Annual Financial Report - 2019-2020
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
CITY OF ATLANTIC BEACH, FLORIDA
SEPTEMBER 30, 2020
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2020
INDEPENDENT AUDITOR’S REPORT ...................................................................................................................................... 1
MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................................................................... 4
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION ........................................................................................................................................... 13
STATEMENT OF ACTIVITIES ................................................................................................................................................. 14
FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS ...................................................................................................................... 15
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET
POSITION ............................................................................................................................................................................ 16
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL
FUNDS ................................................................................................................................................................................. 17
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES .................................................................... 18
STATEMENT OF NET POSITION – PROPRIETARY FUNDS ..................................................................................................... 19
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS ................................... 21
STATEMENT OF CASH FLOWS ............................................................................................................................................. 23
STATEMENT OF FIDUCIARY NET POSITION ......................................................................................................................... 25
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION .................................................................................................... 26
NOTES TO FINANCIAL STATEMENTS ..................................................................................................................................... 27
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
– GENERAL FUND ................................................................................................................................................................ 61
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
BUDGET AND ACTUAL – GENERAL FUND ........................................................................................................................... 63
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
GENERAL EMPLOYEES’ PENSION PLAN .......................................................................................................................... 64
POLICE OFFICERS’ PENSION PLAN .................................................................................................................................. 66
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS...................................................................................................... 68
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS ............................................................................. 69
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS ........................................................................................... 70
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS ........................................................................ 71
CITY OF ATLANTIC BEACH, FLORIDA
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT
SEPTEMBER 30, 2020
SUPPLEMENTARY INFORMATION
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS ............................................................................ 72
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-
MAJOR GOVERNMENTAL FUNDS ....................................................................................................................................... 74
HISTORICAL REVENUES AND EXPENSES .............................................................................................................................. 76
SCHEDULES OF NET REVENUES IN ACCORDANCE WITH BOND RESOLUTIONS – ENTERPRISE FUNDS
(WATER AND SEWER) ......................................................................................................................................................... 77
OTHER BOND COVENANT DISCLOSURES ............................................................................................................................ 78
OTHER STATISTICAL INFORMATION
MAJOR UTILITY CUSTOMERS .............................................................................................................................................. 79
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
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 ................................................................... 80
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE WITH SECTION 218.415, FLORIDA STATUTES ........................ 82
MANAGEMENT LETTER ....................................................................................................................................................... 83
MANAGEMENT’S AFFIDAVIT OF COMPLIANCE WITH SECTION 163.31801, FLORIDA STATUTES ....................................... 85
1
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
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, 2020, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the City’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
2
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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, 2020, 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, General Fund – Budgetary to Actual Schedule and notes to the schedule, and
Required Pension and OPEB schedules as listed in the table of contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by GASB, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence
to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The supplementary information and the other statistical
information section as listed in the table of contents are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The supplementary information are the responsibility of management and were derived from and relate
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or
to the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
3
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
INDEPENDENT AUDITOR’S REPORT
The other statistical information section has not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have issued our report dated June 18, 2021, on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the City’s internal control over financial reporting and
compliance.
Report on Summarized Comparative Information
We have previously audited the City’s 2019 financial statements, and our report dated November 23,
2020, 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, 2019,
is consistent, in all material respects, with the audited financial statements from which it was derived.
June 18, 2021
Gainesville, Florida
Page Intentionally Left Blank
MANAGEMENT’S DISCUSSION AND ANALYSIS
4
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
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, 2020.
Overview of the Financial Statements
This management’s discussion and analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial
statements themselves. The purpose of each of the three components of the basic financial statements is
described below.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City’s finances, in a manner similar to a private sector business. They include the Statement of Net Position
and the Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources with the difference between reported as net
position. Net position is reported as one of three categories: invested in capital assets net of related debt;
restricted; or unrestricted. Restricted net position is further classified as either net position restricted by
enabling legislation or net position that is otherwise restricted. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Activities presents information showing how the City’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues, referred to as “governmental activities,” from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges, referred to as “business-type activities.” The governmental activities of the City include public
safety, road maintenance and construction, parks and recreation, conservation and resource
management, 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 13-14 of this report.
5
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(continued)
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the
funds of the City can be categorized into either governmental funds, proprietary funds, or fiduciary funds.
■ Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of
available financial 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 12 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 11 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 72-75 of this
report.
The City adopts an annual appropriated budget for all funds but is only required to present a budget
comparison for its General Fund. The Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual - General Fund budgetary comparison schedule and notes on pages 61-63 of this
report has been provided to demonstrate compliance with this budget.
■ Proprietary Funds
The City maintains only one type of proprietary fund and that is enterprise funds. The enterprise funds
are used to account for the activities of the water and sewer (utility), stormwater, building code
enforcement, and sanitation activities.
The proprietary fund financial statements provide the same type of information as the government-
wide financial statements, only in more detail. Separate information of the utility, stormwater,
sanitation and building code enforcement activities can be found in the basic proprietary fund financial
statements on pages 19-24 of this report.
6
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
Fund Financial Statements (concluded)
■ 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 25-26 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 26 of this
report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information concerning the City’s progress in funding its obligation to provide
pension benefits to its employees and a budgetary comparison schedule for the General Fund. Required
supplementary information can be found beginning on page 61 of this report.
7
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
Government-wide Financial Analysis
Net position may serve over time as a useful indicator of a City’s financial position. As can be seen in the
summarized table below, the City’s assets exceeded liabilities by $85,338,197 at the close of the fiscal
year ended September 30, 2020.
By far the largest portion of the City’s net position, $67,302,057 (82%), reflects its investment in capital
assets (i.e., land, buildings, equipment, and infrastructure), less any related, outstanding debt used to
acquire those assets. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City’s investment in capital assets is reported net
of related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
A portion of the City’s net position, $6,117,783 (8%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position, $11,918,357
(10%), is used to meet the government’s ongoing obligations to citizens and creditors.
City of Atlantic Beach’s Net Position
September 30, 2020 and 2019
(In Thousands)
Governmental Business-type
Activities Activities Totals
2020 2019 2020 2019 2020 2019
Current and other assets $11,099 $9,762 $15,549 $14,513 $26,648 24,275
Capital assets 45,237 45,690 36,652 38,128 81,889 83,818
Total Assets 56,336 55,452 52,201 52,641 108,537 108,093
Deferred Outflow 2,154 2,300 1,250 1,526 3,404 3,826
Long-term liabilities
outstanding 7,580 7,828 15,839 17,590 23,419 25,418
Other liabilities 1,030 1,011 1,525 1,740 2,555 2,751
Total Liabilities 8,610 8,838 17,364 19,330 25,974 28,169
Deferred Inflow 541 922 88 436 629 1,358
Net Position:
Invested in capital assets,
net of related debt 43,896 44,270 23,406 23,335 67,302 67,605
Restricted 3,276 2,184 2,842 4,135 6,118 6,319
Unrestricted 2,167 1,538 9,751 6,931 11,918 8,469
Total Net Position $49,339 $47,992 $35,999 $34,401 $85,338 $82,393
8
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
As illustrated in the schedule on page vi, the City was able to report positive balances in all categories of
net position, both for the government as a whole, as well as for its separate governmental and business-
type activities. The same situation held true for the prior fiscal year.
City of Atlantic Beach’s Change in Net Position
For the Years Ended September 30, 2020 and 2019
(In Thousands)
Governmental Business-type
Activities Activities Total
2020 2019 2020 2019 2020 2019
Revenues:
Program Revenues:
Charges for Services $1,056 $988 $12,565 $12,265 $13,621 $13,253
Operating Grants and
Contributions 278 186 0 732 278 918
Capital Grants and
Contributions 73 240 432 808 505 1,048
General Revenues:
Property Taxes 5,912 5,519 0 0 5,912 5,519
Public Service Tax and
Franchise Fees 1,856 1,819 0 0 1,856 1,819
Fuel Taxes 544 607 0 0 544 607
Discretionary Sales Surtax 915 924 0 0 915 924
State Shared Revenue 1,821 1,863 0 0 1,821 1,863
Other 363 312 240 472 603 784
Total Revenues 12,818 12,458 13,237 14,277 26,055 26,735
Expenses:
General Government 2,536 2,805 0 0 2,536 2,805
Public Safety 6,582 6,302 0 0 6,582 6.303
Road Maintenance and
Construction 1,866 2,357 0 0 1,866 2,357
Parks and Recreation 1,549 1,652 0 0 1,549 1,652
Conservation and Resource
Management 23 25 0 0 23 25
Interest/Fiscal Charges on Long-
term Debt 47 44 0 0 47 44
Utility 0 0 6,926 7,213 6,926 7,213
Stormwater 0 0 1,369 1,609 1,369 1,609
Sanitation 0 0 1,667 1,710 1,667 1,710
Building Code Enforcement 0 0 545 550 545 550
Total Expenses 12,603 13,185 10,507 11,082 23,110 24,268
Transfers 1,132 658 (1,132) (658) 0 0
Change in Net Position 1,347 (69) 1,598 2,537 2,945 2,468
Net Position-Beginning 47,992 48,061 34,401 31,864 82,393 79,925
Net Position-Ending
$49,33
9 $47,992 $35,999 $34,401 $85,338 $82,393
9
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
Fund Financial Analysis
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements. Following is a summary of fund activity financial information for the fiscal year,
rounded to the nearest thousand dollars:
■ Governmental Funds
At the end of the current fiscal year, the City’s governmental funds reported a combined ending fund
balance of $10,092,315, an increase of $1,315,899 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 $2,923,600, which equated to 24% 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 $472,356 or 7% during the current fiscal year. Property tax revenues increased
by $392,607 or 7% from the previous year. This was a result of an increase in the taxable values. General
Fund transfers in increased by $248,960, and there was no transfers out. Overall, general fund
expenditures decreased by $356,900 or 3%. This can be attributed to the COVID-19 pandemic.
Nonmajor governmental funds consisting of special revenue funds, the capital projects fund and the
debt service fund have a combined fund balance of $3,084,897. The net increase in fund balance after
transfers in nonmajor governmental funds was $843,543. The increase in the fund was related to the
decrease in Capital Outlay Expenditures as many projects were put on hold due to the COVID-19
pandemic.
■ 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 $12,534,122, expenses of $10,025,601, net non-operating revenue of $(209,877) and net capital
contributions, grants and transfers of $431,653. The net position in the proprietary funds increased
$1,598,444 as a result of the fiscal year’s activities. The unrestricted net position of the enterprise
funds amounted to $9,751,310 at the end of fiscal year 2020.
Stormwater rates stayed constant in fiscal year 2020 as there were no rate changes. The $8.39 per
ERU is approximately 67%, compared to 61% for the prior year, of the total operating expenses of
$1,326,171 needed to fully fund the operation with charges for service.
During fiscal year 2020, the Sanitation Fund netted an increase in net position of $38,803.
General Fund Budgetary Highlights
Net Budget
The overall net difference from the final budgeted resources (revenues and other financing sources) and
adjusted final budgeted uses (expenditures and other financing uses) was a deficit of $ 400,366. The
actual increase in fund balance was $472,356. This resulted in a $872,722 positive budgetary variance.
10
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
Capital Assets and Debt Administration
Capital Assets―The City’s investment in capital assets, net of related depreciation, for its governmental
and business-type activities as of September 30, 2020, amounted to $81,889,145. 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 $453,240 or 1.0% for governmental activities and a decrease of $1,475,559 or 3.9% for
business-type activities.
Capital asset events during the current fiscal year included the following:
▪ Governmental Activities
Buildings reflected a net decrease of $170,395 as a result of depreciation.
Intangible Assets reflected a net increase of $52,165. This asset category includes land easements
and computer software.
Improvements Other Than Buildings reflected a net decrease of $422,264. This represents capital
asset increase of $286,943 offset by depreciation of $709,207.
Equipment reflected a net decrease of $82,160. This represents capital asset increase of $522,602,
offset by depreciation of $604,762.
Construction in progress increased by $169,414.
■ Business-type Activities
Buildings reflected a net decrease in asset value of $8,442 from depreciation.
Improvements Other Than Buildings reflected a net decrease of $2,138,595. This represents capital
asset increases of 157,244, offset by depreciation of $2,295,839.
Equipment reflected a net decrease of $79,025. This represents capital asset increase of $190,794,
offset by depreciation of $269,819.
Construction in Progress had a net increase of $748,386.
11
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Continued)
City of Atlantic Beach’s Capital Assets
(Net of Depreciation)
(In Thousands)
Governmental Business-type
Activities Activities Totals
2020 2019 2020 2019 2020 2019
Land $11,914 $11,914 $1,656 $1,656 $13,570 $13,570
Intangibles 104 52 213 213 317 265
Buildings 6,805 6,975 27 36 6,832 7,011
Improvements-Other 24,129 24,551 31,291 33,429 55,420 57,980
Equipment 1,218 1,300 1,027 1,103 2,245 2,403
Construction in Progress 1,067 897 2,439 1,690 3,506 2,587
Total $45,237 $45,689 $36,653 $38,127 $81,890 $83,816
Additional information on the City’s capital assets can be found in Note 5 on pages 40-41 of this report.
Long-term Debt
At the end of the 2020 fiscal year, the City had total bonded debt outstanding of $15,078,028. The amount
of $13,748,028 represents the City’s debt related to its business type activities. This amount was
comprised of debt secured solely by specified revenue sources. A detailed listing of the City’s debt can be
found in the table below.
City of Atlantic Beach’s Outstanding Debt
September 30,
(In Thousands)
2020 2019
Governmental Activities:
Capital Improvement Revenue Bonds, Series 2018 $1,330 $1,400
Business-type Activities:
Utilities System Revenue Bond, Series 2014 8,070 9,310
F.D.E.P. State Revolving Funds Loan, 2010 453 490
F.D.E.P. State Revolving Funds Loan, 2009 5,086 5,430
Capital Lease Payable - 2018 139 205
Total $15,078 $16,835
Debt service coverage calculations can be found on page 77. Additional information on the City’s long-
term debt can be found in Note 6 on pages 42-45 of this report.
12
CITY OF ATLANTIC BEACH, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2020
(Concluded)
Revenue Highlights:
■ Total General Fund Revenues for 2020 were $409,255 higher than 2019 revenue (page 16). Increase
in property tax revenue of $392,607 is the largest contributor to this increase.
■ The 2020 taxable property values were about 7.4% higher than the 2019 values. The City Commission
voted to use the same millage rate of 3.2285 mills. The purpose for adopting the millage rate of 3.2285
was to maintain a level of ad valorem tax revenue sufficient to maintain adequate funding for the
existing level of services at the estimated cost and to continue to maintain the city’s infrastructure
and adequate reserves. The final gross taxable property value was $19,071,720. Ad valorem taxes of
$5,912,053 represent 53% of the General Fund revenues for 2020.
■ The 2020 Intergovernmental revenues of $1,997,831 make up 17.8% of general fund revenues. This
is a decrease of $226,900 over 2019.
■ The City’s investment portfolio is valued at approximately $17,432,327 as of September 30, 2020. The
investments showed a gain of $553,014 for the year.
Expenditure Highlights:
■ Total Governmental Fund Expenditures decreased in current year by $845,729 when compared to prior
year. Capital expenditures decreased from $1,206,655 in 2019 to $1,029,051 in 2020. This decrease is
due to projects not being able to be completed due to the COVID-19 pandemic.
Requests for Information
The financial report is designed to provide a general overview of the City’s finances for all those with an
interest in the City’s finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to the City of Atlantic Beach, Finance
Director, 800 Seminole Road, Atlantic Beach, Florida 32233.
Melissa Burns
Director of Finance
BASIC FINANCIAL STATEMENTS
These basic financial statements contain Government-wide, Fund Financial Statements
and Notes to Financial Statements
See accompanying notes.
13
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION
SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
Primary Government
Governmental Business-type 2019
Activities Activities Total Totals
ASSETS
Equity in pooled cash and investments $ 6,093,404 $ 12,017,397 $ 18,110,801 $ 14,619,837
Cash with fiscal agent - - - 1,443,312
Receivables, current:
Customer accounts, net 54,055 806,968 861,023 919,865
Intergovernmental and other 1,198,857 131,817 1,330,674 1,046,782
Notes receivable, net 760 15,759 16,519 16,519
Inventory 32,256 60,763 93,019 102,905
Prepaid expenses 352,394 - 352,394 4,852
Restricted assets: Equity in pooled cash and investments 3,365,134 2,396,286 5,761,420 6,000,046
Capital assets:
Non-depreciable 12,980,937 4,094,817 17,075,754 16,157,954
Depreciable, net 32,255,794 32,557,597 64,813,391 67,659,990
Notes receivable, noncurrent 1,520 119,320 120,840 121,286
TOTAL ASSETS 56,335,111 52,200,724 108,535,835 108,093,348
DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 2,097,174 687,502 2,784,676 3,157,133
Deferred outflows - loss on refunding - 539,716 539,716 647,660
Deferred outflows related to OPEB 57,065 23,219 80,284 21,385
TOTAL DEFERRED OUTFLOWS OF RESOURCES 2,154,239 1,250,437 3,404,676 3,826,178
LIABILITIES Accounts payable and accrued expenses 716,839 423,279 1,140,118 1,398,881
Construction costs payable 10,616 38,160 48,776 26,191
Due to other governments 80,064 53,809 133,873 41,063
Unearned revenue 185,438 181,993 367,431 347,581
Accrued interest payable 23,608 158,056 181,664 201,677
Customer deposits 13,108 669,629 682,737 734,906
Long-term obligations:
Due within one year 279,663 1,783,557 2,063,220 1,971,799
Due in more than one year 7,300,193 14,055,876 21,356,069 23,446,085
TOTAL LIABILITIES 8,609,529 17,364,359 25,973,888 28,168,183
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 394,463 28,200 422,663 1,326,445
Deferred inflows related to OPEB 146,256 59,507 205,763 31,903
Total deferred inflows of resources 540,719 87,707 628,426 1,358,348
NET POSITION
Net investment in capital assets 43,896,115 23,405,942 67,302,057 67,604,870
Restricted for:
General government facilities 257,689 - 257,689 257,689
Public safety 119,127 - 119,127 299,845
Road maintenance and construction 2,687,062 - 2,687,062 1,318,572
Other purposes 212,062 - 212,062 308,383
Debt service - 280,916 280,916 280,916
Renewal and replacement - 250,000 250,000 250,000
Utility rate stabilization - 400,000 400,000 400,000
Utility system improvements - 1,715,370 1,715,370 2,756,853
Building code enforcement - 195,557 195,557 447,232
Unrestricted 2,167,047 9,751,310 11,918,357 8,468,635
TOTAL NET POSITION $ 49,339,102 $ 35,999,095 $ 85,338,197 $ 82,392,995
See accompanying notes.
14
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
Program Revenues Net (Expense) Revenue and
Operating Capital Changes in Net Position
Charges for Grant and Grant and Governmental Business-Type 2019
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Totals
PRIMARY GOVERNMENT:
Governmental activities:
General government $ 2,536,219 $ 225,216 $ 1,175 $ 72,921 $ (2,236,907) $ - $ (2,236,907) $ (2,386,622)
Public safety 6,581,867 664,562 150,341 - (5,766,964) - (5,766,964) (5,609,943)
Transportation 1,865,563 120,170 103,534 - (1,641,859) - (1,641,859) (2,176,387)
Parks and recreation 1,549,470 46,320 - - (1,503,150) - (1,503,150) (1,544,697)
Conservation and resource
management 22,714 - 22,505 - (209) - (209) (8,698)
Interest on long-term debt 47,215 - - - (47,215) - (47,215) (44,700)
Total governmental activities 12,603,048 1,056,268 277,555 72,921 (11,196,304) - (11,196,304) (11,771,047)
Business-type activities
Utility 6,925,617 9,325,440 - 431,653 - 2,831,476 2,831,476 2,501,362
Stormwater 1,368,718 894,776 - - - (473,942) (473,942) (715,576)
Sanitation 1,667,152 1,973,819 - - - 306,667 306,667 970,386
Building code enforcement 544,757 370,961 - - - (173,796) (173,796) (34,107)
Total business-type activities 10,506,244 12,564,996 - 431,653 - 2,490,405 2,490,405 2,722,065
TOTAL PRIMARY GOVERNMENT $ 23,109,292 $ 13,621,264 $ 277,555 $ 504,574 $ (11,196,304) $ 2,490,405 $ (8,705,899) $ (9,048,982)
GENERAL REVENUES
Taxes:
Property taxes, levied for general purposes 5,912,053 - 5,912,053 5,519,446
Public service taxes and franchise fees 1,856,292 - 1,856,292 1,819,333
Fuel taxes levied for transportation purposes 543,623 - 543,623 607,300
Discretionary Sales Surtax 914,697 - 914,697 924,384
State shared revenue 1,821,375 - 1,821,375 1,862,114
Investment earnings (loss) 341,496 193,740 535,236 647,147
Miscellaneous 21,673 46,152 67,825 137,132
Gain (loss) on disposal of capital assets - - - 623
TRANSFERS 1,131,853 (1,131,853) - -
Total general revenues and transfers 12,543,062 (891,961) 11,651,101 11,517,479
CHANGE IN NET POSITION 1,346,758 1,598,444 2,945,202 2,468,497
NET POSITION, beginning of year 47,992,344 34,400,651 82,392,995 79,924,498
NET POSITION, end of year $ 49,339,102 $ 35,999,095 $ 85,338,197 $ 82,392,995
See accompanying notes.
15
CITY OF ATLANTIC BEACH, FLORIDA
BALANCE SHEET – GOVERNMENTAL FUNDS
AS OF SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
2020
Non-Major
General Governmental 2019
Fund Funds Total Totals
ASSETS
Equity in pooled cash and investments $ 6,093,404 $ 3,365,134 $ 9,458,538 $ 8,586,993
Cash with fiscal agent - - - 94,850
Receivables, net
Customer accounts, net 54,055 - 54,055 116,007
Intergovernmental and other 939,864 258,993 1,198,857 914,965
Notes receivable, current 760 - 760 760
Inventory 32,256 - 32,256 42,142
Prepaid expenditures 350,846 1,548 352,394 4,852
Due from other funds 394,451 - 394,451 283,396
Notes receivable, non-current 1,520 - 1,520 1,520
TOTAL ASSETS $ 7,867,156 $ 3,625,675 $ 11,492,831 $ 10,045,485
LIABILITIES
Accounts payable and accrued liabilities 582,319 134,520 716,839 790,606
Construction costs payable 3,270 7,346 10,616 19,936
Due to other governments 80,064 - 80,064 -
Due to other funds - 394,451 394,451 283,396
Deposits 8,647 4,461 13,108 9,543
Unearned revenue 185,438 - 185,438 165,588
TOTAL LIABILITIES 859,738 540,778 1,400,516 1,269,069
FUND BALANCE
Nonspendable:
Inventory 32,256 - 32,256 42,142
Prepaids 350,846 1,548 352,394 4,852
Restricted for:
Public safety - 119,127 119,127 299,845
Road maintenance and construction - 2,687,062 2,687,062 1,318,572
Other capital projects - 257,689 257,689 257,689
Other purposes - 212,062 212,062 308,383
Committed to:
Conservation and resource management - 77,732 77,732 77,940
Assigned to:
Community redevelopment 50,000 - 50,000 50,000
Operating reserves 3,650,716 - 3,650,716 3,427,234
Unassigned 2,923,600 (270,323) 2,653,277 2,989,759
TOTAL FUND BALANCES 7,007,418 3,084,897 10,092,315 8,776,416
TOTAL LIABILITIES, DEFERRED INFLOWS
TOTAL LIABILITIES AND FUND BALANCES $ 7,867,156 $ 3,625,675 $ 11,492,831 $ 10,045,485
See accompanying notes.
16
CITY OF ATLANTIC BEACH, FLORIDA
RECONCILIATION OF BALANCE SHEET OF GOVENRMENTAL FUNDS TO THE STATEMENT OF NET POSITION
SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
Amounts reported for governmental activities in the statement of net position
are different because:
2020 2019
FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 10,092,315 $ 8,776,416
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 45,236,731 45,689,971
Deferred outflows of resources represent an consumption of net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. 2,154,239 2,300,441
Deferred inflows of resources represent an increase in net position or
fund balance that applies to a future period(s) and, therefore, are not
reported in the governmental funds. (540,719) (922,021)
Interest payable on long-term debt does not require current financial resources
and therefore, is not reported as a liability in governmental funds. (23,608) (24,850)
Long-term liabilities (including bonds and notes payable, compensated
absences liability, OPEB obligation, and net pension liabilities)
are not due and payable in the current period and, therefore, are not
reported in the governmental funds.
This is the amount of the long-term obligations (7,579,856) (7,827,613)
NET POSITION OF GOVERNMENTAL ACTIVITIES $ 49,339,102 $ 47,992,344
See accompanying notes.
17
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Non-major
General Governmental 2019
Fund Funds Total Totals
REVENUES:
Property taxes $ 5,912,053 $ - $ 5,912,053 $ 5,519,446
Non-property taxes 1,271,015 1,458,320 2,729,335 2,713,883
Licenses and permits 905,755 - 905,755 795,447
Intergovernmental revenue 1,997,831 - 1,997,831 2,224,731
Charges for services 759,599 52,823 812,422 785,278
Fines and forfeitures 52,945 20,766 73,711 63,367
Investment earnings (loss) 292,108 49,390 341,498 247,851
Miscellaneous revenues 22,848 22,506 45,354 79,947
Total revenues 11,214,154 1,603,805 12,817,959 12,429,950
EXPENDITURES:
General government 2,407,069 22,714 2,429,783 2,820,090
Public safety 6,420,395 41,986 6,462,381 6,357,114
Transportation 1,384,495 - 1,384,495 1,707,217
Culture/recreation 1,209,480 265 1,209,745 1,368,716
Capital outlay 661,967 367,084 1,029,051 1,206,655
Debt service - 118,458 118,458 19,850
Total expenditures 12,083,406 550,507 12,633,913 13,479,642
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (869,252) 1,053,298 184,046 (1,049,692)
OTHER FINANCING SOURCES (USES)
Transfers in 1,341,608 1,288,458 2,630,066 1,092,648
Transfers (out) - (1,498,213) (1,498,213) (435,000)
TOTAL OTHER FINANCING SOURCES (USES) 1,341,608 (209,755) 1,131,853 657,648
NET CHANGE IN FUND BALANCE 472,356 843,543 1,315,899 (392,044)
FUND BALANCE, beginning of year 6,535,062 2,241,354 8,776,416 9,168,460
FUND BALANCE, end of year $ 7,007,418 $ 3,084,897 $ 10,092,315 $ 8,776,416
See accompanying notes.
18
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, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
Amounts reported for governmental activities in the statement of net activities
are different because:
2020 2019
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 1,315,899 $ (392,044)
Governmental funds report capital outlay as expenditures. However,
in the statement of activities, the cost of these assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount of capital assets recorded in the current period. 1,056,082 1,219,139
This is the amount of depreciation recorded in the current period. (1,509,322) (1,367,154)
Long-term obligations including bonds and notes payable, compensated absences
and other post-employment benefit obligations are reported as liabilities in the
government-wide statement of net position but are not reported as liabilities in the
governmental funds because they do not require the use of current financial resources:
This is the repayment of bond principal reported as expenditures in governmental funds. 70,000 -
This is the change in accrued interest payable on long-term obligations. 1,242 (24,850)
This is the change in accrued compensated absences during the year. (184,664) (19,568)
Other postemployment benefit (OPEB) expense is reported in the statement of activities
which differs from OPEB expenditures as report in the governmental funds:
This amount represents the change in deferred inflows related to OPEB. (123,417) (10,015)
This amount represents the change in deferred outflows related to OPEB. 41,755 (859)
This amount represents the change in the total OPEB liability. 66,177 (22,547)
Pension expense is reported in the statement of activities which differs from
pension expenditures as reported in the governmental finds:
This amount represents the change in deferred inflows related to pensions. 504,719 (464,962)
This amount represents the change in deferred outflows related to pensions. (187,957) (34,244)
This amount represents the change in the net pension liability. 296,244 1,048,798
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 1,346,758 $ (68,306)
See accompanying notes.
19
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Totals Totals
ASSETS
Current assets:
Equity in pooled cash and investments $ 9,900,286 $ 1,032,739 $ 669,146 $ 415,226 $ 12,017,397 $ 8,345,121
Cash with fiscal agent - - - - -1,348,462
Accounts receivables, net 663,420 56,248 87,300 -806,968 803,858
Due from other governments 35,244 -96,573 -131,817 131,817
Notes receivable - current 15,759 --- 15,759 15,759
Inventory 60,763 --- 60,763 60,763
Total current assets 10,675,472 1,088,987 853,019 415,226 13,032,704 10,705,780
Noncurrent assets:
Restricted assets:
Equity in pooled cash and investments 2,396,286 - - - 2,396,286 3,687,769
Notes receivable - noncurrent 119,320 - - - 119,320 119,766
Capital assets:
Non-depreciable 2,215,589 1,879,228 - - 4,094,817 3,346,431
Depreciable, net 24,469,953 7,995,578 2,474 89,592 32,557,597 34,781,542
Total noncurrent assets 29,201,148 9,874,806 2,474 89,592 39,168,020 41,935,508
Total assets 39,876,620 10,963,793 855,493 504,818 52,200,724 52,641,288
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 529,430 64,655 43,458 49,959 687,502 872,002
Deferred outflows - refunding loss 469,553 70,163 - - 539,716 647,660
Deferred outflows related to OPEB 14,410 3,269 -5,540 23,219 6,075
Total deferred outflows of resources 1,013,393 138,087 43,458 55,499 1,250,437 1,525,737
Continued…
See accompanying notes.
20
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (concluded)
SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Totals Totals
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 102,348 $ 185,650 $ 120,702 $ 14,579 $ 423,279 $ 608,275
Construction costs payable 6,255 31,905 - - 38,160 6,255
Due to other governments - - - 53,809 53,809 41,063
Unearned revenue 90,605 29,898 61,490 - 181,993 181,993
Compensated absences 43,614 3,046 - 10,878 57,538 44,220
Bonds and notes payable, current 1,527,497 198,522 - - 1,726,019 1,686,515
Total current liabilities 1,770,319 449,021 182,192 79,266 2,480,798 2,568,321
Noncurrent liabilities:
Liabilities payable from restricted assets:
Customer deposits 669,629 - - - 669,629 725,363
Interest payable 145,834 12,222 - - 158,056 176,827
Compensated absences 213,662 11,144 - 32,293 257,099 205,783
Other postemployment obligation payable 68,243 15,481 - 26,239 109,963 133,514
Net pension liability 1,283,571 156,751 105,361 121,122 1,666,805 1,772,211
Bonds and notes payable, noncurrent portion 11,101,931 920,078 - - 12,022,009 13,748,028
Total noncurrent liabilities 13,482,870 1,115,676 105,361 179,654 14,883,561 16,761,726
Total liabilities 15,253,189 1,564,697 287,553 258,920 17,364,359 19,330,047
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions 21,716 2,652 1,783 2,049 28,200 427,263
Deferred inflows related to OPEB 36,930 8,378 - 14,199 59,507 9,064
Total deferred inflows of resources 58,646 11,030 1,783 16,248 87,707 436,327
NET POSITION Net investment in capital assets 14,519,412 8,794,464 2,474 89,592 23,405,942 23,334,835
Restricted for: Debt retirement 280,916 - - - 280,916 280,916
Renewal and replacement 250,000 - - - 250,000 250,000
Utility rate stabilization 400,000 - - - 400,000 400,000
Utility system improvements (expendable) 1,715,370 - - - 1,715,370 2,756,853
Building code enforcement - - - 195,557 195,557 447,232
Unrestricted 8,412,480 731,689 607,141 - 9,751,310 6,930,815
Total net position $ 25,578,178 $ 9,526,153 $ 609,615 $ 285,149 $ 35,999,095 $ 34,400,651
See accompanying notes.
21
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Totals Total
OPERATING REVENUES:
Charges for services
Customer charges $ 9,300,483 $ 894,776 $ 1,915,650 $ 370,961 $ 12,481,870 $ 12,133,524
Franchise permits - - 9,000 - 9,000 13,500
Miscellaneous revenues 43,252 - - - 43,252 67,291
Total operating income 9,343,735 894,776 1,924,650 370,961 12,534,122 12,214,315
OPERATING EXPENSES:
Personnel services 1,827,004 366,654 47,747 422,228 2,663,633 2,625,868
Contractual services 375,144 92,471 1,458,853 17,835 1,944,303 2,364,023
Supplies 404,897 24,114 - 13,609 442,620 534,903
Repairs and maintenance 89,111 - 5,671 10,940 105,722 224,337
Utilities 351,447 - - - 351,447 352,529
Depreciation 1,899,373 652,585 771 19,254 2,571,983 2,577,417
Intergovernmental charges 1,321,314 162,745 152,276 50,336 1,686,671 1,494,710
Other expenses 219,231 27,602 1,834 10,555 259,222 386,370
Total operating expenses 6,487,521 1,326,171 1,667,152 544,757 10,025,601 10,560,157
OPERATING INCOME (LOSS) 2,856,214 (431,395) 257,498 (173,796) 2,508,521 1,654,158
NONOPERATING REVENUE (EXPENSE)
Connection charges 24,957 - - - 24,957 44,018
Intergovernmental - - - - - 731,746
Franchise fees - - 49,169 - 49,169 73,964
Investment earnings (loss) 234,288 (31,263) 8,923 (18,208) 193,740 399,295
Interest expense (438,096) (42,547) - - (480,643) (522,969)
Other, net 2,900 - - - 2,900 5,800
Total nonoperating revenues (expense) (175,951) (73,810) 58,092 (18,208) (209,877) 731,854
Continued…
See accompanying notes.
22
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Totals Total
INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 2,680,263 $ (505,205) $ 315,590 $ (192,004) $ 2,298,644 $ 2,386,012
CAPITAL CONTRIBUTIONS
System development charges 427,040 - - - 427,040 808,439
Capital grants and contributions 4,613 - - - 4,613 -
Total capital contributions 431,653 - - - 431,653 808,439
TRANSFERS
Transfers in - 285,000 - - 285,000 200,000
Transfers out (740,066) (400,000) (276,787) (1,416,853) (857,648)
Total transfers (740,066) (115,000) (276,787) - (1,131,853) (657,648)
CHANGE IN NET POSITION 2,371,850 (620,205) 38,803 (192,004) 1,598,444 2,536,803
NET POSITION, beginning of year 23,206,328 10,146,358 570,812 477,153 34,400,651 31,863,848
NET POSITION, end of year $ 25,578,178 $ 9,526,153 $ 609,615 $ 285,149 $ 35,999,095 $ 34,400,651
See accompanying notes.
23
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Total Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers $ 9,286,144 $ 891,860 $ 1,926,759 $ 383,707 $ 12,488,470 $ 12,129,837
Payments to suppliers (2,920,335) (313,713) (1,623,743) (117,190) (4,974,981) (5,201,235)
Payments for salaries and benefits (2,029,661) (378,666) (67,404) (433,489) (2,909,220) (2,812,030)
Net cash flows from operating activities 4,336,148 199,481 235,612 (166,972) 4,604,269 4,116,572
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers from (to) other funds (740,066) (115,000) (276,787) - (1,131,853) (657,648)
Change in amounts due from/to other funds - - - - - (367,030)
Connection charges received 24,957 - - - 24,957 44,018
Operating grants - - - - - 731,746
Franchise fees received - - 49,169 - 49,169 73,964
Net cash flows from noncapital financing activities (715,109) (115,000) (227,618) - (1,057,727) (174,950)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Acquisition and construction of capital assets, net of related payables (530,595) (455,000) - (78,925) (1,064,520) (912,551)
Principal paid on notes, bonds and lease obligations (1,492,547) (193,968) - - (1,686,515) (1,647,556)
Interest paid on borrowings and other debt costs (361,078) (30,392) - - (391,470) (434,026)
Capital contributions and impact fees received,
net of change in related receivables 431,653 - - - 431,653 830,737
Net cash flows from capital and related financing activities (1,952,567) (679,360) - (78,925) (2,710,852) (2,163,396)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on invested funds 234,288 (31,263) 8,924 (18,208) 193,741 399,295
Other income 2,900 - - - 2,900 5,800
Net cash flows from investing activities 237,188 (31,263) 8,924 (18,208) 196,641 405,095
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,905,660 (626,142) 16,918 (264,105) 1,032,331 2,183,321
CASH AND CASH EQUIVALENTS, beginning of year 10,390,912 1,658,881 652,228 679,331 13,381,352 11,198,031
CASH AND CASH EQUIVALENTS, end of year $ 12,296,572 $ 1,032,739 $ 669,146 $ 415,226 $ 14,413,683 $ 13,381,352
As shown in the Accompanying Financial Statements
Equity in cash and investments $ 9,900,286 $ 1,032,739 $ 669,146 $ 415,226 $ 12,017,397 $ 8,345,121
Cash with fiscal agent - - - - - 1,348,462
Restricted equity in cash and investments 2,396,286 - - - 2,396,286 3,687,769
Total cash and cash equivalents $ 12,296,572 $ 1,032,739 $ 669,146 $ 415,226 $ 14,413,683 $ 13,381,352
Noncash financing and investing activities:
Amortization of refunding loss $ 93,911 $ 14,033 $ - $ - $ 107,944 $ 107,943
Continued…
See accompanying notes.
24
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CASH FLOWS (concluded)
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Business Type Activities - Enterprise Funds
Building Code 2019
Utility Stormwater Sanitation Enforcement Total Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $ 2,856,214 $ (431,395) $ 257,498 $ (173,796) $ 2,508,521 $ 1,654,158
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense 1,899,373 652,585 771 19,254 2,571,983 2,577,417
(Increase) decrease in accounts receivable (2,303) (2,916) 2,109 - (3,110) (134,944)
(Increase) decrease in notes receivable 446 - - - 446 1,257
(Increase) decrease in amounts due from other governments - - - 12,746 12,746 15,090
Increase (decrease) in accounts payable (159,191) (6,781) (5,109) (13,915) (184,996) 155,637
Increase (decrease) in compensated absences 52,267 426 - 11,941 64,634 15,029
Increase (decrease) in customer deposits (55,734) - - - (55,734) 34,119
(Increase) decrease in OPEB related deferred outflows (10,561) (2,546) - (4,037) (17,144) 1,211
Increase (decrease) in the total OPEB liability (16,355) (398) - (6,798) (23,551) (7,931)
Increase (decrease) in OPEB related deferred inflows 31,187 7,300 - 11,956 50,443 3,286
(Increase) decrease in pension related deferred outflows 150,484 8,615 11,290 14,111 184,500 (87,871)
Increase (decrease) in the net pension liability (98,251) 7,840 (5,905) (9,090) (105,406) (362,550)
Increase (decrease) in pension related deferred inflows (311,428) (33,249) (25,042) (29,344) (399,063) 252,664
Net cash flows from operating activities $ 4,336,148 $ 199,481 $ 235,612 $ (166,972) $ 4,604,269 $ 4,116,572
See accompanying notes.
25
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2019
Pension Trust
Funds
ASSETS 2020 2019
Cash and cash equivalents $ 495,614 $ 318,445
Accrued income 32,888 35,719
Investments at fair value 34,362,981 32,403,671
Total assets 34,891,483 32,757,835
LIABILITIES
Accounts payable and accrued liabilities 7,810 -
Due to City - 11,652
Total Liabilities 7,810 11,652
NET POSITION
Restricted for pension benefits $ 34,883,673 $ 32,746,183
See accompanying notes.
26
CITY OF ATLANTIC BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
Pension Trust
Funds
2020 2019
ADDITIONS
Contributions:
City $ 2,107,974 $ 2,251,184
Plan members 258,087 249,769
State of Florida 132,844 -
Total contributions 2,498,905 2,500,953
Investment income 1,876,162 1,039,693
Less investment expenses: (118,261) (111,228)
Net investment income 1,757,901 928,465
Total additions 4,256,806 3,429,418
DEDUCTIONS
Administrative expenses 73,887 86,926
Payments to retirees and participants 2,045,429 2,470,938
Total deductions 2,119,316 2,557,864
CHANGE IN NET POSITION 2,137,490 871,554
NET POSITION, beginning of year 32,746,183 31,874,629
NET POSITION, end of year $ 34,883,673 $ 32,746,183
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
27
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Atlantic Beach, Florida, (the City), conform to accounting principles generally
accepted in the United States of America as applicable to governments. The following is a summary of the more
significant policies used in the preparation of these financial statements:
Reporting Entity
The City was incorporated in 1957, under a charter in accordance with the laws of the State of Florida, Florida
Statutes Section 57-1126. The City operates under a form of government, which comprises an elected City
Commission (four Commissioners and a Mayor-Commissioner) and provides, under the administration of an
appointed City Manager, the following services: public safety, public works (streets and infrastructure), recreation,
conservation and resource management, sanitation, stormwater, reuse, planning, zoning, water and sewer, and
general government services.
In accordance with the Codification of Governmental and Financial Reporting Standards, the financial reporting
entity consists of the primary government, organizations for which the primary government is financially
accountable, and other organizations whose exclusions would cause the reporting entity’s financial statements to
be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria for
consideration in determining financial accountability. These criteria include appointing a majority of an
organization’s governing body and: (1) the ability of the City to impose its will on that organization; or (2) the
potential for that organization to provide specific benefits to or impose specific financial burdens on the City. Other
considerations are whether the organization is legally separate, whether the City holds the corporate powers of the
organization, and whether there is fiscal dependency by the organization on the City. Based upon the application of
these criteria, the City has no component units.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the non-fiduciary activities of the City. For the most part, the effect of inter-fund activity has
been removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent
on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity.
Indirect costs are included in the program expense reported for individual functions and activities. Program
revenues include: (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services,
or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or activity. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though the latter are excluded from the government-wide financial statements. Major individual governmental
funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
28
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
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 inter-fund activity has been eliminated from the government-wide financial
statements. The major exception to this general rule is charges between the City’s water and sewer function and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods, services, or
privileges provided; (2) operating grants and contributions; and (3) capital grants and contributions, including special
assessments. General revenues include all taxes.
Net position is reported as one of three categories: (1) Net Investment in Capital Assets; (2) Restricted; or (3)
Unrestricted.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and
the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to
be available if they are collected within sixty days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences, other postemployment benefits, pension expense, and claims and
judgments, are recorded only when payment is due.
Taxes, intergovernmental revenue, licenses and permits, charges for services, and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
The City reports the following major governmental fund:
• The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
29
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (cont…)
The City reports the following major proprietary funds:
• The Utility Fund accounts for the activities of the City’s water distribution, sewer collection and treatment
systems, and reuse system.
• The Sanitation Fund accounts for the activities of the City’s sanitation system.
• The Stormwater Fund accounts for the activities of the City’s stormwater system.
• The Building Code Enforcement Fund accounts for the activities of the City’s Building Department.
Additionally, the City reports the following fund types:
• Special Revenue Funds—The special revenue funds are used to account for the proceeds of specific revenue
sources (other than major capital projects) that are legally restricted to expenditures for specified purposes.
• Capital Projects Funds—The capital projects funds are used to account for the financial resources to be
used for the acquisition or construction of major capital facilities and improvement projects (other than
those financed by proprietary funds or special revenue funds).
• Pension Trust Funds—These funds account for the activities of the Employees’ Retirement System, which
accumulates resources for pension benefit payments to qualified police officers and general employees.
Fund Balance Classification
Fund Balance is reported in five components – non-spendable, restricted, committed, assigned, and unassigned:
• Non-Spendable 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
30
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (concluded)
When both restricted and unrestricted resources are available for use, it is the City’s practice to use restricted
resources first, then unrestricted resources as they are needed. When unrestricted resources (committed, assigned,
and unassigned) are available for use in any governmental fund, it is the City’s practice to use committed resources
first, then assigned, and then unassigned as needed.
The City Commission establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance.
This is typically done through adoption and amendment of the budget. A fund balance commitment is further
indicated in the budget document as a designation or commitment of the fund. Assigned fund balance is established
by City Commission through adoption or amendment of the budget as intended for specific purpose (such as the
purchase of fixed assets, construction, debt service, or for other purposes).
In the General Fund, the City strives to maintain a fund balance operating reserve 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 non-operating 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 non-operating revenues and expenses.
Budgets
General governmental revenue and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total appropriations
at the individual fund level.
Budgets are adopted for all governmental funds (general, special revenue, 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. These pooled cash, investments and related accrued investment earnings are reported in the financial
statements as “Equity in pooled cash and investments” under the City’s “pooling” concept (see Note 2). 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
31
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
The proprietary funds use this pool as a demand deposit accounts, and accordingly, all amounts in the pool are
considered cash and cash equivalents for the purposes of the statement of cash flows.
Investments are valued at fair market value (see Note 2).
Receivables
Receivables are recorded at their net realizable value.
Inter-Fund 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 inter-fund loans) or
“advances to/from other funds” (i.e., the non-current portion of inter-fund 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 non-spendable fund balance, which
indicates that it does not constitute “available spendable resources” even though it is a component of net current
assets. The cost of governmental fund-type inventories is recorded as expenditure when consumed.
Restricted Assets
Certain enterprise fund assets are required to be segregated from other current assets due to various bond indenture
agreements and City ordinances. These assets are legally restricted for specific purposes, such as debt service, new
construction, and renewals and replacements.
Use of Restricted Funds
When both restricted and unrestricted resources are available for use in the City’s funds, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, drainage
improvements, sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Property, plant and equipment with initial, individual costs
that equal or exceed $1,000 and estimated useful lives of over one year are recorded as capital assets. Capital assets
are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are
recorded at estimated acquisition 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
32
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Property, plant and equipment are depreciated using the straight-line method over the following estimated useful
lives:
Assets Years
Buildings and Improvements 10-40
Improvements Other Than Buildings 10-50
Infrastructure 25-100
Machinery and Equipment 3-40
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-
type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and refunding losses
are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are
expensed when incurred with the exception of bond insurance, which is amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received,
are reported as debt service expenditures.
Compensated Absences
Accumulated unpaid vacation and sick pay are accrued when incurred in the government-wide and proprietary fund
financial statements.
Deferred Inflows/Outflows of Resources
Deferred inflows of resources reported on applicable governmental fund types represent revenues, which are
measurable but not available in accordance with the modified accrual basis of accounting. The deferred inflows will
be recognized as revenue in the fiscal year they are earned or become available. Deferred outflows of resources
represent consumption of net position that is applicable to a future reporting period. Deferred outflows have a
positive effect on net position, similar to assets. Deferred inflows of resources represent the acquisition of net
position that is applicable to a future reporting period. Deferred inflows have a negative effect on net position,
similar to liabilities.
Unamortized Refunding Loss—the difference between the net reacquisition cost of new debt and the net carrying
amount of the old debt is recorded as a deferred outflow of resources. The unamortized refunding loss is recognized
as expense over the remaining term of the new debt using the straight-line method.
Pension and OPEB Related—the difference between expected and actual experience with regard to economic or
demographic factors and changes to assumptions in the measurement of total pension and OPEB liability and the
differences between expected and actual earnings on pension plan investments, are reported as deferred inflows or
outflows of resources, to be recognized in expense in future years. Contributions made subsequent to the
measurement date, but prior to the reporting date, are reported as deferred outflows of resources.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
33
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
Revenue Recognition
Utility revenues are reported on the accrual basis in the accompanying financial statements. Grant revenues are
recorded using the modified accrual basis in governmental funds and the accrual basis in the proprietary funds.
Restricted grant revenues, which are received but not expended, are recorded as unearned revenues.
Property Taxes
The assessment of all properties and the collection of all property taxes are made through the Property Appraiser
and Tax Collector of the City of Jacksonville, Florida. General property taxes are recorded as received, in cash, which
approximates taxes levied less discounts for the current fiscal year.
Taxes are levied on November 1 of each year. All taxes become delinquent on April 1 of the following year. Discounts
are allowed for early payment. On or prior to June 1, interest-bearing certificates are sold for all uncollected real
property taxes. Unsold certificates are held by the City of Jacksonville, Florida.
Inter-Fund Transactions
During the course of normal operations, the City has various transactions between funds to construct assets and
comply with local ordinances and other legal restrictions. These transactions are reflected as transfers. In addition,
certain transfers have been made between systems and accounts of the utility enterprise fund as required by bond
covenants.
Prior Period Information
The financial statements include certain prior year summarized comparative information in total. Such information
does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting
principles. Accordingly, such information should be read in conjunction with the City’s financial statements for the
year ended September 30, 2019, from which the summarized information was derived.
Future GASB Pronouncement Implementations
The City is currently evaluating the effects that the following GASB Statements, which will be implemented in future
financial statements, will have on its financial statements for subsequent fiscal years:
• Statement No. 87, “Leases.”
This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows
of resources or outflows of resources based on the payment provisions of the contract. It establishes a single
model for lease accounting based on the foundational principle that leases are financings of the right to use an
underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-
to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources,
thereby enhancing the relevance and consistency of information about governments’ leasing activities. This
statement is currently under review and the City will consider the impact, if any, upon financial reporting.
The effective date for this Statement was originally for those years beginning after June 15, 2020 but this date
was extended with the passage of Statement No. 95, “Postponement of the Effective Dates of Certain
Authoritative Guidance.” The provisions of this statement are now effective for fiscal years beginning after June
15, 2021.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont…)
• Statement 89, “Accounting for Interest Cost Incurred before the End of a Construction Period”
This statement will improve financial reporting by providing users of financial statements with more relevant
information about capital assets and the cost of borrowing for a reporting period by requiring that financial
statements prepared using the economic resources measurement focus report interest cost incurred before the
end of a construction period as an expense in the period in which the cost is incurred.
The provisions of this statement are effective for fiscal years beginning after December 15, 2020.
• Statement 91, “Conduit Debt Obligations”
This statement will improve financial reporting by enhancing the comparability and consistency of conduit debt
obligation reporting and reporting of related transactions and other events.
The effective date for this Statement was originally for those years beginning after December 15, 2020 but this
date was extended with the passage of Statement No. 95, “Postponement of the Effective Dates of Certain
Authoritative Guidance.” The provisions of this statement are now effective for fiscal years beginning after
December 15, 2021.
• Statement 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue
Code Section 457 Deferred Compensation Plans.”
This statement increases consistency and comparability related to the reporting of fiduciary component units in
circumstances in which a potential component unit does not have a governing board and the primary
government performs the duties that a governing board typically would perform; (2) mitigate costs associated
with the reporting of certain defined contribution pension plans, defined contribution other postemployment
benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee
benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the
relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code
(IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan
and for benefits provided through those plans.
The provisions of this statement are effective for fiscal years beginning after June 15, 2021.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
35
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.
On September 30, 2020, the carrying amount of cash on hand and on deposit with banks, including interest-bearing
deposits was $6,442,730, and the related bank balance was $7,421,929. Monies which are placed on deposit with
financial institutions in the form of demand deposit accounts, time deposit accounts, and certificates of deposit are
defined as public deposits. All of the City’s public deposits are held in qualified public depositories pursuant to
Florida Statutes Chapter 280, Florida Security for Public Deposits Act (the Act). Under the Act, all qualified public
depositories are required to pledge eligible collateral having a market value equal to or greater than the average
daily or monthly balance of all public deposits, times the depository’s collateral pledged level. The pledging level
may range from 25% to 125% depending upon the depository’s financial condition and establishment period. All
collateral must be deposited with an approved financial institution.
Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral
and, if necessary, assessments against other qualified public depositories of the same type as the depository in
default.
The City elected to adopt a written investment policy as authorized under Florida Statutes.
Under the City’s investment policies, general investments’ activities are authorized to invest in obligations of the
U.S. Treasury, demand deposits, U.S. government agency securities, certificates of deposit, U.S. government
sponsored enterprises, government and corporate fixed income mutual funds, corporate notes and bonds, and local
government investment pools. Pension trust funds can invest in the aforementioned and, additionally, authorized
investments include domestic and foreign equity securities, domestic and foreign fixed income securities, and cash
equivalent securities.
Following are the investments, credit ratings, and maturities of the City’s governmental and business-type activities
on September 30, 2020:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Accrued interest $ 79,145 $ 79,145 $ - $ - $ - 79,145
Money market funds / cash 207,870 207,870 - - - 207,870
Corporate bonds 5,422,361 751,980 4,324,434 345,947 - 5,422,361
U.S. Treasury Obligations and
Federal Agency Securities 11,698,425 1,528,523 9,935,473 234,429 - 11,698,425
Florida PRIME 24,526 24,526 - - - 24,526
Total $ 17,432,327 $ 2,592,044 $ 14,259,907 $ 580,376 $ - $ 17,432,327
The Florida PRIME component of the cash and investments is an investment in an investment pool administered by
the State Board of Administration, under the regulatory oversight of the State of Florida. Florida PRIME meets all the
necessary criteria to report their investments at amortized cost in accordance with GASB Cod. Sec. In5. As of
September 30, 2020, there were no redemption fees, maximum transaction amounts or any other requirements
that service to limit the City’s access to one hundred percent of their account value. The fair value of the City’s
position in the pool in the same as the value of the pool shares.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
36
NOTE 2 – CASH AND INVESTMENTS (cont…)
The City’s fixed income investment balances as of on September 30, 2020, are comprised of the following items:
Percentage of
S & P Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds AAA 0.40%
Corporate Bonds AA+ 0.31%
Corporate Bonds AA 0.18%
Corporate Bonds AA- 1.05%
Corporate Bonds A+ 2.01%
Corporate Bonds A 5.83%
Corporate Bonds A- 6.42%
Corporate Bonds BBB+ 6.79%
Corporate Bonds BBB 3.10%
Corporate Bonds BBB- 0.25%
Corporate Bonds Not Rated 5.33%
U.S. Treasury Obligations and Federal Agency Securities AAA 5.65%
U.S. Treasury Obligations and Federal Agency Securities AA+ 55.96%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 6.72%
100.00%
Listed below are the investments, credit ratings and maturities in the City’s pension trust funds on September 30,
2020:
General Employees’ Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 458,973 $ 458,973 $ - $ - $ - $ 458,973
Corporate bonds 2,171,497 79,031 1,164,884 927,582 - 2,171,497
U.S. Treasury Obligations and
Federal Agency Securities 1,960,889 - 1,223,927 227,875 509,087 1,960,889
Fixed Income Mutual Funds 1,891,688 1,891,688 - - - 1,891,688
Total $ 6,483,047 $ 2,429,692 $ 2,388,811 $ 1,155,457 $ 509,087 $ 6,483,047
Police Officers Pension Plan:
Investment Maturities
Fair Less than 1-5 6-10 More than
Investment Type Value 1 Year Years Years 10 Years Total
Money market funds / cash $ 280,487 $ 280,487 $ - $ - $ - $ 280,487
Corporate bonds 1,256,454 45,595 676,057 534,802 - 1,256,454
U.S. Treasury Obligations and
Federal Agency Securities 1,126,008 - 711,844 120,736 293,428 1,126,008
Fixed Income Mutual Funds 1,076,142 1,076,142 - - - 1,076,142
Total $ 3,739,091 $ 1,402,224 $ 1,387,901 $ 655,538 $ 293,428 $ 3,739,091
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
37
NOTE 2 – CASH AND INVESTMENTS (cont…)
The City’s pension trust fund fixed income investment balances as of September 30, 2020, are comprised of the
following items:
General Employees’ Pension Plan:
Percentage of
S & P Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds AAA 7.20%
Corporate Bonds A- 10.94%
Corporate Bonds BBB+ 9.06%
Corporate Bonds BBB 13.25%
Corporate Bonds BBB- 12.09%
U.S. Treasury Obligations and Federal Agency Securities AA+ 35.13%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 12.33%
100.00%
Police Officers Pension Plan:
Percentage of
S & P Credit Total Fixed Income
Investment Type Rating Investments
Corporate Bonds AAA 7.23%
Corporate Bonds A- 10.95%
Corporate Bonds BBB+ 11.21%
Corporate Bonds BBB 13.27%
Corporate Bonds BBB- 10.08%
U.S. Treasury Obligations and Federal Agency Securities AA+ 34.95%
U.S. Treasury Obligations and Federal Agency Securities Not Rated 12.31%
100.00%
Credit Risk—It is the City’s Police Officers’ Retirement System Trust Fund’s and the City’s General Employees’
Retirement System Trust Fund’s investment policies to, at a minimum, limit 80% of the total fixed income portfolio
to those that are rated investment grade of higher. The Police Officers’ Retirement System Trust Fund’s investment
policy defines investment grade as “BBB”, Baa”, or their equivalent.
Also, no more than 10% (at cost) of the fixed income portfolio total value can be invested in the securities of any
single corporate issuer. The maximum allocation to International Equities is 25%.
Custodial Credit Risk—For an investment, custodial credit risk is the risk that, in the event of the failure of the
counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the
possession of an outside party.
The City’s investment policy does not contain legal or policy requirements that would limit the exposure to custodial
credit risk for deposits or investments, other than the following provision for deposits: The Finance Director may
execute a third party Custodial Safekeeping Agreement with a commercial bank having trust powers or a trust
company which is chartered by the United States government or the State of Florida. All securities purchased and/or
collateral obtained by the City shall be properly designated as an asset of the City and held in safekeeping by the
trust department or trust company, and no withdrawal of such securities, in whole or in part, shall be made from
safekeeping, except by an authorized City staff member. The third party Custodial Safekeeping Agreement shall
include letters of authority from the City with details as to responsibilities of parties, notification of security
purchases, sales, deliver, repurchase agreements, wire transfers, safekeeping and transaction costs, procedures in
case of wire failure or other unforeseen mishaps, including liability of each party.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
38
NOTE 2 – CASH AND INVESTMENTS (concluded)
Fair Value Measurements
The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels:
• Level 1 Inputs―are quoted prices (unadjusted) for identical assets or liabilities in active markets that a
government can access at the measurement date.
• Level 2 Inputs―are inputs other than quoted prices included within Level 1 that are observable for an asset
or liability, either directly or indirectly.
• Level 3 Inputs―are unobservable inputs for an asset or liability.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price
for an identical asset or liability is not observable, a government should measure fair value using another valuation
technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs.
The City’s investments are measured at fair value on a recurring basis. Fair value measurements are categorized
based on the valuation inputs used to measure an asset’s fair value in the hierarchy described above.
The fair value measurements for the City’s investments are as follows on September 30, 2020:
Fair Value Measurements Using
Quoted Prices in Significant Other Significant
Active Markets for Observable Unobservable
Identical Assets Inputs Inputs
Investments by Fair Value Level Amount (Level 1) (Level 2) (Level 3)
City Investments:
Accrued interest $ 79,145 $ 79,145 $ - $ -
Money Markets 232,396 232,396 - -
Corporate Bonds 5,422,361 - 5,422,361 -
U.S. Treasury Obligations and
Federal Agency Securities 11,698,425 - 11,698,425 -
Subtotal - City Investments 17,432,327 311,541 17,120,786 -
General Employees' Pension Plan:
Money Markets 458,973 458,973 - -
Corporate Bonds 2,171,497 - 2,171,497 -
U.S. Treasury Obligations and
Federal Agency Securities 1,960,889 - 1,960,889 -
Mutual Funds - Fixed Income 1,891,688 1,891,688 - -
Mutual Funds - Equities 2,646,865 2,646,865 - -
ETFs 3,679,755 3,679,755 - -
Equities 8,832,404 8,832,404 - -
ICMA Self Directed - - - -
Subtotal - General Employees' Pension Plan 21,642,071 17,509,685 4,132,386 -
Police Officers' Pension Plan:
Money Markets 280,487 280,487 - -
Corporate Bonds 1,256,454 - 1,256,454 -
U.S. Treasury Obligations and
Federal Agency Securities 1,126,008 - 1,126,008 -
Mutual Funds - Fixed Income 1,076,142 1,076,142 - -
Mutual Funds - Equities 1,631,395 1,631,395 - -
ETFs 1,897,151 1,897,151 - -
Equities 5,277,957 5,277,957 - -
ICMA Self Directed 175,316 175,316 - -
Subtotal - Police Officers' Pension Plan 12,720,910 10,338,448 2,382,462 -
Total Investments Measured at Fair Value $ 51,795,308 $ 28,159,674 $ 23,635,634 $ -
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
39
NOTE 3 – RECEIVABLES
Receivables, net of the allowance for doubtful accounts on September 30, 2020, consist of the following:
Less
Total Allowance Accounts
Accounts for Doubtful Receivable
Fund Receivable Accounts Net
General Fund $ 54,055 $ - $ 54,055
Utility Fund 1,113,441 (450,021) 663,420
Stormwater Fund 71,845 (15,597) 56,248
Sanitation Fund 140,902 (53,602) 87,300
Total $ 1,380,243 $ (519,220) $ 861,023
Included in accounts receivable are $244,053 of water and sewer revenues earned, but not billed as of September
30, 2020.
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 due to the City on September 30, 2020:
Notes Receivable $ 135,079
(Current Portion) (15,759)
Total Notes Receivable - Noncurrent $ 119,320
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
40
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended September 30, 2020, is as follows:
Balance Balance
October 1, September 30,
2019 Transfers Increases Decreases 2020
Governmental Activities:
Capital assets, not being depreciated:
Land $ 11,913,572 $ - $ - - $ 11,913,572
Construction in process 897,951 - 169,414 - 1,067,365
Total capital assets, not being depreciated 12,811,523 - 169,414 - 12,980,937
Capital assets, being depreciated:
Buildings 9,547,484 - - - 9,547,484
Intangible assets 448,322 (12,846) 89,969 - 525,445
Improvements other than buildings 42,222,685 12,846 274,097 - 42,509,628
Machinery and equipment 5,657,522 - 522,602 - 6,180,124
Total capital assets, being depreciated 57,876,013 - 886,668 - 58,762,681
Less accumulated depreciation for:
Buildings (2,572,148) - (170,395) - (2,742,543)
Intangible assets (396,144) - (24,958) - (421,102)
Improvements other than buildings (17,671,486) - (709,207) - (18,380,693)
Machinery and equipment (4,357,787) - (604,762) - (4,962,549)
Total accumulated depreciation (24,997,565) - (1,509,322) - (26,506,887)
Total capital assets being depreciated, net 32,878,448 - (622,654) - 32,255,794
Governmental activities capital assets, net $ 45,689,971 $ - $ (453,240) $ - $ 45,236,731
Business-type activities:
Capital assets, not being depreciated:
Land $ 1,656,018 $ - $ - $ - $ 1,656,018
Construction-in-progress 1,690,413 - 748,386 - 2,438,799
Total capital assets, not being depreciated 3,346,431 - 748,386 - 4,094,817
Capital assets, being depreciated:
Buildings 4,356,384 - - - 4,356,384
Intangible assets 244,709 - - - 244,709
Improvements other than buildings 85,657,044 - 157,244 - 85,814,288
Machinery and equipment 3,503,245 - 190,794 - 3,694,039
Total capital assets, being depreciated 93,761,382 - 348,038 - 94,109,420
Less accumulated depreciation for:
Buildings (4,320,769) - (8,442) - (4,329,211)
Intangible assets (31,234) - (190) - (31,424)
Improvements other than buildings (52,227,900) (2,307) (2,293,532) - (54,523,739)
Machinery and equipment (2,399,937) 2,307 (269,819) - (2,667,449)
Total accumulated depreciation (58,979,840) - (2,571,983) - (61,551,823)
Total capital assets being depreciated, net 34,781,542 - (2,223,945) - 32,557,597
Business-type activities capital assets, net $ 38,127,973 $ - $ (1,475,559) $ - $ 36,652,414
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
41
NOTE 5 – CAPITAL ASSETS (concluded)
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government $ 204,559
Public safety 375,860
Transportation 577,907
Parks and recreation 350,996
Total depreciation expense - governmental activities $ 1,509,322
Business-type Activities:
Utility $ 1,899,373
Stormwater 652,585
Sanitation 771
Building Code Enforcement 19,254
Total depreciation expense - business-type activities $ 2,571,983
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
42
NOTE 6 – LONG-TERM OBLIGATIONS
The following is a summary of the changes in long-term obligations of the City for the year ended September 30,
2020:
Balance Balance Amounts
October 1, September 30, Due within
2019 Increases Decreases 2020 One Year
Governmental Activities:
Long-term debt:
Capital Improvement Revenue Bond, Series 2018 $ 1,400,000 $ - $ (70,000) $ 1,330,000 $ 75,000
Total long-term debt 1,400,000 - (70,000) 1,330,000 75,000
Other liabilities:
OPEB obligation 336,441 - (66,177) 270,264 -
Net pension liability 5,328,821 - (296,244) 5,032,577 -
Compensated absences 762,351 184,664 - 947,015 204,663
Total other liabilities 6,427,613 184,664 (362,421) 6,249,856 204,663
Total long-term obligations $ 7,827,613 $ 184,664 $ (432,421) 7,579,856 $ 279,663
Less amounts due in one year (279,663)
Total noncurrent obligations due in more than one year $ 7,300,193
Business-type Activities:
Long-term debt:
Utility System Revenue Refunding Bond, Series 2014 $ 9,310,000 $ - $ (1,240,000) $ 8,070,000 $ 1,265,000
FDEP Loan DW160710 490,006 - (36,848) 453,158 37,853
FDEP Loan WW160700 5,430,002 - (344,131) 5,085,871 355,022
Capital Lease Payable - 2018 204,535 - (65,536) 138,999 68,144
Total bonds and notes payable 15,434,543 - (1,686,515) 13,748,028 1,726,019
Other liabilities:
OPEB obligation 133,514 - (23,551) 109,963 -
Net pension liability 1,772,211 - (105,406) 1,666,805 -
Compensated absences 250,003 64,634 - 314,637 57,538
Total other liabilities 2,155,728 64,634 (128,957) 2,091,405 57,538
Total long-term liabilities $ 17,590,271 $ 64,634 $ (1,815,472) 15,839,433 $ 1,783,557
Less amounts due in one year (1,783,557)
Net long-term liabilities in excess of one year $ 14,055,876
Notes to the Long-Term Obligations Table:
Long term liabilities, including accumulated compensated absences, OPEB liability and the City’s net pension
liabilities, are typically liquidated by the individual fund to which the liability is directly associated.
All of the City’s long-term debt arose through direct borrowings or direct placements.
Governmental Activities:
• Capital Improvement Revenue Bond, Series 2019 – Payable in annual installment of principal and
semiannual installments of interest through October 1, 2033, bearing coupon rates of 3.550%, secured
solely by a pledge of non-advalorem revenues.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
43
NOTE 6 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
Business-type Activities
• Utilities System Revenue Refunding Bond, Series 2014, Payable in Annual Installments of Principal and
Semiannual Installments of Interest Through October 1, 2025, Bearing Coupon Rates of 2.330%, Secured
Solely by a Pledge of and Lien on Net Water and Sewer System Revenues and Certain Other Revenues
as Defined in the Bond Ordinance.
• Florida Department of Environmental Protection,(FDEP) disbursements and capitalized interest for a
$773,030 state of Florida revolving loan #DW160710, issued to finance the construction costs to replace a
well at water treatment plant no. 1 and a transmission main on Ocean Boulevard, payable in semiannual
installments of principal and interest through November 15, 2030, with financing rates of 2.71%, secured
solely by a pledge of net water and sewer system revenues, after payment of all yearly payment obligations
on account of the senior revenue obligations, as defined in the loan agreement.
• Florida Department of Environmental Protection (FDEP), Disbursements, Service Fee, and Capitalized
Interest for a Combined $9,368,576 State of Florida Revolving Loan #WW160700, Issued to Finance the
Construction of Treatment and Transmission Facilities for the Buccaneer WWTP Phase-out Improvements
and TMDL Compliance Program WWTP #1, Payable in Semiannual Installments of Principal and Interest
Through May 15, 2032, with Financing Rates of 3.14% and 2.88%, Secured Solely by a Pledge of Net Water
and Sewer System Revenues, After Payment of all Yearly Payment Obligations on Account of the Senior
Revenue Obligations, as Defined in the Loan Agreement.
• Capital Lease Payable – 2018 - The City entered into a lease agreement for financing the acquisition of a
Vac-Con Vacuum Truck. Lease payments including principal and interest are due each September 1, until
2022 at an interest rate of 3.98%.
The asset acquired through the capital lease are as follows:
Business-type
Activities
Asset:
Vac-Con vacuum truck $ 334,544
Less: accumulated depreciation (148,686)
Net book value $ 185,858
The future minimum lease obligations and the net present value of these minimum lease payments as of
September 30, 2020, were as follows:
Year Ending
September 30 Principal Interest Total
2021 $ 68,144 $ 5,532 $ 73,676
2022 70,855 2,820 73,675
$ 138,999 $ 8,352 $ 147,351
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
44
NOTE 6 – LONG-TERM OBLIGATIONS (cont…)
Notes to the Long-Term Obligations Table:
The annual requirements to amortize all revenue bonds and loans payable outstanding at September 30, 2020, are
as follows:
Governmental Activities Business-type Activities
Fiscal Year Ending Principal Interest Principal Interest
2021 $ 75,000 $ 45,884 $ 1,657,875 $ 409,836
2022 80,000 43,133 1,705,143 356,031
2023 80,000 40,293 1,747,795 300,790
2024 85,000 37,364 1,790,842 244,183
2025 85,000 34,346 1,834,297 186,195
2026-2030 475,000 123,096 3,863,525 393,708
2031-2035 450,000 32,838 1,009,552 39,294
Total $ 1,330,000 $ 356,954 $ 13,609,029 $ 1,930,037
Interest and amortization incurred during the year ended September 30, 2020, amounted to $570,184. Of the
amount incurred, no interest was capitalized.
The City is also required to maintain certain debt service coverage ratios in accordance with bond resolutions. As of
September 30, 2020, and during the year then ended, the City was in compliance with those ratios.
Pledged Revenue
The City has pledged certain revenues to repay certain bonds and notes outstanding as of September 30, 2020. The
following table reports the revenues, sometimes net of related operating expenses, pledged for each debt issue, the
amounts of such revenues received in the current year, the current year principal and interest paid on the debt, the
approximate percentage of each revenue which is pledged to meet the debt obligation, and the date through which
the revenue is pledged under the debt agreement, and the total pledged future revenues for each debt, which is the
amount of the remaining principal and interest on the bonds and notes at September 30, 2020:
Percentage
of Net
Revenue Total Principal Current Year Revenues to
Pledged and Interest Principal and Current Year Principal and
Description Pledged Revenue Through Outstanding Interest Paid Net Revenue Interest Paid
2014 - Utility System
Refunding Bonds Utility Net Revenues 2026 $ 8,871,903 $ 1,442,478 $ 4,755,587
FDEP Loan DW160710 Utility Net Revenues 2031 $ 523,727 $ 49,879 $ 4,755,587
FDEP Loan WW160700 Utility Net Revenues 2032 $ 6,143,436 $ 511,953 $ 4,755,587
Total $ 15,539,066 $ 2,004,310 $ 4,755,587 237.27%
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
45
NOTE 6 – LONG-TERM OBLIGATIONS (concluded)
Remedies in the Event of Default
The City’s debt obligations all allow for the obligors to take whatever legal actions necessary to collect the amounts
due in the event of default. The following debt obligations have additional remedies in the event of default as
follows:
• FDEP Loans DW160710 and WW160700 - The lender, subject to the rights of superior liens on the pledged
revenues, may request a court to appoint a receiver to manage the water and sewer systems, intercept the
delinquent amount from any unobligated funds due to the City under any revenue or tax sharing fund
established by the State of Florida, impose a penalty in the amount not to exceed a rate of 18 percent per
annum on the amount due, notify financial market credit rating agencies and potential creditors and may
accelerate the repayment schedule or increase the interest rate on the unpaid principal of the loan to as
much as three times the loan interest rate.
Conduit Debt
The City has issued Health Facility Revenue and Refunding Bonds to provide financial assistance to private sector
entities for the acquisition and construction of health care facilities deemed to be in the public interest. These bonds
are secured by the financed property and are payable solely from the payments received on the underlying mortgage
loans.
There is no obligation on the part of the City or any political subdivision for repayment of the bonds. Accordingly,
the bonds are not reported as liabilities in the accompanying financial statements. As of September 30, 2020, there
are two series of Health Facility Revenue and Refunding Bonds outstanding, with an aggregate principal amount
payable of $165,495,000.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
46
NOTE 7 – DEFINED BENEFIT PENSION PLANS
Plan Descriptions
The City maintains two separate single employer defined benefit pension plans, one for police officers and one for
general employees, which cover substantially all full-time City employees hired before September 1, 2008. The
general employees’ defined benefit plan is closed to new entrants. Full-time general employees hired on or after
September 1, 2008, are covered by the defined contribution plan disclosed in Note 8. The pension plans do not issue
separate stand-alone financial statements. Combining statements are included in the supplementary information
to the basic financial statements.
General Employees’ Retirement Plan
Plan Description
The General Employees’ Retirement Plan (the Plan) provides retirement, disability, and death benefits to Plan
members and their beneficiaries. The City Commission has the authority to establish and amend the benefit
provisions of the Plan. The Plan is governed by a Retirement Plan Board appointed by the City Commission and
comprised of five members, two of which will be eligible legal residents of the City, two of which will be general
employees elected by the majority of general employees who are members of the Plan, and one of which will be
elected by the other four members. Plan membership in the General Employees’ Retirement Plan as of September
30, 2020 and 2019, is as follows:
September 30 September 30
2019 2018
Inactive plan members or beneficiaries
currently receiving benefits 75 74
Inactive plan members entitled to but
not yet receiving benefits 7 7
Active plan members 28 34
Total 110 115
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, 2020, Plan net position included $0 of DROP account balances.
Contributions
The City is required to contribute at an actuarially determined rate (83.9%) of covered payroll for the year ended
September 30, 2020. City contributions to the Plan were $1,362,952 for the year ended September 30, 2020. 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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
47
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2019, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 2020, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Plan for the year ended September 30, 2020 is
shown below.
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2019 $ 23,534,251 $ 19,714,297 $ 3,819,954
Changes for the year:
Service cost 332,673 - 332,673
Interest 1,566,226 - 1,566,226
Difference between actual and
expected experience 40,197 - 40,197
Contributions - City - 1,424,479 (1,424,479)
Contributions - employee - 107,745 (107,745)
Net investment income - 619,176 (619,176)
Benefit payments, including refunds
of employee contributions (1,327,161) (1,327,161) -
Administrative expense - (40,584) 40,584
Net changes 611,935 783,655 (171,720)
Reporting period ending 9/30/2020 $ 24,146,186 $ 20,497,952 $ 3,648,234
*Note: Plan Net Position per Fiduciary Statement of Net Position on page 52 is different than the Plan Net Position
noted above primarily due to reporting differences between the actuarially determined changes in the net pension
liability above and the Fiduciary Statement of Net Position. Differences are immaterial.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
48
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability for the Plan as of the September 30, 2020 measurement date were as
follows:
Total pension liability $ 24,665,518
Plan fiduciary net position (21,719,136)
Net pension liability (asset) $ 2,946,382
Plan fiduciary net position as a
percentage of the total pension liability 88%
For the year ended September 30, 2020, the City recognized total pension expense of $706,803. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 21,056 $ 61,721
Change in assumptions 90,719 -
Difference between projected and
actual earnings on Plan investments 30,047 -
City contributions subsequent to the
measurement date 1,362,952 -
Total $ 1,504,774 $ 61,721
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability in the fiscal year ended September 30, 2021. Other amounts reported as deferred outflows of resources
related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2021 $ (94,207)
2022 (47,403)
2023 78,293
2024 143,418
$ 80,101
Plan Investments
The Retirement Plan Board is responsible for establishing and amending the Plan’s investment policies. The Plan’s
current investment policy gives the Board discretion to allocate assets with assistance of the Plan’s investment
consultant. No formal targets are stated in the investment policy although the maximum allocation to international
equities is 25%. The money-weighted rate of return on Plan investments, net of investment related expenses, was
6.41% and 4.04% for the years ended September 30, 2020 and 2019, respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
49
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of October 1, 2018, rolled forward
to the measurement date of September 30, 2019, using the following actuarial assumptions, applied to all periods
included in the measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 9.50% (including 2.50% price inflation.
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: RP-2000 Combined Healthy Participant Mortality Table for males and
females with generational projections from the Year 2000 Projection Scale
BB.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.40%
US Large-Cap Value Stocks 12% 7.00%
US Mid-Cap Growth Stocks 3% 8.60%
US Mid-Cap Value Stocks 4% 7.80%
US Mid-Cap Core Stocks 3% 6.90%
US Small-Cap Growth Stocks 5% 9.60%
US Small-Cap Value Stocks 5% 8.60%
International Equities 5% 7.20%
US Investment Grade Bonds 40% 1.80%
Cash (US 90-day T-Bill) 10% 0.20%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
50
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
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 noted below, as well as what the City's net pension liability would be
if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the
current rate for both the measurement date of September 30, 2019 and the financial reporting date of September
30, 2020.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2019 6.75% $ 6,263,183 $ 3,648,234 $ 1,407,059
9/30/2020 6.75% $ 5,568,387 $ 2,946,382 $ 699,271
Police Officers’ Retirement Plan
Plan Description
The Police Officers’ Retirement Plan (the Police Plan) provides retirement, disability, and death benefits to Police
Plan members and their beneficiaries. The Police Plan is governed by the Policemen’s Pension Board of Trustees,
although the City Commission retains the authority to establish and amend the benefit provisions of the Police Plan.
The Policemen’s Pension Board of Trustees is appointed by the City Commission and comprised of five members,
two of which will be eligible legal residents of the City, two of which will be police officers elected by the majority of
police officers who are members of the Police Plan, and one of which will be elected by the other four trustees.
Membership in the Police Officers’ Retirement Plan as of the September 30, 2019 and 2018 measurement dates, is
as follows:
September 30 September 30
2019 2018
Inactive plan members or beneficiaries
currently receiving benefits 23 22
Inactive plan members entitled to but
not yet receiving benefits 3 4
Active plan members 26 24
Total 52 50
Plan Benefits
For members hired before January 1, 2013, normal retirement is available upon the attainment of age fifty and the
completion of twenty years of credited service, the attainment of age fifty-five and the completion of ten years of
credited service, the completion of twenty-five years of credited service regardless of age, or the attainment of age
sixty and the completion of five years of credited service. For members hired on or after January 1, 2013, normal
retirement is available upon the attainment of age fifty-five and the completion of ten years of credited service or
the attainment of age fifty-two and the completion of twenty-five years of credited service. Early retirement is
available with a reduced benefit upon the attainment of age fifty and the completion of ten years of credited service.
For members hired before January 1, 2013, the normal retirement benefit shall equal 3.00% of average final
compensation for each year of credited service. For members hired on or after January 1, 2013, the normal
retirement benefit shall equal 2.00% of average final compensation for each year of credited service. The Police Plan
includes a DROP under which members eligible for normal retirement may have their monthly pension benefit
credited to an account while continuing to be actively employed for up to five years. As of September 30, 2019,
Police Plan net position included $0 of DROP account balances.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
51
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Contributions
The City is required to contribute, at actuarially determined rate (33.2%) of covered payroll for the year ended
September 30, 2020. The City may use State contributions to offset this required contribution. City and State
contributions to the Police Plan were $877,866 for the year ended September 30, 2020. Police Plan members are
required to contribute 8.0% of their annual covered salary. Per City Code, the City Commission may amend
established contribution requirements.
Measurement Date
The City elected to use a measurement date to value the net pension liability and related deferred inflows and
outflows as of September 30, 2019, one year prior to the reporting date. The City’s Pension Plans do not issue
separate financial statements. Therefore, the disclosures required for the Plan as of September 30, 2020, are also
included below.
Net Pension Liability
The components of the changes in the net pension liability for the Police Plan for the year ended September 30,
2020 (September 30, 2019 measurement date) is shown below:
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position (Asset) Liability
(a) (b) (a)-(b)
Reporting period ending 9/30/2019 $ 15,445,722 $ 12,164,644 $ 3,281,078
Changes for the year:
Service cost 332,419 - 332,419
Interest 1,026,422 - 1,026,422
Difference between actual and
expected experience (351,262) - (351,262)
Contributions - City - 826,705 (826,705)
Contributions - employee - 142,024 (142,024)
Net investment income - 307,543 (307,543)
Benefit payments, including refunds
of employee contributions (1,143,777) (1,143,777) -
Administrative expense - (38,763) 38,763
Net changes (136,198) 93,732 (229,930)
Reporting period ending 9/30/2020 $ 15,309,524 $ 12,258,376 $ 3,051,148
*Note: Plan Net Position per Fiduciary Statement of Net Position on page 52 is different than the Plan Net Position
noted above primarily due to reporting differences between the actuarially determined changes in the net pension
liability above and the Fiduciary Statement of Net Position. Differences are immaterial.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
52
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
The components of the net pension liability for the Police Plan as of the September 30, 2020 measurement date
were as follows:
Total pension liability $ 16,100,283
Plan fiduciary net position (13,153,186)
Net pension liability (asset) $ 2,947,097
Plan fiduciary net position as a
percentage of the total pension liability 82%
For the year ended September 30, 2020, the City recognized total pension expense of $601,041. The City reported
deferred outflows of resources and deferred inflows of resources related to the General Employees’ Pension Plan
from the following sources:
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
Differences between expected and
actual experience $ 57,416 $ 360,942
Change in assumptions 227,491 -
Net difference between projected and
actual earnings on Plan investments 117,128 -
City contributions subsequent to the
measurement date 877,867 -
Total $ 1,279,902 $ 360,942
Contributions made after the measurement date (shown above) will be recognized as a reduction of net pension
liability in the fiscal year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year ending
September 30, Amount
2021 $ (15,432)
2022 (21,564)
2023 (4,937)
2024 83,026
$ 41,093
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 Plan investments, net
of investment related expenses, was 6.15% and 4.38% for the years ended September 30, 2020 and 2019,
respectively.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
53
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
Actuarial Assumptions
The total pension liability was determined by actuarial valuations for the Plan as of September 30, 2018, rolled
forward to September 30, 2019, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation: 2.50%
Salary Increases: Age based ranging from 4.80% to 18.50% (including 2.50% price inflation.
Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses.
Mortality: RP-2000 Combined Healthy Participant Mortality Table for males and
females with generational projections from the Year 2000 Projection Scale
BB.
Date of Experience Study: Dated August 9, 2017 for the period October 1, 2009 to September 30, 2016
Long Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method
in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense of 0.50% and inflation of 2.50%) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the pension plan's target asset allocation (see the discussion of the
pension plans’ investment policy) are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Net Rate of Return
US Large-Cap Growth Stocks 13% 7.40%
US Large-Cap Value Stocks 12% 7.00%
US Mid-Cap Growth Stocks 3% 8.60%
US Mid-Cap Value Stocks 4% 7.80%
US Mid-Cap Core Stocks 3% 6.90%
US Small-Cap Growth Stocks 5% 9.60%
US Small-Cap Value Stocks 5% 8.60%
International Equities 5% 7.20%
US Investment Grade Bonds 40% 1.80%
Cash (US 90-day T-Bill) 10% 0.20%
Discount Rate
A single discount rate was used to measure the total pension liability. The single discount rate was based on the
expected rate of return on Plan investments of 6.75%. The projection of cash flows used to determine the single
discount rate assumed that plan member contributions will be made at the current contribution rate and that City
contributions will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of
return on Plan investments (6.75%) was applied to all periods of projected benefit payments to determine the total
pension liability.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
54
NOTE 7 – DEFINED BENEFIT PENSION PLANS (cont…)
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 noted below, as well as what the City's net pension liability would be
if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the
current rate for both the measurement date of September 30, 2019 and the financial reporting date of September
30, 2020.
Current
As of Discount
September, Rate 1% Decrease Current Rate 1% Increase
9/30/2019 6.75% $ 4,821,956 $ 3,051,148 $ 1,406,207
9/30/2020 6.75% $ 4,884,449 $ 2,947,097 $ 1,329,735
The Statements of Fiduciary Net Position for the City’s pension trust funds for the year ended September 30, 2020
were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2020 2019
Plan Plan Totals Totals
ASSETS
Cash and cash equivalents $ 72,186 $ 423,428 $ 495,614 $ 318,445
Accrued income 20,841 12,047 32,888 35,719
Investments at fair value 21,642,071 12,720,910 34,362,981 32,403,671
Total assets 21,735,098 13,156,385 34,891,483 32,757,835
LIABILITIES
Accounts payable and accrued liabilities 4,310 3,500 7,810 -
Due to City - - - 11,652
Total Liabilities 4,310 3,500 7,810 11,652
NET POSITION
Restricted for pension benefits $ 21,730,788 $ 13,152,885 $ 34,883,673 $ 32,746,183
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
55
NOTE 7 – DEFINED BENEFIT PENSION PLANS (concluded)
The Statements of Changes in Fiduciary Net Position for the City’s pension trust funds for the year ended September
30, 2020 were as follows:
Pension Trust Funds
General Police
Employees' Officers'
Retirement Retirement 2020 2019
Plan Plan Totals Totals
ADDITIONS
Contributions:
City $ 1,362,952 $ 745,022 $ 2,107,974 $ 2,251,184
Plan members 96,921 161,166 258,087 249,769
State of Florida - 132,844 132,844 -
Total contributions 1,459,873 1,039,032 2,498,905 2,500,953
Investment income 1,226,055 650,107 1,876,162 1,039,693
Less investment expenses: (75,430) (42,831) (118,261) (111,228)
Net investment income 1,150,625 607,276 1,757,901 928,465
Total additions 2,610,498 1,646,308 4,256,806 3,429,418
DEDUCTIONS
Administrative expenses 42,469 31,418 73,887 86,926
Payments to retirees and participants 1,329,553 715,876 2,045,429 2,470,938
Total deductions 1,372,022 747,294 2,119,316 2,557,864
CHANGE IN NET POSITION 1,238,476 899,014 2,137,490 871,554
NET POSITION, beginning of year 20,492,312 12,253,871 32,746,183 31,874,629
NET POSITION, end of year $ 21,730,788 $ 13,152,885 $ 34,883,673 $ 32,746,183
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
56
NOTE 8 – DEFINED CONTRIBUTION PLAN
The City passed an ordinance in 2013 closing the General Employees’ defined benefit plan to new entrants and
creating the City of Atlantic Beach Defined Contribution Plan. The City’s 457 defined contribution plan is
administered through ICMA, which covers all eligible employees employed with the City on or after September 1,
2008, who are not covered by the City’s Police Officers’ defined benefit plan. Under the 457 Plan, the City
contributes an employer matching contribution of up to 6% of earnings during the first ten years of service.
Following ten years of service, the City contributes an additional fixed contribution of 4% of earnings for a total of
10%. Employees have the option to voluntarily contribute to the 457 Plan. Employer matching contributions from
the City were $107,404 and $88,051 for the years ended September 30, 2020 and 2019, respectively. Under the 457
Plan, an employee is considered fully vested after 5 years of completed service.
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The City of Atlantic Beach administers a single employer defined benefit health care plan (the Plan) that provides
medical insurance benefits to its employees and their eligible dependents. In accordance with Section 112.0801 of
the Florida Statutes, because the City provides a medical plan to active employees of the City and their eligible
dependents, the City is also required to provide retirees with the opportunity to participate in this Plan. Benefit
provisions for the Plan are established by the City Commission and may be amended by the City Commission. The
City does not issue stand-alone financial statements for the Plan.
Membership in the Plan consisted of the following, as of September 30, 2019, the date of the latest actuarial
valuation:
September 30,
2019
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 101
Total 102
Funding Policy
Contribution rates for the Plan are established on an annual basis by the City Commission. Eligible retirees and their
covered dependents receiving benefits contribute 100% of the blended (active and retiree combined) equivalent
premium rates. While the City does not directly contribute towards the costs of retiree premiums via an explicit
subsidy, the ability of retirees to obtain health insurance coverage at a blended, group rate constitutes a significant
economic benefit to retirees, or an “implicit” subsidy. This implicit subsidy is considered to be another
postemployment benefit (OPEB) obligation of the City.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
57
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Actuarial Methods and Assumptions
For the September 30, 2019 actuarial valuation, the Entry Age Normal Actuarial Cost Method was used. This method
determines a service cost rate as a fixed percentage of compensation for each active participant. The current years’
service cost is the participant’s compensation multiplied by the service cost rate. Under this method, service cost
for each individual participant, payable from date of employment to date of retirement, is sufficient to pay for the
participant’s benefit at retirement.
Other actuarial assumptions are as follows:
Discount Rate: 2.75%
Investment Rate of Return: 0.0%
Salary Increases: Rates used in the October 1, 2018 actuarial valuation of the City’s pension plans.
Healthcare Cost Trend: Based on Getzen Model, with trend of 1.95% for 2020 and 6.25% for 2021 and gradually
decreasing to an ultimate trend rate of 3.99% plus 0.36% increase for excise tax.
Mortality: Mortality tables used for Regular and Special Risk Class members in the July 1, 2018 actuarial valuation
of the Florida Retirement System. They are based on the results of a statewide experience study covering the period
2008 through 2013.
Discount Rate
The discount rate used to measure the total OPEB liability was 2.75% as of September 30, 2019, which is equal to
the single rate of return developed pursuant to GASB 75. The discount rate used to determine the liabilities under
GASB 75 depends on the City’s funding policy. Since the City does not prefund benefits, the discount rate required
to be used is based on the Fidelity 20-Year Municipal General Obligation AA Index. This index includes only federally
tax-exempt municipal bonds and the yield curves are constructed using option adjusted analytics of a diverse
population of over 10,000 tax exempt securities.
Annual OPEB Cost and Net OPEB Obligation
The City’s total OPEB liability was measured as of September 30, 2019 and was determined by an actuarial valuation
as of September 30, 2019. Changes in the Total OPEB liability were as follows:
Total
OPEB
Liability
Reporting period ending September 30, 2019 $ 469,955
Changes for the year:
Service cost 38,095
Interest 19,049
Differences between expected and actual experience (203,632)
Changes of assumptions 78,146
Benefit payments (21,386)
Net changes (89,728)
Reporting period ending September 30, 2020 $ 380,227
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
58
NOTE 9 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont…)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate.
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current
discount rate:
1% Decrease Rate Assumption 1% Increase
Total OPEB liability $ 426,391 $ 380,227 $ 340,115
Sensitivity of the Total OPEB Liability to Changes in Healthcare Cost Trend Rates.
The following presents the total OPEB liability for the City, as well as what the City’s total OPEB liability would be if
it were calculated using healthcare trend rates that are 1-percentage-point lower or 1-percentage-point higher than
the current healthcare cost trend rates:
Current Healthcare
Cost Trend Rate
1% Decrease Assumption 1% Increase
Total OPEB liability $ 317,455 $ 380,227 $ 461,324
OPEB Expense and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2020, the City recognized OPEB expense of $36,903. On September 30, 2020, the
City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following
sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of assumptions or
other inputs $ 68,616 $ 26,964
Differences between expected and
actual experience - 178,799
City contributions subsequent to the
measurement date 11,668 -
Total $ 80,284 $ 205,763
Of the total amount reported as deferred outflows of resources related to OPEB, $11,668 resulting from benefits
paid subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of
the total OPEB liability in the year ended September 30, 2021. Other amounts reported as deferred inflows of
resources related to OPEB will be recognized in OPEB expense as follows:
Year ended September 30,
Amount
2021 $ (20,241)
2022 (20,241)
2023 (20,241)
2024 (20,241)
2025 (20,238)
Thereafter (35,945)
Total $ (137,147)
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
59
NOTE 10 – INTERFUND ACCOUNTS
Individual fund inter-fund receivables and payables on September 30, 2020, consist of the following:
Due Due
from Other to Other
Funds Funds
General Fund $ 394,451 $ -
Community Development Block
Grants Fund - 197,786
Local Option Gas Tax Fund 124,665
Police Grants Fund - 8,083
Capital Projects Fund - 44,067
Debt Service Fund - 19,850
$ 394,451 $ 394,451
Inter-fund receivable/payables are due to timing differences or due to deficit positions in the City’s pooled cash and
investments. 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 inter-fund transfers for the year ended
September 30, 2020:
Transfer In:
General Capital Projects Debt Service Stormwater
Fund Fund Fund Fund Total
Transfers Out:
Utility Fund $ 740,066 $ - $ - $ - $ 740,066
Local Option Gas Tax Fund 234,623 470,000 - - 704,623
Capital Projects Fund 90,132 - - - 90,132
Sanitation Fund 276,787 - - - 276,787
Community Development Block Grant Fund - 200,000 - - 200,000
Stormwater Fund - 400,000 - - 400,000
Convention Development Tax Fund - - 118,458 - 118,458
Half-cent Sales Tax Fund - 100,000 - 285,000 385,000
Total $ 1,341,608 $ 1,170,000 $ 118,458 $ 285,000 $ 2,915,066
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.
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
60
NOTE 12 – COMMITMENTS
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, 2020, the
City incurred $1,236,431 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 is provided
through the Public Risk Insurance Agency and LB Bryan and Company for the following types of risk:
• Workers’ Compensation and Employer’s Liability
• Automobile Liability
• Automobile Physical Damage
• Accidental Death and Dismemberment
• General Liability
• Public Officials’ Liability
• Property Coverage
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.
Page Intentionally Left Blank
REQUIRED SUPPLEMENTARY INFORMATION
61
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2020
Actual
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
REVENUES
Property taxes $ 5,950,351 $ 5,950,351 $ 5,912,053 $ (38,298)
Non-property taxes 1,099,364 1,120,661 1,271,015 150,354
Licenses and permits 903,106 903,106 905,755 2,649
Intergovernmental revenue 2,209,867 2,209,867 1,997,831 (212,036)
Charges for services 842,971 842,971 759,599 (83,372)
Fines and forfeitures 113,090 113,090 52,945 (60,145)
Investment earnings (loss) 180,000 292,108 292,108 -
Miscellaneous revenues 30,857 30,857 22,848 (8,009)
Interfund charges 1,701,852 1,789,976 1,778,652 (11,324)
Total revenues 13,031,458 13,252,987 12,992,806 (260,181)
EXPENDITURES
City Administration:
City Commission 55,876 55,876 45,834 10,042
City Clerk 358,543 358,543 309,706 48,837
City Attorney 150,000 150,000 150,000 -
City Manager 442,233 442,223 419,797 22,426
Human resources 250,149 255,019 250,394 4,625
Information technology 782,592 782,592 708,411 74,181
Finance 1,063,701 1,103,301 1,113,333 (10,032)
Total City administration 3,103,094 3,147,554 2,997,475 150,079
Planning and zoning 424,764 374,764 284,350 90,414
General government 748,880 770,410 580,184 190,226
Public safety:
Police 4,810,484 5,380,879 5,205,722 175,157
Animal control 96,155 96,155 94,311 1,844
Fire control 1,660,567 1,590,567 1,550,874 39,693
Code enforcement 106,432 106,432 94,693 11,739
Total public safety 6,673,638 7,174,033 6,945,600 228,433
Continued…
62
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL – GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2020
Amounts Variance with
Budgeted Amounts (Budgetary Final Budget
Basis) see Positive
Original Final Note A (Negative)
Public works:
Administration and streets 1,745,890 1,745,890 1,403,463 342,427
Fleet maintenance 299,090 299,090 257,682 41,408
Total public works 2,044,980 2,044,980 1,661,145 383,835
Parks and recreation
Recreation and special events 484,333 484,333 442,921 41,412
Parks maintenance 979,030 1,028,187 950,383 77,804
Total parks and recreation 1,463,363 1,512,520 1,393,304 119,216
Total expenditures 14,458,719 15,024,261 13,862,058 1,162,203
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (1,427,261) (1,771,274) (869,252) 902,022
OTHER FINANCING SOURCES (USES):
Transfers in 1,345,908 1,345,908 1,341,608 4,300
Sale of general capital assets 25,000 25,000 - (25,000)
Total other financing sources (uses) 1,370,908 1,370,908 1,341,608 (20,700)
NET CHANGE IN FUND BALANCE $ (56,353) $ (400,366) $ 472,356 $ 872,722
63
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL –
GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2020
Note A - Budgets and Budgetary Accounting
General governmental revenues and expenditures accounted for in budgetary funds are controlled by a budgetary
accounting system in accordance with various legal requirements which govern the City’s operations. Budgets are
monitored at varying levels of classification detail; however, expenditures cannot legally exceed total
appropriations at the individual fund level. Encumbrances are recorded. Unexpended items which are
unencumbered at year-end must be re-appropriated in the subsequent year.
Budgets are adopted for all governmental funds (general, special revenue, and capital projects funds). The City
Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions
that increase the total expenditures of any department or fund must be approved by the City Commission. All
necessary supplemental appropriations are adopted by the City Commission and are included in the reported
budgetary data. The budget presented in the accompanying required supplemental information is prepared in
conformity with accounting principles generally accepted in the United States of America.
Explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures
Sources/inflows of resources
Total revenue from the budgetary comparison schedule $ 12,992,806
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,778,652) (*)
Total revenues as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 11,214,154
Uses/outflows of resources
Actual amounts (budgetary basis) "total charges to appropriations" from the
Total expenditures from the budgetary comparison schedule $ 13,862,058
Differences - budget to GAAP:
For GAAP, General Fund inter-fund charges are reported as a reduction in the
applicable expenditure function rather than revenues. (1,778,652) (*)
Total expenditures as reported on the statement of revenues, expenditures
and changes in fund balances (page 16) $ 12,083,406
(*) - Interfund charges by Division
City Manager $ 160,747
Finance 836,132
Public Works Admin 274,137
Fleet and Equipment Maintenance 76,800
Human Resources 58,049
Information Technology 237,831
Facility Maintenance 134,956
$ 1,778,652
64
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date
9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total pension liability
Service cost $ 288,450 $ 332,673 $ 345,019 $ 346,460
Interest 1,604,466 1,566,226 1,574,193 1,485,239
Change in assumptions - - 695,507 559,117
Difference between expected and actual
experience (44,031) 40,197 (473,189) 291,669
Benefit payments, including refunds of
of employee contributions (1,329,553) (1,327,161) (1,501,456) (1,319,107)
Employee buy-back - - - -
Net change in total pension liability 519,332 611,935 640,074 1,363,378
Total pension liability, beginning 24,146,186 23,534,251 22,894,177 21,530,799
Total pension liability, ending (a) $ 24,665,518 $ 24,146,186 $ 23,534,251 $ 22,894,177
Plan fiduciary net position
Contributions - City $ 1,362,952 $ 1,424,479 $ 1,332,119 $ 1,175,572
Contributions - Employee 96,921 107,745 117,536 124,024
Net investment income (loss) 1,138,973 619,176 1,554,225 1,792,192
Benefit payments, including refunds Of
employee contributions (1,329,553) (1,327,161) (1,501,456) (1,319,107)
Administrative expenses (48,109) (40,584) (31,261) (53,880)
Net change in plan fiduciary net position 1,221,184 783,655 1,471,163 1,718,801
Plan fiduciary net position, beginning 20,497,952 19,714,297 18,243,134 16,524,333
Plan fiduciary net position, ending (b) $ 21,719,136 $ 20,497,952 $ 19,714,297 $ 18,243,134
Net pension liability (asset) (a)-(b) $ 2,946,382 $ 3,648,234 $ 3,819,954 $ 4,651,043
Plan fiduciary net position as a percentage
of total pension liability 88.05% 84.89% 83.77% 79.68%
Covered payroll $ 1,615,350 $ 1,795,750 $ 1,958,933 $ 2,067,067
Net pension liability as a percentage of
covered payroll 182.40% 203.16% 195.00% 225.01%
Continued…
65
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - GENERAL EMPLOYEES’ PENSION PLAN
City reporting period date 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 348,604 $ 402,093 $ 399,576
Interest 1,437,296 1,404,316 1,386,245
Change in assumptions - - 1,814,460
Difference between expected and actual
experience 164,601 (162,280) -
Benefit payments, including refunds of
of employee contributions (1,207,804) (1,031,191) (707,218)
Employee buy-back - - -
Net change in total pension liability 742,697 612,938 2,893,063
Total pension liability, beginning 20,788,102 20,175,164 17,282,101
Total pension liability, ending (a) $ 21,530,799 $ 20,788,102 $ 20,175,164
Plan fiduciary net position
Contributions - City 1,112,344 $ 863,613 $ 950,980
Contributions - Employee 128,204 136,191 157,383
Net investment income (loss) 1,515,746 162,326 778,981
Benefit payments, including refunds Of
employee contributions (1,207,804) (1,031,191) (707,218)
Administrative expenses (32,495) (41,909) (31,529)
Net change in plan fiduciary net position 1,515,995 89,030 1,148,597
Plan fiduciary net position, beginning 15,008,338 14,919,308 13,770,711
Plan fiduciary net position, ending (b) $ 16,524,333 $ 15,008,338 $ 14,919,308
Net pension liability (asset) (a)-(b) $ 5,006,466 $ 5,779,764 $ 5,255,856
Plan fiduciary net position as a percentage
of total pension liability 76.75% 72.20% 73.95%
Covered payroll $ 2,136,733 $ 2,269,850 $ 2,623,050
Net pension liability as a percentage of
covered payroll 234.30% 254.63% 200.37%
Additional years will be added to this schedule annually until 10 years’ data is presented.
Change of Assumptions:
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7-year experience study
performed for the Plan.
66
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date
9/30/2021 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2020 9/30/2019 9/30/2018 9/30/2017
Total pension liability
Service cost $ 369,089 $ 332,419 $ 329,254 $ 335,185
Interest 1,034,146 1,026,422 1,016,983 970,877
Change in excess State money - - (120,454) -
Difference between expected and actual
experience 103,400 (351,261) (209,232) 187,216
Change of assumptions - - 454,983 (40,955)
Benefit payments, including refunds of
of employee contributions (715,876) (1,143,778) (690,688) (643,872)
Net change in total pension liability 790,759 (136,198) 780,846 808,451
Total pension liability, beginning 15,309,524 15,445,722 14,664,876 13,856,425
Total pension liability, ending (a) $ 16,100,283 $ 15,309,524 $ 15,445,722 $ 14,664,876
Plan fiduciary net position
Contributions - City $ 745,022 $ 826,705 $ 854,780 $ 945,540
Contributions - State of Florida 132,844 - 236,772 -
Contributions - Employee 161,166 142,024 131,498 129,552
Net investment income (loss) 607,277 307,543 853,894 950,447
Benefit payments, including refunds of
employee contributions (715,876) (1,143,777) (690,688) (643,872)
Administrative expenses (35,623) (38,763) (25,152) (51,481)
Other - - - -
Net change in plan fiduciary net position 894,810 93,732 1,361,104 1,330,186
Plan fiduciary net position, beginning 12,258,376 12,164,644 10,803,540 9,473,354
Plan fiduciary net position, ending (b) $ 13,153,186 $ 12,258,376 $ 12,164,644 $ 10,803,540
Net pension liability (asset) (a)-(b) $ 2,947,097 $ 3,051,148 $ 3,281,078 $ 3,861,336
Plan fiduciary net position as a percentage
of total pension liability 81.70% 80.07% 78.76% 73.67%
Covered payroll $ 2,014,575 $ 1,775,300 $ 1,643,725 $ 1,619,400
Net pension liability as a percentage of
covered payroll 146.29% 171.87% 199.61% 238.44%
Continued...
67
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - POLICE OFFICERS’ PENSION PLAN
City reporting period date 9/30/2017 9/30/2016 9/30/2015
Measurement date 9/30/2016 9/30/2015 9/30/2014
Total pension liability
Service cost $ 279,863 $ 291,761 $ 269,182
Interest 931,370 900,982 879,486
Change in excess State money - 120,454 -
Difference between expected and actual
experience (2,998) (213,426) -
Change of assumptions - - 1,275,669
Benefit payments, including refunds of
of employee contributions (754,465) (553,042) (585,616)
Net change in total pension liability 453,770 546,729 1,838,721
Total pension liability, beginning 13,402,655 12,855,926 11,017,205
Total pension liability, ending (a) $ 13,856,425 $ 13,402,655 $ 12,855,926
Plan fiduciary net position
Contributions - City $ 729,483 $ 574,014 $ 563,203
Contributions - State of Florida 112,972 103,528 96,217
Contributions - Employee 117,274 112,354 103,095
Net investment income (loss) 804,901 43,534 642,480
Benefit payments, including refunds of
employee contributions (754,465) (553,042) (585,616)
Administrative expenses (29,933) (35,984) (22,742)
Other (change in excess State money) - 120,454 -
Net change in plan fiduciary net position 980,232 364,858 796,637
Plan fiduciary net position, beginning 8,493,122 8,128,264 7,331,627
Plan fiduciary net position, ending (b) $ 9,473,354 $ 8,493,122 $ 8,128,264
Net pension liability (asset) (a)-(b) $ 4,383,071 $ 4,909,533 $ 4,727,662
Plan fiduciary net position as a percentage
of total pension liability 68.37% 63.37% 63.23%
Covered payroll $ 1,465,925 $ 1,404,425 $ 1,472,786
Net pension liability as a percentage of
covered payroll 299.00% 349.58% 321.00%
Additional years will be added to this schedule annually until 10 years’ data is presented.
Change of Assumptions:
For measurement date September 30, 2018:
• The assumed investment return assumption was reduced from 7.00% to 6.75%.
• The assumed rates of salary increase, retirement and withdrawal were revised based on a 7-year experience study
performed for the Plan.
68
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Contributions
in Relation to Contributions
Year Actuarially the Actuarially Contribution as a % of
Ended Determined Determined Excess Covered Covered
September 30, Contribution Contribution (Deficiency) Payroll Payroll
General Employees' Plan
2020 $ 1,355,973 $ 1,362,952 $ 6,979 $ 1,615,350 84.38%
2019 $ 1,424,479 $ 1,424,479 $ - $ 1,795,750 79.33%
2018 $ 1,332,118 $ 1,332,119 $ 1 $ 1,958,933 68.00%
2017 $ 1,175,572 $ 1,175,572 $ - $ 2,067,067 56.87%
2016 $ 1,112,344 $ 1,112,344 $ - $ 2,136,733 52.06%
2015 $ 863,613 $ 863,613 $ - $ 2,269,850 38.05%
2014 $ 950,980 $ 950,980 $ - $ 2,623,050 36.25%
Police Officers' Plan
2020 $ 668,090 $ 877,866 $ 209,776 $ 2,014,575 43.58%
2019 $ 826,705 $ 826,705 $ - $ 1,775,300 46.57%
2018 $ 841,726 $ 1,091,552 $ 249,826 $ 1,643,725 66.41%
2017 $ 849,061 $ 945,540 $ 96,479 $ 1,619,400 58.39%
2016 $ 825,700 $ 842,455 $ 16,755 $ 1,465,925 57.47%
2015 $ 665,091 $ 677,542 $ 12,451 $ 1,404,425 48.24%
2014 $ 654,280 $ 659,420 $ 5,140 $ 1,472,786 44.77%
Additional years will be added to this schedule annually until 10 years; data is presented.
69
CITY OF ATLANTIC BEACH, FLORIDA
NOTES TO THE SCHEDULE OF CONTRIBUTIONS – ALL PENSION PLANS
Significant methods and assumptions used in calculating the actuarially determined contributions:
The following pertain to both City’s defined benefit pension plans unless separately stated.
• Valuation Date: October 1, 2018. Actuarially determined contribution rates are calculated as of September 30, two
years prior to the end of the fiscal year in which contributions are required.
• Actuarial Cost Method: Entry Age Normal Cost Method
• Amortization Method:
o General Employees’ Plan – Closed, Level Dollar Method
o Police Officers’ Plan - Closed, Level % of Pay Method
• Remaining Amortization Period:
o General Employees’ Plan – 10 Years.
o Police Officers’ Plan - 29 years.
• Asset Valuation Method: 4-year smoothed market value where the difference between the expected and actual
return on market value of assets is phased in over a period of four years at a rate of 25% per year.
• Inflation:2.50%
• Salary Increases:
o General Employees Plan – Age Based ranging from 4.8% to 9.5% (including 2.5% price inflation).
o Police Officers’ Plan – Age Based ranging from 4.5% to 18.5% (including 2.5% price inflation).
• Payroll Growth:
o General Employees Plan – None
o Police Officers’ Plan – 3.50%
• Investment Rate of Return: 6.75% per year compounded annually, net of investment expenses, including inflation.
• Retirement Age: Experience-based table of rates (from Experience Study dated August 9, 2017 for the period
October 1, 2009 to September 30, 2016) that vary by age.
• Mortality:RP-2000 Combined Healthy Participant Mortality Table (for preretirement mortality) and the RP-2000
Mortality Table for Annuitants (for postretirement mortality), with mortality improvements projected to all future
years after 2000 using Scale BB.
o General Employees’ Plan – For males, the base mortality rates include a 50% blue collar adjustment and a
50% white collar adjustment and for females, the base mortality rates include a 100% white collar
adjustment.
o Police Officers’ Plan - For males, the base mortality rates include a 90% blue collar adjustment and a 10%
white collar adjustment and for females, the base mortality rates include a 100% white collar adjustment.
70
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF INVESTMENT RETURNS – ALL PENSION PLANS
Year Ended September 30,
2020 2019 2018 2017 2016 2015
General Employees' Plan
Annual money-weighted rate of return
net of investment expenses 6.41% 4.04% 8.67% 10.92% 10.18% 1.10%
Police Officers' Plan
Annual money-weighted rate of return
net of investment expenses 6.15% 4.38% 8.26% 10.80% 9.93% 0.53%
Additional years will be added to this schedule annually until 10 years; data is presented.
71
CITY OF ATLANTIC BEACH, FLORIDA
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Reporting date 9/30/2020 9/30/2019 9/30/2018
Measurement date 9/30/2019 9/30/2018 9/30/2017
Total OPEB Liability
Service cost $ 38,095 $ 39,404 $ 41,222
Interest 19,049 16,906 14,667
Difference between expected
and actual experience (203,632) - -
Changes in assumptions 78,146 (18,238) (21,261)
Benefit payments (21,386) (23,456) (22,404)
Net change in total OPEB Liability (89,728) 14,616 12,224
Total OPEB Liability - beginning 469,955 455,339 443,115
Total OPEB Liability - ending $ 380,227 $ 469,955 $ 455,339
Covered-employee payroll $ 5,196,501 $ 6,647,363 $ 6,272,956
Total OPEB liability as a percentage
of covered-employee payroll 7.32% 7.07% 7.26%
Notes to Schedule:
No assets are being accumulated in a trust to pay for plan benefits.
Changes in Assumptions:
Changes in assumptions reflect the effects of changes in the discount rate of each period. The following are the discount rates
used for each measurement date.
Measurement Date Discount Rate
September 30, 2019 2.75%
September 30, 2018 3.83%
September 30, 2017 3.50%
September 30, 2016 3.10%
Additional changes in assumptions for the following measurement dates:
• September 30, 2019
o Per capita costs and premiums were updated based on information provided.
o Assumed ultimate rate of inflation was revised from 2.5% to 2.25% and the healthcare cost trend
assumption was revised to reflect this change.
Additional years will be added to this schedule annually until 10 years; data is presented.
SUPPLEMENTARY INFORMATION
72
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
ASSETS
Equity in pooled cash and investments $ 77,732 $ - $ 148,406 $ 1,447,310 $ 24,267 $ 48,343 $ 91,465
Cash with fiscal agent - - - - - - -
Receivables, net
Customer accounts, net - - - - - - -
Intergovernmental and other - 77,537 10,833 164,341 247 4,480 1,455
Prepaid expenditures - - - - - - -
TOTAL ASSETS $ 77,732 $ 77,537 $ 159,239 $ 1,611,651 $ 24,514 $ 52,823 $ 92,920
LIABILITIES
Accounts payable and accrued liabilities - - - - 500 - -
Construction costs payable - - - 4,212 - - -
Due to other funds - 124,665 - - - - -
Deposits - - - - - - -
TOTAL LIABILITIES - 124,665 - 4,212 500 - -
FUND BALANCE
Nonspendable:
Prepaids - - - - - - -
Restricted for:
Public safety - - - - 24,014 - 92,920
Road maintenance and construction - - - 1,607,439 - - -
Other capital projects - - - - - - -
Other purposes - - 159,239 - - 52,823 -
Committed to:
Conservation and resource management 77,732 - - - - - -
Unassigned - (47,128) - - - - -
TOTAL FUND BALANCES 77,732 (47,128) 159,239 1,607,439 24,014 52,823 92,920
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 77,732 $ 77,537 $ 159,239 $ 1,611,651 $ 24,514 $ 52,823 $ 92,920
Continued…
73
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING BALANCE SHEET – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Capital Governmental 2019
Revenue Block Grants Grants Funds Service Projects Funds Totals
ASSETS
Equity in pooled cash and investments $ 3,484 $ - $ 8,728 $ 1,849,735 $ - $ 1,515,399 $ 3,365,134 $ 2,312,277
Cash with fiscal agent - - - - - - - 94,850
Receivables, net
Customer accounts, net - - - - - - - 115,512
Intergovernmental and other - 100 - 258,993 - - 258,993 239,328
Prepaid expenditures - - 1,548 1,548 - - 1,548 -
TOTAL ASSETS $ 3,484 $ 100 $ 10,276 $ 2,110,276 $ - $ 1,515,399 $ 3,625,675 $ 2,761,967
LIABILITIES
Accounts payable and accrued liabilities - - - 500 - 134,020 134,520 217,785
Construction costs payable - 3,134 - 7,346 - - 7,346 16,666
Due to other funds - 197,786 8,083 330,534 19,850 44,067 394,451 283,396
Deposits 4,461 - - 4,461 - - 4,461 2,766
TOTAL LIABILITIES 4,461 200,920 8,083 342,841 19,850 178,087 540,778 520,613
FUND BALANCE
Nonspendable:
Prepaids - - 1,548 1,548 - - 1,548 -
Restricted for:
Public safety - - 2,193 119,127 - - 119,127 299,845
Road maintenance and construction - - - 1,607,439 - 1,079,623 2,687,062 1,318,572
Other capital projects - - - - - 257,689 257,689 257,689
Other purposes - - - 212,062 - - 212,062 308,383
Committed to:
Conservation and resource management - - - 77,732 - - 77,732 77,940
Unassigned (977) (200,820) (1,548) (250,473) (19,850) - (270,323) (21,075)
TOTAL FUND BALANCES (977) (200,820) 2,193 1,767,435 (19,850) 1,337,312 3,084,897 2,241,354
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 3,484 $ 100 $ 10,276 $ 2,110,276 $ - $ 1,515,399 $ 3,625,675 $ 2,761,967
74
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Special Revenue Funds
Local Convention
Tree Option Development Half-Cent Court Cost Parking Radio
Replacement Gas Tax Tax Sales Tax Training Facilities Communication
REVENUES:
Non-property taxes $ - $ 446,752 $ 96,871 $ 914,697 $ - $ - $ -
Charges for services - - - - - 52,823 -
Fines and forfeitures - - - - 3,269 - 17,497
Investment earnings (loss) - (23,598) (13,863) 6,063 (1,574) - 1,330
Miscellaneous revenues 22,506 - - - - - -
Interfund charges - - - - - - -
Total revenues 22,506 423,154 83,008 920,760 1,695 52,823 18,827
EXPENDITURES:
General government 22,714 - - - - - -
Public safety - - - - 17,751 - -
Transportation - - - - - - -
Culture/recreation - - 265 - - - -
Capital outlay - - 113,429 12,552 - - -
Debt service - - - - - - -
Total expenditures 22,714 - 113,694 12,552 17,751 - -
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (208) 423,154 (30,686) 908,208 (16,056) 52,823 18,827
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - -
Transfers (out) - (704,623) (118,458) (385,000) - - -
TOTAL OTHER FINANCING SOURCES (USES) - (704,623) (118,458) (385,000) - - -
NET CHANGE IN FUND BALANCE (208) (281,469) (149,144) 523,208 (16,056) 52,823 18,827
FUND BALANCE, beginning of year 77,940 234,341 308,383 1,084,231 40,070 - 74,093
FUND BALANCE, end of year $ 77,732 $ (47,128) $ 159,239 $ 1,607,439 $ 24,014 $ 52,823 $ 92,920
Continued…
75
CITY OF ATLANTIC BEACH, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS (CONCLUDED)
FOR THE YEAR ENDED SEPTEMBER 30, 2020
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2019
2020
Special Revenue Funds
Total Totals
Community Special Non-Major
Contraband Development Police Revenue Debt Capital Governmental 2019
Revenue Block Grants Grants Funds Service Projects Funds Totals
REVENUES:
Non-property taxes $ - $ - $ - $ 1,458,320 $ - $ - $ 1,458,320 $ 1,531,684
Charges for services - - - 52,823 - - 52,823 -
Fines and forfeitures - - - 20,766 - - 20,766 22,252
Investment earnings (loss) (572) - - (32,214) - 81,604 49,390 56,294
Miscellaneous revenues - - - 22,506 - - 22,506 14,821
Total revenues (572) - - 1,522,201 - 81,604 1,603,805 1,625,051
EXPENDITURES:
General government - - - 22,714 - - 22,714 23,519
Public safety - - - 17,751 - 24,235 41,986 26,478
Transportation - - - - - - - 270,834
Culture/recreation - - - 265 - - 265 368
Capital outlay - - - 125,981 - 241,103 367,084 698,287
Debt service - - - - 118,458 - 118,458 19,850
Total expenditures - - - 166,711 118,458 265,338 550,507 1,039,336
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (572) - - 1,355,490 (118,458) (183,734) 1,053,298 585,715
OTHER FINANCING SOURCES (USES)
Transfers in - - - - 118,458 1,170,000 1,288,458 -
Transfers (out) - (200,000) - (1,408,081) - (90,132) (1,498,213) (435,000)
TOTAL OTHER FINANCING SOURCES (USES) - (200,000) - (1,408,081) 118,458 1,079,868 (209,755) (435,000)
NET CHANGE IN FUND BALANCE (572) (200,000) - (52,591) - 896,134 843,543 150,715
FUND BALANCE, beginning of year (405) (820) 2,193 1,820,026 (19,850) 441,178 2,241,354 2,090,639
FUND BALANCE, end of year $ (977) $ (200,820) $ 2,193 $ 1,767,435 $ (19,850) $ 1,337,312 $ 3,084,897 $ 2,241,354
76
CITY OF ATLANTIC BEACH, FLORIDA
HISTORICAL REVENUES AND EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30, 2016, THROUGH SEPTEMBER 30, 2020
2020 2019 2018 2017 2016
Revenues
Operating Revenues:
Water:
Customer charges $ 3,550,004 $ 3,462,039 $ 3,206,520 $ 3,262,314 $ 3,177,331
Miscellaneous charges 43,252 67,291 64,563 65,198 62,477
Total water 3,593,256 3,529,330 3,271,083 3,327,512 3,239,808
Sewer:
Customer charges 5,750,479 5,399,935 5,092,613 5,111,353 5,045,673
Miscellaneous charges - - - 590 -
Total sewer 5,750,479 5,399,935 5,092,613 5,111,943 5,045,673
Total operating revenues 9,343,735 8,929,265 8,363,696 8,439,455 8,285,481
Non-operating revenues
Investment income (loss):
Water 143,198 163,209 (7,606) 21,455 58,092
Sewer 158,264 115,389 (8,249) 17,281 38,929
Total non-operating revenues 301,462 278,598 (15,855) 38,736 97,021
Total revenues 9,645,197 9,207,863 8,347,841 8,478,191 8,382,502
Expenses
Operating expenses:
Water 1,044,002 1,299,974 1,348,985 1,488,854 1,379,495
Sewer 2,222,833 2,387,924 2,393,828 2,309,637 2,064,614
Total operating expenses 3,266,835 3,687,898 3,742,813 3,798,491 3,444,109
Administrative, non divisional
and other
Water 642,424 508,655 508,655 502,058 561,069
Sewer 678,890 624,796 624,796 591,161 725,248
Total administrative non-
divisional and other 1,321,314 1,133,451 1,133,451 1,093,219 1,286,317
Total expenses 4,588,149 4,821,349 4,876,264 4,891,710 4,730,426
Net revenues available for
debt service 5,057,048 4,386,514 3,471,577 3,586,481 3,652,076
Non-operating income(expense)
Interest expense (344,186) (381,546) (404,297) (455,259) (481,693)
Loan amortization (93,910) (93,910) (93,910) (93,910) (93,910)
Total non-operating income
(expense) (438,096) (475,456) (498,207) (549,169) (575,603)
Change in net position before
depreciation expense and
interfund transfers $ 4,618,952 $ 3,911,058 $ 2,973,370 $ 3,037,312 $ 3,076,473
77
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, 2020 AND SEPTEMBER 30, 2019
2020 2019
Gross revenues:
Utility $ 9,343,735 $ 8,929,265
Connection charges 24,957 44,018
Interest 234,288 328,612
Total Gross Revenues 9,602,980 9,301,895
Operating Expenses
Personnel services 1,827,004 1,794,213
Contractual services 375,144 643,360
Supplies 507,960 474,547
Repairs and maintenance (13,952) 188,756
Utilities 351,447 352,529
Intergovernmental charges 1,321,314 1,133,451
Other expenses 219,231 234,493
Total operating expenses 4,588,148 4,821,349
Total net revenues in accordance with Bond resolutions $ 5,014,832 $ 4,480,546
Total debt service $ 1,853,625 $ 1,856,755
Debt service coverage ratio 270.54% 241.31%
Required debt service coverage ratio 110.00% 110.00%
78
CITY OF ATLANTIC BEACH, FLORIDA
OTHER BOND COVENANT DISCLOSURES
FOR THE YEAR ENDED SEPTEMBER 30, 2016, THROUGH SEPTEMBER 30, 2020
Utility Service Tax Collections
(last five years)
Year Electricity Communications Gas Fuel Oil Total
2020 $ 499,712 $ 489,444 14,122 $ - $ 1,003,278
2019 587,563 484,505 12,518 - 1,084,586
2018 498,379 497,133 16,262 - 1,011,774
2017 475,895 479,551 15,229 - 970,675
2016 483,516 500,295 17,881 6 1,001,698
Ad Valorem Tax Collections
(last five years)
Year Total
2020 $ 5,912,053
2019 5,519,446
2018 5,063,409
2017 4,730,476
2016 4,482,739
OTHER STATISTICAL INFORMATION
79
CITY OF ATLANTIC BEACH, FLORIDA
MAJOR UTILITY CUSTOMERS
FOR THE YEAR ENDED SEPTEMBER 30, 2020
(UNAUDITED)
Annual
Billings
Fleet Landing (retirement community) $ 417,910
Navy (Federal Government) 313,290
PAC-2160 Mayport GP, LLC 159,642
City of Atlantic Beach, Florida 138,390
John's Creek Estates (mobile home park) 132,254
Hanna Park (regional park) 123,710
PBG MAYPORT LLC 118,382
Sea Turtle Inn 115,432
Yes Companies 96,618
Seaside Apartments (apartment complex) 69,322
$ 1,684,950
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
80
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
City of Atlantic Beach
Atlantic Beach, Florida
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
City of Atlantic Beach, Florida, (the City), as of and for the year ended September 30, 2020, and the related
notes to the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated June 18, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
81
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
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
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, non-compliance 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 non-compliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
June 18, 2021
Gainesville, Florida
82
INDEPENDENT ACCOUNTANT’S REPORT ON COMPLIANCE
WITH SECTION 218.415, FLORIDA STATUTES
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
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, 2020, as required by Section 10.556(10)(a), Rules of the
Auditor General. Management is responsible for the City’s compliance with those requirements. Our
responsibility is to express an opinion on the City’s compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants (AICPA) and, accordingly, included examining, on a test basis,
evidence about the City’s compliance with those requirements and performing such other procedures as
we considered necessary in the circumstances. We believe that our examination provides a reasonable
basis for our opinion. Our examination does not provide a legal determination of the City’s compliance
with specified requirements.
In our opinion, the City complied, in all material respects, with the aforementioned requirements for the
year ended September 30, 2020.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, the City, its
management, and is not intended to be, and should not be, used by anyone other than these specified
parties.
June 18, 2021
Gainesville, Florida
83
MANAGEMENT LETTER
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Atlantic Beach, Florida (the City) as of and for the
year ended September 30, 2020, and have issued our report thereon dated June 18, 2021.
Auditor’s Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General.
Other Reporting Requirements
We have issued our Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance
with Government Auditing Standards, and Independent Accountant’s Report on an examination
conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance
requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those
reports and schedule, which are dated June 18, 2021, should be considered in conjunction with this
management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address findings and recommendations made in the preceding annual financial
report. Corrective actions have been taken to address prior audit findings 17-3 and 15-1.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. This information is
included in Note 1 to the financial statements.
Financial Condition and Management
Sections 10.554(1)(i)5.(a) and 10.556(7), Rules of the Auditor General, require that we apply appropriate
procedures and report the results of our determination as to whether or not the City has met one or more
of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met. In connection with our audit, we determined that the City did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
84
Honorable Mayor, City Commissioners, and
City Manager
City of Atlantic Beach
Atlantic Beach, Florida
MANAGEMENT LETTER
Pursuant to Sections 10.554(1)(i)5(c) and 10.556(8), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the City’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any recommendations
to improve financial management. In connection with our audit, we did not have any such
recommendations.
Special District Component Units
Section 10.554(1)(i)5.(d), Rules of the Auditor General, requires that we determine whether or not a
special district that is a component unit of a county, municipality, or special district, provided the financial
information necessary for proper reporting of the component unit, within the audited financial
statements of the county, municipality, or special district in accordance with Section 218.39(3)(b), Florida
Statutes. In connection with our audit, we determined that there were no special district component
units that were required to be reported in accordance with Section 218.39(3)(b), Florida Statutes.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address non-compliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred,
that have an effect on the financial statements that is less than material but which warrants the attention
of those charged with governance. In connection with our audit, we did not have any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, and applicable management, and is not intended to be and
should not be used by anyone other than these specified parties.
June 18, 2021
Gainesville, Florida
85