Annual Financial Report - 2012-2013 - vFINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2013
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2013
TABLE OF CONTENTS
Independent Auditors’ Report ..................................................................................................................... i-iii
Management’s Discussion and Analysis .................................................................................................. iv-xiii
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position .......................................................................................................................... 1
Statement of Activities .............................................................................................................................. 2
Fund Financial Statements
Balance Sheet - Governmental Funds ....................................................................................................... 3
Reconciliation of Balance Sheet of Governmental Funds to the
Statement of Net Position ....................................................................................................................... 4
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds ............................................................................................................ 5
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ........................................................................................................................... 6
Statement of Net Position - Proprietary Funds ...................................................................................... 7-8
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Funds .............................................................................................................................. 9-10
Statement of Cash Flows - Proprietary Funds ...................................................................................11-13
Statement of Net Position - Fiduciary Funds .......................................................................................... 14
Statement of Changes in Net Position - Fiduciary Funds ....................................................................... 15
Notes to Financial Statements ........................................................................................................ 16-38
Required Supplementary Information
Schedules of Pension Funding Progress ....................................................................................................... 39
Schedules of Contributions from Employer and Other Contributing
Entities .................................................................................................................................................40-41
Other Postemployment Benefits Plan - Schedule of Funding Progress ...................................................... 42
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund .....................................................................................................43-44
Note to Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual - General Fund ......................................................................................... 45
Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds ................................................................46-47
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Governmental Funds .........................................................................48-49
Combining Statement of Net Position- Fiduciary Funds ............................................................................. 50
Combining Statement of Changes in Net Position- Fiduciary Funds .......................................................... 51
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2013
TABLE OF CONTENTS
(Concluded)
Supplementary Information (Concluded)
Historical Revenues and Expenses ............................................................................................................... 52
Schedules of Net Revenues in Accordance with Bond
Resolutions - Enterprise Funds (Water and Sewer) ................................................................................ 53
Other Bond Covenant Disclosures ............................................................................................................... 54
Other Statistical Information
Major Utility Customers ............................................................................................................................... 55
Summary of Water Usage ............................................................................................................................. 56
Summary of Wastewater Treatment - Atlantic Beach Sewer
Division .................................................................................................................................................... 57
Summary of Wastewater Treatment - Outside City Sewer Division .......................................................... 58
Additional Elements of Report Prepared in Accordance With
Government Auditing Standards, Issued by the Comptroller
General of the United States; the Rules of the Auditor General
of the State of Florida; and Other Contract Requirements
Schedule of Expenditures of Federal Awards and State Financial
Assistance Projects ........................................................................................................................59-60
Note to Schedule of Expenditures of Federal Awards and State
Financial Assistance Projects ............................................................................................................. 61
Schedule of Source and Expenditure of the City Grant Funds ............................................................... 62
Independent Auditors’ Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Basic Financial Statements Performed in Accordance
with Government Auditing Standards .......................................................................................... 63-64
Management Letter ............................................................................................................................ 65-66
INDEPENDENT AUDITORS’ REPORT
i
INDEPENDENT AUDITORS’ REPORT
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Atlantic Beach,
Florida, (the City), as of and for the year ended September 30, 2013, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
ii
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS’ REPORT
(Continued)
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of September 30, 2013, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and other required information on pages iv–xiii and 39–45 be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The supplementary information on pages 46- 54, the other
statistical section on pages 55-58, and the schedule of expenditures of grant funds per the City of
Jacksonville’s Ordinance Code Chapter 118.202(e) are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The accompanying schedule of expenditures of
federal and state awards, is presented for the purpose of additional analysis as required by the U.S. Office
of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, and Chapter 10.550, Rules of the Auditor General and is also not a required part of the
financial statements.
The supplementary information, schedule of federal and state awards, and schedule of expenditures of
grant funds per the City of Jacksonville’s Ordinance Code Chapter 118.202(e) are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United States
of America. In our opinion, the supplementary information and schedule of federal and state awards are
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The other statistical section has not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
iii
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS’ REPORT
(Concluded)
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated March 4, 2014, on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the City’s internal control over financial reporting
and compliance.
Report on Summarized Comparative Information
We have previously audited the City’s 2012 financial statements, and our report dated April 10, 2013,
expressed an unqualified opinion on those audited financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended September 30, 2013, is consistent,
in all material respects, with the audited financial statements from which it was derived.
March 4, 2014
Gainesville, Florida
iv
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
As management of the City of Atlantic Beach, Florida (the City), we offer readers of our financial
statements this narrative overview and analysis for the fiscal year ended September 30, 2013.
Overview of the Financial Statements
This management’s discussion and analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City’s finances, in a manner similar to a private sector business. They include the Statement of Net
Position and the Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net position. Net position is reported as one of three categories:
invested in capital assets - net of related debt; restricted; or unrestricted. Restricted net position is further
classified as either net position restricted by enabling legislation or net position that is otherwise
restricted. Over time, increases or decreases in net position may serve as a useful indicator of whether the
financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues, referred to as “governmental activities,” from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges, referred to as “business-type activities.” The governmental activities of the City include public
safety, road maintenance and construction, parks and recreation, conservation and resource management,
physical environment (i.e., infrastructure), debt, and general government, which include administration
and other support functions. The business-type activities of the City include the utility, comprised of the
water and sewer systems, the stormwater system, the sanitation service and the building code enforcement
enterprise fund. The government-wide financial statements can be found on pages 1 - 2 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of
the funds of the City can be categorized into either governmental funds, proprietary funds, or fiduciary
funds.
v
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
Fund Financial Statements (Concluded)
■ Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows
of available resources, as well as on balances of available resources at the end of the fiscal year. Such
information may be useful in evaluating a City’s near-term financing requirements. Because the
focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so,
readers may better understand the long-term impact of the government’s near-term financing
decisions. Reconciliations are provided between the Governmental Funds Balance Sheet and the
Statement of Net Position and the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and Statement of Activities to facilitate this comparison between
governmental funds and governmental activities.
The City maintains fourteen individual governmental funds. Information is presented separately in
the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances for the General Fund, which is considered to be a major
fund. Data from the other thirteen governmental funds are combined into a single, aggregated
presentation called Nonmajor Governmental Funds. Fund data for these nonmajor governmental
funds is provided in the form of combining statements. These combining statements can be found on
pages 46 – 49 of this report.
The City adopts an annual appropriated budget for all funds but is only required to present a budget
comparison for its General Fund. The Schedule of Revenues, Expenditures, and Changes in Fund
Balance - Budget and Actual - General Fund budgetary comparison schedule and notes on pages 43 -
45 of this report has been provided to demonstrate compliance with this budget.
■ Proprietary Funds
The City maintains only one type of proprietary fund and that is enterprise funds. The enterprise
funds are used to account for the activities of the water and sewer (utility), stormwater, building code
enforcement and sanitation activities.
The proprietary fund financial statements provide the same type of information as the government-
wide financial statements, only in more detail. Separate information of the utility, stormwater,
sanitation and building code enforcement activities can be found in the basic proprietary fund
financial statements on pages 7 - 13 of this report.
■ Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City (i.e.,
pension beneficiaries). Fiduciary funds are not reflected in the government-wide financial statements
because the resources of those funds are not available to support the City’s own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary
fund financial statements can be found on pages 14 - 15 of this report.
Notes to Financial Statements
The notes to financial statements provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes begin on page 16 of
this report.
vi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the City’s progress in funding its obligation to provide
pension benefits to its employees and a budgetary comparison schedule for the General Fund. Required
supplementary information can be found beginning on page 39 of this report.
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City’s financial position. As can be seen in the
summarized table below of this analysis, the City’s assets exceeded liabilities by $74,678,000 at the close
of the fiscal year ended September 30, 2013.
By far the largest portion of the City’s net position, $58,038,000 (78%), reflects its investment in capital
assets (i.e., land, buildings, equipment, and infrastructure), less any related, outstanding debt used to acquire
those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are
not available for future spending. Although the City’s investment in capital assets is reported net of related
debt, it should be noted that the resources needed to repay this debt must be provided from other sources,
since the capital assets themselves cannot be used to liquidate these liabilities.
A portion of the City’s net position, $5,434,000 (7%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $11,205,000,
(15%), is used to meet the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Position
September 30, 2013 and 2012
(In Thousands)
Governmental Business-type
Activities Activities Totals
2013 2012 2013 2012 2013 2012
Current and other assets $10,853 $ 10,350 $9,235 $9,457 $20,088 $19,807
Capital assets 39,411 39,786 41,080 42,413 80,491 82,199
Total Assets 50,264 50,136 50,315 51,870 100,579 102,006
Long-term liabilities
outstanding 574 378 21,567 22,656 22,141 23,034
Other liabilities 836 1,177 2,924 3,746 3,760 4,923
Total Liabilities 1,410 1,555 24,491 26,402 25,901 27,957
Net Position:
Invested in capital assets,
net of related debt 39,342 39,649 18,697 18,291 58,039 57,940
Restricted 3,656 3,414 1,778 1,712 5,434 5,126
Unrestricted 5,856 5,518 5,349 5,465 11,205 10,983
Total Net Position $48,854 $48,581 $25,824 $25,468 $74,678 $74,049
vii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
As illustrated in the schedule on page vi, the City was able to report positive balances in all categories of
net position, both for the government as a whole, as well as for its separate governmental and business-
type activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach’s Change in Net Position
For the Years Ended September 30, 2013 and 2012
(In Thousands)
Governmental Business-type
Activities Activities Totals
2013
2012
2013
2012
2013
2012
Revenues:
Program Revenues:
Charges for services $1,837 $1,714 $11,071 $10,860 $12,908 $12,574
Operating grants and
contributions 610 627 0 0 610 627
Capital grants and
contributions 130 736 279 165 409 901
General Revenues:
Property taxes 3,844 3,961 0 0 3,844 3,961
Sales taxes 1,156 1,080 0 0 1,156 1,080
Business and utility taxes 1,197 1,124 0 0 1,197 1,124
State revenue sharing 283 279 0 0 283 279
Discretionary sales surtax 684 648 0 0 684 648
Investment Earnings (Loss) (201) 345 (146) 248 (347) 593
Miscellaneous 403 32 0 0 403 32
Total Revenues 9,943 10,546 11,204 11,273 21,147 21,819
Expenses:
General government 1,972 1,846 0 0 1,972 1,846
Public safety 5,140 5,489 0 0 5,140 5,489
Road maintenance and
construction 1,881
1,937
0
0
1,881
1,937
Parks and recreation 1,289 1,376 0 0 1,289 1,376
Interest/Fiscal Charges on long-
term debt 3
6
0
0
3
6
Utility 0 0 7,326 7,669 7,326 7,669
Stormwater 0 0 1,143 1,166 1,143 1,166
Sanitation 0 0 1,503 1,550 1,503 1,550
Building code enforcement 0 0 261 270 261 270
Total Expenses 10,285 10,654 10,233 10,655 20,518 21,309
Transfers 615 315 (615) (315) 0 0
Change in net position 273 207 356 303 629 510
Net position-Beginning 48,581 48,374 25,468 25,165 74,049 73,539
Net position-Ending $48,854
$48,581
$25,824
$25,468
$74,678
$74,049
viii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. Following is a summary of fund activity financial information for the fiscal
year, rounded to the nearest thousand dollars:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund
balance of $10,212,000, an increase of $724,000 in comparison with the prior year.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance was $3,446,000, which equated to 32% of total General Fund expenditures,
without transfers out. The net result of various revenue and expense items resulted in an increase to the
City’s General Fund of $333,000 or 5% during the current fiscal. This increase primarily resulted from
revenues being less than budgeted by $12,000, while expenses were $557,000 less than budget for a net
positive variance of $545,000. The General Fund revenues were close to the budgeted amount in total
and increased from 2012 by $58,000. Revenues from earnings on City investments was the largest item
lower than expected, but was partially offset by code enforcement fines and property sales that
generated $130,000, active collections of past due business tax receipts of $27,000, unanticipated sales
tax revenue of $44,000, and receipts from the settlement of the Estates of Atlantic Beach lawsuit of
$27,000. The expenditures of the General Fund were lower than expected, mostly from capital project
monies not being spent and unfilled positions. There were budget surpluses throughout all departments
of the General Fund, the largest being Public Safety with a positive variance of $145,000.
Nonmajor governmental funds consisting of special revenue funds, the debt service fund, and the
capital projects fund have a combined fund balance of $3,634,000. Of this fund balance, $73,000 is
restricted as a debt service reserve and $3,214,000 is restricted for capital projects. The net increase
in fund balance after transfers in nonmajor governmental funds was $391,000.
■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. Net position in the proprietary funds increased $356,000 during
the fiscal year. In fiscal year 2013, a stormwater rate adjustment of $1.50 per ERU was implemented to
help cover the cost of the stormwater system maintenance and to allow more Gas Tax proceeds to go
towards street paving. Operating expenses, including depreciation, decreased $687,000. After non-
operating revenues and expenses are added, the income was $700,000 before transfers and capital
contributions. After capital contributions and net transfers of $270,000 and $615,000, respectively, the
total change in net position was $356,000.
The subsidy by the Local Option Gas Tax Fund to the Stormwater Fund to support its operating
expenses was suspended this fiscal year, as a result of increased revenues from the ERU rate increases
of $1.50 and $1.89 in fiscal year 2013 and 2012, respectively. The $8.39 per ERU rate is
approximately 82%, compared to 64% for the prior year, of the total operating expenses of
$1,042,000 needed to fully fund the operation with charges for service.
During fiscal year 2013, the Sanitation Fund netted an increase in net position of $13,000, after
contributing $268,000 to the General Fund. The unrestricted net position of the enterprise funds
amounted to $5,349,000 at the end of fiscal year 2013. The total decrease in unrestricted net position
of $116,000 from 2012 was primarily due to recognition of the loan origination fee expense
associated with the State Revolving Loan for the TMDL sewer project.
ix
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
General Fund Budgetary Highlights
The $329,000 increase in the original budgeted revenues and the final amended budget stemmed from the
Riverbranch Foundation contribution for acquisition of marsh property near Dutton Island Road. The
expense budget included a $583,000 increase in appropriations, and a $5,000 increase in transfers.
The portion of the increase in appropriations for the encumbrances rolling forward from 2012 was
$57,000.
Net Budget
The overall net difference from the final budgeted revenues and adjusted final budgeted expenses was a
deficit of $227,000. The actual increase in fund balance was $309,000. This resulted in a $535,000
excess variance above what was budgeted in the General Fund.
Capital Assets and Debt Administration
Capital Assets―The City’s investment in capital assets, net of related depreciation, for its governmental
and business-type activities as of September 30, 2013, amounted to $80,491,000. This investment in
capital assets includes land, land improvements, land easements, buildings and infrastructure
improvements, equipment, and construction in progress.
The total change in the City’s capital assets, net of related depreciation, for the current fiscal year was a
decrease of $375,000 (1%) for governmental activities and a decrease of $1,332,000 (3%) for business-
type activities.
Capital asset events during the current fiscal year included the following:
Governmental Activities
Land increased $329,000 for the marsh preserve acquired through the Riverbranch Foundation
contribution.
Buildings, net of accumulated depreciation, decreased by $114,000 through annual depreciation of
the capital assets.
Intangible Assets reflected a net decrease of $19,000. This asset category includes land easements
and computer software. A $10,000 acquisition of enhanced computer software enabling citizen
access to City documents through a web link to the record retention software was offset by a
decrease in asset value of $29,000 attributed to depreciation.
Improvements Other Than Buildings reflected a net decrease of $588,000. This represented a
capital asset increase of $84,000, offset by depreciation of $672,000. Acquisitions this year
included: installation of sidewalks on Dutton Island Road and West 9th Street; improved lighting in
the parking lot servicing City Hall and Russell Park; directional road signs for Tideviews and
Dutton Island Preserves; and, providing enhanced irrigation controls by zone for the medians on
Atlantic Boulevard.
x
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
Governmental Activities (Concluded)
Equipment assets reflected a net decrease of $80,000. This net decrease was comprised of assets
acquired for a value of $251,000, offset by disposed assets with a net book value of $7,000 and
depreciation of $324,000. Asset acquisitions of note in this category were: the grant-funded storm
shutters for City Hall and surveillance equipment for the Police Department; a replacement copier
for City Hall; laptop replacements for police officers; cable fiber extensions to enhance
communications between City locations; new vans for the painter and building maintenance
workers and other City fleet vehicles identified for replacement during the budget process; and, a
small boat for park rangers to assist with maintenance of the marsh parks.
Construction in progress increased $101,000 as project costs were incurred for Rose Park design
and development, and design work on the Marsh Master Plan that is not yet complete.
Business-type Activities
Buildings and Intangible Assets reflected a net decrease in asset value of $69,000 from
depreciation.
Improvements Other Than Buildings reflected a net decrease of $1,416,000. This represented a
capital asset increase of $733,000, offset by depreciation of $2,149,000. Utility projects completed
in this category included: water main work on 12th street and on Ocean Boulevard; recoating of the
elevated water storage tanks at WTP # 1 and 2; outfall interconnectivity; and, sewer-related cured-
in-place pipe improvements.
Equipment assets reflected a net increase of $83,000. This net increase was comprised of assets
acquired for a value of $181,000, offset by a $1,000 disposal of a computer and $98,000 of
depreciation. Some of the assets acquired in this category were: a sludge truck; a generator for the
Schooners Bay lift station; three 30-yard roll-on/off containers; and, a replacement chlorinator.
Construction in progress increased by $70,000. All of the water main projects in the $116,000
balance from the prior fiscal year were completed and put into service. The remaining balance of
$185,000 in construction in progress at September 30, 2013 represents engineering design and
permitting costs associated with the reclaimed water plant project and water main replacements on
Pine Street and near Finnegan Elementary School.
xi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
City of Atlantic Beach’s Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities Totals
2013 2012 2013 2012 2013 2012
Land $10,363 $10,034 $1,656 $1,656 $12,019 $11,690
Intangibles 22 41 215 215 237 256
Buildings 2,751 2,865 94 163 2,845 3,028
Improvements-Other 25,278 25,866 38,528 39,944 63,806 65,810
Equipment 896 976 402 318 1,298 1,294
Construction in Progress 101 4 185 116 286 120
Total $39,411 $39,786 $41,080 $42,412 $80,491 $82,198
Additional information on the City’s capital assets can be found in Note 5 on pages 27-28 of this report.
Long-term Debt
At the end of the 2013 fiscal year, the City had total bonded debt outstanding of $22,628,000. This
amount was comprised of debt secured solely by specified revenue sources. A detailed listing of the
City’s debt can be found in the table below.
City of Atlantic Beach’s Outstanding Debt
September 30, 2013
(In Thousands)
Governmental Business-type
Activities Activities Totals
Utility System Revenue Bonds, Series 2004 $0 $13,238 $13,238
Utility System Revenue Bonds, Series 2010A-1 0 807 807
Utility System Revenue Bonds, Series 2010B 0 601 601
SunTrust Revenue Refunding Bonds, Series 1999 69 86 155
F.D.E.P. State Revolving Funds Loan, 2010 0 691 691
F.D.E.P. State Revolving Funds Loan, 2009 0 7,136 7,136
Total $69 $22,559 $22,628
The City has been able to pay for ongoing capital projects related to governmental activities since
borrowing funds in 1989 (refunded in 1999 to take advantage of reduced interest rates). Therefore, it has
a high capacity for additional debt, if needed. The only Governmental Activity Debt outstanding will be
fully paid off in the first quarter of fiscal year 2014.
Debt service coverage calculations can be found on page 53. Additional information on the City’s long-
term debt can be found in Note 6 on pages 28 – 31 of this report.
xii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2013
(Continued)
Economic and Budgetary Highlights
The City has experienced the same economic downturn as other cities across the country in recent years.
Most of the City’s major revenue sources have declined. While news stories indicate that the economy is
starting to rebound, there is no indication of additional revenues from any of the major sources.
Projections for revenues remain essentially flat. Even though costs in some areas are expected to
increase, no increase in rates were budgeted for 2014. The 25% contingency levels set by the City
Commission are continuing to be maintained. Service levels have been maintained at essentially the same
levels to those before the recession. Major adjustments to support these service levels included fewer
capital projects than in past years, increased storm water fees, the elimination of capital projects from the
General Fund, pension reform and health care restructuring, and increased efficiency in water and sewer
operations. Some strategic planning and budgetary highlights the City expect to address in 2014 and into
the future are highlighted below.
Revenue Highlights:
■ The 2013 taxable property values are about 0.5% higher than the 2012 values. The City Commission
voted to use the same rate of 3.3285 mills, instead of the roll-back rate of 3.3156%. The purpose for
adopting the millage rate of 3.3285 was to maintain a level of ad valorem tax revenue sufficient to
maintain adequate funding for the existing level of services at the estimated cost and to continue to
maintain the City’s infrastructure. With the slight increase of 0.39% over the roll-back rate, tax
collections are budgeted to be almost the same in 2013 as they were in 2012. The final gross taxable
property value was $1,206,595,653. Ad valorem taxes are estimated to represent about 35% of the
General Fund revenues for 2013.
■ State-shared revenues ended the year with a 5.03% increase from 2012. From 2012 to 2013, the
combination of General Fund sales taxes and revenue sharing collections increased $75,000. The
projection for 2014 exhibits a trend that slightly increases these revenues by $32,000. These two
sources account for about 14.63% of the General Fund revenues.
■ The City modified its investment policy during the year to include corporate bond mutual funds to the
portfolio. This policy change was made to enhance the fixed income, short duration mutual fund
strategy and attempt to “de-risk” the portfolio, due to the volatility of the treasury market. As of
September 30, 2013, the City had approximately $14,000,000 invested. The investment earning loss
for the year was $347,000, compared to a $593,000 gain the prior year. Over the past three years, the
City has recognized an overall investment earnings gain of $595,000. With the current investment
strategy, the City anticipates the loss for 2013 will be recouped in 2014.
■ In Fiscal Year 2013, the City increased the storm water rates by $1.50 from $6.89 to $8.39 per ERU.
This increase generated an additional $171,000 in revenues. As a result of rate increases in 2012 and
2013, the City was able to discontinue the transfer from the Gas Tax Fund to cover a portion of its
operating budget. These rate increases will only generate about half of what is needed to fully fund
the Storm Water Utility with its own rates. Each dollar increase represents about $100,000 in
additional revenues. Without further rate increases, the utility continues to receive an annual transfer
from the Half Cent Sales Tax Fund, $252,000 in 2013 and a budgeted $285,000 in 2014. There are
no water or sewer rate increases included in the 2014 budget.
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide Financial Statements, Fund Financial
Statements, and Notes to Financial Statements.
See accompanying notes.
1
Governmental Business-type 2012
Activities Activities Totals Totals
Assets
Equity in Pooled Cash and Investments 9,656,124$ 5,506,238$ 15,162,362$ 15,079,991$
Receivables - Net 116,693 615,699 732,392 621,379
Due from Other Governments 871,151 0 871,151 1,054,659
Inventories 26,098 62,876 88,974 80,249
Notes Receivable - Current 760 15,759 16,519 11,469
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 0 2,544,207 2,544,207 2,649,289
Capital Assets:
Land 10,363,002 1,656,018 12,019,020 11,690,355
Buildings 4,491,659 4,356,384 8,848,043 8,848,043
Improvements Other Than Buildings 38,839,863 77,061,749 115,901,612 115,084,536
Equipment 3,367,925 2,023,485 5,391,410 5,029,576
Intangibles - Easements and Computer Software 341,079 244,709 585,788 575,293
(Accumulated Depreciation and Amortization)(18,093,554) (44,447,284) (62,540,838) (59,149,598)
Construction in Progress 101,062 184,671 285,733 120,020
Prepaid Items 180,849 181,147 361,996 34,871
Notes Receivable - Noncurrent 1,520 133,446 134,966 85,306
Unamortized Loan Costs 0 175,913 175,913 190,405
Total Assets 50,264,231 50,315,017 100,579,248 102,005,843
Liabilities
Accounts Payable and Other Current Liabilities 622,010 438,035 1,060,045 1,258,057
Construction Retainages Payable 0 0 0 385,117
Due to Other Governments 0 9,384 9,384 7,141
Deferred Revenue 7,302 182,444 189,746 238,476 Deposits 9,916 0 9,916 8,090
Compensated Absences - Current 195,576 81,499 277,075 596,000
Accrued Interest Payable 971 0 971 1,917
Payable from Restricted Assets:
Current Portion of Bonds Payable 0 1,050,992 1,050,992 1,012,767
Current Portion of Loan Payable 0 164,475 164,475 457,492
Accrued Interest Payable 0 423,372 423,372 439,420
Customer Deposits 0 573,879 573,879 518,653
Noncurrent Liabilities:
Due Within One Year 69,203 0 69,203 67,712
Due in More Than One Year 0 21,343,633 21,343,633 22,525,649
Compensated Absences - Noncurrent 369,224 179,590 548,814 292,426
Other Postemployment Benefits Obligation 135,726 44,072 179,798 148,363
Total Liabilities 1,409,928 24,491,375 25,901,303 27,957,280
Net Position
Net Investment in Captial Assets 39,341,833 18,696,545 58,038,378 57,939,888
Restricted for:
Renewal and Replacement 0 500,000 500,000 500,000
Debt Service 73,113 1,201,062 1,274,175 1,249,208
Public Safety 167,967 0 167,967 178,300
Road Maintenance and Construction 92,254 0 92,254 123,526
Parks and Recreation 0 0 0 1,194
Other Capital Projects 3,214,166 0 3,214,166 2,982,216
Other Purposes 108,741 0 108,741 52,732
Building Code Enforcement 0 76,921 76,921 38,463
Unrestricted 5,856,229 5,349,114 11,205,343 10,983,036
Total Net Position 48,854,303$ 25,823,642$ 74,677,945$ 74,048,563$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
2013
See accompanying notes.
2
Operating Capital
Charges for Grants and Grants and Governmental Business-type 2012
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals Totals
Primary Government
Governmental Activities:
General Government 1,971,683$ 850,187$ 0$ 14,739$ (1,106,757)$ 0$ (1,106,757)$ (820,733)$
Public Safety 5,139,730 803,752 80,073 2,786 (4,253,119) 0 (4,253,119) (4,668,887)
Road Maintenance and
Construction 1,881,260 115,501 530,104 22,291 (1,213,364) 0 (1,213,364) (1,296,742)
Parks and Recreation 1,289,134 67,629 0 90,380 (1,131,125) 0 (1,131,125) (1,064,934)
Physical Environment 0 0 0 0 0 0 0 277,183
Conservation and Resource
Management 0 0 0 0 0 0 0 2,106
Interest/Fiscal Charges on
Long-term Debt 3,370 0 0 0 (3,370) 0 (3,370) (6,201)
Total Governmental Activities 10,285,177 1,837,069 610,177 130,196 (7,707,735) 0 (7,707,735) (7,578,208)
Business-type Activities:
Utility 7,325,251 8,146,988 0 279,208 0 1,100,945 1,100,945 624,888
Stormwater 1,143,204 854,812 0 0 0 (288,392) (288,392) (482,700)
Sanitation 1,503,635 1,798,512 0 0 0 294,877 294,877 214,741
Building Code Enforcement 260,885 270,415 0 0 0 9,530 9,530 13,140
Total Business-type Activities 10,232,975 11,070,727 0 279,208 0 1,116,960 1,116,960 370,069
Total Primary Government 20,518,152$ 12,907,796$ 610,177$ 409,404$ (7,707,735) 1,116,960 (6,590,775) (7,208,139)
General Revenues
Property Taxes 3,843,755 0 3,843,755 3,961,395
Sales Taxes 1,156,129 0 1,156,129 1,080,006
Business and Utility Taxes 1,197,337 0 1,197,337 1,124,151
State Revenue Sharing 283,121 0 283,121 278,547
Discretionary Sales Surtax 684,187 0 684,187 648,258
Investment Earnings (Loss)(201,327) (146,114) (347,441) 593,067
Miscellaneous 403,069 0 403,069 32,131
Transfers 614,758 (614,758) 0 0
Total General Revenues
and Transfers 7,981,029 (760,872) 7,220,157 7,717,555
Change in Net Position 273,294 356,088 629,382 509,416
Net Position, Beginning of Year 48,581,009 25,467,554 74,048,563 73,539,147
Net Position, End of Year 48,854,303$ 25,823,642$ 74,677,945$ 74,048,563$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
Primary Government
2013
Program Revenues Net (Expense) Revenue and Changes in Net Position
See accompanying notes.
3
Nonmajor Totals
Governmental Governmental 2012
General Funds Funds Totals
Assets
Equity in Pooled Cash and Investments 6,178,222$ 3,477,902$ 9,656,124$ 9,214,353$
Receivables - Net 116,693 0 116,693 7,523
Due from Other Funds 9,097 0 9,097 213,265
Due from Other Governments 641,289 229,862 871,151 1,054,659
Inventories 26,098 0 26,098 35,566
Notes Receivable - Current 760 0 760 760
Prepaid Items 178,578 0 178,578 34,871
Notes Receivable - Noncurrent 1,520 0 1,520 2,280
Total Assets 7,152,257 3,707,764 10,860,021 10,563,277
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued Liabilities 564,523 57,487 622,010 662,115
Due to Other Funds 0 9,097 9,097 213,265
Deposits 2,750 7,166 9,916 8,090
Deferred Revenue 7,302 0 7,302 192,090
Total Liabilities 574,575 73,750 648,325 1,075,560
Fund Balances
Nonspendable:
Inventories 26,098 0 26,098 35,566
Prepaids 178,578 0 178,578 34,871
Restricted for:
Public Safety 28,720 139,247 167,967 178,300
Road Maintenance and Construction 0 92,254 92,254 123,526
Parks and Recreation 0 0 0 1,194
Debt Service Reserve 0 73,113 73,113 75,350
Other Capital Projects 0 3,214,166 3,214,166 2,982,216
Other Purposes 0 108,741 108,741 52,732
Committed to:
Conservation and Resource Management 0 6,493 6,493 6,493
Assigned to:
Re-establishment of Fire Department 300,000 0 300,000 300,000
Operating Reserves 2,598,195 0 2,598,195 2,619,256
Unassigned 3,446,091 0 3,446,091 3,078,213
Total Fund Balances 6,577,682 3,634,014 10,211,696 9,487,717
Total Liabilities and Fund Balances 7,152,257$ 3,707,764$ 10,860,021$ 10,563,277$
2013
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
See accompanying notes.
4
Total Fund Balances of Governmental Funds 10,211,696$ 9,487,717$
Amounts Reported for Governmental
Activities in the Statement of Net Assets
are Different Because:
Capital assets used in governmental
activities are not financial resources
and, therefore, are not reported in
the funds:
Total Capital Assets 57,504,590$ 56,803,027$
(Accumulated Depreciation)(18,093,554) (17,016,814)
39,411,036 39,786,213
Nonexchange receivables that do not
provide current financial resources and,
therefore, are not reported revenues
in the funds.0 156,857
Long-term liabilities are not due and
payable in the current period and,
accordingly, are not reported as fund
liabilities. Interest on long-term debt is
not accrued in the governmental funds,
but rather is recognized as an expenditure
when due. Certain prepayments are not
current financial resources, and are not
reported in the funds. All liabilities both
current and long-term, are reported in the
statement of net position. Long-term
liabilities (assets) at year-end consist of:
Revenue Bonds Payable 69,203 136,915
Compensated Absences 564,800 598,925
Net Pension Asset (2,271) 0
Other Postemployment Benefits
Obligation 135,726 112,021
Accrued Interest Payable 971 1,917
(768,429) (849,778)
Total Net Position of Governmental Activities 48,854,303$ 48,581,009$
2013 2012
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
See accompanying notes.
5
Nonmajor Totals
Governmental Governmental 2012
General Funds Funds Totals
Revenues
Property Taxes 3,843,755$ 0$ 3,843,755$ 3,961,395$
Nonproperty Taxes 1,197,336 1,197,709 2,395,045 2,277,222
Permits, Fees and Special Assessments 830,708 0 830,708 858,634
Intergovernmental Revenues 1,567,425 275,112 1,842,537 2,079,732
Fines and Forfeitures 224,758 30,355 255,113 118,181
Charges for Services 725,294 310 725,604 707,835
Investment Earnings (Loss)(128,430) (72,897) (201,327) 345,009
Miscellaneous Revenues 409,135 0 409,135 43,770
Interfund Charges 1,435,569 0 1,435,569 1,556,765
Total Revenues 10,105,550 1,430,589 11,536,139 11,948,543
Expenditures
Current:
General Government 2,877,855 0 2,877,855 2,983,158
Public Safety 4,841,216 110,104 4,951,320 4,849,156
Road Maintenance and Construction 1,420,481 305,607 1,726,088 1,792,000
Parks and Recreation 1,031,424 0 1,031,424 1,128,617
Debt Service:
Principal 0 67,712 67,712 63,684
Interest and Other 0 4,316 4,316 7,100
Capital Outlay 546,352 221,851 768,203 833,587
(Total Expenditures)(10,717,328) (709,590) (11,426,918) (11,657,302)
(Deficiency) Excess of Revenues (Under)
Over Expenditures (611,778) 720,999 109,221 291,241
Other Financing Sources (Uses)
Transfers in 975,454 71,000 1,046,454 1,404,982
Transfers (out)(31,000) (400,696) (431,696) (915,934)
Sale of General Fixed Assets 0 0 0 25,649
Total Other Financing (Uses)944,454 (329,696) 614,758 514,697
Net Change in Fund Balances 332,676 391,303 723,979 805,938
Fund Balances, Beginning of Year 6,245,006 3,242,711 9,487,717 8,681,779
Fund Balances, End of Year 6,577,682$ 3,634,014$ 10,211,696$ 9,487,717$
2013
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
See accompanying notes.
6
Net Change in Fund Balances - Total Governmental Funds 723,979$ 805,938$
Amounts Reported for Governmental Activities in the
Statement of Activities are Different Because:
Governmental funds report capital purchases as
expenditures. However, in the statement of
activities, the cost of those assets is depreciated
over their estimated useful lives and reported as
depreciation expense:
Expenditures for Capital Assets 768,203$ 833,588$
(Current Year Depreciation)(1,139,045) (1,145,847)
(370,842) (312,259)
Certain nonexchange revenues reported in the
statement of activities are not considered current
financial resources and, therefore, are not reported
as revenue in the governmental funds.(156,857) 153,927
Repayment of long-term debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the
statement of net assets.67,712 63,684
Governmental funds report sale of general fixed
assets as financial resources. The gain or loss on
disposal of general fixed assets is not reflected
in the governmental funds:
Proceeds from Sale of General Fixed Assets (Loss)0 (25,649)
or Gain on Disposal of General Fixed Assets (4,335) (362,498)
(4,335) (388,147)
Some expenses/revenues reported in the statement
of activities do not require the use of or provide
current financial resources and, therefore, are not
reported as expenditures in governmental funds:
Transfer of Capital Assets 0 (173,922)
Debt Interest Expense 946 899
Compensated Absences 34,125 89,485
Net Pension Asset 2,271 0
Other Postemployment Benefits Obligation (23,705) (33,189) 13,637 (116,727)
Change in Net Position - Governmental Activities 273,294$ 206,416$
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
2013 2012
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
See accompanying notes.
7
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Assets
Current Assets:
Equity in Pooled Cash and Investments 3,265,437$ 1,445,748$ 679,460$ 115,593$ 5,506,238$ 5,865,638$
Accounts Receivable - Net 508,707 40,242 66,750 0 615,699 613,856
Due from Other Governments 0 0 0 0 0 0
Inventories 62,876 0 0 0 62,876 44,683
Notes Receivable - Current 15,759 0 0 0 15,759 10,709
Prepaid Items 155,723 25,424 0 0 181,147 0
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 2,373,508 170,699 0 0 2,544,207 2,649,289
Capital Assets:
Land 749,499 906,519 0 0 1,656,018 1,656,018
Buildings 4,356,384 0 0 0 4,356,384 4,356,384
Improvements Other Than Buildings 60,860,203 16,201,546 0 0 77,061,749 76,328,842
Equipment 1,547,125 253,483 185,377 37,500 2,023,485 1,843,161
Intangibles - Easements and Computer Software 226,394 0 0 18,315 244,709 244,709
(Accumulated Depreciation and Amortization)(36,496,998) (7,719,369) (175,102) (55,815) (44,447,284) (42,132,784)
Construction in Progress 137,817 46,854 0 0 184,671 115,682
Notes Receivable - Noncurrent 133,446 0 0 0 133,446 83,026
Unamortized Loan Costs 153,636 22,277 0 0 175,913 190,405
Total Assets 38,049,516$ 11,393,423$ 756,485$ 115,593$ 50,315,017$ 51,869,618$
2013
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2013,
Business-type Activities - Enterprise Funds
See accompanying notes.
8
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Liabilities
Current Liabilities Payable from Current
Assets:
Accounts Payable and Other Current Liabilities 295,079$ 32,383$ 104,228$ 6,345$ 438,035$ 595,942$
Construction Retainages Payable 0 0 0 0 0 385,117
Due to Other Governments 6,926 0 0 2,458 9,384 7,141
Deferred Revenue 91,225 28,855 62,364 0 182,444 203,243
Compensated Absences - Current 72,069 1,697 0 7,733 81,499 126,000
Current Liabilities Payable from Restricted
Assets:
Current Portion of Bonds Payable 923,114 127,878 0 0 1,050,992 1,012,767
Current Portion of Loans Payable 164,475 0 0 0 164,475 457,492
Accrued Interest Payable 380,551 42,821 0 0 423,372 439,420
Customer Deposits 573,879 0 0 0 573,879 518,653
Noncurrent Liabilities:
Due in More Than One Year 19,536,897 1,806,736 0 0 21,343,633 22,456,446
Compensated Absences - Noncurrent 162,529 827 0 16,234 179,590 163,501
Other Postemployment Benefits Obligation 29,314 8,856 0 5,902 44,072 36,342
Total Liabilities 22,236,058 2,050,053 166,592 38,672 24,491,375 26,402,064
Net Position
Net Investment in Capital Assets 10,909,574 7,776,696 10,275 0 18,696,545 18,290,590
Restricted for:
Renewal and Replacement 500,000 0 0 0 500,000 500,000
Debt Service 1,073,184 127,878 0 0 1,201,062 1,173,858
Other Capital Projects 0 0 0 0 0 0
Building Code Enforcement 0 0 0 76,921 76,921 38,463
Unrestricted 3,330,700 1,438,796 579,618 0 5,349,114 5,464,643
Total Net Position 15,813,458$ 9,343,370$ 589,893$ 76,921$ 25,823,642$ 25,467,554$
Business-type Activities - Enterprise Funds
(Concluded)
SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
2013
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
CITY OF ATLANTIC BEACH, FLORIDA
See accompanying notes.
9
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Operating Revenues
Charges for Services:
Customer Charges 7,951,876$ 854,812$ 1,746,085$ 270,415$ 10,823,188$ 10,777,484$
Franchise Permits 0 0 3,000 0 3,000 7,500
Miscellaneous Revenues 195,112 0 0 0 195,112 48,955
Total Operating Revenues 8,146,988 854,812 1,749,085 270,415 11,021,300 10,833,939
Operating Expenses
Personal Services 1,761,806 206,548 18,186 220,458 2,206,998 2,266,087
Contractual Services 654,600 134,074 1,304,339 1,262 2,094,275 2,299,668
Supplies 333,387 25,409 0 3,790 362,586 356,488
Repairs and Maintenance 101,929 18,402 6,435 7,014 133,780 157,677
Utilities 382,694 0 0 0 382,694 629,185
Depreciation 1,837,311 463,473 15,220 70 2,316,074 2,356,965
Intergovernmental Charges 982,292 166,595 162,618 23,369 1,334,874 1,442,177
Other Expenses 213,710 27,173 (3,163) 4,922 242,642 252,399
(Total Operating Expenses)(6,267,729) (1,041,674) (1,503,635) (260,885) (9,073,923) (9,760,646)
Operating Income (Loss)1,879,259 (186,862) 245,450 9,530 1,947,377 1,073,293
Nonoperating Revenues (Expenses)
Connection Charges 8,530 0 0 0 8,530 7,064
Franchise Fees 0 0 49,427 0 49,427 25,681
Investment Earnings (Loss)(97,294) (32,697) (13,981) (2,142) (146,114) 248,057
Interest Expense (896,571) (99,628) 0 0 (996,199) (881,739)
Gain (Loss) on Disposal of Fixed Assets 1,601 0 0 0 1,601 2,077
Amortization of Loan Costs (162,552) (1,902) 0 0 (164,454) (14,654)
Total Nonoperating Revenues (Expenses)(1,146,286) (134,227) 35,446 (2,142) (1,247,209) (613,514)
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
2013
Business-type Activities - Enterprise Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
See accompanying notes.
10
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Income (Loss) Before Contributions
and Transfers 732,973$ (321,089)$ 280,896$ 7,388$ 700,168$ 459,779$
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants 270,678 0 0 0 270,678 158,347
Transfers in 0 252,000 0 31,000 283,000 564,695
Transfers (out)(629,860) 0 (267,898) 0 (897,758) (879,821)
Total Capital Contributions and Grants
and Transfers (359,182) 252,000 (267,898) 31,000 (344,080) (156,779)
Change in Net Position 373,791 (69,089) 12,998 38,388 356,088 303,000
Net Position, Beginning of Year 15,439,667 9,412,459 576,895 38,533 25,467,554 25,164,554
Net Position, End of Year 15,813,458$ 9,343,370$ 589,893$ 76,921$ 25,823,642$ 25,467,554$
2013
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
STATEMENT OF REVENUES, EXPENSES, AND
CITY OF ATLANTIC BEACH, FLORIDA
Business-type Activities - Enterprise Funds
(Concluded)
CHANGES IN NET POSITION
PROPRIETARY FUNDS
See accompanying notes.
11
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Cash Flows from Operating Activities
Cash Received from Customers 7,961,458$ 860,265$ 1,753,768$ 270,415$ 10,845,906$ 10,947,884$
Cash Paid to Suppliers (2,417,775) (210,977) (1,306,889) (16,533) (3,952,174) (3,787,845)
Cash Paid to Employees (1,784,055) (204,581) (18,186) (220,858) (2,227,680) (2,259,918)
Cash Paid for Interfund Services (982,292) (166,595) (162,618) (23,369) (1,334,874) (1,442,177)
Net Cash Provided by (Used in) Operating
Activities 2,777,336 278,112 266,075 9,655 3,331,178 3,457,944
Cash Flows from Noncapital Financing
Activities
Connection Charges 8,530 0 49,427 0 57,957 7,064
Franchise Fees 0 0 0 0 0 25,681
Transfers in 0 252,000 0 31,000 283,000 390,773
Transfers (out)(629,860) 0 (267,898) 0 (897,758) (879,821)
Net Cash Provided by (Used in) Noncapital
Financing Activities (621,330) 252,000 (218,471) 31,000 (556,801) (456,303)
Capital and Related Financing Activities
Capital Grants 270,678 0 0 0 270,678 158,347
Proceeds from Loan 0 0 0 0 0 5,332,349
Fixed Asset Additions (931,673) (46,856) (4,500) 0 (983,029) (6,017,822)
Principal Payments on Long-term Debt (1,345,906) (123,039) 0 0 (1,468,945) (985,971)
Interest Paid (823,230) (87,732) 0 0 (910,962) (729,606)
Net Cash Provided by (Used in) Capital
and Related Financing Activities (2,830,131) (257,627) (4,500) 0 (3,092,258) (2,242,703)
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
2013
See accompanying notes.
12
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Cash Flows from Investing Activities
Sale (Purchase) of Investments 615,872$ (174,286)$ (18,708)$ (28,355)$ 394,523$ (4,477,408)$
Interest Received (97,294) (32,697) (13,981) (2,629) (146,601) 248,888
Net Cash Provided by (Used in)
Investing Activities 518,578 (206,983) (32,689) (30,984) 247,922 (4,228,520)
Net Increase (Decrease) in Cash and
Cash Equivalents (155,547) 65,502 10,415 9,671 (69,959) (3,469,582)
Cash and Cash Equivalents, Beginning of Year 1,531,107 328,813 155,332 18,527 2,033,779 5,503,361
Cash and Cash Equivalents, End of Year 1,375,560$ 394,315$ 165,747$ 28,198$ 1,963,820$ 2,033,779$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating
Activities
Operating Income (Loss)1,879,259$ (186,862)$ 245,450$ 9,530$ 1,947,377$ 1,073,362$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
(Used in) Operating Activities:
Depreciation 1,837,311 463,473 15,220 70 2,316,074 2,356,896
Change in Assets and Liabilities:
Accounts Receivable (67,001) 5,421 4,267 0 (57,313) 75,036
Inventory (18,193) 0 0 0 (18,193) 1,508
Prepaids (155,723) (25,424) 0 0 (181,147) 0
Compensated Absences (27,403) 422 0 (1,431) (28,412) 6,169
OPEB Obligation 5,154 1,545 0 1,031 7,730 0
Accounts Payable and Accrued Liabilities (713,262) 19,505 722 455 (692,580) (93,936)
Customer Deposits 55,226 0 0 0 55,226 (796)
Deferred Revenue (18,032) 32 416 0 (17,584) 39,705
Net Cash Provided by (Used in) OperatingActivities 2,777,336$ 278,112$ 266,075$ 9,655$ 3,331,178$ 3,457,944$
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
(Continued)
2013
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
See accompanying notes.
13
Building Code 2012
Utility Stormwater Sanitation Enforcement Totals Totals
Reconciliation of Cash and Cash
Equivalents to Balance Sheet
Equity in Pooled Cash and Cash
Equivalents in Current Assets 3,265,437$ 1,445,748$ 679,460$ 115,593$ 5,506,238$ 5,865,638$
Restricted Equity in Pooled Cash
and Cash Equivalents 2,373,508 170,699 0 0 2,544,207 2,649,289
Equity in Pooled Investments (4,263,385) (1,222,132) (513,713) (87,395) (6,086,625) (6,481,148)
Total Cash and Cash Equivalents 1,375,560$ 394,315$ 165,747$ 28,198$ 1,963,820$ 2,033,779$
Noncash Activity
Noncash Transfers 0$ 0$ 0$ 0$ 0$ (173,922)$
Amortization of Bond Issue Costs 12,646 1,846 0 0 14,492 14,254
Amortization of Bond Discount (Premium)87,350 13,776 0 0 101,126 98,541
Amortization of Loss on Refunding 1,282 210 0 0 1,492 2,444
2013
Business-type Activities - Enterprise Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
(Concluded)
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
See accompanying notes.
14
2013 2012
Assets
Cash and Cash Equivalents 130,743$ 86,828$
Prepaids 5,830 0
Interest Receivable 34,097 28,197
Investments at Fair Value 21,341,304 19,832,927
Total Assets 21,511,974 19,947,952
Liabilities
Accounts Payable and Accrued Liabilities 900 424
Excess Premium Tax Liability 120,454 120,454
DROP Plan Payable 288,280 198,554
Total Liabilities 409,634 319,432
Total Net Position
Held in Trust for Pension Benefits 21,102,340$ 19,628,520$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
SEPTEMBER 30, 2013,
See accompanying notes.
15
2013 2012
Additions
Contributions:
Employer 1,562,327$ 1,538,619$
Employees 258,156 261,992
State of Florida 91,077 88,795
Total Contributions 1,911,560 1,889,406
Net (Decrease) Increase in
Fair Value of Investments 729,168 2,218,699
Interest and Dividends 420,837 443,921
Miscellaneous Revenue 58,206 0
Total Additions 3,119,771 4,552,026
Deductions
Refunds of Contributions 118,126 12,751
Benefits 1,381,388 1,254,883
Investment Expenses 84,793 103,133
Administrative Expenses 61,644 57,614
Total Deductions 1,645,951 1,428,381
Change in Net Position 1,473,820 3,123,645
Net Position, Beginning of Year 19,628,520 16,504,875
Net Position, End of Year 21,102,340$ 19,628,520$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
16
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
Note 1 - Summary of Significant Accounting Policies
The accounting policies of the City of Atlantic Beach, Florida, (the City), conform to
accounting principles generally accepted in the United States of America as applicable to
governments. The following is a summary of the more significant policies used in the
preparation of these financial statements.
Reporting Entity
The City was incorporated in 1957, under a charter in accordance with the laws of the State of
Florida, Florida Statutes Section 57-1126. The City operates under a form of government
which comprises an elected City Commission (four Commissioners and a Mayor-
Commissioner) and provides, under the administration of an appointed City Manager, the
following services: public safety, public works (streets and infrastructure), recreation,
sanitation, stormwater, planning, zoning, water and sewer, and general government services.
In accordance with the Codification of Governmental and Financial Reporting Standards, the
financial reporting entity consists of the primary government, organizations for which the
primary government is financially accountable, and other organizations whose exclusions
would cause the reporting entity’s financial statements to be misleading or incomplete. The
Governmental Accounting Standards Board (GASB) has set forth criteria for consideration in
determining financial accountability. These criteria include appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that
organization; or, (2) the potential for that organization to provide specific benefits to or impose
specific financial burdens on the City. Other considerations are whether the organization is
legally separate, whether the City holds the corporate powers of the organization, and whether
there is fiscal dependency by the organization on the City. Based upon the application of these
criteria, the City has no component units.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) report information on all of the nonfiduciary activities of the City. For the most
part, the effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges
for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or activity. Indirect costs are included in the program
expense reported for individual functions and activities. Program revenues include:
(1) charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or activity; and (2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or activity. Taxes and other items not properly included among program
revenues are reported instead as general revenues.
17
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Government-wide and Fund Financial Statements (Concluded)
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide Financial Statements
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. The major exception to this general rule is charges between the City’s
water and sewer function and various other functions of the City. Elimination of these charges
would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for
goods, services, or privileges provided; (2) operating grants and contributions; and (3) capital
grants and contributions, including special assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets; (2)
Restricted; or (3) Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences, other postemployment
benefits, and claims and judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and permits, charges for services, and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so
have been recognized as revenues of the current fiscal period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
18
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Fund Financial Statements (Concluded)
The City reports the following major governmental fund:
■ The General Fund is the City’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another
fund.
The City reports the following major proprietary funds:
■ The Utility Fund accounts for the activities of the City’s water distribution and sewer
collection and treatment systems.
■ The Sanitation Fund accounts for the activities of the City’s sanitation system.
■ The Stormwater Fund accounts for the activities of the City’s stormwater system.
■ The Building Code Enforcement Fund accounts for the activities of the City’s Building
Department.
Additionally, the City reports the following fund types:
■ Special Revenue Funds—The special revenue funds are used to account for the proceeds
of specific revenue sources (other than major capital projects) that are legally restricted to
expenditures for specified purposes.
■ Debt Service Funds—The debt service fund is used to account for the accumulation of
resources for, and the payment of, long-term general obligation debt principal, interest and
related costs other than obligations payable from the operations of the proprietary funds.
■ Capital Projects Funds—The capital projects funds are used to account for the financial
resources to be used for the acquisition or construction of major capital facilities and
improvement projects (other than those financed by proprietary funds or special revenue
funds).
■ Pension Trust Funds—These funds account for the activities of the Employees’
Retirement System, which accumulates resources for pension benefit payments to
qualified police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – nonspendable, restricted, committed, assigned
and unassigned:
19
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Fund Balance Classification (Concluded)
■ Nonspendable Fund Balance—amounts that are not in spendable form (such as
inventory) or are required to be maintained intact.
■ Restricted Fund Balance—amounts constrained to specific purposes by their providers
(such as grantors, bondholders, and higher levels of government), through constitutional
provisions, or by enabling legislation.
■ Committed Fund Balance—amounts constrained to specific purposes by the City itself,
using its highest level of decision-making authority (i.e., ordinance passed by City
Commission). To be reported as committed, amounts cannot be used for any other
purpose unless the City takes the same highest level action to remove or change the
constraint.
■ Assigned Fund Balance—amounts the City intends to use for a specific purpose. Intent
can be expressed by the City Commission or by an official or body to which the City
Commission delegates the authority.
■ Unassigned Fund Balance—amounts that are available for any purpose. Positive
amounts are reported only in the General Fund.
When both restricted and unrestricted resources are available for use, it is the City’s practice to
use restricted resources first, then unrestricted resources as they are needed. When
unrestricted resources (committed, assigned and unassigned) are available for use in any
governmental fund, it is the City’s practice to use committed resources first, then assigned, and
then unassigned as needed.
The City Commission establishes (and modifies or rescinds) fund balance commitments by
passage of an ordinance. This is typically done through adoption and amendment of the
budget. A fund balance commitment is further indicated in the budget document as a
designation or commitment of the fund. Assigned fund balance is established by City
Commission through adoption or amendment of the budget as intended for specific purpose
(such as the purchase of fixed assets, construction, debt service, or for other purposes).
In the General Fund, the City strives to maintain a fund balance operating reserve to be used
for unanticipated emergencies of approximately 25% of the subsequent year’s budgeted
General Fund payroll and operating expenditures.
Proprietary Funds
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues of the City’s enterprise funds are charges to customers for sales
and services. Operating expenses for enterprise funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
20
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are
controlled by a budgetary accounting system in accordance with various legal requirements
which govern the City’s operations. Budgets are monitored at varying levels of classification
detail; however, expenditures cannot legally exceed total appropriations at the individual fund
level.
Budgets are adopted for all governmental funds (general, special revenue, debt service and
capital projects). The City Manager is authorized to transfer budgeted amounts within
departments within any fund; however, any revisions that increase the total expenditures of
any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the
reported budgetary data. The budget presented in the accompanying required supplemental
information is prepared in conformity with accounting principles generally accepted in the
United States of America.
Cash and Investments
Except where prohibited, cash resources of the individual funds are combined to form a pool
of cash and investments. Investment earnings and losses on the pooled cash and investments
are distributed to the appropriate funds based on the average monthly balance of investments
in each fund.
Investments are valued at fair market value (see Note 2).
For the purposes of the statement of cash flows, the City’s proprietary funds consider cash and
cash equivalents to include cash and investments with an original maturity of three months or
less.
Receivables
Receivables are recorded at their net realizable value.
Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding
at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of
interfund loans).
Inventories
Inventories consisting principally of expendable materials, supplies and fuel are determined by
physical count at the City’s year-end on an annual basis and are valued at the lower of cost
(first-in, first-out) or market. On the balance sheet - governmental funds, the inventory
balance reported is considered nonspendable fund balance, which indicates that it does not
constitute “available spendable resources” even though it is a component of net current assets.
The cost of governmental fund-type inventories is recorded as expenditure when consumed.
21
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to
various bond indenture agreements and City ordinances. These assets are legally restricted for
specific purposes, such as debt service, new construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City’s enterprise
funds, it is the City’s policy to use restricted resources first, then unrestricted resources as they
are needed.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
drainage improvements, sidewalks, and similar items), are reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Property, plant, and equipment with initial, individual costs that equal or exceed
$1,000 and estimated useful lives of over one year are recorded as capital assets. Capital
assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
Property, plant and equipment are depreciated using the straight-line method over the
following estimated useful lives:
Assets Years
Buildings and Improvements 10 – 40
Improvements Other Than Buildings 10 – 50
Infrastructure 25 – 100
Machinery and Equipment 3 – 40
Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net position. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the effective interest method. Bonds payable are
reported net of the applicable bond premium or discount. Bond issuance costs are reported as
deferred charges and amortized over the term of the related debt.
22
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
Long-term Obligations (Concluded)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide
and proprietary fund financial statements.
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements.
Grant revenues are recorded using the modified accrual basis in governmental funds and the
accrual basis in the proprietary funds. Restricted grant revenues, which are received but not
expended, are recorded as deferred revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the
Property Appraiser and Tax Collector of the City of Jacksonville, Florida. General property
taxes are recorded as received, in cash, which approximates taxes levied less discounts for the
current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the
following year. Discounts are allowed for early payment. On or prior to June 1, interest-
bearing certificates are sold for all uncollected real property taxes. Unsold certificates are held
by the City of Jacksonville, Florida.
Interfund Transactions
During the course of normal operations, the City has various transactions between funds to
construct assets and comply with local ordinances and other legal restrictions. These
transactions are reflected as transfers. In addition, certain transfers have been made between
systems and accounts of the utility enterprise fund as required by bond covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in
total. Such information does not include sufficient detail to constitute a presentation in
conformity with generally accepted accounting principles. Accordingly, such information
should be read in conjunction with the City’s financial statements for the year ended
September 30, 2012, from which the summarized information was derived.
23
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded)
New Accounting Pronouncements
During the year, the City implemented GASB Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements (GASB 62). This standard incorporates into the GASB’s authoritative
literature certain accounting and financial reporting guidance included in FASB
pronouncements, which does not conflict with or contradict GASB pronouncements, and
eliminates the criteria to apply post-November 30, 1989 pronouncements that do not conflict
or contradict GASB pronouncements.
During the year, the City implemented GASB Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position (GASB 63).
This standard establishes a new statement of net position format that reports separately all
assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net
position (which is the residual amount of the other elements). This Statement requires
deferred outflows of resources and deferred inflows of resources to be reported separately
from assets and liabilities. The financial reporting impact resulting from the implementation
of GASB 63 in the City’s financial statements was the renaming of “Net Assets” to “Net
Position”, including changing the name of the financial statement from “Statement of Net
Assets” to “Statement of Net Position”.
Note 2 - Cash and Investments
The City maintains a cash and investment pool that is designed for use by all funds, except for
those monies which are periodically transferred for pension investment purposes. In addition,
investments are separately held and individually accounted for where contractual
arrangements and bond covenants provide for and require such arrangements.
At September 30, 2013, the carrying amount of cash on hand and on deposit with banks,
including interest-bearing deposits was $3,349,896, and the related bank balance was
$3,536,473. Monies which are placed on deposit with financial institutions in the form of
demand deposit accounts, time deposit accounts, and certificates of deposit are defined as
public deposits. All of the City’s public deposits are held in qualified public depositories
pursuant to Florida Statutes Chapter 280, Florida Security for Public Deposits Act. Under the
Act, all qualified public depositories are required to pledge eligible collateral having a market
value equal to or greater than the average daily or monthly balance of all public deposits, times
the depository’s collateral pledged level. The pledging level may range from 25% to 125%
depending upon the depository’s financial condition and establishment period. All collateral
must be deposited with an approved financial institution.
Any losses to public depositors are covered by applicable deposit insurance, sale of securities
pledged as collateral and, if necessary, assessments against other qualified public depositories
of the same type as the depository in default.
The City elected to adopt a written investment policy as authorized under Florida Statutes.
24
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 2 - Cash and Investments (Continued)
Under the City’s investment policies, general investments’ activities are authorized to invest in
obligations of the U.S. Treasury, demand deposits, U.S. government agency securities,
certificates of deposit, U.S. government sponsored enterprises, government and corporate
fixed income mutual funds, corporate notes and bonds, and local government investment
pools. Pension trust funds can invest in the aforementioned and, additionally, authorized
investments include domestic and foreign equity securities, domestic and foreign fixed income
securities, and cash equivalent securities.
Following are the investments, credit ratings, and maturities of the City’s governmental and
business-type activities at September 30, 2013:
Investment Maturities
Investment Credit Fair Less Than 1-5 6-10
Type Rating Value 1 Year Years Years Total
Money Market Funds:
Citibank, N.A.
Bank Deposit Program Unrated $ 1,003,070 $ 1,003,070 $ 0 $ 0 $ 1,003,070
Mutual Funds:
Alliance Limited Duration
High Income Mutual Fund Unrated 2,857,723 2,857,723 0 0 2,857,723
Guggenheim Floating Rate
Strategy Class A Unrated 2,835,127 2,835,127 0 0 2,835,127
Invesco Floating Rate
Class A Unrated 2,820,909 2,820,909 0 0 2,820,909
Lord Abbett Floating Rate
Income Class A Unrated 1,469,807 1,469,807 0 0 1,469,807
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 1,017,017 1,017,017 0 0 1,017,017
Putnam Diversified Income
Trust Class A Unrated 2,483,629 2,483,629 0 0 2,483,629
Florida PRIME A-1 247 247 0 0 247
Fund B Surplus Trust Funds
Investment Pool Unrated 98 0 0 98 98
Total $ 14,487,627 $ 14,487,529 $ 0 $ 98 $14,487,627
25
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 2 - Cash and Investments (Continued)
Listed below are the investments and maturities in the City’s pension trust funds at
September 30, 2013:
Investment Maturities
Investment Fair Less Than 1-5 6-10 More Than
Type Value* 1 Year Years Years 10 Years Total
Cash Deposits and
Money Markets $ 1,082,227 $ 1,082,227 $ 0 $ 0 $ 0 $ 1,082,227
Common Stocks 12,315,249 12,315,249 0 0 0 12,315,249
Corporate Bonds 6,471,829 253,405 3,357,866 2,860,558 0 6,471,829
Mutual Funds –
Fixed Income 426,035 426,035 0 0 0 426,035
Government and
GSE Bonds 791,781 0 386,857 223,120 181,804 791,781
ICMA Self Directed 288,280 288,280 0 0 0 288,280
Total $ 21,375,401 $ 14,365,196 $ 3,744,723 $ 3,083,678 $ 181,804 $ 21,375,401
* Fair value balances reported include interest receivable.
The total pension investment balances of the City at September 30, 2013, are comprised of the
following items:
Moody’s Percent
Investment Credit of
Type Rating Total
Corporate Bonds A1 2.08%
Corporate Bonds A2 4.34%
Corporate Bonds A3 6.23%
Corporate Bonds AA2 0.67%
Corporate Bonds AA3- 0.75%
Corporate Bonds BAA1 5.97%
Corporate Bonds BAA2 8.76%
Corporate Bonds BAA3 1.48%
Government and GSE Bonds AAA 3.70%
Mutual Funds – Fixed Income NR 1.99%
Stocks NR 57.62%
Cash and Money Market NR 5.06%
ICMA Self Directed NR 1.35%
Restricted cash and investments at September 30, 2013, in the enterprise funds follows:
Renewal System
Enterprise Customer and Debt Development
Funds Deposits Replacement Service Charges Totals
Utility Fund $ 582,889 $ 500,000 $ 1,290,619 $ 0 $ 2,373,508
Stormwater Fund $ 0 $ 0 $ 170,699 $ 0 $ 170,699
26
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 2 - Cash and Investments (Concluded)
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Funds’ investment
policy to, at a minimum, limit 60% of the market value of its investment in fixed income
securities to those that meet or exceed a credit rating of “A” by Moody’s or Standard & Poor’s
rating services. It is the City’s General Employees’ Retirement System Trust Funds’ investment
policy to, at a minimum, limit 45% of the total fixed income portfolio to “investment grade” or
higher.
Also, no more than 5% (at cost) of the fixed income portfolio total value can be invested in the
securities of any single corporate issuer or 15% (at cost) of the plan’s total assets can be invested
in foreign securities.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments
or collateral securities that are in the possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the
exposure to custodial credit risk for deposits or investments, other than the following provision
for deposits: The Finance Director may execute a third party Custodial Safekeeping Agreement
with a commercial bank having trust powers or a trust company which is chartered by the United
States government or the State of Florida. All securities purchased and/or collateral obtained by
the City shall be properly designated as an asset of the City and held in safekeeping by the trust
department or trust company, and no withdrawal of such securities, in whole or in part, shall be
made from safekeeping, except by an authorized City staff member. The third party Custodial
Safekeeping Agreement shall include letters of authority from the City with details as to
responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure
or other unforeseen mishaps, including liability of each party.
Note 3 - Receivables
Receivables, net of the allowance for doubtful accounts at September 30, 2013, consist of the
following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General $ 116,693 $ 0 $ 116,693
Utility 521,009 (12,302) 508,707
Stormwater 41,488 (1,246) 40,242
Sanitation 71,909 (5,159) 66,750
Total $ 751,099 $ (18,707) $ 732,392
Included in accounts receivable are $216,363 of water and sewer revenues earned, but not
billed as of September 30, 2013.
27
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 4 - Notes Receivable
It is the City’s policy to allow its water and sewer customers to pay connection fees over an
extended period.
Following is a summary of the outstanding balance at September 30, 2013:
Notes Receivable $ 149,205
(Current Portion) (15,759)
Total Notes Receivable - Noncurrent $ 133,446
Note 5 - Capital Assets
Capital asset activity for the fiscal year ended September 30, 2013, is as follows:
Beginning Ending
Balance Increases (Decreases) Balance
Governmental Activities
Capital Assets Not Being
Depreciated:
Land $ 10,034,337 $ 328,665 $ 0 $ 10,363,002
Construction in Progress 4,338 101,062 (4,338) 101,062
Total Capital Assets Not
Being Depreciated 10,038,675 429,727 (4,338) 10,464,064
Capital Assets Being
Depreciated:
Buildings 4,491,659 0 0 4,491,659
Intangible Assets 330,584 10,495 0 341,079
Improvements Other Than
Buildings 38,755,694 84,169 0 38,839,863
Machinery and Equipment 3,186,415 251,009 (69,499) 3,367,925
Total Capital Assets Being
Depreciated 46,764,352 345,673 (69,499) 47,040,526
Less Accumulated Depreciation
for:
Buildings (1,626,454) (113,771) 0 (1,740,225)
Intangible Assets (289,490) (29,631) 0 (319,121)
Improvements Other Than
Buildings (12,890,254) (671,888) 0 (13,562,142)
Machinery and Equipment (2,210,616) (323,755) 62,305 (2,472,066)
Total Accumulated Depreciation (17,016,814) (1,139,045) 62,305 (18,093,554)
Total Capital Assets Being
Depreciated, Net 29,747,538 (793,372) (7,194) 28,946,972
Governmental Activities Capital
Assets, Net $ 39,786,213 $ (363,645) $ (11,532) $ 39,411,036
28
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 5 - Capital Assets (Concluded)
Beginning Ending
Balance Increases (Decreases) Balance
Business-type Activities
Capital Assets Not Being Depreciated:
Land $ 1,656,018 $ 0 $ 0 $ 1,656,018
Construction in Progress 115,682 184,671 (115,682) 184,671
Total Capital Assets Not Being
Depreciated 1,771,700 184,671 (115,682) 1,840,689
Capital Assets Being Depreciated:
Buildings 4,356,384 0 0 4,356,384
Intangible Assets 244,709 0 0 244,709
Improvements Other Than Buildings 76,328,842 732,907 0 77,061,749
Machinery and Equipment 1,843,161 181,899 (1,575) 2,023,485
Total Capital Assets Being Depreciated 82,773,096 914,806 (1,575) 83,686,327
Less Accumulated Depreciation for:
Buildings (4,193,761) (68,890) 0 (4,262,651)
Intangible Assets (29,902) (190) 0 (30,092)
Improvements Other Than Buildings (36,384,560) (2,148,986) 0 (38,533,546)
Machinery and Equipment (1,524,562) (98,008) 1,575 (1,620,995)
Total Accumulated Depreciation (42,132,785) (2,316,074) 1,575 (44,447,284)
Total Capital Assets Being Depreciated,
Net 40,640,311 (1,401,268) 0 39,239,043
Business-type Activities Capital Assets,
Net $ 42,412,011 $ (1,216,597) $ (115,682) $ 41,079,732
Depreciation expense was charged to functions/programs as follows:
Governmental Activities
General Governmental $ 149,875
Public Safety 216,916
Road Maintenance and Construction 515,512
Parks and Recreation 256,742
Total Depreciation Expense - Governmental Activities $ 1,139,045
Business-type Activities
Utility $ 1,837,311
Stormwater 463,473
Sanitation 15,220
Building Code Enforcement 70
Total Depreciation Expense - Business-type Activities $ 2,316,074
Note 6 - Long-term Debt
Revenue Bonds and Loans payable are comprised of the following:
29
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 6 - Long-term Debt (Continued)
Revenue Bonds Payable
Utilities System Revenue Refunding Bonds, Series 2004, Payable in Annual
Installments of Principal and Semiannual Installments of Interest Through
October 1, 2025, Bearing Coupon Rates of 2.00% to 4.50%, Secured Solely
by a Pledge of and Lien on Net Water and Sewer System Revenues and
Certain Other Revenues as Defined in the Bond Ordinances $ 14,420,001
SunTrust Revenue Refunding Bonds, Series 1999, Payable in Annual
Installments of Principal and Semiannual Installments of Interest at a
Rate of 4.20%; the Note is Secured by the City’s Utility Service Taxes 155,661
Utilities System Revenue Bonds, Series 2010A-1, Payable in Annual
Installments of Principal and Semiannual Installments of Interest Through
April 1, 2026, Bearing Coupon Rates of 3.59%, Secured Solely by a Pledge
of and Lien on Net Water and Sewer System Revenues 807,202
Utilities System Revenue Refunding Bonds, Series 2010B, Payable in Annual
Installments of Principal and Semiannual Installments of Interest Through
April 1, 2026, Bearing Coupon Rates of 3.68%, Secured Solely by a Pledge
of and Lien on Net Water and Sewer System Revenues 620,504
Loans Payable
Florida Department of Environmental Protection, Disbursements and
Capitalized Interest for a $773,030 State of Florida Revolving Loan
#DW160710, Issued to Finance the Construction Costs to Replace a
Well at Water Treatment Plant No. 1 and a Transmission Main on
Ocean Boulevard, Payable in Semiannual Installments of Principal
and Interest Through November 15, 2030, with Financing Rates of
2.71%, Secured Solely by a Pledge of Net Water and Sewer System
Revenues, After Payment of All Yearly Payment Obligations on Account
of the Senior Revenue Obligations, as Defined in the Loan Agreement 691,426
Florida Department of Environmental Protection, Disbursements, Service
Fee and Capitalized Interest for a Combined $9,368,576 State of Florida
Revolving Loan #WW160700, Issued to Finance the Construction of
Treatment and Transmission Facilities for the Buccaneer WWTP
Phaseout Improvements and TMDL Compliance Program WWTP #1,
Payable in Semiannual Installments of Principal and Interest Through
May 15, 2032, with Financing Rates of 3.14% and 2.88%, Secured Solely
by a Pledge of Net Water and Sewer System Revenues, After Payment
of All Yearly Payment Obligations on Account of the Senior Revenue
Obligations, as Defined in the Loan Agreement 7,135,656
Total Revenue Bonds and Loans Payable 23,830,450
(Unamortized Discount) (123,564)
(Unamortized Refunding Loss) (1,078,583)
Total Long-term Debt, Net $ 22,628,303
30
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 6 - Long-term Debt (Continued)
The annual requirements to amortize all revenue bonds and loans payable outstanding at
September 30, 2013, are as follows:
Governmental Activities Business-type Activities
Year Ending Long-term Debt Long-term Debt
September 30 Principal Interest Total Principal Interest Total
2014 $ 69,203 $ 1,457 $ 70,660 $ 1,219,361 $ 869,052 $ 2,088,413
2015 0 0 0 1,322,556 824,791 2,147,347
2016 0 0 0 1,369,127 777,243 2,146,370
2017 0 0 0 1,421,065 726,747 2,147,812
2018 0 0 0 1,468,290 673,204 2,141,494
Thereafter 0 0 0 16,960,848 3,424,811 20,385,659
Total $ 69,203 $ 1,457 $ 70,660 $ 23,761,247 $ 7,295,848 $31,057,095
Interest and amortization incurred during the year ended September 30, 2013, was $4,316 in
the debt service fund and $996,199 in the enterprise funds. Of the amount incurred in the
enterprise funds, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with
bond resolutions. As of September 30, 2013, and during the year then ended, the City was in
compliance with those ratios.
The following is a summary of the changes in long-term debt of the City for the year ended
September 30, 2013:
Balance Balance Due
October 1, September 30, Within
2012 Additions Reductions 2013 One Year
Governmental Activities
Revenue Bonds Payable $ 136,915 $ 0 $ (67,712) $ 69,203 $ 69,203
Compensated Absences 598,925 381,453 (415,578) 564,800 195,576
OPEB Obligation 112,021 23,705 0 135,726 0
Total Governmental Activities -
Long-term Liabilities $ 847,861 $ 405,158 $ (483,290) $ 769,729 $ 264,779
Business-type Activities
State Revolving Fund Loans $ 8,283,255 $ 0 $ (456,173) $ 7,827,082 $ 164,475
Revenue Bonds Payable 16,946,937 0 (1,012,772) 15,934,165 1,050,992
Less Deferred Amounts:
For Issuance Discounts (133,861) 0 10,297 (123,564) 0
Loss on Bond Refunding (1,169,626) 0 91,043 (1,078,583) 0
Total Revenue Bonds Payable 15,643,450 0 (911,432) 14,732,018 1,050,992
Total Bonds/Loans Payable 23,926,705 0 (1,367,605) 22,559,100 1,215,467
Compensated Absences 289,501 145,932 (174,344) 261,089 81,499
OPEB Obligation 36,342 7,730 0 44,072 0
Total Business-type Activities -
Long-term Liabilities $ 24,252,548 $ 153,662 $ (1,541,949) $ 22,864,261 $ 1,296,966
31
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 6 - Long-term Debt (Concluded)
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial
assistance to private sector entities for the acquisition and construction of health care facilities
deemed to be in the public interest. These bonds are secured by the financed property and are
payable solely from the payments received on the underlying mortgage loans.
There is no obligation on the part of the City or any political subdivision for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial
statements. As of September 30, 2013, there was one series of Health Facility Revenue and
Refunding Bonds outstanding, with an aggregate principal amount payable of $40,050,000.
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of
September 30, 2013. The following table reports the revenues, sometimes net of related
operating expenses, pledged for each debt issue, the amounts of such revenues received in the
current year, the current year principal and interest paid on the debt, the approximate
percentage of each revenue which is pledged to meet the debt obligation, and the date through
which the revenue is pledged under the debt agreement, and the total pledged future revenues
for each debt, which is the amount of the remaining principal and interest on the bonds and
notes at September 30, 2013:
Outstanding
Principal Estimated Principal
Pledged Revenue and Interest Percentage and Pledged
Description Revenue Received Paid Pledged Interest Through
1999 – Utility System Utility
Refunding Bonds Service Tax $ 480,539 $ 162,027 33.72% $ 158,939 2014
2004 – Utility System Utility
Refunding Bonds Revenues 3,644,174 1,448,711 39.75% 18,729,373 2025
2010A-1 – Utility System Utility
Revenue Bonds Revenues 3,644,174 77,930 2.14% 1,009,822 2026
2010B – Utility System Utility
Refunding Bonds Revenues 3,644,174 58,558 1.61% 780,511 2026
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,644,174 49,879 1.37% 872,878 2031
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,644,174 650,358 17.85% 9,576,232 2032
32
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 7 - Defined Benefit Pension Plans
Plan Descriptions and Contribution Information
The City maintains two separate single-employer defined benefit pension plans, one for police
officers and one for general employees, which cover substantially all full-time City employees
hired before September 1, 2008. Full-time employees hired on or after September 1, 2008, are
covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue
separate stand-alone financial statements. Combining statements are included in the
supplementary information to the basic financial statements. Membership of each plan
consists of the following at September 30, 2013, the date of the latest actuarial valuation: General
Employees Police
Retirees, Disabled Members and Beneficiaries
Receiving Benefits 56 20
Terminated Plan Members Entitled to but Not
Yet Receiving Benefits 11 4
Active Plan Members 56 22
Total 123 46 ■ General Employees’ Retirement Plan
● Plan Description
The General Employees’ Retirement Plan (Plan) provides retirement, disability and
death benefits to Plan members and their beneficiaries. The City Commission has the
authority to establish and amend the benefit provisions of the Plan. ● Contributions
The City is required to contribute at an actuarially determined rate (26.34% of
valuation payroll for the year ended September 30, 2013). Plan members are required
to contribute 6.0% of their annual covered salary. Contribution requirements are
established by City code, which may be amended by the City Commission. ■ Police Retirement Plan
● Plan Description
The Police Retirement Plan (Plan) provides retirement, disability and death benefits
to Plan members and their beneficiaries. The Plan is governed by the Policemen’s
Pension Board of Trustees, although the City Commission retains the authority to
establish and amend the benefit provisions of the Plan. ● Contributions
Plan members are required to contribute 7.0% of their annual covered salary. The
City is required to contribute, at actuarially determined rates, if State of Florida
contributions are not sufficient (combined City and State contributions were 40.86%
of valuation payroll for the year ended September 30, 2013). Per City Code, the City
Commission may amend established contribution requirements.
Other Pension Plan Information
The Annual Required Contribution (ARC) for the current year was determined as part of the
September 30, 2013 actuarial valuations for the General Employees’ and Police Retirement
Plans using the entry-age actuarial cost method. The actuarial assumptions include an 8.0%
rate of return on investments, projected salary increases of 5.0% to 14.0% per year including
price inflation of 3.0% and a payroll growth assumption based on the level dollar method. The
assumptions did not include postretirement benefit increases.
33
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 7 - Defined Benefit Pension Plans (Concluded)
Other Pension Plan Information (Concluded)
The actuarial value of assets was determined using techniques that spread the effects of short-
term volatility in the market value of investments over a four-year period. The unfunded
actuarial accrued liabilities are being amortized over remaining amortization periods of one to
thirty years as a level percentage of active member payroll.
Three-year trend information:
Fiscal Year Ended Annual Pension Percentage of Net Pension
September 30 Cost (APC) APC Contributed Asset/(Liability)
General Employees
2011 $ 722,769 100% $ 0
2012 998,516 100% 0
2013 1,044,392 100% 0
Police
2011 $ 487,032 100% $ 0
2012 628,898 100% 0
2013 606,741 100.4% 2,271
Funded Status and Funding Progress
The following is funded status information for each Plan as of September 30, 2013, the most
recent actuarial valuation date and is intended to help users assess: (1) the Plan’s funded status
on a going concern basis; and (2) progress being made toward accumulating the assets needed
to pay benefits when due.
General Employees’ Retirement Plan
Total Actuarial Accrued Liability $ (17,282,000)
Actuarial Value of Assets (Market Value was $13,770,711) 13,816,000
Unfunded Actuarial Accrued Liability $ (3,466,000)
The General Employees’ Retirement Plan is 79.9% funded and the Unfunded Actuarial
Accrued Liability represents 126.8% of covered payroll as of September 30, 2013.
Police Retirement Plan
Total Actuarial Accrued Liability $ (10,895,000)
Actuarial Value of Assets (Market Value was $7,331,629) 7,429,000
Unfunded Actuarial Accrued Liability $ (3,466,000)
The Police Retirement Plan is 68.20% funded and the Unfunded Actuarial Accrued Liability
represents 254.8% of covered payroll as of September 30, 2013.
The schedule of funding progress, presented as Required Supplementary Information (RSI)
following the notes to the financial statements, presents multiyear trend information about
whether the actuarial value of Plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits.
34
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 8 - Deferred Compensation Plan
The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to
new entrants and creating the City of Atlantic Beach Defined Contribution Plan. The City’s
457 defined contribution plan is administered through ICMA, which covers all eligible
employees employed with the City on or after September 1, 2008, who are not covered by the
City’s Police Officers’ defined benefit plan. Under the 457 Plan, the City contributes an
employer matching contribution of up to 6% of earnings during the first ten years of service.
Following ten years of service, the City contributes a fixed contribution of 4% of earnings.
Employees have the option to voluntarily contribute to the plan. Employer matching
contributions from the City were $76,092 and $0 for the years ended September 30, 2013 and
2012, respectively. Under the plan, an employee is considered fully vested after 5 years of
completed service.
Note 9 - Postemployment Benefits Other Than Pensions
Plan Description
The City of Atlantic Beach administers a single-employer defined benefit health care plan
(Plan) that provides medical insurance benefits to its employees and their eligible dependents.
In accordance with Section 112.0801 of the Florida Statutes, because the City provides a
medical plan to active employees of the City and their eligible dependents, the City is also
required to provide retirees with the opportunity to participate in this Plan. Benefit provisions
for the Plan are established by the City Commission and may be amended by the City
Commission. The City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of October 1, 2012, the date of the latest
actuarial valuation:
Retirees and Beneficiaries Receiving Benefits 2
Active Plan Members 90
Total 92
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission.
Eligible retirees and their covered dependents receiving benefits contribute 100% of the
blended (active and retiree combined) equivalent premium rates. While the City does not
directly contribute towards the costs of retiree premiums via an explicit subsidy, the ability of
retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to
be an other postemployment benefit (OPEB) obligation of the City. The City is currently
funding this OPEB obligation on a pay-as-you-go basis. ARC amounted to $43,758 for the
current fiscal year. The annual required contribution is based on a rate of 1.0% of projected
payroll of $4,204,177 or an average $486 per active participant. For the year ended
September 30, 2013, the City estimated it implicitly subsidized $12,552 of health care costs
for its retirees and covered dependents. This implied subsidy reduced the annual OPEB cost
to a net expense of $31,435 after interest on the Net OPEB Obligation and adjustments to
ARC.
35
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued) Note 9 - Postemployment Benefits Other Than Pensions (Continued)
Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on the annual required
contribution of the employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover normal cost each year to amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following
table shows the components of the City’s annual OPEB cost for the year, the amount actually
contributed to the Plan, and changes in the City’s net OPEB obligation to the retiree health
plan:
Annual Required Contribution $ 43,758
Interest on Net OPEB Obligation 5,935
Adjustment to Annual Required Contribution (5,706)
Annual OPEB Cost (Expense) 43,987
Employer Contribution (12,552)
Increase in Net OPEB Obligation 31,435
Net OPEB Obligation - Beginning of Year 148,363
Net OPEB Obligation - End of Year $ 179,798
The City reflected the $31,345 increase in net OPEB obligation at September 30, 2013, by
recording an obligation of $23,705 for governmental activities and $7,730 for business-type
activities in its government-wide statement of net position. The utility fund reported a net
OPEB obligation of $29,314, while the stormwater fund, sanitation fund, and building code
enforcement fund reported $8,856, $0, and $5,902, respectively. The OPEB obligation is a
function of annual required contributions, interest, adjustments to the annual required
contribution, annual pension costs and actual employers’ contributions made to the Plan.
No trust or agency fund has been established for the Plan.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan,
and the net OPEB obligation as of September 30, 2013, are presented below.
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
September 30, 2011 $ 58,794 32.9% $ 104,351
September 30, 2012 62,159 29.2% 148,363
September 30, 2013 43,987 28.5% 179,798 Funded Status and Funding Progress
As of October 1, 2012, the date of the latest actuarial valuation, the actuarial accrued liability for
benefits was $360,584, all of which was unfunded. The covered payroll (annual payroll of
active employees covered by the Plan) was $4,204,177, and the ratio of the unfunded actuarial
accrued liability to the covered payroll was 8.58%. The projection of future benefit payments
for an ongoing plan involves estimates of the value of reported amounts and assumptions about
the probability of occurrence of events far into the future. Examples include assumptions about
future employment, mortality, and the health care cost trend. Amounts determined regarding the
funded status of the Plan and the annual required contributions of the employer are subject to
36
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 9 - Postemployment Benefits Other Than Pensions (Concluded)
Funded Status and Funding Progress (Concluded)
continual revision as actual results are compared with past expectations and new estimates are
made about the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multiyear trend information
about whether the actuarial value of Plan assets is increasing or decreasing over time, relative to
the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities, consistent with the long-term perspective of the calculations.
In the actuarial valuation as of October 1, 2012, the date of the latest actuarial valuation, the
Entry-Age Normal Actuarial Cost Method was used, which spreads the costs evenly as a
percent of pay throughout the collective careers of those in the covered workforce. The
unfunded actuarial accrued liability is being amortized using a level (principal and interest
combined) percent of payroll over a 26-year period.
Other significant actuarial assumptions include a 4% discount rate, an annual health care cost
trend rate of -17%, followed by 11% for the next year, followed by 7.5% for the next year,
reduced by decrements of 0.5% each year to the ultimate value of 5%, projected salary
increases of 4% annually (including general price inflation of 3%), and future participation
rates of 15% up to Medicare eligibility with a 2% participation rate thereafter.
Note 10 - Interfund Accounts
Individual fund interfund receivables and payables at September 30, 2013, consist of the
following:
Due Due
from Other to Other
Funds Funds
General $ 9,097 $ 0
Nonmajor Governmental 0 (9,097)
Interfund receivable/payables are due to timing differences associated with grant
reimbursements. The receivable/payables are expected to be received/paid within one year.
Note 11 - Interfund Transfers
Transfers of resources from a fund receiving revenue to the fund through which the resources
are to be expended are recorded as transfers and are reported as other financing sources (uses)
in the governmental funds and as transfers in (out) in the proprietary funds. Following is a
summary of interfund transfers for the year ended September 30, 2013:
37
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Continued)
Note 11 - Interfund Transfers (Concluded)
Transfers In
Nonmajor
Stormwater General Building Code Governmental Total
Transfers Out Fund Fund Fund Funds Transfers
Nonmajor Governmental
Funds $ 252,000 $ 77,696 $ 0 $ 71,000 $ 400,696
Utility Fund 0 629,860 0 0 629,860
Sanitation Fund 0 267,898 0 0 267 ,898
General Fund 0 0 31,000 0 31,000
Total Transfers $ 252,000 $ 975,454 $ 31,000 $ 71,000 $ 1,329,454
Transfers are used to move revenues from the fund that ordinance or budget requires to collect
them to the fund that ordinance or budget requires to expend them.
Note 12 - Commitments
As of September 30, 2013, the City had outstanding commitments on contracts in progress as
follows:
Unexpended
Project Type Contract Amounts
Utility System Improvements $ 370,830
Stormwater System Improvements 21,693
General Government Improvements 232,213
Building Code Enforcement 525
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida,
whereas the City of Jacksonville will provide advanced life support and fire services to the
residents and businesses located in the City. The term of the agreement shall be from the
effective date and continuing for a period of 25 years unless terminated earlier by the parties
(such parties must provide a one year notice). For the year ended September 30, 2013, the
City incurred $1,005,332 in services under this agreement. The amount will be adjusted
annually by an amount equal to 103% of the previous year’s amount for all services provided
by the City of Jacksonville.
Note 13 - Contingencies
The City is a defendant in several lawsuits which arose in the ordinary course of the City’s
business. To the extent the outcome of such litigation has been determined to result in
probable loss to the City, an estimated loss has been accrued in the accompanying financial
statements. The outcome of the remaining claims cannot be determined at this time.
The City of Atlantic Beach and the City of Jacksonville are currently in discussions
concerning the terms of an interlocal agreement with regard to the disposal of residential
waste. The agreement allows Atlantic Beach free tippage at the landfill until Jacksonville
charges a uniform rate. The agreement contains certain criteria, that when met, would trigger
the City to begin paying those tippage fees. Jacksonville asserts that under terms of the
agreement, the City should have begun paying tipping fees beginning October 2011. The
38
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2013
(Concluded)
Note 13 - Contingencies (Concluded)
City’s position is that the criteria have not been fully met and that no tipping fees are due at
this time. Annual tipping fees are estimated to be approximately $400,000. Based on the
City’s position, no provision has been made in the accompanying financial statements related
to this issue.
Note 14 - Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and natural disasters for which the City carries commercial
insurance. Insurance against losses are provided through the Public Risk Insurance Agency
and LB Bryan and Company for the following types of risk:
■ Workers’ Compensation and Employer’s Liability ■ General Liability
■ Automobile Liability ■ Public Officials’ Liability
■ Automobile Physical Damage ■ Property Coverage
■ Accidental Death and Dismemberment
The City’s coverage for workers’ compensation is under a retrospectively rated policy.
Premiums are accrued based on the ultimate cost to-date of the City’s experience for this type
of risk.
REQUIRED SUPPLEMENTARY INFORMATION
39
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF PENSION FUNDING PROGRESS
SEPTEMBER 30, 2013
General Employees’ Retirement Plan
Actuarial UAAL as
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL) (UAAL) Ratio Payroll Payroll
9/30/08* $ 9,209,000 $ 12,624,000 $ 3,415,000 72.9% $ 3,727,000 91.6%
9/30/09 9,841,000 13,682,000 3,841,000 71.9% 4,019,000 95.6%
9/30/10 10,618,000 15,180,000 4,562,000 69.9% 3,838,000 118.9%
9/30/11 11,119,000 16,053,000 4,934,000 69.3% 3,738,000 132.0%
9/30/12** 12,465,000 16,599,000 4,134,000 75.1% 3,072,000 134.6%
9/30/13 13,816,000 17,282,000 3,466,000 79.9% 2,733,000 126.8%
Police Retirement Plan
Actuarial UAAL as
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL) (UAAL) Ratio Payroll Payroll
9/30/08 $ 5,764,000 $ 8,112,000 $ 2,348,000 71.1% $ 1,476,000 159.1%
9/30/09* 5,922,000 8,689,000 2,767,000 68.2% 1,697,000 163.1%
9/30/10* 6,164,000 9,449,000 3,285,000 65.2% 1,639,000 200.4%
9/30/11 6,305,000 10,065,000 3,760,000 62.6% 1,606,000 234.1%
9/30/12** 6,880,000 10,559,000 3,679,000 65.2% 1,548,000 237.7%
9/30/13 7,429,000 10,895,000 3,466,000 68.2% 1,360,000 254.80%
* After changes in benefits and/or actuarial assumptions and/or actuarial cost methods.
** Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system’s funded status on a
going concern basis. Analysis of this 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.
40
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
SEPTEMBER 30, 2013
General Employees’ Retirement Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed Percentage
September 30 Payroll (ARC) Contributed
2008 13.62% $ 457,005 100%
2009 14.03% 528,428 100%
2010 14.84% 599,292 100%
2011 16.6% 722,769 100%
2012 24.53% 998,516 100%
2013 26.34% 1,044,392 100%
The information presented in the required supplementary schedules was determined as part of the
actuarial valuation at the dates indicated. Additional information for the general employees’ retirement
plan as of the latest actuarial valuation follows:
Valuation Date September 30, 2013
Contribution Rate
Employer 31.52%
Plan Members 6.0%
Actuarial Cost Method Entry Age
Amortization Method Closed, Level % of Pay Method
Equivalent Single Amortization Period 10.0 Years
Asset Valuation Method 4-Year Smoothed
Actuarial Assumptions
Investment Rate of Return 8.0%
Projected Salary Increases 5.5% - 14.0%
Includes Price Inflation 3.0%
Cost-of-Living Adjustments None
Payroll Growth Assumption None (Level Dollar Method)
41
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
SEPTEMBER 30, 2013
(Concluded)
Police Retirement Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed
September 30 Payroll (ARC)
2008 22.80% $ 309,841
2009 21.93% 345,280
2010 26.62% 425,823
2011 26.49% 487,032
2012 36.18% 628,898
2013 35.63% 606,741
The information presented in the required supplementary schedules was determined as part of the
actuarial valuation at the dates indicated. Additional information for the police retirement plan as of the
latest actuarial valuation follows:
Valuation Date September 30, 2013
Contribution Rates
Employer 40.86%
Plan Members 7.0%
Actuarial Cost Method Entry Age
Amortization Method Closed, Level % of Pay Method
Equivalent Single Amortization Period 11.01 Years
Asset Valuation Method 4-Year Smoothed
Actuarial Assumptions
Investment Rate of Return 8.0%
Projected Salary Increases 5.0% - 23.0%
Includes Price Inflation 3.0%
Cost-of-Living Adjustments None
Payroll Growth Assumption 1.88%
42
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2013
Actuarial UAAL as
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL) (UAAL) Ratio Payroll Payroll
9/30/06 $ 0 $ 470,703 $ 470,703 0.0% $ 4,812,000 9.78%
10/1/09 0 497,883 497,883 0.0% 5,828,339 8.54%
10/1/12 0 360,584 360,584 0.0% 4,204,177 8.58%
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system’s funded status on a
going concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing
the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the
effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay
benefits when due. Generally, the smaller this percentage, the stronger the plan.
43
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)
Revenues
Property Taxes 3,816,716$ 3,816,716$ 3,843,755$ 27,039$
Nonproperty Taxes 1,226,437 1,226,437 1,197,336 (29,101)
Permits, Fees and Special Assessments 871,520 871,520 830,708 (40,812)
Intergovernmental Revenues 1,520,135 1,520,135 1,567,425 47,290
Fines and Forfeitures 79,640 79,640 224,758 145,118
Charges for Services 747,704 747,704 725,294 (22,410)
Interest Income 75,250 75,250 (128,430) (203,680)
Miscellaneous Revenues 15,150 343,816 409,135 65,319
Interfund Charges 1,436,068 1,436,068 1,435,569 (499)
Total Revenues 9,788,620 10,117,286 10,105,550 (11,736)
Expenditures
Governing Body:
City Commission 42,645 42,645 40,225 2,420
City Clerk 256,946 278,410 270,758 7,652
City Attorney 107,618 159,918 152,109 7,809
Total Governing Body 407,209 480,973 463,092 17,881
City Administration:
City Manager 266,721 267,781 263,366 4,415
General Government 443,723 773,005 751,947 21,058
Human Resources 189,719 188,828 187,272 1,556
Information Technology 462,679 485,252 465,376 19,876
Finance 1,066,166 1,094,650 1,027,898 66,752
Total City Administration 2,429,008 2,809,516 2,695,859 113,657
Planning and Zoning 178,062 179,431 151,766 27,665
Public Safety:
Police 3,560,473 3,617,364 3,508,384 108,980
School Crossing Guards 9,700 9,808 10,717 (909)
Animal Control 104,637 106,927 93,985 12,942
Fire 1,223,687 1,225,183 1,212,484 12,699
Code Enforcement 91,718 98,379 87,206 11,173
Total Public Safety 4,990,215 5,057,661 4,912,776 144,885
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
AND CHANGES IN FUND BALANCES
SCHEDULE OF REVENUES, EXPENDITURES,
BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2013
44
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)
Expenditures (Concluded)
Public Works:
Administration and Streets 1,300,173$ 1,321,625$ 1,222,945$ 98,680$
Fleet Maintenance 284,640 284,640 238,451 46,189
Total Public Works 1,584,813 1,606,265 1,461,396 144,869
Parks and Recreation:
Recreation and Special Events 397,376 406,151 390,436 15,715
Parks Maintenance 728,640 758,495 666,030 92,465
Total Parks and Recreation 1,126,016 1,164,646 1,056,466 108,180
(Total Expenditures)(10,715,323) (11,298,492) (10,741,355) 557,137
(Deficiency) of Revenues (Under)
Expenditures (926,703) (1,181,206) (635,805) 545,401
Other Financing Sources (Uses)
Transfers in 970,258 975,454 975,454 0
Transfers (out)(31,000) (31,000) (31,000) 0
Sale of General Fixed Assets 10,000 10,000 0 (10,000)
Total Other Financing Sources (Uses)949,258 954,454 944,454 (10,000)
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses 22,555 (226,752) 308,649 535,401
Fund Balances, Beginning of Year 6,187,511 6,187,511 6,187,511 0
Fund Balances, End of Year 6,210,066$ 5,960,759$ 6,496,160$ 535,401$
* Actual amounts include a reversal of $57,495 prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of $81,523.
BUDGET AND ACTUAL - GENERAL FUND
(Concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2013
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
45
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a
budgetary accounting system in accordance with various legal requirements which govern the City’s
operations. Budgets are monitored at varying levels of classification detail; however, expenditures cannot
legally exceed total appropriations at the individual fund level. Encumbrances are recorded. Unexpended
items which are unencumbered at year-end must be reappropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, debt service and capital
projects funds). The City Manager is authorized to transfer budgeted amounts within departments within
any fund; however, any revisions that increase the total expenditures of any department or fund must be
approved by the City Commission. All necessary supplemental appropriations are adopted by the City
Commission and are included in the reported budgetary data. The budget presented in the accompanying
required supplemental information is prepared in conformity with accounting principles generally
accepted in the United States of America.
SUPPLEMENTARY INFORMATION
46
Convention
Tree Local Option Development Half-cent Court Cost EMG - FEMA Radio
Replacement Gas Tax Tax Sales Tax Training Wind Retrofit Communication
Assets
Equity in Pooled Cash and
Investments 6,493$ 22,554$ 85,148$ 420,413$ 121,770$ 0$ 2,901$
Due from Other Governments 0 69,700 23,593 117,695 509 0 1,627
Total Assets 6,493 92,254 108,741 538,108 122,279 0 4,528
Liabilities and Fund Balances
Liabilities
Accounts Payable and
Accrued Liabilities 0 0 0 48,172 0 0 1,674
Due to Other Funds 0 0 0 0 0 0 0
Deposits 0 0 0 0 0 0 0
Deferred Revenue 0 0 0 0 0 0 0
Total Liabilities 0 0 0 48,172 0 0 1,674
Fund Balances
Restricted for:
Public Safety 0 0 0 0 122,279 0 2,854
Road Maintenance and
Construction 0 92,254 0 0 0 0 0
Parks and Recreation 0 0 0 0 0 0 0
Debt Service Reserve 0 0 0 0 0 0 0
Other Capital Projects 0 0 0 489,936 0 0 0
Other Purposes 0 0 108,741 0 0 0 0
Committed:
Conservation and Resource
Management 6,493 0 0 0 0 0 0
Unassigned 0 0 0 0 0 0 0
Total Fund Balances 6,493 92,254 108,741 489,936 122,279 0 2,854
Total Liabilities and Fund
Balances 6,493$ 92,254$ 108,741$ 538,108$ 122,279$ 0$ 4,528$
Special Revenue Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
2013
47
Totals Totals
Community Special Nonmajor
Contraband Development Police Energy Revenues Debt Capital Governmental 2012
Forfeiture Block Grants Grants Grants Funds Service Projects Funds Totals
21,280$ 0$ 0$ 0$ 680,559$ 73,113$ 2,724,230$ 3,477,902$ 3,214,612$
0 7,641 9,097 0 229,862 0 0 229,862 456,736
21,280 7,641 9,097 0 910,421 73,113 2,724,230 3,707,764 3,671,348
0 7,641 0 0 57,487 0 0 57,487 51,652
0 0 9,097 0 9,097 0 0 9,097 213,265
7,166 0 0 0 7,166 0 0 7,166 6,340
0 0 0 0 0 0 0 0 157,380
7,166 7,641 9,097 0 73,750 0 0 73,750 428,637
14,114 0 0 0 139,247 0 0 139,247 158,580
0 0 0 0 92,254 0 0 92,254 123,526
0 0 0 0 0 0 0 0 1,194
0 0 0 0 0 73,113 0 73,113 75,350
0 0 0 0 489,936 0 2,724,230 3,214,166 2,982,216
0 0 0 0 108,741 0 0 108,741 52,732
0 0 0 0 6,493 0 0 6,493 6,493
0 0 0 0 0 0 0 0 (157,380)
14,114 0 0 0 836,671 73,113 2,724,230 3,634,014 3,242,711
21,280$ 7,641$ 9,097$ 0$ 910,421$ 73,113$ 2,724,230$ 3,707,764$ 3,671,348$
2013
Special Revenue Funds
48
Convention
Tree Local Option Development Half-cent Court Cost EMG - FEMA Radio
Replacement Gas Tax Tax Sales Tax Training Wind Retrofit Communication
Revenues
Taxes 0$ 423,141$ 90,381$ 684,187$ 0$ 0$ 0$
Other Intergovernmental
Revenues 0 0 0 0 0 14,216 0
Charges for Services 0 0 0 310 0 0 0
Fines and Forfeitures 0 0 0 0 6,329 0 19,512
Investment Earnings (Loss)0 (5,306) (1,482) (7,123) (2,375) 0 (3)
Miscellaneous Revenues 0 0 0 0 0 0 0
Total Revenues 0 417,835 88,899 677,374 3,954 14,216 19,509
Expenditures
Current:
Culture and Recreation 0 0 0 0 0 0 0
Public Safety 0 0 0 0 13,505 0 16,742
Road Maintenance and
Construction 0 305,607 0 0 0 0 0
Debt Service:
Principal 0 0 0 0 0 0 0
Interest and Other 0 0 0 0 0 0 0
Capital Outlay 0 0 32,890 130,048 0 18,954 0
(Total Expenditures)0 (305,607) (32,890) (130,048) (13,505) (18,954) (16,742)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 0 112,228 56,009 547,326 (9,551) (4,738) 2,767
Other Financing Sources (Uses)
Transfers in 0 0 0 0 0 0 0
Transfers (out)0 (143,500) 0 (252,000) 0 (5,196) 0
Total Other Financing
Sources (Uses)0 (143,500) 0 (252,000) 0 (5,196) 0
Net Change in Fund Balances 0 (31,272) 56,009 295,326 (9,551) (9,934) 2,767
Fund Balances, Beginning of Year 6,493 123,526 52,732 194,610 131,830 9,934 87
Fund Balances, End of Year 6,493$ 92,254$ 108,741$ 489,936$ 122,279$ 0$ 2,854$
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
2013
Special Revenue Funds
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
49
Totals Totals
Community Special Nonmajor
Contraband Development Police Energy Revenue Debt Capital Governmental 2012
Forfeiture Block Grants Grants Grants Funds Service Projects Funds Totals
0$ 0$ 0$ 0$ 1,197,709$ 0$ 0$ 1,197,709$ 1,153,071$
0 22,291 81,225 157,380 275,112 0 0 275,112 586,886
0 0 0 0 310 0 0 310 0
4,514 0 0 0 30,355 0 0 30,355 39,110
(763) 0 0 0 (17,052) (1,209) (54,636) (72,897) 114,030
0 0 0 0 0 0 0 0 7,848
3,751 22,291 81,225 157,380 1,486,434 (1,209) (54,636) 1,430,589 1,900,945
0 0 0 0 0 0 0 0 59,607
1,417 0 78,440 0 110,104 0 0 110,104 162,217
0 0 0 0 305,607 0 0 305,607 330,766
0 0 0 0 0 67,712 0 67,712 63,684
0 0 0 0 0 4,316 0 4,316 7,100
14,883 22,291 2,785 0 221,851 0 0 221,851 613,231
(16,300) (22,291) (81,225) 0 (637,562) (72,028) 0 (709,590) (1,236,605)
(12,549) 0 0 157,380 848,872 (73,237) (54,636) 720,999 664,340
0 0 0 0 0 71,000 0 71,000 580,934
0 0 0 0 (400,696) 0 0 (400,696) (906,000)
0 0 0 0 (400,696) 71,000 0 (329,696) (325,066)
(12,549) 0 0 157,380 448,176 (2,237) (54,636) 391,303 339,274
26,663 0 0 (157,380) 388,495 75,350 2,778,866 3,242,711 2,903,437
14,114$ 0$ 0$ 0$ 836,671$ 73,113$ 2,724,230$ 3,634,014$ 3,242,711$
Special Revenue Funds
2013
50
Police General
Officers'Employees'
Retirement Retirement 2013 2012
Plan Plan Totals Totals
Assets
Cash and Cash Equivalents 82,413$ 48,330$ 130,743$ 86,828$
Prepaids 2,915 2,915 5,830 0
Interest Receivable 27,703 6,394 34,097 28,197
Investments at Fair Value 7,538,212 13,803,092 21,341,304 19,832,927
Total Assets 7,651,243 13,860,731 21,511,974 19,947,952
Liabilities
Accounts Payable and Accrued Liabilities 0 900 900 424
Excess Premium Tax Liability 120,454 0 120,454 120,454
DROP Plan Payable 199,160 89,120 288,280 198,554
Total Liabilities 319,614 90,020 409,634 319,432
Total Net Position
Held in Trust for Pension Benefits 7,331,629$ 13,770,711$ 21,102,340$ 19,628,520$
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2012
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF NET POSITION
FIDUCIARY FUNDS
SEPTEMBER 30, 2013,
51
Police General
Officers'Employees'
Retirement Retirement 2013 2012
Plan Plan Totals Totals
Additions
Contributions:
Employer 517,935$ 1,044,392$ 1,562,327$ 1,538,619$
Employees 77,406 180,750 258,156 261,992
State of Florida 91,077 0 91,077 88,795
Total Contributions 686,418 1,225,142 1,911,560 1,889,406
Net (Decrease) Increase in Fair
Value of Investments 247,703 481,465 729,168 2,218,699
Interest and Dividends 146,121 274,716 420,837 443,921
Miscellaneous Revenue 26,587 31,619 58,206 0
Total Additions 1,106,829 2,012,942 3,119,771 4,552,026
Deductions
Refunds of Contributions 0 118,126 118,126 12,751
Benefits 651,941 729,447 1,381,388 1,254,883
Investment Expenses 30,857 53,936 84,793 103,133
Administrative Expenses 27,095 34,549 61,644 57,614
Total Deductions 709,893 936,058 1,645,951 1,428,381
Change in Net Position 396,936 1,076,884 1,473,820 3,123,645
Net Position, Beginning of Year 6,934,693 12,693,827 19,628,520 16,504,875
Net Position, End of Year 7,331,629$ 13,770,711$ 21,102,340$ 19,628,520$
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2012
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013,
52
2009 2010 2011 2012 2013
Revenues
Operating Revenues:
Water:
Customer Charges 2,738,565$ 3,188,599$ 3,382,973$ 3,069,998$ 3,006,787$
Miscellaneous Charges 40,906 44,859 46,424 48,815 52,996
Total Water 2,779,471 3,233,458 3,429,397 3,118,813 3,059,783
Sewer:
Customer Charges 4,112,335 4,644,090 5,085,318 5,015,358 4,953,619
Miscellaneous Charges 3,769 7,528 20,006 3,303 1,651
Total Sewer 4,116,104 4,651,618 5,105,324 5,018,661 4,955,270
Total Operating Revenues 6,895,575 7,885,076 8,534,721 8,137,474 8,015,053
Nonoperating Revenues:
Investment Income (Loss):
Water 7,963 153,782 108,762 197,492 (115,023)
Sewer 6,886 5,361 (16,367) (21,010) 18,426
Total Nonoperating Revenues 14,849 159,143 92,395 176,482 (96,597)
Total Revenues 6,910,424 8,044,219 8,627,116 8,313,956 7,918,456
Expenses
Operating Expenses:
Water 1,087,283 1,120,172 1,292,948 1,303,708 1,228,763
Sewer 2,111,097 2,367,631 2,569,748 2,493,500 2,005,653
Total Operating Expenses 3,198,380 3,487,803 3,862,696 3,797,208 3,234,416
Administrative, Nondivisional
and Other:
Water 634,541 554,538 545,971 518,506 521,600
Sewer 1,142,214 681,893 685,074 696,922 674,514
Total Administrative, Non-
divisional and Other 1,776,755 1,236,431 1,231,045 1,215,428 1,196,114
(Total Expenses)(4,975,135) (4,724,234) (5,093,741) (5,012,636) (4,430,530)
Net Revenues Available for
Debt Service 1,935,289 3,319,985 3,533,375 3,301,320 3,487,926
Nonoperating Income (Expense)
Interest Expense (732,939) (710,196) (726,058) (766,111) (996,199)
Loan Amortization (14,730) (14,730) (25,712) (12,787) (14,654)
Total Nonoperating (Expense)(747,669) (724,926) (751,770) (778,898) (1,010,853)
Net Income Before Depreciation
and Operating Transfers 1,187,620$ 2,595,059$ 2,781,605$ 2,522,422$ 2,477,073$
FOR THE YEARS ENDED SEPTEMBER 30, 2009 THROUGH SEPTEMBER 30, 2013
HISTORICAL REVENUES AND EXPENSES
CITY OF ATLANTIC BEACH, FLORIDA
53
2013 2012
Gross Revenues
Utility 8,146,988$ 8,127,246$
Connection Charges 25,011 8,246
Interest (97,294) 176,482
Total Gross Revenues 8,074,705 8,311,974
Operating Expenses
Personal Services 1,761,806 1,808,192
Contractual Services 654,600 841,708
Supplies 333,387 331,039
Repairs and Maintenance 101,929 123,310
Utilities 382,694 629,185
Intergovernmental Charges 982,292 1,047,909
Other Expenses 213,823 232,292
(Total Operating Expenses)(4,430,531) (5,013,635)
Total Net Revenues in Accordance with Bond Resolutions 3,644,174$ 3,298,339$
Total Debt Service 2,285,436$ 1,631,133$
Debt Service Coverage Ratio 159.45%202.21%
Required Debt Service Coverage Ratio 100.00%100.00%
(a) Rate Stabilization Fund:
Balance, Beginning of Year 400,000$ 400,000$
Transfer/Redeposit to Revenue Fund 0 0
Balance, End of Year 400,000$ 400,000$
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULES OF NET REVENUES IN ACCORDANCE
WITH BOND RESOLUTIONS
ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2013 AND SEPTEMBER 30, 2012
54
Year Electricity Communications Gas Fuel Oil Total
2009 430,774$ 600,716$ 25,815$ 18$ 1,057,323$
2010 486,475 624,254 26,158 34 1,136,921
2011 487,585 604,567 28,062 33 1,120,247
2012 452,183 567,909 23,187 14 1,043,293
2013 459,672 576,839 20,849 17 1,057,377
Year Total
2009 4,089,288$
2010 4,146,432
2011 3,968,233
2012 3,961,395
2013 3,843,755
Ad Valorem Tax Collections
(Last Five Years)
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2009 THROUGH SEPTEMBER 30, 2013
Utility Service Tax Collections
(Last Five Years)
OTHER STATISTICAL INFORMATION
55
Annual
Billings
Fleet Landing (Retirement Community)369,808$
Navy (Federal Government)295,071
Oaks of Atlantic Beach (Mobile Home Park)137,344
City of Atlantic Beach, Florida 141,366
Sea Oats Plantation (Apartment Complex)135,001
Lakes of Mayport (Apartment Complex)131,993
John Creek Estate (Mobile Home Park)116,528
One Ocean Resort (Hotel)110,640
Mayport Trace (Apartment Complex)109,687
Hanna Park (Regional Park)103,193
Total 1,650,631$
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2013
(UNAUDITED)
56
Annual Average Average
Total Percentage Demand Percentage
Year Population Change CAB BUC Total CAB BUC Total (MGD)Change
2004 24,007 2.4%5,222 2,593 7,815 2,006 2,281 4,287 2.93 -5.15%
2005 22,914 -4.5%5,263 2,590 7,853 2,367 1,939 4,306 2.75 -6.14%
2006 23,208 1.3%5,256 2,430 7,686 2,107 2,164 4,271 2.73 -0.73%
2007 23,151 -0.2%5,283 2,346 7,629 1,895 2,079 3,974 2.69 -1.47%
2008 23,200 0.2%5,285 2,341 7,626 2,006 2,288 4,294 2.50 -7.06%
2009 23,058 -0.6%5,166 2,342 7,508 1,917 2,159 4,076 2.30 -8.00%
2010 22,908 -0.6%5,171 2,326 7,497 1,904 2,135 4,039 2.32 0.87%
2011 21,205 -7.4%5,179 2,353 7,532 1,903 2,134 4,037 2.41 3.88%
2012 20,952 -1.2%5,195 2,318 7,513 1,898 2,130 4,028 2.27 -5.81%
2013 20,875 -0.4%5,218 2,349 7,567 1,904 2,135 4,039 1.99 -12.33%
Atlantic Beach Division (CAB)
Buccaneer Division (BUC)
Single Unit Multi-Unit
Water System Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WATER USAGE
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2013
(UNAUDITED)
57
Annual Average Annual
Percentage Flow Percentage
Year Population Change Single Unit Multi-Unit Total (MGD)Change
2004 13,911 3.70%4,913 1,978 6,891 1.5980 -8.06%
2005 14,064 1.10%4,999 2,387 7,386 1.8160 13.64%
2006 14,079 0.10%5,020 2,111 7,131 1.5990 -11.95%
2007 14,015 -0.50%5,057 1,900 6,957 1.6370 2.38%
2008 13,819 -1.40%5,086 1,904 6,990 1.6380 0.06%
2009 13,819 0.00%4,997 1,903 6,900 1.5820 -3.42%
2010 13,779 -0.30%4,987 1,912 6,899 1.5190 -3.98%
2011 12,655 -8.20%5,041 1,791 6,832 1.4762 -2.82%
2012 12,718 0.50%5,168 1,903 7,071 1.5397 4.30%
2013 12,670 -0.38%5,200 1,916 7,116 1.8052 17.24%
(UNAUDITED)
Sewer Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
ATLANTIC BEACH SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2013
58
Annual Average Annual
Percentage Flow Percentage
Year Population Change Single Unit Multi-Unit Total (MGD)Change
2004 10,096 0.70%2,504 2,497 5,001 0.8240 -2.25%
2005 8,850 -12.30%2,503 2,145 4,648 0.7460 -9.47%
2006 9,129 3.20%2,356 2,268 4,624 0.6820 -8.58%
2007 9,136 0.10%2,267 2,268 4,535 0.7120 4.40%
2008 9,381 2.70%2,263 2,482 4,745 0.7040 -1.12%
2009 9,239 -1.50%2,258 2,355 4,613 0.6510 -7.53%
2010 9,129 -1.20%2,243 2,328 4,571 0.5720 -12.14%
2011 8,550 -6.30%2,282 2,334 4,616 0.6165 7.78%
2012 8,234 -3.84%2,249 2,329 4,578 0.5088 -17.47%
2013*8,205 -0.35%2,275 2,333 4,608 0.0000 -100.00%
* At the end of 2012, the Outside City sewer treatment plant closed and flows were diverted to the inside City plant.
(UNAUDITED)
Sewer Customers
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
OUTSIDE CITY SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2013
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS, ISSUED BY THE
COMPTROLLER GENERAL OF THE UNITED STATES; THE RULES OF
THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND OTHER
CONTRACT REQUIREMENTS
59
CFDA Grant/Contract Contract Program Funds
Number Number Period Awards Expenditures *Received
Federal Awards
14.218 B10UC120017 / 5629-54 10/01/2012-09/30/2013 1,434$ 1,434$ 1,434$
14.218 B11UC1200-17 / 5629-54 10/01/2012-09/30/2013 79,064 20,857 20,857
80,498 22,291 22,291
80,498 22,291 22,291
Hazard Mitigation Grant Program 97.039 12HM-3G-04-26-02-005 05/24/2012 - 03/31/2014 29,802 14,216 14,216
97.067 03/04/2013-6/30/2013 1,351 1,351 0
31,153 15,567 14,216
16.607 2010-BUBX-10053127 04/01/2010 - 08/31/2012 2,205 0 167
Bulletproof Vest Partnership Program 16.607 2011-BUBX-11059375 04/01/2011 - 08/31/2013 1,754 710 1,043
16.607 2012-BUBX-12061407 04/01/2012 - 08/31/2014 1,050 1,050 0
16.607 2013-BUBX-13069025 04/01/2013 - 08/31/2015 2,333 864 0
Subtotal Expenditures - 16.607 7,342 2,624 1,210
16.738 2013-JAGC-DUVA-1-D7-059 10/01/2010 - 09/30/2011 36,440 36,440 33,773
16.738 2013-JAGC-DUVA-2-D7-109 10/01/2011 - 09/30/2012 42,000 42,000 35,570
16.738 2013-JAGD-DUVA-2-D8-023 10/01/2011 - 09/30/2012 2,785 2,785 2,785
81,225 81,225 72,128
Total U.S. Department of Justice 88,567 83,849 73,338
and Consumer Services:
ARRA-81.041 17495 / ARS028 01/31/2011 - 07/31/2012 234,789 0 157,380
234,789 0 157,380 Total U.S. Department of Energy
Direct Programs:
State Energy Program
Edward Byrne Memorial Justice Assistance Grant Program
Indirect Programs:
Passed Through Florida Department of Law Enforcement:
U.S. Department of Energy
Indirect Programs:
Subtotal Expenditures - 16.738
Bulletproof Vest Partnership Program
Passed Through Florida Department of Agriculture
Edward Byrne Memorial Justice Assistance Grant Program
Edward Byrne Memorial Justice Assistance Grant Program
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Passed Through Florida Division of Emergency Management:
U.S. Department of Justice
Passed Through City of Jacksonville, Florida:
Urban Area Security Intiative
Total U.S. Department of Homeland Security
Community Development Block Grant (CDBG)
Indirect Programs:
Passed Through City of Jacksonville, Florida:
U.S. Department of Homeland Security
Total U.S. Department of Housing and Urban Development
Subtotal Expenditures - 14.218
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Community Development Block Grant (CDBG)
AND STATE FINANCIAL ASSISTANCE PROJECTS
Grantor/Pass-Through Entity
U.S. Department of Housing and Urban Development
Indirect Programs:
60
(Concluded)
CFDA Grant/Contract Contract Program Funds
Number Number Period Awards Expenditures *Received
U.S. Executive Office of the President
Indirect Programs:
Passed Through St. Johns County Sheriffs Office:
North Florida High Intensity Drug Trafficking Area Maritime
and Land Investigation and Interductions Initiative 95.001 G13NF0001A 02/14/2013 - 06/14/2014 20,000$ 373$ 373$
Total U.S. Executive Office of the President 20,000 373 373
Indirect Programs:
Passed Through Florida Department of Environmental Protection:
CM245 06/11/2013 - 03/30/2014 17,500 0 0
17,500 0 0
Total Federal Expenditures 472,507 122,080 267,598
State Financial Assistance
37.077 WW160700 N/A 10,368,576 0 0
Total State Financial Assistance 10,368,576 0 0
Total Expenditures of Federal Awards and State Financial Assistance 10,841,083$ 122,080$ 267,598$
* Includes grant expenditures only (matching funds not reported).
Florida Department of Environmental Protection
Direct Projects:
Grantor/Pass-Through Entity
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Statewide Surface Water Restoration and Wastewater Projects
Total U.S. Department of Commerce
Florida Coastal Management Program
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE PROJECTS
U.S. Department of Commerce
61
CITY OF ATLANTIC BEACH, FLORIDA
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE PROJECTS
FOR THE YEAR ENDED SEPTEMBER 30, 2013
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards and state financial assistance
projects includes the federal and state awards activity of the City of Atlantic Beach, Florida,
under programs of the federal government and projects of the state government for the year
ended September 30, 2013. The information is presented in accordance with the requirement of
OMB Circular A-133, Audits of State and Local Governments and Non-Profit Organizations
and the State of Florida Single Audit Act. Because the schedule presents only a selected portion
of the operations of the City, it is not intended and does not present the financial position,
changes in net position or cash flows of the City. Expenditures reported on the schedule are
presented on the accrual basis of accounting.
62
Fiscal Year
2012-2013
Grant No. 5629-54
Amount of Award (Per City of Jacksonville
Budget Ordinance)80,498$ (A)
Actual Funds Received from City of
Jacksonville in Last Audit Period 0
Actual Funds Received this Period (22,291)
Amount Earned but Not Received this Period 0
Unspent Award Amount 58,207$
Expenditure of City Funds
(A) City Fiscal Year 2011-2012 Grant #5629-51 - $80,498
Actual
10/1/2012 Remaining
Budgeted 9/30/2013 Balance
Area Neighborhood Infrastructure Improvements
# 004799 / BU11UC120017 1,434$ 1,434$ 0$
Donner Park Improvements
# 004415 / B09UC1200-17 79,064 20,857 58,207
Total 80,498$ 22,291$ 58,207$
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF SOURCE AND EXPENDITURE OF THE CITY GRANT FUNDS
PER ORDINANCE CODE CHAPTER 118.301(e)
FOR FISCAL YEAR 2012-2013
City of Jacksonville Public Service Grants Received as a
Subgrant Recipient Per Interlocal Agreement
Source of City Funds
Project / Federal Grant Number
63
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City), as of and for the year ended September 30, 2013, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated March 4. 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
64
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
(Concluded)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
March 4, 2014
Gainesville, Florida
65
MANAGEMENT LETTER
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
We have audited the basic financial statements of the City of Atlantic Beach, Florida (the City), as of and
for the fiscal year ended September 30, 2013, and have issued our report thereon dated March 4, 2014.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor
General. We have issued our independent auditors’ report on internal control over financial reporting and
compliance and other matters based on an audit of the financial statements performed in accordance with
Government Auditing Standards. Disclosures in those reports and schedule, which are dated March 4,
2014, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General,
which governs the conduct of local governmental entity audits performed in the State of Florida. This
letter includes the following information, which is not included in the aforementioned auditors’ report or
schedule.
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
audit report. There were no comments made in the preceding annual financial audit report.
Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding investment of public funds. In connection with
our audit, we determined that the City complied with Section 218.415, Florida Statutes.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter
any recommendations to improve financial management. In connection with our audit, we did not have
any such recommendations.
Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but which warrants the attention of
those charged with governance. In connection with the audit, we did not have any such findings.
Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government be disclosed in this management letter, unless disclosed in the notes
to the financial statements. This information is included in Note 1 to the financial statements.
66
Honorable Mayor, City Commissioners and
Interim City Manager
Atlantic Beach, Florida
MANAGEMENT LETTER
(Concluded)
Section 10.554(1)(i)6.a., Rules of the Auditor General, requires a statement to be included as to whether
or not the local government has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we
determined that the City does not meet any of the conditions described in Section 218.503(1), Florida
Statutes.
Section 10.554(1)(i)6.b., Rules of the Auditor General, requires that we determine whether the annual
financial report for the City for the fiscal year ended September 30, 2013, was filed with the Florida
Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with
the annual financial audit report for the fiscal year ended September 30, 2013. In connection with our
audit, we determined that these two reports were in agreement.
Pursuant to Section 10.554(1)(i)6.c. and 10.556(7), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than the specified parties.
March 4, 2014
Gainesville, Florida