Annual Financial Report - 2013-2014 - vFINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2014
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2014
TABLE OF CONTENTS
Independent Auditors' Report ..................................................................................................................... i-iii
Management's Discussion and Analysis ................................................................................................... iv-xii
Basic Financial Statements
Government-wide Financial Statements
Statement ofNet Position .......................................................................................................................... 1
Statement of Activities .............................................................................................................................. 2
Fund Financial Statements
Balance Sheet -Gove1nmental Funds ....................................................................................................... 3
Reconciliation of Balance Sheet of Governmental Funds to the
Statement of Net Position ....................................................................................................................... 4
Statement of Revenues, Expenditures, and Changes in Fund
Balances -Governmental Funds ............................................................................................................ 5
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
State1nent of Activities ........................................................................................................................... 6
Statement ofNet Position-Proprietary Funds ......................................................................................7-8
Statement of Revenues, Expenses, and Changes in Net Position-
Proprietary Funds .............................................................................................................................. 9-1 0
Statement of Cash Flows -Proprietary Funds ................................................................................... 11-13
Statement of Fiduciary Net Position ....................................................................................................... 14
Statement of Changes in Fiduciary Net Position .................................................................................... 15
Notes to Financial Statements ........................................................................................................ 16-40
Required Supplementary Information
General Employees' Pension Plan Schedule of Changes in Net
Pension Liability and Related Ratios ....................................................................................................... 41
General Employees' Pension Plan Schedule oflnvestment Returns ..........................................................41
General Employees' Pension Plan Schedule of Funding Progress ............................................................. 42
General Employees' Pension Plan Schedule ofContributions .................................................................... 43
Police Officers' Pension Plan Schedule of Changes in Net Pension
Liability and Related Ratios .................................................................................................................... 44
Police Officers' Pension Plan Schedule of Investment Retums .................................................................. 44
Police Officers' Pension Plan Schedule of Funding Progress ..................................................................... 45
Police Officers' Pension Plan Schedule of Contributions ........................................................................... 46
Other Postemployment Benefits Plan-Schedule of Funding Progress ...................................................... 47
Schedule of Revenues, Expenditures, and Changes in Fund Balances-
Budget and Actual -General Fund .................................................................................................... .48-49
Note to Schedule of Revenues, Expenditures, and Changes in Fund
Balance -Budget and Actual -General Fund ......................................................................................... 50
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2014
TABLE OF CONTENTS
(Concluded)
Supplementary Information
Combining Balance Sheet -Nonmajor Governmental Funds ................................................................51-52
Combining Statement of Revenues, Expenditures, and Changes
Schedules of Net Revenues in Accordance with Bond
in Fund Balances -Nonmajor Governmental Funds ........................................................................ ,53-54
Combining Statement of Fiduciary Net Position ......................................................................................... 55
Combining Statement of Changes in Fiduciary Net Position ...................................................................... 56
Historical Revenues and Expenses ............................................................................................................... 57
Resolutions-Enterprise Funds (Water and Sewer) ................................................................................ 58
Other Bond Covenant Disclosures ............................................................................................................... 59
Other Statistical Information
Major Utility Customers ............................................................................................................................... 60
Summary of Water Usage
Summary of Wastewater Treatment-Atlantic Beach Sewer
............................................................................................................................. 61
Division .................................................................................................................................................... 62
Summary of Wastewater Treatment -Outside City Sewer Division .......................................................... 63
Additional Elements of Report Prepared in Accordance With
Govemment Auditing Standards, Issued by the Comptroller
General of the United States; the Rules oftlte Auditor Geneml
of the State of Florida; and Other Contract Requirements
Schedule ofExpenditures ofFederal Awards ......................................................................................... 64
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' Repmt on Compliance with
Note to Schedule of Expenditures of Federal Awards ............................................................................ 65
Schedule of Source and Expenditure of the City Grant Funds ............................................................... 66
with Government Auditing Standards .......................................................................................... 67-68
Section 218.415, Florida Statutes ....................................................................................................... 69
Management Letter ............................................................................................................................ 70-71
INDEPENDENT AUDITORS' REPORT
PurvisGray&. ____________________C_om_Qany
INDEPENDENT AUDITORS' REPORT
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities , each major fund, and the aggregate remaining fund information of the City of Atlantic Beach,
Florida, (the City) , as of and for the year ended September 30 , 2014, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accout)ting 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 AuditinJ? Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments , the auditor considers internal control relevant to the City's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Certified Public Accountants
P.O. Box 14 1270 • 222 N .E. 1st Stree t • Gai nes ville, Florid a 32614-12 70 • (352) 37 8 -246 1 • FAX (352) 378-25 0 5
Laurel Ridge Profess io nal Cen ter • 234 7 S.E. 17th Stree t • O ca la, Flo rida 3447 1 • (352) 73 2-3872 • FAX (3 52) 732 -0 542
443 Eas t Co llege A ve n ue • Tallahassee, Flori da 323 01 • (85 0) 224-7144 • FA X (850) 2 24 -1 762
5001 Lakewood Ranc h Blvd. N., Suite 101 • Sara sota, Flo rida 34240 • (9 4 1) 907-03 50 • FA X (9 4 1) 907-0309
ML\ \O [RS OF AMERICAN AND rLORID1\ INSTITUTES or CERT IFIED PUil liC ACCO UN Tr\ NTS
M[M SER o r AMER ICAN INSTI TUTE OF CER TI FIED PUilli C AC COLIN T,\NTS PR IV,\TE C0 .\1P,\ NIES t\ ND S.L C. PRACT ICE SECTION S
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS' REPORT
(Continued)
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City, as of September 30, 2014, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and other required information on pages iv-xii and 41-50 be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The supplementary information on pages 51-59, the other
statistical section on pages 60-63, and the schedule of expenditures of grant funds per the City of
Jacksonville's Ordinance Code Chapter 118.202(e) are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The accompanying schedule of expenditures of
federal and state awards is presented for the purpose of additional analysis.
The supplementary information, schedule of federal awards, and schedule of expenditures of grant funds
per the City of Jacksonville's Ordinance Code Chapter 118.202( e) are the responsibility of management
and were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and cettain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In our opinion,
the supplementary information, schedule of federal awards, and schedule of expenditures of grant funds
per the City of Jacksonville's Ordinance Code Chapter 118.202(e) are fairly stated, in ali material
respects, in relation to the basic financial statements as a whole.
The other statistical section has not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
ii
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITORS' REPORT
(Concluded)
Other Reporting Required by Government Auditin~: Standards
In accordance with Government Auditing Standards, we have issued our rep01t dated April 20, 2015, on
our consideration of the City's internal control over financial rep01ting and on our tests of its compliance
with ce1tain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that rep01t 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 rep01t is an integral pmt of an audit performed in accordance
with Government Auditing Standards in considering the City's internal control over financial rep01ting
and compliance.
Report on Summarized Comparative Information
We have previously audited the City's 2013 financial statements, and our report dated March 4, 2014,
expressed an unmodified opinion on those audited financial statements. In our opinion, the summarized
comparative information presented herein as of and for the year ended September 30, 2013, is consistent,
in all material respects , with the audited financial statements from which it was derived.
~,~£W<i~,u__fJ
April 20, 2015
Gainesville, Florida
iii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
As management of the City of Atlantic Beach, Florida (the City), we offer readers of our financial
statements this narrative overview and analysis for the fiscal year ended September 30, 2014.
Overview ofthe Financial Statements
This management's discussion and analysis is intended to serve as an introduction to the City's basic
financial statements. The City's basic financial statements are comprised of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This repmt also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to a private sector business. They include the Statement of Net
Position and the Statement of Activities.
The Statement of Net Position presents information on all of the City's assets and liabilities, with the
difference between the two repmted 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 fmther
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 repmted 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 repmt.
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.
iv
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
Fund Financial Statements (Concluded)
111 Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows
of available resources, as well as on balances of available resources at the end of the fiscal year. Such
information may be useful in evaluating a City's near-term financing requirements. Because the
focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information
presented for governmental activities in the government-wide financial statements. By doing so,
readers may better understand the long-term impact of the government's near-term financing
decisions. Reconciliations are provided between the Governmental Funds Balance Sheet and the
Statement of Net Position; and the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances and Statement of Activities to facilitate this comparison between
governmental funds and governmental activities.
The City maintains twelve individual governmental funds. Information is presented separately in the
Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances for the General Fund, which is considered to be a major
fund. Data from the other eleven governmental funds are combined into a single, aggregated
presentation called Nonmajor Governmental Funds. Fund data for these nonmajor governmental
funds is provided in the form of combining statements. These combining statements can be found on
pages 51 -54 of this report.
The City adopts an annual appropriated budget for all funds but is only required to present a budget
comparison for its General Fund. The Schedule of Revenues, Expenditures, and Changes in Fund
Balance -Budget and Actual -General Fund budgetary comparison schedule and note on pages 48
50 of this report have been provided to demonstrate compliance with this budget.
111 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 infonnation 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 repmi.
111 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.
v
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
Other Information
In addition to the basic financial statements and accompanying notes, this repmi also presents certain
required supplementary information concerning the City's progress in funding its obligation to provide
pension benefits to its employees and a budgetary comparison schedule for the General Fund. Required
supplementary information can be found beginning on page 41 of this report.
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City's financial position. As can be seen in the
summarized table below of this analysis, the City's assets exceeded liabilities by $75,880,000 at the close
of the fiscal year ended September 30, 2014.
By far the largest portion of the City's net position, $59,972,000 (79%), reflects its investment in capital
assets (i.e., land, buildings, equipment, and infrastructure), less any related, outstanding debt used to acquire
those assets. The City uses these capital assets to provide services to citizens; consequently, these assets are
not available for future spending. Although the City's investment in capital assets is repmted 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 pmtion of the City's net position, $4,802,000 (6%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $11,106,000
(15%), is used to meet the government's ongoing obligations to citizens and creditors.
City of Atlantic Beach's Net Position
September 30,2014 and 2013
(In Thousands)
Govemmental Business-type
Activities Activities Totals
2014 2013 2014 2013 2014 2013
Current and other assets $11,345 $ 10,853 $8,362 $9,059 $19,707 $19,912
Capital assets 39,215 39,411 41,190 41,080 80,405 80,491
Total Assets 50,560 50,264 49,552 50,139 100,112 100,403
Deferred Outflow 0 0 1,187 0 1,187 0
Long-term liabilities
outstanding 503 574 21,504 21,567 22,007 22,141
Other liabilities 638 836 2,774 2,924 3,412 3,760
Total Liabilities 1,141 1,410 24,278 24,491 25,419 25,901
Net Position:
Invested in capital assets,
net of related debt 39,214 39,342 20,758 18,521 59,972 57,863
Restricted 4,004 3,656 798 1,778 4,802 5,434
Unrestricted 6,201 5,856 4,905 5,349 11,106 11,205
Total Net Position $49,419 $48,854 $26,461 $25,648 $75,880 $74,502
vi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
Government-wide Financial Analysis (Concluded)
As illustrated in the schedule on page vi, the City was able to repmt positive balances in all categories of
net position, both for the government as a whole, as well as for its separate governmental and business
type activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach's Change in Net Position
For the Years Ended September 30,2014 and 2013
(In Thousands)
Governmental Business-type
Activities Activities Totals
2014 2013 2014 2013 2014 2013
Revenues:
Program Revenues:
Charges for Services $ 1,786 $ 1,837 $ 11,015 $ 11,071 $ 12,801 $ 12,908
Operating Grants and
Contributions 627 610 0 0 627 610
Capital Grants and
Contributions 299 130 776 279 1,075 409
General Revenues:
Property Taxes 3;908 3,844 0 0 3,908 3,844
Sales Taxes 1,208 1,156 0 0 1,208 1,156
Business and Utility Taxes 1,136 1,197 0 0 1,136 1,197
State Revenue Sharing 300 283 0 0 300 283
Discretionary Sales Surtax 722 684 0 0 722 684
Investment Earnings (Loss) 313 (201) 213 (146) 526 (347)
Miscellaneous 64 403 0 0 64 403
Total Revenues 10,363 9,943 12,004 11,204 22,367 21,147
Expenses:
General Government 2,054 1,972 0 0 2,054 1,972
Public Safety: 5,184 5,140 0 0 5,184 5,140
Road Maintenance and
Construction 1,872 1,881 0 0 1,872 1,881
Parks and Recreation 1,309 1,289 0 0 1,309 1,289
Interest/Fiscal Charges on
Long-term Debt 0 3 0 0 0 3
Utility 0 0 7,309 7,326 7,309 7,326
Stormwater 0 0 1,153 1,143 1,153 1,143
Sanitation 0 0 1,869 1,503 1,869 1,503
Building Code Enforcement 0 0 239 261 239 261
Total Expenses 10,419 10,285 10,570 10,233 20,989 20,518
T..ansfers 621 615 (621) (615) 0 0
Change in Net Position 565 273 813 356 1,378 629
Net Position-Beginning
(as Restated) 48,854 48,581 25,648 25,292 74,502 73,873
Net Position-Ending $ 49,419 $ 48 854 $ 26,461 $ 25,648 $ 75,880 $ 74 502
vii
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance
related legal requirements. Following is a summary of fund activity financial information for the fiscal
year, rounded to the nearest thousand dollars:
11 Governmental Funds
At the end of the current fiscal year, the City's governmental funds reported a combined ending fund
balance of $10,932,000, an increase of $720,000 in comparison with the prior year.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance was $4,186,000, which equated to 39% of total General Fund expenditures,
without transfers. The net result of various revenue and expense items resulted in an increase to the
City's General Fund of $344,000 or 5% during the current fiscal. This increase primarily resulted from
revenues being more than budgeted by $245,000, while expenses were $531,000 less than budget for a
net positive variance of $776,000. The General Fund revenues were close to the budgeted amount in
total and increased from 2013 by $1,000. The expenditures of the General Fund were lower than
expected, mostly from capital project monies not being spent and unfilled positions. There were budget
surpluses throughout all departments of the General Fund, the largest being City Administration with a
positive variance of $178,000 due mostly to employee turnover.
Nonmajor governmental funds consisting of special revenue funds, the debt service fund, and the
capital projects fund have a combined fund balance of$4,011,000. Ofthis fund balance, $3,589,000
is restricted for capital projects. The net increase in fund balance after transfers in nonmajor
governmental funds was $377,000.
11 Proprietary Funds
The City's proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. During the fiscal year the proprietary funds recorded revenues
of $10,961,000, expenses of $9,681,000, net non-operating costs of $(621,000), and net capital
contributions, grants, and transfers of $155,000. The net position in the proprietmy funds increased
$814,000 as a result of the fiscal year's activities. The unrestricted net position of the enterprise funds
amounts to $4,905,000 at the end of fiscal year 2014.
Stormwater rates stayed constant in fiscal year 2014 as there were no rate changes. The $8.39 per
equivalent residential unit (ERU) is approximately 79%, compared to 82% for the prior year, of the
total operating expenses of$1,087,000 needed to fully fund the operation with charges for service.
During fiscal year 2014, the Sanitation Fund netted a decrease in net position of $335,000; the
decrease was a result of the $322,000 settlement being reached between the City of Atlantic Beach
and Jacksonville, with regards to tipping fees.
General Fund Budgetary Highlights
The final expense budget included a $154,000 increase in appropriations. The portion of the increase in
appropriations for the encumbrances rolling forward from 2013 was $82,000.
viii
II
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
General Fund Budgetary Highlights (Continued)
Net Budget
The overall net difference from the final budgeted revenues and adjusted final budgeted expenses was a
deficit of $724,000. The actual increase in fund balance was $78,000. This resulted in an $803,000
excess variance above what was budgeted.
Capital Assets and Debt Administration
Capital Assets-The City's investment in capital assets, net of related depreciation, for its governmental
and business-type activities as of September 30, 2014, amounted to $80,405,000. This investment in
capital assets includes land, land improvements, land easements, buildings and infrastructure
improvements, equipment, and construction in progress.
The total change in the City's capital assets, net of related depreciation, for the current fiscal year was a
decrease of $196,000 (.5%) for govemmental activities and an increase of $110,000 (.3%) for business
type activities.
Capital asset events during the current fiscal year included the following:
Governmental Activities
Buildings, net of accumulated depreciation, decreased by $117,000 through annual depreciation of
the capital assets.
Intangible Assets reflected a net decrease of $15,000 through annual depreciation of the capital
assets. This asset category includes land easements and computer software.
Improvements Other than Buildings reflected a net decrease of $360,000. This represents capital
asset increase of $317,000, offset by depreciation of $676,000. Major projects in this category
include: field improvements at Donner Park, sidewalk and drainage project at Dutton Isle Rd., and
pedestrian and bike path project at Tideview Preserve.
Equipment assets reflected a net decrease of $22,000. This represents capital asset increase of
$269,000, offset by depreciation of $291,000. Some of the assets acquired in this category were: a
police interceptor, 5 trucks, 1 sp01t utility vehicle, and computer hardware.
Construction in Progress increased $317,000. Major projects included in this category are the Rose
Park Development, Marsh Project Pedestrian Path, and the Robett Street ditch design .
• Business-type Activities
Buildings reflected a net decrease in asset value of$14,000 from depreciation.
Improvements Other than Buildings reflected a net increase of $98,000. This represents capital
asset increases of $2,283,000, offset by depreciation of $2,185,000. The largest increases in this
category are improvements were the reclaimed water plant project and East Coast Dr. drainage
improvements.
ix
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
General Fund Budgetary Highlights (Continued)
Capital Assets and Debt Administration (Concluded)
• Business-type Activities (Concluded)
Equipment assets reflected a net increase of $37,000. This represents capital asset increase of
$128,000, offset by depreciation of $91,000. Some of the assets acquired this year consisted of 3
vehicles being utilized by the Public Works Department.
Construction in Progress had a net decrease of $12,000; costs incurred were for design of Saltair
Sidewalk and Drainage Project and Seminole Streetscape.
City of Atlantic Beach's Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities Totals
2014 2013 2014 2013 2014 2013
Land $10,363 $10,363 $1,656 $1,656 $12,019 $12,019
Intangibles 7 22 215 215 222 237
Buildings 2,635 2,751 80 94 2,715 2,845
Improvements-Other 24,918 25,278 38,626 38,528 63,544 63,806
Equipment 874 896 440 402 1,314 1,298
Construction in Progress 418 101 173 185 591 286
Total $39,215 $39,411 $41,190 $41,080 $80,405 $80,491
Additional information on the City's capital assets can be found in Note 5 on pages 27-28 of this report.
Long-term Debt
At the end of the 2014 fiscal year, the City had total bonded debt outstanding of $20,431,000. This
amount was comprised of debt secured sol
City's debt can be found in the table below.
ely by specified revenue sources. A detailed listing of the
City of Atlan
S
tic Beach's Outstanding De
eptember 30, 2014
(In Thousands)
bt
Utilities System Revenue Bond, Series 2014
F.D.E.P. State Revolving Funds Loan, 2010
F.D.E.P. State Revolving Funds Loan, 2009
Total
Business-type
Activities
$ 12,772
660
6 999
$ 20.431
X
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Continued)
General Fund Budgetary Highlights (Concluded)
Long-term Debt (Concluded)
In fiscal year 2014, the City issued a $13,960,000 Utility System Refunding Bond to take advantage of
low interest rates to pay off older debt. The current refunding resulted in a difference between the
reacquisition price and the net carrying amount of the old debt of $1.18 million. The City completed the
current refunding to reduce its total debt service payments over the next 25 years by $1,618,745, and to
obtain an economic gain (difference between the present values of the old and new debt service
payments) of$1,415,127. The City paid off all remaining Governmental Activity Debt in the first quarter
of fiscal year 2014.
Debt service coverage calculations can be found on page 58. Additional information on the City's long
term debt can be found in Note 6 on pages 28-31 of this report.
Economic and Budgetary Highlights
Projections for fiscal year 2015 revenues remain essentially flat. Overall revenue is down $548,000, but
this is primarily due to a grant being received in prior year. The millage rate was held to 3.3285, which is
consistent with fiscal year 2014. This is projected to increase General Fund Revenue by $237,000. The
rise in prope1ty tax revenue will help offset a slight decrease in enterprise fund transfers. Even though
costs in some areas are expected to increase, no increase in rates were budgeted for 2015. The 25%
contingency levels set by the City Commission are continuing to be maintained. Service levels have been
maintained at essentially the same levels to those before the recession. Major adjustments to suppmt
these service levels included fewer capital projects than in past years, increased storm water fees, the
elimination of capital projects from the General Fund, pension reform and health care restructuring, and
increased efficiency in water and sewer operations. Some strategic planning and budgetary highlights the
City expect to address in 2015 and into the future are highlighted below.
Revenue Highlights:
11 The 2014 taxable prope1ty values are about 0.5% higher than the 2013 values. The City Commission
voted to use the same rate of 3.3285 mills, instead of the roll-back rate of 3.3156. The purpose for
adopting the millage rate of 3.3285 was to maintain a level of ad valorem tax revenue sufficient to
maintain adequate funding for the existing level of services at the estimated cost and to continue to
maintain the City's infrastructure. With the slight increase of 0.47% over the roll-back rate, tax
collections are budgeted to be almost the same in 2014 as they were in 2013. The final gross taxable
property value was $1,204,471,000. Ad valorem taxes of $3,908,000 represent about 39% of the
General Fund revenues for 2014.
11 The 2014 intergovernmental revenues of $1,634,000 make up 16.01% of general fund revenues. This
is an increase of$67.000 over 2013.
111 The City's investment portfolio is valued at approximately $15,747,000 as of September 30, 2014.
The investment earnings gain for the year was $526,000, compared to a $347,000 loss the prior year.
Over the past four years, the City has recognized an overall investment earnings gain of$1,121,000.
xi
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT'S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2014
(Co11cluded)
Expenditure Highlights:
• Included in the 2015 Budget, Personnel Services expenses are budgeted to increase $374,000 over the
current year. This increase is made up of three things. It includes increases in wages, health
insurance, and workers' compensation insurance. These increases are partially off-set by a reduction
in pension costs. It also includes the differences in pay for various staffing changes and includes the
difference between 2014 estimates reduced for vacant positions compared to a fully funded 2015
budget.
• Operating Expenses of$10,794,000 are $196,000 less than the current year estimate. The largest part of
that decrease is due to a large decrease in the amount of benefits paid out of the pension funds. The rest
is mostly lower estimates for professional services and point repairs in the Public Utilities divisions.
• During fiscal year 2015, Jacksonville and Atlantic Beach reached an agreement with regards to the
payment of past due tipping fees. A payment of $322,000 was made in February 2015. The City of
Atlantic Beach also renegotiated their contract with their waste hauler to include payment of the tipping
fee directly to the City of Jacksonville at no additional cost to the citizens of Atlantic Beach.
• Capital Outlay budget in 2015 totaled $6,703,000 . Tlus is an increase of$2,434,000 over the 2014 and
is mostly made of two major projects. These are the Senlinole Road Streetscape and Waterline
Replacement Project at $1.6 million and the Public Safety Building at $2.6 million. Other budgeted
projects include Saltair subdivision drainage and sidewalk improvements, replacement of the effluent
outfall line, progress on the Marsh Master Plan, and Russell Park Improvements.
• Debt Setvice expenses in fiscal year 2015 were reduced by $162,000, from $2,309,000 to $2,148,000
city-wide. This is due to the pay-off of one loan in the current year that was originally borrowed for
water, sewer, and street projects and the reduction in debt service for our SRF loan entered into last year
for the sewer plant TMDL upgrades. Going forward, the remaining three loans are being refinanced at
2.33% this year, which will lead to future savings of$1.6 million over the next ten years.
• Transfers Out budget for 2015 represents the movement of funds from the Public Utility Funds and the
Sanitation Fund to the General Fund and the Half Cent Sales Tax Funds to a project fund. We also are
transferring $160,000 from the Gas Tax Fund to the General Fund to help pay for the street
maintenance.
Requests for Information
The financial report is designed to provide a general overview of the City's finances for all those with an
interest in the City's finances. Questions concerning any of the infom1ation provided in this report or
requests for additional financial information should be addressed to the City of Atlantic Beach, Finance
Director, 800 Seminole Road, Atlantic Beach, Florida 32233.
xii
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, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
2014
Govemmental Business-type 2013
Activities Activities Totals Totals
Assets
Equity in Pooled Cash and Investments $ 10,312,186 $ 5,737,089 $ 16,049,275 $ 15,162,362
Receivables -Net 2,730 629,505 632,235 732,392
Due from Other Governments 988,067 228,532 1,216,599 871,151
Inventories 29,370 12,827 42,197 88,974
Notes Receivable-Current 0 15,759 15,759 16,519
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents 0 1,578,519 1,578,519 2,544,207
Capital Assets:
Land 10,363,002 1,656,018 12,019,020 12,019,020
Buildings 4,491,659 4,356,384 8,848,043 8,848,043
Improvements Other Than Buildings 39,156,369 79,345,283 118,501,652 115,901,612
Equipment 3,637,172 2,151,907 5,789,079 5,391,410
Intangibles -Easements and Computer Software 341,079 244,709 585,788 585,788
(Accumulated Depreciation and Amortization) (19, 192,636) (46,737,041) (65,929,677) (62,540,838)
Construction in Progress 417,906 172,514 590,420 285,733
Prepaid Items 13,008 32,210 45,218 361,996
Notes Receivable-Noncurrent 0 127,828 127,828 134 966
Total Assets 50,559,912 49,552 043 100,111,955 100,403,335
Deferred Outflows of Resources
Noncurrent
Unamortized Refunding Loss 0 1,187,375 1,187,375 0
Liabilities
Accounts Payable and Other Current Liabilities 393,083 1,084,426 1,477,509 1,060,045
Construction Retainages Payable 0 56,696 56,696 0
Due to Other Governments 0 10,194 10,194 9,384
Unearned Revenue 10,905 176,970 187,875 189,746
Deposits 9,199 0 9,199 9,916
Compensated Absences -Current 224,960 109,167 334,127 277,075
Accrued Interest Payable 0 0 0 971
Payable from Restricted Assets:
Current Portion of Bonds Payable 0 0 0 1,050,992
Current Portion of Loan Payable 0 286,174 286,174 164,475
Accrued Interest Payable 0 97,471 97,471 423,372
Customer Deposits 0 952,496 952,496 573,879
Noncurrent Liabilities:
Due Within One Year 0 0 0 69,203
Due in More Than One Year 0 21,332,540 21,332,540 21,343,633
Compensated Absences-Noncurrent 345,560 120,160 465,720 548,814
Other Postemployment Benefits Obligation 156,845 51,836 208,681 179,798
Total Liabilities 1 140 552 24,278,130 25,418,682 25,901,303
Net Position
Net Investment in Captial Assets
Restricted for:
39,214,551 20,758,435 59,972,986 57,862,465
Renewal and Replacement
Debt Service
Public Safety
Road Maintenance and Constmction
Other Capital Projects
Other Purposes
Building Code Enforcement
Unrestricted
0
0
168,310
159,677
3,588,843
86,906
0
6 201,073
250,000
286,174
0
0
0
0
261,288
4 905,391
250,000
286,174
168,310
159,677
3,588,843
86,906
261,288
11106,464
500,000
1,274,175
167,967
92,254
3,214,166
108,741
76,921
11 205,343
Total Net Position $ 49419360 $ 26.461.288 $ 15.880.648 $ 74,502.032
See accompanying notes.
1
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
2014
Program Revenues Net (Ex12ense) Revenue and Changes in Net Position
Operating Capital Prima!! Government
Charges for Grants and Grants and Governmental Business-type 2013
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals Totals
Primary Government
Governmental Activities:
General Government $ 2,053,969 $ 876,793 $ 0 $ 0 $ (l,I77,I76) $ 0 $ (I,I77,I76) $ (I,I 06, 757)
Public Safety 5,I83,96I 7I3,623 83,829 2,I70 ( 4,384,339) 0 ( 4,384,339) ( 4,253,11 9)
Road Maintenance and
Construction 1,872,226 I25,517 534,839 132,856 (1,079,014) 0 (I,079,0I4) (1,2I3,364)
Parks and Recreation I,309,407 70,43I 0 163,888 (I,075,088) 0 (1,075,088) (I,I31,I25)
Conservation and Resource
Management 0 0 8,I80 0 8,180 0 8,I80 0
Interest/Fiscal Charges on
Long-term Debt 486 0 0 0 {4862 0 {4862 {33702
Total Governmental Activities 10,420,049 1,786,364 626,848 298,914 {7.707,9232 0 {7.707,9232 {7.707,735}
Business-type Activities:
Utility 7,309,320 7,943,365 0 775,929 0 1,409,974 I,409,974 1,100,945
Storm water I,I52,729 858,751 0 0 0 (293,978) (293,978) (288,392)
Sanitation 1,869,006 1,790,208 0 0 0 (78,798) (78,798) 294,877
Building Code Enforcement 239.145 423.129 0 0 0 I83,984 183,984 9.530
Total Business-type Activities I0,570,200 11.015,453 0 775.929 0 1,221,182 1.221.182 1.116,960
Total Primary Government $ 20,990,249 $ 12,801,817 $ 626,848 $ 1,074,843 {7.707,9232 1.221.182 {6.486,7412 {6.590,775}
General Revenues
Property Taxes
Sales Taxes
Business and Utility Taxes
State Revenue Sharing
Discretionary Sales Surtax
Investment Earnings (Loss)
Miscellaneous
Transfers
Total General Revenues
and Transfers
Change in Net Position
Net Position, Beginning of Year (As Restated)
Net Position, End of Year $
3,908,365
1,208,547
I,135,931
300,007
721,981
3I2,798
64,556
620,795
8,272,980
565,057
48,854,303
49,419.360 $
0
0
0
0
0
2I3,172
0
(620,795)
{407,6232
8I3,559
25,647,729
26.461.288 $
3,908,365
1,208,547
I,135,93I
300,007
72I,981
525,970
64,556
0
7,865,357
1,378,616
74,502,032
75.880.648 $
3,843,755
I,I56,I29
1,197,337
283,12I
684,187
(347,44I)
403,069
0
7,220,157
629,382
73,872,650
74.502.032
See accompanying notes.
2
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
2014
General
Nonmajor
Governmental
Funds
Totals
Governmental
Funds
2013
Totals
Assets
Equity in Pooled Cash and Investments
Receivables -Net
Due from Other Funds
Due from Other Governments
Inventories
Notes Receivable -Current
Prepaid Items
Notes Receivable -NoncmTent
Total Assets
$ 6,572,815
2,730
6,531
700,121
29,370
0
13,008
0
7 324 575
$ 3,739,371
0
0
287,946
0
0
0
0
4 027 317
$ 10,312,186
2,730
6,531
988,067
29,370
0
13,008
0
11,351,892
$ 9,656,124
116,693
9,097
871,151
26,098
760
178,578
1,520
10,860,021
Liabilities and Fund Balances
Liabilities
Accounts Payable and Accrued Liabilities
Due to Other Funds
Deposits
Unearned Revenue
Total Liabilities
Fund Balances
Nonspendable:
Inventories
Prepaids
Restricted for:
Public Safety
Road Maintenance and Construction
Debt Service Reserve
Other Capital Projects
Other Purposes
Committed to:
Conservation and Resource Management
Assigned to:
Re-establishment of Fire Department
Operating Reserves
Unassigned
Total Fund Balances
Total Liabilities and Fund Balances
389,562
0
2,800
10,905
403,267
29,370
13,008
7,543
0
0
0
0
0
0
2,685,355
4,186,032
6,921,308
$ 7,324,575
3,521
6,531
6,399
0
16,451
0
0
160,767
159,677
0
3,588,843
86,906
14,673
0
0
0
4,010,866
$ 4,027,317
393,083
6,531
9,199
10,905
419,718
29,370
13,008
168,310
159,677
0
3,588,843
86,906
14,673
0
2,685,355
4,186,032
10,932,174
$ 11,351,892
622,010
9,097
9,916
7,302
648,325
26,098
178,578
167,967
92,254
73,113
3,214,166
108,741
6,493
300,000
2,598,195
3,446,091
10,211,696
$ 10,860,021
See accompanying notes.
3
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER30, 2013
2014 2013
Total Fund Balances of Governmental Funds $ 10,932,174 $ 10,211,696
Amounts Reported for Governmental
Activities in the Statement of Net Position
are Different Because:
Capital assets used in governmental
activities are not financial resources
and, therefore, are not reported in
the funds:
Total Capital Assets
(Accumulated Depreciation)
$ 58,407,187
(19,192,636)
39,214,551
$ 57,504,590
(18,093,554)
39,411,036
Long-term liabilities are not due and
payable in the current period and,
accordingly, are not reported as fund
liabilities. Interest on long-term debt is
not accrued in the governmental funds,
but rather is recognized as an expenditure
when due. Ce1tain prepayments are not
current financial resources, and are not
rep01ted in the funds. All liabilities both
current and long-term, are rep01ted in the
statement of net position. Long-term
liabilities (assets) at year-end consist of:
Revenue Bonds Payable
Compensated Absences
Net Pension Asset
Other Postemployment Benefits
Obligation
Accrued Interest Payable
0
570,520
0
156,845
0
(727,365)
69,203
564,800
(2,271)
135,726
971
(768,429)
Total Net Position of Governmental Activities $ 49,419,360 $ 48,854,303
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, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
Revenues
Property Taxes
Nonproperty Taxes
Permits, Fees, and Special Assessments
Intergovernmental Revenues
Fines and Forfeitures
Charges for Services
Investment Earnings (Loss)
Miscellaneous Revenues
Interfund Charges
Total Revenues
Expenditures
Current:
General Government
Public Safety
Road Maintenance and Construction
Parks and Recreation
Debt Service:
Principal
Interest and Other
Capital Outlay
(Total Expenditures)
(Deficiency) Excess of Revenues (Under)
Over Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers (out)
Sale of General Fixed Assets
Total Other Financing (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
2014
General
Nonmajor
Governmental
Funds
$ 3,908,365
1,135,931
863,978
1,634,354
94,534
756,446
215,548
54,146
1,443,440
10,106,742
$ 0
1,252,577
0
278,510
59,909
0
96,491
3,724
0
1,691,211
3,004,357
4,851,060
1,442,396
1,060,821
0
122,354
285,478
0
0
0
502,639
(10,861,273)
69,203
1,457
390,159
(868,651)
(754,531) 822,560
1,066,503
0
31,654
1,098,157
275,500
(721,208)
0
(445,708)
343,626 376,852
6,577,682 3,634,014
$ 6,921,308 $ 4,010,866
Totals
Governmental
Funds
2013
Totals
$ 3,908,365
2,388,508
863,978
1,912,864
154,443
756,446
312,039
57,870
1,443,440
11,797,953
$ 3,843,755
2,395,045
830,708
1,842,537
255,113
725,604
(201,327)
409,135
1,435,569
11,536,139
3,004,357
4,973,414
1,727,874
1,060,821
2,877,855
4,951,320
1,726,088
1,031,424
69,203
1,457
892,798
(11 ,729,924)
67,712
4,316
768,203
(11 ,426,918)
68,029 109,221
1,342,003
(721,208)
31,654
652,449
1,046,454
(431,696)
0
614,758
720,478 723,979
10,211,696 9,487,717
$ 10,932,174 $ 10,211,696
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, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2013
2014 2013
Net Change in Fund Balances-Total Governmental Funds $ 720,478 $ 723,979
Amounts Reported for Governmental Activities in the
Statement of Activities are Different Because:
Governmental funds report capital purchases as
expenditures. However, in the statement of
activities, the cost of those assets is depreciated
over their estimated useful lives and reported as
depreciation expense:
Expenditures for Capital Assets
(Current Year Depreciation)
$ 892,798
(1,099,082)
(206,284)
$ 768,203
(1,139,045)
(370,842)
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. 9,799 (156,857)
Repayment oflong-term debt principal is an
expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the
statement of net assets. 69,203 67,712
Governmental funds report sale of general fixed
assets as financial resources. The gain or loss on
disposal of general fixed assets is not reflected
in the governmental funds:
Gain (Loss) on Disposal of General Fixed Assets 0
0
(4,335)
(4,335)
Some expenses/revenues reported in the statement
of activities do not require the use of or provide
current financial resources and, therefore, are not
rep01ted as expenditures in governmental funds:
Debt Interest Expense
Compensated Absences
Net Pension Asset
Other Postemployment Benefits Obligation
970
(5,719)
(2,271)
(21,119)
(28,139)
946
34,125
2,271
{232705}
13,637
Change in Net Position-Governmental Activities $ 565,057 $ 273,294
See accompanying notes.
6
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
2014
Assets
Current Assets:
Equity in Pooled Cash and Investments
Accounts Receivable -Net
Due from Other Governments
Inventories
Notes Receivable-Current
Prepaid Items
Restricted Assets:
Equity in Pooled Cash and Cash Equivalents
Capital Assets:
Land
Buildings
Improvements Other Than Buildings
Equipment
Intangibles -Easements and Computer Software
(Accumulated Depreciation and Amortization)
Construction in Progress
Notes Receivable-Noncurrent
Total Assets
$
$
Business-type Activities -Enterprise Funds
Building Code
Utility Stormwater Sanitation Enforcement
3,288,462 $ 1,488,259 $ 676,555 $ 283,813
514,344 49,577 65,584 0
228,532 0 0 0
12,827 0 0 0
15,759 0 0 0
32,210 0 0 0
1,222,787 0 0 355,732
749,499 906,519 0 0
4,356,384 0 0 0
62,883,046 16,462,237 0 0
1,645,935 273,748 189,877 42,347
226,394 0 0 18,315
(38,316,346) (8,185,604) (178,468) (56,623)
74,291 98,223 0 0
127,828 0 0 0
37,061,952 $ 11,092,959 $ 753,548 $ 643,584
$
$
Totals
5,737,089
629,505
228,532
12,827
15,759
32,210
1,578,519
1,656,018
4,356,384
79,345,283
2,151,907
244,709
(46,737,041)
172,514
127,828
49,552,043
$
$
2013
Totals
5,506,238
615,699
0
62,876
15,759
181,147
2,544,207
1,656,018
4,356,384
77,061,749
2,023,485
244,709
(44,447,284)
184,671
133,446
50,139,104
Deferred Outflows of Resources
Noncurrent
Unamortized Refunding Loss 1,033,016 154,359 0 0 1,187,375 0
See accompanying notes.
7
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2013
(Concluded)
2014
Business-type Activities -Enterprise Funds
Building Code 2013
Utility Stormwater Sanitation Enforcement Totals Totals
Liabilities
Current Liabilities Payable from Current
Assets:
Accounts Payable and Other Current Liabilities $ 605,088 $ 34,797 $ 438,679 $ 5,862 $ 1,084,426 $ 438,035
Construction Retainages Payable 56,696 0 0 0 56,696 0
Due to Other Governments 6,923 0 0 3,271 10,194 9,384
Unearned Revenue 88,112 28,632 60,226 0 176,970 182,444
Compensated Absences -Current 105,212 958 0 2,997 109,167 81,499
Current Liabilities Payable from Restricted
Assets:
Current Portion of Bonds Payable 0 0 0 0 0 1,050,992
Current Portion of Loans Payable 286,174 0 0 0 286,174 164,475
Accrued Interest Payable 97,471 0 0 0 97,471 423,372
Customer Deposits 596,764 0 0 355,732 952,496 573,879
Noncurrent Liabilities:
Due in More Than One Year 19,517,740 1,814,800 0 0 21,332,540 21,343,633
Compensated Absences -Noncurrent 116,599 0 0 3,561 120,160 179,590
Other Postemployment Benefits Obligation 35,526 9,476 0 6,834 51,836 44,072
Total Liabilities 21,512,305 1,888,663 498,905 378,257 24,278,130 24,491,375
Net Position
Net Investment in Capital Assets 12,848,305 7,894,682 11,409 4,039 20,758,435 18,520,632
Restricted for:
Renewal and Replacement 250,000 0 0 0 250,000 500,000
Debt Service 286,174 0 0 0 286,174 1,201,062
Building Code Enforcement 0 0 0 261,288 261,288 76,921
Unrestricted 3,198,184 1,463,973 243,234 0 4,905,391 5,349,114
Total Net Position $ 16,582,663 $ 9,358,655 $ 254,643 $ 265_,32_7_ $ 26,461288_ $ 25,647,729
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, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30, 2013
2014
Business-tyl!e Activities -Enterf!rise Funds
Building Code 2013
Utility Stormwater Sanitation Enforcement Totals Totals
Operating Revenues
Charges for Services:
Customer Charges $ 7,877,329 $ 855,265 $ 1,742,009 $ 423,129 $ 10,897,732 $ 10,823,188
Franchise Permits 0 0 2,500 0 2,500 3,000
Miscellaneous Revenues 56,847 3 486 0 0 60,333 195,112
Total Operating Revenues 7,934,176 858,751 1,744,509 423,129 10,960,565 11,021,300
Operating Expenses
Personal Services 1,802,458 173,703 18,369 191,775 2,186,305 2,206,998
Contractual Services 788,322 195,798 1,674,712 5,397 2,664,229 2,094,275
Supplies 366,425 31,372 0 4,644 402,441 362,586
Repairs and Maintenance 133,621 25,481 6,471 4,936 170,509 133,780
Utilities 367,452 0 0 0 367,452 382,694
Depreciation 1,819,348 466,235 3,367 808 2,289,758 2,316,074
Intergovernmental Charges 986,547 173,124 158,948 26,605 1,345,224 1,334,874
Other Expenses 221,639 20,885 7,139 4,980 254,643 242,642
(Total Operating Expenses) (6,485,812) (1,086,598) (1,869,006) (239,145) (9,680,561) (9,073,923)
Operating Income (Loss) 1,448,364 (227,847) (124,497) 183,984 1,280,004 1,947,377
Nonoperating Revenues (Expenses)
Connection Charges 9,189 0 0 0 9,189 8,530
Franchise Fees 0 0 45,699 0 45,699 49,427
Investment Earnings (Loss) 142,727 46,540 19,483 4,422 213,172 (146,114)
Interest Expense (778,782) (82,699) 0 0 (861,481) (996,199)
Gain (Loss) on Disposal ofFixed Assets 1,210 23,475 0 0 24,685 1,601
Issuance Costs {45,9362 {6,9072 0 0 {52,8432 {164,4542
Total Nonoperating Revenues (Expenses) (671,592) (19,591) 65,182 4,422 (621,579) (1,247,209)
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, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
(Concluded)
2014
Business-type Activities -Enterprise Funds
Income (Loss) Before Contributions
and Transfers
Capital Contributions and Grants
and Transfers
Capital Contributions and Grants
Transfers in
Transfers (out)
Total Capital Contributions and Grants
and Transfers
Change in Net Position
Net Position, Beginning of Year (As Restated)
Net Position, End of Year
Utility
$ 776,772
775,929
0
(629,860)
146,069
922,841
15,659,822
$ 16,582,663
Stormwater Sanitation
Building Code
Enforcement
$ (247,438) $ (59,315) $ 188,406
0
285,000
0
0
0
(275,935)
0
0
0
285,000 (275,935) 0
37,562 (335,250) 188,406
9,321,093 589,893 76,921
$ 9,358,655 $ 254,643 $ 265,327
2013
Totals Totals
$ 658,425 $ 700,168
775,929 270,678
285,000 283,000
(905,795) (897,758)
155,134 (344,080)
813,559 356,088
25,647,729 25,291,641-
$ 26,461,288 $ 25,647,729
See accompanying notes.
10
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30, 2013
2014
Cash Flows from Operating Activities
Cash Received from Customers
Cash Paid to Suppliers
Cash Paid to Employees
Cash Paid for Interfund Services
Net Cash Provided by (Used in) Operating
Activities
Cash Flows from Noncapital Financing
Activities
Connection Charges
Franchise Fees
Transfers in
Transfers (out)
Net Cash Provided by (Used in) Noncapital
Financing Activities
Capital and Related Financing Activities
Capital Grants
Proceeds from Loan
Fixed Asset Additions
Proceeds from Sale ofPPE
Principal Payments on Long-term Debt
Issuance Costs Paid
Interest Paid
Net Cash Provided by (Used in) Capital
and Related Financing Activities
Business-type Activities -Enterr:"!rise Funds
Building Code
Utilit_y__ Stormwater Sanitation Enforcement
$ 7,953,929
(1,337, 192)
(1,809,033)
(986,547)
$ 849,193
(245,698)
(174,649)
(173,124)
3,821,157 255,722
9,189
0
0
(629,860)
0
0
285,000
0
(620,671) 285,000
547,397
12,145,200
(2,058, 129)
1,210
(13,998,789)
( 45,936)
(1,061,862)
0
1,814,800
(332,324)
23,475
(2,088,974)
(6,907)
(125,520)
$ 1,743,537
(1,353,871)
(18,369)
(158,948)
212,349
0
45,699
0
(275,935)
(230,236)
0
0
(4,501)
0
0
0
0
$ 778,861
(20,440)
(208,252)
(26,605)
523,564
0
0
0
0
0
0
0
(4,847)
0
0
0
0
Totals -
2013
Totals
$ 11,325,520
(2,957,201)
(2,21 0,303)
(1,345,224)
$ 10,845,906
(3,952,174)
(2,227,680)
(1,334,874)
4,812,792 3,331,178
9,189
45,699
285,000
(905,795)
57,957
0
283,000
(897,758)
(565,907) (556,801)
547,397
13,960,000
(2,399,801)
24,685
(16,087,763)
(52,843)
(1,187,382)
270,678
0
(983,029)
0
(1,468,945)
0
(910,962)
(4,470,909) (715,450) (4,501) (4,847) (5,195,707) (3,092,258)
See accompanying notes.
11
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30, 2013
(Continued)
2014
Cash Flows from Investing Activities
Sale (Purchase) oflnvestments
Interest Received
Net Cash Provided by (Used in)
Investing Activities
$
Utility
241,153
142,727
383,880
Business-type Activities -Enterprise Funds
Building Code
Stormwater Sanitation Enforcement
$ (104,80 1) $ (89,504) $ (482,824)
46,540 19,483 5,235
(58,261) (70,021) (477,589)
$
Totals
(435,976)
213,985
(221,991)
$
2013
Totals
394,523
(146,601)
247,922
Net Increase (Decrease) in Cash and
Cash Equivalents (886,543) (232,989) (92,409) 41,128 (1,170,813) (69,959)
Cash and Cash Equivalents, Beginning of Year 1,375,560 394,315 165,747 28,198 1,963,820 2,033,779
Cash and Cash Equivalents, End of Year $ 489,017 $ 161,326 $ 73,338 $ 69,326 $ 793,007 $ 1,963,820
Reconciliation of Ouerating Income (Loss) to
Net Cash Provided bl: (Used in) Ouerating
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
Prep aids
Compensated Absences
OPEB Obligation
Accounts Payable and Accrued Liabilities
Customer Deposits
Deferred Revenue
Net Cash Provided by (Used in) Operating
Activities
$
$
1,448,364
1,819,348
(19)
50,049
123,513
(12,787)
6,212
366,705
22,885
(3, 113)
3,821,157
$ (227,847)
466,235
(9,335)
0
25,424
(1,566)
620
2,414
0
(223)
$ 255,722
$ (124,497)
3,367
1,166
0
0
0
0
334,451
0
2,138)
$ 212,349
$ 183,984
808
0
0
0
(17,409)
932
(483)
355,732
0
$ 523,564
$
$
1,280,004
2,289,758
(8,188)
50,049
148,937
(31,762)
7,764
703,087
378,617
(5,474)
4,812,792
$
$
1,947,377
2,316,074
(57,313)
(18,193)
(181,147)
(28,412)
7,730
(692,580)
55,226
(17,584)
3,331,178
See accompanying notes.
12
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
(Concluded)
2014
Reconciliation of Cash and Cash
Equivalents to Balance Sheet
Utility
Business-t~ee Activities -Entererise Funds
Stormwater Sanitation
Building Code
Enforcement Totals
2013
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
$
$
3,288,462
1,222,787
( 4,022,232)
489,017
$ 1,488,259
0
(1,326,933)
$ 161,326
$
$
676,555
0
(603,2171
73,338
$ 283,813
355,732
(570,219)
$ 69,326
$
$
5,737,089
1,578,519
(6,522,601)
793,007
$
$
5,506,238
2,544,207
(6,086,625)
1,963,820
See accompanying notes.
13
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER30, 2013
Assets
Cash and Cash Equivalents
Prepaids
Interest Receivable
Investments at Fair Value
Total Assets
$
Pension Trust Funds
2014 2013
37,480 $ 130,743
0 5,830
64,250 34,097
23,066,411 21,341,304
23,168,141 21,511,974
Liabilities
Accounts Payable and Accrued Liabilities
Excess Premium Tax Liability
Total Liabilities
114
120,454
120,568
900
120,454
121,354
Net Position
Net Position Restricted for Pensions $ 23,047,573 $ 21,390,620
See accompanying notes.
14
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER30, 2013
Additions
Contributions:
Employer
Employees
State ofFlorida
Total Contributions
Net (Decrease) Increase in
Fair Value oflnvestments
Interest and Dividends
Miscellaneous Revenue
Total Additions
$
Pension Trust Funds
2014 2013
1,514,183 $ 1,562,327
260,478 258,156
96,217 91,077
1,870,878 1,911,560
792,566 729,168
441,637 420,837
0 58,206
3,105,081 3,119,771
Deductions
Refunds of Contributions
Benefits
Investment Expenses
Administrative Expenses
Total Deductions
70,596
1,222,239
101,021
54,272
1,448,128
118,126
1,381,388
84,793
61,644
1,645,951
Change in Net Position 1,656,953 1,473,820
Net Position, Beginning of Year (as Restated) 21,390,620 19,916,800
Net Position, End of Year $ 23,047,573 $ 21,390,620
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
Note 1 -Summary of Significant Accounting Policies
The accounting policies of the City of Atlantic Beach, Florida, (the City), conform to
accounting principles generally accepted in the United States of America as applicable to
governments. The following is a summary of the more significant policies used in the
preparation of these financial statements.
Reporting Entity
The City was incorporated in 1957, under a chmter 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 repmting 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 suppmted by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges
for suppmt.
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, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Government-wide and Fund Financial Statements (Concluded)
Separate financial statements are provided for governmental funds, proprietary funds, and
fiducimy 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 fi·om 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: (I) Net Investment in Capital Assets; (2)
Restricted; or (3) Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences, other postemployment
benefits, and claims and judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and pennits, charges for services, and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so
have been recognized as revenues of the 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, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Fund Financial Statements (Concluded)
The City repmis 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 repmis 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 repmied in five components -nonspendable, restricted, committed, assigned
and unassigned:
18
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Fund Balance Classification (Concluded)
• Nonspendable Fund Balance-amounts that are not in spendable form (such as
inventory) or are required to be maintained intact.
• Restricted Fund Balance-amounts constrained to specific purposes by their providers
(such as grantors, bondholders, and higher levels of government), through constitutional
provisions, or by enabling legislation.
• Committed Fund Balance-amounts constrained to specific purposes by the City itself,
using its highest level of decision-making authority (i.e., ordinance passed by City
Commission). To be reported as committed, amounts cannot be used for any other
purpose unless the City takes the same highest level action to remove or change the
constraint.
• Assigned Fund Balance-amounts the City intends to use for a specific purpose. Intent
can be expressed by the City Commission or by an official or body to which the City
Commission delegates the authority.
• Unassigned Fund Balance-amounts that are available for any purpose. Positive
amounts are reported only in the General Fund.
When both restricted and unrestricted resources are available for use, it is the City's practice to
use restricted resources first, then umestricted resources as they are needed. When
umestricted 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.
19
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are
controlled by a budgetary accounting system in accordance with various legal requirements
which govern the City's operations. Budgets are monitored at varying levels of classification
detail; however, expenditures cannot legally exceed total appropriations at the individual fund
level.
Budgets are adopted for all governmental funds (general, special revenue, debt service and
capital projects). The City Manager is authorized to transfer budgeted amounts within
departments within any fund; however, any revisions that increase the total expenditures of
any department or fund must be approved by the City Commission. All necessary
supplemental appropriations are adopted by the City Commission and are included in the
reported budgetary data. The budget presented in the accompanying required supplemental
information is prepared in conformity with accounting principles generally accepted in the
United States of America.
Cash and Investments
Except where prohibited, cash resources of the individual funds are combined to form a pool
of cash and investments. Investment earnings and losses on the pooled cash and investments
are distributed to the appropriate funds based on the average monthly balance of investments
in each fund.
Investments are valued at fair market value (see Note 2).
For the purposes of the statement of cash flows, the City's proprietary funds consider cash and
cash equivalents to include cash and investments with an original maturity of three months or
less.
Receivables
Receivables are recorded at their net realizable value.
Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding
at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current
portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent pmiion 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.
20
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to
various bond indenture agreements and City ordinances. These assets are legally restricted for
specific purposes, such as debt service, new construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City's enterprise
funds, it is the City's policy to use restricted resources first, then unrestricted resources as they
are needed.
Capital Assets
Capital assets, which include propetty, plant, equipment, and infrastructure assets (e.g., roads,
drainage improvements, sidewalks, and similar items), are repmted 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.
Propetty, 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.
21
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Continued)
Long-term Obligations (Concluded)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs during the current period. The face amount of debt
issued is repmted as other financing sources. Premiums received on debt issuances are
repotted 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 repmted as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide
and proprietary fund financial statements.
Deferred Inflows/Outflows of Resources
Deferred outflows of resources represent the consumption of net position that is applicable to a
future period. Deferred outflows have a positive effect on net position, similar to assets.
Currently, the City only repmts deferred outflows of resources for the difference between the
net reacquisition cost of new debt and the net carrying amount of old debt. This refunding loss
is ammtized over the remaining term of the new debt using the straight-line method. Deferred
inflows of resources represent the acquisition of net position that is applicable to a future
repmting period. DefeiTed inflows have a negative effect on net position, similar to liabilities.
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements.
Grant revenues are recorded using the modified accrual basis in governmental funds and the
accrual basis in the proprietary funds. Restricted grant revenues, which are received but not
expended, are recorded as unearned revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the
Property Appraiser and Tax Collector of the City of Jacksonville, Florida. General propetty
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 cettificates are sold for all uncollected real property taxes. Unsold cettificates 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, cettain transfers have been made between
systems and accounts of the utility enterprise fund as required by bond covenants.
22
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 1 -Summary of Significant Accounting Policies (Concluded)
Prior Period Information
The financial statements include certain prior year summarized comparative information in
total. Such information does not include sufficient detail to constitute a presentation in
conformity with generally accepted accounting principles. Accordingly, such information
should be read in conjunction with the City's financial statements for the year ended
September 30, 2013, from which the summarized information was derived.
New Accounting Pronouncements
During the year, the City implemented GASB No. 65, Items Previously Reported as Assets
and Liabilities (GASB 65), which amends or supersedes the accounting and financial reporting
guidance for certain items previously required to be reported as assets or liabilities. The
objective is to either properly classify certain items that were previously repmied as assets or
liabilities as deferred outflows of resources or deferred inflows of resources to recognize
cetiain items that were previously repotied as assets and liabilities as outflows of resources
(expenses) or inflow of resources (revenues). Under GASB 65, bond issuance costs will now
be expensed when incurred, instead of being ammiized over the term of the bond. As such,
the implementation of GASB 65 resulted in the reduction of beginning net position in the
Business-type Activities of$175,913, of which $153,636 was reported in the Utility Fund and
$22,277 was repotied in the Stormwater Fund. The implementation of GASB 65 also resulted
in the reclassification ofthe unamortized portion of bond refunding losses. These amounts are
now reported as Deferred Outflows of Resources instead of as a reduction of Bonds Payable.
During the year, the City implemented GASB No.67 (GASB 67), Financial Reporting for
Pension Plans; an amendment of GASB Statement No.25. This statement replaces the
requirements of Statements No. 25 and No. 50 related to pension plans that are administered
through trusts or equivalent arrangements. This statement requires additional disclosures
regarding the City's pension plans and specifies the required approach to measuring the net
pension liability. Under GASB 67, the removal of the obligation for DROP benefits is
required. As noted in Note 15, this resulted in an increase of $288,280 to the beginning net
position in the Statement of Changes in Fiduciary Net Position.
Note 2-Cash and Investments
The City maintains a cash and investment pool that is designed for use by all funds, except for
those monies which are periodically transferred for pension investment purposes. In addition,
investments are separately held and individually accounted for where contractual
arrangements and bond covenants provide for and require such arrangements.
At September 30, 2014, the carrying amount of cash on hand and on deposit with banks,
including interest-bearing deposits was $1,917,678, and the related bank balance was
$2,387,846. Monies which are placed on deposit with financial institutions in the form of
demand deposit accounts, time deposit accounts, and certificates of deposit are defined as
public deposits. All of the City's public deposits are held in qualified public depositories
pursuant to Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act).
Under the Act, all qualified public depositories are required to pledge eligible collateral having
a market value equal to or greater than the average daily or monthly balance of all public
deposits, times the depository's collateral pledged level. The pledging level may range from
25% to 125% depending upon the depository's financial condition and establishment period.
All collateral must be deposited with an approved financial institution.
23
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 2 -Cash and Investments (Continued)
Any losses to public depositors are covered by applicable deposit insurance, sale of securities
pledged as collateral and, if necessary, assessments against other qualified public depositories
of the same type as the depository in default.
The City elected to adopt a written investment policy as authorized under Florida Statutes.
Under the City's investment policies, general investments' activities are authorized to invest in
obligations of the U.S. Treasury, demand deposits, U.S. government agency securities,
ce1tificates of deposit, U.S. government sponsored enterprises, government and corporate
fixed income mutual funds, corporate notes and bonds, and local government investment
pools. Pension trust funds can invest in the aforementioned and, additionally, authorized
investments include domestic and foreign equity securities, domestic and foreign fixed income
securities, and cash equivalent securities.
Following are the investments, credit ratings, and maturities of the City's governmental and
business-type activities at September 30, 2014:
Investment Maturities
Investment
Type
Money Aia~·ket Funds:
Morgan Stanley, N.A.
Credit
Rating
Umated $
Fair
Value
1,778 $
Less Than
1 Year
1,778 $
1-5
Years
0 $
6-10
Years
0
Total
$ 1,778
Aiutual Funds:
Alliance Limited Duration
High Income Mutual Fund Unrated 2,424,772 2,424,772 0 0 2,424,772
Guggenheim Floating Rate
Strategy Class A Umated 1,521,915 1,521,915 0 0 1,521,915
Hmtford Floating Rate
Class A Unrated 1,527,314 1,527,314 0 0 1,527,314
Invesco Floating Rate
Income Class A Unrated 1,712,213 1,712,213 0 0 1,712,213
Lord Abbett Short Duration
Income Class A Mutual Fund Unrated 2,993,363 2,993,363 0 0 2,993,363
MainStay Short Duration High
Yield Fund Class A Unrated 2,567,593 2,567,593 0 0 2,567,593
Putnam Diversified Income
Trust Class A Unrated 2,998,316 2,998,316 0 0 2,998,316
Florida PRIME A-1 334 334 0 0 334
Total $ 15 747.598 $ 15 747 598 $ 0 $ 0 $15,747.598
24
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 2 -Cash and Investments (Continued)
Listed below are the investments and maturities in the City's pension trust funds at
September 30,2014:
Investment Maturities
Investment Fair Less Than 1-5 6-10 More Than
T:yne Value* 1 Year Years Years 10 Years Total
Cash Deposits and
Money Markets $ 6,746,846 $ 6,746,846 $ 0 $ 0 $ 0 $ 6,746,846
Common Stocks 7,724,216 7,724,216 0 0 0 7,724,216
Corporate Bonds 7,917,033 1,029,513 3,616,024 3,271,496 0 7,917,033
Government and
GSEBonds 251,478 70,182 181,296 0 0 251,478
ICMA Self Directed 491.088 491.088 0 0 0 491 088
Total $ 23.130.661 $ 16 061,845 $ 3.797.320 $ 3,271,496 $ 0 $ 23 130,661
* Fair value balances reported include interest receivable.
The total pension investment balances ofthe City at September 30, 2014, are comprised of the
following items:
Moody's Percent
Investment Credit of
T:yne Rating Total
Corporate Bonds AI 2.22%
Corporate Bonds A2 3.66%
Corporate Bonds A3 5.98%
Corporate Bonds AA3-0.74%
Corporate Bonds BAAl 9.26%
Corporate Bonds BAA2 7.89%
Corporate Bonds BAA3 4.48%
Government and GSE Bonds AAA 1.09%
Stocks NR 33.39%
Cash and Money Market NR 29.17%
ICMA Self Directed NR 2.12%
Restricted cash and investments at September 30,2014, in the enterprise funds follows:
Enterprise
Funds
Utility Fund $
Customer
Denosits
596 :Z64 $
Renewal
and
Renlacement
250.000 $
Debt
Service
316,023
D
$
System
evelopment
Charges
0
Totals
$ 1.222,787
Building Code
Enforcement Fund $ 355 732 $ 0 $ 0 $ 355,732
25
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 2 -Cash and Investments (Concluded)
Credit Risk-It is the City's Police Officers' Retirement System Trust Funds' investment
policy to, at a minimum, limit 60% of the market value of its investment in fixed income
securities to those that meet or exceed a credit rating of "A" by Moody's or Standard & Poor's
rating services. It is the City's General Employees' Retirement System Trust Funds' investment
policy to, at a minimum, limit 45% of the total fixed income portfolio to "investment grade" or
higher.
Also, no more than 5% (at cost) of the fixed income portfolio total value can be invested in the
securities of any single corporate issuer or 15% (at cost) of the plan's total assets can be invested
in foreign securities.
Custodial Credit Risk-For an investment, custodial credit risk is the risk that, in the event of
the failure of the counterparty, the City will not be able to recover the value of its investments
or collateral securities that are in the possession of an outside pmiy.
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 chmiered 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 patiy Custodial
Safekeeping Agreement shall include letters of authority from the City with details as to
responsibilities of pmiies, 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 patiy.
Note 3 -Receivables
Receivables, net of the allowance for doubtful accounts at September 30, 2014, consist ofthe
following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General $ 2,730 $ 0 $ 2,730
Utility 530,286 (15,942) 514,344
Stormwater 49,577 0 49,577
Sanitation 76 103 (10,519) 65 584
Total $ 658,626 $ (26,461) $ 632,235
Included in accounts receivable are $220,784 of water and sewer revenues earned, but not
billed as of September 30, 2014.
26
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 4 -Notes Receivable
It is the City's policy to allow its water and sewer customers to pay connection fees over an
extended period.
Following is a summary of the outstanding balance at September 30,2014:
Notes Receivable $ 143,587
(Current Portion) (15,759)
Total Notes Receivable -Noncurrent $ 127.828
Note 5 -Capital Assets
Capital asset activity for the fiscal year ended September 30,2014, is as follows:
Beginning Ending
Balance Increases (Decreases} Balance
Governmental Activities
Capital Assets Not Being
Depreciated:
Land $ 10,363,002 $ 0 $ 0 $ 10,363,002
Construction in Progress 101 062 514 871 (198,027) 417 906
Total Capital Assets Not
Being Depreciated 10 464 064 514 871 (198,027) 10,780,908
Capital Assets Being
Depreciated:
Buildings 4,491,659 0 0 4,491,659
Intangible Assets 341,079 0 0 341,079
Improvements Other Than
Buildings 38,839,863 316,506 0 39,156,369
Machinery and Equipment 3,367,925 269 247 0 3 637.172
Total Capital Assets Being
Depreciated 47,040,526 585 753 0 47.626,279
Less Accumulated Depreciation
for:
Buildings (1,740,225) (116,535) 0 (1,856,760)
Intangible Assets (319,121) (15,094) 0 (334,215)
Improvements Other Than
Buildings (13,562, 142) (676,143) 0 (14,238,285)
Machinery and Equipment (2,472,066) (291,310) 0 (2.763,376)
Total Accumulated Depreciation (18,093,554) (1.099.082) 0 (19,192,636)
Total Capital Assets Being
Depreciated, Net 28.946.972 (513,329) 0 28.433.643
Governmental Activities Capital
Assets, Net $ 32.411 036 $ I 542 $ (198.027) $ 32214,551
27
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 5Capital Assets (Concluded)
Beginning Ending
Balance Increases (Decreases) Balance
Business-type Activities
Capital Assets Not Being Depreciated:
Land $ 1,656,018 $ 0 $ 0 $ 1,656,018
Construction in Progress 184 671 2 271.377 (2283,534) 172 514
Total Capital Assets Not Being
Depreciated 1.840,689 2271.377 (2,283,534) 1.828,532
Capital Assets Being Depreciated:
Buildings 4,356,384 0 0 4,356,384
Intangible Assets 244,709 0 0 244,709
Improvements Other Than Buildings 77,061,749 2,283,534 0 79,345,283
Machinery and Equipment 2,023,485 128,422 0 2,151,907
Total Capital Assets Being Depreciated 83,686,327 2,411.956 0 86,098283
Less Accumulated Depreciation for:
Buildings ( 4,262,651) (13,336) 0 (4,275,987)
Intangible Assets (30,092) (190) 0 (30,282)
Improvements Other Than Buildings (38,533,546) (2,185,431) 0 (40,718,977)
Machinery and Equipment (1,620,995) (90,800) 0 (1,711,795)
Total Accumulated Depreciation (44,447,284) (2,289,757) 0 (46,737,041)
Total Capital Assets Being Depreciated,
Net 39239,043 122 199 0 39,361,242
Business-type Activities Capital Assets,
Net $ 41 079 732 $ 2,393,576 $ (2.283.534) $ 41.189 774
Depreciation expense was charged to functions/programs as follows:
Governmental Activities
General Governmental
Public Safety
Road Maintenance and Construction
Parks and Recreation
Total Depreciation Expense -Governmental Activities
$
$
135,355
194,295
526,716
242 716
1.099,082
Business-type Activities
Utility
Storm water
Sanitation
Building Code Enforcement
Total Depreciation Expense -Business-type Activities
$
$
1,819,348
466,235
3,367
808
2.289,758
Note 6Long-term Debt
Debt Refunding
On August 12, 2014, the City issued a $13,960,000 Utility System Refunding Bond with an
interest rate of 2.33% to refund the $13,545,000 outstanding of Utility System Refunding
Bonds, Series 2004, $757,387 outstanding of Utility System Revenue Bonds, Series 2010 A-1
Bonds, and $580,784 outstanding ofUtility System Revenue Refunding Bonds, Series 2010B
Bonds. The proceeds of the bond were put into an irrecoverable trust to refund the bonds
28
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 6 -Long-term Debt (Continued)
Debt Refunding (Concluded)
within 90 days of the new debt issuance date. This resulted in a legal defeasance and current
refunding of the 2004, 2010A-1, and 2010B bonds. The 2004 bonds and 2010B bonds were
unpaid as of September 30,2014. The net proceeds of$13,912,717 (after payment of$47,283
in underwriting and other issuance costs) plus an additional $1.2 million in sinking fund
monies were used to purchase U.S. government securities, which were put into the
irrecoverable trust.
The current refunding resulted in a difference between the reacquisition price and the net
carrying amount of the old debt of $1.18 million. This difference, repmied in the
accompanying financial statements as a deferred outflow, is being charged to operations
through the year 2025 using the straight-line method. The City completed the current
refunding to reduce its total debt service payments over the next 25 years by $1,618,745 and to
obtain an economic gain (difference between the present values of the old and new debt
service payments) of$1,415,127.
Revenue Bonds Payable
Revenue Bonds and Loans payable are comprised of the following:
Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual
Installments of Principal and Semiannual Installments oflnterest Through
October 1, 2025, Bearing Coupon Rates of2.330%, Secured Solely by a
Pledge of and Lien on Net Water and Sewer System Revenues and
Certain Other Revenues as Defined in the Bond Ordinance $ 13,960,000
Loans Payable
Florida Department of Environmental Protection, Disbursements and
Capitalized Interest for a $773,030 State of Florida Revolving Loan
#DW160710, Issued to Finance the Construction Costs to Replace a
Well at Water Treatment Plant No. 1 and a Transmission Main on
Ocean Boulevard, Payable in Semiannual Installments ofPrincipal
and Interest Through November 15, 2030, with Financing Rates of
2.71%, Secured Solely by a Pledge ofNet Water and Sewer System
Revenues, After Payment of All Yearly Payment Obligations on Account
ofthe Senior Revenue Obligations, as Defined in the Loan Agreement 660,073
Florida Department of Environmental Protection, Disbursements, Service
Fee and Capitalized Interest for a Combined $9,368,576 State of Florida
Revolving Loan #WW160700, Issued to Finance the Construction of
Treatment and Transmission Facilities for the Buccaneer WWTP
Phaseout Improvements and TMDL Compliance Program WWTP #1,
Payable in Semiannual Installments of Principal and Interest Through
May 15,2032, with Financing Rates of3.14% and 2.88%, Secured Solely
by a Pledge of Net Water and Sewer System Revenues, After Payment
of All Yearly Payment Obligations on Account of the Senior Revenue
Obligations, as Defined in the Loan Agreement 6 998 641
Total Revenue Bonds and Loans Payable $ 21,618.714
29
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 6 -Long-term Debt (Continued)
The annual requirements to ammiize all revenue bonds and loans payable outstanding at
September 30,2014, are as follows:
Business-type Activities
Year Ending Long-term Debt
September 30 Principal Inte1·est Total
2015 $ 286,174 $ 442,042 $ 728,216
2016 1,429,595 534,807 1,964,402
2017 1,507,413 500,776 2,008,189
2018 1,543,259 462,611 2,005,870
2019 1,584,443 423,466 2,007,909
Thereafter 15,267,830 2 091 073 17 358 903
Total $ 21.618.714 $ 4.454.775 $ 26.073.489
Interest and amortization incurred during the year ended September 30, 2014, was $1,457 in
the debt service fund and $861 ,482 in the enterprise funds. Of the amount incurred in the
enterprise funds, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with
bond resolutions. As of September 30, 2014, and during the year then ended, the City was in
compliance with those ratios.
The following is a summary of the changes in long-term debt of the City for the year ended
September 30, 2014:
Governmental Activities
Revenue Bonds Payable
Compensated Absences
OPEB Obligation
Total Governmental Activities-
Long-term Liabilities
$
$
Balance
October 1,
2013
69,203 $
564,800
135.726
769 729 $
Additions
0 $
372,840
39 047
411.887 $
Reductions
(69,203) $
(367,120)
(17,928)
(454.251) $
Balance
September 30,
2014
0
570,520
156 845
727.365
$
$
Due
Within
One Year
0
224,960
0
224 960
Business-type Activities
State Revolving Fund Loans $ 7.827.082 $ 0 $ (168.368) $ 7,658,714 $ 286,174
Revenue Bonds Payable
Less Defened Amounts:
For Issuance Discounts
Loss on Bond Refunding
15,934,165
(123,564)
(1 ,078,583)
13,960,000
0
(1, 187,375)
(15,934, 165)
123,564
1,078,583
13,960,000
0
(1,187,375)
0
0
0
Total Revenue Bonds Payable 14,732,018 12,772,625 (14,732,018) 12,772,625 0
Total Bonds/Loans Payable 22,559,100 12,772,625 (14,900,386) 20,431,339 286,174
Compensated Absences 261,089 137,834 (169,596) 229,327 109,167
OPEB Obligation 44 072 14 355 (6,591) 51 836 0
Total Business-type Activities-
Long-term Liabilities $ 22.864.261 $ 12 924 814 $ (I 5.076.573) $ 20 712 502 $ 395 341
30
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 6-Long-term Debt (Concluded)
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial
assistance to private sector entities for the acquisition and construction of health care facilities
deemed to be in the public interest. These bonds are secured by the financed property and are
payable solely from the payments received on the underlying m01igage loans.
There is no obligation on the pmi of the City or any political subdivision for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial
statements. As of September 30, 2014, there are two series of Health Facility Revenue and
Refunding Bonds outstanding, with an aggregate principal amount payable of$57,055,000.
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of
September 30, 2014. The following table repotis the revenues, sometimes net of related
operating expenses, pledged for each debt issue, the amounts of such revenues received in the
current year, the current year principal and interest paid on the debt, the approximate
percentage of each revenue which is pledged to meet the debt obligation, and the date through
which the revenue is pledged under the debt agreement, and the total pledged future revenues
for each debt, which is the amount of the remaining principal and interest on the bonds and
notes at September 30, 2014:
Outstanding
Net Principal Estimated Principal
Pledged Revenue and Intet·est Percentage and Pledged
Descriution Revenue Received Paid Pledged Interest Through
2014-Utility System
Refunding Bonds
Utility
Revenues $ 3,426,731 $ 0* 0% $16,035,335 2026
Florida Department of
Environmental
Protection, SRF Loan
Utility
Revenues 3,426,731 49,879 1.46% 823,000 2031
Florida Depmiment of
Environmental
Protection, SRF Loan
Utility
Revenues 3,426,731 362,392 10.58% 9,215,154 2032
*See note above regarding refunding -principal and interest payments not due until fiscal year 2015.
Note 7-Defined Benefit Pension Plans
Plan Descriptions
The City maintains two separate single-employer defined benefit pension plans, one for police
officers and one for general employees, which cover substantially all full-time City employees
hired before September 1, 2008. The general employees' defined benefit plan is closed to new
entrants. Full-time general employees hired on or after September 1, 2008, are covered by the
defined contribution plan disclosed in Note 8. The pension plans do not issue separate stand
alone financial statements. Combining statements are included in the supplementary
information to the basic financial statements. Membership of each plan consists of the
following at September 30, 2013, the date of the latest actuarial valuations:
31
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 7 -Defined Benefit Pension Plans (Continued)
Plan Descriptions (Continued)
General Police
Employees Officers
Inactive Plan Members or Beneficiaries
Currently Receiving Benefits 56 20
Inactive Plan Members Entitled to but Not
Yet Receiving Benefits 11 4
Active Plan Members 56 22
Total 123 46
11 General Employees' Retirement Plan
• Plan Description
The General Employees' Retirement Plan (Plan) provides retirement, disability, and
death benefits to Plan members and their beneficiaries. The City Commission has the
authority to establish and amend the benefit provisions of the Plan. The Plan is
governed by a Retirement Plan Board appointed by the City Commission and
comprised of five members, two of which will be eligible legal residents of the City,
two of which will be general employees elected by the majority of general employees
who are members of the Plan, and one of which will be elected by the other four
members.
• Plan Benefits
Normal retirement is available upon the attainment of age sixty and the completion of
five years of credited service. Early retirement is available with a reduced benefit
upon the attainment of age fifty-five and the completion of five years of credited
service. For members hired before April 24, 2005, the normal retirement benefit
shall equal 2.85% of average final compensation for each year of credited service.
For members hired on or after April 24, 2005, the normal retirement benefit shall
equal 2.50% of average final compensation for each year of credited service. The
Plan includes a deferred retirement option program (DROP) under which members
eligible for normal retirement may have their monthly pension benefit credited to an
account while continuing to be actively employed for up to five years. As of
September 30,2014, Plan net position included $273,114 of DROP account balances.
• Contributions
The City is required to contribute at an actuarially determined rate (34.79% of
valuation payroll for the year ended September 30, 2014). City contributions to the
Plan were $950,980 for the year ended September 30, 2014. Plan members are
required to contribute 6.0% of their annual covered salary. Contribution requirements
are established by City code, which may be amended by the City Commission.
• Plan Investments
The Retirement Plan Board is responsible for establishing and amending the Plan's
investment policies. The Plan's current investment policy gives the Board discretion
to allocate assets with assistance of the Plan's investment consultant. No fonnal
targets are stated in the investment policy although the maximum allocation to
international equities is 25%. The money-weighted rate of return on Plan
investments, net of investment related expenses, was 4.9% for the year ended
September 30,2014.
32
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 7-Defined Benefit Pension Plans (Continued)
• Police Officers' Retirement Plan
• Plan Description
The Police Officers' Retirement Plan (Police Plan) provides retirement, disability, and
death benefits to Police Plan members and their beneficiaries. The Police Plan is
governed by the Policemen's Pension Board of Trustees, although the City
Commission retains the authority to establish and amend the benefit provisions of the
Police Plan. The Policemen's Pension Board of Trustees is appointed by the City
Commission and comprised of five members, two of which will be eligible legal
residents of the City, two of which will be police officers elected by the majority of
police officers who are members of the Police Plan, and one of which will be elected
by the other four trustees.
• Plan Benefits
For members hired before January 1, 2013, normal retirement is available upon the
attainment of age fifty and the completion of twenty years of credited service, the
attainment of age fifty-five and the completion of ten years of credited service, the
completion of twenty-five years of credited service regardless of age, or the
attainment of age sixty and the completion of five years of credited service. For
members hired on or after January 1, 2013, normal retirement is available upon the
attainment of age fifty-five and the completion often years of credited service or the
attainment of age fifty-two and the completion of twenty-five years of credited
service. Early retirement is available with a reduced benefit upon the attainment of
age fifty and the completion often years of credited service.
For members hired before January 1, 2013, the normal retirement benefit shall equal
3.00% of average final compensation for each year of credited service. For members
hired on or after January 1, 2013, the normal retirement benefit shall equal 2.00% of
average final compensation for each year of credited service. The Police Plan
includes a DROP under which members eligible for normal retirement may have
their monthly pension benefit credited to an account while continuing to be actively
employed for up to five years. As of September 30, 2014, Police Plan net position
included $346,448 of DROP account balances.
• Contributions
The City is required to contribute, at actuarially determined rates, if State of Florida
contributions are not sufficient (combined City and State contributions were 48.48%
of valuation payroll for the year ended September 30, 2014). City and State
contributions to the Police Plan were $659,420 for the year ended September 30,
2014. Police Plan members are required to contribute 7.0% of their annual covered
salary (increasing to 8.0% effective October 1, 2014). Per City Code, the City
Commission may amend established contribution requirements.
• Plan Investments
The Policemen's Pension Board of Trustees is responsible for establishing and
amending the Police Plan's investment policies. The Police Plan's current
investment policy gives the Board discretion to allocate assets with assistance of the
Police Plan's investment consultant. No formal targets are stated in the investment
policy although the maximum allocation to international equities is 25%. The
money-weighted rate of return on Police Plan investments, net of investment related
expenses, was 5.9% for the year ended September 30, 2014.
33
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 7 -Defined Benefit Pension Plans (Continued)
Net Pension Liability
The components of the net pension liability at September 30,2014, were as follows:
General Employees' Retirement Plan
Total Pension Liability $ 20,175,164
Plan Net Position (14,919,308)
Net Pension Liability $ 5.255.856
General Employees' Retirement Plan Net Position as a Percentage
of Total Pension Liability 73.95%
Police Officers' Retirement Plan
Total Pension Liability $ 12,855,926
Plan Net Position (8,128.264)
Net Pension Liability $ 4.727.662
Police Officers' Retirement Plan Net Position as a Percentage
of Total Pension Liability 63.23%
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for each Plan as of
September 30, 2013, rolled forward to September 30, 2014, using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation: 2.50%
General Employees' Plan Salary Increases: 5.0%-13.5%
Police Officers' Plan Salary Increases: 4.5%-22.5%
Investment Rate of Return: 7.0%, net of investment expenses, including
inflation
Mortality: RP2000 Combined Health Participant Motiality
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:
34
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 7Defined Benefit Pension Plans (Concluded)
Actuarial Assumptions (Concluded)
Asset Class Target Allocation
Long-term Expected
Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.4%
US Large-Cap Value Stocks 12% 7.0%
US Mid-Cap Growth Stocks 3% 8.6%
US Mid-Cap Value Stocks 4% 7.8%
US Mid-Cap Core Stocks 3% 6.9%
US Small-Cap Growth Stocks 5% 9.6%
US Small-Cap Value Stocks 5% 8.6%
International Equities 5% 7.2%
US Investment Grade Bonds 40% 1.8%
Cash (US 90-day T -bill) 10% 0.2%
Discount rate. The discount rate used to measure the total pension liability was 7.00%. The
projection of cash flows used to determine the discount rate assumed that plan member
contributions will be made at the current contribution rate and that City contributions will be
made at rates equal to the difference between actuarially determined contribution rates and the
member rate. Based on those assumptions, the pension plans' fiduciary net position was
projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents
the net pension liability of the City, calculated using the discount rate of 7.00%, as well as
what the City's net pension liability would be if it were calculated using a discount rate that is
!-percentage-point lower (6.00%) or !-percentage-point higher (8.00%) than the current rate:
Net Pension 1°/o Decrease Current Discount 1% Increase
Liability (6.00%) Rate (7.00%) (8.00%)
General Employees'
Pension Plan $ 7,489,269 $ 5,255,856 $ 3,344,704
Police Officers'
Pension Plan 6,321,181 4,727,662 3,399,917
35
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 8 -Deferred Compensation Plan
The City passed an ordinance in 2013 closing the General Employees' defined benefit plan to
new entrants and creating the City of Atlantic Beach Defined Contribution Plan. The City's
457 defined contribution plan is administered through ICMA, which covers all eligible
employees employed with the City on or after September 1, 2008, who are not covered by the
City's Police Officers' defined benefit plan. Under the 457 Plan, the City contributes an
employer matching contribution of up to 6% of earnings during the first ten years of service.
Following ten years of service, the City contributes a fixed contribution of 4% of earnings.
Employees have the option to voluntarily contribute to the plan. Employer matching
contributions from the City were $44,268 and $76,092 for the years ended September 30, 2014
and 2013, respectively. Under the plan, an employee is considered fully vested after 5 years of
completed service.
Note 9-Postemployment Benefits Other Than Pensions
Plan Description
The City of Atlantic Beach administers a single-employer defined benefit health care plan
(Plan) that provides medical insurance benefits to its employees and their eligible dependents.
In accordance with Section 112.0801 of the Florida Statutes, because the City provides a
medical plan to active employees of the City and their eligible dependents, the City is also
required to provide retirees with the opportunity to participate in this Plan. Benefit provisions
for the Plan are established by the City Commission and may be amended by the City
Commission. The City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted ofthe following, as of October 1, 2012, the date ofthe latest
actuarial valuation:
Retirees and Beneficiaries Receiving Benefits 2
Active Plan Members 90
Total 92
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission.
Eligible retirees and their covered dependents receiving benefits contribute 100% of the
blended (active and retiree combined) equivalent premium rates. While the City does not
directly contribute towards the costs of retiree premiums via an explicit subsidy, the ability of
retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an "implicit" subsidy. This implicit subsidy is considered to
be an other postemployment benefit (OPEB) obligation of the City. The City is currently
funding this OPEB obligation on a pay-as-you-go basis. Annual Required Contribution
(ARC) amounted to $46,210 for the current fiscal year. The ARC is based on a rate of 1.0%
of projected payroll of $4,204,177 or an average $486 per active participant. For the year
ended September 30, 2014, the City estimated it implicitly subsidized $17,604 of health care
costs for its retirees and covered dependents. This implied subsidy reduced the annual OPEB
cost to a net expense of $28,883 after interest on the Net OPEB Obligation and adjustments to
ARC.
36
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 9 -Postemployment Benefits Other Than Pensions (Continued)
Annual OPEB Cost and Net OPEB Obligation
The City's annual OPEB cost (expense) is calculated based on the ARC of the employer, an
amount actuarially determined in accordance with the parameters of GASB Statement No. 45.
The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover
normal cost each year to amortize any unfunded actuarial liabilities (or funding excess) over a
period not to exceed 30 years. The following table shows the components of the City's annual
OPEB cost for the year, the amount actually contributed to the Plan, and changes in the City's
net OPEB obligation to the retiree health plan:
Annual Required Contribution $ 46,210
Interest on Net OPEB Obligation 7,192
Adjustment to Annual Required Contribution (6,915)
Annual OPEB Cost (Expense) 46,487
Employer Contribution (17,604)
Increase in Net OPEB Obligation 28,883
Net OPEB Obligation-Beginning ofYear 179 798
Net OPEB Obligation -End ofYear $ 208.681
The City reflected the $28,883 increase in net OPEB obligation at September 30, 2014, by
recording an obligation of $21,119 for governmental activities and $7,764 for business-type
activities in its government-wide statement of net position. The utility fund reported a net
OPEB obligation of $6,212, while the stormwater fund, sanitation fund, and building code
enforcement fund reported $620, $0, and $932, respectively. The OPEB obligation is a
function of ARCs, interest, adjustments to the ARC, annual pension costs, and actual
employers' contributions made to the Plan.
No trust or agency fund has been established for the Plan.
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan,
and the net OPEB obligation as of September 30, 2014, are presented below.
Percentage
Fiscal Annual of Annual Net
Year OPEB OPEB Cost OPEB
Ended Cost Contributed Obligation
September 30, 2012 $ 62,159 29.2% $ 148,363
September 30, 2013 43,987 28.5% 179,798
September 30, 2014 46,487 37.9% 208,681
Funded Status and Funding Progress
As of October 1, 2012, the date of the latest actuarial valuation, the actuarial accrued liability for
benefits was $360,584, all of which was unfunded. The covered payroll (annual payroll of
active employees covered by the Plan) was $4,204,177, and the ratio of the unfunded actuarial
accrued liability to the covered payroll was 8.58%. The projection of future benefit payments
for an ongoing plan involves estimates of the value of repmted 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.
37
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 9 -Postemployment Benefits Other Than Pensions (Concluded)
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities, consistent with the long-term perspective of the calculations.
In the actuarial valuation as of October 1, 2012, the date of the latest actuarial valuation, the
Entry-Age Normal Actuarial Cost Method was used, which spreads the costs evenly as a
percent of pay throughout the collective careers of those in the covered workforce. The
unfunded actuarial accrued liability is being amortized using a level (principal and interest
combined) percent of payroll over a 26-year period.
Other significant actuarial assumptions include a 4% discount rate, an annual health care cost
trend rate of -17%, followed by 11% for the next year, followed by 7.5% for the next year,
reduced by decrements of 0.5% each year to the ultimate value of 5%, projected salary
increases of 4% annually (including general price inflation of 3%), and future participation
rates of 15% up to Medicare eligibility with a 2% participation rate thereafter.
Note 10-Interfund Accounts
Individual fund interfund receivables and payables at September 30, 2014, consist of the
following:
General
Nonmajor Governmental
Due
from Other
Funds
$ 6,531
0
$
Due
to Other
Funds
0
6,531
Interfund receivable/payables are due to timing differences associated with grant
reimbursements. The receivable/payables are expected to be received/paid within one year.
Note 11-Interfund Transfers
Transfers of resources from a fund receiving revenue to the fund through which the resources
are to be expended are recorded as transfers and are reported as other financing sources (uses)
in the governmental funds and as transfers in (out) in the proprietary funds. Following is a
summary of interfund transfers for the year ended September 30, 2014:
Transfers In
Nonmajor
Stormwater General Governmental Total
Transfers Out Fund Fund Funds Tmnsfers
Nonmajor Governmental Funds $ 285,000 $ 160,708 $ 275,500 $ 721,208
Utility Fund 0 629,860 0 629,860
Sanitation Fund 0 275.935 0 275 935
Total Transfers $ 285.000 $ 1.066,503 $ 275.500 $ 1 627 003
Transfers are used to move revenues from the fund that ordinance or budget requires to collect
them to the fund that ordinance or budget requires to expend them.
38
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Continued)
Note 12 -Commitments
As of September 30, 2014, the City had outstanding commitments on contracts in progress as
follows:
Unexpended
Project Type Contract Amounts
Utility System Improvements $ 394,351
Storm water System Improvements 53,984
General Government Improvements 440,988
Building Code Enforcement 2,750
On June 2, 1999, the City entered into an agreement with the City of Jacksonville, Florida,
whereas the City of Jacksonville will provide advanced life support and fire services to the
residents and businesses located in the City. The term of the agreement shall be from the
effective date and continuing for a period of 25 years unless terminated earlier by the parties
(such parties must provide a one year notice). For the year ended September 30, 2014, the
City incurred $1,035,492 in services under this agreement. The amount will be adjusted
annually by an amount equal to 103% of the previous year's amount for all services provided
by the City of Jacksonville.
Note 13 -Contingencies
The City is a defendant in several lawsuits which arose in the ordinary course of the City's
business. To the extent the outcome of such litigation has been determined to result in
probable loss to the City, an estimated loss has been accrued in the accompanying financial
statements. The outcome of the remaining claims cannot be determined at this time.
Note 14-Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; errors and omissions; and natural disasters for which the City carries commercial
insurance. Insurance against losses are provided through the Public Risk Insurance Agency
and LB Bryan and Company for the following types of risk:
• Workers' Compensation and Employer's Liability • General Liability
• Automobile Liability • Public Officials' Liability
• Automobile Physical Damage • Property Coverage
• Accidental Death and Dismemberment
The City's coverage for workers' compensation is under a retrospectively rated policy.
Premiums are accrued based on the ultimate cost to-date of the City's experience for this type
of risk.
39
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2014
(Concluded)
Note 15 -Changes to Comparative Statements
Beginning Net Position in the Statement of Net Position-Proprietary Funds was decreased by
$175,913 as a result of removing unamortized loan costs as required by GASB 65, Items
Previously Reported as Assets and Liabilities, which the City adopted effective October 1,
2013.
Net Position, September 30, 2013 $ 25,823,642
Decrease (175.913)
Net Position, September 30, 2013, as Restated $ 25.647.729
Beginning Net Position in the Statement of Changes in Fiduciary Net Position was increased
by $288,280 as a result of removing the obligation for DROP benefits as required under
GASB 67, Financial
October 1, 2013.
Reporting for Pension Plans, which the City adopted effective
Net Position Held in Trust for Pension
Benefits, September 30, 2013
Increase
Net Position Held in Trust for Pension
Benefits, September 30, 2013, as Restated
$
$
21,102,340
288 280
21.390.620
40
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
CITY OF ATLANTIC BEACH, FLORIDA
September 30, 2014
Total Pension Liability
Service Cost $
Interest
Changes in Assumptions
Benefit Payments
Refunds
Net Change in Total Pension Liability
Total Pension Liability-Beginning
399,576
1,386,245
1,814,460
(697,702)
(9,516)
2,893,063
17,282,101
Total Pension Liability-Ending (a) 20,175,164
Plan Fiduciary Net Position
Contributions -Employer
Contributions -Employee
Net Investment Income
Benefit Payments
Refunds
Administrative Expenses
950,980
157,383
778,981
(697,702)
(9,516)
(31,529)
Net Change in Plan Fiduciary Net Position
Plan Fiduciary Net Position -Beginning
Plan Fiduciary Net Position-Ending (b)
1,148,597
13,770,711
14,919,308
Net Pension Liability-Ending (a)-(b) $ 5,255,856
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability
Covered Employee Payroll $
Net Pension Liability as a Percentage of Covered
Employee Payroll
SCHEDULE OF INVESTMENT RETURNS
Annual Money Weighted Rate ofReturn
Net oflnvestment Expenses
The data presented above was measured using actuarial methods prescribed by GASB 67/68.
Additional years will be added to this schedule annually, until I 0 years of data is presented.
73.95%
2,733,429
192.28%
4.90%
41
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
General Employees' Retirement Plan
Actuarial UAAL as
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL} (UAAL} Ratio Payroll Payroll
9/30/08* $ 9,209,000 $ 12,624,000 $ 3,415,000 72.9% $ 3,727,000 91.6%
9/30/09 9,841,000 13,682,000 3,841,000 71.9% 4,019,000 95.6%
9/30/10 10,618,000 15,180,000 4,562,000 69.9% 3,838,000 118.9%
9/30/11 11,119,000 16,053,000 4,934,000 69.3% 3,738,000 132.0%
9/30/12** 12,465,000 16,599,000 4,134,000 75.1% 3,072,000 134.6%
9/30113 13,816,000 17,282,000 3,466,000 79.9% 2,733,000 126.8%
* After changes in benefits and/or actuarial assumptions and/or actuarial cost methods.
** Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
Note: The data presented above was computed following the actuarial methods prescribed by GASB 25/27, which
differs from the methods prescribed by GASB 67/68. The date above is presented for historical information only.
General Employees' Retirement Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed Percentage
September 30 Payroll (ARC} Contributed
2008 13.62% $ 457,005 100%
2009 14.03% 528,428 100%
2010 14.84% 599,292 100%
2011 16.60% 722,769 100%
2012 24.53% 998,516 100%
2013 26.34% 1,044,392 100%
42
GENERAL EMPLOYEES' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
CITY OF ATLANTIC BEACH, FLORIDA
September 30, 2014
Actuarially Determined Contribution $ 950,980
Contributions in Relation to the Actuarially Determined Contribution 950,980
Contribution Deficiency (Excess) $ 0
Covered Employee Payroll $ 2,733,429
Contributions as a Percentage of Covered
Employee Payroll 34.79%
Additional years will be added to this schedule annually until 10 years of data is presented.
NOTES TO SCHEDULE
Valuation Date: September 30, 2013
Actuarially determined contribution rates are calculated as of September 30, two years prior to the end ofthe 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 of25% per
year), adjusted to be no greater than 120% and no less than 80% ofthe fair market value.
Inflation: 3.0% per year
Salary Increases: 5.5%-14.0%
Interest Rate: 8.0% per year compounded annually, net of investment related expenses
Retirement Age: Age 60 with 5 or more years of Credited Service
Post Retirement COLA: None
Mortality: RP2000 Combined Healthy Pmticipant Mortality Table for males and females with
generational projections :from the year 2000 Projection Scale AA.
43
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
CITY OF ATLANTIC BEACH, FLORIDA
September 30, 2014
Total Pension Liability
Service Cost $ 269,182
Interest 879,486
Changes in Assumptions 1,275,669
Benefit Payments (524,537)
Refunds (61,079)
Net Change in Total Pension Liability 1,838,721
Total Pension Liability-Beginning l1,017,205
Total Pension Liability-Ending (a) 12,855,926
Plan Fiduciary Net Position
Contributions -Employer/State 659,420
Contributions -Member 103,095
Net Investment Income 642,480
Benefit Payments (524,537)
Refunds (61,079)
Administrative Expenses (22,742)
Net Change in Plan Fiduciary Net Position 796,637
Plan Fiduciary Net Position-Beginning 7,331,627
Plan Fiduciary Net Position-Ending (b) 8,128,264
Net Pension Liability-Ending (a)-(b) $ 4,727,662
Plan Fiduciary Net Position as a Percentage of
the Total Pension Liability 63.23%
Covered Employee Payroll $ 1,360,245
Net Pension Liability as a Percentage of Covered
Employee Payroll 347.56%
SCHEDULE OF INVESTMENT RETURNS
Annual Money Weighted Rate ofReturn
Net oflnvestment Expenses 5.90%
The data presented above was measured using actuarial methods prescribed by GASB 67/68.
Additional years will be added to this schedule annually until 10 years of data is presented.
44
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
Police Officers' Pension Plan
Actuarial UAALas
Actuarial Accrued Unfunded Annual Percentage
Valuation Value of Liability AAL Funded Covered of Covered
Date Assets (AAL} (UAAL} Ratio Payroll Payroll
9/30/08 $ 5,764,000 $ 8,112,000 $ 2,348,000 71.1% $ 1,476,000 159.1%
9130109* 5,922,000 8,689,000 2,767,000 68.2% 1,697,000 163.1%
9/30110* 6,164,000 9,449,000 3,285,000 65.2% 1,639,000 200A%
9/30/11 6,305,000 10,065,000 3,760,000 62.6% 1,606,000 234.1%
9/30/12** 6,880,000 10,559,000 3,679,000 65.2% 1,548,000 237.7%
9/30113 7,429,000 10,895,000 3,466,000 68.2% 1,360,000 254.80%
* After changes in benefits and/or actuarial assumptions and/or actuarial cost methods.
** Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
Note: The data presented above was computed following the actuarial methods prescribed by GASB 25/27, which
differs from the methods prescribed by GASB 67/68. The date above is presented for historical information only.
Police Officers' Pension Plan
Contribution Annual
Rate as a Required
Year Ended Percent of Contributed
September 30 Payroll (ARC)
2008 22.80% $ 309,841
2009 21.93% 345,280
2010 26.62% 425,823
2011 26.49% 487,032
2012 36.18% 628,898
2013 35.63% 606,741
45
POLICE OFFICERS' PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
CITY OF ATLANTIC BEACH, FLORIDA
September 30,2014
Actuarially Detennined Contribution* $ 654,280
Contributions in Relation to the Actuarially Detennined Contribution* 659,420
Contribution Deficiency (Excess) $ (5,140)
Covered Employee Payroll $ 1,360,245
Contributions as a Percentage of Covered Employee Payroll 48.48%
*Amounts include the contribution from the State of Florida.
Additional years will be added to this schedule annually until 10 years of data is presented.
NOTES TO SCHEDULE
Valuation Date: September 30, 2013
Actuarially determined contribution rates are calculated as of September 30, two years prior to the end ofthe 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% ofthe fair market value
Inflation: 3.0% per year
Salary Increases: 5.0%-23.0%
Payroll Growth: 1.88% per year
Interest Rate: 8.0% per year compounded annually, net of investment related expenses
Retirement Age: Experience-based table of rates based on year ofeligibility
Post Retirment COLA: None
Mortality: RP2000 Combined Healthy Participant Motiaility Table for males and females
with generational projections from the year 2000 Projection Scale AA
46
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS PLAN
SCHEDULE OF FUNDING PROGRESS
SEPTEMBER 30, 2014
Actuarial UAALas
Valuation
Date
9/30/06 $
10/1/09
10/1/12
Actuarial Accrued Unfunded Annual
Value of Liability AAL Funded Covered
Assets (AAL) (UAAL) Ratio Payroll
0 $ 470,703 $ 470,703 0.0% $ 4,812,000
0 497,883 497,883 0.0% 5,828,339
0 360,584 360,584 0.0% 4,204,177
Percentage
of Covered
Payroll
9.78%
8.54%
8.58%
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system's funded status on a
going concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation. Expressing
the unfunded actuarial accrued liability as a percentage of covered payroll approximately adjusts for the
effects of inflation and aids analysis of the progress being made in accumulating sufficient assets to pay
benefits when due. Generally, the smaller this percentage, the stronger the plan.
47
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, 2014
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts* (Negative)
Revenues
Property Taxes $ 3,815,346 $ 3,815,346 $ 3,908,365 $ 93,019
Nonproperty Taxes 1,172,908 1,172,908 1,135,931 (36,977)
Permits, Fees, and Special Assessments 865,270 865,270 863,978 (1,292)
Intergovernmental Revenues 1,599,140 1,599,140 1,634,354 35,214
Fines and Forfeitures 80,870 79,660 94,534 14,874
Charges for Services 747,319 747,319 756,446 9,127
Interest Income 100,000 101,010 215,548 114,538
Miscellaneous Revenues 24,700 24,900 54,146 29,246
Interfund Charges 1,456,544 1,456,544 1,443,440 (13,104)
Total Revenues 9,862,097 9,862,097 10,106,742 244,645
Expenditures
Governing Body:
City Commission 42,933 42,933 38,323 4,610
City Clerk 244,207 244,267 239,768 4,499
City Attorney 127,726 149,726 142,539 7,187
Total Governing Body 414,866 436,926 420,630 16,296
City Administration:
City Manager 264,240 364,240 334,769 29,471
General Government 443,964 454,464 424,645 29,819
Human Resources 184,002 184,002 173,539 10,463
Information Technology 791,657 795,720 731,593 64,127
Finance 1,004,816 951,765 907,604 44,161
Total City Administration 2,688,679 2,750,191 2,572,150 178,041
Planning and Zoning
Public Safety:
Police
School Crossing Guards
Animal Control
Fire
Code Enforcement
Total Public Safety
166,829
3,605,437
9,995
135,120
1,289,327
63,283
5,103,162
166,829
3,619,227
9,995
134,740
1,289,327
63,283
5,116,572
117,221
3,538,617
9,858
123,999
1,284,997
57,289
5,014,760
49,608
80,610
10,741
4,330
5,994
101,812
48
137
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, 2014
(Concluded)
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts* (Negative)
Expenditures (Concluded)
Public Works:
Administration and Streets $ 1,506,884 $ 1,515,984 $ 1,418,160 $ 97,824
Fleet Maintenance 287,330 287,330 249,786 37,544
Total Public Works 1,794,214 1,803,314 1,667,946 135,368
Parks and Recreation:
Recreation and Special Events 394,612 411,551 362,938 48,613
Parks Maintenance 940,532 971,857 970,826 1,031
Total Parks and Recreation 1,335,144 1,383,408 1,333,764 49,644
(Total Expenditures) (11 ,502,894) (11,657,240) (11,126,471) 530,769
(Deficiency) of Revenues (Under)
Expenditures ( 1 ,640, 797) ----'-(1....:...,7_9_5':.....14_3-"-) _ __,_(1....:...,0_1_9':.....7_29-"-) ___7_7_;5':.....4_14_
Other Financing Sources (Uses)
Transfers in 1,068,520 1,070,974 1,066,503 (4,471)
Sale of General Fixed Assets 0 0 31,654 31,654
Total Other Financing Sources (Uses) 1,068,520 1,070,974 1,098,157 27,183
Excess of Revenues and Other
Financing Sources Over Expenditures
and Other Financing Uses (572,277) (724,169) 78,428 802,597
Fund Balances, Beginning of Year 6,210,066 5,960,759 6,496,160 535,401
Fund Balances, End of Year $ 5,637,789 $ 5,236,590 $ 6,574,588 $ 1,337,998
* Actual amounts include a reversal of$81,523 prior year encumbrance roll-forward,
plus current year encumbrance roll-forward of$346,721.
49
CITY OF ATLANTIC BEACH, FLORIDA
REQUIRED SUPPLEMENTARY INFORMATION
NOTE TO SCHEDULE OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL-GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2014
Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a
budgetary accounting system in accordance with various legal requirements which govern the City's
operations. Budgets are monitored at varying levels of classification detail; however, expenditures cannot
legally exceed total appropriations at the individual fund level. Encumbrances are recorded. Unexpended
items which are unencumbered at year-end must be reappropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, debt service, and capital
projects funds). The City Manager is authorized to transfer budgeted amounts within departments within
any fund; however, any revisions that increase the total expenditures of any department or fund must be
approved by the City Commission. All necessary supplemental appropriations are adopted by the City
Commission and are included in the repmied 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.
50
SUPPLEMENTARY INFORMATION
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2013
2014
Special Revenue Funds
Convention
Tree Local Option Development Half-cent Court Cost Radio
Replacement Gas Tax Tax Sales Tax Training Communication
Assets
Equity in Pooled Cash and
Investments $ 14,673 $ 83,461 $ 58,632 $ 425,917 $ 115,106 $ 1,600
Due from Other Governments 0 76,354 28,274 125,330 310 1,147
Total Assets 14,673 159,815 86,906 551,247 115,416 2,747
Liabilities and Fund Balances
Liabilities
Accounts Payable and
Accrued Liabilities
Due to Other Funds
Deposits
0
0
0
138
0
0
0
0
0
3,383
0
0
0
0
0
0
0
0
Total Liabilities 0 138 0 3,383 0 0
Fund Balances
Restricted for:
Public Safety 0 0 0 0 115,416 2,747
Road Maintenance and
Construction 0 159,677 0 0 0 0
Debt Service Reserve 0 0 0 0 0 0
Other Capital Projects 0 0 0 547,864 0 0
Other Purposes 0 0 86,906 0 0 0
Committed:
Conservation and Resource
Management 14,673 0 0 0 0 0
Total Fund Balances 14,673 159,677 86,906 547,864 115,416 2,747
Total Liabilities and Fund
Balances $ 14,673 $ 159,815 $ 86,906 $ 551,247 $ 115,416 $ 2,747
51
2014
Special Revenue Funds
Totals Totals
Community Special Nonmajor
Contraband Development Police Revenues Debt Capital Governmental 2013
Fo..Ceiture Block Grants Grants Funds Service Projects Funds Totals
$ 49,003 $ 0 $ 0 $ 748,392 $ 0 $ 2,990,979 $ 3,739,371 $ 3,477,902
0 0 6,531 237,946 0 50,000 287,946 229,862
49,003 0 6,531 986,338
0
0
6,399
6,399
42,604
0
0
0
0
0
0 0
0 6,531
0 0
0 6,531
0 0
0 0
0 0
0 0
0 0
0 0
3,521
6,531
6,399
16,451
160,767
159,677
0
547,864
86,906
14,673
0 3,040,979
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 3,040,979
0 0
0 0
4,027,317
3,521
6,531
6,399
16,451
160,767
159,677
0
3,588,843
86,906
14,673
3,707,764
57,487
9,097
7,166
73,750
139,247
92,254
73,113
3,214,166
108,741
6,493
42,604 0 0 969,887 0 3,040,979 4,010,866 3,634,014
$ 49,003 =$=====0==$===::::!6,=53=1= $ 986,338 =$=====0= $ 3,040,979 $ 4,027,317 $ 3,707,764
52
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30,2013
2014
Special Revenue Funds
Convention
Tree Local Option Development Half-cent Court Cost Radio
Replacement Gas Tax Tax Sales Tax Training Communication
Revenues
Taxes $ 0 $ 428,988 $ 101,608 $ 721,981 $ 0 $ 0
Other Intergovernmental
Revenues 0 0 0 0 0 0
Charges for Services 0 0 0 0 0 0
Fines and Forfeitures 4,456 0 0 0 4,732 l7,ll0
Investment Earnings (Loss) 0 3,200 2,057 I 0,391 3,319 40
Miscellaneous Revenues 3,724 0 0 0 0 0
Total Revenues 8,180 432,188 103,665 732,372 8,051 17,150
Expenditures
Current:
Public Safety 0 0 0 0 14,914 17,257
Road Maintenance and
Construction 0 209,540 0 75,938 0 0
Debt Service:
Principal 0 0 0 0 0 0
Interest and Other 0 0 0 0 0 0
Capital Outlay 0 0 0 163,506 0 0
(Total Expenditures) 0 (209,540) 0 (239,444) (14,914) (17,257)
Excess (Deficiency) of Revenues
Ovet· (Under) Expenditures 8,180 222,648 103,665 492,928 (6,863) (107)
Other Financing Sources (Uses)
Transfers in
Transfers (out)
Total Other Financing
Sources (Uses)
0
0
0
0
(155,225)
(155,225)
0
(125,500)
(125,500)
0
(435,000)
(435,000)
0
0
0
0
0
0
Net Change in Fund Balances 8,180 67,423 (21,835) 57,928 (6,863) (107)
Fund Balances, Beginning of Year 6,493 92,254 108,741 489,936 122,279 2,854
Fund Balances, End of Year $ 14,673 $ 159,677 $ 86,906 $ 547,864 $ 115,416 $ 2,747
53
2014
Special Revenue Funds
Totals Totals
Community Special Nonmajor
Contraband Development Police Revenue Debt Capital Governmental 2013
Forfeiture Blocli Grants Grants Funds Service Projects Funds Totals
$ 0 $ 0 $ 0 $ 1,252,577 $ 0 $ 0 $ 1,252,577 $ 1,197,709
0
0
33,611
441
0
132,856
0
0
0
0
83,375
0
0
0
0
216,231
0
59,909
19,448
3,724
0
0
0
0
0
62,279
0
0
77,043
0
278,510
0
59,909
96,491
3,724
275,112
310
30,355
(72,897)
0
34,052 132,856 83,375 1,551,889 0 139,322 1,691,211 1,430,589
2,532 0 81,205 115,908 0 6,446 122,354 110,104
0 0 0 285,478 0 0 285,478 305,607
0
0
0
0
0
132,856
0
0
2,170
0
0
298,532
69,203
1,457
0
0
0
91,627
69,203
1,457
390,159
67,712
4,316
221,851
(2,532) (132,856) (83,375) (699,918) (70,660) (98,073) (868,651) (709,590)
31,520 0 0 851,971 (70,660) 41,249 822,560 720,999
0 0 0 0 0 275,500 275,500 71,000
(3,030) 0 0 (718,755) (2,453) 0 (721,208) (400,696)
(3,030) 0 0 (718,755) (2,453) 275,500 (445,708) (329,696)
28,490 0 0 133,216 (73, 113) 316,749 376,852 391,303
14,114 0 0 836,671 73,113 2,724,230 3,634,014 3,242,711
$ 42,604 $ 0 $ 0 $ 969,887 $ 0 $ 3,040,979 $ 4,010,866 $ 3,634,014
54
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF FIDUCIARY
NET POSITION
SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2013
Pension Trust Funds
Police General
Officers'
Retirement
Employees'
Retirement 2014 2013
Plan Plan Totals Totals
Assets
Cash and Cash Equivalents
Prepaids
Interest Receivable
Investments at Fair Value
Total Assets
$ 9,581
0
23,541
8,215,597
8,248,719
$ 27,899
0
40,709
14,850,814
14,919,422
$ 37,480
0
64,250
23,066,411
23,168,141
$ 130,743
5,830
34,097
21,341,304
21,511,974
Liabilities
Accounts Payable and Accrued Liabilities
Excess Premium Tax Liability
Total Liabilities
0
120,454
120,454
114
0
114
114
120,454
120,568
900
120,454
121,354
Total Net Position
Held in Trust for Pension
Benefits (as Restated) $ 8,128,265 $ 14,919,308 $ 23,047,573 $ 21,390,620
55
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2014,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2013
Pension Trust Funds
Additions
Contributions:
Employer
Employees
State ofFiorida
Total Contributions
Net (Decrease) Increase in Fair
Value oflnvestments
Interest and Dividends
Miscellaneous Revenue
Total Additions
Police
Officers'
Retirement
Plan
$ 563,203
103,095
96,217
762,515
327,258
151,352
0
1,241,125
General
Employees'
Retirement
Plan
$ 950,980
157,383
0
1,108,363
465,308
290,285
0
1,863,956
$
2014
Totals
1,514,183
260,478
96,217
1,870,878
792,566
441,637
0
3,105,081
$
2013
Totals
1,562,327
258,156
91,077
1,911,560
729,168
420,837
58,206
3,119,771
Deductions
Refunds of Contributions
Benefits
Investment Expenses
Administrative Expenses
Total Deductions
61,080
524,537
35,290
22,742
643,649
9,516
697,702
65,731
31,530
804,479
70,596
1,222,239
101,021
54,272
1,448,128
118,126
1,381,388
84,793
61,644
1,645,951
Change in Net Position 597,476 1,059,477 1,656,953 1,473,820
Net Position, Beginning of
Year (as Restated) 7,530,789 13,859,831 21,390,620 19,916,800
Net Position, End of Year $ 8,128,265 $ 14,919,308 $ 23,047,573 $ 21,390,620
56
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2010 THROUGH SEPTEMBER 30, 2014
2010 2011 2012 2013 2014
Revenues
Operating Revenues:
Water:
Customer Charges $ 3,188,599 $ 3,382,973 $ 3,069,998 $ 3,006,787 $ 2,955,863
Miscellaneous Charges 44,859 46,424 48,815 52,996 54,852
Total Water 3,233,458 3,429,397 3,118,813 3,059,783 3,010,715
Sewer:
Customer Charges 4,644,090 5,085,318 5,015,358 5,109,868 4,938,510
Miscellaneous Charges 7,528 20,006 3,303 1,651 1,237
Total Sewer 4,651,618 5,105,324 5,018,661 5,111,519 4,939,747
Total Operating Revenues 7,885,076 8,534,721 8,137,474 8,171,302 7,950,462
Nonoperating Revenues:
Investment Income (Loss):
Water 153,782 108,762 197,492 (115,023) 186,681
Sewer 5,361 (16,367) (21,010) 18,426 (43,954)
Total Nonoperating Revenues 159,143 92,395 176,482 (96,597) 142,727
Total Revenues 8,044,219 8,627,116 8,313,956 8,074,705 8,093,189
Expenses
Operating Expenses:
Water 1,120,172 1,292,948 1,303,708 1,228,763 1,287,783
Sewer 2,367,631 2,569,748 2,493,500 2,005,653 2,170,495
Total Operating Expenses 3,487,803 3,862,696 3,797,208 3,234,416 3,458,278
Administrative, Nondivisional
and Other:
Water 554,538 545,971 518,506 521,600 530,715
Sewer 681,893 685,074 696,922 674,514 677,464
Total Administrative, Non-
divisional and Other 1,236,431 1,231,045 1,215,428 1,196,114 1,208,179
(Total Expenses) ( 4,724,234) (5,093,741) (5,0 12,636) ( 4,430,530) ( 4,666,457)
Net Revenues Available for
Debt Service 3,319,985 3,533,375 3,301,320 3,644,175 3,426,732
Nonoperating Income (Expense)
Interest Expense (71 0,196) (726,058) (766,111) (896,571) (778,782)
Loan Amortization (14,730) (25,712) (12,787) (162,552) (45,936)
Total Nonoperating (Expense) (724,926) (751,770) (778,898) (1,059,123) (824,718)
Net Income Before Depreciation
and Operating Transfers $ 2,595,059 $ 2,781,605 $ 2,522,422 $ 2,585,052 $ 2,602,014
57
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULES OF NET REVENUES IN ACCORDANCE
WITH BOND RESOLUTIONS
ENTERPRISE FUNDS (WATER AND SEWER)
FOR THE YEARS ENDED SEPTEMBER 30, 2014 AND SEPTEMBER 30, 2013
2014 2013
Gross Revenues
Utility $ 7,933,418 $ 8,146,988
Connection Charges 17,044 25,011
Interest 142,727 (97,294)
Total Gross Revenues 8,093,189 8,074,705
Operating Expenses
Personal Services 1,802,458 1,761,806
Contractual Services 788,322 654,600
Supplies 366,425 333,387
Repairs and Maintenance 133,621 101,929
Utilities 367,452 382,694
Intergovernmental Charges 986,547 982,292
Other Expenses 221,633 213,823
(Total Operating Expenses) ( 4,666,458) ( 4,430,531)
Total Net Revenues in Accordance with Bond Resolutions $ 3,426,731 $ 3,644,174
Total Debt Service $ 2,001,479 $ 2,285,436
Debt Service Coverage Ratio 171.21% 159.45%
Required Debt Service Coverage Ratio 100.00% 100.00%
(a) Rate Stabilization Fund:
Balance, Beginning of Year $ 400,000 $ 400,000
Transfer/Redeposit to Revenue Fund 0 0
Balance, End of Year $ 400,000 $ 400,000
58
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEARS ENDED SEPTEMBER 30, 2010 THROUGH SEPTEMBER 30, 2014
Utility Service Tax Collections
(Last Five Years)
Year
2010
2011
2012
2013
2014
Electricity
$ 486,475
487,585
452,183
459,672
473,097
Communications
$ 624,254
604,567
567,909
576,839
522,654
Gas
$ 26,158
28,062
23,187
20,849
16,911
$
Fuel Oil
34
33
14
17
29
$
Total
1,136,921
1,120,247
1,043,293
1,057,377
1,012,691
Ad Valorem Tax Collections
(Last Five Years)
Year
2010
2011
2012
2013
2014
Total
$ 4,089,288
3,968,233
3,961,395
3,843,755
3,908,365
59
OTHER STATISTICAL INFORMATION
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2014
(UNAUDITED)
Navy (Federal Government)
Fleet Landing (Retirement Community)
Hanna Park (Regional Park)
Sea Oats Plantation (Apartment Complex)
Oaks of Atlantic Beach (Mobile Home Park)
Lakes ofMaypmi (Apartment Complex)
John Creek Estate (Mobile Home Park)
City of Atlantic Beach, Florida
Mayport Trace (Apartment Complex)
One Ocean Resort (Hotel)
Total
Annual
Billings
$ 398,094
334,938
165,142
145,419
142,726
136,424
128,216
125,868
115,141
97,572
$ 1,789,540
60
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WATER USAGE
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2014
(UNAUDITED)
Annual Water Srstem Customers Average Average
Total Percentage SinO'Ie Unit Multi-Unit Demand Percentage
Year Population Change CAB* BUC** Total CAB* BUC** Total (MGD) Change
2004 24,007 2.4% 5,222 2,593 7,815 2,006 2,281 4,287 2.93 -5.15%
2005 22,914 -4.5% 5,263 2,590 7,853 2,367 1,939 4,306 2.75 -6.14%
2006 23,208 1.3% 5,256 2,430 7,686 2,107 2,164 4,271 2.73 -0.73%
2007 23,151 -0.2% 5,283 2,346 7,629 1,895 2,079 3,974 2.69 -1.47%
2008 23,200 0.2% 5,285 2,341 7,626 2,006 2,288 4,294 2.50 -7.06%
2009 23,058 -0.6% 5,166 2,342 7,508 1,917 2,159 4,076 2.30 -8.00%
2010 22,908 -0.6% 5,171 2,326 7,497 1,904 2,135 4,039 2.32 0.87%
2011 21,205 -7.4% 5,179 2,353 7,532 1,903 2,134 4,037 2.41 3.88%
2012 20,952 -1.2% 5,195 2,318 7,513 1,898 2,130 4,028 2.27 -5.81%
2013 20,875 -0.4% 5,218 2,349 7,567 1,904 2,135 4,039 1.99 -12.33%
2014 21,152 1.3% 5,253 2,286 7,539 1,904 2,337 4,241 2.04 2.51%
*Atlantic Beach Division (CAB)
**Buccaneer Division (BUC)
61
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
ATLANTIC BEACH SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2014
(UNAUDITED)
Annual Average
Percentage Sewer Customers Flow
Year Population Change Single Unit Multi-Unit Total (MGD)
2004 13,911 3.70% 4,913 1,978 6,891 1.5980
2005 14,064 1.10% 4,999 2,387 7,386 1.8160
2006 14,079 0.10% 5,020 2,111 7,131 1.5990
2007 14,015 -0.50% 5,057 1,900 6,957 1.6370
2008 13,819 -1.40% 5,086 1,904 6,990 1.6380
2009 13,819 0.00% 4,997 1,903 6,900 1.5820
2010 13,779 -0.30% 4,987 1,912 6,899 1.5190
2011 12,655 -8.20% 5,041 1,791 6,832 1.4762
2012 12,718 0.50% 5,168 1,903 7,071 1.5397
2013 12,670 -0.38% 5,200 1,916 7,116 1.8052
2014 12,851 1.43% 5,253 1,904 7,157 1.7842
Annual
Percentage
Change
-8.06%
13.64%
-11.95%
2.38%
0.06%
-3.42%
-3.98%
-2.82%
4.30%
17.24%
-1.16%
62
CITY OF ATLANTIC BEACH, FLORIDA
SUMMARY OF WASTEWATER TREATMENT
OUTSIDE CITY SEWER DIVISION
FOR THE YEARS ENDED SEPTEMBER 30, 2004 THROUGH SEPTEMBER 30, 2014
(UNAUDITED)
Annual Average Annual
Percentage Sewer Customers Flow Percentage
Year Population Change Single Unit Multi-Unit Total (MGD) Change
2004 10,096 0.70% 2,504 2,497 5,001 0.8240 -2.25%
2005 8,850 -12.30% 2,503 2,145 4,648 0.7460 -9.47%
2006 9,129 3.20% 2,356 2,268 4,624 0.6820 -8.58%
2007 9,136 0.10% 2,267 2,268 4,535 0.7120 4.40%
2008 9,381 2.70% 2,263 2,482 4,745 0.7040 -1.12%
2009 9,239 -1.50% 2,258 2,355 4,613 0.6510 -7.53%
2010 9,129 -1.20% 2,243 2,328 4,571 0.5720 -12.14%
2011 8,550 -6.30% 2,282 2,334 4,616 0.6165 7.78%
2012 8,234 -3.84% 2,249 2,329 4,578 0.5088 -17.47%
2013* 8,205 -0.35% 2,275 2,333 4,608 0.0000 -100.00%
2014 8,301 1.16% 2,286 2,337 4,623 0.0000 0.00%
*At the end of2012, the Outside City sewer treatment plant closed and flows were diverted to the inside City plant.
63
ADDITIONAL ELEMENTS OF REPORT PREPARED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS, ISSUED BY THE
COMPTROLLER GENERAL OF THE UNITED STATES; THE RULES OF
THE AUDITOR GENERAL OF THE STATE OF FLORIDA; AND OTHER
CONTRACT REQUIREMENTS
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014
Grantor/Pass-Through Entity
Federal Awards
U.S. Department of Housing and Urban Development
Indirect Programs:
Passed Through City of Jacksonville, Florida:
Community Development Block Grant (CDBG)
Community Development Block Grant (CDBG)
Subtotal Expenditures -14.218
Total U.S. Department of Housing and Urban Development
U.S. Department of Homeland Security
Indirect Programs:
Passed Through Florida Division of Emergency Management:
Hazard Mitigation Grant Program
Total U.S. Department of Homeland Security
U.S. Department of Justice
Direct Programs:
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Bulletproof Vest Partnership Program
Subtotal Expenditures-16.607
Indirect Programs:
Passed Through Florida Department ofLaw Enforcement:
Edward Byrne Memorial Justice Assistance Grant Program
Edward Byrne Memorial Justice Assistance Grant Program
Edward Byrne Memorial Justice Assistance Grant Program
Subtotal Expenditures-16.738
Total U.S. Department of Justice
U.S. Department of Commerce
Indirect Programs:
Passed Through Florida Department ofEnvironmental Protection:
Florida Coastal Management Program
Total U.S. Department of Commerce
Total Federal Expenditures
CFDA
Number
14.218
14.218
97.039
16.607
16.607
16.607
16.607
16.738
16.738
16.738
11.419
Grant/Contract
Number
B12UC120017 I 5629-56
B13UCI20017 I 5629-56
14HM-6B-04-26-02-504
2011-BUBX-11059375
2012-BUBX-12061407
2013-BUBX-13069025
2014-BUBX-14072029
20 14-JAGC-DUV A-2-E5-020
20 14-JAGC-DUV A-1-E5-032
2014-JAGD-DUVA-2-E6-025
CM245
Contract
Period
10/01/2013-09/30/2014
10/01/2013-09/30/2014
06/06/2014-06/30/2015
04/01/2011 -09/30/2013
04/01/2012-08/31/2014
04/01/2013-08/31/2015
04/01/2014 -08/31/2016
10/01/2013-09/30/2014
10/01/2013-09/30/2014
02/01/2014-06/30/2014
04/01/2013-03/30/2014
Program
Awards
$ 58,856
83,192
142,048
142,048
116,250
116,250
1,754
1,050
1,731
2,792
7,327
39,205
42,000
2,170
83,375
90,702
17,500
17,500
$ 366,500
Expenditures *
Funds
Received
$ 58,856
74,000
132,856
132,856
$ 58,856
74,000
132,856
132,856
101,635 0
101,635 0
0 710
0 1,050
867 864
882 0
1,749 2,624
39,205
42,000
2,170
83,375
22,851
24,039
2,170
49,060
85,124 51,684
12,279 12,279
12,279 12,279
$ 331,894 $ 196,819
64
CITY OF ATLANTIC BEACH, FLORIDA
NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
FOR THE YEAR ENDED SEPTEMBER 30, 2014
Note 1-Basis ofPresentation
The accompanying schedule of expenditures of federal awards includes the federal awards
activity of the City of Atlantic Beach, Florida, under programs of the federal government for
the year ended September 30, 2014. The information is presented in accordance with the
requirement of OMB Circular A-133, Audits of State and Local Governments and Non-Profit
Organizations. Because the schedule presents only a selected portion of the operations of the
City, it is not intended and does not present the financial position, changes in net position or
cash flows of the City. Expenditures repmied on the schedule are presented on the accrual
basis of accounting.
65
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF SOURCE AND EXPENDITURE OF THE CITY GRANT FUNDS
PER ORDINANCE CODE CHAPTER 118.301(e)
FOR FISCAL YEAR 2012-2014
City of Jacksonville Public Service Grants Received as a
Subgrant Recipient Per Interlocal Agreement
Source of City Funds
Fiscal Year
2013-2014
Grant No. 5629-56
Amount of Award (Per City of Jacksonville
Budget Ordinance) $ 142,048 (A)
Actual Funds Received from City of
Jacksonville in Last Audit Period (132,856)
Actual Funds Received this Period
Amount Earned but Not Received this Period
Unspent Award Amount $ 9,192
Expenditure of City Funds
(A) City Fiscal Year 2013-2014 Grant #5629-56-includes cany-over of$58,207 fi·om 2012-2013 Grant #5629-54
Actual
Project I Federal Grant Number Budgeted
10/112013
9/30/2014
Remaining
Balance
Area Neighborhood Infrastructure Improvements
# 004799 I B12UC1200-17
Donner Park Improvements
# 005016 I B13UC1200-17
Total
$ 58,856
83,192
$ 142,048
$ 58,856
74,000
$ 132,856
$
$
0
9,192
9,192
66
PurvisGray&. ____________________Co_m_Qany
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
We have audited , in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Gov ernm ent Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund , and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City), as of and for the year ended September 30, 2014, and the
related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our rep01t thereon dated April 20, 2015.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of City ' s intemal 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 weakn ess is a deficiency, or a
combination of deficiencies, in internal control , such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis. A significant deficiency is a deficiency , or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we
did not identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified .
Certified Public Accountants
P.O. Bo x 14 1270 • 222 N .E. 1st Stree t • Gain esvill e, Florida 3261 4-1270 • (352) 378-246 1 • FAX (3 52) 378-2 50 5
Laurel Rid ge Profess io nal Cent er • 2 34 7 S.E . 17th Str ee t • O cala , Florida 344 71 • (3 52 ) 73 2-387 2 • FAX (352) 732 -0 54 2
4 43 East Coll ege Avenu e • Tall ahass ee , Fl o r id a 323 01 • (85 0) 224 -71 44 • FA X (850) 224 -1 762
5001 Lak ewood Ranc h Blvd . N., Suite 101 • Sar as ota, Flo rida 34 240 • (941) 90 7-0 35 0 • FAX (9 4 1) 907-0309
MEMRERS O f A~I E RI C•\N AND f lOR ID,\ INSffiUTES or CER Ti fiED PUR LI C •\ CCOUNT,\NTS
MEMUER OF AMER ICAN INS TIT UTE OF CERTI FI[D PURLI C 1\ CCOUNTAN TS I'R IV!\T[ COMPAN IES AND S.E.C. PR 1\ CT ICE SECT IONS
67
Honorable Mayor, City Commissioners and
City Manager
Atlantic Beach, Florida
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
(Concluded)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with ce1tain provisions of laws, regulations,
contracts, and grant agreements , noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
repmted under Government Auditing Standards .
Purpose of this Report
The purpose of this repmt 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 repmt 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.
~' Gw-y evru:f ~'LJ._fJ
April 20, 2015
Gainesville, Florida
68
PurvisGray~ ____________________Co_m_Qany
INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE
WITH SECTION 218.415 , FLORIDA STATUTES
Honorable M ayor , City Commissioners and
City Manager
Atlantic Beach, Florida
We have examined the City of Atlantic Beach, Florida's (the City) compliance with Section 218.415,
Florida Statutes during the period ended September 30, 2014, as required by Section 10.556(10)(a), Rules
of the Auditor Gene ral. Management is responsible for the City ' s compliance with those requirement s .
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 Cettified Public Accountants (AICPA) and , accordingly, included examining, on a test basis,
evidence about the City ' s compliance with those requirements and performing such other procedures as
we considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination of the City's compliance
with specified requirements.
In our opinion, the City complied, in all material respects , with the aforementioned requirements for the
year ended September 30, 2014 .
This repmt 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 patties.
~'~C1hU{ ~'LL.-P
April 20, 2015
Gainesville, Florida
Certified Public Accountants
P.O. Box 141270 • 222 N .E. 1st St reet • Gai nesv ille, Flo ri da 32614-12 70 • (352) 3 78-246 1 • FAX (352) 378 -2505
Lau rel Ri dge Profess io nal Ce nter • 2 347 S.E. 17th Str ee t • O cal a, Flo ri da 3447 1 • (352) 732-38 72 • FAX (35 2) 732-0 54 2
443 Eas t Co ll ege Av enu e • Tall ahassee , Fl o ri da 3 23 01 • (85 0) 224-7 144 • FAX (85 0) 224 -17 62
500 1 La kew oo d Ranc h Blvd . N ., Su ite 101 • Sara sota, Flo rida 34240 • (941 ) 90 7-03 50 • FA X (9 4 1) 90 7-03 09
ME,\-\BERS O F /\.\ \[R ICAN ,\ ND r LORIDt\ INST ITUTES OF CER TIFIED PU BLI C J\CCO LIN TA I'.'T S
MEMB ER OF t\MER ICJ\N INS TI TUT E OF CF.RTIF IED PUBLI C t\ CCO UNTAN TS PRIVATE CO,\\I'AN IES J\ND S. E.C. PRACT ICE SECT IONS
69
PurvisGray&_
____________________C_o_mQany
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 Atl antic Beach, Florida (the City) as of and for the
year ended Septemb er 30 , 2014 , and have issued our repott thereon dated April 20 , 2015.
Auditors' Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America, the stand ard s applicable to financial audits conta ined in Governm ent A uditing Standards , issued
by the Comptroller General of the United States; OMB Circular A-133 , A udits of States, L ocal
Governments, and N on-Profit Org aniz ations; and Chapter 10.550, Rules ofth e Florida A uditor Gen eral.
Other Reports and Schedule
We have issued our Independent Auditors' Repott on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Governm ent Auditing Standards, and Independent Accountants' Repott on an examination conducted
in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in
accordance with Chapter 10.550 , Rules of th e A uditor General. Disclosures in those repotts and schedule,
which are dated April20, 2015 , should be considered in conjunction with th is management letter.
Prior Audit Findings
Section 10.554(l)(i)l., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financi al
repott. There were no recommendations made in the preceding annual financial report.
Official Title and Legal Authority
Section 10.554(l)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the prim ary go vernment and each component unit of the repmting entity be disclosed in this
management letter, unl ess disclosed in the notes to th e financial statements . Thi s information is included in
Note 1 to the financial statements .
Financial Condition
Section 10 .554(l)(i)5 .(a), Rules ofthe Auditor General, requires a statement to be included as to whether or
not the local government entity has met one or more of the conditions described in Section 218 .503(1),
Florida Statutes, and identification of the specific conditions met. In connection with our audit, we
determined that the City did not meet any of the conditions described in Section 218.503(1), Florida
Statutes.
Certified Public Accountants
P.O. Bo x 14 1270 • 222 N. E. 1st Str ee t • Gaines v i lle, Fl orida 32 61 4-12 70 • (3 52) 378-24 61 • FAX (352) 3 78 -2505
Lilurel Ridg e Profess ional Ce n te r • 23 4 7 S.E. 17th Stree t • O ci!lil, Florida 34471 • (3 52) 732-38 72 • FAX (3 52) 732-0 54 2
4 43 Ea st College Av enue • Tall ahassee , Fl orida 323 01 • (8 50 ) 224-71 44 • FA X (8 50 ) 224 -1 762
5001 Lake wood Ran c h Blvd. N., Suite 101 • Saraso tt1, Flo rid t1 34 24 0 • (941) 907-0350 • FA X (9 4 1) 907-0309
ML\·Ill ERS O F 1\ MER IG\ N 1\ND FLORI DA IN STIT UTES Of CERl lr! ED PUBLI C ACCO UNT.V•HS
M[MBER OF l\M[R IG \ N INSTIT UT[ OF CERT IFIED PUB LI C 1\ CCO UNTA NTS PRIVATE COMPANI ES 1\ ND S,E,C 1% \ Cl l([ SECT IO NS
70
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(l)(i)5(c) and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management's responsibility to monitor the City's financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Annual Financial Report
Section 10.554(l)(i)5.(b), Rules of the Auditor General, requires that we determine whether the annual
financial report for the City for the fiscal year ended September 30, 2014, filed with the Florida Department
of Financial Services pursuant to Section 218.32(1 )(a), Florida Statutes, is in agreement with the annual
financial audit repmt for the fiscal year ended September 30, 2014. In connection with our audit, we
determined that these two repmts were in agreement.
Special District Component Units
Section 10.554(l)(i)5.(d), Rules ofthe 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 repmting 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
cmmection with our audit, we determined that there were no special district component units that were
required to be repmted in accordance with Section 218.39(3)(b ), Florida Statutes.
Other Matters
Section 10.554(l)(i)3., Rules ofthe Auditor General, requires that we address in the management letter any
recommendations to improve financial management. In connection with our audit, we did not have any
such recommendations.
Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that
have an effect on the financial statements that is less than material but which warrants the attention of those
charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than these specified pmties.
We wish to take this oppo1tunity to thank you and your staff for the cooperation and courtesies extended to
us during the course of our audit. Please let us know if you have any questions or comments concerning this
letter, our accompanying repmts, or other matters.
~'G.ay t:Yrui ~'u..:f'
April 20, 2015
Gainesville, Florida
71