Annual Financial Report - 2014-2015 - v
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2015
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
Statement of Net Position .......................................................................................................................... 1
Statement of Activities .............................................................................................................................. 2
Fund Financial Statements
Balance Sheet -Governmental Funds ....................................................................................................... 3
Reconciliation of Balance Sheet of Governmental Funds to the
Statement of Revenues, Expenditures, and Changes in Fund
Statement of Net Position....................................................................................................................... 4
Balances -Governmental Funds ............................................................................................................ 5
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ........................................................................................................................... 6
Statement of Net Position -Proprietary Funds ......................................................................................7-8
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds ..............................................................................................................................9-10
Statement of Cash Flows -Proprietary Funds ...................................................................................11-13
Statement of Fiduciary Net Position ....................................................................................................... 14
Statement of Changes in Fiduciary Net Position .................................................................................... 15
Notes to Financial Statements ........................................................................................................ 16-44
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
Note to Schedule of Revenues, Expenditures, and Changes in Fund
Budget and Actual -General Fund .....................................................................................................50-51
Balances -Budget and Actual -General Fund........................................................................................ 52
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS’ REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2015
TABLE OF CONTENTS
(Concluded)
Supplementary Information
Combining Balance Sheet -Nonmajor Governmental Funds ................................................................53-54
Combining Statement of Revenues, Expenditures, and Changes
Schedules of Net Revenues in Accordance with Bond
in Fund Balances -Nonmajor 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
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 the 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 Performed in Accordance
Independent Accountants’ Report on Compliance with
with Government Auditing Standards .......................................................................................... 64-65
Section 218.415, Florida Statutes ....................................................................................................... 66
Management Letter ............................................................................................................................ 67-68
Management Response Letter ................................................................................................................. 69
INDEPENDENT AUDITORS’ REPORT
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 of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.
i
Honorable Mayor, City Commissioners, and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS’ REPORT
(Continued)
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of September 30, 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 participating 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 Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and other required information on pages iv–xi and 45–52 be presented to
supplement the basic financial statements. Such information, 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 information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The supplementary information on pages 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
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 certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information and schedule of 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 June 23, 2016, on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the City’s internal control over financial reporting
and compliance.
Report on Summarized Comparative Information
We have previously audited the City’s 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.
June 23, 2016
Gainesville, Florida
iii
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 report also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City’s finances, in a manner similar to a private sector business. They include the Statement of Net Position
and the Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between reported as net position.
Net position is reported as one of three categories: invested in capital assets -net of related debt; restricted;
or unrestricted. Restricted net position is further classified as either net position restricted by enabling
legislation or net position that is otherwise restricted. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues, referred to as “governmental activities,” from other
functions that are intended to recover all or a significant portion of their costs through user fees and charges,
referred to as “business-type activities.” The governmental activities of the City include public safety, road
maintenance and construction, parks and recreation, conservation and resource management, 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
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of available
iv
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 of Revenues, 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 information of the utility, stormwater, sanitation and
building code enforcement activities can be found in the basic proprietary fund financial statements on
pages 7 - 13 of this report.
■ Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the City (i.e.,
pension beneficiaries). Fiduciary funds are not reflected in the government-wide financial statements
because the resources of those funds are not available to support the City’s own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary
fund financial statements can be found on pages 14 - 15 of this report.
Notes to Financial Statements
The notes to financial statements provide additional information that is essential to a full understanding of the
data provided in the government-wide and fund financial statements. The notes begin on page 16 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the City’s progress in funding its obligation to provide
pension benefits to its employees and a budgetary comparison schedule for the General Fund. Required
supplementary information can be found beginning on page 45 of this report.
v
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Continued)
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City’s financial position. As can be seen in the
summarized table below, the City’s assets exceeded liabilities by $71,376,000 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. The City has allocated its proportionate share
of the General Employee Pension Plan and the Police Pension Plan’s net pension liabilities, deferred
outflows of resources, deferred inflows of resources, and pension expenses between the governmental and
business-type activities. 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 infrastructure), less any related, outstanding debt used to acquire those
assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the City’s investment in capital assets is reported net of related debt,
it should be noted that the resources needed to repay this debt must be provided from other sources, since the
capital assets themselves cannot be used to liquidate these liabilities.
A portion of the City’s net position, $4,766,000 (7%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $7,674,000
(11%), is used to meet the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Position
September 30, 2015 and 2014
(In Thousands)
Governmental Business-type
Activities Activities Totals
2015 2014 2015 2014 2015 2014
Current and other assets $11,965 $11,345 $9,466 $8,362 $21,431 $19,707
Capital assets 39,542 39,215 39,607 41,190 79,149 80,405
Total Assets 51,507 50,560 49,073 49,552 100,580 100,112
Deferred Outflow 2,993 0 2,083 1,187 5,076 1,187
Long-term liabilities
outstanding 8,374 503 22,235 21,504 30,609 22,007
Other liabilities 707 638 2,924 2,774 3,631 3,412
Total Liabilities 9,081 1,141 25,159 24,278 34,240 25,419
Deferred Inflow 40 0 0 0 40 0
Net Position:
Invested in capital assets,
net of related debt 39,542 39,214 19,394 20,758 58,936 59,972
Restricted 3,883 4,004 883 798 4,766 4,802
Unrestricted 1,954 6,201 5,720 4,905 7,674 11,106
Total Net Position $45,379 $49,419 $25,997 $26,461 $71,376 $75,880
vi
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 report positive balances in all categories of
net position, both for the government as a whole, as well as for its separate governmental and business-type
activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach’s Change in Net Position
For the Years Ended September 30, 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
Transfers 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
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 $517,000 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 $638,000 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 of the 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
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.
Construction 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
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
Activities
Business-type
Activities Totals
2015 2014 2015 2014 2015 2014
Land
Intangibles
Buildings
Improvements-Other
Equipment
Construction in Progress
$10,363
38
2,599
25,151
994
397
$10,363
7
2,635
24,918
874
418
$1,656
214
70
36,577
529
560
$1,656
215
80
38,626
440
173
$12,019
252
2,669
61,728
1,523
957
$12,019
222
2,715
63,544
1,314
591
Total $39,542 $39,215 $39,606 $41,190 $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
(In Thousands)
Business-type
Activities
Utilities System Revenue Bond, Series 2014 $12,881
F.D.E.P. State Revolving Funds Loan, 2010 628
F.D.E.P. State Revolving Funds Loan, 2009 6,704
Total $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
Revenue Highlights:
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2015
(Concluded)
• Total revenue for 20 15 was $3,000 lower than 2014 revenue (page 2). Mos t 2015 revenue sources were
hi g he r than previous year with the exception of Investment Earnings which came in $524,000 higher
in 20 14.
• The 20 15 taxable property values were about 6. 18 % hi gher than the 20 14 values. The C ity Com mi ssion
voted to use the same rate of 3.3285 mills, ins tead of the roll-back rate of 3.1567. The purpose for
adopting the mil lage rate of 3.3285 was to maintain a level of ad valorem tax revenue s ufficient to
maintain adequate funding for the existing level of services at the estimated cos t and to continue to
maintain the C ity 's infrast ructure and adequate reserves. The fin a l gross taxable property value was
$1,278,868,000. Ad valorem taxes of $4,11 3,000 represent 40% of th e General Fund revenues for
20 15.
• The 20 15 Intergovernme ntal revenues of$1 ,749,000 make up 17 .06% of general fund revenues . This
is an increase of $1 14,000 over 20 14.
• T he City 's investment portfolio is value d at approximately $15,773,000 a s of September 30, 20 15. The
investment s howed a lo ss of$2,000 for the year, compared to a gain of$526,000 in the prior year. Over
th e past five years, the City h as recogni zed an overall investm e nt earning s gain of$1, 119,000.
Expenditure Highlights:
• Expenditures in creased in c urrent year by $143 ,000 w hen compared to pr ior year. This in crease was a
res ult of a $543,000 increased investment in capital o utl ay being offset by decreases of $160,000 in
General Governme nt and $136,000 in Road M ainte nance and Construction.
• In 20 15 a la rger investment in the C ity's infrastructure res ulted in capital expenditu res increasi ng from
$893,000 in 20 14 to $1,436,000 in 2015. The major projects in that were completed or started in 20 15
were improve me nt s at Bull Park, improvements at Russel l Park, Francis A venue drainage improvements,
a nd Saltair drainage improvements.
• Transfers in 20 15 represents the movement of funds from the Public Utility Funds and th e 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 desi g ned to provide a general overview of the C ity 's financ es for all those with a n
interest in the City's finance s. Questions concerning any of the inform ation prov id ed in thi s report or
requests for additional financial information s hould be add ressed to th e City of Atlantic Beach, Finance
Director, 800 Sem in o le Road, Atlanti c Beach, F lorid a 32233.
Director of Fin ance
xi
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide Financial Statements, Fund Financial
Statements, and Notes to Financial Statements.
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATIVE 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 $ 18,440,875 $ 16,049,275
Receivables - Net 450 548,386 548,836 632,235
Due from Other Governments 936,932 35,244 972,176 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 49,073,269 100,580,001 100,111,955
Deferred Outflows of Resources
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 Deferred Outflows of Resources 2,992,625 2,082,633 5,075,258 1,187,375
Liabilities Accounts Payable and Other Current Liabilities 491,380 375,992 867,372 1,477,509
Construction Retainages Payable 0 24,819 24,819 56,696
Due to Other Governments 0 11,066 11,066 10,194
Unearned 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 Benefits 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 $ 71,374,867 $ 75,880,648
See accompanying notes.
1
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
Program Revenues Net (Expense) Revenue and Changes in Net Position
Operating Capital Primary Government
Charges for Grants and Grants and Governmental Business-type 2014
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals Totals
Primary Government
Governmental Activities:
General Government $ 1,935,146 882,415 $ $ 0 $ 0 $ (1,052,731) $ 0 $ (1,052,731) $ (1,177,176)
Public Safety 5,349,726 661,428 76,938 0 (4,611,360) 0 (4,611,360) (4,384,339)
Road Maintenance and
Construction 1,771,375 119,194 559,281 89,937 (1,002,963) 0 (1,002,963) (1,079,014)
Parks and Recreation 1,298,116 75,703 0 127,058 (1,095,355) 0 (1,095,355) (1,075,088)
Conservation and Resource
Management 1,800 0 6,083 0 4,283 0 4,283 8,180
Interest/Fiscal Charges on
Long-term Debt 0 0 0 0 0 0 0 (486)
Total Governmental Activities 10,356,163 1,738,740 642,302 216,995 (7,758,126) 0 (7,758,126) (7,707,923)
Business-type Activities:
Utility 7,277,596 7,988,066 0 341,713 0 1,052,183 1,052,183 1,409,974
Stormwater 1,091,752 859,315 0 0 0 (232,437) (232,437) (293,978)
Sanitation 1,560,020 1,825,560 0 0 0 265,540 265,540 (78,798)
Building Code Enforcement 350,671 441,588 0 0 0 90,917 90,917 183,984
Total Business-type Activities 10,280,039 11,114,529 0 341,713 0 1,176,203 1,176,203 1,221,182
Total Primary Government $ 20,636,202 $ 12,853,269 642,302 $ 558,708 $ (7,758,126) 1,176,203 (6,581,923) (6,486,741)
General Revenues
Property Taxes 4,113,476 0 4,113,476 3,908,365
Sales Taxes 1,296,201 0 1,296,201 1,208,547
Business and Utility Taxes 1,109,471 0 1,109,471 1,135,931
State Revenue Sharing 321,521 0 321,521 300,007
Discretionary Sales Surtax 772,098 0 772,098 721,981
Investment Earnings (Loss) 3,170 (5,518) (2,348) 525,970
Miscellaneous 52,293 0 52,293 64,556
Transfers 578,210 (578,210) 0 0
Total General Revenues and Transfers 8,246,440 (583,728) 7,662,712 7,865,357
Change in Net Position 488,314 592,475 1,080,789 1,378,616
Net Position, Beginning of Year 49,419,360 26,461,288 75,880,648 74,502,032
Prior Period Adjustment (4,529,366) (1,057,204) (5,586,570) 0
Net Position, Beginning of Year (as Restated) 44,889,994 25,404,084 70,294,078 74,502,032
Net Position, End of Year 45,378,308 $ 25,996,559 $ 71,374,867 $ 75,880,648 $
See accompanying notes.
2
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014
2015
Nonmajor
Governmental
Totals
Governmental 2014
General Funds Funds Totals
Assets
Equity in Pooled Cash and Investments
Receivables - Net
Due from Other Funds
Due from Other Governments
Inventories
Notes Receivable - Current
$ 7,122,799
450
10,781
689,932
20,827
760
3,822,524 $
0
0
247,000
0
0
10,945,323 $
450
10,781
936,932
20,827
760
10,312,186 $
2,730
6,531
988,067
29,370
0
Prepaid Items
Notes Receivable - Noncurrent
Total Assets
58,786
1,520
7,905,855
0
0
4,069,524
58,786
1,520
11,975,379
13,008
0
11,351,892
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued Liabilities
Due to Other Funds
Deposits
Unearned Revenue
Total Liabilities
322,756
0
2,625
22,017
347,398
168,624
10,781
111
0
179,516
491,380
10,781
2,736
22,017
526,914
393,083
6,531
9,199
10,905
419,718
Fund Balances
Nonspendable:
Inventories
Prepaids
Restricted for:
20,827
58,786
0
0
20,827
58,786
29,370
13,008
Public Safety
Road Maintenance and Construction
Other Capital Projects
Other Purposes
Committed to:
10,287
0
0
0
170,475
248,141
3,325,789
128,595
180,762
248,141
3,325,789
128,595
168,310
159,677
3,588,843
86,906
Conservation and Resource Management
Assigned to:
Operating Reserves
Unassigned
Total Fund Balances
0
2,836,042
4,632,515
7,558,457
18,956
0
(1,948)
3,890,008
18,956
2,836,042
4,630,567
11,448,465
14,673
2,685,355
4,186,032
10,932,174
Total Liabilities and Fund Balances $ 7,905,855 4,069,524 $ 11,975,379 $ $ 11,351,892
See accompanying notes.
3
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 $ 11,448,465 $ 10,932,174
Amounts Reported for Governmental
Activities in the Statement of Net Position
are Different Because:
Capital assets used in governmental
activities are not financial resources
and, therefore, are not reported in
the funds:
Total Capital Assets
(Accumulated Depreciation)
59,843,271 $
(20,301,137)
39,542,134
$ 58,407,187
(19,192,636)
39,214,551
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
Deferred Inflows Related to Pensions
2,992,625
(39,827)
2,952,798
0
0
0
Long-term liabilities are not due and payable
in the current period and, therefore, are
not reported in the governmental funds:
Compensated Absences
Other Postemployment Benefits Obligation
Net Pension Liability
(573,231)
(178,501)
(7,813,357)
(8,565,089)
(570,520)
(156,845)
0
(727,365)
Total Net Position of Governmental Activities $ 45,378,308 $ 49,419,360
See accompanying notes.
4
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
Nonmajor 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
Intergovernmental 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 1,317,266 274,068 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) (10,633,762) (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
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 - Total Governmental Funds 516,291 $ $ 720,478
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
(Current Year Depreciation)
1,436,084 $ 892,798 $
(1,108,501) (1,099,082)
327,583 (206,284)
Certain nonexchange revenues reported in the
statement of activities are not considered current
financial resources and, therefore, are not reported
as revenue in the governmental funds. 0 9,799
Repayment of long-term debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the
statement of net assets. 0 69,203
The changes in net pension liability and pension related
deferred outflows and inflows of resources result in
an adjustment to pension expense in the statement of
activities, but not in the governmental fund statements. (331,193) 0
Some expenses/revenues reported in the statement
of activities do not require the use of or provide
current financial resources and, therefore, are not
reported as expenditures in governmental funds:
Debt Interest Expense
Compensated Absences
Net Pension Asset
Other Postemployment Benefits Obligation
Change in Net Position - Governmental Activities
0
(2,711)
0
(21,656)
970
(5,719)
(2,271)
(21,119)
(24,367)
488,314 $ $
(28,139)
565,057
See accompanying notes.
6
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 2014
Utility Stormwater Sanitation Enforcement Totals Totals
Assets
Current Assets:
Equity in Pooled Cash and Investments $ 4,914,330 1,779,734 $ 397,201 $ 404,287 $ $ 7,495,552 $ 5,737,089
Accounts Receivable - Net 428,823 53,992 65,571 0 548,386 629,505
Due from Other Governments 35,244 0 0 0 35,244 228,532
Inventories 12,827 0 0 0 12,827 12,827
Notes Receivable - Current 15,759 0 0 0 15,759 15,759
Prepaid Items 16,105 0 0 0 16,105 32,210
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 1,218,056 0 0 0 1,218,056 1,578,519
Capital Assets:
Land 749,499 906,519 0 0 1,656,018 1,656,018
Buildings 4,356,384 0 0 0 4,356,384 4,356,384
Improvements Other Than Buildings 63,047,605 16,465,051 0 0 79,512,656 79,345,283
Equipment 1,758,710 337,447 189,877 42,347 2,328,381 2,151,907
Intangibles - Easements and Computer Software 226,394 0 0 18,315 244,709 244,709
(Accumulated Depreciation and Amortization) (40,152,145) (8,659,899) (181,360) (58,238) (49,051,642) (46,737,041)
Construction in Progress 253,048 307,360 0 0 560,408 172,514
Notes Receivable - Noncurrent 124,426 0 0 0 124,426 127,828
Total Assets 37,005,065 11,190,204 471,289 406,711 49,073,269 49,552,043
Deferred Outflows of Resources
Unamortized Refunding Loss 939,106 140,326 0 0 1,079,432 1,187,375
Pension Related 844,812 43,193 10,153 105,043 1,003,201 0
Total Deferred Outflows 1,783,918 183,519 10,153 105,043 2,082,633 1,187,375
See accompanying notes.
7
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014
(Concluded)
2015
Business-type Activities - Enterprise 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 Postemployment 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 COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2014
2015
Business-type Activities - Enterprise Funds
Building Code 2014
Utility Stormwater Sanitation Enforcement Totals Totals
Operating Revenues
Charges for Services:
Customer Charges $ 7,892,897 859,315 $ 1,756,608 $ 441,588 $ $ 10,950,408 $ 10,897,732
Franchise Permits 0 0 7,500 0 7,500 2,500
Miscellaneous Revenues 62,419 0 0 0 62,419 60,333
Total Operating Revenues 7,955,316 859,315 1,764,108 441,588 11,020,327 10,960,565
Operating Expenses
Personal Services 1,968,049 190,302 25,736 299,145 2,483,232 2,186,305
Contractual Services 638,961 127,173 1,386,682 965 2,153,781 2,664,229
Supplies 388,737 40,291 1,115 2,745 432,888 402,441
Repairs and Maintenance 120,049 18,015 5,858 3,780 147,702 170,509
Utilities 372,361 0 0 0 372,361 367,452
Depreciation 1,835,798 474,295 2,892 1,616 2,314,601 2,289,758
Intergovernmental Charges 1,113,777 160,883 137,737 35,027 1,447,424 1,345,224
Other Expenses 194,619 18,033 0 7,393 220,045 254,643
(Total Operating Expenses) (6,632,351) (1,028,992) (1,560,020) (350,671) (9,572,034) (9,680,561)
Operating Income (Loss) 1,322,965 (169,677) 204,088 90,917 1,448,293 1,280,004
Nonoperating Revenues (Expenses)
Connection Charges 32,750 0 0 0 32,750 9,189
Franchise Fees 0 0 61,452 0 61,452 45,699
Investment Earnings (Loss) (11,976) (2,166) 491 8,133 (5,518) 213,172
Interest Expense (556,635) (48,040) 0 0 (604,675) (861,481)
Gain on Disposal of Fixed Assets 9,897 0 0 0 9,897 24,685
Amortization of Refunding Loss (98,507) (14,720) 0 0 (113,227) (52,843)
Total Nonoperating Revenues (Expenses) (624,471) (64,926) 61,943 8,133 (619,321) (621,579)
See accompanying notes.
9
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
(Concluded)
2015
Income (Loss) Before Contributions
and Transfers $
Utility
698,494
Building Code
Stormwater Sanitation Enforcement
(234,603) $ 266,031 $ 99,050 $
Business-type Activities - Enterprise Funds
$
Totals
828,972 $
2014
Totals
658,425
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants
Transfers in
Transfers (out)
Total Capital Contributions and Grants
and Transfers
341,713
0
(615,167)
(273,454)
0
260,000
0
260,000
0
0
(223,043)
(223,043)
0
0
0
0
341,713
260,000
(838,210)
(236,497)
775,929
285,000
(905,795)
155,134
Change in Net Position 425,040 25,397 42,988 99,050 592,475 813,559
Net Position, Beginning of Year 16,582,663 9,358,655 254,643 265,327 26,461,288 25,647,729
Prior Period Adjustments (890,288) (45,518) (10,700) (110,698) (1,057,204) 0
Net Position, Beginning of Year (As Restated) 15,692,375 9,313,137 243,943 154,629 25,404,084 25,647,729
Net Position, End of Year $ 16,117,415 9,338,534 $ 286,931 $ 253,679 $ $ 25,996,559 $ 26,461,288
See accompanying notes.
10
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
2015
Business-type Activities - Enterprise Funds
Building Code 2014
Utility Stormwater Sanitation Enforcement Totals Totals
Cash Flows from Operating Activities
Cash Received from Customers $ 8,027,673 855,370 $ 1,764,044 $ 441,588 $ $ 11,088,675 $ 11,325,520
Cash Paid to Customer for Return of Deposit 0 0 0 (355,732) (355,732) 0
Cash Paid to Suppliers (2,146,833) (178,164) (1,719,936) (23,857) (4,068,790) (2,957,201)
Cash Paid to Employees (1,894,067) (179,444) (24,625) (271,071) (2,369,207) (2,210,303)
Cash Paid for Interfund Services (1,113,777) (160,886) (137,737) (35,027) (1,447,427) (1,345,224)
Net Cash Provided by (Used in) Operating
Activities 2,872,996 336,876 (118,254) (244,099) 2,847,519 4,812,792
Cash Flows from Noncapital Financing
Activities
Connection Charges 32,750 0 61,452 0 94,202 9,189
Franchise Fees 0 0 0 0 0 45,699
Transfers in 0 260,000 0 0 260,000 285,000
Transfers (out) (615,167) 0 (223,043) 0 (838,210) (905,795)
Net Cash Provided by (Used in) Noncapital
Financing Activities (582,417) 260,000 (161,591) 0 (484,008) (565,907)
Capital and Related Financing Activities
Capital Grants 535,001 0 0 0 535,001 547,397
Proceeds from Loan 0 0 0 0 0 13,960,000
Fixed Asset Additions (456,090) (275,650) 0 0 (731,740) (2,399,801)
Proceeds from Sale of PPE 9,897 0 0 0 9,897 24,685
Principal Payments on Long-term Debt (326,697) 0 0 0 (326,697) (16,087,763)
Issuance Costs Paid 0 0 0 0 0 (52,843)
Interest Paid (419,577) (27,585) 0 0 (447,162) (1,187,382)
Net Cash Provided by (Used in) Capital
and Related Financing Activities (657,466) (303,235) 0 0 (960,701) (5,195,707)
See accompanying notes.
11
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
(Continued)
2015
Cash Flows from Investing Activities
Sale (Purchase) of Investments
Interest Received
Net Cash Provided by (Used in)
Investing Activities
$
Utility
(865,804)
(11,976)
(877,780)
Building Code
Stormwater Sanitation Enforcement
(91,667) $ 286,614 $ 247,968 $
(2,166) 491 8,841
(93,833) 287,105 256,809
Business-type Activities - Enterprise Funds
$
Totals
(422,889)
(4,810)
(427,699)
$
2014
Totals
(435,976)
213,985
(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 Operating Income (Loss) to
Net Cash Provided by (Used in) Operating
Activities
Operating Income (Loss)
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
(Used in) Operating Activities:
Depreciation
Change in Assets and Liabilities:
Accounts Receivable
Inventory
Prepaids
Compensated Absences
OPEB Obligation
Accounts Payable and Accrued Liabilities
Customer Deposits
Unearned Revenue
Change in Deferred Outflow
Change in Net Pension Liability Net Cash Provided by (Used in) Operating Activities
1,322,965 $ (169,677) $ 204,088 $ 90,917 $ $
1,835,798 474,295 2,892 1,616
88,923 (4,415) 13 0
0 0 0 0
16,105 0 0 0
(24,817) 0 0 3,176
6,370 636 0 956
(448,211) 30,706 (326,281) 3,475
(17,492) 136 0 (355,732)
926 470 (77) 0
(514,144) (26,287) (6,179) (63,928)
606,573 31,012 7,290 75,421
2,872,996 $ 336,876 $ (118,254) $ (244,099) $ $
1,448,293
2,314,601
84,521
0
16,105
(21,641)
7,962
(740,311)
(373,088)
1,319
(610,538)
720,296
2,847,519
$
$
1,280,004
2,289,758
(8,188)
50,049
148,937
(31,762)
7,764
703,087
378,617
(5,474)
0
0
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 SEPTEMBER 30, 2014
(Concluded)
2015
Reconciliation of Cash and Cash Equivalents
to Balance Sheet
Utility
Building Code
Stormwater Sanitation Enforcement
Business-type Activities - Enterprise Funds
Totals
2014
Totals
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
$
$
4,914,330
1,218,056
(4,888,036)
1,244,350
1,779,734 $ 397,201 $ 404,287 $
0 0 0
(1,418,600) (316,603) (322,251)
361,134 $ 80,598 $ 82,036 $
$
$
7,495,552
1,218,056
(6,945,490)
1,768,118
$
$
5,737,089
1,578,519
(6,522,601)
793,007
See accompanying notes.
13
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2015,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2014
Pension Trust Funds
2015 2014
Assets
Cash and Cash Equivalents 137,107 $ $ 37,480
Interest Receivable 8,921 64,250
Investments at Fair Value 23,355,432 23,066,411
Total Assets 23,501,460 23,168,141
Liabilities
Accounts Payable and Accrued Liabilities 0 114
Total Liabilities 0 114
Net Position
Net Position Restricted for Pensions 23,501,460 $ $ 23,168,027
See accompanying notes.
14
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 of Investments 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 23,501,460 $ 23,168,027 $
See accompanying notes.
15
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 of the State of
Florida, Florida Statutes Section 57-1126. The City operates under a form of government which
comprises an elected City Commission (four Commissioners and a Mayor-Commissioner) and
provides, under the administration of an appointed City Manager, the following services: public
safety, public works (streets and infrastructure), recreation, sanitation, stormwater, reuse,
planning, zoning, water and sewer, and general government services.
In accordance with the Codification of Governmental and Financial Reporting Standards, the
financial reporting entity consists of the primary government, organizations for which the
primary government is financially accountable, and other organizations whose exclusions would
cause the reporting entity’s financial statements to be misleading or incomplete. The
Governmental Accounting Standards Board (GASB) has set forth criteria for consideration in
determining financial accountability. These criteria include appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that
organization; or (2) the potential for that organization to provide specific benefits to or impose
specific financial burdens on the City. Other considerations are whether the organization is
legally separate, whether the City holds the corporate powers of the organization, and whether
there is fiscal dependency by the organization on the City. Based upon the application of these
criteria, the City has no component units.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) report information on all of the nonfiduciary activities of the City. For the most
part, the effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges
for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or activity. Indirect costs are included in the program
expense reported for individual functions and activities. Program revenues include: (1) charges
to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or activity; and (2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or activity.
Taxes and other items not properly included among program revenues are reported instead as
general revenues.
16
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 (Concluded)
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide Financial Statements
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary
fund financial statements. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized
as revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. The major exception to this general rule is charges between the City’s water
and sewer function and various other functions of the City. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods,
services, or privileges provided; (2) operating grants and contributions; and (3) capital grants and
contributions, including special assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets;
(2) Restricted; or (3) Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences, other postemployment
benefits, pension expense, and claims and judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and permits, charges for services, and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have
been recognized as revenues of the current fiscal period. All other revenue items are considered
to be measurable and available only when cash is received by the City.
17
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 reports the following major governmental fund:
■ The General Fund is the City’s primary operating fund. It accounts for all financial resources
of the general government, except those required to be accounted for in another fund.
The City reports the following major proprietary funds:
■ The Utility Fund accounts for the activities of the City’s water distribution, sewer collection
and treatment systems, and reuse system.
■ The Sanitation Fund accounts for the activities of the City’s sanitation system.
■ The Stormwater Fund accounts for the activities of the City’s stormwater system.
■ The Building Code Enforcement Fund accounts for the activities of the City’s Building
Department.
Additionally, the City reports the following fund types:
■ Special Revenue Funds—The special revenue funds are used to account for the proceeds
of specific revenue sources (other than major capital projects) that are legally restricted to
expenditures for specified purposes.
■ Debt Service Funds—The debt service fund is used to account for the accumulation of
resources for, and the payment of, long-term general obligation debt principal, interest, and
related costs other than obligations payable from the operations of the proprietary funds.
■ Capital Projects Funds—The capital projects funds are used to account for the financial
resources to be used for the acquisition or construction of major capital facilities and
improvement projects (other than those financed by proprietary funds or special revenue
funds).
■ Pension Trust Funds—These funds account for the activities of the Employees’
Retirement System, which accumulates resources for pension benefit payments to qualified
police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – nonspendable, restricted, committed, assigned,
and unassigned:
■ 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
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 reported 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
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
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 Years
Buildings and Improvements 10 – 40
Improvements Other Than Buildings 10 – 50
Infrastructure 25 – 100
Machinery and Equipment 3 – 40
Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type statement
of net position. Bond premiums, discounts, and refunding losses are deferred and amortized
over the life of the bonds using the effective interest method. Issuance costs, whether or not
withheld from the actual debt proceeds, are reported as debt service expenditures.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide
and proprietary fund financial statements.
21
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
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 information on Pension Related Deferred Inflows and
Outflows.
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements.
Grant revenues are recorded using the modified accrual basis in governmental funds and the
accrual basis in the proprietary funds. Restricted grant revenues, which are received but not
expended, are recorded as unearned revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the
Property Appraiser and Tax Collector of the City of Jacksonville, Florida. General property
taxes are recorded as received, in cash, which approximates taxes levied less discounts for the
current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the
following year. Discounts are allowed for early payment. On or prior to June 1, interest-bearing
certificates are sold for all uncollected real property taxes. Unsold certificates are held by the
City of Jacksonville, Florida.
Interfund Transactions
During the course of normal operations, the City has various transactions between funds to
construct assets and comply with local ordinances and other legal restrictions. These
transactions are reflected as transfers. In addition, certain transfers have been made between
systems and accounts of the utility enterprise fund as required by bond covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in total.
Such information does not include sufficient detail to constitute a presentation in conformity
with generally accepted accounting principles. Accordingly, such information should be read
in conjunction with the City’s financial statements for the year ended September 30, 2014, from
which the summarized information was derived.
22
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. In addition,
investments are separately held and individually accounted for where contractual arrangements
and bond covenants provide for and require such arrangements.
At September 30, 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
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
Type Rating Value 1 Year Years Years 10 Years Total
Money Market Funds:
Morgan Stanley, N.A. Unrated $ 7,168 $ 7,168 $ 0 $ 0 $ 0 $ 7,168
Mutual Funds:
Alliance Limited Duration
High Income Mutual Fund Unrated 1,189,005 1,189,005 0 0 0 1,189,005
Delaware Diversified Income A Unrated 2,483,596 2,483,596 0 0 0 2,483,596
Guggenheim Floating Rate
Strategy Class A Unrated 4,165,322 4,165,322 0 0 0 4,165,322
Invesco Floating Rate
Income Class A Unrated 727,801 727,801 0 0 0 727,801
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 3,011,218 3,011,218 0 0 0 3,011,218
Voya Floating Rate A Unrated 4,166,004 4,166,004 0 0 0 4,166,004
Florida PRIME A-1 22,817 22,817 0 0 0 22,817
Total $ 15,772,931 $ 15,772,931 $ 0 $ 0 $ 0 $ 15,772,931
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
Type 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 $ 22,321,049 $ 474,876 $ 568,428 $ 0 $ 23,364,353
* Fair value balances reported include interest receivable.
The total pension investment balances of the City at September 30, 2015, are comprised of the
following items:
24
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 2 -Cash and Investments (Continued)
Moody’s Percent
Investment Credit of
Type Rating Total
Corporate Bonds A1 0.32%
Corporate Bonds A2 0.21%
Corporate Bonds A3 0.74%
Corporate Bonds AA1 0.11%
Corporate Bonds AA3 0.21%
Corporate Bonds AAA 0.10%
Corporate Bonds BAA1 1.64%
Corporate Bonds BAA2 0.63%
Corporate Bonds BAA3 0.39%
Government and GSE Bonds AAA 0.64%
Stocks NR 61.21%
Cash and Money Market NR 31.59%
ICMA Self Directed NR 2.21%
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Fund’s and the City’s
General Employees’ Retirement System Trust Fund’s investment policies to, at a minimum,
limit 80% of the total fixed income portfolio to those that are rated investment grade of higher.
The Police Officers’ Retirement System Trust Fund’s investment policy defines investment
grade as “BBB”, Baa”, or their equivalent.
Also, no more than 10% (at cost) of the fixed income portfolio total value can be invested in the
securities of any single corporate issuer. The maximum allocation to International Equities is
25%.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments
or collateral securities that are in the possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the
exposure to custodial credit risk for deposits or investments, other than the following provision
for deposits: The Finance Director may execute a third party Custodial Safekeeping Agreement
with a commercial bank having trust powers or a trust company which is chartered by the United
States government or the State of Florida. All securities purchased and/or collateral obtained
by the City shall be properly designated as an asset of the City and held in safekeeping by the
trust department or trust company, and no withdrawal of such securities, in whole or in part,
shall be made from safekeeping, except by an authorized City staff member. The third party
Custodial Safekeeping Agreement shall include letters of authority from the City with details as
to responsibilities of parties, notification of security purchases, sales, deliver, repurchase
agreements, wire transfers, safekeeping and transaction costs, procedures in case of wire failure
or other unforeseen mishaps, including liability of each party.
25
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:
Renewal
Enterprise Customer and Debt
Funds Deposits Replacement Service Totals
Utility Fund $ 586,894 $ 250,000 $ 381,162 $ 1,218,056
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
Stormwater 69,589 (15,597) 53,992
Sanitation 119,173 (53,602) 65,571
Total $ 637,655 $ (88,059) $ 549,596
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 $ 140,185
(Current Portion) (15,759)
Total Notes Receivable -Noncurrent $ 124,426
26
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 5 -Capital Assets
Capital asset activity for the fiscal year ended September 30, 2015, is as follows:
Beginning Ending
Balance Increases (Decreases) Balance
Governmental Activities
Capital Assets Not Being Depreciated:
Land $ 10,363,002 $ 0 $ 0 $ 10,363,002
Construction in Progress 417,906 898,463 (919,508) 396,861
Total Capital Assets Not
Being Depreciated 10,780,908 898,463 (919,508) 10,759,863
Capital Assets Being Depreciated:
Buildings 4,491,659 82,987 0 4,574,646
Intangible Assets 341,079 40,860 0 381,939
Improvements Other Than Buildings 39,156,369 919,508 0 40,075,877
Machinery and Equipment 3,637,172 413,774 0 4,050,946
Total Capital Assets Being Depreciated 47,626,279 1,457,129 0 49,083,408
Less Accumulated Depreciation for:
Buildings (1,856,760) (118,933) 0 (1,975,693)
Intangible Assets (334,215) (9,741) 0 (343,956)
Improvements Other Than Buildings (14,238,285) (686,756) 0 (14,925,041)
Machinery and Equipment (2,763,376) (293,071) 0 (3,056,447)
Total Accumulated Depreciation (19,192,636) (1,108,501) 0 (20,301,137)
Total Capital Assets Being
Depreciated, Net 28,433,643 348,628 0 28,782,271
Governmental Activities Capital
Assets, Net $ 39,214,551 $ 1,247,091 $ (919,508) $ 39,542,134
Business-type Activities
Capital Assets Not Being Depreciated:
Land $ 1,656,018 $ 0 $ 0 $ 1,656,018
Construction in Progress 172,514 555,267 (167,373) 560,408
Total Capital Assets Not Being Depreciated 1,828,532 555,267 (167,373) 2,216,426
Capital Assets Being Depreciated:
Buildings 4,356,384 0 0 4,356,384
Intangible Assets 244,709 0 0 244,709
Improvements Other Than Buildings 79,345,283 167,373 0 79,512,656
Machinery and Equipment 2,151,907 176,474 0 2,328,381
Total Capital Assets Being Depreciated 86,098,283 343,847 0 86,442,130
Less Accumulated Depreciation for:
Buildings (4,275,987) (9,903) 0 (4,285,890)
Intangible Assets (30,282) (190) 0 (30,472)
Improvements Other Than Buildings (40,718,977) (2,216,682) 0 (42,935,659)
Machinery and Equipment (1,711,795) (87,826) 0 (1,799,621)
Total Accumulated Depreciation (46,737,041) (2,314,601) 0 (49,051,642)
Total Capital Assets Being Depreciated,
Net 39,361,242 (1,970,754) 0 37,390,488
Business-type Activities Capital Assets,
Net $ 41,189,774 $ (1,415,487) $ (167,373) $ 39,606,914
27
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
$
$
141,838
193,301
535,805
237,557
1,108,501
Business-type Activities
Utility
Stormwater
Sanitation
Building Code Enforcement
Total Depreciation Expense -Business-type Activities
$
$
1,835,798
474,295
2,892
1,616
2,314,601
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 Annual
Installments of Principal and Semiannual Installments of Interest Through
October 1, 2025, Bearing Coupon Rates of 2.330%, Secured Solely by a
Pledge of and Lien on Net Water and Sewer System Revenues and Certain
Other Revenues as Defined in the Bond Ordinance
Loans Payable
$ 13,960,000
Florida Department of Environmental Protection, Disbursements and
Capitalized Interest for a $773,030 State of Florida Revolving Loan
#DW160710, Issued to Finance the Construction Costs to Replace a
Well at Water Treatment Plant No. 1 and a Transmission Main on
Ocean Boulevard, Payable in Semiannual Installments of Principal
and Interest Through November 15, 2030, with Financing Rates of
2.71%, Secured Solely by a Pledge of Net Water and Sewer System
Revenues, After Payment of all Yearly Payment Obligations on Account
of the Senior Revenue Obligations, as Defined in the Loan Agreement 627,866
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 of 3.14% and 2.88%, Secured Solely
by a Pledge of Net Water and Sewer System Revenues, After Payment
of all Yearly Payment Obligations on Account of the Senior Revenue
Obligations, as Defined in the Loan Agreement 6,704,151
Total Revenue Bonds and Loans Payable $ 21,292,017
28
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 Principal 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 1,009,551 39,294 1,048,845
Total $ 21,292,017 $ 4,012,732 $ 25,304,749
Interest and amortization incurred during the year ended September 30, 2015, amounted to
$717,902. Of the 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 $ 2,464,955 $ (374,334) $ 8,565,089 $ 191,157
29
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 6 -Long-term Debt (Continued)
Balance Balance Due
October 1, September 30, Within
2014 Additions Reductions 2015 One Year
Business-type Activities
State Revolving Fund Loans $ 7,658,714 $ 0 $ (326,697) $ 7,332,017 $ 336,895
Revenue Bonds Payable 13,960,000 0 0 13,960,000 1,090,000
Less Deferred Amounts:
Loss on Bond Refunding (1,187,375) 0 107,943 (1,079,432) 0
Total Revenue Bonds Payable 12,772,625 0 107,943 12,880,568 1,090,000
Total Bonds/Loans Payable 20,431,339 0 (218,754) 20,212,585 1,426,895
Compensated Absences 229,327 123,786 (145,291) 207,822 68,035
OPEB Obligation 51,836 7,962 0 59,798 0
Net Pension Liability 1,449,865 720,298 0 2,170,163 0
Total Business-type Activities
Long-term Liabilities $ 22,162,367 $ 852,046 $ (364,045) $ 22,650,368 $ 1,494,930
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial
assistance to private sector entities for the acquisition and construction of health care facilities
deemed to be in the public interest. These bonds are secured by the financed property and are
payable solely from the payments received on the underlying mortgage loans.
There is no obligation on the part of the City or any political subdivision for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial
statements. As of September 30, 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 certain 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
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 6 -Long-term Debt (Concluded)
Outstanding
Net Principal Estimated Principal
Pledged Revenue and Interest Percentage and Pledged
Description Revenue Received Paid Pledged Interest Through
2014 – Utility System Utility
Refunding Bonds Revenues $ 3,180,693 $ 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 1, 2015.
Note 7 -Defined Benefit Pension Plans
Plan Descriptions
The City maintains two separate single-employer defined benefit pension plans, one for police
officers and one for general employees, which cover substantially all full-time City employees
hired before September 1, 2008. The general employees’ defined benefit plan is closed to new
entrants. Full-time general employees hired on or after September 1, 2008, are covered by the
defined contribution plan disclosed in Note 8. The pension plans do not issue separate stand
alone financial statements. Combining statements are included in the supplementary
information to the basic financial statements.
General Employees’ Retirement Plan
Plan Description
The General Employees’ Retirement Plan (Plan) provides retirement, disability, and death
benefits to Plan members and their beneficiaries. The City Commission has the authority to
establish and amend the benefit provisions of the Plan. The Plan is governed by a Retirement
Plan Board appointed by the City Commission and comprised of five members, two of which
will be eligible legal residents of the City, two of which will be general employees elected by
the majority of general employees who are members of the Plan, and one of which will be elected
by the other four members. Plan membership in the General Employees’ Retirement Plan as of
September 30, 2015 and 2014, is as follows:
31
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, September 30,
Retirees and Beneficiaries 2015 2014
Inactive Plan Members or Beneficiaries
Currently Receiving Benefits 59 56
Inactive Plan Members Entitled to but Not Yet Receiving Benefits 12 11
Active Plan Members 48 56
Total 119 123
Plan Benefits
Normal retirement is available upon the attainment of age sixty and the completion of five years
of credited service. Early retirement is available with a reduced benefit upon the attainment of
age fifty-five and the completion of five years of credited service. For members hired before
April 24, 2005, the normal retirement benefit shall equal 2.85% of average final compensation
for each year of credited service. For members hired on or after April 24, 2005, the normal
retirement benefit shall equal 2.50% of average final compensation for each year of credited
service. The Plan includes a deferred retirement option program (DROP) under which members
eligible for normal retirement may have their monthly pension benefit credited to an account
while continuing to be actively employed for up to five years. As of September 30, 2015, Plan
net position included $29,039 of DROP account balances.
Contributions
The City is required to contribute at an actuarially determined 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% of their annual
covered salary. Contribution requirements are established by City code, which may be amended
by the City Commission.
Measurement Date
As described in Note 15, 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 Pens ion Plan Fiduciary Net Pens ion
Liability Net Pos ition Liability
Balances at S eptember 30, 2013 17,282,101 $ 13,770,711 $ 3,511,390 $
Changes for the Year:
Service Cos t 399,576 0 399,576
In teres t 1,386,245 0 1,386,245
Changes in As s umptions 1,814,460 0 1,814,460
Contributions - Employer 0 950,980 (950,980)
Contributions - State 0 0 0
Contributions - Employee 0 157,383 (157,383)
Net Inves tment Income 0 778,981 (778,981)
Benefit Payments , Including
Refunds of Contributions (707,218) (707,218) 0
Adminis trative Expens es 0 (31,529) 31,529
Net Changes 2,893,063 1,148,597 1,744,466
Balances at S eptember 30, 2014 20,175,164 $ 14,919,308 $ 5,255,856 $
32
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 $ 20,788,102
Plan Net Position (15,008,338)
Net Pension Liability $ 5,779,764
General Employees’ Retirement Plan Net Position as a Percentage
of Total Pension Liability 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 $ 1,296,043
Differences Between Project and Actual Earnings 269,969
Contributions Made Subsequent to Measurement Date 863,613
Total Deferred Outflows of Resources $ 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 Amount
2016 $ 585,909
2017 585,909
2018 326,701
2019 67,493
2020 0
Thereafter 0
Total $ 1,566,012
Plan Investments
The Retirement Plan Board is responsible for establishing and amending the Plan’s investment
policies. The Plan’s current investment policy gives the Board discretion to allocate assets with
assistance of the Plan’s investment consultant. No formal targets are stated in the investment
policy although the maximum allocation to international equities is 25%.
33
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: 2.50%
Salary Increases: Age based ranging from 5.00% - 13.50%
Investment Rate of Return: 7.00%, net of investment expenses, including
inflation
Mortality: RP2000 Combined Health Participant Mortality
Table for males and females with generational
projections from the Year 2000 Projection Scale
AA
Date of Experience Study: Other significant actuarial assumptions used in
the September 30, 2013 valuation were based on
the results of an actuarial experience study for the
period October 1, 2001 - September 30, 2010.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense of 0.50% and inflation of 2.50%) are
developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates
of return for each major asset class included in the pension plan's target asset allocation (see the
discussion of the pension plans’ investment policy) are summarized in the following table:
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-bill) 10% 0.2%
34
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 return on Plan investments (7.00%) was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents
the net pension liability of the City, calculated using the discount rate of 7.00%, as well as what
the City's net pension liability would be if it were calculated using a discount rate that is 1
percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:
As of September 30, 2015:
Net Pension
Liability
General Employees’
Pension Plan
1% Decrease
(6.00%)
$ 8,074,170
Current Discount
Rate (7.00%)
$ 5,779,764
1% Increase
(8.00%)
$ 3,819,787
As of September 30, 2014:
Net Pension
Liability
General Employees’
Pension Plan
1% Decrease
(6.00%)
$ 7,489,269
Current Discount
Rate (7.00%)
$ 5,255,856
1% Increase
(8.00%)
$ 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
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)
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
September 30,
2015
20
5
21
46
September 30,
2014
20
4
22
46
Plan Benefits
For members hired before January 1, 2013, normal retirement is available upon the attainment
of age fifty and the completion of twenty years of credited service, the attainment of age fifty-
five and the completion of ten years of credited service, the completion of twenty-five years of
credited service regardless of age, or the attainment of age sixty and the completion of five years
of credited service. For members hired on or after January 1, 2013, normal retirement is
available upon the attainment of age fifty-five and the completion of ten years of credited service
or the attainment of age fifty-two and the completion of twenty-five years of credited service.
Early retirement is available with a reduced benefit upon the attainment of age fifty and the
completion of ten years of credited service.
For members hired before January 1, 2013, the normal retirement benefit shall equal 3.00% of
average final compensation for each year of credited service. For members hired on or after
January 1, 2013, the normal retirement benefit shall equal 2.00% of average final compensation
for each year of credited service. The Police Plan includes a DROP under which members
eligible for normal retirement may have their monthly pension benefit credited to an account
while continuing to be actively employed for up to five years. As of September 30, 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, 2015). 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 described in Note 15, 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
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 Pens ion Plan Fiduciary Net Pens ion
Liability Net Pos ition Liability
Balances at S eptember 30, 2013 11,017,205 $ 7,331,627 $ 3,685,578 $
Changes for the Year:
Service Cos t 269,182 0 269,182
Interes t 879,486 0 879,486
Changes of As s umptions 1,275,669 0 1,275,669
Contributions - Employer 0 563,203 (563,203)
Contributions - State 0 96,217 (96,217)
Contributions - Employee 0 103,095 (103,095)
Net Inves tment Income 0 642,480 (642,480)
Benefit Payments , including
Refunds of Contributions (585,616) (585,616) 0
Adminis trative Expens es 0 (22,742) 22,742
Net Changes 1,838,721 796,637 1,042,084
Balances at S eptember 30, 2014 12,855,926 $ 8,128,264 $ 4,727,662 $
September 30, 2015
Total Pension Liability $ 13,402,655
Plan Net Position (8,493,122)
Net Pension Liability $ 4,909,533
Police Officers’ Retirement Plan Net Position as a Percentage
of Total Pension Liability 63.37%
For the year ended September 30, 2015, the City recognized total pension expense of $749,144.
The City reported deferred outflows of resources and deferred inflows of resources related to the
Police Officers’ Pension Plan from the following sources:
Deferred Outflows of Resources
Differences Between Project and Actual Earnings $ 992,187
Contributions Made Subsequent to Measurement Date 574,014
Total Deferred Outflows of Resources $ 1,566,201
Deferred Inflows of Resources
Differences Between Project and Actual Earnings $ 39,827
Total Deferred Outflows of Resources $ 39,827
37
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)
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 reported 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: 2.50%
Salary Increases: Age based ranging from 4.50% - 22.50%
Investment Rate of Return: 7.00%, net of investment expenses, including
inflation
Mortality: RP2000 Combined Health Participant Mortality
Table for males and females with generational
projections from the Year 2000 Projection Scale AA
Date of Experience Study: Other significant actuarial assumptions used in the
September 30, 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 determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense of 0.50% and inflation of 2.50%) are
developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates
of return for each major asset class included in the pension plan's target asset allocation (see the
discussion of the pension plans’ investment policy) are summarized in the following table:
38
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)
Long-term Expected
Asset Class Target Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.4%
US Large-Cap Value Stocks 12% 7.0%
US Mid-Cap Growth Stocks 3% 8.6%
US Mid-Cap Value Stocks 4% 7.8%
US Mid-Cap Core Stocks 3% 6.9%
US Small-Cap Growth Stocks 5% 9.6%
US Small-Cap Value Stocks 5% 8.6%
International Equities 5% 7.2%
US Investment Grade Bonds 40% 1.8%
Cash (US 90-day T-bill) 10% 0.2%
Discount rate. 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 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 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 benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents
the net pension liability of the City, calculated using the discount rate of 7.00%, as well as what
the City's net pension liability would be if it were calculated using a discount rate that is 1
percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:
September 30, 2015
Net Pension
Liability
Police Officers’
Pension Plan
1% Decrease
(6.00%)
$ 6,525,880
Current Discount
Rate (7.00%)
$ 4,909,533
1% Increase
(8.00%)
$ 3,565,056
September 30, 2014
Net Pension
Liability
Police Officers’
Pension Plan
1% Decrease
(6.00%)
$ 6,321,181
Current Discount
Rate (7.00%)
$ 4,727,662
1% Increase
(8.00%)
$ 3,399,917
39
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 -Postemployment Benefits Other Than Pensions
Plan Description
The City of Atlantic Beach administers a single-employer defined benefit health care plan (Plan)
that provides medical insurance benefits to its employees and their eligible dependents. In
accordance with Section 112.0801 of the Florida Statutes, because the City provides a medical
plan to active employees of the City and their eligible dependents, the City is also required to
provide retirees with the opportunity to participate in this Plan. Benefit provisions for the Plan
are established by the City Commission and may be amended by the City Commission. The
City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of October 1, 2012, the date of the latest
actuarial valuation:
Retirees and Beneficiaries Receiving Benefits 2
Active Plan Members 90
Total 92
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission.
Eligible retirees and their covered dependents receiving benefits contribute 100% of the blended
(active and retiree combined) equivalent premium rates. While the City does not directly
contribute towards the costs of retiree premiums via an explicit subsidy, the ability of retirees to
obtain health insurance coverage at a blended, group rate constitutes a significant economic
benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to be 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 participant. 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 OPEB cost to a net expense of
$29,617 after interest on the Net OPEB Obligation and adjustments to ARC.
40
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 $ 49,705
Interest on Net OPEB Obligation 8,347
Adjustment to Annual Required Contribution (8,695)
Annual OPEB Cost (Expense) 49,357
Employer Contribution (19,740)
Increase in Net OPEB Obligation 29,617
Net OPEB Obligation -Beginning of Year 208,681
Net OPEB Obligation -End of Year $ 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
September 30, 2013
September 30, 2014
September 30, 2015
Cost
$ 43,987
46,487
49,357
Contributed
28.5%
37.9%
20.7%
Obligation
$ 179,798
208,681
238,298
Funded Status and Funding Progress
As of October 1, 2012, the date of the latest actuarial valuation, the actuarial accrued liability for
benefits was $360,584, all of which was unfunded. The covered payroll (annual payroll of active
employees covered by the Plan) was $4,204,177, and the ratio of the unfunded actuarial accrued
liability to the covered payroll was 8.58%. The projection of future benefit payments for an
ongoing plan involves estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about
future employment, mortality, and the health care cost trend. Amounts determined regarding the
funded status of the Plan and the ARCs of the employer are subject to continual revision as actual
results are compared with past expectations and new estimates are made about the future. The
schedule of funding progress, presented as required supplementary information following the
notes to the financial statements, presents multiyear trend information about whether the actuarial
value of Plan assets is increasing or decreasing over time, relative to the actuarial accrued
liabilities for benefits.
41
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 of 3%), and future participation rates of 15%
up to Medicare eligibility with a 2% participation rate thereafter.
Note 10 -Interfund Accounts
Individual fund interfund receivables and payables at September 30, 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 from a fund receiving revenue to the fund through which the resources
are to be expended are recorded as transfers and are reported as other financing sources (uses)
in the governmental funds and as transfers in (out) in the proprietary funds. Following is a
summary of interfund transfers for the year ended September 30, 2015:
Transfers In
Nonmajor
Stormwater 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 $ 1,003,210 $ 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
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Continued)
Note 12 -Commitments
As of September 30, 2015, the City had outstanding commitments on contracts in progress as
follows:
Unexpended
Project Type Contract Amounts
Utility System Improvements $ 225,819
Stormwater System Improvements 82,399
General Government Improvements 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 carries commercial
insurance. Insurance against losses are provided through the Public Risk Insurance Agency and
LB Bryan and Company for the following types of risk:
■ Workers’ Compensation and Employer’s Liability ■ General Liability
■ Automobile Liability ■ Public Officials’ Liability
■ Automobile Physical Damage ■ Property Coverage
■ Accidental Death and Dismemberment
The City’s coverage for workers’ compensation is under a retrospectively rated policy.
Premiums are accrued based on the ultimate cost to-date of the City’s experience for this type
of risk.
43
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(Concluded)
Note 15 -Other Disclosures
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:
Governmental Activities
Governmental Activities $ 4,529,366
Business-type Activities
Utility 890,288
Stormwater 45,518
Sanitation 10,700
Building Code Enforcement 110,698
Total Business-type Activities –
Enterprise Funds 1,057,204
Total Restatement of Net Position $ 5,586,570
Components of the restatement consist of the following:
Net Pension Liability 7,196,968
Deferred Outflows – Contributions Made During
Fiscal Year Ended September 30, 2015 (1,610,398)
Total Restatement of Net Position $ 5,586,570
44
REQUIRED SUPPLEMENTARY INFORMATION
0
CITY OF ATLANTIC BEACH, FLORIDA
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
September 30, 2015 September 30, 2014
Total Pension Liability
Service Cost $ 402,093 $ 399,576
Interest 1,404,316 1,386,245
Difference Between Actual and Expected Experience (162,280)
Changes in Assumptions 0 1,814,460
Benefit Payments (1,031,191) (697,702)
Refunds 0 (9,516)
Net Change in Total Pension Liability 612,938 2,893,063
Total Pension Liability - Beginning 20,175,164 17,282,101
Total Pension Liability - Ending (a) 20,788,102 20,175,164
Plan Fiduciary Net Position
Contributions - Employer 863,613 950,980
Contributions - Employee 136,191 157,383
Net Investment Income 162,326 778,981
Benefit Payments (1,031,191) (697,702)
Refunds 0 (9,516)
Administrative Expenses (41,909) (31,529)
Net Change in Plan Fiduciary Net Position 89,030 1,148,597
Plan Fiduciary Net Position - Beginning 14,919,308 13,770,711
Plan Fiduciary Net Position - Ending (b) 15,008,338 14,919,308
Net Pension Liability - Ending (a) - (b) $ 5,779,764 $ 5,255,856
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 72.20% 73.95%
Covered Employee Payroll $ 2,643,589 $ 3,026,642
Net Pension Liability as a Percentage of Covered
Employee Payroll 218.63% 173.65%
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
CITY OF ATLANTIC BEACH, FLORIDA
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
September 30, 2015 September 30, 2014
Actuarially Determined Contribution 863,613 $ 950,980 $
Contributions in Relation to the Actuarially Determined Contribution 863,613 950,980
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 will be added to this schedule annually until 10 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: Entry Age Normal Cost Method
Amortization Method: Closed, Level Dollar Method
Remaining Amortization Period: 10 years
Asset Valuation Method: 4-year Smoothed Market Value: Difference between the expected and actual return on
market value of assets phased in over a period of four (4) years (at the rate of 25% per
year), adjusted to be no greater than 120% and no less than 80% of the fair market value.
Inflation: 3.0% per year
Salary Increases: 5.5% - 14.0%
Interest Rate: 7.0% per year compounded annually, net of investment related expenses.
Members' Contribution Rate: 6.00%
Retirement Age: Experience-based table of rates that vary by age.
Post Retirement COLA: None
Mortality: RP2000 Combined Healthy Participant Mortality Table for males and females with
generational projections from the year 2000 Projection Scale AA.
Date of the Most Recent
Experience Study: Other significant actuarial assumptions used in the September 30, 2013 valuation were
based on the results of an actuarial experience study for the period October 1, 2001
September 30, 2010.
46
CITY OF ATLANTIC BEACH, FLORIDA
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
September 30, 2015 September 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 103,528 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 until 10 years of data is presented.
47
CITY OF ATLANTIC BEACH, FLORIDA
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
September 30, 2015 September 30, 2014
Actuarially Determined Contribution* 665,091 $ 654,280 $
Contributions in Relation to the Actuarially Determined Contribution* 677,542 659,420
Contribution Deficiency (Excess) $ (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 of Florida.
Additional years will be added to this schedule annually until 10 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: Entry Age Normal Cost Method
Amortization Method: Closed, Level % of Pay Method
Remaining Amortization Period: 26 years
Asset Valuation Method: Smoothed market value over a period of four (4) years, as prescribed under
Internal Revenue Procedure 2000-40, adjusted to be no greater than 120% and
no less than 80% of the fair market value.
Inflation: 3.0% per year
Salary Increases: 5.0% - 23.0%
Payroll Growth: 1.88% per year
Interest Rate: 7.0% per year compounded annually, net of investment related expenses.
Retirement Age: Experience-based table of rates based on year of eligibility.
Post Retirement COLA: None
Mortality: RP2000 Combined Healthy Participant Mortality Table for males and females
with generational projections from the year 2000 Projection Scale AA.
Date of the Most Recent
Experience Study: 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
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2015
Actuarial UAAL as
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL) (UAAL) Ratio Payroll Payroll
9/30/06 $ 0 $ 470,703 $ 470,703 0.0% $ 4,812,000 9.78%
10/1/09 0 497,883 497,883 0.0% 5,828,339 8.54%
10/1/12 0 360,584 360,584 0.0% 4,204,177 8.58%
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded actuarial
accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a percentage of
the actuarial accrued liability provides one indication of the system’s funded status on a going concern
basis. Analysis of this percentage over time indicates whether the system is becoming financially stronger
or weaker. Generally, the greater this percentage, the stronger the plan. The unfunded actuarial accrued
liability and annual covered payroll are both affected by inflation. Expressing the unfunded actuarial
accrued liability as a percentage of covered payroll approximately adjusts for the effects of inflation and
aids analysis of the progress being made in accumulating sufficient assets to pay benefits when due.
Generally, the smaller this percentage, the stronger the plan. The actuarial accrued liability (AAL)
decreased significantly from the last valuation due to a decrease in the number of retirees receiving post-
employment health benefits, as well as a change in the medical trend assumption.
49
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
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts * (Negative)
Revenues
Property Taxes $ 4,055,229 $ 4,055,229 $ 4,113,476 $ 58,247
Nonproperty Taxes 1,133,812 1,133,812 1,109,470 (24,342)
Permits, Fees, and Special Assessments 857,743 857,743 858,232 489
Intergovernmental Revenues 1,704,051 1,704,051 1,748,737 44,686
Fines and Forfeitures 83,700 83,700 77,434 (6,266)
Charges for Services 774,658 774,658 742,416 (32,242)
Interest Income 116,250 116,250 4,435 (111,815)
Miscellaneous Revenues 49,385 56,885 49,909 (6,976)
Interfund Charges 1,549,137 1,549,137 1,545,981 (3,156)
Total Revenues 10,323,965 10,331,465 10,250,090 (81,375)
Expenditures
Governing Body:
City Commission 41,665 41,665 38,708 2,957
City Clerk 288,265 292,368 253,017 39,351
City Attorney 132,000 132,000 96,150 35,850
Total Governing Body 461,930 466,033 387,875 78,158
City Administration:
City Manager 261,506 261,506 235,093 26,413
General Government 521,706 557,322 461,303 96,019
Human Resources 194,531 194,531 187,215 7,316
Information Technology 835,706 876,662 809,654 67,008
Finance 906,827 934,421 859,608 74,813
Total City Administration 2,720,276 2,824,442 2,552,873 271,569
Planning and Zoning 152,292 245,166 145,206 99,960
Public Safety:
Police 3,941,813 3,955,249 3,597,391 357,858
School Crossing Guards 9,693 9,693 9,850 (157)
Animal Control 96,506 96,627 91,161 5,466
Fire 1,310,639 1,314,338 1,312,786 1,552
Code Enforcement 64,455 64,455 50,204 14,251
Total Public Safety 5,423,106 5,440,362 5,061,392 378,970
50
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
(Concluded)
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts * (Negative)
Expenditures (Concluded)
Public Works:
Administration and Streets 1,292,899 $ 1,318,688 $ 1,150,691 $ 167,997 $
Fleet Maintenance 269,624 269,624 261,471 8,153
Total Public Works 1,562,523 1,588,312 1,412,162 176,150
Parks and Recreation:
Recreation and Special Events 364,353 364,353 346,294 18,059
Parks Maintenance 735,210 896,491 637,421 259,070
Total Parks and Recreation 1,099,563 1,260,844 983,715 277,129
(Total Expenditures) (11,419,690) (11,825,159) (10,543,223) 1,281,936
(Deficiency) of Revenues (Under)
Expenditures (1,095,725) (1,493,694) (293,133) 1,200,561
Other Financing Sources (Uses)
Transfers in 1,003,210 1,003,210 1,003,210 0
Transfers (out) 0 (322,709) 0 322,709
Sale of General Fixed Assets 0 0 17,611 17,611
Total Other Financing Sources (Uses) 1,003,210 680,501 1,020,821 340,320
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses (92,515) (813,193) 727,688 1,540,881
Fund Balances, Beginning of Year 5,637,789 5,236,590 6,574,588 1,337,998
Fund Balances, End of Year 5,545,274 $ 4,423,397 $ 7,302,276 $ 2,878,879 $
* Actual amounts include a reversal of $(346,721) prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of $257,113.
51
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL -GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 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 conformity with accounting principles generally accepted in the
United States of America.
52
SUPPLEMENTARY INFORMATION
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
Assets
Equity in Pooled Cash and
Investments
Due from Other Governments
Total Assets
Tree
Replacement
18,956 $
0
18,956
Convention
Local Option Development Half-cent
Gas Tax Tax Sales Tax
169,795 $ 102,939 $ 637,775 $
78,346 25,656 131,190
248,141 128,595 768,965
Court Cost
Training
105,927 $
230
106,157
Liabilities and Fund Balances
Liabilities
Accounts Payable and
Accrued Liabilities
Due to Other Funds
Deposits
Total Liabilities
0
0
0
0
0
0
0
0
0
0
0
0
124,107
0
0
124,107
0
0
0
0
Fund Balances
Restricted for:
Public Safety
Road Maintenance and
Construction
Other Capital Projects
Other Purposes
Committed:
Conservation and Resource
Management
Unassigned
Total Fund Balances
0
0
0
0
18,956
0
18,956
0
248,141
0
0
0
0
248,141
0
0
0
128,595
0
0
128,595
0
0
644,858
0
0
0
644,858
106,157
0
0
0
0
0
106,157
Total Liabilities and Fund
Balances 18,956 $ 248,141 $ 128,595 $ 768,965 $ 106,157 $
53
2015
Radio
Communication
Community
Contraband Development
Forfeiture Block Grants
Special Revenue Funds
Police
Grants
Totals
Special
Revenues
Funds
Capital
Projects
Totals
Nonmajor
Governmental
Funds
2014
Totals
14,208 $
797
15,005
47,231 $ 2,314 $ $
0 0
47,231 2,314
5,828
10,781
16,609
1,104,973 $
247,000
1,351,973
2,717,551 $
0
2,717,551
3,822,524 $
247,000
4,069,524
$ 3,739,371
287,946
4,027,317
0
0
0
0
0
0
111
111
4,262
0
0
4,262
3,635
10,781
0
14,416
132,004
10,781
111
142,896
36,620
0
0
36,620
168,624
10,781
111
179,516
3,521
6,531
6,399
16,451
15,005 47,120 0 2,193 170,475 0 170,475 160,767
0
0
0
0
0
0
0
0
0
0
0
0
248,141
644,858
128,595
0
2,680,931
0
248,141
3,325,789
128,595
159,677
3,588,843
86,906
0
0
15,005
0
0
47,120
0
(1,948)
(1,948)
0
0
2,193
18,956
(1,948)
1,209,077
0
0
2,680,931
18,956
(1,948)
3,890,008
14,673
0
4,010,866
15,005 $ 47,231 $ 2,314 $ $ 16,609 1,351,973 $ 2,717,551 $ 4,069,524 $ $ 4,027,317
54
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 (119)
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) of Revenues
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
2015
Radio
Communication
12,305 $
0
0
(47)
0
12,258
Special Revenue Funds
Community
Contraband Development
Forfeiture Block Grants
0$ 0$
0 89,937
8,489 0
(71) 0
1,098 0
9,516 89,937
$
Police
Grants
0
74,939
0
0
0
74,939
Totals
Special
Revenue
Funds
$ 1,362,169
164,876
12,348
300
7,181
1,546,874
Capital
Projects
0$
0
0
(2,325)
0
(2,325)
Totals
Nonmajor
Governmental
Funds
1,362,169 $
164,876
12,348
(2,025)
7,181
1,544,549
$
2014
Totals
1,252,577
278,510
59,909
96,491
3,724
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
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING 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
Police
Officers'
Retirement
Plan
68,372 $
3,355
8,421,395
8,493,122
General
Employees'
Retirement
Plan
68,735 $
5,566
14,934,037
15,008,338
$
2015
Totals
137,107
8,921
23,355,432
23,501,460
2014
Totals
37,480 $
64,250
23,066,411
23,168,141
Liabilities
Accounts Payable and Accrued Liabilities
Total Liabilities
0
0
0
0
0
0
114
114
Total Net Position
Held in Trust for Pension
Benefits (as Restated) 8,493,122 $ 15,008,338 $ $ 23,501,460 $ 23,168,027
57
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
Additions
Contributions:
Employer
Employees
State of Florida
Total Contributions
Net (Decrease) Increase in Fair
Value of Investments
Interest and Dividends
Total Additions
Police
Officers'
Retirement
Plan
574,014 $
112,354
103,528
789,896
37,142
50,642
877,680
General
Employees'
Retirement
Plan
863,613 $
136,191
0
999,804
152,158
88,632
1,240,594
$
2015
Totals
1,437,627
248,545
103,528
1,789,700
189,300
139,274
2,118,274
$
2014
Totals
1,514,183
260,478
96,217
1,870,878
792,566
441,637
3,105,081
Deductions
Refunds of Contributions
Benefits
Investment Expenses
Administrative Expenses
Total Deductions
28,505
524,537
44,250
35,985
633,277
0
1,031,191
78,464
41,909
1,151,564
28,505
1,555,728
122,714
77,894
1,784,841
70,596
1,222,239
101,021
54,272
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
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL 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
Miscellaneous Charges
Total Water
Sewer:
$ 3,382,973
46,424
3,429,397
$ 3,069,998
48,815
3,118,813
$ 3,006,787
52,996
3,059,783
$ 2,955,863
54,852
3,010,715
$ 2,992,677
62,286
3,054,963
Customer Charges
Miscellaneous Charges
Total Sewer
Total Operating Revenues
5,085,318
20,006
5,105,324
8,534,721
5,015,358
3,303
5,018,661
8,137,474
5,109,868
1,651
5,111,519
8,171,302
4,938,510
1,237
4,939,747
7,950,462
4,934,151
107
4,934,258
7,989,221
Nonoperating Revenues:
Investment Income (Loss):
Water
Sewer
Total Nonoperating Revenues
Total Revenues
108,762
(16,367)
92,395
8,627,116
197,492
(21,010)
176,482
8,313,956
(115,023)
18,426
(96,597)
8,074,705
186,681
(43,954)
142,727
8,093,189
(7,718)
(4,257)
(11,975)
7,977,246
Expenses
Operating Expenses:
Water
Sewer
Total Operating Expenses
1,292,948
2,569,748
3,862,696
1,303,708
2,493,500
3,797,208
1,228,763
2,005,653
3,234,416
1,287,783
2,170,495
3,458,278
1,442,578
2,055,780
3,498,358
Administrative, Nondivisional
and Other:
Water
Sewer
Total Administrative, Non-
divisional and Other
(Total Expenses)
545,971
685,074
1,231,045
(5,093,741)
518,506
696,922
1,215,428
(5,012,636)
521,600
674,514
1,196,114
(4,430,530)
530,715
677,464
1,208,179
(4,666,457)
563,356
734,839
1,298,195
(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
Loan Amortization
Total Nonoperating Income
(Expense)
(710,196)
(14,730)
(724,926)
(726,058)
(25,712)
(751,770)
(766,111)
(12,787)
(778,898)
(896,571)
(162,552)
(1,059,123)
(556,635)
(98,507)
(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
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULES OF NET REVENUES IN ACCORDANCE
WITH BOND RESOLUTIONS
ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND SEPTEMBER 30, 2014
2015 2014
Gross Revenues
Utility 7,955,290 $ $ 7,933,418
Connection Charges 33,932 17,044
Interest (11,977) 142,727
Total Gross Revenues 7,977,245 8,093,189
Operating Expenses
Personal Services 1,968,047 1,802,458
Contractual Services 638,961 788,322
Supplies 388,737 366,425
Repairs and Maintenance 120,049 133,621
Utilities 372,361 367,452
Intergovernmental Charges 1,113,777 986,547
Other Expenses 194,619 221,633
(Total Operating Expenses) (4,796,551) (4,666,458)
Total Net Revenues in Accordance with Bond Resolutions 3,180,694 $ $ 3,426,731
Total Debt Service $ 768,739 * $ 2,001,479
Debt Service Coverage Ratio 413.75% 171.21%
Required Debt Service Coverage Ratio 100.00% 100.00%
(a) Rate Stabilization Fund:
Balance, Beginning of Year 400,000 $ $ 400,000
Transfer/Redeposit to Revenue Fund 0 0
Balance, End of Year 400,000 $ $ 400,000
* The 2014 Series Refunding Bonds' first principal payment was not due until October 1, 2015.
60
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2011 THROUGH SEPTEMBER 30, 2015
Utility Service Tax Collections
(Last Five Years)
Year Electricity Communications Gas Fuel Oil Total
2011 $ 487,585 $ 604,567 $ 28,062 $ 33 $ 1,120,247
2012 452,183 567,909 23,187 14 1,043,293
2013 459,672 576,839 20,849 17 1,057,377
2014 473,097 522,654 16,911 29 1,012,691
2015 476,997 526,996 15,555 7 1,019,555
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
OTHER STATISTICAL INFORMATION
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2015
(UNAUDITED)
Annual
Billings
Fleet Landing (Retirement Community) $ 386,590
Oaks of Atlantic Beach (Mobile Home Park) 1,644,484
Navy (Federal Government) 294,668
City of Atlantic Beach, Florida 143,636
Arium Atlantic Beach (Apartment Complex) 129,311
John Creek Estate (Mobile Home Park) 126,044
Hanna Park (Regional Park) 105,919
Avesta Homes (Apartment Complex) 81,911
One Ocean Resort (Hotel) 77,958
Sea Oats Plantation (Apartment Complex) 60,727
Total $ 3,051,248
62
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
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF SOURCE AND EXPENDITURE OF THE CITY GRANT FUNDS
PER ORDINANCE CODE CHAPTER 118.301(e)
FOR FISCAL YEAR 2014-2015
City of Jacksonville Public Service Grants Received as a
Subgrant Recipient Per Interlocal Agreement
Source of City Funds
Fiscal Year
2014-2015
Grant No. 5629-57
Amount of Award (Per City of Jacksonville
Budget Ordinance) $ 91,386 (A)
Actual Funds Received from City of
Jacksonville in Last Audit Period 0
Actual Funds Received this Period (89,937)
Amount Earned but Not Received this Period 0
Unspent Award Amount $ 1,449
Expenditure of City Funds
(A) City Fiscal Year 2014-2015 Grant #5629-76 - includes carry-over of $9,192 from 2013-2014 Grant #5629-56.
Actual
10/1/2014 Remaining
Project / Federal Grant Number Budgeted 9/30/2015 Balance
Area Neighborhood Infrastructure Improvements
# 005525 / B14UC120017 $ 91,386 $ 89,937 $ 1,449
Total $ 91,386 $ 89,937 $ 1,449
63
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 June 23, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the City’s financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or, significant deficiencies. We consider the following deficiency in
internal control to be a material weakness:
64
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 reporting 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 reporting 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
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
June 23, 2016
Gainesville, Florida
65
INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE
WITH SECTION 218.415, FLORIDA STATUTES
Honorable Mayor, City Commissioners, and
City Manager
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida’s (the City) compliance with Section 218.415,
Florida Statutes during the period ended September 30, 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 performing such other procedures as
we considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination of the City’s compliance
with specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 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 parties.
June 23, 2016
Gainesville, Florida
66
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 June 23, 2016.
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; and Chapter 10.550, Rules of the Auditor General.
Other Reports and Schedule
We have issued our Independent Auditors’ Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountants’ Report on an examination conducted
in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in
accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule,
which are dated June 23, 2016, should be considered in conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
report. There were no recommendations made in the preceding annual financial report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in this
management letter, unless disclosed in the notes to the financial statements. This information is included in
Note 1 to the financial statements.
Financial Condition
Sections 10.554(1)(i)5.(a) and 10.556(7), Rules of the Auditor General, require that we apply appropriate
procedures and report the results of our determination as to whether or not the City has met one or more of
the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met. In connection with our audit, we determined that the City did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
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Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
(Concluded)
Financial Condition (Concluded)
Pursuant to Sections 10.554(1)(i)5(c) and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Annual Financial Report
Sections 10.554(1)(i)5.(b.) and 10.556(7), Rules of the Auditor General, require that we apply appropriate
procedures and report the results of our determination as to whether the annual financial report 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(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a special
district that is a component unit of a county, municipality, or special district, provided the financial
information necessary for proper reporting of the component unit, within the audited financial statements of
the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida Statutes. In
connection with our audit, we determined that there were no special district component units that were
required to be reported in accordance with Section 218.39(3)(b), Florida Statutes.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any
recommendations to improve financial management. In connection with our audit, we did not have any
such recommendations.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that
have an effect on the financial statements that is less than material but which warrants the attention of those
charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than these specified parties.
June 23, 2016
Gainesville, Florida
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