Amended Agenda Item 2ADRAFT
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
!
SEPTEMBER 30, 2015
AMENDED ITEM 2A
JUNE 27, 2016
DRAFT
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30,2015
TABLE OF CONTENTS
Independent Auditors' Report. ..................................................................................................................... i-iii
Management's Discussion and Analysis .................................................................................................... iv-xi
Basic Financial Statements
Government-wide Financial Statements
Staten1ent 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
Staten1ent of Activities ............................................................................................................................ 6
Statement ofNet 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 ........................................................................................................ 16-44
Required Supplementary Information
General Employees' Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios ....................................................... .45
Schedule of Contributions ........................................................................................................................ 46
Police Officers' Pension Plan:
Schedule of Changes in Net Pension Liability and Related Ratios ....................................................... .47
Schedule of Contributions ........................................................................................................................ 48
Other Postemployment Benefits Plan-Schedule of Funding Progress ...................................................... .49
Schedule of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual-General Fund .................................................................................................... 50-51
Note to Schedule of Revenues, Expenditures, and Changes in Fund
Balances -Budget and Actual -General Fund ........................................................................................ 52
DRAFT
Supplementary Information
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2015
TABLE OF CONTENTS
(Concluded)
Combining Balance Sheet-Nonmajor Governmental Funds ................................................................ 53-54
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances -Non major Governmental Funds ......................................................................... 55-56
Combining Statement of Fiduciary Net Position .......................................................................................... 57
Combining Statement of Changes in Fiduciary Net Position ................................. , .................................... 58
Historical Revenues and Expenses ............................................................................................................... 59
Schedules ofNet Revenues in Accordance with Bond
Resolutions-Enterprise Funds (Water and Sewer) ................................................................................ 60
Other Bond Covenant Disclosures ................................................................................................................ 61
Other Statistical Information
Major Utility Customers ................................................................................................................................ 62
Additional Elements of Report Prepared in Accordance With
Government Auditing Standards, Issued by the Comptroller
General of the United States; the Rules of tlte Auditor General
of the State of Florida; and Other Contract Requirements
Schedule of Source and Expenditure of the City Grant Funds .............................................................. 63
Independent Auditors' Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Basic Financial Statements Perfonned in Accordance
with Government Auditing Standards .......................................................................................... 64-65
Independent Accountants' Report on Compliance with
Section 218.415, Florida Statutes ...................................................................................................... 66
Management Letter ............................................................................................................................ 67-68
DRAFT
INDEPENDENT AUDITORS' REPORT
DRAFT
GPurvis
ray~
____________________ Co_m_· Qany
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, 2015, 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 ofthe risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auqitor considers internal control relevant to the City's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Certified Public Accountants
P.O. Box 141270 • 222 N.E. 1st Street • Gainesville, Florida 32614-1270 • (352) 378-2461 • FAX (352) 378-2505
L<~urel Ridge Professional Center • 2347 S.E. 17th Street • Ocala, Florida 34471 • (352) 732-3872 ~ FAX (352) 732-0542
443 East College Avenue • Tallahassee, Florida 32301 • (850) 224-7144 • FAX (B50) 224-1762
5001 Lakewood Ranch Blvd. N., Suite 101 • Sarasota, Florida 34240 • (941) 907-0350 • FAX (941) 907-0309
Mr:MBFRS Of AMf:RICAI\ AND r-L0,11DA INSTITUTES Of CERTIFIW PUBLIC ACCOUNTANTS
M[MBER OF AM::RICAN 11\STITL;TF Or CERTIFifO PUBLIC ACCOUI\TANTS PRIVATF. COMPANIES Ai'o:O U.r::. PRJ\CTICE SECTI()I\$
DRAFT
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 infonnation of the City, as of September 30, 2015, 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.
Emphasis of Matter
As discussed in Note 15 to the financial statements, during the current year, the City adopted
Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial
Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions Made
Subsequent to the Measurement Date. These statements require employers pa:tiicipating in defined
benefit pension plans to report the net pension liability and other pension related deferred inflows and
outflows related to these plans. In connection with the implementation of these statements, the City
decreased its beginning net position in the governmental activities by $4,529,366 and decreased
beginning net position in the business-type activities by $1,057,204. Our opinion is not modified with
respect to this matter.
Other Matters
Required Supplementary Iriformation
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-xi and 45-52 be presented to
supplement the basic financial statements. Such infmmation, although not a part of the basic financial
statements, is required by GASB, who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary infonnation 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 infonnation 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 53-61, the other
statistical information section on page 62, 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.
ii
DRAFT
Honorable Mayor, City Commissioners, and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS' REPORT
(Concluded)
Other Matters (Concluded)
Other Information (Concluded)
The supplementary information 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 ce1tain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information and schedule of 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 information section has not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated , on our
consideration of the City's internal control over financial reporting and on our tests of its compliance with
ce1tain 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 intemal control over financial
reporting or on compliance. That report is an integral part of an audit perfonned in accordance with
Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Repol't on Summarized Comparative Information
We have previously audited the City's 2014 financial statements, and our report dated April 20, 2015,
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, 2014, is consistent,
in all material respects, with the audited financial statements from which it was derived.
Gainesville, Florida
11l
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
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, 2015.
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 repmt also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to a private sector business. They include the Statement of Net Position
and the Statement of Activities.
The Statement of Net Position presents information on all of the City's assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between reported as net position.
Net position is reported as one of three categories: invested in capital assets -net of related debt; restricted;
or unrestricted. Restricted net position is further classified as either net position restricted by enabling
legislation or net position that is otherwise restricted. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position ofthe 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 "govemmental 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.
• Governmental Funds
Govemmental funds are used to account for essentially the same functions reported as govemmental
activities in the govemment-wide financial statements. However, unlike the government-wide financial
statements, govemmental fund financial statements focus on near-tem1 inflows and outflows of available
iv
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
Fund Financial Statements (Concluded)
• Governmental Funds (Concluded)
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 53 -58 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 ofRevenues, Expenditures, and Changes in Fund Balance
Budget and Actual -General Fund budgetary comparison schedule and notes on pages 50 -52 of this
report has been provided to demonstrate compliance with this budget.
• Proprietary Funds
The City maintains only one type of proprietary fund and that is enterprise funds. The enterprise funds
are used to account for the activities of the water and sewer (utility), stormwater, building code
enforcement and sanitation activities.
The proprietary fund financial statements provide the same type of information as the government-wide
financial statements, only in more detail. Separate infotmation 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 repmt.
• 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 infmmation 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 ofthis report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information conceming 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 45 of this report.
v
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
Govemment-wide Financial Analysis
Net position may serve over time as a useful indicator of a City's financial position. As can be seen in the
summarized table below, the City's assets exceeded liabilities by $71,375,000 at the close of the fiscal year
ended September 30, 2015. During the year, the City's net financial position was negatively impacted by
the implementation of two GASB reporting changes. The City implemented GASB Statement No. 68,
Accounting and Financial Reporting for Pensions; and GASB Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date. With the new reporting changes, the City is
allocated its proportionate share ofthe General Employee Pension Plan and the Police Pension Plan's net
pension assets, deferred outflows of resources, deferred inflows of resources, and pension expenses. A
restatement to record the effects of the new reporting guidance decreased beginning net position by
$4,529,000 in governmental activities and $1,057,000 in business type activities.
By far the largest portion of the City's net position, $58,936,000 (82%), reflects its investment in capital assets
(i.e., land, buildings, equipment, and infi·astructure), 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, $4,765,000 (7%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $7,673,000
(11 %), is used to meet the government's ongoing obligations to citizens and creditors.
Current and other assets
Capital assets
Total Assets
Deferred Outflow
Long-term liabilities
outstanding
Other liabilities
Total Liabilities
Deferred Inflow
Net Position:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total Net Position
City of Atlantic Beach's Net Position
September 30, 2015 and 2014
(In Thousands)
Governmental Business-type
Activities Activities
2015 2014 2015 2014
$11,965 $11,345 $9,466 $8,362
39,542 39,215 39,607 41,190
51,507 50,560 49,073 49,552
2,993 0 2,083 1,187
8,374 503 22,235 21,504
707 638 2,924 2,774
9,081 1,141 25,159 24,278
40 0 0 0
39,542 39,214 19,394 20,758
3,883 4,004 883 798
1,954 6,201 5,720 4,905
$45,379 $49,419 $25,997 $26,461
vi
Totals
2015 2014
$21,431 $19,707
79,149 80,405
l 00,580 100,112
5,076 I, 187
30,609 22,007
3,631 3,412
34,240 25,419
40 0
58,936 59,972
4,766 4,802
7,674 11,106
$71,376 $75,880
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
As illustrated in the schedule on page vi, the City was able to repott positive balances in all categories of
net position, both for the government as a whole, as well as for its separate govemmental 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 30,2015 and 2014
(In Thousands)
Governmental Business-type
Activities Activities Totals
2015 2014 2015 2014 2015 2014
Revenues:
Program Revenues:
Charges for Services $1,739 $1,786 $11,114 $11,015 $12,853 $12,801
Operating Grants and
Contributions 642 627 0 0 642 627
Capital Grants and
Contributions 217 299 342 776 559 1,075
General Revenues:
Property Taxes 4,113 3,908 0 0 4,113 3,908
Sales Taxes 1,296 1,208 0 0 1,296 1,208
Business and Utility Taxes 1,109 1,136 0 0 1,109 1,136
State Revenue Sharing 322 300 0 0 322 300
Discretionary Sales Surtax 772 722 0 0 772 722
Investment Earnings (Loss) 3 313 (5) 213 (2) 526
Miscellaneous 53 64 0 0 53 64
Total Revenues 10,266 10,363 11,451 12,004 21,717 22,367
Expenses:
General Government 1,935 2,054 0 0 1,935 2,054
Public Safety 5,350 5,184 0 0 5,350 5,184
Road Maintenance and
Construction 1,771 1,872 0 0 1,771 1,872
Parks and Recreation 1,299 1,309 0 0 1,299 1,309
Interest/Fiscal Charges on
Long-term Debt 0 0 0 0 0 0
Utility 0 0 7,278 7,309 7,278 7,309
Stormwater 0 0 1,092 1,153 1,092 1,153
Sanitation 0 0 1,560 1,869 1,560 1,869
Building Code Enforcement 0 0 350 239 350 239
Total Expenses 10,355 10,419 10,280 10,570 20,635 20,989
Transfel's 578 621 (578) (621} 0 0
Change in Net Position 489 565 593 813 1,082 1,378
Net position-Beginning
(As Restated) 44,890 48,854 25,404 25,648 70,294 74,502
Net Position-Ending $45,379 $49,419 $25,997 $26,461 $71,376 $75,880
vii
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(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 $11,449,000, an increase of $51 7,000 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 $4,633,000, which equated to 44% 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 $63 8,000 or 9% during the current fiscal. The expenditures of the General Fund were
lower than expected, mostly from unfilled positions.
Nonmajor governmental funds consisting of special revenue funds, the debt service fund, and the capital
projects fund have a combined fund balance of $3,890,000. Of this fund balance, $3,326,000 is
restricted for capital projects. The net decrease in fund balance after transfers in nonmajor
governmental funds was $121,000.
• 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
$11,020,000, expenses of$9,572,000, net non-operating costs of$(619,000) and net capital contributions,
grants and transfers of $(236,000). The net position in the proprietary funds increased $592,000 as a
result of the fiscal year's activities. The unrestricted net position of the enterprise funds amounted to
$5,720,000 at the end of fiscal year 2015.
Stormwater rates stayed constant in Fiscal year 2015 as there were no rate changes. The $8.39 per ERU
is approximately 84%, compared to 79% for the prior year, of the total operating expenses of
$1,029,000 needed to fully fund the operation with charges for service.
During fiscal year 2015, the Sanitation Fund netted an increase in net position of $43,000.
General Fund Budgetary Highlights
The final expense budget included a $405,000 increase in appropriations. The portion ofthe increase in
appropriations for the encumbrances rolling forward from 2014 was $347,000.
Net Budget
The initial budget had a negative variance of $92,000 (page 50). The actual increase in fund balance was
$728,000. This resulted in a $820,000 excess variance above the original budget.
viii
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
Capital Assets and Debt Administration
Capital Assets-The City's investment in capital assets, net of related depreciation, for its governmental
and business-type activities as of September 30,2015, amounted to $79,149,000. 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 an
increase of $328,000 (.4%) for governmental activities and a decrease of$1,583,000 (1.97%) for business-
type activities.
Capital asset events during the current fiscal year included the following:
• Governmental Activities
Buildings, net of accumulated depreciation, decreased by $36,000 through annual depreciation of the
capital assets.
Intangible Assets reflected a net increase of $31,000 through annual depreciation of the capital
assets. This asset category includes land easements and computer software.
Improvements Other Than Buildings reflected a net increase of $233,000. This represents capital
asset increase of $920,000, offset by depreciation of $687,000. Major projects in this category
include: Rose Park Development, Marsh Overlook and Kayak Launch, Francis Ave. drainage
improvements, improvements at Bull Park, and renovations at Russell Park.
Equipment reflected a net increase of$121,000. This represents capital asset increase of$414,000,
offset by depreciation of $293,000. Some of the assets acquired in this category were: new phone
system throughout the City, 3 police interceptors, 2 trailers, and computer hardware.
Constr~1ction in progress decreased $21,000. Major projects included in this category are the
Russell Park Renovation, Marsh Project Pedestrian Path, and the Robert Street ditch design.
• Business-type Activities
Buildings reflected a net decrease in asset value of $10,000 from depreciation.
Improvements Other Than Buildings reflected a net decrease of $2,049,000. This represents
capital asset increases of $167,000, offset by depreciation of $2,217,000. The largest increases in
this category are improvements were the reclaimed water plant project and Francis Avenue Drainage
drainage improvements.
Equipment reflected a net increase of $89,000. This represents capital asset increase of $176,000,
offset by depreciation of$88,000. Some of the assets acquired this year consisted of 4 vehicles being
utilized by the Public Works Department.
Construction in Progress had a net increase of $388,000, costs incurred were for design of Saltair
Sidewalk and Drainage Project and Seminole Streetscape.
ix
DRAFT
Land
Intangibles
Buildings
Improvements-Other
Equipment
Construction in Progress
Total
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
City of Atlantic Beach's Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities
2015 2014 2015 2014
$10,363 $10,363 $1,656 $1,656
38 7 214 215
2,599 2,635 70 80
25,151 24,918 36,577 38,626
994 874 529 440
397 418 560 173
$39,542 $39,215 $39,606 $41,190
Totals
2015 2014
$12,019 $12,019
252 222
2,669 2,715
61,728 63,544
1,523 1,314
957 591
$79,148 $80,405
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 2015 fiscal year, the City had total bonded debt outstanding of$20,213,000. 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, 2015
Utilities System Revenue Bond, Series 2014
F.D.E.P. State Revolving Funds Loan, 2010
F.D.E.P. State Revolving Funds Loan, 2009
Total
(In Thousands)
Business-type
Activities
$12,881
628
6,704
$20,213
Debt service coverage calculations can be found on page 61. Additional information on the City's long-
term debt can be found in Note 6 on pages 28-31 of this report.
X
DRAFT
Revenue Highlights:
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Concluded)
• Total revenue for 2015 was $3,000 lower than 2014 revenue (page 2). Most 2015 revenue sources were
higher than previous year with the exception of Investment Earnings which came in $524,000 higher
in 2014.
• The2015 taxable prope1iyvalues were about 6.18% higher than the 2014 values. The City Commission
voted to use the same rate of 3.3285 mills, instead of the roll-back rate of 3.1567. 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 and adequate reserves. The final gross taxable property value was
$1,278,868,000. Ad valorem taxes of $4,113,000 represent 40% of the General Fund revenues for
2015.
• The 2015 Intergovernmental revenues of$1,749,000 make up 17.06% of general fund revenues. This
is an increase of$114,000 over 2014.
• The City's investment portfolio is valued at approximately $15,773,000 as of September 30,2015. The
investment showed a loss of$2,000 for the year, compared to a gain of$526,000 in the prior year. Over
the past five years, the City has recognized an overall investment earnings gain of $1,119,000.
Expenditure Highlights:
• Expenditures increased in current year by $143,000 when compared to prior year. This increase was a
result of a $543,000 increased investment in capital outlay being offset by decreases of $160,000 in
General Government and $136,000 in Road Maintenance and Constmction.
• In 2015 a larger investment in the City's infrastructure resulted in capital expenditures increasing from
$893,000 in 2014 to $1,436,000 in 2015. TI1e major projects in that were completed or started in 2015
were improvements at Bull Park, improvements at Russell Park, Francis A venue drainage improvements,
and Saltair drainage improvements.
• Transfers in 2015 represents the movement of funds from the Public Utility Funds and the Sanitation
Fund to the General Fund and the Half Cent Sales Tax Funds to a project fund. A transfer of $160,000
from the Gas Tax Fund to the General Fund helped fund street maintenance.
Requests for Information
The financial report is designed to provide a general overview of the City's finances for all those with an
interest in the City's finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the City of Atlantic Beach, Finance
Director, 800 Seminole Road, Atlantic Beach, Florida 32233.
Russell Caffey
Director of Finance
XI
DRAFT
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide Financial Statements, Fund Financial
Statements, and Notes to Financial Statements.
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATNE TOTALS FOR SEPTEMBER 30, 2014
2015
Governmental Business-type 2014
Activities Activities Totals Totals
Assets
Equity in Pooled Cash and Investments $ 10,945,323 $ 7,495,552 $ I8,440,875 $ 16,049,275
Receivables -Net 450 548,386 548,836 632,235
Due fi·om Other Governments 936,932 35,244 972,I76 1,216,599
Inventories 20,827 12,827 33,654 42,197
Notes Receivable -Current 760 15,759 16,519 15,759
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 0 1,218,056 1,218,056 1,578,519
Capital Assets:
Land 10,363,002 1,656,018 12,019,020 12,019,020
Buildings 4,574,646 4,356,384 8,931,030 8,848,043
Improvements Other Than Buildings 40,075,877 79,512,656 119,588,533 118,501,652
Equipment 4,050,946 2,328,381 6,379,327 5,789,079
Intangibles -Easements and Computer Software 381,939 244,709 626,648 585,788
(Accumulated Depreciation and Amortization) (20,301,137) (49,051,642) (69,352,779) (65,929,677)
Construction in Progress 396,861 560,408 957,269 590,420
Prepaid Items 58,786 16,105 74,891 45,218
Notes Receivable-Noncurrent 1,520 124,426 125 946 127,828
Total Assets 51,506,732 49,073,269 100,580,00 I 100,111,955
Deferred Outflows of Resources-Noncurrent
Unamortized Refunding Loss 0 1,079,432 1,079,432 1,187,375
Pension Related 2,992,625 1,003,201 3,995,826 0
Total Assets and Deferred Outflows 54 499 357 51 155,902 I 05,65 5,259 I 01,299,330
Liabilities
Accounts Payable and Other Current Liabilities 491,380 375,992 867,372 1,477,509
Constn1ction Retainages Payable 0 24,819 24,819 56,696
Due to Other Governments 0 11,066 11,066 10,194
Uneamed Revenue 22,017 178,289 200,306 187,875
Deposits 2,736 0 2,736 9,199
Compensated Absences -Current 191,157 68,035 259,192 334,127
Payable from Restricted Assets:
Current Portion of Bonds Payable 0 1,090,000 1,090,000 0
Current Portion of Loan Payable 0 336,895 336,895 286,174
Accrued Interest Payable 0 252,483 252,483 97,471
Customer Deposits 0 586,894 586,894 952,496
Noncurrent Liabilities:
Due in More Than One Year 0 19,865,122 19,865,122 21,332,540
Compensated Absences-Noncurrent 382,074 139,787 521,861 465,720
Other Postemployment I3enefits Obligation 178,501 59,798 238,299 208,681
Net Pension Liability 7,813,357 2,170,163 9,983,520 0
Total Liabilities 9,081,222 25,159,343 34,240,565 25,418,682
Deferred Inflow of Resources
Pension Related 39.827 0 39 827 0
Net Position
Net Investment in Captial Assets 39,542,134 19,394,329 58,936,463 59,972,986
Restricted for:
Renewal and Replacement 0 250,000 250,000 250,000
Debt Service 0 381,162 381,162 286,174
Public Safety 180,762 0 180,762 168,310
Road Maintenance and Construction 248,141 0 248,141 159,677
Other Capital Projects 3,325,789 0 3,325,789 3,588,843
Other Purposes 128,595 0 128,595 86,906
Building Code Enforcement 0 251,255 251,255 261,288
Unrestricted 1,952 887 5.719,813 7 672,700 11,106,464
Total Net Position $ 45.378 308 $ 25,996.559 s 71.374,867 $ 75.880,648
See accompanying notes.
I
Functions/Programs
Primary Government
Governmental Activities:
General Government $
Public Safety
Road Maintenance and
Construction
Parks and Recreation
Conservation and Resource
Management
Interest/Fiscal Charges on
Long-tenn Debt
Total Governmental Activities
Business-type Activities:
Utility
Storm water
Sanitation
Building Code Enforcement
Total Business-type Activities
Total Primary Government $
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2014
2015
0
::D
)>
Prog_ram Revenues Net (Expense) Revenue and Changes in Net Position Tl
Expenses
1,935,146
5,349,726
1,771,375
1,298,116
1,800
0
10 356,163
7,277,596
1,091,752
1,560,020
350 671
10.280.039
20,636,202
Operating
Charges for Grants and
Capital
Grants and
Services Contributions Contributions
$ 882,415 $ 0 $ 0
661,428 76,938 0
119,194 559,281 89,937
75,703 0 127,058
0 6,083 0
0 0 0
1,738,740 642.302 216,995
7,988,066 0 341,713
859,315 0 0
1,825,560 0 0
441 588 0 0
11,114,529 0 341.713
~ 12.853.269 $ 642,302 $ 558.708
General Revenues
Property Taxes
Sales Taxes
Business and Utility Taxes
State Revenue Sharing
Discretionary Sales Surtax
Investment Earnings (Loss)
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position, Beginning of Year
Prior Period Adjustment
Net Position, Beginning of Year (as Restated)
Net Position, End of Year
See accompanying notes.
2
Primarv Government
Governmental Business-type 2014
Activities Activities Totals Totals
$ (1,052,731) $ 0 $ (1,052,731) $ (1, 177, 176)
(4,611 ,360) 0 (4,611,360) ( 4,384,339)
(1 ,002,963) 0 (1,002,963) (1,079,014)
(1 ,095,355) 0 (1,095,355) (1,075,088)
4,283 0 4,283 8,180
0 0 0 (486}
{7, 758, 126} 0 {7. 758,126} (7,707,923}
0 1,052,183 1,052,183 1,409,974
0 (232,437) (232,437) (293,978)
0 265,540 265,540 (78,798)
0 90,917 90.917 183.984
0 I 176 203 1 176.203 1.221,182
{7,758,126} 1,176,203 {6,581,923) (6,486,741}
4,113,476 0 4,113,476 3,908,365
1,296,201 0 1,296,201 1,208,547
1,109,471 0 1,109,471 1,135,931
321,521 0 321,521 300,007
772,098 0 772,098 721,981
3,170 (5,518) (2,348) 525,970
52,293 0 52,293 64,556
578 210 (578,210) 0 0
8,246,440 {583,728) 7,662,712 7,865,357
488,314 592,475 1,080 789 1,378,616
49,419,360 26,461,288 75,880,648 74,502,032
{4,529,366} {1,057,204) {5,586,570} 0
44,889 994 25,404,084 70,294,078 74,502,032
$ 45378,308 $ 25,996,559 $ 71 374.867 $ 75.880,648
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014
Assets
Equity in Pooled Cash and Investments
Receivables-Net
Due from Other Funds
Due from Other Governments
Inventories
Notes Receivable-Current
Prepaid Items
Notes Receivable -Noncurrent
Total Assets
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued Liabilities
Due to Other Funds
Deposits
Unearned Revenue
Total Liabilities
Fund Balances
N onspendab le:
Inventories
Prep aids
Restricted for:
Public Safety
Road Maintenance and Construction
Other Capital Projects
Other Purposes
Committed to:
Conservation and Resource Management
Assigned to:
Operating Reserves
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
2015
Non major
Governmental
General
$ 7,122,799 $
450
10,781
689,932
20,827
760
58,786
1,520
7 905 855
322,756
0
2,625
22,017
347,398
20,827
58,786
10,287
0
0
0
0
2,836,042
4,632,515
7,558,457
$ 7,905,855 $
See accompanying notes.
3
Funds
3,822,524
0
0
247,000
0
0
0
0
4,069,524
168,624
10,781
111
0
179,516
0
0
170,475
248,141
3,325,789
128,595
18,956
0
(1,948)
3,890,008
4,069,524
Totals
Governmental
Funds
$ 10,945,323
450
10,781
936,932
20,827
760
58,786
1,520
11,975,379
491,380
10,781
2,736
22,017
526,914
20,827
58,786
180,762
248,141
3,325,789
128,595
18,956
2,836,042
4,630,567
11,448,465
$ 11,975,379
2014
Totals
$ 10,312,186
2,730
6,531
988,067
29,370
0
13,008
0
11,351,892
393,083
6,531
9,199
10,905
419,718
29,370
13,008
168,310
159,677
3,588,843
86,906
14,673
2,685,355
4,186,032
10,932,174
$ 11,351,892
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2014
2015 2014
Total Fund Balances of Governmental Funds
Amounts Reported for Governmental
Activities in the Statement of Net Position
are Different Because:
Capital assets used in govemmental
activities are not financial resources
and, therefore, are not reported in
the funds:
Total Capital Assets
(Accumulated Depreciation)
Certain pension related amounts are being
deferred and amortized over a period of
years or are being deferred as contributions
to the pension plan made after the
measurement date:
Deferred Outflows Related to Pensions
Defen-ed Inflows Related to Pensions
Long-term liabilities are not due and payable
in the current period and, therefore, are
not reported in the govenunental funds:
Compensated Absences
Other Postemployment Benefits Obligation
Net Pension Liability
Total Net Position of Governmental Activities
$ 59,843,271
(20,301,137)
2,992,625
(39,827)
(573,231)
(178,501)
(7 ,813 ,3 57)
$ 11,448,465
39,542,134
2,952,798
(8,565,089)
$ 45,378,308
See accompanying notes.
4
$ 58,407,187
(19,192,636)
0
0
(570,520)
(156,845)
0
$ 10,932,174
39,214,551
0
(727,365)
$ 49,419,360
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014
2015
Non major Totals
Governmental Governmental 2014
General Funds Funds Totals
Revenues
Property Taxes $ 4,113,476 $ 0 $ 4,113,476 $ 3,908,365
Nonproperty Taxes 1,109,470 1,362,169 2,471,639 2,388,508
Permits, Fees, and Special Assessments 858,232 0 858,232 863,978
Intergovemmental Revenues 1,748,737 164,876 1,913,613 1,912,864
Fines and Forfeitures 77,434 12,348 89,782 154,443
Charges for Services 742,416 0 742,416 756,446
Investment Earnings (Loss) 4,435 (2,025) 2,410 312,039
Miscellaneous Revenues 49,909 7,181 57,090 57,870
Interfund Charges 1,545,981 0 1,545,981 1,443,440
Total Revenues 10,250,090 1,544,549 11,794,639 11,797,953
Expenditures
Current:
General Government 2,845,102 0 2,845,102 3,004,357
Public Safety 4,868,455 103,287 4,971,742 4,973,414
Road Maintenance and Construction 1,3 I 7,266 274,068 1,591,334 1,727,874
Parks and Recreation 1,027,605 500 1,028,105 1,060,821
Conservation and Resource
Management 0 1,800 1,800 0
Debt Service:
Principal 0 0 0 69,203
Interest and Other 0 0 0 1,457
Capital Outlay 575,334 860,752 1,436,086 892,798
(Total Expenditures) (1 0,633,762) (1,240,407) (11,874,169) (11,729,924)
(Deficiency) Excess of Revenues (Under)
Over Expenditures (383,672) 304,142 (79,530) 68,029
Other Financing Sources (Uses)
Transfers in 1,003,210 85,000 1,088,210 1,342,003
Transfers (out) 0 (510,000) (510,000) (721,208)
Sale of General Fixed Assets 17,611 0 17,611 31,654
Total Other Financing Sources (Uses) 1,020,821 (425,000) 595,821 652,449
Net Change in Fund Balances 637,149 (120,858) 516,291 720,478
Fund Balances, Beginning of Year 6,921,308 4,010,866 10,932,174 10,211,696
Fund Balances, End of Year $ 7 558 457 $ 3,890,008 $ 11.448.465 $ 10,932,174
See accompanying notes.
5
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014
2015 2014
Net Change in Fund Balances-Tota!Dovernmental Funds
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 $ 1,436,084
(Current Year Depreciation) (1,108,501)
Certain nonexchange revenues reported in the
statement of activities are not considered current
fmancial resources and, therefore, are not reported
as revenue in the governmental funds.
Repayment of long-tem1 debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the
statement of net assets.
The changes in net pension liability and pension related
defeiTed outflows and inflows of resources result in
an adjustment to pension expense in the statement of
activities, but not in the govermnental fund statements.
Some expenses/revenues reported in the statement
of activities do not require the use of or provide
cun·ent financial resources and, therefore, are not
reported as expenditures in governmental funds:
Debt Interest Expense 0
Compensated Absences (2,711)
Net Pension Asset 0
Other Postemployment Benefits Obligation (21,656)
Change in Net Position-Governmental Activities
See accompanying notes.
6
$ 516,291 $
$ 892,798
(1,099,082)
327,583
0
0
(331, 193)
970
(5,719)
(2,271)
(21,119)
(24,367)
$ 488,314 $
720,478
(206,284)
9,799
69,203
0
(28,139)
565,057
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014
2015
Business-type Activities -Enterprise Funds
Building Code
Utility Stormwater Sanitation Enforcement
Assets
Current Assets:
Equity in Pooled Cash and Investments $ 4,914,330 $ 1,779,734 $ 397,201 $ 404,287
Accounts Receivable-Net 428,823 53,992 65,571 0
Due from Other Governments 35,244 0 0 0
Inventories 12,827 0 0 0
Notes Receivable-Current 15,759 0 0 0
Prepaid Items 16,105 0 0 0
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 1,218,056 0 0 0
Capital Assets:
Land 749,499 906,519 0 0
Buildings 4,356,384 0 0 0
Improvements Other Than Buildings 63,047,605 16,465,051 0 0
Equipment 1,758,710 337,447 189,877 42,347
Intangibles -Easements and Computer Software 226,394 0 0 18,315
(Accumulated Depreciation and Amortization) (40,152,145) (8,659,899) (181,360) (58,238)
Construction in Progress 253,048 307,360 0 0
Notes Receivable-Noncurrent 124,426 0 0 0
Total Assets 3720052065 11 '190,204 471 289 406,711
Deferred Outflows of Resources-Noncurrent
Unamortized Refunding Loss 939,106 140,326 0 0
Pension Related 844,812 43,193 10,153 105,043
Total Assets and Deferred Outflows 1,783,918 183,519 10,153 105,043
See accompanying notes.
7
Totals
$ 7,495,552
548,386
35,244
12,827
15,759
16,105
1,218,056
1,656,018
4,356,384
79,512,656
2,328,381
244,709
(49,051,642)
560,408
124,426
49,0732269
1,079,432
1,003,201
2,082,633
$
2014
Totals
5,737,089
629,505
228,532
12,827
15,759
32,210
1,578,519
1,656,018
4,356,384
79,345,283
2,151,907
244,709
(46,737,041)
172,514
127,828
49,552,043
1,187,375
0
1,187,375
0
::D
)>
11
-I
0
CITY OF ATLANTIC BEACH, FLORIDA :D STATEMENT OF NET POSITION
PROPRIETARY FUNDS )> SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER30, 2014 11 (Concluded)
2015 -I Business-tyEe Activities -Enteq~rise Funds
Building Code 2014
Utility Stormwater Sanitation Enforcement Totals Totals
Liabilities
Current Liabilities Payable from Current Assets:
Accounts Payable and Other Current Liabilities $ 207,318 $ 46,939 $ 112,398 $ 9,337 $ 375,992 $ 1,084,426
Construction Retainages Payable 6,255 18,564 0 0 24,819 56,696
Due to Other Governments 7,086 0 0 3,980 11,066 10,194
Unearned Revenue 89,038 29,102 60,149 0 178,289 176,970
Compensated Absences -Current 62,125 1,094 0 4,816 68,035 109,167
Current Liabilities Payable from Restricted Assets:
Current Portion of Bonds Payable 948,300 141,700 0 0 1,090,000 0
Current Portion of Loans Payable 336,895 0 0 0 336,895 286,174
Accrued Interest Payable 231,341 21,142 0 0 252,483 97,471
Customer Deposits 586,894 0 0 0 586,894 952,496
Noncurrent Liabilities:
Due in More Than One Year 18,192,022 1,673,100 0 0 19,865,122 21,332,540
Compensated Absences-Noncurrent 134,869 0 0 4,918 139,787 120,160
Other Postemp1oyment Benefits Obligation 41,896 10,112 0 7,790 59,798 51,836
Net Pension Liability 1,827,529 93,436 21,964 227,234 2,170,163 0
Total Liabilities 22,671,568 2,035,189 194,511 258,075 25,159,343 24,278,130
Net Position
Net Investment in Capital Assets 11,701,384 7,682,004 8,517 2,424 19,394,329 20,758,435
Restricted for:
Renewal and Replacement 250,000 0 0 0 250,000 250,000
Debt Service 381,162 0 0 0 381,162 286,174
Building Code Enforcement 0 0 0 251,255 251,255 261,288
Unrestricted 3,784,869 1,656,530 278,414 0 5,719,813 4,905,391
Total Net Position $ 16,117,415 $ 9,338,534 $ 286 931 $ 253,679 $ 25,996,559 $ 26,461,288
See accompanying notes.
8
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COl\IIPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30, 2014
2015
Business-type Activities -Enterprise Funds
Building Code
Utility Stormwater Sanitation Enforcement Totals
Operating Revenues
Charges for Services:
Customer Charges $ 7,892,897 $ 859,315 $ 1,756,608 $ 441,588 $ 10,950,408
Franchise Permits 0 0 7,500 0 7,500
Miscellaneous Revenues 62 419 0 0 0 62,419
Total Operating Revenues 7,955,316 859,315 -1,764,108 441,588 __ 11,020,327
Operating Expenses
Personal Services 1,968,049 190,302 25,736 299,145 2,483,232
Contractual Services 638,961 127,173 1,386,682 965 2,153,781
Supplies 388,737 40,291 1,115 2,745 432,888
Repairs and Maintenance 120,049 18,015 5,858 3,780 147,702
Utilities 372,361 0 0 0 372,361
Depreciation 1,835, 798 474,295 2,892 1,616 2,314,601
Intergovernmental Charges 1,113,777 160,883 137,737 35,027 1,447,424
Other Expenses 194 619 18,033 0 7 393 220 045
(Total Operating Expenses) (6,632,351) (1,028,992) (1,560,020) (350,671) (9,572,034)
Operating Income (Loss) 1,322,965 (169,677) 204,088 90,917 1,448,293
Nonoperating Revenues (Expenses)
Connection Charges 32,750 0 0 0 32,750
Franchise Fees 0 0 61,452 0 61,452
Investment Earnings (Loss) (11,976) (2,166) 491 8,133 (5,518)
Interest Expense (556,635) (48,040) 0 0 (604,675)
Gain on Disposal of Fixed Assets 9,897 0 0 0 9,897
Amortization of Refunding Loss {98,5072 04,7202 0 0 (113,2272
Total Nonoperating Revenues (Expenses) (624,471) (64,926) 61,943 8,133 (619,321)
See accompanying notes.
9
$
2014
Totals
10,897,732
2,500
60,333
10,960,565
2,186,305
2,664,229
402,441
170,509
367,452
2,289,758
1,345,224
254 643
(9,680,561)
1,280,004
9,189
45,699
213,172
(861,481)
24,685
~52,8432
(621,579)
0
::D
)> ,
-I
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2014
Income (Loss) Before Contributions
and Transfers $
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants
Transfers in
Transfers (out)
Total Capital Contributions and Grants
and Transfers
Change in Net Position
Net Position, Beginning of Year
Prior Period Adjustments
Net Position, Beginning of Year (As Restated)
Net Position, End of Year $
(Concluded)
2015
Business-tyEe Activities -Enter(!rise Funds
Utility Storm water Sanitation
698,494 $ (234,603) $
341,713 0
0 260,000
(615,167) 0
(273,454) 260,000
425,040 25,397
16,582,663 9,358,655
(890,288) (45,518)
15,692,375 9,313,137
16,117,415 $ 9,338,534 $
See accompanying notes.
10
266,031
0
0
(223,043)
(223,043)
42,988
254,643
(10,700)
243,943
286,931
Building Code
Enforcement
$ 99,050
0
0
0
0
99,050
265,327
(110,698)
154,629
$ 253,679
$
$
0
:D
)>
Tl _,
2014
Totals Totals
828,972 $ 658,425
341,713 775,929
260,000 285,000
(838,210) (905,795)
(236,497) 155,134
592,475 813,559
26,461,288 25,647,729
(1,057,204) 0
25,404,084 25,647,729
25,996,559 $ 26,461,288
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2014
Cash Flows from Operating Activities
Cash Received from Customers
Cash Paid to Customer for Return of Deposit
Cash Paid to Suppliers
Cash Paid to Employees
Cash Paid for Interfund Services
Net Cash Provided by (Used in) Operating
Activities
Cash Flows from Noncapital Financing
Activities
Connection Charges
Franchise Fees
Transfers in
Transfers (out)
Net Cash Provided by (Used in) Noncapital
Financing Activities
Capital and Related Financing Activities
Capital Grants
Proceeds from Loan
Fixed Asset Additions
Proceeds from Sale ofPPE
Principal Payments on Long-term Debt
Issuance Costs Paid
Interest Paid
Net Cash Provided by (Used in) Capital
and Related Financing Activities
$
2015
Business-type Activities -Enterprise Funds
Building Code
Utility Stormwater Sanitation Enforcement Totals
8,027,673 $ 855,370 $ 1,764,044 $ 441,588 $ 11,088,675
0 0 0 (355,732) (355,732)
(2, 146,833) (178,164) (1,719,936) (23,857) (4,068,790)
(1,894,067) (179,444) (24,625) (271,071) (2,369,207)
(1,113,777) (160,886) (137,737) (35,027) (1,447,427)
2,872,996 336,876 (118,254) (244,099) 2,847,519
32,750 0 61,452 0 94,202
0 0 0 0 0
0 260,000 0 0 260,000
(615, 167) 0 (223,043) 0 (838,210)
(582,417) 260,000 (161,591) 0 (484,008)
535,001 0 0 0 535,001
0 0 0 0 0
(456,090) (275,650) 0 0 (731,740)
9,897 0 0 0 9,897
(326,697) 0 0 0 (326,697)
0 0 0 0 0
(419,577) (27,585) 0 0 (447,162)
(657,466) (303,2~ 0 0 (960,701)
See accompanying notes.
11
$
2014
Totals
11,325,520
0
(2,957,201)
(2,210,303)
(1,345,224)
4,812,792
9,189
45,699
285,000
(905,795)
(565,907)
547,397
13,960,000
(2,399,80 1)
24,685
(16,087,763)
(52,843)
(1, 187,382)
(5,195,707)
0
::D
)>
11
--i
CITY OF ATLANTIC BEACH, FLORIDA 0
STATEMENT OF CASH FLOWS JJ PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015, )> WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30,2014
(Continued)
2015 11
Business-tyEe Activities -Enterprise Funds -1 Building Code 2014
Utility Storm water Sanitation Enforcement Totals Totals
Cash Flows from Investing Activities
Sale (Purchase) of Investments $ (865,804) $ (91,667) $ 286,614 $ 247,968 $ (422,889) $ (435,976)
Interest Received (11,976) (2,166) 491 8,841 (4,810) 213,985
Net Cash Provided by (Used in)
Investing Activities (877,780) ~93,833) 287,105 256,809 (427,699) (221,991)
Net Increase (Decrease) in Cash and
Cash Equivalents 755,333 199,808 7,260 12,710 975,111 (1,170,813)
Cash and Cash Equivalents, Beginning of Year 489,017 161,326 73,338 69,326 793,007 1,963,820
Cash and Cash Equivalents, End of Year $ 1,244,350 $ 361,134 $ 80,598 $ 82,036 $ 1,768,118 $ 793,007
Reconciliation of O~erating Income (Loss} to
Net Cash Provided b:y (Used in} O~erating
Activities
Operating Income (Loss) $ 1,322,965 $ (169,677) $ 204,088 $ 90,917 $ 1,448,293 $ 1,280,004
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
(Used in) Operating Activities:
Depreciation 1,835,798 474,295 2,892 1,616 2,314,601 2,289,758
Change in Assets and Liabilities:
Accounts Receivable 88,923 (4,415) 13 0 84,521 (8,188)
Inventory 0 0 0 0 0 50,049
Prep aids 16,105 0 0 0 16,105 148,937
Compensated Absences (24,817) 0 0 3,176 (21,641) (31, 762)
OPEB Obligation 6,370 636 0 956 7,962 7,764
Accounts Payable and Accrued Liabilities (448,211) 30,706 (326,281) 3,475 (740,311) 703,087
Customer Deposits (17,492) 136 0 (355,732) (373,088) 378,617
Unearned Revenue 926 470 (77) 0 1,319 (5,474)
Change in Deferred Outflow (514, 144) (26,287) (6, 179) (63,928) (610,538) 0
Change in Net Pension Liability 606,573 31,012 7,290 75,421 720,296 0
Net Cash Provided by (Used in) Operating Activities $ 2.872,996 $ 336 876 $ {118,254) $ (244,099) $ 2.847.519 $ 4.812.792
See accompanying notes.
12
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30,2014
(Concluded)
Reconciliation of Cash and Cash Eguivalents
to Balance Sheet
Equity in Pooled Cash and Cash
Equivalents in Current Assets $
Restricted Equity in Pooled Cash
and Cash Equivalents
Equity in Pooled Investments
Total Cash and Cash Equivalents $
2015
Business-type Activities-Enterprise Funds
Building Code
Utility Stormwater Sanitation Enforcement
4,914,330 $ 1,779,734 $
1,218,056 0
(4,888,036) ~I ,418,6002
1,244,350 $ 361,134 $
See accompanying notes.
13
397,201 $ 404,287
0 0
(316,603) (322,251)
80,598 $ 82,036
Totals
$ 7,495,552
1,218,056
(6,945,490)
$ 1,768,118
$
$
2014
Totals
5,737,089
1,578,519
(6,522,6012
793,007
0
JJ
)> .,.,
-I
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2014
Pension Trust Funds
Assets
Cash and Cash Equivalents
Interest Receivable
Investments at Fair Value
Total Assets
Liabilities
Accounts Payable and Accrued Liabilities
Total Liabilities
Net Position
Net Position Restricted for Pensions
See accompanying notes.
14
$
$
2015 2014
137,107 $ 37,480
8,921 64,250
23,355,432 23,066,411
23,501,460 23,168,141
0 114
0 114
23,501,460 $ 23,168,027
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014
Pension Trust Funds
2015 2014
Additions
Contributions:
Employer $ 1,437,627 $ 1,514,183
Employees 248,545 260,478
State of Florida 103,528 96,217
Total Contributions 1,789,700 1,870,878
Net (Decrease) Increase in
Fair Value oflnvestments 189,300 792,566
Interest and Dividends 139,274 441,637
Total Additions 2,118,274 3,105,081
Deductions
Refunds of Contributions 28,505 70,596
Benefits 1,555,728 1,222,239
Investment Expenses 122,714 101,021
Administrative Expenses 77,894 54,272
Total Deductions 1,784,841 1,448,128
Change in Net Position 333,433 1,656,953
Net Position, Beginning of Year (as Restated) 23,168,027 21,511,074
Net Position, End of Year
See accompanying notes.
15
$ 23,501,460 $ 23,168,027
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
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 ofthe State of
Florida, Florida Statutes Section 57-1126. The City operates under a form of goveniment which
comprises an elected City Commission (foUl' Commissioners and a Mayor-Commissioner) and
provides, under the administration of an appointed City Manager, the following se1vices: 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 qf 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: (I) 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 non fiduciary 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.
16
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Government-wide and Fund Financial Statements (Collcluded)
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 repm1ed 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 ofthe City. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Amounts repmted 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: (I) Net Investment in Capital Assets;
(2) Resh·icted; or (3) Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accmal 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 cunent 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 CUITent fiscal period. Expenditures· generally are
recorded when a liabj]jty is incurred, as under acctual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences, other postemployment
benefits, pension expense, and claims and judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and pennits, 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 cunent fiscal period. All other revenue items are considered
to be measurable and available only when cash is received by the City.
17
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Fund Financial Statements (Concluded)
The City repmts the following major governmental fund:
• The Geneml 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 ofthe 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 Stormwatcr 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 ofthe 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:
• 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.
18
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Fund Balance Classification (Concluded)
• 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 repmted as nonoperating revenues and expenses.
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are controlled
by a budgetary accounting system in accordance with various legal requirements which govern
the City's operations. Budgets are monitored at varying levels of classification detail; however,
expenditures cannot legally exceed total appropriations at the individual fund level.
19
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Budgets (Concluded)
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.
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.
20
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 1-Summary of Significant Accounting Policies (Continued)
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
Buildings and lmprovements
Improvements Other Than Buildings
Infrastructure
Machinery and Equipment
Long-term Obligations
Years
10-40
10-50
25-100
3-40
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.
In the fund financial statements, govemmental 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 govemment-wide
and proprietary fund financial statements.
21
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Co~ttinued)
Note 1 -Summary of Significant Accounting Policies (Concluded)
Deferred Inflows/Outflows of Resources
Deferred inflows of resources reported on applicable governmental fund types represent
revenues which are measureable but not available in accordance with the modified accrual basis
of accounting. The deferred inflows will be recognized as revenue in the fiscal year they are
earned or become available. Deferred outflows of resources represent consumption of net
position that is applicable to a future reporting period. Deferred outflows have a positive effect
on net position, similar to assets.
Pension Related -Pension Related Deferred Inflows and Outflows represent the difference
between expected and actual experience with regard to economic or demographic factors and
changes to assumptions in the measurement of total pension liability, and the differences
between expected and actual earnings on pension plan investments. These amounts are reported
as deferred inflows or outflows of resources, to be recognized in expense over time. Also
included in deferred outflows are amounts contributed to the pension plans subsequent to the
measurement date. See Note 7 for infonnation on Pension Related Deferred Inflows and
Outflows.
Revenue Recognition
Utility revenues are repmted 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 prope1ties 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 nonnal operations, the City has various transactions between funds to
construct assets and comply with local ordinances and other legal restrictions. These
transactions are reflected as transfers. In addition, certain transfers have been made between
systems and accounts of the utility enterprise fund as required by bond covenants.
Prior Period Information
The financial statements include ce1tain prior year summarized comparative infonnation 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, 2014, from
which the summarized information was derived.
22
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
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. ln addition,
investments are separately held and individually accounted for where contractual arrangements
and bond covenants provide for and require such arrangements.
At September 30, 2015, the carrying amount of cash on hand and on deposit with banks, including
interest-bearing deposits was $4,022,717, and the related bank balance was $4,369,095. 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.
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 30,2015:
23
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 2 -Cash and Investments (Continued)
Investment Maturities
Less More
Investment Credit Fair Than 1-5 6-10 Than
TyQe Rating Value I Year Years Years 10 Years
Money Market Funds:
Morgan Stanley, N.A. Unrated $ 7,168 $ 7,168 $ 0 $ 0 $ 0
Mutual Funds:
Alliance Limited Duration
High Income Mutual Fund Unrated 1,189,005 1,189,005 0 0 0
Delaware Diversified Income A Unrated 2,483,596 2,483,596 0 0 0
Guggenheim Floating Rate
Strategy Class A Unrated 4,165,322 4,165,322 0 0 0
Invesco Floating Rate
Income Class A Unrated 727,801 727,801 0 0 0
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 3,011,218 3,011,218 0 0 0
Voya Floating Rate A Unrated 4,166,004 4,166,004 0 0 0
Florida PRIME A-1 22,817 22 817 0 0 0
Total $15,:Z:Z2 931 $ 15 :Z:Z2 231 $ Q $ 0 $ Q
Total
$ 7,168
1,189,005
2,483,596
4,165,322
727,801
3,011,218
4,166,004
22,817
$15112 231
Listed below are the investments and maturities in the City's pension trust funds at September 30,
2015:
Investment Maturities
Investment Fair Less Than 1-5 6-10 More Than
Ty[!e Value* 1 Year Years Years 10 Years Total
Cash Deposits and
Money Markets $ 7,381,526 $ 7,381,526 $ 0 $ 0 $ 0 $ 7,381,526
Common Stocks 14,302,996 14,302,996 0 0 0 14,302,996
Corporate Bonds 1,011,304 119,447 364,489 527,368 0 1,011,304
Government and
GSE Bonds 151,447 0 110,387 41,060 0 151,447
ICMA Self Directed 517 080 517 080 0 0 0 517 080
Total $ 23 364.353 $ 22 3?1 049 $ 474 816 .$_____568 428 $ 0 $ 23 364 353
* Fair value balances reported include interest receivable.
The total pension investment balances ofthe City at September 30, 2015, are comprised ofthe
following items:
24
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 2-Cash and Investments (Continued)
Moody's
Investment Credit
Ty(!e Rating
Corporate Bonds AI
Corporate Bonds A2
Corporate Bonds A3
Corporate Bonds AAI
Corporate Bonds AA3
Corporate Bonds AAA
Corporate Bonds BAAl
Corporate Bonds BAA2
Corporate Bonds BAA3
Government and GSE Bonds AAA
Stocks NR
Cash and Money Market NR
ICMA Self Directed NR
Percent
of
Total
0.32%
0.21%
0.74%
0.11%
0.21%
0.10%
1.64%
0.63%
0.39%
0.64%
61.21%
31.59%
2.21%
Credit Risl<-lt is the City's Police Officers' Retirement System Trust Fund's and the City's
General Employees' Retirement System Trust Fund's investment policies to, at a minimum,
limit 80% of the total fixed income portfolio to those that are rated investment grade of higher.
The Police Officers' Retirement System Trust Fund's investment policy defines investment
grade as "BBB", Baa", or their equivalent.
Also, no more than 10% (at cost) ofthe fixed income portfolio total value can be invested in the
securities of any single corporate issuer. The maximum allocation to International Equities is
25%.
Custodial Credit Risk-For an investment, custodial credit risk is the risk that, in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments
or collateral securities that are in the possession of an outside party.
The City's investment policy does not contain legal or policy requirements that would limit the
exposure to custodial credit risk for deposits or investments, other than the following provision
for deposits: The Finance Director may execute a third party Custodial Safekeeping Agreement
with a commercial bank having trust powers or a trust company which is chartered by the United
States government or the State of Florida. All securities purchased and/or collateral obtained
by the City shall be properly designated as an asset of the City and held in safekeeping by the
trust department or trust company, and no withdrawal of such securities, in whole or in part,
shall be made from safekeeping, except by an authorized City staff member. The third party
Custodial Safekeeping Agreement shall include letters of authority from the City with details as
to responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure
or other unforeseen mishaps, including liability of each party.
25
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 2-Cash and Investments (Concluded)
Restricted cash and investments at September 30, 2015, in the enterprise funds follows:
Enterprise
Funds
Renewal
Customer and
Deposits Replacement
Debt
Service Totals
Utility Fund $ 586.894 $ 250.000 $ 3 8 1.162 !!!,$ ===ll,.,;2~18g..g,05~6
Note 3-Receivables
Receivables, net of the allowance for doubtful accounts at September 30, 2015, consist of the
following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General $ 1,210 $ 0 $ 1,210
Utility 447,683 (18,860) 428,823
Storm water 69,589 (15,597) 53,992
Sanitation 119 173 (53,602) 65 571
Total $ 631,655 $ (88,Q52) s 542,526
Included in accounts receivable are $203,390 of water and sewer revenues earned, but not billed
as of September 30,2015.
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, 2015:
Notes Receivable
(Current Portion)
Total Notes Receivable-Noncurrent
26
$
$
140,185
(I 5,759)
124.426
DRAFT
Note 5 -Capital Assets
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Capital asset activity for the fiscal year ended September 30, 2015, is as follows:
Beginning
Balance Increases (Decreases)
Governmental Activities
Capital Assets Not Being Depreciated:
Land $ 10,363,002 $ 0 $ 0 $
Construction in Progress 417 906 898 463 (919,508)
Total Capital Assets Not
Being Depreciated 10,780,908 898.463 (919,508)
Capital Assets Being Depreciated:
Buildings 4,491,659 82,987 0
Intangible Assets 341,079 40,860 0
Improvements Other Than Buildings 39,156,369 919,508 0
Machinery and Equipment 3,637,172 413 774 0
Total Capital Assets Being Depreciated 47,626.279 1 457 129 0
Less Accumulated Depreciation for:
Buildings (1,856,760) (118,933) 0
Intangible Assets (334,215) (9,741) 0
Improvements Other Than Buildings (14,238,285) (686,756) 0
Machinery and Equipment (2,763,376) (293,071) 0
Total Accumulated Depreciation (19.192,636) (1,108,501) 0
Total Capital Assets Being
Depreciated, Net 28,433,643 348 628 0
Governmental Activities Capital
Assets, Net L39 214 551 $ 1 247 091 $ (919.508) $
Business-type Activities
Capital Assets Not Being Depreciated:
Land $ 1,656,018 $ 0 $ 0 $
Construction in Progress 172 514 555 267 (167,373)
Total Capital Assets Not Being Depreciated 1,828,532 555.267 (167,373)
Capital Assets Being Depreciated:
Buildings 4,356,384 0 0
Intangible Assets 244,709 0 0
Improvements Other Than Buildings 79,345,283 167,373 0
Machinery and Equipment 2,151,907 176 474 0
Total Capital Assets Being Depreciated 86,098,283 343 847 0
Less Accumulated Depreciation for:
Buildings (4,275,987) (9,903) 0
Intangible Assets (30,282) (190) 0
Improvements Other Than Buildings (40,718,977) (2,216,682) 0
Machinery and Equipment (1,7Jl,795) (87,826) 0
Total Accumulated Depreciation (46,737,041) (2,314,601) 0
Total Capital Assets Being Depreciated,
Net 39,361,242 (1,970,754) 0
Business-type Activities Capital Assets,
Net $ 41 189 774 $ (1 .415,1Rl} $ (167 373) $
27
Ending
Balance
10,363,002
396 861
10,759,863
4,574,646
381,939
40,075,877
4 050 946
49,083,408
( 1,975,693)
(343,956)
(14,925,041)
(3,056,447)
(20,301,137)
28,782,271
39 542 134
1,656,018
560 408
2 216 426
4,356,384
244,709
79,512,656
2,328.381
86,442,130
( 4,285,890)
(30,472)
(42,935,659)
(1, 799,621)
( 49,05 I ,642)
37,390,488
39 606 914
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 5 -Capital Assets (Concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities
General Governmental
Public Safety
Road Maintenance and Construction
Parks and Recreation
Total Depreciation Expense-Governmental Activities
Business-type Activities
Utility
Storm water
Sanitation
Building Code Enforcement
Total Depreciation Expense-Business-type Activities
Note 6-Long-term Debt
Revenue Bonds and Loans payable are comprised of the following:
Revenue Bond Payable
Utilities System Revenue Refunding Bond, Series 2014, Payable in Atmual
Installments of Principal and Semiannual Installments oflnterest Through
October 1, 2025, Bearing Coupon Rates of2.330%, 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
Loans Payable
Florida Department of Environmental Protection, Disbursements and
Capitalized Interest for a $773,030 State of Florida Revolving Loan
#DW\60710, 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 ofNet 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
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
Phase-out Improvements and TMDL Compliance Program WWTP #1,
Payable in Semiannual Installments of Principal and Interest Through
May 15, 2032, with Financing Rates of3. 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 ofthe Senior Revenue
Obligations, as Defined in the Loan Agreement
Total Revenue Bonds and Loans Payable
28
$ 141,838
193,301
535,805
237 557
$ 1.108 501
$ 1,835,798
474,295
2,892
1 616
$ 2.314.601
$ 13,960,000
627,866
6 704 151
$ 21 222,017
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 6-Long-term Debt (Continued)
The annual requirements to amortize all revenue bonds and loans payable outstanding at
September 30, 2015, are as follows:
Business-type Activities
Year Ending Long-term Debt
September 30 PrinciQal Interest Total
2016 $ 1,426,895 $ 537,506 $ 1,964,401
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
2020 1,620,979 383,330 2,004,309
2021-2025 8,735,952 1,278,514 10,014,466
2026-2030 3,863,525 387,235 4,250,760
2031-2032 I 009 551 39 294 I 048 845
Total $ 21 222 017 $ 4 012,732 $ 25 304742
Interest and amortization incurred during the year ended September 30, 2015, amounted to
$717,902. Ofthe amount incurred, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with
bond resolutions. As of September 30, 2015, 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, 2015:
Balance Balance Due
October 1, September 30, Within
2014 Additions Reductions 2015 One Year
Governmental Activities
Compensated Absences $ 570,520 $ 377,045 $ (374,334)$ 573,231 $ 191,157
OPEB Obligation 156,845 21,656 0 178,501 0
Net Pension Liability 5,747,103 2,066,254 0 7 813 357 0
Total Governmental Activities-
Long-term Liabilities $ 6,474,468 $ 2 464955 $ (314 334)$ 8 565 089 $ 19] 151
29
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 6-Long-term Debt (Continued)
Balance Balance
October 1, September 30,
2014 Additions Reductions 2015
Business-type Activities
State Revolving Fund Loans $ 7,658,714 $ 0 $ (326,697)$ 7,332,017
Revenue Bonds Payable 13,960,000 0 0 13,960,000
Less Deferred Amounts:
Loss on Bond Refunding (1,187,375) 0 107 943 ( 1,079,432)
Total Revenue Bonds Payable 12,772,625 0 107 943 12,880,568
Total Bonds/Loans Payable 20,431,339 0 (218,754) 20,212,585
Compensated Absences 229,327 123,786 (145,291) 207,822
OPEB Obligation 51,836 7,962 0 59,798
Net Pension Liability 1,449,865 720,298 0 2,170.163
Total Business-type Activities.
Long-term Liabilities $ 22 162.161 $ 852 Q46 $ (364.045)$ 22,65Q 368
Conduit Debt
Due
Within
One Year
:!! 336,895
1,090,000
0
1,090,000
1,426,895
68,035
0
0
$ I 424 23Q
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, 2015, there are two series of Health Facility Revenue and
Refunding Bonds outstanding, with an aggregate principal amount payable of $56,080,000.
Pledged Revenue
The City has pledged certain revenues to repay cet1ain bonds and notes outstanding as of
September 30, 2015. 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 30,2015:
30
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 6-Long-term Debt (Concluded)
Note 7-
Outstanding
Net Principal Estimated Principal
Pledged Revenue and Interest Percentage and Pledged
Descri[!tion Revenue Received Paid Pledged Interest Through
2014-Utility System Utility
Refunding Bonds Revenues $ 3,180,693 $ 206,907 * 6.51% $15,828,426 2026
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,180,693 49,879 1.57% 773,121 2031
Florida Department of
Environmental Utility
Protection, SRF Loan Revenues 3,180,693 511,953 16.10% 8,703,202 2032
* First principal payment was not due until October I, 2015.
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.
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 govemed by a Retirement
Plan Board appointed by the City Commission and comprised of five members, two of which
will be eligible legal residents of the City, two of which will be general employees elected by
the majority of general employees who are members of the Plan, and one of which will be elected
by the other four members. Plan membership in the General Employees' Retirement Plan as of
September 30, 2015 and 2014, is as follows:
31
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
General Employees' Retirement Plan (Continued)
Plan Description (Concluded)
September 30,
Retirees and Beneficiaries
Inactive Plan Members or Beneficiaries
Currently Receiving Benefits
Inactive Plan Members Entitled to but Not Yet Receiving Benefits
Active Plan Members
Total
Plan Benefits
2015
59
12
48
112
September 30,
2014
56
11
56
123
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
April24, 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, 2015, Plan
net position included $29,039 of DROP account balances.
Contributions
The City is required to contribute at an actuarially dete1mined rate (32.67%) of valuation payroll
for the year ended September 30, 2015. City contributions to the Plan were $863,613 for the
year ended September 30,2015. Plan members are required to contribute 6.0% oftheir annual
covered salary. Contribution requirements are established by City code, which may be amended
by the City Commission.
Measurement Date
As previously described, the City implemented GASB 68 during the current year for its pension
plans. As permitted by the standard, the City elected to use a measurement date to value the net
pension liability and related deferred inflows and outflows as of September 30, 2014, one year
prior to the reporting date. The City's Pension Plans do no issue separate financial statements.
Therefore, the disclosures required by GASB 67 as of September 30, 2015, are also included
below.
Total Pension Plan Fiduciary Net Pension
Liabili!l: Net Position Liabili!l:
Balances at September 30,2013 $ 17,282,101 $ 13,770,7ll $ 3,511,390
Changes for the Year:
SetVice Cost 399,576 0 399,576
Interest 1,386,245 0 1,386,245
Changes in Assumptions 1,814,460 0 1,814,460
Contnbutions -Employer 0 950,980 (950,980)
Contributions -State 0 0 0
Contributions -Employee 0 157,383 (157,383)
Net Investment Income 0 778,981 (778,981)
Benefit Payments, Including
Refunds of Contributions (707,218) (707,218) 0
Administrative &penses 0 {31,529~ 31,529
Net Changes 2,893,063 1,148,597 1,744,466
Balances at September 30,2014 $ 20,175,164 $ 14,919,308 $ 5,255,g56
32
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7 -Defined Benefit Pension Plans (Continued)
General Employees' Retirement Plan (Continued)
Measurement Date (Concluded)
September 30, 2015
Total Pension Liability
Plan Net Position
Net Pension Liability
General Employees' Retirement Plan Net Position as a Percentage
of Total Pension Liability
$
$
20,788,102
(15,008.338)
5.779 764
72.20%
For the year ended September 30, 2015, the City recognized total pension expense of $1,129,434.
The City reported deferred outflows of resources and deferred inflows of resources related to the
General Employees' Pension Plan from the following sources:
Deferred Outflows of Resources
Changes in Assumptions
Differences Between Project and Actual Eamings
Contributions Made Subsequent to Measurement Date
Total Deferred Outflows of Resources
$
$
1,296,043
269,969
863 613
2.429.625
Contributions made after the measurement date (shown above) will be recognized in the fiscal
year ended September 30, 2016. Other amounts reported as deferred outflows of resources
related to pensions will be recognized in pension expense as follows:
Year Ended
September 30
Plan Investments
2016
2017
2018
2019
2020
Thereafter
Total
$
$
Amount
585,909
585,909
326,701
67,493
0
0
1 566.012
The Retirement Plan Board is responsible for establishing and amending the Plan's investment
policies. The Plan's cunent 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%.
33
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
General Employees' Retirement Plan (Continued)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of
September 30, 2014, rolled forward to September 30, 2015, using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation:
Salary Increases:
Investment Rate of Return:
Mortality:
Date ofExperience Study:
2.50%
Age based ranging from 5.00%-13.50%
7 .00%, net of investment expenses, including
inflation
RP2000 Combined Health Participant Mortality
Table for males and females with generational
projections from the Year 2000 Projection Scale
AA
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-tenn 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 of0.50% and intlation of2.50%) are
developed for each major asset class. These ranges are combined to produce the long-term
expected rate of retum by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inf1ation. 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 st1mmarized in the following table:
Target Long-term Expected
Asset Class 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-hill) 10% 0.2%
34
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
General Employees' Retirement Plan (Concluded)
Actuarial Assumptions (Concluded)
Discount rate. A single discount rate was used to measure the total pension liability. The single
discount rate was based on the expected rate of return on Plan investments of 7.00%. The
projection of cash flows used to determine the single discount rate assumed that plan member
contributions will be made at the current contribution rate and that City contributions will be
made at rates equal to the difference between actuarially determined contribution rates and the
member rate. Based on those assumptions, the Plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members. Therefore, the
long-term expected rate of retum on Plan investments (7 .00%) was applied to all periods of
projected benefit payments to dete1mine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents
the net pension liability ofthe City, calculated using the discount rate of7.00%, 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:
As of September 30, 2015:
Net Pension 1% Decrease Cunent Discount 1% Increase
Liability (6.00%) Rate (7.00%) (8.00%}
General Employees'
Pension Plan $ 8,074,!70 $ 5,779,764 $ 3,819,787
As of September 30,2014:
Net Pension 1% Decrease Current Discount 1% Increase
Liabilit~ (6.00%) Rate (7.00%} (8.00%)
General Employees'
Pension Plan $ 7,489,269 $ 5,255,856 $ 3,344,704
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. Membership in the Police Officers' Retirement Plan as of September 30,
2015 and 2014, is as follows:
35
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7 -Defined Benefit Pension Plans (Continued)
Police Officers' Retirement Plan (Continued)
Plan Description (Concluded)
September 30,
Retirees and Beneficiaries 2015
Inactive Plan Members or Beneficiaries
Currently Receiving Benefits 20
ln(lctive Plan Members Entitled to but Not Yet Receiving Benefits 5
Active Plan Members 21
Total 46
Plan Benefits
September 30,
2014
20
4
22
46
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 often 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 equal3.00% of
average final compensation for each year of credited service. For members hired on or after
Janumy 1, 2013, the nonnal retirement benefit shall equal2.00% 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, 2015, Police
Plan net position included $488,041 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 41.48% of
valuation payroll for the year ended September 30, 20 15). City and State contributions to the
Police Plan were $677,542 for the year ended September 30, 2015. Police Plan members are
required to contribute 7.0% of their annual covered salary. Per City Code, the City Commission
may amend established contribution requirements.
Measurement Date
As previously described, the City implemented GASB 68 during the current year for its pension
plans. As permitted by the standard, the City elected to use a measurement date to value the net
pension liability and related deferred inflows and outflows as of September 30, 2014, one year
prior to the reporting date. The City's Pension Plans do no issue separate financial statements.
Therefore, the disclosures required by GASB 67 as of September 30, 2015, are also included
below:
36
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
Police Officers' Retirement Plan (Continued)
Measurement Date (Concluded)
Total Pension Plan Fiduciary
Balances atSeptember30,2013
Changes for the Year:
Service Cost
Interest
Changes of Assumptions
Contributions -Employer
Contributions -State
Contributions -Employee
Net Investment Income
Benefit Payments, including
Refunds ofContributions
Administrative Expenses
Net Changes
Balances at September 30,2014
September 30, 2015
Total Pension Liability
Plan Net Position
Net Pension Liability
Liabili!l:
$ ll,Ol7,205
269,182
879,486
1,275,669
0
0
0
0
(585,616)
0
1,838,721
$ 12,855,926
Police Officers' Retirement Plan Net Position as a Percentage
of Total Pension Liability
Net Position
$ 7,331,627
0
0
0
563,203
96,217
103,095
642,480
(585,616}
(22,742)
796,637
$ 8,128,264
$
$
Net Pension
$
$
Uabili!l:
3,685,578
269,182
879,486
1,275,669
(563,203}
(96,217)
(103,095}
(642,480}
0
22,742
1,042,084
4,727,662
13,402,655
{8,493, 122)
4.909 533
63.37%
For the year ended September 30,2015, the City recognized total pension expense of$749,144.
The City repmied deferred outflows of resources and deferred inflows of resources related to the
Police Officers' Pension Plan from the following sources:
Defened Outflows of Resources
Differences Between Project and Actual Earnings
Contributions Made Subsequent to Measurement Date
Total Deferred Outflows of Resources
Deferred Inflows of Resources
Differences Between Project and Actual Eamings
Total Deferred Outflows of Resources
37
$
$
$
_$
992,187
574 014
1 566 201
39.827
39 827
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
Police Officers' Retirement Plan (Coutinued)
Deferred Inflows of Resources (Concluded)
Contributions made after the measurement date (shown above) will be recognized in the fiscal
year ended September 30, 2016. Other amounts repmted as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ended
September 30 Amount
2016 $ 273,525
2017 273,525
2018 273,525
2019 131,785
2020 0
Thereafter 0
Total $______ 952,360
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%.
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of
September 30, 2014, rolled forward to September 30, 2015, using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation:
Salary Increases:
Investment Rate of Return:
Mortality:
Date of Experience Study:
2.50%
Age based ranging from 4.50%-22.50%
7.00%, net of investment expenses, including
inflation
RP2000 Combined Health Patticipant Mortality
Table for males and females with generational
projections from the Year 2000 Projection Scale AA
Other significant actuarial assumptions used in the
September 30, 2014, 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 detennined 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 of2.50%) are
developed for each major asset class. These ranges are combined to produce the long-tetm
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:
38
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 7-Defined Benefit Pension Plans (Concluded)
Police Officers' Retirement Plan (Concluded)
Actuarial Assumptions (Concluded)
Asset Class Target Allocation
US Large-Cap Growth Stocks 13%
US Large-Cap Value Stocks 12%
US Mid-Cap Growth Stocks 3%
US Mid-Cap Value Stocks 4%
US Mid-Cap Core Stocks 3%
US Small-Cap Growth Stocks 5%
US Small-Cap Value Stocks 5%
International Equities 5%
US Investment Grade Bonds 40%
Cash (US 90-day T -bill) 10%
Long-term Expected
Real Net Rate of Return
7.4%
7.0%
8.6%
7.8%
6.9%
9.6%
8.6%
7.2%
1.8%
0.2%
Discount rate. A single discount rate was used to measure the total pension liability. The single
discount rate was based on the expected rate of return on Police Plan investments of7.00%. The
projection of cash flows used to determine the single discount rate assumed that plan member
contributions will be made at the current contribution rate and that City contributions will be
made at rates equal to the difference between actuarially determined contribution rates and the
member rate. Based on those assumptions, the Police Plan's fiduciary net position was projected
to be available to make all projected future benefit payments of current Police Plan members.
Therefore, the long-term expected rate of return on Police Plan investments (7 .00%) was applied
to all periods of projected benetit 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 of7.00%, 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 !-percentage-point higher (8.00%) than the current rate:
September 30, 2015
Net Pension
Liability
1% Decrease
(6.00%)
Current Discount
Rate (7.00%)
1% Increase
(8.00%)
Police Officers'
Pension Plan $ 6,525,880 $ 4,909,533 $ 3,565,056
September 30, 2014
Net Pension
Liability
Police Officers'
Pension Plan $
1% Decrease
(6.00%)
6,321,181 $
39
Current Discount
Rate (7.00%)
4,727,662 $
1% Increase
(8.00%)
3,399,917
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 8-Defined Contribution Plan
The City passed an ordinance in 2013 closing the General Employees' defined benefit plan to
new entrants and creating the City of Atlantic Beach Defined Contribution Plan. The City's 457
defined contribution plan is administered through ICMA, which covers all eligible employees
employed with the City on or after September 1, 2008, who are not covered by the City's Police
Officers' defined benefit plan. Under the 457 Plan, the City contributes an employer matching
contribution of up to 6% of earnings during the 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 457 Plan. Employer matching contributions from the City
were $57,604 and $44,268 for the years ended September 30, 2015 and 2014, respectively.
Under the 457 Plan, an employee is considered fully vested after 5 years of completed service.
Note 9-Postemploymeut 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 oppmtunity to pmticipate 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
Active Plan Members
Total
Funding Policy
2
90
92
Contribution rates for the Plan are established on an annual basis by the City Commission.
Eligible retirees and their covered dependents receiving benefits contribute I 00% of the blended
(active and retiree combined) equivalent premium rates. While the City does not directly
contribute towards the costs of retiree premiums via an explicit subsidy, the ability of retirees to
obtain health insurance coverage at a blended, group rate constitutes a significant economic
benefit to retirees, or an "implicit" subsidy. This implicit subsidy is considered to be another
postemployment benefit (OPEB) obligation of the City. The City is currently funding this
OPEB obligation on a pay-as-you-go basis. Annual Required Contribution (ARC) amounted to
$49,705 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 pmticipant. For the year ended September 30, 2015,
the City estimated it implicitly subsidized $19,740 of health care costs for its retirees and
covered dependents. This implied subsidy reduced the annual OPES cost to a net expense of
$29,617 after interest on the Net OPEB Obligation and adjustments to ARC.
40
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(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
Interest on Net OPEB Obligation
Adjustment to Annual Required Contribution
Annual OPEB Cost (Expense)
Employer Contribution
Increase in Net OPEB Obligation
Net OPEB Obligation-Beginning ofYear
Net OPEB Obligation-End of Year
$
$
49,705
8,347
(8,695)
49,357
(19,740)
29,617
208.681
238.298
The City reflected the $29,617 increase in net OPEB obligation at September 30, 2015, by
recording an obligation of $21,655 for governmental activities and $7,962 for business-type
activities in its government-wide statement of net position. The utility fund reported a net OPEB
obligation of$41,896, while the stormwater fund, sanitation fund, and building code enforcement
fund reported $10,112, $0, and $7,790, 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 30,2015, are presented below.
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Ob1igation
September 30,2013 $ 43,987 28.5% $ 179,798
September 30, 2014 46,487 37.9% 208,681
September 30, 2015 49,357 20.7% 238,298
Funded Status and Funding Progress
As of October l, 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.
41
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(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 of3%), 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, 2015, consist of the
following:
Due Due
from Other to Other
Funds Funds
General $ 10,781 $ 0
Nonmajor Governmental 0 10,781
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 fi·om a fund receiving revenue to the fund through which the resources
are to be expended are recorded as transfers and are repotied as other financing sources (uses)
in the governmental funds and as transfers in (out) in the proprietary funds. Following is a
summary ofinterfund transfers for the year ended September 30, 2015:
Transfers In
Nonmajor
Storm water General Governmental Total
Transfers Out Fund Fund Funds Transfers
Nonmajor Governmental Funds $ 260,000 $ 165,000 $ 85,000 $ 510,000
Utility Fund 0 615,167 0 615,167
Sanitation Fund 0 223,043 0 223 043
Total Transfers $ 260,000 $ I 003 210 $ 85 000 $ 1 348 210
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.
42
DRAFT
Note 12-Commitments
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
As of September 30, 2015, the City had outstanding commitments on contracts in progress as
follows:
Project Type
Utility System Improvements
Stormwater System Improvements
General Government Improvements
Unexpended
Contract Amounts
$ 225,819
82,399
578,207
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, 2015, the City
incurred $1,066,557 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 can·ies 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.
43
DRAFT
Note 15-Other Disclosures
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Concluded)
New Accounting Pronouncements
During the year, the City implemented GASB Statement No. 68, Accounting and Financial
Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date. GASB 68 establishes standards for measuring and
recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and
expenses/expenditures related to the City's pension plans. For defined benefit pensions,
GASB 68 identifies the methods and assumptions that should be used to project benefit payments,
discount projected benefit payments to their present value, and attribute that present value to
periods of employee service. GASB 68 also addresses note disclosure and required
supplementary information. As permitted by the standard, the City chose to use a measurement
date of the net pension liability one year prior to the reporting date. GASB 71 requires a
government that is transitioning to the new standards to recognize a beginning deferred outflow
of resources to its pension contributions made subsequent to the measurement date of the
beginning net pension liability of the initial fiscal year of implementation.
As a result of these statements, beginning Net Position was reduced as follows:
Govemmental Activities
Governmental Activities
Business-type Activities
Utility
Storm water
Sanitation
Building Code Enforcement
Total Business-type Activities-
Enterprise Funds
Total Restatement of Net Position
Components ofthe restatement consist of the following:
Net Pension Liability
Deferred Outflows -Contributions Made During
Fiscal Year Ended September 30, 2015
Total Restatement of Net Position
44
$
$
$
4,529,366
890,288
45,518
10,700
110 698
1,057,204
5,586,510
7,196,968
( 1, 61 0.398)
5.586,570
DRAFT
REQUIRED SUPPLEMENTARY INFORMATION
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Total Pension Liability
Setvice Cost
Interest
Difference Between Actual and Expected Experience
Changes in Assumptions
Benefit Payments
Refunds
Net Change in Total Pension Liability
Total Pension Liability -Beginning
Total Pension Liability -Ending (a)
Plan Fiduciary Net Position
Contributions-Employer
Contributions-Employee
Net Investment Income
Benefit Payments
Refunds
Administrative Expenses
Net Change in Plan Fiduciary Net Position
Plan Fiduciary Net Position -Beginning
Plan Fiduciary Net Position -Ending (b)
Net Pension Liability-Ending (a) -(b)
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability
Covered Employee Payroll
Net Pension Liability as a Percentage of Covered
Employee Payroll
September 30, 2015
$ 402,093
1,404,316
(162,280)
0
(1,031,191)
0
612,938
20,175,164
20,788,102
863,613
136,191
162,326
(1,031,191)
0
(41,909)
89,030
14,919,308
15,008,338
$ 5,779,764
72.20%
$ 2,643,589
218.63%
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.
45
September 30,2014
$ 399,576
1,386,245
0
1,814,460
(697,702)
(9,516)
2,893,063
17,282,101
20,175,164
950,980
157,383
778,981
(697,702)
(9,516)
(31,5291
1,148,597
13,770,711
14,919,308
$ 5,255,856
73.95%
$ 3,026,642
173.65%
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
Actuarially Determined Contribution
September 30, 2015
$ 863,613
863,613
September 30, 2014
$ 950,980
950,980 Contributions in Relation to the Actuarially Determined Contribution
Contribution Deficiency (Excess) $ 0 $ 0
Covered Employee Payroll $ 2,643,589 $ 3,026,642
Contributions as a Percentage of Covered
Employee Payroll 32.67% 31.42%
Additional years wi II be added to this schedule annually until I 0 years of data is presented.
NOTES TO SCHEDULE
Valuation Date: October 1, 2013
Actuarially determined contribution rates are calculated as of September 30, two years prior to the end of the fiscal year in which
contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method:
Amortization Method:
Remaining Amortization Period:
Asset Valuation Method:
Inflation:
Salary Increases:
Interest Rate:
Members' Contribution Rate:
Retirement Age:
Post Retirement COLA:
Mottality:
Date ofthe Most Recent
Experience Study:
Entry Age Normal Cost Method
Closed, Level Dollar Method
10 years
4-year Smoothed Market Value: Difference between the expected and actual return on
market value of assets phased in over a period offour (4) years (at the rate of25% per
year), adjusted to be no greater than 120% and no less than 80% of the fair market value.
3.0% per year
5.5%-14.0%
7.0% per year compounded annually, net of investment related expenses.
6.00%
Experience-based table of rates that vary by age.
None
RP2000 Combined Healthy Pmticipant Mortality Table for males and females with
generational projections from the yem· 2000 Projection Scale AA.
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, 200 I -
September 30, 2010.
46
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Se~tember 30, 2015 SeEtember 30, 2014
Total Pension Liability
Service Cost $ 291,761 $ 269,182
Interest on the Total Pension Liability 900,982 879,486
Difference Between Actual and Expected Experience (213,426) 0
Changes in Assumptions 0 1,275,669
Benefit Payments (524,537) (524,537)
Refunds (28,505) (61,079)
Other (Excess Premium Tax Liability) 120,454 0
Net Change in Total Pension Liability 546,729 1,838,721
Total Pension Liability -Beginning 12,855,926 11,017,205
Total Pension Liability-Ending (a) 13,402,655 12,855,926
Plan Fiduciary Net Position
Contributions -Employer 574,014 563,203
Contributions -State I 03,528 96,217
Contributions -Member 112,354 103,095
Net Investment Income 43,534 642,480
Benefit Payments (524,537) (524,537)
Refunds (28,505) (61,079)
Administrative Expenses (35,984) (22,742)
Other (Excess Premium Tax Liability) 120,454 0
Net Change in Plan Fiduciary Net Position 364,858 796,637
Plan Fiduciary Net Position -Beginning 8,128,264 7,331,627
Plan Fiduciary Net Position-Ending {b) 8,493,122 8,128,264
Net Pension Liability-Ending (a)-{b) $ 4,909,533 $ 4,727,662
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 63.37% 63.23%
Covered Employee Payroll $ 1,633,327 $ 1,696,583
Net Pension Liability as a Percentage of Covered
Employee Payroll 300.58% 278.66%
The data presented above was measured using actuarial methods prescribed by GASB 67/68.
Additional years will be added to this schedule annually unti110 years of data is presented.
47
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
Actuarially Dete1mined Contribution*
Contributions in Relation to the Actuarially Determined Contribution*
Contribution Deficiency (Excess)
September 30, 2015
$ 665,091
677,542
September 30, 2014
$ 654,280
659,420
$ (12,451) $ (5, 140)
Covered Employee Payroll $ 1,633,327 $ 1,696,583
Contributions as a Percentage of Covered Employee Payroll 41.48% 38.87%
*Amounts include the contribution from the State ofFlorida.
Additional years will be added to this schedule annually until I 0 years of data is presented.
NOTES TO SCHEDULE
Valuation Date: October I, 2013
Actuarially determined contribution rates are calculated as of September 3 0, two years prior to the end of the fiscal year in which
contributions are reported.
Methods and assumptions used to determine contribution rates:
Funding Method:
Amortization Method:
Remaining Amortization Period:
Asset Valuation Method:
Inflation:
Salary Increases:
Payroll Growth:
Interest Rate:
Retirement Age:
Post Retirement COLA:
Mortality:
Date of the Most Recent
Experience Study:
Entry Age Normal Cost Method
Closed, Level% of Pay Method
26 years
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.
3.0% per year
5.0%-23.0%
1.88% per year
7.0% per year compounded annually, net of in_vestment related expenses.
Experience-based table of rates based on year of eligibility.
None
RP2000 Combined Healthy Participant Mortality Table for males and females
with generational projections from the year 2000 Projection Scale AA.
Significant assumptions used in the September 30, 2013 valuation were based on the
results of an actuarial experience study for the period of October 1, 2001 -
September 30, 2010.
48
DRAFT
Valuation
Date
9/30/06 $
10/1/09
10/1/12
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2015
Actuarial
Actuarial Accrued Unfunded Annual
Value of Liability AAL Funded Covered
Assets (AAL} (UAAL} Ratio Payroll
0 $ 470,703 $ 470,703 0.0% $ 4,812,000
0 497,883 497,883 0.0% 5,828,339
0 360,584 360,584 0.0% 4,204,177
UAALas
Percentage
of Covered
Payroll
9.78%
8.54%
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.
49
DRAFT
Revenues
Property Taxes
Nonproperty Taxes
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2015
Budgeted Amounts Actual
Original Final Amounts*
$ 4,055,229 $ 4,055,229 $ 4,113,476
1,133,812 1,133,812 1,109,470
Permits, Fees, and Special Assessments 857,743 857,743 858,232
Intergovernmental Revenues 1,704,051 1,704,051 1,748,737
Fines and Forfeitures 83,700 83,700 77,434
Charges for Services 774,658 774,658 742,416
Interest Income 116,250 116,250 4,435
Miscellaneous Revenues 49,385 56,885 49,909
lnterfund Charges 1,549,137 1,549,137 1,545,981
Total Revenues 10,323,965 10,331,465 10,250,090
Expenditures
Governing Body:
City Commission 41,665 41,665 38,708
City Clerk 288,265 292,368 253,017
City Attorney 132,000 132,000 96,150
Total Governing Body
' 461,930 466,033 387,875
City Administration:
City Manager 261,506 261,506 235,093
General Government 521,706 557,322 461,303
Human Resources 194,531 194,531 187,215
Information Technology 835,706 876,662 809,654
Finance 906,827 934,421 859,608
Total City Administration 2,720,276 2,824,442 2,552,873
Planning and Zoning 152,292 245,166 145,206
Public Safety:
Police 3,941,813 3,955,249 3,597,391
School Crossing Guards 9,693 9,693 9,850
Animal Control 96,506 96,627 91,161
Fire 1,310,639 1,314,338 1,312,786
Code Enforcement 64,455 64,455 50,204
Total Public Safety 5,423,106 5,440,362 5,061,392
50
Variance With
Final Budget -
Positive
(Negative)
$ 58,247
(24,342)
489
44,686
(6,266)
(32,242)
(111,815)
(6,976)
(3, 156)
(81,375)
2,957
39,351
35,850
78,158
26,413
96,019
7,316
67,008
74,813
271,569
99,960
357,858
(157)
5,466
1,552
14,251
378,970
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGETANDACTUAL-GENERALFUND
FOR THE YEAR ENDED SEPTEMBER 30, 2015
(Concluded)
Budgeted Amounts Actual
Original Final Amounts*
Expenditures (Concluded)
Public Works:
Administration and Streets $ 1,292,899 $ I,318,688
Fleet Maintenance 269,624 269,624
Total Public Works 1,562,523 1,588,3I2
Parks and Recreation:
Recreation and Special Events 364,353 364,353
Parks Maintenance 735,210 896,491
Total Parks and Recreation I,099,563 1,260,844
(Total Expenditures) (I 1,419,690) (11 ,825, 159)
(Deficiency) of Revenues (Under)
Expenditures (1,095,725) (1,493,694)
Other Financing Sources (Uses)
Transfers in 1,003,210 1,003,210
Transfers (out) 0 (322,709)
Sale of General Fixed Assets 0 0
Total Other Financing Sources (Uses) 1,003,210 680,50I
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses (92,515) (813,I93)
Fund Balances, Beginning of Year 5,637,789 5,236,590
Fund Balances, End of Year $ 5,545,274 $ 4,423,397
* Actual amounts include a reversal of$(346,721) prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of $257,113.
51
$ I,150,691
261,471
1 ,412,I62
346,294
637,421
983,715
(10,543,223)
(293, 133)
1,003,210
0
17,611
I,020,821
727,688
6,574,588
$ 7,302,276
Variance With
Final Budget -
Positive
(Negative)
$ I67,997
8,153
176,150
18,059
259,070
277,129
1,281,936
1,200,561
0
322,709
I 7,611
340,320
1,540,881
1,337,998
$ 2,878,879
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGETANDACTUAL-GENERALFUND
FOR THE YEAR ENDED SEPTEMBER 30, 2015
Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a
budgetary accounting system in accordance with various legal requirements which govern the City's
operations. Budgets are monitored at varying levels of classification detail; however, expenditures cannot
legally exceed total appropriations at the individual fund level. Encumbrances are recorded. Unexpended
items which are unencumbered at year-end must be re-appropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, 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 confonnity with accounting principles generally accepted in the
United States of America.
52
DRAFT
SUPPLEMENTARY INFORMATION
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2014
2015
Special Revenue Funds
Convention
Tree Local Option Development Half-cent Court Cost
Replacement Gas Tax Tax Sales Tax Training
Assets
Equity in Pooled Cash and
Investments $ 18,956 $ 169,795 $ 102,939 $ 637,775 $ 105,927
Due from Other Governments 0 78,346 25,656 131,190 230
Total Assets 18,956 248,141 128,595 768,965 106,157
Liabilities and Fund Balances
Liabilities
Accounts Payable and
Accrued Liabilities 0 0 0 124,107 0
Due to Other Funds 0 0 0 0 0
Deposits 0 0 0 0 0
Total Liabilities 0 0 0 124,107 0
Fund Balances
Restricted for:
Public Safety 0 0 0 0 106,157
Road Maintenance and
Construction 0 248,141 0 0 0
Other Capital Projects 0 0 0 644,858 0
Other Purposes 0 0 128,595 0 0
Committed:
Conservation and Resource
Management 18,956 0 0 0 0
Unassigned 0 0 0 0 0
Total Fund Balances 18,956 248,141 128,595 644,858 106,157
Total Liabilities and Fund
Balances $ 18,956 $ 248,141 $ 128,595 $ 768,965 $ 106,157
53
DRAFT
Special Revenue Funds
Radio
Communication
$ 14,208
797
15,005
0
0
0
0
15,005
0
0
0
0
0
15,005
Contraband
$
Forfeiture
47,231
0
47,231
0
0
Ill
Ill
47,120
0
0
0
0
0
47,120
Community
Development
Block Grants
$ 2,314
0
2,314
4,262
0
0
4,262
0
0
0
0
0
(1,948)
(1,948)
$
2015
Police
Grants
5,828
10,781
16,609
3,635
10,781
0
14,416
2,193
0
0
0
0
0
2,193
$
Totals
Special
Revenues
Funds
1,104,973
247,000
1,351,973
132,004
10,781
Ill
142,896
170,475
248,141
644,858
128,595
18,956
(1,948)
1,209,077
$
Capital
Projects
2,717,551
0
2, 717,551
36,620
0
0
36,620
0
0
2,680,931
0
0
0
2,680,931
Totals
Nonmajor
Governmental
$
Funds
3,822,524
247,000
4,069,524
168,624
10,781
Ill
179,516
170,475
248,141
3,325,789
128,595
18,956
(1,948)
3,890,008
$
2014
Totals
3,739,371
287,946
4,027,317
3,521
6,531
6,399
16,451
160,767
159,677
3,588,843
86,906
14,673
0
4,010,866
$ 15,005 $ 47,231 $ 2,314 =$===1=6,=6=09= $ 1,351,973 $ 2,717,551 $ 4,069,524 $ 4,027,317
54
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2014
2015
Special Revenue Funds
Convention
Tree Local Option Development Half-cent Court Cost
Replacement Gas Tax Tax Sales Tax Training
Revenues
Taxes $ 0 $ 450,707 $ 127,059 $ 772,098 $ 0
Other Intergovernmental
Revenues 0 0 0 0 0
Fines and Forfeitures 0 0 0 0 3,859
Investment Earnings (Loss) 0 567 (370) 340 (I 19)
Miscellaneous Revenues 6,083 0 0 0 0
Total Revenues 6,083 451,274 126,689 772,438 3,740
Expenditures
Current:
Culture and Recreation 0 0 0 0 0
Public Safety 0 0 0 0 12,999
Road Maintenance and
Construction 0 202,810 0 71,258 0
Conservation and Resource
Management 1,800 0 0 0 0
Debt Service:
Principal 0 0 0 0 0
Interest and Other 0 0 0 0 0
Capital Outlay 0 0 0 344,186 0
(Total Expenditures) (1,800) (202,810) 0 (415,444) (12,999)
Excess (Deficiency) ofRevenues
Over (Under) Expenditures 4,283 248,464 126,689 356,994 (9,259)
Other Financing Sources (Uses)
Transfers in 0 0 0 0 0
Transfers (out) 0 (160,000) (85,000) (260,000) 0
Total Other Financing
Sources (Uses) 0 (160,000) (85,000) (260,000) 0
Net Change in Fund Balances 4,283 88,464 41,689 96,994 (9,259)
Fund Balances, Beginning of Year 14,673 159,677 86,906 547,864 115,416
Fund Balances, End of Year $ 18,956 $ 248,141 $ 128,595 $ 644,858 $ 106,157
55
DRAFT
2015
Special Revenue Funds
Totals Totals
Community Special Nonmajor
Radio Contraband Development Police Revenue Capital Governmental 2014
Communication Forfeiture Block Grants Grants Funds Projects Funds Totals
$ 12,305 $ 0 $ 0 $ 0 $ 1,362,169 $ 0 $ 1,362,169 $ 1,252,577
0 0 89,937 74,939 164,876 0 164,876 278,510
0 8,489 0 0 12,348 0 12,348 59,909
(47) (71) 0 0 300 (2,325) (2,025) 96,491
0 1,098 0 0 7,181 0 7,181 3,724
12,258 9,516 89,937 74,939 1,546,874 (2,325) 1,544,549 1,691,211
0 0 500 0 500 0 500 0
0 0 0 72,746 85,745 17,542 103,287 122,354
0 0 0 0 274,068 0 274,068 285,478
0 0 0 0 1,800 0 1,800 0
0 0 0 0 0 0 0 69,203
0 0 0 0 0 0 0 1,457
0 0 91,385 0 435,571 425,181 860,752 390,159
0 0 (91,885) (72,746) (797,684) (442, 723) ( 1,240,407) (868,651)
12,258 9,516 (1,948) 2,193 749,190 (445,048) 304,142 822,560
0 0 0 0 0 85,000 85,000 275,500
0 (5,000) 0 0 (510,000) 0 (510,000) (721,208)
0 (5,000) 0 0 (510,000) 85,000 (425,000) (445,708)
12,258 4,516 (1,948) 2,193 239,190 (360,048) (120,858) 376,852
2,747 42,604 0 0 969,887 3,040,979 4,010,866 3,634,014
$ 15,005 $ 47,120 $ (1,948) $ 2,193 $ 1,209,077 $ 2,680,931 $ 3,890,008 $ 4,010,866
56
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2014
Pension Trust Funds
Police General
Officers' Employees'
Retirement Retirement 2015
Plan Plan Totals
Assets
Cash and Cash Equivalents $ 68,372 $ 68,735 $ 137,107
Interest Receivable 3,355 5,566 8,921
Investments at Fair Value 8,421,395 14,934,037 23,355,432
Total Assets 8,493,122 15,008,338 23,501,460
Liabilities
Accounts Payable and Accrued Liabilities 0 0 0
Total Liabilities 0 0 0
Total Net Position
Held in Trust for Pension
Benefits (as Restated) $ 8,493,122 $ 15,008,338 $ 23,501,460
57
2014
Totals
$ 37,480
64,250
23,066,411
23,168,141
114
114
$ 23,168,027
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2015
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014
Pension Trust Funds
Police General
Officers' Employees'
Retirement Retirement 2015 2014
Plan Plan Totals Totals
Additions
Contributions:
Employer $ 574,014 $ 863,613 $ 1,437,627 $ 1,514,183
Employees 112,354 136,191 248,545 260,478
State of Florida 103,528 0 103,528 96,217
Total Contributions 789,896 999,804 1,789,700 1,870,878
Net (Decrease) Increase in Fair
Value ofinvestments 37,142 152,158 189,300 792,566
Interest and Dividends 50,642 88,632 139,274 441,637
Total Additions 877,680 1,240,594 2,118,274 3,105,081
Deductions
Refunds of Contributions 28,505 0 28,505 70,596
Benefits 524,537 1,031,191 1,555,728 1,222,239
Investment Expenses 44,250 78,464 122,714 101,021
Administrative Expenses 35,985. 41,909 77,894 54,272
Total Deductions 633,277 1,151,564 1,784,841 1,448,128
Change in Net Position 244,403 89,030 333,433 1,656,953
Net Position, Beginning of
Year (as Restated) 8,248,719 14,919,308 23,168,027 21,511,074
Net Position, End of Year $ 8,493,122 $ 15,008,338 $ 23,501,460 $ 23,168,027
58
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
IDSTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2011 THROUGH SEPTEMBER 30, 2015
2011 2012 2013 2014 2015
Revenues
Operating Revenues:
Water:
Customer Charges $ 3,382,973 $ 3,069,998 $ 3,006,787 $ 2,955,863 $ 2,992,677
Miscellaneous Charges 46,424 48,815 52,996 54,852 62,286
Total Water 3,429,397 3,118,813 3,059,783 3,010,715 3,054,963
Sewer:
Customer Charges 5,085,318 5,015,358 5,109,868 4,938,510 4,934,151
Miscellaneous Charges 20,006 3,303 1,651 1,237 107
Total Sewer 5,105,324 5,018,661 5,111,519 4,939,747 4,934,258
Total Operating Revenues 8,534,721 8,137,474 8,171,302 7,950,462 7,989,221
Nonoperating Revenues:
Investment Income (Loss):
Water 108,762 197,492 (115,023) 186,681 (7,718)
Sewer (16,367) (21 ,01 0) 18,426 (43,9542 (4,257)
Total Nonoperating Revenues 92,395 176,482 {96,597) 142,727 (11 ,9752
Total Revenues 8,627,116 8,313,956 8,074,705 8,093,189 7,977,246
Expenses
Operating Expenses:
Water 1,292,948 1,303,708 1,228,763 1,287,783 1,442,578
Sewer 2,569,748 2,493,500 2,005,653 2,170,495 2,055,780
Total Operating Expenses 3,862,696 3,797,208 3,234,416 3,458,278 3,498,358
Administrative, Nondivisional
and Other:
Water 545,971 518,506 521,600 530,715 563,356
Sewer 685,074 696,922 674,514 677,464 734,839
Total Administrative, Non-
divisional and Other 1,231,045 1,215,428 1,196,114 1,208,179 1,298,195
(Total Expenses) (5,093,7412 (5,012,636) (4,430,530) ( 4,666,457) (4,796,553)
Net Revenues Available for
Debt Service 3,533,375 3,301,320 3,644,175 3,426, 732 3,180,693
Nonoperating Income (Expense)
Interest Expense (71 0,196) (726,058) (766,111) (896,571) (556,635)
Loan Amortization (14,730) (25, 712) (12,787) (162,552) (98,507~
Total Nonoperating Income
(Expense) (724,926) (751,770) (778,898) (1,059,123) (655, 142)
Net Income Before Depreciation
and Operating Transfers $ 2,808,449 $ 2,549,550 $ 2,865,277 $ 2,367,609 $ 2,525,551
59
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULESOFNETREVENUESINACCORDANCE
WITH BOND RESOLUTIONS
ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND SEPTEMBER 30, 2014
2015
Gross Revenues
Utility $ 7,955,290 $
Connection Charges 33,932
Interest (11,977)
Total Gross Revenues 7,977,245
Operating Expenses
Personal Services 1,968,047
Contractual Services 638,961
Supplies 388,737
Repairs and Maintenance 120,049
Utilities 372,361
Intergovernmental Charges 1,113,777
Other Expenses 194,619
(Total Operating Expenses) (4,796,551)
Total Net Revenues in Accordance with Bond Resolutions $ 3,180,694 $
Total Debt Service $ 768,739 * $
Debt Service Coverage Ratio 413.75%
Required Debt Service Coverage Ratio 100.00%
(a) Rate Stabilization Fund:
Balance, Beginning of Year $ 400,000 $
Transfer/Redeposit to Revenue Fund 0
Balance, End of Year $ 400,000 $
*The 2014 Series Refunding Bonds' first principal payment was not due until October 1, 2015.
60
2014
7,933,418
17,044
142,727
8,093,189
1,802,458
788,322
366,425
133,621
367,452
986,547
221,633
( 4,666,458)
3,426,731
2,001,479
171.21%
100.00%
400,000
0
400,000
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2011 THROUGH SEPTEMBER 30, 2015
Year
2011
2012
2013
2014
2015
Electricity
$ 487,585
452,183
459,672
473,097
476,997
Utility Service Tax Collections
(Last Five Years)
Communications
$ 604,567
567,909
576,839
522,654
526,996
Gas
$ 28,062
23,187
20,849
16,911
15,555
Ad Valorem Tax Collections
(Last Five Years)
Year Total
2011 $ 3,968,233
2012 3,961,395
2013 3,843,755
2014 3,908,365
2015 4,113,476
61
Fuel Oil Total
$ 33 $ 1,120,247
14 1,043,293
17 1,057,377
29 1,012,691
7 1,019,555
DRAFT
OTHER STATISTICAL INFORMATION
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2015
(UNAUDITED)
Fleet Landing (Retirement Community)
Oaks of Atlantic Beach (Mobile Home Park)
Navy (Federal Government)
City of Atlantic Beach, Florida
Arium Atlantic Beach (Apartment Complex)
John Creek Estate (Mobile Home Park)
Hanna Park (Regional Park)
Avesta Homes (Apartment Complex)
One Ocean Resort (Hotel)
Sea Oats Plantation (Apartment Complex)
Total
62
Annual
Billings
$ 386,590
1,644,484
294,668
143,636
129,311
126,044
105,919
81,911
77,958
60,727
$ 3,051,248
DRAFT
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
DRAFT
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF SOURCE AND EXPENDITURE OF THE CITY GRANT FUNDS
PER ORDINANCE CODE CHAPTER 118.301(e)
Source of City Funds
FOR FISCAL YEAR 2014-2015
City of Jacksonville Public Service Grants Received as a
Su bgrant Recipient Per Inter local Agreement
Fiscal Year
2014-2015
Grant No. 5629-57
Amount of Award (Per City of Jacksonville
Budget Ordinance) $ 91,386
Actual Funds Received from City of
Jacksonville in Last Audit Period
Actual Funds Received this Period
Amount Earned but Not Received this Period
Unspent Award Amount
Expenditure of City Funds
$
0
(89,937)
0
1,449
(A) City Fiscal Year 2014-2015 Grant #5629-76-includes carry-over of$9,192fi"om 2013-2014 Grant #5629-56.
Project I Federal Grant Number
Area Neighborhood Infrastructure Improvements
# 005525/Bl4UC120017
Total
63
Budgeted
$ 91,386
$ 91,386
Actual
10/1/2014 Remaining
9/30/2015 Balance
$ 89,937 $ 1,449
$ 89,937 $ 1,449
(A)
DRAFT Purvis Gray&.. ____________________ C_om_Qany
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
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, 2015, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated ____ _
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 conect, 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 repmiing 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. We consider the following deficiency in
internal control to be a material weakness:
Certified Public Accountants
P.O. Box 141270 • 222 N.E. 1st Street w Gainesville, Florida 32614-1270 • (352) 378-2461 • FAX (352) 378-2505
L;lUrel Ridge Professional Center ~ 2347 S.E. 17th Street • Ocala, Florida 34471 • (352) 732-3872 • FAX (352) 732-0542
443 East College Avenue ~ Tallahassee, Florida 32301 • (850) 224-7144 • FAX (850) 224-1762
5001 Lakewood Ranch 131vd. N., Suite "101 • Sarasota, Florida 34240 • (941) 907-03.50 • FAX (941) 907-0309
MI:MBERS OF AMERIC\N AND FLORIDA INS!IruTES Of CEJ(TirJED PUIJLIC ACCOUNTANTS
MlMillR Of AMERICAN INSTITUT[ OF CfRTiriELll'llilUC •ICCOl''HAi-iTS PRIVATE CCJ,\-WANIES A~'() ~.E.C PRACTICE SECTIDNS
64
DRAFT
Honorable Mayor, City Commissioners, and
City Manager
Atlantic Beach, Florida
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
(Concluded)
Internal Control Over Financial Reporting (Concluded)
15-1-Financial Close and Reporting
Condition-At the commencement of final fieldwork it was noted that the preliminary working trial
balance did not reflect all of the required closing entries, including but not limited to the accrual and
reversal of numerous balance sheet accounts. It was also noted that a large prior year accrual was
improperly booked to expense in fiscal year 2015. A deficiency in the financial repmting and close
process could result in numerous errors and increases the risk of undetected misstatements.
Recommendation-We recommend that the City's finance department evaluates their monthly and yearly
financial close and repmting process. In addition, the finance department should perform variance
analysis throughout the year over major balance and income statement accounts in order to identify and
correct any errors in a timely manner.
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
repmted 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
contwl or on compliance. This report is an integral pa11 of an audit perfmmed 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.
Gainesville, Florida
65
DRAFT
GPurvis
ray~ ____________________ Co_m_Qany
JNDEPENDENT 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, 2015, 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 petforming 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, 2015.
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 pru.ties.
Gainesville, Florida
Certified Public Accountants
P.O. Box 141270 "222 N.E. 1st Street • Gainesville, Florida 32614-1270 • (352) 378-2461 • FAX (352) 378-2505
Laurel Ridge Professional Center • 2347 S.E. 17th Street • Ocala, Florida 34471 • (352) 732-3872 ~ FAX (352) 732-0542
443 East College Avenue • Tallahassee, Florida 32301 • (850j 224-7144 • FAX (850) 224-1762
5001 Lakewood Ranci1 Blvd. N .. Suite 101 .. Sarasota, Florida 34240 • (941) 907-0350 • FAX (941) 907-0309
MFMBFRS OF AMERICAN AND FL(JRIOA INoTITLJTF.S Of CFRTIFIFO i'URI.IC ACCOUNTANTS
MfMRF.R Of AMERICAN 11-.'STITl.JTE OF CERTIFIHJ PUBLIC ACCOl ''-IT ANTS PRIVATE COMPA/':I[S ANO S.f.C PRACTICE SKTIOK!,
66
DRAFT
GPurvis
ray~ ____________________ C_om_P-any
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, 2015, and have issued our report thereon dated _____ _
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.
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 Perfonned 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 I 0.550, Rules of the Auditor General. Disclosures in those reports and schedule,
which are dated , should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)l., 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 repmt.
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
detennined that the City did not meet any of the conditions described in Section 218.503(1), Florida
Statutes.
Certified Public Accountants
P.O. Box 141270 • 222 N.E. 1st Street • Gainesville, Florida 32614-1270 "(352) 378-2461 • FAX (352) 378-2505
Laurel Ridge Proiessional Center • 2347 S.E. 17th Street .. Ocala, Florida 3447·1 " (352) 732-3872 • FAX (352) 732-0542
. 443 East College Avenue • Tallahassee, Florida 32301 • (850) 224-7144 ~ FAX (850) 224-1762
5001 Lakewood Ranch Blvd, 1~., Suite 101 • Sarasota, Florida 34240 • (941) 907-03.50 • FAX (941) 907-0309
ML~\B[RS OF AMlRi\At-; AND ~LORIDA />;Sl/TUHS Or O:RHriEO PUUL!C ACCOUNTANTS
ML~llJER Of AMERICA!~ /.'-:STIT\JH 01' C[I{Tif'I[LJI'UB!.Il ACCOUNTANTS PRI\'AH COMPANIES A', . .J S.LC. PRACT/C[ SlCI/01\S
67
DRAFT
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
At,lantic Beach, Florida
Financial Condition (Concluded)
MANAGEMENT LETTER
(Concluded)
Pursuant to Sections 10.554(l)(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 detennine whether the annual
financial repmt for the City for the fiscal year ended September 30, 2015, 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, 2015. In connection with our audit, we
determined that these two reports were in agreement.
Special District Component Units
Section 10.554(l)(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
infmmation 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(l)(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(l)(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 infmmation 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 patties.
We wish to take this oppmtunity 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 conceming this
letter, our accompanying reports, or other matters.
Gainesville, Florida
68