Audit Report - 2001-2002r
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CITY OF ATLANTIC BEACII, FLORIDA
FINANCIAL STATEAZENTS
SEPTE11iBER 30, 2002
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CITY OF ATLANTIC BEACl3, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
TABLE OF CONTENTS
Page
Number(s)
Independent Auditors' Report 1 - 2
General Purpose Financial Statements
Combined Balance Sheet -Ali Fund Types and Account Groups 4 - 5
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All
Governmental Fund Types and Expendable Trust Funds 6
Combined Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual -All Governmental Fund Types 8 - 9
Combined Statement of Revenues, Expenses and Changes in Retained Earnings -All
Proprietary Fund Types 11
Combined Statement of Cash Flows -All Proprietary Fund Types 13
Combined Statement of Changes in Plan Net Assets -Pension Trust Funds 15
Notes to Financial Statements 16 - 30
Required Supplementary Information
Schedules of Pension Funding Progress 32
Schedules of Contributions from Employer and Other Contributing Entities 33
Combining and Individual Fund Financial Statements and Schedules
General Fund
Schedule of Expenditures -Budget and Actual 38 - 39
Special Revenue Funds
Combining Balance Sheet 42
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 43
Enterprise Funds
Combining Balance Sheet 47
Combining Statement of Revenues, Expenses and Changes in Retained Earnings 49
Combining Statement of Cash Flows 51
Schedules of Net Revenues in Accordance with Bond Resolutions -Water and Sewer
Systems 53
Combining Schedules of Utility Fund Systems
Balance Sheet Infonmation 55
Revenues, Expenses and Changes in Retained Earnings Information 56 - 57
Cash Flow Information 58 - 59
Trust and Agency Funds
Combining Balance Sheet -All Trust and Agency Funds 62
Combining Statement of Plan Net Assets -All Pension Trust Funds 63
Combining Statement of Changes in Plan Net Assets -All Pension Trust Funds 64
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CITI' OF ATLANTIC BEACIi, FLORIDA
FINANCIAL STATEMENTS
SEPTEA'IBER 30, 2002
TABLE OF CONTENTS
(Continued)
Additional Information (Llnauditcd)
Selected Financial and Operating Information Regarding the Water and Sewer System
Historical Revenues and Expenses
Major Utility Customers
Summary of Water Usage
Summary of Wastewater Treatment
Atlantic Beach Sewer Division
Buccaneer Sewer Di~7sion
Other Disclosures
Utility Tax Service Collections
Ad Valorem Tax Collections
Other Pension Schedules
Computed Pension Contribution Comparative Schedule
Pension Revenues by Source and Expenses by Type
Schedule of Expenditures of Federal Awards and State Financial Assistance
Independent Auditors' Report on Compliance and on Internal Control over
Financial Reporting Based on an Audit of Financial Statements Performed in
Accordance v~~th Government Auditing Standards
A'lanagement Letter of Independent Auditors Required by Chapter 10.550 Rules of
the Auditor General
_ iii -
Page
1~Tumber(s) •
66
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68
69
70
71
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72
73
74
75
77
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JAMES MOORS ~ CO., P.L.
CERTIFIED I~UBLIC ACCOUNTANTS
AND CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor, City Commissioners, and City Manager
of the City of Atlantic Beach, Florida:
We have audited the accompanying general purpose financial statements of the City of Atlantic Beach,
Florida, as of and for the year ended September 30, 2002, as listed in the table of contents. These general
purpose financial statements are the responsibility of the City of Atlantic Beach, Florida's management.
Our responsibility is to express an opinion on these general purpose financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the general purpose financial statements
are free of~material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the general purpose financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
f^ overall general purpose financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the City of Atlantic Beach, Florida, as of September 30, 2002, and the
results of its operations and cash flows of its proprietary fund types for the year then ended in conformity
_ with accounting principles generally accepted in the United States of America.
l In accordance with Government Auditing Standards, we have also issued a report dated November 20,
2002, on our consideration of the City of Atlantic Beach, Florida's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and
I grants. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be read in connection with this report in considering the results of our audit.
As discussed in Note 14 to the financial statements, the City changed its method of accounting for
nonexchange transactions to comply with Statement No. 33 of the Governmental Accounting Standards
Board. The statement was effective for fiscal years beginning after June 15, 2000, therefore the effects of
the adjustments have been reflected by restating fund balances and retained earnings in the appropriate
funds.
Our audit was performed for the purpose of forming an opinion on the general purpose financial
statements taken as a whole. The combining and individual fund financial statements and schedules
listed in the table of contents are presented for purposes of additional analysis and are not a required part
of the general purpose financial statements of the City of Atlantic Beach, Florida. Such information has
been subjected to the auditing procedures applied in the audit of the general purpose financial statements
and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose financial
,,, statements taken as a whole. The additional information listed in the table of contents has not been
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subject to the auditing procedures applied in the audit of the general purpose financial statements and,
accordingly, we express no opinion on it.
The required supplementary information listed in the table of contents is not a required part of the
general purpose financial statements but is supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures, which consisted principally of ~'
inquiries.of management regarding the methods of measurement and presentation of the supplementary
information. However, we did not~audit the information and do not express an opinion on it.
4~Gl~ 0~~63z~. ~ ~ .
Daytona Beach, Florida
November 20, 2002
-2- _.
GENERAL PURPOSE FINANCIAL STATEAZENTS
These basic statements provide a summary overview of the
financial position of all funds and account groups, as well as the
operating results of all funds and cash flows of the proprietary fund
types. They also serve as an introduction to and summary of the
more detailed statements and schedules that follow in the next
subsection.
-3-
CITY OF ATLANTIC BEACH, I~T.ORIDA
COMBINED BALANCE SHEET -
ALL rUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 2002
Fiduciary
Governmental Fund Types Proprietary Pund Types Fund Types Account Croups
Special Debt
Capital Internal
Tn~st and General General
Long-Term Fined Totals
(l~lemoran-
ASSETS AND OTIIER DEBITS General Revenue Service Projects Enterprise Sen~ice Agency llebt Assets dum Only)
Assets
Casli and cash equivalents $ 5,316,347 $ 1,789,908 $ 122,814 $ 214,999 $ 5,223,557 $ 73,667 $ 162,518 $ - $ - $12
903
810
Investments
Accounts receivable, net -
12,760 - -
- - - -
- 483,345 - 8,462,788
- - -
- - ,
,
8,462,788
496
105
Special assessment receivable - ,
current
Note receivable -current -
- - -
- - - 72,000 -
- 10,362 - -
- - -
- - 72,000
10
362
Due from other funds 104,048 - - - - - - - ,
104
048
Due from other governments 565,708 292,388 - - - 2,464 - - ,
860
560
Inventories
Restricted assets: 10,602 - - - 43,098 - - - - ,
53,700
Cash and cash equivalents
Special assessment receivable - - - - - 6,138,238 - - - 6,138,238
noncurrent
Note receivable -noncurrent 16,047
- - -
- - - 239,181
- 46,630 -
-
- - 255,228
46
630
Other noncurrent assets - - - - 18,800 - - - - ,
18
800
Fixed assets -net, where ,
applicable, of accumulated
d
eprec~at~on - - - - 31,734,361 233,042 - - 10,474,748 42,442,151
Unamortizcd Loan costs - - - - 400,672 - - - - 400,672
Other debits
Amount available in debt service
fund - - - - - - - 122,814 - 122,814
Amount to be provided for
payment oflong-term debt - - - - - - - 1,019,553 - 1,019,553
Amount to be provided for
payment oflong-term portion of
compensated absences - - - - - - - 296,733 - 296,733
Total Assets and Other Debits $$ 6~ $$ 2® $ 122,814 $~~ $44,410,244 $~ $ 8,627,770 $$ 1~439,1Oa0 $10~ $ 73,704,192
The accompanying notes to financial statements
are an integral part of this statement.
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(Continued)
CITY Or ATLANTIC BEACH, FLORIDA
COMBINED BALANCE SIIEET -
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 2002
(Continued) .
' Fiduciary
Governmental Fund Types Proprietary Fund Types Fnnd Types Account Groups
LIATIiLIT1ES, EQUITY AND
Special
Debt Capital
Internal
Trust and General
Long-Term Genera
Fixed Totals
(1liemoran-
OT1iER CKEUI'I'S General Revenue Service Projects Enterprise Service Agency Debt Assets darn Only)
Llabilitles
Accounts payable and accrued
liabilities
Due to other funds $ 436,371
- $ 6,911
99
799 $ - $ 138,438
- $ 426,043 $ 88,804 $ 60,447 $ - $ - $ 1,157,014
Deposits
D
f
d
5,000 ,
- -
- - -
- -
- 4,249 - - 104,048
5,000
e
erre
revenue
Payable from restricted assets: 27,930 8,997 - 26,339 - - - - 63,266
Accounts payable - - - - 316,973 - - - - 316
973
Revenue bonds and note ,
payable -current portion - - - - 520 217 - - - - 520
217
interest payable
Customer deposits -
- -
- - -
- - 580581
451,112 -
- -
- -
- -
- ,
580,581
451
112
Revenue bonds and note payable
Accrued compensated absences -
- -
- - -
- 21,035,454
104,016 -
69,226 -
- .1,142,367
296,733 - ,
22,177,821
469,975
Total liabilities 469,301 115,707 - 138,438 23,460,735 158,030 64,696 1,439,100 - 25,846,007
Equity and other credits
Contributed capital
Investment in general fixed assets -
- -
- - -
- - 6,302,792 - - - - 6,302,792
Retained earnings: - - - - 10,474,748 10,474,748
Reserved for renewal and
lacement
Un~rescrved retained earnings
-
-
- -
10,377,362
148,679
-
-
- 4,269,355
10
526
041
Fund balances: ,
,
Reserved for payment of long-
term debt
Reserved for police training and - - 122,814 - - - - - - 122,8(4
other expenditures - - - - - 102,987 - - 102
987
Reserved for prnsion benefits - - - - - - 8,460,087 - - ,
460
8
087
Other reserves 10,602 1,966,589 - - - - - - - ,
,
1
977
191
Unreserved,undesignated 5,545,609 - 76,561 - - - ,
,
5,622
170
Equity and other aedits 5,556,211 1,966,589 122,814 76,561 20,949,509 148,679 8,563,074 - 10,474,748 ,
47,858,185
Total Liabilities, Equity and
Othcrcredlts $ 6,025 512-
~~ $ 2
,082,296
$ 122,814 $ 214,999
$44,410,244
$ 306,709
$ 8,627,770
$ 1,439,100
$10,474,748
$73,704,192
The accompanying notes to financial statements
are an integral part of this statement.
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CITY OF ATLANTIC BEACH FLORIDA
COAIDINED STATEMENT OF REVENUES, EXPENDITURES AND
CIiANGES IN FUI~'D BALANCES -
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS
FOR THE YEAR ENDED SEPTEAIDER 30, 2002
Revenues
Taxes
Licenses and pcrtnits
State-shared revenues
Other intergovernmental
revenues
Charges for services
Fines and forfeitures
Interest income
. Miscellaneous revenues
Total revenues
Expenditures
Current:
General government
Public safety
Transportation
Culture and recreation
Debt service•
Principal retirement
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses)
Operating transfers in
Operating transfers out
Total other financing
sources (uses)
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures
and other financing uses
Fund balances, beginning of
year, as originally stated
Prior period adjustment
Fund balances, beginning of
year, as restated
Fund balances, end of year
Fiduciary
Governmental Fund Types Fund
Totals
Special Debt Capital Expendable (11'Icmoran-
General Revenue Sen~Icc Projects Trust dum Only)
$ 3,907,380 $ 1,129,118 $ - $ - $ - $ 5,036,498
289,161 - - - - 289,161
1,555,372 - - - - 1,555,372
433,713 172,997 - 227,423 23,700 857,833
114,688 - - - - 114,688
134,604 19,129
~ 153,733
105,560 39,566 1,650 5,671 2,587 155,034
220,956 41,725 13,488 276,169
6,761,434 1,383,406 1,650 246,582 45,416 8,438,488
632,615 154,319 - - - 786,934
4,067,062 45,488 - - 106,475 4,219,025
710,110 491,697 - - - 1,201,807
905,861 - - - - 905,861
- . - 162,345 - - 162,345
- - 57,985 - - 57,985
- 1,170,062 1,170,062
6,315,648 691,504 220,330 1,170,062 106,475 8,504,019
445,786 691,902 (218,680) (923,480) (61,059) ~ (65,531)
648,102 9,934 220,362 508,153 3,024 1,389,575
(900,791) (1,119,173) - - (9,934) (2,029,898)
(252,689) (1,109,239) 220,362 508,153 (6,910) (640,323)
193,097 (417,337) 1,682 (415,327) (67,969) (705,854)
5,268,453 2,307,449 121,132 491,888 170,956 8,359,878
94,661 76,477 - - - 171,138
5,363,114 2,383,926 121,132 491,888 170,956 8,531,016
$ 5,556,211 $ 1,966,589
~~ $ 122,814 $ 76,561 $ 102,987 $ 7,825,162
The accompanying notes to fmancial statements
are an integral part of this statement.
-6-
Revenues
Taxes
Licenses and permits
State-shared revenues
Other intergovernmental revenues
Charges for services
Fines and forfeitures
Interest income
Miscellaneous revenues
Total revenues
Expenditures
Current:
General government
Public safety
Transportation
Culture and recreation
Debt service:
Principal retirement
Interest and fiscal charges
Capital outlay
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources (uses)
Operating transfers rn
Operating transfers out
Total other financing sources
(uses)
Excess (deficiency) of revenues and
other fnancing sources over (under)
expenditures and other financing uses
Fund balances, beginning of year, as
originally stated
Prior period adjustment
Fund balances, beginning of year, as
restated
Fund balances, end of year
CITY OF ATLANTIC BEACH, FLORH)A
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES -
BUDGET AND ACTUAL -ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR END ED SEPTEM BER 30, 2002
General Fund Special Revenue Fund Debt Service Fu nd
anance
Favorable anance
Favorable anance
Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable)
S 3,475,722 S 3,907,380 S 431,658 $ 1,034,682 5 1,129,118 $ 94,436 S - $ - $ _
247,998 289,161 41,163 - - - _ _ _
1,515,240 1,555,372 40,132 - - _ _ _ _
440,346 433,713 (6,633) 210,963 172,997 (37,966) - - _
108,739 114,688 5,949 - - - _ _ _
172,570 134,604 (37,966 - - _ ~
239,200
105,560
(133,640
107,000
39,566
(67,434
2,000
1,650 (350)
49,846 220,956 171,110 44,725 41,725 3 000 - - _
6,249,661 6,761,434 511,773 1,397,370 1,383,406 (13,964) 2,000 1,650 (350)_
796,638 632,615 164,023 186,181 154,319 31,862 - - _
4,255,194 4,067,062 188,132 64,336 45,488 18,848 - - _
744,825 710,110 34,715 1,159,291 491,697 667,594 - - _
955,336 905,861 49,475 - - - _ _ _
- - - - - - 162,345 162,345 -
- - - - - - 58,017 57,985 32
6,751,993 6,315,648 436,345 1,409,808 691,504 718,304 220,362 220,330 -32
(502,332) 445,786 948,(18 (12,438) 691,902 704,340 (218,362) (218,680) (318)
648,102 648,102 - 9,934 9,934 - 220,362 ~ 220,362 -
(911,333) (900,791) 10,542 (1,119,173) (1,119,173) - - - _
(263,231) (252,689) 10,542 (1,109,239) (1,109,239) - 220,362 220,362 -
(765,563) 193,097 958,660 (1,121,677) (417,337) 704,340 2,000 1,682 (318)
5,268,453 5,268,453 - 2,307,449 2,307,449 - 121,132 121,132 -
- 94,661 94,661 - 76,477 76,477 - - -
5,268,453 5,363,114 94,661 2,307,449 2,383,926 76,477 121,132 121,132 -
S 4,502,890 S 5,556,211 S 1,053,321 $ 1,185,772 S 1,966,589 S 780,817 S 123,132 S 122,814 S (318)
The accompanying notes to financial statements
are an integral part of this statement.
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CITY OF ATLANTIC BEACH, FLORIDA
COMBINED STATEb'IENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL -ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED SEPTEA7iBER 30, 2002
(Continued)
Capital Projects Fund Totals (11'Iemorandum Only)
anance ariance
Favorable Favorable
Budget Actual (Unfavorable) Budget Actual (Unfavorable)
Revenues
T~~
Licenses and permits $ - $ - $ - $ 4,510,404 $ 5,036,498 $ 526,094
- - - 247,998 289,161 41
163
State-shared revenues
Other intergovemmrntal revenues ,
- - - 1,515,240 1 555,372 40 132
311,335 227,423 (83,912) 962,644 '834,133 (128;511
)
Charges forservices
Fines and forfeitures - - - 108,739 114,688 5,949
- 172,570 134,604 (37
966)
Interest income
Miscellaneous revrnues ,
6,400 5,671 ( (729) 354,600 152,447 (202,153)
63,068 13,488 49 580) 157,639 276,169 118
530
Total revenues ,
380,803 246,582 (134,221) 8,029,834 8,393,072 363,238
Expenditures
Current:
Grneral govemmrnt
Public safety -
- -
- -
- 982,819
4,319,530 786,934
4,(12,550 195,885
206
980
Transportation
Culture and recreation -
- -
- -
- 1,904,116
955,336 1,201,807
905,861 ,
702,309
49
475
Debt service: ,
Principal retirement - - - 162,345 162,345 -
Interest and fiscal charges - - - 58,017 57,985 32
Capital outlay
Total exprnditures 1,346,289 1,170,062 176,227 1,346,289 1,170,062 176,227
Excess (deficienccyy) of revenues over 1,346,289 1,170,062 176,227 9,728,452 8,397,544 1,330,908
(under) expenditures (965,486) (923,480) 42,006 (1,698,618) (4,472) 1,694,146
Other financing sources (uses)
Operating transfers in 508,153 508,153 - 1,386,551 1,386,551 -
Operatmgtransfers out
Total other financing sources - - - (2,030,506) (2,019,964) 10,542
(uses) 508,153 508,153 (643,955) (633,413) 10,542
Excess (deficiency) of revenues and
other mancing sources over (under)
expenditures and other financing uses (457,333) (415,327) 42,006 (2,342,573) (637,885) 1,704,688
Fund balances, beginning of year, as
originally stated 491,888 491,888 - 8,188,922 8,188,922 -
Priorperiodadjustment - - - - 171,138 171,138
Fuad balances, beginning of year, as
restated 491,888 491,888 - 8,188,922 8,360,060 171,138
Fund balances, end ofyear $ 34,555 S 76,561
®~~ $ 42,006
~ $ 5,846,349 $ 7,722,175 S
~. 1,875,826
The accompanying notes to financial statements
are an integral part of this sta tement.
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CITI' OF ATLANTIC BEACH FLORIDA
COMBINED STATEMENT OF
i
REVENUES E7
PENSES Ai\~ CIiANG
RETAINED EARNIl\'GS -ALL PRO~'RIETARl' F1J1~'D Tl'PES ES IN
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Totals
Internal (Memorandum
Enterprise Sen~ice Only)
Operating revenues
Interfund charges $ - $ 1,903,816 $ 1,903,816
Customer charges 6,734,505 - 6,734,505
Other income
T
tal
ti 319,262
7
053
767 886
1
904
702 320,148
8
9
8
o
opera
ng revenues ,
, ,
, ,
5
,469
Opperating expenses
Pe
so
r
r
na
sernces
Contractual services 1,460,484
1,820,851 1,375,016
242,350 2,835,500
2,063,201
` Supplies
Repairs and maintenance 259,445
117,924 41,207
65,615 300,652
183,539
Heat, light and power 399,330 9,296 408,626
Depreciation
Oth 1,592,995 77,690 1,670,685
er expenses 1,261,512 263,481 .1,524,993
Total operating expenses 6,912,541 2,074,655 8,987,196
t Operating income (loss) 141,226 (169,953) (28,727)
Nonopcrating revenues (expenses)
Connection charges 55,366 - 55,366
Sewer generation charges 145,471 145,471
Other intergovernmental revenues 116,174 _ 116,174
Interest income 137,119 - 137,119
Interest expense (1,050,971 - (1,050,971
Amortization of loan costs 19 791 - 19,791
Total nonoperating revenues (expenses) (616,632) - (616,632)
Loss before contributions and operating transfers
l
D (475,406)
226
908 (169,953) (645,359)
eve
oper/customer contributions , - 226,908
~" Other financing sources (uses)
(
I Operating transfers in
Operating transfers out 1,063,226
(618,000) 175,638 1 238,864
618,000)
Total other financing (uses) sources 445,226 175,638 620,864
Nct income 196,728 5,685 202,413
Depreciation related to contributed assets 238,497 - 238,497
I
I Incrcasein retained earnings 435,225 5,685 440,910
Retained earnings, beginning of year, as originally
stated ~
Prior
eriod adjustment 13,838,709
372
783 142,994 13,981,703
p , - 372,783
Retained earnings, beginning of year, as restated 14,211,492 142,994 14,354,486
r $ 14
646
717
t Retained earnings, end of year ,
,
$ 148,679 $ 14,795,396
r
l The accompanying notes to financial statements
are an integral part of this statement.
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CITY OF ATLANTIC BEACH, FLORIDA
COMBINED STATEIi7El\'T OF CASH FLOWS -ALL PROPRIETARY FUND Tl~'ES
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Cash flor~•s from operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization
Loss on disposals
(Increase) decrease in certain assets:
Accounts receivable
Invento
Increase (~ecrease) in certain liabilities:
Accounts payable and accrued liabilities
Customer deposits
Deferred revenue
Total adjustments
Totals
Internal (Memorandum
Enterprise Service Only)
$ 141,226 $ (169,953) $ (28,727)
1,592,995 77,690
8,S 11 -
((37,337 -
495,759 3,515
56,508 -
(SS,406) -
1,915,856 81,205
1,670,685
8,511
((37,337
499,274
56,508
(55,406)
1,997,061
Net cash provided by (used in) operating activities 2,057,082 (88,748) 1,968,334
Cash floK•s from noncapital financing activities
Connection charges
SS,366 -
55,366
Sewer generation charges 145,471 - 145,471
Intergovernmental revenues 116,174 - 116,174
Operating transfers in 1,063,226 175,638 1,238,864
Operating transfers out (618,000) - (618,000)
Net cash provided by noncapital financing activities 762,237 175,638 ~ 937,875
Cash flows from capital and related financing activities
Change in interest receivable
Collections on note receivable
Collections on special assessments
Developer/customer contnbutions
Fixed asset additions
Principal pa ents on bonds payable
Interest paid
Net cash used in capital and related financing activities
23,661 -
10,3 62 -
81,227 -
226,908 -
(3,688,006 (69,350)
(498,385 -
1 029 872 -
(4,874,1OS) (69,350)
23,661
10,362
81,227
226,908
(3,757,356
(498,385
(1.029.872
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r
Cash flows from investing activities
Interest income
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of yeaz
Cash and cash equivalents, end of yeaz
(4,943,455)
137,119 - 137,119
(1,917,667) 17,540 (1,900,127)
13,279,462 56,127 13,335,589
$ 11,361,795 $ 73,667 $ 11,435,462
Balance sheet components of cash and cash equivalents
Cash and cash equivalents $ 5,223,557 $ 73,667 $ 5,297,224
Restricted cash and cash equivalents 6,138,238 - 6,138,238
Total cash and cash equivalents, end ofyeaz $ 11,361,795 $ 73,667 $ 11,435,462
Noncash activity
Net capitalized interest expense
$ 94,620 $ - $ 94,620
The accompanying notes to financial statements
are an integral part of this statement.
-13-
CITY OF ATLANTIC BEACIi, FLORIDA
COMBINED STATE117ENT OF CIiA11TGES IN PLAN NET ASSETS -
PENSION TRUST FUNDS
FOR THE I~AR ENDED SEPTEMBER 30, 2002
Additions
Contributions:
Employer
Employee
State of Florida
Total contributions
Investment earnings (loss)
Net decrease in fair value of investments
Investment expenses
Operating transfers in
Total additions
Deductions
Benefits
Refunds of contributions
Administrative expense
Total deductions
1\'ct decrease
Net assets held in trust for pension benefits, beginning of year
1~'et assets held in trust for pension benefits, end of year
The accompanying notes to financial statements
are an integral part of this statement.
-15-
S 442,593
81,581
85,719
609,893
(514,964)
(89,597)
19,458
24,790
459,636
17,301
19,458
496,395
(471,605)
8,931,692
S 8,460,087
CITY OF ATLANTIC BEACI~, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(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 fmancial
statements.
(a) Reporting entity-The City of Atlantic Beach, Florida 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 aMayor-Commissioner) and provides, under the administration of an
appointed City Manager, the following services: public safety, public works (streets and
infrastructure), recreation, sanitation, stormwater, planning, zoning, water and sewer, and general
government services.
As outlined in Governmental Accounting Standards Board (GASB) Statement No. 14, The
Reporting Entity, the financial reporting entity consists of the primary government, organizations
for which the primary governments is financially accountable, and other organizations whose
exclusions would cause the reporting entity's financial statements to be misleading or incomplete.
Each potential component unit is individually evaluated using specific criteria outlined in GASB
Statement No. 14, to determine whether the entity is: a) part of the primary government; b) a
component unit which should be included in the reporting entity (blended or discreetly presented);
or c) an organization which should be excluded from the reporting entity entirely. The principal
criteria for classifying a potential component unit include the legal separateness of the organization,
the fmancial accountability of the primary government for the potential component unit resulting
from either the primary government's ability to impose its .will on the potential component unit, or
the potential component unit's fiscal dependency on the primary government. Based upon the
application of these criteria, the City has no component units.
(b) Basis of presentation-The accounts of the City are organized on the' basis of funds and
account groups, each of which is considered a separate accounting entity. The operations of each
fund are accounted for using a separate set of self-balancing accounts which comprise its assets,
liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting
segregates funds according to their intended purpose and is used to aid management in
demonstrating compliance with finance-related legal and contractual provisions. Account groups
are a reporting device to account for certain assets and liabilities of the governmental funds not
recorded directly in those funds. The City has the following fund types and account groups:
(i) Governmental Fund Types
General fund-The general fund is the general operating fund of the City. It is used to
account for all financial resources of the general government, except those required to
be accounted for in another fund.
-16-
CITY OF ATLANTIC BEACII, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(1) Summan~ of Significant Accounting Policies: (Continued)
Special revenue funds-The special revenue funds are used to account for the proceeds
of specific revenue sources (other than major capital projects or expendable trusts) that
are legally restricted to expenditures for specified purposes.
Debt service fca:ci' The debt service fund is used to account for the accumulation of
resources for, and the payment of, long-term debt principal, interest and related costs
other than obligations payable from the operations of the proprietary funds.
Capital projects funds--Capital projects funds are used to account for the financial
resources to be used for the acquisition or construction of major capital facilities (other
than those financed by proprietary fund types or special revenue funds).
(ii) Proprietary Fund Types
Enterprise funds The enterprise funds are used to account for those operations that are
financed and operated in a manner similar to private business enterprises where the
governing body has decided that the determination of revenues earned, costs incurred
and/or net income is necessary for management accountability. Additionally, the cost of
providing goods or services to the general public are financed or recovered primarily
through user charges. The City maintains a utility enterprise fund and a sanitation
1
1 enterprise fund.
The utility fund is comprised of the following systems and accounts:
Water system~7sed to account for activities of the water system.
Sewer system-Used to account for activities of the sewer system.
Stonnwater system~Jsed to account for activities of the stonnwater system.
Bond c
t
ti
t~J
d
f
ons
ruc
on accoun
se
to account
or expenditures of utility revenue bond
proceeds for water, sewer and stonnwater system capital projects.
,., The sanitation fund accounts for the activities of the sanitation system.
Internal service funds-Internal service funds are used to account for the financing of
goods or services provided by central services departments to other departments of the
r City on a cost reimbursement basis.
_ iii Fiducia Fund T • cs
( ) ry b P
Trust unds-Trust funds are used to account for assets held as a trustee or agent by the
City or others. The pension trust funds are accounted for in essentially the same manner
as proprietary funds. The expendable trust fund is accounted for in essentially the same
manner as governmental funds.
(iv) Account Groups
General long-term debt account group-This account group is used to account for the
outstanding long-term liabilities other than those payable from the operations of the
enterprise or trust funds.
~" General faxed asset accountgroup-This account group is used to account for all fixed
assets of the City other than those accounted for in the proprietary or trust funds.
-17-
CITY OF ATLANTIC BEACI3, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(1) Summary of Significant Accounting Policies: (Continued)
(c) Basis of accounting and measurement focus-The accounting and reporting treatment
applied to a fund is determined by its measurement focus. Basis of accounting refers to when
revenues and expenditures or expenses are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the measurements made, regardless of the
measurement focus applied.
All governmental funds and expendable trust funds are accounted for on a current financial
resources measurement focus. This means that only current assets and current liabilities are
generally included on their balance sheets. Their reported fund balance (net current assets) is
considered a measure of "available spendable resources: 'Governmental fund operating statements
present increases (revenues and other financial sources) and decreases (expenditures and other
financing uses) in net current assets.
The governmental fund types and expendable trust funds use the modified accrual basis of accounting.
Under the modified accrual basis, revenues are recognized in the accounting period in which they
become measurable and available. "Measurable" means that the amount of the transaction can be
determined; "available" means the revenue must be collectible within the current period or soon
enough thereafter to be used to pay liabilities of the current period. The City considers all revenues
available if they are collected within 60 days after year end. Expenditures are recorded when the
related fund liability is incurred, except for unmatured interest on general long-term debt which is
recognized when due, and certain compensated absences and claims and judgments which are
recognized when the obligations aze expected to be liquidated with expendable available fmancial
resources.
All proprietary funds and the pension trust funds aze accounted for on the flow of economic resources
measurement focus and use the accrual basis of accounting. Under this method, revenue is recognized
when earned and expenses are recognized at the time liabilities aze incurred.
Proprietary fund types follow all applicable GASB pronouncements as well as Financial
Accounting Standazds Board (FASB) Statements issued on or before November 30, 1989. Pursuant
to GASB Statement No. 20, the City has elected not to apply all FASB Statements and
Interpretations issued after November 30, 1989, to its proprietary fund type activities.
(d) Budgets-General governmental revenue and expenditures accounted for in budgetary. funds
are controlled by a budgetary accounting system in accordance with various legal requirements
which govern the City's operations. Budgets are monitored at varying levels of classification detail;
however, expenditures cannot legally exceed total appropriations at the individual fund level.
Encumbrances are recorded. Unexpended items which are unencumbered at year end must be
reappropriated in the subsequent year.
-18-
Ir
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CITY OF ATLANTIC BEACH FLORIDA
NOTES TO FINANCIAL STATEMEI\"TS
SEPTED'IBER 30, 2002
(1) Summan~ of Significant Accounting Policies: (Continued)
Budgets are adopted for all govenimental funds (general, special revenue, debt service and capital
projects funds). The City Manager is authorized to transfer budgeted amounts within departments
within any fund; however, any revisions that increase the total expenditures of any department or fund
must be approved by the City Commission. All necessary supplemental appropriations are adopted by
the City Commission and are included in the reported budgetary data. The budget presented on the
combined statement of revenues, expenditures and changes m fund balances -budget and actual -all
governmental fund types is prepared in conformity with accounting principles generally accepted in
the United States of Amenca. Following are the more significant supplemental revenue and
appropriation items included in Ordinance 20-02-54:
Expenditures
Revenues and and transfers
• transfers in out
General Fund S 85,865 $. 718,927
Capital Projects 490,456 342,664
.Other supplemental budgetary appropriations in other funds were not considered material.
(e) Cash and investments-Except where prohibited, cash resources of the individual funds are
combined to form a pool of cash and investments. Investments in the pooled cash fund consist
primarily of cash invested with the State Board of Administration. Interest income earned on the
pooled cash and investments is distributed to the appropriate funds based on the average monthly
balance of investments in each fund.
Investments are valued at fair market value (see Note 2 .
For the purposes of the statement of cash flows, the City's proprietary funds consider cash and cash
equivalents to include cash and investments with an original maturity of three months or less.
Receivables-Receivables are recorded at their net realizable value. The allowance for
uncollectible accounts and assessments at September 30, 2002, in the enterprise funds is $154,054.
(g) Inventories~nventories consisting principally of expendable materials, supplies and fuel are
determined by ph sical count at the City's year end on an annual basis and are valued at the lower
I of cost (first-in, first-out) or market. The inventory balance reported is offset by a fund balance
reserve which indicates that it does not constitute "available spendable resources" even though it is
a component of net current assets.
! (h) 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.
(i) Fiacd assets~ixed assets purchased in the ~ovenunental fund types are recorded as
expenditures at the time of purchase. Assets are capitalized at cost in the general fixed assets
account group. Donated fixed assets are recorded in the general fixed assets at fair market value at
the time received. No depreciation has been provided on general fixed assets, and the City does not
r capitalize infrastructure general fixed assets.
1.
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i -19-
CITY OF ATLANTIC BEACII, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(1) Summary of Significant Accounting Policies: (Continued)
The fixed assets of the enterprise funds are capitalized at cost when purchased. Donated fixed .-
assets are capitalized at their fair mazket value at the date received and classified as contributions.
Interest is capitalized on enterprise fund assets acc)uired with tax-exempt debt. The amount of
interest to be capitalized is calculated by offsetting interest expense incurred from the date of the
borrowing until completion of the project with interest earned on invested proceeds over the same -
period. Depreciation is provided using the straight-line method over the assets' estimated useful
lives. Depreciation expense on assets from contnbuted capital is added back to retained earnings
and deducted from contributed capital. The estimated useful lives of the various classes of
depreciable assets aze as follows: --
Assets Years
Buildings and improvements 10 - 40
Improvements other than buildings 10 - 50
Machinery and equipment 3 - 40
(j) Long-term debt~ebt recorded in the general long-term debt account group is paid from
govenunental fund resources. Debt recorded in the enterprise funds is paid from the enterpnse fund
resources.
(k) Compensated absences-Accumulated unpaid vacation and sick pay aze accrued when
incurred in the proprietary type funds and the general long-term obligations account group. The
guidelines of GASB Statement No. 16 were applied in determining the liability for both
governmental and proprietary fund types.
(1) Revenue recognition~Jtility revenues are reported on the accrual basis in the
accomppanying financial statements. Restricted grant revenues, which aze received but not
expended, are recorded as deferred revenues. Grant revenues receivable are recorded when
reimbursable expenditures on those grants have been incurred but not reimbursed.
(m) 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 yeaz. 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 aze held by the City of Jacksonville,
Florida.
(n) Interfund transactions-During the course of normal operations, the City has various
transactions between funds to construct assets and comply with local ordinances and other legal
restrictions. These transactions are reflected as operating transfers. In addition, certain transfers
have been made between systems and accounts of the utility enterprise fund as required by bond
covenants. These transactions aze accounted for as capital transfers on the combining statements of
the utility fund.
-20-
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CITY OF ATLANTIC BEACIi, FLORIDA
NOTES TO FINANCIAL STATE11zENT5
SEPTEMBER 30, 2002
(1) Summary of Significant Accounting Policies: (Continued)
(o) Contributed capital--Contributed capital in the proprietary fund types represents prior years
contributions from other funds, developers, and federal, state and local grant programs. The
contributions were used primarily for capital outlay projects and were recognized as increases in
equity in the period they were earned or received. See Note 14 for a discussion of change in
accounting principle for capital contributions.
(p) Other reserves of fund balances and retained earnings-Reserves recorded in the
governmental funds represent portions of fund balance which cannot be appropriated for
expenditures or which have been segregated for specific future uses. Governmental fund reserves at
September 30, 2002, are as follows:
Special revenue funds
Road and street expenditures $ 1,759,692
Tourism and recreation -168,382
Tree replacement 35,171
Public safety 3,344
Total special revenue funds $ 1,966,589
General fund
t Inventory $ 10,602
t Reserves recorded in the enterprise funds are created by the existence of assets restricted for debt
service, construction and renewals and replacements. The City Commission may also designate
certain amounts of year end fund balance for various projects.
(q) Total columns on combined statements-Total columns on the combined financial
(^ statements are captioned "Totals (Memorandum Only)" to indicate that they are presented only to
facilitate financial analysis. The data in these columns does not present financial position, results of
operations, or cash flows in conformity with generally accepted accounting prine~ples. Neither is
such data comparable to a consolidation. Interfund eliminations have •not been made in the
(~ aggregate of this data.
(2) Deposits 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 to the pension custodian. In addition, investments are separately held and
individually accounted for by several of the City's funds where contractual arrangements and bond
1 covenants provide for and requu•e such arrangements. The deposits and investments of the pension trust
1 funds which have been transferred to the pension custodian are held separately from those of other City
funds and are required to be administered by an investment manager.
At September 30, 2002, the carrying amount of cash on hand and on deposit with banks, including interest-
, bearing deposits was $295,751, and the related bank balance was $34,845. 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 depositones pursuant to Florida Statutes, Chapter 280, "Florida Security for Public Deposits Act:'
Under the Act, all qualified public depositories are required to pledge eligible collateral having a market
value equal to or greater than the average daily or monthly balance of all public deposits, times the
depository's collateral pledged level. The pledging level may range from 50% to 125% depending upon the
depository's financial condition and establishment period. All collateral must be deposited with an approved
financial institution.
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-21-
CITY OF ATLANTIC BEACIi, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(2) Deposits and Investments: (Continued)
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. Accordingly, all deposits aze considered category one credit risk under GASB
Statement No. 3.
The City's investment practices are also governed by Florida Statutes, which allow the City to invest in
certificates of deposit, money market certificates, obligations of the U.S. Treasury, its agencies and
instrumentalities, repurchase and reverse repurchase agreements collateralized by U.S. securities, and the
State Board of Administration. The pension trust funds are also authorized to invest in corporate bonds,
preferred stocks, common stocks, and mutual funds.
Cash and investments at September 30, 2002, are categorized in accordance with GASB Statement No. 3 to
indicate the level of risk assumed by the City. The pension investments held by SunTrust Trust Department
and Merrill Lynch are considered to be category one credit risk investments, which means that they aze fully
insured ($100,000 per participant). The deposits and investments with state agencies (State Board of
Administration) are not classified by credit risk since they are held by independent agencies. The City is a
member of the Local Government Surplus Funds Trust Fund Investment Pool (the Pool) that is administered
by the State Board of Administration of Florida (SBA). This pool is a " 2a-7 like" pool which has the
characteristics of a money market fund. Therefore, the fair value of the City's position in the Pool is the
same as the value of the Pool shazes. Funds that have not been transferred to the state investment pool are
placed in a money mazket fund. The Bank of America Repurchase Agreement is invested in treasury funds
and is not classified by credit risk since this is a mutual fund. There were no violations of the legal or
contractual provisions for deposits and investments.
The total cash and cash equivalents and investment balances of the City at September 30, 2002, are
comprised of the following items:
Cash and cash equivalents
Petty cash on hand $ 1,900
Checking and repurchase agreement ~ 295,751
Investment with State Board of Administration 18,744,397
Total cash and cash equivalents 19,042,048
Less: Cash and cash equivalents, restricted 6,138,238
Total cash and cash equivalents, unrestricted $ 12,903,810
Pension trust investments
SunTrust Short-Term Treasury Portfolio $ 4,866
SunTrust High-Grade Equity Fund 3,275,521
SunTrust U.S. Limited Capitalization Equity Fund 583,263
SunTrust High-Grade Bond Fund 3,918,845
Merrill Lynch American Euro Pacific Growth 680,224
Merrill Lynch Ready Assets 69
Total pension trust investments S 8,462,788
-22-
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CITY OF ATLANTIC BEACIi, FLORIDA
NOTES TO FINANCIAL STATEAZENT5
SEPTEA'IBER 30, 2002
(2) Deposits and Investments: (Continued)
Restricted cash and investments at September 30, 2002, in the enterprise funds follows:
Customer Rene~~al and
Deposits Replacement
Construction
Account Debt Service Total
Enterprise fund
Utility fund $ 451,112 $ 500,000 $ 4,086,328 $ 1,100,798 $ 6,138,238
(3) Saecial Assessments:
l : During 1991, the City imposed a special assessment on residents in a certain area of the City known as
"Section H" to recover a portion of the costs of water and wastewater improvements constructed by the City
in that area. Assessments are payable in equal annual installments through 2010 plus interest at 5.35%
(reduced from 8% in 1999).
During 1993, the City imposed other special assessments on residents in certain areas of the City known as
"Ocean Grove Unit 2," "Dewees," and "Seminole" (shown below as Other Assessments) to recover the cost
. of water and wastewater improvements constructed by the City in those areas. Assessments are payable in
equal monthly installments through 2004 plus interest at 5.91%.
During 1998, the City imposed a special assessment on residents in a certain area of the City known as
"Beach Avenue" to recover the costs of sewer improvements constructed by the City in that area.
Assessments are payable in equal monthly installments through 2009 plus interest at 6.00%.
During 2002, the City imposed a special assessment on residents in a certain area of the City known as
"Selva Marina" to recover the costs of water lines, stormwater improvements and street improvements
constructed by the City in that area. Assessments are payable in equal monthly installments over one year
plus interest at 7.00%.
Following is a summary of the outstanding balances at September 30, 2002:
Beach
Section H Avenue Sch~a Other
r Assessment Assessments Marina Assessments Total
Special assessment receivable,
September 30, 2002 $ 232,719 $ 27,416 $ 16,047 $ 51,046 $ 327,228
Less: current portion 57,000 15,000 - - 72,000
Special assessment receivable - $ 175,719 $ 12,416 $ 16,047 $ 51,046 $ 255,228
noncurrent ~ ~ ~__
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- 23 -
CITY OF ATLANTIC BEACH, FLORIDA
1\TOTES TO FINANCIAL STATEMENTS
SEPTEATBER 30, 2002
(4) Note Receivable:
During 1993, the City signed an agreement with anew mobile home park customer which allowed the
customer to pay its sewer connection fee over an extended period. An initial down payment of $20,000
was received in 1993 on the total connection fee of $175,432. Per agreement, the remainder will be paid
in 180 equal installments of $863.51 beginning April 1, 1993, with no interest ($10,362 was received
during 2002). The City has reserved the right to terminate service in the event of nonpayment.
Following is a summary of the outstanding balance at September 30, 2002:
Note receivable, September 30, 2002 $ 56,992
Less: Current portion 10,362
Note receivable -noncurrent $ 46,630
(5) Fixed Assets:
A summary of changes in general fixed assets follows:
Balance Balance
October 1, September 30,
2001 Additions Deletions 2002
Land $ 1,604,226 $ 85 $ - $ 1,604,311
Buildings 3,018,673 13,879 14,055 3,018,497
Improvements other than
buildings 2,087,827 1,507,150 17,074 3,577,903
Machinery and equipment 1,597,559 205,827 162,534 1,640,852
Construction-in-progress 416,888 1,723,447 1,507,150 633,185
Totals $ 8,725,173 $ 3,450,388 $ 1,700,813 $ 10,474,748
A summary of fixed assets of the enterprise funds at Sept ember 30, 2002, follows:
Utility Fund
Bond Total
R'etcr Stormwater Construction Total Utility Sanitation Enterprise
System Sewer System System Account Fund Fund Funds
Land $ 51,865 $ 697,634 $ - $ - $ 749,499 $ - $ 749,499
Buildings 516,933 3,811,621 - - 4,328,554 - 4,328,554
lmprovcments
other than
buildings 12,201,960 22,702,793 2,052,388 - 36,957,141 - 36,957,141
Machinery and
equipment 440,627 519,624 150,630 - 1,110,881 15,709 1,126,590
Less:
Accumulated
depreciation (4,705,341) (9,477,929) (182,978) - (14,366,248) (11,004) (14,377,252)
8,506,044 18,253,743 2,020,040 - 28,779,827 4,705 28,784,532
Construction-
in-progress 24,358 684,194 191,804 2,049,473 2,949,829 - 2,949,829
Totals $ 8,530,402 $ 18,937,937 $ 2,211,844 $ 2,049,473 $31,729,656 $ 4,705 $31,734,361
- 24 -
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CITY OF ATLANTIC BEACII, FLORIDA
NOTES TO FINANCIAL STATEAZENTS
SEPTEA'IBER 30, 2002
(6) Lone-Term Debt:
The following is a summary of the changes in general long-term debt of the City for the year ended
September 30, 2002:
General Long-Term Debt
Revenue Compensated
Bonds Absences Total
Balances, October 1, 2001 $ 1,304,712 $ 259,681 $ 1,564,393
Additions - 303,775 303,775
Deletions (162,345) (266,723) (429,068)
Balance, September 30, 2002 $ 1,142,367 $ 296,733 $ 1,439,100
Revenue bonds and note payable are comprised of the following:
Utilities System Revenue Bonds, Series 1996 payable in annual installments of principal
and semiannual installments of interest through October 1, 2025, bearing coupon rates
of 3.90% to 5.50%, secured solely by a pledge of and lien on net water and sewer
system revenues and certain other revenues as defined in the bond ordinances. $ 21,160,000
SunTrust Revenue Note, Series 1995 payable in quarterly installments of principal and
interest through January 1, 2006, bearing coupon rates of 4.40% to 5.85%, secured by a
pledge of non-ad valorem revenues.
SunTrust Revenue Refunding Bonds, Series 1999 payable in annual installments of
principal and semiannual installments of interest a rate of 4.20%. The note is secured
by the City's utility service taxes.
Total revenue bonds and note payable
Less: Unamortized discount
Less: Unamortized refunding loss
Revenue bonds and note payable, net
Reported on combined balance sheet as follows:
General long-term debt
Revenue bonds and note payable -current portion
Revenue bonds and note payable -noncurrent portion
Revenue bonds and note payable, net
468,257
1,516,415
23,144,672
(432,522)
(14,112)
$ 22,698,038
$ 1,142,367
520,217
21,035,454
$ 22,698,038
-25-
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEAZENTS
SEPTEMBER 30, 2002
(6) Long-Term Debt: (Continued)
The annual requirements to amortize all revenue bonds payable outstanding at September 30, 2002, are
as follows:
General Long-Term Debt
Account Group Proprietary Fund Types
September 30, Principal lnterest 't'otal Principal lnterest Total
2003 $ 169,738 $ 50,214 $ 219,952 $ 520,217 $ 1,161,268 $ 1,681,485
2004 177,552 41,968 219,520 541,915 1,137,345 1,679,260
2005 188,175 32,754 220,929 571,164 1,134,768 1,705,932
2006 121,550 23,042 144,592 592,557 1,084,373 1,676,930
2007 53,213 19,270 72,483 621,490 1,055,346 1,676,836
Thereafter. 432,139 66,585 498,724 19,154,962 11,387,802 30,542,764
Totals ~ $ 1,142,367 $ 233,833 $ 1,376,200 $
~ 22,002,305 $ 16,960,902
- $ 38,963,207
Interest incurred during the year ended September 30, 2002, was $57,985 in the debt service fund and
$1,246,964 in the enterprise funds. Of the amou nt incurred in the enterprise funds, $94,620 was
capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with bond
resolutions. As of September 30, 2002, and during the year then ended, the City was in compliance with
those ratios.
(7) Defined Benefit Pension Plans:
(a) Plan descriptions and contribution information-The City maintains two separate single-
employer pension plans, one for police officers and one for general employees, which cover
substantially all full-time City employees. The pension plans do not issue separate stand-alone
financial statements. Membership of each plan consists of the following at September 30, 2001, the
date of the latest actuarial valuation:
Retirees and beneficiaries receiving benefits
Disabled members and beneficiaries receiving
benefits
Terminated plan members entitled to but not
yet receiving benefits
Active plan members
Total
General
Employees Police
25 7
2
13
75
115
(i) General Employees' Retirement Plan
2
3
26
38
Plan Description-The General Employees' Retirement 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.
Contributions-The City is required to contribute at an actuarially determined rate. Plan
members are required to contribute 2.0% of their annual covered salary. Contribution
requirements are established by City code, which may be amended by the City
Commission. Administrative costs of the General Employees' Retirement Plan are
funded by a transfer from the City's general fund.
-26-
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CITI' OF ATLANTIC BEACIi, FLORIDA
NOTES TO FINANCIAL STATEMENT'S
SEPTEMBER 30, 2002
1.
(7) Defined Benefit Pension Plans: (Continued)
(ii) Police Retirement Plan
Plan Description-The Police Retirement Plan provides retirement, disability and death
benefits to plan members and their beneficiaries. The Police Retirement Plan is
governed by the Policemen's Pension Board of Trustees, although the City Commission
retains the authority to establish and amend the benefit provisions of the plan.
1 Contributiorzr Plan members are required to contribute 1.0% (4.815% for nonunion
1 participants) of their annual covered salary. The City is required to contribute at
actuarially determined rates, if State of Florida contributions are not sufficient. Per City
code, the City Commission may amend established contribution requirements.
Administrative costs are funded.by a transfer from the City's general fund.
(b) Annual pension costs and net pension obligation-The City's annual pension cost and net
pension obligation to the General Employee's and Police Retirement Plans for the current year
were as follows:
i, General
Employees Police
Annual required contribution (ARC) $ 288,070 $ 240,242
Interest on net pension obligation -
Adjustment to ARC -
Annual pension cost 288,070 240,242
Contributions made ~ (288,070) (240,242)
Net pension obligation, end of year $ - $ -
(c) Other pension plan information-The annual required contributions for the current year
were determined as part of the September 30, 2000, actuarial valuations for the General
Employees' and Police Retirement Plans using the individual entry-age actuarial cost method. The
actuarial assumptions include an 8.0% rate of return on investments and projected salary increases,
which range from 5.5% to 8.5% for both plans. The assumptions did not include post retirement
benefit.increases.
The actuarial value of assets was determined using market value and a funding value adjustment for
both plans. The unfunded actuarial accrued liabilities are being amortized over remaining
r amortization periods of 7 to 30 years.
11
-27-
CITY OF ATLANTIC BEACH, FLORIDA --
NOTES TO FINANCIAL STATEII7ENTS
SEPTEMBER 30, 2002
(7) Defined Benefit Pension Plans: (Continued)
Three-year trend information
Annual Percentage
Fiscal Year Ended Pension Cost of APC Net Pension
September 30, (APC) Contributed Obligation
General Employees
2000 $ 259,414 100% $ -
2001 266,148 100% -
2002 288,070 100% -
Police
2000 179,988 100% -
2001 183,092 100% -
2002 240,242 100% -
(8) Intcrfund Transactions Reconciliation:
A summary of interfund receivables and payables as of September 30, 2002, is as follows:
Duc from other funds Due to other funds Amount
General Special Revenue -Miscellaneous Grants $ 97,830
General Special Revenue -Police Grants 1,969
General Trust and Agency -Police Pension Trust 4,249
$ 104,048
(9) Chances in Contributed Capital:
Following is a summary of changes in contributed capital for the year ended September 30, 2002:
Balance, October 1, 2001, as restated (See Note 15) $ 6,541,288
Less: Amortization 238,496
Balance, September 30, 2002 $ 6,302,792
- 28 -
C~
CITY OF ATLANTIC BEACH FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
' ' (10) Sc~ment Information for Enterprise Funds:
~" The City has established a utility enterprise fund to account for water, sewer an d stormwater services,
` along with bond construction expenditures. In addition, the City maintains a separate enterprise fund to
account for sanitation services. Segment information for the City's enterprise funds for the year ended
September 30, 2002 is as follows:
Total
Sanitation Enterprise
Utility Fund Fund Funds
Operating revenues ~ $ 5,866,487 $ 1,187,280 $ 7,053,767
Depreciation 1,591,125 1,870 1,592,995
Operating income (loss) (64,371) 205,597 141,226
Nonoperating income (expense) (628,992) 12,360 (616,b32)
Developer/customer contributions 226,908 - 226,908
Net operating transfers in (out) 651,226 (206,000) 445,226
Net income 184,771 11,957 196,728 .
Net fixed assets 31,729,656 4,705 31,734,361
Special assessment receivable
noncurrent 239,181 - 239,181
Net working capital 4,680,186 595,777 5,275,963
Fixed asset additions 3,688,006 - 3,688,006
Long-term debt 21,035,454 - 21,035,454
Total equity 20,349,027 600,482 20,949,509
Total assets 43,739,348 670,896 44,410,244
(11) Commitments
As of September 30, 2002, the City had outstanding commitments on contracts in progress as follows:
Unexpended
Contract
Project Type Amounts
l Water system improvements $ 1,108,078
l Wastewater system improvements 486,578
Stormwater system improvements 1,604,953
r General government improvements 1,382,478
` ' 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 Atlantic Beach. 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, 2002, the City incurred $726,273 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. .
(12) Continacncics:
~~ The City is a defendant in several lawsuits which arose in the ordinary course of the City's business. It is
the City's position that the probability is unlikely that material amounts will ever be payable as a result
r of these proceedings.
l
-29-
CITY OF ATLANTIC BEACH FLORIDA -
NOTES TO FIl\'ANCIAL STATEMENTS
SEPTEMBER 30, 2002
(13) Risk A'Iana c~ merit:
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions; and natural disasters for which the City carries commercial insurance. Insurance
against losses are provided through the Florida League of Cities, Inc. and Risk Management Associates,
Inc. for the followmg 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 nsk.
(14) Change in Accounting Princinlc:
GASB issued Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions,
which provides accounting and reporting guidance for nonexchange transactions (e.g., most taxes, grants,
and donations) and was effective for financial statements for periods beginning after June 15, 2000. One
of the provisions of Statement No. 33, upon meeting certam eligibility requirements, requires the
recording of capital contributions to proprietary funds as revenues. In the prior year, in the water and
sewer fund, contributions received from the federal government and developers for capital acquisitions
or construction were reported as contributed capital. Prior year contributed capital and retained earnngs
have been adjusted by $372,783 for capital grant contributions received during the year ended
September 30, 2001. For the year ended September 30, 2002, there were no capital grant contributions
received; therefore, Statement No. 33 had no impact on the current year combined statement of revenues,
expenses and changes in retained earnings.
Additionally Statement No. 33, required recognition of taxes, grants and donations when the underlying -'
transaction occurs. Prior year fund balances in the general fund and special revenue funds have been
restated in the amounts of $94,661 and $76,477 respectively to reflect receivables for tax revenues where
the underlying transactions occurred prior to September 30, 2001.
(15) Subsequent Event:
On October 1, 2002, the City paid the outstanding balance of the SunTrust Revenue Note, Series 1995 in
the amount of $468,257. The City expects to save approximately $50,000 representing interest payments
had the note remained outstanding to maturity.
-30-
REQUIl2ED SUPPLEMENTARI' INFORMATION
-31 -
CITY OF ATLANTIC BEACIi, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCIiEDULES OF PENSION FUNDING PROGRESS
SEPTEMBER 30, 2002
General Employees' and Police Retirement Plans (prior to September 30, 1998)
(3) (4)
Entry-Age Unfunded
Normal Actuarial (7)
(2) Actuarial Accrued (5) (6) UAAL as
(1) Actuarial Accrued Liability Funded Annual Percentage
Valuation Value of Liability (UAAL) Ratio Covered of Payroll
Date Assets (AVA) (AAL) (3)-(2) (2)/(3) Payroll (4)/(6)
9/30/94 $ 4,549,000 $ 6,061,000 $ 1,512,000 75.1% $ 3,068,000 49.3%
9/30/95 5,546,000 7,200,000 1,654,000 77.0% 3,054,000 54.2%
9/30/96 6,517,000 8,290,000 1,773,000 78.0% 3,107,000 57.1%
9/30/97 ~'~ 7,435,000 9,275,000 1,840,000 80.2% 3,305,000 55.7%
9/30/98 7,127,000 9,144,000 2,017,000 77.9% 3,007,000 67.1%
cap The actuarial value of assets used before plan year September 30, 1997, was at market value; the
asset method used after that date was the funding value.
General Employees' Retirement Plan
Annual UAAL as
Valuation Funded Covered Percentage
Date AVA AAL UAAL Ratio Payroll of Payroll
9/30/99 $ 4,650,000 $ 5,796,000 $ 1,146,000 80.2% $ 2,185,000 52.4%
9/30/00 5,229,000 6,462,000 1,233,000 80.9% 2,330,000 52.9%
9/30/01 5,587,000 6,986,000 1,399,000 80.0% 2,462,000 56.8%
Police Retirement Plan
Valuation
Date AVA
AAL
UAAL
Annual UAAL as
Funded Covered Percentage
Ratio Payroll of Payroll
9/30/99 $ 3,393,000 $ 4,089,000 $ 696,000 83.0% $ 1,018,000 68.4%
9130/00 3,791,000 4,615,000 824,000 82.1% 1,213,000 67.9%
9/30/01 4,068,000 5,016,000 948,000 81.1% 1,155,000 82.1%
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system's funded status on a
going-concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing
the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the
effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay
benefits when due. Generally, the smaller this percentage, the stronger the plan.
-32-
r
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~ CITY OF ATLANTIC BEACH
FLORIDA
,
REQUIRED SUPPLEMENTARY INFORMATION
SCIIEDULES OF CONTRIBUTIONS FRODZ EMPLOYER
^ -AND OTIiER CONTRIBUTING ENTITIES
E SEPTEMBER 30, 2002
General Employees' and Police Retirement
Plan (Prior to September 30, 1998)
Annual
Required
fear Ended Contributed Percentage
September 30, (ARC) Contributed
1994 $ 271,518 101%
I
1 1995 326,284 100%
1996 420,591 100%
1997 419,766 105%
1998 441,972 109%
1999 460,819 104%
General Employees' Retirement Plan
Annual
Required
Year Ended Contributed Percentage
September 30, (ARC) Contributed
2000 $ 259,414 100%
2001 266,148 100%
2002 2ss,o7o loo°i°
Police Retirement Plan
Annual
required
Year Ended Contributed Percentage
September 30 (ARC) Contributed
2000 $ 179,988 100%
2001 183,091 100%
2002 240,242 100%
r
r
The information presented in the required supplementary schedules was determined as part of the
actuarial valuation at the dates indicated. Additional information for the general employees' and police
retirement plans as of the latest actuarial valuation follows:
~~aluation Date
Actuarial Cost Method
Amortization Method
Remaining Amortization Period
Asset Valuation A'Iethod
Actuarial Assumptions
Investment Rate of Return
Projected Salary Increases
Inflation
September 30, 2001
Entry-Age Actuarial Cost Method
Level Percent of Payroll, Closed
7 to 30 years
Market Value through September 30, 1997, and
Funding Value after September 30, 1997
8.00%
5.50%
5.00%
- 33 -
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COAZBINIl~'G AND Il~'DI~'IDUAL FUND
STATEMENTS AND SCIIEDULES
Combining financial statements provide a more detailed view of the
general purpose financial statements presented in the preceding
subsection.
Individual statements and schedules, although not necessary for a
fair presentation in conformity with accounting principles generally
accepted in the United States of America, are presented to provide
greater detail and comparative financial information for certain
fund types.
- 35 -
GENERAL F'UNll
The general fund accounts for all revenues and expenditures used to
finance the traditional services associated with a municipal
government which are not accounted for in other funds. In the City
of Atlantic Beach, Florida, these services include police and fire
protection, street services, parks and recreation, building safety,
general administration and other activities for which a special fund
has not been created.
-37-
CITY OF ATLANTIC BEACH FLORIDA
SCIIEDULE OF EXPENDITURES -BUDGET AND ACTUAL -
GENERAL FUND
FOR TIIE YEAR ENDED SEPTEMBER 30, 2002
(VVITII COMPARATIVE TOTALS FOR SEPTEMBER 30, 2001)
Expenditures
General government
Legislative:
Personal services
Operating expenditures
Total legislative
Legal counsel:
Personal services
Operating expenditures
Total legal counsel
Planning and zoning:
Personal services
Operating expenditures
Total planning and zoning
City Clerk:
Personal services
Operating expenditures
Capital outlay
Total City Clerk
2002 2001
Variance
Favorable
Budget Actual (Unfavorable) Actual
$ 36,765 $ 33,701 $ 3,064 $ 37,730
10,020 5,582 4,438 7,491
46,785 39,283 7,502 45,221
14,120 12,971 1,149 10,619
108,000 58,477 49,523 98,949
122,120 71,448 50,672 109,568
94,071 94,241 (170) 78,113
49,098 37,124 11,974 15,566
143,169 131,365 11,804 93,679
136,299 130,489 5,810 117,571
92,870 80,912 11,958 43,196
- - - 4,251
229,169 211,401 17,768 165,018
Other general government:
Personal services - - - -
Operating expenditures 254,930 179,118 75,812 186,398
Capital outlay 465 - 465 25,648
Total other general government 255,395 179,118 76,277 212,046
Total General Government 796,638 632,615 164,023 625,532
Public Safety
Law enforcement:
Personal services
Operating expenditures
Capital outlay
Total law enforcement
Lifeguards:
Personal services
Operating expenditures
Capital outlay
Total lifeguards
2,219,089 2,201,443 17,646 1,846,697
503,819 463,051 40,768 381,475
16,785 16,725 60 46,631
2,739,693 2,681,219 58,474 2,274,803
118,561 118,049 512 111,270
42,376 44,792 (2,416) 26,022
28,665 28,662 3 -
189,602 191,503 (1,901) 137,292
-38-
(Continued)
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CITI' OF ATLANTIC BEACII FLORIDA
SCI3EDULE OF E~'ENDITURES -BUDGET AND ACTUAL -
GENERAL FUND
FOR THE PEAR ENDED SEPTEA'IBER 30, 2002
(VVITII COMPARATIVE TOTALS FOR SEPTEA'IBER 30, 2001)
r (Continued)
ll
r
Fire control: .
Personal services
Operating expenditures
Total fire control
Animal control:
Personal sen7ces
Operating expenditures
Capital outlay
l
` Total animal control
Code enforcement:
Personal services
Operating expenditures
Capital outlay
Total code enforcement
Buildin
i
s
ti
g
n
pec
ons:
Personal services
Operating expenditures
Capital outlay
Total building inspections
Total Public Safety
l Transportation
Personal services
Operating expenditures
Capital outlay
Grants and aids
Total Transportation
Culturc/Recrcation
Pazks and recreation:
Personal services
r Operating expenditures
I Capital outlay
l Grants and aids
Total Culturc/Recrcation
r
E . Total Expenditures
r
2002 2001
Vnriancc
Favorable
Budget Actual (Unfavorable) Actual
5 10,991 S 12,010 $ (1,019) $ 10,776
837,257 775,275 61,982 760,643
848,248 787,285 60,963 771,419
61,338 23,951 37,387 58,992
22,310 14,405 7,905 19,315
4,050 3,695 355 4,524
87,698 42,051 45,647. 82,831
40,373 40,406 (33) 39,052
17,270 13,068 4,202 13,926
- - - 1,953
57,643 53,474 4,169 54,931
236,085. 227,016 9,069 160,546
61,113 50,593 10,520 72,009
35,112 33,921 1,191 18,427
332,310 311,530 20,780 250,982
4,255,194 4,067,062 188,132 3,572,258
278,218 265,288 12,930
407,326 387,967 19,359
59,281 56,855 2,426
744,825 710,110 34,715
388,290 377,152
497,865 464,218
69,181 64,491
955,336 905,861
11,138
33,647
4,690
49,475
$ 6,751,993 $ 6,315,648
$ 436,345
231,641
423,625
71,973
/l /,13y
303,112
391,444
283,433
50.685
1,028,674
J,`JJ:3, /Uj
-39-
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SPECIAL REVENUE FUNDS
The special revenue funds are used to account for proceeds of
specific revenue sources (other than major capital projects or
expendable trusts) that are .legally .restricted to expenditures for
specified purposes.
The tree protection fund consists of mitigation proceeds to be used
for planting of trees within the City.
I The local option gas tax fund consists of the City's share of county
I gas tax revenues and related interest earnings, to be used in support
of capital outlay and maintenance for local roads and drainage
systems.
The miscellaneous grants fund consists of grant monies received
from local, state, and/or federal agencies which are restricted for
purposes specified by the grantors.
The convention development tax fu~:d is funded through the levy of
the local tourist development tax, and the funds are restricted for the
extension, enlargement, improvement, construction or maintenance
of convention centers, stadiums, coliseums, arenas or other
r recreational centers.
t
The half cent discretionary sales tax fund provides for the
r-~ collection and spending of the additional half cent sales tax, which
(` is restricted for capital projects, such as streets, public facilities or
parks.
The police grants fund consists of grant monies received from local,
state and/or federal agencies which are restricted by the grantors for
specific public safety projects.
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-41-
CITY OF ATLANTIC BEACH, FLORIDA
COMMI3INING BALANCE SHEET -ALL SPECIAL REVENUE FUNDS
SEPTEMBER 30, 2002
Assets
Cash and cash equivalents
Due from other governments
Total Assets
Liabilities and Fund Balances
Liabilities
Accounts payable and accrued
expenses
Due to other funds
Deferred revenue
Total liabilities
Fund balances
Reserved for roads and street
expenditures
Reserved for tourism and
recreation
Reserved for tree replacement
Reserved for public safety
Total fund balances
Total Liabilities and Fund
Balances
Convention
Tree Local Option Miscellaneous Development half-Cent
Protection Gas Tax Grants Tax Sales Taz Police Grants Totals
$ 35,171 $ 1,239,100 ~ - $ 161,872 $ 343,397 ~ 10,368 $ 1,789,908
- 88,185. 97,992 6,510 94,988 4,713 292,388
35,171 1;327,285 97,992 168,382 438,385 15,081 2,082,296
- 6,140 - - - 771 6,911
- - 97,830 - - 1,969 99,799
- - - - - 8,997 8,997
- 6,140 97,830 - - 11,737 115,707
- 1,321,145 162 - 438,385 - 1,759,692
- - - 168,382 - - 168,382
35,171 - - - - - 35,171
- ~ - - - - 3,344 3,344
35,171 1,321,145 162 168,382 438,385 3,344 1,966,589
$ 35,171 $ 1,327,285 $ 97,992 ~ 168,382 $ 438,385 $ 15,081 $ 2,082,296
-42-
1 I
CITY OF ATLANTIC BEACLI FLORIDA
COAII3INING STATEMENT OF REVENUE
EYPENDTTURE
N
, D
S A
CIiANGES IN FUND BALANCES -ALL SPECIAL REVEN UE FUNDS
FOR TILE YEAR ENDED SEPTEMBER 30, 2002
Com~ention
Tree LocalO~tion liscellaneous Development half-Cent
Protection Gas Tax Grants Tax Sales Tax Police Grants Totals
Revenues
Taxes $ - $ 502,278 $ - $ 72,914. $ 553,926 $ - $ 1,129,118
Federal grants - - 139,229 - - 33,768 172,997
Miscellaneous 37;225 - - 4,500 - - 41,725
Interest income - 30,616 - 2,574 6,167 209 39,566
Total revenues 37,225 532,894 139,229 79,988 560,093 33,977 1,383,406
Expenditures
General government 5,220 - 139,229 9,870 - - 154,319
Public safety - - - - - 45,488 45,488
Transportation - 491,697 - - ~ - - 491,697
Total expenditures 5,220 491,697 139,229 9,870 - 45,488 691,504
Excess (deficiency) of revenues
over (under) expenditures 32,005 41,197 - 70,118 560,093 (11,511) 691,902
Other financing sources (uses)
Operating transfers in - - - - - 9,934 9,934
Operating transfers out - (575,730) (100) (30,000) (510,317) (3,026) (1,119,173)
Total other fmaneing
sources (uses) - (575,730) (100) (30,000) (510,317) 6,908 (1,109,239)
Excess (deficiency) of revenues
and outer financins sources
over (under) expenditures and
ot}rer financing uses 32,005 (534,533) (100) 40,118 49,776 (4,603) (417,337)
Fund balances, beginning ofyear,
as originally stated 3,166 1,818,589 262 128,264 349,221 7,947 2,307,449
Prior period adjustment - 37,089 - - 39,388 - 76,477
Fund Balances, beginning of year,
as restated 3,166 1,855,678 262 128,264 388,609 7,947 2,383,926
Fund balances, end ofyear $ 35,171 $ 1,321,145 $ 162 $ 168,382 $ 438,385 $ 3,344 $ 1,966,589
- 43 -
ENTERPRISE FUNDS
Enterprise funds are used to account for operations that are financed
and operated in a manner similar to private business enterprises,
where the intent of the City's commission is that the cost of
providing goods or services to the general public on a continuing
basis be financed or recovered primarily through changes, or where
the City's Commission has decided that periodic determination of
net income is appropriate for accountability purposes.
The utility fund is used to account for the operations of the City's
water, sewer and stormwater systems and to account for the use of
bond construction proceeds for capital projects related to the
various utility systems.
The sanitation fund is, used to account for the operations of City's
sanitation system.
-45-
CITY OF ATLANTIC BEACII, FLORIDA
COMBINING BALANCE SKEET -
ALL ENTERPRISE FUNDS
SEPTEMBER 30, 2002
ASSETS
Assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Special assessment receivable -current
Note receivable -current
Restricted assets:
Cash and cash equivalents
Fixed assets, net of accumulated depreciation
Special assessment receivable- noncurrent
Note receivable- noncurrent
Other noncurrent assets
Unamortized loan costs
Total Assets
LIABTLTTiES Al~'I) EQUITY
Liabilities
Current liabilities (payable from current assets):
Accounts payable and accrued liabilities
Deferred revenue
Accrued compensated absences
Cun;ent liabilities (payable from restricted assets):
Accounts payable
Interest payable
Revenue bonds payable -current portion
Customer deposits
Revenue bonds payable
Total liabilities
Equity
Contn~buted capital
Retained earnings
Reserved for renewal and replacement
Unreserved
Total equity
Total Liabilities and Equity
Total
.Sanitation Enterprise
Utility Fund Fund Funds
$ 4,575,057 $ 648,500 $ 5,223,557
4 65,654 17,691 483,345
43,098 - 43,098
72,000 - 72,000
10,362 - 10,362
6,138,238 - 6,138,238
31,729,656 4,705 31,734,361
239,181 - 239,181
46,630 - 46,630
18,800 - 18,800
400,672 - 400,672
$ 43,739,348 $ 670,896 $ 44,410,244
$ 355,629 $ 70,414 $ 426,043
26,339 - 26,339
104,016 - 104,016
316,973 - 316,973
580,581 - 580,581
520,217 - 520,217
451,112 - 451,112
21,035,454 - 21,035,454
23,390,321 70,414 23,460,735
6,302,792 - 6,302,792
4,269,355 - 4,269,355
9,776,880 600,482 10,377,362
20,349,027 600,482 20,949,509
$ 43,739,348 $ 670,896 $ 44,410,244
-47-
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CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN .RETAINED EARNINGS
~' ALL ENTERPRISE FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Operating revenues
Customer charges
Other income
' Total operating revenues
Operating expenses
Personal services
Contractual services
Supplies
Repairs and maintenance
Heat, light and power
Depreciation
Other expenses
Total operating expenses
Operating income (loss)
Nono
eratin
revenues (ex
e
p
g
p
nses)
Connection charges
Sewer generation charges
Other intergovernmental revenues
Interest income
Interest expense
Amortization of loan costs
Total nonoperating revenues (expenses)
Income (loss) before contributions and operating transfers
Developer/customer contributions
E Other financing sources (uses)
Operating transfers in
t Operating transfers out
t Total other financing sources (uses)
Net income
Depreciation related to contributed assets
Increase in retained earnings
Retained earnings, beginning ofyear, as originally stated
Prior period adjustment
Retained earnings, beginning ofyear, as restated
I Retained earnings, end ofyear
Total
Sanitation Enterprise
Utility Fund Fund Funds
$ 5,547,225 $ 1,187,280 $ 6,734,505
319,262 - 319,262
5,866,487 1,187,280 7,053,767
1,455,169 5,315 1,460,484
971,861 848,990 1,820,851
259,445 - 259,445
117,924 - 117,924
399,330 - 399,330
1,591,125 1,870 1,592,995
1,136,004 125,508 1,261,512
5,930,858 981,683 6,912,541
(64,371) 205,597 141,226
55,366 - 55,366
145,471 - 145,471
116,174 - 116,174
124,759 12,360 137,119
(1,050,971) - (1,050,971)
(19,791) (19,791)
(628,992) 12,360 (616,632)
(693,363) 217,957 (475,406)
226,908 - 226,908
1,063,226 - 1,063,226
(412,000) (206,000) (618,000)
651,226 (206,000) 445,226
184,771 11,957 196,728
238,497 - 238,497
423,268 11,957 435,225
13,250,184 588,525 13,838,709
372,783 - 372,783
13,622,967 588,525 14,211,492
$ 14,046,235 $ 600,482 $ 14,646,717
-49-
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CITI' OF ATLANTIC BEACH FLORIDA
COMBINING STATEMENT OF CASK FLOWS -
ALL ENTERPRISE FUNDS
FOR TIIE YEAR ENDED SEPTEMBER 30, 2002
Cash flows from operating activities
Operating income (loss
Adjustments to reconci a operating income (loss) to net cash
provided by operating activities:
Depreciation
Loss on disposals
(Increase) decrease in certain assets
Accounts receivable, net
Invento
Increase (~ecrease) in certain liabilities
Accounts payable and accrued liabilities
Customer deposits
Deferred revenue
Total adjustments
Net cash provided by operating activities
Total
Sanitation Enterprise
Utility Fund Fund Funds
$ (64,371) $ 205,597 $ 141,226
1,591,125 1,870
8,511 -
(144,713 (461)
(37,337 -
1,592,995
8,511 .
(145,174
(37,337
491,180 4,579 495,759
56,508 - 56,508
(55,406) - (55,406)
1,909,868 5,988 1,915,856
1,845,497 211,585 2,057,082
Cash flo~~•s from noncapital financing activities
Connection charges ~ 55,366
Sewer generation charges 145,471
Intergovernmental revenues 116,174
Operating transfers out (412,000)
Operating transfers in 1,063,226
Net cash provided by (used in) noncapital financing
activities 968,237
_ Cash flows from capital and related financing activities
Changes in interest receivable
Collections on note receivable
Collections on special assessments
Property, plant and equipment additions
Developer/customer contributions
Principal pa ents on bonds payable
Interest paid net of capitalized interest
Net cash used in capital and related financing activities
Cash flows from investing activities
Interest income
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of yeaz
Cash and cash equivalents, end of year
Balance sheet components of cash and cash equivalents
Cash and cash equivalents
Restricted assets:
Cash and cash equivalents
Total cash and cash equivalents, end of year
Noncash activity
Capitalized interest expense
(206,000)
(206,000)
55,366
145,471
116,174
(618,000)
1,063,226
762,237
23,661 - 23,661
10,362 - 10,362
81,227 - 81,227
(3,688,006) - (3,688,006)
226,908 - 226,908
(498,385 - (498,385
1 029 872 - 1 029 872
(4,874,105) - (4,874,105)
124,75 9 12,3 60 13 7,119
(1,935,612) 17,945 (1,917,667)
12,648,907 630,555 13,279,462
$ 10,713,295 $ 648,500 $ 11,361,795
$ 4,575,057 $ 648,500 $ 5,223,557
6,138,238 - 6,135,238
$ 10,713,295 $ 648,500 $ 11,361,795
$ 94,620 $ - $ 94,620
-51 -
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CITY OF ATLANTIC BEACII, FLORIDA
SCIiEDULES OF NET REVENUES IN ACCORDANCE
WITII BOND RESOLUTIONS -
WATER AND SEWER SI'STEMS
FOR TIIE YEAR ENDED SEPTEIIZBER 30, 2002
(VVITII COA'IPARATIVE TOTALS FOR SEPTEMBER 30, 2001)
Gross revenues
Water
Sewer
Other intergovernmental revenues
Connection charges
Developer/resident contributions
Interest
Total gross revenues
Operating expenses
Personal services
Contractual services
Supplies
Repairs and maintenance
Heat, light and power
Other expenses
Total operating expenses
Total net revenues in accordance with bond resolutions
Capital facilities charges
1~'et revenues plus capital facilities charges
Debt sen~ce
Interest paid
Principal paid
Total debt service
Debt ser~~ce coverage ratio
Debt service coverage ratio excluding capital facilities charges
Required debt service coverage ratio
Required debt service coverage ratio, excluding capital facilities
charges
2002 2001
$ 2,221,803 $ 2,062,336
3,359,035 3,242,675
52,320 -
55,366 55,170
226,908 ~ 197,392
118,562 359,606
6,033,994 5,917,179
1,273,031 1,015,862
832,113 1,028,719
228,521 295,129
109,772 159,778
399,330 388,815
1,066,491 1,083,968
3,909,258 3,972,271
2,124,736 1,944,908
145,471 137,965
$ 2,270,207 $ 2,082,873
$ 1,147,300 $ 1,166,228
445,000 425,000
$ 1,592,300 $ 1,591,228
1.43 1.31
1.33 1.22
1.10 1.10
1.05 1.05
~, - 53
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF BALANCE SKEET INFORMATION
UTILITY FUND SYSTEMS
SEPTEMBER 30, 2002
ASSETS
Assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Special assessment receivable -current
Note receivable -current
Restricted assets:
Cash and cash equivalents
Fixed assets, net of accumulated depreciation
Special assessment receivable -noncurrent
Note receivable -noncurrent
Other noncurrent assets
Unamortized loan coasts
Total Assets
LIABILITIES AND EQUITY
Liabilities
Current liabilities (payable from current assets):
Accounts payable and accrued liabilities
Deferred revenue
Accrued compensated absences
Current liabiliries (payable from restricted assets):
Accounts payable
Interest payable
Revenue bonds payable -current portion
Customer deposits
Revenue bonds payable
Total liabilities
Equityty
Contnbuted capital
Retained earnings (accumulated deficit):
Reserved for renewal and replacement
Unreserved
Total equity
' Total Liabilities and Equity
Stormwater Bond Total Utility
~'Vater System Sewer System System Construction Fund
$ 1,317,908 $ 2,771,968 $ 485,181 $ - $ 4,575,057
174,935 228,423 62,296 - 465,654
34,465 8,633 - - 43,098
25,000 47,000 - - 72,000
- 10,362 - - 10,362
975,941 861,051 214,918 4,086,328 6,138,238
8,530,402 18,937,937 2,211,844 2,049,473 31,729,656
93,37b 145,805 - - 239,181
- 46,630 - - 46,630
- 18,800 - - 18,800
93,419 244,039 63,214 - 400,672
$ 11,245,446 $ 23,320,648 $ 3,037,453 $ 6,135,801 $ 43,739,348
$ 111,626 $ 212,063 $ 31,940 $ - $ 355,629
- 26,339 - - 26,339
29,583 74,433 - - 104,016
- - - 316,973 316,973
140,636 321,700 118,245 - 580,581
134,193 289,351 9b,673 - 520,217
451,112 - - - 451,112
4,178,354 13,173,842 3,b83,258 - 21,035,454
5,045,504 14,097,728 3,930,116 316,973 23,390,321
1,477,280 4,800,512 25,000 - 6,302,792
250,000 250,000 - 3,769,355 4,269,355
4,472,662 4 172 408 (917,663) 2,049,473 9,776,880
6,199,942 9,222,920 (892,663) 5,818,828 20,349,027
$ 11,245,446 $ 23,320,648 $ 3,037,453 $ 6,135,801 $ 43,739,34$
~s
- 55 -
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS INFORMATION -
UTILITY FUND SYSTEMS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Operating revenues
Customer charges
Other income
Total operating revenues
Operating expenses
Personal services
Contractual services
Supplies
Repairs and maintenance
Heat, light and power
Depreciation
Other expenses
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses)
Connection charges
Sewer generation charges
Other intergovernmental revenues
Interest income
Interest expense
Amortization of loan costs
Total nonoperating revenues (expenses)
Income (loss) before contributions and operating transfers
Developer/customer contributions
Stormwater Bond Total Utility
~Vater System Sewer System System Construction Fund
$ 1,972,909 $ 3,303,467 $ 270,849 $ - $ 5,547,225
248,894 55,568 14,800 - 319,262
2,221,803 3,359,035 285,649 - 5,866,487
525,019 748,012 182,138 - 1,455,169
355,157 476,956 139,748 - 971,861
109,235 119,286 30,924 - 259,445
41,155 68,617 8,152 - 117,924
79,912 319,418 - - 399,330
464,574 1,017,681 108,870 - 1,591,125
424,162 642,329 69,513 - 1,136,004
1,999,214 3,392,299 539,345 - 5,930,858
222,589 (33,264) (253,696) - (64,371)
35,004 20,362 - - 55,366
- 145,471 - - 145,471
10,000 42,320 63,854 - 116,174
50,487 68,075 6,197 - 124,759
(340,965) (542,503) (167,503) - (1,050,971)
(4,686) (11,994) (3,111) - (19,791)
(250,160) (278,269) (100,563) - (628,992)
(27,571) (311,533) (354,259) - (693,363)
46,210 180,698 - - 226,908
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1 I 1 I 1 1 I 1 1 I
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS INFORMATION -
UTILITY FUND SYSTEMS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
(Continued)
Other financing sources (uses)
Operating transfers in
Operating transfers out
Capital transfers in
Capital transfers out
Total other financing sources (uses)
Net income
Depreciation related to contributed assets
Increase in retained earnings
Retained earnings, beginning of year, as originally stated
Prior period adjustment
Retained earnings, beginning of year, as restated
Retained earnings, end of year
Stormwater Bond Total Utility
~Vater System Sewer System System Construction Fund
- 64,035 999,191 - 1,063,226
(144,200) (267,800) - - (412,000)
338,356 53,038 355,366 195,993 -
(19,952) (86,844) (89,157) (746,760) -
174,204 (237,611) 1,265,400 (550,767) 651,226
]92,843 (368,446) 911,141 (550,767) 184,771
77,087 161,410 - - 238,497
269,930 (207,036) 911,141 (550,767) 423,268
4,321,924 4,387,469 (1,828,804) 6,369,595 13,250,184
130,808 241,975 - - 372,783
4,452,732 4,629,444 (1,828,804) 6,369,595 13,622,967
$ 4,722,662 $ 4,422,408 $ (917,663) $ 5,818,828 $ 14,046,235
-57-
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CASH FLOW INFORMATION
ALL UTLITY FUND SYSTEMS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Cash flows from operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash provided
by operating activities:
Depreciation
Loss on disposals
(Increase) decrease in certain assets
Accounts receivable, net
Inventory
Increase (decrease) in certain liabilities
Accounts payable and accrued liabilities
Customer deposits
Deferred revenue
Total adjustments
Net cash provided by operating activities
Stormwater
Water System Sewer System System
Bond Total Utility
Construction Fund
$ 222,589 $ (33,264) $ (253,696) $ - $ (64,371)
464,574 1,017,681 108,870 - 1,591,125
1,088 - 7,423 - 8,511
(43,791) (42,440) (58,482) - (144,713)
(34,465) (2,872) - - (37,337)
57,209 163,396 1,859
56,508 - -
(13,086) (42,320) -
488,037 1,093,445 59,670
710,626 1,060,181 (194,026)
268,716 491,180
- 56,508
- (55,406)
268,716 1,909,868
268,716 1,845,497
Cash flows from noncapital financing activities
Connection charges 35,004 20,362 - - 55,366
Sewer generation charges - 145,471 - - 145,471
Intergovernmental revenues 10,000 42,320 63,854 - 116,174
Operating transfers out (144,200) (267,800) - - (412,000)
Operating transfers in - 64,035 999,191 - 1,063,226
Net cash provided by (used in) noncapital financing activities (99,196) 4,388 1,063,045 - 968,237
Cash flows from capital and related financing activities
Changes in interest receivable
Collections on note receivable
Collections on special assessments
Property, plant and equipment additions
Developer/customer contributions
Principal payments on bonds payable
Interest paid, net of capitalized interest
Capital transfers in
Capital transfers out
Net cash used in capital and related financing activities
10,000 13,661 - - 23,661
- 10,362 - - 10,362
18,104 63,123 - - 81,227
(794,599) (1,567,510) (549,519) (776,378) (3,688,006)
46,210 .180,698 - - 226,908
(128,650) (277,219) (92,516) - (498,385)
(310,494) (569,834) (149,544) - (1,029,872)
338,356 53,038 355,366 . 195,993 942,753
(19,952) (86,884) (89,157) (746,760) (942,753)
(841,025) (2,180,565) (525,370) (1,327,145) (4,874,105)
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__~ ._____.~ .____~ .__._~ ---~ -~ ---~ .---~ .~ ...~ .~-1 ....~ ~ .r ~ ..-1 ---~ ..~~ -.j .+) -._._.~
CITY OF ATLANTIC BEACII, FLORIDA
SCHEDULE OF CASH FLOW INFORMATION
ALL UTLITY FUND SYSTEI<IS
FOR THE YEAR ENDED SEPTE11H3ER 30, 2002
(Continued)
Cash flows from investing activities
Interest income
Net increase (decrease) in cash and cash equivalents
Cash anti cash equivalents, beginning of year
Cash and cash equivalents, end ofyear
Balance sl~ect con-ponents of cash and cash equivalents
Cash and cash equivalents
Restricted assets:
Cash and cash equivalents
Total cash and cash equivalents, end of year
Noncasl~ activity
Fixed asset transfer in (out)
Capitalized interest expense (income)
Stormwatcr Bond Total Utility
Water System Sewer System System Construction Fund
50,487 68,075 6,197 - 124,759
(179,108) (1,047,921) 349,846 (1,058,429) (1,935,612)
2,472,957 4;680,940 350,253 _ 5,144,757 12,648,907
$ 2,293,849 $ 3,633,019 $ 700,099 $ 4,086,328 $ 10
713
295
,
,
$ 1,317,908 S 2,771,968 $ 485,181 $ - $ 4,575,057
975,941 861,051 214,918 4,086,328 6,138,238
$ 2,293,849 $ 3,633,019 $ 700,099 $ 4,086,328 $ 10,713,295
S 333,356 ~ 53,038 $ 355,366 $ (746,760) $ -
$ 19,952 $ 86,884 ~ 89,157 $ (101,373) $ 94,620
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TRUST AND AGENCY FUNDS
Trust and agency funds are set up for the purpose of accounting for
money and property received from nonenterprise fund sources and
held by the City in the capacity of trustee, custodian or agent for
individuals, governmental entities and non-public organizations.
Use of these funds facilitates the discharge of responsibilities
placed upon the City by virtue of law or other similar authority.
The agency fund is a custodial fund accounting for the assets of the
pooled cash/payroll clearingfund.
The trust funds consist of a pension trust fund for general
employees and police officers and an expendable trust fund for
court cost training, radio communications and law enforcement.
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-61-
CITY OF ATLANTIC BEACII; FLORIDA
COMBINING BALANCE SIIEET -ALL TRUST AND AG ENCY FUNDS
SEPTEMBER 30, 2002
Total Trust
Payroll Expendable and Agency '-
Clearing Pension Trust Trust Funds
Assets -
Cash and cash equivalents $ 45,684 $ 16,140 $ 100,694 $ 162,518
Investments - 8,462,788 - 8,462,788
Due from other governments - - 2,464 2,464
Total Assets
45,684
8,478,928
103,158 _
8,627,770
Liabilities and Fund Balances
Liabilities '
Accounts payable and accrued liabilities 45,684 14,592 171 60,447.
Due to other funds - 4,249 - 4,249 _
Total liabilities 45,684 18,841 171 64,696
Fund Balances _
Reserved for police training and other
expenditures - - 102,987 102,987
Reserved for retirement - 8,460,087 - 8,460,087
Total fund balances - 8,460,087 102,987 8,563,074 -
Total Liabilities and Fund Balances $ 45,684 $ 8,478,928 $ 103,158 $ 8,627,770
-62-
CITY OF ATLANTIC BEACII, FLORIDA
COMBII~'ING STATEMENT OF PLAN NET ASSETS -ALL PENSION TRUST FUNDS
SEPTEMBER 30, 2002
Assets
Cash and cash equivalents
Investments
Total Assets
Liabilities and Net Assets
Liabilities
Accounts payable and accrued liabilities
Due to other funds
Total liabilities
Net assets held in trust for pension benefits
Total Liabilities and I\'et Assets
General
Employees' Police
Retirement Retirement
Plan Plan Totals
S 16,140 $ - $ 16,140 .
4,841,131 ~ 3,621,657 8,462,788
$ 4,857,271 $ 3,621,657 $ 8,478,928
$ 8,218 $ 6,374 $ 14,592
- 4,249 4,249
8,218 10,623 18,541
4,849,053 3,611,034 8,460,087
$ 4,857,271 S 3,621,657 $ 8,478,928
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CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN PLAN NET ASSETS -
ALL PENSION TRUST FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Additions
Contributions:
Employer
Employee
State of Florida
Total contributions
Net investment loss
Investment expenses
Operating transfers in
Total additions
Deductions
Benefits
Refunds of contributions
Administrative expense
Total deductions
Net decrease
I\Tet assets held in trust for pension benefits,
beginning of year
Net assets held in trust for pension benefits, end of
Yom'
General
Employees' Police
Retirement Retirement
Plan Plan Totals
$ 288,070 $ 154,523 8 442,593
57,505 24,076 81,581
- 85,719 85,719
345,575 264,318 609,893
(295,167) (219,797) (514,964)
(49,615) (39,982) (89,597)
13,376 6,082 19,458
14,169 10,621 24,790
254,472 205,164 ~ 459,636
14,720 2,581 17,301
13,376 6,082 19,458
282,568 213,827 496,395
(268,399) (203,206) (471,605)
5,117,452 3,814,240 8,931,692
-64-
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ADDITIONAL INFORMATION (UNAUDITED)
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Additional information schedules differ from financial statements
because they usually cover more than one fiscal year and may
present nonaccounting data. Certain schedules are unaudited, as
marked.
- 65 -
CITY OF ATLANTIC BEACIi, FLORIDA
HISTORICAL REVENUES AND E?iPENSES
FOR TI3E YEARS ENDED SEPTEDZI3ER 30,1998 THIZOUGIi 2002
(Unaudited)
1998 1999 2000 2001 2002
Revenues
Operating revenues
Water.
Customer charges $ 1,770,795 $ 1,752,053 $ 1,835,015 $ 1,913,167 $ 2,064,123
Miscellaneous charges 308,630 333,271 363,435 231,298 248,894
Total water 2,079,425 2,085,324 2,198,450 2,144,465 2,313,017
Sewer:
Customer charges 2,977,937 2,993,178 3,193,566 3,413,108 3,602,415
Total operating revenues 5,057,362 5,078,502 5,392,016 5,557,573 5,915,432
l~~onoperating revenues
Interest income:
Water 186,562 157,038 135,249 123,274 50,487
Sewer 292,921 271,776 277,093 236,332 68,075
Total nonoperating
revenues 479,483 428,814 412,342 359,606 118,562
Total revenues 5,536,845 5,507,316 5,804,358 5,917,179 6,033,994
Expenses
Operating expenses
Water 774,192 963,064 989,235 1,051,904 1,110,478
Sewer 1,316,590 1,488,922 1,574,226 1,836,399 1,732,289
Total operating expenses 2,090,782 2,451,956 2,563,461 2,888,303 2,842,767
Administrative, nondivisional
and other
Water 423,425 423,131 378,966 381,287 424,162
Sewer 555,867 567,278 712,948 702,681 642,329
Total administrative,
nondivisional and other 979,292 990,409 1,091,914 1,083,968 1,066,491
Total expenses 3,070,074 3,442,395 3,655,375 3,972,271 3,909,258
1\'et revenues 2,466,771 2,064,921 2,148,983 1,944,908 2,124,736
Capital improvement charges
Sewer 295,504 132,109 135,465 137,965 145,471
Net revenues available for debt
service 2,762,275 2,197,030 2,284,448 2,082,873 2,270,207
1\'onoperating income (expense)
Interest expense (781,217) (797,692) (764,757) (874,231) (883,468)
Loan amortization (15,383) (15,695) (16,006) (16,618) (16,680)
Total nonoperating
income (expense) (796,600) (813,387) (780,763) (890,849) (900,148)
1\'et income before depreciation
and operating transfers $$ 1~ $$ 1~ $ 1,503,685 $$ 1~ $ 1,370,059
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CITI' OF ATLANTIC BEACII FLORIDA
MAJOR UTILITY CUSTOMERS
~" FOR TIIE PEAR En'DED SEPTEMBER 30, 2002
` (UNAUDITED)
. Annual
A'Iajor Customer Billings
Naval Off-Base Housing $ 385 265
Fleet Landing (Retirement Community) 194,978
Hannah (Regional) Park 148 157
City of Atlantic Beach, Florida 82,912
Oaks of Atlantic Beach (Mobile Home Park) 70,250
Admiral's Walk (Mobile Home Park) 68,431
S
T
rtl
I
H
t
l
ea
u
e
nn (
o
e
) 61,299
Sea Oats Plantation (Apartment Complex) 57,709
Arms Apartments 47,416
Comfort Inn (Hotel) 37,840
Total ~$ 1,154,257
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CITY Or ATLANTIC I3EACII, TLORIDA
SUMMARY OF WATER USAGE
rOR TIIE YEARS ENDED SEPTEMBER 30, 1994 TIIROUGII 2002
(UNAUDITED)
Annual Water System Customers Average Average
Total Percentage Single Unit Multi-Unit Demand Percentage
Year Population Change CAB BUC Total CAB BUC Total (1~iGD) Change
1994 22,006 0.9 % 4,300 2,063 6,363 1,281 1,287 2,568 3.131 8.1
1995 22,259 1.1 4,345 2,079 6,424 1,287 1,283 2,570 3.154 0.7
1996 22,857 2.7 4,504 2,167 6,671 1,491 2,184 3,675 .3.237 2.G
1997 23,445 2.6 4,709 2,267 6,976 1,506 2,184 3,690 3.175 (1.9)
1998 23,766 1.4 4,750 2,280 7,030 1,516 2,184 3,700 3.163 (0.4)
1999 23,866 0.4 4,829 2,270 7,099 1,516 2,184 3,700 3.290 4.0
2000 ~'~ 25,193 8.6 4956 2,361 7,317 1,560 2,211 3,771 3.294 0.1
2001 25,570 }.5 5,008 2,472 7,480 1,580 2,111 3,691 3.099 (5.9)
2002 25,953 1.5 5,248 2,507 7,755 1,473 2,315 3,788 3.197 3.2
Atlantic Beach Division (CAB)
Buccaneer Division (BUC)
t~~ Per 2000 Census, prior and subsequent years are estimated
-68-
CITY OF ATLANTIC BEACII FLORIDA
SUA`II~IARY OF ~VASTE~VAT
~
ER TR EATMENT AT L
NTIC BEACII S EWER DIVI SION
FOR TIIE YEARS ENDED SEPTEMBER 30, 1994 TIIROUGH 2002
(UNAUDITED)
Annual Sewer Customers Average Annual
Year
Population Percentage
Change
Single Unit A u ti-
Unit
Total Flow
(MGD) Percentage
Chan
ge
1994 12,561 0.5 % 3,744 1,228 4,972 2.280 4.1
1995 12,802 1.9 3,815 1,223 5,038 2.634 15.5
1996 13,202 3.1 3,948 1,431 5,379 1.807 (31.4)
1997 13,650 3.4 4,133 1,433 5,566 1.639 (9.3)
1998 13,562 (0.6) 4,202 1,458 5,660 1.780 8.G
1999 13,619 0.4 4,311 1,462 5,773 1.528 (14.2)
2000 ~'~ 13,368 (1.8) 4,429 1,518 5,947 1.622 6.2
2001 13,568 1.5 4,549 1,489 6,038 1.560 (3.8)
2002 ~ 13,771 1.5 4,613 1,434 6,047 1.683 7.9
t~~ Per 2000 Census, prior and subsequent years are estimated
-G9-
CITY OF ATLANTIC BEACII FLORIDA
SUMATARY OF ~VASTE~VATER tTREATMENT
BUCCANEER SEVER DIVISION
FOR TIIE YEARS ENDED SEPTEAiI3ER 30,1994 TIIROUGII 2002
(UNAUDITED)
Annual Sewer Customers Average Annual
Year
Population Percentage
Change
Single Unit N1u ti-
Unit
Total Flow
(MGD) Percentage
Change
1994 9,445 1.4% 2,261 1,178 3,439 1.027 15.0%
1995 9,457 ~ 0.1 2,254 1,174 3,428 1.028 0.1
1996 9,655 2.1 2,329 2,437 4,766 1.009 (1.8)
1997 9,795 1.5 2,402 2,437 4,839 1.027 1.8
1998 10,204 4.2 2,441 2,461 4,902 1.011 (1.6)
1999 10,247 0.4 2,489 2,458 4,947 .951 (5.9)
2000 ~~~ ~ 11,825 15.4 2,563 2,491 5,054 .918 (3.5)
2001 12,002 1.5 2,378 2,555 4,933 .875 (4.7)
2002 12,182 1.5 2,409 2,489 4,898 .905 3.4
~~~ Per 2000 Census, prior and subsequent years are estimated
-70-
CITY OF ATLANTIC BEACII, FLORIDA
OTIIER BOND COVENANT DISCLOSURES
FOR THE PEARS ENDED SEPTEMBER 30,1998 THROUGII 2002
(UNAUDITED)
Utility Service Tax Collections (Unaudited)
(Last Five Years)
Year Electricity Telecom Gas Fuel Oil Total
1998 331,985 153,314 40,693 276 526,268
1999 329,467 175,524 21,826 126 526,943
2000 330,139 203,206 40,721 165 574,231
2001 344,198 189,139 45,056 194 578,587
2002 339,138 680,595 26,959 ~ 224 1,046,916
Ad Valorem Tax Collections (Unaudited)
(Last Five Years)
fear Current Delinquent Total
1998 1,519,645 5,413 1,525,058
1999 1,757,357 1,175 1,758,532
2000 1,875,702 748 1,876,450
2001 2,132,923 1,466 2,134,389
2002 2,256,475 6,781 2,263,256
-71-
CITY OF ATLANTIC BEACH, FLORIDA
COMPUTED PENSION CONTRIBUTION CONIPARATIVE SCIiEDULE
LAST TEN FISCAL YEARS
(UNAUDITED)
Employees' Retirement Plan **
Contribution Rates as Percents of Dollar Contribution for
Valuation Payroll Fiscal Year
Valuation ~ Valuation
Fiscal Year Ending 9/30 Date 9/30 General Police Firefighters Payroll Computed Actual
1993 1991 9.27 % 11.15 % 6.46 % $ 2,491,992 $ 255,488 $ 268,271
1994 1992 9.02 10.46 6.48 2,755,004 271,518 274,892
1995 1993* 9.57 11.32 10.67 2,964,866 326,284 327,581
1996 1994* 10.85 14.95 13.67 3,067,702 420,591 421,465
1997 1995* 11.12 14.56 15.26 3,053,964 419,766 439,671
1998 1996* 11.99 18.90 5.41 3,106,770 441,972 480,407
1999 1997* 11.94 18.98 6.44 3,305,491 460,819 477,147
2000 1998* 11.58 17.63 N/A 3,007,312 439,433 439,431
General Employees' Retirement Plan .
Dollar Contribution
for Fiscal Ycar
Valuation Contribution Rates as Percents of Valuation
Fiscal Year Ending 9/30 Date 9/30 Valuation Payroll Payroll Computed Actual
2001 1999 11.24 % $ 2,185,131 $ 266,148 $ 266,148
2002 2000 11.41 2,329,877 288,070 288,070
2003 2001 11.81 2,462,229 315,106 -
Police Retirement Plan
Dollar Contribution
for Fiscal Year
Valuation ContribtttIon Rates as Percents of Valttatlon
Fiscal Year Ending 9/30 Date 9/30 Valuation Payroll Payroll Computed Actual
2001 1999 16.70 % $ 1,018,459 $ 183,091 $ 183,091
2002 2000 17.10 1,213,234 224,812 240,242
2003 2001 18.05 1,155,404 225,991 -
* After changes in benefit provisions and/or actuarial experience estimates.
** Prior to creation of separate pension plans for police and general employees
-72-
CITY OF ATLANTIC BEACII, TLORIDA
PENSION REVENUES BY SOURCE AND EXPENSES BY TYPE
LAST TEN rISCAL YEARS
(UNAUDITED)
2002 '
Amount Percent 2001 2000 1999 1998 1997 1996 1995 1994 1993
Pension Revenues
Contributions:
Member
Ci $ 81,581
442
593 71.3 %
386
9 $ 72,466 $ 72,356 $ 86,172 $ 96,549 $ 97,778 $ 111,431 $ 99,115 $ 93,905 $ 28,613
ty
State -Police ,
85,719 .
74.9 379,682
69,557 375,434
63,997 358,351
68
058 362,340
70
289 331,540
68
966 329,495
62
426 243,429
57
858 198,158
4 194,679
State -Fire , , , , , 9,918 46,880
Fighters
investment interest - - - 2,110 50,748 47,778 39,165 29,544 26,294 26,816 26,712
and dividends 22,347 19.6 123,670 15,222 9,766 8,290 5,300 4,863 3,887 2
933 3
419
Gain (loss) (537,311) (469.7) (186,145) 556,808 839,503 781,553 1,423,586 757,698 823,698 ,
21
828 ,
482
123
Miscellaneous , ,
revenues 19,458 17.0 24,591 46,320 47,375 18,747 18,766 12,133 -
- 42
Total Pension
Rcvenues $ 114,387 100.0 % $ 483,821 $$ 1~ $ 1,459,973 $ 1,385,546 $ 1,985,101 $ 1,307
590 $ 254
1
281 $ 393
558 $ 782
468
, ,
, , ,
Pension
Expenditures .
Benefits and '
refunds paid
* $ 476,937 81.4% $ 397,011 $ 385,657 $ 416,698 $ 400,832 $ 360,891 $ 280,159 $ 257,042 $ 155
842 $ 118
272
Othercxpcnses 109,055 18.6 80,766 103,719 108,447 82,623 70,058 56,329 - ,
_ ,
Total Pension
Expenditures $ 585,992 100.0% $ 477,777 $ 489,376 $ 525,145 $ 483,455 $ 430,949 $ 336,488 $ 257,042 $ 155,842 $ 118,272
* Other expenses shown separate from benefits and refunds since 1995.
-73-
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL A«'ARDS AND
STATE FINANCIAL ASSISTANCE (U11'AUDITED)
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Federal/State Agency/ CFDA/ Program/ Program/
Pass-Through Entity CFSA Project Project
Federal Program/State Project Title Number Contract/ Grant Number Award Expenditures
Federal Awards
U.S. Department of Housing and
Urban Development Passed through
City of Jacksonville, Florida
Community Development Block Grant 14.218 5629-22 $ 171,560 $ 139,229
U.S. Department of Justice Passed
through Florida Department of Law
Enforcement
Byrne Grant -Jordan Park 16.579 02-CJ-2H-04-26-02-166 25,000 18,362
Local Law Enforcement Block Grant -
ITUpgrade 16.592 O1-CJ-2E-04-26-02-084 10,000 10,000
Local Law Enforcement Block Grant -
FY2001 16.592 2001-LB-BX-4109 14,402 5,405
U.S. Department of Environmental
Protection Passed through Florida
Department of Environmental
Protection
Nonpoint Source Implementation -
319 Program 66.460 C9994515-99-0 428,450 43,854
Total Federal Awards 649,412 216,850 .
State Financial Assistance
Florida Department of Community
Affairs
Emergency Management Preparedness
Grant
Florida Department of Environmental
Protection
Beach Erosion Control Program
Rose Park Addition
Total State Financial
Assistance
Total Federal A~ti•ards and
State Financial Assistance
52.008 OOCP-07-04-26-02-102
37.003 OODU1
37.017 F0095
300,000 42,320
15,000 13,881
56,250 56,250
371,250 112,451
$ 1,020,662 $ 329,301
-74-
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JAMES MOORS cSz. CO., P.L.
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL
OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORATED IN ACCORDANCE WITH
GOVER1VAfE11'T A UDITIII'G STA11'DARDS
To the Honorable Mayor, City Commissioners, and City Manager
of City of Atlantic Beach, Florida:
We have audited the general purpose financial statements of City of Atlantic Beach, Florida, as of and
for the year ended September 30, 2002, and have issued our report thereon dated November 20, 2002.
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.
Compliance
As part of obtaining reasonable assurance about whether City of Atlantic Beach, Florida's general
purpose financial statements aze free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grants, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do
not express such an opinion. The results of our tests disclosed no instances of noncompliance that are
required to be reported under Govcrnment Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Atlantic Beach, Florida's internal control
over financial reporting in order to determine our auditing procedures for the purpose of expressing our
opinion on the general purpose financial statements and not to provide assurance on the internal control
over fmancial reporting. Our consideration of the internal control over fmancial reporting would not
necessarily disclose all matters in the internal control over financial reporting that might be material
weaknesses. A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements in
amounts that would be material in relation to the general purpose fmancial statements being audited may
occur and not be detected within a timely period by employees in the normal course of performing their
assigned functions. We noted no matters involving the internal control over financial reporting and its
operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, the City Commissioners, and
the office of the Auditor General, State of Florida and agencies providing state and federal fmancial
assistance and is not intended to be and should not be used by anyone other than these specified parties.
Daytona Beach, Florida
November 20, 2002
~~o ~ F ~.
-75-
AMES MOORS ~ CO. P.L.
1
CERTIFIED PUBLIC ACCOUNTANTS
AND CONSULTANTS
MANAGEMENT LETTER OF INDEPENDENT AUDTI'ORS
REQUIRED BY CHAPTER 10.550 RULES OF THE AUDITOR GENERAL
r
To the Honorable Mayor, City Commissioners, and City Manager
of City of Atlantic Beach, Florida:
We have audited the general purpose financial statements of City of Atlantic Beach, Florida, as of and
for the fiscal year ended September 30, 2002, and have issued our report thereon dated November 20,
2002.
:. 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. We have issued our Independent Auditors'
Report on Compliance and on Internal Control Over Financial Reporting dated November 20, 2002.
. Disclosures in that report, if any, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the
t Auditor General, which govern the conduct of local governmental entity audits performed in the State of
Florida and require that certain items be addressed in this letter.
l The Rules of the Auditor General (Section 10.554 (1) (g) l.a.) require that we comment as to whether or
l not inaccuracies, shortages, defalcations, fraud, and/or violations of laws, rules, regulations, and
contractual provisions reported in the preceding annual financial audit report have been corrected. Such
comments made in the preceding annual financial audit report regarding compliance with requirements
applicable to each major program and internal control over compliance in accordance with OMB
Circular A-133 have been corrected.
l The Rules of the Auditor General (Section 10.554 (1) (g) l.b.) require that we comment as to whether or
not recommendations made in the preceding annual financial audit report have been followed.
Recommendations made in the preceding annual financial audit report regarding compliance with
requirements applicable to each major program and internal control over compliance in accordance with
t OMB Circular A-133 have been followed.
As required by the Rules of the Auditor General (Section 10.554 (1) (g) 2.), the City of Atlantic Beach
has complied with Section 218.415, Florida Statutes, regarding the investment of public funds.
The Rules of the Auditor General (Sections 10.554 (1) (g) 3., and 4.) require disclosure in the
management letter of the following matters if not already addressed in the auditors' report on compliance
and internal control or schedule of findings and questioned costs: (1) recommendations to improve
financial management, accounting procedures, and internal controls; (2) violations of laws, rules,
regulations, and contractual provisions that have occurred, or were likely to have occurred, and were
i discovered within the scope of the audit; (3) illegal or improper expenditures discovered within the scope
of the financial audit that may or may not materially affect the financial statements; (4) improper or
inadequate accounting procedures (e.g., the omission of required disclosures from the financial
statements); (5) failures to properly record financial transactions; and, (6) other inaccuracies, shortages,
defalcations and instances of fraud discovered by, or that came to the attention of, the auditor. None of
r the aforementioned was discovered within the scope of our audit.
lI
-77-
The Rules of the Auditor General (Section 10.554 (1) (g) 5.) also require that the name or official title
and legal authority for the primary government and each component unit of the reporting entity be
disclosed in the management letter, unless disclosed in the notes to the financial statements. The City of
Atlantic Beach, Florida, was established by Florida Statutes Section 165.031(4), Chapter 57-1126. There
are no component units related to the City of Atlantic Beach, Florida.
As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6.a.), the scope of our audit
included a review of the provisions of Section 218.503 (1), Florida Statutes, "Determination of Financial
Emergency." In connection with our audit, we determined that the City of Atlantic Beach, Florida, is not
in a state of financial emergency as a consequence of the conditions described in Section 218.503(1),
Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6.b.), we determined that the
annual financial report for the City of Atlantic Beach, Florida, for the fiscal year ended September 30,
2002, was filed with the Department of Banking Finance pursuant to Section 218.32 (1) (a), Florida
Statutes, and is in agreement with the annual financial audit report for the fiscal year ended
September 30, 2002.
As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6.c.), the scope of our audit
included application of financial condition assessment procedures pursuant to Rule 10.556(8) of the --
Auditor General. 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. ,_
This report is intended solely for the information and use of the Auditor General of the State of Florida,
management, and the City Commissioners, and is not intended to be and should not be used by anyone
other than these specified parties.
~~ ~~~
Daytona Beach, Florida
November 20, 2002
- 78 -
r
January 27, 2003
To the City Commissioners
City of Atlantic Beach, Florida
We have audited the financial statements of City of Atlantic Beach, Florida for the year ended
September 30, 2002, and have issued our report thereon dated November 20, 2002. Professional standards
require that we provide you with the following information related to our audit.
Our_Responsibilityundec Auditing Standards Generally Accepted in the United States of America
As stated in our engagement letter dated June 27, 2002, our responsibility, as described by professional
standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the
financial statements are free of material misstatement and are fairly presented in accordance with
accounting principles generally accepted in the United States of America. Because an audit is designed to
provide reasonable, but not absolute assurance and because we did not perform a detailed examination of
all transactions, there is a risk that material misstatements may exist and not be detected by us.
As part of our audit, we considered the internal control of the City of Atlantic Beach, Florida. Such
considerations were solely for the purpose of determining our audit procedures and not to provide any
assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City of Atlantic Beach, Florida's compliance with certain
provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to
provide an opinion on compliance with such provisions.
Significant Accounting Policies
Management has the responsibility for selection and use of appropriate accounting policies. In accordance
with the terms of our engagement letter, we will advise management about the appropriateness of
accounting policies and their application. The significant accounting policies used by the City of Atlantic
Beach, Florida are described in Note 1 to the financial statements. The City adopted Governmental
Accounting Standards Board Statement No. 33 during the year ended September 30, 2002 for accounting
for nonexchange transactions. Accordingly, the change has been reflected as an adjustment to beginning
fund balance or retained earnings as applicable in the general purpose financial statements. We noted no
transactions entered into by the City of Atlantic Beach, Florida during the year that were both significant
and unusual, and of which, under professional standards, we are required to inform you, or transactions
for which there is a lack of authoritative guidance or consensus.
Members o(the Private Companies 620 N W 16th Avenue 2473 Care Drive 121 Executive Circle
Practice Section and the SEC P.O. Box 1616 Suite 2 Daytona Beach, FL 32114-1180
Practice Section of t(ie Division jor Gainesville, FL 32602-1616 Tallahassee. FL 32308-0580 Telephone: 386,1257-4100
CPA Firms of the American Institute Telephone: 352/378-1331 Telephone: 850,~386,i6184 Fax: 386,/255-3261
o/Certi/ied Public Accountants Fax: 352;'372-3741 Fax: 850,422-2071 dab¢jmco.com
gnv¢jmco.com tlh¢jmco.com
A Member o/ AGN International Ltd -Accountants Glvbnl Network an inter national association
To the City Commissioners
City of Atlantic Beach, Florida
January 7, 2003
Page 2
Accounting Estimates
Accounting estimates are an integral part of the cun:ent funds financial statements prepared by
management and are based on management's knowledge and experience about past and current events
and assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events affecting
them may differ significantly from those expected. There were no sensitive estimate affecting the
financial statements was:
Management's estimate of the allowance for doubtful accounts is based on historical water and sewer
revenues, historical loss levels, and an analysis of the collectibility of individual accounts. We evaluated
the key factors and assumptions used to develop the allowance in determining that it is reasonable in
relation to the financial statements taken as a whole.
Audit Adjustments
For purposes of this letter, professional standards define an audit adjustment as a proposed correction of
the financial statements that, in our judgment, may not have been detected except through our auditing
procedures. An audit adjustment may or may not indicate matters that could have a significant effect on
the City of Atlantic Beach, Florida's financial reporting process (that is, cause future financial statements
to be materially misstated).
In our judgment, none of the adjustments we proposed, whether recorded or unrecorded (see attached
schedule summarizing uncorrected misstatements of the financial statements management has determined
the effects of which are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole), by the City of Atlantic Beach, Florida, either individually or in the aggregate, indicate
matters that could have a significant effect on the City of Atlantic Beach, Florida's financial reporting
process.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing
matter that could be significant to the financial statements or the auditor's report. We are pleased to report
that no such disagreements arose during the course of our audit.
Consultations with Other Independent Accountant
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City of Atlantic Beach, Florida financial statements or a
determination of the type of auditor's opinion that may be expressed on those statements, our professional
standards require the consulting accountant to check with us to determine that the consultant has all the
relevant facts. To our knowledge, there were no such consultations with other accountants.
To the City Commissioners
City of Atlantic Beach, Florida
January 7, 2003
Page 3
Issues Discussed Prior to Retention of Independent Audltors
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City of Atlantic Beach, Florida auditors.
However, these discussions occurred in the normal course of our professional relationship and our
responses were not a condition to our retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
This information is intended solely for the use of the City Commissioners and management of the City of
Atlantic Beach, Florida and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
d~~ ~~~
JAMES MOORS & CO., P.L.
_.
City of Atlantic Beach, Florida
Summary of Passed Adjusting Journal Entries
September• 30, 2002
PROFESSIONAL SERVICES
ACCOUNTS PAYABLE
To accrue additional liability for work performed before year end
FIXED ASSETS
INVESTMENT IN GENERAL FIXED ASSETS
To write-off retired (inactive) assets.
DUE FROM OTHER AGENCIES
TAXES
To record additional receivable from JEA regarding Sept. fees
CAPITALIZED INTEREST
FIXED ASSETS /CONSTRUCTION IN PROGRESS
To adjust capitalized interest based on recalculation
ALLOWANCE FOR BAD DEBTS
BAD DEBT EXPENSE
To adjust estimate of allowance for miscellaneous receivables
PAJE Totals By Classification
Net effect on Fund:
General Fund
General Fixed Assets
Enterprise Funds
(Revenue)
_ Asset Liability Equity Expense
(46,782)
5,260
(38,220)
(24,727)
9,500
(9,500)
46,782
(5,260)
38,220
24,727
-104,468.82 -9,500.00 46,782.09 67,186.73
5,260 (9,500) 4,240
(46,782) 46,782
(62,947) 62,947
January 27, 2003
To the City Commissioners
City of Atlantic Beach, Florida
We have audited the financial statements of City of Atlantic Beach, Florida for the year ended
September 30, 2002, and have issued our report thereon dated November 20, 2002. Professional standards
require that we provide you with the following information related to our audit.
Our Reponsibility under Auditing Standards Generally Accented in the United States of America
As stated in our engagement letter dated June 27, 2002, our responsibility, as described by professional
standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the
financial statements are free of material misstatement and are fairly presented in accordance with
accounting principles generally accepted in the United States of America. Because an audit is designed to
provide reasonable, but not absolute assurance and because we did not perform a detailed examination of
all transactions, there is a risk that material misstatements may exist and not be detected by us.
As part of our audit, we considered the internal control of the City of Atlantic Beach, Florida. Such
considerations were solely for the purpose of determining our audit procedures and not to provide any
assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City of Atlantic Beach, Florida's compliance with certain
provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to
provide an opinion on compliance with such provisions.
Significant Accounting Policies
Management has the responsibility for selection and use of appropriate accounting policies. In accordance
with the terms of our engagement letter, we will advise management about the appropriateness of
accounting policies and their application. The significant accounting policies used by the City of Atlantic
Beach, Florida are described in Note 1 to the financial statements. The City adopted Governmental
Accounting Standards Board Statement No. 33 during the year ended September 30, 2002 for accounting
for nonexchange transactions. Accordingly, the change has been reflected as an adjustment to beginning
fund balance or retained earnings as applicable in the general purpose financial statements. We noted no
transactions entered into by the City of Atlantic Beach, Florida during the year that were both significant
and unusual, and of which, under professional standards, we are required to inform you, or transactions
for which there is a lack of authoritative guidance or consensus.
Members o/the Private Companies 620 N W 16th Avenue 2473 Care Drive 121 Executive Circle
Practice Section and the SEC P.O. Box 1616 Suite 2 Daytona Beach, FL 32114-1180
Practice Section o/ the Division /or Gainesville, FL 32602-1616 Tallahassee, FL 32308-4580 Telephone: 386/257-0100
CPA Firms o/the American Institute Telephone: 352,1378-1331 Telephone: 850;386,'6184 Fax: 386/255-3261
o/Certi/icdPublicAccountants Fax: 352/372-3741 Fax:850,~422-2074 dab~jmco.com
gnv~jmco.com tlh~jmco.com
A Member o/ AGN International Ltd -Accountants Globa( Network an intenmtionat association
To the City Commissioners
City of Atlantic Beach, Florida
January 7, 2003
Page 2
Accounting Estimates
Accounting estimates are an integral part of the current funds financial statements prepared by
management and are based on management's knowledge and experience about past and current events
and assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events affecting
them may differ significantly from those expected. There were no sensitive estimate affecting the
financial statements was:
Management's estimate of the allowance for doubtful accounts is based on historical water and sewer
revenues, historical loss levels, and an analysis of the collectibility of individual accounts. We evaluated
the key factors and assumptions used to develop the allowance in determining that it is reasonable in
relation to the financial statements taken as a whole.
Audit Adjustments
For purposes of this letter, professional standards define an audit adjustment as a proposed correction of
the financial statements that, in our judgment, may not have been detected except through our auditing
procedures. An audit adjustment may or may not indicate matters that could have a significant effect on
the City of Atlantic Beach, Florida's financial reporting process (that is, cause future financial statements
to be materially misstated).
]n our judgment, none of the adjustments we proposed, whether recorded or unrecorded (see attached
schedule summarizing uncorrected misstatements of the financial statements management has determined
the effects of which are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole), by the City of Atlantic Beach, Florida, either individually or in the aggregate, indicate
matters that could have a significant effect on the City of Atlantic Beach, Florida's financial reporting
process.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing
matter that could be significant to the financial statements or the auditor's report. We are pleased to report
that no such disagreements arose during the course of our audit.
Consultations with Other Independent Accountant
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves
application of an accounting principle to the City of Atlantic Beach, Florida financial statements or a
determination of the type of auditor's opinion that may be expressed on those statements, our professional
standards require the consulting accountant to check with us to determine that the consultant has all the
relevant facts. To our knowledge, there were no such consultations with other accountants.
To the City Commissioners
City of Atlantic Beach, Florida
January 7, 2003
Page 3
Issues Discussed Prior to Retention of Independent Auditors
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City of Atlantic Beach, Florida auditors.
However, these discussions occurred in the normal course of our professional relationship and our
responses were not a condition to our retention.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
This information is intended solely for the use of the City Commissioners and management of the City of
Atlantic Beach, Florida and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
JAMES MOORS & CO., P.L.
City of Atlantic Beach, Florida
Summary of Passed Adjusting Journal Entries
September 30, 2002
PROFESSIONAL SERVICES
ACCOUNTS PAYABLE
To accrue additional liability for work performed before year end
FIXED ASSETS
INVESTMENT IN GENERAL FIXED ASSETS
To write-off retired (inactive) assets.
DUE FROM OTHER AGENCIES
TAXES
To record additional receivable from JEA regarding Sept, fees
CAPITALIZED INTEREST
FIXED ASSETS /CONSTRUCTION IN PROGRESS
To adjust capitalized interest based on recalculation
ALLOWANCE FOR BAD DEBTS
BAD DEBT EXPENSE
To adjust estimate of allowance for miscellaneous receivables
PAJE Totals By Classification
Net effect on Fund:
General Fund
General Fixed Assets
Enterprise Funds
(Revenue)
Asset Liability Equity Expense
(46,782)
5,260
(38,220)
(24,727)
9,500
(9,500)
46,782
(5,260)
38,220
24,727
-104,468.82 -9,500.00 46,782.09 67,186.73
5,260
(46,782)
(62,947)
(9,500) 4,240
46,782
62,947