HomeMy WebLinkAbout2015 - 2016CITY OF SEBASTIAN, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2016
CITY COUNCIL
Bob McPartlan Jerome Adams
Mayor Vice-Mayor
Andrea Coy
Council Member
Jim Hill Richard Gillmor
Council Member Council Member
Prepared by: Administrative Services Department
CITY OF SEBASTIAN, FLORIDA
Table of Contents
Page
INTRODUCTORY SECTION 1
City Officials 2
Letter of Transmittal 3
Organizational Chart 8
GFOA Certificate of Achievement 9
FINANCIAL SECTION 11
Independent Auditors’ Report 13
Management’s Discussion and Analysis 17
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 30
Statement of Activities 31
Fund Financial Statements:
Balance Sheet – Governmental Funds 34
Reconciliation of Fund Balances for Governmental Funds to Net Position
of Governmental Activities 35
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 36
Reconciliation of Net Changes in Fund Balance of Governmental
Funds to Change in Net Position of Governmental Activities 37
Statement of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual:
General Fund 38
Discretionary Sales Tax Fund 39
Riverfront Redevelopment Fund 40
Statement of Net Position – Proprietary Funds 41
Statement of Revenues, Expenses and Changes in Fund
Net Position – Proprietary Funds 42
Statement of Cash Flows – Proprietary Funds 43
Statement of Fiduciary Net Position 45
Statement of Changes in Fiduciary Net Position 46
Notes to Financial Statements 47
CITY OF SEBASTIAN, FLORIDA
Table of Contents
Page
Required Supplementary Information:
Single-employer Pension Trust Fund:
Schedule of Changes in Net Pension Liability and Related Ratios 78
Schedule of the Net Pension Liability 79
Schedule of Investment Returns 79
Schedule of Contributions 80
Other Postemployment Benefits Plan:
Schedule of Funding Progress 81
Schedule of Employer Contributions 81
Coastal Florida Public Employees Association Pension Plan:
Schedule of Employer Contributions 82
Combining and Individual Fund Financial Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet 84
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances 86
Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget and Actual:
Local Option Gas Tax 88
Parking In-Lieu of Fund 89
Recreation Impact Fee Fund 90
Stormwater Utility Fund 91
Law Enforcement Forfeiture Fund 92
Discretionary Sales Surtax Revenue Bonds 2003 Fund 93
Stormwater Utility Revenue Bonds 2003 Fund 94
Agency Fund:
Combining Statement of Changes in Assets and Liabilities 96
Other:
Capital Assets used in the Operations of Governmental Funds:
Comparative Schedule by Source 98
Schedule by Function and Activity 99
Schedule of Changes by Function and Activity 100
Internal Control and Compliance
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance with Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Governmental Auditing Standards 103
Independent Auditors' Management Letter 105
109Independent Accountants' Report
CITY OF SEBASTIAN, FLORIDA
Table of Contents
Page
STATISTICAL SECTION (UNAUDITED)111
Statistical Section Table of Contents 113
Financial Trends Information
Net Position by Component 114
Changes in Net Position 116
Fund Balances, Governmental Funds 120
Changes in Fund Balances, Governmental Funds 122
Program Revenues by Function/Program 124
Revenue Capacity Information
Tax Revenues by Source 126
Property Tax Rates ($1 per $1,000 of Taxable Value) – Direct and
Overlapping Governments 127
Assessed and Estimated Actual Value of Taxable Property 128
Principal Property Taxpayers 130
Property Taxes, Levies and Collections 131
Debt Capacity Information
Ratio of Outstanding Debt by Type 132
Ratio of Net General Bonded Debt to Estimated Actual Value and Net
General Bonded Debt Per Capita 133
Computation of Legal Debt Margin for General Obligation Bonds 134
Pledged Revenue Coverage 136
Demographic and Economic Information
Demographic and Economic Statistics 138
Principal Employers 140
Operating Information
Full-Time Equivalent City Employees by Function/Program 142
Operating Indicators by Function/Program 144
Capital Asset Statistics by Function/Program 146
INTRODUCTORY SECTION
1
CITY OF SEBASTIAN, FLORIDA
CITY OFFICIALS
For the Year Ended September 30, 2016
Joseph Griffin
City Manager
Jeanette Williams, MMC
City Clerk
Robert Ginsburg
City Attorney
Michelle Morris
Police Chief
Kenneth W. Killgore
Frank Watanabe Administrative Services Director
City Engineer
Tim Walker
Wayne Eseltine Public Works Director
Building Official
Greg Gardner
Scott Baker Golf Course Director
Airport Director
DEPARTMENT HEADS
2
February 10, 2017
To the Citizens of the City of Sebastian, Florida:
The City of Sebastian, Florida is located in Indian River County approximately midway through the east
coast of the Florida Peninsula (between Melbourne and Vero Beach) in an area known as the Treasure
Coast. It is recognized as the Home of Pelican Island, the first designated wildlife refuge in the United
States, a Millennium City, and a Tree City USA. It was first incorporated as the Town of Sebastian in
1924. In the late 1950s General Development Corporation purchased the land from the Mackle family of
Miami and began the development of a planned community that is now the City of Sebastian.
We are submitting the Comprehensive Annual Financial Report of the City of Sebastian, Florida for the
fiscal year ended September 30, 2016, as prepared by the City’s Administrative Services department.
State law requires that every general-purpose local government publish within six months of the close
of each fiscal year a complete set of audited financial statements. This report is published to fulfill that
requirement for the fiscal year ended September 30, 2016.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based on a comprehensive framework of internal control that is established for
this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective
is to provide reasonable, rather than absolute, assurance that the financial statements are free of any
material misstatements.
Chapter 218.39, Florida Statutes requires that the financial statements of the City of Sebastian be
audited by a certified public accountant selected by the City Council. The City’s independent Certified
Public Accountants, Rehmann Robson LLC., has issued an unmodified ("clean") opinion on the City of
Sebastian’s financial statements for the year ended September 30, 2016. The independent auditors’
report is located on page 13, 14 and 15. Management’s discussion and analysis (MD&A) immediately
follows the independent auditors’ report and provides a narrative introduction, overview, and analysis
of the basic financial statements. The MD&A complements this letter of transmittal and should be read
in conjunction with it.
Profile of the Government
The City has a population of 23,137 living in an area of approximately 14.6 square miles. The City is
empowered to levy a property tax on both real and personal property located within its boundaries. It
also is empowered by state statute to extend its corporate limits by annexation, which it has done from
time to time.
3
The City is a Florida municipal corporation with a five-member City Council. Council members serve a
two-year term. Annual elections are held on the first Tuesday following the first Monday in November
and two members are elected in even-numbered years and three members are elected in odd-numbered
years. Elections are non-partisan and at-large. Mayor and Vice Mayor are elected from among the
members of every newly seated Council at a Special meeting following the election each year. The City
has operated under a Council-City Manager form of government since 1989.
The City provides a wide range of services including general government administration, police
protection, the construction and maintenance of local roads, public works, recreational and cultural
activities, a golf course, a general aviation airport, and a building department to enforce building
codes.
This report includes all funds of the City. In evaluating the City as a reporting entity, we have included
all component units for which the City Council is financially accountable. The component units have
been blended with the financial statements presented for the Primary Government because the
component unit’s governing body is the same as the City Council or because the component unit
exclusively serves the City. The blended component units are the Riverfront Redevelopment Agency and
the Sebastian Police Officer’s Pension Trust Fund.
Local Economy
The region (which includes the City of Sebastian and the surrounding unincorporated area within the
same county) has a fluctuating labor force depending on agricultural demand and is a strong retirement
community. Although the labor force fluctuates, unemployment in the region increased to high levels
for several years but has shown good improvement in the last few years. As of September 2016, the
Florida Research & Economic Database reported an improved unemployment rate of 6.2%, which
corresponds with improvements being enjoyed at the state and national levels. The overall
unemployment rate for the area has historically been greater than that of the State of Florida.
The largest major industry sector was Health Care and Social Assistance with 18% of the employment,
followed by Retail Trade with 16.8% of the employment and Accommodation and Food Services with
10.8% of the employment. According to the U.S. Census Bureau (2000), 86% of the population age 25 or
older are high school graduates and 23.1% hold a bachelor’s degree or higher. The area median age for
2010 was 50.1 per the U.S. Census Bureau. The median household income for 2015 was $49,887, as
reported by the Florida Research and Economic Database. The geographical area of the City of
Sebastian, just north of the Treasure Coast, houses a number of high-tech industries including NASA and
various aerospace industry-related businesses. In the past, this attracted a workforce with a higher than
average education and technical skills to the vicinity but with the end of the Space Shuttle program,
the loss of these activities affected job availability. Now, the area has diversified to industries focused
on building aerospace vehicles rather than just launching activities. This has helped with providing
employment for this highly skilled work force.
The Council is required to adopt a final budget no later than the close of the fiscal year. This annual
budget serves as the foundation for the City’s financial planning and control. The budget is prepared by
fund, function (e.g., transportation), and department (e.g., public works). Shifts in appropriations
within fund totals may be done administratively on the authority of the City Manager. Total fund
appropriation changes and use of contingency appropriations must be approved by the City Council.
4
The voters of Indian River County in November 2003 extended the Infrastructure Sales Surtax in the
amount of $.01 per $1.00 sale for an additional fifteen years and seven months beginning in January
2004. This Infrastructure Sales Surtax is estimated to provide the City in excess of $40 million dollars
over the life of the extension for the City’s emergency vehicle and capital improvement needs. In
addition, the City has funded a number of other capital projects with impact fees and has actively
pursued grant funding for some major transportation and environmental improvements. It has also
employed the use of a Community Redevelopment Agency that is funded by means of tax-increment
financing.
The millage was levied at the same 3.8556 for fiscal year 2015. The City had a slight overall increase in
ad valorem proceeds resulting from increases in taxable values due to improvements and additions.
Construction activity increased significantly with 191 permits being issued for new construction in fiscal
year 2016 with a value of $43.4 million compared to 142 permits being issued for new construction in
fiscal year 2015 with a value of $40.6 million. These levels are higher than past years and can be
primarily attributed to the improved outlook for the housing market.
General Fund unassigned fund balance and amounts committed by the financial policies resolution
based on the minimum of 30% of the General Fund expenditures budget, were 49% for the fiscal year
2016 expenditures budget. The City has been steadfast and refused to spend down these balances
because the City understands reliance on accumulated fund balances to fund operating expenditures is
not a prudent fiscal strategy. To this end, the original budget for fiscal year 2016 was balanced without
a reduction of fund balances.
Long-term Financial Planning
Administration
Stormwater
Major Initiatives
New agreements were negotiated with the two collective bargaining units. In related measures,
modifications were made to the employee health insurance coverages to reduce the employee's cost for
family coverage and an agreement was reached to pursue changes to the Police Officer's Pension Plan.
These actions should help attract better job applicants. Also, a competitive selection process for
property, liability and workers' compensation insurance resulted in a 20% savings for these coverages.
Recognizing that a number of employees could be interested in a voluntary early retirement option, a
program was adopted to pay $1,000 for each year of service and continue group insurance to age 65 or
up to three years for those over age 50 having at least 15 years of service. With 13 employees electing
the program, several departments were reorganized and a number of promotional opportunities became
available. This action was also expected to significantly reduce the annual payroll and enable the City
to recover the amounts paid out within about a two year time frame.
The main focus of Stormwater activities the past fiscal year continued to be on the Stormwater
Management Program, which includes capital projects, maintenance, citizen response and education
and forward planning. The City discontinued the program to install quarter-round piping in drainage
swales and began a renewed focus on mowing and clearing swales and ditches. This is expected to be a
better means of insuring a smooth flow of stormwater. Additional equipment was acquired and City
crews are now concentrated on the task of keeping those areas clear of vegetation. Operation and
maintenance activities are accounted for in the General Fund, with about one-half of the costs offset
by an annual transfer from the Stormwater Utility Fund. Equipment replacements are being accounted
for in the Stormwater Utility Fund.
5
The Police Department continues to participate in the accreditation program offered by the commission
for Florida Law Enforcement Accreditation. The designation encourages the Police Department to
establish goals and objectives with provisions for periodic updating; constant reevaluation of whether
departmental resources are being employed in accordance with agency goals, objectives and mission;
constant reevaluation of departmental policies and procedures as documented in the department’s
written directive system; to accommodate correction of internal deficiencies and inefficiencies before
they become public problems; and the opportunity to reorganize without the appearance of personal
attacks. Standards and performance measurements resulting from the accreditation process will
continue to guide both Sebastian Police Department and city administration in alleviating potentially
adverse conditions.
Public Safety
The City continues to work on transportation improvements. Grant matching funds were allocated from
discretionary sales taxes for roadway enhancements to the Main Street entrance to the Airport and for
improvements to Tulip Drive. Funds were also allocated from discretionary sales taxes to purchase a
new Patch Truck needed for repairing pot holes throughout the City and for the major reconstruction of
Barber Street. Several roads were resurfaced using funds available from local option gas taxes. Other
projects planned for future years include repairs to sidewalks, plus additional street repaving that will
be funded by local option gas taxes.
The Sebastian Municipal Airport’s infrastructure is being developed with the intent of attracting
economic development and stimulating the business climate in order to create jobs in the community.
The current Master Plan serves as the guiding document for airport planning. Land leases are a primary
source of airport revenues and over 150 acres of property is available for lease, for both aviation and
non-aviation businesses. Also important are sales from a self-serve fueling facility. The Airport’s limited
resources continue to be leveraged by aggressively seeking and obtaining grants from the Florida
Department of Transportation (FDOT) and Federal Aviation Administration (FAA) to develop the
necessary infrastructure. Planned improvements include constructing another hangar with grant funds
matched by funds from discretionary sales taxes.
Airport
Traffic & Transportation
Culture & Recreation
The City continued efforts to promote the “working waterfront” concept on the riverfront properties
that were purchased with grant funding and matching funds provided by discretionary sales taxes.
Additional grants were also secured for installation of a baffle box, drainage improvements and other
enhancements. During fiscal year 2016, a project to pave the CavCor boat parking property was paid
from the tax increment funds available in the Riverfront Community Development Agency Fund. In other
areas, the City continued supporting the use of Lakefront Park for gatherings organized by various
community groups, including the Clam Bake, Chamber of Commerce and Art Club. The City also used
discretionary sales taxes and monies advanced from the Building Enterprise Fund to allow the Golf
Course to totally replace the golf course irrigation system.
6
Respectfully submitted,
Joseph Griffin
City Manager
Kenneth W. Killgore
Administrative Services Director
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Sebastian for its
comprehensive annual financial report for the fiscal year ended September 30, 2015. This is a
prestigious national award-recognizing conformance with the highest standards for preparation of state
and local government financial reports. In order to be awarded a Certificate of Achievement, a
government must publish an easily readable and efficiently organized comprehensive annual financial
report. This report must satisfy both U.S. generally accepted accounting principles and applicable legal
requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our
current comprehensive annual financial report continues to meet the Certificate of Achievement
Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another
certificate.
Awards and Acknowledgements
The preparation of this report would not be possible without the dedicated service of the
Administrative Services department staff. Their efforts toward improving the accounting and financial
reporting systems has led to the improved quality of information reported to the City Council, State and
Federal agencies and the citizens of the City of Sebastian. We sincerely appreciate their contributions.
7
CITY OF SEBASTIAN, FLORIDA
Organizational Chart
8
CITY OF SEBASTIAN, FLORIDA
GFOA Certificate of Achievement
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10
FINANCIAL SECTION
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INDEPENDENT AUDITORS' REPORT
February 10, 2017
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
Report on the Financial Statements
Management's Responsibility for the Financial Statements
Independent Auditors' Responsibility
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
Sebastian, Florida (the “City”), as of and for the year ended September 30, 2016, 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 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.
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 auditors' 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 entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of
the financial statements.
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
13
Opinions
Required Supplementary Information
Other Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and the schedules for the pension and other postemployment benefit plans, 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 the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Sebastian, Florida’s basic financial statements. The combining and
individual fund financial statements and schedules are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The combining and individual fund financial statements and schedules 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. The 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 information is fairly stated in all material respects in relation to
the basic financial statements as a whole.
In our opinion, the financial statements referred to previously 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 of Sebastian, Florida as of
September 30, 2016, and the respective changes in financial position and cash flows, where applicable,
thereof and the respective budgetary comparison for the General Fund and each major special revenue
fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
14
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated February 10,
2017, on our consideration of the City of Sebastian, Florida’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.
The introductory section and statistical tables are presented for purposes or additional analysis and are
not a required part of the basic financial statements. Such information 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 it.
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16
MANAGEMENT'S DISCUSSION AND ANALYSIS
17
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Financial Highlights
·
·
·
·
Overview of the Financial Statements
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current years activities, resulting
changes and currently known facts, please read it in conjunction with the Transmittal Letter and the City's financial
statements.
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of
resources at the close of the fiscal year 2016 by $55,983,849 (net position). Of this amount, $2,898,724
(unrestricted net position) may be used to meet the City's on-going obligations to citizens and creditors.
The City's total net position increased by $1,025,641 in governmental activities and $686,939 in business-type
activities primarily from an increase of $760,934 in general revenues from governmental activities and $705,067 in
transfers recorded in business-type activities.
Governmental funds reported a combined ending fund balance of $11,850,326, an increase of $330,117 from the
prior year. Almost 46% of this amount, $5,397,274 is unassigned and available for spending, a $166,569 increase
from fiscal year 2015, due to a larger amount of tax revenues in the General Fund.
The Golf Course Fund and Airport Fund reported an increase in the deficit in unrestricted net position, due to
operating losses in those funds, largely resulting from the large investments made in capital assets. The Building
Enterprise fund reported an increase in net position, as a result of an improved levels of construction activity. All
of the City's enterprise funds reported a positive increase in overall net position at the end of the year.
The annual report consists of a series of financial statements. The Statement of Net Position and the Statement of
Activities provide information about the activities of the City as a whole and present a longer-term view of the City's
finances. For governmental activities, the fund financial statements tell how these services were financed in the
short term as well as what remains for future spending. Fund financial statements also report the City's operations in
more detail by providing information about the City's most significant funds. The notes to the financial statements
provide additional information that is essential to a full understanding of the data provided in the government-wide
and fund financial statements.
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.
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 them reported as net position.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 government’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 (e.g., uncollected taxes and earned but
unused vacation leave).
The City of Sebastian's (the "City") discussion and analysis is designed to (a) assist the reader in focusing on significant
financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the City's financial
position, (d) identify any material deviations from the financial plan, and (e) identify individual fund issues or
concerns.
18
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Fiduciary Funds.Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. 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.
Both of the government-wide financial statements distinguish functions of the City that are principally supported by
taxes and intergovernmental revenues (governmental activities ) from other functions that are intended to recover all
or a significant portion of their costs through user fees and charges (business-type activities ). The governmental
activities of the City include general government, public safety, physical and economical environment, transportation,
cultural and recreation. The business-type activities of the City include the golf course, airport and building
operations.
The City maintains fifteen 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, Discretionary Sales Tax Fund and Riverfront Redevelopment Fund all of which are
considered to be major funds. Data from the other twelve governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form
of combining statements and schedules elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund and special revenue funds. Budgetary comparison
statements or schedules have been provided for these funds to demonstrate compliance with this budget.
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 divided into three categories: governmental funds, proprietary funds, and 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 spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful
in evaluating a government’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. Both the governmental fund balance sheet
and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
Notes to the Financial Statements.The notes provide additional information that is essential to a full understanding
of the data provided in the government-wide and fund financial statements.
Other Information.In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information.
Proprietary Funds.The City maintains one type of proprietary funds.Enterprise funds are used to report the same
functions presented as business-type activities in the government-wide financial statements. The City uses
enterprise funds to account for the golf course, airport, and buildings department.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more
detail. The proprietary fund financial statements provide separate information for the City's golf course and airport,
which are major funds, and the buildings department, which is a nonmajor fund.
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CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Governmental Activities Business-type Activities Total
2016 2015 2016 2015 2016 2015
Current and other assets 12,603,239$ 12,446,304$ (229,839)$ 488,176$ 12,373,400$ 12,934,480$
Capital assets, net 39,992,087 41,261,857 12,151,911 10,730,146 52,143,998 51,992,003
Total assets 52,595,326 53,708,161 11,922,072 11,218,322 64,517,398 64,926,483
Deferred outflows of
resources 1,050,060 905,733 - - 1,050,060 905,733
Long-term liabilities 5,397,721 7,597,609 373,094 398,419 5,770,815 7,996,028
Other liabilities 3,392,050 3,138,184 276,365 234,229 3,668,415 3,372,413
Total liabilities 8,789,771 10,735,793 649,459 632,648 9,439,230 11,368,441
Deferred inflows of
resources 144,379 192,506 - - 144,379 192,506
Net position
Net investment in
capital assets 35,886,087 35,220,857 11,989,666 10,517,895 47,875,753 45,738,752
Restricted 5,209,372 4,997,724 - - 5,209,372 4,997,724
Unrestricted 3,615,777 3,467,014 (717,053) 67,779 2,898,724 3,534,793
Total net position 44,711,236$ 43,685,595$ 11,272,613$ 10,585,674$ 55,983,849$ 54,271,269$
A substantial portion of the City’s net position, $47,875,753 (85.5 percent), reflects its investment in capital assets
(e.g., land, buildings, machinery and equipment), 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 its 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.
An additional portion of the City’s net position of $5,209,372 (9.3 percent) represents resources that are subject to
external restrictions on how they may be used. The City may use the remaining balance of unrestricted net position
of $2,898,724 (5.2 percent) to meet its ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position,
for the government as a whole and for its separate governmental activities. Unrestricted net position were negative
for business-type activities as a whole, primarily due to the substantial investments made in capital assets this past
year.
Government-wide Financial Analysis
As previously stated, net position may serve over time as a useful indicator of a government’s financial position. In
the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources
by $55,983,849 at the close of the most recent fiscal year.
Net Position
20
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Governmental Activities Business-type Activities Total
2016 2015 2016 2015 2016 2015
Revenues
Program revenues:
Charges for services 1,576,721$ 1,608,600$ 2,461,829$ 2,503,127$ 4,038,550$ 4,111,727$
Operating grants 323,101 345,937 - - 323,101 345,937
Capital grants 809,932 994,546 841,668 702,154 1,651,600 1,696,700
General revenues:
Property taxes 3,942,048 3,594,210 - - 3,942,048 3,594,210
Other taxes 5,762,921 5,555,270 - - 5,762,921 5,555,270
Intergovernmental 2,466,546 2,365,137 - - 2,466,546 2,365,137
Other 1,650,986 1,546,950 6,787 25,970 1,657,773 1,572,920
Total revenues 16,532,255 16,010,650 3,310,284 3,231,251 19,842,539 19,241,901
Expenses
General government 3,285,607 3,015,536 - - 3,285,607 3,015,536
Public safety 5,476,136 5,164,197 - - 5,476,136 5,164,197
Physical environment 2,538,752 2,759,461 - - 2,538,752 2,759,461
Transportation 1,861,946 2,024,814 - - 1,861,946 2,024,814
Economic environment 364,675 194,630 - - 364,675 194,630
Cultural and recreation 1,191,488 1,293,246 - - 1,191,488 1,293,246
Interest and fiscal
charges 82,943 100,468 - - 82,943 100,468
Golf course - - 1,584,214 1,409,829 1,584,214 1,409,829
Airport - - 1,197,549 1,038,361 1,197,549 1,038,361
Building - - 546,649 531,087 546,649 531,087
Total expenses 14,801,547 14,552,352 3,328,412 2,979,277 18,129,959 17,531,629
Change in net position,
before transfers 1,730,708 1,458,298 (18,128) 251,974 1,712,580 1,710,272
Transfers (705,067) 2,988 705,067 (2,988) - -
Change in net position 1,025,641 1,461,286 686,939 248,986 1,712,580 1,710,272
Net position, beginning
of year 43,685,595 43,656,553 10,585,674 10,336,688 54,271,269 53,993,241
Restatement for
implementation of
GASB 68 - (1,432,244) - - - (1,432,244)
Net position end, of year 44,711,236$ 43,685,595$ 11,272,613$ 10,585,674$ 55,983,849$ 54,271,269$
The City’s net position increased by $1,712,580 during the current fiscal year. The primary reason for the increase in
net position for governmental activities is related to an increase in general revenues. For business-type activities, the
increase in net position is related to investments made in capital assets made possible by transfers from governmental
funds and capital grants.
Change in Net Position
21
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
·
·
·
· A change in transfers of $708,055
Expenses and Program Revenues - Governmental Activities
Revenues by Source - Governmental Activities
An increase in general revenues of $760,934
An increase in expenses of $249,195
Governmental Activities.Governmental activities increased the City’s net position by $1,025,641 as compared to the
prior year increase of $1,461,286. Key elements of this increase are as follows:
A decrease in program revenues of $239,329
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
General
government
Public safety Physical
environment
Transportation Economic
environment
Cultural and
recreation
Interest and
fiscal
Expenses
Program Revenues
Charges for services
10%
Operating grants
2%
Capital grants
5%
Property taxes
24%
Other taxes
42%
Intergovernmental
15%
Other
2%
22
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
·
·
·
·
· A change in transfers in of $708,055
Expenses and Program Revenues - Business-type Activities
Revenues by Source - Business-type Activities
Business-type Activities.Business-type activities increased the City’s net position by $686,939. The key elements of
this increase are as follows:
A decrease in charges for services of $41,298
An increase in expenses of $349,135
A decrease in general revenues of $19,183
An increase in capital grants of $139,514
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Golf course Airport Building
Expenses
Program Revenues
Charges for services
75%
Capital grants
25%
Operating grants and
other
0%
23
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
·
·
·
·
·
·
·
·
·
·
·
·
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund
balance of the General Fund was $5,526,675 while total fund balance amounted to $5,811,428. As a measure of the
General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total
fund expenditures. Unassigned fund balance represents 49.2 percent of total General Fund expenditures, while total
fund balance represents 51.7 percent of that same amount.
Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds.The focus of the City’s governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing
requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year.
Public utility taxes increased by $47,611
The Discretionary Sales Tax revenue special revenue fund has a total fund balance $2,709,105, an increase from the
$2,413,576 total fund balance of the prior year. Funds are restricted for projects that are planned in future years.
Property tax revenues had a positive budgetary variance of $8,850, with 96% of the tax roll being collected. 96%
of the tax roll is budgeted as being collected, based on experience. No less than 95% must be budgeted per
Florida statutes.
Intergovernmental revenue had a positive budgetary variance from higher than anticipated receipts from
municipal revenue sharing and local half-cent sales taxes transmitted by the state.
General Fund expenditures had an overall positive budgetary variance of $484,069. Unanticipated capital
purchases were necessary in several departments, however these were usually covered by savings from operating
accounts or by additional appropriations from reserves.
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$11,850,326, an increase of $330,117 from the prior year. Of this amount, 46 percent ($5,397,274) constitutes
unassigned fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is
classified as one of the following: A) Nonspendable for 1) inventories and prepaids, 2) long-term cash advances, or 3)
is nonspendable as permanent fund corpus for cemetery perpetual care; B) Restricted for capital projects or due to
debt service and special revenue fund designations; C) is committed for development by local ordinance; or D) has
been assigned for other specific uses in the City’s general operations.
The fund balance of the City’s General Fund increased by $158,834 during the current fiscal year, as compared to the
$80,738 decrease reported in the prior fiscal year. Key factors in this change are as follows:
Expenditures increased by $358,500
The General Fund originally budgeted for no changes in the fund balance. The final amended budget showed a deficit
of $424,651. The actual increase in fund balance was $158,834. Significant changes in budgetary variances are as
follows:
All other revenues increased by $71,157
Charges for services increased by $5,820
Intergovernmental increased by $138,997
Franchise fees increased by $15,915
Transfers out from other funds were increased by $343,700
Transfers in from other funds were increased by $7,447
Property tax revenues increased by $305,234 due to millage increase and additions to taxable property values.
24
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Amendments
· $12,000 to replace Airport perimeter gates.
· $10,600 for trial program for landscaping services at Riverview Park and Indian River Drive.
· -$75,000 to discontinue Cemetery Storage Building project.
· $16,000 to record donation from the Greer Trust for Police Department expenditures.
· $14,450 to replace a roller unit that was too expensive to repair.
· $24,600 to make electrical repairs to the Golf Cart Barn.
· $60,425 recorded Building Fund loan for roofing and shutters at Golf Course.
· $51,285 recorded Building Fund loan for parking lot lights.
· $156,125 to purchase an Asphalt Patch Truck.
· $32,247 to replace City Council Chamber air conditioner.
· $117,000 to use Discretionary Sales Tax Reserves to replace a chipper and tractor.
· $18,000 to replace a forklift for the Fleet Management Division.
· $20,000 to use MACE Unit disbandment funds to purchase Police equipment.
· $19,000 increases Airport Main Street project.
· $169,027 to record receipt of State Funds to be deposited to the Police Pension Fund.
· $61,844 to record use of auction proceeds for repair of vehicles and to replace forklift.
· $10,750 to use Discretionary Sales Tax Reserves to match grant for Airport Master Plan update.
· $63,479 to replace work stations at the Police Dispatch Center.
· $13,110 to use Discretionary Sales Tax Reserves to match grant for Taxiway Improvements.
· $371,548 to use General Fund Reserves for payouts on Voluntary Early Retirement Program.
Other factors concerning the finances of these three funds have already been addressed in the discussion of the City's
business-type activities.
Budgetary Highlights
Proprietary Funds.The City’s proprietary fund financial statements provide the same type of information found in
the government-wide financial statements, but in more detail.
The total net position of the airport fund at the end of the fiscal year amounted to $9,838,655, while the unrestricted
net position (deficit) amounted to ($708,735). Compared to the prior year in the same category, net position has
increased by $346,156 while the unrestricted net position (deficit) has changed from ($642,330) to ($708,735). The
change in the unrestricted net position (deficit) is mainly due to an increase in amounts invested in capital assets
resulting from capital contributions.
The total net position of the building fund at the end of the fiscal year amounted to $1,170,935. This is an increase of
$164,566 from the prior year, which was primarily due to the continuation of healthy levels of operating income.
The total net position of the golf course fund at the end of the fiscal year amounted to $263,023, while the
unrestricted net position (deficit) amounted to ($1,095,926). Compared to the prior year in the same category, net
position increased from the prior year and the unrestricted net position (deficit) changed by from ($264,935) to
($1,095,926). This is mainly due to the increase in noncurrent assets recorded for the fiscal year.
The Riverfront Redevelopment Fund ended the year with $458,053 in fund balance, as a result of the transfers out for
pending construction projects being less than budgeted.
Over the course of the fiscal year, the City Council formally approved revisions to the City budget four times. These
budget adjustments fell into three major categories. The first includes amendments to allocate additional funds for
grants, new projects or equipment repairs/replacements that were not originally budgeted. The second includes
transfers to address budget shortages in operating budget accounts resulting from properly classifying charges or for
unanticipated expenditures. The third includes project transfers to close out capital projects or reallocate funds
between them to address budget shortages due to higher bids than anticipated and/or other unanticipated
expenditures. The main components of the increases are as follows:
25
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Amendments (Concluded)
· $36,400 to use Discretionary Sales Tax Reserves to match grant for Hangar C design work.
· $52,524 allocates additional funds for CavCor, Police Parking and Indian River Drive Parking.
· $178,500 to record non-cash proceeds from Velocity Building deeded over to the City.
· $72,000 to use Discretionary Sales Tax Reserves to fund Airport AWOS System.
· $13,984 to allocate funds received from JAG Grant to Police equipment.
· $28,116 to use insurance proceeds for damaged wind turbine for netting poles and repairing entrance gate.
· $58,614 for all other purposes during the fiscal year.
Operating Budget Transfers
· $20,000 to purchase software to enable use of smart phones.
· $12,600 to appropriate previous year unexpended budget for the Clear Village program.
· $80,270 to adjust departmental charges for expenditures for group insurance.
· $10,700 to cover cost of using an IT consultant.
· $10,804 to set up project to improve automation of payroll processes.
· $10,000 to cover expenditures on baffle box maintenance.
· $23,112 to cover work on doors at the Art's and Senior's restrooms.
· $25,000 to cover account overages in the Facilities Maintenance Division accounts.
· $21,684 to cover overages in the Parks Division accounts.
· $7,112 for all transfers between Police Department accounts.
· $25,723 for all other transfers between Public Works Department accounts.
· $15,755 for all transfers between Golf Course accounts.
· $30,637 for all other transfers between other Department accounts.
Project Budget Transfers
· -$91,500 closes Highway Beautification and City Hall Parking projects to cover Veteran's Memorial project.
· -$297,490 closed out a number of completed projects.
· -$42,447 to close completed Fish House Improvements project.
· $142,500 transfers Repaving project funds to a specific Main Street Repaving project.
· $726,000 allocates Barber St. Bridge project, Columbariums project & LOGT Reserves to Repaving project.
· $162,000 discontinues 1/4 Round installation work and uses funds for purchase of an Armadillo unit.
· $60,000 transfers Sidewalk project funds to specific Brushfoot Sidewalk project.
· $33,270 uses rest of Columbarium project funds for additional funding of Police Evidence Building project.
· $22,000 uses Shoreline Stabilization project funds for additional funding of CavCor project.
· $7,490 for all other transfers between other projects.
During the fiscal year, total General Fund actual expenditures were $484,069 less than final amended budgetary
estimates. The overall variance on revenues and expenditures resulted in a $158,834 change to existing fund
balances. To address a number of unbudgeted repairs and replacements that had been deferred during the years of
the economic downturn, $104,686 was allocated from fund balance.
26
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2016 2015 2016 2015 2016 2015
Land 8,319,588$ 8,319,588$ 19,436$ 19,436$ 8,339,024$ 8,339,024$
Buildings 7,755,514 7,602,031 4,923,679 4,763,414 12,679,193 12,365,445
Improvements 2,950,753 3,231,519 1,590,742 789,680 4,541,495 4,021,199
Equipment 2,083,959 2,040,362 489,079 372,574 2,573,038 2,412,936
Infrastructure 18,655,238 19,595,982 4,048,111 4,441,103 22,703,349 24,037,085
Construction in progress 227,035 472,375 1,080,864 343,939 1,307,899 816,314
Total capital assets, net 39,992,087$ 41,261,857$ 12,151,911$ 10,730,146$ 52,143,998$ 51,992,003$
·
·
·
·
·
·
·
·
Total Long-Term Liabilities
Governmental Activities Business-type Activities Total
2016 2015 2016 2015 2016 2015
Notes payable 4,106,000$ 6,041,000$ 162,245$ 212,250$ 4,268,245$ 6,253,250$
Compensated absences 1,200,521 1,465,409 210,849 186,169 1,411,370 1,651,578
Termination benefits - - - - - -
Pollution remediation 91,200 91,200 - - 91,200 91,200
Total 5,397,721$ 7,597,609$ 373,094$ 398,419$ 5,770,815$ 7,996,028$
Long-Term Liabilities.At the end of the current fiscal year, the City had total long-term liabilities outstanding of
$5,770,815. Of this amount, $4,268,245 consist of notes pledging specific revenues to the repayment of the debt.
More detailed information regarding these activities and funds can be found in Footnote 8 of the of the Notes to the
Financial Statements section of the CAFR.
The City’s total debt decreased by $2,225,213 (27.83%) during the current fiscal year. The net decrease was
attributable to annual principal payments that occurred during the year.
Capital Assets.At the end of fiscal year 2016, the City had $52,143,998 invested in a broad range of capital assets,
including land, police and public works equipment, buildings, park facilities, roads, bridges, and stormwater drainage
structures. This amount represents a net increase (including additions and deductions) of $151,996, or (0.3%), over
last year. The following table illustrates the changes in capital assets. Additional information regarding the City's
capital assets can be found in Footnote 7 of the of the Notes to the Financial Statements section of the CAFR.
Business-type activities had the following major changes during the fiscal year:
An increase in improvements due to the new irrigation system at the Golf Course.
An increase in construction in progress due to the maintenance building at the Airport.
Governmental activities had the following major changes during the fiscal year:
A decrease in improvements mainly due to the amount of depreciation
An increase in buildings due to acquiring the Velocity production hangar.
Capital Asset and Debt Administration
An increase in construction in progress due to the CavCor boat parking improvements.
An increase in buildings mainly due to the fish house at the working waterfront.
A decrease in infrastructure mainly due to depreciation.
A decrease in infrastructure mainly due to the amount of depreciation.
27
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Economic Factors and Next Year’s Budget and Rates
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general
overview of the City's finances and to show the City's accountability for the money it receives. If you have questions
about this report or need additional information, contact the Administrative Services Department at City of Sebastian,
1225 Main Street, Sebastian, Florida 32958.
The City's debt is primarily bank notes which are not rated by AAA rated insurance agencies. Other obligations of the
City include accrued vacation pay and sick leave.
The City's elected and appointed officials considered many factors when setting the fiscal year 2017 budget, tax rates,
and fees that will be charged for the business-type activities. One of those factors is the economy. Sebastian's local
economy consists largely of retail and service industries. Less than one percent is devoted to industrial activities.
Construction of new homes is the largest single business in the area. Some of the largest retail stores include Publix
Supermarket and Wal-Mart Stores, Inc.® The Indian River County unemployment rate in September 2016 was 6.2
percent and less than the higher levels of previous years, which is a positive sign and analogous to the economic
pattern existing throughout the state and nation.
The City experienced a 7.2% overall increase in property values for 2017. The millage of 3.8000 was levied in order
to continue allocating funds to improve the Indian River Lagoon and resurface roadways. The City was also able to
restore one-half of the $371,548 to cash reserves that was paid out in 2016 for the Voluntary Early Retirement
program.
The Golf Course reported less revenues from fees in 2016. It was necessary to make additional temporary loans from
the General Fund at year end and although its net position improved with the large investment in capital assets, a
portion of that investment was accomplished by an advance from the Building Fund. The City anticipates the
investments made will result in an increase in customers that will generate higher revenues and enable the loans and
advances to begin to be repaid.
Requests for Information
The General Fund also made temporary interfund loans to the Airport in order to provide sufficient cash flow to cover
large construction contract payments associated with reimbursable grants. Sizable operating losses are primarily the
result of depreciation on capital assets.
With a good level of revenues from building permit fees, the Building Enterprise Fund continued to report a positive
change in net position. There are signs of steady activity in the local housing market, which are encouraging.
28
BASIC FINANCIAL STATEMENTS
29
Statement of Net Position
September 30, 2016
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents 5,674,714$ 532,178$ 6,206,892$
Temporarily restricted cash and cash equivalents 1,287,851 - 1,287,851
Investments 2,777,066 711,739 3,488,805
Permanently restricted investments 74,402 - 74,402
Receivables 972,293 148,342 1,120,635
Internal balances 1,676,438 (1,676,438) -
Prepaid items 87,928 20,942 108,870
Inventories 39,723 31,796 71,519
Deposits held in escrow 12,824 1,602 14,426
Capital assets not being depreciated 8,546,623 1,100,300 9,646,923
Capital assets being depreciated, net 31,445,464 11,051,611 42,497,075
Total assets 52,595,326 11,922,072 64,517,398
Deferred outflows of resources
Deferred pension amounts 1,050,060 - 1,050,060
Liabilities
Accounts payable and other current liabilities 694,237 182,341 876,578
Accrued interest payable 27,321 417 27,738
Unearned revenues 58,676 92,414 151,090
Long-term liabilities:
Due within one year 1,022,009 51,956 1,073,965
Due in more than one year 4,375,712 321,138 4,696,850
Net other postemployment benefits obligation 29,241 1,193 30,434
Net pension liability 2,582,575 - 2,582,575
Total liabilities 8,789,771 649,459 9,439,230
Deferred inflows of resources
Deferred pension amounts 144,379 - 144,379
Net position
Net investment in capital assets 35,886,087 11,989,666 47,875,753
Restricted for:
Debt service 141,115 - 141,115
Perpetual care:
Nonexpendable 996,778 - 996,778
Special revenue uses:
Infrastructure improvements 3,073,005 - 3,073,005
Redevelopment expenses 458,053 - 458,053
Stormwater expenses 457,465 - 457,465
Law enforcement events 82,956 - 82,956
Unrestricted (deficit) 3,615,777 (717,053) 2,898,724
Total net position 44,711,236$ 11,272,613$ 55,983,849$
The accompanying notes are an integral part of these basic financial statements.
CITY OF SEBASTIAN, FLORIDA
Primary Government
30
Statement of Activities
For the Year Ended September 30, 2016
Program Revenues
Operating Capital Net
Charges Grants and Grants and (Expense)
Functions / Programs Expenses for Services Contributions Contributions Revenue
Primary government
Governmental activities:
General government 3,285,607$ 374,581$ 104,814$ -$ (2,806,212)$
Public safety 5,476,136 98,446 207,935 - (5,169,755)
Physical environment 2,538,752 1,049,735 - - (1,489,017)
Transportation 1,861,946 - 10,352 646,132 (1,205,462)
Economic environment 364,675 - - - (364,675)
Cultural and recreation 1,191,488 53,959 - 163,800 (973,729)
Interest and fiscal charges 82,943 - - - (82,943)
Total governmental activities 14,801,547 1,576,721 323,101 809,932 (12,091,793)
Business-type activities:
Golf course 1,584,214 1,135,357 - - (448,857)
Airport 1,197,549 516,403 - 841,668 160,522
Building 546,649 810,069 - - 263,420
Total business-type activities 3,328,412 2,461,829 - 841,668 (24,915)
Total primary government 18,129,959$ 4,038,550$ 323,101$ 1,651,600$ (12,116,708)$
continued…
CITY OF SEBASTIAN, FLORIDA
31
CITY OF SEBASTIAN, FLORIDA
Statement of Activities
For the Year Ended September 30, 2016
Primary Government
Governmental Business-type
Activities Activities Total
Changes in net position
Net revenue (expense) (12,091,793)$ (24,915)$ (12,116,708)$
General revenues:
Property taxes, levied for general purposes 3,942,048 - 3,942,048
Sales and use taxes 5,762,921 - 5,762,921
Franchise fees 1,257,430 - 1,257,430
State shared revenues not restricted to specific programs 2,466,546 - 2,466,546
Interest earnings 77,317 6,787 84,104
Miscellaneous 316,239 - 316,239
Transfers (705,067) 705,067 -
Total general revenues and transfers 13,117,434 711,854 13,829,288
Change in net position 1,025,641 686,939 1,712,580
Net position, beginning of year 43,685,595 10,585,674 54,271,269
Net position, end of year 44,711,236$ 11,272,613$ 55,983,849$
concluded
The accompanying notes are an integral part of these basic financial statements.
32
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33
CITY OF SEBASTIAN, FLORIDA
Balance Sheet
Governmental Funds
September 30, 2016
Nonmajor Total
Discretionary Riverfront Governmental Governmental
General Sales Tax Redevelopment Funds Funds
Assets
Cash and cash equivalents 3,363,563$ 660,559$ 363,678$ 2,574,765$ 6,962,565$
Investments 1,074,335 1,205,152 97,232 474,749 2,851,468
Accounts receivable, net 398,148 - - - 398,148
Due from other funds 1,088,132 - - - 1,088,132
Due from other governments 201,434 292,756 - 79,955 574,145
Deposits held in escrow 12,824 - - - 12,824
Inventories 39,723 - - - 39,723
Prepaid items 87,928 - - - 87,928
Advance to other funds 100,000 550,638 - - 650,638
Total assets 6,366,087$ 2,709,105$ 460,910$ 3,129,469$ 12,665,571$
Liabilities
Accounts payable and accrued liabilities 419,172$ -$ 2,857$ 195,397$ 617,426$
Due to other funds - - - 62,332 62,332
Due to other governments 76,811 - - - 76,811
Unearned revenue 58,676 - - - 58,676
Total liabilities 554,659 - 2,857 257,729 815,245
Fund balances (deficit)
Nonspendable 227,651 - - 996,778 1,224,429
Restricted 46,262 2,709,105 458,053 1,026,495 4,239,915
Committed - - - 977,868 977,868
Assigned 10,840 - - - 10,840
Unassigned 5,526,675 - - (129,401) 5,397,274
Total fund balances 5,811,428 2,709,105 458,053 2,871,740 11,850,326
Total liabilities and fund balances 6,366,087$ 2,709,105$ 460,910$ 3,129,469$ 12,665,571$
The accompanying notes are an integral part of these basic financial statements.
34
CITY OF SEBASTIAN, FLORIDA
Reconciliation
Fund Balances for Governmental Funds
to Net Position of Governmental Activities
September 30, 2016
Fund balances - total governmental funds 11,850,326$
Amounts reported for governmental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial resources,
and therefore are not reported in the fund statement.
Capital assets not being depreciated 8,546,623
Capital assets being depreciated, net 31,445,464
Certain liabilities, such as notes payable, are not due and payable
in the current period, and therefore are not reported in the funds.
Notes payable (4,106,000)
Compensated absences (1,200,521)
Net other postemployment benefits obligation (29,241)
Contamination liability (91,200)
Accrued interest on long-term debt (27,321)
Certain pension-related amounts, such as the net pension liability and deferred amounts
are not due and payable in the current period or do not represent current financial
resources and therefore are not reported in the funds.
Net pension liability (2,582,575)
Deferred outflows related to the net pension liability 1,050,060
Deferred inflows related to the net pension liability (144,379)
Net position of governmental activities 44,711,236$
The accompanying notes are an integral part of these basic financial statements.
35
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2016
Nonmajor Total
Discretionary Riverfront Governmental Governmental
General Sales Tax Redevelopment Funds Funds
Revenues
Taxes:
Property 3,603,024$ -$ 339,024$ -$ 3,942,048$
Public utility 2,686,322 - - - 2,686,322
Sales - 3,052,152 - - 3,052,152
Motor fuel - - - 646,132 646,132
Franchise fees 1,257,430 - - - 1,257,430
Licenses and permits 136,614 - - - 136,614
Intergovernmental 2,654,806 - - 54,260 2,709,066
Impact fees - - - 163,800 163,800
Charges for services 326,775 - - 1,064,720 1,391,495
Fines 72,011 - - 1,048 73,059
Investment earnings 28,859 28,449 3,019 16,990 77,317
Contributions and donations 72,681 - - 7,900 80,581
Other revenues 226,579 - 36,000 53,660 316,239
Total revenues 11,065,101 3,080,601 378,043 2,008,510 16,532,255
Expenditures
Current:
General government 3,051,521 - 2,033 - 3,053,554
Public safety 4,959,610 - - 8,648 4,968,258
Physical environment 1,234,117 - - 82,580 1,316,697
Transportation 951,380 - - 217,539 1,168,919
Economic environment - - 331,589 - 331,589
Culture and recreation 849,789 - - - 849,789
Debt service:
Principal - - - 1,935,000 1,935,000
Interest and fiscal charges - - - 92,907 92,907
Capital outlay 191,903 - 15,084 1,573,371 1,780,358
Total expenditures 11,238,320 - 348,706 3,910,045 15,497,071
Revenues (under) over expenditures (173,219) 3,080,601 29,337 (1,901,535) 1,035,184
Other financing sources (uses)
Transfers in 675,753 - 10,600 3,007,926 3,694,279
Transfers out (343,700) (2,785,072) (28,612) (1,241,962) (4,399,346)
Total other financing sources (uses)332,053 (2,785,072) (18,012) 1,765,964 (705,067)
Net changes in fund balances 158,834 295,529 11,325 (135,571) 330,117
Fund balances, beginning of year 5,652,594 2,413,576 446,728 3,007,311 11,520,209
Fund balances, end of year 5,811,428$ 2,709,105$ 458,053$ 2,871,740$ 11,850,326$
The accompanying notes are an integral part of these basic financial statements.
36
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended September 30, 2016
Net change in fund balances - total governmental funds 330,117$
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.
Capital outlay 1,795,583
Depreciation expense (3,050,128)
Loss on disposal of capital assets (15,225)
Bond proceeds provide current financial resources to governmental funds
in the period issued, but issuing bonds increases long-term liabilities in the
statement of net position. Repayment of bond principal is an expenditure in the
governmental funds, but the repayment reduces long-term liabilities in the
statement of net position.
Principal payments on long-term liabilities 1,935,000
Some expenses reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in
governmental funds.
Change in accrued interest payable on long-term debt 9,964
Change in the accrual for compensated absences 264,888
Change in the accrual for other postemployment benefits (4,515)
Change in the net pension liability and related deferred amounts (240,043)
Change in net position of governmental activities 1,025,641$
The accompanying notes are an integral part of these basic financial statements.
CITY OF SEBASTIAN, FLORIDA
37
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Property 3,594,174$ 3,594,174$ 3,603,024$ 8,850$
Public utility 2,684,100 2,684,100 2,686,322 2,222
Franchise fees 1,255,053 1,255,053 1,257,430 2,377
Licenses and permits 145,500 145,500 136,614 (8,886)
Intergovernmental 2,383,860 2,566,871 2,654,806 87,935
Charges for services 334,534 334,534 326,775 (7,759)
Fines 65,300 85,300 72,011 (13,289)
Investment earnings 21,000 21,000 28,859 7,859
Contributions and donations 11,100 29,055 72,681 43,626
Other revenues 149,700 216,404 226,579 10,175
Total revenues 10,644,321 10,931,991 11,065,101 133,110
Expenditures
Current:
General government 2,923,833 3,162,170 3,051,521 (110,649)
Public safety 4,696,513 5,014,271 4,959,610 (54,661)
Physical environment 1,406,699 1,405,886 1,234,117 (171,769)
Transportation 1,005,599 997,127 951,380 (45,747)
Culture and recreation 871,161 883,339 849,789 (33,550)
Capital outlay 211,000 259,596 191,903 (67,693)
Total expenditures 11,114,805 11,722,389 11,238,320 (484,069)
Revenues over (under) expenditures (470,484) (790,398) (173,219) 617,179
Other financing sources (uses)
Transfers in 770,484 727,151 675,753 (51,398)
Transfers out (300,000) (361,404) (343,700) 17,704
Total other financing sources (uses)470,484 365,747 332,053 (33,694)
Net changes in fund balances - (424,651) 158,834 583,485
Fund balance, beginning of year 5,652,594 5,652,594 5,652,594 -
Fund balance, end of year 5,652,594$ 5,227,943$ 5,811,428$ 583,485$
The accompanying notes are an integral part of these basic financial statements.
38
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Discretionary Sales Tax Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Sales 2,931,500$ 2,931,500$ 3,052,152$ 120,652$
Investment earnings 23,353 23,353 28,449 5,096
Total revenues 2,954,853 2,954,853 3,080,601 125,748
Other financing sources uses
Transfers out (2,954,853) (4,907,073) (2,785,072) 2,122,001
Net changes in fund balance - (1,952,220) 295,529 2,247,749
Fund balance, beginning of year 2,413,576 2,413,576 2,413,576 -
Fund balance, end of year 2,413,576$ 461,356$ 2,709,105$ 2,247,749$
The accompanying notes are an integral part of these basic financial statements.
39
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Riverfront Redevelopment Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Property 325,099$ 325,099$ 339,024$ 13,925$
Investment earnings 440 440 3,019 2,579
Other revenues 36,000 36,000 36,000 -
Total revenues 361,539 361,539 378,043 16,504
Expenditures
Current:
General government 2,568 2,568 2,033 (535)
Economic environment 258,355 532,351 331,589 (200,762)
Capital outlay - 8,500 15,084 6,584
Total expenditures 260,923 543,419 348,706 (194,713)
Revenues over (under) expenditures 100,616 (181,880) 29,337 211,217
Other financing sources (uses)
Transfers in 64,384 10,600 10,600 -
Transfers out (165,000) (220,417) (28,612) 191,805
Total other financing sources (uses)(100,616) (209,817) (18,012) 191,805
Net changes in fund balance - (391,697) 11,325 403,022
Fund balance, beginning of year 446,728 446,728 446,728 -
Fund balance, end of year 446,728$ 55,031$ 458,053$ 403,022$
The accompanying notes are an integral part of these basic financial statements.
40
CITY OF SEBASTIAN, FLORIDA
Statement of Net Position
Proprietary Funds
September 30, 2016
Golf Nonmajor -
Course Airport Building Total
Assets
Current assets:
Cash and cash equivalents 1,498$ 384,728$ 145,952$ 532,178$
Investments - - 711,739 711,739
Accounts receivable 233 5,288 - 5,521
Due from other governments - 142,821 - 142,821
Inventories 12,871 18,925 - 31,796
Deposits held in escrow 493 616 493 1,602
Prepaid items 8,119 9,889 2,934 20,942
Total current assets 23,214 562,267 861,118 1,446,599
Noncurrent assets:
Advance to other funds - - 356,700 356,700
Capital assets:
Land - 9,060 10,376 19,436
Buildings 498,223 6,187,616 - 6,685,839
Improvements other than buildings 1,147,670 1,662,147 - 2,809,817
Machinery and equipment 398,018 913,415 116,997 1,428,430
Infrastructure 1,100,951 7,362,883 - 8,463,834
Construction in process 10,242 1,070,622 - 1,080,864
Less accumulated depreciation (1,633,910) (6,658,353) (44,046) (8,336,309)
Total noncurrent assets 1,521,194 10,547,390 440,027 12,508,611
Total assets 1,544,408 11,109,657 1,301,145 13,955,210
Liabilities
Current liabilities:
Accounts payable and accrued liabilities 65,586 83,887 20,156 169,629
Due to other funds 535,800 490,000 - 1,025,800
Due to other governments 6,046 1,125 5,958 13,129
Unearned revenues 69,721 14,673 8,020 92,414
Current portion of notes payable 51,956 - - 51,956
Total current liabilities 729,109 589,685 34,134 1,352,928
Noncurrent liabilities:
Compensated absences, net of current portion 84,925 30,489 95,435 210,849
Advance from other fund 356,700 650,638 - 1,007,338
Notes payable 110,289 - - 110,289
Net other postemployment benefit obligation 362 190 641 1,193
Total noncurrent liabilities 552,276 681,317 96,076 1,329,669
Total liabilities 1,281,385 1,271,002 130,210 2,682,597
Net position
Net investment in capital assets 1,358,949 10,547,390 83,327 11,989,666
Unrestricted (deficit) (1,095,926) (708,735) 1,087,608 (717,053)
Total net position 263,023$ 9,838,655$ 1,170,935$ 11,272,613$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
41
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended September 30, 2016
Golf Nonmajor -
Course Airport Building Total
Operating revenues
Charges for fees and rents:
Building permit fees -$ -$ 804,568$ 804,568$
Golf course fees 1,089,255 - - 1,089,255
Rents 28,473 332,238 - 360,711
Other revenues 13,729 184,025 - 197,754
Total operating revenues 1,131,457 516,263 804,568 2,452,288
Operating expenses:
Salaries, wages and employee benefits 365,632 141,636 428,763 936,031
Contractual services, materials and supplies 1,076,735 318,388 104,152 1,499,275
Depreciation 134,575 718,149 13,734 866,458
Total operating expenses 1,576,942 1,178,173 546,649 3,301,764
Operating income (loss) (445,485) (661,910) 257,919 (849,476)
Nonoperating revenues (expenses)
Investment income 616 939 5,232 6,787
Interest expense (7,272) (19,376) - (26,648)
Gain on disposal of capital assets 3,900 140 5,501 9,541
Total nonoperating revenues (expenses)(2,756) (18,297) 10,733 (10,320)
Income (loss) before capital contributions and transfers (448,241) (680,207) 268,652 (859,796)
Capital contributions - 841,668 - 841,668
Transfers in 624,458 184,695 - 809,153
Transfers out - - (104,086) (104,086)
Total transfers 624,458 184,695 (104,086) 705,067
Change in net position 176,217 346,156 164,566 686,939
Net position, beginning of year 86,806 9,492,499 1,006,369 10,585,674
Net position, end of year 263,023$ 9,838,655$ 1,170,935$ 11,272,613$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
42
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2016
Golf Nonmajor -
Course Airport Building Total
Cash flows from operating activities
Cash received from customers and users 1,141,158$ 1,029,009$ 447,916$ 2,618,083$
Cash payments to suppliers (1,038,242) (347,313) (99,812) (1,485,367)
Cash payments for employee services (352,611) (140,689) (417,849) (911,149)
Net cash provided (used) by operating activities (249,695) 541,007 (69,745) 221,567
Cash flows from noncapital financing activities
Interest paid on advance from other fund (7,272) (19,376) - (26,648)
Cash payments to other funds - - (104,086) (104,086)
Cash receipts from other funds 1,383,158 134,046 - 1,517,204
Net cash provided (used) by noncapital
financing activities 1,375,886 114,670 (104,086) 1,386,470
Cash flows from capital and related
financing activities
Repayment of long term debt (50,005) - - (50,005)
Acquisition and construction of capital assets (1,091,778) (1,148,440) (65,736) (2,305,954)
Proceeds from sale of capital assets 3,900 17,870 5,501 27,271
Receipts from capital contributions - 841,668 - 841,668
Net cash used by capital and
related financing activities (1,137,883) (288,902) (60,235) (1,487,020)
Cash flows from investing activities
Sale of investments 129,287 - 2,140 131,427
Purchase of investments (122,638) - (3,852) (126,490)
Investment income 616 939 5,232 6,787
Net cash provided by (used in) investing activities 7,265 939 3,520 11,724
Net increase (decrease) in cash and cash equivalents (4,427) 367,714 (230,546) 132,741
Cash and cash equivalents, beginning of year 5,925 17,014 376,498 399,437
Cash and cash equivalents, end of year 1,498$ 384,728$ 145,952$ 532,178$
continued…
Business-type Activities - Enterprise Funds
43
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2016
Golf Nonmajor -
Course Airport Building Total
Business-type Activities - Enterprise Funds
Cash flow from operating activities:
Operating income (loss) (445,485)$ (661,910)$ 257,919$ (849,476)$
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense 134,575 718,149 13,734 866,458
Change in:
Accounts receivable (233) 47 - (186)
Inventories (34) (6,179) - (6,213)
Due from other governments - 507,184 - 507,184
Advance to other funds - - (356,700) (356,700)
Prepaid items (4,458) (2,247) 388 (6,317)
Accounts payable 42,985 (20,499) 3,952 26,438
Due to other governments 858 234 380 1,472
Unearned revenues 9,076 5,281 (332) 14,025
Accrued compensated absences 12,960 915 10,806 24,681
Net other postemployment benefit obligation 61 32 108 201
Total adjustments 195,790 1,202,917 (327,664) 1,071,043
Net cash provided (used) by operating activities (249,695)$ 541,007$ (69,745)$ 221,567$
concluded
The accompanying notes are an integral part of these basic financial statements.
44
CITY OF SEBASTIAN, FLORIDA
Statement of Fiduciary Net Position
Fiduciary Funds
September 30, 2016
Pension
Trust Agency
Police
Officers' Performance
Pension Deposits
Assets
Cash and cash equivalents -$ 32,841$
Receivables:
Interest and dividends 33,095 -
Investments, at fair value:
Local government surplus trust funds investment pools - 73,750
Money market funds 509,494 -
United States treasuries 571,515 -
United States agencies 255,812 -
Unit Investment trusts 96,153 -
Municipal obligations 131,449 -
Domestic corporate bonds 2,604,211 -
Domestic corporate equities 8,044,036 -
Foreign corporate equities 238,184 -
EFT equities 4,761 -
Total investments 12,455,615 73,750
Total assets 12,488,710 106,591$
Liabilities
Refunds payable - 106,591$
Net position
Restricted for pension benefits 12,488,710$
The accompanying notes are an integral part of these basic financial statements.
45
CITY OF SEBASTIAN, FLORIDA
Statement of Changes in Fiduciary Net Position
Fiduciary Fund - Pension Trust
For the Year Ended September 30, 2016
Police
Officers'
Pension
Additions
Contributions:
Employer 322,998$
Plan members 167,309
State 169,027
Total contributions 659,334
Investment income:
Net increase in fair value of investments 829,478
Interest and dividends 300,653
Total investment income 1,130,131
Investment expenses (62,992)
Net investment earnings 1,067,139
Total additions 1,726,473
Deductions
Benefits 493,765
Administrative expenses 28,025
Total deductions 521,790
Change in net position 1,204,683
Net position, beginning of year 11,284,027
Net position, end of year 12,488,710$
The accompanying notes are an integral part of these basic financial statements.
46
NOTES TO FINANCIAL STATEMENTS
47
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government-wide and Fund Financial Statements
The City of Sebastian (the "City"), a Florida Municipal Corporation, was incorporated in 1924 under Sections 1826-
1832 of the Revised Florida Statutes. The City has a population of 23,137 living in an area of approximately 14.6
square miles. The governing body is a five member elected City Council with a mayor elected from the five
members. The City Council appoints the City Manager who is responsible for the administration of all City
services.
The financial statements of the City have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the
accepted standard setting body for establishing governmental accounting and financial reporting principles. The
more significant of the City’s accounting policies are described below.
Reporting Entity
As required by generally accepted accounting principles, these financial statements present the government and
its component units, entities for which the City is financially accountable. Blended component units, although
legally separate entities, are, in substance, part of the government’s operations and as such, data from these
units are combined with data of the primary government.Discretely presented component units, on the other
hand, are reported in a separate column in the combined financial statements to emphasize that they are legally
separate from the government. The City has no discretely presented component units.
Blended Component Units
Blended component units are legally separate entities that are from the City but so intertwined with the City that
they are, in substance, the same as the City. Discretely presented component units are entities that are legally
separate from the City but for which the City is financially accountable, or their relationship with the City is such
that exclusion would cause the City’s financial statements to be misleading or incomplete. The City has two
component units are blended with the primary government for financial statement purposes because the
component unit's governing body is substantially the same as the City Council and/or there is a financial
benefit/burden relationship between the primary government and the component unit.
Community Redevelopment Agency (CRA) – The governing body of the CRA is identical to the Sebastian City
Council and there is a benefit/burden relationship to the City. The CRA is accounted for in a special revenue fund
entitled "Riverfront Redevelopment." F.S. Section 163.387(8) requires an independent audit of the fund each
fiscal year and a report of such audit. The City has presented the CRA as a major fund of the City to satisfy this
requirement simply due to the scope of the audit for a major fund being broader than a non-major fund.
City of Sebastian Police Officers' Pension Plan – The City Council only appoints two of the five members of the
governing board, but it is financially responsible for funding the police officers' pension benefits. The City of
Sebastian Police Officers' Pension Trust Fund only exists to provide pension benefits to City of Sebastian police
officers. It is accounted for as a Pension Trust fund entitled "Police Officers' Pension."
The government-wide financial statements (i.e., the statement of net position and the statement of activities)
report information on all of the nonfiduciary activities of the primary government and its component units. For
the most part, the effect of interfund activity has been removed from these statements. Governmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately from business-
type activities, which rely to a significant extent on fees and charges for support.
48
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment
are offset by program revenues.Direct expenses are those that are clearly identifiable with a specific function
or segment.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 segment and (2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported instead as general
revenues.
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
relatedcashflows. 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.
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 60 days of the end of the current fiscal period, and expenditure-driven
grants which must be collected within one year. 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 and claims and judgments, are recorded only when payment is due.
Property taxes, intergovernmental revenue, licenses, and interest associated with the current fiscal period are all
considered to be susceptible to accrual and as such 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
government.
Agency funds are custodial in nature and do not present results of operations or have a measurement focus.
The City reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all the financial resources of the
general government, except those accounted for and reported in another fund.
The Discretionary Sales Tax Fund accounts for the financial resources used for infrastructure improvements and
equipment purchases.
The Riverfront Redevelopment Fund accounts for tax increment revenues that are legally restricted for the
redevelopment of the City's riverfront area.
49
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Capital projects funds are used to account for and report financial resources that are restricted, committed, or
assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other
capital assets.
The permanent fund is used to record the activity and balance of the Cemetery Trust which provides funds for
perpetual care of cemetery lots.
The pension trust fund accounts for the activities of the Police Officer's Retirement System, which accumulates
resources for pension benefit payments to qualified police officers.
The performance deposits agency fund accounts for deposits placed by bidders and developers to guarantee
performance pursuant to bid or contract. These funds are held by the City as agent for individuals and businesses.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are payments in lieu of taxes and various other functions of the
government. Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned. The General Fund provides certain central services to other funds of the City which
are presented as program expenses in the funds receiving services. The related General Fund revenue has been
netted against program expense in the government-wide statement of activities.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are
charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
Restricted net position represents resources that are subject to restrictions beyond the government’s control. The
restrictions may be externally imposed or imposed by law. When both restricted and unrestricted resources are
available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as
they are needed.
The City reports the following major proprietary funds:
Additionally, the City reports the following fund types:
The enterprise funds account for those operations that are financed and operated in a manner similar to private
business or where the City has decided that the determination of revenues earned, costs incurred and/or net
income is necessary for management accountability.
The Golf Course Fund accounts for the activities of the municipal golf course.
The Airport Fund accounts for the activities of the municipality's general aviation airport.
Special revenue funds are used to account for and report the proceeds of specific revenue sources that are
restricted or committed to expenditure for specified purposes other than debt service or capital projects.
Debt service funds are used to account for and report financial resources that are restricted, committed, or
assigned to expenditure for principal and interest.
50
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Equity
Deposits and Investments
Internal Balances
Restricted Assets
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of
the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or
“advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances
between funds are reported as “due to/from other funds.” Any residual balances outstanding between the
governmental activities and business-type activities are reported in the government-wide financial statements as
“internal balances.”
Advances between funds are offset by nonspendable fund balance in General Fund and restricted fund balance in
other applicable governmental funds to indicate they are not available for appropriation and are not expendable
available financial resources.
Certain amounts reported as cash and cash equivalents are classified as restricted assets. These include balances
in the debt service funds that are set aside to meet bonded debt requirements, balances in the capital projects
funds to be used for the payment of project costs and balances in the Cemetery Fund that are either not
permitted to be spent or can only be spent for items incidental to cemetery expansions. The amount of the
Cemetery Fund investments is also classified as restricted assets and reported as permanently restricted
investments.
The City considers cash on hand and demand deposits, restricted cash deposits, and short-term investments with
maturities of three months or less when purchased to be cash for the statement of cash flows. Cash in excess of
current requirements is invested in various interest-bearing securities and disclosed as part of the City's
investments.
Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, common stock, guaranteed
investment contracts and the Local Government Surplus Funds Trust Fund Investment pool. The Local Government
Surplus Funds Trust Fund is administered by the Florida State Board of Administration, which is not a registrant
with the Securities and Exchange Commission. However, the Board has adopted operating procedures consistent
with the requirements for a 2a-7 fund or accounts. In accordance with the regulations of 2a-7 like pools, the City's
share of investments held at the State Board of Administration are reported at amortized cost, which
approximates fair value. This pool is regulated by the State and the fair value of the position in the pool is the
same as the value of the pool share. Investment earnings are allocated to the participating funds at the end of
each month based upon the ratio of each participant's investment to the total pooled investments. Other
investments, including the Police Officers' Pension Fund, are reported at their fair value based on the quoted
market price or the best available information.
51
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Receivables and Payables
Other Assets
Capital Assets
Years
Buildings and improvements 10-40
Public domain infrastructure 40-50
System infrastructure 15-30
Improvements other than building 10-40
Machinery, equipment and other 5-15
Airport runways 20
All trade and property tax receivables are shown net of an allowance for uncollectibles, as applicable.
Amounts due from other governments include amounts due from grantors for specific programs and capital
projects. Program grants and capital grants for capital assets are recorded as receivables and revenues at the
time reimbursable project costs are incurred. Revenues received in advance of project costs being incurred are
deferred. Receivables consist of trade receivables, due from other governments and interest receivable and are
recorded at the net realizable value. As of September 30, 2016, the City has no allowance for doubtful accounts,
since all receivables are considered collectible.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset
lives are not capitalized.
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, if any, is included as part of the
capitalized value of the asset constructed.
Inventories are valued at cost using the average cost method. Inventory in the General Fund consists of materials
and supplies held for consumption. The cost is recorded as an expenditure/expense at the time the individual
inventory items are consumed. Inventory in the Golf Course Fund consists of supplies held for resale.
Capital assets, which include land, buildings, improvements, equipment, and infrastructure assets (e.g., roads,
bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. The City defines capital assets as assets with an initial,
individual cost of more than $750 and an estimated useful life in excess of one year. Such assets are recorded at
historical cost, if purchased, and at estimated acquisition cost at date of gift, if donated. Major additions are
capitalized while maintenance and repairs that do not improve or extend the life of the respective assets are
expensed.
Costs associated with the issuance or refunding of bonds payable are reported as assets the in proprietary funds
and government-wide statements. These costs are amortized over the life of the related debt utilizing the
straight-line method.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both the government-wide and fund financial statements.
52
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Deferred Outflows of Resources
Compensated Absences
Unearned Revenue
Deferred Inflows of Resources
Long-term Obligations
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.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element represents an acquisition of net position that
applies to future periods and so will not be recognized as an inflow of resources until that time. The
governmental funds report unavailable revenues, which arise only under a modified accrual basis of accounting
that are reported as deferred inflows of resources. These amounts are deferred and recognized as an inflow of
resources in the period that the amounts become available. In addition, the City reports deferred inflows of
resources for changes in expected and actual investment returns, assumptions and benefits provided in its pension
plans.
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits and
these are accounted for using the termination payment method. All vacation and sick leave amounts are accrued
in the government-wide and proprietary financial statements. A liability for these amounts is reported in
governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
In addition to assets, the statement of financial position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element represents a consumption of net position that
applies to future periods and so will not be recognized as an outflow of resources until then. The City reports
deferred outflows of resources related to the net pension liability. A portion of these costs represent
contributions to the plan subsequent to the plan measurement date. More detailed information can be found in
Note 13.
Governmental funds report unearned revenue in connection with resources that have been received, but not yet
earned.
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.
53
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Fund Equity
Use of Estimates
2. BUDGETARY INFORMATION
Actual results of operations presented in accordance with U.S. generally accepted accounting principles (GAAP
basis) and the City's accounting policies do not recognize encumbrances as expenditures until the period in which
the actual goods or services are received and a liability is incurred. It is necessary to include budgetary
encumbrances to reflect actual revenues and expenditures on a basis consistent with the City's legally adopted
budget.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of
monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension
of formal budgetary integration in the General, Special Revenue, Debt Service, and Capital Projects funds.
Encumbrances outstanding at year end are carried forward and reappropriated to the next year's budget.
On or before the third Friday in May of each year, all agencies of the government submit requests for
appropriations to the government's City Manager so that a budget may be prepared. Before July 3I, the proposed
budget is presented to the government's council for review. The council holds budget workshops and public
hearings and a final budget must be prepared and adopted no later than September 30.
When the government incurs an expenditure for purposes for which various fund balance classifications can be
used, it is the government’s policy to use restricted fund balance first, then committed fund balance, assigned
fund balance, and finally unassigned fund balance.
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results may differ from those estimates.
Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted fund balance
is reported when externally imposed constraints are placed on the use of resources by grantors, contributors, or
laws or regulations of other governments. Committed fund balance is reported for amounts that can only be used
for specific purposes pursuant to constraints imposed by formal action of the City Council (the government’s
highest level of decision-making authority). A formal resolution of the City Council is required to establish,
modify, or rescind a fund balance commitment. The City Council has the authority and reports assigned fund
balance for amounts that are constrained by the government’s intent to be used for specific purposes, but are
neither restricted nor committed. Unassigned fund balance is the residual classification for the General Fund.
Budgets are prepared annually on a modified accrual basis with encumbrance accounting for all governmental
funds except the capital project funds, which are approved on a "life of the project basis", and the permanent
fund, which is not budgeted. All annual appropriations lapse at year end.
54
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
3. DEPOSITS AND INVESTMENTS
Statement of Net Position
Cash and cash equivalents 6,206,892$
Temporarily restricted cash and cash equivalents 1,287,851
Investments 3,488,805
Permanently restricted investments 74,402
Statement of Fiduciary Net Position
Police Officers' Pension:
Investments 12,455,615
Agency funds:
Cash and cash equivalents 32,841
Investments 73,750
Total 23,620,156$
Deposits and investments
Bank deposits:
Checking and savings accounts 7,525,154$
Investments:
Investments, at fair value 3,636,957
Police officers' pension fund investments 12,455,615
Cash on hand 2,430
Total 23,620,156$
Custodial Credit Risk - Investments.On April 23, 2003, Sebastian City Council formally adopted an investment
policy pursuant to Section 218.415, Florida Statutes that established permitted investments, asset allocation
limits and issuer limits, credit ratings requirements and maturity limits for all investments except the Pension
Trust Funds. The City maintains a common cash and investment pool for the use of all funds, except the Pension
Trust Funds, which are held with third party trustees and are governed by rules established by Florida Statute
Chapter 185.
Following is a reconciliation of deposit and investment balances as of September 30, 2016:
Custodial Credit Risk - Deposits.Custodial credit risk is the risk that, in the event of a bank failure, the City's
deposits might not be returned. At September 30, 2016, the carrying amount of the City of Sebastian's deposits
with banks was $7,525,154 and the bank balance was $7,841,344. All the deposits were covered by the FDIC or
collateralized in accordance with the "Florida Security for Public Deposits Act". Under the Act, every qualified
public depository shall deposit with the Treasurer eligible collateral having a market value equal to 50% of the
average daily balance for each month that all public deposits are in excess of any applicable deposit insurance. If
the public deposits exceed the total amount of the regulatory capital accounts of a bank or the regulatory net
worth of a savings association, the required collateral shall have a market value equal to 125% of the deposits.
Investment holdings during the year included United States Government Agencies which were reported at fair
value in accordance with GASB Statement No.31 "Accounting and Financial Reporting for Certain Investments and
for External Investment Pools". These investments were held in trust by the City's bank depository in the City's
name or by the Custodian of the Pension Trust Funds.
55
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Fair Value Less Than 1 From 1-3 From 4-6 Over 7
General investments
Local government surplus
funds trust fund ("SBA")3,636,957$ 3,636,957$ -$ -$ -$
Police officers' pension fund investments
Money market 509,494$ 509,494$ -$ -$ -$
United States treasuries 571,515 105,157 201,356 171,861 93,141
United States agencies 255,812 - 27,698 - 228,114
Unit Investment trusts 96,153 96,153 - - -
Municipal obligations 131,449 - 57,659 34,870 38,920
Domestic corporate bonds 2,604,211 100,436 935,926 638,812 929,037
Domestic corporate equities 8,044,036 8,044,036 - - -
Foreign corporate equities 238,184 238,184 - - -
EFT equities 4,761 4,761
12,455,615$ 9,098,221$ 1,222,639$ 845,543$ 1,289,212$
Florida Statutes Chapter 185 regulates the types of investment that may be held by the Police Pension Trust
Fund. The investment guidelines have been augmented by City ordinance that have adopted specific investment
policies. Compliance with the policies and guidelines has been evaluated by the pension board.
Investment Maturity (Years)
Section 218.415, Florida Statutes, limits the types of investments that the City can invest in unless specially
authorized in the City's investment policy. The City's formal investment policy, for all investments except the
Pension Trust Fund, allows for the following investments: Florida Local Government Surplus Funds Trust Fund,
United States Government Securities, United States Government Agencies, Federal Instrumentalities, Interest
Bearing Time Deposit or Saving Accounts, Repurchase Agreements, Commercial Paper, High Grade Corporate
Notes, Bankers' Acceptances, State and/or Local Government Taxable and/or Tax-Exempt Debt, Registered
Investment Companies (Money Market Mutual Funds), and Intergovernmental Investment Pool.
Investment Type
As of September 30, 2016, the City had the following investments and effective duration presented in terms of
years:
Interest Rate Risk.The City's investment policy limits interest rate risk by attempting to match investment
maturities with known cash needs and anticipated cash flow requirements. Investment maturities shall not exceed
thirty-six (36) months. Investments of construction funds shall have a term appropriate to the need for funds and
in accordance with debt covenants.
56
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Investment in the City's pension trust funds are limited by State Statutes Chapter 185 and by an investment policy
adopted by the fund's Board of Trustees on June 24, 2005. The allowable investment instruments include: United
States government and agency issues, bankers acceptances and certificates of deposit by United States banks,
savings accounts with banks or other financial institutions incorporated in the United States and commercial paper
rated A-2 or P-2 or higher by Moody's or Standard and Poors. In addition, common stocks of corporations listed on
a recognized national stock exchange, plus issues convertible into common stock are also allowed. No more than
ten percent (10%) of the cost value of total assets may be invested in foreign securities.
As of September 30, 2016, the City had $3,636,957 invested in the State Board of Administration's Local
Government Surplus Trust Funds Investment Pool, which consist of accounts in Pool A. Pool A had a rating by
Standard and Poor's Rating Services as "AAAm" on September 30, 2016 and amounts may be withdrawn without
penalty.
Mutual funds shall be rated "m" or "AAm-G" or better by Standard & Poor's, or the equivalent by another rating
agency. State and/or local government taxable and/or tax-exempt debt, general obligation and/or revenue
bonds, rated at least "Aa" by Moody's and "AA" by Standard & Poor's for long-term debt, or rated at least "MIG-2"
by Moody's and 'SP-2" by Standard & Poor's for short-term debt. Bankers' acceptances issued by a domestic bank or
a federally chartered domestic office of a foreign bank, which are eligible for purchase by the Federal Reserve
System, at the time of purchase, the short-term paper is rated, at a minimum, "P-I" by Moody's Investors Services
and "A-I" Standard & Poor's. Commercial paper of any United States company that is rated, at the time of
purchase, "Prime-1" by Moody's and "A-I" by Standard & Poor's (prime commercial paper). Corporate notes issued
by corporations organized and operating within the United States or by depository institutions licensed by the
United States that have a long-term debt rating, at the time of purchase, at a minimum "Aa" by Moody's and a
minimum long term debt rating of "AA" by Standard & Poor's.
As of September 30, 2016, the City's investment securities, for all investments except the Pension Trust Fund,
were all individually rated AAAm by Standard & Poor's. The investment ratings for the Pension Trust Fund ranged
between AAA+ through BBB+.
Custodial Credit Risk.The City's investment policy pursuant to Section 218.415(18), Florida Statutes requires
securities, with the exception of certificates of deposits, shall be held with a third party custodian; and all
securities purchased by, and all collateral obtained by the City should be properly designated as an asset of the
City. The securities must be held in an account separate and apart from the assets of the financial institution. A
third party custodian is defined as any bank depository chartered by the Federal Government, the State of
Florida, or any other state or territory of the United States which has a branch or principal place of business in
the State of Florida as defined in Section 658.12, Florida Statutes, or by a national association organized and
existing under the laws of the United States, which is authorized to accept and execute trusts and which is doing
business in the State of Florida. Certificates of deposits maintained by book-entry at the issuing bank shall clearly
identify the City as the owner.
Concentration of Credit Risk.The City's investment policy has established asset allocation and issuer limits on the
following investments, which are designed to reduce concentration of credit risk of the City's investment
portfolio.
Credit Risk.The City investment policy that covers all investments, except the Pension Trust Fund, permits
investments in the following securities, which are limited to credit quality ratings from nationally recognized
agencies as follows:
57
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local government surplus funds
trust fund ("SBA")3,636,957$ 100.00%-$ 0.00%
Money market - 0.00%509,494 4.09%
United States treasuries - 0.00%571,515 4.59%
United States agencies - 0.00%255,812 2.05%
Unit Investment trusts - 0.00%96,153 0.77%
Municipal obligations - 0.00%131,449 1.06%
Domestic corporate bonds - 0.00% 2,604,211 20.91%
Domestic corporate equities - 0.00% 8,044,036 64.58%
Foreign corporate equities - 0.00%238,184 1.91%
EFT equities - 0.00%4,761 0.04%
$ 3,636,957 100.00% $ 12,455,615 100.00%
Fair Value Measurement
As of September 30, 2016, the City had the following issuer concentration based on fair value:
Amount
Percentage of
Portfolio Amount
A maximum of 100% of available funds may be invested in the SBA and in the United States Government
Securities, 50% of available funds may be invested in United States Government agencies with a 25% limit on
individual issuers, 80% of available funds may be invested in Federal Instrumentalities with a 40% limit on
individual issuers, 25% of available funds may be invested in non-negotiable interest bearing time certificates of
deposits with a 15% limits on individual issuers, 50% of available funds may be invested in repurchase agreements
excluding one (1) business day agreements and overnight sweep agreements with a 25% limit on anyone
institution, 25% of available funds may be directly invested in prime commercial paper with a 10% limit on
individual issuers, 15% of available funds may be directly invested in corporate notes with a 5% limit on individual
issuers, 25% of available funds may be directly invested in Bankers' Acceptances with a 10% limit on individual
issuers, 20% of available funds may be invested in taxable and tax-exempt debts, 50% of available funds may be
invested in money market mutual fund with a 25% limit on individual issuers, 10% of available funds may be
invested in intergovernmental investment pools.
Percentage of
PortfolioIssuer
General Investments
Total
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted
accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset,
as determined by the City's investment advisors. Level 1 inputs are quoted prices in active markets for identical
assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
Pension Investments
The City's pension trust funds investment policy adopted by the fund's Board of Trustees has established asset
allocation and issuer limits on the following investments, which are designed to focus on performance. A
maximum of 100% of available funds may be invested in fixed income securities and a maximum of 60% of
available funds may be invested in equity securities.
58
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local government surplus funds
trust fund ("SBA") 3,636,957$ -$ -$ 3,636,957$
Money market 509,494 - - 509,494
United States treasuries 571,515 - - 571,515
United States agencies - 255,812 - 255,812
Unit Investment trusts 96,153 - - 96,153
Municipal obligations - 131,449 - 131,449
Domestic corporate bonds - 2,604,211 - 2,604,211
Domestic corporate equities 7,218,810 825,226 - 8,044,036
Foreign corporate equities 238,184 - - 238,184
EFT equities 4,761 - - 4,761
$ 12,275,874 $ 3,816,698 $ - $ 16,092,572
4. RECEIVABLES
Governmental
Activities
Business-type
Activities Total
Accounts receivable 398,148$ 5,521$ 403,669$
Due from other governments 574,145 142,821 716,966
972,293$ 148,342$ 1,120,635$
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Governmental
Activities
Business-type
Activities Total
Accounts payable 339,065$ 135,931$ 474,996$
Accrued liabilities 278,361 33,281 311,642
Due to other governments 76,811 13,129 89,940
694,237$ 182,341$ 876,578$
Receivables are comprised of the following at year-end:
Level 2 Level 3 Total
Accounts payable and accrued liabilities are comprised of the following at year-end:
The City has the following recurring fair value measurements as of September 30, 2016:
Level 1
59
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
6. INTERFUND RECEIVABLES AND PAYABLES AND TRANSFERS
Due from
Other Funds
Due to Other
Funds
General Fund 1,088,132$ -$
Airport - 490,000
Golf Course - 535,800
Nonmajor Governmental Funds - 62,332
1,088,132$ 1,088,132$
Advance from
Other Funds
Advance to
Other Funds
General Fund -$ 100,000$
Discretionary Sales Tax - 550,638
Airport 650,638 -
Building - 356,700
Golf Course 356,700 -
1,007,338$ 1,007,338$
Advances to and from primary government funds
The composition of interfund balances as of September 30, 2016, was as follows:
Due to and from primary government funds
The balance of $550,638 advanced to the airport fund from the discretionary sales tax fund is to be repaid over a
thirty year period in accordance with Resolution No. R-08-20 for the initial $285,000 advance and with Resolution
No. R-10-22 authorizing an additional $290,000 advance. In relationship to these advances, $24,362 has been
repaid as of September 30, 2016. The balance of $100,000 advanced to the airport from general fund represents a
cash loan made in 2007 without any specified terms for repayment. The $356,000 was advanced from the Building
Fund to replace the irrigation system and make other improvements at the Golf Course.
These balances resulted from the time lag between the dates that (1) interfund goods and services are provided
or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments
between funds are made.
60
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
General Fund
Discretionary
Sales Tax Fund
Riverfront
Redevelopment
Fund
Nonmajor
Governmental
Funds Building Fund Totals
General Fund -$ -$ 21,667$ 550,000$ 104,086$ 675,753$
Riverfront Redevelopment
Fund 10,600 - - - - 10,600
Nonmajor Governmental
Funds 305,700 2,003,319 6,945 691,962 - 3,007,926
Airport Fund 2,800 181,895 - - - 184,695
Golf Course 24,600 599,858 - - - 624,458
343,700$ 2,785,072$ 28,612$ 1,241,962$ 104,086$ 4,503,432$
7. CAPITAL ASSETS
Beginning
Balance Additions Disposals Transfers
Ending
Balance
Governmental activities
Capital assets, not being depreciated:
Land 8,319,588$ -$ -$ -$ 8,319,588$
Construction in progress 472,375 554,434 (15,225) (784,549) 227,035
8,791,963 554,434 (15,225) (784,549) 8,546,623
Capital assets, being depreciated:
Buildings 12,609,808 14,069 - 486,952 13,110,829
Non-building improvements 6,833,246 36,592 - - 6,869,838
Machinery and equipment 8,691,504 736,749 (759,897) - 8,668,356
Infrastructure 39,186,897 453,739 - 297,597 39,938,233
67,321,455 1,241,149 (759,897) 784,549 68,587,256
Less accumulated depreciation for:
Buildings (5,007,777) (347,538) - - (5,355,315)
Non-building improvements (3,601,727) (317,358) - - (3,919,085)
Machinery and equipment (6,651,142) (693,152) 759,897 - (6,584,397)
Infrastructure (19,590,915) (1,692,080) - - (21,282,995)
(34,851,561) (3,050,128) 759,897 - (37,141,792)
Total capital assets
being depreciated, net 32,469,894 (1,808,979) - 784,549 31,445,464
Governmental activities
capital assets, net 41,261,857$ (1,254,545)$ (15,225)$ -$ 39,992,087$
Transfers In
Transfers out
Capital asset activity for the primary government for the year ended September 30, 2016, was as follows:
Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is
required or allowed to expend them and (2) move receipts restricted to or allowed for debt service from the
funds collecting the receipts to the debt service fund as required by debt covenants.
For the year ended September 30, 2016, interfund transfers consisted of the following:
61
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Beginning
Balance Additions Disposals Transfers
Ending
Balance
Business-type activities
Capital assets, not being depreciated:
Land 19,436$ -$ -$ -$ 19,436$
Construction in progress 343,939 1,786,918 - (1,049,993) 1,080,864
363,375 1,786,918 - (1,049,993) 1,100,300
Capital assets, being depreciated:
Buildings 6,341,864 178,500 - 165,476 6,685,840
Non-building improvements 1,889,637 35,664 - 884,517 2,809,818
Machinery and equipment 1,206,471 252,231 (30,272) - 1,428,430
Infrastructure 8,441,588 52,641 (30,395) - 8,463,834
17,879,560 519,036 (60,667) 1,049,993 19,387,922
Less accumulated depreciation for:
Buildings (1,578,450) (183,711) - - (1,762,161)
Non-building improvements (1,099,957) (119,119) - - (1,219,076)
Machinery and equipment (833,897) (135,726) 30,272 - (939,351)
Infrastructure (4,000,485) (427,902) 12,664 - (4,415,723)
(7,512,789) (866,458) 42,936 - (8,336,311)
Total capital assets
being depreciated, net 10,366,771 (347,422) (17,731) 1,049,993 11,051,611
Business-type activities
capital assets, net 10,730,146$ 1,439,496$ (17,731)$ -$ 12,151,911$
Depreciation of governmental activities by function
General government 313,187$
Public safety 304,080
Transportation 787,600
Physical environment 1,218,282
Economic environment 33,086
Cultural and recreation 393,893
Total governmental activities 3,050,128$
Depreciation of business-type activities by function
Golf course 134,575$
Airport 718,149
Building 13,734
Total business-type activities 866,458$
Depreciation expense was charged to functions/programs of the primary government as follows:
62
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
8. LONG-TERM DEBT
·
·
·
·
· As of September 30, 2016, there was no outstanding in-substance defeased debt.
Beginning
Balance Additions Deductions
Ending
Balance
Due Within
One Year
Governmental activities
Notes payable 6,041,000$ -$ (1,935,000)$ 4,106,000$ 931,000$
Compensated absences 1,465,409 149,110 (413,998) 1,200,521 91,009
Pollution remediation 91,200 - - 91,200 -
Totals governmental
activities 7,597,609$ 149,110$ (2,348,998)$ 5,397,721$ 1,022,009$
Notes payable
Florida Gas Tax Revenue Note, due in annual installments of
$97,000 to $121,000 plus interest at 1.94%
through 2023.1,478,000$
2013 Infrastructure Sales Surtax Refunding Revenue Note,
Series 2013, due in annual installments of $353,000 to $508,000
plus interest at 0.86% through 2017.353,000
2013 Stormwater Utility Refunding Revenue Note, Series 2013,
due in annual installments of $352,000 to $395,000 plus
interest at 1.73% through 2022.2,275,000
4,106,000$
The City issued a nine (9) year, $3,096,000 Stormwater Utility Refunding Revenue Note, Series
2013 in December 2013. The City has pledged Stormwater Fee Revenues for repayment of
principal and interest. These proceeds and other Stormwater Fee revenues were used to totally
advance refund all of the outstanding Stormwater Utility Revenue Bonds prior to September 30,
2014.
The City entered into a nine (9) year loan agreement in 2012 with a local bank for $2,296,000 to
provide financing to repave certain roads in the City and payoff an outstanding loan. The City
pledged Local Option Gas Tax revenues to repay the note payable. The funds are accumulated in
the Local Option Gas Tax Special Revenue fund for repayment of principal and interest.
Revenue notes are secured by and payable from the revenues of the respective funds that issued them.
The following is a summary of governmental activities long-term debt transactions for the year ended September
30, 2016:
The City entered into a four (4) year loan agreement in 2013 with a local bank for $299,050 to
provide financing to purchase equipment for the Golf Course. Repayment of principal and
interest will be made from Golf Course revenues.
The City issued a four (4) year, $2,893,000 Infrastructure Sales Surtax Refunding Revenue Note,
Series 2013 in December 2013. The City has pledged Infrastructure Sales Surtax revenues for
repayment of principal and interest. These proceeds and other Infrastructure Sales Surtax
revenues were used to totally refund or advance refund all of the outstanding Infrastructure Sales
Surtax Bonds prior to September 30, 2014.
63
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Beginning
Balance Additions Deductions
Ending
Balance
Due Within
One Year
Business-type activities
Note payable 212,250$ -$ (50,005)$ 162,245$ 51,956$
Compensated absences 186,169 24,680 - 210,849 -
Totals business-type
activities 398,419$ 24,680$ (50,005)$ 373,094$ 51,956$
Note payable
Note payable to a bank, collateralized by real property,
payable in equal monthly installments of $4,756,
including interest charged at 3.850%. The note
matures on November 7, 2017 162,245$
Year Ended
September
30, Principal Interest Principal Interest
2017 931,000$ 71,547$ 51,956$ 5,120$
2018 590,000 56,523 110,289 341
2019 601,000 45,836 - -
2020 611,000 34,939 - -
2021 620,000 23,868 - -
2022-2023 753,000 13,808 - -
4,106,000$ 246,521$ 162,245$ 5,461$
A pollution remediation obligation was recorded for a Florida Department of Environmental (FDEP) Order dated
March 10, 1997. This was related to an incident of petroleum contamination at the Public Works Department on
April 22, 1991. The City was named as the party responsible for the cleanup but FDEP determined the discharge is
eligible under the Petroleum Cleanup Participation Program and will not compel site rehabilitation prior to
funding becoming available from that program. The program has a funding cap of $400,000, with a 25% required
cost share percentage. The City must also pay for a limited contamination assessment report sufficient to
determine the extent of the contamination and cleanup. Based on the information available, the City estimated
its expenditure to be $91,200 dependent on the extent of work that is eventually required and recorded a long-
term liability of $91,200.
Annual debt service requirements to maturity for long-term debt are as follows:
The following is a summary of business-type activities long-term debt transactions for the year ended September
30, 2016:
Business-type Activities
For the governmental activities, compensated absences, the unfunded OPEB obligation and termination benefits
are generally liquidated by the General Fund. For business-type activities, compensated absences and unfunded
OPEB obligations are allocated to and liquidated by the golf course, airport or building funds.
Governmental Activities
64
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
9. LEASES
Year Ended
September 30, Airport
2017 100,000$
2018 100,000
2019 100,000
2020 100,000
2021 100,000
2022-2026 500,000
2027-2031 500,000
2032-2036 500,000
2037-2041 500,000
2042-2045 400,000
Total 2,900,000$
Year Ended
September 30,
Governmental
Activities
2017 250,132$
2018 233,133
2019 222,272
2020 224,689
2021 227,106
2022-2026 1,003,073
2027-2031 975,509
2032-2036 1,084,533
2037-2041 1,223,677
2042-2046 1,301,264
2047-2051 1,127,916
2052-2055 1,107,056
Total 8,980,361$
Operating Leases - Lessor
The City is the lessor in two communication tower leases with terms of up to fifty-five years. The towers have a
cost of $39,285 and have been fully depreciated. Following is a schedule by year of minimum future rental
income on noncancelable operating leases:
Operating Leases - Lessee
The City is obligated under a lease for land accounted for as an operating lease. Operating leases do not give rise
to property rights or lease obligations. Total costs for the lease was $100,000 for the fiscal year ended
September 30, 2016. This represents the Airport Fund's lease obligation for the property used as the City's golf
course. The following is a schedule by years for future minimum rental payments required under the operating
lease that has initial or remaining noncancelable lease terms in excess of one year at September 30, 2016:
65
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
September 30,
Business-type
Activities
2017 214,372$
2018 205,079
2019 170,781
2020 170,781
2021 170,781
2022-2026 726,293
2027-2031 582,418
2032-2035 276,209
Total 2,516,714$
10. PROPERTY TAXES
11. CONTINGENT LIABILITIES
Various suits and claims are currently pending against the City. It is impossible for the City to accurately quantify
the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's
latitude in awarding attorney's fees. The City intends to vigorously defend against these lawsuits and believes it
has a good chance of prevailing on their merits. The City is contingently liable with respect to lawsuits and other
claims incidental to the ordinary course of its operations. In the opinion of management and based on the advice
of legal counsel, the ultimate disposition of lawsuits will not have a material adverse effect on the financial
position of the City.
The Airport Fund is the lessor of various properties (land with a cost basis of $9,060) with lease terms varying
from twenty to thirty years. These include the lease to the Golf Course Fund requiring annual payments of
$100,000 through 2035. Following is a schedule by year of minimum future rental income on noncancelable
operating leases:
Future minimum rental commitments are as follows:
The tax levy of the City is established by City Council. Under Florida law, the assessment of all properties and the
collection of municipal taxes are provided by offices of the County's Property Appraiser and Tax Collector. Ad
Valorem taxes are levied on property values as of January 1. The fiscal year for which taxes are levied begins
October 1. Taxes are due November I and become delinquent on April 1. All taxes unpaid as of May 30 are subject
to a tax certificate sale. Property tax revenues are recognized in the fiscal year for which they are levied and also
become due and payable.
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal and state governments. Any disallowed claims, including amounts already collected, may
constitute a liability to the applicable funds. The amount, if any, of expenditures that may be disallowed by the
grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
The City is permitted by State law to levy taxes up to 10 mills on assessed valuation. The millage rate levied by
the City for the fiscal year ended September 30, 2016, was 3.8556 mills. Total tax collections were approximately
96.38% of the total tax levy.
66
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
12. RISK MANAGEMENT
13. BENEFIT PLANS
Defined Benefit Pension Plan
Police Officer's Pension Plan
Plan Description.ThePoliceOfficers'PensionPlanisaFloridaStatute Chapter 185 single-employer defined
benefit plan. Only City police officers participate in the Police Pension Plan. The state provides a contribution to
the Police Pension Plan through a distribution of funds collected from insurance premium taxes. The pension plan
data provided in these financial statements are from the actuarial valuation as of October 1, 2016 to determine
the required contribution for the fiscal year ending September 30, 2016. Although the Police Officers' Pension
Plan provides separate reporting, which may be obtained in the Finance department, it is also a component unit
(reporting as a Pension Trust Fund) of the City's financial reporting entity.
Basis of Accounting.Financial statements are prepared using the accrual basis of accounting. Plan member
contributions are recognized in the period in which the contributions are due. Employer contributions are
recognized when due, and the employer has made formal commitment to provide the contributions. Benefits and
refunds are recognized when due and payable in accordance with the terms of the Plan.
Investment Policy . The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a wide
range of policies and describes the prudent investment process that the Board deems appropriate. The plan's
asset allocation policy is shown on the following pages.
Concentrations.At September 30, 2016, the plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments) in
certain organizations that represent 5 percent or more of the plan's fiduciary net position. Please see Note 3 for
details of these concentrations.
The City is exposed to various risks of loss related to torts; theft of or damage to and destruction of assets; errors
and omissions; and natural disasters. The City purchases commercial insurance with various deductibles for
different types of losses. The cost of this insurance is accounted for in the General Fund, Golf Course Fund,
Airport Fund, and Building Fund. Settled claims have not exceeded this commercial coverage in the past three
fiscal years.
Method Used to Value Investments.Investments are reported at fair value. Short-term investments are reported
at cost, which approximates fair value. Securities traded on a national or international exchange are valued at
the last reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and
interest payments, and are discounted at prevailing interest rates for similar instruments. Investments that do not
have an established market are reported at estimated fair value. Investments in securities of a single organization
(excluding mutual funds and those issued or guaranteed by the U.S. government) held by the pension plan did not
exceed five percent of the total plan assets.
67
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Plan Membership. As of September 30, 2016, employee membership data was as follows:
Inactive plan members or beneficiaries currently receiving benefits 12
Inactive plan members entitled to but not yet receiving benefits 10
Active plan members 32
Total membership 54
Total pension liability 15,071,285$
Less: Plan fiduciary net position 12,488,710
City's net pension liability 2,582,575$
Plan fiduciary net position as
percentage of total pension
liability 82.86%
Inflation 2.30%
Salary increases 3.80% - 16.00%
Discount rate 7.45%
Investment rate of return 7.45%
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of October 1, 2015
updated to September 30, 2016 using the following actuarial assumptions applied to all measurement periods.
Mortality is based on the RP-2000 Table with no projection. Disabled lives are set forward 5 years. The City feels
this assumption sufficiently accommodates future mortality improvements.
Contributions.Contributions to the plan are based upon the hire date of the members. Members hired prior to
October 1, 2011 contribute 8% of their salary, effective October 1, 2012 (5% of salary prior to that date).
Members hired after September 30, 2011 contribute 5% of their salary. City and state contributions consist of the
remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, over a
period not exceeding 30 years.
Rate of Return.For the year ended September 30, 2016, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 9.39 percent. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts actually
invested.
Net Pension Liability of the City.The components of the net pension liability of the City at September 30, 2016,
were as follows:
Benefit Provisions and Contribution Requirements.The Police Officers' Pension Plan provides retirement and
disability benefits to plan members and beneficiaries. This plan is administered by a separate local Board of
Trustees. Chapter 185, Florida Statutes, as amended governs all benefit provisions of the plan. Contribution
requirements, in accordance with Chapter 185, Florida Statutes, are established by City ordinance, as provided in
Chapter 58, Article III of the Sebastian City Code. The City Council has the authority to amend funding
requirements.
68
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Target
Allocation
Long-term
Expected Real
Rate of
Return
Money-
Weighted
Rate of
Return
Domestic equity 50.00% 7.45% 3.73%
International equity 10.00% 7.05% 0.71%
Fixed income 40.00% 2.15% 0.86%
Total 100.00%5.30%
2.30%
Risk adjustments (0.15%)
Investment rate of return 7.45%
One Percent
Decrease
Current
Discount Rate
One Percent
Increase
6.45% 7.45% 8.45%
Net Pension Liability $ 4,527,139 $ 2,582,575 $ 960,821
The other significant assumptions are based upon the most recent actuarial experience study performed on
September 16, 2013, for the period 1999-2012.
Discount Rate.The discount rate used to measure the total pension liability was 7.45 percent. The projection of
cash flows used to determine the discount rate assumed that plan member contributions will be made at the
current contribution rate and that sponsor contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the member rate. Based on those assumptions, the pension 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 pension plan investments was applied to all
period of projected benefit payments to determine the total pension liability.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate . The following presents the net pension
liability of the City, calculated using the discount rate of 7.45 percent, as well as what the City's net pension
liability would be if it were calculated using a discount rate that is one percentage point lower (6.45 percent) or
one percentage point higher (8.45 percent) than the current rate.
Changes in Assumptions.The City revised certain actuarial assumptions in the September 30, 2016 valuation that
had a significant impact on the total pension liability from the prior measurement date. The most significant
change was a decrease in the expected investment rate of return from 7.60% to 7.45%.
Inflation
Asset Class
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 expenses and inflation) are developed for each major asset class. These ranges are combined to
produce a long term expected rate of return by weighing 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 as of September 30, 2016 are
summarized in the following table:
69
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a) - (b)
Balances at September 30, 2015 13,434,105$ 11,284,027$ 2,150,078$
Changes for the year:
Service cost 418,143 - 418,143
Interest on total pension liability 1,027,558 - 1,027,558
Differences between expected and
actual experience 59,175 - 59,175
Assumption changes 626,069 - 626,069
Benefit payments, including refunds
of employee contributions (493,765) (493,765) -
Employer contributions - 322,998 (322,998)
State contributions - 169,027 (169,027)
Employee contributions - 167,309 (167,309)
Pension plan net investment
income (loss) - 1,067,139 (1,067,139)
Administrative expense - (28,025) 28,025
Net changes 1,637,180 1,204,683 432,497
Balances at September 30, 2016 15,071,285$ 12,488,710$ 2,582,575$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows of
Resources
Difference between expected and
actual experience $ 47,340 $ 144,379 $ (97,039)
Changes in assumptions 634,775 - 634,775
Net difference between projected and actual
earnings on pension plan investments 367,945 - 367,945
1,050,060$ 144,379$ 905,681$
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions.For
the year ended September 30, 2016, the City recognized pension expense of $584,782. At September 30, 2016,
the City reported pension-related deferred outflows of resources and deferred inflows of resources from the
following sources:
Changes in the net pension liability. The components of the change in the net pension liability are summarized as
follows:
70
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
September 30, Amount
2017 $ 270,996
2018 270,996
2019 270,996
2020 92,693
Total 905,681$
Negotiated Defined Benefit Pension Plan
Lump Sum Disability Benefit.If the employee has been awarded a Social Security Disability Award with the date
of entitlement before May 1, 2009 and is vested, but not immediately eligible to receive any pension described
above, the employee may be eligible for a lump sum disability benefit.
Coastal Florida Public Employees Association
Normal Pension.Minimum age 65: 5 years of service credit required if any portion of service credit was earned
after January 1, 1989. 10 years of service credit required if employees' coverage ended before January 1, 1989.
Once the service credit amount is accrued, the employee is vested and cannot lose the right to a pension.
Disability Pension.No minimum age and the pension amount is not reduced for age; there must be a Social
Security Disability Award, 10 years of actual service credit and a contribution for covered employment must have
been made within three calendar years preceding the entitlement date to Social Security Disability Pension. An
application must be filed with the plan within 6 months of the Social Security Notice of Award date to receive
pension retroactive to the Social Security entitlement date.
Early Pension.Minimum age 62: 20 years of service credit required if employed after January 1, 1989, and 25
years of service credit required if employment ended before January I, 1993. Pension amounts are permanently
reduced based on age on the effective date, because the payments are expected to be made for a longer period
of time.
Amounts reported as pension-related deferred outflows of resources and deferred inflows of resources will be
recognized in pension expense as follows:
Plan Description.The Communication Workers of America / International Typographical Union Negotiated
Pension Plan (NPP), which began in 1967, is a multi-employer cost-sharing, defined benefit plan. The plan is
available to any Coastal Florida Public Employees Association bargaining unit member and benefits are portable
from one contributing employer to another. The plan is not a state or local governmental plan, is used to provide
defined benefit pensions both to employees of state or local governmental employers and to employees of
employers that are not state or local governmental employers, has no predominant state or local governmental
employer and issues audited financials following FASB guidelines, which can be obtained at
http://www.cwaitu.com. The City of Sebastian approved the plan by Resolution No. R-01-36, effective April 29,
2001. There is currently no expiration date of the collective-bargaining agreement requiring contributions to the
pension plan. The total number of governmental employees covered as of September 30, 2016, was 69. The City
chose to early implement the GASB 78 disclosure requirements in FY15.
71
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Plan Participation. As of September 30, 2016, there were a total of 17 employees participating in the plan.
Withdrawal Benefit.If the employee did not earn enough service credit to qualify for a normal pension, the
employee may be eligible for a lump sum withdrawal benefit, based on total contributions, after the employee
has incurred a break in service. Benefit Provisions and Contribution Requirements: The NPP provides retirement
and disability benefits to plan members and beneficiaries. The plan is administered at the plan office in Colorado
Springs, Colorado. Contribution requirements are established by the CWA contract, effective date October 1,
2011, which is negotiated every 3 years, and approved by City Council.
Funding Policy.Administration costs of the pension plan are financed by the plan. The employer contribution
rate, expressed as a percentage of compensation, was 9.0% for the 2015-2016 fiscal year. Employees do not
contribute to this plan. Contributions to the CWA Pension Plan for the fiscal years ended September 30, 2014,
2015 and 2016 were $204,361, $217,916 and $200,889 respectively, which are equal to 100% of the required
contribution for each year.
Death Benefit.If the employee dies before becoming a pensioner and has at least $250 contributed on the
employees' behalf, a lump sum death benefit equal to total contributions credited on the employees' behalf or 36
times the Normal Pension amount, if greater, will be paid to employees' beneficiary. If the employee is married
at the time of death, the spouse will have the choice of a lump sum or a monthly survivor benefit.
Periodic Payments.Retirement benefits can be paid monthly, quarterly, semi-annual (at six-month intervals only)
or annual payments until assets are fully paid out.
Rollover.Retirement benefits can be rolled over to another employer plan (including a 457 deferred
compensation plan) that accepts rollovers, or to a Traditional IRA.
Defined Contribution 401(a) Plan
Plan Description.The ICMA Retirement Corporation's 401 Retirement Plan is a Defined Contribution Plan
"qualified" under Section 401(a) of the Internal Revenue Code. Each participant has a plan account to which
contributions are made. Plan benefits are based on the total amount of money in the employees' account at
retirement or other eligible event. The plan is available to all management staff and may be rolled over to
another "qualified" employer plan that accepts rollovers, or Traditional IRA's.
Lump Sum. Retirement benefits can be paid either partially or by total distribution of the employees' account
Annuities. Retirement benefits can be utilized to purchase an annuity.
Benefit Provisions and Contribution Requirements.The NPP provides retirement and disability benefits to plan
members and beneficiaries. The plan is administered at the plan office in Colorado Springs, Colorado.
Contribution requirements are established by the CWA contract, effective date October 1, 2013, which is
negotiated every 3 years, and approved by City Council.
Employer Withdrawal Liability.Under federal law, employers who partially or completely withdraw from a
multiemployer plan are assessed withdrawal liability for their proportionate share of the plan's unfunded vested
liabilities as of the beginning of the year in which they withdraw. Withdrawal liability is usually paid in quarterly
installments as determined by a statutory formula over a maximum of 20 years.
72
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
14. OTHER POSTEMPLOYMENT BENEFITS
Annual required contribution $ 5,024
Interest on net OPEB obligation 841
Adjustment to annual required contribution (1,149)
Net OPEB cost 4,716
Contributions made -
Increase in net OPEB obligation 4,716
Net OPEB obligation, beginning of year 25,718
Net OPEB obligation, end of year $ 30,434
Employees are eligible to receive a partial subsidy from the Retiree Medical Plan upon retirement, if they are
enrolled in the active medical plan immediately prior to retiringandachievedatleast20yearsofserviceinafull
time capacity. If eligible, the City pays 50% of the costs of single coverage group health insurance for up to 2
years after retirement.
Plan Description.Pursuant to Section 112.0801, Florida Statutes, the City is required to permit participation in
the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater
than the cost at which coverage is available for active employees. The City, by policy, has elected to provide
qualified retirees with partial subsidy. In this respect, the City operates a single-employer plan.
Funding Policy . Based on GASB Statement 43 and 45, which set forth the guidelines for treatment of other
postemployment benefits, the City had an actuary calculate future funding requirements in 2014. The actuary's
2015 and 2016 estimate, using the Entry Age Normal (level percentage of pay) Method, produced an unfunded
obligation of $50,901 and a total annual required contribution of $5,024 with the net OPEB cost of $4,716, of
which $4,515 is the general fund portion. The City elected to fund the OPEB obligation on a pay-as-you-go basis.
The enterprise fund portion of $201 is also recognized in the enterprise fund financial statements. The entire
unfunded obligation was recognized in the government-wide financial statements. As such, a separate audited
GAAP basis postemployment benefit plan report is not available.
Annual OPEB Cost and Net OPEB Obligation.The City's annual other postemployment benefit (OPEB) cost is
calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities (or funding excess) over a period not to exceed thirty years.
Benefit Provisions and Contribution Requirements.The 401 provides retirement benefits to plan members and
beneficiaries. The plan is administered by the ICMA Retirement Corporation. Contribution requirements are
established by the City of Sebastian, Management Benefit Package, revised October 1, 2006, and approved by the
City Manager.
Funding Policy.The administration costs of the pension plan are financed by the Plan. The employer
contribution rate, expressed as a percentage of compensation, was 9% for the 2015-2016 fiscal year. Employees
do not contribute to this Plan. Contributions to the 401 Defined Contribution Plan for the fiscal years ended
September 30, 2014, 2015 and 2016 were $113,098, $130,719 and $151,891 respectively, which are equal to 100%
of the required contribution for each year.
The following table shows the components of the City's annual OPEB cost for the year ended September 30, 2016,
the amount actually contributed to the plan, and changes in the City's net OPEB obligation:
73
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
Annual OPEB
Cost
Percentage of
Annual OPEB
Cost
Contributed
Net OPEB
Obligation
2014 4,207$ 0.0%21,022$
2015 4,696 0.0%25,718
2016 4,716 0.0%30,434
Termination Benefits
The actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events far into the future. Actuarially determined amounts are subject to continual revision as
actual results are compared to past expectations and new estimates are made about the future. Calculations are
based on the types of benefits provided with the plan at the time of each valuation and on the pattern of sharing
of costs between the employer and plan members to that point. Calculations reflect a long-term perspective and
assumptions used include techniques designed to reduce short-term volatility in actuarial accrued liabilities and
actuarial value of assets. The schedule of funding progress shown below is required to present multi-trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits. The City elected to fund the OPEB on a pay-as-you-go basis and
consequently, reports a zero balance for the actuarial value of assets.
Actuarial Methods and Assumptions.Projections of benefits for financial reporting purposes are based on the
substantive plan (the plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs between the
employer and plan members to that point. The actuarial methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value
of assets, consistent with the long-term perspective of the calculations.
Three-Year Trend Information
The City offers to pay 50% of the cost of single coverage group (health only) insurance for up to two years for
employees retiring after twenty years of service in a full-time capacity. During the year ended September 30,
2016, no retiring employees made this election, and $0 was recorded at year end as the total accrued termination
benefits in the governmental activities of the government-wide financial statements.
The required contribution was determined as part of the October 1, 2015 actuarial valuation using the entry age
normal (level percentage of pay) actuarial funding method. The actuarial assumptions included (a) 4 percent
investment rate of return (net of administrative expenses), (b) a 3 percent payroll growth rate, (c) a 3 percent
inflation rate, and (d) an annual healthcare trend rate of 9 percent initially, reduced by decrements to an
ultimate rate of 5 percent in 2017. The actuarial assumptions utilized the RP-2000 Combined Healthy Mortality
Table projected to 2014. The plan's unfunded actuarial accrued liability is being amortized as a level dollar of
projected payroll on an open basis. The remaining amortization period at October 1, 2015 was 29 years.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB
obligation for fiscal year 2016 and the previous two years were as follows:
Funded Status and Funding Progress.As of October 1, 2015, the date of the most recent actuarial valuation, the
actuarial accrued liability for benefits was $50,901, all of which was unfunded. The covered payroll (annual
payroll of active employees covered by the plan) was $6,561,930, and the ratio of the UAAL to the covered
payroll was 0.9 percent.
74
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
15. FUND BALANCES - GOVERNMENTAL FUNDS
General Fund
Discretionary
Sales Tax
Riverfront
Redevelopment
Nonmajor
Funds Total
Nonspendable:
Inventory 39,723$ -$ -$ -$ 39,723$
Prepaids 87,928 - - - 87,928
Long-term advances 100,000 - - - 100,000
Permanent fund corpus - - - 996,778 996,778
Total nonspendable 227,651 - - 996,778 1,224,429
Restricted for:
Debt service - - - 168,436 168,436
Infrastructure - 2,709,105 - 363,900 3,073,005
Redevelopment - - 458,053 - 458,053
Stormwater - - - 457,465 457,465
Law enforcement 46,262 - - 36,694 82,956
Total restricted 46,262 2,709,105 458,053 1,026,495 4,239,915
Committed for:
Recreational system
development - - - 904,893 904,893
Development of
public parking - - - 72,975 72,975
Total committed - - - 977,868 977,868
Assigned for:
Law enforcement events 10,840 - - - 10,840
Unassigned 5,526,675 - - (129,401) 5,397,274
Total fund balances,
governmental funds 5,811,428$ 2,709,105$ 458,053$ 2,871,740$ 11,850,326$
In accordance with GASB Statement No. 54,Fund Balance Reporting and Governmental Fund Type Definitions,
the City classifies fund balances based primarily on the extent to which it is bound to observe constraints imposed
upon the use of the resources reported in governmental funds. Detailed information on fund balances of
governmental funds is as follows:
75
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
16. NET INVESTMENT IN CAPITAL ASSETS
Governmental
Activities
Business-type
Activities Total
Capital assets:
Capital assets not being depreciated 8,546,623$ 1,100,300$ 9,646,923$
Capital assets being depreciated, net 31,445,464 11,051,611 42,497,075
39,992,087 12,151,911 52,143,998
Related debt:
Total notes payable 4,106,000 162,245 4,268,245
Net investment in capital assets 35,886,087$ 11,989,666$ 47,875,753$
17. COMMITMENTS AND CONTINGENCIES
A. Contracts and Other Commitments
A summary of these projects at September 30, 2016 is as follows:
Total Contract
Price
Total Paid as of
September 30,
2016
Remaining
Balance at
September 30,
2016
Patch Truck 156,125$ -$ 156,125$
Tulip Drive 247,328 (30,600) 216,728
CavCor 225,301 - 225,301
Barber Street 478,118 - 478,118
Hangar C 1,658,811 (291,032) 1,367,779
Total 2,765,683$ (321,632)$ 2,444,051$
The composition of net investment in capital assets as of September 30, 2016, was as follows:
The City has various contracts and commitments outstanding as of September 30, 2016. In the Capital Projects
Fund, there are contracts for a Patch Truck, Tulip Drive drainage improvements, CavCor parking lot
improvements, reconstruction and paving of Barber Street and construction of Hangar "C" at the Airport.
76
REQUIRED SUPPLEMENTARY INFORMATION
77
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Single-employer Pension Trust Fund
Fiscal Year
Ending
September 30,
2016
Fiscal Year
Ending
September 30,
2015
Fiscal Year
Ending
September 30,
2014
Fiscal Year
Ending
September 30,
2013
Total pension liability
Service cost $ 418,143 $ 403,611 $ 396,146 $ 367,653
Interest on total pension liability 1,027,558 979,259 914,243 853,018
Change in excess state money - 22,218 24,386 -
Changes of benefit terms - (4,316) - -
Differences between expected and actual experience 59,175 (240,633) - -
Changes of assumptions 626,069 223,200 - -
Benefit payments, including refunds of employee contributions (493,765) (496,363) (452,892) (465,435)
Net change in total pension liability 1,637,180 886,976 881,883 755,236
Total pension liability, beginning of year 13,434,105 12,547,129 11,665,246 10,910,010
Total pension liability, end of year 15,071,285 13,434,105 12,547,129 11,665,246
Plan fiduciary net position
Employer contributions 322,998 320,179 401,103 396,603
State contributions 169,027 145,700 147,868 145,961
Employee contributions 167,309 161,270 160,494 154,683
Pension plan net investment income (loss) 1,067,139 (60,326) 951,910 1,029,818
Benefit payments (493,765) (496,363) (452,892) (465,435)
Administrative expense (28,025) (39,673) (27,815) (32,153)
Net change in plan fiduciary net position 1,204,683 30,787 1,180,668 1,229,477
Plan fiduciary net position, beginning of year 11,284,027 11,253,240 10,072,572 8,843,096
Plan fiduciary net position, end of year 12,488,710 11,284,027 11,253,240 10,072,573
Net pension liability 2,582,575$ 2,150,078$ 1,293,889$ 1,592,673$
Plan fiduciary net position as a percentage of total pension liability 82.86% 84.00% 89.69% 86.35%
Covered payroll 2,263,866$ 2,154,612$ 2,106,767$ 2,131,399$
Net pension liability as a percentage of covered payroll 114.08% 99.79% 61.42% 74.72%
Schedule of Changes in Net Pension Liability and Related Ratios
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of data will be
presented.
78
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Single-employer Pension Trust Fund
Fiscal Year
Ending
September 30,
Total Pension
Liability
Plan Net
Position
Net Pension
Liability
Plan Net
Position as a
Percentage of
Total Pension
Liability
Covered
Payroll
Net Pension
Liability as a
Percentage of
Covered
Payroll
2013 $ 11,665,246 $ 10,072,573 $ 1,592,673 86.35% $ 2,131,399 74.72%
2014 12,547,129 11,253,240 1,293,889 89.69% 2,106,767 61.42%
2015 13,434,105 11,284,027 2,150,078 84.00% 2,154,612 99.79%
2016 15,071,285 12,488,710 2,582,575 82.86% 2,263,866 114.08%
Fiscal Year
Ending
September 30,
Annual Return
(1)
2013 11.51%
2014 9.42%
2015 -0.45%
2016 9.39%
Schedule of Investment Returns
Schedule of the Net Pension Liability
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of
data will be presented.
(1) Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years of
data will be presented.
79
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Single-employer Pension Trust Fund
Schedule of Contributions
Actual
Contribution
Fiscal Year Actuarially Contribution as Percentage
Ending Determined City State Deficiency Covered of Covered
September 30, Contribution Contribution Contribution (Excess) Payroll Payroll
2013 506,560$ 396,603$ 145,961$ (36,004)$ 2,131,399$ 25.46%
2014 524,585 401,103 147,868 (24,386) 2,106,767 26.06%
2015 596,502 320,179 145,700 130,623 2,154,612 21.62%
2016 667,764 322,998 169,027 175,739 2,263,866 21.73%
Notes to Schedule of Contributions
Valuation date October 1, 2014
Notes
Methods and assumptions used to determine contribution rates:
Funding method
Amortization method
Remaining amortization period
Mortality
Interest rate 7.75% per year compounded annually, net of investment related expens
Inflation
Retirement age
Early retirement
Disability rates
Age Assumption
30 0.12%
40 0.21%
50 0.54%
60 2.70%
Termination rates Credited Service Assumption
First two years 14.00%
Years 3-9 5.70%
Years 10-14 2.80%
15 years and
Greater 0.00%
Salary increases Credited Service Assumption
First year 16.00%
Years 2-14 7.40%
15 years and
Greater 3.80%
Final salary load
Payroll growth
Actuarial asset method
Actuarially determined contribution amounts are calculated as of October 1, two years
prior to the end of the fiscal year in which contributions are reported.
RP-2000 Table with no projection. Based on a study of over 650
public safety funds, this table reflects a 10% margin for future
mortality improvements. (Disabled lives set forward 5 years).
Earlier of: 1) age 55 and 10 years of credited service, or 2) age 52 and
25 years of credited service, regardless of age. Also, any member
who has reached Normal Retirement is assumed to continue
employment for one additional year.
Frozen initial liability cost method
Level percentage-of-payroll, closed
2.30% per year
28 Years (as of October 1, 2014)
Market Value, net of investment-related expenses
Commencing at the assumed Early Retirement Age (50), members are
assumed to retire with an immediate subsidized benefit at the rate
of 5% per year.
Age based rates with increasing probability of disablement at higher
ages. A sample of rates are shown below:
Additionally, it is assumed that 75% of disablements and active
Member deaths are service related.
The projected salary at retirement is increased 20% to account for
lump sum payments.
3% for amortization of all UAAL bases
80
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Other Postemployment Benefits Plan
Schedule of Funding Progress
Other Postemployment Benefits Plan
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL) -AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL)Ratio Payroll Payroll
Fiscal Year Date (a)(b)(b-a)(a / b)(c)((b-a) / c)
2010 9/30/2009 -$ 98,100$ 98,100$ - 6,424,614$ 2%
2011 9/30/2010 - 67,500 67,500 - 6,426,614 1%
2012 9/30/2010 - 50,901 50,901 - 5,933,331 1%
2013 9/30/2013 - 50,901 50,901 - 5,693,181 1%
2014 9/30/2014 - 50,901 50,901 - 6,044,900 1%
2015 9/30/2015 - 50,901 50,901 - 6,213,151 1%
2016 9/30/2015 - 50,901 50,901 - 6,561,930 1%
Schedule of Employer Contributions
Other Postemployment Benefits Plan
Fiscal Annual
Year Ending Required Percentage
September 30, Contributions Contributed
9/30/2010 4,600$ 0%
9/30/2011 4,700 0%
9/30/2012 3,800 0%
9/30/2013 3,674 0%
9/30/2014 4,207 0%
9/30/2015 5,024 0%
9/30/2016 5,024 0%
81
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Coastal Florida Public Employees Association Pension Plan
Fiscal Annual
Year Ending Required
September 30, Contributions
9/30/2006 229,159$
9/30/2007 254,909
9/30/2008 241,718
9/30/2009 254,997
9/30/2010 234,219
9/30/2011 223,113
9/30/2012 210,258
9/30/2013 202,612
9/30/2014 204,361
9/30/2015 217,916
9/30/2016 200,889
Critical Status.Under federal pension law, a plan generally will be considered to be in "critical" status if either the funded percentage of
the plan is less than 65 percent or if certain other tests are met. If a pension plan enters critical status, the trustees of the plan are required
to adopt a rehabilitation plan. Rehabilitation plans establish steps and benchmarks for pension plans to improve their funding status over a
specified period of time.
The Plan's actuary has certified that for the 2014 Plan year, the Plan was in critical status because the Plan has a deficit in the minimum
funding standard account. The Board of Trustees adopted a rehabilitation plan on March 8, 2010, that for new pensions: eliminates the 60
month minimum guarantee in the Life/5 pension option; increases the minimum age for Early Pension from age 60 to 62 (with 20 years of
service credit); removes the Early Pension subsidy by increasing the reduction factors; discontinues the offering of retroactive pension
payments; and required 5 years of service credit to vest for participants reaching normal retirement age before a break in service. A
mandatory increase in contributions is not required under the Rehabilitation Plan, but decreases in contribution rates or the exclusion of
covered employees are not permitted. A copy of the rehabilitation plan may be obtained be contacting the Coastal Pension Plan office.
Notes to Schedule of Employer Contributions - Coastal Florida Public Employees Association Pension Plan
Coastal Florida Public Employees Association Pension Plan
Schedule of Employer Contributions
82
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
83
CITY OF SEBASTIAN, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2016
Local Law
Option Parking Recreation Stormwater Enforcement
Gas Tax In-Lieu-of Impact Fee Utility Forfeiture
Assets
Cash and cash equivalents 310,677$ -$ 611,803$ 362,022$ 2,412$
Investments - 72,975 293,090 - 34,282
Due from other governments 54,088 - - 12,534 -
Total assets 364,765$ 72,975$ 904,893$ 374,556$ 36,694$
Liabilities
Accounts payable and
accrued liabilities 865 - - - -
Due to other funds - - - - -
Total liabilities 865 - - - -
Fund balances:
Nonspendable - - - - -
Restricted 363,900 - - 374,556 36,694
Committed - 72,975 904,893 - -
Unassigned - - - - -
Total fund balances 363,900 72,975 904,893 374,556 36,694
Total liabilities and
fund balances 364,765$ 72,975$ 904,893$ 374,556$ 36,694$
Special Revenue Funds
84
Permanent
Discretionary Stormwater Total
Sales Surtax Utility General Stormwater Nonmajor
Revenue Note Revenue Capital Transportation Capital Utility Governmental
2013 Bonds 2003 Improvements Improvements Projects Improvements Cemetery Funds
-$ 168,436$ -$ -$ 114,130$ 82,909$ 922,376$ 2,574,765$
- - - - - - 74,402 474,749
- - 13,333 - - - - 79,955
-$ 168,436$ 13,333$ -$ 114,130$ 82,909$ 996,778$ 3,129,469$
- - 77,336 3,066 114,130 - - 195,397
- - 18,905 43,427 - - - 62,332
- - 96,241 46,493 114,130 - - 257,729
- - - - - - 996,778 996,778
- 168,436 - - - 82,909 - 1,026,495
- - - - - - - 977,868
- - (82,908) (46,493) - - - (129,401)
- 168,436 (82,908) (46,493) - 82,909 996,778 2,871,740
-$ 168,436$ 13,333$ -$ 114,130$ 82,909$ 996,778$ 3,129,469$
Capital Projects FundsDebt Service
85
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances - Nonmajor Governmental Funds
For the Year Ended September 30, 2016
Local Law
Option Parking Recreation Stormwater Enforcement
Gas Tax In-Lieu-of Impact Fee Utility Forfeiture
Revenues
Taxes:
Motor fuel 646,132$ -$ -$ -$ -$
Intergovernmental 10,352 - - - -
Impact fees - - 163,800 - -
Charges for services - - - 991,055 -
Fines - - - - 1,048
Investment earnings 1,793 358 4,353 3,401 214
Contributions and donations - - - - -
Other revenues - 26,130 - - 27,530
Total revenues 658,277 26,488 168,153 994,456 28,792
Expenditures
Current:
Public safety - - - - 8,648
Physical environment - - - 50,700 -
Transportation 214,569 62 - - -
Debt Service:
Principal 211,000 - - - -
Interest and fiscal charges 31,748 - - - -
Capital outlay - - 14,875 - 15,159
Total expenditures 457,317 62 14,875 50,700 23,807
Revenues over (under) expenditures 200,960 26,426 153,278 943,756 4,985
Other financing sources (uses)
Transfers in 200,000 - - 100,000 -
Transfers out (444,255) - (17,524) (769,499) -
Total other financing sources (uses)(244,255) - (17,524) (669,499) -
Net change in fund balances (43,295) 26,426 135,754 274,257 4,985
Fund balances, beginning of year 407,195 46,549 769,139 100,299 31,709
Fund balances, end of year 363,900$ 72,975$ 904,893$ 374,556$ 36,694$
Special Revenue Funds
86
Permanent
Discretionary Stormwater Total
Sales Surtax Utility General Stormwater Nonmajor
Revenue Note Revenue Capital Transportation Capital Utility Governmental
2013 Bonds 2003 Improvements Improvements Projects Improvements Cemetery Funds
-$ -$ -$ -$ -$ -$ -$ 646,132$
- - 43,908 - - - - 54,260
- - - - - - - 163,800
- - - - - - 73,665 1,064,720
- - - - - - - 1,048
914 918 - - - - 5,039 16,990
- - - - 7,900 - - 7,900
- - - - - - - 53,660
914 918 43,908 - 7,900 - 78,704 2,008,510
- - - - - - - 8,648
- - - - 14,789 17,091 - 82,580
- - - 2,908 - - - 217,539
1,369,000 355,000 - - - - - 1,935,000
15,661 45,498 - - - - - 92,907
- - 222,036 641,646 628,828 50,827 - 1,573,371
1,384,661 400,498 222,036 644,554 643,617 67,918 - 3,910,045
(1,383,747) (399,580) (178,128) (644,554) (635,717) (67,918) 78,704 (1,901,535)
868,342 401,141 139,230 612,669 635,717 50,827 - 3,007,926
- - - - - - (10,684) (1,241,962)
868,342 401,141 139,230 612,669 635,717 50,827 (10,684) 1,765,964
(515,405) 1,561 (38,898) (31,885) - (17,091) 68,020 (135,571)
515,405 166,875 (44,010) (14,608) - 100,000 928,758 3,007,311
-$ 168,436$ (82,908)$ (46,493)$ -$ 82,909$ 996,778$ 2,871,740$
Capital Projects FundsDebt Service
87
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Local Option Gas Tax
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Motor fuel 590,000$ 590,000$ 646,132$ 56,132$
Intergovernmental 10,352 10,352 10,352 -
Investment earnings 84 84 1,793 1,709
Total revenues 600,436 600,436 658,277 57,841
Expenditures
Current:
Transportation 320,103 352,517 214,569 (137,948)
Debt service:
Principal 211,000 211,000 211,000 -
Interest and fiscal charges 31,748 31,748 31,748 -
Total expenditures 562,851 595,265 457,317 (137,948)
Revenues over (under) expenditures 37,585 5,171 200,960 195,789
Other financing sources (uses)
Transfers in 200,000 200,000 200,000 -
Transfers out (200,000) (450,178) (444,255) 5,923
Total other financing sources (uses)- (250,178) (244,255) 5,923
Net changes in fund balance 37,585 (245,007) (43,295) 201,712
Fund balance, beginning of year 407,195 407,195 407,195 -
Fund balance, end of year 444,780$ 162,188$ 363,900$ 201,712$
88
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Parking In-Lieu-Of Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 100$ 100$ 358$ 258$
Other revenues 19,730 19,730 26,130 6,400
Total revenues 19,830 19,830 26,488 6,658
Expenditures
Current:
Transportation - - 62 62
Capital outlay (25,000) 41,129 - (41,129)
Total expenditures (25,000) 41,129 62 (41,067)
Net change in fund balance 44,830 (21,299) 26,426 47,725
Fund balance, beginning of year 46,549 46,549 46,549 -
Fund balance, end of year 91,379$ 25,250$ 72,975$ 47,725$
89
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Recreation Impact Fee Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Impact fees 100,000$ 100,000$ 163,800$ 63,800$
Investment earnings 1,830 1,830 4,353 2,523
Total revenues 101,830 101,830 168,153 66,323
Expenditures
Capital outlay - - 14,875 14,875
Revenue over (under) expenditures 101,830 101,830 153,278 51,448
Other financing sources (uses)
Transfers out (210,000) (117,744) (17,524) 100,220
Net change in fund balances (108,170) (15,914) 135,754 151,668
Fund balance, beginning of year 769,139 769,139 769,139 -
Fund balance, end of year 660,969$ 753,225$ 904,893$ 151,668$
90
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Stormwater Utility Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Charges for services 985,500$ 985,500$ 991,055$ 5,555$
Investment earnings 1,851 1,851 3,401 1,550
Total revenues 987,351 987,351 994,456 7,105
Expenditures
Current:
Physical environment 290,000 127,100 50,700 (76,400)
Revenues over (under) expenditures 697,351 860,251 943,756 83,505
Other financing sources (uses)
Transfers in 100,000 100,000 100,000 -
Transfers out (649,000) (859,526) (769,499) 90,027
Other financing sources (users)(549,000) (759,526) (669,499) 90,027
Net change in fund balance 148,351 100,725 274,257 173,532
Fund balance, beginning of year 100,299 100,299 100,299 -
Fund balance, end of year 248,650$ 201,024$ 374,556$ 173,532$
91
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Law Enforcement Forfeiture Special Revenue Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Fines 1,000$ 1,000$ 1,048$ 48$
Investment earnings 110 110 214 104
Other revenues - - 27,530 27,530
Total revenues 1,110 1,110 28,792 27,682
Expenditures
Current:
Public safety - - 8,648 8,648
Capital outlay - - 15,159 15,159
Total expenditures - - 23,807 23,807
Net change in fund balance 1,110 1,110 4,985 3,875
Fund balance, beginning of year 31,709 31,709 31,709 -
Fund balance, end of year 32,819$ 32,819$ 36,694$ 3,875$
92
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Discretionary Sales Surtax Revenue Note 2013 Debt Service Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 2,144$ 2,144$ 914$ (1,230)$
Expenditures
Debt service:
Principal 1,016,000 1,016,000 1,369,000 353,000
Interest and fiscal charges 12,625 12,625 15,661 3,036
Total expenditures 1,028,625 1,028,625 1,384,661 356,036
Revenues over (under) expenditures (1,026,481) (1,026,481) (1,383,747) (357,266)
Other financing sources
Transfers in 867,112 867,112 868,342 1,230
Net change in fund balance (159,369) (159,369) (515,405) (356,036)
Fund balance, beginning of year 515,405 515,405 515,405 -
Fund balance, end of year 356,036$ 356,036$ -$ (356,036)$
93
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Stormwater Utility Revenue Bond Debt Service Fund
For the Year Ended September 30, 2016
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 133$ 133$ 918$ 785$
Expenditures
Debt service:
Principal 355,000 355,000 355,000 -
Interest and fiscal charges 45,500 45,500 45,498 (2)
Total expenditures 400,500 400,500 400,498 (2)
Revenues over (under) expenditures (400,367) (400,367) (399,580) 787
Other financing sources
Transfers in 401,141 401,141 401,141 -
Net change in fund balance 774 774 1,561 787
Fund balance, beginning of year 166,875 166,875 166,875 -
Fund balance, end of year 167,649$ 167,649$ 168,436$ 787$
94
AGENCY FUND
95
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2016
Balance Balance
October 1, September 30,
2015 Additions Deletions 2016
Performance Deposits
Assets
Cash and cash equivalents 32,841$ 113,909$ (113,909)$ 32,841$
Investments, at fair value 73,750 113,409 (113,409) 73,750
Total assets 106,591$ 227,318$ (227,318)$ 106,591$
Liabilities
Performance deposits held in escrow 106,591$ 500$ (500)$ 106,591$
96
CAPITAL ASSETS
97
CITY OF SEBASTIAN, FLORIDA
Comparative Schedule by Source
Capital Assets Used in the Operation of Governmental Funds
September 30, 2016
2016 2015
Governmental funds capital assets
Land 8,319,588$ 8,319,588$
Buildings and structures 13,110,829 12,609,808
Non-building improvements 6,869,838 6,833,246
Machinery and equipment 8,668,356 8,691,504
Infrastructure 39,938,233 39,186,897
Construction in progress 227,035 472,375
Total governmental funds capital assets 77,133,879$ 76,113,418$
Investment in governmental funds capital assets (by sources)
Federal grants 4,550,000$ 5,605,250$
State grants 2,750,000 2,575,775
County grants 725,000 720,500
General Fund 11,100,000 11,125,600
Law enforcement trust fund 87,000 67,980
Recreational impact fee 2,200,000 2,114,695
Stormwater utility fee 6,600,000 6,602,058
Riverfront redevelopment 2,200,000 2,110,000
Cemetery trust fund 485,000 525,710
Donations 2,600,000 2,695,000
Sales taxes 22,100,000 20,120,225
Motor fuel taxes 7,375,000 7,350,000
Revenue bond debt 13,850,000 13,995,750
Parking in Lieu of Fee 36,879 32,500
Capital projects 475,000 472,375
Total investment in governmental funds capital assets 77,133,879$ 76,113,418$
98
Schedule by Function and Activity
Capital Assets Used in the Operation of Governmental Funds
September 30, 2016
Machinery
Non-Building and
Functions / Programs Land Buildings Improvements Equipment Infrastructure Total
General government:
Legislative -$ -$ -$ 784$ -$ 784$
City manager - - - 24,443 - 24,443
City clerk - - - 235,585 - 235,585
Administrative services - - 1,100 47,904 - 49,004
MIS - 5,841 56,151 588,226 - 650,218
Audio visual/broadcast - - - 35,819 - 35,819
Facilities maintenance - 682,668 21,187 168,279 - 872,134
Community development - 85,555 - 60,827 - 146,382
Non-departmental 3,646,929 6,184,989 126,636 204,375 52,699 10,215,628
Total general government 3,646,929 6,959,053 205,074 1,366,242 52,699 12,229,997
Public safety:
Special operations - - - 43,532 - 43,532
Administration 9,560 3,347,152 89,320 416,561 - 3,862,593
School resource - - - 42,661 - 42,661
Road patrol - - - 2,746,833 - 2,746,833
Community policing - - - 13,863 - 13,863
Code enforcement - - - 54,856 - 54,856
Investigations - - 1,701 264,179 - 265,880
Support services - - - 50,516 - 50,516
Communications - - 16,404 208,969 - 225,373
Building department - - - 20,107 - 20,107
Total public safety 9,560 3,347,152 107,425 3,862,077 - 7,326,214
Transportation:
Engineering - - - 6,478 - 6,478
Central garage - 130,489 115,232 198,616 674 445,011
Roads and drainage 47,125 166,907 1,087,622 921,513 18,341,122 20,564,289
Total transportation 47,125 297,396 1,202,854 1,126,607 18,341,796 21,015,778
Economic environment:
Non-departmental 2,308,392 1,040,589 6,562 - - 3,355,543
Physical environment:
Stormwater - - 3,870 1,653,308 19,719,620 21,376,798
Cemetery 572,181 82,019 78,354 67,553 22,717 822,824
Total physical environment 572,181 82,019 82,224 1,720,861 19,742,337 22,199,622
Culture/recreation:
Parks and recreation 1,735,401 1,384,619 5,265,699 592,570 1,801,401 10,779,690
Total 8,319,588$ 13,110,828$ 6,869,838$ 8,668,357$ 39,938,233$ 76,906,844
Construction in progress 227,035
Total 77,133,879$
CITY OF SEBASTIAN, FLORIDA
99
Schedule of Changes by Function and Activity
Capital Assets Used in the Operation of Governmental Funds
September 30, 2016
Capital Assets Capital Assets
October 1, Transfers Transfers September 30,
Functions / Programs 2015 Additions Disposals In Out 2016
General government:
Legislative 784$ -$ -$ -$ -$ 784$
City manager 24,443 - - - - 24,443
City clerk 236,886 - 1,301 - - 235,585
Administrative services 50,361 - 1,357 - - 49,004
MIS 791,963 12,754 165,619 11,120 - 650,218
Audio visual/broadcast - 35,819 - - - 35,819
Facilities maintenance 374,004 486,952 16,178 27,356 - 872,134
Community development 136,291 - 11,657 21,748 - 146,382
Non-departmental 10,215,628 - - - - 10,215,628
Total general government 11,830,360 535,525 196,112 60,224 - 12,229,997
Public safety:
Special operations 69,843 - 26,311 - - 43,532
Administration 3,773,877 89,855 1,139 - - 3,862,593
School resource 44,077 - 1,416 - - 42,661
Road patrol 2,667,234 172,954 84,552 - 8,803 2,746,833
Community policing 13,863 - - - - 13,863
Code enforcement 82,183 - - - 27,327 54,856
Investigations 238,884 48,677 21,681 - - 265,880
Support services 50,516 - - - - 50,516
Communications 227,690 - - - 2,317 225,373
Building department 38,430 - 18,323 - - 20,107
Total public safety 7,206,597 311,486 153,422 - 38,447 7,326,214
Transportation:
Engineering - 6,478 - - - 6,478
Central garage 422,823 35,512 - - 13,324 445,011
Roads and drainage 19,823,948 772,928 59,914 27,327 - 20,564,289
Total transportation 20,246,771 814,918 59,914 27,327 13,324 21,015,778
Economic environment:
Non-departmental 3,355,543 - - - - 3,355,543
Physical environment:
Stormwater 21,403,715 222,801 263,043 13,325 - 21,376,798
Cemetery 819,524 3,300 - - - 822,824
Total physical environment 22,223,239 226,101 263,043 13,325 - 22,199,622
Culture/recreation:
Parks and recreation 10,778,533 137,671 87,409 - 49,105 10,779,690
Total 75,641,043 2,025,701 759,900 100,876 100,876 76,906,844
Construction in progress 472,375 554,434 799,774 - - 227,035
Total 76,113,418$ 2,580,135$ 1,559,674$ 100,876$ 100,876$ 77,133,879$
CITY OF SEBASTIAN, FLORIDA
100
INTERNAL CONTROL AND COMPLIANCE
101
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102
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
GOVERNMENT AUDITING STANDARDS
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 the City of Sebastian, Florida (the "City"), as of and for the year ended September
30, 2016, and the related notes to the financial statements, which collectively comprise the City’s
basic financial statements, and have issued our report thereon dated February 10, 2017.
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 the 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 entity’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.
February 10, 2017
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
rehmann.com
103
Compliance and Other Matters
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 entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Purpose of this Report
Our consideration of internal control 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 and therefore, material weaknesses or significant deficiencies
may exist that were not identified. 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.
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
104
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
Report on the Financial Statements
Auditor's Responsibility
Other Reports and Schedule
Prior Audit Findings
February 10, 2017
INDEPENDENT AUDITORS'
MANAGEMENT LETTER
We have audited the financial statements of the City of Sebastian, Florida as of and for the fiscal year
ended September 30, 2016 and have issued our report thereon dated February 10, 2017.
We conducted our audit in accordance with United States generally accepted auditing standards; 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.
We have issued our Independent Auditor's Report on Internal Control over Financial Reporting and
Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards; and Independent Accountant's Report on an examination
conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance
requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those
reports and schedule, which are dated February 10, 2017, should be considered in conjunction with this
management letter.
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 audit report. Corrective actions have been taken to address findings and
recommendations made in the preceding annual financial report.
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
rehmann.com
105
Official Title and Legal Authority
Financial Condition
Annual Financial Report
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 all special district
component units provided the necessary information for proper reporting in accordance with Section
218.39(3)(b), Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554(1)(i)2), the scope of our audit
included a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of
public funds. In connection with our audit, we determined that the City of Sebastian, Florida complied
with Section 218.415, Florida Statutes.
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. The legal authority
for the City of Sebastian, Florida is disclosed in the notes to the financial statements. The City of
Sebastian, Florida’s component unit, the Police Officer’s Pension Plan, was established under Section
58-46 through 58-54 Code of Ordinances in October 1989.
Section 10.554(1)(i)5.a.,Rules of the Auditor General,requires that we report the results of our
determination as to whether or not the City of Sebastian, Florida has met one or more of the conditions
described in Section 218.503(1), Florida Statutes, and identification of the specified condition(s) met.
In connection with our audit, we determined that the City of Sebastian, Florida did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
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 of Sebastian,
Florida'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)5.b.,Rules of the Auditor General,requires that we report the results of our
determination as to whether the annual financial report for the City of Sebastian, Florida for the fiscal
year ended September 30, 2016, filed with the Florida Department of Financial Services pursuant to
Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the
fiscal year ended September 30, 2016. In connection with our audit, we determined that these two
reports were in agreement.
106
Other Matters
Purpose of this Letter
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management
letter any recommendations to improve financial management. In connection with our audit, we did
not have any such recommendations.
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and Florida House of Representatives, the Florida Auditor
General, Federal and other granting agencies, the City Council, and applicable management, and is not
intended to be and should not be used by anyone other than these specified parties.
Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with
provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but which warrants
the attention of those charged with governance. In connection with our audit, we did not have any
such findings.
107
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108
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
Our management letter is intended solely for the information and use of management, the City Council
and the Florida Auditor General, and is not intended to be and should not be used by anyone other
than these specified parties.
INDEPENDENT ACCOUNTANTS' REPORT
We have examined the compliance of the City of Sebastian, Florida (the "City") with Sections 218.415,
28.35 and 28.36, Florida Statutes, during the year ended September 30, 2016. Management is
responsible for 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 and, accordingly, include 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 on 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, 2016.
February 10, 2017
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
rehmann.com
109
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110
STATISTICAL SECTION
111
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112
CITY OF SEBASTIAN, FLORIDA
Statistical Section Table of Contents
Page
Financial Trends These schedules contain trend information to help the reader
understand and evaluate how the City’s financial condition,
performance and well-being have changed over time.114
Revenue Capacity These schedules contain information to help the reader assess
the City’s ability to generate its most significant local revenue
source, the property tax. 126
Debt Capacity These schedules present information to help the reader assess
the affordability of the City’s current levels of outstanding debt
and its ability to issue additional debt in the future. 132
Demographic and
Economic Information
These schedules present various demographic and economic
indicators to help the reader understand the environment within
which the City operates and how they affect the City’s financial
activities. 138
Operating Information These schedules contain information about the City’s operations
and resources to help the reader understand how the information
in the City’s financial report relates to the services the City
provides and the activities it performs. 142
This part of the City’s Comprehensive Annual Financial Report presents detailed information to assist the
user in understanding what the financial statements, note disclosures and required supplementary
information say about the overall economic condition of the City of Sebastian, Florida.
Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive
Annual Financial Report for the relevant year. The City implemented GASB Statement No. 34 in 2001;
schedules presenting government-wide information include data beginning in that year.
113
CITY OF SEBASTIAN, FLORIDA
Net Position by Component
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Governmental activities
Net investment in capital assets 35,886,087$ 35,220,857$ 35,210,526$ 32,038,749$ 31,500,173$
Restricted 5,209,372 4,997,724 5,115,627 5,839,440 6,192,777
Unrestricted 3,615,777 3,467,014 3,330,400 4,577,440 3,607,228
Total governmental activities net position 44,711,236$ 43,685,595$ 43,656,553$ 42,455,629$ 41,300,178$
Business-type activities
Net investment in capital assets 11,989,666$ 10,517,895$ 10,439,804$ 10,846,501$ 11,181,823$
Restricted - - - - -
Unrestricted (717,053) 67,779 (103,116) (306,497) (490,298)
Total business-type activities net position 11,272,613$ 10,585,674$ 10,336,688$ 10,540,004$ 10,691,525$
Primary Government
Net investment in capital assets 47,875,753$ 45,738,752$ 45,650,330$ 42,885,250$ 42,681,996$
Restricted 5,209,372 4,997,724 5,115,627 5,839,440 6,192,777
Unrestricted 2,898,724 3,534,793 3,227,284 4,270,943 3,116,930
Total primary government net position 55,983,849$ 54,271,269$ 53,993,241$ 52,995,633$ 51,991,703$
Fiscal Year
114
Table 1 - Unaudited
2011 2010 2009 2008 2007
31,541,953$ 28,938,587$ 26,744,896$ 24,133,550$ 21,469,456$
5,668,155 8,757,043 8,197,018 9,215,801 9,419,129
4,052,751 3,889,011 4,502,440 5,035,184 5,249,998
41,262,859$ 41,584,641$ 39,444,354$ 38,384,535$ 36,138,583$
11,850,561$ 11,389,704$ 10,725,676$ 9,111,251$ 8,895,501$
- - 98,320 570,149 570,890
(644,620) (342,340) 86,517 753,076 1,303,886
11,205,941$ 11,047,364$ 10,910,513$ 10,434,476$ 10,770,277$
43,392,514$ 40,328,291$ 37,470,572$ 33,244,801$ 30,364,957$
5,668,155 8,757,043 8,295,338 9,785,950 9,990,019
3,408,131 3,546,671 4,588,957 5,788,260 6,553,884
52,468,800$ 52,632,005$ 50,354,867$ 48,819,011$ 46,908,860$
Fiscal Year
115
CITY OF SEBASTIAN, FLORIDA
Changes in Net Position
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Expenses
Governmental activities:
General government 3,285,607$ 3,015,536$ 2,923,398$ 2,784,485$ 2,640,677$
Public safety 5,476,136 5,164,197 4,908,374 4,928,203 5,025,274
Physical environment 2,538,752 2,759,461 2,310,539 2,039,380 2,007,902
Transportation 1,861,946 2,024,814 1,828,569 1,845,429 1,800,432
Economic environment 364,675 194,630 247,891 155,214 170,960
Culture and recreation 1,191,488 1,293,246 1,229,369 1,232,345 1,239,512
Interest on debt 82,943 100,468 235,071 368,432 562,496
Total governmental activities expenses 14,801,547 14,552,352 13,683,211 13,353,488 13,447,253
Business-type activities:
Golf Course 1,584,214 1,409,829 1,406,770 1,377,039 1,394,731
Airport 1,197,549 1,038,361 1,031,464 1,146,905 1,166,588
Building 546,649 531,087 465,717 417,887 397,295
Total business-type activities expenses 3,328,412 2,979,277 2,903,951 2,941,831 2,958,614
Total primary government expenses 18,129,959$ 17,531,629$ 16,587,162$ 16,295,319$ 16,405,867$
Program Revenue
Governmental activities:
Charges for services:
General government 374,581$ 372,255$ 407,068$ 314,158$ 214,488$
Public safety 98,446 80,763 76,132 67,297 66,474
Physical environment 1,049,735 1,087,642 1,073,015 1,101,864 876,693
Culture and recreation 53,959 67,940 67,371 70,982 66,954
Operating grants and contributions 323,101 345,937 186,295 332,627 187,333
Capital grants and contributions 809,932 994,546 739,785 770,123 791,265
Total governmental activities program revenue 2,709,754 2,949,083 2,549,666 2,657,051 2,203,207
Business-type activities:
Charges for services:
Golf Course 1,135,357 1,333,189 1,277,660 1,302,441 1,394,844
Airport 516,403 457,318 470,703 481,759 491,367
Building 810,069 712,620 700,751 706,964 419,705
Capital grants and contributions 841,668 702,154 235,215 230,868 150,083
Total business-type activities program revenue 3,303,497 3,205,281 2,684,329 2,722,032 2,455,999
Total primary government program revenue 6,013,251 6,154,364 5,233,995 5,379,083 4,659,206
Net (expense) revenue
Governmental activities (12,091,793) (11,603,269) (11,133,545) (10,696,437) (11,244,046)
Business-type activities (24,915) 226,004 (219,622) (219,799) (502,615)
Total primary government net
(expense) revenue (12,116,708)$ (11,377,265)$ (11,353,167)$ (10,916,236)$ (11,746,661)$
Fiscal Year
116
Table 2 - Unaudited
2011 2010 2009 2008 2007
2,766,575$ 3,309,381$ 3,169,851$ 3,375,178$ 3,083,609$
5,546,632 5,720,933 5,420,585 5,226,512 5,377,107
1,558,974 1,947,605 1,347,771 1,805,755 1,695,066
2,263,367 1,863,551 3,437,724 2,111,360 2,276,497
208,518 135,885 167,470 113,101 605,510
1,227,198 1,240,383 1,073,249 1,420,734 1,237,398
546,103 566,410 730,100 634,891 667,950
14,117,367 14,784,148 15,346,750 14,687,531 14,943,137
1,355,266 1,388,158 1,477,299 1,488,472 1,533,900
1,188,788 1,067,525 1,079,869 1,099,653 1,046,994
470,406 496,800 533,641 605,422 905,452
3,014,460 2,952,483 3,090,809 3,193,547 3,486,346
17,131,827$ 17,736,631$ 18,437,559$ 17,881,078$ 18,429,483$
197,945$ 203,915$ 220,073$ 353,836$ 422,897$
92,350 118,368 95,606 85,009 92,853
868,059 881,338 908,829 903,285 891,021
61,353 62,046 66,540 83,378 85,945
196,534 210,050 228,002 786,016 192,676
838,242 3,178,618 1,865,174 835,607 1,014,481
2,254,483 4,654,335 3,384,224 3,047,131 2,699,873
1,382,421 1,335,647 1,406,956 1,438,233 1,652,288
485,229 468,698 438,485 523,989 344,813
401,021 356,264 358,947 347,189 408,875
900,340 904,853 1,356,914 494,098 500,428
3,169,011 3,065,462 3,561,302 2,803,509 2,906,404
5,423,494 7,719,797 6,945,526 5,850,640 5,606,277
(11,862,884) (10,129,813) (11,962,526) (11,640,400) (12,243,264)
154,551 112,979 470,493 (390,038) (579,942)
(11,708,333)$ (10,016,834)$ (11,492,033)$ (12,030,438)$ (12,823,206)$
continued…
Fiscal Year
117
CITY OF SEBASTIAN, FLORIDA
Changes in Net Position
Last Ten Fiscal Years
2016 2015 2014 2013 2012
General revenue and other changes in net position
Governmental Activities:
Property taxes, levied for general purposes 3,942,048$ 3,594,210$ 3,248,113$ 3,221,304$ 3,063,495$
Sales and use taxes 5,762,921 5,555,270 5,320,051 5,123,046 4,852,413
Franchise fees 1,257,430 1,241,515 1,190,233 1,118,886 1,124,568
State shared revenues not restricted
to specific programs 2,466,546 2,365,137 2,208,700 2,063,450 1,934,733
Investment earnings 77,317 65,256 43,293 74,650 82,129
Miscellaneous 316,239 240,179 338,901 315,296 201,538
Transfers (705,067) 2,988 (14,822) (37,734) 22,489
Total governmental activities 13,117,434 13,064,555 12,334,469 11,878,898 11,281,365
Business-type activities:
Investment earnings 6,787 5,368 1,484 4,391 6,563
Miscellaneous - 20,602 - 274 4,125
Transfers 705,067 (2,988) 14,822 37,734 (22,489)
Total business-type activities 711,854 22,982 16,306 42,399 (11,801)
Total primary government general revenue 13,829,288 13,087,537 12,350,775 11,921,297 11,269,564
Change in net position
Governmental activities 1,025,641 1,461,286 1,200,924 1,182,461 37,319
Business-type activities 686,939 248,986 (203,316) (177,400) (514,416)
1,712,580$ 1,710,272$ 997,608$ 1,005,061$ (477,097)$
Fiscal Year
Total primary government change in net
position
118
2011 2010 2009 2008 2007
3,453,778$ 4,164,128$ 4,801,924$ 5,149,047$ 5,089,841$
4,751,021 4,765,200 4,670,106 4,753,718 4,776,691
1,184,686 1,228,692 1,327,253 1,199,762 1,106,698
1,868,555 1,825,215 1,821,347 1,989,606 2,083,523
111,943 144,432 261,203 634,919 1,147,931
171,119 149,453 140,512 159,300 192,300
- (7,020) - - 42,720
11,541,102 12,270,100 13,022,345 13,886,352 14,439,704
4,026 15,658 5,544 54,237 137,207
- 1,194 - - -
- 7,020 - - (42,720)
4,026 23,872 5,544 54,237 94,487
11,545,128 12,293,972 13,027,889 13,940,589 14,534,191
(321,782) 2,140,287 1,059,819 2,245,952 2,196,440
158,577 136,851 476,037 (335,801) (485,455)
(163,205)$ 2,277,138$ 1,535,856$ 1,910,151$ 1,710,985$
concluded
Fiscal Year
119
CITY OF SEBASTIAN, FLORIDA
Fund Balances, Governmental Funds
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Governmental funds
General Fund:
Nonspendable 227,651$ 316,036$ 369,329$ 368,564$ 370,450$
Restricted 46,262 38,544 7,969 28,632 -
Committed - - - - 2,861,708
Assigned 10,840 8,692 7,129 7,020 35,707
Unassigned 5,526,675 5,289,322 5,348,905 5,065,242 1,734,307
Total General Fund 5,811,428 5,652,594 5,733,332 5,469,458 5,002,172
All other governmental funds:
Nonspendable 996,778 928,758 1,390,073 1,323,838 1,289,693
Restricted 4,193,653 4,181,787 3,756,950 4,647,950 4,371,826
Committed 977,868 815,688 625,007 589,364 719,686
Assigned - - - - -
Unassigned (129,401) (58,618) (64,875) - -
Total all other governmental funds 6,038,898 5,867,615 5,707,155 6,561,152 6,381,205
Total governmental funds 11,850,326$ 11,520,209$ 11,440,487$ 12,030,610$ 11,383,377$
1
2 Reduction in unassigned fund balance to fund operations.
The significant reduction in restricted fund balance reported in all other governmental funds from 2008 to 2009 is a result of the
significant completion of the Indian River Drive/Main Street and Pedestrian Bridge projects, along with the significant
construction completed on the Collier Canal Retrofit project.
Fiscal Year
120
Table 3 - Unaudited
2011 2010 2009 2008 2007
346,995$ 352,248$ 357,696$ 381,528$ 368,609$
- - - - -
2,949,139 3,063,585 3,083,463 3,502,560 3,742,617
21,911 31,656 1,983 33,453 19,055
1,784,413 2 2,164,910 2,324,972 2,390,641 2,260,507
5,102,458 5,612,399 5,768,114 6,308,182 6,390,788
1,494,779 859,463 830,029 771,927 694,506
4,748,376 7,897,580 8,557,389 1 12,446,260 12,926,545
- - - - -
- - - - -
- - - - -
6,243,155 8,757,043 9,387,418 13,218,187 13,621,051
11,345,613$ 14,369,442$ 15,155,532$ 19,526,369$ 20,011,839$
Fiscal Year
121
CITY OF SEBASTIAN, FLORIDA
Changes in Fund Balances For Governmental Funds
For the Last Ten Fiscal Years
2016 2015 2014 2013 2012
Revenues
Taxes 10,326,654$ 9,782,109$ 9,123,879$ 8,894,880$ 8,465,990$
Franchise fees 1,257,430 1,241,515 1,190,233 1,118,886 1,124,568
Licenses, fees and permits 136,614 147,219 138,564 45,500 22,431
Intergovernmental 2,709,066 2,742,950 2,373,695 2,411,395 2,088,038
Impact fees 163,800 281,450 168,350 169,000 58,500
Charges for services 1,391,495 1,397,395 1,431,101 1,462,522 1,158,075
Fines 73,059 63,035 54,140 60,190 57,575
Investment earnings 77,317 65,256 43,293 78,411 86,516
Contributions and donations 80,581 48,124 36,801 22,406 216,091
Other revenues 316,239 241,597 338,901 315,296 201,888
Total revenues 16,532,255 16,010,650 14,898,957 14,578,486 13,479,672
Expenditures
Current:
General government 3,053,554 2,717,049 2,575,605 2,447,893 2,410,345
Public safety 4,968,258 4,666,343 4,623,060 4,425,000 4,523,802
Physical environment 1,316,697 1,498,706 1,110,788 1,075,162 1,042,349
Transportation 1,168,919 1,187,871 1,165,004 1,158,945 1,208,411
Economic environment 331,589 161,545 144,612 122,730 138,531
Culture and recreation 849,789 893,394 888,795 847,781 876,502
Debt service:
Principal 1,935,000 1,567,000 2,306,000 1,307,000 3,321,000
Interest 92,907 108,678 413,995 393,447 472,399
Capital outlay 1,780,358 3,133,330 2,246,399 2,115,561 1,767,058
Total expenditures 15,497,071 15,933,916 15,474,258 13,893,519 15,760,397
Revenues over (under) expenditures 1,035,184 76,734 (575,301) 684,967 (2,280,725)
Other Financing Sources (Uses)
Issuance of long-term debt - - - - 2,296,000
Transfers in 3,694,279 4,989,726 3,903,204 3,598,949 3,694,765
Transfers out (4,399,346) (4,986,738) (3,918,026) (3,636,683) (3,672,276)
Total other financing sources (uses)(705,067) 2,988 (14,822) (37,734) 2,318,489
Net change in fund balances 330,117$ 79,722$ (590,123)$ 647,233$ 37,764$
Debt service as a percentage of
noncapital expenditures (1)14.8%13.1%20.6%14.4%27.1%
(1)
Fiscal Year
To calculate the ratio, divide the total debt service expenditures (principal plus interest) by total noncapital
expenditures (the difference between the total expenditures and capitalized capital outlay expenditure).
122
Table 4 - Unaudited
2011 2010 2009 2008 2007
8,762,729$ 9,525,074$ 10,065,806$ 10,504,155$ 10,554,617$
1,184,686 1,228,692 1,327,253 1,199,762 1,106,698
1,121,967 1,154,739 1,186,161 1,209,617 1,271,102
23,646 33,182 29,151 163,471 186,875
81,534 90,948 88,938 65,246 71,314
2,249,447 4,572,550 3,270,854 2,674,761 2,463,628
42,250 26,000 13,975 32,825 56,875
- - 3,849 - -
103,795 228,216 250,914 647,312 1,062,043
224,823 169,039 176,430 461,553 244,629
13,794,877 17,028,440 16,413,331 16,958,702 17,017,781
2,539,211 2,699,289 2,976,896 3,087,789 2,999,652
5,030,708 4,938,147 4,926,714 4,677,618 4,700,447
1,166,309 1,210,823 1,448,067 1,368,593 1,301,719
1,217,521 1,405,310 1,696,254 1,545,045 1,733,697
188,918 129,352 167,470 113,101 80,279
903,836 977,780 1,148,408 1,079,379 975,087
1,203,000 2,142,190 1,218,995 1,326,182 1,284,418
521,152 577,593 706,093 611,554 643,305
4,048,051 6,189,026 6,495,271 3,634,910 5,242,590
16,818,706 20,269,510 20,784,168 17,444,171 18,961,194
(3,023,829) (3,241,070) (4,370,837) (485,469) (1,943,413)
- 2,462,000 - - -
5,376,658 4,486,626 5,196,376 5,679,896 5,158,296
(5,376,658) (4,493,646) (5,196,376) (5,679,896) (5,115,576)
- 2,454,980 - - 42,720
(3,023,829)$ (786,090)$ (4,370,837)$ (485,469)$ (1,900,693)$
13.5% 19.3% 13.5% 14.0% 14.1%
Fiscal Year
123
CITY OF SEBASTIAN, FLORIDA
Program Revenues by Function/Program
Last Ten Fiscal Years
2016 2015 2014 2013 2012
Program Revenues
Governmental activities:
General government 479,395$ 534,524$ 413,727$ 471,299$ 230,550$
Public safety 306,381 254,381 246,010 233,309 228,392
Physical environment 1,049,735 1,087,642 1,073,015 1,101,864 876,693
Transportation 656,484 643,146 565,692 560,713 560,055
Economic environment - - 15,501 - 13,998
Culture and recreation 217,759 429,390 235,721 289,866 293,519
Total governmental activities 2,709,754 2,949,083 2,549,666 2,657,051 2,203,207
Business-type activities:
Charges for services:
Golf Course 1,135,357 1,333,189 1,277,660 1,302,441 1,394,892
Airport 1,358,071 1,159,472 705,918 712,627 641,455
Building 1 810,069 712,620 700,751 706,964 426,215
Total business-type activities 3,303,497 3,205,281 2,684,329 2,722,032 2,462,562
Total primary government 6,013,251$ 6,154,364$ 5,233,995$ 5,379,083$ 4,665,769$
1 The significant increase in business-type activities for the airport from 2008 to 2009 is mainly due to capital grant funding from the
Florida Department of Transportation and the Federal Aviation Administration.
Fiscal Year
124
Table 5 - Unaudited
2011 2010 2009 2008 2007
243,039$ 209,144$ 226,003$ 377,305$ 450,267$
234,437 304,630 299,119 515,997 249,756
930,018 881,338 1,408,829 1,256,277 891,021
743,383 614,305 612,335 619,949 721,103
- 2,556,872 6,000 - -
103,606 88,046 831,938 277,603 387,726
2,254,483 4,654,335 3,384,224 3,047,131 2,699,873
1,382,421 1,335,647 1,406,955 1,438,233 1,652,288
1,385,569 1,373,551 1,795,399 1,018,087 845,241
401,021 356,264 358,948 347,189 408,875
3,169,011 3,065,462 3,561,302 2,803,509 2,906,404
5,423,494$ 7,719,797$ 6,945,526$ 5,850,640$ 5,606,277$
Fiscal Year
125
CITY OF SEBASTIAN, FLORIDA Table 6 - Unaudited
Tax Revenue by Source
Governmental Funds
For the Last Ten Fiscal Years
(Rate per $1,000 of assessed value)
Fiscal Year
Ended Property Public Sales Motor Millage
Tax Year September 30 Taxes Utility Tax Fuel Total Rate
2006 2007 5,089,841$ 2,216,381$ 2,560,310$ 688,085$ 10,554,617$ 3.0519
2007 2008 5,149,047 2,250,781 2,502,937 601,390 10,504,155 2.9917
2008 2009 4,801,924 2,341,458 2,328,648 593,776 10,065,806 3.3456
2009 2010 4,164,128 2,437,050 2,328,150 595,746 9,525,074 3.3456
2010 2011 3,453,778 2,392,345 2,358,676 557,930 8,762,729 3.3041
2011 2012 3,063,495 2,387,553 2,464,240 550,702 8,465,990 3.3041
2012 2013 3,221,304 2,534,434 2,587,903 551,239 8,894,880 3.7166
2013 2014 3,248,113 2,581,427 2,738,405 555,934 9,123,879 3.7166
2014 2015 3,594,210 2,638,711 2,916,092 633,096 9,782,109 3.8556
2015 2016 3,942,048 2,686,322 3,052,152 646,132 10,326,654 3.8556
126
CITY OF SEBASTIAN, FLORIDA Table 7 - Unaudited
Direct and Overlapping Property Tax Rates
For the Last Ten Fiscal Years
(Rate per $1,000 of taxable value)
Tax Fiscal Basic Debt Total Total Basic Debt
Year Year Rate Service Direct County 1 Rate Service Total Other 2
2006 2007 3.0519 0.0000 3.0519 5.3661 7.1630 0.2800 7.4430 1.47940
2007 2008 2.9917 0.0000 2.9917 5.1485 7.2680 0.2700 7.5380 1.38160
2008 2009 3.3456 0.0000 3.3456 6.2861 6.7600 0.2800 7.0400 1.11204
2009 2010 3.3456 0.0000 3.3456 6.2693 7.2960 0.3000 7.5960 1.33570
2010 2011 3.3041 0.0000 3.3041 6.2860 7.9200 0.3000 8.2200 1.35050
2011 2012 3.3041 0.0000 3.3041 6.9590 7.8940 0.3500 8.2440 1.35460
2012 2013 3.7166 0.0000 3.7166 6.2572 7.9230 0.3900 8.3130 1.35460
2013 2014 3.7166 0.0000 3.7166 5.6207 8.1160 - 8.1160 1.71280
2014 2015 3.8556 0.0000 3.8556 5.6868 7.9950 - 7.9950 1.71260
2015 2016 3.8556 0.0000 3.8556 5.6868 7.9550 - 7.9550 1.69930
Note:
1 Millage includes General Fund, MSTUs, Emergency Services District and Land Bonds
2 All Special Taxing Districts
Source: Indian River County Property Appraiser's Office
Tax rates are uniformly applied to taxable values based on a single millage rate determined by each taxing entity. The millage rate is expressed as $1.00
per $1,000 of the taxable value.
City Direct Rates Overlapping Rates
County School Board
127
CITY OF SEBASTIAN, FLORIDA
Actual and Estimated Value of Taxable Property
For the Last Ten Fiscal Years
Tax Fiscal Assessed Estimated Assessed Estimated
Year Year Value Actual Value Value Actual Value
2006 2007 2,124,615,672$ 2,655,769,590$ 55,913,696$ 55,913,696$
2007 2008 2,054,408,055 2,568,010,069 64,899,942 64,899,942
2008 2009 1,933,934,630 2,417,418,288 62,476,508 62,476,508
2009 2010 1,650,311,449 2,062,889,311 56,920,223 56,920,223
2010 2011 1,392,267,434 1,740,334,293 55,234,086 55,234,086
2011 2012 1,273,059,710 1,591,324,639 48,922,492 48,922,492
2012 2013 1,210,328,690 1,512,910,863 47,410,545 47,410,545
2013 2014 1,267,035,970 1,583,794,963 53,045,209 53,045,209
2014 2015 1,363,105,220 1,703,881,525 55,646,868 55,646,868
2015 2016 1,447,311,640 1,809,139,550 59,305,756 59,305,756
Source: Indian River County Property Appraiser
Real Property Personal Property
68.5%67.8%
53.2%54.2%55.0%
53.5%52.6%54.1%55.0%55.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fiscal Year
Ratio of Taxable to Actual Value
128
Table 8 - Unaudited
Less: Total Total Ratio of
Tax-Exempt Taxable Estimated Taxable to
Property Value Actual Value Actual Value
322,318,753$ 1,858,210,615$ 2,711,683,286$ 68.5%
334,302,515 1,785,005,482 2,632,910,011 67.8%
676,808,522 1,319,602,616 2,479,894,796 53.2%
558,090,532 1,149,141,140 2,119,809,534 54.2%
460,752,786 986,748,734 1,795,568,379 55.0%
444,524,142 877,458,060 1,640,247,130 53.5%
437,040,114 820,699,121 1,560,321,408 52.6%
435,071,311 885,009,868 1,636,840,172 54.1%
451,939,888 966,812,200 1,759,528,393 55.0%
468,930,126 1,037,687,270 1,868,445,306 55.5%
129
CITY OF SEBASTIAN, FLORIDA Table 9 - Unaudited
Principal Property Tax Payers
Current Year and Nine Years Ago
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Taxpayer Value Rank Value Value Rank Value
Florida Power & Light (Utility/Electric)19,251,530$ 1 1.86 % 19,621,470$ 1 1.06 %
Comcast of Florida, Inc. (Communications)9,395,615 2 0.91 - --
Wal-Mart Stores, Inc. (Retail)8,550,680 3 0.82 15,159,607 2 0.82
Park Place Community, LLC (Rental/Retail)6,951,394 4 0.67 7,814,264 9 0.42
BW US 1, Inc. (Commercial)6,164,130 5 0.59 - --
CR512 Shopping Center (Commercial)5,970,530 6 0.58 8,184,770 8 0.44
CSMA BLT LLC (Commercial)5,037,750 7 0.49 - --
Bellsouth Communications (Utility/Telephone)4,657,553 8 0.45 7,790,960 10 0.42
Hartwell Groves, Inc. (Agriculture)4,558,540 9 0.44 - --
Sebastian Inlet Marina & Trading Co, Inc. -
(Restaurant/Hotel)3,893,690 10 0.38 - --
KB Homes Treasure Coast LLC (Construction)- -- 13,128,500 3 0.71
Chance Holding LLC (Development)- -- 11,151,290 4 0.60
Sebastian Crossing LLC (Construction)- -- 8,797,890 5 0.47
Adams Homes of Northwest FL (Construction)- -- 8,724,593 6 0.47
IPF/Sebastian LLC (Retail)- -- 8,708,020 7 0.47
74,431,412$ 7.19 % 109,081,364$ 5.88 %
Total Taxable Value 1,037,687,270$ 1,858,210,615$
Source: Indian River County Property Appraiser
2016 Fiscal Year 2007 Fiscal Year
7.19%
92.81%
Concentration of 2016 Taxpayers
Top Ten Taxpayers All Other Taxpayers
130
CITY OF SEBASTIAN, FLORIDA Table 10 - Unaudited
Property Tax Levies and Collections
For the Last Ten Fiscal Years
Taxes Levied Delinquent and
Tax Fiscal for the Penalty Tax
Year Year Fiscal Year Amount Collections Amount
2006 2007 4,747,938$ 4,537,100$ 95.56 9,429$ 4,546,529$ 95.76
2007 2008 4,919,994 4,634,338 94.19 2,906 4,637,244 94.25
2008 2009 4,441,535 4,225,106 95.13 1,694 4,226,800 95.17
2009 2010 3,844,658 3,716,797 96.67 17,723 3,734,520 97.14
2010 2011 3,260,316 3,144,864 96.46 11,294 3,156,158 96.81
2011 2012 2,899,209 2,799,146 96.55 9,279 2,808,425 96.87
2012 2013 3,050,099 2,947,248 96.63 7,733 2,954,981 96.88
2013 2014 3,074,729 2,975,299 96.77 754 2,976,053 96.79
2014 2015 3,422,716 3,295,549 96.28 2,241 3,297,790 96.35
2015 2016 3,738,202 3,530,235 94.44 72,789 3,603,024 96.38
Source: Indian River County Property Appraiser and Department of Revenue, Certification of Final Taxable Value, DR-422.
of Levy of Levy
Collected within the
Fiscal Year of the Levy Total Collections to Date
Percentage Percentage
-
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Millions
Fiscal Year
Total Tax Collections
131
CITY OF SEBASTIAN, FLORIDA Table 11 - Unaudited
Ratios of Outstanding Debt By Type
For the Last Ten Fiscal Years
Roadway Infrastructure Heavy Stormwater Golf Course Total Percentage
Fiscal Improvement Sales Tax Equipment Utility Revenue Revenue Primary of Personal Per
Year Notes Bonds/Notes Lease Bonds/Notes Bonds Government Income Capita
112
2007 1,566,839$ 9,145,000$ 147,538$ 4,815,000$ 870,000$ 16,544,377$ 22% 738
2008 1,333,197 8,445,000 - 4,570,000 590,000 14,938,197 19% 652
2009 1,089,203 7,725,000 - 4,315,000 300,000 13,429,203 21% 591
2010 2,414,000 6,980,000 - 4,055,000 - 13,449,000 20% 587
2011 2,246,000 6,215,000 - 3,785,000 - 12,246,000 17% 558
2012 2,296,000 5,420,000 - 3,505,000 - 11,221,000 15% 510
2013 2,099,000 4,600,000 - 3,215,000 - 9,914,000 13% 447
2014 1,896,000 2,730,000 - 2,982,000 - 7,608,000 8% 341
2015 1,689,000 1,722,000 - 2,630,000 - 6,041,000 6% 267
2016 1,478,000 353,000 - 2,275,000 - 4,106,000 (3) 193
1. The Infrastructure Sales Tax and Stormwater Utility Revenue Bonds were refunded in 2014 with Bank Notes.
2. A bank note was issued in 2014 for the purchase of golf carts.
3. Information net yet available.
Business-Type
Activities
-
20.00
40.00
60.00
80.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Millions
Fiscal Year
Primary Government Debt
132
CITY OF SEBASTIAN, FLORIDA Table 12 - Unaudited
Ratios of General Bonded Debt Outstanding
For the Last Ten Fiscal Years
Fiscal Applicable Legal Per
Year Debt Limit to Limit Debt Margin Capita
2007 92,910,531$ 15,674,377$ 77,236,154$ 16.87%3,444$
2008 89,250,574 14,348,197 74,902,377 16.08%3,267
2009 65,980,131 13,129,203 52,850,928 19.90%2,326
2010 57,457,057 13,449,000 44,008,057 23.41%1,920
2011 49,337,437 12,246,000 37,091,437 24.82%1,691
2012 43,872,903 11,221,000 32,651,903 25.58%1,485
2013 41,034,956 9,914,000 31,120,956 24.16%1,403
2014 44,250,493 7,608,000 36,642,493 17.19%1,643
2015 48,340,610 6,041,000 42,299,610 12.50%1,870
2016 51,884,364 4,106,000 47,778,364 7.91%2,050
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Debt Limit
General Bonded Debt Outstanding
Percentage of
133
CITY OF SEBASTIAN, FLORIDA
Legal Debt Margin Information
For the Last Ten Fiscal Years
2016 2015 2014 2013 2012
Debt limit 51,884,364$ 48,340,610$ 44,250,493$ 41,034,956$ 43,872,903$
Total net debt applicable to limit 4,106,000 6,041,000 7,608,000 9,914,000 11,221,000
Legal debt margin 47,778,364$ 42,299,610$ 36,642,493$ 31,120,956$ 32,651,903$
Total net debt applicable to the
limit as a percentage of debt limit 7.91%12.50%17.19% 24.16% 25.58%
Assessed value 1,506,617,396$
Less: Exempt property (468,930,126)
1,037,687,270
Debt limit (5% of assessed value) 51,884,364
Debt applicable to limit:
General obligation bonds -
Revenue bonds/notes 4,106,000
Total net debt applicable to limit 4,106,000
Legal debt margin 47,778,364$
The City of Sebastian has no overlapping general obligation bonded debt for the year ended September 30, 2016.
Legal Debt Margin as a Percentage of Debt Limit
Legal Debt Margin Calculation for Fiscal Year 2016
Fiscal Year
Direct and Overlapping Governmental Activities Debt - General Obligations Bonds
134
Table 13 - Unaudited
2011 2010 2009 2008 2007
49,337,437$ 57,457,057$ 65,980,131$ 89,250,274$ 92,910,531$
12,246,000 13,449,000 13,129,203 14,348,197 15,674,377
37,091,437$ 44,008,057$ 52,850,928$ 74,902,077$ 77,236,154$
24.82% 23.41% 19.90% 16.08% 16.87%
Fiscal Year
135
CITY OF SEBASTIAN, FLORIDA
Pledged-Revenue Coverage
For the Last Ten Fiscal Years
Less:Net
Fiscal Gross Operating Available
Year Revenue 1 Expenses 2 Revenue Principal Interest Total
Coverage 3
2007 1,701,171$ 1,218,382$ 482,789$ 255,000$ 51,590$ 306,590$ 1.57
2008 1,455,749 1,174,169 281,580 270,000 41,090 311,090 0.91
2009 1,408,535 1,178,144 230,391 570,000 49,860 619,860 0.37
2010 1,341,555 1,129,651 211,904 300,000 21,700 321,700 0.66
2011 - - - - - - -
2012 - - - - - - -
2013 - - - - - - -
2014 - - - - - - -
2015 - - - - - - -
2016 - - - - - - -
1
2
3
4
5
Required coverage was 1.25. Final payment was made on September 30, 2010.
Total revenues consist of stormwater utility fees and interest.
Required coverage is 1.35.
Total direct operating expenses excludes depreciation, amortization, annual Airport lease payment and one time hurricane repair cost.
Recreational Facilities Improvement and Refunding Revenue Bonds, Series 2001
Debt Service
Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements.
Total revenues including charges for services, rents and interest.
136
Table 14 - Unaudited
Gross
Revenues 4 Principal Interest Total Coverage 5
932,183$ 240,000$ 197,273$ 437,273$ 2.13
856,568 245,000 191,873 436,873 1.96
814,419 255,000 185,135 440,135 1.85
858,664 260,000 177,485 437,485 1.96
816,415 270,000 169,035 439,035 1.86
810,382 280,000 159,248 439,248 1.84
1,007,221 290,000 148,048 438,048 2.30
- - - - -
- - - - -
- - - - -
Stormwater Utility Revenue Bonds, Series 2003
Debt Service
137
CITY OF SEBASTIAN, FLORIDA
Demographic and Economic Statistics
For the Last Ten Calendar Years
Personal Per
Income Capita
(thousands Personal School
Year Population
of dollars) 1 Income 1 Enrollment 2
2007 22,426 7,552,059$ 56,852$ 47,563$ 5,117 7.0 4.4
2008 22,924 7,976,086 58,528 48,267 4,710 9.8 7.1
2009 22,722 6,534,146 47,689 43,685 5 3,751 14.5 11.2
2010 22,922 6,737,286 48,276 47,525 5,167 14.5 11.3
2011 21,929 7,080,348 50,977 42,053 5,228 13.4 10.6
2012 21,995 7,429,653 52,855 42,638 5,208 11.8 8.6
2013 22,188 7,731,263 54,448 44,326 6,739 8.8 6.9
2014 22,296 9,139,902 63,140 47,548 6,034 6.5 5.6
2015 22,622 10,055,169 67,978 49,887 5,930 6.1 4.8
2016 23,137 4 4 4 6,132 6.2 4.8
Sources:
1
2
3
4 Information not yet available.
5
Indian River County Property Appraiser
Indian River County School Board
Florida Research & Economic Database (FRED). Information available for Indian River County Only.
The school population appears to have declined as a result of loss of job opportunities. Our community lost
many construction jobs as a result of the declining economy.
Note: School enrollment consists of Sebastian River High School, Sebastian River Middle School, Liberty Magnet,
Treasure Coast Elementary, Pelican Island Elementary, Sebastian Elementary, Storm Grove Middle School and
Sebastian Charter Junior High School.
Median
Household
Income 1
Unemployment
Rate 1
State
Unemployment
Rate
138
Table 15 - Unaudited
Property Total
Taxes Taxable
Per Property
Capita Value 3
226.96 1,858,210,615
224.61 1,785,005,482
211.33 1,319,602,616
181.67 1,149,141,140
157.50 986,748,734
139.28 877,458,060
145.18 820,699,121
145.68 885,009,868
158.88 966,812,200
166.01 1,037,687,270
139
CITY OF SEBASTIAN, FLORIDA Table 16 - Unaudited
Principal Employers
Current Year and Nine Years Ago
Employees Rank Employees Rank
School District of Indian River County (Government)2,113 1 3.39 % 2,203 1 3.80 %
Indian River Medical Center (Healthcare)1,753 2 2.82 1,300 3 2.24
Indian River County (Government)1,328 3 2.13 1,614 2 2.78
Publix Supermarkets (Food/Beverage)1,250 4 2.01 1,104 4 1.90
Wal-Mart (Retail)693 5 1.11 449 9 0.77
Piper Aircraft, Inc. (Manufacturer)650 6 1.04 1,045 5 1.80
Sebastian River Medical Center (Healthcare)569 7 0.91 530 7 0.90
John's Island (Residential/Resort)526 8 0.85 446 10 0.77
City of Vero Beach (Government)424 9 0.68 600 6 1.03
Medical Data Systems (Collection Agency)400 10 0.64 171 - 0.29
Visiting Nurse Association (Healthcare)399 11 0.64 297 16 0.51
Indian River Estates (Retirement/Life care)350 12 0.56 442 11 0.76
Disney Vero Beach (Resort Hotel)300 13 0.48 315 14 0.54
CVS Warehouse/Distribution (Distribution)289 14 0.46 275 17 0.48
Grand Harbor Management (Developer)281 15 0.45 310 15 0.53
Sun Ag, Inc. (Agricultural)210 16 0.34 350 12 0.60
City of Sebastian (Government)179 17 0.29 212 20 0.38
Captain Hirams (Restaurant/Resort) 165 18 0.26 - --
Flight Safety International (Education)163 19 0.27 180 - 0.31
Vero Beach Hotel and Spa (Hotel) 118 20 0.20 - --
Saint Edward's School (Education)- --237 19 0.42
Dodgertown Complex (Sports)- --255 18 0.44
Gracewood Fruit Packing (Agricultural)- --330 13 0.58
Hale Indian River Groves (Agricultural)- --450 8 0.78
12,160 19.53 % 13,115 22.61 %
Total Average County Employees 62,267 58,001
Source: Indian River County Community Development Report.
Note: Principal employers information available for Indian River County Only.
Employer
Percentage of
Total County
Employment
2016
Percentage of
Total County
Employment
2007
140
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141
CITY OF SEBASTIAN, FLORIDA
Full-Time Equivalent City Government Employees By Function
For the Last Ten Fiscal Years
2016 2015 2014 2013 2012 2011
General government
City council 2.5 2.5 2.5 2.5 2.5 2.5
City manager 2.5 2.0 2.0 2.0 2.0 2.0
City clerk 3.0 5.0 5.0 3.0 3.0 3.0
City attorney - - - - - -
Administrative Services 4.0 5.5 5.5 5.0 5.0 5.0
Finance - - - - - -
Management information 2.0 2.0 2.0 3.0 3.0 4.0
Audio/visual 1.0 - - - - -
Human resources - - - - - -
Facilities maintenance 3.5 5.0 5.0 4.0 3.0 2.0
Community development 2.0 4.0 4.0 3.0 3.0 4.0
Public safety
Police 57.5 57.0 57.0 55.5 55.0 58.0
Building 5.0 5.0 5.0 5.0 4.0 5.0
Code enforcement 3.0 3.0 3.0 3.0 3.0 3.0
Transportation
Roads and drainage 11.0 10.0 10.0 10.0 10.0 12.0
Fleet management 3.5 3.5 3.5 3.5 3.5 2.5
Airport 1.0 1.0 1.0 2.0 3.0 3.0
Physical environment
Cemetery 2.0 2.0 2.0 2.0 1.0 1.0
Engineering - - - - - -
Stormwater utility 9.0 9.0 9.0 9.0 9.0 12.0
Culture and recreation
Parks and recreation 19.0 20.0 20.0 20.0 20.0 21.0
Golf course 10.0 10.0 10.0 10.0 10.0 10.5
Total 141.5 146.5 146.5 142.5 140.0 150.5
Source: City of Sebastian, Florida 2007-2016 Annual Budgets
Method: Using 1.0 for each full-time employee and 0.5 for each part-time and seasonal employee.
Function
Full-time Equivalent Employees as of September 30
142
Table 17 - Unaudited
2010 2009 2008 2007
2.5 2.5 2.5 2.5
2.5 2.5 2.5 2.0
3.0 3.0 3.0 4.0
- 2.0 2.0 2.0
5.0 - - -
- 5.0 5.0 5.0
3.0 3.0 3.0 3.0
- - - -
- 2.0 3.0 3.0
2.0 2.0 2.0 2.0
5.0 5.0 5.0 5.0
58.0 59.0 58.0 57.0
5.0 5.0 6.0 11.0
2.5 2.5 2.5 3.0
12.0 10.0 10.0 11.5
3.5 3.5 2.5 3.5
3.0 3.0 3.0 3.0
2.0 2.0 2.0 2.0
- 7.0 7.0 9.0
12.0 11.0 13.0 13.0
23.0 23.5 23.5 23.5
10.5 9.0 9.0 12.5
154.5 162.5 164.5 177.5
Full-time Equivalent Employees as of September 30
143
CITY OF SEBASTIAN, FLORIDA
Operating Indicators By Function/Program
For the Last Ten Fiscal Years
2016 2015 2014 2013 2012
General government
Number of annexations approved - - - 2 -
Acres of annexed property - - - 4.00 -
Purchase orders issued 328 254 242 233 201
Public Safety
Police
Physical arrests 258 287 347 440 441
Traffic violations 3,065 3,725 4,587 4,491 4,319
Parking violations 73 60 29 80 167
Building
Construction permits issued 1 191 142 175 170 66
Estimated value of construction (in millions)43.4$ 40.6$ 40.0$ 35.9$ 14.7$
Transportation
Road maintenance (man hours)250 200 200 300 500
Asphalt for road maintenance (tons)20 10 20 30 50
Physical environment
Cemetery
Cemetery internments 61 71 67 65 65
Grave deeds sold 39 43 47 38 38
Stormwater
Swales maintained (miles)300 300 280 280 280
Ditches maintained (miles)75 75 50 50 50
Road crossings maintained 68 68 68 50 50
Culture and recreation
Program participants 7,280 7,647 7,571 8,113 9,713
Number of discount cards 631 653 653 710 786
Number of golf course memberships 127 93 84 86 88
Average daily golf revenue 3,100$ 3,653$ 3,500$ 3,569$ 3,822$
Sources: City of Sebastian Police Department, Growth Management, Public Works, Golf Course and Building Department.
1 New commercial and residential only.
Function
Fiscal Year
144
Table 18 - Unaudited
2011 2010 2009 2008 2007
- 1 3 - 1
- 5.90 26.00 - 3.87
228 216 288 254 284
500 487 543 662 697
5,941 4,083 4,849 4,418 7,221
242 87 50 208 289
51 36 23 55 104
10.2$ 6.6$ 5.1$ 13.3$ 22.5$
700 1,264 600 538 888
50 103 328 358 210
54 66 74 68 69
34 33 39 46 49
280 280 280 280 280
50 50 50 50 50
40 40 30 30 30
8,649 11,701 13,465 12,910 14,177
735 844 879 950 1,004
94 96 95 97 108
3,787$ 3,673$ 4,000$ 3,988$ 4,661$
Fiscal Year
145
CITY OF SEBASTIAN, FLORIDA
Capital Asset Statistics By Function/Program
For the Last Ten Fiscal Years
2016 2015 2014 2013 2012
General Government
Square footage occupied 21,500 21,500 21,500 21,500 21,500
Departmental vehicles 4 5 5 6 1
Public safety
Police stations 1 1 1 1 1
Police department Square footage 25,600 25,600 25,600 25,600 25,600
Building department Square footage 2,500 2,500 2,500 2,500 2,500
Police vehicles 70 66 62 61 66
Building inspector vehicles 4 4 3 3 3
Transportation
Streets (miles)156 156 156 156 156
Streetlights 1 1,085 1,085 1,085 1,080 1,228
Airport vehicles 4 3 1 1 1
Public service vehicles 12 12 15 17 17
Physical environment
Public service vehicles 17 17 10 10 9
Culture and recreation
Parks vehicles 6 18 18 18 18
Recreation centers 2 2 2 2 2
Park acreage 315.01 315.01 315.01 315.01 315.01
Recreation center square footage 4,859 4,859 4,859 4,859 4,859
Park maintenance vehicles 12 12 9 12 13
Golf course vehicles - - 1 1 1
Sources: City of Sebastian Administrative Services Department and Park and Recreation Divisio
1 This number represents actual unmetered street lights in the City (source: Florida Power & Light - January billing
Function
Fiscal Year
146
Table 19 - Unaudited
2011 2010 2009 2008 2007
21,500 21,500 21,500 21,500 21,500
3 3 3 3 3
1 1 1 1 1
25,600 25,600 25,600 25,600 25,600
2,500 2,500 2,500 2,500 2,500
67 63 63 62 57
3 3 4 4 5
156 156 156 156 156
1,236 1,230 1,240 1,229 1,309
1 1 1 1 1
19 22 18 23 21
9 15 7 11 10
18 18 18 15 14
2 2 2 2 2
315.01 315.01 233.79 233.79 229.37
4,859 4,859 4,859 4,859 4,859
14 13 13 13 12
1 1 1 1 1
Fiscal Year
147