Audit ReportFINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2014
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT CITY OF ATLANTIC BEACH, FLORIDA SEPTEMBER 30, 2014 TABLE OF CONTENTS Independent Auditors’ Report ..................................................................................................................... i-iii Management’s Discussion and Analysis ................................................................................................... iv-xii 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 Fiduciary Net Position ....................................................................................................... 14 Statement of Changes in Fiduciary Net Position .................................................................................... 15 Notes to Financial Statements ........................................................................................................ 16-40 Required Supplementary Information General Employees’ Pension Plan Schedule of Changes in Net Pension Liability and Related Ratios ....................................................................................................... 41 General Employees’ Pension Plan Schedule of Investment Returns .......................................................... 41 General Employees’ Pension Plan Schedule of Funding Progress ............................................................. 42 General Employees’ Pension Plan Schedule of Contributions .................................................................... 43 Police Officers’ Pension Plan Schedule of Changes in Net Pension Liability and Related Ratios .................................................................................................................... 44 Police Officers’ Pension Plan Schedule of Investment Returns .................................................................. 44 Police Officers’ Pension Plan Schedule of Funding Progress ..................................................................... 45 Police Officers’ Pension Plan Schedule of Contributions ........................................................................... 46 Other Postemployment Benefits Plan - Schedule of Funding Progress ...................................................... 47 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund .....................................................................................................48-49 Note to Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ......................................................................................... 50
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA SEPTEMBER 30, 2014
TABLE OF CONTENTS
(Concluded)
Supplementary Information Combining Balance Sheet - Nonmajor Governmental Funds ................................................................51-52 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds .........................................................................53-54 Combining Statement of Fiduciary Net Position ......................................................................................... 55 Combining Statement of Changes in Fiduciary Net Position ...................................................................... 56 Historical Revenues and Expenses ............................................................................................................... 57 Schedules of Net Revenues in Accordance with Bond Resolutions - Enterprise Funds (Water and Sewer) ................................................................................ 58 Other Bond Covenant Disclosures ............................................................................................................... 59 Other Statistical Information Major Utility Customers ............................................................................................................................... 60 Summary of Water Usage ............................................................................................................................. 61 Summary of Wastewater Treatment - Atlantic Beach Sewer Division .................................................................................................................................................... 62 Summary of Wastewater Treatment - Outside City Sewer Division .......................................................... 63 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 ......................................................................................... 64 Note to Schedule of Expenditures of Federal Awards ............................................................................ 65
Schedule of Source and Expenditure of the City Grant Funds ............................................................... 66 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 .......................................................................................... 67-68 Independent Accountants’ Report on Compliance with
Section 218.415, Florida Statutes ....................................................................................................... 69 Management Letter ............................................................................................................................ 70-71
INDEPENDENT AUDITORS’ REPORT
i
INDEPENDENT AUDITORS’ REPORT Honorable Mayor, City Commissioners and 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, 2014, 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 City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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
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, 2014, 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–xii and 41–50 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 51–59, the other statistical section on pages 60–63, 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. The supplementary information, schedule of federal 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, schedule of federal awards, and schedule of expenditures of grant funds
per the City of Jacksonville’s Ordinance Code Chapter 118.202(e) 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
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 April 20, 2015, 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 2013 financial statements, and our report dated March 4, 2014, expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended September 30, 2013, is consistent,
in all material respects, with the audited financial statements from which it was derived.
April 20, 2015
Gainesville, Florida
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014
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, 2014. 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,
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.
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014 (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 twelve 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 eleven 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 51 – 54 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 note on pages 48 -
50 of this report have 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.
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014 (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 41 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 $75,880,000 at the close of the fiscal year ended September 30, 2014. By far the largest portion of the City’s net position, $59,972,000 (79%), 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, $4,802,000 (6%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $11,106,000 (15%), is used to meet the government’s ongoing obligations to citizens and creditors. City of Atlantic Beach’s Net Position
September 30, 2014 and 2013 (In Thousands) Governmental Business-type
Activities Activities Totals
2014 2013 2014 2013 2014 2013
Current and other assets $11,345 $ 10,853 $8,362 $9,059 $19,707 $19,912 Capital assets 39,215 39,411 41,190 41,080 80,405 80,491
Total Assets 50,560 50,264 49,552 50,139 100,112 100,403
Deferred Outflow 0 0 1,187 0 1,187 0
Long-term liabilities outstanding 503 574 21,504 21,567 22,007 22,141
Other liabilities 638 836 2,774 2,924 3,412 3,760
Total Liabilities 1,141 1,410 24,278 24,491 25,419 25,901
Net Position:
Invested in capital assets, net of related debt 39,214 39,342 20,758 18,521 59,972 57,863 Restricted 4,004 3,656 798 1,778 4,802 5,434
Unrestricted 6,201 5,856 4,905 5,349 11,106 11,205
Total Net Position $49,419 $48,854 $26,461 $25,648 $75,880 $74,502
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014 (Continued)
Government-wide Financial Analysis (Concluded) As illustrated in the schedule on page vi, the City was able to report positive balances in all categories of net position, both for the government as a whole, as well as for its separate governmental and business-
type activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach’s Change in Net Position For the Years Ended September 30, 2014 and 2013 (In Thousands)
2014 2013 2014 2013 2014 2013
Revenues:
Program Revenues:
Charges for Services 1,786$ 1,837$ 11,015$ 11,071$ 12,801$ 12,908$
Operating Grants and
Contributions 627 610 0 0 627 610
Capital Grants and
Contributions 299 130 776 279 1,075 409
General Revenues:
Property Taxes 3,908 3,844 0 0 3,908 3,844
Sales Taxes 1,208 1,156 0 0 1,208 1,156
Business and Utility Taxes 1,136 1,197 0 0 1,136 1,197
State Revenue Sharing 300 283 0 0 300 283
Discretionary Sales Surtax 722 684 0 0 722 684
Investment Earnings (Loss) 313 (201) 213 (146) 526 (347)
Miscellaneous 64 403 0 0 64 403
Total Revenues 10,363 9,943 12,004 11,204 22,367 21,147
Expenses:
General Government 2,054 1,972 0 0 2,054 1,972
Public Safety: 5,184 5,140 0 0 5,184 5,140
Road Maintenance and
Construction 1,872 1,881 0 0 1,872 1,881
Parks and Recreation 1,309 1,289 0 0 1,309 1,289
Interest/Fiscal Charges on
Long-term Debt 0 3 0 0 0 3
Utility 0 0 7,309 7,326 7,309 7,326
Stormwater 0 0 1,153 1,143 1,153 1,143
Sanitation 0 0 1,869 1,503 1,869 1,503
Building Code Enforcement 0 0 239 261 239 261
Total Expenses 10,419 10,285 10,570 10,233 20,989 20,518
Transfers 621 615 (621) (615) 0 0
Change in Net Position 565 273 813 356 1,378 629
Net Position-Beginning
(as Restated) 48,854 48,581 25,648 25,292 74,502 73,873
Net Position-Ending 49,419$ 48,854$ 26,461$ 25,648$ 75,880$ 74,502$
Totals
Business-type
Activities
Governmental
Activities
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014 (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 $10,932,000, an increase of $720,000 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 $4,186,000, which equated to 39% of total General Fund expenditures, without transfers. The net result of various revenue and expense items resulted in an increase to the
City’s General Fund of $344,000 or 5% during the current fiscal. This increase primarily resulted from
revenues being more than budgeted by $245,000, while expenses were $531,000 less than budget for a net positive variance of $776,000. The General Fund revenues were close to the budgeted amount in
total and increased from 2013 by $1,000. 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 City Administration with a
positive variance of $178,000 due mostly to employee turnover. Nonmajor governmental funds consisting of special revenue funds, the debt service fund, and the capital projects fund have a combined fund balance of $4,011,000. Of this fund balance, $3,589,000
is restricted for capital projects. The net increase in fund balance after transfers in nonmajor governmental funds was $377,000. ■ Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. During the fiscal year the proprietary funds recorded revenues
of $10,961,000, expenses of $9,681,000, net non-operating costs of $(621,000), and net capital
contributions, grants, and transfers of $155,000. The net position in the proprietary funds increased $814,000 as a result of the fiscal year’s activities. The unrestricted net position of the enterprise funds
amounts to $4,905,000 at the end of fiscal year 2014. Stormwater rates stayed constant in fiscal year 2014 as there were no rate changes. The $8.39 per equivalent residential unit (ERU) is approximately 79%, compared to 82% for the prior year, of the
total operating expenses of $1,087,000 needed to fully fund the operation with charges for service. During fiscal year 2014, the Sanitation Fund netted a decrease in net position of $335,000; the decrease was a result of the $322,000 settlement being reached between the City of Atlantic Beach
and Jacksonville, with regards to tipping fees. General Fund Budgetary Highlights The final expense budget included a $154,000 increase in appropriations. The portion of the increase in appropriations for the encumbrances rolling forward from 2013 was $82,000.
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2014 (Continued)
General Fund Budgetary Highlights (Continued)
Net Budget The overall net difference from the final budgeted revenues and adjusted final budgeted expenses was a
deficit of $724,000. The actual increase in fund balance was $78,000. This resulted in an $803,000 excess variance above what was budgeted.
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, 2014, amounted to $80,405,000. 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 $196,000 (.5%) for governmental activities and an increase of $110,000 (.3%) for business-
type activities.
Capital asset events during the current fiscal year included the following:
Governmental Activities Buildings, net of accumulated depreciation, decreased by $117,000 through annual depreciation of
the capital assets. Intangible Assets reflected a net decrease of $15,000 through annual depreciation of the capital assets. This asset category includes land easements and computer software. Improvements Other than Buildings reflected a net decrease of $360,000. This represents capital
asset increase of $317,000, offset by depreciation of $676,000. Major projects in this category include: field improvements at Donner Park, sidewalk and drainage project at Dutton Isle Rd., and
pedestrian and bike path project at Tideview Preserve. Equipment assets reflected a net decrease of $22,000. This represents capital asset increase of
$269,000, offset by depreciation of $291,000. Some of the assets acquired in this category were: a
police interceptor, 5 trucks, 1 sport utility vehicle, and computer hardware. Construction in Progress increased $317,000. Major projects included in this category are the Rose
Park Development, Marsh Project Pedestrian Path, and the Robert Street ditch design.
Business-type Activities Buildings reflected a net decrease in asset value of $14,000 from depreciation. Improvements Other than Buildings reflected a net increase of $98,000. This represents capital
asset increases of $2,283,000, offset by depreciation of $2,185,000. The largest increases in this
category are improvements were the reclaimed water plant project and East Coast Dr. drainage
improvements.
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued) General Fund Budgetary Highlights (Continued) Capital Assets and Debt Administration (Concluded)
Business-type Activities (Concluded)
Equipment assets reflected a net increase of $37,000. This represents capital asset increase of
$128,000, offset by depreciation of $91,000. Some of the assets acquired this year consisted of 3
vehicles being utilized by the Public Works Department. Construction in Progress had a net decrease of $12,000; costs incurred were for design of Saltair
Sidewalk and Drainage Project and Seminole Streetscape.
City of Atlantic Beach’s Capital Assets (Net of Depreciation)
(In Thousands) Governmental Business-type
Activities Activities Totals
2014 2013 2014 2013 2014 2013
Land $10,363 $10,363 $1,656 $1,656 $12,019 $12,019 Intangibles 7 22 215 215 222 237
Buildings 2,635 2,751 80 94 2,715 2,845 Improvements-Other 24,918 25,278 38,626 38,528 63,544 63,806
Equipment 874 896 440 402 1,314 1,298
Construction in Progress 418 101 173 185 591 286
Total $39,215 $39,411 $41,190 $41,080 $80,405 $80,491
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 2014 fiscal year, the City had total bonded debt outstanding of $20,431,000. 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, 2014 (In Thousands)
Business-type Activities Utilities System Revenue Bond, Series 2014 $ 12,772 F.D.E.P. State Revolving Funds Loan, 2010 660
F.D.E.P. State Revolving Funds Loan, 2009 6,999 Total $ 20,431
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CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
General Fund Budgetary Highlights (Concluded)
Long-term Debt (Concluded)
In fiscal year 2014, the City issued a $13,960,000 Utility System Refunding Bond to take advantage of low interest rates to pay off older debt. The current refunding resulted in a difference between the
reacquisition price and the net carrying amount of the old debt of $1.18 million. The City completed the current refunding to reduce its total debt service payments over the next 25 years by $1,618,745, and to obtain an economic gain (difference between the present values of the old and new debt service
payments) of $1,415,127. The City paid off all remaining Governmental Activity Debt in the first quarter of fiscal year 2014.
Debt service coverage calculations can be found on page 58. Additional information on the City’s long-term debt can be found in Note 6 on pages 28 – 31 of this report.
Economic and Budgetary Highlights
Projections for fiscal year 2015 revenues remain essentially flat. Overall revenue is down $548,000, but
this is primarily due to a grant being received in prior year. The millage rate was held to 3.3285, which is consistent with fiscal year 2014. This is projected to increase General Fund Revenue by $237,000. The
rise in property tax revenue will help offset a slight decrease in enterprise fund transfers. Even though costs in some areas are expected to increase, no increase in rates were budgeted for 2015. 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 2015 and into the future are highlighted below.
Revenue Highlights: ■ The 2014 taxable property values are about 0.5% higher than the 2013 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 0.47% over the roll-back rate, tax collections are budgeted to be almost the same in 2014 as they were in 2013. The final gross taxable
property value was $1,204,471,000. Ad valorem taxes of $3,908,000 represent about 39% of the General Fund revenues for 2014.
■ The 2014 intergovernmental revenues of $1,634,000 make up 16.01% of general fund revenues. This is an increase of $67.000 over 2013.
■ The City’s investment portfolio is valued at approximately $15,747,000 as of September 30, 2014. The investment earnings gain for the year was $526,000, compared to a $347,000 loss the prior year.
Over the past four years, the City has recognized an overall investment earnings gain of $1,121,000.
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide Financial Statements, Fund Financial
Statements, and Notes to Financial Statements.
See accompanying notes.
1
Governmental Business-type 2013
Activities Activities Totals TotalsAssetsEquity in Pooled Cash and Investments 10,312,186$ 5,737,089$ 16,049,275$ 15,162,362$ Receivables - Net 2,730 629,505 632,235 732,392 Due from Other Governments 988,067 228,532 1,216,599 871,151 Inventories 29,370 12,827 42,197 88,974
Notes Receivable - Current 0 15,759 15,759 16,519 Restricted Assets:Equity in Pooled Cash and Cash Equivalents 0 1,578,519 1,578,519 2,544,207 Capital Assets:Land 10,363,002 1,656,018 12,019,020 12,019,020 Buildings 4,491,659 4,356,384 8,848,043 8,848,043 Improvements Other Than Buildings 39,156,369 79,345,283 118,501,652 115,901,612 Equipment 3,637,172 2,151,907 5,789,079 5,391,410 Intangibles - Easements and Computer Software 341,079 244,709 585,788 585,788 (Accumulated Depreciation and Amortization)(19,192,636) (46,737,041) (65,929,677) (62,540,838) Construction in Progress 417,906 172,514 590,420 285,733 Prepaid Items 13,008 32,210 45,218 361,996 Notes Receivable - Noncurrent 0 127,828 127,828 134,966
Total Assets 50,559,912 49,552,043 100,111,955 100,403,335
Deferred Outflows of Resources - NoncurrentUnamortized Refunding Loss 0 1,187,375 1,187,375 0
LiabilitiesAccounts Payable and Other Current Liabilities 393,083 1,084,426 1,477,509 1,060,045 Construction Retainages Payable 0 56,696 56,696 0
Due to Other Governments 0 10,194 10,194 9,384
Unearned Revenue 10,905 176,970 187,875 189,746 Deposits 9,199 0 9,199 9,916 Compensated Absences - Current 224,960 109,167 334,127 277,075 Accrued Interest Payable 0 0 0 971 Payable from Restricted Assets:Current Portion of Bonds Payable 0 0 0 1,050,992 Current Portion of Loan Payable 0 286,174 286,174 164,475 Accrued Interest Payable 0 97,471 97,471 423,372 Customer Deposits 0 952,496 952,496 573,879 Noncurrent Liabilities:Due Within One Year 0 0 0 69,203 Due in More Than One Year 0 21,332,540 21,332,540 21,343,633 Compensated Absences - Noncurrent 345,560 120,160 465,720 548,814 Other Postemployment Benefits Obligation 156,845 51,836 208,681 179,798 Total Liabilities 1,140,552 24,278,130 25,418,682 25,901,303
Net PositionNet Investment in Captial Assets 39,214,551 20,758,435 59,972,986 57,862,465 Restricted for:Renewal and Replacement 0 250,000 250,000 500,000 Debt Service 0 286,174 286,174 1,274,175 Public Safety 168,310 0 168,310 167,967 Road Maintenance and Construction 159,677 0 159,677 92,254 Other Capital Projects 3,588,843 0 3,588,843 3,214,166 Other Purposes 86,906 0 86,906 108,741 Building Code Enforcement 0 261,288 261,288 76,921 Unrestricted 6,201,073 4,905,391 11,106,464 11,205,343 Total Net Position 49,419,360$ 26,461,288$ 75,880,648$ 74,502,032$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
2014
See accompanying notes.
2
Operating Capital
Charges for Grants and Grants and Governmental Business-type 2013
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals Totals
Primary Government
Governmental Activities:
General Government 2,053,969$ 876,793$ 0$ 0$ (1,177,176)$ 0$ (1,177,176)$ (1,106,757)$ Public Safety 5,183,961 713,623 83,829 2,170 (4,384,339) 0 (4,384,339) (4,253,119) Road Maintenance and Construction 1,872,226 125,517 534,839 132,856 (1,079,014) 0 (1,079,014) (1,213,364) Parks and Recreation 1,309,407 70,431 0 163,888 (1,075,088) 0 (1,075,088) (1,131,125) Conservation and Resource Management 0 0 8,180 0 8,180 0 8,180 0
Interest/Fiscal Charges on
Long-term Debt 486 0 0 0 (486) 0 (486) (3,370) Total Governmental Activities 10,420,049 1,786,364 626,848 298,914 (7,707,923) 0 (7,707,923) (7,707,735)
Business-type Activities:
Utility 7,309,320 7,943,365 0 775,929 0 1,409,974 1,409,974 1,100,945 Stormwater 1,152,729 858,751 0 0 0 (293,978) (293,978) (288,392) Sanitation 1,869,006 1,790,208 0 0 0 (78,798) (78,798) 294,877 Building Code Enforcement 239,145 423,129 0 0 0 183,984 183,984 9,530 Total Business-type Activities 10,570,200 11,015,453 0 775,929 0 1,221,182 1,221,182 1,116,960
Total Primary Government 20,990,249$ 12,801,817$ 626,848$ 1,074,843$ (7,707,923) 1,221,182 (6,486,741) (6,590,775)
General RevenuesProperty Taxes 3,908,365 0 3,908,365 3,843,755
Sales Taxes 1,208,547 0 1,208,547 1,156,129
Business and Utility Taxes 1,135,931 0 1,135,931 1,197,337
State Revenue Sharing 300,007 0 300,007 283,121
Discretionary Sales Surtax 721,981 0 721,981 684,187
Investment Earnings (Loss)312,798 213,172 525,970 (347,441)
Miscellaneous 64,556 0 64,556 403,069
Transfers 620,795 (620,795) 0 0
Total General Revenues
and Transfers 8,272,980 (407,623) 7,865,357 7,220,157
Change in Net Position 565,057 813,559 1,378,616 629,382 Net Position, Beginning of Year (As Restated)48,854,303 25,647,729 74,502,032 73,872,650
Net Position, End of Year 49,419,360$ 26,461,288$ 75,880,648$ 74,502,032$
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
Primary Government
2014
Program Revenues Net (Expense) Revenue and Changes in Net Position
See accompanying notes.
3
Nonmajor Totals
Governmental Governmental 2013
General Funds Funds Totals
Assets
Equity in Pooled Cash and Investments 6,572,815$ 3,739,371$ 10,312,186$ 9,656,124$
Receivables - Net 2,730 0 2,730 116,693 Due from Other Funds 6,531 0 6,531 9,097
Due from Other Governments 700,121 287,946 988,067 871,151
Inventories 29,370 0 29,370 26,098 Notes Receivable - Current 0 0 0 760
Prepaid Items 13,008 0 13,008 178,578
Notes Receivable - Noncurrent 0 0 0 1,520
Total Assets 7,324,575 4,027,317 11,351,892 10,860,021
Liabilities and Fund Balances
LiabilitiesAccounts Payable and Accrued Liabilities 389,562 3,521 393,083 622,010
Due to Other Funds 0 6,531 6,531 9,097
Deposits 2,800 6,399 9,199 9,916 Unearned Revenue 10,905 0 10,905 7,302
Total Liabilities 403,267 16,451 419,718 648,325
Fund Balances
Nonspendable:
Inventories 29,370 0 29,370 26,098 Prepaids 13,008 0 13,008 178,578
Restricted for:Public Safety 7,543 160,767 168,310 167,967
Road Maintenance and Construction 0 159,677 159,677 92,254
Debt Service Reserve 0 0 0 73,113 Other Capital Projects 0 3,588,843 3,588,843 3,214,166
Other Purposes 0 86,906 86,906 108,741
Committed to: Conservation and Resource Management 0 14,673 14,673 6,493
Assigned to:
Re-establishment of Fire Department 0 0 0 300,000 Operating Reserves 2,685,355 0 2,685,355 2,598,195
Unassigned 4,186,032 0 4,186,032 3,446,091 Total Fund Balances 6,921,308 4,010,866 10,932,174 10,211,696
Total Liabilities and Fund Balances 7,324,575$ 4,027,317$ 11,351,892$ 10,860,021$
2014
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
See accompanying notes.
4
Total Fund Balances of Governmental Funds 10,932,174$ 10,211,696$
Amounts Reported for Governmental
Activities in the Statement of Net Position
are Different Because:
Capital assets used in governmental
activities are not financial resources
and, therefore, are not reported in
the funds:
Total Capital Assets 58,407,187$ 57,504,590$
(Accumulated Depreciation)(19,192,636) (18,093,554)
39,214,551 39,411,036
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 0 69,203
Compensated Absences 570,520 564,800
Net Pension Asset 0 (2,271)
Other Postemployment Benefits
Obligation 156,845 135,726
Accrued Interest Payable 0 971
(727,365) (768,429)
Total Net Position of Governmental Activities 49,419,360$ 48,854,303$
2014 2013
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
See accompanying notes.
5
Nonmajor Totals
Governmental Governmental 2013
General Funds Funds Totals
Revenues
Property Taxes 3,908,365$ 0$ 3,908,365$ 3,843,755$
Nonproperty Taxes 1,135,931 1,252,577 2,388,508 2,395,045
Permits, Fees, and Special Assessments 863,978 0 863,978 830,708
Intergovernmental Revenues 1,634,354 278,510 1,912,864 1,842,537
Fines and Forfeitures 94,534 59,909 154,443 255,113
Charges for Services 756,446 0 756,446 725,604
Investment Earnings (Loss)215,548 96,491 312,039 (201,327)
Miscellaneous Revenues 54,146 3,724 57,870 409,135
Interfund Charges 1,443,440 0 1,443,440 1,435,569
Total Revenues 10,106,742 1,691,211 11,797,953 11,536,139
Expenditures
Current:
General Government 3,004,357 0 3,004,357 2,877,855
Public Safety 4,851,060 122,354 4,973,414 4,951,320
Road Maintenance and Construction 1,442,396 285,478 1,727,874 1,726,088
Parks and Recreation 1,060,821 0 1,060,821 1,031,424
Debt Service:
Principal 0 69,203 69,203 67,712
Interest and Other 0 1,457 1,457 4,316
Capital Outlay 502,639 390,159 892,798 768,203
(Total Expenditures)(10,861,273) (868,651) (11,729,924) (11,426,918)
(Deficiency) Excess of Revenues (Under)
Over Expenditures (754,531) 822,560 68,029 109,221
Other Financing Sources (Uses)
Transfers in 1,066,503 275,500 1,342,003 1,046,454
Transfers (out)0 (721,208) (721,208) (431,696)
Sale of General Fixed Assets 31,654 0 31,654 0 Total Other Financing (Uses)1,098,157 (445,708) 652,449 614,758
Net Change in Fund Balances 343,626 376,852 720,478 723,979
Fund Balances, Beginning of Year 6,577,682 3,634,014 10,211,696 9,487,717
Fund Balances, End of Year 6,921,308$ 4,010,866$ 10,932,174$ 10,211,696$
2014
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
See accompanying notes.
6
Net Change in Fund Balances - Total Governmental Funds 720,478$ 723,979$
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 892,798$ 768,203$
(Current Year Depreciation)(1,099,082) (1,139,045) (206,284) (370,842)
Certain nonexchange revenues reported in the statement of activities are not considered currentfinancial resources and, therefore, are not reported as revenue in the governmental funds.9,799 (156,857)
Repayment of long-term debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in thestatement of net assets.69,203 67,712
Governmental funds report sale of general fixedassets as financial resources. The gain or loss on
disposal of general fixed assets is not reflected
in the governmental funds:
Gain (Loss) on Disposal of General Fixed Assets 0 (4,335)
0 (4,335)
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: Debt Interest Expense 970 946 Compensated Absences (5,719) 34,125 Net Pension Asset (2,271) 2,271 Other Postemployment Benefits Obligation (21,119) (23,705) (28,139) 13,637
Change in Net Position - Governmental Activities 565,057$ 273,294$
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
2014 2013
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
See accompanying notes.
7
Building Code 2013
Utility Stormwater Sanitation Enforcement Totals Totals
Assets
Current Assets:
Equity in Pooled Cash and Investments 3,288,462$ 1,488,259$ 676,555$ 283,813$ 5,737,089$ 5,506,238$
Accounts Receivable - Net 514,344 49,577 65,584 0 629,505 615,699
Due from Other Governments 228,532 0 0 0 228,532 0
Inventories 12,827 0 0 0 12,827 62,876
Notes Receivable - Current 15,759 0 0 0 15,759 15,759
Prepaid Items 32,210 0 0 0 32,210 181,147
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 1,222,787 0 0 355,732 1,578,519 2,544,207
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 62,883,046 16,462,237 0 0 79,345,283 77,061,749
Equipment 1,645,935 273,748 189,877 42,347 2,151,907 2,023,485
Intangibles - Easements and Computer Software 226,394 0 0 18,315 244,709 244,709
(Accumulated Depreciation and Amortization)(38,316,346) (8,185,604) (178,468) (56,623) (46,737,041) (44,447,284)
Construction in Progress 74,291 98,223 0 0 172,514 184,671
Notes Receivable - Noncurrent 127,828 0 0 0 127,828 133,446
Total Assets 37,061,952$ 11,092,959$ 753,548$ 643,584$ 49,552,043$ 50,139,104$
Deferred Outflows of Resources -
Noncurrent
Unamortized Refunding Loss 1,033,016 154,359 0 0 1,187,375 0
2014
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2014,
Business-type Activities - Enterprise Funds
See accompanying notes.
8
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
Building Code 2013UtilityStormwaterSanitationEnforcementTotalsTotalsLiabilities
Current Liabilities Payable from CurrentAssets:
Accounts Payable and Other Current Liabilities 605,088$ 34,797$ 438,679$ 5,862$ 1,084,426$ 438,035$ Construction Retainages Payable 56,696 0 0 0 56,696 0 Due to Other Governments 6,923 0 0 3,271 10,194 9,384
Unearned Revenue 88,112 28,632 60,226 0 176,970 182,444
Compensated Absences - Current 105,212 958 0 2,997 109,167 81,499 Current Liabilities Payable from Restricted
Assets:
Current Portion of Bonds Payable 0 0 0 0 0 1,050,992 Current Portion of Loans Payable 286,174 0 0 0 286,174 164,475
Accrued Interest Payable 97,471 0 0 0 97,471 423,372
Customer Deposits 596,764 0 0 355,732 952,496 573,879 Noncurrent Liabilities:
Due in More Than One Year 19,517,740 1,814,800 0 0 21,332,540 21,343,633 Compensated Absences - Noncurrent 116,599 0 0 3,561 120,160 179,590
Other Postemployment Benefits Obligation 35,526 9,476 0 6,834 51,836 44,072
Total Liabilities 21,512,305 1,888,663 498,905 378,257 24,278,130 24,491,375
Net Position
Net Investment in Capital Assets 12,848,305 7,894,682 11,409 4,039 20,758,435 18,520,632 Restricted for:
Renewal and Replacement 250,000 0 0 0 250,000 500,000
Debt Service 286,174 0 0 0 286,174 1,201,062 Building Code Enforcement 0 0 0 261,288 261,288 76,921
Unrestricted 3,198,184 1,463,973 243,234 0 4,905,391 5,349,114
Total Net Position 16,582,663$ 9,358,655$ 254,643$ 265,327$ 26,461,288$ 25,647,729$
Business-type Activities - Enterprise Funds
(Concluded)
2014
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
CITY OF ATLANTIC BEACH, FLORIDA
See accompanying notes.
9
Building Code 2013
Utility Stormwater Sanitation Enforcement Totals Totals
Operating RevenuesCharges for Services:
Customer Charges 7,877,329$ 855,265$ 1,742,009$ 423,129$ 10,897,732$ 10,823,188$ Franchise Permits 0 0 2,500 0 2,500 3,000
Miscellaneous Revenues 56,847 3,486 0 0 60,333 195,112
Total Operating Revenues 7,934,176 858,751 1,744,509 423,129 10,960,565 11,021,300
Operating Expenses
Personal Services 1,802,458 173,703 18,369 191,775 2,186,305 2,206,998
Contractual Services 788,322 195,798 1,674,712 5,397 2,664,229 2,094,275
Supplies 366,425 31,372 0 4,644 402,441 362,586 Repairs and Maintenance 133,621 25,481 6,471 4,936 170,509 133,780
Utilities 367,452 0 0 0 367,452 382,694 Depreciation 1,819,348 466,235 3,367 808 2,289,758 2,316,074
Intergovernmental Charges 986,547 173,124 158,948 26,605 1,345,224 1,334,874
Other Expenses 221,639 20,885 7,139 4,980 254,643 242,642
(Total Operating Expenses)(6,485,812) (1,086,598) (1,869,006) (239,145) (9,680,561) (9,073,923)
Operating Income (Loss)1,448,364 (227,847) (124,497) 183,984 1,280,004 1,947,377
Nonoperating Revenues (Expenses)
Connection Charges 9,189 0 0 0 9,189 8,530 Franchise Fees 0 0 45,699 0 45,699 49,427
Investment Earnings (Loss)142,727 46,540 19,483 4,422 213,172 (146,114) Interest Expense (778,782) (82,699) 0 0 (861,481) (996,199)
Gain (Loss) on Disposal of Fixed Assets 1,210 23,475 0 0 24,685 1,601
Issuance Costs (45,936) (6,907) 0 0 (52,843) (164,454)
Total Nonoperating Revenues (Expenses)(671,592) (19,591) 65,182 4,422 (621,579) (1,247,209)
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
2014Business-type Activities - Enterprise Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
See accompanying notes.
10
Building Code 2013
Utility Stormwater Sanitation Enforcement Totals Totals
Income (Loss) Before Contributions
and Transfers 776,772$ (247,438)$ (59,315)$ 188,406$ 658,425$ 700,168$
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants 775,929 0 0 0 775,929 270,678
Transfers in 0 285,000 0 0 285,000 283,000
Transfers (out)(629,860) 0 (275,935) 0 (905,795) (897,758)
Total Capital Contributions and Grants
and Transfers 146,069 285,000 (275,935) 0 155,134 (344,080)
Change in Net Position 922,841 37,562 (335,250) 188,406 813,559 356,088
Net Position, Beginning of Year (As Restated)15,659,822 9,321,093 589,893 76,921 25,647,729 25,291,641
Net Position, End of Year 16,582,663$ 9,358,655$ 254,643$ 265,327$ 26,461,288$ 25,647,729$
2014
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
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 2013UtilityStormwaterSanitationEnforcementTotalsTotalsCash Flows from Operating Activities
Cash Received from Customers 7,953,929$ 849,193$ 1,743,537$ 778,861$ 11,325,520$ 10,845,906$
Cash Paid to Suppliers (1,337,192) (245,698) (1,353,871) (20,440) (2,957,201) (3,952,174) Cash Paid to Employees (1,809,033) (174,649) (18,369) (208,252) (2,210,303) (2,227,680)
Cash Paid for Interfund Services (986,547) (173,124) (158,948) (26,605) (1,345,224) (1,334,874) Net Cash Provided by (Used in) OperatingActivities 3,821,157 255,722 212,349 523,564 4,812,792 3,331,178
Cash Flows from Noncapital FinancingActivities
Connection Charges 9,189 0 0 0 9,189 57,957 Franchise Fees 0 0 45,699 0 45,699 0
Transfers in 0 285,000 0 0 285,000 283,000
Transfers (out)(629,860) 0 (275,935) 0 (905,795) (897,758) Net Cash Provided by (Used in) Noncapital
Financing Activities (620,671) 285,000 (230,236) 0 (565,907) (556,801)
Capital and Related Financing Activities
Capital Grants 547,397 0 0 0 547,397 270,678
Proceeds from Loan 12,145,200 1,814,800 0 0 13,960,000 0 Fixed Asset Additions (2,058,129) (332,324) (4,501) (4,847) (2,399,801) (983,029)
Proceeds from Sale of PPE 1,210 23,475 0 0 24,685 0 Principal Payments on Long-term Debt (13,998,789) (2,088,974) 0 0 (16,087,763) (1,468,945)
Issuance Costs Paid (45,936) (6,907) 0 0 (52,843) 0
Interest Paid (1,061,862) (125,520) 0 0 (1,187,382) (910,962) Net Cash Provided by (Used in) Capital
and Related Financing Activities (4,470,909) (715,450) (4,501) (4,847) (5,195,707) (3,092,258)
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
2014
See accompanying notes.
12
Building Code 2013UtilityStormwaterSanitationEnforcementTotalsTotalsCash Flows from Investing ActivitiesSale (Purchase) of Investments 241,153$ (104,801)$ (89,504)$ (482,824)$ (435,976)$ 394,523$ Interest Received 142,727 46,540 19,483 5,235 213,985 (146,601)
Net Cash Provided by (Used in) Investing Activities 383,880 (58,261) (70,021) (477,589) (221,991) 247,922
Net Increase (Decrease) in Cash and Cash Equivalents (886,543) (232,989) (92,409) 41,128 (1,170,813) (69,959)
Cash and Cash Equivalents, Beginning of Year 1,375,560 394,315 165,747 28,198 1,963,820 2,033,779
Cash and Cash Equivalents, End of Year 489,017$ 161,326$ 73,338$ 69,326$ 793,007$ 1,963,820$
Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) OperatingActivities
Operating Income (Loss)1,448,364$ (227,847)$ (124,497)$ 183,984$ 1,280,004$ 1,947,377$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by(Used in) Operating Activities:Depreciation 1,819,348 466,235 3,367 808 2,289,758 2,316,074 Change in Assets and Liabilities:Accounts Receivable (19) (9,335) 1,166 0 (8,188) (57,313) Inventory 50,049 0 0 0 50,049 (18,193) Prepaids 123,513 25,424 0 0 148,937 (181,147) Compensated Absences (12,787) (1,566) 0 (17,409) (31,762) (28,412) OPEB Obligation 6,212 620 0 932 7,764 7,730 Accounts Payable and Accrued Liabilities 366,705 2,414 334,451 (483) 703,087 (692,580) Customer Deposits 22,885 0 0 355,732 378,617 55,226 Deferred Revenue (3,113) (223) (2,138) 0 (5,474) (17,584) Net Cash Provided by (Used in) OperatingActivities 3,821,157$ 255,722$ 212,349$ 523,564$ 4,812,792$ 3,331,178$
Business-type Activities - Enterprise Funds
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
(Continued)
2014
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
See accompanying notes.
13
Building Code 2013UtilityStormwaterSanitationEnforcementTotalsTotals
Reconciliation of Cash and Cash
Equivalents to Balance Sheet
Equity in Pooled Cash and Cash
Equivalents in Current Assets 3,288,462$ 1,488,259$ 676,555$ 283,813$ 5,737,089$ 5,506,238$
Restricted Equity in Pooled Cash
and Cash Equivalents 1,222,787 0 0 355,732 1,578,519 2,544,207
Equity in Pooled Investments (4,022,232) (1,326,933) (603,217) (570,219) (6,522,601) (6,086,625)
Total Cash and Cash Equivalents 489,017$ 161,326$ 73,338$ 69,326$ 793,007$ 1,963,820$
2014Business-type Activities - Enterprise Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
(Concluded)
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
See accompanying notes.
14
2014 2013
Assets
Cash and Cash Equivalents 37,480$ 130,743$
Prepaids 0 5,830
Interest Receivable 64,250 34,097
Investments at Fair Value 23,066,411 21,341,304
Total Assets 23,168,141 21,511,974
Liabilities
Accounts Payable and Accrued Liabilities 114 900
Excess Premium Tax Liability 120,454 120,454
Total Liabilities 120,568 121,354
Net Position
Net Position Restricted for Pensions 23,047,573$ 21,390,620$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2014,
See accompanying notes.
15
2014 2013
Additions
Contributions:
Employer 1,514,183$ 1,562,327$
Employees 260,478 258,156
State of Florida 96,217 91,077
Total Contributions 1,870,878 1,911,560
Net (Decrease) Increase in
Fair Value of Investments 792,566 729,168
Interest and Dividends 441,637 420,837
Miscellaneous Revenue 0 58,206
Total Additions 3,105,081 3,119,771
Deductions
Refunds of Contributions 70,596 118,126
Benefits 1,222,239 1,381,388
Investment Expenses 101,021 84,793
Administrative Expenses 54,272 61,644
Total Deductions 1,448,128 1,645,951
Change in Net Position 1,656,953 1,473,820
Net Position, Beginning of Year (as Restated)21,390,620 19,916,800
Net Position, End of Year 23,047,573$ 21,390,620$
Pension Trust Funds
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
16
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014
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, reuse, planning, zoning, water and sewer, and general government services.
In accordance with the Codification of Governmental and Financial Reporting Standards, the financial reporting entity consists of the primary government, organizations for which the
primary government is financially accountable, and other organizations whose exclusions
would cause the reporting entity’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria for consideration in
determining financial accountability. These criteria include appointing a majority of an organization’s governing body and: (1) the ability of the City to impose its will on that organization; or (2) the potential for that organization to provide specific benefits to or impose
specific 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, 2014 (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, 2014 (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, sewer
collection and treatment systems, and reuse system.
■ The Sanitation Fund accounts for the activities of the City’s sanitation system.
■ The Stormwater Fund accounts for the activities of the City’s stormwater system.
■ 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, 2014 (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, 2014 (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, 2014 (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, discounts, and refunding losses are deferred and amortized
over the life of the bonds using the effective interest method. Issuance costs, whether or not
withheld from the actual debt proceeds, are reported as debt service expenditures.
22
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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.
Deferred Inflows/Outflows of Resources Deferred outflows of resources represent the consumption of net position that is applicable to a
future period. Deferred outflows have a positive effect on net position, similar to assets. Currently, the City only reports deferred outflows of resources for the difference between the
net reacquisition cost of new debt and the net carrying amount of old debt. This refunding loss
is amortized over the remaining term of the new debt using the straight-line method. Deferred inflows of resources represent the acquisition of net position that is applicable to a future
reporting period. Deferred inflows have a negative effect on net position, similar to liabilities. Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements. Grant revenues are recorded using the modified accrual basis in governmental funds and the
accrual basis in the proprietary funds. Restricted grant revenues, which are received but not
expended, are recorded as unearned revenues. Property Taxes
The assessment of all properties and the collection of all property taxes are made through the Property Appraiser and Tax Collector of the City of Jacksonville, Florida. General property
taxes are recorded as received, in cash, which approximates taxes levied less discounts for the current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the
following year. Discounts are allowed for early payment. On or prior to June 1, interest-bearing certificates are sold for all uncollected real property taxes. Unsold certificates are held
by the City of Jacksonville, Florida. 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.
23
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 1 - Summary of Significant Accounting Policies (Concluded) 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, 2013, from which the summarized information was derived. New Accounting Pronouncements During the year, the City implemented GASB No. 65, Items Previously Reported as Assets and Liabilities (GASB 65), which amends or supersedes the accounting and financial reporting
guidance for certain items previously required to be reported as assets or liabilities. The objective is to either properly classify certain items that were previously reported as assets or
liabilities as deferred outflows of resources or deferred inflows of resources to recognize
certain items that were previously reported as assets and liabilities as outflows of resources (expenses) or inflow of resources (revenues). Under GASB 65, bond issuance costs will now
be expensed when incurred, instead of being amortized over the term of the bond. As such,
the implementation of GASB 65 resulted in the reduction of beginning net position in the Business-type Activities of $175,913, of which $153,636 was reported in the Utility Fund and
$22,277 was reported in the Stormwater Fund. The implementation of GASB 65 also resulted in the reclassification of the unamortized portion of bond refunding losses. These amounts are now reported as Deferred Outflows of Resources instead of as a reduction of Bonds Payable. During the year, the City implemented GASB No.67 (GASB 67), Financial Reporting for Pension Plans; an amendment of GASB Statement No.25. This statement replaces the requirements of Statements No. 25 and No. 50 related to pension plans that are administered
through trusts or equivalent arrangements. This statement requires additional disclosures regarding the City’s pension plans and specifies the required approach to measuring the net
pension liability. Under GASB 67, the removal of the obligation for DROP benefits is
required. As noted in Note 15, this resulted in an increase of $288,280 to the beginning net position in the Statement of Changes in Fiduciary 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, 2014, the carrying amount of cash on hand and on deposit with banks,
including interest-bearing deposits was $1,917,678, and the related bank balance was
$2,387,846. Monies which are placed on deposit with financial institutions in the form of demand deposit accounts, time deposit accounts, and certificates of deposit are defined as
public deposits. All of the City’s public deposits are held in qualified public depositories pursuant to Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act). Under the Act, all qualified public depositories are required to pledge eligible collateral having
a market value equal to or greater than the average daily or monthly balance of all public deposits, times the depository’s collateral pledged level. 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.
24
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 2 - Cash and Investments (Continued)
Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories
of the same type as the depository in default. The City elected to adopt a written investment policy as authorized under Florida Statutes.
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, 2014:
Investment Maturities
Investment Credit Fair Less Than 1-5 6-10
Type Rating Value 1 Year Years Years Total
Money Market Funds:
Morgan Stanley, N.A. Unrated $ 1,778 $ 1,778 $ 0 $ 0 $ 1,778
Mutual Funds:
Alliance Limited Duration
High Income Mutual Fund Unrated 2,424,772 2,424,772 0 0 2,424,772
Guggenheim Floating Rate
Strategy Class A Unrated 1,521,915 1,521,915 0 0 1,521,915
Hartford Floating Rate
Class A Unrated 1,527,314 1,527,314 0 0 1,527,314
Invesco Floating Rate
Income Class A Unrated 1,712,213 1,712,213 0 0 1,712,213
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 2,993,363 2,993,363 0 0 2,993,363 MainStay Short Duration High Yield Fund Class A Unrated 2,567,593 2,567,593 0 0 2,567,593 Putnam Diversified Income Trust Class A Unrated 2,998,316 2,998,316 0 0 2,998,316 Florida PRIME A-1 334 334 0 0 334 Total $ 15,747,598 $ 15,747,598 $ 0 $ 0 $15,747,598
25
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 2 - Cash and Investments (Continued)
Listed below are the investments and maturities in the City’s pension trust funds at September 30, 2014:
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 $ 6,746,846 $ 6,746,846 $ 0 $ 0 $ 0 $ 6,746,846
Common Stocks 7,724,216 7,724,216 0 0 0 7,724,216
Corporate Bonds 7,917,033 1,029,513 3,616,024 3,271,496 0 7,917,033
Government and
GSE Bonds 251,478 70,182 181,296 0 0 251,478
ICMA Self Directed 491,088 491,088 0 0 0 491,088
Total $ 23,130,661 $ 16,061,845 $ 3,797,320 $ 3,271,496 $ 0 $ 23,130,661
* Fair value balances reported include interest receivable. The total pension investment balances of the City at September 30, 2014, are comprised of the
following items:
Moody’s Percent
Investment Credit of
Type Rating Total
Corporate Bonds A1 2.22%
Corporate Bonds A2 3.66%
Corporate Bonds A3 5.98%
Corporate Bonds AA3- 0.74%
Corporate Bonds BAA1 9.26%
Corporate Bonds BAA2 7.89%
Corporate Bonds BAA3 4.48%
Government and GSE Bonds AAA 1.09%
Stocks NR 33.39%
Cash and Money Market NR 29.17%
ICMA Self Directed NR 2.12%
Restricted cash and investments at September 30, 2014, in the enterprise funds follows:
Renewal System
Enterprise Customer and Debt Development
Funds Deposits Replacement Service Charges Totals
Utility Fund $ 596,764 $ 250,000 $ 376,023 $ 0 $ 1,222,787
Building Code
Enforcement Fund $ 355,732 $ 0 $ 0 $ 0 $ 355,732
26
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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, 2014, consist of the
following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General $ 2,730 $ 0 $ 2,730
Utility 530,286 (15,942) 514,344
Stormwater 49,577 0 49,577
Sanitation 76,103 (10,519) 65,584
Total $ 658,696 $ (26,461) $ 632,235
Included in accounts receivable are $220,784 of water and sewer revenues earned, but not
billed as of September 30, 2014.
27
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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, 2014:
Notes Receivable $ 143,587
(Current Portion) (15,759)
Total Notes Receivable - Noncurrent $ 127,828
Note 5 - Capital Assets
Capital asset activity for the fiscal year ended September 30, 2014, is as follows:
Beginning Ending
Balance Increases (Decreases) Balance
Governmental Activities
Capital Assets Not Being
Depreciated:
Land $ 10,363,002 $ 0 $ 0 $ 10,363,002
Construction in Progress 101,062 514,871 (198,027) 417,906
Total Capital Assets Not
Being Depreciated 10,464,064 514,871 (198,027) 10,780,908
Capital Assets Being
Depreciated:
Buildings 4,491,659 0 0 4,491,659
Intangible Assets 341,079 0 0 341,079
Improvements Other Than
Buildings 38,839,863 316,506 0 39,156,369
Machinery and Equipment 3,367,925 269,247 0 3,637,172
Total Capital Assets Being
Depreciated 47,040,526 585,753 0 47,626,279
Less Accumulated Depreciation
for:
Buildings (1,740,225) (116,535) 0 (1,856,760)
Intangible Assets (319,121) (15,094) 0 (334,215)
Improvements Other Than
Buildings (13,562,142) (676,143) 0 (14,238,285)
Machinery and Equipment (2,472,066) (291,310) 0 (2,763,376)
Total Accumulated Depreciation (18,093,554) (1,099,082) 0 (19,192,636)
Total Capital Assets Being
Depreciated, Net 28,946,972 (513,329) 0 28,433,643
Governmental Activities Capital
Assets, Net $ 39,411,036 $ 1,542 $ (198,027) $ 39,214,551
28
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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 184,671 2,271,377 (2,283,534) 172,514
Total Capital Assets Not Being
Depreciated 1,840,689 2,271,377 (2,283,534) 1,828,532
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 77,061,749 2,283,534 0 79,345,283
Machinery and Equipment 2,023,485 128,422 0 2,151,907
Total Capital Assets Being Depreciated 83,686,327 2,411,956 0 86,098,283
Less Accumulated Depreciation for:
Buildings (4,262,651) (13,336) 0 (4,275,987)
Intangible Assets (30,092) (190) 0 (30,282)
Improvements Other Than Buildings (38,533,546) (2,185,431) 0 (40,718,977)
Machinery and Equipment (1,620,995) (90,800) 0 (1,711,795)
Total Accumulated Depreciation (44,447,284) (2,289,757) 0 (46,737,041)
Total Capital Assets Being Depreciated,
Net 39,239,043 122,199 0 39,361,242
Business-type Activities Capital Assets,
Net $ 41,079,732 $ 2,393,576 $ (2,283,534) $ 41,189,774 Depreciation expense was charged to functions/programs as follows:
Governmental Activities
General Governmental $ 135,355
Public Safety 194,295
Road Maintenance and Construction 526,716
Parks and Recreation 242,716
Total Depreciation Expense - Governmental Activities $ 1,099,082
Business-type Activities
Utility $ 1,819,348
Stormwater 466,235
Sanitation 3,367
Building Code Enforcement 808
Total Depreciation Expense - Business-type Activities $ 2,289,758 Note 6 - Long-term Debt
Debt Refunding On August 12, 2014, the City issued a $13,960,000 Utility System Refunding Bond with an
interest rate of 2.33% to refund the $13,545,000 outstanding of Utility System Refunding Bonds, Series 2004, $757,387 outstanding of Utility System Revenue Bonds, Series 2010 A-1
Bonds, and $580,784 outstanding of Utility System Revenue Refunding Bonds, Series 2010B
Bonds. The proceeds of the bond were put into an irrecoverable trust to refund the bonds
29
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued) Note 6 - Long-term Debt (Continued)
Debt Refunding (Concluded)
within 90 days of the new debt issuance date. This resulted in a legal defeasance and current refunding of the 2004, 2010A-1, and 2010B bonds. The 2004 bonds and 2010B bonds were
unpaid as of September 30, 2014. The net proceeds of $13,912,717 (after payment of $47,283
in underwriting and other issuance costs) plus an additional $1.2 million in sinking fund monies were used to purchase U.S. government securities, which were put into the
irrecoverable trust. The current refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $1.18 million. This difference, reported in the
accompanying financial statements as a deferred outflow, is being charged to operations through the year 2025 using the straight-line method. The City completed the current
refunding to reduce its total debt service payments over the next 25 years by $1,618,745 and to
obtain an economic gain (difference between the present values of the old and new debt service payments) of $1,415,127. Revenue Bonds Payable Revenue Bonds and Loans payable are comprised of the following: Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual
Installments of Principal and Semiannual Installments of Interest Through
October 1, 2025, Bearing Coupon Rates of 2.330%, Secured Solely by a
Pledge of and Lien on Net Water and Sewer System Revenues and
Certain Other Revenues as Defined in the Bond Ordinance $ 13,960,000 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 660,073 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 6,998,641 Total Revenue Bonds and Loans Payable $ 21,618,714
30
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 6 - Long-term Debt (Continued) The annual requirements to amortize all revenue bonds and loans payable outstanding at September 30, 2014, are as follows:
Business-type Activities
Year Ending Long-term Debt
September 30 Principal Interest Total
2015 $ 286,174 $ 442,042 $ 728,216
2016 1,429,595 534,807 1,964,402
2017 1,507,413 500,776 2,008,189
2018 1,543,259 462,611 2,005,870
2019 1,584,443 423,466 2,007,909
Thereafter 15,267,830 2,091,073 17,358,903
Total $ 21,618,714 $ 4,454,775 $ 26,073,489 Interest and amortization incurred during the year ended September 30, 2014, was $1,457 in the debt service fund and $861,482 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, 2014, 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, 2014:
Balance Balance Due
October 1, September 30, Within
2013 Additions Reductions 2014 One Year
Governmental Activities
Revenue Bonds Payable $ 69,203 $ 0 $ (69,203) $ 0 $ 0
Compensated Absences 564,800 372,840 (367,120) 570,520 224,960
OPEB Obligation 135,726 39,047 (17,928) 156,845 0
Total Governmental Activities -
Long-term Liabilities $ 769,729 $ 411,887 $ (454,251) $ 727,365 $ 224,960
Business-type Activities
State Revolving Fund Loans $ 7,827,082 $ 0 $ (168,368) $ 7,658,714 $ 286,174
Revenue Bonds Payable 15,934,165 13,960,000 (15,934,165) 13,960,000 0
Less Deferred Amounts:
For Issuance Discounts (123,564) 0 123,564 0 0
Loss on Bond Refunding (1,078,583) (1,187,375) 1,078,583 (1,187,375) 0
Total Revenue Bonds Payable 14,732,018 12,772,625 (14,732,018) 12,772,625 0
Total Bonds/Loans Payable 22,559,100 12,772,625 (14,900,386) 20,431,339 286,174
Compensated Absences 261,089 137,834 (169,596) 229,327 109,167
OPEB Obligation 44,072 14,355 (6,591) 51,836 0
Total Business-type Activities -
Long-term Liabilities $ 22,864,261 $ 12,924,814 $ (15,076,573) $ 20,712,502 $ 395,341
31
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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, 2014, there are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount payable of $57,055,000.
Pledged Revenue The City has pledged certain revenues to repay certain bonds and notes outstanding as of
September 30, 2014. 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, 2014:
Outstanding
Net Principal Estimated Principal
Pledged Revenue and Interest Percentage and Pledged
Description Revenue Received Paid Pledged Interest Through
2014 – Utility System Utility
Refunding Bonds Revenues $ 3,426,731 $ 0* 0% $ 16,035,335 2026
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,426,731 49,879 1.46% 823,000 2031
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,426,731 362,392 10.58% 9,215,154 2032
*See note above regarding refunding - principal and interest payments not due until fiscal year 2015. Note 7 - Defined Benefit Pension Plans Plan Descriptions The City maintains two separate single-employer defined benefit pension plans, one for police officers and one for general employees, which cover substantially all full-time City employees hired before September 1, 2008. The general employees’ defined benefit plan is closed to new entrants. Full-time general employees hired on or after September 1, 2008, are covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue separate stand-alone financial statements. Combining statements are included 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 valuations:
32
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued) Note 7 - Defined Benefit Pension Plans (Continued) Plan Descriptions (Continued) General Police
Employees Officers
Inactive Plan Members or Beneficiaries
Currently Receiving Benefits 56 20
Inactive 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. The Plan is governed by a Retirement Plan Board appointed by the City Commission and comprised of five members, two of which will be eligible legal residents of the City, two of which will be general employees elected by the majority of general employees who are members of the Plan, and one of which will be elected by the other four members.
● Plan Benefits Normal retirement is available upon the attainment of age sixty and the completion of five years of credited service. Early retirement is available with a reduced benefit upon the attainment of age fifty-five and the completion of five years of credited service. For members hired before April 24, 2005, the normal retirement benefit shall equal 2.85% of average final compensation for each year of credited service. For members hired on or after April 24, 2005, the normal retirement benefit shall equal 2.50% of average final compensation for each year of credited service. The Plan includes a deferred retirement option program (DROP) under which members eligible for normal retirement may have their monthly pension benefit credited to an account while continuing to be actively employed for up to five years. As of September 30, 2014, Plan net position included $273,114 of DROP account balances. ● Contributions The City is required to contribute at an actuarially determined rate (34.79% of valuation payroll for the year ended September 30, 2014). City contributions to the Plan were $950,980 for the year ended September 30, 2014. 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. ● Plan Investments The Retirement Plan Board is responsible for establishing and amending the Plan’s
investment policies. The Plan’s current investment policy gives the Board discretion to allocate assets with assistance of the Plan’s investment consultant. No formal
targets are stated in the investment policy although the maximum allocation to international equities is 25%. The money-weighted rate of return on Plan investments, net of investment related expenses, was 4.9% for the year ended
September 30, 2014.
33
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued) Note 7 - Defined Benefit Pension Plans (Continued) ■ Police Officers’ Retirement Plan ● Plan Description The Police Officers’ Retirement Plan (Police Plan) provides retirement, disability, and death benefits to Police Plan members and their beneficiaries. The Police Plan is governed by the Policemen’s Pension Board of Trustees, although the City Commission retains the authority to establish and amend the benefit provisions of the Police Plan. The Policemen’s Pension Board of Trustees is appointed by the City Commission and comprised of five members, two of which will be eligible legal residents of the City, two of which will be police officers elected by the majority of police officers who are members of the Police Plan, and one of which will be elected by the other four trustees. ● Plan Benefits For members hired before January 1, 2013, normal retirement is available upon the
attainment of age fifty and the completion of twenty years of credited service, the attainment of age fifty-five and the completion of ten years of credited service, the
completion of twenty-five years of credited service regardless of age, or the
attainment of age sixty and the completion of five years of credited service. For members hired on or after January 1, 2013, normal retirement is available upon the
attainment of age fifty-five and the completion of ten years of credited service or the attainment of age fifty-two and the completion of twenty-five years of credited service. Early retirement is available with a reduced benefit upon the attainment of
age fifty and the completion of ten years of credited service. For members hired before January 1, 2013, the normal retirement benefit shall equal 3.00% of average final compensation for each year of credited service. For members
hired on or after January 1, 2013, the normal retirement benefit shall equal 2.00% of average final compensation for each year of credited service. The Police Plan
includes a DROP under which members eligible for normal retirement may have
their monthly pension benefit credited to an account while continuing to be actively employed for up to five years. As of September 30, 2014, Police Plan net position
included $346,448 of DROP account balances. ● Contributions The City is required to contribute, at actuarially determined rates, if State of Florida contributions are not sufficient (combined City and State contributions were 48.48% of valuation payroll for the year ended September 30, 2014). City and State contributions to the Police Plan were $659,420 for the year ended September 30, 2014. Police Plan members are required to contribute 7.0% of their annual covered salary (increasing to 8.0% effective October 1, 2014). Per City Code, the City Commission may amend established contribution requirements. ● Plan Investments
The Policemen’s Pension Board of Trustees is responsible for establishing and amending the Police Plan’s investment policies. The Police Plan’s current
investment policy gives the Board discretion to allocate assets with assistance of the
Police Plan’s investment consultant. No formal targets are stated in the investment policy although the maximum allocation to international equities is 25%. The
money-weighted rate of return on Police Plan investments, net of investment related
expenses, was 5.9% for the year ended September 30, 2014.
34
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued) Note 7 - Defined Benefit Pension Plans (Continued) Net Pension Liability The components of the net pension liability at September 30, 2014, were as follows: General Employees’ Retirement Plan
Total Pension Liability $ 20,175,164
Plan Net Position (14,919,308)
Net Pension Liability $ 5,255,856 General Employees’ Retirement Plan Net Position as a Percentage of Total Pension Liability 73.95% Police Officers’ Retirement Plan
Total Pension Liability $ 12,855,926
Plan Net Position (8,128,264)
Net Pension Liability $ 4,727,662 Police Officers’ Retirement Plan Net Position as a Percentage of Total Pension Liability 63.23% Actuarial Assumptions The total pension liability was determined by actuarial valuations for each Plan as of September 30, 2013, rolled forward to September 30, 2014, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation: 2.50% General Employees’ Plan Salary Increases: 5.0% - 13.5% Police Officers’ Plan Salary Increases: 4.5% - 22.5% Investment Rate of Return: 7.0%, net of investment expenses, including inflation Mortality: RP2000 Combined Health Participant Mortality Table for males and females with generational projections from the Year 2000 Projection Scale AA Date of Experience Study: Other significant actuarial assumptions used in the September 30, 2013, valuation were based on the results of an actuarial experience study for the period October 1, 2001 – September 30, 2010
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation (see
the discussion of the pension plans’ investment policy) are summarized in the following table:
35
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 7 - Defined Benefit Pension Plans (Concluded)
Actuarial Assumptions (Concluded)
Long-term Expected
Asset Class Target Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.4%
US Large-Cap Value Stocks 12% 7.0%
US Mid-Cap Growth Stocks 3% 8.6%
US Mid-Cap Value Stocks 4% 7.8%
US Mid-Cap Core Stocks 3% 6.9%
US Small-Cap Growth Stocks 5% 9.6%
US Small-Cap Value Stocks 5% 8.6%
International Equities 5% 7.2%
US Investment Grade Bonds 40% 1.8%
Cash (US 90-day T-bill) 10% 0.2%
Discount rate. The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that City contributions will be
made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plans’ fiduciary net position was
projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the City, calculated using the discount rate of 7.00%, as well as
what the City's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:
Net Pension 1% Decrease Current Discount 1% Increase
Liability (6.00%) Rate (7.00%) (8.00%)
General Employees’
Pension Plan $ 7,489,269 $ 5,255,856 $ 3,344,704
Police Officers’
Pension Plan 6,321,181 4,727,662 3,399,917
36
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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 $44,268 and $76,092 for the years ended September 30, 2014
and 2013, 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. Annual Required Contribution
(ARC) amounted to $46,210 for the current fiscal year. The ARC 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, 2014, the City estimated it implicitly subsidized $17,604 of health care
costs for its retirees and covered dependents. This implied subsidy reduced the annual OPEB cost to a net expense of $28,883 after interest on the Net OPEB Obligation and adjustments to
ARC.
37
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (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 ARC of the employer, 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 $ 46,210
Interest on Net OPEB Obligation 7,192
Adjustment to Annual Required Contribution (6,915)
Annual OPEB Cost (Expense) 46,487 Employer Contribution (17,604)
Increase in Net OPEB Obligation 28,883
Net OPEB Obligation - Beginning of Year 179,798
Net OPEB Obligation - End of Year $ 208,681 The City reflected the $28,883 increase in net OPEB obligation at September 30, 2014, by recording an obligation of $21,119 for governmental activities and $7,764 for business-type activities in its government-wide statement of net position. The utility fund reported a net OPEB obligation of $6,212, while the stormwater fund, sanitation fund, and building code enforcement fund reported $620, $0, and $932, respectively. The OPEB obligation is a function of ARCs, interest, adjustments to the ARC, 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, 2014, are presented below. Percentage Fiscal Annual of Annual Net Year OPEB OPEB Cost OPEB Ended Cost Contributed Obligation September 30, 2012 $ 62,159 29.2% $ 148,363 September 30, 2013 43,987 28.5% 179,798 September 30, 2014 46,487 37.9% 208,681 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 ARCs of the employer are subject to 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.
38
CITY OF ATLANTIC BEACH, FLORIDA NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued) Note 9 - Postemployment Benefits Other Than Pensions (Concluded) 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, 2014, consist of the following:
Due Due from Other to Other
Funds Funds
General $ 6,531 $ 0
Nonmajor Governmental 0 6,531 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, 2014: Transfers In
Nonmajor
Stormwater General Governmental Total
Transfers Out Fund Fund Funds Transfers
Nonmajor Governmental Funds $ 285,000 $ 160,708 $ 275,500 $ 721,208
Utility Fund 0 629,860 0 629,860
Sanitation Fund 0 275,935 0 275,935
Total Transfers $ 285,000 $ 1,066,503 $ 275,500 $ 1,627,003 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.
39
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Continued)
Note 12 - Commitments
As of September 30, 2014, the City had outstanding commitments on contracts in progress as follows:
Unexpended
Project Type Contract Amounts
Utility System Improvements $ 394,351
Stormwater System Improvements 53,984
General Government Improvements 440,988
Building Code Enforcement 2,750 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, 2014, the City incurred $1,035,492 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.
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.
40
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 (Concluded)
Note 15 - Changes to Comparative Statements
Beginning Net Position in the Statement of Net Position – Proprietary Funds was decreased by $175,913 as a result of removing unamortized loan costs as required by GASB 65, Items
Previously Reported as Assets and Liabilities, which the City adopted effective October 1, 2013.
Net Position, September 30, 2013 $ 25,823,642 Decrease (175,913)
Net Position, September 30, 2013, as Restated $ 25,647,729
Beginning Net Position in the Statement of Changes in Fiduciary Net Position was increased by $288,280 as a result of removing the obligation for DROP benefits as required under GASB 67, Financial Reporting for Pension Plans, which the City adopted effective
October 1, 2013.
Net Position Held in Trust for Pension
Benefits, September 30, 2013 $ 21,102,340
Increase 288,280
Net Position Held in Trust for Pension
Benefits, September 30, 2013, as Restated $ 21,390,620
REQUIRED SUPPLEMENTARY INFORMATION
41
September 30, 2014
Total Pension Liability
Service Cost 399,576$
Interest 1,386,245
Changes in Assumptions 1,814,460
Benefit Payments (697,702)
Refunds (9,516)
Net Change in Total Pension Liability 2,893,063
Total Pension Liability - Beginning 17,282,101
Total Pension Liability - Ending (a)20,175,164
Plan Fiduciary Net Position
Contributions - Employer 950,980
Contributions - Employee 157,383
Net Investment Income 778,981
Benefit Payments (697,702)
Refunds (9,516)
Administrative Expenses (31,529)
Net Change in Plan Fiduciary Net Position 1,148,597
Plan Fiduciary Net Position - Beginning 13,770,711
Plan Fiduciary Net Position - Ending (b)14,919,308
Net Pension Liability - Ending (a) - (b)5,255,856$
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 73.95%
Covered Employee Payroll 2,733,429$
Net Pension Liability as a Percentage of Covered
Employee Payroll 192.28%
Annual Money Weighted Rate of Return
Net of Investment Expenses 4.90%
The data presented above was measured using actuarial methods prescribed by GASB 67/68.
Additional years will be added to this schedule annually, until 10 years of data is presented.
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS
42
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION GENERAL EMPLOYEES’ PENSION PLAN SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
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%
* After changes in benefits and/or actuarial assumptions and/or actuarial cost methods.
** Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
Note: The data presented above was computed following the actuarial methods prescribed by GASB 25/27, which
differs from the methods prescribed by GASB 67/68. The date above is presented for historical information only.
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 16.60% 722,769 100%
2012 24.53% 998,516 100%
2013 26.34% 1,044,392 100%
43
September 30, 2014
Actuarially Determined Contribution 950,980$
Contributions in Relation to the Actuarially Determined Contribution 950,980
Contribution Deficiency (Excess)0$
Covered Employee Payroll 2,733,429$
Contributions as a Percentage of Covered
Employee Payroll 34.79%
Additional years will be added to this schedule annually until 10 years of data is presented.
Valuation Date:September 30, 2013
contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method:Entry Age Normal Cost Method
Amortization Method:Closed, Level Dollar Method
Remaining Amortization Period: 10 years
Asset Valuation Method:4-year Smoothed Market Value: Difference between the expected and actual return on
market value of assets phased in over a period of four (4) years (at the rate of 25% per
year), adjusted to be no greater than 120% and no less than 80% of the fair market value.
Inflation:3.0% per year
Salary Increases:5.5% - 14.0%
Interest Rate: 8.0% per year compounded annually, net of investment related expenses
Retirement Age: Age 60 with 5 or more years of Credited Service
Post Retirement COLA:None
Mortality:RP2000 Combined Healthy Participant Mortality Table for males and females with
generational projections from the year 2000 Projection Scale AA.
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO SCHEDULE
Actuarially determined contribution rates are calculated as of September 30, two years prior to the end of the fiscal year in which
44
September 30, 2014
Total Pension Liability
Service Cost 269,182$
Interest 879,486
Changes in Assumptions 1,275,669
Benefit Payments (524,537)
Refunds (61,079)
Net Change in Total Pension Liability 1,838,721
Total Pension Liability - Beginning 11,017,205
Total Pension Liability - Ending (a)12,855,926
Plan Fiduciary Net Position
Contributions - Employer/State 659,420
Contributions - Member 103,095
Net Investment Income 642,480
Benefit Payments (524,537)
Refunds (61,079)
Administrative Expenses (22,742)
Net Change in Plan Fiduciary Net Position 796,637
Plan Fiduciary Net Position - Beginning 7,331,627
Plan Fiduciary Net Position - Ending (b)8,128,264
Net Pension Liability - Ending (a) - (b)4,727,662$
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 63.23%
Covered Employee Payroll 1,360,245$
Net Pension Liability as a Percentage of Covered
Employee Payroll 347.56%
Annual Money Weighted Rate of Return
Net of Investment Expenses 5.90%
The data presented above was measured using actuarial methods prescribed by GASB 67/68.
Additional years will be added to this schedule annually until 10 years of data is presented.
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS
45
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION POLICE OFFICERS’ PENSION PLAN SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
Police Officers’ Pension 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.
Note: The data presented above was computed following the actuarial methods prescribed by GASB 25/27, which
differs from the methods prescribed by GASB 67/68. The date above is presented for historical information only.
Police Officers’ Pension 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
46
September 30, 2014
Actuarially Determined Contribution*654,280$
Contributions in Relation to the Actuarially Determined Contribution*659,420
Contribution Deficiency (Excess)(5,140)$
Covered Employee Payroll 1,360,245$
Contributions as a Percentage of Covered Employee Payroll 48.48%
*Amounts include the contribution from the State of Florida.
Additional years will be added to this schedule annually until 10 years of data is presented.
Valuation Date:September 30, 2013
contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method:Entry Age Normal Cost Method
Amortization Method:Closed, Level % of Pay Method
Remaining Amortization Period: 26 years
Asset Valuation Method:Smoothed market value over a period of four (4) years, as prescribed under
Internal Revenue Procedure 2000-40, adjusted to be no greater than 120% and
no less than 80% of the fair market value
Inflation:3.0% per year
Salary Increases:5.0% - 23.0%
Payroll Growth: 1.88% per year
Interest Rate: 8.0% per year compounded annually, net of investment related expenses
Retirement Age: Experience-based table of rates based on year of eligibility
Post Retirment COLA:None
Mortality:RP2000 Combined Healthy Participant Mortaility Table for males and females
with generational projections from the year 2000 Projection Scale AA
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO SCHEDULE
Actuarially determined contribution rates are calculated as of September 30, two years prior to the end of the fiscal year in which
47
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
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.
48
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)
Revenues
Property Taxes 3,815,346$ 3,815,346$ 3,908,365$ 93,019$
Nonproperty Taxes 1,172,908 1,172,908 1,135,931 (36,977)
Permits, Fees, and Special Assessments 865,270 865,270 863,978 (1,292)
Intergovernmental Revenues 1,599,140 1,599,140 1,634,354 35,214
Fines and Forfeitures 80,870 79,660 94,534 14,874
Charges for Services 747,319 747,319 756,446 9,127
Interest Income 100,000 101,010 215,548 114,538
Miscellaneous Revenues 24,700 24,900 54,146 29,246
Interfund Charges 1,456,544 1,456,544 1,443,440 (13,104)
Total Revenues 9,862,097 9,862,097 10,106,742 244,645
Expenditures
Governing Body:
City Commission 42,933 42,933 38,323 4,610
City Clerk 244,207 244,267 239,768 4,499
City Attorney 127,726 149,726 142,539 7,187
Total Governing Body 414,866 436,926 420,630 16,296
City Administration:
City Manager 264,240 364,240 334,769 29,471
General Government 443,964 454,464 424,645 29,819
Human Resources 184,002 184,002 173,539 10,463
Information Technology 791,657 795,720 731,593 64,127
Finance 1,004,816 951,765 907,604 44,161
Total City Administration 2,688,679 2,750,191 2,572,150 178,041
Planning and Zoning 166,829 166,829 117,221 49,608
Public Safety:
Police 3,605,437 3,619,227 3,538,617 80,610
School Crossing Guards 9,995 9,995 9,858 137
Animal Control 135,120 134,740 123,999 10,741
Fire 1,289,327 1,289,327 1,284,997 4,330
Code Enforcement 63,283 63,283 57,289 5,994
Total Public Safety 5,103,162 5,116,572 5,014,760 101,812
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, 2014
49
Variance With
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts *(Negative)Expenditures (Concluded)
Public Works:
Administration and Streets 1,506,884$ 1,515,984$ 1,418,160$ 97,824$
Fleet Maintenance 287,330 287,330 249,786 37,544
Total Public Works 1,794,214 1,803,314 1,667,946 135,368
Parks and Recreation:
Recreation and Special Events 394,612 411,551 362,938 48,613
Parks Maintenance 940,532 971,857 970,826 1,031
Total Parks and Recreation 1,335,144 1,383,408 1,333,764 49,644
(Total Expenditures)(11,502,894) (11,657,240) (11,126,471) 530,769
(Deficiency) of Revenues (Under)
Expenditures (1,640,797) (1,795,143) (1,019,729) 775,414
Other Financing Sources (Uses)
Transfers in 1,068,520 1,070,974 1,066,503 (4,471)
Sale of General Fixed Assets 0 0 31,654 31,654
Total Other Financing Sources (Uses)1,068,520 1,070,974 1,098,157 27,183
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses (572,277) (724,169) 78,428 802,597
Fund Balances, Beginning of Year 6,210,066 5,960,759 6,496,160 535,401
Fund Balances, End of Year 5,637,789$ 5,236,590$ 6,574,588$ 1,337,998$
* Actual amounts include a reversal of $81,523 prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of $346,721.
BUDGET AND ACTUAL - GENERAL FUND
(Concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2014
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
50
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION NOTE TO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2014 Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a budgetary accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are monitored at varying levels of classification detail; however, expenditures cannot
legally exceed total appropriations at the individual fund level. Encumbrances are recorded. Unexpended items which are unencumbered at year-end must be reappropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, debt service, and capital projects funds). The City Manager is authorized to transfer budgeted amounts within departments within
any fund; however, any revisions that increase the total expenditures of any department or fund must be
approved by the City Commission. All necessary supplemental appropriations are adopted by the City Commission and are included in the reported budgetary data. The budget presented in the accompanying
required supplemental information is prepared in conformity with accounting principles generally
accepted in the United States of America.
SUPPLEMENTARY INFORMATION
51
Convention
Tree Local Option Development Half-cent Court Cost Radio
Replacement Gas Tax Tax Sales Tax Training Communication
Assets
Equity in Pooled Cash and
Investments 14,673$ 83,461$ 58,632$ 425,917$ 115,106$ 1,600$
Due from Other Governments 0 76,354 28,274 125,330 310 1,147
Total Assets 14,673 159,815 86,906 551,247 115,416 2,747
Liabilities and Fund Balances
Liabilities
Accounts Payable and
Accrued Liabilities 0 138 0 3,383 0 0
Due to Other Funds 0 0 0 0 0 0
Deposits 0 0 0 0 0 0
Total Liabilities 0 138 0 3,383 0 0
Fund Balances
Restricted for:
Public Safety 0 0 0 0 115,416 2,747
Road Maintenance and
Construction 0 159,677 0 0 0 0
Debt Service Reserve 0 0 0 0 0 0
Other Capital Projects 0 0 0 547,864 0 0
Other Purposes 0 0 86,906 0 0 0
Committed:
Conservation and Resource
Management 14,673 0 0 0 0 0
Total Fund Balances 14,673 159,677 86,906 547,864 115,416 2,747
Total Liabilities and Fund
Balances 14,673$ 159,815$ 86,906$ 551,247$ 115,416$ 2,747$
Special Revenue Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
2014
52
Totals Totals
Community Special Nonmajor
Contraband Development Police Revenues Debt Capital Governmental 2013
Forfeiture Block Grants Grants Funds Service Projects Funds Totals
49,003$ 0$ 0$ 748,392$ 0$ 2,990,979$ 3,739,371$ 3,477,902$
0 0 6,531 237,946 0 50,000 287,946 229,862
49,003 0 6,531 986,338 0 3,040,979 4,027,317 3,707,764
0 0 0 3,521 0 0 3,521 57,487
0 0 6,531 6,531 0 0 6,531 9,097
6,399 0 0 6,399 0 0 6,399 7,166
6,399 0 6,531 16,451 0 0 16,451 73,750
42,604 0 0 160,767 0 0 160,767 139,247
0 0 0 159,677 0 0 159,677 92,254
0 0 0 0 0 0 0 73,113
0 0 0 547,864 0 3,040,979 3,588,843 3,214,166
0 0 0 86,906 0 0 86,906 108,741
0 0 0 14,673 0 0 14,673 6,493
42,604 0 0 969,887 0 3,040,979 4,010,866 3,634,014
49,003$ 0$ 6,531$ 986,338$ 0$ 3,040,979$ 4,027,317$ 3,707,764$
2014
Special Revenue Funds
53
Convention
Tree Local Option Development Half-cent Court Cost Radio
Replacement Gas Tax Tax Sales Tax Training Communication
Revenues
Taxes 0$ 428,988$ 101,608$ 721,981$ 0$ 0$
Other Intergovernmental
Revenues 0 0 0 0 0 0
Charges for Services 0 0 0 0 0 0
Fines and Forfeitures 4,456 0 0 0 4,732 17,110
Investment Earnings (Loss)0 3,200 2,057 10,391 3,319 40
Miscellaneous Revenues 3,724 0 0 0 0 0
Total Revenues 8,180 432,188 103,665 732,372 8,051 17,150
Expenditures
Current:
Public Safety 0 0 0 0 14,914 17,257
Road Maintenance and
Construction 0 209,540 0 75,938 0 0
Debt Service:
Principal 0 0 0 0 0 0
Interest and Other 0 0 0 0 0 0
Capital Outlay 0 0 0 163,506 0 0
(Total Expenditures)0 (209,540) 0 (239,444) (14,914) (17,257)
Excess (Deficiency) of Revenues
Over (Under) Expenditures 8,180 222,648 103,665 492,928 (6,863) (107)
Other Financing Sources (Uses)
Transfers in 0 0 0 0 0 0
Transfers (out)0 (155,225) (125,500) (435,000) 0 0
Total Other Financing
Sources (Uses)0 (155,225) (125,500) (435,000) 0 0
Net Change in Fund Balances 8,180 67,423 (21,835) 57,928 (6,863) (107)
Fund Balances, Beginning of Year 6,493 92,254 108,741 489,936 122,279 2,854
Fund Balances, End of Year 14,673$ 159,677$ 86,906$ 547,864$ 115,416$ 2,747$
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, 2013
2014
Special Revenue Funds
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
54
Totals Totals
Community Special Nonmajor
Contraband Development Police Revenue Debt Capital Governmental 2013
Forfeiture Block Grants Grants Funds Service Projects Funds Totals
0$ 0$ 0$ 1,252,577$ 0$ 0$ 1,252,577$ 1,197,709$
0 132,856 83,375 216,231 0 62,279 278,510 275,112
0 0 0 0 0 0 0 310
33,611 0 0 59,909 0 0 59,909 30,355
441 0 0 19,448 0 77,043 96,491 (72,897)
0 0 0 3,724 0 0 3,724 0
34,052 132,856 83,375 1,551,889 0 139,322 1,691,211 1,430,589
2,532 0 81,205 115,908 0 6,446 122,354 110,104
0 0 0 285,478 0 0 285,478 305,607
0 0 0 0 69,203 0 69,203 67,712
0 0 0 0 1,457 0 1,457 4,316
0 132,856 2,170 298,532 0 91,627 390,159 221,851
(2,532) (132,856) (83,375) (699,918) (70,660) (98,073) (868,651) (709,590)
31,520 0 0 851,971 (70,660) 41,249 822,560 720,999
0 0 0 0 0 275,500 275,500 71,000
(3,030) 0 0 (718,755) (2,453) 0 (721,208) (400,696)
(3,030) 0 0 (718,755) (2,453) 275,500 (445,708) (329,696)
28,490 0 0 133,216 (73,113) 316,749 376,852 391,303
14,114 0 0 836,671 73,113 2,724,230 3,634,014 3,242,711
42,604$ 0$ 0$ 969,887$ 0$ 3,040,979$ 4,010,866$ 3,634,014$
Special Revenue Funds
2014
55
Police General
Officers'Employees'
Retirement Retirement 2014 2013
Plan Plan Totals Totals
Assets
Cash and Cash Equivalents 9,581$ 27,899$ 37,480$ 130,743$
Prepaids 0 0 0 5,830
Interest Receivable 23,541 40,709 64,250 34,097
Investments at Fair Value 8,215,597 14,850,814 23,066,411 21,341,304
Total Assets 8,248,719 14,919,422 23,168,141 21,511,974
Liabilities
Accounts Payable and Accrued Liabilities 0 114 114 900
Excess Premium Tax Liability 120,454 0 120,454 120,454
Total Liabilities 120,454 114 120,568 121,354
Total Net Position
Held in Trust for Pension
Benefits (as Restated)8,128,265$ 14,919,308$ 23,047,573$ 21,390,620$
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2014,
56
Police General
Officers'Employees'
Retirement Retirement 2014 2013
Plan Plan Totals Totals
Additions
Contributions:
Employer 563,203$ 950,980$ 1,514,183$ 1,562,327$
Employees 103,095 157,383 260,478 258,156
State of Florida 96,217 0 96,217 91,077
Total Contributions 762,515 1,108,363 1,870,878 1,911,560
Net (Decrease) Increase in Fair
Value of Investments 327,258 465,308 792,566 729,168
Interest and Dividends 151,352 290,285 441,637 420,837
Miscellaneous Revenue 0 0 0 58,206
Total Additions 1,241,125 1,863,956 3,105,081 3,119,771
Deductions
Refunds of Contributions 61,080 9,516 70,596 118,126
Benefits 524,537 697,702 1,222,239 1,381,388
Investment Expenses 35,290 65,731 101,021 84,793
Administrative Expenses 22,742 31,530 54,272 61,644
Total Deductions 643,649 804,479 1,448,128 1,645,951
Change in Net Position 597,476 1,059,477 1,656,953 1,473,820
Net Position, Beginning of
Year (as Restated)7,530,789 13,859,831 21,390,620 19,916,800
Net Position, End of Year 8,128,265$ 14,919,308$ 23,047,573$ 21,390,620$
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
Pension Trust Funds
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
57
2010 2011 2012 2013 2014
Revenues
Operating Revenues:
Water:
Customer Charges 3,188,599$ 3,382,973$ 3,069,998$ 3,006,787$ 2,955,863$
Miscellaneous Charges 44,859 46,424 48,815 52,996 54,852
Total Water 3,233,458 3,429,397 3,118,813 3,059,783 3,010,715
Sewer:
Customer Charges 4,644,090 5,085,318 5,015,358 5,109,868 4,938,510
Miscellaneous Charges 7,528 20,006 3,303 1,651 1,237
Total Sewer 4,651,618 5,105,324 5,018,661 5,111,519 4,939,747
Total Operating Revenues 7,885,076 8,534,721 8,137,474 8,171,302 7,950,462
Nonoperating Revenues:
Investment Income (Loss):
Water 153,782 108,762 197,492 (115,023) 186,681
Sewer 5,361 (16,367) (21,010) 18,426 (43,954)
Total Nonoperating Revenues 159,143 92,395 176,482 (96,597) 142,727
Total Revenues 8,044,219 8,627,116 8,313,956 8,074,705 8,093,189
Expenses
Operating Expenses:
Water 1,120,172 1,292,948 1,303,708 1,228,763 1,287,783
Sewer 2,367,631 2,569,748 2,493,500 2,005,653 2,170,495
Total Operating Expenses 3,487,803 3,862,696 3,797,208 3,234,416 3,458,278
Administrative, Nondivisional
and Other:
Water 554,538 545,971 518,506 521,600 530,715
Sewer 681,893 685,074 696,922 674,514 677,464
Total Administrative, Non-
divisional and Other 1,236,431 1,231,045 1,215,428 1,196,114 1,208,179
(Total Expenses)(4,724,234) (5,093,741) (5,012,636) (4,430,530) (4,666,457)
Net Revenues Available for
Debt Service 3,319,985 3,533,375 3,301,320 3,644,175 3,426,732
Nonoperating Income (Expense)
Interest Expense (710,196) (726,058) (766,111) (896,571) (778,782)
Loan Amortization (14,730) (25,712) (12,787) (162,552) (45,936)
Total Nonoperating (Expense)(724,926) (751,770) (778,898) (1,059,123) (824,718)
Net Income Before Depreciation
and Operating Transfers 2,595,059$ 2,781,605$ 2,522,422$ 2,585,052$ 2,602,014$
FOR THE YEARS ENDED SEPTEMBER 30, 2010 THROUGH SEPTEMBER 30, 2014
HISTORICAL REVENUES AND EXPENSES
CITY OF ATLANTIC BEACH, FLORIDA
58
2014 2013
Gross Revenues
Utility 7,933,418$ 8,146,988$
Connection Charges 17,044 25,011
Interest 142,727 (97,294)
Total Gross Revenues 8,093,189 8,074,705
Operating Expenses
Personal Services 1,802,458 1,761,806
Contractual Services 788,322 654,600
Supplies 366,425 333,387
Repairs and Maintenance 133,621 101,929
Utilities 367,452 382,694
Intergovernmental Charges 986,547 982,292
Other Expenses 221,633 213,823
(Total Operating Expenses)(4,666,458) (4,430,531)
Total Net Revenues in Accordance with Bond Resolutions 3,426,731$ 3,644,174$
Total Debt Service 2,001,479$ 2,285,436$
Debt Service Coverage Ratio 171.21%159.45%
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, 2014 AND SEPTEMBER 30, 2013
59
Year Electricity Communications Gas Fuel Oil Total
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
2014 473,097 522,654 16,911 29 1,012,691
Year Total
2010 4,089,288$
2011 3,968,233
2012 3,961,395
2013 3,843,755
2014 3,908,365
Ad Valorem Tax Collections
(Last Five Years)
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2010 THROUGH SEPTEMBER 30, 2014
Utility Service Tax Collections
(Last Five Years)
OTHER STATISTICAL INFORMATION
60
Annual
Billings
Navy (Federal Government)398,094$
Fleet Landing (Retirement Community)334,938
Hanna Park (Regional Park)165,142
Sea Oats Plantation (Apartment Complex)145,419
Oaks of Atlantic Beach (Mobile Home Park)142,726
Lakes of Mayport (Apartment Complex)136,424
John Creek Estate (Mobile Home Park)128,216
City of Atlantic Beach, Florida 125,868
Mayport Trace (Apartment Complex)115,141
One Ocean Resort (Hotel)97,572
Total 1,789,540$
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2014
(UNAUDITED)
61
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%
2014 21,152 1.3%5,253 2,286 7,539 1,904 2,337 4,241 2.04 2.51%
*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, 2014
(UNAUDITED)
62
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%
2014 12,851 1.43%5,253 1,904 7,157 1.7842 -1.16%
(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, 2014
63
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%
2014 8,301 1.16%2,286 2,337 4,623 0.0000 0.00%
* 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, 2014
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
64
CFDA Grant/Contract Contract Program Funds
Grantor/Pass-Through Entity Number Number Period Awards Expenditures *Received
Federal Awards
14.218 B12UC120017 / 5629-56 10/01/2013-09/30/2014 58,856$ 58,856$ 58,856$
14.218 B13UC120017 / 5629-56 10/01/2013-09/30/2014 83,192 74,000 74,000
142,048 132,856 132,856
142,048 132,856 132,856
Hazard Mitigation Grant Program 97.039 14HM-6B-04-26-02-504 06/06/2014 - 06/30/2015 116,250 101,635 0
116,250 101,635 0
16.607 2011-BUBX-11059375 04/01/2011 - 09/30/2013 1,754 0 710
Bulletproof Vest Partnership Program 16.607 2012-BUBX-12061407 04/01/2012 - 08/31/2014 1,050 0 1,050
16.607 2013-BUBX-13069025 04/01/2013 - 08/31/2015 1,731 867 864
16.607 2014-BUBX-14072029 04/01/2014 - 08/31/2016 2,792 882 0
Subtotal Expenditures - 16.607 7,327 1,749 2,624
16.738 2014-JAGC-DUVA-2-E5-020 10/01/2013 - 09/30/2014 39,205 39,205 22,851
16.738 2014-JAGC-DUVA-1-E5-032 10/01/2013 - 09/30/2014 42,000 42,000 24,039
16.738 2014-JAGD-DUVA-2-E6-025 02/01/2014 - 06/30/2014 2,170 2,170 2,170
83,375 83,375 49,060
Total U.S. Department of Justice 90,702 85,124 51,684
Indirect Programs:
Passed Through Florida Department of Environmental Protection:
Florida Coastal Management Program 11.419 CM245 04/01/2013-03/30/2014 17,500 12,279 12,279
17,500 12,279 12,279
Total Federal Expenditures 366,500$ 331,894$ 196,819$
Total U.S. Department of Commerce
U.S. Department of Commerce
Direct Programs:
Edward Byrne Memorial Justice Assistance Grant Program
Indirect Programs:
Passed Through Florida Department of Law Enforcement:
Subtotal Expenditures - 16.738
Bulletproof Vest Partnership Program
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
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, 2014
Community Development Block Grant (CDBG)
U.S. Department of Housing and Urban Development
Indirect Programs:
65
CITY OF ATLANTIC BEACH, FLORIDA
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2014
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal awards activity of the City of Atlantic Beach, Florida, under programs of the federal government for
the year ended September 30, 2014. The information is presented in accordance with the requirement of OMB Circular A-133, Audits of State and Local Governments and Non-Profit Organizations. 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.
66
Fiscal Year
2013-2014
Grant No. 5629-56
Amount of Award (Per City of Jacksonville
Budget Ordinance)142,048$ (A)
Actual Funds Received from City of
Jacksonville in Last Audit Period (132,856)
Actual Funds Received this Period
Amount Earned but Not Received this Period
Unspent Award Amount 9,192$
Expenditure of City Funds
(A) City Fiscal Year 2013-2014 Grant #5629-56 - includes carry-over of $58,207 from 2012-2013 Grant #5629-54
Actual
10/1/2013 Remaining
Budgeted 9/30/2014 Balance
Area Neighborhood Infrastructure Improvements
# 004799 / B12UC1200-17 58,856$ 58,856$ 0$
Donner Park Improvements
# 005016 / B13UC1200-17 83,192 74,000 9,192
Total 142,048$ 132,856$ 9,192$
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 2012-2014
City of Jacksonville Public Service Grants Received as a
Subgrant Recipient Per Interlocal Agreement
Source of City Funds
Project / Federal Grant Number
67
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners and
City Manager 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, 2014, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 20, 2015.
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 City’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
68
Honorable Mayor, City Commissioners and
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.
April 20, 2015
Gainesville, Florida
69
INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE
WITH SECTION 218.415, FLORIDA STATUTES
Honorable Mayor, City Commissioners and City Manager
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with Section 218.415,
Florida Statutes during the period ended September 30, 2014, as required by Section 10.556(10)(a), Rules of the Auditor General. Management is responsible for the City’s compliance with those requirements. Our responsibility is to express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants (AICPA) and, accordingly, included examining, on a test basis,
evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination of the City’s compliance
with specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2014.
This report is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the City, its management, and is not intended to be, and should not be, used by anyone other than these
specified parties.
April 20, 2015
Gainesville, Florida
70
MANAGEMENT LETTER
Honorable Mayor, City Commissioners and
City Manager
City of Atlantic Beach Atlantic Beach, Florida Report on the Financial Statements
We have audited the financial statements of the City of Atlantic Beach, Florida (the City) as of and for the year ended September 30, 2014, and have issued our report thereon dated April 20, 2015. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of
America, the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. Other Reports and Schedule
We have issued our Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountants’ Report on an examination conducted
in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule,
which are dated April 20, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial report. There were no recommendations made in the preceding annual financial report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information is included in Note 1 to the financial statements.
Financial Condition Section 10.554(1)(i)5.(a), Rules of the Auditor General, requires a statement to be included as to whether or not the local government entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific conditions met. In connection with our audit, we determined that the City did not meet any of the conditions described in Section 218.503(1), Florida Statutes.
71
Honorable Mayor, City Commissioners and
City Manager City of Atlantic Beach
Atlantic Beach, Florida MANAGEMENT LETTER (Concluded)
Financial Condition (Concluded) Pursuant to Sections 10.554(1)(i)5(c) and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. Annual Financial Report
Section 10.554(1)(i)5.(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, 2014, 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, 2014. In connection with our audit, we
determined that these two reports were in agreement. Special District Component Units Section 10.554(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a special
district that is a component unit of a county, municipality, or special district, provided the financial information necessary for proper reporting of the component unit, within the audited financial statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we determined that there were no special district component units that were required to be reported in accordance with Section 218.39(3)(b), Florida Statutes. Other Matters
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 our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. We wish to take this opportunity to thank you and your staff for the cooperation and courtesies extended to us during the course of our audit. Please let us know if you have any questions or comments concerning this letter, our accompanying reports, or other matters.
April 20, 2015
Gainesville, Florida