Annual Financial Report - 2020-2021
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2021
Page Intentionally Left Blank
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2021
INDEPENDENT AUDITOR’S REPORT ...................................................................................................................................... 1
MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................................................................... 4
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION ........................................................................................................................................... 13
STATEMENT OF ACTIVITIES ................................................................................................................................................. 14
FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS ...................................................................................................................... 15
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET
POSITION ............................................................................................................................................................................ 16
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL
FUNDS ................................................................................................................................................................................. 17
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES .................................................................... 18
STATEMENT OF NET POSITION – PROPRIETARY FUNDS ..................................................................................................... 19
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS ................................... 21
STATEMENT OF CASH FLOWS ............................................................................................................................................. 23
STATEMENT OF FIDUCIARY NET POSITION ......................................................................................................................... 25
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION .................................................................................................... 26
NOTES TO FINANCIAL STATEMENTS ..................................................................................................................................... 27
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
– GENERAL FUND ................................................................................................................................................................ 61
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – GENERAL FUND ........................................................................................................................... 63
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
GENERAL EMPLOYEES’ PENSION PLAN .......................................................................................................................... 64
POLICE OFFICERS’ PENSION PLAN .................................................................................................................................. 66
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS...................................................................................................... 68
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ............................................................................. 69
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS ........................................................................................... 70
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS ........................................................................ 71
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2021
SUPPLEMENTARY INFORMATION
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS ............................................................................ 72
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-
MAJOR GOVERNMENTAL FUNDS ....................................................................................................................................... 74
HISTORICAL REVENUES AND EXPENSES .............................................................................................................................. 76
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS
(WATER AND SEWER) ......................................................................................................................................................... 77
OTHER BOND COVENANT DISCLOSURES ............................................................................................................................ 78
OTHER STATISTICAL INFORMATION
MAJOR UTILITY CUSTOMERS .............................................................................................................................................. 79
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; THE
RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND OTHER CONTRACT
REQUIREMENTS
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................... 80
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES ........................ 82
MANAGEMENT LETTER ....................................................................................................................................................... 83
1
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
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, 2021, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
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.
Auditor’s 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 of financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 City’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 City’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.
2
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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, 2021, 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, General Fund – Budgetary to Actual Schedule and notes to the schedule, and
Required Pension and Other Postemployment Benefits Schedules as listed in the table of contents be
presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by GASB, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted
of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not provide
us with sufficient evidence to express an opinion or provide any assurance.
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 and the other statistical
information section as listed in the table of contents are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The supplementary information 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 are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
3
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
The other statistical information 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated July 20, 2022, on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the City’s internal control over financial reporting and
compliance.
Report on Summarized Comparative Information
We have previously audited the City’s 2020 financial statements, and our report dated June 18, 2021,
expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended September 30, 2020, is consistent,
in all material respects, with the audited financial statements from which it was derived.
July 20, 2022
Gainesville, Florida
MANAGEMENT’S DISCUSSION AND ANALYSIS
4
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
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, 2021.
Overview of the Financial Statements
This management’s discussion and analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City’s finances, in a manner similar to a private sector business. They include the Statement of Net Position
and the Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between reported as net
position. Net position is reported as one of three categories: invested in capital assets net of related debt;
restricted; or unrestricted. Restricted net position is further classified as either net position restricted by
enabling legislation or net position that is otherwise restricted. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues, referred to as “governmental activities,” from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges, referred to as “business-type activities.” The governmental activities of the City include public
safety, road maintenance and construction, parks and recreation, conservation and resource
management, and general government, which include administration and other support functions. The
business-type activities of the City include the utility, comprised of the water and sewer systems, the
stormwater system, the sanitation service and the building code enforcement enterprise fund. The
government-wide financial statements can be found on pages 13-14 of this report.
5
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(continued)
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the
funds of the City can be categorized into either governmental funds, proprietary funds, or fiduciary funds.
■ Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of
available financial resources, as well as on balances of available resources at the end of the fiscal year.
Such information may be useful in evaluating a City’s near-term financing requirements. Because the
focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so, readers
may better understand the long-term impact of the government’s near-term financing decisions.
Reconciliations are provided between the Governmental Funds Balance Sheet and the Statement of Net
Position and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund
Balances and Statement of Activities to facilitate this comparison between governmental funds and
governmental activities.
The City maintains 12 individual governmental funds. Information is presented separately in the
Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances for the General Fund, which is considered to be a major
fund. Data from the other 11 governmental funds are combined into a single, aggregated presentation
called Nonmajor Governmental Funds. Fund data for these nonmajor governmental funds is provided in
the form of combining statements. These combining statements can be found on pages 72-75 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 61-63 of this
report has been provided to demonstrate compliance with this budget.
■ Proprietary Funds
The City maintains only one type of proprietary fund and that is enterprise funds. The enterprise funds
are used to account for the activities of the water and sewer (utility), stormwater, building code
enforcement, and sanitation activities.
The proprietary fund financial statements provide the same type of information as the government-
wide financial statements, only in more detail. Separate information of the utility, stormwater,
sanitation and building code enforcement activities can be found in the basic proprietary fund financial
statements on pages 19-24 of this report.
6
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
Fund Financial Statements (concluded)
■ Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City (i.e.,
pension beneficiaries). Fiduciary funds are not reflected in the government-wide financial statements
because the resources of those funds are not available to support the City’s own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary
fund financial statements can be found on pages 25-26 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 27 of this
report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the City’s progress in funding its obligation to provide
pension benefits to its employees and a budgetary comparison schedule for the General Fund. Required
supplementary information can be found beginning on page 61 of this report.
7
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City’s financial position. As can be seen in the
summarized table below, the City’s assets exceeded liabilities by $87,232,114 at the close of the fiscal
year ended September 30, 2021.
By far the largest portion of the City’s net position, $65,240,433 (75%), reflects its investment in capital
assets (i.e., land, buildings, equipment, and infrastructure), less any related, outstanding debt used to
acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City’s investment in capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
A portion of the City’s net position, $6,632,470 (7%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $15,359,211
(18%), is used to meet the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Position
September 30, 2021 and 2020
(In Thousands)
Governmental Business-type
Activities Activities Totals
2021 2020 2021 2020 2021 2020
Current and other assets $12,951 $11,099 $16,474 $15,549 $29,425 $26,648
Capital assets 44,198 45,237 33,996 36,652 78,194 81,889
Total Assets 57,149 56,336 50,470 52,201 107,619 108,537
Deferred Outflow 2,627 2,154 1,167 1,250 3,794 3,404
Long-term liabilities
outstanding 7,137 7,580 11,960 15,839 19,097 23,419
Other liabilities 881 1,030 3,771 1,525 4,652 2,555
Total Liabilities 8,018 8,610 15,731 17,364 23,749 25,974
Deferred Inflow 366 541 66 88 432 629
Net Position:
Invested in capital assets,
net of related debt 42,934 43,896 22,307 23,406 65,421 67,302
Restricted 4,382 3,276 2,250 2,842 6,632 6,118
Unrestricted 4,076 1,538 11,283 9,751 15,359 11,918
Total Net Position $51,392 $49,339 $35,840 $35,999 $87,232 $85,751
8
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
As illustrated in the schedule on page vi, the City was able to report positive balances in all categories of
net position, both for the government as a whole, as well as for its separate governmental and business-
type activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach’s Change in Net Position
For the Years Ended September 30, 2021 and 2020
(In Thousands)
Governmental Business-type
Activities Activities Totals
2021 2020 2021 2020 2021 2020
Revenues:
Program Revenues:
Charges for Services $1,238 $1,056 $13,183 $12,565 $14,421 $13,621
Operating Grants and
Contributions 537 278 0 0 537 278
Capital Grants and
Contributions 99 73 313 432 412 505
General Revenues:
Property Taxes 6,342 5,912 0 0 6,342 5,912
Public Service Tax and
Franchise Fees 1,655
1,856
0
0
1,655
1,856
Fuel Taxes 622 544 0 0 622 544
Discretionary Sales Surtax 1,040 915 0 0 1,040 915
State Shared Revenue 2,091 1,821 0 0 2,091 1,821
Other 36 363 19 240 55 603
Total Revenues 13,660 12,818 13,515 13,237 27,175 26,055
Expenses:
General Government 2,931 2,536 0 0 2,931 2,536
Public Safety 6,448 6,582 0 0 6,448 6,582
Road Maintenance and
Construction 2,291
1,866
0
0
2,291
1,866
Parks and Recreation 1,369 1,549 0 0 1,369 1,549
Conservation and Resource
Management 3
23
0
0
3
23
Interest/Fiscal Charges on
Long-term Debt 45
47
0
0
45
47
Utility 0 0 8,255 6,926 8,255 6,926
Stormwater 0 0 1,661 1,261 1,661 1,369
Sanitation 0 0 1,717 1,667 1,717 1,667
Building Code Enforcement 0 0 561 545 561 545
Total Expenses 13,087 12,603 12,194 10,399 25,281 23,110
Transfers 1,480 1,132 (1,480) (1,132) 0 0
Change in Net Position 2,053 1,347 (159) 1,598 1,894 2,945
Net Position-Beginning 49,339 47,992 35,999 34,401 85,338 82,393
Net Position-Ending $51,392 $49,339 $35,840 $35,999 $87,232 $85,338
9
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. Following is a summary of fund activity financial information for the fiscal year,
rounded to the nearest thousand dollars:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund
balance of $12,090,942 an increase of $1,998,627 in comparison with the prior year.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance was $3,805,291, which equated to 31% of total General Fund expenditures
without transfers. The net result of various revenue and expense items resulted in an increase to the
City’s General Fund of $944,050 or 13% during the current fiscal year. Property tax revenues increased
by $429,745 or 7% from the previous year. This was a result of an increase in the taxable values. General
Fund transfers in increased by $136,490, and there was no transfers out. Overall, general fund
expenditures increased by $200,647 or 2%. This can be attributed returning to normal business
operations suspended during the COVID-19 pandemic.
Nonmajor governmental funds consisting of special revenue funds, the capital projects fund and the
debt service fund have a combined fund balance of $4,139,474. The net increase in fund balance after
transfers in nonmajor governmental funds was $1,054,577. The increase in the fund was related to
the decrease in Capital Outlay Expenditures as many projects remained on hold due to supplies and
labor being difficult to procure.
■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. During the fiscal year the proprietary funds recorded operating
revenues of $13,162,051, operating expenses of $11,612,935, net non-operating expense of $540,452
and net capital contributions, grants and transfers of $(1,167,495). The net position in the proprietary
funds decreased $158,830 as a result of the fiscal year’s activities. The unrestricted net position of the
enterprise funds amounted to $11,282,685 at the end of fiscal year 2021.
Stormwater rates stayed constant in fiscal year 2021 as there were no rate changes. The $8.39 per
ERU is approximately 55%, compared to 72% for the prior year, of the total operating expenses of
$1,623,091 needed to fully fund the operation with charges for service.
During fiscal year 2021, the Sanitation Fund netted a decrease in net position of $59,906.
General Fund Budgetary Highlights
Net Budget
The overall net difference from the final budgeted resources (revenues and other financing sources) and
adjusted final budgeted uses (expenditures and other financing uses) was a deficit of $806,472. The
actual increase in fund balance was $1,010,772. This resulted in a $1,817,244 positive budgetary
variance.
10
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
Capital Assets and Debt Administration
Capital Assets―The City’s investment in capital assets, net of related depreciation, for its governmental
and business-type activities as of September 30, 2021, amounted to $78,195,260. 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 $1,037,939 or 2.2% for governmental activities and a decrease of $2,655,946 or 7.2% for
business-type activities.
Capital asset events during the current fiscal year included the following:
▪ Governmental Activities
Buildings reflected a net decrease of $49,657 as a result of depreciation.
Intangible Assets reflected a net decrease of $17,658. This asset category includes land easements
and computer software.
Improvements Other Than Buildings reflected a net decrease of $391,851. This represents capital
asset increase of $341,831 offset by depreciation of $733,682.
Equipment reflected a net decrease of $137,874. This represents capital asset increase of $201,459,
offset by depreciation of $339,333.
Construction in progress decreased by $510,778.
■ Business-type Activities
Buildings reflected a net decrease in asset value of $6,671 from depreciation.
Improvements Other Than Buildings reflected a net decrease of $773,105. This represents capital
asset increases of $1,467,689, offset by depreciation of $2,240,794.
Equipment reflected a net decrease of $137,874. This represents capital asset increase of $201,459,
offset by depreciation of $339,333.
Construction in Progress had a net decrease of $1,738,106.
11
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Continued)
City of Atlantic Beach’s Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities Totals
2021 2020 2021 2020 2021 2020
Land $11,914 $11,914 $1,656 $1,656 $13,570 $13,570
Intangibles 87 104 213 213 300 317
Buildings 6,755 6,805 21 27 6,776 6,832
Improvements-Other 23,737 24,129 30,517 31,291 54,254 55,420
Equipment 1,150 1,218 889 1,027 2,039 2,245
Construction in Progress 557 1,067 701 2,439 1,258 3,506
Total $44,200 $45,237 $33,997 $36,653 $78,197 $81,890
Additional information on the City’s capital assets can be found in Note 4 on pages 40-41 of this report.
Long-term Debt
At the end of the 2021 fiscal year, the City had total bonded debt outstanding of $13,323,856. The amount
of $12,068,856 represents the City’s debt related to its business type activities. This amount was
comprised of debt secured solely by specified revenue sources. A detailed listing of the City’s debt can be
found in the table below.
City of Atlantic Beach’s Outstanding Debt
September 30, 2021
(In Thousands)
2021 2020
Governmental Activities:
Capital Improvement Revenue Bonds, Series 2018 $1,255 $1,330
Business-type Activities:
Utilities System Revenue Bond, Series 2014 6,805 8,070
F.D.E.P. State Revolving Funds Loan, 2010 0 453
F.D.E.P. State Revolving Funds Loan, 2009 0 5,086
Refunding Bank Loan Series 2021 5,193 0
Capital Lease Payable - 2018 71 139
Total $13,324 $15,078
Debt service coverage calculations can be found on page 77. Additional information on the City’s long-
term debt can be found in Note 5 on pages 42-45 of this report.
12
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2021
(Concluded)
Revenue Highlights:
■ Total General Fund Revenues for 2021 were $522,621 higher than 2020 revenue (page 17). Increase
in property tax revenue of $429,745 is the largest contributor to this increase.
■ The 2021 taxable property values were about 7% higher than the 2020 values. The City Commission
voted to use the same millage rate of 3.2285 mills. The purpose for adopting the millage rate of 3.2285
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
and adequate reserves. The final gross taxable property value was $2,032,291,878. Ad valorem taxes
of $6,341,798 represent 53% of the General Fund revenues for 2021.
■ The 2021 Intergovernmental revenues of $2,455,036 make up 20% of general fund revenues. This is
an increase of $457,205 over 2020.
■ The City’s investment portfolio is valued at approximately $17,381,086 as of September 30, 2021. The
investments showed a loss of $84,443 for the year.
Expenditure Highlights:
■ Total Governmental Fund Expenditures increased in current year by $382,504 when compared to prior
year. Capital expenditures decreased from $1,029,051 in 2020 to $773,989 in 2021. This decrease is due
to projects not being able to be completed due to the continued effects of the `COVID-19 pandemic.
Requests for Information
The financial report is designed to provide a general overview of the City’s finances for all those with an
interest in the City’s finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the City of Atlantic Beach, Finance
Director, 800 Seminole Road, Atlantic Beach, Florida 32233.
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide, Fund Financial Statements
and Notes to Financial Statements
See accompanying notes.
13
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
Primary Government
Governmental Business-type 2020
Activities Activities Total Totals
ASSETS
Equity in pooled cash and investments $ 7,545,142 $ 13,356,204 $ 20,901,346 $ 18,110,801
Receivables, current:
Customer accounts, net 400 802,438 802,838 861,023
Intergovernmental and other 998,649 131,817 1,130,466 1,330,674
Notes receivable, net 760 - 760 16,519
Inventory 43,923 60,763 104,686 93,019
Prepaid expenses 33,374 - 33,374 352,394
Restricted assets:
Equity in pooled cash and investments 4,325,779 2,122,551 6,448,330 5,761,420
Capital assets:
Non-depreciable 12,470,159 2,356,711 14,826,870 17,075,754
Depreciable, net 31,728,633 31,639,757 63,368,390 64,813,391
Notes receivable, noncurrent 1,520 - 1,520 120,840
TOTAL ASSETS 57,148,339 50,470,241 107,618,580 108,535,835
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 2,579,766 715,862 3,295,628 2,784,676
Deferred outflows - loss on refunding - 431,772 431,772 539,716
Deferred outflows related to OPEB 47,652 19,336 66,988 80,284
TOTAL DEFERRED OUTFLOWS OF RESOURCES 2,627,418 1,166,970 3,794,388 3,404,676
LIABILITIES
Accounts payable and accrued expenses 806,564 793,526 1,600,090 1,140,118
Construction costs payable 10,616 52,127 62,743 48,776
Due to other governments - 50,698 50,698 133,873
Unearned revenue 30,396 181,993 212,389 367,431
Accrued interest payable 22,276 108,258 130,534 181,664
Customer deposits 11,029 717,809 728,838 682,737
Long-term obligations:
Due within one year 290,446 1,866,656 2,157,102 2,063,220
Due in more than one year 6,846,373 11,959,787 18,806,160 21,356,069
TOTAL LIABILITIES 8,017,700 15,730,854 23,748,554 25,973,888
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 224,625 8,643 233,268 422,663
Deferred inflows related to OPEB 141,583 57,449 199,032 205,763
Total deferred inflows of resources 366,208 66,092 432,300 628,426
NET POSITION
Net investment in capital assets 42,933,176 22,307,257 65,240,433 67,302,057
Restricted for:
General government facilities 257,189 - 257,189 257,689
Public safety 133,634 - 133,634 119,127
Road maintenance and construction 3,675,631 - 3,675,631 2,687,062
Other purposes 315,693 - 315,693 212,062
Debt service - 280,916 280,916 280,916
Renewal and replacement - 250,000 250,000 250,000
Utility rate stabilization - 400,000 400,000 400,000
Utility system improvements - 1,191,635 1,191,635 1,715,370
Building code enforcement - 127,772 127,772 195,557
Unrestricted 4,076,526 11,282,685 15,359,211 11,918,357
TOTAL NET POSITION $ 51,391,849 $ 35,840,265 $ 87,232,114 $ 85,338,197
See accompanying notes.
14
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
Program Revenues Net (Expense) Revenue and
Operating Capital Changes in Net Position
Charges for Grant and Grant and Governmental Business-Type 2020
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Totals
PRIMARY GOVERNMENT:
Governmental activities:
General government $ 2,931,404 $ 182,013 $ 40,119 $ 25,325 $ (2,683,947) $ - $ (2,683,947) $ (2,236,907)
Public safety 6,448,233 708,075 295,969 73,310 (5,370,879) - (5,370,879) (5,766,964)
Transportation 2,291,416 300,352 160,459 - (1,830,605) - (1,830,605) (1,641,859)
Parks and recreation 1,368,700 47,506 - - (1,321,194) - (1,321,194) (1,503,150)
Conservation and resource
management 2,550 - 40,891 - 38,341 - 38,341 (209)
Interest on long-term debt 44,553 - - - (44,553) - (44,553) (47,215)
Total governmental activities 13,086,856 1,237,946 537,438 98,635 (11,212,837) - (11,212,837) (11,196,304)
Business-type activities
Utility 8,255,088 9,807,843 - 178,312 - 1,731,067 1,731,067 2,831,476
Stormwater 1,660,502 898,242 - 134,447 - (627,813) (627,813) (473,942)
Sanitation 1,716,831 2,001,862 - - - 285,031 285,031 306,667
Building code enforcement 561,097 474,977 - - - (86,120) (86,120) (173,796)
Total business-type activities 12,193,518 13,182,924 - 312,759 - 1,302,165 1,302,165 2,490,405
TOTAL PRIMARY GOVERNMENT $ 25,280,374 $ 14,420,870 $ 537,438 $ 411,394 $ (11,212,837) $ 1,302,165 $ (9,910,672) $ (8,705,899)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 6,341,798 - 6,341,798 5,912,053
Public service taxes and franchise fees 1,655,198 - 1,655,198 1,856,292
Fuel taxes levied for transportation purposes 621,762 - 621,762 543,623
Discretionary Sales Surtax 1,039,813 - 1,039,813 914,697
State shared revenue 2,090,852 - 2,090,852 1,821,375
Investment earnings (loss) (34,757) (49,686) (84,443) 535,236
Miscellaneous 70,664 68,945 139,609 67,825
TRANSFERS 1,480,254 (1,480,254) - -
Total general revenues and transfers 13,265,584 (1,460,995) 11,804,589 11,651,101
CHANGE IN NET POSITION 2,052,747 (158,830) 1,893,917 2,945,202
NET POSITION, beginning of year 49,339,102 35,999,095 85,338,197 82,392,995
NET POSITION, end of year $ 51,391,849 $ 35,840,265 $ 87,232,114 $ 85,338,197
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET – GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
2021
Non-Major
General Governmental 2020
Fund Funds Total Totals
ASSETS
Equity in pooled cash and investments $ 7,545,142 $ 4,325,779 $ 11,870,921 $ 9,458,538
Receivables, net
Customer accounts, net 400 - 400 54,055
Intergovernmental and other 676,785 321,864 998,649 1,198,857
Notes receivable, current 760 - 760 760
Inventory 43,923 - 43,923 32,256
Prepaid expenditures 33,374 - 33,374 352,394
Due from other funds 488,329 - 488,329 394,451
Notes receivable, non-current 1,520 - 1,520 1,520
TOTAL ASSETS $ 8,790,233 $ 4,647,643 $ 13,437,876 $ 11,492,831
LIABILITIES
Accounts payable and accrued liabilities 795,835 10,729 806,564 716,839
Construction costs payable 3,270 7,346 10,616 10,616
Due to other governments - - - 80,064
Due to other funds - 488,329 488,329 394,451
Deposits 9,264 1,765 11,029 13,108
Unearned revenue 30,396 - 30,396 185,438
TOTAL LIABILITIES 838,765 508,169 1,346,934 1,400,516
FUND BALANCE
Nonspendable:
Inventory 43,923 - 43,923 32,256
Prepaids 33,374 - 33,374 352,394
Restricted for:
Public safety - 133,634 133,634 119,127
Road maintenance and construction - 3,675,631 3,675,631 2,687,062
Other capital projects - 257,189 257,189 257,689
Other purposes - 315,693 315,693 212,062
Committed to:
Conservation and resource management - 116,072 116,072 77,732
Assigned to:
Community redevelopment 50,000 - 50,000 50,000
Operating reserves 4,018,880 - 4,018,880 3,650,716
Unassigned 3,805,291 (358,745) 3,446,546 2,653,277
TOTAL FUND BALANCES 7,951,468 4,139,474 12,090,942 10,092,315
TOTAL LIABILITIES AND FUND BALANCES $ 8,790,233 $ 4,647,643 $ 13,437,876 $ 11,492,831
See accompanying notes.
16
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
Amounts reported for governmental activities in the statement of net position
are different because:
2021 2020
FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 12,090,942 $ 10,092,315
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 44,198,792 45,236,731
Deferred outflows of resources represent an consumption of net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. 2,627,418 2,154,239
Deferred inflows of resources represent an increase in net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. (366,208) (540,719)
Interest payable on long-term debt does not require current financial resources
and therefore, is not reported as a liability in governmental funds. (22,276) (23,608)
Long-term liabilities (including bonds and notes payable, compensated
absences liability, OPEB obligation, and net pension liabilities)
are not due and payable in the current period and, therefore, are not
reported in the governmental funds.
This is the amount of the long-term obligations (7,136,819) (7,579,856)
NET POSITION OF GOVERNMENTAL ACTIVITIES $ 51,391,849 $ 49,339,102
See accompanying notes.
17
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Non-major
General Governmental 2020
Fund Funds Total Totals
REVENUES:
Property taxes $ 6,341,798 $ - $ 6,341,798 $ 5,912,053
Non-property taxes 1,278,490 1,661,575 2,940,065 2,729,335
Licenses and permits 789,254 - 789,254 905,755
Intergovernmental revenue 2,388,315 - 2,388,315 1,997,831
Charges for services 963,957 66,595 1,030,552 812,422
Fines and forfeitures 57,838 32,978 90,816 73,711
Investment earnings (loss) (17,504) (17,254) (34,758) 341,498
Miscellaneous revenues (65,373) 40,890 (24,483) 45,354
Total revenues 11,736,775 1,784,784 13,521,559 12,817,959
EXPENDITURES:
General government 2,741,504 2,550 2,744,054 2,429,783
Public safety 6,682,464 17,244 6,699,708 6,462,381
Transportation 1,247,340 341,160 1,588,500 1,384,495
Culture/recreation 1,089,282 - 1,089,282 1,209,745
Capital outlay 523,464 250,525 773,989 1,029,051
Debt service - 120,884 120,884 118,458
Total expenditures 12,284,054 732,363 13,016,417 12,633,913
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (547,279) 1,052,421 505,142 184,046
OTHER FINANCING SOURCES (USES)
Transfers in 1,478,098 1,217,551 2,695,649 2,630,066
Transfers (out) - (1,215,395) (1,215,395) (1,498,213)
Sale of general capital assets 13,231 - 13,231 -
TOTAL OTHER FINANCING SOURCES (USES) 1,491,329 2,156 1,493,485 1,131,853
NET CHANGE IN FUND BALANCE 944,050 1,054,577 1,998,627 1,315,899
FUND BALANCE, beginning of year 7,007,418 3,084,897 10,092,315 8,776,416
FUND BALANCE, end of year $ 7,951,468 $ 4,139,474 $ 12,090,942 $ 10,092,315
See accompanying notes.
18
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
Amounts reported for governmental activities in the statement of net activities
are different because:
2021 2020
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 1,998,627 $ 1,315,899
Governmental funds report capital outlay as expenditures. However,
in the statement of activities, the cost of these assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount of capital assets recorded in the current period. 712,910 1,056,082
This is the amount of depreciation recorded in the current period. (1,577,916) (1,509,322)
This is the book value of dispositions recorded in the current period. (172,933) -
Long-term obligations including bonds and notes payable, compensated absences
and other post-employment benefit obligations are reported as liabilities in the
government-wide statement of net position but are not reported as liabilities in the
governmental funds because they do not require the use of current financial resources:
This is the repayment of bond principal reported as expenditures in governmental funds. 75,000 70,000
This is the change in accrued interest payable on long-term obligations. 1,332 1,242
This is the change in accrued compensated absences during the year. (51,549) (184,664)
Other postemployment benefit (OPEB) expense is reported in the statement of activities
which differs from OPEB expenditures as report in the governmental funds:
This amount represents the change in deferred inflows related to OPEB. 4,673 (123,417)
This amount represents the change in deferred outflows related to OPEB. (9,413) 41,755
This amount represents the change in the total OPEB liability. (20,934) 66,177
Pension expense is reported in the statement of activities which differs from
pension expenditures as reported in the governmental finds:
This amount represents the change in deferred inflows related to pensions. 169,838 504,719
This amount represents the change in deferred outflows related to pensions. 482,592 (187,957)
This amount represents the change in the net pension liability. 440,520 296,244
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 2,052,747 $ 1,346,758
See accompanying notes.
19
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Totals Totals
ASSETS
Current assets:
Equity in pooled cash and investments $ 11,591,513 $ 579,517 $ 853,686 $ 331,488 $ 13,356,204 $ 12,017,397
Accounts receivables, net 656,721 54,628 91,089 - 802,438 806,968
Due from other governments 35,244 - 96,573 - 131,817 131,817
Notes receivable - current - - - - - 15,759
Inventory 60,763 - - - 60,763 60,763
Total current assets 12,344,241 634,145 1,041,348 331,488 14,351,222 13,032,704
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 2,122,551 - - - 2,122,551 2,396,286
Notes receivable - noncurrent - - - - - 119,320
Capital assets:
Non-depreciable 1,114,907 1,241,804 - - 2,356,711 4,094,817
Depreciable, net 23,569,192 7,997,378 2,024 71,163 31,639,757 32,557,597
Total noncurrent assets 26,806,650 9,239,182 2,024 71,163 36,119,019 39,168,020
Total assets 39,150,891 9,873,327 1,043,372 402,651 50,470,241 52,200,724
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 527,065 106,026 1,745 81,026 715,862 687,502
Deferred outflows - refunding loss 375,642 56,130 - - 431,772 539,716
Deferred outflows related to OPEB 13,938 2,767 - 2,631 19,336 23,219
Total deferred outflows of resources 916,645 164,923 1,745 83,657 1,166,970 1,250,437
Continued…
See accompanying notes.
20
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (concluded)
SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Totals Totals
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 335,322 $ 15,294 $ 430,726 $ 12,184 $ 793,526 $ 423,279
Construction costs payable 6,255 45,872 - - 52,127 38,160
Due to other governments 8,294 - - 42,404 50,698 53,809
Unearned revenue 90,605 29,898 61,490 - 181,993 181,993
Compensated absences 42,488 2,041 - 14,271 58,800 57,538
Bonds and notes payable, current 1,603,428 204,428 - - 1,807,856 1,726,019
Total current liabilities 2,086,392 297,533 492,216 68,859 2,945,000 2,480,798
Noncurrent liabilities:
Liabilities payable from restricted assets:
Customer deposits 717,809 - - - 717,809 669,629
Interest payable 97,952 10,306 - - 108,258 158,056
Compensated absences 220,979 11,891 - 46,338 279,208 257,099
Other postemployment obligation payable 85,172 16,908 - 16,077 118,157 109,963
Net pension liability 958,194 192,753 3,171 147,304 1,301,422 1,666,805
Bonds and notes payable, noncurrent portion 9,545,350 715,650 - - 10,261,000 12,022,009
Total noncurrent liabilities 11,625,456 947,508 3,171 209,719 12,785,854 14,883,561
Total liabilities 13,711,848 1,245,041 495,387 278,578 15,730,854 17,364,359
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 6,364 1,280 21 978 8,643 28,200
Deferred inflows related to OPEB 41,411 8,221 - 7,817 57,449 59,507
Total deferred inflows of resources 47,775 9,501 21 8,795 66,092 87,707
NET POSITION
Net investment in capital assets 13,904,708 8,329,362 2,024 71,163 22,307,257 23,405,942
Restricted for:
Debt retirement 280,916 - - - 280,916 280,916
Renewal and replacement 250,000 - - - 250,000 250,000
Utility rate stabilization 400,000 - - - 400,000 400,000
Utility system improvements (expendable) 1,191,635 - - - 1,191,635 1,715,370
Building code enforcement - - - 127,772 127,772 195,557
Unrestricted 10,280,654 454,346 547,685 - 11,282,685 9,751,310
Total net position $ 26,307,913 $ 8,783,708 $ 549,709 $ 198,935 $ 35,840,265 $ 35,999,095
See accompanying notes.
21
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Totals Total
OPERATING REVENUES:
Charges for services
Customer charges $ 9,773,510 $ 898,242 $ 1,930,877 $ 474,977 $ 13,077,606 $ 12,481,870
Franchise permits - - 15,500 - 15,500 9,000
Miscellaneous revenues 68,945 - - - 68,945 43,252
Total operating income 9,842,455 898,242 1,946,377 474,977 13,162,051 12,534,122
OPERATING EXPENSES:
Personnel services 1,776,734 371,312 (30,200) 456,726 2,574,572 2,663,633
Contractual services 673,262 70,803 1,574,973 7,214 2,326,252 1,944,303
Supplies 513,146 38,978 - 5,820 557,944 442,620
Repairs and maintenance 876,185 350,681 5,288 5,528 1,237,682 105,722
Utilities 349,132 - - - 349,132 351,447
Depreciation 2,005,224 562,879 450 18,429 2,586,982 2,571,983
Intergovernmental charges 1,283,844 186,319 164,383 55,465 1,690,011 1,686,671
Other expenses 234,388 42,119 1,937 11,915 290,359 259,222
Total operating expenses 7,711,915 1,623,091 1,716,831 561,097 11,612,934 10,025,601
OPERATING INCOME (LOSS) 2,130,540 (724,849) 229,546 (86,120) 1,549,117 2,508,521
NONOPERATING REVENUE (EXPENSE)
Connection charges 34,333 - - - 34,333 24,957
Franchise fees - - 55,485 - 55,485 49,169
Investment earnings (loss) (44,607) 368 (5,353) (94) (49,686) 193,740
Interest expense (414,392) (37,411) - - (451,803) (480,643)
Other, net (128,781) - - - (128,781) 2,900
Total nonoperating revenues (expense) (553,447) (37,043) 50,132 (94) (540,452) (209,877)
Continued…
See accompanying notes.
22
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Totals Total
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 1,577,093 $ (761,892) $ 279,678 $ (86,214) $ 1,008,665 $ 2,298,644
CAPITAL CONTRIBUTIONS
System development charges 178,312 - - - 178,312 427,040
Capital grants and contributions - 134,447 - - 134,447 4,613
Total capital contributions 178,312 134,447 - - 312,759 431,653
TRANSFERS
Transfers in - 285,000 - - 285,000 285,000
Transfers out (1,025,670) (400,000) (339,584) (1,765,254) (1,416,853)
Total transfers (1,025,670) (115,000) (339,584) - (1,480,254) (1,131,853)
CHANGE IN NET POSITION 729,735 (742,445) (59,906) (86,214) (158,830) 1,598,444
NET POSITION, beginning of year 25,578,178 9,526,153 609,615 285,149 35,999,095 34,400,651
NET POSITION, end of year $ 26,307,913 $ 8,783,708 $ 549,709 $ 198,935 $ 35,840,265 $ 35,999,095
See accompanying notes.
23
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Total Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 9,897,334 $ 899,862 $ 1,942,588 $ 463,572 $ 13,203,356 $ 12,488,470
Payments to suppliers (3,696,984) (859,256) (1,436,557) (88,337) (6,081,134) (4,974,981)
Payments for salaries and benefits (2,078,732) (376,539) (32,039) (458,879) (2,946,189) (2,909,220)
Net cash flows from operating activities 4,121,618 (335,933) 473,992 (83,644) 4,176,033 4,604,269
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers from (to) other funds (1,025,670) (115,000) (339,584) - (1,480,254) (1,131,853)
Connection charges received 34,333 - - - 34,333 24,957
Franchise fees received - - 55,485 - 55,485 49,169
Net cash flows from noncapital financing activities (991,337) (115,000) (284,099) - (1,390,436) (1,057,727)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Acquisition and construction of capital assets, net of related payables (147,232) (233,761) - - (380,993) (1,064,520)
Principal paid on notes, bonds and lease obligations (6,673,650) (198,522) - - (6,872,172) (1,686,515)
Interest paid on borrowings and other debt costs (368,363) (25,294) - - (393,657) (391,470)
Proceeds from long-term debt 5,193,000 - - - 5,193,000 -
Proceeds from the sale of capital assets 143,451 - - - 143,451 -
Capital contributions and impact fees received,
net of change in related receivables 178,312 454,920 - - 633,232 431,653
Net cash flows from capital and related financing activities (1,674,482) (2,657) - - (1,677,139) (2,710,852)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on invested funds (44,607) 368 (5,353) (94) (49,686) 193,741
Other income 6,300 - - - 6,300 2,900
Net cash flows from investing activities (38,307) 368 (5,353) (94) (43,386) 196,641
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,417,492 (453,222) 184,540 (83,738) 1,065,072 1,032,331
CASH AND CASH EQUIVALENTS, beginning of year 12,296,572 1,032,739 669,146 415,226 14,413,683 13,381,352
CASH AND CASH EQUIVALENTS, end of year $ 13,714,064 $ 579,517 $ 853,686 $ 331,488 $ 15,478,755 $ 14,413,683
As shown in the Accompanying Financial Statements
Equity in cash and investments $ 11,591,513 $ 579,517 $ 853,686 $ 331,488 $ 13,356,204 $ 12,017,397
Restricted equity in cash and investments 2,122,551 - - - 2,122,551 2,396,286
Total cash and cash equivalents $ 13,714,064 $ 579,517 $ 853,686 $ 331,488 $ 15,478,755 $ 14,413,683
Noncash financing and investing activities:
Amortization of refunding loss $ 93,911 $ 14,033 $ - $ - $ 107,944 $ 107,944
Continued…
See accompanying notes.
24
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2020
Utility Stormwater Sanitation Enforcement Total Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ 2,130,540 $ (724,849) $ 229,546 $ (86,120) $ 1,549,117 $ 2,508,521
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense 2,005,224 562,879 450 18,429 2,586,982 2,571,983
(Increase) decrease in accounts receivable 6,699 1,620 (3,789) - 4,530 (3,110)
(Increase) decrease in notes receivable - - - - - 446
(Increase) decrease in amounts due from other governments - - - (11,405) (11,405) 12,746
Increase (decrease) in accounts payable 232,974 (170,356) 310,024 (2,395) 370,247 (184,996)
Increase (decrease) in compensated absences 14,485 (258) - 17,438 31,665 64,634
Increase (decrease) in customer deposits 48,180 - - - 48,180 (55,734)
(Increase) decrease in OPEB related deferred outflows 472 502 - 2,909 3,883 (17,144)
Increase (decrease) in the total OPEB liability 16,929 1,427 - (10,162) 8,194 (23,551)
Increase (decrease) in OPEB related deferred inflows 4,481 (157) - (6,382) (2,058) 50,443
(Increase) decrease in pension related deferred outflows 2,365 (41,371) 41,713 (31,067) (28,360) 184,500
Increase (decrease) in the net pension liability (325,377) 36,002 (102,190) 26,182 (365,383) (105,406)
Increase (decrease) in pension related deferred inflows (15,352) (1,372) (1,762) (1,071) (19,557) (399,063)
Net cash flows from operating activities $ 4,121,620 $ (335,933) $ 473,992 $ (83,644) $ 4,176,035 $ 4,604,269
See accompanying notes.
25
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2020
Pension Trust
Funds
ASSETS 2021 2020
Cash and cash equivalents $ 866,209 $ 495,614
Due from other governments 137,840 -
Accrued income 38,822 32,888
Investments at fair value 42,152,119 34,362,981
Total assets 43,194,990 34,891,483
LIABILITIES
Accounts payable and accrued liabilities - 7,810
Due to City 62,891 -
Total Liabilities 62,891 7,810
NET POSITION
Restricted for pension benefits $ 43,132,099 $ 34,883,673
See accompanying notes.
26
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
Pension Trust
Funds
2021 2020
ADDITIONS
Contributions:
City $ 2,119,081 $ 2,107,974
Plan members 255,665 258,087
State of Florida 274,267 132,844
Total contributions 2,649,013 2,498,905
Investment income 7,948,224 1,876,162
Less investment expenses: (160,383) (118,261)
Net investment income 7,787,841 1,757,901
Total additions 10,436,854 4,256,806
DEDUCTIONS
Administrative expenses 65,266 73,887
Payments to retirees and participants 2,123,162 2,045,429
Total deductions 2,188,428 2,119,316
CHANGE IN NET POSITION 8,248,426 2,137,490
NET POSITION, beginning of year 34,883,673 32,746,183
NET POSITION, end of year $ 43,132,099 $ 34,883,673
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
27
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Atlantic Beach, Florida, (the City), conform to accounting principles generally
accepted in the United States of America as applicable to governments. The following is a summary of the more
significant policies used in the preparation of these financial statements:
Reporting Entity
The City was incorporated in 1957, under a charter in accordance with the laws of the State of Florida, Florida
Statutes Section 57-1126. The City operates under a form of government, which comprises an elected City
Commission (four Commissioners and a Mayor-Commissioner) and provides, under the administration of an
appointed City Manager, the following services: public safety, public works (streets and infrastructure), recreation,
conservation and resource management, sanitation, stormwater, reuse, 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 who se exclusions would cause the reporting entity’s financial statements to
be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria for
consideration in determining financial accountability. These criteria incl ude appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that organization; or (2) the
potential for that organization to provide specific benefits to or impose specific financial burdens on the City. Other
considerations are whether the organization is legally separate, whether the City holds the corporate powers of the
organization, and whether there is fiscal dependency by the organization on the City. Based upon the application of
these criteria, the City reports the following fiduciary component units:
• General Employees’ Retirement Plan
• Police Officers’ Retirement Plan
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the non-fiduciary activities of the City. For the most part, the effect of inter -fund activity has
been removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent
on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.
Indirect costs are included in the program expense reported for individual functions and activities. Program
revenues include: (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services,
or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or activity. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though the latter are excluded from the government-wide financial statements. Major individual governmental
funds and major individual enterprise funds a re reported as separate columns in the fund financial statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
28
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
Government-Wide Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related
cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
As a general rule, the effect of inter-fund activity has been eliminated from the government -wide financial
statements. The major exception to this general rule is charges between the City’s water and sewer function and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include : (1) charges to customers or applicants for goods, services, or
privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special
assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets; (2) Restricted; or (3)
Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. R evenues 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, th e 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 expendit ures, as well as
expenditures related to compensated absences, other postemployment benefits, pension expense, and claims and
judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and permits, charges for services, an d interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
The City reports the following major governmental fund:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
29
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
The City reports the following major proprietary funds:
• The Utility Fund accounts for the activities of the City’s water distribution, sewer collection and treatment
systems, and reuse system.
• The Sanitation Fund accounts for the activities of the City’s sanitation system.
• The Stormwater Fund accounts for the activities of the City’s stormwater system.
Additionally, the City reports the following fund types:
• Special Revenue Funds—The special revenue funds are used to account for the proceeds of specific revenue
sources (other than major capital projects) that are legally restricted to expenditures for specified purposes.
• Capital Projects Funds—The capital projects funds are used to account for the financial resources to be
used for the acquisition or construction of major capital facilities and improvement projects (other than
those financed by proprietary funds or special revenue funds).
• Pension Trust Funds—These funds account for the activities of the Employees’ Retirement System, which
accumulates resources for pension benefit payments to qua lified police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – non-spendable, restricted, committed, assigned, and unassigned:
• Non-Spendable Fund Balance—amounts that are not in spendable form (such as inventory) or are required
to be maintained intact.
• Restricted Fund Balance—amounts constrained to specific purposes by their providers (such as grantors,
bondholders, and higher levels of government), through constitutional provisions, or by enabling
legislation.
• Committed Fund Balance—amounts constrained to specific purposes by the City itself, using its highest
level of decision-making authority (i.e., ordinance passed by City Commission). To be reported as
committed, amounts cannot be used for any other purpose unless the City takes the same highest level
action to remove or change the constraint.
• Assigned Fund Balance—amounts the City intends to use for a specific purpose. Intent can be expressed
by the City Commission or by an official or body to which the City Commission delegates the authority.
• Unassigned Fund Balance—amounts that are available for any purpose. Positive amounts are reported
only in the General Fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
30
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (concluded)
When both restricted and unrestricted resources are available for use, it is the City’s practice to use res tricted
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 furthe r
indicated in the budget document as a designation or commitment of the fund. Assigned fund balance is established
by City Commission through adoption or amendment of the budget as intended for specific purpose (such as the
purchase of fixed assets, construction, debt service, or for other purposes).
In the General Fund, the City strives to maintain a fund balance operating reserve of approximately 25% of the
subsequent year’s budgeted General Fund payroll and operating expenditures.
Proprietary Funds
Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are
charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as non-operating revenues and expenses.
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total appropriations
at the individual fund level.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects). The City Manager
is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that
increase the total expenditures of any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the reported budgetary data.
The budget presented in the accompanying required supplemental information is prepared in conformity with
accounting principles generally accepted in the United States of America.
Cash and Investments
Except where prohibited, cash resources of the individual funds are combined to form a pool of cash and
investments. These pooled cash, investments and related accrued investment earnings are reported in the financial
statements as “Equity in pooled cash and investments” under the City’s “pooling” concept (see Note 2). Investment
earnings and losses on the pooled cash and investments are distributed to the appropriate funds based on the
average monthly balance of investments in each fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
31
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
The proprietary funds use this pool as a demand deposit accounts, and ac cordingly, all amounts in the pool are
considered cash and cash equivalents for the purposes of the statement of cash flows.
Investments are valued at fair market value (see Note 2).
Receivables
Receivables are recorded at their net realizable value.
Inter-Fund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of inter -fund loans) or
“advances to/from other funds” (i.e., the non-current portion of inter-fund loans).
Inventories
Inventories consisting principally of expendable materials, supplies, and fuel are determined by physical count at the
City’s year-end on an annual basis and are valued at the lower of cost (first-in, first-out) or market. On the balance
sheet - governmental funds, the inventory balance reported is considered non -spendable fund balance, which
indicates that it does not constitute “available spendable resources” even though it is a component of net current
assets. The cost of governmental fund-type inventories is recorded as expenditure when consumed.
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to various bond indenture
agreements and City ordinances. These assets are legally restricted for specific purposes, such as debt service, new
construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City’s funds, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, drainage
improvements, sidewalks, and similar items), are reported in the applicable governmental or business -type activities
columns in the government-wide financial statements. Property, plant and equipment with initial, individual costs
that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Capital assets
are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are
recorded at estimated acquisition value at the date of donation.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred
during the construction phase of capital assets of business-type activities is included as part of the capitalized value
of the assets constructed.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’
lives are not capitalized.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
32
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Property, plant and equipment are depreciated using the straight -line method over the following estimated useful
lives:
Assets Years
Buildings and Improvements 10-40
Improvements Other Than Buildings 10-50
Infrastructure 25-100
Machinery and Equipment 3-40
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, long -term
debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-
type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and refunding losses
are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are
expensed when incurred with the exception of bond insurance, which is amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received,
are reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide and proprietary fund
financial statements.
Deferred Inflows/Outflows of Resources
Deferred inflows of resources reported on applicable governmental fund types represent revenues, which are
measurable but not available in accordance with the modified accrual basis of accounting. The deferred inflows will
be recognized as revenue in the fiscal year they are earned or become available. Deferred outflows of resources
represent consumption of net position that is applicable to a future reporting period. Deferred outflows have a
positive effect on net position, similar to assets. Deferred inflows of resources represent the acquisition of net
position that is applicable to a future reporting period. Deferred inflows have a negative effect on net position,
similar to liabilities.
Unamortized Refunding Loss—the difference between the net reacquisition cost of new debt and the net carrying
amount of the old debt is recorded as a deferred outflow of resources. The unamortized refunding loss is recognized
as expense over the remaining term of the new debt using the straight-line method.
Pension and OPEB Related—the difference between expected and actual experience with regard to economic or
demographic factors and changes to assumptions in the measurement of total pension and OPEB liability and the
differences between expected and actual earnings on pension plan investments, are reported as deferred inflows or
outflows of resources, to be recognized in expense in future years. Contributions made subsequent to the
measurement date, but prior to the reporting date, are reported as deferred outflows of resources.
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements. Grant revenues are
recorded using the modified accrual basis in governmental funds and the accrual basis in the proprietary funds.
Restricted grant revenues, which are received but not expended, are recorded as unearned revenues.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
33
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the Property Appraiser
and Tax Collector of the City of Jacksonville, Florida. General property taxes are recorded as received, in cash, which
approximates taxes levied less discounts for the current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the following year. Discounts
are allowed for early payment. On or prior to June 1, interest -bearing certificates are sold for all uncollected real
property taxes. Unsold certificates are held by the City of Jacksonville, Florida.
Inter-Fund Transactions
During the course of normal operations, the City has various transactions between funds to construct assets and
comply with local ordinances and other legal restrictions. These transactions are reflected as transfers. In addition,
certain transfers have been made between systems and accounts of the utility enterprise fund as required by bond
covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in total. Such information
does not include sufficient detail to constitute a presen tation 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, 2020, from which the summarized information was derived.
Future GASB Pronouncement Implementations
The City is currently evaluating the effects that the following GASB Statements, which will be implemented in future
financial statements, will have on its financial statements for subsequent fiscal years:
• Statement No. 87, “Leases.”
This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows
of resources or outflows of resources based on the payment provisions of the contract. It establishes a single
model for lease accounting based on the foundational principle that leases are financings of the right to use an
underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-
to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources,
thereby enhancing the relevance and consistency o f information about governments’ leasing activities. This
statement is currently under review and the City will consider the impact, if any, upon financial reporting.
The effective date for this Statement was originally for those years beginning after J une 15, 2020 but this date
was extended with the passage of Statement No. 95, “Postponement of the Effective Dates of Certain
Authoritative Guidance.” The provisions of this statement are now effective for fiscal years beginning after June
15, 2021.
• Statement 91, “Conduit Debt Obligations”
This statement will improve financial reporting by enhancing the comparability and consistency of conduit debt
obligation reporting and reporting of related transactions and other events.
The effective date for this Statement was originally for those years beginning after December 15, 2020 but this
date was extended with the passage of Statement No. 95, “Postponement of the Effective Dates of Certain
Authoritative Guidance.” The provisions of this statement are now effective for fiscal years beginning after
December 15, 2021.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
• Statement 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue
Code Section 457 Deferred Compensation Plans.”
This statement increases consistency and comparability related to the reporting of fiduciary component units in
circumstances in which a potential component unit does not have a governing board and the primary
government performs the duties that a governing board typically would perform; (2) mitigate costs associated
with the reporting of certain defined contribution pension plans, defined contribution other postemployment
benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee
benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the
relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenu e Code
(IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan
and for benefits provided through those plans.
The provisions of this statement are effective for fiscal years beginning after June 15, 2021.
• Statement No. 96, “Subscription-Based Information Technology Arrangement.”
The requirements of this Statement will improve financial reporting by establishing a definition for Subscription -
Based Information Technology Arrangement (SBITA)s and providing uniform guidance for accounting and
financial reporting for transactions that meet that definition. That definition and uniform guidance will result in
greater consistency in practice. Establishing the capitalization criteria for implementation costs also will reduce
diversity and improve comparability in financial reporting by governments. This Statement also will enhance the
relevance and reliability of a government's financial statements by requiring a government to report a
subscription asset and subscription liability for a SBITA and to disclose essential information about the
arrangement. The disclosures will allow users to understand the scale and important aspects of a government's
SBITA activities and evaluate a government's obligations and assets resulting from SBITAs. This statement is
currently under review and the City will consider the impact, if any, upon financial reporting.
NOTE 2 – CASH AND INVESTMENTS
The City maintains a cash and investment pool that is designed for use by all funds, except for those monies which
are periodically transferred for pension investment purposes. In addition, investments are separately held and
individually accounted for where contractual arrangements and bond covenants provide for and require such
arrangements.
On September 30, 2021, the carrying amount of cash on hand and on deposit with banks, including interest-bearing
deposits was $10,833,678, and the related bank balance was $10,974,983. Monies which are placed on deposit with
financial institutions in the form of demand deposit accounts, time deposit accounts, and certi ficates of deposit are
defined as public deposits. All of the City’s public deposits are held in qualified public depositories pursuant to
Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act). Under the Act, all qualified publ ic
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 p ledged as collateral
and, if necessary, assessments against other qualified public depositories of the same type as the depository in
default.
The City elected to adopt a written investment policy as authorized under Florida Statutes.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
35
NOTE 2 – CASH AND INVESTMENTS (cont…)
Under the City’s investment policies, general investments’ activities are authorized to invest in obligations of the
U.S. Treasury, demand deposits, U.S. government agency securities, certificates of deposit, U.S. government
sponsored enterprises, government and corporate fixed income mutual funds, corporate notes and bonds, and local
government investment pools. Pension trust funds can invest in the aforementioned and, additionally, authorized
investments include domestic and foreign equity securities, 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
on September 30, 2021:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Accrued interest $ 59,056 $ 59,056 $ - $ - $ - 59,056
Investment sale receivable - - - - - -
Money market funds / cash 266,274 266,274 - - - 266,274
Corporate bonds 5,296,428 797,867 4,498,561 - - 5,296,428
U.S. Treasury Obligations and
Federal Agency Securities 11,734,771 510,181 11,224,590 - - 11,734,771
Florida PRIME 24,557 24,557 - - - 24,557
Total $ 17,381,086 $ 1,657,935 $ 15,723,151 $ - $ - $ 17,381,086
The Florida PRIME component of the cash and investments is an investment in an investment pool administered by
the State Board of Administration, under the regulatory oversight of the State of Florida. Florida PRIME meets all the
necessary criteria to report their investments at amortized cost in accordance with GASB Cod. Sec. In5. As of
September 30, 2021, there were no redemption fees, maximum transaction amounts or any other requirements
that service to limit the City’s access to one hundred percent of their account value. The fair value of the City’s
position in the pool in the same as the value of the pool sha res.
The City’s fixed income investment balances as of on September 30, 2021, are comprised of the following items:
Percentage of
Moody's Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 0.84%
Corporate Bonds Aa2 0.54%
Corporate Bonds Aa3 2.12%
Corporate Bonds A1 2.98%
Corporate Bonds A2 6.06%
Corporate Bonds A3 4.29%
Corporate Bonds Baa1 4.73%
Corporate Bonds Baa2 3.23%
Corporate Bonds Baa3 0.39%
Corporate Bonds BBB- 0.00%
Corporate Bonds Not Rated 5.91%
U.S. Treasury Obligations and Federal Agency Securities Aaa 66.00%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 2.91%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
36
NOTE 2 – CASH AND INVESTMENTS (cont…)
Listed below are the investments, credit ratings and maturities in the City’s pension trust funds on September 30,
2021:
General Employees’ Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 422,892 $ 422,892 $ - $ - $ - $ 422,892
Corporate bonds 2,297,838 343,063 1,679,809 274,966 - 2,297,838
U.S. Treasury Obligations and
Federal Agency Securities 1,882,155 622,213 691,413 396,872 171,657 1,882,155
Fixed Income Mutual Funds 1,953,136 1,953,136 - - - 1,953,136
Total $ 6,556,021 $ 3,341,304 $ 2,371,222 $ 671,838 $ 171,657 $ 6,556,021
Police Officers Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 222,719 $ 222,719 $ - $ - $ - $ 222,719
Corporate bonds 1,345,298 - 986,089 309,398 49,811 1,345,298
U.S. Treasury Obligations and
Federal Agency Securities 1,111,148 373,014 403,683 235,070 99,381 1,111,148
Fixed Income Mutual Funds 1,130,296 1,130,296 - - - 1,130,296
Total $ 3,809,461 $ 1,726,029 $ 1,389,772 $ 544,468 $ 149,192 $ 3,809,461
The City’s pension trust fund fixed income investment balances as of September 30, 2021, are comprised of the
following items:
General Employees’ Pension Plan:
Percentage of
Moody's Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 4.48%
Corporate Bonds A1 1.93%
Corporate Bonds A2 5.23%
Corporate Bonds A3 1.30%
Corporate Bonds Baa1 2.60%
Corporate Bonds Baa2 11.66%
Corporate Bonds Baa3 7.85%
Fixed income mutual funds Not Rated 36.24%
U.S. Treasury Obligations and Federal Agency Securities Aaa 26.09%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 2.62%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
37
NOTE 2 – CASH AND INVESTMENTS (cont…)
Police Officers Pension Plan:
Percentage of
Moody's Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 2.05%
Corporate Bonds Aa2 2.41%
Corporate Bonds A1 1.98%
Corporate Bonds A2 5.28%
Corporate Bonds A3 1.33%
Corporate Bonds Baa1 2.64%
Corporate Bonds Baa2 11.71%
Corporate Bonds Baa3 7.92%
Fixed income mutual funds Not Rated 35.52%
U.S. Treasury Obligations and Federal Agency Securities AAA 26.56%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 2.60%
100.00%
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Fund’s and the City’s General Employees’
Retirement System Trust Fund’s investment policies to, at a minimum, limit 80% of the total fixed income portfolio
to those that are rated investment grade of higher. The Police Officers’ Retirement System Trust Fund’s investment
policy defines investment grade as “BBB”, Baa”, or their equivalent.
Also, no more than 10% (at cost) of the fixed income portfolio total value can be invested in the securities of any
single corporate issuer. The maximum allocation to International Equities is 25%.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of the failure of the
counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the
possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the exposure to custodial
credit risk for deposits or investments, other than the following provision for deposits: The Finance Director may
execute a third-party Custodial Safekeeping Agreement with a commercial bank having trust powers or a trust
company which is chartered by the United States government or the State of Florida. All securities purchased and/or
collateral obtained by the City shall be properly designated as an asset of the City and held in safekeeping by the
trust department or trust company, and no withdrawal of such securities, in whole or in part, shall be made from
safekeeping, except by an authorized City staff member. The third-party Custodial Safekeeping Agreement shall
include letters of authority from the City with details as to responsibilities of parti es, notification of security
purchases, sales, deliver, repurchase agreements, wire transfers, safekeeping and transaction costs, procedures in
case of wire failure or other unforeseen mishaps, including liability of each party.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
38
NOTE 2 – CASH AND INVESTMENTS (concluded)
Fair Value Measurements
The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels:
• Level 1 Inputs―are quoted prices (unadjusted) for identical assets or li abilities in active markets that a
government can access at the measurement date.
• Level 2 Inputs―are inputs other than quoted prices included within Level 1 that are observable for an asset
or liability, either directly or indirectly.
• Level 3 Inputs―are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price
for an identical asset or liability is not observable, a government should measure fai r value using another valuation
technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The City’s investments are measured at fair value on a recurring basis. Fair value measurements are categorized
based on the valuation inputs used to measure an asset’s fair value in the hierarchy described above.
The fair value measurements for the City’s investments are as follows on September 30, 2021:
Fair Value Measurements Using
Quoted Prices in Significant Other Significant
Active Markets for Observable Unobservable
Identical Assets Inputs Inputs
Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3)
City Investments:
Accrued interest $ 59,056 $ 59,056 $ - $ -
Money Markets 290,831 290,831 - -
Corporate Bonds 5,296,428 - 5,296,428 -
U.S. Treasury Obligations and
Federal Agency Securities 11,734,771 - 11,734,771 -
Subtotal - City Investments 17,381,086 349,887 17,031,199 -
General Employees' Pension Plan:
Money Markets 422,892 422,892 - -
Corporate Bonds 2,297,838 - 2,297,838 -
U.S. Treasury Obligations and
Federal Agency Securities 1,882,155 - 1,882,155 -
Mutual Funds - Fixed Income 1,953,136 1,953,136 - -
Mutual Funds - Equities 4,081,823 4,081,823 - -
ETFs 3,096,279 3,096,279 - -
Equities 12,801,111 12,801,111 - -
Subtotal - General Employees' Pension Plan 26,535,234 22,355,241 4,179,993 -
Police Officers' Pension Plan:
Money Markets 222,719 222,719 - -
Corporate Bonds 1,345,298 - 1,345,298 -
U.S. Treasury Obligations and
Federal Agency Securities 1,111,148 - 1,111,148 -
Mutual Funds - Fixed Income 1,130,296 1,130,296 - -
Mutual Funds - Equities 2,385,404 2,385,404 - -
ETFs 1,799,992 1,799,992 - -
Equities 7,444,399 7,444,399 - -
ICMA Self Directed 177,629 177,629 - -
Subtotal - Police Officers' Pension Plan 15,616,885 13,160,439 2,456,446 -
Total Investments Measured at Fair Value $ 59,533,205 $ 35,865,567 $ 23,667,638 $ -
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
39
NOTE 3 – RECEIVABLES
Receivables, net of the allowance for doubtful accounts on September 30, 2021, consist of the following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General Fund $ 400 $ - $ 400
Utility Fund 1,106,742 (450,021) 656,721
Stormwater Fund 70,225 (15,597) 54,628
Sanitation Fund 144,691 (53,602) 91,089
Total $ 1,322,058 $ (519,220) $ 802,838
Included in accounts receivable are $313,509 of water and sewer revenues earned, but not billed as of September
30, 2021.
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
40
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2021, is as follows:
Balance Balance
October 1, September 30,
2020 Transfers Increases Decreases 2021
Governmental Activities:
Capital assets, not being depreciated:
Land $ 11,913,572 $ - $ - $ - $ 11,913,572
Construction in process 1,067,365 (379,760) 41,046 (172,064) 556,587
Total capital assets, not being depreciated 12,980,937 (379,760) 41,046 (172,064) 12,470,159
Capital assets, being depreciated:
Buildings 9,547,484 118,500 8,000 - 9,673,984
Intangible assets 525,445 - - - 525,445
Improvements other than buildings 42,509,628 261,260 81,440 (869) 42,851,459
Machinery and equipment 6,180,124 - 582,424 - 6,762,548
Total capital assets, being depreciated 58,762,681 379,760 671,864 (869) 59,813,436
Less accumulated depreciation for:
Buildings (2,742,543) - (176,157) - (2,918,700)
Intangible assets (421,102) - (17,658) - (438,760)
Improvements other than buildings (18,380,693) - (733,682) - (19,114,375)
Machinery and equipment (4,962,549) - (650,419) - (5,612,968)
Total accumulated depreciation (26,506,887) - (1,577,916) - (28,084,803)
Total capital assets being depreciated, net 32,255,794 379,760 (906,052) (869) 31,728,633
Governmental activities capital assets, net $ 45,236,731 $ - $ (865,006) $ (172,933) $ 44,198,792
Business-type activities:
Capital assets, not being depreciated:
Land $ 1,656,018 $ - $ - $ - $ 1,656,018
Construction-in-progress 2,438,799 (1,270,463) 102,071 (569,714) 700,693
Total capital assets, not being depreciated 4,094,817 (1,270,463) 102,071 (569,714) 2,356,711
Capital assets, being depreciated:
Buildings 4,356,384 - - (1,821) 4,354,563
Intangible assets 244,709 - - - 244,709
Improvements other than buildings 85,814,288 1,270,463 197,226 - 87,281,977
Machinery and equipment 3,694,039 - 201,459 - 3,895,498
Total capital assets, being depreciated 94,109,420 1,270,463 398,685 (1,821) 95,776,747
Less accumulated depreciation for:
Buildings (4,329,211) - (6,665) 1,815 (4,334,061)
Intangible assets (31,424) - (190) - (31,614)
Improvements other than buildings (54,523,739) 2,307 (2,243,101) - (56,764,533)
Machinery and equipment (2,667,449) (2,307) (337,026) - (3,006,782)
Total accumulated depreciation (61,551,823) - (2,586,982) 1,815 (64,136,990)
Total capital assets being depreciated, net 32,557,597 1,270,463 (2,188,297) (6) 31,639,757
Business-type activities capital assets, net $ 36,652,414 $ - $ (2,086,226) $ (569,720) $ 33,996,468
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
41
NOTE 4 – CAPITAL ASSETS (concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government $ 195,822
Public safety 420,420
Transportation 615,280
Parks and recreation 346,394
Total depreciation expense - governmental activities $ 1,577,916
Business-type Activities:
Utility $ 2,005,224
Stormwater 562,879
Sanitation 450
Building Code Enforcement 18,429
Total depreciation expense - business-type activities $ 2,586,982
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
42
NOTE 5 – LONG-TERM OBLIGATIONS
The following is a summary of the changes in long-term obligations of the City for the year ended September 30,
2021:
Balance Balance Amounts
October 1, September 30, Due within
2020 Increases Decreases 2021 One Year
Governmental Activities:
Long-term debt:
Capital Improvement Revenue Bond, Series 2018 $ 1,330,000 $ - $ (75,000) $ 1,255,000 $ 80,000
Total long-term debt 1,330,000 - (75,000) 1,255,000 80,000
Other liabilities:
OPEB obligation 270,264 20,934 - 291,198 -
Net pension liability 5,032,577 - (440,520) 4,592,057 -
Compensated absences 947,015 51,549 - 998,564 210,446
Total other liabilities 6,249,856 72,483 (440,520) 5,881,819 210,446
Total long-term obligations $ 7,579,856 $ 72,483 $ (515,520) 7,136,819 $ 290,446
Less amounts due in one year (290,446)
Total noncurrent obligations due in more than one year $ 6,846,373
Business-type Activities:
Long-term debt:
Utility System Revenue Refunding Bond, Series 2014 $ 8,070,000 $ - $ (1,265,000) $ 6,805,000 $ 1,300,000
FDEP Loan DW160710 453,158 - (453,158) - -
FDEP Loan WW160700 5,085,871 - (5,085,871) - -
Refunding Bank Loan Series 2021 - 5,193,000 - 5,193,000 437,000
Capital Lease Payable - 2018 138,999 - (68,143) 70,856 70,856
Total bonds and notes payable 13,748,028 5,193,000 (6,872,172) 12,068,856 1,807,856
Other liabilities:
OPEB obligation 109,963 8,194 - 118,157 -
Net pension liability 1,666,805 - (365,383) 1,301,422 -
Compensated absences 314,637 23,371 - 338,008 58,800
Total other liabilities 2,091,405 31,565 (365,383) 1,757,587 58,800
Total long-term liabilities $ 15,839,433 $ 5,224,565 $ (7,237,555) 13,826,443 $ 1,866,656
Less amounts due in one year (1,866,656)
Net long-term liabilities in excess of one year $ 11,959,787
Notes to the Long-Term Obligations Table:
Long term liabilities, including accumulated compensated absences, OPEB liability and the City’s net pension
liabilities, are typically liquidated by the individual fund to which the liability is directly associated.
All of the City’s long-term debt arose through direct borrowings or direct placements.
Governmental Activities:
• Capital Improvement Revenue Bond, Series 2019 – Payable in annual installment of principal and
semiannual installments of interest through October 1, 2033, bearing coupon rates of 3.5 50%, secured
solely by a pledge of non-advalorem revenues.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
43
NOTE 5 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
Business-type Activities
• Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual Installments of Principal and
Semiannual Installments of Interest Through October 1, 2025, Bearing Coupon Rates of 2.330%, Secured
Solely by a Pledge of and Lien on Net Water and Sewer System Revenues and Certain Other Revenues
as Defined in the Bond Ordinance.
• Florida Department of Environmental Protection,(FDEP) disbursements and capitalized interest for a
$773,030 state of Florida revolving loan #DW160710, issued to finance the construction costs to replace a
well at water treatment plant no. 1 and a transmission main on Ocean Boulevard, payable in semiannual
installments of principal and interest through November 15, 2030, with financing rates of 2.71%, secured
solely by a pledge of net water and sewer system revenues, after payment of all yearly payment obligations
on account of the senior revenue obligations, as defined in the loan agreement. This loan was fully retired
in 2021 with the issuance of the Refunding Bank Loan Series 2021.
• Florida Department of Environmental Protection (FDEP), Disbursements, Service Fee, and Capitalized
Interest for a Combined $9,368,576 State of Florida Revolving Loan #WW160700, Issued to Finance the
Construction of Treatment and Transmission Facilities for the Buccaneer WWTP Phase -out Improvements
and TMDL Compliance Program WWTP #1, Payable in Semiannual Installments of Principal and Interest
Through May 15, 2032, with Financing Rates of 3.14% and 2.88%, Secured Solely by a Pledge of Net Water
and Sewer System Revenues, After Payment of all Yearly Payment Obli gations on Account of the Senior
Revenue Obligations, as Defined in the Loan Agreement. This loan was fully retired in 2021 with the issuance
of the Refunding Bank Loan Series 2021.
• Refunding Bank Loan Series 2021 was issued on May 17, 2021 in the amount of $5,193,000 to refund the
FDEP loans #DW160710 and #WW160700. The FDEP loans were originally used for water and wastewater
system improvements. The Refunding Bank Loan Series 2021 is payable in semiannual installments of
principal and interest through May 15, 2032 with an effective interest rate of 1.69% and is secured solely
by a pledge of net water and sewer system revenues, after payment of all yearly payment obligations on
account of the senior revenue obligations, as defined in the loan agreement.
The difference between the cash flows required to service the old debts and that required to service the
new debt and to complete the refunding resulted in a savings of approximately $397,800 which equates to
an economic gain of approximately $351,100.
• Capital Lease Payable – 2018 - The City entered into a lease agreement for financing the acquisition of a
Vac-Con Vacuum Truck. Lease payments including principal and interest are due each September 1, until
2022 at an interest rate of 3.98%.
The asset acquired through the capital lease are as follows:
Business-type
Activities
Asset:
Vac-Con vacuum truck $ 334,544
Less: accumulated depreciation (223,029)
Net book value $ 111,515
The future minimum lease obligations and the net present value of these minimum lease payments as of
September 30, 2021, were as follows:
Year Ending
September 30 Principal Interest Total
2022 $ 70,856 $ 2,820 $ 73,676
$ 70,856 $ 2,820 $ 73,676
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
44
NOTE 5 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
The annual requirements to amortize all revenue bonds and loans payable outstanding on September 30, 2021, are
as follows:
Governmental Activities Business-type Activities
Fiscal Year Ending Principal Interest Principal Interest
2022 $ 80,000 $ 43,133 $ 1,737,000 $ 231,805
2023 80,000 40,293 1,777,000 191,403
2024 85,000 37,364 1,815,000 152,464
2025 85,000 34,346 1,851,000 112,696
2026 90,000 31,240 1,895,000 72,058
2027-2031 490,000 105,967 2,451,000 154,554
2032-2036 345,000 18,726 472,000 5,993
Total $ 1,255,000 $ 311,069 $ 11,998,000 $ 920,973
Interest and amortization incurred during the year ended September 30, 2021, amounted to $496,356. Of the
amount incurred, 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, 2021, and during the year then ended, the City was in compliance with those ratios .
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, 2020. 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, 2021:
Percentage
of Net
Revenue Total Principal Current Year Revenues to
Pledged and Interest Principal and Current Year Principal and
Description Pledged Revenue Through Outstanding Interest Paid Net Revenue Interest Paid
2014 - Utility System
Refunding Bonds Utility Net Revenues 2026 $ 7,208,614 $ 1,438,294 $ 4,135,764
FDEP Loan DW160710 Utility Net Revenues 2031 - 54,425 4,135,764
FDEP Loan WW160700 Utility Net Revenues 2032 - 511,953 4,135,764
Refunding Bank Loan,
Series 2021 Utility Net Revenues 2032 5,707,539 - 4,135,764
Total $ 12,916,153 $ 2,004,672 $ 4,135,764 206.31%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
45
NOTE 5 – LONG-TERM OBLIGATIONS (concluded)
Remedies in the Event of Default
The City’s debt obligations all allow for the obligors to take whatever legal actions necessary to collect the amounts
due in the event of default.
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial assistanc e 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, 2021, there
are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount
payable of $164,305,000.
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
46
NOTE 6 – DEFINED BENEFIT PENSION PLANS
Plan Descriptions
The City maintains two separate single employer defined benefit pension plans, one for police officers and one for
general employees, which cover substantially all full-time City employees hired before September 1, 2008. The
general employees’ defined benefit plan is closed to new entrants. Full -time general employees hired on or after
September 1, 2008, are covered by the defined contribution plan disclosed in Note 7. The pension plans do not issue
separate stand-alone financial statements. Combining statements are included below in Note 6 of the notes to
financials statements.
General Employees’ Retirement Plan
Plan Description
The General Employees’ Retirement Plan (the Plan) provides retirement, disability, and death benefits to Plan
members and their beneficiaries. The City Commission has the authority to establish and amend the benefit
provisions of the Plan. The Plan is governed by a Retirement Plan Board appointed b y the City Commission and
comprised of five members, two of which will be eligible legal residents of the City, two of which will be general
employees elected by the majority of general employees who are members of the Plan, and one of which will be
elected by the other four members. Plan membership in the General Employees’ Retirement Plan as of September
30, 2021 and 2020, is as follows:
September 30 September 30
2020 2019
Inactive plan members or beneficiaries
currently receiving benefits 80 75
Inactive plan members entitled to but
not yet receiving benefits 6 7
Active plan members 23 28
Total 109 110
Plan Benefits
Normal retirement is available upon the attainment of age sixty and the completion of five years of credited service.
Early retirement is available with a reduced benefit upon the attainment of age fifty -five and the completion of five
years of credited service. For members hired before April 24, 2005, the normal retirement benefit shall equal 2.85%
of average final compensation for each year of credited service. For members hired on or after April 24, 2005, the
normal retirement benefit shall equal 2.50% of average final compensation for each year of credited service. The
Plan includes a deferred retirement option program (DROP) under which members eligible for normal retirement
may have their monthly pension benefit credited to an account while continuing to be actively employed for up to
five years. As of September 30, 2021, Plan net position included $424,865 of DROP account balances.
Contributions
The City is required to contribute at an actuarially determined rate (76.02%) of covered payroll for the year ended
September 30, 2021. City contributions to the Plan were $1,248,604 for the year ended September 30, 2021. 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
47
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2020, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 20 21, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Plan for the year ended September 30, 2021 is
shown below.
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2020 $ 24,146,186 $ 20,497,952 $ 3,648,234
Changes for the year:
Service cost 288,450 - 288,450
Interest 1,604,466 - 1,604,466
Difference between actual and
expected experience (44,031) - (44,031)
Contributions - City - 1,362,952 (1,362,952)
Contributions - employee - 96,921 (96,921)
Net investment income - 1,138,973 (1,138,973)
Benefit payments, including refunds
of employee contributions (1,329,553) (1,329,553) -
Administrative expense - (48,109) 48,109
Net changes 519,332 1,221,184 (701,852)
Reporting period ending 9/30/2021 $ 24,665,518 $ 21,719,136 $ 2,946,382
*Note: Plan Net Position per Fiduciary Statement of Net Position on page 54 is different than the Plan Net Position
noted above primarily due to reporting differences between the actuarially determined changes in the net pension
liability above and the Fiduciary Statement of Net Position. Differences are immaterial.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
48
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Plan as of the September 30, 2021 measurement date
were as follows:
Total pension liability $ 24,901,187
Plan fiduciary net position (26,496,836)
Net pension liability (asset) $ (1,595,649)
Plan fiduciary net position as a
percentage of the total pension liability 106%
For the year ended September 30, 2021, the City recognized total pension expense of $388,684. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 1,915 $ 19,569
Difference between projected and
actual earnings on Plan investments 370,171 -
City contributions subsequent to the
measurement date 1,248,604 -
Total $ 1,620,690 $ 19,569
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability (or increase in the net pension asset) in the fiscal year ended September 30, 2021. Other amounts reported
as deferred outflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2022 $ (17,527)
2023 127,738
2024 192,863
2025 49,443
$ 352,517
Plan Investments
The Retirement Plan Board is responsible for establishing and amending the Plan’s investment policies. The Plan’s
current investment policy gives the Board discretion to allocate assets with assistance of the Plan’s investment
consultant. No formal targets are stated in the investment policy although the maximum allocation to international
equities is 25%. The money-weighted rate of return on Plan investments, net of investment related expenses, was
23.65% and 6.41% for the years ended September 30, 2021 and 2020, respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
49
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 2019, rolled forward
to the measurement date of September 30, 2020, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 9.50% (including 2.50% price inflation).
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: RP-2000 Combined Healthy Participant Mortality Table for males and
females with generational projections from the Year 2000 Projection Scale
BB.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building -block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (se e the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.40%
US Large-Cap Value Stocks 12% 7.00%
US Mid-Cap Growth Stocks 3% 8.60%
US Mid-Cap Value Stocks 4% 7.80%
US Mid-Cap Core Stocks 3% 6.90%
US Small-Cap Growth Stocks 5% 9.60%
US Small-Cap Value Stocks 5% 8.60%
International Equities 5% 7.20%
US Investment Grade Bonds 40% 1.80%
Cash (US 90-day T-Bill) 10% 0.20%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
50
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the City's net pension liability
(asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2020 and the financial reporting date
of September 30, 2021.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2020 6.75% $ 5,568,387 $ 2,946,382 $ 699,271
9/30/2021 6.75% $ 948,369 $ (1,595,649) $ (3,783,906)
Police Officers’ Retirement Plan
Plan Description
The Police Officers’ Retirement Plan (the Police Plan) provides retirement, disability, and death benefits to Police
Plan members and their beneficiaries. The Police Plan is governed by the Policemen’s Pension Board of Trustees,
although the City Commission retains the authority to establish and amend the benefit provisions of the Police Plan.
The Policemen’s Pension Board of Trustees is appointed by the City Commission and comprised of five members,
two of which will be eligible legal residents of the City, two of which will be police officers elected by the majority of
police officers who are members of the Police Plan, and one of which will be elected by the other four trustees.
Membership in the Police Officers’ Retirement Plan as of the September 30, 2020 and 2019 measurement dates, is
as follows:
September 30 September 30
2020 2019
Inactive plan members or beneficiaries
currently receiving benefits 22 23
Inactive plan members entitled to but
not yet receiving benefits 3 3
Active plan members 24 26
Total 49 52
Plan Benefits
For members hired before January 1, 2013, normal retirement is available upon the attainment of age fifty and the
completion of twenty years of credited service, the attainment of age fifty -five and the completion of ten years of
credited service, the completion of twenty-five years of credited service regardless of age, or the attainment of age
sixty and the completion of five years of credited service. For members hired on or after January 1, 2013, normal
retirement is available upon the attainment of age fifty -five and the completion of ten years of credited service or
the attainment of age fifty-two and the completion of twenty-five years of credited service. Early retirement is
available with a reduced benefit upon the attainment of age fifty and the completion of ten years of credited service.
For members hired before January 1, 2013, the normal retirement benefit shall equal 3.00% of average final
compensation for each year of credited service. For members hired on or after January 1, 2013, the normal
retirement benefit shall equal 2.00% of average final compensation for each year of credited service. The Police Plan
includes a DROP under which members eligible for normal retirement may have their monthly pension benefit
credited to an account while continuing to be actively employed for up to five years. As of September 30, 20 21,
Police Plan net position included $177,629 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
51
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute, at actuarially determined rate (36.07%) of covered payroll for the year ended
September 30, 2021. The City may use State contributions to offset this required contribution. City and State
contributions to the Police Plan were $1,144,744 for the year ended September 30, 2021. Police Plan members are
required to contribute 8.0% of their annual covered salary. Per City Code, the City Commission may amend
established contribution requirements.
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2020, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 20 21, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Police Plan for the year ended September 30,
2021 (September 30, 2020 measurement date) is shown below:
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2020 $ 15,309,524 $ 12,258,376 $ 3,051,148
Changes for the year:
Service cost 369,089 - 369,089
Interest 1,034,146 - 1,034,146
Difference between actual and
expected experience 103,400 - 103,400
Contributions - City - 877,866 (877,866)
Contributions - employee - 161,166 (161,166)
Net investment income - 607,277 (607,277)
Benefit payments, including refunds
of employee contributions (715,876) (715,876) -
Administrative expense - (35,623) 35,623
Net changes 790,759 894,810 (104,051)
Reporting period ending 9/30/2021 $ 16,100,283 $ 13,153,186 $ 2,947,097
*Note: Plan Net Position per Fiduciary Statement of Net Position on page 54 is different than the Plan Net Position
noted above primarily due to reporting differences between the actuarially determined changes in the net pension
liability above and the Fiduciary Statement of Net Position. Differences are immaterial.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
52
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Police Plan as of the September 30, 20 21 measurement
date were as follows:
Total pension liability $ 16,284,898
Plan fiduciary net position (16,635,263)
Net pension liability (asset) $ (350,365)
Plan fiduciary net position as a
percentage of the total pension liability 102%
For the year ended September 30, 2021, the City recognized total pension expense of $498,414. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 81,407 $ 213,699
Change in assumptions 113,745 -
Net difference between projected and
actual earnings on Plan investments 335,042 -
City contributions subsequent to the
measurement date 1,144,744 -
Total $ 1,674,938 $ 213,699
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability (or increase in the net pension asset) in the fiscal year ending September 30, 2021. Other amounts reported
as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2022 $ 51,592
2023 68,219
2024 150,738
2025 45,946
$ 316,495
Plan Investments
The Policemen’s Pension Board of Trustees is responsible for establishing and amending the Police Plan’s investment
policies. The Police Plan’s current investment policy gives the Board discretion to allocate assets with assistance of
the Police Plan’s investment consultant. No formal targets are stated in the investment policy although the
maximum allocation to international equities is 25%. The money-weighted rate of return on Plan investments, net
of investment related expenses, was 23.67% and 6.15% for the years ended September 30, 2021 and 2020,
respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
53
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of September 30, 2018, rolled
forward to September 30, 2020, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 18.50% (including 2.50% price inflation.
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: RP-2000 Combined Healthy Participant Mortality Table for males and
females with generational projections from the Year 2000 Projection Scale
BB.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building -block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.40%
US Large-Cap Value Stocks 12% 7.00%
US Mid-Cap Growth Stocks 3% 8.60%
US Mid-Cap Value Stocks 4% 7.80%
US Mid-Cap Core Stocks 3% 6.90%
US Small-Cap Growth Stocks 5% 9.60%
US Small-Cap Value Stocks 5% 8.60%
International Equities 5% 7.20%
US Investment Grade Bonds 40% 1.80%
Cash (US 90-day T-Bill) 10% 0.20%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and th at City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
54
NOTE 6 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the City's net pension liability
(asset) would be if it were calculated using a discount rate that is 1 -percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2020 and the financial reporting date
of September 30, 2021.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2020 6.75% $ 4,884,449 $ 2,947,097 $ 1,329,735
9/30/2021 6.75% $ 1,543,538 $ (350,365) $ (1,942,683)
The Statements of Fiduciary Net Position for the City’s pension trust funds for the year ended September 30, 20 21
were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2021 2020
Plan Plan Totals Totals
ASSETS
Cash and cash equivalents $ - $ 866,209 $ 866,209 $ 495,614
Due from other governments - 137,840 137,840 -
Accrued income 24,493 14,329 38,822 32,888
Investments at fair value 26,535,234 15,616,885 42,152,119 34,362,981
Total assets 26,559,727 16,635,263 43,194,990 34,891,483
LIABILITIES
Accounts payable and accrued liabilities - - - 7,810
Due to City 62,891 - 62,891 -
Total Liabilities 62,891 - 62,891 7,810
NET POSITION
Restricted for pension benefits $ 26,496,836 $ 16,635,263 $ 43,132,099 $ 34,883,673
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
55
NOTE 6 – DEFINED BENEFIT PENSION PLANS (concluded)
The Statements of Changes in Fiduciary Net Position for the City’s pension trust funds for the year ended September
30, 2021 were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2021 2020
Plan Plan Totals Totals
ADDITIONS
Contributions:
City $ 1,248,604 $ 870,477 $ 2,119,081 $ 2,107,974
Plan members 87,209 168,456 255,665 258,087
State of Florida - 274,267 274,267 132,844
Total contributions 1,335,813 1,313,200 2,649,013 2,498,905
Investment income 4,992,743 2,955,481 7,948,224 1,876,162
Less investment expenses: (101,289) (59,094) (160,383) (118,261)
Net investment income 4,891,454 2,896,387 7,787,841 1,757,901
Total additions 6,227,267 4,209,587 10,436,854 4,256,806
DEDUCTIONS
Administrative expenses 31,283 33,983 65,266 73,887
Payments to retirees and participants 1,429,936 693,226 2,123,162 2,045,429
Total deductions 1,461,219 727,209 2,188,428 2,119,316
CHANGE IN NET POSITION 4,766,048 3,482,378 8,248,426 2,137,490
NET POSITION, beginning of year 21,730,788 13,152,885 34,883,673 32,746,183
NET POSITION, end of year $ 26,496,836 $ 16,635,263 $ 43,132,099 $ 34,883,673
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
56
NOTE 7 – DEFINED CONTRIBUTION PLAN
The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to new entrants and
creating the City of Atlantic Beach Defined Contribution Plan. The City’s 457 defined contribution plan is
administered through ICMA, which covers all eligible employees employed with the City on or after September 1,
2008, who are not covered by the City’s Police Officers’ defined benefit plan. Under the 457 Plan, the City
contributes an employer matching contribution of up to 6% of earnings durin g the first ten years of service.
Following ten years of service, the City contributes an additional fixed contribution of 4% of earnings for a total of
10%. Employees have the option to voluntarily contribute to the 457 Plan. Employer matching contribu tions from
the City were $125,416 and $107,404 for the years ended September 30, 2021 and 2020, respectively. Under the
457 Plan, an employee is considered fully vested after 5 years of completed service.
NOTE 8 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The City of Atlantic Beach administers a single employer defined benefit health care plan (the Plan) that provides
medical insurance benefits to its employees and their eligible dependents. In accordance with Section 112.0801 of
the Florida Statutes, because the City provides a medical plan to active employees of the City and their eligible
dependents, the City is also required to provide retirees with the opportunity to participate in this Plan. Benefit
provisions for the Plan are established by the City Commission and may be amended by the City Commission. The
City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of September 30, 2019, the date of the latest actuarial
valuation:
September 30,
2019
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 101
Total 102
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission. Eligible retirees and their
covered dependents receiving benefits contribute 100% of the blended (active and retiree combined) equivalent
premium rates. While the City does not directly contribute towards the costs of retiree premiums via an explicit
subsidy, the ability of retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to be another
postemployment benefit (OPEB) obligation of the City.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
57
NOTE 8 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Actuarial Methods and Assumptions
For the September 30, 2019 actuarial valuation, the Entry Age Normal Actuarial Cost Method was used. This method
determines a service cost rate as a fixed percentage of compensation for each active participant. The current years’
service cost is the participant’s compensation multiplied by the service cost rate. Under this method, service cost
for each individual participant, payable from date of employment to date of retirement, is sufficient to pay for the
participant’s benefit at retirement.
Other actuarial assumptions are as follows:
Discount Rate: 2.41%
Investment Rate of Return: 0.0%
Salary Increases: Rates used in the October 1, 2019 actuarial valuation of the City’s pension plans.
Healthcare Cost Trend: Based on Getzen Model, with trend of 1.95% for 2020 and 6.25% for 2021 and
gradually decreasing to an ultimate trend rate of 3.99% plus 0.36%.
Mortality: Mortality tables used for Regular and Special Risk Class members in the July 1, 20 20 actuarial
valuation of the Florida Retirement System. These rates were taken from the adjusted Pub-2010 mortality
tables published by the Society of Actuaries with generational improvements using scale MP -2018. The
adjustments to the reference tables are based on the results of a statewide experience study covering the
period 2013 through 2018.
Discount Rate
The discount rate used to measure the total OPEB liability was 2.41% as of September 30, 2020, which is equal to
the single rate of return developed pursuant to GASB 75. The discount rate used to determine the liabilities under
GASB 75 depends on the City’s funding policy. Since the City does not prefund benefits, the discount rate required
to be used is based on the Fidelity 20-Year Municipal General Obligation AA Index. This index includes only federally
tax-exempt municipal bonds and the yield curves are constructed using option adjusted analytics of a diverse
population of over 10,000 tax exempt securities.
Annual OPEB Cost and Net OPEB Obligation
The City’s total OPEB liability was measured as of September 30, 2020 and was determined by an actuarial valuation
as of September 30, 2019. Changes in the Total OPEB liability were as follows:
Total
OPEB
Liability
Reporting period ending September 30, 2020 $ 380,227
Changes for the year:
Service cost 55,135
Interest 11,812
Changes of assumptions (26,153)
Benefit payments (11,666)
Net changes 29,128
Reporting period ending September 30, 2021 $ 409,355
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
58
NOTE 8 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate.
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current
discount rate:
1% Decrease Rate Assumption 1% Increase
Total OPEB liability $ 458,439 $ 409,355 $ 366,880
Sensitivity of the Total OPEB Liability to Changes in Healthcare Cost Trend Rates.
The following presents the total OPEB liability for the City, as well as what the City’s total OPEB liability would be if
it were calculated using healthcare trend rates that are 1-percentage-point lower or 1-percentage-point higher than
the current healthcare cost trend rates:
Current Healthcare
Cost Trend Rate
1% Decrease Assumption 1% Increase
Total OPEB liability $ 340,877 $ 409,355 $ 497,505
OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2021, the City recognized OPEB expense of $43,593. On September 30, 2021, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following
sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of assumptions or
other inputs $ 59,086 $ 45,066
Differences between expected and
actual experience - 153,966
City contributions subsequent to the
measurement date 7,902 -
Total $ 66,988 $ 199,032
Of the total amount reported as deferred outflows of resources related to OPEB, $7,902 resulting from estimated
benefits paid subsequent to the measurement date and before the end of the fiscal year will be included as a
reduction of the total OPEB liability in the year ended September 30, 2021. Other amounts reported as deferred
inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended September 30, Amount
2022 $ (23,354)
2023 (23,354)
2024 (23,354)
2025 (23,351)
2026 (20,693)
Thereafter (25,840)
Total $ (139,946)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
59
NOTE 9 – INTERFUND ACCOUNTS
Individual fund inter-fund receivables and payables on September 30, 2021, consist of the following:
Due Due
from Other to Other
Funds Funds
General Fund $ 488,329 $ -
Community Development Block
Grants Fund - 214,453
Local Option Gas Tax Fund 201,876
Police Grants Fund - 8,083
Capital Projects Fund - 44,067
Debt Service Fund - 19,850
$ 488,329 $ 488,329
Inter-fund receivable/payables are due to timing differences or due to deficit positions in the City’s pooled cash and
investments. The receivable/payables are expected to be received/paid within one year.
NOTE 10 – INTERFUND TRANSFERS
Transfers of resources from a fund receiving revenue to the fund through which the resources are to be expended are
recorded as transfers and are reported as other financing sources (uses) in the governmental funds and as transfers in
(out) in the proprietary funds. Following is a summary of inter-fund transfers for the year ended September 30, 2021:
Transfer In:
General Capital Projects Debt Service Stormwater
Fund Fund Fund Fund Total
Transfers Out:
Utility Fund $ 925,670 $ 100,000 $ - $ - $ 1,025,670
Local Option Gas Tax Fund 212,844 325,000 - - 537,844
Sanitation Fund 339,584 - - - 339,584
Community Development Block Grant Fund - 16,667 - - 16,667
Stormwater Fund - 400,000 - - 400,000
Convention Development Tax Fund - - 120,884 - 120,884
Half-cent Sales Tax Fund - 255,000 - 285,000 540,000
Total $ 1,478,098 $ 1,096,667 $ 120,884 $ 285,000 $ 2,980,649
Transfers are used to move revenues from the fund that ordinance or budget requires to collect them to the fund that
ordinance or budget requires to expend them.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
60
NOTE 11 – COMMITMENTS
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida, whereas the City of
Jacksonville will provide advanced life support and fire services to the residents and businesses located in the City.
The term of the agreement shall be from the effective date and continuing for a period of 25 years unless terminated
earlier by the parties (such parties must provide a one-year notice). For the year ended September 30, 2021, the
City incurred $1,273,524 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 12 - CONTINGENCIES
The City is a defendant in several lawsuits which arose in the ordinary course of the City’s business. To the extent
the outcome of such litigation has been determined to result in probable loss to the City, an estimated loss has been
accrued in the accompanying financial statements. The outcome of the remaining claims cannot be determined at
this time.
NOTE 13 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and
omissions; and natural disasters for which the City carries commercial insurance. Insurance against losses is provided
through the Public Risk Insurance Agency and LB Bryan and Company for the following types of risk:
• Workers’ Compensation and Employer’s Liability
• Automobile Liability
• Automobile Physical Damage
• Accidental Death and Dismemberment
• General Liability
• Public Officials’ Liability
• Property Coverage
The City’s coverage for workers’ compensation is under a retrospectively rated policy. Premiums are accrued based
on the ultimate cost to-date of the City’s experience for this type of risk.
Page Intentionally Left Blank
REQUIRED SUPPLEMENTARY INFORMATION
61
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2021
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Property taxes $ 6,450,028 $ 6,450,028 $ 6,341,798 $ (108,230)
Non-property taxes 1,118,157 1,118,157 1,278,490 160,333
Licenses and permits 854,039 854,039 789,254 (64,785)
Intergovernmental revenue 2,103,188 2,167,429 2,455,036 287,607
Charges for services 849,858 849,858 963,957 114,099
Fines and forfeitures 54,681 54,681 57,838 3,157
Investment earnings (loss) 180,000 180,000 (17,504) (197,504)
Miscellaneous revenues 9,525 9,525 (65,373) (74,898)
Interfund charges 1,799,638 1,799,638 1,785,341 (14,297)
Total revenues 13,419,114 13,483,355 13,588,837 105,482
EXPENDITURES
City Administration:
City Commission 51,707 51,707 46,206 5,501
City Clerk 403,109 403,109 318,141 84,968
City Attorney 150,000 150,442 150,442 -
City Manager 437,442 437,442 418,472 18,970
Human resources 244,578 244,578 355,771 (111,193)
Information technology 820,890 820,890 675,785 145,105
Finance 1,144,787 1,174,338 1,177,590 (3,252)
Total City administration 3,252,513 3,282,506 3,142,407 140,099
Planning and zoning 406,194 406,194 368,974 37,220
General government 911,777 881,784 730,001 151,783
Public safety:
Police 5,564,236 5,628,477 5,331,087 297,390
Animal control 117,896 117,896 112,491 5,405
Fire control 1,705,156 1,705,156 1,556,551 148,605
Code enforcement 94,536 94,536 79,165 15,371
Total public safety 7,481,824 7,546,065 7,079,294 466,771
Continued…
62
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2021
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
Public works:
Administration and streets 1,740,237 1,695,091 1,269,097 425,994
Fleet maintenance 341,138 341,138 268,379 72,759
Total public works 2,081,375 2,036,229 1,537,476 498,753
Parks and recreation
Recreation and special events 546,001 546,001 441,343 104,658
Parks maintenance 957,503 1,094,146 769,899 324,247
Total parks and recreation 1,503,504 1,640,147 1,211,242 428,905
Total expenditures 15,637,187 15,792,925 14,069,394 1,723,531
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (2,218,073) (2,309,570) (480,557) 1,829,013
OTHER FINANCING SOURCES (USES):
Transfers out - - - -
Transfers in 1,386,373 1,478,098 1,478,098 -
Sale of general capital assets 25,000 25,000 13,231 (11,769)
Total other financing sources (uses) 1,411,373 1,503,098 1,491,329 (11,769)
NET CHANGE IN FUND BALANCE $ (806,700) $ (806,472) $ 1,010,772 $ 1,817,244
63
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL –
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2021
Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures
Sources/inflows of resources
Total revenue from the budgetary comparison schedule $ 13,588,837
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,785,341) (*)
Total revenues as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 11,803,496
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from the
Total expenditures from the budgetary comparison schedule $ 14,069,394
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,785,341) (*)
Total expenditures as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 12,284,053
(*) - Interfund charges by Division
City Manager $ 172,309
Finance 818,959
Public Works Admin 356,604
Fleet and Equipment Maintenance 79,773
Human Resources 60,264
Information Technology 177,684
Facility Maintenance 119,748
$ 1,785,341
Note A - Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total
appropriations at the individual fund level. Encumbrances are recorded. Unexpended items which are
unencumbered at year-end must be re-appropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects funds). The City
Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions
that increase the total expenditures of any department or fund must be approved by the City Commission. Al l
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.
64
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2022 9/30/2021 9/29/2020 9/30/2019
Measurement date 9/30/2021 9/29/2020 9/30/2019 9/30/2018
Total pension liability
Service cost $ 244,995 $ 288,450 $ 332,673 $ 345,019
Interest 1,633,199 1,604,466 1,566,226 1,574,193
Change in assumptions (420,148) - - 695,507
Difference between expected and actual
experience 207,558 (44,031) 40,197 (473,189)
Benefit payments, including refunds of
of employee contributions (1,429,935) (1,329,553) (1,327,161) (1,501,456)
Employee buy-back - - - -
Net change in total pension liability 235,669 519,332 611,935 640,074
Total pension liability, beginning 24,665,518 24,146,186 23,534,251 22,894,177
Total pension liability, ending (a) $ 24,901,187 $ 24,665,518 $ 24,146,186 $ 23,534,251
Plan fiduciary net position
Contributions - City $ 1,248,604 $ 1,362,952 $ 1,424,479 $ 1,332,119
Contributions - Employee 87,209 96,921 107,745 117,536
Net investment income (loss) 4,891,453 1,138,973 619,176 1,554,225
Benefit payments, including refunds of
employee contributions (1,429,935) (1,329,553) (1,327,161) (1,501,456)
Administrative expenses (19,631) (48,109) (40,584) (31,261)
Net change in plan fiduciary net position 4,777,700 1,221,184 783,655 1,471,163
Plan fiduciary net position, beginning 21,719,136 20,497,952 19,714,297 18,243,134
Plan fiduciary net position, ending (b) $ 26,496,836 $ 21,719,136 $ 20,497,952 $ 19,714,297
Net pension liability (asset) (a)-(b) $ (1,595,649) $ 2,946,382 $ 3,648,234 $ 3,819,954
Plan fiduciary net position as a percentage
of total pension liability 106.41% 88.05% 84.89% 83.77%
Covered payroll $ 1,453,483 $ 1,615,350 $ 1,795,750 $ 1,958,933
Net pension liability (asset) as a percentage of
covered payroll -109.78% 182.40% 203.16% 195.00%
Continued…
65
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2018 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 346,460 $ 348,604 $ 402,093 $ 399,576
Interest 1,485,239 1,437,296 1,404,316 1,386,245
Change in assumptions 559,117 - - 1,814,460
Difference between expected and actual
experience 291,669 164,601 (162,280) -
Benefit payments, including refunds of
of employee contributions (1,319,107) (1,207,804) (1,031,191) (707,218)
Employee buy-back - - - -
Net change in total pension liability 1,363,378 742,697 612,938 2,893,063
Total pension liability, beginning 21,530,799 20,788,102 20,175,164 17,282,101
Total pension liability, ending (a) $ 22,894,177 $ 21,530,799 $ 20,788,102 $ 20,175,164
Plan fiduciary net position
Contributions - City $ 1,175,572 1,112,344 $ 863,613 $ 950,980
Contributions - Employee 124,024 128,204 136,191 157,383
Net investment income (loss) 1,792,192 1,515,746 162,326 778,981
Benefit payments, including refunds of
employee contributions (1,319,107) (1,207,804) (1,031,191) (707,218)
Administrative expenses (53,880) (32,495) (41,909) (31,529)
Net change in plan fiduciary net position 1,718,801 1,515,995 89,030 1,148,597
Plan fiduciary net position, beginning 16,524,333 15,008,338 14,919,308 13,770,711
Plan fiduciary net position, ending (b) $ 18,243,134 $ 16,524,333 $ 15,008,338 $ 14,919,308
Net pension liability (asset) (a)-(b) $ 4,651,043 $ 5,006,466 $ 5,779,764 $ 5,255,856
Plan fiduciary net position as a percentage
of total pension liability 79.68% 76.75% 72.20% 73.95%
Covered payroll $ 2,067,067 $ 2,136,733 $ 2,269,850 $ 2,623,050
Net pension liability as a percentage of
covered payroll 225.01% 234.30% 254.63% 200.37%
Additional years will be added to this schedule annually until 10 years’ data is presented.
Change of Assumptions:
For measurement date September 30, 2021:
• Reflects updated mortality tables to those used by Florida Retirement System (FRS) as mandated by Section
112.63(1)(f), Florida Statutes.
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7 -year experience study
performed for the Plan.
66
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2022 9/30/2021 9/29/2020 9/30/2019
Measurement date 9/30/2021 9/29/2020 9/30/2019 9/30/2018
Total pension liability
Service cost $ 396,817 $ 369,089 $ 332,419 $ 329,254
Interest 1,090,158 1,034,146 1,026,422 1,016,983
Change in excess State money - - - (120,454)
Difference between expected and actual
experience (130,811) 103,400 (351,261) (209,232)
Change of assumptions (478,322) - - 454,983
Benefit payments, including refunds of
of employee contributions (693,227) (715,876) (1,143,778) (690,688)
Net change in total pension liability 184,615 790,759 (136,198) 780,846
Total pension liability, beginning 16,100,283 15,309,524 15,445,722 14,664,876
Total pension liability, ending (a) $ 16,284,898 $ 16,100,283 $ 15,309,524 $ 15,445,722
Plan fiduciary net position
Contributions - City $ 870,477 $ 745,022 $ 826,705 $ 854,780
Contributions - State of Florida 274,267 132,844 - 236,772
Contributions - Employee 168,456 161,166 142,024 131,498
Net investment income (loss) 2,896,388 607,277 307,543 853,894
Benefit payments, including refunds of
employee contributions (693,227) (715,876) (1,143,777) (690,688)
Administrative expenses (34,284) (35,623) (38,763) (25,152)
Other - - - -
Net change in plan fiduciary net position 3,482,077 894,810 93,732 1,361,104
Plan fiduciary net position, beginning 13,153,186 12,258,376 12,164,644 10,803,540
Plan fiduciary net position, ending (b) $ 16,635,263 $ 13,153,186 $ 12,258,376 $ 12,164,644
Net pension liability (asset) (a)-(b) $ (350,365) $ 2,947,097 $ 3,051,148 $ 3,281,078
Plan fiduciary net position as a percentage
of total pension liability 102.15% 81.70% 80.07% 78.76%
Covered payroll $ 2,105,700 $ 2,014,575 $ 1,775,300 $ 1,643,725
Net pension liability (asset) as a percentage of
covered payroll -16.64% 146.29% 171.87% 199.61%
Continued...
67
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2018 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 335,185 $ 279,863 $ 291,761 $ 269,182
Interest 970,877 931,370 900,982 879,486
Change in excess State money - - 120,454 -
Difference between expected and actual
experience 187,216 (2,998) (213,426) -
Change of assumptions (40,955) - - 1,275,669
Benefit payments, including refunds of
of employee contributions (643,872) (754,465) (553,042) (585,616)
Net change in total pension liability 808,451 453,770 546,729 1,838,721
Total pension liability, beginning 13,856,425 13,402,655 12,855,926 11,017,205
Total pension liability, ending (a) $ 14,664,876 $ 13,856,425 $ 13,402,655 $ 12,855,926
Plan fiduciary net position
Contributions - City $ 945,540 $ 729,483 $ 574,014 $ 563,203
Contributions - State of Florida - 112,972 103,528 96,217
Contributions - Employee 129,552 117,274 112,354 103,095
Net investment income (loss) 950,447 804,901 43,534 642,480
Benefit payments, including refunds of
employee contributions (643,872) (754,465) (553,042) (585,616)
Administrative expenses (51,481) (29,933) (35,984) (22,742)
Other (change in excess State money) - - 120,454 -
Net change in plan fiduciary net position 1,330,186 980,232 364,858 796,637
Plan fiduciary net position, beginning 9,473,354 8,493,122 8,128,264 7,331,627
Plan fiduciary net position, ending (b) $ 10,803,540 $ 9,473,354 $ 8,493,122 $ 8,128,264
Net pension liability (asset) (a)-(b) $ 3,861,336 $ 4,383,071 $ 4,909,533 $ 4,727,662
Plan fiduciary net position as a percentage
of total pension liability 73.67% 68.37% 63.37% 63.23%
Covered payroll $ 1,619,400 $ 1,465,925 $ 1,404,425 $ 1,472,786
Net pension liability as a percentage of
covered payroll 238.44% 299.00% 349.58% 321.00%
Additional years will be added to this schedule annually until 10 years’ data is presented.
Change of Assumptions:
For measurement date September 30, 2021:
• Reflects updated mortality tables to those used by Florida Retirement System (FRS) as mandated by Section
112.63(1)(f), Florida Statutes.
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7 -year experience study
performed for the Plan.
68
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Contributions
in Relation to Contributions
Year Actuarially the Actuarially Contribution as a % of
Ended Determined Determined Excess Covered Covered
September 30, Contribution Contribution (Deficiency) Payroll Payroll
General Employees' Plan
2021 $ 1,248,604 $ 1,248,604 $ - $ 1,453,483 85.90%
2020 $ 1,355,973 $ 1,362,952 $ 6,979 $ 1,615,350 84.38%
2019 $ 1,424,479 $ 1,424,479 $ - $ 1,795,750 79.33%
2018 $ 1,332,118 $ 1,332,119 $ 1 $ 1,958,933 68.00%
2017 $ 1,175,572 $ 1,175,572 $ - $ 2,067,067 56.87%
2016 $ 1,112,344 $ 1,112,344 $ - $ 2,136,733 52.06%
2015 $ 863,613 $ 863,613 $ - $ 2,269,850 38.05%
2014 $ 950,980 $ 950,980 $ - $ 2,623,050 36.25%
Police Officers' Plan
2021 $ 668,499 $ 1,144,744 $ 476,245 $ 2,105,700 54.36%
2020 $ 668,090 $ 877,866 $ 209,776 $ 2,014,575 43.58%
2019 $ 826,705 $ 826,705 $ - $ 1,775,300 46.57%
2018 $ 841,726 $ 1,091,552 $ 249,826 $ 1,643,725 66.41%
2017 $ 849,061 $ 945,540 $ 96,479 $ 1,619,400 58.39%
2016 $ 825,700 $ 842,455 $ 16,755 $ 1,465,925 57.47%
2015 $ 665,091 $ 677,542 $ 12,451 $ 1,404,425 48.24%
2014 $ 654,280 $ 659,420 $ 5,140 $ 1,472,786 44.77%
Additional years will be added to this schedule annually until 10 years; data is presented.
69
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Significant methods and assumptions used in calculating the actuarially determined contributions:
The following pertain to both City’s defined benefit pension plans unless separately stated.
• Valuation Date: October 1, 2019. Actuarially determined contribution rates are calculated as of September 30, two
years prior to the end of the fiscal year in which contributions are required.
• Actuarial Cost Method: Entry Age Normal Cost Method
• Amortization Method:
o General Employees’ Plan – Closed, Level Dollar Method
o Police Officers’ Plan - Closed, Level % of Pay Method
• Remaining Amortization Period:
o General Employees’ Plan – 10 Years.
o Police Officers’ Plan - 28 years.
• Asset Valuation Method: 4-year smoothed market value where the difference between the expected and actual
return on market value of assets is phased in over a period of four years at a rate of 25% per year.
• Inflation:2.50%
• Salary Increases:
o General Employees Plan – Age Based ranging from 4.8% to 9.5% (including 2.5% price inflation).
o Police Officers’ Plan – Age Based ranging from 4.5% to 18.5% (including 2.5% price inflation).
• Payroll Growth:
o General Employees Plan – None
o Police Officers’ Plan – 3.50%
• Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses, including inflation.
• Retirement Age: Experience-based table of rates (from Experience Study dated August 9, 2017 for the period
October 1, 2009 to September 30, 2016) that vary by age.
• Mortality:RP-2000 Combined Healthy Participant Mortality Table (for preretirement mortality) and the RP -2000
Mortality Table for Annuitants (for postretirement mortality), with mortality improvements projected to all future
years after 2000 using Scale BB.
o General Employees’ Plan – For males, the base mortality rates include a 50% blue collar adjustment and a
50% white collar adjustment and for females, the base mortality rates include a 100% white collar
adjustment.
o Police Officers’ Plan - For males, the base mortality rates include a 90% blue collar adjustment and a 10%
white collar adjustment and for females, the base mortality rates include a 100% white collar adjustment.
70
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS
Year Ended September 30,
2020 2020 2019 2018 2017 2016 2015
General Employees' Plan
Annual money-weighted rate of return
net of investment expenses 23.65% 6.41% 4.04% 8.67% 10.92% 10.18% 1.10%
Police Officers' Plan
Annual money-weighted rate of return
net of investment expenses 23.67% 6.15% 4.38% 8.26% 10.80% 9.93% 0.53%
Additional years will be added to this schedule annually until 10 years; data is presented .
71
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Reporting date 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service cost $ 55,135 $ 38,095 $ 39,404 $ 41,222
Interest 11,812 19,049 16,906 14,667
Difference between expected
and actual experience - (203,632) - -
Changes in assumptions (26,153) 78,146 (18,238) (21,261)
Benefit payments (11,666) (21,386) (23,456) (22,404)
Net change in total OPEB Liability 29,128 (89,728) 14,616 12,224
Total OPEB Liability - beginning 380,227 469,955 455,339 443,115
Total OPEB Liability - ending $ 409,355 $ 380,227 $ 469,955 $ 455,339
Covered-employee payroll $ 7,602,334 $ 5,196,501 $ 6,647,363 $ 6,272,956
Total OPEB liability as a percentage
of covered-employee payroll 5.38% 7.32% 7.07% 7.26%
Notes to Schedule:
No assets are being accumulated in a trust to pay for plan benefits.
Changes in Assumptions:
Changes in assumptions reflect the effects of changes in the discount rate of each period. The following are the discount rates
used for each measurement date.
Measurement Date Discount Rate
September 30, 2020 2.41%
September 30, 2019 2.75%
September 30, 2018 3.83%
September 30, 2017 3.50%
September 30, 2016 3.10%
Additional changes in assumptions for the following measurement dates:
• September 30, 2019
o Per capita costs and premiums were updated based on information provided.
o Assumed ultimate rate of inflation was revised from 2.5% to 2.25% and the healthcare cost trend
assumption was revised to reflect this change.
Additional years will be added to this schedule annually until 10 years; data is presented.
SUPPLEMENTARY INFORMATION
72
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
ASSETS
Equity in pooled cash and investments $ 116,072 $ - $ 157,855 $ 1,375,319 $ 10,327 $ 107,771 $ 112,769
Cash with fiscal agent - - - - - - -
Receivables, net
Customer accounts, net - - - - - - -
Intergovernmental and other - 80,468 38,420 187,875 230 11,647 1,576
Prepaid expenditures - - - - - - -
TOTAL ASSETS $ 116,072 $ 80,468 $ 196,275 $ 1,563,194 $ 10,557 $ 119,418 $ 114,345
LIABILITIES
Accounts payable and accrued liabilities - - - 6,995 - - -
Construction costs payable - - - 4,212 - - -
Due to other funds - 201,876 - - - - -
Deposits - - - - - - -
TOTAL LIABILITIES - 201,876 - 11,207 - - -
FUND BALANCE
Nonspendable:
Prepaids - - - - - - -
Restricted for:
Public safety - - - - 10,557 - 114,345
Road maintenance and construction - - - 1,551,987 - - -
Other capital projects - - - - - - -
Other purposes - - 196,275 - - 119,418 -
Committed to:
Conservation and resource management 116,072 - - - - - -
Unassigned - (121,408) - - - - -
TOTAL FUND BALANCES 116,072 (121,408) 196,275 1,551,987 10,557 119,418 114,345
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 116,072 $ 80,468 $ 196,275 $ 1,563,194 $ 10,557 $ 119,418 $ 114,345
Continued…
73
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Capital Governmental 2020
Revenue Block Grants Grants Funds Service Projects Funds Totals
ASSETS
Equity in pooled cash and investments $ 8,304 $ - $ 8,728 $ 1,897,145 $ - $ 2,428,634 $ 4,325,779 $ 2,312,277
Cash with fiscal agent - - - - - - - 94,850
Receivables, net
Customer accounts, net - - - - - - - 115,512
Intergovernmental and other - 100 1,548 321,864 - - 321,864 239,328
Prepaid expenditures - - - - - - - -
TOTAL ASSETS $ 8,304 $ 100 $ 10,276 $ 2,219,009 $ - $ 2,428,634 $ 4,647,643 $ 2,761,967
LIABILITIES
Accounts payable and accrued liabilities - - - 6,995 - 3,734 10,729 217,785
Construction costs payable - 3,134 - 7,346 - - 7,346 16,666
Due to other funds - 214,453 8,083 424,412 19,850 44,067 488,329 283,396
Deposits 1,765 - - 1,765 - - 1,765 2,766
TOTAL LIABILITIES 1,765 217,587 8,083 440,518 19,850 47,801 508,169 520,613
FUND BALANCE
Nonspendable:
Prepaids - - - - - - - -
Restricted for:
Public safety 6,539 - 2,193 133,634 - - 133,634 299,845
Road maintenance and construction - - - 1,551,987 - 2,123,644 3,675,631 1,318,572
Other capital projects - - - - - 257,189 257,189 257,689
Other purposes - - - 315,693 - - 315,693 308,383
Committed to:
Conservation and resource management - - - 116,072 - - 116,072 77,940
Unassigned - (217,487) - (338,895) (19,850) - (358,745) (21,075)
TOTAL FUND BALANCES 6,539 (217,487) 2,193 1,778,491 (19,850) 2,380,833 4,139,474 2,241,354
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 8,304 $ 100 $ 10,276 $ 2,219,009 $ - $ 2,428,634 $ 4,647,643 $ 2,761,967
74
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
REVENUES:
Non-property taxes $ - $ 463,472 $ 158,290 $ 1,039,813 $ - $ - $ -
Charges for services - - - - - 66,595 -
Fines and forfeitures - - - - 3,742 - 21,702
Investment earnings (loss) - 92 (370) (4,332) 45 - (277)
Miscellaneous revenues 40,890 - - - - - -
Total revenues 40,890 463,564 157,920 1,035,481 3,787 66,595 21,425
EXPENDITURES:
General government 2,550 - - - - - -
Public safety - - - - 17,244 - -
Transportation - - - 341,160 - - -
Culture/recreation - - - - - - -
Capital outlay - - - 209,773 - - -
Debt service - - - - - - -
Total expenditures 2,550 - - 550,933 17,244 - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 38,340 463,564 157,920 484,548 (13,457) 66,595 21,425
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - -
Transfers (out) - (537,844) (120,884) (540,000) - - -
TOTAL OTHER FINANCING SOURCES (USES) - (537,844) (120,884) (540,000) - - -
NET CHANGE IN FUND BALANCE 38,340 (74,280) 37,036 (55,452) (13,457) 66,595 21,425
FUND BALANCE, beginning of year 77,732 (47,128) 159,239 1,607,439 24,014 52,823 92,920
FUND BALANCE, end of year $ 116,072 $ (121,408) $ 196,275 $ 1,551,987 $ 10,557 $ 119,418 $ 114,345
Continued…
75
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2021
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2020
2021
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Capital Governmental 2020
Revenue Block Grants Grants Funds Service Projects Funds Totals
REVENUES:
Non-property taxes $ - $ - $ - $ 1,661,575 $ - $ - $ 1,661,575 $ 1,458,320
Charges for services - - - 66,595 - - 66,595 52,823
Fines and forfeitures 7,534 - - 32,978 - - 32,978 20,766
Investment earnings (loss) (18) - - (4,860) - (12,394) (17,254) 49,390
Miscellaneous revenues - - - 40,890 - - 40,890 22,506
Total revenues 7,516 - - 1,797,178 - (12,394) 1,784,784 1,603,805
EXPENDITURES:
General government - - - 2,550 - - 2,550 22,714
Public safety - - - 17,244 - - 17,244 41,986
Transportation - - - 341,160 - - 341,160 -
Culture/recreation - - - - - - - 265
Capital outlay - - - 209,773 - 40,752 250,525 367,084
Debt service - - - - 120,884 - 120,884 118,458
Total expenditures - - - 570,727 120,884 40,752 732,363 550,507
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 7,516 - - 1,226,451 (120,884) (53,146) 1,052,421 1,053,298
OTHER FINANCING SOURCES (USES)
Transfers in - - - - 120,884 1,096,667 1,217,551 1,288,458
Transfers (out) - (16,667) - (1,215,395) - - (1,215,395) (1,498,213)
TOTAL OTHER FINANCING SOURCES (USES) - (16,667) - (1,215,395) 120,884 1,096,667 2,156 (209,755)
NET CHANGE IN FUND BALANCE 7,516 (16,667) - 11,056 - 1,043,521 1,054,577 843,543
FUND BALANCE, beginning of year (977) (200,820) 2,193 1,767,435 (19,850) 1,337,312 3,084,897 2,241,354
FUND BALANCE, end of year $ 6,539 $ (217,487) $ 2,193 $ 1,778,491 $ (19,850) $ 2,380,833 $ 4,139,474 $ 3,084,897
76
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2017, THROUGH SEPTEMBER 30, 2021
2021 2020 2019 2018 2017
Revenues
Operating Revenues:
Water:
Customer charges $ 3,677,424 $ 3,550,004 $ 3,462,039 $ 3,206,520 $ 3,262,314
Miscellaneous charges 68,937 43,252 67,291 64,563 65,198
Total water 3,746,361 3,593,256 3,529,330 3,271,083 3,327,512
Sewer:
Customer charges 6,096,086 5,750,479 5,399,935 5,092,613 5,111,353
Miscellaneous charges 8 - - - 590
Total sewer 6,096,094 5,750,479 5,399,935 5,092,613 5,111,943
Total operating revenues 9,842,455 9,343,735 8,929,265 8,363,696 8,439,455
Non-operating revenues
Investment income (loss):
Water (27,591) 143,198 163,209 (7,606) 21,455
Sewer (22,584) 158,264 115,389 (8,249) 17,281
Total non-operating revenues (50,175) 301,462 278,598 (15,855) 38,736
Total revenues 9,792,280 9,645,197 9,207,863 8,347,841 8,478,191
Expenses
Operating expenses:
Water 1,321,892 1,044,002 1,299,974 1,348,985 1,488,854
Sewer 3,100,956 2,222,833 2,387,924 2,393,828 2,309,637
Total operating expenses 4,422,848 3,266,835 3,687,898 3,742,813 3,798,491
Administrative, non divisional
and other
Water 584,856 642,424 508,655 508,655 502,058
Sewer 698,988 678,890 624,796 624,796 591,161
Total administrative non-
divisional and other 1,283,844 1,321,314 1,133,451 1,133,451 1,093,219
Total expenses 5,706,692 4,588,149 4,821,349 4,876,264 4,891,710
Net revenues available for
debt service 4,085,588 5,057,048 4,386,514 3,471,577 3,586,481
Non-operating income(expense)
Interest expense (320,482) (344,186) (381,546) (404,297) (455,259)
Loan amortization (93,910) (93,910) (93,910) (93,910) (93,910)
Total non-operating income
(expense) (414,392) (438,096) (475,456) (498,207) (549,169)
Change in net position before
depreciation expense and
interfund transfers $ 3,671,196 $ 4,618,952 $ 3,911,058 $ 2,973,370 $ 3,037,312
77
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, 2021 AND SEPTEMBER 30, 2020
2021 2020
Gross revenues:
Utility $ 9,842,455 $ 9,343,735
Connection charges 34,333 24,957
Interest (44,607) 234,288
Total Gross Revenues 9,832,181 9,602,980
Operating Expenses
Personnel services 1,776,734 1,827,004
Contractual services 673,262 375,144
Supplies 513,146 507,960
Repairs and maintenance 876,185 (13,952)
Utilities 349,132 351,447
Intergovernmental charges 1,283,844 1,321,314
Other expenses 234,388 219,231
Total operating expenses 5,706,691 4,588,148
Total net revenues in accordance with Bond resolutions $ 4,125,490 $ 5,014,832
Total debt service $ 1,895,860 $ 1,853,625
Debt service coverage ratio 217.61% 270.54%
Required debt service coverage ratio 110.00% 110.00%
78
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEAR ENDED SEPTEMBER 30, 2017, THROUGH SEPTEMBER 30, 2021
Utility Service Tax Collections
(last five years)
Year Electricity Communications Gas Fuel Oil Total
2021 $ 441,950 $ 471,029 $ 13,068 $ - $ 926,047
2020 499,712 489,444 14,122 - 1,003,278
2019 587,563 484,505 12,518 - 1,084,586
2018 498,379 497,133 16,262 - 1,011,774
2017 475,895 479,551 15,229 - 970,675
Ad Valorem Tax Collections
(last five years)
Year Total
2021 $ 6,341,798
2020 5,912,053
2019 5,519,446
2018 5,063,409
2017 4,730,476
OTHER STATISTICAL INFORMATION
79
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2021
(UNAUDITED)
Annual
Billings
Fleet Landing (retirement community) $ 464,152
Navy (Federal Government) 354,449
PAC-2160 Mayport GP, LLC 178,372
John's Creek Estates (mobile home park) 149,593
City of Atlantic Beach, Florida 134,990
Hanna Park (regional park) 126,750
Yes Companies 124,050
PBG MAYPORT LLC 123,325
Sea Turtle Inn 119,241
Seaside Apartments (apartment complex) 71,029
$ 1,845,951
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED
STATES; THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND
OTHER CONTRACT REQUIREMENTS
80
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City), as of and for the year ended September 30, 2021, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated July 20, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City’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 over financial reporting 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.
81
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, non-compliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of non-compliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
July 20, 2022
Gainesville, Florida
82
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE
WITH FLORIDA STATUTES SECTION 218.415 – INVESTMENTS OF PUBLIC FUNDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with Section 218.415, Florida
Statutes during the period ended September 30, 2021, as required by Section 10.556(10)(a), Rules of the
Auditor General. Management is responsible for the City’s compliance with those requirements. Our
responsibility is to express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the City’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination of the City’s compliance with
specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2021.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, federal and
other granting agencies and pass-through entities, the City, its management, and is not intended to
be, and should not be, used by anyone other than these specified parties.
July 20, 2022
Gainesville, Florida
83
MANAGEMENT LETTER
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Atlantic Beach, Florida (the City) as of and for the
year ended September 30, 2021, and have issued our report thereon dated July 20, 2022.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountant’s Report on an examination
conducted in accordance with American Institute of Certified Public Accountants Professional Standards,
AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the
Auditor General. Disclosures in those reports and schedule, which are dated July 20, 2022, should be
considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
report. There were no such findings or recommendations made in the preceding financial audit report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. This information is
included in Note 1 to the financial statements.
Financial Condition and Management
Sections 10.554(1)(i)5.(a) and 10.556(7), Rules of the Auditor General, require that we apply appropriate
procedures and report the results of our determination as to whether or not the City has met one or more
of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met. In connection with our audit, we determined that the City did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
84
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
Pursuant to Sections 10.554(1)(i)5(c) and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Special District Component Units
Section 10.554(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a
special district that is a component unit of a county, municipality, or special district, provided the financial
information necessary for proper reporting of the component unit, within the audited financial
statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida
Statutes. In connection with our audit, we determined that there were no special district component
units that were required to be reported in accordance with Section 218.39(3)(b), Florida Statutes.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but which warrants the attention
of those charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than these specified parties.
July 20, 2022
Gainesville, Florida