HomeMy WebLinkAbout2005 - 2006
The City of Sebastian Municipal Airport Administration Building
For the Fiscal Year October 1, 2005 through September 30, 2006
The City of Sebastian Municipal Airport Administration Building project was
officially completed in October 2006. The total construction period for the
building was approximately 24 months. The project cost is approximately $2
million, 40% funded by the Florida Department of Transportation and 60%
funded by the City of Sebastian.
A dedication ceremony was held on October 27, 2006. The new one story,10,000
square foot building is designed to accommodate the Airport and the Public
Works Administration staffs, a pilot lounge, as well as extra space for future
leasing opportunities.
CIN OF
SEBASTIAN, FLORIDA
GTY OF
.~~d'i.~l lrrr _
Comprehensive Annual Financial Report
For the Year Ended September 30, 2006
CITY COUNCIL
Brian S. Burkeen ................................ Mayor
Andrea Coy ..........................................Councilmember
Nathan McCollum ............................... Councilmember
Sal Neglia ............................................ Councilmember
Al Paternoster ..................................... Councilmember
THIS PAGE INTENTIONALLY LEFT BLANK
INTRODUCTORY SECTION
This section contains the following subsections:
- Table of Contents
- Letter of Transmittal
- Certificate of Achievement for Excellence in Financial
Reporting for the Fiscal Year Ended September 30,
2005
- Organizational Chart
- List of Officials
CITY OF SEBASTIAN, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
SEPTEMBER 30, 2006
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Table of Contents .......................................................................................................................................... ii
Letter of Transmittal ...................................................................................................................................... v
Certificate of Achievement for Excellence in Financial Reporting ............................................................... ix
Organizational Chart ..................................................................................................................................... x
List of Officials ............................................................................................................................................. xi
FINANCIAL SECTION
Independent Auditors' Report ....................................................................................................................... 3
Management's Discussion and Analysis ....................................................................................................... 5
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets ......................................................................................................................... 15
Statement of Activities ............................................................................................................................ 16
Fund Financial Statements:
Balance Sheet -Governmental Funds .................................................................................................... 18
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds ........................................................................................................................... 20
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities ....................................................................... 22
Statement of Net Assets -Proprietary Funds ......................................................................................... 23
Statement of Revenues, Expenses, and Changes in Fund Net Assets -Proprietary Funds .................... 24
Statement of Cash Flows -Proprietary Funds ...................................................................................... 25
Statement of Fiduciary Net Assets -Fiduciary Funds ........................................................................... 27
Statement of Changes in Fiduciary Net Assets -Fiduciary Fund .......................................................... 28
Notes to Financial Statements .................................................................................................................. 29
Required Supplementary Information:
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -General Fund ........................................................................................................................... 49
Schedule of Revenues; Expenditures, and Changes in Fund Balances -Budget and
Actual -Discretionary Sales Tax Special Revenue Fund ...................................................................... 50
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual - Riverfront Redevelopment Agency Special Revenue Fund ..................................................... 51
Notes to the Required Supplementary Information -Budget Comparisons .............................................. 53
Police Officers' Pension Plan -Schedule of Contributions from the Employer and other
Contributing Entities .............................................................................................................................. 54
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet -Nonmajor Governmental Funds ....................................................................... 58
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -Nonmajor
Governmental Funds .................................................................................................................................. 62
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -Community Development Block Grant Special Revenue Fund .................................................. 66
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -Local Option Gas Tax Special Revenue Fund ............................................................................. 67
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -Recreation Impact Fee Special Revenue Fund ............................................................................ 68
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual - Stormwater Utility Special Revenue Fund .................................................................................. 69
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -Law Enforcement Forfeiture Special Revenue Fund .................................................................. 70
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual - G.R.E.A.T. Program Special Revenue Fund ............................................................................... 70
1i
Pase
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual - Stormwater Utility Revenue Bonds 2003 Debt Service Fund ..................................................... 71
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual -Discretionary Sales Surtax Revenue Bonds 2003 Debt Service Fund ......................................... 72
Statement of Changes in Assets and Liabilities -Agency Fund ................................................................... 73
Capital Assets Used in the Operation of Governmental Funds -Comparative
Schedule by Source ................................................................................................................................... 74
Capital Assets Used in the Operation of Governmental Funds -Schedule
by Function and Activity ........................................................................................................................... 75
Capital Assets Used in the Operation of Governmental Funds -Schedule of Changes
by Function and Activity ........................................................................................................................... 76
STATISTICAL SECTION (Unaudited)
Financial Trends
Net assets by Component -Last Six Fiscal Years .................................................................................... 78
Changes in Net Assets -Last Six Fiscal Years ........................................................................................ 80
Fund Balances, Governmental Funds -Last Ten Fiscal Years ................................................................ 84
Changes in Fund Balances, Governmental Funds -Last Ten Fiscal Years ............................................. 86
Program Revenues by Function/Program -Last Six Fiscal Years ........................................................... 88
Revenue Capacity
Tax Revenues by Source, Governmental Funds -Last Ten Fiscal Years ................................................ 90
Property Tax Rates, Direct and Overlapping Governments -Last Ten Fiscal Years ............................... 91
Assessed Valuation and Estimated True Values of Taxable Property -Last Ten Fiscal Years ............... 92
Principal Taxpayers -Year 2006 and Year 1998 ..................................................................................... 94
Property Tax Levies and Collections -Last Ten Fiscal Years ................................................................. 95
Debt Capacity
Ratios of Outstanding Debt by Type -Last Ten Fiscal Years ................................................................. 96
Computation of Legal Debt Margin -September 30, 2006 ...................................................................... 97
Direct and Overlapping Governmental Activities Debt, General Obligation Bonds -
September 30, 2006 .............................................................................................................................. 97
Ratios of General Bonded Debt Outstanding and Legal Debt Margin -Last Eight Fiscal Years ............ 98
Pledged Revenue Coverage -Last Ten Fiscal Years ............................................................................... 100
Economic and Demographic Information
Demographic and Economic Statistics -Last Ten Years ......................................................................... 102
Principal Employers -Year 2005 and Six Years Ago .............................................................................. 104
Operating Information
Full-time Equivalent City Government Employees by Function/Program -Last Ten Fiscal Years ........ 105
Operating Indicators by Function/Program -Last Eight Fiscal Years ..................................................... 106
Capital Asset Statistics by Function/Program -Last Eight Fiscal Years ................................................. 107
SINGLE AUDIT SECTION
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 ............................................................................................................. 111
Independent Auditors' Report on Compliance and Internal Control Over Compliance to Each
Major State Project .................................................................................................................................... 113
Schedule of Findings and Questioned Costs -State Projects ......................................................................... 115
Schedule of Expenditures of State Financial Assistance ............................................................................... 116
Notes to Schedule of Expenditures of State Financial Assistance ................................................................. 117
Independent Auditors' Management Letter ................................................................................................... 119
Response to Independent Auditors' Management Letter .............................................................................. 121
111
an of
. ~ ,'...
--~.
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
iv
CITY OF
HOME OF PELICAN ISLAND
1225 MAIN STREET • SEBASTIAN, FLORIDA 32958
TELEPHONE: (772) 589-5330 • FAX (772) 589-5570
January 31, 2007
Honorable Mayor and City Council
City of Sebastian, Florida
Dear Council Members:
We are submitting the Comprehensive Annual Financial Report of the City of Sebastian, Florida for the
fiscal year ended September 30, 2006, as prepared by the City's Finance department. State law requires
that every general-purpose local government publish within six months of the close of each fiscal year a
complete set of audited financial statements. This report is published to fulfill that requirement for the
fiscal year ended September 30, 2006.
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, Harris, Cotherman, Jones, Price & Associates, has issued an unqualified ("clean') opinion
on the City of Sebastian's financial statements for the year ended September 30, 2006. The independent
auditors' report is located on page 3 and 4.
Management's discussion and analysis (MD&A) immediately follows the independent auditors' report
and provides a narrative introduction, overview, and analysis of the basic financial statements. The
MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of the Government
The City 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.
The City of Sebastian 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
21,666 living in an area of approximately 14.6 square miles. The City is empowered to levy a property
tax on both real and personal property located within its boundaries. It also is empowered by state statute
v
to extend its corporate limits by annexation, which it has done from time to time. The City has seen
rapid growth in the past several years and it is anticipated to continue.
The City is a Florida municipal corporation with afive-member City Council. Council members serve a
two-year term. Annual elections are held on the second Tuesday in March and two members are elected
in even-numbered years and three members are elected in odd-numbered years. Elections are non-
partisan and at-large. Mayor and Vice Mayor are elected from among the members of every newly
seated Council at a Special meeting following the election each year. The City has operated under a
Council-City Manager form of government since 1989.
The City provides a wide range of services including general government administration, police
protection, the construction and maintenance of local roads, public works, recreational and cultural
activities, a golf course, a general aviation airport, and a building department to enforce building codes.
This report includes all funds of the City. In evaluating the City as a reporting entity, we have included
all component units for which the City Council is financially accountable. The component units have
been blended with the financial statements presented for the Primary Government because the
component unit's governing body is the same as the City Council or because the component unit
exclusively serves the City. The blended component units are the Riverfront Redevelopment Agency
and the Sebastian Police Officer's Pension Trust Fund.
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.
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 a strong retirement
community. Although the labor force fluctuates, unemployment in the region has been between 4% and
8.1% over the past ten years. Retail sales and the service industries remain the largest sectors of
employment in the Sebastian area. The historical overall unemployment rate for the area over the past
ten years and the projected unemployment rate for the next ten years are greater than that of the State of
Florida. This high number indicates that the influx of residents to the area continues to outpace job
creation. 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 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. This attracts a workforce with a higher than average
education and technical skills to the vicinity. The area median age for 2000 was 49.2 per U.S Census
Bureau and median household income for 2003 was $40,291 per the Florida Research & Economic
Database.
In FY 2006, the City of Sebastian experienced a decrease (35%) in building activity and an increase
(29%) in property value, which are consistent with the state and national trend. The overall local
economy is stable and the slow down on building activity level is expected to continue for FY 2007.
Long-term Financial Planning
The voters of Indian River County in November 2003 extended the Infrastructure Sales Surtax in the
amount of $.O1 per $1.00 sale for an additional fifteen years and seven months beginning in January
vi
2004. This Infrastructure Sales Surtax is estimated to provide the City in excess of $40 million dollars
over the life of the extension for the City's emergency vehicle and capital improvement needs.
Strong growth in the City continued and has provided the City funding for a high level of services to
City residents and visitors without increasing the property tax millage rate. Property tax revenues
increased 15.45% and the assessed value for real property has increased by 24%. Construction activity
in fiscal year 2006 was not as strong as fiscal year 2005, with 506 permits being issued for construction
with a value of $88.3 million. Unreserved, undesignated fund balance in the general fund (42.56% of
total general fund expenditure budget) exceeds the policy guidelines set by the Council for budgetary
and planning purposes (i.e., minimum of 25% of total general fund expenditure budget). In an effort to
be more in line with the adopted policy guideline, the City Council actually has reduced the fiscal year
2007 millage rate by 22.4%. The City faces challenges relative to growth in both residential and
commercially zoned areas. With the continued residential growth, there are parallel new commercial
developments. The Village Shops of Sebastian are nearing completion of Phase II, adding several new
retail buildings in the "historic fishing village" theme. Commercial growth on the west side of Sebastian
continues, with a new Publix grocery store and a new shopping center (Shoppes of Sebastian, Phase I)
offering dining and other retail amenities. Several new commercially zoned areas were annexed into the
City, and are in various stages of planning for new commercial developments including a Space Coast
Credit Union, Shoppes of Sebastian Phase II, Sebastian Crossing Commercial and Sebastian Crossroads
Plaza. Several industrial properties have also been developed providing additional service and
warehousing opportunities. These include two buildings in the Sebastian Industrial Park, new mini-
warehouse buildings in the 512 Commerce Center, a contractor trade building (Arnold's Air) and an
auto service building (Firehouse Garage).
Major Initiatives
Stormwater -The main focus of stormwater effort expended for the past fiscal year has been on the
City's Stormwater Management Program, including capital projects, maintenance, citizen response and
education, and forward planning. In fiscal year 2006, City Council initiated a citywide stormwater
drainage cleanup program by outsourcing. The phase I of the program involves swale and ditch clean up.
At the end of the fiscal year 2006, the phase I of the program had been completed and proven to be
successful and cost effective. The phase II of the program will mainly involve mowing and maintaining.
With the adoption of City Ordinance 05-16 (allows stormwater utility fees to be utilized to fund the
General Fund stormwater operation), the City's ability to deal with stormwater maintenance issues is
enhanced.
Traffic & Transportation -The City continues working on a long-term street-resurfacing program for
the next 10 to 15 years. City administration will also continue to program funding for streetscape
projects to help maintain public safety and beautification efforts. In addition, capital improvement
programming for sidewalk installation throughout the City will continue for both the short and long term
as funding and resources permit.
Airport -The Fiscal Year 2002 adoption of the current Sebastian Municipal Airport (SMA) Master Plan
has yielded numerous successes and accomplishments involving the ability to receive federal and state
grants, which permitted for much needed infrastructure improvements at the Airport. As Sebastian
Municipal Airport's infrastructure is being developed to attract businesses and create jobs in our
community, a comprehensive business plan is being developed and an initial Council Workshop was
held in August 2006 to review the plan. Presently requested changes are being incorporated into the
business plan, which will be submitted to the City Council for official adoption.
vii
Other endeavors at the Airport are aimed to help diverse revenues. One such task is the completion of
the self-serve fuel facility, which is expected to be completed in the first part of the new fiscal year.
These and other ventures will help diversify airport revenues, providing for a stronger enterprise fund
that has the potential to increase taxable values.
Public Safety -Despite recent policy directives by The School District of Indian River County not to
sustain partnership with the City of Sebastian to continue the School Resources Officer Program, the
City continues its sponsorship of two officers, one to remain stationed at Pelican Island Elementary
School and the other at Sebastian Elementary School. The encouragement of this program remains
indicative of the philosophy that preventative education for this age group is most effective in
preventing long-term juvenile crime, as well as to instill the importance of community safety and
responsibility. Such rationale also justifies the Drug Awareness Resistance Education (D.A.R.E.) and
Gang Resistance Education and Training (G.R.E.A.T.) initiatives as well as a new child abduction
resistance course called Resist Aggression Defensively (R.A.D. Kids). The programs remain very
popular among both children and parents and are expected to continue in fiscal year 2007 via assistance
from various grant programs sponsored by the United States Department of Justice.
Awards and Acknowled e~ meets
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, 2005. The Certificate of
Achievement 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.
The preparation of this report would not be possible without the dedicated service of the Finance
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.
submitted,
Manager
K
Shai L. Francis, CPA, CGFO
Director of Finance
viii
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Sebastian
Florida
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2005
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual fmancial
reports (CAFRs) achieve the highest
standards in government accounting
and fmancial reporting.
G~~
~CE OPF~
~SiA ~ .
_~, ~ .~ President
90~ sear, A~
o~~~
Executive Director
ix
CITY OF SEBASTIAN, FLORIDA
ORGANIZATIONAL CHART
I CITIZENS OF I
SEBASTIAN
CITY COUNCIL
CITY
CLERK
POLICE
ADMINISTRATION
SPECIAL
OPERATIONS
SCHOOL RESOURCE
ROAD PATROL
COMMUNITY
POLICING
DETECTIVE
SUPPORT
SERVICES
DISPATCH
PROFESSIONAL
sTANDARDs
CITY
MANAGER
FINANCE
MANAGEMENT
INFORMATION
SYSTEM
HUMAN RESOURCES
ENGINEERING
GROWTH
MANAGEMENT
~ CODE
ENFORCEMENT
GOLF COURSE
AIRPORT
BUILDING DEPARTMENT
BOARDS&
COMMISSIONS
CITY
ATTORNEY
PUBLIC WORKS
ROAD &
MAINTENANCE
PARKS &
RECREATION
CENTRAL GARAGE
CEMETERY
STORMWATER
BUILDING
MAINTENANCE
x
CITY OF SEBASTIAN, FLORIDA
CITY OFFICIALS
City Manager
City Clerk
City Attorney
DEPARTMENT HEADS:
Police Chief
Director of Finance
City Engineer
Acting Public Works Director
Growth Management Director
Building Director
Human Resources Director
Golf Course Director
Airport Director
AL MINNER
SALLY A. MAID, MMC
RICH STRINGER
JAMES A. DAVIS
SHAI L. FRANCIS, CPA, CGFO
DAVID W. FISHER, P.E.
JERRY CONVERSE
REBECCA GROHALL
WAYNE ESELTINE
DEBRA KRUEGER
GREG GARDNER
JOSEPH GRIFFIN
xi
THIS PAGE INTENTIONALLY LEFT BLANK
xii
FINANCIAL SECTION
This section contains the following subsections:
- Independent Auditor's Report
- Management's Discussion and Analysis
- Government-wide Financial Statements
- Fund Financial Statements
- Notes to Financial Statements
- Required Supplementary Information
- Combining and Individual Fund Statements
and Schedules
1
GTY OF
~~~~~
._ ~.~
..~ , .
.._
~ - -
. _ _ __.
®i of ~ +'
__- _.
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
Harris, Cotherman,
Jones, Price & Associates
Certified Public Accountants -Chartered
5070 North Highway t~lA, Suite 250
Vero Beach, FL 32963
Tel 772-234-8484
Fax 772-234-8488
Independent Auditors' Report
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
~ 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, as of and for the year ended September 30, 2006, which collectively comprise the City's basic
fmancial statements as listed in the table of contents. These financial statements are the responsibility of
the City of Sebastian, Florida's, management. Our responsibility is to express opinions on these fmancial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standazds applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standazds require that we plan and perform
the audit to obtain reasonable assurance about whether the fmancial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
i disclosures in the financial statements. An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as evaluating the overall fmancial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective fmancial 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, 2006,
and the respective changes in fmancial position and cash flows, where applicable, thereof for the year
then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Governmental Auditing Standards, we have also issued our report dated December 8,
2006, 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
the internal control over fmancial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
The management's discussion and analysis on pages 5 - 14 and the required supplementary information
on pages 49 - 54 are not a required part of the basic financial statements but are supplementary
information required by accounting principles generally accepted in the United States of America.. We
have applied certain limited :procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
.,
>~ "Providing Vision and Direction to our Clients"
Member AICPA Member AICPA Division For CPA Films Member FICPA
T Private Companies Practice Section
'~i 3
Honorable Mayor and Members of City Council
City of Sebastian
Page two
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 introductory section, combining
and individual nonmajor fund fmancial statements and statistical tables-are presented for purposes of
additional analysis and are not a required part of the basic fmancial statements. The combining and
individual nonmajor fund fmancial statements have been subjected to the auditing procedures applied in
the audit of the basic fmancial statements and, in our opinion, are fairly stated in all material respects in
relation to the basic fmancial statements taken as a whole. The introductory section and statistical tables
have not been subjected to the auditing procedures applied in the audit of the basic fmancial statements
and, accordingly, we express no opinion on them.
The accompanying schedule of expenditures of state financial assistance is presented for purposes of
additional analysis as required by the Florida Single Audit Act; and Chapter 10.550 Rules of the Auditor
General, and is also not a required part of the basic financial statements of the City of Sebastian, Florida.
Such information has been subjected to the auditing procedures applied in the audit of the basic fmancial
statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/~J tom, Cl~trH~i L~/kte; ~P.t~t # ~sd et3lA~t+t1
(,„,Pri~ ~tt+b l f C Q~1'1t/1~~7~5 ' ~~71i/! ~t~Pll~
Harris, Cotherman, Jones, Price & Associates, Chartered
Certified Public Accountants
December 8, 2006
{
4
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 (beginning
on page v) and the City's financial statements (beginning on page 15).
HIGHLIGHTS
Financial Highlights
• The assets of the City exceeded its liabilities at the close of the fiscal year 2006 by $45,197,875 (net
assets). Of this amount, $13,190,416 (unrestricted net assets) may be used to meet the government's on
going obligations to citizens and creditors.
• The city's total net assets increased by $4,844,683. The increase is mainly attributable to increases in tax
revenues, franchise fees, state shared revenues, interest earnings, and the elimination of restricted net
assets for building code enforcement due to the one time transfer of building code enforcement reserve
from the general fund to the building fund in FY 2006.
• As of the close of current fiscal year, the City's governmental funds reported combined ending fund
balance of $21,918,531, an increase of $1,843,896 in comparison with the prior year. Approximately 46%
of this amount, $10,045,161, is available for spending at the City's discretion (unreserved, undesignated
fund balance).
• At the end of the current fiscal year, unreserved, undesignated fund balance for the general fund was
$4,663,885, or a 43% increase from prior year general fund unreserved and undesignated fund balance.
The key factor in this increase was the elimination of reserve for building code enforcement due to the
one time transfer of building code enforcement reserve from the general fund to the building fund in FY
2006.
USING THIS ANNUAL REPORT
The annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of
Activities (on pages 15, 16, and 17) provide information about the activities of the City as a whole and present a
longer-term view of the City's finances. Fund financial statements begin on page 18. For governmental
activities, these 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 remaining statements provide financial information
about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the
government.
Reporting the City as a Whole
Our analysis of the City as a whole begins on page 15. One of the most important questions asked about the
City's finances is, "Is the City as a whole better off or worse off as a result of the year's activities?" The
Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its
activities in a way that helps answer this question. These statements include all assets and liabilities using the
accrual basis of accounting, which is similar to the accounting used in most private-sector companies. All of the
current year's revenues and expenses are taken into account regardless of when cash is received or paid.
5
These two statements report the City's net assets and changes in them. You can think of the City's net assets -
the difference between assets and liabilities - as one way to measure the City's financial health, or financial
position. Over time, increases or decreases in the City's net assets, is one indicator of whether its financial
health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as
changes in the City's property tax base and the condition of the City's roads, to assess the overall health of the
City.
In the Statement of Net Assets and the Statement of Activities, we divide the City into two kinds of activities:
~ Governmental activities -Most of the City's basic services are reported here, including the police, public
works, parks and recreation, and general administration. Taxes, franchise fees, and state shared revenue
finance most of these activities.
Business-type activities -The City charges a fee to customers to help it cover all or most of the cost of
certain services it provides. The City's Golf Course, Airport, and Building operations are reported here.
Fund Financial Statements
Our analysis of the City's major funds begins on page 18. The fund financial statements provide detailed
information about the most significant funds -not the City as a whole. Some funds are required to be established
by State law and by bond covenants. However, the City Council establishes many other funds to help it control
and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain
taxes, grants, and other money (like the local option gas tax and infrastructure sales surtax (a.k.a. Discretionary
Sales Tax)).
Governmental Funds
Most of the City's basic services are reported in governmental funds, which focus on how money flows into and
out of those funds and the balances left at year-end that are available for spending. These funds are reported using
an accounting method called modified accrual accounting, which measures cash and all other financial assets that
can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the
City's general government operations and the basic services it provides. Governmental fund information helps
you determine whether there are more or fewer financial resources that can be spent in the near future to finance
the City's programs. We describe the relationship (or differences) between governmental activities (reported in
the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliations at the
bottom of the fund financial statements.
The City maintains seventeen individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes
in fund balances for the general fund, discretionary sales tax special revenue fund, riverfront redevelopment
special revenue fund, and stormwater utility improvements capital project fund, all of which are considered to be
major funds. Data from the other thirteen governmental funds are combined into a single, aggregated presentation.
Individual fund data for each nonmajor governmental fund is provided in the form of combining statements
begins on page 55.
Annual budgets are adopted 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. The budgetary comparison statements
have been provided for all governmental funds except capital project funds to demonstrate compliance with the
budget.
The basic governmental fund financial statements can be found on pages 18-22 of this report.
6
Proprietary Funds
When the City charges customers for the services it provides -whether to outside customers or to other units of
the City -these services are generally reported in proprietary funds. Proprietary funds are reported in the same
way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the
City's enterprise funds (a component of proprietary funds) are the same as the business-type activities we report
in the government-wide statements but provide more detail and additional information, such as cash flows, for
proprietary funds.
The basic proprietary fund financial statements can be found on page 23-26 of this report.
Fiduciary Funds
The City is the trustee, or fiduciary, for the Police Officers' Pension Plan. The City's fiduciary activities are
reported in separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets on page 27 and 28.
We exclude these activities from the City's other financial statements because the City cannot use these assets to
finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for
their intended purposes.
The City holds deposits for various individuals and businesses for contract performance that are then returned
when the contract has been completed. These deposits are accounted for in an Agency fund, where assets equal
liabilities.
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. The notes to the financial statements can be found on pages 29-
48 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City's major funds budget and actual comparison and progress in
funding its obligation to provide pension benefits to its employees. Required supplementary information can be
found on pages 49-54 of this report.
THE CITY AS A WHOLE
Financial Analysis of the City as a Whole
The City's combined net assets increased $4.8 million from $40.4 million to $45.2 million or 12°Io. Looking at
the net assets and net revenues of the governmental and business-type activities, the increase occurred in both the
governmental-type activities and the business-type activities. Our analysis focuses on net assets (Table 1) and
changes in net assets (Table 2) of the City's governmental and business-type activities.
GOVERNMENT-WIDE STATEMENTS
Statement of Net Assets
The following table reflects the condensed Statements of Net Assets:
7
Table 1
Statements of Net Assets
as of September 30, 2006 and 2005
(in thousands)
Governmental Activities Business-type Activities Total Primary Government
2006 2005 2006 2005 2006 2005
Current and other assets $ 23,313 $ 22,018 $ 2,867 $ 2,049 $ 26,180 $ 24,067
Capital assets 29,644 30,331 9,909 8,817 39,553 39,148
Total assets $ 52,957 $ 52,349 $ 12,776 $ 10,866 $ 65,733 $ 63,215
Non-current liabilities $ 17,083 $ 18,385 $ 1,259 $ 1,440 $ 18,342 $ 19,825
Other liabilities 1,932 2,383 261 653 2,193 3,036
Total liabilities $ 19,015 $ 20,768 $ 1,520 $ 2,093 $ 20,535 $ 22,861
Net assets:
Invested in capital assets,
net of related debt $ 17,580 $ 17,103 $ 8,799 $ 7,460 $ 26,379 $ 24,563
Restricted 5,068 5,396 560 574 5,628 5,970
Unrestricted 11,294 9,082 1,897 739 13,191 9,821
Total net assets $ 33,942 $ 31,581 $ 11,256 $ 8,773 $ 45,198 $ 40,354
For more detail information see the Statement of Net Assets on page 15.
Total net assets of the governmental activities increased from $31.581 million to $33.942 million. Total net assets
for business-type activities increased from $8.773 million to $11.256 million.
The decrease in governmental activities capital assets is due to depreciation. The decrease in governmental
activities non-current liabilities is due to the payment of long-term debt. The increase in unrestricted net assets is
mainly due to the elimination of restricted net assets for building code enforcement due to the one time transfer of
building code enforcement reserve from the general fund to the building fund in FY 2006.
The overall increase in business-type activities is due to the transfer of building department operation from the
general fund to the proprietary fund. The increase in net assets -invested iri capital assets of the City's business-
type activities is primarily due to the increase in capital assets funded by the Federal Aviation Administration and
the Florida Department of Transportation for the City's municipal airport.
The following table shows the revenue and expenses of the total primary government.
8
Table 2
Changes in Net Assets
For the Fiscal Years Ended September 30, 2006 and 2005
(in thousands)
Governmental Business-type Total Primary
Activities Activities Govermnent
2006 2005 2006 2005 2006 2005
REVENUES
Program revenues:
Charges for services $ 1,634 $ 2,612 $ 3,177 $ 1,817 $ 4,811 $ 4,429
Operating grants and contributions 408 2,802 7 13 415 2,815
Capital grants and contributions 1,301 1,782 1,057 2,290 2,358 4,072
General revenues:
Property taxes 4,645 4,018 - - 4,645 4,018
Other taxes 4,908 4,719 - - 4,908 4,719
Intergovernmental 2,242 2,138 - - 2,242 2,138
Other 2,338 1,403 125 46 2,463 1,449
Total revenues 17,476 19,474 4,366 4,166 21,842 23,640
EXPENSES
General government 3,130 3,262 - - 3,130 3,262
Public safety 4,191 4,817 - - 4,191 4,817
Physical environment 2,194 1,284 - - 2,194 1,284
Transportation 2,173 4,035 - - 2,173 4,035
Economic environment 99 32 - - 99 32
Culture and recreation 1,208 1,260 - - 1,208 1,260
Golf Course - - 1,558 1,465 1,558 1,465
Airport - - 802 519 802 519
Building - - 937 - 937 -
Interest and fiscal charges 706 740 - - 706 740
Total expenses 13,701 15,430 3,297 1,984 16,998 17,414
Change in net assets before transfers 3,775 4,044 1,069 2,182 4,844 6,226
Transfers (1,414) (107) 1,414 107 - -
Increase in net assets 2,361 3,937 2,483 2,289 4,844 6,226
Net assets -October 1, 2005 31,581 27,643 8,773 6,484 40,354 34,127
Net assets -September 30, 2006 $ 33,942 $ 31,580 $ 11,256 $ 8,773 $ 45,198 $ 40,353
Overall the total revenues decreased $1.798 million from the previous year. The total cost of all programs
decreased by 2.4% ($0.416 million). Our analysis below separately considers the operations of governmental and
business-type activities.
Governmental Activities
Governmental activities revenues exceed expenses by $3.775 million. Total revenues decreased approximately
$1.998 million from the previous year. Decreases in grant revenues are mainly due to reimbursements received in
FY 2005 from FEMA and the State for damages caused by Hurricanes Frances and Jeanne. Decrease in charges
for services are due to the transfer of building department operation from general fund to proprietary fund at the
beginning of FY 2006. Increase in property values generates an increase in property taxes. The strong local
economy plus population growth of the City contributed to increases in sales taxes and state shared revenues.
Total expenses decreased $1.729 million from the previous year. Decreased spending was primarily due to the
costs incurred in FY 2005 for debris removal, signage replacements, and repair works associated with hurricanes
Frances and Jeanne.
9
The following is a graphic illustration of the comparison for governmental activities revenue and expenses.
Governmental Activities Comparison
for Fiscal Year 2006 and Fiscal Year 2005
6,000
y 5,000 -- -
b
~ ~ 4,000 ---
c ~ 3,000 -
0
d F 2,000
C
1,000
oi~`~,~~~~{~`~,~Sao ~~~~~re`~~ ~e~e``e~e~oVe`~e~~`S~`e~~to~er4o`~~p o~e<eC`ea~~o`~aebc
G~a~$¢s~ OQ¢ta CaQ 4toQ O ~`e~$o O Ge°e~o,~ Q~` 5'ca`e0 ~~ao o~c ,tJ`eapa or~o9~
4 ~c GJ l9te~e5
Revenue/Expense types
D 2006 ®2005
Business-type Activities
Revenues of the City's business-type activities (see Table 2) increased by 4.8% (an increase of $0.2 million in
fiscal year 2006 compared to a decrease of $0.227 million in fiscal year 2005) and expenses rose 66.2%. The
increase in revenues is mainly due to the transfer of building department operation from the general fund to
proprietary fund at the beginning of FY 2006. Capital contributions have a decrease of $1.233 million mainly due
to the completion of major grant funded projects in FY 2006. The City's Municipal Airport enjoys a continued
interest by the Florida Department of Transportation-Aviation Section and Federal Aviation Administration to
upgrade the airport facilities as evidenced by repeated support via grant funding.
Following is a graphic comparison of the City's business-type activities.
Business-Type Activities Comparison
for Fiscal Year 2006 and Fiscal Yeal 2005
3,500
3,000
2,500 - -
b
~ m 2,000 -- -
o ~
0
~ F 1,500 -- -- - -
C
1,000 - -
500 -
e'~ceS ~`~9~ ~a~~ ~e~Je ~e9 ~y6 des
X0`5 ~ as°~' ~~ ~¢``e `eeaQe o ~eaQ`' ~ e+Q`'
Gra~~es p4ec GaQ p Oo,~Goo e ~vt4 v ~,~~ 6
Revenue/Expense types
2006 ®2005
10
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of a government's net resources available for
spending at the end of the fiscal year.
As the City completed the fiscal year, its governmental funds (as presented in the balance sheet on pages 18-19)
reported a combined fund balance of $21.9 million, which is an increase of $1.8 million over the prior year of
$20.1 million. Approximately 45.8% of this total amount ($10 million) constitutes unreserved, undesignated fund
balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved or
designated to indicate that it is not available for new spending because it has already been committed 1) to pay
debt service ($225,916), 2) to fund the advances from general fund to airport capital project ($1,000,000), 3) to
fund the capital projects ($8,038,947), 4) to generate income to pay for the perpetual care of the municipal
cemetery ($656,160), or 5) for a variety of other restricted or designated purposes ($1,952,347).
The general fund is the chief operating fund of the City. At the end of the fiscal year, unreserved, undesignated
fund balance of the general fund was $4,663,885, while total fund balance reached $6,479,072. As a measure of
the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to
total fund expenditures. Unreserved, undesignated fund balance represents 42 percent of total general fund
expenditures, while total fund balance represents 58 percent of that same amount.
The fund balance of the City's general fund increased by $375,605 during the current fiscal year. Key factors in
this growth are as follows:
• Tax revenues increased by $576,297, as a result of property value and population increases.
• Franchise fees increased by $367,359, as a result of population increase.
The discretionary sales tax revenue special revenue fund has a total fund balance of $1,804,332, all of which is
unreserved and undesignated. The increase of the total fund balance from prior year ($525,071) is mainly due to
an increase in discretionary sales surtax collection, which is population driven.
The riverfront redevelopment special revenue fund has an unreserved and undesignated fund balance of
$580,161, while total fund balance reached $675,417. The increase of the total fund balance from prior year
($298,735) is mainly due to property value increases.
The stormwater utility improvements capital project fund has a total fund balance of $5,038,514, all of which
is reserved for stormwater capital projects. The decrease of the total fund balance from prior year ($109,562) is
due to the spend down on construction debt proceeds of the Stormwater Utility Revenue Bonds, Series 2003.
11
Proprietary Funds
The City's proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail.
The total net assets of the golf course fund at the end of the fiscal year amounted to $311,819, while the
unrestricted net assets amounted to $5,861. Compared to the prior year in the same category, the net assets has an
increase of $69,677 from the prior year while the unrestricted net assets has a decrease of $65,673 from prior year.
This is mainly due to the increase in invested in capital assets net of related debt. As the negative number in
invested in capital assets net of related debt continue to move toward a positive territory due to the decreasing in
outstanding debt, the unrestricted net assets will decrease in the coming year if the golf operation continues its flat
performance. Detailed golf course net assets information is presented on page 23.
The total net assets of the airport fund at the end of the fiscal year amounted to $9,465,768, while the
unrestricted net assets amounted to $455,314. Compared to the prior year in the same category, the net assets has
an increase of $935,341 from the prior year while the unrestricted net assets has a decrease of $211,671 from prior
year. The decrease in unrestricted net assets is mainly due to the construction of airport capital projects.
The total net asset of the building fund at the end of the fiscal year amounted to $1,478,145, while the
unrestricted net assets amounted to $1,435,364. The building fund started its enterprise operation on October 1,
2005. Aone-time transfer from the general fund in the amount of $1,139,289 took place in the beginning of FY
2005-06. The amount represents the unspent building code enforcement fund reserve.
Other factors concerning the finances of these three funds have already been addressed in the discussion of the
City's business-type activities.
General Fund Budgetary Highlights
Over the course of the fiscal year, the City Council revised the City budget four times. These budget amendments
fall into two categories. The first category includes amendments and supplemental appropriations that were
approved shortly after the beginning of the year and reflect the actual beginning balances (versus the amounts
originally estimated in July 2005). The second category includes the changes that the Council made during the
year to take into account the City's staff restructuring efforts. During the fiscal year, the City amended the
general fund budget in the amount of $1,139,871 for encumbrances carried forward, intergovernmental revenues,
contributions, and insurance reimbursements. Following are the main components of the increase:
• $248,706 supplemental appropriation to the public works and engineering departments for the debris
clean up, property damages, and signage repairs costs associated with hurricanes Wilma that impacted the
City in October 2005.
• $83,084 supplemental appropriation to general fund departments for encumbered amounts carried forward
from the prior fiscal year.
• $117,621 supplemental appropriation to the police department for the pension contribution.
~ $336,799 supplemental appropriation to increase the amount transferred from the general fund to the
building fund for building code enforcement reserve generated for FY 2005-06 building operation.
The increase is possible because of anticipated revenues received. Those revenues included grant revenues
associated with FEMA, State, and Federal Highway Administration and insurance reimbursement for hurricane
costs ($248,706), State police pension contributions ($117,621), excess building revenues set aside as building
code enforcement reserve ($336,799), and the encumbered amount carried forward from the prior fiscal year
($83,084).
During the fiscal year, total general fund actual revenues exceeded final amended budgetary estimates and total
general fund actual expenditures were less than the final amended budgetary estimates, therefore, eliminating the
need to draw upon existing fund balance. The increase in anticipated revenues are mainly due to the increase in
franchise fees, property taxes and interest earnings.
12
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2006 the City had $57,298,192 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 $2,353,612, or 4.3%, over last year.
The following table illustrates the changes in capital assets. See page 38 and page 39 in the notes to the financial
statements for detailed changes in capital assets.
Table 3
Governmental Business-type
Activities Activities Totals
2006 2005 2006 2005 2006 2005
Land $ 5,301,947 $ 5,489,774 $ 9,060 $ 9,060 $ 5,311,007 $ 5,498,834
Buildings 9,958,190 9,890,903 1,832,148 1,555,358 11,790,338 11,446,261
Improvements 4,614,326 4,152,943 1,181,052 779,905 5,795,378 4,932,848
Equipment 6,436,238 6,100,906 638,926 585,282 7,075,164 6,686,188
Infrastructure 17,375,199 17,203,261 6,012,963 3,313,755 23,388,162 20,517,016
Construction-in
Progress 1,167,207 1,006,241 2,770,936 4,857,192 3,938,143 5,863,433
Totals $ 44,853,107 $ 43,844,028 $ 12,445,085 $ 11,100,552 $ 57,298,192 $ 54,944,580
Governmental activities had the following major increases during the fiscal year:
• A decrease in land mainly due to a contribution made to the Indian River County.
• An increase in infrastructure mainly due to the capitalization of Louisiana Avenue improvements project.
• An increase in improvements mainly due to the capitalization of River View Park and lightings at the
Barber Street Sports Complex.
• An increase in equipment mainly due to the capitalization of new police vehicles.
Business-type activities had the following major increases during the fiscal year:
• A decrease in construction in progress primarily due to the completion of airport run way and security
fencing projects.
• An increase in infrastructure and improvements primarily due to the completion of the airport runway and
security-fencing project.
Debt
On September 30, 2006, the City had $18,068,698 in bonds, notes and capital leases outstanding versus
$19,564,551 on September 30, 2005 - a decrease of 7.6% - as shown in the table on the following page:
The decrease in debt is solely attributable to the retirement of debts. The Infrastructure Sales Surtax Revenue
Bonds, Series 2003 and Series 2003A and the stormwater Utility Revenue Bonds, Series 2003 are insured by
AAA rated insurance agencies, the bonds are all rated AAA, which is the highest rating given by rating agencies.
The City's Recreational Facilities Improvement and Refunding Revenue Bonds, Series 2001 carries an AAA
rating from Standard & Poor's, a rating it has held since 1992. All of the City's other debt, primarily notes and a
capital lease, are not rated. Other obligations of the City include accrued vacation pay and sick leave.
Additional information on the City's long-term debt can be found on pages 42 through 44 in the notes to the
financial statements.
13
Table 4
Governmental Business-type
Activities Activities Totals
2006 2005 2006 2005 2006 2005
Infrastructure sales surtax revenue
bonds, Series 2003 $ 7,955,000 $ 8,490,000 $ - $ - $ 7,955,000 $ 8,490,000
Infrastructure sales surtax revenue
bonds, Series 2003A 1,870,000 2,000,000 - - 1,870,000 2,000,000
Stormwater utility revenue bonds,
Series 2003 5,055,000 5,290,000 - - 5,055,000 5,290,000
Notes payable (backed by local
option gas tax) 1,790,544 2,004,718 - - 1,790,544 2,004,718
Capital lease obligation (backed
by City) 288,252 422,456 - - 288,252 422,456
Recreational facilities
improvements and refunding
revenue bonds, series 2001 - - 1,109,902 1,357,377 1,109,902 1,357,377
Totals $ 16,958,796 $ 18,207,174 $ 1,109,902 $ 1,357,377 $ 18,068,698 $ 19,564,551
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when setting the fiscal year 2007 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 2006 was 4.1% up from 4% in the previous year and down from a high of 8.1% in 1997. This indicates that
business growth in the area remains strong. Still, employment in the county fluctuates seasonally due to farm
workers. In FY 2006, the city has experienced a significant increase in property value (29% increase) and a
decrease in construction permits (35% drop) especially in single-family residents permits. The decrease in
construction permits reflects the national trend and is consistent with the national housing market.
These indicators were taken into account when adopting the General Fund budget for fiscal year 2007. Amounts
available for appropriation in the General Fund budget are $12,322,178, an increase of 2.9% from the original
fiscal year 2006 budget of $11,975,141 and a decrease of 6% from the final fiscal year 2006 budget. The 2.9%
increase is mainly due to increases in estimated property taxes and public services taxes to be received due to
growth. The 6% decrease from the final fiscal year 2006 budget is mainly due to the hurricane related
expenditures in FY 2006. The City will use the increases in tax revenues to finance programs we currently offer,
as well as, the effect that we expect inflation to have on program costs.
The Golf Course has experienced an increase in golf revenues in FY 2006 mainly due to hurricanes that impacted
the City in FY 2005. The increase of revenues has help the City to meet the Recreational Facilities Improvement
and Refunding Revenue Bonds, Series 2001 bond coverage requirement, which is the net revenues equal to at
least 125% of the annual debt service payment. City staff continues to monitor the revenue stream and intends to
adjust rates whenever necessary to meet the bond coverage requirement.
REQUEST FOR INFORMATION
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 Finance Department at City of
Sebastian, 1225 Main Street, Sebastian, Florida 32958.
14
City of Sebastian, Florida
Statement of Net Assets
September 30, 2006
Governmental Business-type
Activities Activities
ASSETS
Cash and cash equivalents
Investments
Receivables
Special assessment receivable
Prepaid items
Inventory
Restricted assets:
Temporarily restricted:
Cash and cash equivalents
Investments
Permanently restricted:
Investments
Overfunded pension costs
Deferred charges
Capital assets not being depreciated:
Land
Construction in progress
Capital assets (net of accumulated depreciation):
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total assets
LIABILITIES
Accounts payable and other current
liabilities
Matured bonds payable
Accrued interest payable
Deferred revenues
Non-current liabilities:
Due within one year
Due in more than one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital projects
Debt service
Road projects
Perpetual care:
Expendable
Nonexpendable
Other purposes
Unrestricted
Total net assets
560,581
$ 116,997 $ 71,513 $ 188,510
11,563,402 2,071,589 13,634,991
1,160,632 93,179 1,253,811
3,849 - 3,849
6,775 1,575 8,350
50,611 13,688 64,299
74,847
9,139, 870
542,950
148,607
504,171
5,301,947
1,167,207
8,372,924
3,447,330
1,933,944
9,420,783
52,956,846
848,864
920,000
97,081
65,292
465,346
16,618,120
19,014,703
17,579,683
55,588
9,060
2,770,936
1,475,418
945,782
125,384
4,581,934
12,776,227
177,080
84,667
1,258,748
1,520,495
Total
74,847
9,700,451
542,950
148,607
559,759
5,311,007
3,938,143
9,848,342
4,393,112
2,059,328
14,002,717
65,733,073
1,025,944
920,000
97,081
149,959
465,346
17,876,868
20,535,198
8,798,612 26,378,295
2,221,359 - 2,221,359
225,916 316,490 542,406
1,932,026 - 1,932,026
113,210 - 113,210
542,950 - 542,950
33,122 244,091 277,213
11,293,877 1,896,539 13,190,416
$ 33,942,143 $ 11,255,732 $ 45,197,875
The accompanying notes to financial statements are an integral part of this financial statement.
15
City of Sebastian, Florida
Statement of Activities
For the year ended September 30, 2006
Program Revenues
Operating Capital
Charges for Grants and Grants and
Function/Prosram Expenses Services Contributions Contributions
Governmental activities:
General government $ 3,129,723 $ 533,482 $ 46,109 $ -
Public safety 4,191,295 140,545 165,175 982
Physical environment 2,193,589 887,819 2,273 -
Transportation 2,173,071 - 183,870 716,495
Economic environment 98,661 - - 30,059
CulturaUrecreation 1,208,288 72,472 10,471 553,902
Interest and fiscal charges 706,303 - - -
Total governmental activities 13,700,930 1,634,318 407,898 1,301,438
Business-type activities:
Golf Course 1,558,338 1,580,407 6,998 -
Airport 801,967 375,768 - 1,056,562
Building 936,793 1,220,823 - -
Total business-type activities 3,297,098 3,176,998 6,998 1,056,562
Total government $ 16,998,028 $ 4,811,316 $ 414,896 $ 2,358,000
General Revenues:
Property taxes, levied for general purposes
Sales and use taxes
Franchise fees
State shared revenues not restricted to specific programs
Interest earnings
Miscellaneous
Total general revenues
Transfers
Total general revenues and transfers
Change in net assets
Net assets -beginning
Net assets -ending
The accompanying notes to financial statements are an integral part of this financial statement.
16
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business-type
Activities Activities Total
$ (2,550,132) $ - $ (2,550,132)
(3,884,593) - (3,884,593)
(1,303,497) - (1,303,497)
(1,272,706) - (1,272,706)
(68,602) - (68,602)
(571,443) - (571,443)
(706,303) - (706,303)
(10,357,276) - (10,357,276)
- 29,067 29,067
- 630,363 630,363
- 284,030 284,030
- 943,460 943,460
(10,357,276) 943,460 (9,413,816)
4,645,050 - 4,645,050
4,907,906 - 4,907,906
1,253,749 - 1,253,749
2,242,292 - 2,242,292
827,224 125,498 952,722
256,780 - 256,780
14,133,001 125,498 14,258,499
(1,414,205) 1,414,205 -
12,718,796 1,539,703 ~ 14,258,499
2,361,520 2,483,163 4,844,683
31,580,623 8,772,569 40,353,192
$ 33,942,143 $ 11,255,732 $ 45,197,875
17
City of Sebastian, Florida
Balance Sheet
Governmental Funds
September 30, 2006
Stormwater Other
Discretionary Riverfront Utility Governmental
General Sales Tax Redevelopment Improvements Funds
ASSETS
Cash and cash equivalents $ 37,839 $ 4,690 $ 6,892 $ 9,816 $ 132,607
Investments 6,357,752 1,560,640 664,839 4,976,833 7,686,158
Accounts receivables 337,454 - - - -
Special assessments receivable 3,849 - - - -
Due from other funds 108,269 - - - -
Due from other governments 328,984 226,039 - 2,798 100,570
Interest receivable 48,806 12,963 4,318 50,237 48,463
Inventory 50,611 - - - -
Prepaid items 6,775 - - - 176,603
Total assets $ 7,280,339 $ 1,804,332 $ 676,049 $ 5,039,684 $ 8,144,401
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 521,299 $ - $ 632 $ 1,170 $ 109,246
Retainage payable - - - - 5,690
Due to other funds - - - - 108,269
Due to other governments 210,827 - - - -
Deferred revenues 69,141 - - - -
Totalliabilities 801,267 - 632 1,170 223,205
Fund balances:
Reserved for:
Encumbrance 58,020 - 95,256 65,206 943,576
Debt service - - - - 225,916
Capital projects 1,000,000 - - 4,973,308 3,065,639
Property and casualty 100,000 - - - -
Cemeterycare - - - - 656,160
Law enforcement - - - - 33,122
Emergency services 350,000 - - - -
Equipment replacement 307,167 - - - -
Unreserved:
Designated for employee events 4,082 - - - -
Designated for law enforcement 5,774 - - - -
Undesignated, reported in:
General fund 4,654,029 - - - -
Specialrevenuefunds - 1,804,332 580,161 - 2,996,783
Total fund balances 6,479,072 1,804,332 675,417 5,038,514 7,921,196
Total liabilities and fund balances $ 7,280,339 $ 1,804,332 $ 676,049 $ 5,039,684 $ 8,144,401
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources, therefore, are not reported in the funds.
Negative net pension obligation resulting from overfunding of the police officers' pension plan.
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.
Accrued long term debt interest expenses are not financial uses, therefore, are not reported in the funds.
Special assessment receivables are not financial resources in the current period, therefore, are reported as deferred revenues.
Net assets of governmental activities
The accompanying notes to financial statements are an integral part of this financial statement.
18
Total
Governmental
Funds
$ 191,844
21,246,222
337,454
3,849
108,269
658,391
164,787
50,611
1 R3378
lL,y44,2SUJ
$ 632,347
5,690
108,269
210,827
69 141
1,UL6,1 /4
1,162,058
225,916
9,038,947
100,000
656,160
33,122
350,000
307.167
4,082
5,774
4,654,029
5.381.276
L1,y12S,JS1
29,644,135
148,607
(17,499,295)
(273,684)
3,849
$ 33,942,143
19
City of Sebastian, Florida
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2006
REVENUES:
Taxes:
Property
Public utility
Sales
Motor fuel
Franchise fees
Licenses and permits
Intergovernmental
Impact fees
Charges for services
Fines
Special assessments
Investment earnings
Contributions and donations
Other revenue
Total revenues
EXPENDITURES:
Current:
General government
Public safety
Physical environment
Transportation
Economic enviromnent
Culture and recreation
Debt Service:
Principal
Interest and fiscal charges
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Stormwater Other
Discretionary Riverfront Utility Goverrunental
General Sales Tax Redevelopment Improvements Funds
$ 4,306,213 $ - $ 338,837 $ - $ -
2,183,164 - - - -
- 2,724,742 - - -
- - - - 716,495
1,253,749 - - - -
244,370 - - - -
2,617,774 - - - 234,519
- - - - 337,675
457,780 - - - 59,825
62,648 - - - 15,128
- - - - 819,286
295,123 107,965 28,400 103,837 291,899
41,110 - - - 4,055
247,357 - 100 - 2,073
11,709,288 2,832,707 367,337 103,837 2,480,955
2,494, 863 - - - -
3,810,648 - - - 3,260
1,843,877 - - - 6,765
1,462,048 - - - 210,935
- - 68,602 - 30,059
926, 846 - - - -
- - - - 1,248,378
- - - - 678,682
556,673 - - 152,830 741,557
11,094,955 - 68,602 152,830 2,919,636
614,333 2,832,707
298,735 (48,993) (438,681)
900,561 6,960 - - 2,878,460
(1,139,289) (2,314,596) - (60,579) (1,685,722)
(238,728) (2,307,636) - (60,579) 1,192,738
375,605 525,071 298,735 (109,572) 754,057
6,103,467 1,279,261 376,682 5,148,086 7,167,139
$ 6,479,072 $ 1,804,332 $ 675,417 $ 5,038,514 $ 7,921,196
The accompanying notes to financial statements are an integral part of this financial statement.
20
Total
Governmental
Funds
$ 4,645,050
2,183,164
2,724,742
716,495
1,253,749
244,370
2,852,293
337,675
517,605
77,776
819,286
827,224
45,165
249,530
17,494,124
2,494, 863
3,813,908
1,850,642
1,672,983
98,661
926, 846
1,248,378
678,682
1,451,060
14,236,023
3,258,101
3,785,981
(5,200,186)
(1,414,205)
1,843,896
20,074,635
$ 21,918,531
21
City of Sebastian, Florida
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Find Balances of Governmental Funds
To the Statement of Activities
For the Year Ended September 30, 2006
Net change in fund balances -total governmental funds $ 1,843,896
Amount reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlay as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives as depreciation expense.
(464,232)
Governmental funds only report the disposal of assets to the extent proceeds are
received from the sale. In the statement of activities, a gain or loss is reported for
each disposal. (223,024)
Overfunded pension contributions are reported as expenditures in the fund financial
statements and recorded as a net pension asset on the statement of net assets. 26,187
Repayment of bond principal, note principal, and capital lease principal are
expenditures in the governmental funds, but the payment reduces long-term
liabilities in the statement of net assets. 1,248,378
Some expenses reported in the statement of activities do not require the use of
current financial resources, therefore, are not reported as expenditures in the
governmental funds. (69,685)
Change in net assets of governmental activities
$ 2,361,520
The accompanying notes to financial statements are an integral part of this financial statement.
22
City of Sebastian, Florida
Statement of Net Assets
Proprietary Funds
September 30, 2006
Enterprise Funds
Golf Course Airport Building Totals
ASSETS
Current assets:
Cash and cash equivalents $ 12,162 $ 37,940 $ 21,411 $ 71,513
Investments 89,751 474,132 1,507,706 2,071,589
Restricted cash, cash equivalents and
investments:
Revenue bond covenant accounts 560,581 - - 560,581
Accounts receivable - 39,172 - 39,172
Due from other governments - 41,737 - 41,737
Interest receivable 3,253 97 8,920 12,270
Inventory 13,688 - - 13,688
Prepaid items 1,575 - - 1,575
Total current assets 681,010 593,078 1,538,037 2,812,125
Noncurrent assets:
Deferred charges $55,588 - - 55,588
Capital assets:
Land - 9,060 - 9,060
Buildings 331,228 1,500,920 - 1,832,148
Improvements other than buildings 220,556 960,496 - 1,181,052
Machinery and equipment 338,527 252,347 48,052 638,926
Infrastructure 1,616,948 4,396,015 - 6,012,963
Construction in process - 2,770,936 - 2,770,936
Less accumulated depreciation (1,651,980) (879,320) (5,271) (2,536,571)
Total noncurrent assets 910,867 9,010,454 42,781 9,964,102
Total assets 1,591,877 9,603,532 1,580,818 12,776,227
LIABILITIES
Current liabilities:
Accounts payable 43,592 105,187 19,966 168,745
Due to other governments 8,083 252 - 8,335
Deferred revenues 66,877 3,775 14,015 84,667
Compensated absences 1,385 1,897 2,994 6,276
Total cua~ent liabilities 119,937 111,111 36,975 268,023
Non-current liabilities:
Compensated absences 50,219 26,653 65,698 142,570
Bonds payable (net of unamortized premium
and deferred amount on refunding) 1,109,902 - - 1,109,902
Total non-current liabilities 1,160,121 26,653 65,698 1,252,472
Total liabilities 1,280,058 137,764 102,673 1,520,495
NET ASSETS
Invested in capital assets, net of related debt (254,623) 9,010,454 42,781 8,798,612
Restricted for:
Debt service 316,490 - - 316,490
Other purposes 244,091 - - 244,091
Unrestricted 5,861 455,314 1,435,364 1,896,539
Total net assets $ 311,819 $ 9,465,768 $ 1,478,145 $ 11,255,732
The accompanying notes to financial statements are an integral part of this financial statement.
23
City of Sebastian, Florida
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended September 30, 2006
Enterprise Funds
Operating revenues:
Charges for fees and rents:
Building permit fees
Golf course fees pledged as
security for revenue bonds
Rents
Other revenue
Total operating revenues
Operating expenses:
Salaries, wages and employee benefits
Contractual services, materials and supplies
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Interest income
Interest income pledged as security
for revenue bonds
Intergovernmental
Interest expense
Bond amortization. expense
Loss on disposal of capital assets
Total nonoperating revenues (expenses)
Income/(loss) before capital contributions
and transfers
Capital contributions in
Capital contributions out
Transfers in
Change in net assets
Total net assets -beginning
Total net assets -ending
Golf Course Airport Building Totals
$ - $ - $ 1,220,823 $ 1,220,823
1,532,185 - - 1,532,185
31,252 313,562 - 344,814
16,970 62,206 - 79,176
1,580,407 375,768 1,220,823 3,176,998
313,305 168,894 639,191 1,121,390
1,061,103 174,827 292,331 1,528,261
105,058 186,955 5,271 297,284
1,479,466 530,676 936,793 2,946,935
100,941 (154,908) 284,030 230,063
- 30,062 54,826 84,888
40,610 - - 40,610
6,998 - - 6,998
(64,715) - - (64,715)
(13,897) - - (13,897)
(260) - - (260)
(31,264) 30,062 54,826 53,624
69,677 (124,846) 338,856 283,687
- 1,056,562 - 1,056,562
- (271,291) - (271,291)
- 274,916 1,139,289 1,414,205
69,677 935,341 1,478,145 2,483,163
242,142 8,530,427 - 8,772,569
$ 311,819 $ 9,465,768 $ 1,478,145 $ 11,255,732
The accompanying notes to financial statements are an integral part of this financial statement.
24
City of Sebastian, Florida
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2006
CASH FLOWS FROM OPERATING
ACTIVITIES:
Cash received from customers and users
Cash payments to suppliers
Cash payments for employee services
Net cash provided (used) by operating
activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets
Receipt from capital grants
Receipt from capital transfers
Receipt from advance from other fund
Principal paid on revenue bond maturities
Bond issuance costs
Interest paid on revenue bonds
Capital contributed to others
Net cash provided (used) by capital and
related financing activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Interest on investments
Net cash provided by investing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents, October 1
Cash and cash equivalents, September 30
Enterprise Funds
Golf Course Airport Building Totals
$ 1,561,274 $ 337,335 $ 1,234,838 $ 3,133,447
(1,057,053) (258,942) (272,365) (1,588,360)
(305,531) (179,680) (570,499) (1,055,710)
198,690 (101,287) 391,974 489,377
(6,717) (1,662,548)
6,998 1,176,601
- 274,916
- (35,416)
(255,000) -
7,525 -
(64,715) -
- (271,291)
(311,909) (517,738)
(48,052) (1,717,317)
- 1,183,599
1,139,289 1,414,205
- (35,416)
- (255,000)
- 7,525
- (64,715)
- (271,291)
1,091,237 261,590
37,605 31,270 45,906 _
37,605 31,270 45,906
(75,614) (587,755) 1,529,117
738,108 1,099,827 - _
$ 662,494 $ 512,072 $ 1,529,117 $
114,781
114,781
865,748
1,837,935
2,703,683
The accompanying notes to financial statements are an integral part of this financial statement.
25
City of Sebastian, Florida
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2006
(Continued)
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense
(Increase) Decrease in assets:
Accounts receivable
Prepaid expenses
Inventories
Increase (Decrease) in liabilities:
Accounts payable
Due to other governments
Accrued compensated absences
Deferred revenues
Total adjustments
Net cash provided (used) by operating activities
Cash and cash equivalents reconciliation:
Current assets:
Cash and cash equivalents
Investments
Restricted asset:
Investments
Cash and cash equivalents at September 30
Enterprise Funds
Golf Course Airport Building
Totals
$ 100,941 $ (154,908) $ 284,030 $ 230,063
105,058 186,955 5,271 297,284
48 (36,997) - (36,949)
- 384 - 384
(4,548) - - (4,548)
10,352 (84,418) 19,966 (54,100)
(1,754) (81) - (1,835)
7,774 (10,786) 68,692 65,680
(19,181) (1,436) 14,015 (6,602)
97,749 53,621 107,944 259,314
$ 198,690 $ (101,287) $ 391,974 $ 489,377
$ 12,162 $ 37,940 $ 21,411 $ 71,513
89,751 474,132 1,507,706 2,071,589
560,581 - - 560,581
$ 662,494 $ 512,072 $ 1,529,117 $ 2,703,683
The accompanying notes to financial statements are an integral part of this financial statement.
26
City of Sebastian, Florida
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2006
ASSETS
Cash and cash equivalents
Receivables:
Interest and dividends
Total receivables
Investments, at fair value:
United States treasuries
United States agency notes
Domestic corporate bonds
Domestic corporate equities
Total investments
Total assets
LIABILITIES
Refunds payable
Total liabilities
NET ASSETS
Held in trust for pension benefits
Pension
Trust
Police
Officers'
Pension
$ 575,997
21,151
597,148
436,213
723,537
531,853
2,422,543
4,114,146
4,711,294
$ 4,711,294
Agency
Performance
Deposits
$ 165,090
165,090
165,090
165,090
165,090
The accompanying notes to financial statements are an integral part of this financial statement.
27
City of Sebastian, Florida
Statement of Changes in Fiduciary Net Assets
Fiduciary Fund -Pension Trust
For the Year Ended September 30, 2006
Police
Officers'
Pension
ADDITIONS
Contributions:
Employer
Plan members
State
Total contributions
Investment earnings:
Net increase in fair value of investments
Interest and dividends
Total investment earnings -
Less investment expenses
Net investment earnings
Total additions
$ 219,898
85,433
117,621
422,952
141,456
144,940
286,396
(20,606)
265,790
688,742
DEDUCTIONS
Benefits
Refunded contributions
Administrative expenses
Total deductions
Change in net assets
Net assets -beginning of year
Net assets -end of year
105,202
12,388
13,078
130,668
558,074
4,153,220
$ 4,711,294
The accompanying notes to financial statements are an integral part of this financial statement.
28
City of Sebastian, Florida
Notes to the Financial Statements
September 30, 2006
I. 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 approximately 21,6001iving 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 U.S. generally accepted accounting principles as applied to
governmental units. The more significant of the City's accounting policies are described below:
A. Reporting Entity
In evaluating the City as a reporting entity, management has included all component units in accordance with Governmental
Accounting Standards Board (GASB) Statement No. 14, "Defining the Financial Reporting Entity". The Financial Reporting Entity
consists of the City of Sebastian (the primary government) and its blended component units. Blended component units are legally
separate organizations for which the City Council is financially accountable. The component units discussed below are included in
the City's reporting entity.
Blended Component Units
The following 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 or because the component unit exclusively serves the City. The
financial statements of these component units may be obtained from the Finance Department of the City of Sebastian.
Community Redevelopment Agency (CRA) -The governing body of the CRA is the Sebastian City Council. 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 is broader than anon-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".
B. Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report
information on all of the nonfiduciary activities of the primary government and its blended 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.
Separate fund 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.
GASB Statement No. 34 Basic Financial Statements and Management Discussion and Analysis for State and Local Governments sets
forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the
governmental and enterprise funds combined) for the determination of major funds. The nonmajor funds are combined in a column
in the fund financial statements and detailed in the combining.section.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
1. Economic Resources Measurement Focus and Accrual Basis of Accounting
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. This means that revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of the 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.
29
In applying the "susceptible to accrual" concept to intergovernmental revenues pursuant to GASB Statement No. 33, Accounting
and Financial Reporting for Nonexchange Transactions as amended by GASB Statement No. 36, Recipient Reporting of Certain
Shazed Nonexchange Revenues (the City may act as either provider or recipient), the provider should recognize liabilities and
expenses and the recipient should recognize receivables and revenue when the applicable eligibility requirements including time
requirements, are met. Resources transmitted before the eligibility requirements aze met should, under most circumstances, be
reported as advances by the provider and deferred revenue by the recipient.
Private-sector standards of accounting and financial reporting issued prior to December I, 1989, generally are followed in both
the government-wide and proprietary fund financial statements to the extent that those standazds do not conflict with or
contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following
subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The
government has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by
program revenues. Direct expenses are those that aze 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.
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 golf course fund and the building fund are charges to customers for
services and for the airport fund lease revenue. Operating expenses for enterprise funds include cost of sales and services,
administrative expenses, and depreciation on capital assets. Al] revenues and expenses not meeting this definition are reported
as nonoperating revenues and expenses.
The agency fund reports only assets and liabilities; therefore, it does not have a measurement focus. However, it uses the accrual
basis of accounting to recognize receivables and payables.
2. Modified Accrual
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. "Available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this
purpose, the City considers revenues to be available if they are collected within sixty (60) days of the end of the current fiscal
period except grant revenues. The City considers grant revenues to be available if they are collected within one year of the end
of the current fiscal period. All material revenues, except for occupational licenses and property taxes, aze considered
measurable and available and are thus susceptible to accrual. Occupational licenses aze not considered available since neither a
legally enforceable claim exists nor were the related services provided before October 1, 2006. Expenditures aze generally
recognized under the modified accrual basis of accounting when the related fund liability is incurred, if measurable. An
exception to this general rule is principal and interest on general long-term obligations, which are recognized when due.
Property taxes, public utility taxes, franchise fees, sales and fuel taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues in the current fiscal period. Only
the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received
by the City.
The government reports the following major governmental funds:
The general fund is the government's primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
The 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 stormwater utility improvements fund accounts for the resources associated with debt and stormwater
assessment fees for the purpose of constructing stormwater related improvements.
30
The government 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.
The building fund accounts for the activities associated with the building permit and inspection program.
Additionally, the government reports the following fund types:
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 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.
D. Assets, Liabilities and Fund Equity
1. Cash and cash equivalents
Cash and cash equivalents represents all investments that are short term, highly liquid, and readily convertible to a specified
cash value. These investments generally have original maturities of three months or less. Cash equivalents consist of cash in
banks and on hand.
2. 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 (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 fora 2a-7 fund.
In accordance with the regulations of 2a-7 like pools, the City's share of investments held at the State Board of Administration
aze 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 of the Pool aze 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. Except for
the Pool, investments, including the Police Officers' Pension Fund, are reported at their fair value based on the quoted market
price or the best available information.
3. Interfund Receivables and Payables
During the course of operations, transactions occur between individual funds that may result in amounts owed between funds.
Short-term interfund loans are reported as "due to and from other funds". Due to and from other funds are eliminated in the
Statement of Net Assets. There were no interfund loans between the Governmental funds and Proprietary funds as of September
30, 2006.
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable
governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
There were no advances between the Governmental funds and Proprietary funds as of September 30, 2006.
4. Receivables
Receivables consist of trade receivables, due from other governments and interest receivable (see Note IV.C. on page 37 for
detail) and are recorded at the net realizable value. The City, as of September 30, 2006, has no allowance for doubtful accounts,
since all receivables aze considered collectible.
5. Inventor and Prepaid Items
Inventory is 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
government-wide and fund financial statements.
31
6. Restricted Assets
Certain net assets of the City are classified as restricted assets on the statement of net assets because their use is limited either by
law through constitutional provision or enabling legislation; or by restrictions imposed externally by creditors, grantors,
contributors, or laws or regulations of other governments. In a fund with both restricted and unrestricted assets, qualified
expenses are considered to be paid first from restricted net assets and then from unrestricted net assets.
7. Capital Assets
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 fair
market value 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.
All infrastructure assets acquired prior to the implementation of GASB Statement 34 were capitalized as projects and were
completed or assets were acquired. Therefore, the initial capitalization of general infrastructure assets was not necessary.
Capital asset depreciation is recognized using the straight-line method over the estimated useful lives as follows:
Classification Range of Lives
Buildings and improvements 10-40 years
Public domain infrastructure 40-50 years
System infrastructure 15-30 years
Improvements other than buildings 10-40 years
Machinery, equipment and other 5-15 years
Airport runways 20 years
8. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits and 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.
9. Long-Term Liabilities
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 assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the straight-line method. Bonds payable are recorded net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and amortized over the life of the related debt. In
the fund financial statements, governmental fund types recognize bond premium and discounts, as well as debt 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.
10. Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for
appropriation or are legally restricted by outside parties for use for a specific purpose. The nature and purpose of these reserves
are explained as follows:
Reserved for encumbrance -represents encumbrances outstanding at year end that the City intends to
honor as commitments.
Reserved for debt service -represents, in accordance with legal restrictions, amounts for payment of
principal and interest maturing in later years.
Reserved for capital projects -represents amounts restricted for capital projects.
Reserved for property and casualty -represents amounts restricted for property and casualty claims.
Reserved for cemetery care -represents amounts restricted for use in cemetery maintenance.
Reserved for law enforcement -represents, in accordance with State Statutes, funds required to be spent
on drug education and awareness activities.
Reserved for emergency services -represents amount restricted for natural disasters.
Reserved for equipment replacement -represents amounts restricted for the replacement of capital assets.
32
Designations of unreserved fund balances are not required by law or accounting principles, but aze further classifications of fund
equity to identify funds that are not earmarked for specific purposes.
II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. Exulanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement
of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net assets-
governmental activities as reported in the government-wide statement of net assets.
"Total fund balances" of the City's governmental funds ($21,918,531) differs from "net assets" of governmental activities
($33,942,143) reported in the statement of net assets. This difference primarily results from the long-term economic focus of the
statement of net assets versus the current financial resources focus of the governmental fund balance sheet. The effect of the
differences is illustrated below.
Capital related items
When capital assets (property, plant, equipment) that are to be used in the governmental activities are purchased or constructed, the
cost of those assets are reported as expenditures in governmental funds. However, the statement of net assets included those capital
assets among the assets of the City as a whole.
Cost of capital assets
Accumulated depreciation
Total
$ 44,853,107
(15.208,972)
$ 29.644.135
Net pension obli ag tion
When net pension obligation is a negative amount, the amount is presented as an asset on the statement of net assets.
Negative net pension obligation
$ 148.607
Long-term debt transactions
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly
are not reported as fund liabilities (both current and long-term) are reported in the statement of net assets. Balances at September 30,
2006 were:
Bonds payable:
Infrastructure sales surtax revenue bonds,
Series 2003 $(7,955,000)
Less: Deferred charge for issuance costs 224,170 $(7,730,830)
Infrastructure sales surtax revenue bonds,
Series 2003A (1,870,000)
Less: Deferred charge for issuance costs 87,695 (1,782,305)
Stormwater utility revenue bonds,
Series 2003 (5,055,000)
Less: Deferred charge for issuance costs 171,143
Less: Deferred charge for bond discounts 12,915 (4,870,942)
Notes payable (1,790,544)
Less: Deferred charge for issuance costs 5.232 (1,785,312)
Capital lease payable (288,252)
Less: Deferred charge for issuance costs 3,016 (285,236)
Compensated absences (1,044,670)
Total $(17.499.295)
Accrued interest
Accrued liabilities in the statement of net assets differs from the amount reported in governmental funds due to accrued interest on
bonds payable, notes payable, and capital lease.
Bonds
Notes
Capital lease
Total
$ (258,800)
(7,453)
(7,431)
(273.6841
33
Deferred revenues
Deferred revenues in the statement of net assets differ from the amount reported in the governmental funds due to special assessment
receivables. Governmental fund financial statements report unearned revenues or revenues which are measurable but not available as
deferred revenues. However, deferred revenues in governmental funds are susceptible to full accrual on government-wide financial
statements.
Deferred revenues reduced
$ 3 849
B. Explanation of Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes
in Fund Balances and the Government-wide Statement of Activities
The "net change in fund balances" for governmental funds ($1,843,896) differs from the "change in net assets" for governmental
activities ($2,361,520) reported in the statement of activities. The differences arise primarily from the long-term economic focus of
the statement of activities versus the current financial resources focus of the governmental funds. The effect of the differences is
illustrated below.
Capital related items
When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those
assets are reported as expenditures in governmental funds. However, in the statement of activities, the costs of those assets is
allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balances decrease by the amount of
financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year.
Capital outlay $ 1,464,502
Depreciation expense (1,928,734)
Difference (464.2321
In the statement of activities, only the gain and loss on the sale of capital assets are reported. However, in the governmental funds, the
proceeds from the sale increase financial resources.
Loss on sale of fixed assets $ (223,024)
Pension obli ag tion
When net pension obligation is a negative amount, the amount represents over funding and reduces the expenses in the statement of
activities.
Increase in negative net pension obligation $ 26,187
Long-term debt transactions
Repayments of bond principal, notes payable principal, and capital lease principal are reported as expenditures in the governmental
funds and, thus, have the effect of reducing fund balance because current financial resources have been used. However, the principal
payments reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities.
Bond principal payment made $ 900,000
Notes payable principal payment made 214,174
Capital lease principal payment made 134,204
Total $ 1 248 378
Some expenses reported in the statement of activities do not require the use of current financial resources, therefore, are not reported
as expenditures in governmental funds.
Net change in compensated absences $ (42,064)
Net accrued bond interest expense 9,277
Net accrued notes interest expense 891
Net accrued capital lease interest expense 3,459
Amortization of issuance costs (41,248)
Net adjustment (69.685)
III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetar~Information
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 31, 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.
34
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. (See page 49 through page 53)
IV. DETAIL NOTES ON ALL FUNDS
A. Deposits
At September 30, 2006, the carrying amount of the City of Sebastian's deposits with banks was $425,743 and the bank balance was
$388,521. 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.
B. 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 to protect
City's cash and investment assets. The City maintains a common cash and investment pool for the use of all funds. Pension Trust
Funds are held with third party trustees and are governed by rules established by Florida Statute Chapter 185.
As of September 30, 2006, the City had the following investments and effective duration presented in terms of years:
Investment Type
Government-wide
U.S Agencies
Guaranteed investment contract
Certificate of deposit
Local government surplus fund trust
fund investment pool
Fiduciary Funds
United States Treasuries
United States Agencies
Domestic corporate bonds
Domestic corporate equities
Total fair value
Investment Maturi ty (Year)
Fair Value Less Than 1 From 1-3 From 4-6 Over 7
$ 10,918,360 $ - $ 10,918,360 $ - $ -
4,894,344 4,894,344 - - -
8,065,688 8,065,688 - - -
23,878,392 12,960,032 10,918,360 - -
436,213 - 179,450 197,953 58,810
723,537 - 63,964 127,336 532,237
531,853 - - 92,396 439,457
2,422,543 2,422,543 - - -
4,114,146 2,422,543 243,414 417,685 1,030,504
$ 27,992,538 $ 15,382,575 $ 11,161,774 $ 417,685 $ 1,030,504
Investment holdings consist of $10,918,360 in direct obligations of the United States Treasury Securities and Federal
instrumentalities which are 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 are held in trust by the City's bank depository in the
City's name.
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 has a formal investment policy that 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.
Interest receivable on the government-wide and fiduciary investment portfolios amounted to $177,057 and $21,151, respectively, as
of September 30, 2006.
35
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.
Included in the government-wide investment portfolio, the City has $10,918,360 in Federal Instrumentalities that have embedded
options consisting of the option at the discretion of the issuer to call their obligation or pay a stated increase in the interest rate. These
securities have different call dates, and mature in 2006, 2007, 2008, and 2009.
Credit Risk
"The City investment policy permits for investments in the following investments, 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-1" by Moody's
Investors Services and "A-1" Standazd & Poor's. Commercial paper of any United States company that is rated, at the time of
purchase, "Prime-1" by Moody's and "A-1" 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 Standazd & Poor's.
As of September 30, 2006, the City's investment securities were all individually rated AAA by Standard & Poor's and Aaa by
Moody's Investor Services.
The City's $8,065,688 investment deposit in the Local Government Surplus Funds Trust Fund investment pool was unrated as of
September 30, 2006.
The City's $4,894,344 guazanteed investment contract represents the investment of construction funds, which has a term appropriate
to the need for funds and in accordance with debt covenants. The investment contract is with Citigroup, which is Aal/AA-rated
Company. The investment was unrated as of September 30, 2006.
Investment in the City's pension trust funds aze limited by State Statutes Chapter 185 and by an investment policy adopted by the
fund's Board of Trustees. The allowable investment instruments include United States Government Obligations, Certificates of
Deposit, and Repurchase Agreements with major money center banks, Commercial Paper rated A-1 by Standazd & Poor's or P-1 by
Moody's or better, with the exception of the custodian's savings account. In addition, common stocks and equity securities having
prospects of attractive returns from a combination of appreciation are also allowed.
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 temtory 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.
As of September 30, 2006, the City's investment portfolio was held with athird-party custodian as required by the City's investment
policy.
36
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 IS% 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
any one institution, 25% of available funds may be directly invested in prime commercial paper with a ] 0% 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 ] 0% 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 50% of available funds may
be invested in equity securities.
As of September 30, 2006, the City had the following issuer concentration based on fair value:
Issuer
Local government surplus funds trust
fund ("SBA")
United States Treasuries
United States Agencies
Guaranteed investment contract
Domestic corporate bonds
Domestic corporate equities
Total
Government-wide
Percentage of
Amount Portfolio
$ 8,065,688
10,918,360
4,894,344
$ 23,878,392
33.78%
0.00%
45.72%
20.50%
0.00%
0.00%
100.00%
Fiduciary Funds
Percentage of
Amount Portfolio
$ - 0.00%
436,213 10.60%
723,537 17.59%
- 0.00%
531,853 12.93%
2,422,543 58.88%
$ 4,114,146 100.00%
C. Receivable and Payable Balances
Receivables
Receivables at September 30, 2006 were as follows:
Governmental activities:
General
Discretionary sales tax
I2iverfi-ont redevelopment
Stormwater utility improvements
Other governmental
Total -governmental activities
Interest Accounts
Due From
Other
Governments Total
Business-type activities:
Golf course
Airport
Building
Total -business-type activities
All receivables are anticipated to be collected.
$ 48,806 $ 337,454 $ 328,984 $ 715,244
12,963 - 226,039 239,002
4,318 - - 4,318
50,237 - 2,798 53,035
48,463 - 100,570 149,033
$ 164,787 $ 337,454 $ 658,391 $ 1,160,632
$ 3,253 $ - $ - $ 3,253
97 39,172 41,737 81,006
8,920 - - 8,920
$ 12,270 $ 39,172 $ 41,737 $ 93,179
37
Payables
Payables at September 30, 2006 were as follows
Salaries Due to
and Other
Vendors Retainage Benefits Government Total
Governmental activities:
General $ 265,901 $ - $ 255,398 $ 210,827 $ 732,126
Riverfront redevelopment 632 - - - 632
Stormwater utility improvements 1,170 - - - 1,170
Other governmental 109,246 5,690 - - 114,936
Total -governmental activities $ 376,949 $ 5,690 $ 255,398 $ 210,827 $ 848,864
Business-type activities:
Golf course $ 33,426 $ - $ 10,166 $ 8,083 $ 51,675
Airport 98,268 - 6,919 252 105,439
Building 1,747 - 18,219 - 19,966
Total -business-type activities $ 133,441 $ - $ 35,304 $ 8,335 $ 177,080
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to
liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have
been received, but not yet earned. At September 30, 2006, the various components of deferred revenue and unearned revenue
reported in the governmental funds were as follows:
Unavailable Deferred
Special assessments not yet due (General fund) $ 3,849 $ -
Occupational licenses received in advance (General Fund) - 65,292
Total deferred/unearned revenue for governmental funds $ 3,849 $ 65,292
D. Capital Assets
Capital asset activity for the year ended September 30, 2006 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $ 5,489,774 $ - $ (187,827) $ 5,301,947
Construction in progress 1,006,241 894,386 (733,420) 1,167>207
Total capital assets, not being depreciated 6,496,015 894,386 (921,247) 6,469,154
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
9,890,903 106,118 (38,831) 9,958,190
4,152,943 461,383 - 4,614,326
6,100,906 564,097 (228,765) 6,436,238
17,203,261 171,938 - 17,375,199
37,348,013 1,303,536 (267,596) 38,383,953
(1,277,135) (312,914) 4,783 (1,585,266)
(961,944) (205,052) - (1,166,996)
(3,974,287) (755,623) 227,616 (4,502,294)
(7,299,271) (655,145) - (7,954,416)
(13,512,637) (1,928,734) 232,399 (15,208,972)
23,835,376 (625,198) (35,197) 23,174,981
$ 30,331,391 $ 269,188 $ (956,444) $ 29,644,135
38
Business-type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Business-type activities capital assets, net
Beginning Ending
Balance Increases Decreases Balance
$ 9,060 $ - $ - $ 9,060
4,857,192 1,605,258 (3,691,514) 2,770,936
4,866,252 1,605,258 (3,691,514) 2,779,996
1,555,358 280,100 (3,310) 1,832,148
779,905 437,932 (36,785) 1,181,052
585,282 55,324 (1,680) 638,926
3,313,755 2,972,927 (273,719) 6,012,963
6,234,300 3,746,283 (315,494) 9,665,089
(319,851) (39,429) 3,050 (356,730)
(213,578) (47,219) 25,527 (235,270)
(457,626) (57,596) 1,680 (513,542)
(1,292,175) (152,540) 13,686 (1,431,029)
(2,283,230) (297,284) 43,943 (2,536,571)
3,951,070 3,448,999 (271,551) 7,128,518
$ 8,817,322 $ 5,054,257 $ (3,963,065) $ 9,908,514
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government
Public safety
Transportation
Physical environment
Cultural and recreation
Total depreciation expense-governmental activities
Business-type activities:
Golf Course
Airport
Building
Total depreciation expense-business-type activities
Construction Commitments
$ 346,823
413,538
516,737
372,114
279,522
$ 1,928,734
$ 105,058
186,955
5,271
$ 297,284
The City has various construction commitments outstanding at September 30, 2006. The major construction commitments include
school building renovation, various park projects, and Louisiana Avenue Improvements.
Remaining Major
Project Spent-to date Commitment Funding Source
Discretionary Sales Tax Revenue Bonds,
School Building Renovation $ 92,617 $ 820,149 Series 2003, and Historic Preservation Grant
Bryan Court Park Playground 4,250 30,635 Recreation impact fees
Blossom Park Playground 94 38,720 Recreation impact fees
Middle Stonecrop Improvements 142,862 52,017 Stormwater Revenue Bonds, Series 2003
Louisiana Avenue Improvements 1,080,005 54,041 Discretionary sales tax
Construct Access Road 68,667 26,071 FDOT
Airfield Lighting and Signage 44,472 26,114 FDOT
Total $ 1,432,967 $ 1,047,747
39
E. Interfund Balances
Interfund balances at September 30, 2006 consisted of the following amount:
Due to General Fund from:
Nonmajor governmental funds:
Local Option Gas Tax $ 108,269
Total $ 108,269
The balance of $108,269 due to the general fund from the local option gas tax fund represents short-term cash loans that will be
repaid within the next twelve months.
F. Interfund Transfers
Transfers are used to 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget
requires to expend them, 2) utilize reserved revenues collected in the General fund to finance various programs accounted for in other
funds in accordance with budgetary. authorizations, and 3) utilize discretionary sales tax revenues for infrastructure improvements
and equipment purchases which must be accounted for in other funds. Following is a schedule of Interfund Transfers:
Transfers In
Transfers Out:
General Fund
Stormwater Utility Improvements
Discretionary Sales Tax Fund
Nonmajor Governmental Funds
Total Transfers Out
G. Leases
Discretionary
General Sales Tax
Fund Fund
$ - $ -
Airport
Nonmajor Capital
Governmental Project Building
Funds Fund Fund Total
$ - $ - $ 1,139,289 $ 1,139,289
50,000 6,960 3,619 - - 60,579
203,904 - 1,835,776 274,916 - 2,314,596
646,657 - 1,039,065 - - 1,685,722
$ 900,561 $ 6,960 $ 2,878,460 $ 274,916 $ 1,139,289 $ 5,200,186
1. Operatine Leases-Lessee
The City is obligated under certain leases for land and golf carts accounted for as operating leases. Operating leases do not give rise
to property rights or lease obligations. Total costs for such leases were $227,250 for the fiscal year ended September 30, 2006. The
following is a schedule by years for future minimum rental payments required under operating leases in the Golf Course Proprietary
fund that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2006:
Golf Course
Golf
Year Endins September 30, to: Airport Carts
2007 $ 175,000 $ 107,988
2008 175,000 -
2009 175,000 -
2010 175,000 -
2011 250,000 -
2012-2015 1,000,000 -
Totals $ 1,950,000 $ 107,988
2. Capital Leases-Lessee
The City has entered into a lease agreement as lessee for financing the acquisition of heavy construction equipment for its public
works department. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the
present value of its future minimum lease payments as of the inception date.
40
The property being leased is included in the statement of net assets governmental activities column and has a cost of $859,859 and a
cazrying value of $319,865. For fiscal yeaz 2006, total depreciation expense for the leased equipment is $100,344. The assets
acquired through the capital lease aze as follows:
Governmental
Activities
Asset:
Machinery and equipment $ 859,859
Less: Accumulated depreciation (539,994)
Total $ 319,865
The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2006 were as
follows:
Governmental
Yeaz Ending September 30, Activities
2007 $ 154,694
2008 154,694
Total minimum lease payments 309,388
Less: amount representing interest (21,136)
Present value of minimum lease payments $ 288,252
3. Operating Leases-Lessor
The City is the lessor of two communication tower leases with lease terms of twenty-five years. Following is a schedule by year of
minimum future rental income on noncancelable operating leases:
Governmental
Year Ending September 30, Activities
2007 $ 35,833
2008 39,135
2009 40,074
2010 41,049
2011 42,064
2012-2016 238,544
2017-2021 287,452
2022-2025 198,346
Total minimum future rentals $ 922,497
The airport is the lessor of vazious properties (land with a cost basis of $9,060) with lease terms varying from twenty to thirty years.
Following is a schedule by yeaz of minimum future rental income on noncancelable operating leases:
Business-type
Yeaz Ending September 30, Activities
2007 $ 274,389
2008 276,304
2009 278,277
2010 280,309
2011 357,401
2012-2016 1,567,062
2017-2021 558,308
2022-2026 624,011
2027-2031 681,497
2032-2035 481,881
Total minimum future rentals $ 5,379,439
41
H. Long-term Obligations
1. Revenue Bonds/Notes
Revenue bonds/notes are secured by and payable from the revenues of the respective funds that issued them.
a. The City entered into a fifteen (15) year loan agreement in 1998 with a local bank for $3,268,890 to provide financing to
repave certain roads in the City. The City pledged Local Option Gas Tax and Municipal Gas Tax to repay the note payable.
The funds are accumulated in the Local Option Gas Tax Special Revenue fund for repayment of principal and interest.
b. The City issued a ten (10) year, $2,435,000 Recreational Facilities Improvement and Refunding Revenue Bonds, Series
2001 in March 2001. The City has pledged Golf Course revenues along with a covenant to budget and appropriate for
repayment of principal and interest.
c. The City issued a fifteen (15) year, $9,500,000 Infrastructure Sales Surtax Revenue Bonds, Series 2003 in April 2003. The
City has pledged Infrastructure Sales Surtax revenues for repayment of principal and interest.
d. The City issued a fifteen (15) year, $2,125,000 Infrastructure Sales Surtax Revenue Bonds, Series 2003A in December
2003. The City has pledged Infrastructure Sales Surtax revenues for repayment of principal and interest.
e. The City issued a nineteen (19) year, $5,630,000 Stormwater Utility Revenue Bonds, Series 2003 in November 2003. The
City has pledged Stormwater Fee Revenues along with a covenant to budget and appropriate for repayment of principal and
interest.
2. Bond Coverage
a. The City has covenanted in the Recreational Facilities Improvement and Refunding Revenue Bonds, Series 2001 Bond
Resolution to fix, establish and maintain such rates, fees, rentals and other charges and collect such fees, rates, rentals, and
other charges for the product, services, facilities and use of its facilities, and revise the same from time to time, whenever
necessary, as will always provide in each fiscal year net revenues equal to at least one hundred twenty-five percent (125%)
of the annual debt service becoming due in such fiscal year.
The following table indicates the degree of compliance with the bond resolution covenants in the Golf Course Fund at
September 30, 2006.
Gross revenues available for compliance (charges $ 1,628,015
for services, interest, and rent revenues)
Opearting and maintenance
expenses (excluding depreciation expense, amortization,
airport lease payment, and one time hurricane repair
expenses) 1,165,411
Amount of revenue over
direct operating expenses $ 462,604
Debt service requirement $ 311,690
Percent coverage for the year
ended September 30, 2006 148%
City management continues to monitor the Golf Course operation and intends to adjust rates whenever necessary to meet
the bond coverage requirement.
b. The City has covenanted in the Stormwater Utility Revenue Bonds, Series 2003 Bond Resolution to fix, establish, maintain
and collect Stormwater fees, and revise the same from time to time whenever necessary, so as to always provide in each
fiscal year Stormwater fee revenues and investment earnings equal to at least one hundred thirty-five percent (135%) of the
annual debt service becoming due in each fiscal year.
42
The following table indicates the degree of compliance with the bond resolution covenants in the stormwater utility fund at
September 30, 2006.
Gross revenues available for compliance $ 908,576
Debt service requirement $ 436,973
Percent coverage for the year
ended September 30, 2006 208%
3. Changes in LOng-term Liabilities
The following is a summary of changes in Long-Term Liabilities of the City for the year ended September 30, 2006:
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Governmental activities:
Bonds payable:
Infrastructure Sales Surtax Revenue
Bonds, Series 2003
Infrastructure Sales Surtax Revenue
Bonds, Series 2003A
stormwater Utility Revenue Bonds,
Series 2003
Total bonds payable
Notes payable
Capital leases
Compensated absences
Governmental activity
long-term liabilites
Business-type activities:
Bonds payable:
Recreational Facilities Improvement and
Refunding Revenue Bonds, Series 2001
Less deferred amount:
Issuance premium
Loss on refunding
Total bonds payable
Compensated absences
Business-type activity
long-term liabilites
$ 8,490,000 $ - $ 535,000 $ 7,955,000 $ 550,000
2,000,000 - 130,000 1,870,000 130,000
5,290,000 - 235,000 5,055,000 240,000
15,780,000 - 900,000 14,880,000 920,000
2,004,718 - 214,174 1,790,544 223,646
422,456 - 134,204 288,252 140,713
1,077,664 545,681 578,675 1,044,670 100,987
$ 19,284,838 $ 545,681 $ 1,827,053 $ 18,003,466 $ 1,385,346
Beginning
Balance Additions
$ 1,395,000 $
Ending Due within
Reductions Balance One Year
- $ 255,000 $ 1,140,000 $ -
3,987 - 797 3,190 -
(41,610) - (8,322) (33,288) -
1,357,377 - 247,475 1,109,902 -
83,166 17],609 105,929 148,846 6,276
$ 1,440,543 $ 171,609 $ 353,404 $ 1,258,748 $ 6,276
For the governmental activities, compensated absences aze generally liquidated by the general fund.
43
4. Debt Service Requirements to Maturity
The annual requirement to amortize all bonded debt outstanding at September 30, 2006, including interest requirements, is as
follows:
Governmental Activities
Roadway Infrastructure Infrastructure Stormwater
Improvement SalesSurtax SalesSurtax Utility
Note Revenue Bonds, Revenue Bonds, Revenue Bonds,
Fiscal Payable Series 2003 Series 2003A Series 2003
Year 4.40% Interest 2% to 4.125% Interest 2% to 4% Interest 2% to 4.5% Interest
2007 $ 223,650 $ 76,350 $ 550,000 $ 286,319 $ 130,000 $ 66,888 $ 240,000 $ 197,272
2008 233,598 66,402 565,000 269,819 135,000 63,800 245,000 191,873
2009 243,990 56,010 585,000 252,869 135,000 60,088 255,000 185,135
2010 254,843 45,157 600,000 233,856 145,000 56,037 260,000 177,485
2011 266,180 33,820 620,000 214,356 145,000 51,325 270,000 169,035
2012-2016 568,283 31,717 3,460,000 723,054 810,000 172,463 1,515,000 681,477
2017-2021 - - 1,575,000 97,212 370,000 22,200 1,850,000 347,510
2022-2022 - - - - - - 420,000 18,900
$ 1,790,544 $ 309,456 $ 7,955,000 $ 2,077,485 $ 1,870,000 $ 492,801 $ 5,055,000 $ 1,968,687
Business-type Activities
Golf Course
Refunding
Bonds,
Fiscal Series 2001
Year 4% to 4.2% Interest
2007* $ - $ 23,245
2008 270,000 41,090
2009 280,000 30,090
2010 290,000 18,545
2011 300,000 6,300
Less unamortized
Bond premium 3,190 -
Loss on refundi~ (33,288) -
$ 1,109,902 $ 119,270
*principal ($255,000) and interest ($28,345) due on October 1, 2006 was paid on September 30, 2006
I. Restricted Assets:
Certain cash and claims to cash, that are legally restricted, have been shown as restricted in the statement of net assets as follows:
Debt service
Capital projects
Renewal and replacement
Rent
Cemetery perpetual care
Total
Govermental
Activities
$ 49,313
9,058,356
649,998
$ 9,757,667 $ 560,581
Business-type
Activities
$ 316,490
69,091
175,000
J. Restricted Net Assets:
The government-wide statement of net assets reports $5,629,164 of restricted net assets, of which all is restricted by enabling
legislation.
44
V. OTHER INFORMATION
A. Property Tax
The City is permitted by State law to levy taxes up to ] 0 mills on assessed valuation. The millage rate levied by the City for the
fiscal year ended September 30, 2006, was 3.9325 mills. Total tax collections were approximately 96.62% 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 liened on
property values as of January 1. The fiscal year for which taxes are levied begins October 1. Taxes are due November 1 and become
delinquent on April I. 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.
B. Grants from Other Governmental Units
Federal, State and local government grants represent an important source of supplementary funding used to finance infrastructure,
recreation, law enforcement, and environmental activities beneficial to the community. These grants are recorded in the General,
Special Revenue, Capital Project, and Enterprise funds. A grant receivable is recorded when the City has a right to reimbursement
and expects to receive the grant within a year under the related grant. The grants normally specify the purpose for which the funds
may be used and are subject to audit by the grantor agency or its representative.
The following is the amount of grant revenue for fiscal year 2006.
Primary Government Amount
General government $ 30,870
Public safety 138,546
Physical environment 2,273
Transportation 900,365
Economic environment 30,059
Cultural/Recreation 224,383
Airport 1,056,562
Golf course 6,998
Total reporting entity $ 2,390,056
C. Police Pension Plan -Defined Benefit 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 report dated July 26, 2005. 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.
Employee membership data as of the actuarial report for period ending October 1, 2004, dated October 11, 2005 is as follows:
Police Pension
Plan 2004
Retirees and beneficiaries currently
receiving benefits 3
Terminated employees entitled to
refund of employee contribution
but not yet received 1
Fully, partially, and non-vested
active plan participants 33
Total 37
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.
Funding Policy. The employer, employee, and State contribution requirements are applicable to the Plan and actuarially determined
on a bi-annual basis in accordance with Florida State Statute. Administration costs of the pension plan are financed by the Plan. The
employee contribution rate, expressed as a percentage of compensation, was 5.0% for the 2005-2006 fiscal year. The employer
contribution rate, expressed as a percentage of compensation, was 13.1 % for the 2005-2006 fiscal year. The employer contribution is
45
$219,898 and the State contribution is $117,621, which represents state shared revenue that is levied on property and casualty
insurance premiums and collected by the State. The State contribution was recognized and recorded in the general fund and the
corresponding expenditure was recorded as public safety expenditure. The City is required to contribute the remaining amounts to
ensure that the Plan is actuarially sound.
Required trend information for the Police Officers' Pension Plan was as follows:
Amount
Actuarially Determined Contribution
2003 $ 140,721
2004 $ 173,025
2005 $ 212,636
Percentage of APC contributed
2003 109.00%
2004 101.00%
2005 113.00%
Since the employer contribution exceeded the annual pension costs, there is no net pension obligation for the plan.
The annual required contribution for the Police Officers' Pension Plan was determined as part of the October 1, 2004, actuarial
valuation using the aggregate actuarial cost method. This method does not identify or separately amortize unfunded actuarial accrued
liabilities. The actuarial assumptions included (a) an 8.0% rate of return (net of administrative costs) and (b) projected salary
increases of 6% per yeaz, including inflation at 3%. 'There is no unfunded actuarial accrued liability as of September 30, 2005.
Reserves. All of the net assets of the Police Pension Plan are legally reserved for plan participant benefits.
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 aze 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 and Concentration of 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 aze valued at the last
reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest payments, and aze
discounted at prevailing interest rates for similar instruments. Investments that do not have an established market aze 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.
Development of Net Pension Obligation (NPO)
This municipal Defined Benefit Plan has been subject to the minimum funding standazds since the adoption of the "Florida Protection
of Public Employee Retirement Benefit Act" (Part VII of Chapter 112, Florida Statutes) in 1980. Accordingly, the sponsor has
funded the actuarially determined required contributions for all years from October 1, 1987, through the transition date, October 1,
1997. Thus, the NPO on October 1, 1997, is $0.
The development of the Net Pension Obligation as of September 30, 2005 is as follows:
Actuarially Determined Contribution (A)
Interest on NPO
Adjustment to (A)
9/30/2003 9/30/2004 9/30/2005
140,721 $ 173,025 $ 212,636
(8,867) (9,760)
(9,794)
11,138
Annual Pension Cost
Contributions made
Increase in NPO
NPO beginning of yeaz
NPO end of yeaz
10,083 11,100
141,937 174,365 213,980
153,111 174,780 240,167
(11,174) (415) (26,187)
(110,832) (122,005) (122,420)
$ (122,006) $ (122,420) $ (148,607)
46
D. CWA / ITU Negotiated Pension Plan -Defined Benefit Plan
Plan Description: The CWA/ITU Negotiated Pension Plan (NPP), which began in 1967, is amulti-employer, defined benefit plan.
The Plan is available to any Communication Workers of America (CWA) bargaining unit member, and benefits are portable from one
contributing employer to another.
Benefits
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 I, 1989. Once the Service Credit amount is
accrued, the employee is vested and cannot lose the right to a pension.
Early Pension: Minimum age 60: 20 years of Service Credit required if employed after January 1, 1989. 25 years of Service Credit
required if employment ended before January 1, 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 five 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 is in receipt of a Social Security Disability Award and is vested, but not immediately
eligible to receive any pension described above, the employee may be eligible for a lump sum equal to total contributions credited on
the employees behalf (or 36 times the Normal Pension amount, if greater). If the employee is immediately eligible for a pension but
not yet receiving one, the employee can still qualify for a lump sum if the employee submits two physicians' written statements that
the disability will lead to death within one year of the date of application.
Death Benefit: If the employee dies before becoming a pensioner and has at ]ease $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.
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, 2003, which is negotiated every 3 years, and approved by City Council.
Funding Policy.• Administration costs of the pension plan are financed by the plan. The employer contribution rate, expressed as a
percentage of compensation, was 9.00% for the 2005-2006 fiscal year. Employees do not contribute to this plan. Contributions to the
CWA Pension Plan for the fiscal years ended September 30, 2004, 2005 and 2006 were $205,056, $216,464, and $229,159
respectively, which are equal to 100% of the required contribution for each year.
E. 401 Plan -Defined Contribution 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 of the City of Sebastian, and may be rolled over to another "qualified" employer plan that accepts rollovers, or
Traditional IRA's.
Benefits
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 paid either partially or by total distribution of the employees' account balance.
Annuities: Retirement benefits can be utilized to purchase an annuity.
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, 2003, and approved by the City Manager.
47
Funding Policy: Administration costs of the pension plan are financed by the Plan. The employer contribution rate, expressed as a
percentage of compensation, was 9.00% for the 2005-2006 fiscal year. Employees do not contribute to this Plan. Contributions to
the 401 Defined Contribution Plan for the fiscal years ended September 30, 2004, 2005, and 2006 were $125,745, $146,840, and
$142,002 respectively, which are equal to 100% of the required contribution for each year.
F. Insurance
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.
G. Litigation
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.
H. Grants
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. If any expenditures
were disallowed as a result of these audits, the claims for reimbursement to the grantor agency would become a liability of the City.
In the opinion of management, any such adjustments would not be significant.
48
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
General Fund
For the Year Ended September 30, 2006
REVENUES:
Taxes:
Property
Public utility
Franchise fees
Licenses and permits
Intergovernmental
Charges for services
Fines
Investment earnings
Contributions and donations
Other revenue
Total revenues
EXPENDITURES:
Current:
General government
Public safety
Physical environment
Transportation
Culture and recreation
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Budget Amounts
Original Final
$ 4,233,424 $ 4,233,424
2,018,250 2,018,250
879,700 879,700
243,280 243,280
2,288,405 2,640,943
481,669 481,669
71,625 71,625
105,000 ]05,000
21,200 46,145
41,520 76,606
2,797,340
4,165,239
1,424,183
1,550,740
997,096
10,934,598
2,866,374
4,375,871
1,965,454
1,653,693
1,065,313
11,926,705
(550,525)
643,362
(802,490)
(159,128)
(709,653)
(1,130,063)
938,281
(1,139,289)
~~ ~.
(1,331,071)
6,103,467 6,103,467
$ 5,393,814 $ 4,772,396
Explanation of differences:
Encumbrances for equipment and supplies ordered but not received are reported in the year
the orders are placed for budgetary purposes, but are reported in the year the equipment and
supplies are received for GAAP purposes.
Current year encumbrances
Prior year encumbrances
Amount reported as ending fund balance in the statement of revenues, expenditures and
changes in fund balance for the General Fund.
Actual
Amounts on
a Budgetary
$ 4,306,213
2,183,164
1,253,749
244,370
2,617,774
457,780
62,648
295,123
41,110
247,357
2,492,908
4,074,675
1,924,606
1,603,794
975,839
637,466
900,561
(1,139,289)
(238,728)
398,738
58,020
(81,153)
$ 6,479,072
Variance with
Final Budget -
Positive
(Negative)
$ 72,789
164,914
374,049
1,090
(23,169)
(23,889)
(8,977)
190,123
(5,035)
170.751
912,646
373,466
301,196
40,848
49,899
89,474
854,883
1,767,529
(37,720)
(37,720)
1,729,809
$ 1,729,809
The accompanying notes to required supplementary information are an integral part of this schedule.
49
City of Sebastian, Florida
Schedule of Revenue, Expenditures, and Changes in Fund Balances -Budget and Actual
Discretionary Sales Tax Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Taxes:
Sales
Investment earnings
Total revenues
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Budget Amounts Amounts on Final Budget -
a Budgetary Positive
Original Final Basis (Negative)
$ 2,500,000 $ 2,500,000 $ 2,724,742 $ 224,742
25,000 25,000 107,965 82,965
2,525,000 2,525,000 2,832,707 307,707
- 6,960 6,960 -
(1,727,787) (2,363,397) (2,314,596) 48,801
(1,727,787) (2,356,437) (2,307,636) 48,801
797,213 168,563 525,071 356,508
1,279,261 1,279,261 1,279,261 -
$ 2,076,474 $ 1,447,824 $ 1,804,332 $ 356,508
The accompanying notes to required supplementary information are an integral part of this schedule.
50
City of Sebastian, Florida
Schedule of Revenue, Expenditures, and Changes in Fund Balances -Budget and Actual
Riverfront Redevelopment Agency Special Revenue Fund
For the Year Ended September 30, 2006
Actual Variance with
Budget Amounts Amounts on Final Budget -
a Budgetary Positive
Original Final Basis (Negative)
REVENUES:
Taxes:
Property $ 363,444 $ 363,444 $ 338,837 $ (24,607)
Investment earnings 10,000 10,000 28,400 18,400
Other revenue - - 100 100
Total revenues 373,444 373,444 367,337 (6,107)
EXPENDITURES:
Current:
Economic environment 192,281 287,537 163,858 123,679
Total expenditures 192,281 287,537 163,858 123,679
Excess of revenues over
over expenditures 181,163 85,907 203,479 117,572
Fund balances -beginning 376,682 376,682 376,682 -
Fundbalances -ending $ 557,845 $ 462,589 580,161 $ 117,572
Explanation of differences:
Encumbrances for professional services contracted but not completed is reported in the
year the service is contracted for budgetary purposes, but are reported in the year the
services are received for GAAP purposes.
Current year encumbrances 95,256
Amount reported as ending fund balance in the statement of revenues, expenditures and
changes in fund balance for the Community Development Block Grant Fund. $ 675,417
The accompanying notes to required supplementary information are an integral part of this schedule.
51
QTY OF
I,,
t t~~
~'
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
52
City of Sebastian, Florida
Notes to the Required Supplementary Information -Budget Comparisons
September 30, 2006
A. Budgetary Basis
Annual budgets are adopted 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. Since all accounting principles applied for purposes
of developing data on a budgetary basis differ significantly from those used to present financial statements in conformity
with U.S. generally accepted accounting principles, reconciliations of the resultant timing differences have been
provided on page 49 through page 51. All annual appropriations lapse at year-end.
B. Budeetary Information
The appropriated budget is prepared by fund, function, and department. The government's department heads, with the
City manager's approval, may make transfers of appropriations within a department or division. Transfers of
appropriations between departments and/or divisions require approval of the City council. The legal level of budgetary
control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. The council made
four supplementary budgetary appropriations throughout the year. The ls` quarter budget amendment highlighted a net
increase of $120,529 for the general fund, which represents fund balance carried over from prior fiscal year to fund
outstanding encumbrances and hurricane repairs. The 2°d quarter budget amendment highlighted a net increase of
$512,509 for the general fund, which represents FEMA and State reimbursement received in the 2°d quarter for hurricane
damage and fund balance carried forward from prior fiscal year for building department fiscal year 2005 net operating
result. The building department has officially being separated from the General Fund operation on October 1, 2005. The
building department has been reclassified as an enterprise fund due to the nature of the revenue sources. Aone-time
transfer of accumulated reserve for building code enforcement has been transferred to the building fund. The total
transfer for this transition is $1,139,289. The 3`d quarter budget amendment highlighted a net increase of $159,212 for the
general fund, which represents property insurance and Federal Highway Administration reimbursements received in the
3`d quarter for hurricane damage and grant awarded by Florida Department pf Agriculture and Consumer Services
Division of Forestry. The 4`'' quarter budget amendment highlighted a net increase of $347,621 for the general fund,
which represents the additional transfer from stormwater utility fund for ditch and Swale mowing contract and the State
contribution for Police Pension.
C. Budgeted Expenditures Exceeded Revenues
Budgeted expenditures exceeded revenues in the stormwater utility special revenue fund and the discretionary sales
surtax revenue bonds 2003 debt service fund. However, this is pursuant to the legally adopted budget to expend available
fund equity (cash carry forward) and does not constitute a deficit.
53
City of Sebastian, Florida
REQUIRED SUPPLEMENTARY INFORMATION
Police Officers' Pension Plan
Governmental Accounting Standards Board Statements No. 25 and 27, Financial Reporting for Defined Benefit
Pension Plans and Note Disclosures for Defined Contribution Plans and Accounting for Pensions by State and Local
Governmental Employers require supplementary information be reported on the local pension plans in addition to
that provided in the Notes to the Financial Statements. This information is presented in the following schedules:
SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
LAST SIX FISCAL YEARS
Annual
Fiscal Required City State Percentage
Year Contributions Contribution Contribution Contributed
2005 $ 330,257 $ 240,166 $ 117,621 108.34%
2004 279,741 174,780 106,716 100.63%
2003 233,435 153,111 92,714 105.31%
2002 61,342 8,620 82,877 149.16%
2001 80,740 29,134 68,646 121.10%
2000 68,954 27,704 112,773 203.73%
The information presented in the required supplementary schedules was determined as part of the actuarial evaluation
at the date indicated. Additional information as of the latest actuarial valuation is as follows:
Contribution rates as of 9/30/05
City
Plan members
Annual pension cost
Contributions made
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
14.4%
5.0%
$ 212,636
$ 240,166
10/1/2002
Frozen Entry Age
Level Percentage of Pay, Closed
30 Years (as of 1/01/2002)
Market Value
54
Nonmajor Governmental Funds
55
Special Revenue Funds
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for
particular purposes.
Community Redevelopment Block Grant Fund -This fund is used to account for the Small Cities Grant for
infrastructure improvements in the Louisiana Avenue area of the City.
Local Option Gas Tax Fund -This fund is used to account for the government's share of motor fuel tax revenues
that are legally restricted to transportation related expenditures within the government's boundaries.
Recreation Impact Fee Fund -This fund is used to account for recreation impact fees that are restricted for use in
the expansion or construction of recreational facilities.
Stormwater Utility Fee Fund -This fund is used to account for fees collected on a per unit basis that are restricted
for the purposes of managing the City's Stormwater system.
Law Enforcement Forfeiture Fund -This fund is used to account for the receipt of forfeited cash and equipment
associated with police activities and is restricted to police related equipment purchases and community education
initiatives.
G.R.E.A.T. Program Fund -This fund is used to account for a federal law enforcement grant to be used for gang
resistance, education and training for school children from grade school through middle school.
Debt Service Fund
Debt service funds are used to account for the accumulation of pledged funds that are legally restricted to pay
debts.
Stormwater Utility Revenue Bonds Debt Service Fund -This fund is used to account for the accumulation of
Stormwater utility fees pledged to pay the principal, interest, and fiscal charges on the Stormwater Utility Revenue
Bonds.
Discretionary Sales Surtax Revenue Bonds Debt Service Fund -This fund is used to account for the accumulation
of discretionary sales tax monies pledged to pay the principal, interest, and fiscal charges on the Discretionary
Sales Surtax Revenue bonds.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than
those financed by proprietary funds.
General Capital Projects Fund -This fund is used to
improvements and general capital construction projects
used to finance the improvements in this fund.
account for the construction of non-stormwater related
Governmental resources and State grant revenues are
Capital Improvements Fund -This fund is used to account for the accumulated resources associated with
infrastructure improvements such as parks and building.
Transportation Improvements Fund -This fund is used to account for transportation related construction such as,
roads, intersections, and sidewalks and is funded with governmental resources, impact fees and State grants.
56
Public Facilities Improvements Fund -This fund accounts for the resources associated with debt for the purpose
of constructing and equipping a new city hall complex and renovation and expansion of the police station.
Permanent Fund
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not
principal, may be used for purposes that support the reporting government's programs.
Cemetery Permanent Fund -This fund is used to account for principal trust amounts received, sale of cemetery
lots and related interest income. One-half of the cemetery lot sales and the interest portion of the trust can be used
to maintain the community cemetery.
57
City of Sebastian, Florida
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2006
Special Revenue Funds
Community Local
Development Option Recreation Stormwater
Block Grant Gas Tax Impact Fee Utility
ASSETS
Cash and cash equivalents $ 52 $ 8,382 $ 26,655 $ 20,309
Investments - 165,406 1,242,007 1,550,131
Due from other governments - 64,881 - 10,084
Interest receivable - 2,167 8,614 11,136
Prepaid items
Total assets $ 52 $ 240,836 $ 1,277,276 $ 1,591,660
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ - $ 110 $ 61 $ 4,601
Retainage payable - - - -
Due to other funds - 108,269 - -
Total liabilities
Fund balances:
Reserved for:
Encumbrance
Debt service
Capital projects
Cemetery care
Law enforcement
Unreserved
Total fund balances
Total liabilities and fund balances
- 108,379 61 4,601
52 132,457 1,277,215 1,587,059
52 132,457 1,277,215 1, 587,059
$ 52 $ 240,836 $ 1,277,276 $ 1,591,660
58
Debt Service Funds
Stormwater Discretionary
Law Utlity Sales Surtax
Enforcement G.R.E.A.T. Revenue Revenue
Forfeiture Program Total Bonds 2003 Bonds 2003 Total
$ 11,398 $ 780 $ 67,576 $ 27 $ 29 $ 56
22,627 - 2,980,171 20,293 28,964 49,257
- - 74,965 - - -
44 3 21,964 - - -
- - - - 176,603 176,603
$ 34,069 $ 783 $ 3,144,676 $ 20,320 $ 205,596 $ 225,916
$ 1,730 $ - $ 6,502 $ - $
- - ] 08,269 -
1,730 - 114,771 -
- $ -
- - - 20,320 205,596 225,916
32,339 783 33,122 - - -
- - 2,996,783 - - -
32,339 783 3,029,905 20,320 205,596 225,916
$ 34,069 $ 783 $ 3,144,676 $ 20,320 $ 205,596 $ 225,916
59
City of Sebastian, Florida
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2006
(Continued)
Capital Projects Funds
General Public
Capital Capital Transportation Facilities
Projects Improvements Improvements Improvements Total
ASSETS
Cash and cash equivalents $ 14,946 $ 17,843 $ 5,074 $ 14,057 $ 51,920
Investments 285,664 1,231,489 1,918,414 584,220 4,019,787
Due from other governments - - - 25,605 25,605
Interest receivable 550 11,089 8,600 54 20,293
Prepaid items
Total assets $ 301,160 $ 1,260,421 $ 1,932,088 $ 623,936 $ 4,117,605
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 5 $ 102,633 $ 62 $ - $ 102,700
Retainage payable - - - 5,690 5,690
Due to other funds - - _ _ _
Total liabilities 5 102,633 62 5,690 108,390
Fund balances:
Reserved for:
Encumbrance - 101,460 223,870 618,246 943,576
Debt service _ _ _ _ _
Capital projects 301,155 1,056,328 1,708,156 3,065,639
Cemetery Gaze - _ _ _ _
Law enforcement - _ _ _ _
Unreserved - _ _ _ _
Total fund balances 301,155 1,157,788 1,932,026 618,246 4,009,215
Total liabilities and fund balances $ 301,160 $ 1,260,421 $ 1,932,088 $ 623,936 $ 4,117,605
60
Permanent
Fund Total
Other
Governmental
Cemetery Funds
$ 13,055 $ 132,607
636,943 7,686,158
- 100,570
6,206 48,463
- 176,603
$ 656,204 $ 8,144,401
$ 44 $ 109,246
- 5,690
- 108,269
44 223,205
- 943,576
- 225,916
- 3,065,639
656,160 656,160
- 33,122
- 2,996,783
656,160 7,921,196
$ 656,204 $ 8,144,401
61
City of Sebastian, Florida
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2006
Special Revenue Funds
Community Local Law
Development Option Recreation Stormwater Enforcement
Block Grant Gas Tax Impact Fee Utility Forfeiture
REVENUES:
Taxes:
Motor fuel $ - $ 716,495 $ - $ - $ -
Intergovernmental 30,059 16,998 - - -
Impact fees - - 337,675 - -
Charges for services - - - 819,286 -
Fines - - - - 15,128
Investment earnings - 48,145 46,310 89,289 1,454
Contributions and donations - - - - 1,740
Other revenue - - - 1 972
Total revenues 30,059 781,638 383,985 908,576 19,294
EXPENDITURES:
Current:
Public safety - - - - 3,260
Physical environment - - - 6,765 -
Transportation - 210,935 - - -
Economic environment 30,059 - - - -
Debt Service:
Principal - 214,174 - - -
Interest and fiscal charges - 85,826 - - -
Capital outlay - _ _ _ _
Total expenditures 30,059 510,935 - 6,765 3,260
Excess (deficiency) of revenues
over (under) expenditures - 270,703 383,985 901,811 16,034
OTHER FINANCING
SOURCES (USES)
Transfers in - - 17,654 3,619 -
Transfers out - (489,438) (95,000) (1,076,004) -
Total other financing sources (uses) - (489,438) (77,346) (1,072,385) -
Net changes in fund balances - (218,735) 306,639 (170,574) 16,034
Fund balances -beginning 52 351,192 970,576 1,757,633 16,305
Fund balances -ending $ 52 $ 132,457 $ 1,277,215 $ 1,587,059 $ 32,339
62
Debt service Funds
Stormwater Discretionary
Utility Sales Surtax
G.R.E.A.T. Revenue Revenue
Program Total Bonds 2003 Bonds 2003 Total
$ - $ 716,495 $ - $ - $ -
- 47,057 - - -
- 337,675 - - -
- 819,286 - - -
- 15,128 - - -
47 185,245 972 1,402 2,374
- 1,740 - - -
- 973 - - -
47 2,123,599 972 1,402 2,374
- 3,260 - - -
- 6,765 - - -
- 210,935 - - -
- 30,059 - - -
- 214,174 235,000 665,000 900,000
- 85,826 202,848 369,519 572,367
- 551,019 437,848 1,034,519 1,472,367
47 1,572,580 (436,876) (1,033,117) (1,469,993)
- 21,273 436,973 1,025,525 1,462,498
- (1,660,442) - - -
- (1,639,169) 436,973 1,025,525 1,462,498
47 (66,589) 97 (7,592) (7,495)
736 3,096,494 20,223 213,188 233,411
$ 783 $ 3,029,905 $ 20,320 $ 205,596 $ 225,916
63
City of Sebastian, Florida
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2006
(Continued)
Capital Projects Funds
General Public
Capital Capital Transportation Facilities
Projects Improvements Improvements Improvements Total
REVENUES:
Taxes:
Motor fuel $ - $ _ $ _ $ _ $ _
Intergovernmental - 161,857 - 25,605 187,462
Impact fees - _ _ _ _
Charges for services - - _ _ _
Fines - _ _ _ _
Investmenteamings 1,155 27,597 21,394 29,640 79,786
Contributions and donations - 2,315 - - 2,315
Other revenue - _ _ _ _
Total revenues 1,155 191,769 21,394 55,245 269,563
EXPENDITURES:
Current:
Public safety - - _ _ _
Physical environment - - - _ _
Transportation - _ _ _ _
Economic environment - - - - _
Debt Service:
Principal 134,204 - - - 134,204
Interest and fiscal charges 20,489 - - - 20,489
Capital outlay - 653,335 7,264 80,958 741,557
Total expenditures 154,693 653,335 7,264 80,958 896,250
Excess (deficiency) of revenues
over (under) expenditures (153,538) (461,566) 14,130 (25,713) (626,687)
OTHER FINANCING
SOURCES (USES)
Transfers in 454,693 95,000 844,996 - 1,394,689
Transfers out - (17,654) - - (17,654)
Total other financing sources (uses) 454,693 77,346 844,996 - 1,377,035
Net changes in fund balances 301,155 (384,220) 859,126 (25,713) 750,348
Fund balances -beginning - 1,542,008 1,072,900 643,959 3,258,867
Fund balances -ending $ 301,155 $ 1,157,788 $ 1,932,026 $ 618,246 $ 4,009,215
64
Permanent
Fund Total
Other
Govermnental
Cemetery Funds
$ - $ 716,495
- 234,519
- 337,675
59,825 879,111
- 15,128
24,494 291,899
- 4,055
1,100 2,073
85,419 2,480,955
- 3,260
- 6,765
- 210,935
- 30,059
- 1,248,378
- 678,682
- 741,557
- 2,919,636
85,419 (438,681)
- 2,878,460
(7,626) (1,685,722)
(7,626) 1,192,738
77,793 754,057
578,367 7,167,139
$ 656,160 $ 7,921,196
65
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Community Development Block Grant Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Intergovernmental
Total revenues
EXPENDITURES:
Current:
Economic Environment
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING USES
Transfers out
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 30,060 $ 30,059 $ (1)
30,060 30,059 (1)
30,060 30,059
30,060 30,059
66
52 52
52 52
1
1
$ -
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Local Option Gas Tax Special Revenue Fund
For the Year Ended September 30, 2006
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
REVENUES:
Motor fuel taxes $ 760,000 $ 716,495 $ (43,505)
Intergovernmental - 16,998 16,998
Investment earnings 12,000 48,145 36,145
Total revenues 772,000 781,638 9,638
EXPENDITURES:
Current:
Transportation
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES
Transfers out
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
211,429 210,935
214,121 214,174
85,879 85,826
511,429 510,935
260,571 270,703
494
(53)
53
494
10,132
(489,438) (489,438) -
(228,867) (218,735) 10,132
351,192 351,192 -
$ 122,325 $ 132,457 $ 10,132
67
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Recreation Impact Fee Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Impact fees
Investment earnings
Total revenues
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
360,000 $ 337,675 $ (22,325)
12,000 46,310 34,310
372,000 383,985 11,985
17,654 17,654
(95,000) (95,000)
(77,346) (77,346)
294,654 306,639
970,576 970,576
$ 1,265,230 $ 1,277,215
68
11,985
$ 11,985
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Stormwater Utility Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Charges for services
Investment earnings
Miscellaneous
Total revenues
EXPENDITURES:
Current:
Physical environment
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 804,980 $ 819,286 $ 14,306
45,119 89,289 44,170
- 1 1
850,099 908,576 58,477
7,119 6,765
7,119 6,765
354
354
842,980 901,811 58,831
- 3,619 3,619
(1,076,599) (1,076,004) 595
(1,076,599) (1,072,385) 4,214
(233,619) (170,574) 63,045
1,757,633 1,757,633 -
$ 1,524,014 $ 1,587,059 $ 63,045
69
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Law Enforcement Forfeiture Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Fines
Investment earnings
Contributions
Other revenues
Total revenues
Final
Budget
$ 5,000
5,000
Actual
Amounts on
a Budgetary
Basis
Variance with
Final Budget -
Positive
(Negative)
$ 10,128
1,454
(3,260)
972
9,294
6,740
6,740
16,034
EXPENDITURES:
Current:
Public safety
Total expenditures
Excess of revenues over expenditures
Fund balances -beginning
Fund balances -ending
10,000
10,000
10,000
16,305
$ 16,305
$ 15,128
1,454
1,740
972
19,294
3,260
3,260
16,034
16,305
$ 32,339 $ 16,034
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
G.R.E.A.T. Program Special Revenue Fund
For the Year Ended September 30, 2006
REVENUES:
Intergovernmental
Investment earnings
Total revenues
EXPENDITURES:
Current:
Public safety
Total expenditures
Excess of revenues over expenditures
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 9,894 $ - $ (9,894)
- 47 47
9, 894 47 (9, 847)
9,894 - 9,894
9,894 - 9,894
- 47 47
736 736 -
$ 736 $ 783 $ 47
70
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Stormwater Utility Revenue Bonds 2003 Debt Service Fund
For the Year Ended September 30, 2006
REVENUES:
Investment earnings
Total revenues
EXPENDITURES:
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditures
OTHER FINANCING SOURCES
Transfers in
Total other financing sources
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 280 $ 972 $ 692
280 972 692
235,000 235,000 -
202,848 202,848 -
437,848 437,848 -
(437,568) (436,876) 692
437,568 436,973 (595)
437,568 436,973 (595)
- 97 97
20,223 20,223
$ 20,223 $ 20,320 $
97
71
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual
Discretionary Sales Surtax Revenue Bonds 2003 Debt Service Fund
For the Year Ended September 30, 2006
REVENUES:
Investment earnings
Total revenues
EXPENDITURES:
Current:
Physical environment
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditures
OTHER FINANCING SOURCES
Transfers in
Total other financing sources
Net changes in fund balances
Fund balances -beginning
Fund balances -ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 7,700 $ 1,402 $ (6,298)
7,700 1,402 (6,298)
300 - 300
665,000 665,000 -
370,544 369,519 1,025
1,035,844 1,034,519 1,325
(1,028,144) (1,033,117) (4,973)
1,032,844 1,025,525 (7,319)
1,032,844 1,025,525 (7,319)
4,700 (7,592) (12,292)
213,188 213,188 -
~_ ~~
72
City of Sebastian, Florida
Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2006
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES
Performance deposits held in escrow
Balance Balance
October 1, September 30,
2005 Additions Deletions 2006
$ 165,340 $ 4,891 $ 5,141 $ 165,090
$ 165,340 $ 4,891 $ 5,141 $ 165,090
165,340 - 250 165,090
Total liabilities $ 165,340 $ - $ 250 $ 165,090
73
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedule By Source
September 30, 2006
Governmental Funds capital assets: FY 2005 FY 2006
Land $ 5,487,774 $ 5,301,947
Buildings and structures 9,890,903 9,958,190
Improvement other than buildings 4,152,943 4,614,326
Machinery and equipment 6,100,906 6,436,238
Infrastructure 17,203,261 17,375,199
Capital projects 1,006,241 1,167,207
Total capital assets
$ 43,842,028 $ 44,853,107
Investment in Governmental Funds capital assets by sources:
Federal grants
State grants
County grants
General fund
Law enforcement trust fund
Recreational impact fee
Stormwater utility fee
Cemetery trust fund
Donations
Sales taxes
Motor fuel taxes
Revenue bond debt
Capital projects
$ 1,725,772 $
1,278,258
712,211
10,469,659
48,737
200,186
16,241
184,185
2,296,054
7,314,896
4,378,033
14,213,555
1,006,241
1,888,342
1,278,258
715,009
10,588,964
42,953
400,532
16,255
181,463
2,324,027
7,779,639
4,378,033
14,092,425
1,167,207
Total investment in capital assets
$ 43,844,028 $
44,853,107
74
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Schedule by Function and Activity
September 30, 2006
Improvements Machinery
Other than and
Function and Activity Land Buildings Buildings Equipment Infrastructure Totals
General government:
Legislative $ - $ - $ 1,100 $ 2,886 $ - $ 3,986
City manager - - - 4,341 - 4,341
City clerk - - - 166,998 - 166,998
City attorney - - - 2,114 - 2,114
Finance - - - 56,063 - 56,063
MIS - 5,841 - 113,821 - 119,662
Human resources - - - 4,942 - 4,942
Building maintenance - 120,192 4,926 88,270 - 213,388
Growthmanagement - 85,555 - 23,428 - 108,983
Non-departmental 3,239,771 5,114,963 260,202 424,314 212,700 9,251,950
Subtotal 3,239,771 5,326,551 266,228 887,177 212,700 9,932,427
Public safety:
Special operations - - - 33,674 - 33,674
Administration 9,560 3,347,150 81;014 283,082 - 3,720,806
School resource - - - 45,383 - 45,383
Road patrol - - - 1,371,890 - 1,371,890
Community policing - - - 123,243 - 123,243
Code enforcement - - - 36,583 - 36,583
Professional Stnd. - - - 20,651 - 20,651
Investigations - - - 179,131 - 179,131
Support services - - - 60,757 - 60,757
Communications - - - 81,829 - 81,829
Building department - - - 90,752 - 90,752
Subtotal 9,560 3,347,150 81,014 2,326,975 - 5,764,699
Transportation
Engineering 78 146,361 155,293 170,907 276,100 748,739
Central garage - 111,654 82,419 135,225 - 329,298
Roads and drainage 47,047 102,784 536,673 962,912 10,135,057 11,784,473
Subtotal 47,125 360,799 774,385 1,269,044 10,411,157 12,862,510
Physical Environment:
Stormwater - - - 1,443,246 5,354,520 6,797,766
Cemetery 272,190 47,519 78,354 38,700 22,717 459,480
Subtotal 272,190 47,519 78,354 1,481,946 5,377,237 7,257,246
Culture/Recreation:
Parks and recreation 1,733,301 876,171 3,414,345 471,096 1,374,105 7,869,018
Subtotal 1,733,301 876,171 3,414,345 471,096 1,374,105 7,869,018
Total $ 5,301,947 $ 9,958,190 $ 4,614,326 $ 6,436,238 $ 17,375,199 $ 43,685,900
Construction in progress 1,167,207
Total $ 44,853,107
75
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Schedule of Changes By Function and Activity
September 30, 2006
Governmental
Funds
Capital Assets Transfers Transfers
Function and Activity October 1, 2005 Additions Deletions In Out
General government:
Legislative
City manager
City clerk
City attorney
Finance
MIS
Human resources
Building maintenance
Growth management
Non-departmental
Subtotal
Public Saftey:
Special operations
Administration
School resource
Road patrol
Community policing
Code enforcement
Professional Stnd.
Investigations
Support services
Communications
Building department
Subtotal
Transportation:
Engineering
Central garage
Roads and drainage
Subtotal
Physical Environment:
Stormwater
Building maintenance
Cemetery
Subtotal
Culture & Recreation:
Parks and recreation
Subtotal
Total
Construction in progress
Total
Governmental
Funds
Capital Assets
September 30, 2005
$ 12,582 $ - $ 7,808 $ - $ 788 $ 3,986
4,341 - 4,341
184,324 11,574 12,937 - 15,963 166,998
5,970 - - 3,856 2,114
60,521 1,281 3,177 56,063
100,096 19,222 1,171 1,515 119,662
5,467 - - - 525 4,942
121,445 - 91,943 - 213,388
105,259 - 3,724 108,983
9,441,941 202,213 12,222 9,251,950
10,041,946 30,796 225,410 109,404 24,309 9,932,427
2,051 31,623 - - - 33,674
3,710,201 10,605 - - - 3,720,806
26,855 38,539 20,011 - - 45,383
1,196,867 177,023 - - 2,000 1,371,890
162,581 1,522 40,860 - 123,243
49,277 5,058 16,050 - 1,702 36,583
21,822 - - - 1,171 20,651
175,098 5,204 - - 1,171 179,131
58,304 2,529 - 2,000 2,076 60,757
80,860 2,140 1,171 - - 81,829
107,352 - 2,641 - 13,959 90,752
5,591,268 274,243 80,733 2,000 22,079 5,764,699
757,863 7,294 16,418 - - 748,739
328,522 5,407 3,780 - 851 329,298
11,870,609 123,452 53,460 - 156,128 11,784,473
12,956,994 136,153 73,658 - 156,979 12,862,510
6,619,466 193,324 33,524 18,500 - 6,797,766
451,854 7,626 - - 459,480
7,071,320 200,950 33,524 18,500 - 7,257,246
7,176,259 661,394 42,098 73,463 - 7,869,018
7,176,259 661,394 42,098 73,463 - 7,869,018
42,837,787 1,303,536 455,423
1,006,241 894,386 733,420
203,367 203,367 43,685,900
- 1,167,207
$ 43,844,028 $ 2,197,922 $ 1,188,843 $ 203,367 $ 203,367 $ 44,853,107
76
Statistical Section
This part of the City of Sebastian, Florida's comprehensive annual financial report
presents detailed information as a context for understanding what the information in the
financial statements, note disclosures, and required supplementary information says
about the city's overall financial health.
Contents Pa e s
Financial Trends 78.89
These schedules contain trend information to help the reader understand how
the city's financial performance and well-being have changed over time.
Revenue Capacity 90-95
These schedules contain information to help the reader assess the city's most
significant local revenue source, the property tax, and the municipal sales tax.
Debt Capacity 96-101
These schedules present information to help the reader assess the affordability
of the city's current levels of outstanding debt and the city's ability to issue
additional debt in the future.
Economic and Demographic Information 102-104
These schedules offer economic and demographic indicators to help the reader
understand the environment within which the city's financial activities take
place.
Operating Information 105-107
These schedules contain service and infrastructure data 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.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The city implemented
GASB Statement 34 in 2001; schedules presenting government-wide information include
information beginning in that year.
77
City of Sebastian, Florida
Net Assets by Component
Last Six Fiscal Years
(accrual basis of accounting)
2006 2005 2004
Governmental Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
$ 17,579,683 $ 17,103,399 $ 16,412,401
5,068,583 5,395,879 4,059,674
11,293,877 (2) 9,081,345 (1) 7,171,123 (1)
Total Governmental Activities Net Assets
Business-Type Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Business-Type Activities Net Assets
Primary government
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Primary Government Net Assets
$ 33,942,143 $ 31,580,623 $ 27,643,198
$ 8,798,612 $ 7,459,945 $ 4,264,961
560,581 574,105 506,006
$ 11,255,732 $ 8,772,569 $ 6,483,624
$ 26,378,295 $ 24,563,344 $ 20,677,362
5,629,164 5,969,984 4,565,680
13,190,416 9,819,864 8,883,780
$ 45,197,875 $ 40,353,192 $ 34,126,822
(1) The large increases in unrestricted net assets from 2003 to 2004 and from 2004 to 2005 are mainly due to increase in
State revenue sharing. sales and use taxes, and tax revenues.
(2) The large increase in unrestricted net assets from 2005 to 2006 is mainly due to increase in tax revenues, franchise fees,
and interest earnings.
78
2003 2002
$ 16,339,222 $ 14,242,832
3,235,266 3,289,670
5,461,224 5,865,388
~nni
$ 12,778,007
2,270,654
5,417,630
$ 25,035,712 $ 23,397,890 $ 20,466,291
$ 1,545,867 $ 363,827 $ 150,722
505,435 458,014 640,973
1,471,457 1,120,224 985,863
$ 3,522,759 $ 1,942,065 $ 1,777,558
$ 17,885,089 $ 14,606,659 $ 12,928,729
3,740,701 3,747,684 2,911,627
~ oz~ ~Qi ~ oR5 ~i~ ti an~z a4z
$ 28,558,471 $ 25,339,955 $ 22,243,849
79
City of Sebastian, Florida
Changes in Net Assets
Last Six Fiscal Years
(accrual basis of accounting)
2006
Program Revenues
Governmental Activities:
Charges for Services:
General Government
Public Safety
Physical Environment
Economic Environment
CulturaURecreation
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Activities Program Revenues
Business-Type Activities:
Charges for Services:
Golf Course
Airport
Building
Operating Grants and Contributions
Capital Grants and Contributions
Total Business-Type Activities Program Revenues
Total Primary Government Program Revenues
Expenses
Governmental Activities:
General Government
Public Safety
Physical Environment
Transportation
Economic Environment
CulturaURecreation
Interest and Fiscal Charges
Total Governmental Activities Expenses
Business-Type Activities:
Golf Course
Airport
Building
Total Business-Type Activities Expenses
Total Primary Government Expenses
$ 533,482
140,545
887,819
72,472
407,898
1,301,438
e ~ zn~ ~cn
2005
$ 370,609
1,356,385
828,907
56,199
2,802,511
1,781,954
e ~ i o~ c~c
~nnn
$ 376,327
1,660,032
850,887
48,590
1,144,528
i ~c~ ncn
1,580,407 $ 1,381,817 $ 1,648,308
375,768 434,818 201,890
936,793 (1) (1)
6,998 13,582 67,576
1,056,562 2,289,986 2,451,212
$ 3,956,528 $ 4,120,203 $ 4,368,986
Q ^~ inn i o~ Q i i~ i~ uo Q n one inn
$ 3,129,723 $ 3,262,276 $ 2,414,865
4,191,295 4,816,614 4,502,109
2,193,589 1,283,889 1,279,257
2,173,071 4,034,900 3,288,532
98,661 32,128 86,041
1,208,288 1,260,395 823,974
706,303 740,372 722,007
$ 13,700,930 $ 15,430,574 $ 13,116,785
1,558,338 $ 1,464,532 $ 1,527,051
801,967 519,235 350,949
936,793 (1) (1)
$ 3,297,098 $ 1,983,767 $ 1,878,000
Q~ 1L nno n'10 S 17 A1A 2~1 @ 1A nnA '74c
(1) The building operation was reclassified from being part of the general fund operation to an enterprise fund
operation at the beginning of fiscal year 2006.
80
$ 247,774 $ 172,135 $ 183,502
824,821 625,924 554,350
799,637 785,683 -
- 24,869 18,753
46,736 73,013 35,050
920,829 958,229 902,001
$ 3,480,691 $ 3,512,343 $ 2,275,597
$ 1,377,245 $ 1,365,027 $ 1,088,104
168,451 179,373 193,649
(1) (1) (1)
- 51,087 123,673
$ 1,620,616 $ 2,010,288 $ 1,676,383
3,391, 831 2,945 ,701 2,526,514
1,920,200 508,616 452,116
2,401,037 2,258,181 1,630,098
166,024 223,207 241,692
747,910 881,260 768,802
312,367 168,749 160,954
$ 10,559,985 $ 8,996,002 $ 7,456,559
$ 1,363,359 $ 1,393,551 $ 1,341,001
315,941 283,726 313,877
(1) (1) (1)
$ 1,679,300 $ 1,677,277 $ 1,654,878
(continued)
81
City of Sebastian, Florida
Changes in Net Assets (continued)
Last Six Fiscal Years
(accrual basis of accounting)
Net (Expense)/Revenue
Governmental Activities
Business-Type Activities
Total Primary Government Net Expense
General Revenues and Other Changes in Net Assets
Governmental Activities:
Property Taxes, Levied for General Purposes
Sales and Use Taxes
Franchise Fees
State Shared Revenues
Interest Earnings
Miscellaneous
Transfers
Total Governmental Activities
Business-Type Activities:
Interest Earnings
Miscellaneous
Transfers
Total Business-Type Activities
Total Primary Government
Change in Net Assets
Governmental Activities
Business-Type Activities
Total Primary Government Change in Net Assets
2006 2005 2004
$(10,357,276) $ (8,234,009) $ (7,682,462)
$ (9,697,846) $ (6,097,573) $ (5,191,476)
$ 4,645,050 $ 4,017,555 $ 3,420,971
4,907,906 4,718,691 4,035,545
1,253,749 886,390 770,600
2,242,292 2,138,020 1,721,956
827,224 398,518 398,158
256,780 118,760 388,562
(1,414,205) (2) (106,500) (445,844)
$ 12,718,796 $ 12,171,434 $ 10,289,948
$ 125,498 $ 45,709 $ 23,774
- 300 261
1,414,205 106,500 445,844
$ 1,539,703 $ 152,509 $ 469,879
$ 2,361,520 $ 3,937,425 $ 2,607,486
$ 4,844,683 $ 6,226,370 $ 5,568,351
(2) The large increase in transfers from 2005 to 2006 is mainly due to the one time transfer of building reserve to
building fund due to the reclassification of fund type for the building operation.
82
$ (7,079,294) $ (5,483,659) $ (5,180,962)
1,015,833 132,385 49,882
$ (6,063,461) $ (5,351,274) $ (5,131,080)
$ 2,944,456 $ 2,615,939 $ 2,557,333
3,705,922 2,844,825 3,013,293
756,194 766,901 753,024
1,523,524 2,068,753 1,336,046
241,358 118,840 236,307
79,662 - -
$ 21,789 $ 32,122 $ 99,521
9,072 - -
$ 564,861 $ 32,122 $ 99,521
$ 1,637,822 $ 2,931,599 $ 2,715,041
$ 3,218,516 $ 3,096,106 $ 2,864,444
83
City of Sebastian, Florida
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2006 2005 2004 2003 2002
General Fund
Reserved $ 1,815,187 $ 2,848,726 $ 2,693,710 $ 1,402,398 $ 232,088
Unreserved 4,663,885 3,254,741 2,421,182 2,479,452 3,690,659
Total General Fund $ 6,479,072 $ 6,103,467 $ 5,114,892 $ 3,881,850 $ 3,922,747
All Other Governmental Funds
Reserved $ 10,058,183 (1) $ 828,819 $ 4,208,170 $ 1,596,981 $ 1,503,172
Unreserved, Reported in:
Special Revenue funds 5,381,276 4,735,396 3,355,229 2,211,585 1,808,288
Capital Projects funds - (2) 8,406,953 6,795,371 9,993,933 (3) 2,384,557
Total All Other Governmental Funds $ 15,439,459 $ 13,971,168 $14,358,770 $ 13,802,499 $ 5,696,017
Total Governmental Funds $ 21,918,531 $ 20,074,635 $19,473,662 $ 17,684,349 $ 9,618,764
(1) The significant change in reserved fund balance from 2005 to 2006 is due to the reclassification of unreserved reported in
capital projects funds to reserved.
(2) The significant change in unreserved reported in capital projects funds from 2005 to 2006 is due to the reclassification of
unreserved reported in capital projects funds to reserved.
(3) The large increase in unreserved fund balance reported in capital projects funds from 2002 to 2003 is due to the issuance of
City's Infrastructure Sales Surtax Revenue Bonds, Series 2003.
84
2001 2000
1999 1998 1997
$ 121,256 $ 64,341 $ 43,113 $ 3,303,761 $ 7,940
3,406,083 2,786,252 2,699,955 3,468,381 3,710,621
$ 3,527,339 $ 2,850,593 $ 2,743,068 $ 6,772,142 $ 3,718,561
$ 1,306,269 $ 2,021,740 $ 605,270 $ 168,093 $ 167,980
548,174 456,461 217,969 - -
2,609,201 1,562,299 4,027,673 - -
$ 4,463,644 $ 4,040,500 $ 4,850,912 $ 168,093 $ 167,980
$ 7,990,983 $ 6,891,093 $ 7,593,980 $ 6,940,235 $ 3,886,541
85
City of Sebastian, Florida
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Revenues
Property and Other Local Taxes
Franchise Fees
Charges for Services
Licenses and Permits
Fines
Intergovernmental
Impact Fees
Special Assessments
Investment Earnings
Miscellaneous
Total Revenues
Expenditures
Current:
General Government
Public Safety
Physical Environment
Transportation
Economic Environment
Cultural and Recreation
Debt service:
Principal Retirement
Interest and Fiscal Charges
Capital Outlay
Total Expenditures
Excess of Revenues Over (Under) Expenditures
Other Financing Sources (Uses)
Debt Proceeds
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Debt Service as a Percentage of Noncapital Expenditures
2006 2005 2004
$ 10,269,451 $ 9,483,664 $ 8,179,344
1,253,749 886,390 770,600
179,930 936,530 962,677
244,370 1,587,675 1,867,920
77,776 95,699 118,918
2,852,293 5,561,695 3,115,520
337,675 385,775 557,700
819,286 11,023 28,424
827,224 398,518 398,158
632,370 144,057 378,268
17,494,124 19,491,026 16,377,529
2,494,863 2,974,736 2,231,532
3,813,908 4,349,639 3,950,228
1,850,642 910,794 1,125,727
1,672,983 3,616,076 2,863,397
98,661 32,128 86,041
926,846 995,406 747,131
1,248,378 1,218,023 985,974
678,682 711,736 887,564
1,451,060 3,975,015 9,021,558
14,236,023 18,783,553 21,899,152
3,258,101 707,473 (5,521,623)
- - 7,756,780
3,785,981 3,745,265 2,745,754
(5,200,186) (3,851,765) (3,191,598)
(1,414,205) (106,500) 7,310,936
$ 1,843,896 $ 600,973 $ 1,789,313
15.1% 13.0% 14.5%
86
2003
2002
2001 2000 1999
$ 7,325,932 $ 6,228,107 $ 6,223,280 $ 6,273,070 $ 5,837,968
1998 1997
$ 5,612,313 $ 5,250,861
756,194 766,901 753,024 - - - -
921,119 1,123,670 300,046 159,701 33,097 74,485 84,051
878,097 578,695 487,618 475,345 448,928 388,936 345,463
119,752 127,027 148,676 140,672 89,697 72,723 59,198
1,785,237 2,841,315 1,968,416 2,318,091 1,865,375 1,697,747 1,332,676
395,850 255,775 - - - - -
22,560 31,756 28,528 128,154 44,964 30,522 68,474
241,358 206,567 417,707 689,395 512,407 290,406 261,548
91,078 126,823 196,311 246,774 650 - -
12,537,177 12,286,636 10,523,606 10,431,202 8,833,086 8,167,132 7,402,271
1,977,033 2,230,870 1,647,858 1,946,702 1,837,031 2,074,479 1,879,432
3,427,711 2,588,526 2,482,393 2,129,662 2,122,823 1,847,503 1,706,546
1,247,452 508,616 452,116 345,844 412,990 82,699 79,528
1,610,761 1,427,992 1,084,401 1,228,234 1,007,426 1,160,404 1,273,318
166,024 327,911 273,927 617 4,830 8,492 64,657
629,835 732,729 612,038 555,584 488,499 348,546 190,651
361,024 344,553 222,954 212,860 225,243 182,434 173,471
158,043 174,864 152,093 151,536 160,940 29,522 40,704
3,859,709 2,322,794 3,402,365 4,713,604 1,915,620 2,640,389 1,331,130
13,437,592 10,658,855 10,330,145 11,284,643 8,175,402 8,374,468 6,739,437
(900,415) 1,627,781 193,461 (853,441) 657,684 (207,336) 662,834
9,500,000 - 900,000 - - 3,261,030 -
2,992,908 2,009,173 2,130,744 2,134,510 1,861,364 258 .2,720
(3,526,908) (2,009,173) (2,130,744) (2,134,510) (1,861,364) (258) (2,720)
8,966,000 - 900,000 - - 3,261,030 -
$ 8,065,585 $ 1,627,781 $ 1,093,461 $ (853,441) $ 657,684 $ 3,053,694 $ 662,834
5.4% 6.2% 5.4% 5.5% 6.2%
3.7% 4.0%
87
City of Sebastian, Florida
Program Revenues by Function/Program
Last Six Fiscal Years
(accrual basis of accounting)
Function/Program
Governmental Activities:
General Government
Publc Safety
Physical Environment
Transportation
Economic Environment
Cultural/Recreation
Total Governmental Activities
Business-type activities:
Golf Course
Airport
Building
Total Business-Type Activities
Total Primary Government
2006 2005 2004 2003
$ 579,591 $ 587,527 $ 392,471 $ 1,095,902
306,702 1,537,557 1,850,710 929,952
890,092 898,821 914,318 1,136,507
900,365 3,392,883 1,670,534 1,580,076
30,059 - - -
636,845 779,777 606,290 663,459
$ 3,343,654 $ 7,196,565 $ 5,434,323 $ 5,405,896
$ 1,587,405 $ 1,395,399 $ 1,715,884 $ 1,377,245
1,432,330 2,724,804 2,653,102 1,317,888
1,220,823 (1) (1) (1)
$ 4,240,558 $ 4,120,203 $ 4,368,986 $ 2,695,133
$ 7,584,212 $ 11,316,768 $ 9,803,309 $ 8,101,029
(1) The building operation was reclassified from being part of the general fund operation to an enterprise fund
operation at the beginning of fiscal year 2006.
88
2002 2001
$ 172,135 $ 226,786
785,373 633,230
785,683 779,837
3,038,913 2,285,809
24,869 18,753
566,959 168,335
$ 5,373,932 $ 4,112,750
$ 1,365,517 $ 1,088,104
444,145 616,656
$ 1,809,662 $ 1,704,760
7,183,594 $ 5,817,510
89
City of Sebastian, Florida
Tax Revenues by Source, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year Property Taxes Public Utility Sales Tax _
2006 (1) $ 4,645,050 $ 2,183,164 $ 2,724,742 $
2005 4,017,555 2,005,124 2,713,567
2004 3,420,971 1,854,632 2,180,913
2003 2,944,456 1,780,717 1,925,205
2002 (2) 2,717,564 983,236 1,861,589
2001 2,608,989 1,151,685 1,861,608
2000 (3) 2,323,566 1,044,595 1,704,749
1999 (4) 2,734,068 413,045 1,553,672
1998 2,810,622 370,170 1,412,207
1997 2,664,153 345,977 1,244,543
Motor Fuel Total
716,495 $ 10,269,451
747,418 9,483,664
722,828 8,179,344
675,554 7,325,932
665,718 6,228,107
600,998 6,223,280
549,800 5,622,710
484,054 5,184,839
440,843 5,033,842
453,858 4,708,531
(1) Fiscal Year 2006 property tax revenue reflects a change in the property tax millage rate from 4.5904 to 3.9325.
(2) Fiscal Year 2002 property tax revenue reflects a change in the property tax millage rate from 5.0000 to 4.5904.
(3) Fiscal Year 2000 property tax revenue reflects a change in the property tax millage rate from 6.5000 to 5.0000.
(4) Fiscal Year 1999 property tax revenue reflects a change in the property tax millage rate from 6.9000 to 6.5000.
Millage Rate represents the dollar of tax per one thousand dollars of taxable valuation.
90
City of Sebastian, Florida
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
Cit y of Sebastian Indian River County School Board
Debt Total Total Debt Total
Fiscal Operating Service City County~l~ Operating Service School
Year Millage Millage Millage Millage Millage Millage Millage Other~Z~
1997 6.9000 -- 6.9000 8.56874 9.15400 1.16500 10.31900 2.64544
1998 6.9000 -- 6.9000 8.30490 9.00300 1.13700 10.14000 2.49690
1999 6.5000 -- 6.5000 8.33160 8.61400 1.00000 9.61400 ~3~
2000 5.0000 -- 5.0000 8.24360 8.61400 1.00000 9.61400 1.52091
2001 5.0000 -- 5.0000 8.24860 8.67700 0.88000 9.55700 1.62899
2002 4.5904 -- 4.5904 8.08410 8.40200 0.68000 9.08200 1.14845
2003 4.5904 -- 4.5904 8.03020 8.10200 0.63000 8.73200 1.43875
2004 4.5904 -- 4.5904 7.93960 8.17900 0.53100 8.71000 1.69278
2005 4.5904 -- 4.5904 7.35050 8.01900 0.48000 8.49900 1.43029
2006 3.9325 -- 3.9325 5.69040 7.88000 0.36000 8.24000 1.60850
(1) Millage includes General Fund, M.S.T.U.s, Emergency Services District and Land Bonds.
(2) All Special Taxing Districts.
(3) Information not available.
Source: Indian River County Property Appraiser's Office
91
City of Sebastian, Florida
Assessed Valuation and Estimated True Values of Taxable Property
Last Ten Fiscal Years
Real Property Personal Property
Exemptions
Fiscal Assessed Estimated Assessed Estimated Real
Year Value Actual Value Value Actual Value Property
1997 563,855,210 704,819,013 30,303,882 30,303,882 172,478,432
1998 587,811,960 734,764,950 31,210,876 31,210,876 177,515,747
1999 626,274,970 782,843,713 46,027,721 46,027,721 187,751,454
2000 656,619,860 820,774,825 42,216,162 41,533,985 190,327,263
2001 754,577,150 943,221,438 45,195,579 45,195,579 198,445,669
2002 829,224,615 1,036,530,769 45,355,170 45,355,170 205,977,066
2003 946,293,950 1,182,867,438 48,613,628 48,613,628 217,554,663
2004 1,157,275,164 1,446,593,955 51,330,277 51,330,277 228,262,825
2005 1,526,923,406 1,908,654,258 51,827,624 51,827,624 271,466,364
2006 2,124,615,672 2,655,769,590 55,913,696 55,913,696 322,318,753
Source: Indian River County Property Appraiser
(1) Total assessed value based on approximately 80 percent of estimated actual value.
92
Total
Assessed
Value
594,159,092
619,022,836
672,302,691
698,836,022
799,772,729
874,579,785
994,907,578
1,208,605,441
1,578,751,030
2,180,529,368
Total
Estimated
Actual Value
735,122,895
765,975,826
828,871,434
862,308,810
988,417,017
1,081,885,939
1,231,481,066
1,497,924,232
1,960,481,882
2,711,683,286
93
City of Sebastian, Florida
Principal Taxpayers
Year 2006 and Year 1998
2006 1998(1)
Real Percentage Real Percentage
Property of Total Property of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Florida Power & Light $ 16,484,295 1 2.34% $ 6,448,890 3 1.02%
Chance Holding LLC 12,308,330 2 1.75% -- --
Wal-Mart Stores Inc. 12,293,340 3 1.74% 7,843,080 2 1.24%
KB Homes Treasure Coast LLC 11,865,150 4 1.68% -- --
Maronda Homes Inc. 8,979,100 5 1.27% -- --
Adams Homes of Northwest FL 8,312,010 6 1.18% -- --
512 Commerce Center LLC 7,368,920 7 1.05% -- --
BellSouth Communications 7,344,000 8 1.04% 7,930,440 1 1.26%
BW US 1 Inc 6,863,460 9 0.97% -- --
Park Place MHP Ltd 5,897,160 10 0.84% 2,737,650 5 0.43%
Lynch, Robert N. (Bishop) -- -- 3,665,790 4 0.58%
Grace's Landing Ltd -- -- 2,111,580 6 0.34%
Falcon Cable Media -- -- 1,618,367 7 0.26%
Winn Dixie Stores Inc. -- -- 1,586,073 8 0.25%
Sebastian Center Ltd -- -- 1,316,420 9 0.21%
RinghaverEquipment -- -- 780,155 10 0.12%
$ 97,715,765 13.86% $ 36,038,445 5.71%
Total Assessed Valuation $ 1,133,374,977 $ 630,218,290
(1) Principal property tax payers for nine years ago is not available. The information is available from 1998
and forward.
Source: Indian River County Property Appraiser's Office
94
City of Sebastian, Florida
Property Tax Levies And Collections
Last Ten Fiscal Years
Percent of Percent of
Total Current Current Tax Delinquent Total Total Tax
Tax Tax Collections Tax Tax Collections
Year Levy Collections To Tax Levy Collections (1) Collections To Tax Levy
2006 $ 4,456,997 $ 4,300,217 96 % $ 39 $ 4,300,256 96 %
2005 3,888,488 3,723,912 96 1,712 3,725,624 96
2004 3,216,940 3,130,521 97 34,247 3,164,768 98
2003 2,862,650 2,725,515 95 26,908 2,752,423 96
2002 2,635,277 2,489,854 94 36,421 2,526,275 96
2001 2,542,544 2,455,930 97 51,690 2,507,620 99
2000 2,422,756 2,283,898 94 35,050 2,318,948 96
1999 2,869,796 2,726,857 95 2,912 2,729,769 95
1998 2,909,597 2,679,819 92 130,803 2,810,622 97
1997 2,727,083 2,513,627 92 150,526 2,664,153 98
(1) Does not include penalties and interest on delinquent taxes.
Source: Indian river County Property Appraiser and Tax Collector
95
City of Sebastian, Florida
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Water Line Roadway
Assessment Improvement
Year Bonds Notes
2006 $ - $1,790,544
2005 - 2,004,718
2004 - 2,209,745
2003 77,615 2,406,028
2002 134,299 2,593,939
2001 187,901 2,773,847
2000 238,589 2,946,113
1999 286,521 3,111,041
1998 322,044 3,268,890 (2)
1997 367,764 158,250
Business-type
Infrastructure Stormwater Golf Course Total
Sales Tax Utility Revenue Revenue Primary Per
Bonds Bonds Bonds Government Capita
$ 9,825,000 $ 5,055,000 $ 1,140,000 $17,810,544 822
10,490,000 5,290,000 1,395,000 19,179,718 957
11,140,000 5,525,000 1,885,000 20,759,745 1,072
9,500,000 - 2,115,000 14,098,643 765
- - 2,335,000 5,063,238 295
- - 2,435,000 (1) 5,396,748 324
- - 1,500,000 4,684,702 290
- - 1,610,000 5,007,562 319
- - 1,715,000 5,305,934 351
- - 1,815,000 2,341,014 162
(1) Golf Course Revenue Bonds, Series 1996 was refunded in 2001.
(2)The City issued a $3,268,890 promissory note to finance costs of roadway improvements in 1998.
96
City of Sebastian, Florida
Computation of Legal Debt Margin
September 30, 2006
Assessed Valuation
Assessed taxable real property value
Add back: exempt real property
Total assessed value of real property
Legal debt margin:
Debt limitation - 5 percent of total assessed real property value (1)
Debt applicable to limitation
Total bonded debt
Less: revenue bonds
Total applicable to limitation
Legal debt margin
2,078,796
$ 104,151,988
(1) City adopted financial policies state the City will limit its total outstanding general obligation debt to
five percent of the assessed valuation of real property.
City of Sebastian, Florida
Direct and Overlapping Governmental Activities Debt
General Obligation Bonds
September 30, 2006
The City of Sebastian has no overlapping general obligation bonded debt.
$ 1,802,296,919
322,318,753
$ 2,124,615,672
$ 106,230,784
$ 16,958,796
(14, 880,000)
97
City of Sebastian, Florida
Ratios of General Bonded Debt Outstanding and Legal Debt Margin
Last Eight Fiscal Year
Debt Limit (1)
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
2,006 2005 2004 2003
$ 76,346,170 $ 76,346,170 $ 57,863,758 $ 47,314,698
2,078,796 2,427,174 2,760,196 3,078,556
$ 74,267,374 $ 73,918,996 $ 55,103,562 $ 44,236,142
2.72% 3.18% 4.77% 6.51%
(1) Under the City's adopted financial policies, the City's outstanding general obligation debt should not exceed 5% of the
assessed valuation of real property. The percentage was dropped from 10% to 5% in fiscal year 2003.
*Data from 1997 through 1998 not available
98
2002 2001 2000 1999
82,922,462 $ 75,457,715 $ 65,661,986 $ 62,627,497
3,382,896 3,673,847 2,946,113 3,111,041
$ 79,539,566 $ 71,783,868 $ 62,715,873 $ 59,516,456
4.08% 4.87% 4.49% 4.97%
99
City of Sebastian, Florida
Pledged-Revenue Coverage
Last Ten Fiscal Years
Recreational Facilities Improvement and Refundin g Revenue Bonds, Series 2001
Less: Net
Fiscal Gross Operating Available Debt Service
Year Revenues~l~ Expenses c2> Revenue Principal Interest Total Coverage
1997 $1,356,609 $ 833,382 $ 523,227 $ 95,000 $ 112,600 $ 207,600 c3> 2.52 ~4~
1998 1,351,368 874,334 477,034 100,000 107,850 207,850 c3> 2.30 c4~
1999 1,414,976 891,914 523,062 105,000 102,650 207,650 c3> 2.52 c4>
2000 1,450,487 947,145 503,342 110,000 96,980 206,980 ~3~ 2.43 ~4>
2001 1,165,091 ~s~ 1,043,741 ~s~ 121,350 -- -- -- ~~ -- ~'~
2002 1,386,424 1,020,640 365,784 100,000 104,481 204,481 c6> 1.79 ~'~
2003 1,400,154 968,052 432,102 220,000 89,890 309,890 c6> 1.39 ~'~
2004 1,497,053 1,108,770 388,283 230,000 80,890 310,890 cb~ 1.25 ~'~
2005 1,395,436 1,023,002 372,434 240,000 71,490 311,490 cb~ 1.20 ~'~
2006 1,628,015 1,165,411 462,604 250,000 61,690 311,690 ~6> 1.48 ~'~
Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Total revenues including charges for services, rents, and interest.
(2) Total direct operating expenses excludes depreciation, amortization, annual Airport lease payment,
and one time hurricane repaire and upgrade.
(3) Golf Course Bond, Series 1985 refunded in 1992 with Series 1992.
(4) Required coverage is 1.0.
(5) Golf Course closed for four months for renovations.
Golf Course Bond, Series 1992 refunded with Recreational Facilities Improvement and Refunding Revenue
(6) Bonds, Series 200E
(7) Required coverage is 1.25.
(8) Total revenues consist of stormwater utility fees and interest.
(9) Required coverage is 1.35.
100
Stormwater Utilit y Revenue Bonds, Series 2003
Gross Debt Service
Revenues~8~ Principal Interest Total Coverage~9~
$ 779,724 $ 105,000 $ 104,386 $ 209,386 3.72
792,886 235,000 206,673 441,673 1.80
908,576 235,000 201,973 436,973 2.08
101
City of Sebastian, Florida
Demographic and Economic Statistics
Last Ten Years
Total Per Capita Median
Personal Personal Household Median
Year Population Income (1) Income (1) Income (1) Age (2)
2006 21,666 (5) (5) (5) (5)
2005 20,048 (5) (5) (5) (5)
2004 19,365 $ 5,071,395,000 $ 40,677 (5) (5)
2003 18,425 4,831,037,000 40,162 $ 40,291 (5)
2002 17,167 4,680,414,000 39,683 39,615 (5)
2001 16,667 4,552,238,000 39,470 39,359 (5)
2000 16,181 4,207,683,000 37,110 40,063 49.2
1999 15,707 3,983,019,000 35,788 37,947 (5)
1998 15,115 3,770,896,000 34,608 37,398 (5)
1997 14,470 3,494,975,000 32,881 35,895 (5)
Sources:
(1) Florida Research & Economic Database. Information available for Indian River County only.
(2) U.S. Census Bureau
(3) Indian River County School Board
(4) Indian River County Property Appraiser
(5) Information not available
102
Educational
Attainment:
Bachelor's Degree School Unemployment Total Assessed
or higher (2) Enrollment (3) Rate (1) Property Value (4)
(5) % 5,604 4.1 % $ 2,180,529,368
(5) 5,258 4.0 1,578,751,030
(5) 4,917 7.6 1,208,605,441
(5) 4,340 7.5 994,907,578
(5) 4,309 7.8 874,579,785
(5) 1,371 7.4 799,772,729
23.1 1,342 6.5 698,836,022
(5) 1,383 7.5 672,302,691
(5) 1,410 7.9 619,022,836
(5) 1,324 8.1 594,159,092
103
City of Sebastian, Florida
Principal Employers
Year 2005 and Six Years Ago
2005
Percentage
Number of of Total County
Employer Employees Employment
The New Piper Aircraft 1,100 1.91 %
Publix Supermarket 950 1.65
Sebastian River Medical Center 525 0.91
John's Island 475 0.82
Hale Indian River Groves 470 0.81
Wal-Mart 462 0.80
Indian River Estate 434 0.75
Disney's Vero Beach Resort 310 0.54
Grand Harbor Management 303 0.53
Visiting Nurse Association 297 0.51
Total 4,226 7.33 %
Total County Employees
57,689
1999
Percentage
Number of of Total County
Employer Employees Employment
The New Piper Aircraft 1249 2.87 %
Publix Supermarket 792 1.82
Wal-Mart 774 1.78
Sun Ag. Inc. 550 1.26
Winn-Dixie 520 1.19
Hale Indian River Groves 505 1.16
Gracewood Fruit Packing 500 1.15
Dodgertown Complex 438 1.00
John's Island 415 .0.95
Graves Brothers 400 0.92
Total 6,143 14.09 %
Total County Employees 43,592
Source: Indian River County Chamber of Commerce
* Principal employers information available for Indian River County only.
104
City of Sebastian, Florida
Full-Time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
Function/nroaram
General Government:
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
City Council 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
City Manager 2.0 5.0 4.0 4.0 4.0 4.0 3.0 3.0 3.0 3.0
City Clerk 4.5 4.0 4.0 4.0 5.0 5.0 5.0 5.0 5.0 5.0
City Attorney 2.0 2.0 1.0 1.0 1.0 1.0 1.0 0.0 0.0 0.0
Finance 6.0 5.0 5.0 5.0 6.0 6.0 5.0 5.0 5.0 5.0
Mgmt Information Svcs 3.0 2.0 2.0 2.0 0.0 0.0 0.0 0.0 0.0 0.0
Human Resources 3.0 3.0 3.0 3.0 3.0 3.0 3.0 2.0 2.0 2.0
Building Maintenance 2.0 2.0 0.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0
Growth Management 4.0 4.0 4.0 4.0 4.0 4.0 4.0 6.0 0.0 0.0
Public Safety:
Police Department -58.0 (2) 59.0 56.5 54.5 53.0 52.5 50.0 47.0 45.0 43.0
Building Department 11.0 9.0 8.0 7.0 7.0 6.0 6.0 6.0 0.0 0.0
Code Enforcement 3.0 (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Transportation:
Roads & Drainage 12.5 12.5 14.5 11.5 (1) 23.5 26.5 27.5 24.0 22.0 27.0
Central Garage 3.5 3.0 3.0 3.0 3.0 3.0 3.0 3.5 3.5 3.5
Airport 4.0 3.5 2.5 2.5 1.5 1.0 0.5 0.5 0.5 0.5
Physical Environment:
Engineering 8.0 8.0 8.0 7.5 8.0 6.5 6.5 6.0 6.0 6.5
Stormwater Utility 13.0 13.0 12.0 12.0 (1) 1.0 0.0 0.0 0.0 0.0 0.0
CulturaURecreation:
Parks & Recreation 24.5 23.5 17.5 16.5 14.0 14.0 10.0 10.0 10.0 5.0
Cemetery 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Golf Course 12.5 12.5 13.5 13.5 14.5 12.5 12.5 11.5 11.5 11.5
Totals: 181.0 175.5 163.0 159.5 157.0 153.5 145.5 138.0 122.0 120.5
(1) Eleven employees were moved from roads & drainage to Stormwater starting fiscal year 2003.
(2) Code enforcement division was transferred out from the Police Department starting fiscal year 2006.
Source: City of Sebastian, Florida 1997-2006 Annual Budgets
Method: Using 1.0 for each full-time employee, and 0.50 for each part-time and seasonal employee
105
City of Sebastian, Florida
Operating Indicators by Function/Program
Last Eight Fiscal Years
Function program 2006 2005 2004 2003 2002 2001 2000 1999
General Government
Number of Annexation Approved 1 1 6 3 0 1 1 0
Acres of Annexed Property 3.3 25.55 484 80 0 80 6 0
Purchase Orders Issued 293 369 408 372 357 411 406 397
Public Safety
Police Department
Physical Arrest 744 786 653 557 515 627 738 481
Traffic Violations 6,291 5,457 5,431 1,939 2,528 2,781 3,562 2,413
Parking Violations 880 303 3,801 632 207 198 305 53
Building Department
Construction Permits Issued 506 774 577 544 363 315 317 210
Estimated Value of Construction (in
millions) $88.3 $114.7 $112.3 $ 82.7 $ 38.9 $ 29.0 (1) $ 9.8
Transportation
Road Maintenance (man hours)* 512 100 878 850 827 (1) (1) (1)
Asphalt for road maintenance (tons) 127 125 88 79 75 (1) (1) (1)
Concrete for road maintenance (yards) (2) 300 0 283 277 275 (1) (1) (1)
Physical Environment
Cemetery
Cemetery Internments 76 79 69 81 73 78 77 52
Grave Deeds Sold 56 56 86 45 54 67 85 34
Stormwater
Mile of Swales Maintained 280 280 280 280 280 280 (1) (1)
Mile of Ditches Maintained 50 50 50 50 50 50 (1) (1)
Road Crossing Maintained 30 30 30 30 30 30 (1) (1)
Catch Basins/Culverts 275 275 275 275 250 248 (1) (1)
Recreation
Recreation Center attendance 8,004 5,504 7,498 (1) (1) (1) (1) (1)
Number of Discount Cards 2,690 1,000 993 855 890 746 791 (1)
Number of Golf Course Memberships 119 85 116 137 169 190 212 (1)
Average daily golf revenue $4,209 $3,854 $4,207 $3,693 $3,588 $2,844 $8,348 $4,996
(1) Information not available
(2) All road maintenance utilized asphalt, no concrete curbing was installed.
Sources: City of Sebastian Police Department, Growth Management, Public Works, Engineering
Department, Golf Course, and Building Department.
*Data from 1997 through 1998 not available
106
City of Sebastian, Florida
Capital Asset Statistics by Function/Program
Last Eight Fiscal Years
Function/program 2006 2005 2004 2003 2002 2001 2000 1999
General Government
Square Footage Occupied 21,500 21,500 5,516 5,516 5,516 5,516 5,516 5,516
Departmental Vehicles 3 5 2 2 2 3 3 3
Public Safety
Police Stations 1 1 1 1 1 1 1 1
Square Footage of Police Department 25,600 25,600 8,700 8,700 8,700 8,700 8,700 8,700
Square Footage of Building Department 2,500 2,500 1,716 1,716 1,716 1,716 1,716 1,716
Police Vehicles 53 52 47 42 40 33 32 24
Building Inspector Vehicles 6 5 4 4 5 4 3 2
Transportation
Streets (miles) 156 156 156 149.6 140.0 140.0 140.0 140.0
Number of Streetlights 3,808 3,555 3,543 3,543 3,531 3,531 3,319 1,156
Airport 1 1 1 1 1 1 1 1
Public Service Vehicles 19 14 24 18 22 19 16 16
Physical Environment
Public Service Vehicles 12 13 6 7 4 4 4 4
Recreation
Number of Parks 14 12 12 12 10 10 10 9
Recreation Centers 2 2 2 2 2 2 2 2
Park Acreage 229.37 223.37 223.37 223.37 207.85 196.47 196.47 194.38
Recreation Center Square Footage 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859
Park Maintenance Vehicles 11 10 8 6 6 5 5 5
Golf Course 1 1 1 1 1 1 1 1
Sources: City of Sebastian Finance Department and Growth Management Department
*Data from 1997 through 1998 not available
107
SE~T~N
THIS PAGE INTENTIONALLY LEFT BLANK
108
SINGLE AUDIT SECTION
The Single Audit Section contains various independent auditor's
reports and schedules as required by the Florida Single Audit Act,
Chapter 215.97, Florida Statutes for state and local governments that
receive state assistance.
- Independent Auditor's 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
- Independent Auditor's Report on Compliance and Internal Control
over Compliance to Each Major State Project
- Schedule of Findings and Questioned Costs -State Projects
- Schedule of Expenditures of State Financial Assistance
109
THIS PAGE INTENTIONALLY LEFT BLANK
110
i
® Harris, Cotherman,
Jones, Price Sz. Associates
~ Certified Public Accountants -Chartered
5070 North Highway ~11A, Suite 250
~~ Vero Beach, FL 32963
~ Te1772-234-8484
Fax ?72-234-8488
Independent Auditors' Report on Internal (:ontrol Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with GovernmentAuditing Standards
.Honorable Mayor and Members of City Council
City ofSebastian
Sebastian, Florida
We have audited the financial statements of the governmental activities, the business-type activities, each
J major fund, and the aggregate remaining fund information of the City of Sebastian, Florida as of and for
the year ended September 30, 2006, which collectively comprise the City's basic fmancial statements, and
have issued our report thereon dated December 8, 2006. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Sebastian, Florida's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing our
opinion on the fmancial statements and not to provide an opinion on the internal control over financial
reporting. Our consideration of the internal control over financial reporting would not necessarily
disclose all matters in the internal control that might be material weaknesses. A material weakness is a
reportable condition in which the design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts
that would be material in relation to the fmancial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their assigned functions. We
noted no matters involving the internal control over financial reporting and its operation that we consider
to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Sebastian, Florida's fmancial
statements are free of 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 fmancial 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.
We noted certain matters that we reported to management of the City of Sebastian in a separate letter,
Independent Auditors' Management Letter Comments, dated December 8, 2006.
"Providing Vision and Direction to our Clients"
Member AICPA Member A1CPA Division For CPA Firms Member FICPA
Private Companies Practice Section
111
~ s
Y
Honorable Mayor and Members of City Council
City of Sebastian
Page two
This report is intended solely for the information and use of the City of Sebastian, Florida and
management, state awarding agencies and pass-through entities, and the State of Florida Office of the
Auditor General and is not intended to be and should not be used by anyone other than these specified
parties.
~{Gsttgt ~d~NtClrf~A•N, L~~tai ~~'I ~-U ~ Qade~ticl~
~~ l~ulil~i Q~.nticfu~tts - Cfh,~+~~erd
Harris, Cotherman, Jones, Price & Associates, Chartered
Certified Public Accountants
December 8, 2006
112
Harris, Cotherman,
Jones, Price & Associates
Certified Public Accountants -Chartered
5070 North Highway AIA, Suite 250
Vero Beach, FL 32963
Te1772-234-8484
Fax 772.234-8488
Independent Auditors' Report on Compliance and Internal Control Over Compliance
to Each Major State Project
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
Compliance
We have audited the compliance of the City of Sebastian, Florida with the types of compliance
requirements described in the Executive Office of the Governor's State Projects Compliance Supplement,
that are applicable-to each of its major state projects for the year ended September 30, 2006. The City of
Sebastian, Florida's major state projects are identified in the summary of auditors' results section of the
accompanying schedule of findings and questioned costs. Compliance with the requirements of laws,
regulations, contracts, and grants applicable to each of its major state projects is the responsibility of the
City of Sebastian, Florida's management. Our responsibility is to express an opinion on the City of
Sebastian, Florida's compliance based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States and Chapter 10.550, Rules of the Auditor General. These
standards and Chapter 10.550, Rules of the Auditor General, require that we plan and perform the audit to
obtain reasonable assurance about whether non-compliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major state project occurred. An audit
includes examining, on a test basis, evidence about the City of Sebastian, Florida's compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination on the City of Sebastian, Florida's compliance with those requirements.
In our opinion, the City of Sebastian, Florida complied, in all material respects, with the requirements
referred to above that are applicable to each of its major state projects for the year ended September 30,
2006. However, we noted a certain matter that we reported to management of the City of Sebastian in a
separate letter, Independent Auditors' Management Letter Comments, dated December S, 2006.
"Providing Vision and Direction to our Clients"
Member AICPA Member AICPA Division For CPA Firms Member FICPA
Private Companies Pracflce Section
113
~-
Honorable Mayor and Members of City Council
City of Sebastian
Page two
Internal Control Over Compliance
The management of the City of Sebastian, Florida is responsible for establishing and maintaining
effective internal control over compliance with the requirements of laws, regulations, contracts, and
grants applicable to state projects. In planning and performing our audit, we considered the City of
Sebastian, Florida's internal control over compliance with requirements that could have a direct and
material effect on a major state project in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance and to test and report on the internal control over compliance in
accordance with Chapter 10.550, Rules of the Auditor General.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that non-compliance with applicable requirements of laws, regulations,
contracts, and grants caused by error or fraud that would be material in relation to a major-state project
being audited may occur and not be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving the internal control over compliance
and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the City of Sebastian, Florida and
management, state awarding agencies and pass-through entities, and the State of Florida Office of the
Auditor General and is not intended to be and should not be used by anyone other than these specified
parties.
~Cww~r G}OV~t~trrtd.~t, 917~r ~~Ibt ~ Qedeals~
~ f~1u61~~ Gib.-n~,rh~s w ~ht~+~~rd
Harris, Cotherman, Jones, Price & Associates, Chartered
Certified Public Accountants
December 8, 2006
114
CITY OF SEBASTIAN, FLORIDA
Schedule of Findings and Questioned Costs
State Projects
Fiscal Year Ended September 30, 2006
SECTION I -SUMMARY OF AUDITORS' RESULTS
Internal control over major State projects:
Material weakness(es) identified?
Reportable condition(s) identified not considered
to be material weaknesses?
Type of auditors' report issued on compliance for
major projects:
Any audit findings disclosed that are required to be
reported in accordance with Chapter 10.550,
rules of the Auditor General?
Yes X No
Yes X None reported
Unqualified
Yes X No
Identification of major State projects:
Name of State Project
Florida Department of Transportation:
Security Improvements
Construct Fuel Farm
Infrastructure Development
Construct Access Roads
Install Security Upgrades
Business Plan
Install Airfield Signage and Lighting
Rehab Taxiway A and Apron and Construction
Administration Building Apron
Florida Department of Environmental Protection:
Riverview Park Expansion
Dollar threshold used to distinguish between Type A
and Type B projects:
State CSFA No.
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
37.017
300 000
SECTION II -FINANCIAL STATEMENT FINDINGS
No matters were reported.
SECTION III -FINDINGS AND QUESTIONED COSTS -MAJOR STATE PROJECTS
No matters were reported.
SECTION IV -PRIOR YEAR FINDINGS AND QUESTIONED COSTS -MAJOR STATE
PROJECTS
No matters were reported.
115
City of Sebastian, Florida
Schedule of Expenditures of State Financial Assistance
For the year ended September 30, 2006
State Agency
Pass-through Entity
State Proiect
Department of Environmental Protection
Direct Project
Florida Recreation Development Assistance Program
Riverview Park Expansion
Total Department of Environmental Proection
Department of Transportation
Direct Projects:
Joint Participation Agreement with Florida
Department of Transportation Aviation
Administration:
Infrastructure Development
Construct Access Roads
Install Security Upgrades
Security Improvements
Rehab Taxiway A & Apron and Construct Administration
Building Apron
Construct Fuel Farm
Business Ptan
Install Airfield Signage and Lighting
District Maintenance
Lighting Maintenance and Compensation Agreement
Total Department of Transportation
Department of State
Direct Project
Division of Historical Resources
2002 Special Category Grant
Total Department of State
TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE:
Contract
CSFA Grant
No. No. Expenditures
37.017 F03394 $ 161,857
161,857
55.004 407682-1-94-01 175,241
55.004 407706-1-94-01 35,601
55.004 412373-1-94-O1 355,550
55.004 236232-1-94-01 143,160
55.004 415216-1-94-O1 3,293
55.004 412399-1-94-O1 30,580
55.004 236223-1-94-01 26,404
55.004 412374-1-94-01 35,577
55.023 405122-1-72-t0 16,998
822,404
45.032 SC356 25,605
25,605
$ 1,009,866
The accompanying notes are an integral part of the audit.
116
City of Sebastian, Florida
Notes to Schedule of Expenditures of State Financial Assistance
September 30, 2006
The accounting policies and presentation of the Single Audit Report of City of Sebastian, Florida, (the "City") have been
designed to conform to generally accepted accounting principles as applicable to governmental unites, including the reporting
and compliance requirements of the Audits of State, Local Governmf;nts, and Non-Profit Organizations and the Florida Single
Audit Act.
A. Reportine Entity
The reporting entity consists of City of Sebastian, the primary government, and each of its component units. The City includes a
Schedule of Expenditures of State Financial Assistance in the ,Single Audit Section. For FY 2005-06, none of the federal
awarded program expenditures has met the Federal Single Audit threshold; therefore, the Schedule of Expenditures of Federal
Awards is not applicable in the Single Audit Section.
B. Basis of Accountine
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the
financial statements. Basis of accounting relates to the timing of measurements made, regardless of the measurement focus.
The modified accrual basis of accounting is followed in the Schedule of Expenditures of State Financial Assistance. Under the
modified accrual basis, revenues are recognized when they become 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 City considered revenues to be available if they are collected within one year after the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred., as under accrual accounting.
117
THIS PAGE INTENTIONALLY LEFT BLANK
118
i
J
0 Harris, Cotherman,
Jones, Price ~- Associates
Certified Public Accountants -Chartered
5070 North Highwa . AlA, Suite 250
Vero Beach, FL 3293
Tel 772-234-8484
Fax 772-234-8488
Independent Auditors'
Management Letter
.Honorable Mayor and Members of City Council
City of Sebastian
,~ Sebastian, Florida
We have audited the financial statements of the City of Sebastian, Florida, as of and for the fiscal year
ended September 30, 2006, and have issued our report thereon dated December 8, 2006.
We conducted our audit in accordance with United States generally accepted auditing standards; the
standards applicable to fmancial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States and the Florida Single Audit Act. We have issued our
Independent Auditors' Report on Compliance and Internal Control over fmancial reporting, Independent
Auditors' Report on Compliance and Internal Control over Compliance applicable to each major State
Project, and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule,
which are dated December 8, 2006, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the
Auditor General, which govern the conduct of local governmental entity audits performed in the State of
_,~ Florida and require that certain items be addressed in this letter.
The rules of the Auditor General (Section 10.554(1)(h)1) require that we address in the management
letter, if not already addressed in the auditors' reports on compliance and internal controls or schedule of
findings and questioned costs, whether or not recommendations made in the preceding annual financial
audit report have been followed. All findings and comments in the prior year have been resolved to our
satisfaction.
As required by the Rules of the Auditor General (Section 10.554(1)(h)2), the scope of our audit included
a review of the provisions of Section 218.415., Florida Statutes, regarding the investment of public funds.
- ` In connection with our audit, we determined that the City of Sebastian, Florida complied with Section
218.415, Florida Statutes.
- The Rules of the Auditor General (Section 10.554(1)(h)3.) require that we address in the management
letter any findings and recommendations to improve financial management, accounting procedures, and
internal controls. In connection with our audit, we did not have any such findings.
The Rules of the Auditor General (Section 10.554(1)(h)4.) require disclosure in the management letter of
the following matters if not already addressed in the auditors' reports on compliance and internal controls
or schedule of findings and questioned costs: (1) violations of laws, rules, regulations, and contractual
provisions that have occurred; or are likely to have occurred; (2) improper or illegal expenditures, (3)
improper or inadequate accounting procedures (e.g., the omission of required disclosures from the
"Providing Vision and Direction to our Clients"
Member AICPA Member AICPA Division For CPA Firms Member FICPA
1_ Private Companies Practice Section
119
Honorable Mayor and Members of City Council
City of Sebastian
Page two
financial statements); (4) failures to properly record fmancial transactions; and (5) other inaccuracies, -
shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor.
We noted the following matter in regards to non-compliance with F.S. 189.418(3): `
During the current year it was noted that the City of Sebastian's Community
Redevelopment Agency (CRA) did have an approved budget as required by Florida `
Statutes. However, the CRA's budget was not authorized by resolution as per F.S. _
189.418(3). We recommend the CRA's budget be adopted by resolution annually to
meet this State requirement for compliance.
The Rules of the Auditor General (Section 10.554(1)(h)5.) also require that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be disclosed e
in the management letter, unless disclosed in the notes to the financial statements. The legal authority for
the City of Sebastian, Florida is disclosed in the footnotes. 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 o
Ordinances in October 1989.
As required by the Rules of the Auditor General (Section 10.554(1)(h)6.a), the scope of our audit
included a review of the provisions of Section 218.503(1), Florida Statutes, regarding financial
emergencies. In connection with our audit, we determined that the City of Sebastian, Florida has not met
any of the fmancial emergency conditions described in Section 218.503(1), Florida Statutes.
As required by the Rules of the Auditor General (Section 10.554(1)(h)6.b.), we determined that the
annual fmancial report for the City of Sebastian, Florida for the fiscal year ended September 30, 2006,
filed with the 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, 2006.
As required by the Rules of the Auditor General (Section 10.554(1)(h)6.c. and 10.556(7)), we applied
financial condition assessment procedures. It is management's responsibility to monitor the entity's
financial condition, and our fmancial condition assessment was based in part on representations made by
management and the review of financial information provided by the same.
This report is intended solely for the information and use of the City of Sebastian, Florida and
management, federal and state awarding agencies and pass through entities, and the State of Florida
Office of the Auditor General and is not intended to be and should not be used by anyone other than these a
specified parties. ___
~r~i., G'awctsr-~a.,r~ Qnw, t ~u ~ l~reeaei~liv
~~r~d ~ubtt~ at+~.nvxs ~ C'h~n~R~d
Harris, Cotherman, Jones, Price & Associates, Chartered
Certified Public Accountants
December 8, 2006
120
CITY OF
HOME OF PELICAN ISLAND
1225 MAIN STREET • SEBASTIAN, FLORIDA 32958
TELEPHONE: (772) 589-5330 • FAX (772) 589-5570
January 25, 2007
Harris, Cotherman, Jones, Price, & Associates
5070 North Highway, AlA, Suite 250
Vero Beach, Florida 32963
Gentlemen:
The following is my response to the management comment for the FY 2005-2006.
Community Redevelopment A;;ency (CRA) Budget Authorization:
We concur with your finding as to what is stated in the comment; the City did have an approved CRA
budget for FY 2005-2006 as required by Florida State Statutes. However, the CRA FY 2005-2006
budget was not authorized by resolution as per F.S. 189.418(3). The City has corrected this compliance
issue by adopting the CRA FY 2006-2007 annual budget with a resolution.
I would like to thank your audit staff for their professional assistance and comment.
121
GTY OF
.^~.
~~ ..
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
122