U r b a n D e v e l o p m e n t Su b t o t a l E x p e n d i t u r e s - 1 4 . 2 1 8 CI T Y O F A T L A N T I C B E A C H , F L O R I D A SC H E D U L E O F E X P E N D I T U R E S O F F E D E R A L A W A R D S FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 Co m m u n i t y D e v e l o p m e n t B l o c k G r a n t ( C D B G ) AN D S T A T E F I N A N C I A L A S S I S T A N C E P R O J E C T S Gr a n t o r / P a s s - T h r o u g h E n t i t y U. S . D e p a r t m e n t o f H o u s i n g a n d U r b a n D e v e l o p m e n t In d i r e c t P r o g r a m s : DR A F T 60 (C o n c l u d e d ) CF D A Gr a n t / C o n t r a c t C o n t r a c t Pr o g r a m Funds Nu m b e r Nu m b e r Pe r i o d Aw a r d s E x p e n d i t u r e s * R e c e i v e d U. S . E x e c u t i v e O f f i c e o f t h e P r e s i d e n t In d i r e c t P r o g r a m s : Pa s s e d T h r o u g h S t . J o h n s C o u n t y S h e r i f f s O f f i c e : No r t h F l o r i d a H i g h I n t e n s i t y D r u g T r a f f i c k i n g A r e a M a r i t i m e an d L a n d I n v e s t i g a t i o n a n d I n t e r d u c t i o n s I n i t i a t i v e 95 . 0 0 1 G1 3 N F 0 0 0 1 A 02 / 1 4 / 2 0 1 3 - 0 6 / 1 4 / 2 0 1 4 2 0 , 0 0 0 $ 373$ 373$ To t a l U . S . E x e c u t i v e O f f i c e o f t h e P r e s i d e n t 20 , 0 0 0 373 373 In d i r e c t P r o g r a m s : Pa s s e d T h r o u g h F l o r i d a D e p a r t m e n t o f E n v i r o n m e n t a l P r o t e c t i o n : CM 2 4 5 06 / 1 1 / 2 0 1 3 - 0 3 / 3 0 / 2 0 1 4 1 7 , 5 0 0 0 0 17 , 5 0 0 0 0 To t a l F e d e r a l E x p e n d i t u r e s 47 2 , 5 0 7 122,080 267,598 St a t e F i n a n c i a l A s s i s t a n c e 37 . 0 7 7 WW 1 6 0 7 0 0 N/ A 10 , 3 6 8 , 5 7 6 0 0 To t a l S t a t e F i n a n c i a l A s s i s t a n c e 10 , 3 6 8 , 5 7 6 0 0 To t a l E x p e n d i t u r e s o f F e d e r a l A w a r d s a n d S t a t e F i n a n c i a l A s s i s t a n c e 10 , 8 4 1 , 0 8 3 $ 122,080$ 267,598$ * I n c l u d e s g r a n t e x p e n d i t u r e s o n l y ( m a t c h i n g f u n d s n o t r e p o r t e d ) . F l o r i d a D e p a r t m e n t o f E n v i r o n m e n t a l P r o t e c t i o n Di r e c t P r o j e c t s : Gr a n t o r / P a s s - T h r o u g h E n t i t y FO R T H E Y E A R E N D E D S E P T E M B E R 3 0 , 2 0 1 3 St a t e w i d e S u r f a c e W a t e r R e s t o r a t i o n a n d W a s t e w a t e r P r o j e c t s To t a l U . S . D e p a r t m e n t o f C o m m e r c e Fl o r i d a C o a s t a l M a n a g e m e n t P r o g r a m CI T Y O F A T L A N T I C B E A C H , F L O R I D A SC H E D U L E O F E X P E N D I T U R E S O F F E D E R A L A W A R D S AN D S T A T E F I N A N C I A L A S S I S T A N C E P R O J E C T S U. S . D e p a r t m e n t o f C o m m e r c e DR A F T 61 CITY OF ATLANTIC BEACH, FLORIDA NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE PROJECTS FOR THE YEAR ENDED SEPTEMBER 30, 2013 Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awardsand 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, 2013. 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 positionor cash flows of the City. Expenditures reported on the schedule are presented on theaccrual basis of accounting. DRAFT 62 Fiscal Year 2012-2013 Grant No. 5629-54 Amount of Award (Per City of Jacksonville Budget Ordinance)80,498$(A) Actual Funds Received from City of Jacksonville in Last Audit Period 0 Actual Funds Received this Period(22,291) Amount Earned but Not Received this Period0 Unspent Award Amount 58,207$ Expenditure of City Funds (A) City Fiscal Year 2011-2012 Grant #5629-51 - $80,498 Actual 10/1/2012Remaining Budgeted 9/30/2013 Balance Area Neighborhood Infrastructure Improvements # 004799 / BU11UC1200171,434$1,434$0$ Donner Park Improvements # 004415 / B09UC1200-17 79,06420,857 58,207 Total 80,498$22,291$58,207$ 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 2012-2013 City of Jacksonville Public Service Grants Received as a Subgrant Recipient Per Interlocal Agreement Source of City Funds Project / Federal Grant Number DRAFT 63 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OFBASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor, City Commissioners and Interim City Manager Atlantic Beach, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Atlantic Beach, Florida, (the City), as of and for the year ended September 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated __________. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies,in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. DRAFT 64 Honorable Mayor, City Commissioners and Interim City Manager Atlantic Beach, Florida INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Concluded) Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’sinternal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. ______________________ Gainesville, Florida DRAFT 65 MANAGEMENT LETTER Honorable Mayor, City Commissioners and Interim 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, 2013, and have issued our report thereon dated ___________. 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 Chapter 10.550, Rules of the Auditor General. We have issued our independent auditors’ report on internal control over financial reporting and compliance and other mattersbased on an audit of the financial statements performed in accordance with Government Auditing Standards. Disclosures in those reports and schedule, which aredated ___________, 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 theState 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. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we addressnoncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with the audit, we did not have any such findings. Section 10.554(1)(i)5., 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. DRAFT 66 Honorable Mayor, City Commissioners and Interim City Manager Atlantic Beach, Florida MANAGEMENT LETTER (Concluded) Section 10.554(1)(i)6.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)6.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, 2013, 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, 2013. In connection with our audit, we determined that these two reports were in agreement. Pursuant to Section 10.554(1)(i)6.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. _______________ Gainesville, Florida DRAFT