HomeMy WebLinkAbout2016 -2017CITY OF SEBASTIAN, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended September 30, 2017
CITY COUNCIL
Jim Hill Linda Kinchen
Mayor Vice-Mayor
Ed Dodd
Council Member
Albert Lovino Bob McPartlan
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 36
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 38
Reconciliation of Net Changes in Fund Balance of Governmental
Funds to Change in Net Position of Governmental Activities 40
Statement of Revenues, Expenditures and Changes in
Fund Balance – Budget and Actual:
General Fund 41
Discretionary Sales Tax Special Revenue Fund 42
Riverfront Redevelopment Special Revenue Fund 43
Statement of Net Position – Proprietary Funds 44
Statement of Revenues, Expenses and Changes in Fund
Net Position – Proprietary Funds 45
Statement of Cash Flows – Proprietary Funds 46
Statement of Fiduciary Net Position 48
Statement of Changes in Fiduciary Net Position 49
Notes to Financial Statements 51
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 88
Schedule of the Net Pension Liability 89
Schedule of Investment Returns 89
Schedule of Contributions 90
Other Postemployment Benefits Plan:
Schedule of Funding Progress 91
Schedule of Employer Contributions 91
Coastal Florida Public Employees Association Pension Plan:
Schedule of Employer Contributions 92
Combining and Individual Fund Financial Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet 94
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances 96
Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget and Actual:
Local Option Gas Tax Special Revenue Fund 98
Parking In-Lieu-Of Special Revenue Fund 99
Recreation Impact Fee Special Revenue Fund 100
Stormwater Utility Special Revenue Fund 101
Law Enforcement Forfeiture Special Revenue Fund 102
Discretionary Sales Surtax Revenue Bonds 2013 Debt Service Fund 103
Stormwater Utility Revenue Bonds Debt Service Fund 104
Agency Fund:
Combining Statement of Changes in Assets and Liabilities 106
Other:
Capital Assets used in the Operations of Governmental Funds:
Comparative Schedule by Source 108
Schedule by Function and Activity 109
Schedule of Changes by Function and Activity 110
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
Direct and Overlapping Property Tax Rates 127
Actual and Estimated Value of Taxable Property 128
Principal Property Taxpayers 130
Property Tax Levies and Collections 131
Debt Capacity Information
Ratios of Outstanding Debt by Type 132
Ratios of General Bonded Debt Outstanding 133
Legal Debt Margin Information 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
Internal Control and Compliance
Independent Auditors' Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Governmental Auditing Standards 151
Independent Auditors' Management Letter 153
157
Independent Accountants' Report
INTRODUCTORY SECTION
1
CITY OF SEBASTIAN, FLORIDA
CITY OFFICIALS
For the Year Ended September 30, 2017
Joseph Griffin Sally A. Maio, MMC
City Manager 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
March 20, 2018
To the Citizens of the City of Sebastian, Florida:
We are submitting the Comprehensive Annual Financial Report of the City of Sebastian, Florida for the
fiscal year ended September 30, 2017, as prepared by the City’s Administrative Services department.
State law requires that every general-purpose local government publish a complete set of audited
financial statements. This report is published to fulfill that requirement for the fiscal year ended
September 30, 2017.
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, has issued an unmodified (“clean’) opinion on the City of
Sebastian’s financial statements for the year ended September 30, 2017. 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.
As the recipient of federal and state financial assistance, the City is also responsible for the
establishment of an adequate internal control structure to help ensure compliance with applicable
laws and regulations related to those programs. The City is required to undergo an annual single audit
perfomed under the provisions of 2 CFR Part 200,Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards and Chapter 10.550,Rules of the Florida
Auditor General . The City did not meet the threshold to require a federal single audit for the current
year. Information related to the state single audit, including the schedule of expenditures of state
financial assistance and auditors' reports on the internal control and compliance with applicable laws
and regulations are included in a separate report, under separate cover.
3
Profile of the Government
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.
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. The
City has a population of 24,192 living in an area of approximately 14.6 square miles.
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 Community Redevelopment Agency
recorded in the Riverfront Redevelopment Fund and 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
2017, the Florida Research & Economic Database reported an improved unemployment rate of 4.3%,
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 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
Major Initiatives
The City experienced substantial impacts from Hurricane Matthew and expended countless hours in
compiling and submitting funding request to FEMA and the State during the year. A major part of the
requested reimbursements related to rebuilding four of the City’s fishing piers that were substantially
damaged from the storm. Those items added to the usual administrative effort required to manage
such projects by the need to adhere to permitting and environmental concerns, while also complying
with FEMA and State stipulations.
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. In November 2016, subsequent to this report, the voters once again extended the Surtax for
another fifteen-year period. This Infrastructure Sales Surtax is essential in providing 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 a reduced rate of 3.80000 for fiscal year 2017. However, the City had an
increase in ad valorem values due to improvements and additions. Construction activity resulted in 147
permits being issued for new construction in fiscal year 2017 with a value of $37.2 million compared to
191 permits being issued for new construction in fiscal year 2016 with a value of $43.4 million. These
levels can be primarily attributed to the improved outlook for the housing market.
The largest major industry sector was Health Care and Social Assistance with 18.6% of the
employment, followed by Retail Trade with 16.9% of the employment and Accommodation and food
Services with 11.3% 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 has 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.
General Fund unassigned fund balance and amounts committed by the financial policies resolution
based on 30% of the general fund expenditures budget, were 35% of the general fund 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 budget for fiscal year 2017 was balanced without a reduction of fund
balances.
Long-term Financial Planning
Administration
5
Stormwater
The City continues working on transportation improvements. Almost $700,000 was spent during 2017
from discretionary sales taxes and local option gas taxes for roadway reconstruction and repaving.
Other projects planned for future years include repairs to sidewalks, plus additional street repaving
that will be funded by local option gas taxes and major road reconstruction by discretionary sales
taxes. In addition, discretionary sales taxes will be used to replace heavy construction equipment
needed for maintaining City rights-of-way and transportation infrastructure.
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 Master Plan serves as the guiding document for airport planning and work has begun to update this
important document. 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 upgrading the taxiways and constructing another hangar with grant funds matched by funds
from discretionary sales taxes.
Airport
Traffic & Transportation
The main focus of stormwater activities the past fiscal year has continued to be on the City's
Stormwater Management Program, which includes capital projects, maintenance, citizen response and
education, and forward planning. The City continued an emphasis on mowing and clearing swales and
ditches. This is expected to be critical to insuring a smooth flow of stormwater. City crews are now
concentrated on the task of keeping those areas clear of vegetation. Operation and maintenance
activities are accounted for in General Fund, with about 75% of the costs offset by an annual transfer
from the Stormwater Utility Fund. Equipment replacements are being accounted for in the Stormwater
Utility Fund.
Administrative initiatives included initiating a competitive process to select an automated payroll
system and have it implemented before year end. This system was expected to reduce the time
required to submit employee time records and automate human resource activities, such as
orientation briefings and performance evaluations. In other areas, efforts were made to use
technology advances, including upgrades to computer servers, improvements to the network and
acquisition of better audio and visual equipment.
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
6
Respectfully submitted,
Joseph Griffin
City Manager
Kenneth W. Killgore
Administrative Services Director
Culture & Recreation
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, 2016. 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 City continued efforts to promote the “working waterfront” concept on the riverfront properties
that were purchased with grant funding, with City matching funds provided by discretionary sales
taxes. Additional grants were secured for installation of a baffle box, drainage improvements and
other enhancements. The City also put emphasis on refurbishing the playground equipment at all the
parks to insure it was safe for children to use. 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 a State grant to
allow the Golf Course to totally rehabilitate the Golf Course Clubhouse Restaurant in conjunction with
the competitive selection of a new tenant to operate it.
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
March 20, 2018
Honorable Mayor and
Members of City Council
City of 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, 2017, 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
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, 2017, 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.
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.
14
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated March 20,
2018, 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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MANAGEMENT'S DISCUSSION AND ANALYSIS
17
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Financial Highlights
·
·
·
·
Overview of the Financial Statements
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.
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 2017 by $56,186,650 (net position). Of this amount, $227,112 (unrestricted net position)
may be used to meet the City's on-going obligations to citizens and creditors.
The City's total net position from governmental activities decreased by $900,579 and from business-type activities
increased by $1,103,380. Net position was decreased in governmental activities as a result of greater expenditures on
public safety and physical environment. Net position for business-type activities increased due to capital grants
received at the Airport.
Governmental funds reported a combined ending fund balance of $10,548,397, a decrease of $1,301,929 from the
prior year. Almost 39% of this amount, $4,062,905 is unassigned and available for spending, a $1,334,369 decrease
from fiscal year 2016, due to General Fund outlays related to Hurricane Matthew.
The Golf Course Fund reported an increase in the deficit in unrestricted net position, due to an operating loss, largely
resulting from lower operating revenues attributed to weather and construction activities. The Airport Fund reported
an improvement in the deficit in unrestricted net position resulting from revenues recorded from capital
contributions. The Building Enterprise fund reported an increase in unrestricted net position, as a result of an
improved levels of construction activity. In total, 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).
18
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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 areusedtoreportthesame
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.
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, Riverfront Redevelopment Fund, General Capital Projects, and
Transportation Improvements, all of which are considered to be major funds. Data from the other ten 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.
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.
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CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Governmental Activities Business-type Activities Total
2017 2016 2017 2016 2017 2016
Current and other assets 11,632,834$ 12,603,239$ (527,648)$ (229,839)$ 11,105,186$ 12,373,400$
Capital assets, net 40,636,026 39,992,087 13,639,422 12,151,911 54,275,448 52,143,998
Total assets 52,268,860 52,595,326 13,111,774 11,922,072 65,380,634 64,517,398
Deferred outflows of
resources 823,292 1,050,060 - - 823,292 1,050,060
Long-term debt outstanding 4,661,794 5,397,721 488,219 373,094 5,150,013 5,770,815
Other liabilities 4,390,126 3,392,050 247,562 276,365 4,637,688 3,668,415
Total liabilities 9,051,920 8,789,771 735,781 649,459 9,787,701 9,439,230
Deferred inflows of
resources 229,575 144,379 - - 229,575 144,379
Net position
Net investment in
capital assets 37,461,026 35,886,087 13,384,969 11,989,666 50,845,995 47,875,753
Restricted 5,113,543 5,209,372 - - 5,113,543 5,209,372
Unrestricted 1,236,088 3,615,777 (1,008,976) (717,053) 227,112 2,898,724
Total net position 43,810,657$ 44,711,236$ 12,375,993$ 11,272,613$ 56,186,650$ 55,983,849$
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
$56,186,650 at the close of the most recent fiscal year.
Net Position
A substantial portion of the City’s net position, $50,845,995 (90.5 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 $5,113,543 (9.1 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
$227,112 (.4 percent) to meet its ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, for
the government as a whole and for its separate governmental activities. Unrestricted net position were negative for
business-type activities as a whole, primarily due to the substantial investments that have continued to be made in capital
assets.
20
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Governmental Activities Business-type Activities Total
2017 2016 2017 2016 2017 2016
Revenues
Program revenues:
Charges for services 1,557,250$ 1,576,721$ 2,306,210$ 2,461,829$ 3,863,460$ 4,038,550$
Operating grants 250,292 323,101 116,055 - 366,347 323,101
Capital grants 947,274 809,932 1,566,737 841,668 2,514,011 1,651,600
General revenues:
Property taxes 4,147,115 3,942,048 - - 4,147,115 3,942,048
Other taxes 5,945,386 5,762,921 - - 5,945,386 5,762,921
Intergovernmental 2,616,522 2,466,546 - - 2,616,522 2,466,546
Other 1,697,286 1,650,986 10,787 6,787 1,708,073 1,657,773
Total revenues 17,161,125 16,532,255 3,999,789 3,310,284 21,160,914 19,842,539
Expenses
General government 3,379,369 3,285,607 - - 3,379,369 3,285,607
Public safety 6,549,037 5,476,136 - - 6,549,037 5,476,136
Physical environment 3,769,377 2,538,752 - - 3,769,377 2,538,752
Transportation 2,279,149 1,861,946 - - 2,279,149 1,861,946
Economic environment 106,577 364,675 - - 106,577 364,675
Cultural and recreation 1,326,245 1,191,488 - - 1,326,245 1,191,488
Interest and fiscal
charges 63,141 82,943 - - 63,141 82,943
Golf course - - 1,537,332 1,584,214 1,537,332 1,584,214
Airport - - 1,361,134 1,197,549 1,361,134 1,197,549
Building - - 586,752 546,649 586,752 546,649
Total expenses 17,472,895 14,801,547 3,485,218 3,328,412 20,958,113 18,129,959
Change in net position,
before transfers (311,770) 1,730,708 514,571 (18,128) 202,801 1,712,580
Transfers (588,809) (705,067) 588,809 705,067 - -
Change in net position (900,579) 1,025,641 1,103,380 686,939 202,801 1,712,580
Net position, beginning
of year 44,711,236 43,685,595 11,272,613 10,585,674 55,983,849 54,271,269
Net position, end of year 43,810,657$ 44,711,236$ 12,375,993$ 11,272,613$ 56,186,650$ 55,983,849$
The City’s net position increased by $202,801 during the current fiscal year. The primary reason for the reduction in net
position for governmental activities is related to outlays related to Hurricane Matthew. 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 ($116,258) caused by less transfers to the enterprise funds.
Expenditures and Program Revenues - Governmental Activities
An increase in program revenues of $45,062 due to higher amounts of capital grants received.
An increase in general revenues of $583,808, mostly from sales taxes and intergovernmental receipts.
An increase in expenses of $2,671,348 primarily attributable to increased payroll costs.
Governmental Activities.Governmental activities decreased the City’s net position by $900,579 as compared to the prior
year increase of $1,025,641. Key elements of this decrease are as follows:
Revenues by Source - Governmental Activities
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
General
government
Public safety Physical
environment
Transportation Economic
environment
Cultural and
recreation
Interest and
fiscal
Expenditures
Program Revenues
Charges for services
9%Operating grants
1%
Capital grants
6%
Property taxes
24%
Other taxes
42%
Intergovernmental
15%
Other
3%
22
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
·
·
·
·
· A change in transfers in of ($116,258) from less construction af the golf course that was funded by other funds.
Expenses and Program Revenues - Business-type Activities
Revenues by Source - Business-type Activities
An increase in expenses of $156,806 primarily in salaries, wages and employee benefits.
An increase in general revenues of $4,000 due to rents and other revenues.
An increase in capital grants of $725,069 resulting from grants to the airport.
Business-type Activities.Business-type activities increased the City’s net position by $1,103,380. The key elements of
this increase are as follows:
A decrease in charges for services of $39,564 from a reduction in building permits and golf course fees.
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Golf course Airport Building
Expenses
Program Revenues
Charges for services
58%
Capital grants
39%
23
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
·
·
·
·
·
·
·
·
·
·
·
·
· Transfers out had the largest budgetary variance due to transfers made to cover the unanticipated expenditures on
fishing piers and debris removal caused by Hurricane Matthew.
The General Fund originally budgeted for no changes in the fund balance. The actual decrease in fund balance was
$1,304,282. Significant changes in budgetary variances are as follows:
All other revenues decreased by $17,374
Transfers out from other funds decreased by $1,829,890
Transfers in from other funds decreased by $12,184
Property tax revenues had a positive budgetary variance of $9,349, 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 favorable budgetary variance of $412,435, which was just a 3.6% difference
from the originally budgeted total.
Financial Analysis of the City’s Funds
Due to additions to taxable property values, property tax revenues increased by $201,850
Charges for services decreased by $14,015
Intergovernmental increased by $153,183
Franchise fees increased by $13,973
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$10,548,397, a decrease of $1,301,929 from the prior year. Of this amount, 39 percent ($4,062,905) 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 decreased by $1,304,282 during the current fiscal year, as compared to the
$158,834 increase reported in the prior fiscal year. Key factors in this change are as follows:
Expenditures decreased by $18,683
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 $4,089,275 while total fund balance amounted to $4,507,146. 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 36.4 percent of total General Fund expenditures, while total fund balance represents
40.2 percent of that same amount.
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 $22,658
The Discretionary Sales Tax revenue special revenue fund has a total fund balance $2,643,877, a decrease from the
$2,709,105 total fund balance of the prior year. Funds are restricted for projects that are planned in future years.
24
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Amendments
· $4,475 to record reimbursement for damaged Airport perimeter gates.
· $500 to reflect donation from the Senior Activity Center toward computer accessories.
· $132,925 to apply additional funds to street reconstruction.
· $34,107 to reallocate funds budgeted for Senior Center Restrooms project the prior year.
· $12,000 to reflect donation from the Greer Trust.
· $100,000 to reflect acceptance of Indian River Lagoon Council Grant for Septic-to-Sewer program.
· $72,000 creates project for the purchase of 190 Sebastian Boulevard property.
· $800 increases amounts budgeted for the Golf Course Regrassing project.
· $130,000 allocates Recreation Impact Fees to renovate the Barber Street Complex Football Field Restrooms.
· $9,374 increases loan to Golf Course from Building Fund for materials needed for Greens Rebuilding project.
· $76,000 increases grant and DST Fund match to add environmental study to Airport Master Plan project.
· $79,007 allocates additional funds to cover actual bid amount for Police Evidence Building project.
· $9,041 decreases the project for Painting City Hall to actual bid amount.
· $49,134 allocates additional funds to cover actual bid amount for the Columbariums project.
The total net position of the airport fund at the end of the fiscal year amounted to $10,982,436, while the unrestricted
net position (deficit) amounted to ($630,048). Compared to the prior year in the same category, net position has increased
by $1,143,781 while the unrestricted net position (deficit) has changed from ($708,735) to ($630,048). 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 Transportation Improvements Fund received reimbursement for expenditures incurred the prior year, which resolved
the $46,493 negative fund balance that had been recorded.
The total net position of the building fund at the end of the fiscal year amounted to $1,371,180. This is an increase of
$200,245 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 $22,377, while the unrestricted net
position (deficit) amounted to ($1,681,678). Compared to the prior year in the same category, net position decreased from
the prior year and the unrestricted net position (deficit) changed from ($1,095,926) to ($1,681,678). This is mainly due to
the increase in noncurrent assets recorded for the fiscal year.
The Riverfront Redevelopment Fund ended the year with $540,748 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 four 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 new allocations funded by transfers from the Equipment & Facilities R&R Reserve and the
fourth includes project transfers to cancel or 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:
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
The General Capital Projects Fund had not been fully reimbursed for expenditures by year end, which resulted in a
$20,550 negative fund balance.
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.
25
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Amendments (Concluded)
· $129,433 allocates additional funds to cover actual bid amount for the Working Waterfront Restrooms project.
· $96,454 applies portion of Building Fund loan for Golf Course improvements to Rebuilding Greens project.
· $68,592 applies portion of Building Fund loan for Golf Course improvements to Cart Path Repair Project.
· $26,838 to apply proceeds from vehicle sales to replace the City Engineer’s vehicle.
· $19,600 to use Recreation Impact Fees to do Recreation Element of the Comprehensive Plan.
· $22,000 to apply additional discretionary sales tax receipts to Stonecrop Drainage Design project.
· $7,990 to reflect JAG Grant for Police equipment.
· $1,000 to reflect donation from the Senior Center to the Barber Street Restroom project.
· $100,000 to allocate DST Funds to cover replacement of Golf Clubhouse flooring, range hood, restrooms, etc.
· $1,230 to record acquisition of a vehicle for Police Department by a final judgement of forfeiture.
· $6,708 to reflect JAG Grant revenue received to purchase bulletproof vest.
· $168,628 to record receipt of State Shared Revenue contributed to the Police Pension Plan.
· $4,999 to reflect Safety Grant by Insurance Carrier to purchase AED units and supplies.
· $5,200 to record recovery of the cost of demolishing a condemned structure.
· $47,928 to reflect Indian River Lagoon Council Grant and use of Lagoon funds to create Oyster Bags project.
· $8,141 to reflect JAG Grant for purchase of Police Department equipment.
· $10,899 to create a project to account for the Chamber of Commerce Sign.
· $38,197 to record adjustment to Tulip Street Grant to cover additional project costs.
· $100,000 to reflect Grant for Restaurant Upgrades and use of additional DST monies for renovations.
· $135,000 to allocate DST Funds toward additional Restaurant renovations.
Operating Budget Transfers
· $26,226 to adjust departmental charges to properly code computer license charges.
· $135,179 adjustments within various department accounts to properly code expenditures.
· $81,382 to adjust City Manager and Administrative Services budgets for transfer of Procurement Manager.
· $105,899 adjustments with Police Department budgets for transfer of Police Commander.
· $5,527 adjustment to reflect interest due on interfund loan to Golf Course from Building Fund.
· $14,805 to adjust accounts within Public Works to hire an Engineering Intern for the summer.
R&R Reserve Allocations
· $32,247 to use Equipment & Facilities R&R Reserve for City Council Chambers Air Conditioner.
· $94,521 to reduce Equipment & Facilities R&R Reserve to a $275,000 maximum.
· $33,495 to use Equipment & Facilities R&R Reserve to replace the Construction Inspector’s vehicle.
· $44,420 to use Equipment & Facilities R&R Reserve to replace Police Air Conditioning Unit.
· $20,683 to use Equipment & Facilities R&R Reserve to replace various small equipment items.
· $18,871 to use Equipment & Facilities R&R Reserve for playground components and irrigation well.
· $28,605 to use Equipment & Facilities R&R Reserve for replacing a Police Department air conditioner.
· $1,874 to use Equipment & Facilities R&R Reserve for repairing the Golf Course irrigation pump’s intake line.
· $33,000 to use Equipment & Facilities R&R Reserve to replace Riverview Park Playground.
· $5,950 to use Equipment & Facilities R&R Reserve to replace Pro Shop Air Conditioner.
· $22,514 to use Equipment & Facilities R&R Reserve to replace Airport truck.
· $9,427 to use Equipment & Facilities R&R Reserve to replace air conditioner unit in the Airport vault.
· $71,583 to use Equipment & Facilities R&R Reserve to repair Clubhouse restrooms, hallway and doors.
Project Budget Transfers
· $46,726 reallocates remaining balances of amounts budgeted for sign grants.
· $62,440 combined unspent balances for computer upgrades into the current year project.
· $84,000 cancels PW Compound projects to enable purchase of additional dump truck.
· $106,000 allocates funds to proceed with Airport AWAS II project.
· $44,703 reallocates funding for Indian River Drive Angled Parking budgeted the prior year.
· $21,346 applies savings from other projects to overages on CavCorp Parking and Police Equipment projects.
· $99,414 reallocates unexpended balance of funds budgeted toward All Aboard Florida issues.
· $164,500 uses funds for Working Waterfront Phase 3 project to create Oyster Pointe Baffle Box project.
· $49,134 changes Columbariums to Trust Fund and applies those DST funds to Police Evidence Building.
· $990,472 closes out a large number of completed, cancelled of deferred projects.
26
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2017 2016 2017 2016 2017 2016
Land 8,391,050$ 8,319,588$ 19,436$ 19,436$ 8,410,486$ 8,339,024$
Buildings 7,614,058 7,755,514 7,254,214 4,923,679 14,868,272 12,679,193
Improvements 2,641,453 2,950,753 1,511,220 1,590,742 4,152,673 4,541,495
Equipment 2,539,466 2,083,959 620,309 489,079 3,159,775 2,573,038
Infrastructure 19,068,110 18,655,238 3,914,198 4,048,111 22,982,308 22,703,349
Construction in progress 381,889 227,035 320,045 1,080,864 701,934 1,307,899
Total capital assets, net 40,636,026$ 39,992,087$ 13,639,422$ 12,151,911$ 54,275,448$ 52,143,998$
·
·
·
·
·
·
·
·
·
Capital Assets.At the end of fiscal year 2017, the City had $54,275,448 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 $2,131,450, or 4.1%, 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.
During the fiscal year, total General Fund actual expenditures were $412,435 less than final amended budgetary
estimates. The overall variance on revenues and expenditures resulted in an unexpected $1,304,282 reduction to existing
fund balances. This was due to the amounts that were transferred out to cover the expenditures resulting from Hurricane
Matthew.
Business-type activities had the following major changes during the fiscal year:
A decrease in improvements due to the amount of depreciation expense for the fiscal year.
A decrease in construction in progress due to the completion of projects.
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 the construction of Hangar "C".
Capital Asset and Debt Administration
An increase in construction in progress due to the construction underway on the Police Evidence Garage and Working
Waterfront Restrooms.
A decrease in buildings mainly due to the amount of depreciation expense for the fiscal year.
An increase in equipment and infrastructure mainly due to the additional of capital assets.
A decrease in infrastructure mainly due to the amount of depreciation.
An increase in equipment due to acquiring the automated weather system.
Long-Term Debt.At the end of the current fiscal year, the City had total long-term debt outstanding of $5,150,013. Of
this amount, $3,175,000 consist of notes pledging specific revenues to the repayment of the debt. More detailed
information regarding these activities and funds can be found in Footnote 8 of the of the Notes to the Financial
Statements section of the CAFR.
27
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Total Long-Term Debt
Governmental Activities Business-type Activities Total
2017 2016 2017 2016 2017 2016
Notes payable 3,175,000$ 4,106,000$ -$ 162,245$ 3,175,000$ 4,268,245$
Compensated absences 1,395,594 1,200,521 233,766 210,849 1,629,360 1,411,370
Pollution remediation 91,200 91,200 - - 91,200 91,200
Capital lease - - 254,453 - 254,453 -
Total 4,661,794$ 5,397,721$ 488,219$ 373,094$ 5,150,013$ 5,770,815$
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 total debt decreased by $620,802 (10.76%) during the current fiscal year. The net decrease was attributable to
annual principal payments that occurred during the year.
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 2018 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 2017 was 4.3 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 12.27% overall increase in property values for 2018. The millage of 3.4000 was levied for taxes to
be recorded in fiscal year 2018 that will essentially provide the equivalent revenue from property taxes as received in
fiscal year 2017.
The Golf Course reported less revenues from fees in 2017, primarily due to temporary closures during reconstruction of
the greens. Although its net position improved with the large investment in capital assets, those investments were
accomplished by advances 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 advances to be repaid.
Requests for Information
Sizable operating losses for the Airport are primarily the result of depreciation on capital assets. The City actively pursues
grant funds for construction new facilities that can generate additional rental revenues.
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 that steady activity in the local housing market can be expected to continue,
which is encouraging.
28
BASIC FINANCIAL STATEMENTS
29
Statement of Net Position
September 30, 2017
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents 3,899,956$ 461,400$ 4,361,356$
Restricted cash and cash equivalents 924,503 - 924,503
Investments 3,113,789 116,946 3,230,735
Permanently restricted investments 876,216 - 876,216
Receivables 1,098,228 323,601 1,421,829
Internal balances 1,476,438 (1,476,438) -
Prepaid items 187,497 26,473 213,970
Inventories 55,008 18,768 73,776
Deposits held in escrow 1,199 1,602 2,801
Capital assets not being depreciated 8,772,939 339,481 9,112,420
Capital assets being depreciated, net 31,863,087 13,299,941 45,163,028
Total assets 52,268,860 13,111,774 65,380,634
Deferred outflows of resources
Deferred pension amounts 823,292 - 823,292
Liabilities
Accounts payable and other current liabilities 1,012,418 160,826 1,173,244
Accrued interest payable 21,950 417 22,367
Unearned revenues 72,019 84,945 156,964
Long-term liabilities:
Due within one year 695,151 48,286 743,437
Due in more than one year 3,966,643 439,933 4,406,576
Net other postemployment benefits obligation 33,757 1,374 35,131
Net pension liability 3,249,982 - 3,249,982
Total liabilities 9,051,920 735,781 9,787,701
Deferred inflows of resources
Deferred pension amounts 229,575 - 229,575
Net position
Net investment in capital assets 37,461,026 13,384,969 50,845,995
Restricted for:
Debt service 148,407 - 148,407
Perpetual care:
Nonexpendable 941,061 - 941,061
Special revenue uses:
Infrastructure improvements 2,854,881 - 2,854,881
Redevelopment expenses 540,748 - 540,748
Stormwater expenses 516,204 - 516,204
Law enforcement events 112,242 - 112,242
Unrestricted (deficit) 1,236,088 (1,008,976) 227,112
Total net position 43,810,657$ 12,375,993$ 56,186,650$
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, 2017
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 3,379,369$ 362,631$ 28,290$ -$ (2,988,448)$
Public safety 6,549,037 124,800 209,470 - (6,214,767)
Physical environment 3,769,377 1,021,038 - - (2,748,339)
Transportation 2,279,149 - 12,532 674,778 (1,591,839)
Economic environment 106,577 - - - (106,577)
Cultural and recreation 1,326,245 48,781 - 272,496 (1,004,968)
Interest and fiscal charges 63,141 - - - (63,141)
Total governmental activities 17,472,895 1,557,250 250,292 947,274 (14,718,079)
Business-type activities:
Golf course 1,537,332 1,058,939 111,652 - (366,741)
Airport 1,361,134 499,321 4,403 1,566,737 709,327
Building 586,752 747,950 - - 161,198
Total business-type activities 3,485,218 2,306,210 116,055 1,566,737 503,784
Total primary government 20,958,113$ 3,863,460$ 366,347$ 2,514,011$ (14,214,295)$
continued…
CITY OF SEBASTIAN, FLORIDA
31
CITY OF SEBASTIAN, FLORIDA
Statement of Activities
For the Year Ended September 30, 2017
Primary Government
Governmental Business-type
Activities Activities Total
Changes in net position
Net revenue (expense) (14,718,079)$ 503,784$ (14,214,295)$
General revenues:
Property taxes, levied for general purposes 4,147,115 - 4,147,115
Sales and use taxes 5,945,386 - 5,945,386
Franchise fees 1,271,403 - 1,271,403
State shared revenues not restricted to specific programs 2,616,522 - 2,616,522
Interest earnings 135,614 10,787 146,401
Miscellaneous 290,269 - 290,269
Transfers (588,809) 588,809 -
Total general revenues and transfers 13,817,500 599,596 14,417,096
Change in net position (900,579) 1,103,380 202,801
Net position, beginning of year 44,711,236 11,272,613 55,983,849
Net position, end of year 43,810,657$ 12,375,993$ 56,186,650$
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, 2017
General
Discretionary Riverfront Capital
General Sales Tax Redevelopment Projects
Assets
Cash and cash equivalents 1,222,758$ 983,818$ 442,764$ 436,303$
Investments 1,941,795 802,906 98,288 -
Accounts receivable, net 371,067 - - -
Due from other funds 886,970 - - -
Due from other governments 284,790 310,265 - -
Deposits held in escrow 1,199 - - -
Inventories 55,008 - - -
Prepaid items 187,497 - - -
Advance to other funds 100,000 550,638 - -
Total assets 5,051,084 2,647,627 541,052 436,303
Liabilities
Accounts payable and accrued liabilities 421,511 3,750 304 456,853
Due to other funds - - - -
Due to other governments 50,408 - - -
Unearned revenue 72,019 - - -
Total liabilities 543,938 3,750 304 456,853
Fund balances (deficit)
Nonspendable 342,505 - - -
Restricted 63,016 2,643,877 540,748 -
Committed - - - -
Assigned 12,350 - - -
Unassigned 4,089,275 - - (20,550)
Total fund balances 4,507,146 2,643,877 540,748 (20,550)
Total liabilities and fund balances 5,051,084$ 2,647,627$ 541,052$ 436,303$
The accompanying notes are an integral part of these basic financial statements.
34
Nonmajor Total
Transportation Governmental Governmental
Improvements Funds Funds
-$ 1,738,816$ 4,824,459$
- 1,147,016 3,990,005
- - 371,067
- - 886,970
9,870 122,236 727,161
- - 1,199
- - 55,008
- - 187,497
- - 650,638
9,870 3,008,068 11,694,004
- 79,592 962,010
9,870 51,300 61,170
- - 50,408
- - 72,019
9,870 130,892 1,145,607
- 941,061 1,283,566
- 946,791 4,194,432
- 995,144 995,144
- - 12,350
- (5,820) 4,062,905
- 2,877,176 10,548,397
9,870$ 3,008,068$ 11,694,004$
35
CITY OF SEBASTIAN, FLORIDA
Reconciliation
Fund Balances for Governmental Funds
to Net Position of Governmental Activities
September 30, 2017
Fund balances - total governmental funds 10,548,397$
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 8,772,939
Capital assets being depreciated, net 31,863,087
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 (3,175,000)
Compensated absences (1,395,594)
Net other postemployment benefits obligation (33,757)
Pollution remediation liability (91,200)
Accrued interest on long-term debt (21,950)
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 (3,249,982)
Deferred outflows related to the net pension liability 823,292
Deferred inflows related to the net pension liability (229,575)
Net position of governmental activities 43,810,657$
The accompanying notes are an integral part of these basic financial statements.
36
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37
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2017
General
Discretionary Riverfront Capital
General Sales Tax Redevelopment Projects
Revenues
Taxes:
Property 3,804,874$ -$ 342,241$ -$
Public utility 2,708,980 - - -
Sales - 3,207,905 - -
Motor fuel - - - -
Franchise fees 1,271,403 - - -
Licenses and permits 135,900 - - -
Intergovernmental 2,807,989 - - -
Impact fees - - - -
Charges for services 312,760 - - -
Fines 70,411 - - -
Investment earnings 59,845 39,963 5,758 -
Contributions and donations 25,420 - - 20,000
Other revenues 227,794 - 36,000 -
Total revenues 11,425,376 3,247,868 383,999 20,000
Expenditures
Current:
General government 2,941,723 - 2,067 -
Public safety 5,068,912 - - -
Physical environment 871,521 - - 1,619,942
Transportation 1,204,258 - - -
Economic environment - 3,750 69,741 -
Culture and recreation 912,599 - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Capital outlay 220,624 - - 1,509,623
Total expenditures 11,219,637 3,750 71,808 3,129,565
Revenues over (under) expenditures 205,739 3,244,118 312,191 (3,109,565)
Other financing sources (uses)
Transfers in 663,569 - - 3,089,015
Transfers out (2,173,590) (3,309,346) (229,496) -
Total other financing sources (uses)(1,510,021) (3,309,346) (229,496) 3,089,015
Net changes in fund balances (1,304,282) (65,228) 82,695 (20,550)
Fund balances, beginning of year 5,811,428 2,709,105 458,053 -
Fund balances, end of year 4,507,146$ 2,643,877$ 540,748$ (20,550)$
The accompanying notes are an integral part of these basic financial statements.
38
Nonmajor Total
Transportation Governmental Governmental
Improvements Funds Funds
-$ -$ 4,147,115$
- - 2,708,980
- - 3,207,905
- 674,778 674,778
- - 1,271,403
- - 135,900
108,699 74,502 2,991,190
- 102,700 102,700
- 1,040,249 1,353,009
- 26,431 96,842
- 30,048 135,614
- - 45,420
- 26,475 290,269
108,699 1,975,183 17,161,125
- - 2,943,790
- 65,476 5,134,388
- 74,069 2,565,532
8,841 120,828 1,333,927
- - 73,491
- 14,775 927,374
- 931,000 931,000
- 68,512 68,512
1,924,348 241,636 3,896,231
1,933,189 1,516,296 17,874,245
(1,824,490) 458,887 (713,120)
1,874,525 1,557,749 7,184,858
(3,542) (2,057,693) (7,773,667)
1,870,983 (499,944) (588,809)
46,493 (41,057) (1,301,929)
(46,493) 2,918,233 11,850,326
-$ 2,877,176$ 10,548,397$
39
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended September 30, 2017
Net change in fund balances - total governmental funds (1,301,929)$
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 3,896,231
Depreciation expense (3,225,067)
Loss on disposal of capital assets (27,225)
Bond note proceeds provide current financial resources to governmental funds
in the period issued, but issuing bond notes increases long-term liabilities in the
statement of net position. Repayment of bond note 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 931,000
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 5,371
Change in the accrual for compensated absences (195,073)
Change in the accrual for other postemployment benefits (4,516)
Change in the net pension liability and related deferred amounts (979,371)
Change in net position of governmental activities (900,579)$
The accompanying notes are an integral part of these basic financial statements.
CITY OF SEBASTIAN, FLORIDA
40
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended September 30, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Property 3,795,525$ 3,795,525$ 3,804,874$ 9,349$
Public utility 2,749,536 2,749,536 2,708,980 (40,556)
Franchise fees 1,325,971 1,325,971 1,271,403 (54,568)
Licenses and permits 139,500 139,500 135,900 (3,600)
Intergovernmental 2,519,300 2,710,767 2,807,989 97,222
Charges for services 321,102 321,102 312,760 (8,342)
Fines 55,000 55,000 70,411 15,411
Investment earnings 34,000 34,000 59,845 25,845
Contributions and donations 11,100 24,600 25,420 820
Other revenues 221,454 253,678 227,794 (25,884)
Total revenues 11,172,488 11,409,679 11,425,376 15,697
Expenditures
Current:
General government 2,964,800 2,998,384 2,941,723 (56,661)
Public safety 4,844,135 5,045,554 5,068,912 23,358
Physical environment 1,062,852 1,047,547 871,521 (176,026)
Transportation 1,370,287 1,384,747 1,204,258 (180,489)
Culture and recreation 925,284 937,032 912,599 (24,433)
Capital outlay 157,925 218,808 220,624 1,816
Total expenditures 11,325,283 11,632,072 11,219,637 (412,435)
Revenues over (under) expenditures (152,795) (222,393) 205,739 428,132
Other financing sources (uses)
Transfers in 663,569 982,532 663,569 (318,963)
Transfers out (510,774) (760,139) (2,173,590) (1,413,451)
Total other financing sources (uses)152,795 222,393 (1,510,021) (1,732,414)
Net changes in fund balances - - (1,304,282) (1,304,282)
Fund balance, beginning of year 5,811,428 5,811,428 5,811,428 -
Fund balance, end of year 5,811,428$ 5,811,428$ 4,507,146$ (1,304,282)$
The accompanying notes are an integral part of these basic financial statements.
41
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Sales 3,004,788$ 3,004,788$ 3,207,905$ 203,117$
Investment earnings 27,418 27,418 39,963 12,545
Total revenues 3,032,206 3,032,206 3,247,868 215,662
Expenditures
Current:
Economic environment - - 3,750 3,750
Revenues over expenditures 3,032,206 3,032,206 3,244,118 211,912
Other financing sources (uses)
Transfers in - 2,352,410 - (2,352,410)
Transfers out (3,032,206) (5,384,616) (3,309,346) 2,075,270
Total other financing uses (3,032,206) (3,032,206) (3,309,346) (277,140)
Net changes in fund balance - - (65,228) (65,228)
Fund balance, beginning of year 2,709,105 2,709,105 2,709,105 -
Fund balance, end of year 2,709,105$ 2,709,105$ 2,643,877$ (65,228)$
The accompanying notes are an integral part of these basic financial statements.
42
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Property 343,707$ 343,707$ 342,241$ (1,466)$
Investment earnings 1,322 1,322 5,758 4,436
Other revenues 36,000 36,000 36,000 -
Total revenues 381,029 381,029 383,999 2,970
Expenditures
Current:
General government 2,500 2,500 2,067 (433)
Economic environment 369,087 221,313 69,741 (151,572)
Total expenditures 371,587 223,813 71,808 (152,005)
Revenues over expenditures 9,442 157,216 312,191 154,975
Other financing sources (uses)
Transfers in - 270,955 - (270,955)
Transfers out - (418,729) (229,496) 189,233
Total other financing uses - (147,774) (229,496) (81,722)
Net changes in fund balance 9,442 9,442 82,695 73,253
Fund balance, beginning of year 458,053 458,053 458,053 -
Fund balance, end of year 467,495$ 467,495$ 540,748$ 73,253$
The accompanying notes are an integral part of these basic financial statements.
43
CITY OF SEBASTIAN, FLORIDA
Statement of Net Position
Proprietary Funds
September 30, 2017
Golf Nonmajor -
Course Airport Building Total
Assets
Current assets:
Cash and cash equivalents 90,207$ 76,801$ 294,392$ 461,400$
Investments - - 116,946 116,946
Accounts receivable 10,823 503 - 11,326
Due from other governments - 312,275 - 312,275
Inventories 13,088 5,680 - 18,768
Deposits held in escrow 493 616 493 1,602
Prepaid items 6,321 12,465 7,687 26,473
Total current assets 120,932 408,340 419,518 948,790
Noncurrent assets:
Advance to other funds - - 1,023,318 1,023,318
Capital assets:
Land - 9,060 10,376 19,436
Buildings 437,153 8,728,972 - 9,166,125
Improvements other than buildings 1,183,568 1,666,973 - 2,850,541
Machinery and equipment 494,864 903,624 112,738 1,511,226
Infrastructure 1,369,779 7,362,883 - 8,732,662
Construction in process 65,212 254,833 - 320,045
Less accumulated depreciation (1,592,068) (7,313,861) (54,684) (8,960,613)
Total noncurrent assets 1,958,508 11,612,484 1,091,748 14,662,740
Total assets 2,079,440 12,020,824 1,511,266 15,611,530
Liabilities
Current liabilities:
Accounts payable and accrued liabilities 76,778 49,941 23,148 149,867
Due to other funds 535,800 290,000 - 825,800
Due to other governments 4,657 1,139 5,580 11,376
Unearned revenues 68,519 9,094 7,332 84,945
Current portion of notes payable 48,286 - - 48,286
Total current liabilities 734,040 350,174 36,060 1,120,274
Noncurrent liabilities:
Compensated absences, net of current portion 93,121 37,357 103,288 233,766
Advance from other fund 1,023,318 650,638 - 1,673,956
Notes payable 206,167 - - 206,167
Net other postemployment benefit obligation 417 219 738 1,374
Total noncurrent liabilities 1,323,023 688,214 104,026 2,115,263
Total liabilities 2,057,063 1,038,388 140,086 3,235,537
Net position
Net investment in capital assets 1,704,055 11,612,484 68,430 13,384,969
Unrestricted (deficit)(1,681,678) (630,048) 1,302,750 (1,008,976)
Total net position 22,377$ 10,982,436$ 1,371,180$ 12,375,993$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
44
CITY OF SEBASTIAN, FLORIDA
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended September 30, 2017
Golf Nonmajor -
Course Airport Building Total
Operating revenues
Charges for fees and rents:
Building permit fees -$ -$ 747,950$ 747,950$
Golf course fees 1,018,066 - - 1,018,066
Rents 26,999 343,646 - 370,645
Other revenues 13,874 155,675 - 169,549
Total operating revenues 1,058,939 499,321 747,950 2,306,210
Operating expenses
Salaries, wages and employee benefits 357,558 216,085 454,375 1,028,018
Contractual services, materials and supplies 1,019,164 429,903 117,480 1,566,547
Depreciation 155,240 690,642 14,897 860,779
Total operating expenses 1,531,962 1,336,630 586,752 3,455,344
Operating income (loss) (473,023) (837,309) 161,198 (1,149,134)
Nonoperating revenues (expenses)
Investment income - 1,284 9,503 10,787
Interest expense (5,370) (24,504) - (29,874)
Gain on sale of capital assets 111,652 4,403 - 116,055
Total nonoperating revenues (expenses)106,282 (18,817) 9,503 96,968
Income (loss) before capital contributions and transfers (366,741) (856,126) 170,701 (1,052,166)
Capital contributions - 1,566,737 - 1,566,737
Transfers in 192,370 498,097 29,544 720,011
Transfers out (66,275) (64,927) - (131,202)
Change in net position (240,646) 1,143,781 200,245 1,103,380
Net position, beginning of year 263,023 9,838,655 1,170,935 11,272,613
Net position, end of year 22,377$ 10,982,436$ 1,371,180$ 12,375,993$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
45
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2017
Golf Nonmajor -
Course Airport Building Total
Cash flows from operating activities
Cash received from customers and users 1,045,758$ 329,087$ 746,884$ 2,121,729$
Cash payments to suppliers (1,006,391) (453,180) (119,241) (1,578,812)
Cash payments for employee services (349,307) (209,188) (446,425) (1,004,920)
Net cash (used) provided by operating activities (309,940) (333,281) 181,218 (462,003)
Cash flows from noncapital financing activities
Interest paid on advance from other fund (5,370) (24,503) - (29,873)
Cash payments to other funds (39,362) (264,927) (666,618) (970,907)
Cash receipts from other funds 832,075 498,097 29,544 1,359,716
Net cash provided (used) by noncapital
financing activities 787,343 208,667 (637,074) 358,936
Cash flows from capital and related
financing activities
Repayment of long term debt (220,944) - - (220,944)
Acquisition and construction of capital assets (382,991) (1,945,121) - (2,328,112)
Proceeds from sale of capital assets 215,241 193,787 - 409,028
Receipts from capital contributions - 1,566,737 - 1,566,737
Net cash used by capital and
related financing activities (388,694) (184,597) - (573,291)
Cash flows from investing activities
Sale of investments - - 595,747 595,747
Purchase of investments - - (954) (954)
Investment income - 1,284 9,503 10,787
Net cash provided by investing activities - 1,284 604,296 605,580
Net increase (decrease) in cash and cash equivalents 88,709 (307,927) 148,440 (70,778)
Cash and cash equivalents, beginning of year 1,498 384,728 145,952 532,178
Cash and cash equivalents, end of year 90,207$ 76,801$ 294,392$ 461,400$
continued…
Business-type Activities - Enterprise Funds
46
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2017
Golf Nonmajor -
Course Airport Building Total
Business-type Activities - Enterprise Funds
Cash flow from operating activities:
Operating income (loss) (473,023)$ (837,309)$ 161,198$ (1,149,134)$
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense 155,240 690,642 14,897 860,779
Change in:
Accounts receivable (10,590) 4,785 - (5,805)
Inventories (217) 13,245 - 13,028
Due from other governments - (169,454) - (169,454)
Prepaid items 1,798 (2,576) (4,753) (5,531)
Accounts payable 11,192 (33,946) 2,992 (19,762)
Due to other governments (1,389) 14 (378) (1,753)
Unearned revenues (1,202) (5,579) (688) (7,469)
Accrued compensated absences 8,196 6,868 7,853 22,917
Net other postemployment benefit obligation 55 29 97 181
Total adjustments 163,083 504,028 20,020 687,131
Net cash (used) provided by operating activities (309,940)$ (333,281)$ 181,218$ (462,003)$
Noncash transactions:concluded
The accompanying notes are an integral part of these basic financial statements.
The Golf Course Fund financed the acquisition of capital assets with noncash capital leases of $313,152 for the year ended
September 30, 2017.
47
CITY OF SEBASTIAN, FLORIDA
Statement of Fiduciary Net Position
Fiduciary Funds
September 30, 2017
Pension
Trust Agency
Police
Officers' Performance
Pension Deposits
Assets
Cash and cash equivalents -$ 6,930$
Receivables:
Interest and dividends 34,918 -
Investments, at fair value:
Local government surplus trust funds investment pools - 73,750
Money market funds 1,469,539 -
United States treasuries 713,872 -
United States agencies 257,300 -
Collateralized mortgage obligations 473,057
Unit Investment trusts 125,087 -
Municipal obligations 169,518 -
Domestic corporate bonds 1,670,219 -
Foreign corporate bonds 433,423 -
Domestic corporate equities 8,232,558 -
Foreign corporate equities 414,998 -
EFT equities 8,030 -
Total investments 13,967,601 73,750
Total assets 14,002,519 80,680$
Liabilities
Refunds payable - 80,680$
Net position
Restricted for pension benefits 14,002,519$
The accompanying notes are an integral part of these basic financial statements.
48
CITY OF SEBASTIAN, FLORIDA
Statement of Changes in Fiduciary Net Position
Fiduciary Fund - Pension Trust
For the Year Ended September 30, 2017
Police
Officers'
Pension
Additions
Contributions:
Employer 337,201$
Plan members 177,585
State 168,628
Total contributions 683,414
Investment income:
Net increase in fair value of investments 1,113,659
Interest and dividends 341,050
Total investment income 1,454,709
Investment expenses (73,317)
Net investment earnings 1,381,392
Total additions 2,064,806
Deductions
Benefits 493,765
Refunded contributions 1,864
Administrative expenses 55,368
Total deductions 550,997
Change in net position 1,513,809
Net position, beginning of year 12,488,710
Net position, end of year 14,002,519$
The accompanying notes are an integral part of these basic financial statements.
49
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50
NOTES TO FINANCIAL STATEMENTS
51
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 24,192 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."
52
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Government-wide and Fund Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
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.
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.
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 government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting , as are the proprietary fund and fiduciary fund financial
statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred,
regardless of the timing of related cash flows . Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
Agency funds are custodial in nature and do not present results of operations or have a measurement
focus.
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.
53
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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 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 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.
The General Capital Projects Fund is 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 Transportation Improvements Capital Projects Fund is used to account for and report financial
resources that are restricted, committed, or assigned to expenditure for improvement and construction of
transportation assets.
The City reports the following major proprietary funds:
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.
Additionally, the City reports the following fund types:
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.
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.
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.
54
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Equity
Deposits and Investments
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 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.
55
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Internal Balances
Restricted Assets
Receivables and Payables
Other 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 restricted investments.
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, 2017, the City
has no allowance for doubtful accounts, since all receivables are considered collectible.
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.
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.
56
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Capital Assets
Years
Buildings and improvements 10-40
Public domain infrastructure 40-50
System infrastructure 15-30
Improvements other than buildings 10-40
Machinery, equipment and other 5-15
Airport runways 20
Deferred Outflows of Resources
Compensated Absences
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.
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.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
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.
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.
57
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Unearned Revenue
Deferred Inflows of Resources
Long-term Obligations
Fund Equity
Governmental funds report unearned revenue in connection with resources that have been received, but
not yet earned.
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.
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.
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.
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.
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.
58
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Use of Estimates
2. BUDGETARY INFORMATION
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.
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.
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.
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.
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.
The legal level of budgetary control is at the departmental level. As reported on the General Fund budget
and actual statement, there were minor violations for the public safety department and capital outlay
accounts.
59
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
3. DEPOSITS AND INVESTMENTS
Statement of Net Position
Cash and cash equivalents 4,361,356$
Restricted cash and cash equivalents 924,503
Investments 3,230,735
Restricted investments 876,216
Statement of Fiduciary Net Position
Police Officers' Pension -
Investments 13,967,601
Agency funds:
Cash and cash equivalents 6,930
Investments 73,750
Total 23,441,091$
Deposits and investments
Bank deposits -
Checking and savings accounts 5,290,359$
Investments:
Investments, at fair value 4,180,701
Police officers' pension fund investments 13,967,601
Cash on hand 2,430
Total 23,441,091$
Following is a reconciliation of deposit and investment balances as of September 30, 2017:
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, 2017, the carrying amount of the City of
Sebastian's deposits with banks was $5,290,359 and the bank balance was $5,292,789. All the deposits
were covered by the FDIC or collateralized in accordance with the "Florida Security for Public Deposits
Act". Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral
having a market value equal to 50% of the average daily balance for each month that all public deposits
are in excess of any applicable deposit insurance. If the public deposits exceed the total amount of the
regulatory capital accounts of a bank or the regulatory net worth of a savings association, the required
collateral shall have a market value equal to 125% of the deposits.
Custodial Credit Risk - Investments.On April 23, 2003, Sebastian City Council formally adopted an
investment policy pursuant to Section 218.415, Florida Statutes that established permitted investments,
asset allocation limits and issuer limits, credit ratings requirements and maturity limits for all
investments except the Pension Trust Funds. The City maintains a common cash and investment pool for
the use of all funds, except the Pension Trust Funds, which are held with third party trustees and are
governed by rules established by Florida Statute Chapter 185.
60
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Fair Value No Maturities Less than 1 From 1-3 From 4-6 Over 7
General investments
Local government surplus
funds trust fund ("SBA") 4,180,701$ 4,180,701$ 4,180,701$ -$ -$ -$
Police officers' pension fund investments
Money market 1,469,539$ 1,469,539$ -$ -$ -$ -$
United States treasuries 713,872 - 29,874 173,977 328,309 181,712
United States agencies 257,300 - 2,039 11,029 - 244,232
Collateralized mortgage obligations 473,057 473,057 - - - -
Unit Investment trusts 125,087 8,030 - - - -
Municipal obligations 169,518 - - - 101,682 67,836
Domesti corporate bonds 1,670,219 - - 322,112 674,619 673,488
Foreign corporate bonds 433,423 - - 79,797 125,421 228,205
Domestic corporate equities 8,232,558 8,232,558 - - - -
Foreign corporate equities 414,998 414,998 - - - -
EFT equitites 8,030 125,087 - - - -
13,967,601$ 10,723,269$ 31,913$ 586,915$ 1,230,031$ 1,395,473$
Investment Type
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.
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.
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.
As of September 30, 2017, the City had the following investments and effective duration presented in terms of years:
Investment Maturity (Years)
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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.
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:
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, 2017, the City's investment securities, for all investments except the Pension Trust
Fund, were all individually rated AAA by Standard & Poor's. The investment ratings for the Pension Trust
Fund ranged between AAA through BBB.
As of September 30, 2017, the City had $4,180,701 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 "AAA" on September 30,2017 and amounts may be withdrawn
without penalty.
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 December 31, 2016. 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. See table below for credit ratings by investment type. 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.
62
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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.
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.
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.
63
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local government surplus
funds trust fund ("SBA") 4,180,701$ 100.00% -$ 0.00%
Money market - 0.00% 1,469,539 10.52% Not Rated
United States treasureies - 0.00% 713,872 5.11% AA+
United States agencies - 0.00% 257,300 1.84% Not Rated
Collateralized mortgage - 0.00% 473,057 3.39% AAA
obligations
Unit Investment trusts - 0.00% 125,087 0.90% Not Rated
Municipal obligations - 0.00% 169,518 1.21% AA-/AA+
Domestic corporate bonds - 0.00% 1,670,219 11.96% BBB thru AAA
Foreign corporate bonds - 0.00% 433,423 3.10% AA-/AAA
Domestic corporate equities - 0.00% 8,232,558 58.94% Not Rated
Foreign corporate equities - 0.00% 414,998 2.97% Not Rated
EFT equities - 0.00% 8,030 0.06% Not Rated
$ 4,180,701 100.00% $ 13,967,601 100.00%
Fair Value Measurement
General Investments
S&P/Moody
RatingsAmount
Percentage of
Portfolio Amount
Percentage of
Portfolio
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.
As of September 30, 2017, the City had the following issuer concentration based on fair value and
investment ratings:
Issuer
Total
Pension Investments
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local government surplus funds
trust fund ("SBA") 4,180,701$ -$ -$ 4,180,701$
Money market 1,469,539 - - 1,469,539
United States treasureies 713,872 - - 713,872
United States agencies - 257,300 - 257,300
Collateralized mortgage - 473,057 - 473,057
Unit Investment trusts 125,087 - - 125,087
Municipal obligations - 169,518 - 169,518
Domestic corporate bonds - 1,670,219 - 1,670,219
Foreign corporate bonds - 433,423 - 433,423
Domestic corporate equities 7,111,317 1,121,241 - 8,232,558
Foreign corporate equities 414,998 - - 414,998
EFT equities 8,030 - - 8,030
$ 14,023,544 $ 4,124,758 $ - $ 18,148,302
4. RECEIVABLES
Governmental
Activities
Business-type
Activities Total
Accounts receivable 371,067$ 11,326$ 382,393$
Due from other governments 727,161 312,275 1,039,436
1,098,228$ 323,601$ 1,421,829$
5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Governmental
Activities
Business-type
Activities Total
Accounts payable 656,663$ 107,924$ 764,587$
Accrued liabilities 305,347 41,526 346,873
Due to other governments 50,408 11,376 61,784
1,012,418$ 160,826$ 1,173,244$
Receivables are comprised of the following at year-end:
Level 1 Level 2 Level 3 Total
The City has the following recurring fair value measurements as of September 30, 2017:
Accounts payable and accrued liabilities are comprised of the following at year-end:
65
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 886,970$ -$
Transportation Improvements Fund - 9,870
Nonmajor Governmental Funds - 51,300
Golf Course - 535,800
Airport - 290,000
886,970$ 886,970$
Advance from
Other Funds
Advance to
Other Funds
General Fund -$ 100,000$
Discretionary Sales Tax - 550,638
Golf Course 1,023,318 -
Airport 650,638 -
Building - 1,023,318
1,673,956$ 1,673,956$
Due to and from primary government funds
The composition of interfund balances as of September 30, 2017, was as follows:
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.
Advances 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. The $100,000 advanced to the
airport from general fund represents a cash loan made in 2007 without any specified terms for
repayment. The $1,023,318 was advanced from the Building Fund to replace the irrigation system and
make other improvements at the Golf Course.
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Riverfront Transportation Nonmajor
Discretionary Redevelopment Improvements Governmental Golf Course Airport
General Fund Sales Tax Fund Fund Fund Funds Fund Fund Totals
General Fund $ - $ - $ - $ - $ 653,569 $ - 10,000$ 663,569$
Capital Projects Fund 1,603,353 1,137,676 - - 347,986 - - 3,089,015
Transportation Improvements -
Fund 132,925 856,622 188,730 3,542 692,706 - - 1,874,525
Nonmajor Governmental -
Funds 305,449 848,102 40,766 - 363,432 - - 1,557,749
78,823 51,816 - - - 61,731 - 192,370
Airport Fund 28,040 415,130 - - - - 54,927 498,097
Building Fund 25,000 - - - - 4,544 - 29,544
2,173,590$ 3,309,346$ 229,496$ 3,542$ 2,057,693$ 66,275$ 64,927$ 7,904,869$
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, 2017, interfund transfers consisted of the following:
Transfers in
Golf Course
67
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
7. CAPITAL ASSETS
Beginning
Balance Additions Disposals Transfers
Ending
Balance
Governmental activities
Capital assets, not being depreciated:
Land 8,319,588$ 71,462$ -$ -$ 8,391,050$
Construction in progress 227,035 1,421,138 - (1,266,284) 381,889
8,546,623 1,492,600 - (1,266,284) 8,772,939
Capital assets, being depreciated:
Buildings 13,110,829 38,933 - 192,290 13,342,052
Non-building improvements 6,869,838 1,400 - - 6,871,238
Machinery and equipment 8,668,356 1,275,314 (299,581) - 9,644,089
Infrastructure 39,938,233 1,087,984 - 1,073,994 42,100,211
68,587,256 2,403,631 (299,581) 1,266,284 71,957,590
Less accumulated depreciation for:
Buildings (5,355,315) (372,679) - - (5,727,994)
Non-building improvements (3,919,085) (310,700) - - (4,229,785)
Machinery and equipment (6,584,397) (792,582) 272,356 - (7,104,623)
Infrastructure (21,282,995) (1,749,106) - - (23,032,101)
(37,141,792) (3,225,067) 272,356 - (40,094,503)
Total capital assets
being depreciated, net 31,445,464 (821,436) (27,225) 1,266,284 31,863,087
Governmental activities
capital assets, net 39,992,087$ 671,164$ (27,225)$ -$ 40,636,026$
Capital asset activity for the primary government for the year ended September 30, 2017, was as follows:
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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 1,080,864 2,292,915 (203,566) (2,850,168) 320,045
1,100,300 2,292,915 (203,566) (2,850,168) 339,481
Capital assets, being depreciated:
Buildings 6,685,840 - (61,070) 2,541,356 9,166,126
Non-building improvements 2,809,818 4,826 - 35,898 2,850,542
Machinery and equipment 1,428,430 343,523 (264,813) 4,086 1,511,226
Infrastructure 8,463,834 - - 268,828 8,732,662
19,387,922 348,349 (325,883) 2,850,168 22,260,556
Less accumulated depreciation for:
Buildings (1,762,161) (210,821) 61,070 - (1,911,912)
Non-building improvements (1,219,076) (120,246) - - (1,339,322)
Machinery and equipment (939,351) (126,971) 175,405 - (890,917)
Infrastructure (4,415,723) (402,741) - - (4,818,464)
(8,336,311) (860,779) 236,475 - (8,960,615)
Total capital assets
being depreciated, net 11,051,611 (512,430) (89,408) 2,850,168 13,299,941
Business-type activities
capital assets, net 12,151,911$ 1,780,485$ (292,974)$ -$ 13,639,422$
Depreciation of governmental activities by function
General government 350,400$
Public safety 321,420
Transportation 890,511
Physical environment 1,236,570
Economic environment 33,088
Cultural and recreation 393,078
Total governmental activities 3,225,067$
Depreciation of business-type activities by function
Golf course 155,240$
Airport 690,642
Building 14,897
Total business-type activities 860,779$
Depreciation expense was charged to functions/programs of the primary government as follows:
69
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
8. LONG-TERM DEBT
·
·
·
·
·
Beginning
Balance Additions Deductions
Ending
Balance
Due Within
One Year
Governmental activities
Notes payable 4,106,000$ -$ (931,000)$ 3,175,000$ 590,000$
Compensated absences 1,200,021 498,984 (303,411) 1,395,594 105,151
Pollution remediation 91,200 - - 91,200 -
Totals governmental
activities 5,397,221$ 498,984$ (1,234,411)$ 4,661,794$ 695,151$
Notes payable
Florida Gas Tax Revenue Note, due in annual installments of
$97,000 to $121,000 plus interest at 1.94%
through 2023. 1,263,000$
2013 Stormwater Utility Refunding Revenue Note, Series 2013,
due in annual installments of $352,000 to $395,000 plus
interest at 1.73% through 2022. 1,912,000
3,175,000$
The following is a summary of governmental activities long-term debt transactions for the year ended
September 30, 2017:
Revenue notes are secured by and payable from the revenues of the respective funds that issued them.
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.
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.
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 four (4) year loan agreement in 2013 with a local bank for $299,050 to provide
financing to purchase equipment for the Golf Course. Repayment of principal and interest will be
made from Golf Course revenues.
As of September 30, 2017, there was no outstanding in-substance defeased debt.
70
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Beginning
Balance Additions Deductions
Ending
Balance
Due Within
One Year
Business-type activities
Note payable 162,245$ -$ (162,245)$ -$ -$
Compensated absences 210,849 61,367 (38,450) 233,766 -
Capital lease - 313,152 (58,699) 254,453 48,286
Totals business-type
activities 373,094$ 374,519$ (259,394)$ 488,219$ 48,286$
Year Ended
September 30, Principal Interest
2018 590,000$ 56,523$
2019 601,000 45,836
2020 611,000 34,939
2021 620,000 23,868
2022 632,000 12,635
Thereafter 121,000 1,174
3,175,000$ 174,975$
Governmental Activities
The following is a summary of business-type activities long-term debt transactions for the year ended
September 30, 2017:
Annual debt service requirements to maturity for long-term debt are as follows:
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.
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 $91,200. This liability
would generally be liquidated by the General Fund.
71
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
9. LEASES
Year Ended
September 30, Airport
2018 100,000$
2019 100,000
2020 100,000
2021 100,000
2022 100,000
2023-2027 500,000
2028-2032 500,000
2033-2037 500,000
2038-2042 500,000
2043-2045 200,000
Total 2,700,000$
Year Ended
September 30,
Governmental
Activities
2018 227,030$
2019 222,272
2020 224,689
2021 227,106
2022 229,771
2023-2027 960,896
2028-2032 995,240
2033-2037 1,109,714
2038-2042 1,255,816
2043-2047 1,242,283
2048-2052 1,180,267
2053-2055 849,042
Total 8,724,125$
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, 2017. 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, 2017:
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 $39,285 and have been fully depreciated. Following is a schedule by year of minimum
future rental income on noncancelable operating leases:
72
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
September 30,
Business-type
Activities
2018 283,832$
2019 249,534
2020 249,534
2021 249,534
2022 249,534
2023-2027 1,069,013
2028-2032 963,452
2033-2037 552,625
2038-2042 138,375
2043-2045 83,025
Total 4,088,458$
10. PROPERTY TAXES
11. CONTINGENT LIABILITIES
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 2045. Following is a schedule by year of minimum future rental income on
noncancelable operating leases:
Future minimum rental commitments are as follows:
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, 2017, was 3.8000 mills. Total tax collections
were approximately 96.38% of the total tax levy.
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.
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.
73
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
12. RISK MANAGEMENT
13. BENEFIT PLANS
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.
Police Officer's Pension Plan
Defined Benefit Pension Plan
Plan Description.The Police Officers' Pension Plan is a Florida Statute 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, 2017.
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.
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.
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.
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.
74
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Plan Membership. As of September 30, 2017, 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 12
Active plan members 37
Total membership 61
Total pension liability 17,252,501$
Less: Plan fiduciary net position 14,002,519
City's net pension liability 3,249,982$
Plan fiduciary net position as
percentage of total pension
liability 81.16%
Concentrations.At September 30, 2017, 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.
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.
Contributions.Members contribute 8% 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. State contributions are reported as revenues and expenditures in
the General Fund before being reported in the Pension Trust Fund.
Rate of Return.For the year ended September 30, 2017, the annual money-weighted rate of return on
pensionplaninvestments,netofpensionplaninvestment expense, was 10.90 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, 2017, were as follows:
75
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Inflation 2.30%
Salary increases 3.80% - 16.00%
Discount rate 7.30%
Investment rate of return 7.30%
Target
Allocation
Long-term
Expected Real
Rate of Return
Money-
Weighted Rate
of Return
Domestic equity 52.50% 5.99% 3.14%
International equity 12.50% 5.60% 0.70%
Fixed income 25.00% 1.85% 0.46%
Real Estate 5.00% 2.90% 0.15%
Master Limited Partnerships 5.00% 5.00% 0.25%
Total 100.00% 4.70%
2.50%
Risk adjustments -0.10%
Investment rate of return 7.30%
Inflation
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of October
1, 2016 updated to September 30, 2017 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.
The other significant assumptions are based upon the most recent actuarial experience study performed
on September 16, 2013, for the period 1999-2012.
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, 2017 are summarized in the following table:
Asset Class
76
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
One Percent
Decrease
Current
Discount Rate
One Percent
Increase
6.30% 7.30% 8.30%
Net Pension Liability $ 5,578,152 $ 3,249,982 $ 1,326,059
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a) - (b)
Balances at September 30, 2016 15,071,285$ 12,488,710$ 2,582,575$
Changes for the year:
Service cost 479,778 - 479,778
Interest on total pension liability 1,179,511 - 1,179,511
Changes of benefit terms 613,973 - 613,973
Differences between expected and
actual experience 20,758 - 20,758
Assumption changes 382,825 - 382,825
Benefit payments, including refunds
of employee contributions (495,629) (495,629) -
Employer contributions - 337,201 (337,201)
State contributions - 168,628 (168,628)
Employee contributions - 177,585 (177,585)
Pension plan net investment
income - 1,381,392 (1,381,392)
Administrative expense - (55,368) 55,368
Net changes 2,181,216 1,513,809 667,407
Balances at September 30, 2017 17,252,501$ 14,002,519$ 3,249,982$
Discount Rate. The discount rate used to measure the total pension liability was 7.30 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.
Changes in Assumptions.The City revised certain actuarial assumptions in the October 31, 2016 valuation
that had an 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 7.45% to 7.30%.
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 7.30 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 (6.30 percent) or one percentage point higher (8.30 percent) than the current rate.
Changes in the net pension liability. The components of the change in the net pension liability are
summarized as follows:
77
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net Deferred
Outflows of
Resources
Difference between expected and
actual experience $ 52,111 $ 96,252 $ (44,141)
Changes in assumptions 771,181 - 771,181
Net difference between projected and actual
earnings on pension plan investments - 133,323 (133,323)
823,292$ 229,575$ 593,717$
Year Ended
September 30, Amount
2018 $ 260,755
2019 260,755
2020 82,452
2121 (10,245)
Total 593,717$
Amounts reported as pension-related deferred outflows of resources and deferred inflows of resources
will be recognized in pension expense as follows:
Changes of benefit terms resulted from an amendment to the plan to provide a cost-of-living adjustment
and modify the member contribution rate and benefit accrued rate.
State statutes mandate that the State contribution be recorded as revenue to the General Fund and then
paid to the Pension Trust Fund.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions.For the year ended September 30, 2017, the City recognized pension expense of $550,997. At
September 30, 2017, the City reported pension-related deferred outflows of resources and deferred
inflows of resources from the following sources:
Payable to the Pension Plan.At September 30, 2017, the City reported $0 payable to the police officers
pension plan.
78
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Negotiated Defined Benefit Pension Plan
Coastal Florida Public Employees Association
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, 2017, was 66. The City chose to early implement
the GASB 78 disclosure requirements in FY15.
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.
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.
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.
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.
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.
79
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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 2016-2017 fiscal year.
Employees do not contribute to this plan. Contributions to the CWA Pension Plan for the fiscal years
ended September 30, 2015, 2016 and 2017 were $217,916, $200,889 and $204,035 respectively, which are
equal to 100% of the required contribution for each year.
Plan Participation.As of September 30, 2017, there were a total of 18 employees participating in the
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.
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.
Lump Sum.Retirement benefits can be paid either partially or by total distribution of the employees'
account balance.
Annuities. Retirement benefits can be utilized to purchase an annuity.
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.
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.
Defined Contribution 401(a) Plan
80
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
14. OTHER POSTEMPLOYMENT BENEFITS
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 2016-2017 fiscal year.
Employees do not contribute to this Plan. Contributions to the 401 Defined Contribution Plan for the
fiscal years ended September 30, 2015, 2016 and 2017 were $130,719, $151,891 and $120,879
respectively, which are equal to 100% of the required contribution for each year.
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.
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 retiring and achieved at least 20 years of
service in a full time capacity. If eligible, the City pays 50% of the costs of single coverage group health
insurance for up to 2 years after retirement.
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, using the
Entry Age Normal (level percentage of pay) Method. The City elected to fund the OPEB obligation on a pay-
as-you-go basis. The general fund portion is calculated to be $4,515 and the enterprise portion is $181.
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.
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Annual required contribution $ 5,024
Interest on net OPEB obligation 841
Adjustment to annual required contribution (1,168)
Net OPEB cost 4,697
Contributions made -
Increase in net OPEB obligation 4,697
Net OPEB obligation, beginning of year 30,434
Net OPEB obligation, end of year $ 35,131
Year Ended
Annual OPEB
Cost
Percentage of
Annual OPEB
Cost
Contributed
Net OPEB
Obligation
2015 4,696$ 0.0%25,718$
2016 4,716 0.0%30,434
2017 4,697 0.0%35,131
Three-Year Trend Information
The following table shows the components of the City's annual OPEB cost for the year ended September
30, 2017, the amount actually contributed to the plan, and changes in the City's net OPEB obligation:
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net
OPEB obligation for fiscal year 2017 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 $6,147,250, and the ratio of
the UAAL to the covered payroll was 0.8 percent.
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.
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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.
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 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, 2017, no retiring employees made this election, and $0 was recorded at year end as the
total accrued termination benefits in the governmental activities of the government-wide financial
statements.
Termination Benefits
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CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
15. FUND BALANCES - GOVERNMENTAL FUNDS
General Fund
Discretionary
Sales Tax
Riverfront
Redevelopment
General Capital
Projects
Nonmajor
Funds Total
Nonspendable:
Inventory 55,008$ -$ -$ -$ -$ 55,008$
Prepaids 187,497 - - - - 187,497
Long-term advances 100,000 - - - - 100,000
Permanent fund corpus - - - - 941,061 941,061
Total nonspendable 342,505 - - - 941,061 1,283,566
Restricted for:
Debt service - - - - 170,357 170,357
Infrastructure - 2,643,877 - - 211,004 2,854,881
Redevelopment - - 540,748 - - 540,748
Stormwater - - - - 516,204 516,204
Law enforcement 63,016 - - - 49,226 112,242
Total restricted 63,016 2,643,877 540,748 - 946,791 4,194,432
Committed for:
Recreational system
development - - - - 955,251 955,251
Development of
public parking - - - - 39,893 39,893
Total committed - - - - 995,144 995,144
Assigned for:
Law enforcement events 12,350 - - - - 12,350
Unassigned (deficit)4,089,275 - - (20,550) (5,820) 4,062,905
Total fund balances,
governmental funds 4,507,146$ 2,643,877$ 540,748$ (20,550)$ 2,877,176$ 10,548,397$
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:
84
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 8,772,939$ 339,481$ 9,112,420$
Capital assets being depreciated, net 31,863,087 13,299,941 45,163,028
40,636,026 13,639,422 54,275,448
Related debt:
Notes payable 3,175,000 - 3,175,000
Capital lease - 254,453 254,453
3,175,000 254,453 3,429,453
Net investment in capital assets 37,461,026$ 13,384,969$ 50,845,995$
17. COMMITMENTS AND CONTINGENCIES
A. Contracts and Other Commitments
A summary of these projects at September 30, 2017 is as follows:
Total Contract
Price
Total Paid as of
September 30,
2017
Remaining
Balance at
September 30,
2017
Evidence Garage 461,411$ (246,578)$ 214,833$
Working Waterfront 306,535 (73,425) 233,110
Master Plan 291,000 (188,325) 102,675
Comprehensive Plan 19,600 - 19,600
Total 1,078,546$ (508,328)$ 570,218$
The composition of net investment in capital assets as of September 30, 2017, was as follows:
The City has various contracts and commitments outstanding as of September 30, 2017. In the Capital Projects
Fund, there are contracts for constructing an evidence garage for use by the Police Department, restrooms
and other amenities at the Working Waterfront facility, developing an update to the master plan for the
Airport and an update to the Parks and Recreation Comprehensive Plan.
85
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86
REQUIRED SUPPLEMENTARY INFORMATION
87
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Single-employer Pension Trust Fund
Fiscal Year
Ending
September 30,
2017
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 $ 479,778 $ 418,143 $ 403,611 $ 396,146 $ 367,653
Interest on total pension liability 1,179,511 1,027,558 979,259 914,243 853,018
Change in excess state money - - 22,218 24,386 -
Changes of benefit terms 613,973 - (4,316) - -
Differences between expected and actual experience 20,758 59,175 (240,633) - -
Changes of assumptions 382,825 626,069 223,200 - -
Benefit payments, including refunds of employee contributions (495,629) (493,765) (496,363) (452,892) (465,435)
Net change in total pension liability 2,181,216 1,637,180 886,976 881,883 755,236
Total pension liability, beginning of year 15,071,285 13,434,105 12,547,129 11,665,246 10,910,010
Total pension liability, end of year 17,252,501 15,071,285 13,434,105 12,547,129 11,665,246
Plan fiduciary net position
Employer contributions 337,201 322,998 320,179 401,103 396,603
State contributions 168,628 169,027 145,700 147,868 145,961
Employee contributions 177,585 167,309 161,270 160,494 154,683
Pension plan net investment income (loss) 1,381,392 1,067,139 (60,326) 951,910 1,029,818
Benefit payments (495,629) (493,765) (496,363) (452,892) (465,435)
Administrative expense (55,368) (28,025) (39,673) (27,815) (32,153)
Net change in plan fiduciary net position 1,513,809 1,204,683 30,787 1,180,668 1,229,477
Plan fiduciary net position, beginning of year 12,488,710 11,284,027 11,253,240 10,072,572 8,843,096
Plan fiduciary net position, end of year 14,002,519 12,488,710 11,284,027 11,253,240 10,072,573
Net pension liability 3,249,982$ 2,582,575$ 2,150,078$ 1,293,889$ 1,592,673$
Plan fiduciary net position as a percentage of total pension liability 81.16%82.86%84.00%89.69%86.35%
Covered payroll 2,438,012$ 2,263,866$ 2,154,612$ 2,106,767$ 2,131,399$
Net pension liability as a percentage of covered payroll 133.30% 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.
88
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% 2,154,612 119.86%
2017 17,252,501 14,002,519 3,249,982 81.16% 2,438,012 133.30%
Fiscal Year
Ending
September 30,
Annual Return
(1)
2013 11.51%
2014 9.42%
2015 -0.45%
2016 9.39%
2017 10.90%
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.
Schedule of the Net Pension Liability
Schedule of Investment Returns
89
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Single-employer Pension Trust Fund
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%
2017 768,277 337,201 168,628 262,448 2,438,012 20.75%
Notes to Schedule of Contributions
Valuation date October 1, 2016
Notes
Methods and assumptions used to determine contribution rates:
Funding method
Amortization method
Remaining amortization period
Mortality
Interest rate 7.60% per year compounded annually, net of investment related expenses
Inflation
Retirement age
Early retirement
Disability rates
Age Assumption
30 0.12%
40 0.21%
50 0.54%
60 2.70%
Credited
Termination rates Service Assumption
First two years 14.00%
Years 3-9 5.70%
Years 10-14 2.80%
15 years and
Greater 0.00%
Credited
Salary increases Service Assumption
First year 16.00%
Years 2-14 7.40%
15 years and
Greater 3.80%
Service Load
Final salary load on 10/1/14 Assumption
5 or more year 20.00%
More than 2,
less then 5
years 10.00%
Less than 2 years 0.00%
Payroll growth
Actuarial asset method 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.
3% for amortization of all UAAL bases
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).
Schedule of Contributions
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.
Individual entry age normal actuarial cost
Level percentage of pay, closed
2.30% per year
29 Years (as of October 1, 2015)
90
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
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 10/1/2009 -$ 98,100$ 98,100$ - 6,424,614$ 1.5%
2011 10/1/2010 - 67,500 67,500 - 6,426,614 1.1%
2012 10/1/2010 - 50,901 50,901 - 5,933,331 0.9%
2013 10/1/2013 - 50,901 50,901 - 5,693,181 0.9%
2014 10/1/2014 - 50,901 50,901 - 6,044,900 0.8%
2015 10/1/2015 - 50,901 50,901 - 6,213,151 0.8%
2016 10/1/2015 - 50,901 50,901 - 6,561,930 0.8%
2017 10/1/2015 - 50,901 50,901 - 6,147,250 0.8%
Schedule of Employer Contributions
Fiscal Annual
Year Ending Required Percentage
September 30, Contributions Contributed
2010 4,600$ 0%
2011 4,700 0%
2012 3,800 0%
2013 3,674 0%
2014 4,207 0%
2015 5,024 0%
2016 5,024 0%
2017 5,024 0%
Schedule of Funding Progress
91
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Coastal Florida Public Employees Association Pension Plan
Fiscal Annual
Year Ending Required
September 30, Contributions
2007 254,909$
2008 241,718
2009 254,997
2010 234,219
2011 223,113
2012 210,258
2013 202,612
2014 204,361
2015 217,916
2016 200,889
2017 204,035
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
Schedule of Employer Contributions
92
COMBINING AND INDIVIDUAL FUND
FINANCIAL STATEMENTS AND SCHEDULES
93
CITY OF SEBASTIAN, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2017
Local Law
Option Parking Recreation Stormwater Enforcement
Gas Tax In-Lieu-of Impact Fee Utility Forfeiture
Assets
Cash and cash equivalents 221,727$ -$ 758,998$ 255,319$ 14,572$
Investments - 39,893 196,253 - 34,654
Due from other governments 61,171 - - 11,284 -
Total assets 282,898$ 39,893$ 955,251$ 266,603$ 49,226$
Liabilities
Accounts payable and accrued liabilities 71,894 - - - -
Due to other funds - - - - -
Total liabilities 71,894 - - - -
Fund balances
Nonspendable - - - - -
Restricted 211,004 - - 266,603 49,226
Committed - 39,893 955,251 - -
Unassigned - - - - -
Total fund balances 211,004 39,893 955,251 266,603 49,226
Total liabilities and
fund balances 282,898$ 39,893$ 955,251$ 266,603$ 49,226$
Special Revenue Funds
94
Permanent
Discretionary Stormwater Total
Sales Surtax Utility Stormwater Nonmajor
Revenue Note Revenue Capital Utility Governmental
2013 Bonds 2003 Improvements Improvements Cemetery Funds
-$ 170,357$ 74$ 252,924$ 64,845$ 1,738,816$
- - - - 876,216 1,147,016
- - 49,781 - - 122,236
-$ 170,357$ 49,855$ 252,924$ 941,061$ 3,008,068$
- - 4,375 3,323 - 79,592
- - 51,300 - - 51,300
- - 55,675 3,323 - 130,892
- - - - 941,061 941,061
- 170,357 - 249,601 - 946,791
- - - - - 995,144
- - (5,820) - - (5,820)
- 170,357 (5,820) 249,601 941,061 2,877,176
-$ 170,357$ 49,855$ 252,924$ 941,061$ 3,008,068$
Capital Projects FundsDebt Service
95
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2017
Local Law
Option Parking Recreation Stormwater Enforcement
Gas Tax In-Lieu-of Impact Fee Utility Forfeiture
Revenues
Taxes:
Motor fuel 674,778$ -$ -$ -$ -$
Intergovernmental 12,532 - - - -
Impact fees - - 102,700 - -
Charges for services - - - 992,839 -
Fines - - - - 26,431
Investment earnings 947 468 8,888 9,300 571
Other revenues - 24,945 - - 1,530
Total revenues 688,257 25,413 111,588 1,002,139 28,532
Expenditures
Current:
Public safety - - - - 5,476
Physical environment - - - 12,016 -
Transportation 120,828 - - - -
Culture and recreation - - 14,775 - -
Debt Service:
Principal 215,000 - - - -
Interest and fiscal charges 27,635 - - - -
Capital outlay 14,268 44,703 - - 10,524
Total expenditures 377,731 44,703 14,775 12,016 16,000
Revenues over (under) expenditures 310,526 (19,290) 96,813 990,123 12,532
Other financing sources (uses)
Transfers in 200,000 - - 100,000 -
Transfers out (663,422) (13,792) (46,455) (1,198,076) -
Total other financing sources (uses)(463,422) (13,792) (46,455) (1,098,076) -
Net change in fund balances (152,896) (33,082) 50,358 (107,953) 12,532
Fund balances, beginning of year 363,900 72,975 904,893 374,556 36,694
Fund balances, end of year 211,004$ 39,893$ 955,251$ 266,603$ 49,226$
Special Revenue Funds
96
Permanent
Discretionary Stormwater Total
Sales Surtax Utility Stormwater Nonmajor
Revenue Note Revenue Capital Utility Governmental
2013 Bonds 2003 Improvements Improvements Cemetery Funds
-$ -$ -$ -$ -$ 674,778$
- - 61,970 - - 74,502
- - - - - 102,700
- - - - 47,410 1,040,249
- - - - - 26,431
(335) 1,316 - - 8,893 30,048
- - - - - 26,475
(335) 1,316 61,970 - 56,303 1,975,183
- - - 60,000 - 65,476
- - 25,670 36,383 - 74,069
- - - - - 120,828
- - - - - 14,775
353,000 363,000 - - - 931,000
1,519 39,358 - - - 68,512
- - 63,602 108,539 - 241,636
354,519 402,358 89,272 204,922 - 1,516,296
(354,854) (401,042) (27,302) (204,922) 56,303 458,887
354,854 402,963 104,390 395,542 - 1,557,749
- - - (23,928) (112,020) (2,057,693)
354,854 402,963 104,390 371,614 (112,020) (499,944)
- 1,921 77,088 166,692 (55,717) (41,057)
- 168,436 (82,908) 82,909 996,778 2,918,233
-$ 170,357$ (5,820)$ 249,601$ 941,061$ 2,877,176$
Capital Projects FundsDebt Service
97
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Local Option Gas Tax Special Revenue Fund
For the Year Ended September 30, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Taxes:
Motor fuel 665,600$ 665,599$ 674,778$ 9,179$
Intergovernmental 12,532 12,532 12,532 -
Investment earnings 97 97 947 850
Total revenues 678,229 678,228 688,257 10,029
Expenditures
Current:
Transportation 95,103 180,249 120,828 (59,421)
Debt service:
Principal 215,000 215,000 215,000 -
Interest and fiscal charges 27,635 27,635 27,635 -
Capital outlay - 14,268 14,268 -
Total expenditures 337,738 437,152 377,731 (59,421)
Revenues over (under) expenditures 340,491 241,076 310,526 69,450
Other financing sources (uses)
Transfers in 200,000 200,000 200,000 -
Transfers out (750,000) (663,422) (663,422) -
Total other financing sources (uses)(550,000) (463,422) (463,422) -
Net changes in fund balance (209,509) (222,346) (152,896) 69,450
Fund balance, beginning of year 363,900 363,900 363,900 -
Fund balance, end of year 154,391$ 141,554$ 211,004$ 69,450$
98
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 107$ 107$ 468$ 361$
Other revenues 19,730 19,730 24,945 5,215
Total revenues 19,837 19,837 25,413 5,576
Expenditures
Capital outlay - 44,703 44,703 -
Revenues over (under) expenditures 19,837 (24,866) (19,290) 5,576
Other financing sources (uses)
Transfers out - (44,703) (13,792) 30,911
Net change in fund balance 19,837 (69,569) (33,082) 36,487
Fund balance, beginning of year 72,975 72,975 72,975 -
Fund balance, end of year 92,812$ 3,406$ 39,893$ 36,487$
99
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Impact fees 135,200$ 135,200$ 102,700$ (32,500)$
Investment earnings 2,112 2,112 8,888 6,776
Total revenues 137,312 137,312 111,588 (25,724)
Expenditures
Current:
Culture and recreation - - 14,775 14,775
Revenue over expenditures 137,312 137,312 96,813 (40,499)
Other financing uses
Transfers out (275,000) (232,542) (46,455) 186,087
Net change in fund balances (137,688) (95,230) 50,358 145,588
Fund balance, beginning of year 904,893 904,893 904,893 -
Fund balance, end of year 767,205$ 809,663$ 955,251$ 145,588$
100
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Charges for services 993,000$ 993,000$ 992,839$ (161)$
Investment earnings 3,875 3,875 9,300 5,425
Total revenues 996,875 996,875 1,002,139 5,264
Expenditures
Current:
Physical environment 20,000 20,000 12,016 (7,984)
Revenues over expenditures 976,875 976,875 990,123 13,248
Other financing sources (uses)
Transfers in 163,125 221,199 100,000 (121,199)
Transfers out (1,140,000) (1,198,074) (1,198,076) (2)
Other financing uses (976,875) (976,875) (1,098,076) (121,201)
Net change in fund balance - - (107,953) (107,953)
Fund balance, beginning of year 374,556 374,556 374,556 -
Fund balance, end of year 374,556$ 374,556$ 266,603$ (107,953)$
101
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, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Fines 1,000$ 1,000$ 26,431$ 25,431$
Investment earnings 145 145 571 426
Other revenues - 1,230 1,530 300
Total revenues 1,145 2,375 28,532 26,157
Expenditures
Current:
Public safety - - 5,476 5,476
Capital outlay - 1,230 10,524 9,294
Total expenditures - 1,230 16,000 14,770
Net change in fund balance 1,145 1,145 12,532 11,387
Fund balance, beginning of year 36,694 36,694 36,694 -
Fund balance, end of year 37,839$ 37,839$ 49,226$ 11,387$
102
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Discretionary Sales Surtax Revenue Bonds 2013 Debt Service Fund
For the Year Ended September 30, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 1,591$ 1,591$ (335)$ (1,926)$
Expenditures
Debt service:
Principal 706,000 706,000 353,000 (353,000)
Interest and fiscal charges 4,554 4,554 1,519 (3,035)
Total expenditures 710,554 710,554 354,519 (356,035)
Revenues under expenditures (708,963) (708,963) (354,854) 354,109
Other financing sources
Transfers in 352,927 352,927 354,854 1,927
Net change in fund balance (356,036) (356,036) - 356,036
Fund balance, beginning of year - - - -
Fund balance, end of year (356,036)$ (356,036)$ -$ 356,036$
103
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
Stormwater Utility Revenue Bonds Debt Service Fund
For the Year Ended September 30, 2017
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Investment earnings 112$ 112$ 1,316$ 1,204$
Expenditures
Debt service:
Principal 363,000 363,000 363,000 -
Interest and fiscal charges 40,132 40,132 39,358 (774)
Total expenditures 403,132 403,132 402,358 (774)
Revenues under expenditures (403,020) (403,020) (401,042) 1,978
Other financing sources
Transfers in 403,020 403,020 402,963 (57)
Net change in fund balance - - 1,921 1,921
Fund balance, beginning of year 168,436 168,436 168,436 -
Fund balance, end of year 168,436$ 168,436$ 170,357$ 1,921$
104
AGENCY FUND
105
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2017
Balance Balance
October 1, September 30,
2016 Additions Deletions 2017
Performance Deposits
Assets
Cash and cash equivalents 32,841$ -$ (25,911)$ 6,930$
Investments, at fair value 73,750 - - 73,750
Total assets 106,591$ -$ (25,911)$ 80,680$
Liabilities
Performance deposits held in escrow 106,591$ -$ (25,911)$ 80,680$
106
CAPITAL ASSETS
107
CITY OF SEBASTIAN, FLORIDA
Comparative Schedule by Source
Capital Assets Used in the Operation of Governmental Funds
September 30, 2017
2017 2016
Governmental funds capital assets
Land 8,391,050$ 8,319,588$
Buildings and structures 13,342,052 13,110,829
Non-building improvements 6,871,238 6,869,838
Machinery and equipment 9,644,089 8,668,356
Infrastructure 42,100,211 39,938,233
Construction in progress 381,889 227,035
Total governmental funds capital assets 80,730,529$ 77,133,879$
Investment in governmental funds capital assets (by sources)
Federal grants 4,507,200$ 4,550,000$
State grants 2,852,055 2,750,000
County grants 507,031 725,000
General Fund 13,039,005 11,100,000
Law enforcement trust fund 97,815 87,000
Recreational impact fee 2,432,716 2,200,000
Stormwater utility fee 8,347,685 6,600,000
Riverfront redevelopment 2,693,061 2,200,000
Cemetery trust fund 592,753 485,000
Donations 2,938,942 2,600,000
Sales taxes 23,648,358 22,100,000
Motor fuel taxes 4,376,938 7,375,000
Revenue bond debt 13,816,786 13,850,000
Parking in Lieu of Fee 90,621 36,879
Capital projects 789,563 475,000
Total investment in governmental funds capital assets 80,730,529$ 77,133,879$
108
Schedule by Function and Activity
Capital Assets Used in the Operation of Governmental Funds
September 30, 2017
Machinery
Non-Building and
Functions / Programs Land Buildings Improvements Equipment Infrastructure Total
General government:
Legislative -$ -$ -$ -$ -$ -$
City manager - - - 49,954 - 49,954
City clerk - - - 4,003 - 4,003
Administrative services - - 1,100 49,254 - 50,354
MIS - 5,841 56,151 623,753 - 685,745
Audio visual/broadcast - - - 307,888 - 307,888
Facilities maintenance - 795,885 21,187 275,468 - 1,092,540
Community development - 84,426 - 52,944 - 137,370
Non-departmental 3,718,391 6,184,989 126,636 204,375 52,700 10,287,091
Total general government 3,718,391 7,071,141 205,074 1,567,639 52,700 12,614,945
Public safety:
Special operations - - - 38,621 - 38,621
Administration 9,560 3,347,152 89,320 416,014 - 3,862,046
School resource - - - 42,661 - 42,661
Road patrol - - - 2,934,173 - 2,934,173
Community policing - - - 13,863 - 13,863
Code enforcement - - - 54,856 - 54,856
Investigations - - 1,700 254,273 - 255,973
Support services - - - 50,516 - 50,516
Communications - - 16,404 272,358 - 288,762
Building department - - - 20,106 - 20,106
Total public safety 9,560 3,347,152 107,424 4,097,441 - 7,561,577
Transportation:
Engineering - - - 109,158 2,257 111,415
Central garage - 130,489 115,231 213,687 674 460,081
Roads and drainage 47,125 166,909 1,087,624 1,017,528 20,119,105 22,438,291
Total transportation 47,125 297,398 1,202,855 1,340,373 20,122,036 23,009,787
Economic environment:
Non-departmental 2,308,392 1,040,590 6,562 - - 3,355,544
Physical environment:
Stormwater - - 3,870 1,972,608 19,828,160 21,804,638
Cemetery 572,181 201,153 78,354 67,316 22,717 941,721
Total physical environment 572,181 201,153 82,224 2,039,924 19,850,877 22,746,359
Culture/recreation:
Parks and recreation 1,735,401 1,384,618 5,267,099 598,712 2,074,598 11,060,428
Total 8,391,050$ 13,342,052$ 6,871,238$ 9,644,089$ 42,100,211$ 80,348,640
Construction in progress 381,889
Total 80,730,529$
CITY OF SEBASTIAN, FLORIDA
109
Schedule of Changes by Function and Activity
Capital Assets Used in the Operation of Governmental Funds
September 30, 2017
Capital Assets Capital Assets
October 1, Transfers Transfers September 30,
Functions / Programs 2016 Additions Disposals In Out 2017
General government:
Legislative 784$ -$ -$ -$ 784$ -$
City manager 24,443 - - 25,511 - 49,954
City clerk 235,585 - - - 231,582 4,003
Administrative services 49,004 1,350 - - - 50,354
MIS 650,218 21,763 7,331 33,215 12,120 685,745
Audio visual/broadcast 35,819 28,367 - 243,702 - 307,888
Facilities maintenance 872,134 220,561 1,284 1,129 - 1,092,540
Community development 146,382 - 975 - 8,037 137,370
Non-departmental 10,215,628 71,463 - - - 10,287,091
Total general government 12,229,997 343,504 9,590 303,557 252,523 12,614,945
Public safety:
Special operations 43,532 - 4,911 - - 38,621
Administration 3,862,593 9,294 9,841 - - 3,862,046
School resource 42,661 - - - - 42,661
Road patrol 2,746,835 336,061 124,500 - 24,223 2,934,173
Community policing 13,863 - - - - 13,863
Code enforcement 54,856 - - - - 54,856
Investigations 265,880 5,188 13,795 - 1,300 255,973
Support services 50,516 - - - - 50,516
Communications 225,373 63,389 - - - 288,762
Building department 20,106 - - - - 20,106
Total public safety 7,326,215 413,932 153,047 - 25,523 7,561,577
Transportation:
Engineering 6,478 79,187 27,225 53,349 374 111,415
Central garage 445,011 28,570 13,500 - - 460,081
Roads and drainage 20,564,290 2,039,548 87,061 374 78,860 22,438,291
Total transportation 21,015,779 2,147,305 127,786 53,723 79,234 23,009,787
Economic environment:
Non-departmental 3,355,544 - - - - 3,355,544
Physical environment:
Stormwater 21,376,799 432,074 4,235 - - 21,804,638
Cemetery 822,824 119,134 237 - - 941,721
Total physical environment 22,199,623 551,208 4,472 - - 22,746,359
Culture/recreation:
Parks and recreation 10,779,686 285,428 4,686 - - 11,060,428
Total 76,906,844 3,741,377 299,581 357,280 357,280 80,348,640
Construction in progress 227,035 3,896,230 3,741,376 - - 381,889
Total 77,133,879$ 7,637,607$ 4,040,957$ 357,280$ 357,280$ 80,730,529$
CITY OF SEBASTIAN, FLORIDA
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
2017 2016 2015 2014 2013
Governmental activities
Net investment in capital assets 37,461,026$ 35,886,087$ 35,220,857$ 35,210,526$ 32,038,749$
Restricted 5,113,543 5,209,372 4,997,724 5,115,627 5,839,440
Unrestricted 1,236,088 3,615,777 3,467,014 3,330,400 4,577,440
Total governmental activities net position 43,810,657$ 44,711,236$ 43,685,595$ 43,656,553$ 42,455,629$
Business-type activities
Net investment in capital assets 13,384,969$ 11,989,666$ 10,517,895$ 10,439,804$ 10,846,501$
Restricted - - - - -
Unrestricted (1,008,976) (717,053) 67,779 (103,116) (306,497)
Total business-type activities net position 12,375,993$ 11,272,613$ 10,585,674$ 10,336,688$ 10,540,004$
Primary Government
Net investment in capital assets 50,845,995$ 47,875,753$ 45,738,752$ 45,650,330$ 42,885,250$
Restricted 5,113,543 5,209,372 4,997,724 5,115,627 5,839,440
Unrestricted 227,112 2,898,724 3,534,793 3,227,284 4,270,943
Total primary government net position 56,186,650$ 55,983,849$ 54,271,269$ 53,993,241$ 52,995,633$
Fiscal Year
114
Table 1 - Unaudited
2012 2011 2010 2009 2008
31,500,173$ 31,541,953$ 28,938,587$ 26,744,896$ 24,133,550$
6,192,777 5,668,155 8,757,043 8,197,018 9,215,801
3,607,228 4,052,751 3,889,011 4,502,440 5,035,184
41,300,178$ 41,262,859$ 41,584,641$ 39,444,354$ 38,384,535$
11,181,823$ 11,850,561$ 11,389,704$ 10,725,676$ 9,111,251$
- - - 98,320 570,149
(490,298) (644,620) (342,340) 86,517 753,076
10,691,525$ 11,205,941$ 11,047,364$ 10,910,513$ 10,434,476$
42,681,996$ 43,392,514$ 40,328,291$ 37,470,572$ 33,244,801$
6,192,777 5,668,155 8,757,043 8,295,338 9,785,950
3,116,930 3,408,131 3,546,671 4,588,957 5,788,260
51,991,703$ 52,468,800$ 52,632,005$ 50,354,867$ 48,819,011$
Fiscal Year
115
CITY OF SEBASTIAN, FLORIDA
Changes in Net Position
Last Ten Fiscal Years
2017 2016 2015 2014 2013
Expenses
Governmental activities:
General government 3,379,369$ 3,285,607$ 3,015,536$ 2,923,398$ 2,784,485$
Public safety 6,549,037 5,476,136 5,164,197 4,908,374 4,928,203
Physical environment 3,769,377 2,538,752 2,759,461 2,310,539 2,039,380
Transportation 2,279,149 1,861,946 2,024,814 1,828,569 1,845,429
Economic environment 106,577 364,675 194,630 247,891 155,214
Culture and recreation 1,326,245 1,191,488 1,293,246 1,229,369 1,232,345
Interest on debt 63,141 82,943 100,468 235,071 368,432
Total governmental activities expenses 17,472,895 14,801,547 14,552,352 13,683,211 13,353,488
Business-type activities:
Golf Course 1,537,332 1,584,214 1,409,829 1,406,770 1,377,039
Airport 1,361,134 1,197,549 1,038,361 1,031,464 1,146,905
Building 586,752 546,649 531,087 465,717 417,887
Total business-type activities expenses 3,485,218 3,328,412 2,979,277 2,903,951 2,941,831
Total primary government expenses 20,958,113 18,129,959 17,531,629 16,587,162 16,295,319
Program revenue
Governmental activities:
Charges for services:
General government 362,631 374,581 372,255 407,068 314,158
Public safety 124,800 98,446 80,763 76,132 67,297
Physical environment 1,021,038 1,049,735 1,087,642 1,073,015 1,101,864
Culture and recreation 48,781 53,959 67,940 67,371 70,982
Operating grants and contributions 250,292 323,101 345,937 186,295 332,627
Capital grants and contributions 947,274 809,932 994,546 739,785 770,123
Total governmental activities program revenue 2,754,816 2,709,754 2,949,083 2,549,666 2,657,051
Business-type activities:
Charges for services:
Golf Course 1,058,939 1,135,357 1,333,189 1,277,660 1,302,441
Airport 499,321 516,403 457,318 470,703 481,759
Building 747,950 810,069 712,620 700,751 706,964
Capital grants and contributions 1,566,737 841,668 702,154 235,215 230,868
Total business-type activities program revenue 3,989,002 3,303,497 3,205,281 2,684,329 2,722,032
Total primary government program revenue 6,743,818 6,013,251 6,154,364 5,233,995 5,379,083
Net (expense) revenue
Governmental activities (14,718,079) (12,091,793) (11,603,269) (11,133,545) (10,696,437)
Business-type activities 503,784 (24,915) 226,004 (219,622) (219,799)
Total primary government net
(expense) revenue (14,214,295)$ (12,116,708)$ (11,377,265)$ (11,353,167)$ (10,916,236)$
Fiscal Year
116
Table 2 - Unaudited
2012 2011 2010 2009 2008
2,640,677$ 2,766,575$ 3,309,381$ 3,169,851$ 3,375,178$
5,025,274 5,546,632 5,720,933 5,420,585 5,226,512
2,007,902 1,558,974 1,947,605 1,347,771 1,805,755
1,800,432 2,263,367 1,863,551 3,437,724 2,111,360
170,960 208,518 135,885 167,470 113,101
1,239,512 1,227,198 1,240,383 1,073,249 1,420,734
562,496 546,103 566,410 730,100 634,891
13,447,253 14,117,367 14,784,148 15,346,750 14,687,531
1,394,731 1,355,266 1,388,158 1,477,299 1,488,472
1,166,588 1,188,788 1,067,525 1,079,869 1,099,653
397,295 470,406 496,800 533,641 605,422
2,958,614 3,014,460 2,952,483 3,090,809 3,193,547
16,405,867 17,131,827 17,736,631 18,437,559 17,881,078
214,488 197,945 203,915 220,073 353,836
66,474 92,350 118,368 95,606 85,009
876,693 868,059 881,338 908,829 903,285
66,954 61,353 62,046 66,540 83,378
187,333 196,534 210,050 228,002 786,016
791,265 838,242 3,178,618 1,865,174 835,607
2,203,207 2,254,483 4,654,335 3,384,224 3,047,131
1,394,844 1,382,421 1,335,647 1,406,956 1,438,233
491,367 485,229 468,698 438,485 523,989
419,705 401,021 356,264 358,947 347,189
150,083 900,340 904,853 1,356,914 494,098
2,455,999 3,169,011 3,065,462 3,561,302 2,803,509
4,659,206 5,423,494 7,719,797 6,945,526 5,850,640
(11,244,046) (11,862,884) (10,129,813) (11,962,526) (11,640,400)
(502,615) 154,551 112,979 470,493 (390,038)
(11,746,661)$ (11,708,333)$ (10,016,834)$ (11,492,033)$ (12,030,438)$
continued…
Fiscal Year
117
CITY OF SEBASTIAN, FLORIDA
Changes in Net Position
Last Ten Fiscal Years
2017 2016 2015 2014 2013
General revenue and other changes in net position
Governmental activities:
Property taxes, levied for general purposes 4,147,115$ 3,942,048$ 3,594,210$ 3,248,113$ 3,221,304$
Sales and use taxes 5,945,386 5,762,921 5,555,270 5,320,051 5,123,046
Franchise fees 1,271,403 1,257,430 1,241,515 1,190,233 1,118,886
State shared revenues not restricted
to specific programs 2,616,522 2,466,546 2,365,137 2,208,700 2,063,450
Investment earnings 135,614 77,317 65,256 43,293 74,650
Miscellaneous 290,269 316,239 240,179 338,901 315,296
Transfers (588,809) (705,067) 2,988 (14,822) (37,734)
Total governmental activities 13,817,500 13,117,434 13,064,555 12,334,469 11,878,898
Business-type activities:
Investment earnings 10,787 6,787 5,368 1,484 4,391
Miscellaneous - - 20,602 - 274
Transfers 588,809 705,067 (2,988) 14,822 37,734
Total business-type activities 599,596 711,854 22,982 16,306 42,399
Total primary government general revenue 14,417,096 13,829,288 13,087,537 12,350,775 11,921,297
Change in net position
Governmental activities (900,579) 1,025,641 1,461,286 1,200,924 1,182,461
Business-type activities 1,103,380 686,939 248,986 (203,316) (177,400)
202,801$ 1,712,580$ 1,710,272$ 997,608$ 1,005,061$
Fiscal Year
Total primary government change in net
position
118
2012 2011 2010 2009 2008
3,063,495$ 3,453,778$ 4,164,128$ 4,801,924$ 5,149,047$
4,852,413 4,751,021 4,765,200 4,670,106 4,753,718
1,124,568 1,184,686 1,228,692 1,327,253 1,199,762
1,934,733 1,868,555 1,825,215 1,821,347 1,989,606
82,129 111,943 144,432 261,203 634,919
201,538 171,119 149,453 140,512 159,300
22,489 - (7,020) - -
11,281,365 11,541,102 12,270,100 13,022,345 13,886,352
6,563 4,026 15,658 5,544 54,237
4,125 - 1,194 - -
(22,489) - 7,020 - -
(11,801) 4,026 23,872 5,544 54,237
11,269,564 11,545,128 12,293,972 13,027,889 13,940,589
37,319 (321,782) 2,140,287 1,059,819 2,245,952
(514,416) 158,577 136,851 476,037 (335,801)
(477,097)$ (163,205)$ 2,277,138$ 1,535,856$ 1,910,151$
concluded
Fiscal Year
119
CITY OF SEBASTIAN, FLORIDA
Fund Balances, Governmental Funds
Last Ten Fiscal Years
2017 2016 2015 2014 2013
Governmental funds
General fund:
Nonspendable 342,505$ 227,651$ 316,036$ 369,329$ 368,564$
Restricted 63,016 46,262 38,544 7,969 28,632
Committed - - - - -
Assigned 12,350 10,840 8,692 7,129 7,020
Unassigned 4,089,275 5,526,675 5,289,322 5,348,905 5,065,242
Total General fund 4,507,146 5,811,428 5,652,594 5,733,332 5,469,458
All other governmental funds:
Nonspendable 941,061 996,778 928,758 1,390,073 1,323,838
Restricted 4,131,416 4,193,653 4,181,787 3,756,950 4,647,950
Committed 995,144 977,868 815,688 625,007 589,364
Assigned - - - - -
Unassigned (26,370) (129,401) (58,618) (64,875) -
Total all other governmental funds 6,041,251 6,038,898 5,867,615 5,707,155 6,561,152
Total governmental funds 10,548,397$ 11,850,326$ 11,520,209$ 11,440,487$ 12,030,610$
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
2012 2011 2010 2009 2008
370,450$ 346,995$ 352,248$ 357,696$ 381,528$
- - - - -
2,861,708 2,949,139 3,063,585 3,083,463 3,502,560
35,707 21,911 31,656 1,983 33,453
1,734,307 1,784,413 2 2,164,910 2,324,972 2,390,641
5,002,172 5,102,458 5,612,399 5,768,114 6,308,182
1,289,693 1,494,779 859,463 830,029 771,927
4,371,826 4,748,376 7,897,580 8,557,389 1 12,446,260
719,686 - - - -
- - - - -
- - - - -
6,381,205 6,243,155 8,757,043 9,387,418 13,218,187
11,383,377$ 11,345,613$ 14,369,442$ 15,155,532$ 19,526,369$
Fiscal Year
121
CITY OF SEBASTIAN, FLORIDA
Changes in Fund Balances, Governmental Funds
For the Last Ten Fiscal Years
2017 2016 2015 2014 2013
Revenues
Taxes 10,738,778$ 10,326,654$ 9,782,109$ 9,123,879$ 8,894,880$
Franchise fees 1,271,403 1,257,430 1,241,515 1,190,233 1,118,886
Licenses, fees and permits 135,900 136,614 147,219 138,564 45,500
Intergovernmental 2,991,190 2,709,066 2,742,950 2,373,695 2,411,395
Impact fees 102,700 163,800 281,450 168,350 169,000
Charges for services 1,353,009 1,391,495 1,397,395 1,431,101 1,462,522
Fines 96,842 73,059 63,035 54,140 60,190
Investment earnings 135,614 77,317 65,256 43,293 78,411
Contributions and donations 45,420 80,581 48,124 36,801 22,406
Other revenues 290,269 316,239 241,597 338,901 315,296
Total revenues 17,161,125 16,532,255 16,010,650 14,898,957 14,578,486
Expenditures
Current:
General government 2,943,790 3,053,554 2,717,049 2,575,605 2,447,893
Public safety 5,134,388 4,968,258 4,666,343 4,623,060 4,425,000
Physical environment 2,565,532 1,316,697 1,498,706 1,110,788 1,075,162
Transportation 1,333,927 1,168,919 1,187,871 1,165,004 1,158,945
Economic environment 73,491 331,589 161,545 144,612 122,730
Culture and recreation 927,374 849,789 893,394 888,795 847,781
Debt service:
Principal 931,000 1,935,000 1,567,000 2,306,000 1,307,000
Interest 68,512 92,907 108,678 413,995 393,447
Capital outlay 3,896,231 1,780,358 3,133,330 2,246,399 2,115,561
Total expenditures 17,874,245 15,497,071 15,933,916 15,474,258 13,893,519
Revenues over (under) expenditures (713,120) 1,035,184 76,734 (575,301) 684,967
Other financing sources (Uses)
Issuance of long-term debt - - - - -
Transfers in 7,184,858 3,694,279 4,989,726 3,903,204 3,598,949
Transfers out (7,773,667) (4,399,346) (4,986,738) (3,918,026) (3,636,683)
Total other financing sources (uses)(588,809) (705,067) 2,988 (14,822) (37,734)
Net change in fund balances (1,301,929)$ 330,117$ 79,722$ (590,123)$ 647,233$
Debt service as a percentage of
noncapital expenditures (1)7.2%14.8%13.1%20.6%14.4%
(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
2012 2011 2010 2009 2008
8,465,990$ 8,762,729$ 9,525,074$ 10,065,806$ 10,504,155$
1,124,568 1,184,686 1,228,692 1,327,253 1,199,762
22,431 1,121,967 1,154,739 1,186,161 1,209,617
2,088,038 23,646 33,182 29,151 163,471
58,500 81,534 90,948 88,938 65,246
1,158,075 2,249,447 4,572,550 3,270,854 2,674,761
57,575 42,250 26,000 13,975 32,825
86,516 - - 3,849 -
216,091 103,795 228,216 250,914 647,312
201,888 224,823 169,039 176,430 461,553
13,479,672 13,794,877 17,028,440 16,413,331 16,958,702
2,410,345 2,539,211 2,699,289 2,976,896 3,087,789
4,523,802 5,030,708 4,938,147 4,926,714 4,677,618
1,042,349 1,166,309 1,210,823 1,448,067 1,368,593
1,208,411 1,217,521 1,405,310 1,696,254 1,545,045
138,531 188,918 129,352 167,470 113,101
876,502 903,836 977,780 1,148,408 1,079,379
3,321,000 1,203,000 2,142,190 1,218,995 1,326,182
472,399 521,152 577,593 706,093 611,554
1,767,058 4,048,051 6,189,026 6,495,271 3,634,910
15,760,397 16,818,706 20,269,510 20,784,168 17,444,171
(2,280,725) (3,023,829) (3,241,070) (4,370,837) (485,469)
2,296,000 - 2,462,000 - -
3,694,765 5,376,658 4,486,626 5,196,376 5,679,896
(3,672,276) (5,376,658) (4,493,646) (5,196,376) (5,679,896)
2,318,489 - 2,454,980 - -
37,764$ (3,023,829)$ (786,090)$ (4,370,837)$ (485,469)$
27.1%13.5%19.3%13.5%14.0%
Fiscal Year
123
CITY OF SEBASTIAN, FLORIDA
Program Revenues by Function/Program
Last Ten Fiscal Years
2017 2016 2015 2014 2013
Program revenues
Governmental activities:
General government 390,921$ 479,395$ 534,524$ 413,727$ 471,299$
Public safety 334,270 306,381 254,381 246,010 233,309
Physical environment 1,021,038 1,049,735 1,087,642 1,073,015 1,101,864
Transportation 687,310 656,484 643,146 565,692 560,713
Economic environment - - - 15,501 -
Culture and recreation 321,277 217,759 429,390 235,721 289,866
Total governmental activities 2,754,816 2,709,754 2,949,083 2,549,666 2,657,051
Business-type activities:
Charges for services:
Golf Course 1,170,591 1,135,357 1,333,189 1,277,660 1,302,441
Airport 2,070,461 1,358,071 1,159,472 705,918 712,627
Building 1 747,950 810,069 712,620 700,751 706,964
Total business-type activities 3,989,002 3,303,497 3,205,281 2,684,329 2,722,032
Total primary government 6,743,818$ 6,013,251$ 6,154,364$ 5,233,995$ 5,379,083$
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
2012 2011 2010 2009 2008
230,550$ 243,039$ 209,144$ 226,003$ 377,305$
228,392 234,437 304,630 299,119 515,997
876,693 930,018 881,338 1,408,829 1,256,277
560,055 743,383 614,305 612,335 619,949
13,998 - 2,556,872 6,000 -
293,519 103,606 88,046 831,938 277,603
2,203,207 2,254,483 4,654,335 3,384,224 3,047,131
1,394,892 1,382,421 1,335,647 1,406,955 1,438,233
641,455 1,385,569 1,373,551 1,795,399 1,018,087
426,215 401,021 356,264 358,948 347,189
2,462,562 3,169,011 3,065,462 3,561,302 2,803,509
4,665,769$ 5,423,494$ 7,719,797$ 6,945,526$ 5,850,640$
Fiscal Year
125
CITY OF SEBASTIAN, FLORIDA Table 6 - Unaudited
Tax Revenues by Source
Governmental Funds
For the Last Ten Fiscal Years
(Rate per $1,000 of assessed value)
Property Public Sales Motor Millage
Tax Year Fiscal Year Taxes 1 Utility 2 Tax 3 Fuel Total Rate
2007 2008 5,149,047$ 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
2016 2017 4,147,115 2,708,980 3,207,905 674,778 10,738,778 3.8000
1 Property taxes comprise the City's largest and most significant own-source revenue.
2 Public utility taxes include a 10% tax on electric, water, gas and propane purchases.
3 Sales taxes are a one-cent tax on the first $5,000 sales price of any single taxable item.
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
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 5.9468 7.9550 - 7.9550 1.69930
2016 2017 3.8000 0.0000 3.8000 5.9755 7.4100 - 7.4100 1.51700
Note:
1 Millage includes General Fund, MSTUs, Emergency Services District and Land Bonds
2 All Special Taxing Districts
Source: Indian River County Property Tax Collector'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 $1,000 of the taxable value.
City Direct Rates Overlapping Rates
County School Board
127
CITY OF SEBASTIAN, FLORIDA
Actual and Estimated Value of Taxable Property
For the Last Ten Fiscal Years
Tax Fiscal Assessed Estimated Assessed Estimated
Year Year Value Actual Value Value Actual Value
2007 2008 2,054,408,055$ 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
2016 2017 1,578,743,546 1,973,429,433 62,277,711 62,277,711
Source: Indian River County Property Appraiser
Real Property Personal Property
67.8%
53.2%54.2%55.0%53.5%
52.6%54.1% 55.0%
55.5%56.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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
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%
486,428,425 1,154,592,832 2,035,707,144 56.7%
129
CITY OF SEBASTIAN, FLORIDA Table 9 - Unaudited
Principal Property Taxpayers
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)23,600,954$ 1 2.04 % 15,508,499$ 1 1.18 %
Comcast of Florida, Inc. (Communications)9,479,934 2 0.82 - --
Wal-Mart Stores, Inc. (Retail)8,463,707 3 0.73 14,155,041 2 1.07
Sebastian Senior Real Estate, LLC (Senior Group Home) 7,925,066 4 0.69 - --
Park Place Community, LLC (Rental/Retail)6,606,477 5 0.57 7,620,573 8 0.58
PSM Sebastian, LLC 6,159,680 6 0.53 8,089,710 6 0.61
BW US 1, Inc. (Commercial)6,139,869 7 0.53 7,361,730 9 0.56
Hartwell Groves, Inc. (Agriculture)4,558,541 8 0.39 - --
CREARX 4,544,251 9 0.39 - --
Sebastian Inlet Marina & Trading Co, Inc. -
(Restaurant/Hotel)4,406,676 10 0.38 - --
Chance Holding LLC (Development)- -- 9,358,870 3 0.71
IPF/Sebastian LLC (Retail)- -- 8,606,240 4 0.65
KB Homes Treasure Coast LLC (Construction)- -- 8,227,760 5 0.62
Bellsouth Communications (Utility/Telephone)- -- 7,772,461 7 0.59
Sebastian Crossing LLC (Construction)- -- 6,741,200 10 0.51
81,885,155$ 7.07 % 93,442,084$ 7.08 %
Total Taxable Value 1,154,592,832$ 1,319,602,616$
Source: Indian River County Property Appraiser
2017 Fiscal Year 2008 Fiscal Year
7.07%
92.93%
Concentration of 2017 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
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
2016 2017 3,943,212 3,726,976 94.52 77,898 3,804,874 96.49
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
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Millions
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 Stormwater Golf Course Total Percentage
Fiscal Improvement Sales Tax Utility Revenue Revenue Primary of Personal Per
Year Notes Bonds/Notes Bonds/Notes Bonds Government Income Capita
1 1 2
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
2017 1,263,000 - 1,912,000 - 3,175,000 3% 131
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.
Business-Type
Activities
-
20.00
40.00
60.00
80.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Millions
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
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%2,065
2017 57,729,642 3,175,000 54,554,642 5.50%2,255
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
2017 2016 2015 2014 2013
Debt limit 57,729,642$ 48,340,610$ 48,340,610$ 44,250,493$ 41,034,956$
Total net debt applicable to limit 3,175,000 6,041,000 6,041,000 7,608,000 9,914,000
Legal debt margin 54,554,642$ 42,299,610$ 42,299,610$ 36,642,493$ 31,120,956$
Total net debt applicable to the
limit as a percentage of debt limit 5.50%12.50%12.50% 17.19% 24.16%
Assessed value 1,641,021,257$
Less: Exempt property (486,428,425)
1,154,592,832
Debt limit (5% of assessed value) 57,729,642
Debt applicable to limit:
Revenue bonds/notes 3,175,000
Total net debt applicable to limit 3,175,000
Legal debt margin 54,554,642$
The City of Sebastian has no overlapping general obligation bonded debt for the year ended September 30, 2017.
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
2012 2011 2010 2009 2008
43,872,903$ 49,337,437$ 57,457,057$ 65,980,131$ 89,250,274$
11,221,000 12,246,000 13,449,000 13,129,203 14,348,197
32,651,903$ 37,091,437$ 44,008,057$ 52,850,928$ 74,902,077$
25.58% 24.82% 23.41% 19.90% 16.08%
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
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 - - - - - - -
2017 - - - - - - -
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 was 1.35. Bank notes were used in 2011 to refund the bonds.
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
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
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 10,380,777 68,491 47,446 6,132 6.2 4.8
2017 24,192 4 4 4 6,122 4.3 3.7
Sources:
1
2
3
4 Information not yet available.
5
Median
Household
Income 1
Unemployment
Rate 1
State
Unemployment
Rate
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.
138
Table 15 - Unaudited
Property Total
Taxes Taxable
Per Property
Capita Value 3
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
170.38 1,037,687,270
171.43 1,154,592,832
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)2,073 1 3.26 % 2,295 1 4.41 %
Indian River Medical Center (Healthcare)1,753 2 2.76 1,671 3 3.21
Publix Supermarkets (Food/Beverage)1,250 3 1.97 1,104 4 2.12
Indian River County (Government)820 4 1.29 1,706 2 3.28
Piper Aircraft, Inc. (Manufacturer)720 5 1.13 1,063 5 2.04
Sebastian River Medical Center (Healthcare)595 6 0.94 565 6 1.09
John's Island (Residential/Resort)584 7 0.92 475 8 0.91
Medical Data Systems (Collection Agency)500 8 0.79 188 19 0.36
City of Vero Beach (Government)409 9 0.64 561 7 1.08
Visiting Nurse Association (Healthcare)396 10 0.62 348 11 0.67
Wal-Mart (Retail)378 11 0.59 404 10 0.78
Indian River Estates (Retirement/Life care)350 12 0.55 442 9 0.85
CVS Warehouse/Distribution (Distribution)260 13 0.41 297 14 0.57
Captain Hirams (Restaurant/Resort)240 14 0.38 - - -
Disney Vero Beach (Resort Hotel)237 15 0.37 301 13 0.58
Sun Ag, Inc. (Agricultural)210 16 0.33 235 17 0.45
City of Sebastian (Government)179 17 0.28 199 18 0.38
Flight Safety International (Education)155 18 0.24 155 - 0.30
Grand Harbor Management (Developer)145 19 0.23 312 12 0.60
Saint Edward's School (Education)120 20 0.19 237 16 0.46
Dodgertown Complex (Sports)- - - 293 15 0.56
Macho Products, Inc./MDI (Manufacture)- - - 185 20 0.36
11,374 17.89 % 13,036 25.06 %
Total Average County Employees 63,597 52,042
Source: Indian River County Community Development Report
Note: Principal employers information available for Indian River County Only
Employer
Percentage of
Total County
Employment
2017
Percentage of
Total County
Employment
2008
140
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141
CITY OF SEBASTIAN, FLORIDA
Full-Time Equivalent City Government Employees By Function/Program
For the Last Ten Fiscal Years
2017 2016 2015 2014 2013 2012
General government
City council 2.5 2.5 2.5 2.5 2.5 2.5
City manager 2.5 2.5 2.0 2.0 2.0 2.0
City clerk 2.5 3.0 5.0 5.0 3.0 3.0
City attorney - - - - - -
Administrative Services 6.0 4.0 5.5 5.5 5.0 5.0
Finance - - - - - -
Management information 2.0 2.0 2.0 2.0 3.0 3.0
Audio/visual 2.5 1.0 - - - -
Human resources - - - - - -
Facilities maintenance 2.5 3.5 5.0 5.0 4.0 3.0
Community development 3.0 2.0 4.0 4.0 3.0 3.0
Public safety
Police 57.5 57.5 57.0 57.0 55.5 55.0
Building 5.0 5.0 5.0 5.0 5.0 4.0
Code enforcement 3.0 3.0 3.0 3.0 3.0 3.0
Transportation
Roads and drainage 11.5 11.0 10.0 10.0 10.0 10.0
Fleet management 3.5 3.5 3.5 3.5 3.5 3.5
Airport 3.0 1.0 1.0 1.0 2.0 3.0
Physical environment
Cemetery 1.5 2.0 2.0 2.0 2.0 1.0
Engineering - - - - - -
Stormwater utility 8.0 9.0 9.0 9.0 9.0 9.0
Culture and recreation
Parks and recreation 18.0 19.0 20.0 20.0 20.0 20.0
Golf course 13.0 10.0 10.0 10.0 10.0 10.0
Total 147.5 141.5 146.5 146.5 142.5 140.0
Source: City of Sebastian, Florida 2008-2017 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
2011 2010 2009 2008
2.5 2.5 2.5 2.5
2.0 2.5 2.5 2.5
3.0 3.0 3.0 3.0
- - 2.0 2.0
5.0 5.0 - -
- - 5.0 5.0
4.0 3.0 3.0 3.0
- - - -
- - 2.0 3.0
2.0 2.0 2.0 2.0
4.0 5.0 5.0 5.0
58.0 58.0 59.0 58.0
5.0 5.0 5.0 6.0
3.0 2.5 2.5 2.5
12.0 12.0 10.0 10.0
2.5 3.5 3.5 2.5
3.0 3.0 3.0 3.0
1.0 2.0 2.0 2.0
- - 7.0 7.0
12.0 12.0 11.0 13.0
21.0 23.0 23.5 23.5
10.5 10.5 9.0 9.0
150.5 154.5 162.5 164.5
Full-time Equivalent Employees as of September 30
143
CITY OF SEBASTIAN, FLORIDA
Operating Indicators By Function/Program
For the Last Ten Fiscal Years
2017 2016 2015 2014 2013
General government
Number of annexations approved - - - - 2
Acres of annexed property - - - - 4.00
Purchase orders issued 289 328 254 242 233
Public Safety
Police
Physical arrests 356 258 287 347 440
Traffic violations 3,192 3,065 3,725 4,587 4,491
Parking violations 49 73 60 29 80
Building
Construction permits issued 1 147 191 142 175 170
Estimated value of construction (in millions)37.2$ 43.4$ 40.6$ 40.0$ 35.9$
Transportation
Road maintenance (man hours)250 250 200 200 300
Asphalt for road maintenance (tons)20 20 10 20 30
Physical environment
Cemetery
Cemetery internments 62 61 71 67 65
Grave deeds sold 29 39 43 47 38
Stormwater
Swales maintained (miles)300 300 300 280 280
Ditches maintained (miles)80 75 75 50 50
Road crossings maintained 70 68 68 68 50
Culture and recreation
Program participants 6,268 7,280 7,647 7,571 8,113
Number of discount cards 657 631 653 653 710
Number of golf course memberships 119 127 93 84 86
Average daily golf revenue 3,100$ 3,100$ 3,653$ 3,500$ 3,569$
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
2012 2011 2010 2009 2008
- - 1 3 -
- - 5.90 26.00 -
201 228 216 288 254
441 500 487 543 662
4,319 5,941 4,083 4,849 4,418
167 242 87 50 208
66 51 36 23 55
14.7$ 10.2$ 6.6$ 5.1$ 13.3$
500 700 1,264 600 538
50 50 103 328 358
65 54 66 74 68
38 34 33 39 46
280 280 280 280 280
50 50 50 50 50
50 40 40 30 30
9,713 8,649 11,701 13,465 12,910
786 735 844 879 950
88 94 96 95 97
3,822$ 3,787$ 3,673$ 4,000$ 3,988$
Fiscal Year
145
CITY OF SEBASTIAN, FLORIDA
Capital Asset Statistics By Function/Program
For the Last Ten Fiscal Years
2017 2016 2015 2014 2013
General Government
Square footage occupied 21,500 21,500 21,500 21,500 21,500
Departmental vehicles 6 4 5 5 6
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 71 70 66 62 61
Building inspector vehicles 4 4 4 3 3
Transportation
Streets (miles)156 156 156 156 156
Streetlights 1 1,100 1,085 1,085 1,085 1,080
Airport vehicles 4 4 3 1 1
Public service vehicles 12 12 12 15 17
Physical environment
Public service vehicles 19 17 17 10 10
Culture and recreation
Parks vehicles 5 6 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 12 9 12
Golf course vehicles - - - 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
2012 2011 2010 2009 2008
21,500 21,500 21,500 21,500 21,500
1 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
66 67 63 63 62
3 3 3 4 4
156 156 156 156 156
1,228 1,236 1,230 1,240 1,229
1 1 1 1 1
17 19 22 18 23
9 9 15 7 11
18 18 18 18 15
2 2 2 2 2
315.01 315.01 315.01 233.79 233.79
4,859 4,859 4,859 4,859 4,859
13 14 13 13 13
1 1 1 1 1
Fiscal Year
147
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148
INTERNAL CONTROL AND COMPLIANCE
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150
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, 2017, and the related notes to the financial statements, which collectively comprise the City’s
basic financial statements, and have issued our report thereon dated March 20, 2018.
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.
March 20, 2018
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
rehmann.com
151
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.
152
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
Report on the Financial Statements
Auditors' Responsibility
Other Reports and Schedule
Prior Audit Findings
March 20, 2018
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, 2017 and have issued our report thereon dated March 20, 2018.
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; Independent Auditor's Report on Compliance for Each Major State
Project and Report on Internal Control over Compliance; Schedule of Findings and Questioned Costs;
and Independent Accountant's Report on an examination conducted in accordance with AICPA
Professional Standards , AT-C Section 315, regarding compliance requirements in accordance with
Chapter 10.550, Rules of the Auditor General. Disclosures in those reports and schedule, which are
dated March 20, 2018, 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
153
Official Title and Legal Authority
Financial Condition and Management
Annual Financial Report
Special District Component Units
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any
recommendations to improve financial management. In connection with our audit, we did not have any
such recommendations.
Section 10.554(1)(i)5.d. Rules of the Auditor General, requires, if appropriate, that we communicate
the failure of a special district that is a component unit of a county, municipality, or special district, to
provide 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 did not note any special district
component units that failed to provide the necessary information for proper reporting in accordance
with Section 218.39(3)(b), 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., and 10.556(7) Rules of the Auditor General, require us to apply appropriate
procedures and communicate 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, 2017, 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, 2017. In
connection with our audit, we determined that these two reports were in agreement.
154
Additional Matters
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and 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 warrants the
attention of those charged with governance. In connection with our audit, we did not note any such
findings.
155
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156
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, 2017. 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, 2017.
March 20, 2018
Rehmann Robson
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
rehmann.com
157