Annual Financial Report - 2021-2022FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2022
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2022
INDEPENDENT AUDITOR’S REPORT .................................................................................................................................. 1
MANAGEMENT’S DISCUSSION AND ANALYSIS .................................................................................................................. 5
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 ................................................................................................................................................................ 62
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – GENERAL FUND ........................................................................................................................... 64
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
– AMERICAN RESCUE PLAN ACT SPECIAL REVENUE FUND ................................................................................................. 65
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
GENERAL EMPLOYEES’ PENSION PLAN .......................................................................................................................... 66
POLICE OFFICERS’ PENSION PLAN .................................................................................................................................. 68
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ...................................................................................................... 70
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ............................................................................. 71
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS ........................................................................................... 72
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS ........................................................................ 73
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2022
SUPPLEMENTARY INFORMATION
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS ............................................................................ 74
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-
MAJOR GOVERNMENTAL FUNDS ....................................................................................................................................... 76
HISTORICAL REVENUES AND EXPENSES .............................................................................................................................. 78
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS
(WATER AND SEWER) ......................................................................................................................................................... 79
OTHER BOND COVENANT DISCLOSURES ............................................................................................................................ 80
OTHER STATISTICAL INFORMATION
MAJOR UTILITY CUSTOMERS .............................................................................................................................................. 81
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED STATES; THE
RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND OTHER CONTRACT
REQUIREMENTS
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ................................................................... 82
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES ........................ 84
INDEPENDENT ACCOUNTANT'S REPORT ON COMPLIANCE FOR THE U.S. TREASURY CORONAVIRUS
STATE AND LOCAL FISCAL RECOVERY FUNDS PROGRAM (CSLFRF) REQUIREMENTS FOR AN
ALTERNATIVE CSLRF COMPLIANCE EXAMINATION ENGAGEMENT .................................................................................... 85
MANAGEMENT LETTER ....................................................................................................................................................... 86
MANAGEMENT’S RESPONSE TO FINDINGS ........................................................................................................................ 88
MANAGEMENT’S AFFIDAVIT OF COMPLIANCE WITH SECTION 163.31801, FLORIDA STATUTES ....................................... 89
INDEPENDENT AUDITOR’S REPORT
1
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Atlantic Beach,
Florida, (the City) as of and for the year ended September 30, 2022, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City as of September 30, 2022, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of the City and to meet our other ethical responsibilities in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of a Matter
As described in Note 1 to the financial statements, in 2022, the City adopted new accounting guidance,
Governmental Accounting Standards Board Statement No. 87, Leases. Our opinion is not modified with
respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
2
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as
a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and, therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if there is a substantial likelihood
that, individually or in the aggregate, they would influence the judgment made by a reasonable user based
on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards, we:
■ Exercise professional judgment and maintain professional skepticism throughout the audit.
■ Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
■ Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
■ Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
■ Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
3
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, General Fund – Budgetary to Actual Schedule and notes to the schedule, ARPA
Fund – Budgetary to Actual Schedule, and Required Pension and Other Postemployment Benefits
Schedules, as listed in the table of contents, be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence
to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The accompanying combining and individual non-major
fund financial statements, historical revenues and expenses, schedule of net revenues in accordance with
bond resolutions, and other bond covenant disclosures (supplementary information) are presented for
purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The information
has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the basic
financial statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the supplementary information is
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the statistical schedule but does not include the basic financial statements and our
auditor’s report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
4
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated June 2, 2023, 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 2021 financial statements, and our report dated July 20, 2022,
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, 2021, is consistent,
in all material respects, with the audited financial statements from which it was derived.
June 2, 2023
Gainesville, Florida
MANAGEMENT’S DISCUSSION AND ANALYSIS
5
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
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, 2022.
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.
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.
6
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
■ Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities
in the government-wide financial statements. However, unlike the government-wide financial statements,
governmental fund financial statements focus on near-term inflows and outflows of available financial
resources, as well as on balances of available resources at the end of the fiscal year. Such information may be
useful in evaluating a City’s near-term financing requirements. Because the focus of governmental funds is
narrower than that of the government-wide financial statements, it is useful to compare the information
presented for governmental funds with similar information presented for governmental activities in the
government-wide financial statements. By doing so, readers may better understand the long-term impact of the
government’s near-term financing decisions. Reconciliations are provided between the Governmental Funds
Balance Sheet and the Statement of Net Position and the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances and Statement of Activities to facilitate this comparison between
governmental funds and governmental activities.
The City maintains 14 individual governmental funds. Information is presented separately in the Governmental
Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund
Balances for the General Fund, American Rescue Plan Act (ARPA) Special Revenue Fund and Capital Projects Fund,
which are considered to be a major funds. Data from the other 11 governmental funds are combined into a single,
aggregated presentation called Non-Major Governmental Funds. Fund data for these non-major governmental
funds is provided in the form of combining statements. These combining statements can be found on pages 74-
77 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 62-64 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.
■ 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.
7
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City’s progress in funding its obligation to provide pension benefits to
its employees and a budgetary comparison schedule for the General Fund. Required supplementary information
can be found beginning on page 62 of this report.
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 $97,908,794 at the close of the fiscal year ended
September 30, 2022.
By far the largest portion of the City’s net position, $66,973,541 (68%), 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, $8,063,580 (8%), represents resources that are subject to external restrictions
on how they may be used. The remaining balance of unrestricted net position, $22,871,673 (24%), is used to meet
the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Position
September 30, 2022 and 2021
(In Thousands)
2022 2021 2022 2021 2022 2021
Current and Other Assets $22,363 $12,951 $20,900 $16,474 $43,263 $29,425
Capital Assets 45,473 44,198 32,755 33,996 78,228 78,194
Total Assets 67,836 57,149 53,655 50,470 121,491 107,619
Deferred Outflow 1,753 2,627 773 1,167 2,526 3,794
Long-Term Liabilities
Outstanding 2,465 7,137 10,733 11,960 13,198 19,097
Other Liabilities 5,603 881 1,783 3,771 7,386 4,652
Total Liabilities 8,068 8,018 12,516 15,731 20,584 23,749
Deferred Inflow 3,562 366 1,962 66 5,524 432
Net Position:
Invested in Capital Assets,
Net of Related Debt 44,225 42,934 22,748 22,307 66,973 65,241
Restricted 5,608 4,382 2,456 2,250 8,064 6,632
Unrestricted 8,126 4,076 14,746 11,283 22,872 15,359
Total Net Position $57,959 $51,392 $39,950 $35,840 $97,909 $87,232
Governmental Business-type
Activities Activities Totals
8
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
As illustrated in the schedule on page 6, 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, 2022 and 2021
(In Thousands)
2022 2021 2022 2021 2022 2021
Revenues:
Program Revenues:
Charges for Services $ 1,365 $ 1,238 $ 14,001 $ 13,183 $ 15,366 $ 14,421
Operating Grants and Contributions 424 537 - - 424 537
Capital Grants and Contributions 334 99 972 313 1,306 412
General Revenues:
Property Taxes 6,709 6,342 - - 6,709 6,342
Public Service Tax and
Franchise Fees 2,086 1,655 - - 2,086 1,655
Fuel Taxes 890 622 - - 890 622
Discretionary Sales Surtax 1,203 1,040 - - 1,203 1,040
State Shared Revenue 2,378 2,091 - - 2,378 2,091
Other 4,306 36 (368) 19 3,938 55
Total Revenues 19,695 13,660 14,605 13,515 34,300 27,175
Expenses:
General Government 2,588 2,931 - - 2,588 2,931
Public Safety 6,378 6,448 - - 6,378 6,448
Road Maintenance and Construction 2,029 2,291 - - 2,029 2,291
Parks and Recreation 1,580 1,369 - - 1,580 1,369
Conservation and Resource Management 14 3 - - 14 3
Interest on Long-Term Debt 42 45 - - 42 45
Utility - - 7,080 8,255 7,080 8,255
Stormwater - - 1,326 1,661 1,326 1,661
Sanitation - - 2,076 1,717 2,076 1,717
Building Code Enforcement - - 510 561 510 561
Total Expenses 12,631 13,087 10,992 12,194 23,623 25,281
Transfers (497) 1,480 497 (1,480) - -
Change in Net Position 6,567 2,053 4,110 (159) 10,677 1,894
Net Position-Beginning 51,392 49,339 35,840 35,999 87,232 85,338
Net Position-Ending $57,959 $51,392 $ 39,950 $ 35,840 $ 97,909 $ 87,232
Governmental Business-type
Activities Activities Totals
9
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. Following is a summary of fund activity financial information for the fiscal year, rounded to the
nearest thousand dollars:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of
$15,424,977 an increase of $3,334,035 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 $4,156,767, 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 $1,812,530
or 23% during the current fiscal year. Property tax revenues increased by $367,186 or 6% from the previous
year. This was a result of an increase in the taxable values. General Fund transfers in increased by $1,086,899,
and there were no transfers out. Overall, general fund expenditures increased by $1,291,434 or 11%. This can
be attributed returning to increase in capital expenditures and salary adjustments.
The City reports two additional major funds as of September 30, 2022, the ARPA special revenue fund and the
capital projects fund. The ARPA special revenue fund was established in 2022 to report the sources, uses and
residual balances of the ARPA State and Local Fiscal Recovery Funds. Revenue recognized in the ARPA special
revenue funds was $4,619,415 and was equal to the allowable costs paid with these funds during the year. The
capital projects fund was previously reported as a non-major fund and has been accumulating resources for
capital projects to the extent that this fund met the definition of a major fund in 2022. The capital projects fund
expended $1,407,916 on capital projects in 2022 and reported total assets of $4,831,063 at September 30, 2022,
which is mainly restricted for road maintenance and construction projects.
Non-major governmental funds consisting of special revenue funds and the debt service fund, which have a
combined fund balance of $1,291,716. The net decrease in fund balance, after transfers, of the non-major
governmental funds was $466,925. The decrease in the fund was related to the increase in Capital Outlay
Expenditures as many projects previously on hold due to supplies and labor being difficult to procure moved
toward completion.
■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail. During the fiscal year the proprietary funds recorded revenues of $13,982,645,
expenses of $10,676,205, net non-operating revenue of $(665,760) and net capital contributions, grants and
transfers of $1,468,924. The net position in the proprietary funds increased $4,109,604 as a result of the fiscal
year’s activities. The unrestricted net position of the enterprise funds amounted to $14,745,587 at the end of
fiscal year 2022.
Stormwater rates stayed constant in fiscal year 2022 as there were no rate changes. The $8.39 per ERU is
approximately 70%, compared to 55% for the prior year, of the total operating expenses of $1,294,114 needed
to fully fund the operation with charges for service.
During fiscal year 2022, the Sanitation Fund netted a decrease in net position of $349,847.
10
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
General Fund Budgetary Highlights
Net Budget
The overall net difference from the final budgeted resources (revenues and other financing sources) and adjusted
final budgeted uses (expenditures and other financing uses) was a deficit of $765,538. The actual increase in fund
balance was $1,812,530. This resulted in a $2,578,068 positive budgetary variance.
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, 2022, amounted to $78,228,534. This investment in capital assets
includes land, land improvements, land easements, buildings and infrastructure improvements, equipment, and
construction in progress.
The total change in the City’s capital assets, net of related depreciation, for the current fiscal year was an increase
of $1,274,741 or 2.9% for governmental activities and a decrease of $1,241,467, or 3.7%, for business-type
activities.
Capital asset events during the current fiscal year included the following:
■ Governmental Activities
Buildings reflected a net decrease of $43,837 as a result of depreciation.
Intangible Assets reflected a net decrease of $15,802 as a result of depreciation. This asset category includes
land easements and computer software.
Improvements Other Than Buildings reflected a net increase of $115,676. This represents capital asset
increase of $845,836 offset by depreciation of $730,160.
Equipment reflected a net decrease of $91,444. This represents capital asset increase of $520,191, offset
by depreciation of $611,635.
Construction in progress increased by $1,132,925.
■ Business-Type Activities
Buildings reflected a net decrease in asset value of $4,892 from depreciation.
Improvements Other Than Buildings reflected a net decrease of $1,889,252. This represents capital asset
increases of $254,800, offset by depreciation of $2,144,052.
Equipment reflected a net decrease of $112,007. This represents capital asset increase of $221,234, offset
by depreciation of $333,241.
Construction in Progress had a net increase of $764,874.
11
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Continued)
City of Atlantic Beach’s Capital Assets
(Net of Depreciation)
(In Thousands)
2022 2021 2022 2021 2022 2021
Land 12,091$ 11,914$ 1,656$ 1,656$ 13,747$ 13,570$
Intangibles 71 87 213 213 284 300
Buildings 6,711 6,755 16 21 6,727 6,776
Improvements-Other 23,853 23,737 28,628 30,517 52,481 54,254
Equipment 1,058 1,150 776 888 1,834 2,039
Construction in Progress 1,690 557 1,466 701 3,156 1,258
Total 45,474$ 44,200$ 32,755$ 33,996$ 78,229$ 78,197$
Governmental Business-type
Activities Activities Totals
Additional information on the City’s capital assets can be found in Note 5 on pages 41-42 of this report.
Long-term Debt
At the end of the 2022 fiscal year, the City had total bonded debt outstanding of $11,436,000. The amount of
$10,261,000 represents the City’s debt related to its business type activities. This amount was comprised of debt
secured solely by specified revenue sources. A detailed listing of the City’s debt can be found in the table below.
City of Atlantic Beach’s Outstanding Debt
September 30, 2022
(In Thousands)
2022 2021
Governmental Activities:
Capital Improvement Revenue Bonds, Series 2018 $ 1,175 $ $1,255
Business-Type Activities:
Utilities System Revenue Bond, Series 2014 5,505 6,805
Refunding Bank Loan Series 2022 4,756 5,193
Capital Lease Payable – 2018 - 71
Total $ 11,436 $ $13,324
Debt service coverage calculations can be found on page 79. Additional information on the City’s long-term debt
can be found in Note 6 on pages 43-45 of this report.
Revenue Highlights:
■ Total General Fund Revenues for 2022 were $1,086,246 higher than 2021 revenue (page 17). Increase in
property tax revenue of $367,186 is the largest contributor to this increase.
■ The 2022 taxable property values were about 5% higher than the 2021 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 $2,138,980,854. Ad valorem taxes of $6,708,984 represent 52% of the General
Fund revenues for 2022.
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2022
(Concluded)
• The 2022 Intergovernmental revenues of $2,740,162 make up 21 % of general fund revenues . This is an
i ncrease of $351 ,847 over 2021.
• The City's investment portfolio is valued at approx i mately $24,537 ,285 as of Septembe r 30, 2022 . The
investments showed a loss of approximately $818 ,000 for the year .
Expenditure Highlights:
• Total Governmental Fund Expenditures increased in cu rrent year by $2,847,679 when compared to pr ior year.
Capital expenditures increased from $773 ,989 in 2021 to $2 ,841,406 in 2022 . This increase is due to pr ior year
projects that were put on hold due to the continued effects of the COVID -19 pandemic being completed in the
current year.
Requests for Information
The financial report is designed to provide a general overv iew of the City's finances for all those with an interest
in the City's finances . Questions concerning any of the information prov i ded in this report or requests for
add itional financial information should be addressed to the City of Atlant ic Beach, Finance Director, 800 Seminole
Road , Atlantic Beach , Florida 32233 .
~M /~
Melissa Burns
Di rector of Finance
12
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, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
Primary Government
Governmental Business-type 2021
Activities Activities Total Totals
ASSETS
Equity in pooled cash and investments $ 8,079,213 $ 14,861,302 $ 22,940,515 $ 20,901,346
Cash with fiscal agent - 1,394,133 1,394,133 -
Receivables, current:
Customer accounts, net 1,077 783,439 784,516 802,838
Intergovernmental and other 1,402,607 - 1,402,607 1,130,466
Notes and leases receivable, net 760 50,502 51,262 760
Inventory 86,539 49,872 136,411 104,686
Prepaid expenses 106,223 - 106,223 33,374
Internal balances 586,446 (586,446) - -
Due from fiduciary component unit 255,259 - 255,259 -
Net pension assets 1,355,221 590,793 1,946,014 -
Restricted assets:
Equity in pooled cash and investments 10,487,930 2,825,069 13,312,999 6,448,330
Capital assets:
Non-depreciable 13,780,307 3,121,585 16,901,892 14,826,870
Depreciable, net 31,693,226 29,633,416 61,326,642 63,368,390
Notes and leases receivable, noncurrent 1,520 930,926 932,446 1,520
TOTAL ASSETS 67,836,328 53,654,591 121,490,919 107,618,580
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 1,709,242 432,851 2,142,093 3,295,628
Deferred outflows - loss on refunding - 323,829 323,829 431,772
Deferred outflows related to OPEB 43,978 16,736 60,714 66,988
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,753,220 773,416 2,526,636 3,794,388
LIABILITIES
Accounts payable and accrued expenses 1,017,764 818,612 1,836,376 1,600,090
Construction costs payable 73,273 69,549 142,822 62,743
Due to other governments - 62,656 62,656 50,698
Unearned revenue 4,477,045 - 4,477,045 212,389
Accrued interest payable 20,856 90,973 111,829 130,534
Customer deposits 14,515 741,255 755,770 728,838
Long-term obligations:
Due within one year 273,015 1,838,578 2,111,593 2,157,102
Due in more than one year 2,191,920 8,894,644 11,086,564 18,806,160
TOTAL LIABILITIES 8,068,388 12,516,267 20,584,655 23,748,554
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 3,392,815 930,479 4,323,294 233,268
Deferred inflows related to OPEB 169,420 64,473 233,893 199,032
Deferred inflows related to leases - 966,919 966,919 -
Total deferred inflows of resources 3,562,235 1,961,871 5,524,106 432,300
NET POSITION
Net investment in capital assets 44,225,260 22,748,281 66,973,541 65,240,433
Restricted for:
General government facilities 371,500 - 371,500 257,189
Public safety 146,095 - 146,095 133,634
Road maintenance and construction 4,780,647 - 4,780,647 3,675,631
Other purposes 309,437 - 309,437 315,693
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 - 1,307,707 1,307,707 1,191,635
Building code enforcement - 217,278 217,278 127,772
Unrestricted 8,125,986 14,745,687 22,871,673 15,359,211
TOTAL NET POSITION $ 57,958,925 $ 39,949,869 $ 97,908,794 $ 87,232,114
See accompanying notes.
14
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
Program Revenues Net (Expense) Revenue and
Operating Capital Changes in Net Position
Charges for Grant and Grant and Governmental Business-Type 2021
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Totals
PRIMARY GOVERNMENT:
Governmental activities:
General government $ 2,588,199 $ 364,479 $ 10,000 $ 223,046 $ (1,990,674) $ - $ (1,990,674) $ (2,683,947)
Public safety 6,377,771 661,307 173,065 52,858 (5,490,541) - (5,490,541) (5,370,879)
Transportation 2,028,970 263,344 139,259 - (1,626,367) - (1,626,367) (1,830,605)
Parks and recreation 1,579,998 76,013 - - (1,503,985) - (1,503,985) (1,321,194)
Conservation and resource
management 14,405 - 101,823 58,008 145,426 - 145,426 38,341
Interest on long-term debt 41,713 - - - (41,713) - (41,713) (44,553)
Total governmental activities 12,631,056 1,365,143 424,147 333,912 (10,507,854) - (10,507,854) (11,212,837)
Business-type activities
Utility 7,079,792 10,542,134 - 972,038 - 4,434,380 4,434,380 1,731,067
Stormwater 1,326,231 909,139 - - - (417,092) (417,092) (627,813)
Sanitation 2,075,805 2,076,213 - - - 408 408 285,031
Building code enforcement 509,817 473,873 - - - (35,944) (35,944) (86,120)
Total business-type activities 10,991,645 14,001,359 - 972,038 - 3,981,752 3,981,752 1,302,165
TOTAL PRIMARY GOVERNMENT $ 23,622,701 $ 15,366,502 $ 424,147 $ 1,305,950 $ (10,507,854) $ 3,981,752 $ (6,526,102) $ (9,910,672)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 6,708,984 - 6,708,984 6,341,798
Public service taxes and franchise fees 2,085,980 - 2,085,980 1,655,198
Fuel taxes levied for transportation purposes 890,413 - 890,413 621,762
Discretionary Sales Surtax 1,202,628 - 1,202,628 1,039,813
State shared revenue 2,377,857 - 2,377,857 2,090,852
Grants not restricted to specific programs 4,619,415 - 4,619,415 -
Investment earnings (loss) (370,552) (447,456) (818,008) (84,443)
Miscellaneous 55,437 78,422 133,859 139,609
Gain (loss) on disposal of capital assets 1,654 - 1,654 -
TRANSFERS (496,886) 496,886 - -
Total general revenues and transfers 17,074,930 127,852 17,202,782 11,804,589
CHANGE IN NET POSITION 6,567,076 4,109,604 10,676,680 1,893,917
NET POSITION, beginning of year 51,391,849 35,840,265 87,232,114 85,338,197
NET POSITION, end of year $ 57,958,925 $ 39,949,869 $ 97,908,794 $ 87,232,114
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET – GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
2022
American
Rescue Plan
Act Capital Non-Major
General Special Projects Governmental 2021
ASSETS Fund Revenue Fund Fund Funds Total Totals
Equity in pooled cash and investments $ 8,079,213 $ 4,328,428 $ 4,831,063 $ 1,328,439 $ 18,567,143 $ 11,870,921
Receivables, net
Customer accounts, net 1,077 - - - 1,077 400
Intergovernmental and other 958,610 - - 443,997 1,402,607 998,649
Notes receivable, current 760 - - - 760 760
Inventory 86,539 - - - 86,539 43,923
Prepaid expenditures 5,367 - - 100,856 106,223 33,374
Due from other funds 1,438,661 - - - 1,438,661 488,329
Notes receivable, non-current 1,520 - - - 1,520 1,520
TOTAL ASSETS $ 10,571,747 $ 4,328,428 $ 4,831,063 $ 1,873,292 $ 21,604,530 $ 13,437,876
LIABILITIES
Accounts payable and accrued liabilities 643,113 - 355,077 19,574 1,017,764 806,564
Construction costs payable 3,270 - 62,657 7,346 73,273 10,616
Due to other governments - - - - - -
Due to other funds - - 44,067 552,889 596,956 488,329
Deposits 12,748 - - 1,767 14,515 11,029
Unearned revenue 148,618 4,328,427 - - 4,477,045 30,396
TOTAL LIABILITIES 807,749 4,328,427 461,801 581,576 6,179,553 1,346,934
FUND BALANCE
Nonspendable:
Inventory 86,539 - - - 86,539 43,923
Prepaids 5,367 - - 100,856 106,223 33,374
Restricted for:
Public safety - - - 146,095 146,095 133,634
Road maintenance and construction - - 3,997,762 782,885 4,780,647 3,675,631
Capital projects - - 371,500 - 371,500 257,189
Other purposes - - - 309,437 309,437 315,693
Committed to:
Conservation and resource management - - - 203,490 203,490 116,072
Assigned to:
Community redevelopment 50,000 - - 50,000 50,000
Operating reserves 4,561,859 1 - - 4,561,860 4,018,880
Subsequent year budget 903,466 - - - 903,466 -
Unassigned 4,156,767 - - (251,047) 3,905,720 3,446,546
TOTAL FUND BALANCES 9,763,998 1 4,369,262 1,291,716 15,424,977 12,090,942
TOTAL LIABILITIES AND FUND BALANCES $ 10,571,747 $ 4,328,428 $ 4,831,063 $ 1,873,292 $ 21,604,530 $ 13,437,876
See accompanying notes.
16
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
Amounts reported for governmental activities in the statement of net position
are different because:
2022 2021
FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 15,424,977 $ 12,090,942
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 45,473,533 44,198,792
The net pension assets are not current financial resources and therefore are
not reported in the governmental funds. 1,355,221 -
Deferred outflows of resources represent an consumption of net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. 1,753,220 2,627,418
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. (3,562,235) (366,208)
Interest payable on long-term debt does not require current financial resources
and therefore, is not reported as a liability in governmental funds. (20,856) (22,276)
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 (2,464,935) (7,136,819)
NET POSITION OF GOVERNMENTAL ACTIVITIES $ 57,958,925 $ 51,391,849
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, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
American
Rescue Plan
Act Capital Non-major
General Special Projects Governmental 2021
Fund Revenue Fund Fund Funds Total Totals
REVENUES:
Property taxes $ 6,708,984 $ - $ - $ - $ 6,708,984 $ 6,341,798
Non-property taxes 1,300,872 - - 2,093,041 3,393,913 2,940,065
Licenses and permits 1,097,637 - - - 1,097,637 789,254
Intergovernmental revenue 2,740,162 4,619,415 - 110,866 7,470,443 2,388,315
Charges for services 847,851 - - 110,305 958,156 1,030,552
Fines and forfeitures 234,136 - - 135,210 369,346 90,816
Investment earnings (loss) (171,235) - (209,706) 10,388 (370,553) (34,758)
Miscellaneous revenues 64,614 1 - 2,476 67,091 (24,483)
Total revenues 12,823,021 4,619,416 (209,706) 2,462,286 19,695,017 13,521,559
EXPENDITURES:
General government 3,012,693 - - 30,171 3,042,864 2,744,054
Public safety 6,816,042 - 16,914 28,111 6,861,067 6,699,708
Transportation 1,503,867 - - - 1,503,867 1,588,500
Culture/recreation 1,491,759 - - - 1,491,759 1,089,282
Capital outlay 751,127 - 1,391,002 699,277 2,841,406 773,989
Debt service - - - 123,133 123,133 120,884
Total expenditures 13,575,488 - 1,407,916 880,692 15,864,096 13,016,417
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (752,467) 4,619,416 (1,617,622) 1,581,594 3,830,921 505,142
OTHER FINANCING SOURCES (USES)
Transfers in 2,564,997 - 3,822,718 339,800 6,727,515 2,695,649
Transfers (out) - (4,619,415) (216,667) (2,388,319) (7,224,401) (1,215,395)
Sale of general capital assets - - - - - 13,231
TOTAL OTHER FINANCING SOURCES (USES) 2,564,997 (4,619,415) 3,606,051 (2,048,519) (496,886) 1,493,485
NET CHANGE IN FUND BALANCE 1,812,530 1 1,988,429 (466,925) 3,334,035 1,998,627
FUND BALANCE, beginning of year 7,951,468 - 2,380,833 1,758,641 12,090,942 10,092,315
FUND BALANCE, end of year $ 9,763,998 $ 1 $ 4,369,262 $ 1,291,716 $ 15,424,977 $ 12,090,942
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, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
Amounts reported for governmental activities in the statement of net activities
are different because:
2022 2021
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 3,334,035 $ 1,998,627
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. 2,878,911 712,910
This is the amount of depreciation recorded in the current period. (1,603,302) (1,577,916)
This is the book value of dispositions recorded in the current period. (868) (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. 80,000 75,000
This is the change in accrued interest payable on long-term obligations. 1,420 1,332
This is the change in accrued compensated absences during the year. (7,455) (51,549)
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. (27,837) 4,673
This amount represents the change in deferred outflows related to OPEB. (3,674) (9,413)
This amount represents the change in the total OPEB liability. 7,282 (20,934)
Pension expense is reported in the statement of activities which differs from
pension expenditures as reported in the governmental finds:
This amount represents the change in deferred inflows related to pensions. (3,168,190) 169,838
This amount represents the change in deferred outflows related to pensions. (870,524) 482,592
This amount represents the change in the net pension liability(asset). 5,947,278 440,520
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 6,567,076 $ 2,052,747
See accompanying notes.
19
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Totals Totals
ASSETS
Current assets:
Equity in pooled cash and investments $ 13,846,033 $ 197,935 $ 451,346 $ 365,988 $ 14,861,302 $ 13,356,204
Cash with fiscal agent 1,212,896 181,237 - - 1,394,133 -
Accounts receivables, net 704,365 38,245 40,829 - 783,439 802,438
Due from other governments - - - - - 131,817
Leases receivable - current 50,502 - - - 50,502 -
Inventory 49,872 - - - 49,872 60,763
Total current assets 15,863,668 417,417 492,175 365,988 17,139,248 14,351,222
Noncurrent assets:
Net pension asset 511,011 - - 79,782 590,793 -
Leases receivable - noncurrent 930,926 - - - 930,926 -
Restricted assets:
Equity in pooled cash and investments 2,825,069 - - - 2,825,069 2,122,551
Capital assets:
Non-depreciable 1,860,217 1,261,368 - - 3,121,585 2,356,711
Depreciable, net 22,113,271 7,465,837 1,574 52,734 29,633,416 31,639,757
Total noncurrent assets 28,240,494 8,727,205 1,574 132,516 37,101,789 36,119,019
Total assets 44,104,162 9,144,622 493,749 498,504 54,241,037 50,470,241
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 374,398 - - 58,453 432,851 715,862
Deferred outflows - refunding loss 281,731 42,098 - - 323,829 431,772
Deferred outflows related to OPEB 12,109 2,342 - 2,285 16,736 19,336
Total deferred outflows of resources 668,238 44,440 - 60,738 773,416 1,166,970
Continued…
See accompanying notes.
20
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (concluded)
SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Totals Totals
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 469,648 $ 35,938 $ 293,887 $ 19,139 $ 818,612 $ 793,526
Construction costs payable 23,677 45,872 - - 69,549 52,127
Due to other governments 10,676 - - 51,980 62,656 50,698
Due to other funds 586,446 - - - 586,446 -
Unearned revenue - - - - - 181,993
Compensated absences 44,339 2,378 - 14,861 61,578 58,800
Bonds and notes payable, current 1,604,100 172,900 - - 1,777,000 1,807,856
Total current liabilities 2,738,886 257,088 293,887 85,980 3,375,841 2,945,000
Noncurrent liabilities:
Liabilities payable from restricted assets:
Customer deposits 741,255 - - - 741,255 717,809
Interest payable 82,636 8,337 - - 90,973 108,258
Compensated absences 234,403 14,151 - 54,047 302,601 279,208
Other postemployment obligation payable 78,175 15,120 - 14,748 108,043 118,157
Net pension liability - - - - - 1,301,422
Bonds and notes payable, noncurrent portion 7,941,250 542,750 - - 8,484,000 10,261,000
Total noncurrent liabilities 9,077,719 580,358 - 68,795 9,726,872 12,785,854
Total liabilities 11,816,605 837,446 293,887 154,775 13,102,713 15,730,854
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 804,825 - - 125,654 930,479 8,643
Deferred inflows related to OPEB 46,649 9,023 - 8,801 64,473 57,449
Deferred inflows related to leases 966,919 - - - 966,919 -
Total deferred inflows of resources 1,818,393 9,023 - 134,455 1,961,871 66,092
NET POSITION
Net investment in capital assets 14,686,192 8,007,781 1,574 52,734 22,748,281 22,307,257
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) 1,307,707 - - - 1,307,707 1,191,635
Building code enforcement - - - 217,278 217,278 127,772
Unrestricted 14,212,587 334,812 198,288 - 14,745,687 11,282,685
Total net position $ 31,137,402 $ 8,342,593 $ 199,862 $ 270,012 $ 39,949,869 $ 35,840,265
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, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Totals Total
OPERATING REVENUES:
Charges for services
Customer charges $ 10,497,239 $ 909,139 $ 2,007,472 $ 473,873 $ 13,887,723 $ 13,077,606
Franchise permits - - 16,500 - 16,500 15,500
Miscellaneous revenues 78,422 - - - 78,422 68,945
Total operating income 10,575,661 909,139 2,023,972 473,873 13,982,645 13,162,051
OPERATING EXPENSES:
Personnel services 1,687,884 204,956 31,712 408,638 2,333,190 2,574,572
Contractual services 535,134 127,733 1,679,841 14,127 2,356,835 2,326,252
Supplies 421,328 27,917 - 1,612 450,857 557,944
Repairs and maintenance 471,440 40,757 5,901 16,946 535,044 1,237,682
Utilities 402,707 - - - 402,707 349,132
Depreciation 1,914,543 548,953 450 18,429 2,482,375 2,586,982
Intergovernmental charges 1,106,562 306,997 355,993 38,387 1,807,939 1,690,011
Other expenses 256,871 36,801 1,908 11,678 307,258 290,359
Total operating expenses 6,796,469 1,294,114 2,075,805 509,817 10,676,205 11,612,934
OPERATING INCOME (LOSS) 3,779,192 (384,975) (51,833) (35,944) 3,306,440 1,549,117
NONOPERATING REVENUE (EXPENSE)
Connection charges 44,895 - - - 44,895 34,333
Franchise fees - - 52,241 - 52,241 55,485
Investment earnings (loss) (457,602) 28,444 (12,078) (6,220) (447,456) (49,686)
Interest expense (290,348) (32,117) - - (322,465) (451,803)
Other, net 7,025 - - - 7,025 (128,781)
Total nonoperating revenues (expense) (696,030) (3,673) 40,163 (6,220) (665,760) (540,452)
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, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Totals Total
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 3,083,162 $ (388,648) $ (11,670) $ (42,164) $ 2,640,680 $ 1,008,665
CAPITAL CONTRIBUTIONS
System development charges 931,013 - - - 931,013 178,312
Capital grants and contributions 41,025 - - - 41,025 134,447
Total capital contributions 972,038 - - - 972,038 312,759
TRANSFERS
Transfers in 2,144,251 424,533 1,407 113,241 2,683,432 285,000
Transfers out (1,369,962) (477,000) (339,584) - (2,186,546) (1,765,254)
Total transfers 774,289 (52,467) (338,177) 113,241 496,886 (1,480,254)
CHANGE IN NET POSITION 4,829,489 (441,115) (349,847) 71,077 4,109,604 (158,830)
NET POSITION, beginning of year 26,307,913 8,783,708 549,709 198,935 35,840,265 35,999,095
NET POSITION, end of year $ 31,137,402 $ 8,342,593 $ 199,862 $ 270,012 $ 39,949,869 $ 35,840,265
See accompanying notes.
23
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Total Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 10,446,349 $ 925,522 $ 2,074,232 $ 483,449 $ 13,929,552 $ 13,203,356
Payments to suppliers (3,057,119) (519,561) (2,180,482) (75,795) (5,832,957) (6,081,134)
Payments for salaries and benefits (2,179,940) (290,927) (33,159) (480,175) (2,984,201) (2,946,189)
Net cash flows from operating activities 5,209,290 115,034 (139,409) (72,521) 5,112,394 4,176,033
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers to other funds (1,369,962) (477,000) (339,584) - (2,186,546) (1,480,254)
Transfers from other funds 2,144,251 424,533 1,407 113,241 2,683,432 -
Cash received from other funds 586,446 - - - 586,446 -
Connection charges received 44,895 - - - 44,895 34,333
Franchise fees received - - 52,241 - 52,241 55,485
Net cash flows from noncapital financing activities 1,405,630 (52,467) (285,936) 113,241 1,180,468 (1,390,436)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets, net of related payables (1,186,510) (36,976) - - (1,223,486) (380,993)
Principal paid on notes, bonds and lease obligations (1,603,428) (204,428) - - (1,807,856) (6,872,172)
Interest paid on borrowings and other debt costs (211,753) (20,054) - - (231,807) (393,657)
Proceeds from long-term debt - - - - - 5,193,000
Proceeds from the sale of capital assets 35,244 - - - 35,244 143,451
Capital contributions, grants and impact fees received,
net of change in related receivables 972,038 - 96,573 - 1,068,611 633,232
Net cash flows from capital and related financing activities (1,994,409) (261,458) 96,573 - (2,159,294) (1,677,139)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on invested funds (457,602) (1,454) (73,568) (6,220) (538,844) (49,686)
Other income 7,025 - - - 7,025 6,300
Net cash flows from investing activities (450,577) (1,454) (73,568) (6,220) (531,819) (43,386)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,169,934 (200,345) (402,340) 34,500 3,601,749 1,065,072
CASH AND CASH EQUIVALENTS, beginning of year 13,714,064 579,517 853,686 331,488 15,478,755 14,413,683
CASH AND CASH EQUIVALENTS, end of year $ 17,883,998 $ 379,172 $ 451,346 $ 365,988 $ 19,080,504 $ 15,478,755
As shown in the Accompanying Financial Statements
Equity in cash and investments $ 13,846,033 $ 197,935 $ 451,346 $ 365,988 $ 14,861,302 $ 13,356,204
Restricted equity in cash and investments 2,825,069 - - - 2,825,069 2,122,551
Total cash and cash equivalents $ 17,883,998 $ 379,172 $ 451,346 $ 365,988 $ 19,080,504 $ 15,478,755
Noncash financing and investing activities:
Amortization of refunding loss $ 93,911 $ 14,032 $ - $ - $ 107,943 $ 107,944
Continued…
See accompanying notes.
24
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Business Type Activities - Enterprise Funds
(non-major)
Building Code 2021
Utility Stormwater Sanitation Enforcement Total Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ 3,779,192 $ (384,975) $ (51,833) $ (35,944) $ 3,306,440 $ 1,549,117
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense 1,914,543 548,953 450 18,429 2,482,375 2,586,982
(Increase) decrease in inventory and prepaids 10,891 - - - 10,891 -
(Increase) decrease in accounts receivable (47,644) 16,383 50,260 - 18,999 4,530
(Increase) decrease in leases receivable 58,334 - - - 58,334 -
Increase (decrease) in lease related deferred inflows (72,843) - - - (72,843) -
(Increase) decrease in amounts due from other governments - - - 9,576 9,576 (11,405)
Increase (decrease) in accounts payable 134,326 20,644 (136,839) 6,955 25,086 370,247
Increase (decrease) in compensated absences 25,951 2,597 - 8,299 36,847 31,665
Increase (decrease) in amounts due to other governments (8,294) - - - (8,294) -
Increase (decrease) in customer deposits 23,446 - - - 23,446 48,180
(Increase) decrease in OPEB related deferred outflows 1,829 425 - 346 2,600 3,883
Increase (decrease) in the total OPEB liability (6,997) (1,788) - (1,329) (10,114) 8,194
Increase (decrease) in OPEB related deferred inflows 5,238 802 - 984 7,024 (2,058)
(Increase) decrease in pension related deferred outflows 152,667 106,026 1,745 22,573 283,011 (28,360)
Increase (decrease) in the net pension liability (958,194) (192,753) (3,171) (147,304) (1,301,422) (365,383)
(Increase) decrease in the net pension asset (511,011) - - (79,782) (590,793) -
Increase (decrease) in pension related deferred inflows 798,461 (1,280) (21) 124,676 921,836 (19,559)
Increase (decrease) in unearned revenue and other (90,605) - - - (90,605) -
Net cash flows from operating activities $ 5,209,290 $ 115,034 $ (139,409) $ (72,521) $ 5,112,394 $ 4,176,033
See accompanying notes.
25
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2021
Pension Trust
Funds
ASSETS 2022 2021
Cash and cash equivalents $ 478,118 $ 866,209
Due from other governments - 137,840
Accrued income 47,643 38,822
Investments at fair value 36,131,971 42,152,119
Total assets 36,657,732 43,194,990
LIABILITIES
Accounts payable and accrued liabilities 10,900 -
Due to City 255,259 62,891
Total Liabilities 266,159 62,891
NET POSITION
Restricted for pension benefits $ 36,391,573 $ 43,132,099
See accompanying notes.
26
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
Pension Trust
Funds
2022 2021
ADDITIONS
Contributions:
City $ 1,879,108 $ 2,119,081
Plan members 259,658 255,665
State of Florida 144,821 274,267
Total contributions 2,283,587 2,649,013
Investment income (6,449,213) 7,948,224
Less investment expenses: (167,816) (160,383)
Net investment income (6,617,029) 7,787,841
Total additions (4,333,442) 10,436,854
DEDUCTIONS
Administrative expenses 86,955 65,266
Payments to retirees and participants 2,320,129 2,123,162
Total deductions 2,407,084 2,188,428
CHANGE IN NET POSITION (6,740,526) 8,248,426
NET POSITION, beginning of year 43,132,099 34,883,673
NET POSITION, end of year $ 36,391,573 $ 43,132,099
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
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 whose 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 include appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that organization; or (2) the
potential for that organization to provide specific benefits to or impose specific fin ancial 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 app lication of
these criteria, the City reports the following fiduciary component units:
• General Employees’ Retirement Plan
• Police Officers’ Retirement Plan
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the non-fiduciary activities of the City. For the most part, the effect of inter -fund activity has
been removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent
on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.
Indirect costs are included in the program expense reported for individual functions and activities. Program
revenues include: (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services,
or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or activity. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though the latter are excluded from the government-wide financial statements. Major individual governmental
funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
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 ar e
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related
cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items
are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
As a general rule, the effect of inter-fund activity has been eliminated from the government -wide financial
statements. The major exception to this general rule is charges between the City’s water and sewer function and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods, services, or
privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special
assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets; (2) Restricted; or (3)
Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to
be available if they are collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual account ing. However, debt service expenditures, 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, and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. All other revenue items are considered to be mea surable and available only when cash is
received by the City.
The City reports the following major governmental funds:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
• The American Rescue Plan Act (ARPA) Special Revenue Fund is used to account for the receipt and
expenditure of ARPA funding to support the City’s recovery from the COVID -19 pandemic.
• The Capital Projects Fund is used to account for the financial resources to be used for the acquisition or
construction of major capital facilities and improvement projects (other than those financed by proprietary
funds or special revenue funds).
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
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 purp oses.
• Debt Service Fund – The debt service fund is used to account for the accumulation of resources for, and
payment of, general long-term debt principal, interest and related costs.
• Pension Trust Funds—These funds account for the activities of the Employees’ Retirement System, which
accumulates resources for pension benefit payments to qualified police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – non-spendable, restricted, committed, assigned, and unassigned:
• Non-Spendable Fund Balance—amounts that are not in spendable form (such as inventory) or are required
to be maintained intact.
• Restricted Fund Balance—amounts constrained to specific purposes by their providers (such as grantors,
bondholders, and higher levels of government), through constitutional provisions, or by enabling
legislation.
• Committed Fund Balance—amounts constrained to specific purposes by the City itself, using its highest
level of decision-making authority (i.e., ordinance passed by City Commission). To be reported as
committed, amounts cannot be used for any other purpose unless the City takes the same highest level
action to remove or change the constraint.
• Assigned Fund Balance—amounts the City intends to use for a specific purpose. Intent can be expressed
by the City Commission or by an official or body to which the City Commission delegates the authority.
• Unassigned Fund Balance—amounts that are available for any purpose. Positive amounts are reporte d
only in the General Fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
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 restricted
resources first, then unrestricted resources as they are needed. When unrestricted resources (committed, assigned,
and unassigned) are available for use in any governmental fund, it is the City’s practice to use commi tted 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 fun d balance commitment is further
indicated in the budget document as a designation or commitment of the fund. Assigned fund balance is established
by City Commission through adoption or amendment of the budget as intended for specific purpose (such as the
purchase of fixed assets, construction, debt service, or for other purposes).
In the General Fund, the City strives to maintain a fund balance operating reserve of approximately 25% of the
subsequent year’s budgeted General Fund payroll and operating expen ditures.
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 control led 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 o f 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, 2022
31
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
The proprietary funds use this pool as a demand deposit accounts, and accordingly, all amounts in the pool are
considered cash and cash equivalents for the purposes of the statement of cash flows.
Investments are valued at fair market value (see Note 2).
Receivables
Receivables are recorded at their net realizable value.
Inter-Fund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of inter-fund loans) or
“advances to/from other funds” (i.e., the non-current portion of inter-fund loans).
Inventories
Inventories consisting principally of expendable materials, supplies, and fuel are determined by physical count at the
City’s year-end on an annual basis and are valued at the lower of cost (first -in, first-out) or market. On the balance
sheet - governmental funds, the inventory balance reported is considered non -spendable fund balance, which
indicates that it does not constitute “available spendable resources” even though it is a component of net current
assets. The cost of governmental fund-type inventories is recorded as expenditure when consumed.
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to various bond indenture
agreements and City ordinances. These assets are legally restricted for specific purposes, such as debt service, new
construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City’s funds, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, drainage
improvements, sidewalks, and similar items), are reported in the applicable governmental or business -type activities
columns in the government-wide financial statements. Property, plant and equipment with initial, individual costs
that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Capital assets
are recorded at historical cost or estimated historical cost if purchased or constructed. Don ated 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, 2022
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 procee ds received,
are reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide and proprietary fund
financial statements.
Deferred Inflows/Outflows of Resources
Deferred inflows of resources reported on applicable governmental fund types represent revenues, which are
measurable but not available in accordance with the modified accrual basis of accounting. The deferred inflows will
be recognized as revenue in the fiscal year they are earned or become available. Deferred outflows of resources
represent consumption of net assets that is applicable to a future reporting period. Deferred outflows have a
positive effect on net position, similar to assets. Deferred inflows of resources represent the acquisition of net assets
that is applicable to a future reporting period. Deferred inflows have a negative effect on net position, similar to
liabilities.
Unamortized Refunding Loss—the difference between the net reacquisition cost of new debt and the net carrying
amount of the old debt is recorded as a deferred outflow of resources. The unamortized refunding loss is recognized
as expense over the remaining term of the new debt using the straight-line method.
Pension and OPEB Related—the difference between expected and actual experience with regard to economic or
demographic factors and changes to assumptions in the measurement of total pension and OPEB liability and the
differences between expected and actual earnings on pension plan investments, are reported as deferred inflows or
outflows of resources, to be recognized in expense in future years. Contributions made subsequent to the
measurement date, but prior to the reporting date, are reported as deferred outflows of r esources.
Lease related – represents the total unrecognized revenue to be received from the City’s antenna placement leases.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
33
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements. Grant revenues are
recorded using the modified accrual basis in governmental funds and the accrual basis in the proprietary funds.
Restricted grant revenues, which are received but not expended, are recorded as unearned revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the Property Appraiser
and Tax Collector of the City of Jacksonville, Florida. General property taxes are recorded as received, in cash, which
approximates taxes levied less discounts for the current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the following year. Discounts
are allowed for early payment. On or prior to June 1, interest -bearing certificates are sold for all uncollected real
property taxes. Unsold certificates are held by the City of Jacksonville, Florida.
Inter-Fund Transactions
During the course of normal operations, the City has various transactions between funds to construct assets and
comply with local ordinances and other legal restrictions. These transactions are reflected as transfers. In addition,
certain transfers have been made between systems and accounts of the utility enterprise fund as required by bond
covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in total. Such information
does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting
principles. Accordingly, such information should be read in conjunction with the City’s financial statements for the
year ended September 30, 2021, from which the summarized information was derived.
Leases:
Lessee: The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-
wide financial statements when the initial, individual value of the lease liability is $1,000 or more. For the year ended
September 30, 2022, the City reports no right-to-use lease assets or lease liabilities.
At the commencement of a lease, the City initially measures the lease liability at the present value of payments
expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion
of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for
lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the
lease asset is amortized on a straight‐line basis over its useful life.
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to
discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
• The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged
by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the
discount rate for leases.
• The lease term includes the noncancellable period of the lease. Lease payments included in the
measurement of the lease liability are composed of fixed payments and purchase option price that the City
is reasonably certain to exercise.
Lease assets are reported with other capital assets and lease liabilities are reported with long‐term debt on the
statement of net position.
Lessor: The City is a lessor for several noncancellable antenna placement leases. The City recognizes a lease
receivable and a deferred inflow of resources in the business-type activities and the enterprise fund financial
statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments
expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal
portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of
the lease receivable, adjusted for lease payments received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenu e over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the
expected lease receipts to present value, (2) lease term, and (3) lease receipts.
• The City uses the stated interest rate in the lease agreement if available and if not, utilizes a high-quality
municipal bond rate based on the S&P Municipal Bond 20 Year High Grade Rate Index as published by S&P
Dow Jones Indices nearest to the date of lease commencement.
• The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement
of the lease receivable are composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure
the lease asset, receivable, liability and/or deferred inflows of resources if certain changes occur that are expected
to significantly affect the amount of the lease liability.
Implementation of New GASB Pronouncements
During the fiscal year ended September 30, 2022, the City implemented the provisions of GASB Statement No. 87 –
Leases. The objective of this Statement is to better meet the information needs of financial statement u sers by
improving accounting and financial reporting for leases by governments. 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. See Note 4 for more
information on the effect of the implementation of this statement.
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. 94, “Public-Private and Public-Public Partnerships and Availability Payment Arrangements.”
The primary objective of this Statement is to improve financial reporting by addressing issues related to public -
private and public-public partnership arrangements. This Statement also provides guidance for accounting and
financial reporting for availability payment arrangements. This statement is effective for the 2023 fiscal year
and is currently under review and the City will consider the impact, if any, upon financial reporting
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
35
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)
• 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
effective for the 2023 fiscal year and is currently under review and the City will consider the impact, if any, upon
financial reporting.
• Statement No. 101, “Compensated Absences.”
The objective of this Statement is to better meet the information needs of financial statement users by updating the
recognition and measurement guidance for compensated absences. That objective is achieved by aligning the
recognition and measurement guidance under a unified model and by amending certain previously required
disclosures. This statement is effective for the 2025 fiscal year and will be evaluated in the future closer to the
implementation period.
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, 2022, the carrying amount of cash on hand and on deposit with banks, including interest -bearing
deposits was $12,165,631, and the related bank balance was $12,686,947. Monies which are placed on deposit with
financial institutions in the form of demand deposit accounts, time deposit accounts, and certificates of deposit are
defined as public deposits. All of the City’s public deposits are held in qualified public depositories pursuant to
Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act ). Under the Act, all qualified public
depositories are required to pledge eligible collateral having a market value equal to or greater than the average
daily or monthly balance of all public deposits, times the depository’s collateral pledged level. Th e pledging level
may range from 25% to 125% depending upon the depository’s financial condition and establishment period. All
collateral must be deposited with an approved financial institution.
Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral
and, if necessary, assessments against other qualified public depositories of the same type as the depository in
default.
The City elected to adopt a written investment policy as authorized under Fl orida Statutes.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
36
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, 2022:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Accrued interest $ 144,544 $ 144,544 $ - $ - $ - 144,544
Money market funds / cash 128,923 128,923 - - - 128,923
Corporate bonds 9,080,399 951,575 8,058,527 70,297 - 9,080,399
U.S. Treasury Obligations and
Federal Agency Securities 15,183,419 969,513 14,213,906 - - 15,183,419
Florida PRIME 24,773 24,773 - - - 24,773
Total $ 24,562,058 $ 2,219,328 $ 22,272,433 $ 70,297 $ - $ 24,562,058
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 wit h GASB Cod. Sec. In5. As of
September 30, 2022, there were no redemption fees, maximum transaction amounts or any other requirements
that service to limit the City’s access to one hundred percent of their account value. The fair value of the City’s
position in the pool in the same as the value of the pool shares.
The City’s fixed income investment balances as of on September 30, 2022, are comprised of the following items:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 0.46%
Corporate Bonds Aa2 0.76%
Corporate Bonds Aa3 0.74%
Corporate Bonds A1 5.37%
Corporate Bonds A2 6.91%
Corporate Bonds A3 5.58%
Corporate Bonds Baa1 6.91%
Corporate Bonds Baa2 4.91%
Corporate Bonds Baa3 0.80%
Corporate Bonds BBB- 0.00%
Corporate Bonds Not Rated 5.04%
U.S. Treasury Obligations and Federal Agency Securities Aaa 56.29%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 6.23%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
37
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,
2022:
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 $ 595,628 $ 595,628 $ - $ - $ - $ 595,628
Corporate bonds 2,174,449 70,019 1,878,417 226,013 - 2,174,449
U.S. Treasury Obligations and
Federal Agency Securities 3,120,651 629,759 1,751,248 450,301 289,343 3,120,651
Total $ 5,890,728 $ 1,295,406 $ 3,629,665 $ 676,314 $ 289,343 $ 5,890,728
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 $ 449,722 $ 449,722 $ - $ - $ - $ 449,722
Corporate bonds 1,318,546 41,437 978,863 298,246 - 1,318,546
U.S. Treasury Obligations and
Federal Agency Securities 1,902,131 376,670 1,071,746 279,757 173,958 1,902,131
Total $ 3,670,399 $ 867,829 $ 2,050,609 $ 578,003 $ 173,958 $ 3,670,399
The City’s pension trust fund fixed income investment balances as of September 30, 2022, are comprised of the
following items:
General Employees’ Pension Plan:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 2.98%
Corporate Bonds Aa2 0.00%
Corporate Bonds A1 4.99%
Corporate Bonds A2 7.44%
Corporate Bonds A3 3.84%
Corporate Bonds Baa1 2.40%
Corporate Bonds Baa2 10.21%
Corporate Bonds Baa3 9.20%
U.S. Treasury Obligations and Federal Agency Securities AAA 49.00%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 9.94%
100.00%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
38
NOTE 2 – CASH AND INVESTMENTS (cont…)
Police Officers Pension Plan:
Percentage of
Moody's Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds Aaa 2.91%
Corporate Bonds Aa2 0.00%
Corporate Bonds A1 5.05%
Corporate Bonds A2 7.47%
Corporate Bonds A3 3.80%
Corporate Bonds Baa1 2.38%
Corporate Bonds Baa2 10.19%
Corporate Bonds Baa3 9.14%
U.S. Treasury Obligations and Federal Agency Securities AAA 49.06%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 10.00%
100.00%
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Fund’s and the City’s General
Employees’ Retirement System Trust Fund’s investment policies to, at a minimum, limit 80% of the total
fixed income portfolio to those that are rated investment grade of higher. The Police Officers’ Retirement
System Trust Fund’s investment policy defines investment grade as “BBB”, Baa”, or their equivalent.
Also, no more than 10% (at cost) of the fixed income portfolio total value can be invested in the securities
of any single corporate issuer. The maximum allocation to International Equities is 25%.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of the failure
of the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the exposure
to custodial credit risk for deposits or investments, other than the following provision for deposits: The
Finance Director may execute a third-party Custodial Safekeeping Agreement with a commercial bank
having trust powers or a trust company which is chartered by the United States government or the State
of Florida. All securities purchased and/or collateral obtained by the City shall be properly designated as
an asset of the City and held in safekeeping by the trust department or trust company, and no withdrawal
of such securities, in whole or in part, shall be made from safekeeping, except by an authorized City staff
member. The third-party Custodial Safekeeping Agreement shall include letters of authority from the City
with details as to responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure or other
unforeseen mishaps, including liability of each party.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
39
NOTE 2 – CASH AND INVESTMENTS (concluded)
Fair Value Measurements
The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels:
• Level 1 Inputs―are quoted prices (unadjusted) for identical assets or liabilities in active markets that a
government can access at the measurement date.
• Level 2 Inputs―are inputs other than quoted prices included within Level 1 that are observable for an asset
or liability, either directly or indirectly.
• Level 3 Inputs―are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price
for an identical asset or liability is not observable, a government should measure fair value using another valuation
technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The City’s investments are measured at fair value on a recurring basis. Fair value measurements are categorized
based on the valuation inputs used to measure an asset’s fair value in the hierarchy described above.
The fair value measurements for the City’s investments are as follows on September 30, 2022:
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 $ 144,544 $ 144,544 $ - $ -
Money Markets 153,696 153,696 - -
Corporate Bonds 9,080,399 - 9,080,399 -
U.S. Treasury Obligations and
Federal Agency Securities 15,183,419 - 15,183,419 -
Subtotal - City Investments 24,562,058 298,240 24,263,818 -
General Employees' Pension Plan:
Money Markets 595,628 595,628 - -
Corporate Bonds 2,174,449 - 2,174,449 -
U.S. Treasury Obligations and
Federal Agency Securities 3,120,651 - 3,120,651 -
Mutual Funds - Equities 2,636,675 2,636,675 - -
ETFs 3,307,481 3,307,481 - -
Equities 10,443,667 10,443,667 - -
Subtotal - General Employees' Pension Plan 22,278,551 16,983,451 5,295,100 -
Police Officers' Pension Plan:
Money Markets 449,722 449,722 - -
Corporate Bonds 1,318,546 - 1,318,546 -
U.S. Treasury Obligations and
Federal Agency Securities 1,902,131 - 1,902,131 -
Mutual Funds - Fixed Income - - - -
Mutual Funds - Equities 1,618,801 1,618,801 - -
ETFs 2,023,257 2,023,257 - -
Equities 6,411,576 6,411,576 - -
ICMA Self Directed 129,387 129,387 - -
Subtotal - Police Officers' Pension Plan 13,853,420 10,632,743 3,220,677 -
Total Investments Measured at Fair Value $ 60,694,029 $ 27,914,434 $ 32,779,595 $ -
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
40
NOTE 3 – RECEIVABLES
Receivables, net of the allowance for doubtful accounts on September 30, 202 2, consist of the following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General Fund $ 1,077 $ - $ 1,077
Utility Fund 1,241,665 (537,300) 704,365
Stormwater Fund 74,173 (35,928) 38,245
Sanitation Fund 140,939 (100,110) 40,829
Total $ 1,457,854 $ (673,338) $ 784,516
Included in accounts receivable are $318,579 of water and sewer revenues earned, but not billed as of September
30, 2022.
NOTE 4 – LEASES
Lease Receivable – In 2022, the City implemented GASB Statement No. 87, Leases and as a result
identified one reportable lease receivables related to antenna lease agreements originally executed in
2005. The lease term includes an initial 5-year period with the option of 5 separate 5-year renewal periods
thereafter. The lease term ends in 2035 and the lease payments are increased by 3.3% each year.
The City also entered into a new antenna placement lease during 2022 whose lease term includes an initial
term of 5 years with the option of 4 5-year renewal periods thereafter ending in 2046. The lease payments
are increased by 2% each year.
The City recognized $75,934 in lease revenue and $13,842 of interest revenue during the fiscal year
related to these two leases. On September 30, 2022, the City’s receivable for lease payments was
$981,427 and reported in the City’s utility enterprise fund. Also, the City has a deferred inflow of resources
associated with this lease that will be recognized as revenue over the lease term. On September 30, 2022,
the balance of the deferred inflow of resources was $966,919.
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
41
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2022, is as follows:
Balance Balance
October 1, September 30,
2021 Transfers Increases Decreases 2022
Governmental Activities:
Capital assets, not being depreciated:
Land $ 11,913,572 $ - $ 177,223 $ - $ 12,090,795
Construction in process 556,587 (8,481) 1,141,406 - 1,689,512
Total capital assets, not being depreciated 12,470,159 (8,481) 1,318,629 - 13,780,307
Capital assets, being depreciated:
Buildings 9,673,984 - 136,896 - 9,810,880
Intangible assets 525,445 - - - 525,445
Improvements other than buildings 42,851,459 8,481 838,223 (868) 43,697,295
Machinery and equipment 6,762,548 - 585,163 (64,972) 7,282,739
Total capital assets, being depreciated 59,813,436 8,481 1,560,282 (65,840) 61,316,359
Less accumulated depreciation for:
Buildings (2,918,700) - (180,733) - (3,099,433)
Intangible assets (438,760) - (15,802) - (454,562)
Improvements other than buildings (19,114,375) - (730,160) - (19,844,535)
Machinery and equipment (5,612,968) - (676,607) 64,972 (6,224,603)
Total accumulated depreciation (28,084,803) - (1,603,302) 64,972 (29,623,133)
Total capital assets being depreciated, net 31,728,633 8,481 (43,020) (868) 31,693,226
Governmental activities capital assets, net $ 44,198,792 $ - $ 1,275,609 $ (868) $ 45,473,533
Business-type activities:
Capital assets, not being depreciated:
Land $ 1,656,018 $ - $ - $ - $ 1,656,018
Construction-in-progress 700,693 - 857,279 (92,405) 1,465,567
Total capital assets, not being depreciated 2,356,711 - 857,279 (92,405) 3,121,585
Capital assets, being depreciated:
Buildings 4,354,563 - - - 4,354,563
Intangible assets 244,709 - - - 244,709
Improvements other than buildings 87,281,977 - 254,800 - 87,536,777
Machinery and equipment 3,895,498 - 221,234 - 4,116,732
Total capital assets, being depreciated 95,776,747 - 476,034 - 96,252,781
Less accumulated depreciation for:
Buildings (4,334,061) - (4,892) - (4,338,953)
Intangible assets (31,614) - (190) - (31,804)
Improvements other than buildings (56,764,533) - (2,144,052) - (58,908,585)
Machinery and equipment (3,006,782) - (333,241) - (3,340,023)
Total accumulated depreciation (64,136,990) - (2,482,375) - (66,619,365)
Total capital assets being depreciated, net 31,639,757 - (2,006,341) - 29,633,416
Business-type activities capital assets, net $ 33,996,468 $ - $ (1,149,062) $ (92,405) $ 32,755,001
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
42
NOTE 5 – CAPITAL ASSETS (concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government $ 187,233
Public safety 487,762
Transportation 587,540
Parks and recreation 340,767
Total depreciation expense - governmental activities $ 1,603,302
Business-type Activities:
Utility $ 1,914,543
Stormwater 548,953
Sanitation 450
Building Code Enforcement 18,429
Total depreciation expense - business-type activities $ 2,482,375
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
43
NOTE 6 – LONG-TERM OBLIGATIONS
The following is a summary of the changes in long-term obligations of the City for the year ended September 30, 2022:
Balance Balance Amounts
October 1, September 30, Due within
2021 Increases Decreases 2022 One Year
Governmental Activities:
Long-term debt:
Capital Improvement Revenue Bond, Series 2018 $ 1,255,000 $ -$ (80,000) $ 1,175,000 $ 80,000
Total long-term debt 1,255,000 -(80,000) 1,175,000 80,000
Other liabilities:
OPEB obligation 291,198 -(7,282) 283,916 -
Net pension liability 4,592,057 -(4,592,057) - -
Compensated absences 998,564 7,455 - 1,006,019 193,015
Total other liabilities 5,881,819 7,455 (4,599,339) 1,289,935 193,015
Total long-term obligations $ 7,136,819 $ 7,455 $ (4,679,339) 2,464,935 $ 273,015
Less amounts due in one year (273,015)
Total noncurrent obligations due in more than one year $ 2,191,920
Business-type Activities:
Long-term debt:
Utility System Revenue Refunding Bond, Series 2014 $ 6,805,000 $ -$ (1,300,000) $ 5,505,000 $ 1,330,000
Refunding Bank Loan Series 2021 5,193,000 -(437,000) 4,756,000 447,000
Vehicle Note Payable - 2018 70,856 -(70,856) - -
Total bonds and notes payable 12,068,856 -(1,807,856) 10,261,000 1,777,000
Other liabilities:
OPEB obligation 118,157 -(10,114) 108,043 -
Net pension liability 1,301,422 -(1,301,422) - -
Compensated absences 338,008 26,171 - 364,179 61,578
Total other liabilities 1,757,587 26,171 (1,311,536) 472,222 61,578
Total long-term liabilities $ 13,826,443 $ 26,171 $ (3,119,392) 10,733,222 $ 1,838,578
Less amounts due in one year (1,838,578)
Net long-term liabilities in excess of one year $ 8,894,644
Notes to the Long-Term Obligations Table:
Long term liabilities, including accumulated compensated absences, OPEB liability and the City’s net pension
liabilities, are typically liquidated by the individual fund to which the liability is directly associated.
All of the City’s long-term debt arose through direct borrowings or direct placements.
Governmental Activities:
•Capital Improvement Revenue Bond, Series 2019 – Payable in annual installment of principal and
semiannual installments of interest through October 1, 2033, bearing coupon rates of 3.550%, secured
solely by a pledge of non-advalorem revenues.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
44
NOTE 6 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
Business-type Activities
• Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual Installments of Principal and
Semiannual Installments of Interest Through October 1, 2025, Bearing Coupon Rates of 2.330%, Secured
Solely by a Pledge of and Lien on Net Water and Sewer System Revenues and Cert ain Other Revenues
as Defined in the Bond Ordinance.
• Refunding Bank Loan Series 2021 was issued on May 17, 2021 in the amount of $5,193,000 to refund the
FDEP loans #DW160710 and #WW160700. The FDEP loans were originally used for water and wastewater
system improvements. The Refunding Bank Loan Series 2021 is payable in semiannual installments of
principal and interest through May 15, 2032 with an effective interest rate of 1.69% and is secured solely
by a pledge of net water and sewer system revenues, after payment of all yearly payment obligations on
account of the senior revenue obligations, as defined in the loan agreement.
• Vehicle Note Payable – 2018 - The City entered into a lease agreement for financing the acquisition of a
Vac-Con Vacuum Truck. Payments including principal and interest were due each September 1, until 2022
at an interest rate of 3.98%.
Notes to the Long-Term Obligations Table:
The annual requirements to amortize all revenue bonds and loans payable outstanding on September 30, 202 2, are
as follows:
Governmental Activities Business-type Activities
Fiscal Year Ending Principal Interest Principal Interest
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 72,057
2027 90,000 28,045 478,000 47,463
2028-2032 510,000 88,218 2,445,000 113,084
2033-2037 235,000 8,431 - -
Total $ 1,175,000 $ 267,937 $ 10,261,000 $ 689,167
Interest and amortization incurred during the year ended September 30, 2022, amounted to $493,516. Of the
amount incurred, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with bond reso lutions. As of
September 30, 2022, and during the year then ended, the City was in compliance with those ratios.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
45
NOTE 6 – LONG-TERM OBLIGATIONS (concluded)
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, 202 2. The
following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the
amounts of such revenues received in the current year, the current year principal and interest paid on the debt, the
approximate percentage of each revenue which is pledged to meet the debt obligation, and the date through which
the revenue is pledged under the debt agreement, and the tota l pledged future revenues for each debt, which is the
amount of the remaining principal and interest on the bonds and notes at September 30, 202 2:
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 $ 5,765,203 $ 1,443,411 $ 5,281,028
Refunding Bank Loan,
Series 2021 Utility Net Revenues 2032 5,184,964 522,577 5,281,028
Total $ 10,950,167 $ 1,965,988 $ 5,281,028 268.62%
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, 2022, there
are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount
payable of $121,020,000.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
46
NOTE 7 – DEFINED BENEFIT PENSION PLANS
Plan Descriptions
The City maintains two separate single employer defined benefit pension plans, one for police officers and one for
general employees, which cover substantially all full-time City employees hired before September 1, 2008. The
general employees’ defined benefit plan is closed to new entrants. Full-time general employees hired on or after
September 1, 2008, are covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue
separate stand-alone financial statements. Combining statements are included below in NOTE 7 of the notes to
financials statements. As of, and for the year ended September 30, 2022, the two plans have the following balances
reported in the government-wide financials statements:
Net
Total pension Deferred Deferred Pension
Pension liability outflows inflows expense
Retirement Plan Liability (asset) of resources of resources (benefit)
General Employees' 24,901,187 (1,595,649) 1,169,070 2,513,091 (497,005)
Police Officers' 16,284,898 (350,365) 973,023 1,810,203 (75,000)
$ 41,186,085 $ (1,946,014) $ 2,142,093 $ 4,323,294 $ (572,005)
Detailed disclosures for each plan follow.
General Employees’ Retirement Plan
Plan Description
The General Employees’ Retirement Plan (the Plan) provides retirement, disability, and death benefits to Plan
members and their beneficiaries. The City Commission has the authority to establish and amend the benefit
provisions of the Plan. The Plan is governed by a Retirement Plan Board appointed by the City Commission and
comprised of five members, two of which will be eligible legal residents of the City, two of which will be general
employees elected by the majority of general employees who are members of the Plan, and one of which will be
elected by the other four members. Plan membership in the General Employees’ Retirement Plan on September 30,
2021 and 2020 (latest actuarial data available), were as follows:
September 30 September 30
2021 2020
Inactive plan members or beneficiaries
currently receiving benefits 81 80
Inactive plan members entitled to but
not yet receiving benefits 5 6
Active plan members 22 23
Total 108 109
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, 2022, Plan net position included $442,948 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
47
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute at an actuarially determined rate (80.6%) of covered payroll for the year ended
September 30, 2022. City contributions to the Plan were $1,099,884 for the year ended September 30, 2022. Plan
members are required to contribute 6.0% of their annual covered salary. Contribution requirements are established
by City code, which may be amended by the City Commission.
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2021, 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, 2022, 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, 2022
(September 30, 2021 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 9/30/2021 $ 24,665,518 $ 21,719,136 $ 2,946,382
Changes for the year:
Service cost 244,995 - 244,995
Interest 1,633,199 - 1,633,199
Difference between actual and
expected experience 207,558 - 207,558
Change in assumptions (420,148) - (420,148)
Contributions - City - 1,248,604 (1,248,604)
Contributions - employee - 87,209 (87,209)
Net investment income - 4,891,453 (4,891,453)
Benefit payments, including refunds
of employee contributions (1,429,935) (1,429,935) -
Administrative expense - (19,631) 19,631
Net changes 235,669 4,777,700 (4,542,031)
Reporting period ending 9/30/2022 $ 24,901,187 $ 26,496,836 $ (1,595,649)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
48
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Plan as of the September 30, 202 2 measurement date
were as follows:
Total pension liability $ 25,540,642
Plan fiduciary net position (22,047,291)
Net pension liability (asset) $ 3,493,351
Plan fiduciary net position as a
percentage of the total pension liability 86%
For the year ended September 30, 2022, the City recognized a total negative pension expense of -$497,005. 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 $ 69,186 $ -
Change in assumptions - 140,049
Difference between projected and
actual earnings on Plan investments - 2,373,042
City contributions subsequent to the
measurement date 1,099,884 -
Total $ 1,169,070 $ 2,513,091
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, 2023. Other amounts reported
as deferred outflows of resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2023 $ (628,896)
2024 (492,908)
2025 (636,328)
2026 (685,773)
$ (2,443,905)
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
-16.01% and 23.65% for the years ended September 30, 2022 and 2021, respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
49
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 20 20, rolled forward
to the measurement date of September 30, 2021, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 9.50% (including 2.50% price inflation).
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: Pub-2010 Headcount-Weighted Mortality Tables are used with mortality
improvements projected for nondisabled lives to all future years using Scale
MP-2018.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building -block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
Large Cap Equity 33% 5.82%
Small/Mid Cap Equity 10% 5.54%
International Equities 15% 4.51%
Fixed Income (70% core/30% Short-term) 30% 1.25%
Alternatives (50% REITS/50% MLPS) 6% 4.19%
Cash and Equivalents 6% 0.74%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
50
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the Ci ty's net pension liability
(asset) would be if it were calculated using a discount rate that is 1 -percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2021 and the financial reporting date
of September 30, 2022.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2021 6.75% $ 948,369 $ (1,595,649) $ (3,783,906)
9/30/2022 6.75% $ 6,031,093 $ 3,493,351 $ 1,307,277
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, 2021 and 2020 measurement dates
(latest actuarial data available), were as follows:
September 30 September 30
2021 2020
Inactive plan members or beneficiaries
currently receiving benefits 22 22
Inactive plan members entitled to but
not yet receiving benefits 4 3
Active plan members 27 24
Total 53 49
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, 2022,
Police Plan net position included $129,387 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
51
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute, at actuarially determined rate (41.6%) of covered payroll for the year ended
September 30, 2022. The City may use State contributions to offset this required contribution. City and State
contributions to the Police Plan were $924,045 for the year ended September 30, 2022. 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 inf lows and
outflows as of September 30, 2021, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 202 2, 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,
2022 (September 30, 2021 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 9/30/2021 $ 16,100,283 $ 13,153,186 $ 2,947,097
Changes for the year:
Service cost 396,817 - 396,817
Interest 1,090,158 - 1,090,158
Difference between actual and
expected experience (130,811) - (130,811)
Changes of assumptions (478,322) - (478,322)
Contributions - City - 870,477 (870,477)
Contributions - State - 274,267 (274,267)
Contributions - employee - 168,456 (168,456)
Net investment income - 2,896,388 (2,896,388)
Benefit payments, including refunds
of employee contributions (693,227) (693,227) -
Administrative expense - (34,284) 34,284
Net changes 184,615 3,482,077 (3,297,462)
Reporting period ending 9/30/2022 $ 16,284,898 $ 16,635,263 $ (350,365)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
52
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability (asset) for the Police Plan as of the September 30, 202 2 measurement
date were as follows:
Total pension liability $ 17,179,024
Plan fiduciary net position (14,344,282)
Net pension liability (asset) $ 2,834,742
Plan fiduciary net position as a
percentage of the total pension liability 83%
For the year ended September 30, 2022, the City recognized total negative pension expense of -$75,000. 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 $ 48,978 $ 159,892
Change in assumptions - 341,659
Net difference between projected and
actual earnings on Plan investments - 1,308,652
City contributions subsequent to the
measurement date 924,045 -
Total $ 973,023 $ 1,810,203
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, 2023. 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
2023 $ (503,577)
2024 (421,058)
2025 (438,831)
2026 (397,759)
$ (1,761,225)
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 -14.98% and 23.67% for the years ended September 30, 2022 and 2021,
respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
53
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 2020, rolled forward
to September 30, 2021, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 18.50% (including 2.50% price inflation.
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: Pub-2010 Headcount-Weighted Mortality Tables are used with mortality
improvements projected for nondisabled lives to all future years using Scale
MP-2018.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building -block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
Large Cap Equity 33% 5.82%
Small/Mid Cap Equity 10% 5.54%
International Equities 15% 4.51%
Fixed Income (70% core/30% Short-term) 30% 1.25%
Alternatives (50% REITS/50% MLPS) 6% 4.19%
Cash and Equivalents 6% 0.74%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
54
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability
(asset) of the City, calculated using the discount rate noted below, as well as what the Ci ty's net pension liability
(asset) would be if it were calculated using a discount rate that is 1 -percentage-point lower or 1-percentage-point
higher than the current rate for both the measurement date of September 30, 2021 and the financial reporting date
of September 30, 2022.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2021 6.75% $ 1,543,538 $ (350,365) $ (1,942,683)
9/30/2022 6.75% $ 4,809,571 $ 2,834,742 $ 1,174,390
The Statements of Fiduciary Net Position for the City’s pension trust funds for the year ended September 30, 202 2
were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2022 2021
Plan Plan Totals Totals
ASSETS
Cash and cash equivalents $ - $ 478,118 $ 478,118 $ 866,209
Due from other governments - - - 137,840
Accrued income 29,599 18,044 47,643 38,822
Investments at fair value 22,278,551 13,853,420 36,131,971 42,152,119
Total assets 22,308,150 14,349,582 36,657,732 43,194,990
LIABILITIES
Accounts payable and accrued liabilities 5,600 5,300 10,900 -
Due to City 255,259 - 255,259 62,891
Total Liabilities 260,859 5,300 266,159 62,891
NET POSITION
Restricted for pension benefits $ 22,047,291 $ 14,344,282 $ 36,391,573 $ 43,132,099
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
55
NOTE 7 – DEFINED BENEFIT PENSION PLANS (concluded)
The Statements of Changes in Fiduciary Net Position for the City’s pension trust funds for the year ended September
30, 2022 were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2022 2021
Plan Plan Totals Totals
ADDITIONS
Contributions:
City $ 1,099,884 $ 779,224 $ 1,879,108 $ 2,119,081
Plan members 81,830 177,828 259,658 255,665
State of Florida - 144,821 144,821 274,267
Total contributions 1,181,714 1,101,873 2,283,587 2,649,013
Investment income (3,976,990) (2,472,223) (6,449,213) 7,948,224
Less investment expenses: (104,493) (63,323) (167,816) (160,383)
Net investment income (4,081,483) (2,535,546) (6,617,029) 7,787,841
Total additions (2,899,769) (1,433,673) (4,333,442) 10,436,854
DEDUCTIONS
Administrative expenses 45,210 41,745 86,955 65,266
Payments to retirees and participants 1,504,566 815,563 2,320,129 2,123,162
Total deductions 1,549,776 857,308 2,407,084 2,188,428
CHANGE IN NET POSITION (4,449,545) (2,290,981) (6,740,526) 8,248,426
NET POSITION, beginning of year 26,496,836 16,635,263 43,132,099 34,883,673
NET POSITION, end of year $ 22,047,291 $ 14,344,282 $ 36,391,573 $ 43,132,099
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CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
56
NOTE 8 – DEFINED CONTRIBUTION PLAN
The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to new entrants and
creating the City of Atlantic Beach Defined Contribution Plan. The City’s 457 defined contribution plan is
administered through ICMA, which covers all eligible employees employed with the City on or after September 1,
2008, who are not covered by the City’s Police Officers’ defined benefit plan. Under the 457 Plan, the City
contributes an employer matching contribution of up to 6% of earnings during the fi rst ten years of service.
Following ten years of service, the City contributes an additional fixed contribution of 4% of earnings for a total of
10%. Employees have the option to voluntarily contribute to the 457 Plan. Employer matching contributions fr om
the City were $160,110 and $125,416 for the years ended September 30, 202 2 and 2021, respectively. Under the
457 Plan, an employee is considered fully vested after 5 years of completed service.
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The City of Atlantic Beach administers a single employer defined benefit health care plan (the Plan) that provides
medical insurance benefits to its employees and their eligible dependents. In accordance with Section 112.0801 of
the Florida Statutes, because the City provides a medical plan to active employees of the City and their eligible
dependents, the City is also required to provide retirees with the opportunity to participate in this Plan. Benefit
provisions for the Plan are established by the City Commission and may be amended by the City Commission. The
City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of September 30, 2021, the measurement date of the latest
actuarial valuation:
September 30,
2021
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 103
Total 104
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission. Eligible retirees and their
covered dependents receiving benefits contribute 100% of the blended (active and retiree combined) equivalent
premium rates. While the City does not directly contribute towards the costs of retiree premiums via an explicit
subsidy, the ability of retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to be another
postemployment benefit (OPEB) obligation of the City.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
57
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Actuarial Methods and Assumptions
For the September 30, 2021 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: 2.19%
Investment Rate of Return: 0.0%
Salary Increases: Rates used in the October 1, 2021 actuarial valuation of the City’s pension plans.
Healthcare Cost Trend: Based on Getzen Model, with trend of 6.25% for 2021, 8.00% for 2022 and 5.75%
for 2023 then gradually decreasing to an ultimate trend rate of 3.75%.
Mortality: Mortality tables used for Regular and Special Risk Class members in the July 1, 2020 actuarial
valuation of the Florida Retirement System. These rates were taken from the adjusted Pub -2010 mortality
tables published by the Society of Actuaries with gener ational improvements using scale MP-2018. The
adjustments to the reference tables are based on the results of a statewide experience study covering the
period 2013 through 2018.
Discount Rate
The discount rate used to measure the total OPEB liability was 2.19% as of September 30, 2021, 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, t he 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, 2021 and was determined by an actuarial valuation
as of September 30, 2021. Changes in the Total OPEB liability were as follows:
Total
OPEB
Liability
Reporting period ending September 30, 2021 $ 409,355
Changes for the year:
Service cost 56,159
Interest 11,124
Differences between expected
and actual experience (20,135)
Changes of assumptions (56,642)
Benefit payments (7,902)
Net changes (17,396)
Reporting period ending September 30, 2022 $ 391,959
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
58
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate.
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current
discount rate:
1% Decrease Rate Assumption 1% Increase
Total OPEB liability $ 430,311 $ 391,959 $ 357,070
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 $ 333,693 $ 391,959 $ 465,651
OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2022, the City recognized OPEB expense of $34,896. On September 30, 2022, 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 $ 49,556 $ 86,993
Differences between expected and
actual experience - 146,900
City contributions subsequent to the
measurement date 11,158 -
Total $ 60,714 $ 233,893
Of the total amount reported as deferred outflows of resources related to OPEB, $11,158 resulting from estimated
benefits paid subsequent to the measurement date and before the end of the fiscal year will be included as a
reduction of the total OPEB liability in the year ended September 30, 202 3. Other amounts reported as deferred
inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended September 30, Amount
2023 $ (32,387)
2024 (32,387)
2025 (32,384)
2026 (29,726)
2027 (27,449)
Thereafter (30,004)
Total $ (184,337)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
59
NOTE 10 – INTERFUND ACCOUNTS
Individual fund inter-fund receivables and payables on September 30, 2022, consist of the following:
Due Due
from Other to Other
Funds Funds
General Fund $ 1,438,661 $ -
Utility fund 586,446
Community Development Block
Grants Fund - 116,546
Local Option Gas Tax Fund 254,444
Police Grants Fund - 52,858
Capital Projects Fund - 44,067
Debt Service Fund - 120,706
Court cost training fund - 8,335
General Employees' Retirement Fund - 255,259
$ 1,438,661 $ 1,438,661
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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2022
60
NOTE 11 – INTERFUND TRANSFERS
Transfers of resources from a fund receiving revenue to the fund through which the resources are to be expended are
recorded as transfers and are reported as other financing sources (uses) in the governmental funds and as transfers in
(out) in the proprietary funds. Following is a summary of inter-fund transfers for the year ended September 30, 2022:
Transfer In:
Community
Development
General Capital Projects Debt Service Block Grant Stormwater
Fund Fund Fund Fund Fund
Transfers Out:
Utility Fund $ 833,911 $ 536,051 $ - $ - $ -
Local Option Gas Tax Fund 166,743 325,000 - - -
Sanitation Fund 339,584 - - - -
ARPA Fund 1,024,759 1,196,224 - - 139,533
Community Development
Block Grant Fund - 58,008 - - -
Stormwater Fund - 477,000 - - -
Convention Development Tax Fund - 184,635 123,133 - -
Capital Projects Fund - - - 216,667 -
Half-cent Sales Tax Fund 200,000 1,045,800 - - 285,000
Total $ 2,564,997 $ 3,822,718 $ 123,133 $ 216,667 $ 424,533
Continued…
Transfer In:
Building Code
Utility Fund Sanitation Enforcement
Fund Fund Fund Total
Transfers Out:
Utility Fund $ - $ - $ - $ 1,369,962
Local Option Gas Tax Fund - - - 491,743
Sanitation Fund - - - 339,584
ARPA Fund 2,144,251 1,407 113,241 4,619,415
Community Development
Block Grant Fund - - - 58,008
Stormwater Fund - - - 477,000
Convention Development Tax Fund - - - 307,768
Capital Projects Fund - - - 216,667
Half-cent Sales Tax Fund - - - 1,530,800
Total $ 2,144,251 $ 1,407 $ 113,241 $ 9,410,947
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, 2022
61
NOTE 12 – COMMITMENTS
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida, whereas the City of
Jacksonville will provide advanced life support and fire services to the residents and businesses located in the City.
The term of the agreement shall be from the effective date and continuing for a period of 25 years unless terminated
earlier by the parties (such parties must provide a one-year notice). For the year ended September 30, 2022, the
City incurred $1,311,731 in services under this agreement. The amount will be adjusted annually by an amount
equal to 103% of the previous year’s amount for all services provided by the City of Jacksonville.
NOTE 13 - CONTINGENCIES
The City is a defendant in several lawsuits which arose in the ordinary course of the City’s bus iness. To the extent
the outcome of such litigation has been determined to result in probable loss to the City, an estimated loss has been
accrued in the accompanying financial statements. The outcome of the remaining claims cannot be determined at
this time.
NOTE 14 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and
omissions; and natural disasters for which the City carries commercial insurance. Insurance against losses is provided
through the Public Risk Insurance Agency and LB Bryan and Company for the following types of risk:
• Workers’ Compensation and Employer’s Liability
• Automobile Liability
• Automobile Physical Damage
• Accidental Death and Dismemberment
• General Liability
• Public Officials’ Liability
• Property Coverage
The City’s coverage for workers’ compensation is under a retrospectively rated policy. Premiums are accrued based
on the ultimate cost to-date of the City’s experience for this type of risk.
REQUIRED SUPPLEMENTARY INFORMATION
62
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2022
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Property taxes $ 6,767,585 $ 6,767,585 $ 6,708,984 $ (58,601)
Non-property taxes 1,189,108 1,189,108 1,300,872 111,764
Licenses and permits 925,700 925,700 1,097,637 171,937
Intergovernmental revenue 2,194,779 2,757,279 2,740,162 (17,117)
Charges for services 885,434 885,434 847,851 (37,583)
Fines and forfeitures 51,375 51,375 234,136 182,761
Investment earnings (loss) 200,000 200,000 (171,235) (371,235)
Miscellaneous revenues 9,525 19,525 64,614 45,089
Interfund charges 1,732,675 1,732,675 1,823,088 90,413
Total revenues 13,956,181 14,528,681 14,646,109 117,428
EXPENDITURES
City Administration:
City Commission 57,044 57,044 47,640 9,404
City Clerk 360,987 373,622 317,345 56,277
City Attorney 150,000 190,000 177,594 12,406
City Manager 443,682 463,700 447,628 16,072
Human resources 249,257 259,483 457,749 (198,266)
Information technology 834,217 860,338 715,220 145,118
Finance 1,228,963 1,339,236 1,305,063 34,173
Total City administration 3,324,150 3,543,423 3,468,239 75,184
Planning and zoning 566,156 600,818 323,393 277,425
General government 1,089,241 1,075,739 781,471 294,268
Public safety:
Police 5,381,720 5,767,558 5,460,814 306,744
Animal control 116,161 120,535 116,866 3,669
Fire control 1,803,239 2,385,648 1,631,477 754,171
Code enforcement 96,217 103,803 94,368 9,435
Total public safety 7,397,337 8,377,544 7,303,525 1,074,019
Continued…
63
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2022
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
Public works:
Administration and streets 1,851,132 1,993,719 1,509,315 484,404
Fleet maintenance 313,590 350,517 292,098 58,419
Total public works 2,164,722 2,344,236 1,801,413 542,823
Parks and recreation
Recreation and special events 571,363 649,906 607,879 42,027
Parks maintenance 1,162,550 1,292,550 1,112,656 179,894
Total parks and recreation 1,733,913 1,942,456 1,720,535 221,921
Total expenditures 16,275,519 17,884,216 15,398,576 2,485,640
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (2,319,338) (3,355,535) (752,467) 2,603,068
OTHER FINANCING SOURCES (USES):
Transfers out - - - -
Transfers in 2,294,338 2,564,997 2,564,997 -
Sale of general capital assets 25,000 25,000 - (25,000)
Total other financing sources (uses) 2,319,338 2,589,997 2,564,997 (25,000)
NET CHANGE IN FUND BALANCE $ - $ (765,538) $ 1,812,530 $ 2,578,068
64
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL –
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2022
Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures:
Total revenue from the budgetary comparison schedule $ 14,646,109
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,823,088) (*)
Total revenues as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 12,823,021
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from the
Total expenditures from the budgetary comparison schedule $ 15,398,576
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,823,088) (*)
Total expenditures as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 13,575,488
(*) - Interfund charges by Division
City Manager $ 154,040
Finance 965,248
Public Works Admin 261,132
Fleet and Equipment Maintenance 90,503
Human Resources 58,195
Information Technology 148,948
Facility Maintenance 145,022
$ 1,823,088
Note A - Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total appropriations
at the individual fund level. Encumbrances are recorded. Unexpended items which are unencumbered at year-end
must be re-appropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects funds). The City
Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that
increase the total expenditures of any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the reported budgetary data.
The budget presented in the accompanying required supplemental information is prepared in conformity with
accounting principles generally accepted in the United States of America.
65
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – AMERICAN RESCUE
PLAN ACT SPECIAL REVENUE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2022
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Intergovernmental revenue $ 3,473,921 $ 8,947,842 $ 4,619,415 $ (4,328,427)
Miscellaneous revenues - - 1 1
Total revenues 3,473,921 8,947,842 4,619,416 (4,328,426)
EXPENDITURES
None - - - -
Total expenditures - - - -
EXCESS (DEFICIENCY) OF REVENUE
OVER
(UNDER) EXPENDITURES 3,473,921 8,947,842 4,619,416 (4,328,426)
OTHER FINANCING SOURCES (USES):
Transfers out (3,456,048) (4,619,415) (4,619,415) -
Transfers in - - - -
Total other financing sources (uses) (3,456,048) (4,619,415) (4,619,415) -
NET CHANGE IN FUND BALANCE $ 17,873 $ 4,328,427 $ 1 $ (4,328,426)
66
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2023 9/30/2022 9/30/2021 9/30/2020 9/30/2019
Measurement date 9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Total pension liability
Service cost $ 241,673 $ 244,995 $ 288,450 $ 332,673 $ 345,019
Interest 1,646,364 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 255,984 207,558 (44,031) 40,197 (473,189)
Benefit payments, including refunds of
of employee contributions (1,504,566) (1,429,935) (1,329,553) (1,327,161) (1,501,456)
Employee buy-back - - - - -
Net change in total pension liability 639,455 235,669 519,332 611,935 640,074
Total pension liability, beginning 24,901,187 24,665,518 24,146,186 23,534,251 22,894,177
Total pension liability, ending (a) $ 25,540,642 $ 24,901,187 $ 24,665,518 $ 24,146,186 $ 23,534,251
Plan fiduciary net position
Contributions - City $ 1,099,884 $ 1,248,604 $ 1,362,952 $ 1,424,479 $ 1,332,119
Contributions - Employee 81,830 87,209 96,921 107,745 117,536
Net investment income (loss) (4,081,483) 4,891,453 1,138,973 619,176 1,554,225
Benefit payments, including refunds Of
employee contributions (1,504,566) (1,429,935) (1,329,553) (1,327,161) (1,501,456)
Administrative expenses (45,210) (19,631) (48,109) (40,584) (31,261)
Net change in plan fiduciary net position (4,449,545) 4,777,700 1,221,184 783,655 1,471,163
Plan fiduciary net position, beginning 26,496,836 21,719,136 20,497,952 19,714,297 18,243,134
Plan fiduciary net position, ending (b) $ 22,047,291 $ 26,496,836 $ 21,719,136 $ 20,497,952 $ 19,714,297
Net pension liability (asset) (a)-(b) $ 3,493,351 $ (1,595,649) $ 2,946,382 $ 3,648,234 $ 3,819,954
Plan fiduciary net position as a percentage
of total pension liability 86.32% 106.41% 88.05% 84.89% 83.77%
Covered payroll $ 1,363,833 $ 1,453,483 $ 1,615,350 $ 1,795,750 $ 1,958,933
Net pension liability as a percentage of
covered payroll 256.14% -109.78% 182.40% 203.16% 195.00%
Continued…
67
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2018 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.
68
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2023 9/30/2022 9/30/2021 9/29/2020 9/30/2019
Measurement date 9/30/2022 9/30/2021 9/29/2020 9/30/2019 9/30/2018
Total pension liability
Service cost $ 414,067 $ 396,817 $ 369,089 $ 332,419 $ 329,254
Interest 1,099,655 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 195,967 (130,811) 103,400 (351,261) (209,232)
Change of assumptions - (478,322) - - 454,983
Benefit payments, including refunds of
of employee contributions (815,563) (693,227) (715,876) (1,143,778) (690,688)
Net change in total pension liability 894,126 184,615 790,759 (136,198) 780,846
Total pension liability, beginning 16,284,898 16,100,283 15,309,524 15,445,722 14,664,876
Total pension liability, ending (a) $ 17,179,024 $ 16,284,898 $ 16,100,283 $ 15,309,524 $ 15,445,722
Plan fiduciary net position
Contributions - City $ 779,224 $ 870,477 $ 745,022 $ 826,705 $ 854,780
Contributions - State of Florida 144,821 274,267 132,844 - 236,772
Contributions - Employee 177,828 168,456 161,166 142,024 131,498
Net investment income (loss) (2,535,548) 2,896,388 607,277 307,543 853,894
Benefit payments, including refunds of
employee contributions (815,563) (693,227) (715,876) (1,143,777) (690,688)
Administrative expenses (41,743) (34,284) (35,623) (38,763) (25,152)
Other - - - - -
Net change in plan fiduciary net position (2,290,981) 3,482,077 894,810 93,732 1,361,104
Plan fiduciary net position, beginning 16,635,263 13,153,186 12,258,376 12,164,644 10,803,540
Plan fiduciary net position, ending (b) $ 14,344,282 $ 16,635,263 $ 13,153,186 $ 12,258,376 $ 12,164,644
Net pension liability (asset) (a)-(b) $ 2,834,742 $ (350,365) $ 2,947,097 $ 3,051,148 $ 3,281,078
Plan fiduciary net position as a percentage
of total pension liability 83.50% 102.15% 81.70% 80.07% 78.76%
Covered payroll $ 2,222,850 $ 2,105,700 $ 2,014,575 $ 1,775,300 $ 1,643,725
Net pension liability as a percentage of
covered payroll 127.53% -16.64% 146.29% 171.87% 199.61%
Continued...
69
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2018 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.
70
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Contributions
in Relation to Contributions
Year Actuarially the Actuarially Contribution as a % of
Ended Determined Determined Excess Covered Covered
September 30, Contribution Contribution (Deficiency) Payroll Payroll
General Employees' Plan
2022 $ 1,099,876 $ 1,099,884 $ 8 $ 1,363,833 80.65%
2021 $ 1,248,604 $ 1,248,604 $ - $ 1,453,483 85.90%
2020 $ 1,355,973 $ 1,362,952 $ 6,979 $ 1,615,350 84.38%
2019 $ 1,424,479 $ 1,424,479 $ - $ 1,795,750 79.33%
2018 $ 1,332,118 $ 1,332,119 $ 1 $ 1,958,933 68.00%
2017 $ 1,175,572 $ 1,175,572 $ - $ 2,067,067 56.87%
2016 $ 1,112,344 $ 1,112,344 $ - $ 2,136,733 52.06%
2015 $ 863,613 $ 863,613 $ - $ 2,269,850 38.05%
2014 $ 950,980 $ 950,980 $ - $ 2,623,050 36.25%
Police Officers' Plan
2022 $ 579,249 $ 924,045 $ 344,796 $ 2,222,850 41.57%
2021 $ 668,499 $ 1,144,744 $ 476,245 $ 2,105,700 54.36%
2020 $ 668,090 $ 877,866 $ 209,776 $ 2,014,575 43.58%
2019 $ 826,705 $ 826,705 $ - $ 1,775,300 46.57%
2018 $ 841,726 $ 1,091,552 $ 249,826 $ 1,643,725 66.41%
2017 $ 849,061 $ 945,540 $ 96,479 $ 1,619,400 58.39%
2016 $ 825,700 $ 842,455 $ 16,755 $ 1,465,925 57.47%
2015 $ 665,091 $ 677,542 $ 12,451 $ 1,404,425 48.24%
2014 $ 654,280 $ 659,420 $ 5,140 $ 1,472,786 44.77%
Additional years will be added to this schedule annually until 10 years; data is presented.
71
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Significant methods and assumptions used in calculating the actuarially determined contributions:
The following pertain to both City’s defined benefit pension plans unless separately stated.
• Valuation Date: October 1, 2020. 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 - 30 years.
• Asset Valuation Method: 4-year smoothed market value where the difference between the expected and actual return
on market value of assets is phased in over a period of four years at a rate of 25% per year.
• Inflation:2.50%
• Salary Increases:
o General Employees Plan – Age Based ranging from 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:
o General Employees’ Plan – Pub-2010 Headcount-Weighted Mortality Tables used by the Florida Retirement
System for Regular Class members in their July 1, 2020 actuarial valuations with mortality improvements
projected for healthy lives to all future years after 2010 using Scale MP-2018.
o Police Officers’ Plan - Pub-2010 Headcount-Weighted Mortality Tables used by the Florida Retirement System for
Special Risk Class members in their July 1, 2020 actuarial valuations with mortality improvements projected for
healthy lives to all future years after 2010 using Scale MP -2018.
o Previous Mortality Tables Used: RP-2000 Combined Healthy Participant Mortality Table (for preretirement
mortality) and the RP-2000 Mortality Table for Annuitants (for postretirement mortality), with mortality
improvements projected to all future years after 2000 using Scale BB.
72
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS
Year Ended September 30,
2022 2021 2020 2019 2018 2017 2016 2015
General Employees' Plan
Annual money-weighted rate of return
net of investment expenses -16.01% 23.65% 6.41% 4.04% 8.67% 10.92% 10.18% 1.10%
Police Officers' Plan
Annual money-weighted rate of return
net of investment expenses -14.98% 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.
73
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Reporting date 9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2021 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service cost $ 56,159 $ 55,135 $ 38,095 $ 39,404 $ 41,222
Interest 11,124 11,812 19,049 16,906 14,667
Difference between expected
and actual experience (20,135) - (203,632) - -
Changes in assumptions (56,642) (26,153) 78,146 (18,238) (21,261)
Benefit payments (7,902) (11,666) (21,386) (23,456) (22,404)
Net change in total OPEB Liability (17,396) 29,128 (89,728) 14,616 12,224
Total OPEB Liability - beginning 409,355 380,227 469,955 455,339 443,115
Total OPEB Liability - ending $ 391,959 $ 409,355 $ 380,227 $ 469,955 $ 455,339
Covered-employee payroll $ 5,961,844 $ 7,602,334 $ 5,196,501 $ 6,647,363 $ 6,272,956
Total OPEB liability as a percentage
of covered-employee payroll 6.57% 5.38% 7.32% 7.07% 7.26%
Notes to Schedule:
No assets are being accumulated in a trust to pay for plan benefits.
Changes in Assumptions:
Changes in assumptions reflect the effects of changes in the discount rate of each period. The following are the
discount rates used for each measurement date.
Measurement Date Discount Rate
September 30, 2021 2.19%
September 30, 2020 2.41%
September 30, 2019 2.75%
September 30, 2018 3.83%
September 30, 2017 3.50%
September 30, 2016 3.10%
Additional changes in assumptions for the following measurement dates:
• September 30, 2021
o Per capita costs and premiums were updated based on information provided.
o Long-term trend rates of healthcare increases were lowered from 3.99% to 3.75%.
• September 30, 2019
o Per capita costs and premiums were updated based on information provided.
o Assumed ultimate rate of inflation was revised from 2.5% to 2.25% and the healthcare cost trend
assumption was revised to reflect this change.
Additional years will be added to this schedule annually until 10 years; data is presented.
SUPPLEMENTARY INFORMATION
74
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
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 $ 203,490 $ - $ 48,025 $ 590,647 $ - $ 221,690 $ 135,629
Receivables, net
Intergovernmental and other -134,600 31,689 214,270 412 8,033 2,035
Prepaid expenditures -- - - - - -
TOTAL ASSETS $ 203,490 $ 134,600 $ 79,714 $ 804,917 $ 412 $ 229,723 $ 137,664
LIABILITIES
Accounts payable and accrued liabilities - - - 17,820 1,754 - -
Construction costs payable - - - 4,212 - - -
Due to other funds -254,444 - - 8,335 - -
Deposits -- - - - - -
TOTAL LIABILITIES -254,444 - 22,032 10,089 - -
FUND BALANCE
Nonspendable:
Prepaids - - - - - - -
Restricted for:
Public safety - - - - - - 137,664
Road maintenance and construction - - - 782,885 - - -
Other capital projects - - - - - - -
Other purposes - - 79,714 - - 229,723 -
Committed to:
Conservation and resource management 203,490 - - - - - -
Unassigned -(119,844) - - (9,677) - -
TOTAL FUND BALANCES 203,490 (119,844) 79,714 782,885 (9,677) 229,723 137,664
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 203,490 $ 134,600 $ 79,714 $ 804,917 $ 412 $ 229,723 $ 137,664
Continued…
75
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Governmental 2021
Revenue Block Grants Grants Funds Service Funds Totals
ASSETS
Equity in pooled cash and investments $ 8,068 $ 118,760 $ 2,130 $ 1,328,439 $ - $ 1,328,439 $ 4,325,779
Receivables, net
Intergovernmental and other - 100 52,858 443,997 - 443,997 321,864
Prepaid expenditures - - - - 100,856 100,856 -
TOTAL ASSETS $ 8,068 $ 118,860 $ 54,988 $ 1,772,436 $ 100,856 $ 1,873,292 $ 4,647,643
LIABILITIES
Accounts payable and accrued liabilities - - - 19,574 - 19,574 10,729
Construction costs payable - 3,134 - 7,346 - 7,346 7,346
Due to other funds - 116,546 52,858 432,183 120,706 552,889 488,329
Deposits 1,767 - - 1,767 - 1,767 1,765
TOTAL LIABILITIES 1,767 119,680 52,858 460,870 120,706 581,576 508,169
FUND BALANCE
Nonspendable:
Prepaids - - - - 100,856 100,856 -
Restricted for:
Public safety 6,301 - 2,130 146,095 - 146,095 133,634
Road maintenance and construction - - - 782,885 - 782,885 3,675,631
Other capital projects - - - - - - 257,189
Other purposes - - - 309,437 - 309,437 315,693
Committed to:
Conservation and resource management - - - 203,490 - 203,490 116,072
Unassigned - (820) - (130,341) (120,706) (251,047) (358,745)
TOTAL FUND BALANCES 6,301 (820) 2,130 1,311,566 (19,850) 1,291,716 4,139,474
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 8,068 $ 118,860 $ 54,988 $ 1,772,436 $ 100,856 $ 1,873,292 $ 4,647,643
76
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
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 $ - $ 699,191 $ 191,222 $ 1,202,628 $ - $ - $ -
Intergovernmental revenue - - - - - - -
Charges for services - - - - - 110,305 -
Fines and forfeitures 101,823 - - - 5,143 - 28,244
Investment earnings (loss) - (5,885) (15) 20,849 602 - (4,925)
Miscellaneous revenues - - - 407 - - -
Total revenues 101,823 693,306 191,207 1,223,884 5,745 110,305 23,319
EXPENDITURES:
General government 14,405 - - 15,766 - - -
Public safety - - - - 25,979 - -
Capital outlay - 199,999 - 446,420 - - -
Debt service - - - - - - -
Total expenditures 14,405 199,999 - 462,186 25,979 - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 87,418 493,307 191,207 761,698 (20,234) 110,305 23,319
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - -
Transfers (out) - (491,743) (307,768) (1,530,800) - - -
TOTAL OTHER FINANCING SOURCES (USES) - (491,743) (307,768) (1,530,800) - - -
NET CHANGE IN FUND BALANCE 87,418 1,564 (116,561) (769,102) (20,234) 110,305 23,319
FUND BALANCE, beginning of year 116,072 (121,408) 196,275 1,551,987 10,557 119,418 114,345
FUND BALANCE, end of year $ 203,490 $ (119,844) $ 79,714 $ 782,885 $ (9,677) $ 229,723 $ 137,664
Continued…
77
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2022
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2021
2022
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Governmental 2021
Revenue Block Grants Grants Funds Service Funds Totals
REVENUES:
Non-property taxes $ - $ - $ - $ 2,093,041 $ - $ 2,093,041 $ 1,661,575
Intergovernmental revenue - 58,008 52,858 110,866 - 110,866 -
Charges for services - - - 110,305 - 110,305 66,595
Fines and forfeitures - - - 135,210 - 135,210 32,978
Investment earnings (loss) (238) - - 10,388 - 10,388 (17,254)
Miscellaneous revenues - - 2,069 2,476 - 2,476 40,890
Total revenues (238) 58,008 54,927 2,462,286 - 2,462,286 1,784,784
EXPENDITURES:
General government - - - 30,171 - 30,171 2,550
Public safety - - 2,132 28,111 - 28,111 17,244
Capital outlay - - 52,858 699,277 - 699,277 250,525
Debt service - - - - 123,133 123,133 120,884
Total expenditures - - 54,990 757,559 123,133 880,692 732,363
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (238) 58,008 (63) 1,704,727 (123,133) 1,581,594 1,052,421
OTHER FINANCING SOURCES (USES)
Transfers in - 216,667 - 216,667 123,133 339,800 1,217,551
Transfers (out) - (58,008) - (2,388,319) - (2,388,319) (1,215,395)
TOTAL OTHER FINANCING SOURCES (USES) - 158,659 - (2,171,652) 123,133 (2,048,519) 2,156
NET CHANGE IN FUND BALANCE (238) 216,667 (63) (466,925) - (466,925) 1,054,577
FUND BALANCE, beginning of year 6,539 (217,487) 2,193 1,778,491 (19,850) 1,758,641 3,084,897
FUND BALANCE, end of year $ 6,301 $ (820) $ 2,130 $ 1,311,566 $ (19,850) $ 1,291,716 $ 4,139,474
78
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2018, THROUGH SEPTEMBER 30, 2022
2022 2021 2020 2019 2018
Revenues
Operating Revenues:
Water:
Customer charges $ 4,060,751 $ 3,677,424 $ 3,550,004 $ 3,462,039 $ 3,206,520
Miscellaneous charges 78,422 68,937 43,252 67,291 64,563
Total water 4,139,173 3,746,361 3,593,256 3,529,330 3,271,083
Sewer:
Customer charges 6,436,488 6,096,086 5,750,479 5,399,935 5,092,613
Miscellaneous charges - 8 - - -
Total sewer 6,436,488 6,096,094 5,750,479 5,399,935 5,092,613
Total operating revenues 10,575,661 9,842,455 9,343,735 8,929,265 8,363,696
Non-operating revenues
Investment income (loss):
Water (285,434) (27,591) 143,198 163,209 (7,606)
Sewer (160,845) (22,584) 158,264 115,389 (8,249)
Total non-operating revenues (446,279) (50,175) 301,462 278,598 (15,855)
Total revenues 10,129,382 9,792,280 9,645,197 9,207,863 8,347,841
Expenses
Operating expenses:
Water 928,369 1,321,892 1,044,002 1,299,974 1,348,985
Sewer 2,846,994 3,100,956 2,222,833 2,387,924 2,393,828
Total operating expenses 3,775,363 4,422,848 3,266,835 3,687,898 3,742,813
Administrative, non divisional
and other
Water 497,959 584,856 642,424 508,655 508,655
Sewer 608,603 698,988 678,890 624,796 624,796
Total administrative non-
divisional and other 1,106,562 1,283,844 1,321,314 1,133,451 1,133,451
Total expenses 4,881,925 5,706,692 4,588,149 4,821,349 4,876,264
Net revenues available for
debt service 5,247,457 4,085,588 5,057,048 4,386,514 3,471,577
Non-operating income(expense)
Interest expense (196,437) (320,482) (344,186) (381,546) (404,297)
Loan amortization (93,911) (93,910) (93,910) (93,910) (93,910)
Total non-operating income
(expense) (290,348) (414,392) (438,096) (475,456) (498,207)
Change in net position before
depreciation expense and
interfund transfers $ 4,957,109 $ 3,671,196 $ 4,618,952 $ 3,911,058 $ 2,973,370
79
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021
2022 2021
Gross revenues:
Utility $ 10,575,661 $ 9,842,455
Connection charges 44,895 34,333
Investment income (loss) (457,602) (44,607)
Total Gross Revenues 10,162,954 9,832,181
Operating Expenses
Personnel services 1,687,884 1,776,734
Contractual services 535,134 673,262
Supplies 421,328 513,146
Repairs and maintenance 471,440 876,185
Utilities 402,707 349,132
Intergovernmental charges 1,106,562 1,283,844
Other expenses 256,871 234,388
Total operating expenses 4,881,926 5,706,691
Total net revenues in accordance with Bond resolutions $ 5,281,028 $ 4,125,490
Total debt service $ 1,815,181 $ 1,895,860
Debt service coverage ratio 290.94% 217.61%
Required debt service coverage ratio 110.00% 110.00%
80
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEAR ENDED SEPTEMBER 30, 2018, THROUGH SEPTEMBER 30, 2022
Utility Service Tax Collections
(last five years)
Year Electricity Communications Gas Fuel Oil Total
2022 $ 515,491 $ 525,166 $ 12,966 $ - $ 1,053,623
2021 441,950 471,029 13,068 - 926,047
2020 499,712 489,444 14,122 - 1,003,278
2019 587,563 484,505 12,518 - 1,084,586
2018 498,379 497,133 16,262 - 1,011,774
Ad Valorem Tax Collections
(last five years)
Year Total
2022 $ 6,708,984
2021 6,341,798
2020 5,912,053
2019 5,519,446
2018 5,063,409
OTHER STATISTICAL INFORMATION
81
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
(UNAUDITED)
Annual
Billings
Fleet Landing (retirement community) $ 591,570
Navy (Federal Government) 395,478
PAC-2160 Mayport GP, LLC 197,927
John's Creek Estates (mobile home park) 161,008
City of Atlantic Beach, Florida 149,503
Hanna Park (regional park) 140,423
Sea Turtle Inn 132,945
BW MAYPORT LLC 129,766
Yes Companies 120,999
Otter Run (apartment complex) 116,413
$ 2,136,032
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS, ISSUED BY THE COMPTROLLER GENERAL OF THE UNITED
STATES; THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND
OTHER CONTRACT REQUIREMENTS
82
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City) as of and for the year ended September 30, 2022, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated June 2, 2023.
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 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 and, therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies
in internal control that we consider to be material weaknesses. We identified certain deficiencies in
internal control, described below as item 2022-001, that we consider to be a significant deficiency.
83
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
2022-001 – Improperly Accrued Accounts Payable
Condition - During our audit, we identified several large invoices that were accrued to the wrong
accounting period. This resulted in an approximate adjustment of $430,000 to reduce accounts payable
and the related expenditure/capital outlay accounts.
Effect – If this error had not been identified, accounts payable would have been overstated for fiscal year
2022.
Recommendation – We recommend that the City’s finance department evaluates their yearly financial
close and reporting process and make the necessary changes to ensure proper cutoff of accounts payable.
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.
June 2, 2023
Gainesville, Florida
84
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE
WITH FLORIDA STATUTES SECTION 218.415 – INVESTMENTS OF PUBLIC FUNDS
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with Section 218.415, Florida
Statutes during the period ended September 30, 2022, as required by Section 10.556(10)(a), Rules of the
Auditor General. Management is responsible for the City’s compliance with those requirements. Our
responsibility is to express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the City’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination of the City’s compliance with
specified requirements.
We are required to be independent of the City and to meet our other ethical responsibilities in accordance
with relevant ethical requirements relating to the engagement.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2022.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, federal and
other granting agencies and pass-through entities, the City, and its management, and is not intended to
be, and should not be, used by anyone other than these specified parties.
June 2, 2023
Gainesville, Florida
85
REPORT ON COMPLIANCE FOR THE U.S. TREASURY CORONAVIRUS STATE AND LOCAL FISCAL
RECOVERY FUNDS PROGRAM (CSLFRF) REQUIRMENTS FOR AN ALTERNATIVE CSLRF COMPLIANCE
EXAMINATION ENGAGEMENT
INDEPENDENT ACCOUNTANT’S REPORT
To Honorable Mayor, City Commissioners,
and City Manager
City of Atlantic Beach
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with the compliance
requirements "activities allowed or unallowed” and “allowable cost/cost principles” (the specified
requirements) as described in Part IV “Requirements for an Alternative Compliance Examination
Engagement for Recipients That Would Otherwise be Required to Undergo a Single Audit or Program-
Specific Audit as a Result of Receiving Coronavirus State and Local Fiscal Recovery Funds” of the CSLFRF
section of the 2022 OMB Compliance Supplement (referred to herein as “Requirements for an Alternative
CSLRF Compliance Examination Engagement”) during the year ended September 30, 2022. Management
of the City is responsible for the City’s compliance with the specified requirements. Our responsibility is
to express an opinion on the City’s compliance with the specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants; the standards applicable to attestation engagements contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and in the
Requirements for an Alternative CSLRF Compliance Examination Engagement. Those standards require that
we plan and perform the examination to obtain reasonable assurance about whether the City complied, in
all material respects, with the specified requirements referenced above. An examination involves
performing procedures to obtain evidence about whether the City complied with the specified
requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including
an assessment of the risks of material non-compliance, whether due to fraud or error. We believe that the
evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the examination engagement.
Our examination does not provide a legal determination on the City’s compliance with specified requirements.
In our opinion, the City complied, in all material respects, with the specified requirements referenced
above during the year ended September 30, 2022.
June 2, 2023
Gainesville, Florida
86
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, 2022, and have issued our report thereon dated June 2, 2023.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountant’s Report on an examination
conducted in accordance with American Institute of Certified Public Accountants Professional Standards,
AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the
Auditor General. Disclosures in those reports and schedule, which are dated June 2, 2023, 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.
87
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Special District Component Units
Section 10.554(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a
special district that is a component unit of a county, municipality, or special district, provided the financial
information necessary for proper reporting of the component unit, within the audited financial
statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida
Statutes. In connection with our audit, we determined that there were no special district component
units that were required to be reported in accordance with Section 218.39(3)(b), Florida Statutes.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material, but which warrants the attention
of those charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, federal and other granting agencies, and applicable management, and is not intended to be, and
should not be, used by anyone other than these specified parties.
June 2, 2023
Gainesville, Florida
City of Atlantic Beach
800 Seminole Road
Atlantic Beach, Florida 32233-54445
Telephone (904) 247-5800
Fax (904) 247-5819
http://www.coab.us
June 6, 2023
Purvis, Gray and Company, LLP
P.O. Box 141270
Gainesville, FL 32614
RE: Responses to the Management Letter
Internal Control Over Financial Reporting
2022-001 – Improperly Accrued Accounts Payable
Condition―During our audit, we identified several large invoices that were accrued to the wrong
accounting period. This resulted in an approximate adjustment of $430,000 to reduce accounts payable and
the related expenditures/capital outlay accounts.
Effect―If this error had not been identified, accounts payable would have been overstated for fiscal year
2022.
Recommendation―We recommend that the City’s finance department evaluates their yearly financial
close and reporting process and make the necessary changes to ensure proper cutoff of accounts payable.
Management Response to Comment 2022-001 – Improperly Accrued Accounts Payable
The City’s finance department will closely review invoices received after year-end to ensure that they are
accrued in the proper accounting period.
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IMPACT FEE AFFIDAVIT
BEFORE ME , the undersigned authority, personally appeared Melissa
Burns, who being duly sworn, deposes and says on oath that:
1. I am the Chief Financial Officer of the City of Atlantic Beach , FL
which is a local governmental entity of the State of Florida.
2. City of Atlantic Beach adopted Ordinance No. 80-92-51 implementing
water and sewer impact fees ; and
3. City of Atlantic Beach has complied and , as of the date of this
Affidavit , remains in compliance with Section 163.31801 , Florida
Statutes.
FURTHER AFFIANT SAYETH NAUGHT.
~~
(Chief Financial OfficerofEntity)
STATE OF FLORIDA
COUNTY OF DUVAL
SWORN TO AND SUBSCRIBED before me this /i,+1-i day of Jl,ln f:/
20 2.3 .
NOTARY PUBLIC
Print Name Dor,na... L -Ba.rf/e,
Personally known ~ produced identification __ _
Type of identification produced : __ /1/_/i~fl ___________ _
My Commission Expires :
M tUJ It W7-5
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