HomeMy WebLinkAbout2011 - 2012Comprehensive Annual Financial Report City of Sebastian, Florida For the Fiscal Year October 1, 2011 through September 30, 2012
The CAFR cover shows photographs of signage improvements made by the recipients of our Facade, Signage and Landscaping Grant Program. This program is designed to encourage visible, exterior
improvements to any existing building (residential or commercial) and to encourage private investment within the Sebastian Community Redevelopment Area (CRA). The program provides up
to $15,000 of public funds per building to match private funds to pay for improvements within the Sebastian CRA. Funds are appropriated annually in the CRA budget, and funding is available
on a first come first serve basis. The program is subject to the availability of funds. Facade, signage and landscaping (FSL) grants must support the goals of the Overlay District for
the CRA area. Applicants are also encouraged to consider the design guidelines specified to achieve the “Old Florida Fishing Village” theme. Concept provided courtesy of: Dorri Bosworth,
Community Development, City of Sebastian Photograph provided courtesy of: Ginny Sieferd, Community Development, City of Sebastian
CITY OF SEBASTIAN, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2012 CITY COUNCIL Jim Hill Don Wright Mayor Vice-Mayor Andrea Coy Council Member Bob
McPartlan Richard H. Gillmor Council Member Council Member Prepared by: Administrative Services Department
CITY OF SEBASTIAN, FLORIDA Table of Contents Page INTRODUCTORY SECTION 1 City Officials 2 Letter of Transmittal 3 Organizational Chart 8 GFOA Certificate of Achievement 9 FINANCIAL SECTION
11 Independent Auditors’ Report 13 Management’s Discussion and Analysis 15 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 28 Statement of Activities
29 Fund Financial Statements: Balance Sheet – Governmental Funds 32 Reconciliation of Fund Balances for Governmental Funds to Net Assets of Governmental Activities 34 Statement of Revenue,
Expenditures and Changes in Fund Balances – Governmental Funds 36 Reconciliation of Net Changes in Fund Balance of Governmental Funds to Change in Net Assets of Governmental Activities
38 Statement of Revenue, Expenditures and Changes in Fund Balance – Budget and Actual: General Fund 39 Local Option Gas Tax Fund 40 Discretionary Sales Tax Fund 41 Riverfront Redevelopment
Fund 42 Discretionary Sales Surtax Revenue Bonds 2003 Fund 43 Statement of Net Assets – Proprietary Funds 44 Statement of Revenue, Expenses and Changes in Fund Net Assets – Proprietary
Funds 45 Statement of Cash Flows – Proprietary Funds 46 Statement of Fiduciary Net Assets 48 Statement of Changes in Fiduciary Net Assets 49 Notes to Financial Statements 51
CITY OF SEBASTIAN, FLORIDA Table of Contents Page Required Supplementary Information: Schedule of Funding Progress – Single-employer Pension Trust Fund 82 Schedule of Employer Contributions
– Single-employer Pension Trust Fund 82 Schedule of Funding Progress – Other Postemployment Benefits Plan 83 Schedule of Employer Contributions – Other Postemployment Benefits Plan 83
Combining and Individual Fund Financial Statements and Schedules: Nonmajor Governmental Funds: Combining Balance Sheet 86 Combining Statement of Revenue, Expenditures and Changes in
Fund Balances 88 Schedule of Revenue, Expenditures and Changes in Fund Balance – Budget and Actual: Parking In-Lieu of Fund 90 Recreation Impact Fee Fund 91 Stormwater Utility Fund 92
Law Enforcement Forfeiture Fund 96 Stormwater Utility Revenue Bonds 2003 Fund 94 Agency Fund: Combining Statement of Changes in Assets and Liabilities 96 Other: Capital Assets used in
the Operations of Governmental Funds: Comparative Schedule by Source 98 Schedule by Function and Activity 99 Schedule of Changes by Function and Activity 100 Internal Control and Compliance
Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance with Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Governmental Auditing Standards 103 Independent Auditors' Management Letter 105
CITY OF SEBASTIAN, FLORIDA Table of Contents Page STATISTICAL SECTION (UNAUDITED) 107 Statistical Section Table of Contents 109 Financial Trends Information Net Assets by Component 110
Changes in Net Assets 112 Fund Balances, Governmental Funds 116 Changes in Fund Balances, Governmental Funds 118 Program Revenues by Function/Program 120 Revenue Capacity Information
Tax Revenues by Source 122 Property Tax Rates ($1 per $1,000 of Taxable Value) – Direct and Overlapping Governments 123 Assessed and Estimated Actual Value of Taxable Property 124 Principal
Property Taxpayers 126 Property Taxes, Levies and Collections 127 Debt Capacity Information Ratio of Outstanding Debt by Type 128 Ratio of Net General Bonded Debt to Estimated Actual
Value and Net General Bonded Debt Per Capita 130 Computation of Legal Debt Margin for General Obligation Bonds 132 Pledged Revenue Coverage 134 Demographic and Economic Information Demographic
and Economic Statistics 136 Principal Employers 139 Operating Information Full-Time Equivalent City Employees by Function/Program 140 Operating Indicators by Function/Program 142 Capital
Asset Statistics by Function/Program 144
INTRODUCTORY SECTION 1
CITY OF SEBASTIAN, FLORIDA CITY OFFICIALS For the Year Ended September 30, 2012 Al Minner Sally A. Maio, MMC City Manager City Clerk Robert Ginsburg City Attorney Michelle Morris Debra
Krueger Police Chief Administrative Service Director Kenneth W. Killgore Jerry Converse Finance Director Public Works Director Wayne Eseltine Greg Gardner Building Official Golf Course
Director Joseph Griffin Community Development & Airport Director DEPARTMENT HEADS 2
March 13, 2013 To the Citizens of the City of Sebastian, Florida: The City of Sebastian, Florida is located in Indian River County approximately midway through the east coast of the
Florida Peninsula (between Melbourne and Vero Beach) in an area known as the Treasure Coast. It is recognized as the Home of Pelican Island, the first designated wildlife refuge in the
United States, a Millennium City, and a Tree City USA. It was first incorporated as the Town of Sebastian in 1924. In the late 1950s General Development Corporation purchased the land
from the Mackle family of Miami and began the development of a planned community that is now the City of Sebastian. We are submitting the Comprehensive Annual Financial Report of the
City of Sebastian, Florida for the fiscal year ended September 30, 2012. 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, 2012. Management assumes full
responsibility for the completeness and reliability of the information contained in this report, based on a comprehensive framework of internal control that is established for this purpose.
Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are
free of any material misstatements. Chapter 218.39, Florida Statutes requires that the financial statements of the City of Sebastian be audited by a certified public accountant selected
by the City Council. The City’s independent Certified Public Accountants, Rehmann Robson, has issued an unqualified ("clean") opinion on the City of Sebastian’s financial statements
for the year ended September 30, 2012. The independent auditors’ report is located on page 13 and 14. Management’s discussion and analysis (MD&A) immediately follows the independent
auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in
conjunction with it. Profile of the Government The City has a population of 21,995 living in an area of approximately 14.6 square miles. The City is empowered to levy a property tax
on both real and personal property located within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time.
3
The City is a Florida municipal corporation with a five-member City Council. Council members serve a two-year term. Annual elections are held on the first Tuesday following the first
Monday in November and two members are elected in even-numbered years and three members are elected in oddnumbered years. Elections are non-partisan and at-large. Mayor and Vice Mayor
are elected from among the members of every newly seated Council at a Special meeting following the election each year. The City has operated under a Council-City Manager form of government
since 1989. The City provides a wide range of services including general government administration, police protection, the construction and maintenance of local roads, public works,
recreational and cultural activities, a golf course, a general aviation airport, and a building department to enforce building codes. This report includes all funds of the City. In evaluating
the City as a reporting entity, we have included all component units for which the City Council is financially accountable. The component units have been blended with the financial statements
presented for the Primary Government because the component unit’s governing body is the same as the City Council or because the component unit exclusively serves the City. The blended
component units are the Riverfront Redevelopment Agency and the Sebastian Police Officer’s Pension Trust Fund. Local Economy The region (which includes the City of Sebastian and the
surrounding unincorporated area within the same county) has a fluctuating labor force depending on agricultural demand and is a strong retirement community. Although the labor force
fluctuates, unemployment in the region steadily declined through 2006 but then increased for the next five years to a range of 13-14%. As of October 12, 2012, the Florida Research &
Economic Database reported a slightly improved unemployment rate of 10.2%. The overall unemployment rate for the area has historically been greater than that of the State of Florida.
This high number is representative of the general economic difficulties being experienced in the area and the lack of job creation. The largest major occupational group is Office and
Administrative Support Occupations (24.7%), followed by Sales and Related Occupations (17.3%) and Food Preparation and Serving Related Occupations (12.4%). According to the U.S. Census
Bureau (2000), 86% of the population age 25 or older are high school graduates and 23.1% hold a bachelor’s degree or higher. The area median age for 2010 was 50.1 per the U.S Census
Bureau and average wage is $34,684 per year, assuming a 40-hour work-week, per the Florida Research & Economic Database. The geographical area of the City of Sebastian, just north of
the Treasure Coast, houses a number of high-tech industries including NASA and various aerospace industry-related businesses. In the past, this attracted a workforce with a higher than
average education and technical skills to the vicinity but with the end of the Space Shuttle program, the loss of these activities has affected job availability. The Council is required
to adopt a final budget no later than the close of the fiscal year. This annual budget serves as the foundation for the City’s financial planning and control. The budget is prepared
by fund, function (e.g., transportation), and department (e.g., public works). Shifts in appropriations within fund totals may be done administratively on the authority of the City Manager.
Total fund appropriation changes and use of contingency appropriations must be approved by the City Council. 4
The voters of Indian River County in November 2003 extended the Infrastructure Sales Surtax in the amount of $.01 per $1.00 sale for an additional fifteen years and seven months beginning
in January 2004. This Infrastructure Sales Surtax is estimated to provide the City in excess of $40 million dollars over the life of the extension for the City’s emergency vehicle and
capital improvement needs. In addition, the City has funded a number of other capital projects with impact fees and has actively pursued grant funding for some major transportation and
environmental improvements. It has also employed the use of a Community Redevelopment Agency that is funded by means of tax-increment financing. The millage was held at 3.3041 for fiscal
year 2012, although the City experienced another sizable decline in taxable value. Construction activity in fiscal year 2012 continued to be low, with just 66 permits being issued for
new construction in fiscal year 2012 with a value of $14.7 million. The decline is primarily attributed to the slowdown of the housing market. General fund unassigned fund balance and
amounts committed by the financial policies resolution based on 30% of the general fund expenditures budget, totaled 48% of the general fund expenditures budget. The City has been steadfast
and refused to spend down these balances due to uncertainty about the future due to the slow down of building activity and because the City understands reliance on accumulated fund balances
to fund operating expenditures is not a prudent fiscal strategy. To this end, the budget for fiscal year 2013 incorporates a small millage increase and plans for no reduction of fund
balances. Long-Term Financial Planning Administration Major Initiatives There were several significant initiatives during the past fiscal year. Through request for proposals, the City
determined to refinance the 2010 Bank Note to provide more street repaving funds and a reduction in the interest rate. Also with a competitive bidding process, the City transitioned
all banking services to a new main depository bank and achieved lower bank service fees and a higher interest rate on overnight deposits. Additionally, the City successfully participated
in rating surveillance activities by Standard & Poor’s and retained “A+” bond ratings on the Stormwater Utilities Revenue Bonds and the Discretionary Sales Tax Revenue Bonds. During
the budget process for fiscal year 2013, there were some notable actions considered important to maintaining healthy balances in uncommitted General Fund reserves. The City experienced
further reductions in taxable property values, as well as lower collections of electric franchise fees and utility taxes. Therefore, some measures were required to bring projected revenues
to the level of spending considered necessary. These included continuing mandatory monthly unpaid furlough days and offering no wage increases for the employees; approving a millage
increase sufficient to replace a $100,000 annual transfer that has been made previously from the local option gas taxes; and increasing stormwater fees to a rate that allows the Stormwater
Fund to replace equipment and continue the $500,000 annual transfer to General Fund. 5
During the year, significant changes were negotiated and approved by the City Council to ensure the future affordability of the Police Officer’s Pension Plan. New Police Officers will
contribute 8% of their salaries and accrue a 2.5% retirement benefit for each year of service, while those employed before October 1, 2012 will have their contribution increase from
5% to 8% of salaries and continue to accrue a 3.0% retirement benefit for each year of service. The Police Department continues to participate in the accreditation program offered by
the commission for Florida Law Enforcement Accreditation. The designation encourages the Police Department to establish goals and objectives with provisions for periodic updating; constant
reevaluation of whether departmental resources are being employed in accordance with agency goals, objectives and mission; constant reevaluation of departmental policies and procedures
as documented in the department’s written directive system; to accommodate correction of internal deficiencies and inefficiencies before they become public problems; and the opportunity
to reorganize without the appearance of personal attacks. Standards and performance measurements resulting from the accreditation process will continue to guide both Sebastian Police
Department and city administration in alleviating potentially adverse conditions. Public Safety Stormwater The City continues working on transportation improvements. The 2012 bank note
refunded the 2010 bank note and also provided $175,000 of additional funds for street repaving. Funds have also been allocated from discretionary sales taxes and the community redevelopment
agency to develop a vehicle and boat parking area on the riverfront. Discretionary sales taxes will also fund enhancements to the “presidential streets” within the community redevelopment
agency area. Other projects being planned for future years include repairs to the bridge on Barber Street and working with the County to make intersection improvements. The Sebastian
Municipal Airport’s infrastructure is being developed with the intent of attracting economic development and stimulating the business climate in order to create jobs in the community.
In fiscal year 2013, a separate budget was approved for expenses made toward promoting economic development. The current Master Plan serves as the guiding document for airport planning.
Land leases are a primary source of airport revenues and over 150 acres of property is available for lease, for both aviation and non-aviation businesses. Also important are sales from
a self-serve fueling facility. The Airport’s limited resources continue to be leveraged by aggressively seeking and obtaining grants available from the Florida Department of Transportation
(FDOT) and Federal Aviation Administration (FAA) to provide the funding needed to develop the necessary infrastructure. Planned improvements in fiscal year 2013 include development of
the Main Street Access Road and constructing parallel lighted taxiways and end of runway identification lighting. These and other ventures will help attract business to the Airport and
thereby improve the financial positions of the Airport and City as a whole. Airport Traffic & Transportation The main focus of Stormwater effort expended for the past fiscal year has
continued to be on the City's Stormwater Management Program, including capital projects, maintenance, citizen response and education, and forward planning. In fiscal year 2007, City
began a program to upgrade the current swale system by installing quarter-round piping. The City also started outsourcing the swale and ditch maintenance work to enable City crews to
focus on different Stormwater maintenance practices. During fiscal year 2012, drainage improvements continued with the installation of quarter-round piping in additional areas of the
City. For fiscal year 2013, a rate increase from $4.00 to $5.00 per month per ERU (equivalent residential unit) was approved in order to continue the quarter-round program and provide
funding for equipment replacements. 6
CITY OF SEBASTIAN, FLORIDA Organizational Chart 8
CITY OF SEBASTIAN, FLORIDA GFOA Certificate of Achievement 9
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FINANCIAL SECTION 11
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INDEPENDENT AUDITORS' REPORT March 13, 2013 Honorable Mayor and City Council City of Sebastian, Florida We have audited the accompanying financial statements of the governmental activities,
the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Sebastian, Florida (the “City”), as of and for the year ended September 30,
2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the management of the
City of Sebastian, Florida. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of the other auditors provides a reasonable
basis for our opinions. In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the respective financial position of
the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Sebastian, Florida as of September 30, 2012, and
the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund and each major special revenue fund
for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued,
our report dated March 13, 2013, on our consideration of the City of Sebastian, Florida’s internal control over financial reporting and our tests of its compliance with certain provisions
of laws, regulations, contracts, and grants, 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 financial 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. 5070 North Highway A1A Suite 250 Vero Beach, FL 32963
Ph: 772.234.8484 Fx: 772.234.8488 13
The introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining
and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation
to the basic financial statements as a whole. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the schedules
of funding progress and employer contributions as noted in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information
for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do
not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS 15
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis Financial Highlights ···· Overview of the Financial Statements Since the Management's Discussion and Analysis (MD&A) is
designed to focus on the current years activities, resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter and the City's financial statements.
The assets of the City exceeded its liabilities at the close of the fiscal year 2012 by $51,991,703 (net assets). Of this amount, $3,648,188 (unrestricted net assets) may be used to
meet the City's on-going obligations to citizens and creditors. The City's total net assets decreased by $477,097 resulting from an increase of $37,319 from governmental activities and
an decrease of $514,416 from business-type activities. Governmental funds reported a combined ending fund balance of $11,383,377, a increase of $37,764 from the prior year. Approximately
15% of this amount, $1,734,307 is unassigned and available for spending, a decrease of $50,106 from fiscal year 2011 due to total General Fund revenue being less than expenditures and
transfers. The golf course fund reported a further reduction in the deficit in unrestricted net assets, primarily due to no longer having debt service payments. The airport deficit is
the result of investment in capital assets that will ultimately be beneficial. The building enterprise fund reported an increase in net assets for the first time in several years, as
a result of an improved levels of construction activity. The annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities provide
information about the activities of the City as a whole and present a longer-term view of the City's finances. For governmental activities, the fund financial statements tell how these
services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail by providing information
about the City's most significant funds. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide
and fund financial statements. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues
(governmental activities ) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities ). The
governmental activities of the City include general government, public safety, cultural and recreation, and general administration. The business-type activities of the City include the
golf course, airport, and building operations. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of
the City’s finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the City’s assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating. The statement of activities presents information showing how the government’s net assets changed during the most recent fiscal year. All changes in net assets are reported
as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The City of Sebastian's (the "City") discussion and
analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the City's
financial position, (d) identify any material deviations from the financial plan, and (e) identify individual fund issues or concerns. 16
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis The City maintains fifteen individual governmental funds. Information is presented separately in the governmental funds
balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Local Option Gas Tax, Discretionary Sales Tax Fund,
Riverfront Redevelopment Fund and Discretionary Sales Surtax Revenue Bonds 2003 Fund, all of which are considered to be major funds. Data from the other ten governmental funds are combined
into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements and schedules elsewhere in
this report. The City adopts an annual appropriated budget for its General Fund and special revenue funds. Budgetary comparison statements have been provided for these funds to demonstrate
compliance with this budget. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific
activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of
the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for
essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental
fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Proprietary
Funds. The City maintains one type of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial
statements. The City uses enterprise funds to account for the golf course, airport, and buildings department. Proprietary funds provide the same type of information as the government-wide
financial statements, only in more detail. The proprietary fund financial statements provide separate information for the golf course, airport, and buildings department, which are considered
to be major funds of the City. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected
in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much
like that used for proprietary funds. 17
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis Net Assets Governmental Activities Business-type Activities Total 2012 2011 2012 2011 2012 2011 Current and other assets
$ 12,067,998 $ 12,664,876 $ 7 58,107 $ 1 ,289,505 $1 2,826,105 $1 3,954,381 Capital assets, net 4 2,713,256 4 3,779,203 1 1,181,823 1 1,850,561 5 3,895,079 55,629,764 Total assets 54,781,254
5 6,444,079 1 1,939,930 1 3,140,066 6 6,721,184 69,584,145 Long-term liabilities 1 2,742,412 1 4,172,911 196,000 236,472 12,938,412 14,409,383 Other liabilities 738,664 1,008,309 1,052,405
1,697,653 1,791,069 2,705,962 Total liabilities 13,481,076 15,181,220 1,248,405 1,934,125 14,729,481 17,115,345 Net assets: Invested in capital assets, net of related debt 31,500,173
31,541,953 11,181,823 11,850,561 42,681,996 43,392,514 Restricted 6,192,777 5,668,155 --6,192,777 5,668,155 Unrestricted 3,607,228 4,052,751 (490,298) (644,620) 3,116,930 3,408,131 Total
net assets $ 41,300,178 $ 41,262,859 $ 10,691,525 $ 11,205,941 $ 51,991,703 $ 52,468,800 Notes to the Financial Statements. The notes provide additional information that is essential
to a full understanding of the data provided in the government-wide and fund financial statements. Other Information. In addition to the basic financial statements and accompanying notes,
this report also presents certain required supplementary information. Government-Wide Financial Analysis As previously stated, net assets may serve over time as a useful indicator of
a government’s financial position. In the case of the City, assets exceeded liabilities by $51,991,703 at the close of the most recent fiscal year. A substantial portion of the City’s
net assets, $42,681,996 (82 percent), reflects its investment in capital assets (e.g., land, buildings, machinery and equipment), less any related outstanding debt used to acquire those
assets. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot
be used to liquidate these liabilities. An additional portion of the City’s net assets of $5,661,519 (11 percent) represents resources that are subject to external restrictions on how
they may be used. The City may use the remaining balance of unrestricted net assets of $3,681,688 (7 percent) to meet its ongoing obligations to citizens and creditors. At the end of
the current fiscal year, the City is able to report positive balances in all three categories of net assets, for the government as a whole and for its separate governmental activities.
Unrestricted net assets were negative for business-type activities, but improved over the prior year for each of the individual enterprise funds. 18
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis Change in Net Assets Governmental Activities Business-type Activities Total 2012 2011 2012 2011 2012 2011 Revenues Program
revenues: Charges for services $ 1 ,224,609 $ 1 ,219,707 $ 2 ,305,916 $ 2 ,268,671 $ 3 ,530,525 $ 3 ,488,378 Operating grants 187,333 196,534 6,563 -193,896 196,534 Capital grants 791,265
838,242 150,083 900,340 941,348 1,738,582 General revenues: Property taxes 3,063,495 3,453,778 --3,063,495 3,453,778 Other taxes 4,852,413 4,751,021 --4,852,413 4,751,021 Intergovernmental
1,934,733 1,868,555 --1,934,733 1,868,555 Other 1,408,235 1,467,748 4,125 4 ,026 1,412,360 1,471,774 Total revenues 13,462,083 1 3,795,585 2,466,687 3,173,037 1 5,928,770 16,968,622
Expenses General government 2,640,677 2,766,575 --2,640,677 2,766,575 Public safety 5,025,274 5,546,632 --5,025,274 5,546,632 Physical environment 2,007,902 1,558,974 --2,007,902 1,558,974
Transportation 1,800,432 2,263,367 --1,800,432 2,263,367 Economic environment 170,960 208,518 --170,960 208,518 Cultural and recreation 1,239,512 1,227,198 --1,239,512 1,227,198 Interest
and fiscal charges 562,496 546,103 --562,496 546,103 Golf course --1,394,731 1,355,266 1,394,731 1,355,266 Airport --1,166,588 1,188,788 1,166,588 1,188,788 Building --397,295 470,406
397,295 470,406 Total expenses 13,447,253 1 4,117,367 2,958,614 3,014,460 1 6,405,867 17,131,827 Change in net assets, before transfers 14,830 (321,782) (491,927) 158,577 (477,097) (163,205)
Transfers 22,489 -( 22,489) ---Change in net assets 37,319 (321,782) (514,416) 158,577 (477,097) (163,205) Net assets, beginning of year 41,262,859 41,584,641 11,205,941 11,047,364 52,468,800
52,632,005 Net assets end, of year $ 41,300,178 $ 41,262,859 $ 10,691,525 $ 11,205,941 $ 51,991,703 $ 52,468,800 The City’s net assets decreased by $477,097 during the current fiscal
year. Increases in ongoing expenses in excess of increases in ongoing revenues resulted in a decrease in net assets. The primary reason for the decrease in net assets is related to a
decrease in general property tax revenues. 19
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ··· Expenses and Program Revenues -Governmental Activities Revenues by Source -Governmental Activities A decrease in general
revenues and transfers of $259,736 A decrease in expenses of $670,114 Governmental Activities. Governmental activities increased the City’s net assets by $37,319 as compared to the prior
year decrease of $321,782. Key elements of this increase are as follows: A decrease in program revenues of $51,276 -1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 General
government Public safety Physical environment Transportation Economic environment Cultural and recreation Interest and fiscal charges Expenses Program Revenues Charges for services 9%
Operating grants 1% Capital grants 6% Property taxes 23% Other taxes 45% Intergovernmental 14% Other 2% 20
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ··· Expenses and Program Revenues -Business-type Activities Revenues by Source -Business-type Activities Business-type
Activities. Business-type activities decreased the City’s net assets by $514,417, as compared to the prior year increase of $158,577. The key elements of this decrease are as follows:
A decrease in expenses of $58,178. A decrease in revenues and transfers of $19,951. A decrease in program revenues of $711,218. -200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
1,600,000 Golf course Airport Building Expenses Program Revenues Charges for services 94% Capital grants 6% Other 0%21
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ·············· Investment earnings were over-estimated as a result in the overall decline in interest rates. Intergovernmental
revenue had a positive budgetary variance from higher than anticipated receipts from municipal revenue sharing and local half-cent sales taxes transmitted by the state. General fund
expenditures had an overall positive budgetary variance of $205,270, of which the greatest portions related to general government, ($57,681), public safety ($57,095), and physical environment
($71,663). Unanticipated capital purchases were necessary in several departments, however these were covered by savings from operating accounts. The general fund is the chief operating
fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was $1,734,307 while total fund balance amounted to $5,002,172. As a measure of the
general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 18 percent of
total General Fund expenditures, while total fund balance represents 51 percent of that same amount. Financial Analysis of the City’s Funds As noted earlier, the City uses fund accounting
to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful
measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $11,383,377, an increase of $37,764 from the prior year. Of this amount, 15 percent ($1,734,307) constitutes unassigned fund balance, which is available for spending
at the City’s discretion. The remainder of fund balance is assigned to indicate that it is not available for new spending because it is classified as one of the following: A) Nonspendable
for 1) inventories and prepaids, 2) long-term cash advances, or 3) is nonspendable as permanent fund corpus for cemetery perpetual care; B) Restricted for capital projects or due to
debt service and special revenue fund designations; C) is committed for working capital per the City's Fund Balance policy; or D) has been assigned for other specific uses in the City’s
general operations. The fund balance of the City’s general fund decreased by $100,286 during the current fiscal year. Key factors in this change are as follows: Expenditures decreased
$804,564 due to reductions in employees and cuts in other operating accounts. The general fund budgeted for an increase in fund balance of $61,000 and the actual decrease in fund balance
was $100,286. Significant changes in budgetary variances are as follows: All other revenues increased by $3,673. Charges for services increased by $30,112. Intergovernmental increased
by $76,653. Property tax revenues had a positive budgetary variance of $26,091, with over 96% of the tax roll being collected. Only 95% of the tax roll is budgeted as being collected,
per Florida statutes. The decrease in fund balance was primarily the result of shortfalls in the collections of public utility taxes and franchise fees that we significantly over estimated.
Transfers in from other funds decreased by $44,011 because less was transferred from the local option gas tax Property tax revenues decreased by $347,742 due to reductions in taxable
property values. Investment earnings decreased $25,139 due to lower rates of return. Fines decreased by $28,347. Franchise fees decreased by $60,118. 22
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ····· The Riverfront Redevelopment Fund ended the year with $478,895 in fund balance. Unanticipated expenses exceeded
budget, but transfers out for pending construction projects were less than budgeted. The end of the year fund balance of the Local Option Gas Tax Fund increased to $190,274 due to refinancing
the bank note and providing additional funds for street paving. Other factors concerning the finances of these three funds have already been addressed in the discussion of the City's
business-type activities. Budgetary Highlights The Discretionary Sales Surtax Revenue Bonds 2003 Fund has a total fund balance of $1,555,411, all of which is restricted for debt service
on the bonds. $2,129 supplemental appropriation for replacing a badge printer. $1,722 supplemental appropriation to reflect the use of insurance proceeds to repair a damaged truck. $150,000
increase to appropriations in the Discretionary Sales Tax Fund for a new project to make street improvements. $13,800 amendment to establish budgetary accounts for the Parking-in-Lieu-of
Fund. The total net assets of the airport fund at the end of the fiscal year amounted to $9,845,816, while the unrestricted net assets (deficit) amounted to ($816,992). Compared to the
prior year in the same category, net assets have increased by $541,164 while the unrestricted net assets (deficit) was reduced by $71,834. The reduction in the unrestricted net assets
(deficit) is mainly due to a reduction in amounts invested in capital assets resulting from depreciation expense. The total net assets of the building fund at the end of the fiscal year
amounted to $487,393, all of which was unrestricted net assets. This is an increase of $26,587 from the prior year, which was primarily due to operating revenue exceeding operating expenses
for the year. The total net assets of the golf course fund at the end of the fiscal year amounted to $358,316, while the unrestricted net assets (deficit) amounted to ($160,699). Compared
to the prior year in the same category, net assets are $161 more than the prior year, while the unrestricted net assets (deficit) was reduced by $55,542 from the prior year. This is
mainly because of a reduction in the amounts invested in capital assets, resulting from depreciation expense. The Discretionary Sales Tax revenue special revenue fund has a total fund
balance $2,015,572, an increase from the $1,623,442 total fund balance of the prior year. Funds are intentionally being accumulated for projects that are planned in future years. Proprietary
Funds. The City’s proprietary fund financial statements provide the same type of information found in the government-wide financial statements, but in more detail. $631,192 supplemental
appropriation to Discretionary Sales Tax, Riverfront Redevelopment and Recreation Impact Fee Funds to cover transfers for open purchase orders and capital projects that were carried
forward from the prior fiscal year. During the year, the City Council revised the City budget four times. These budget amendments fall into three categories. The first category includes
amendments and supplemental appropriations that were approved shortly after the beginning of the year and reflect fund balances carried over from the prior fiscal year to reappropriate
transfers to cover certain purchase orders and capital projects. The second category includes adjustments for unanticipated revenues. The third category includes supplemental appropriations
to cover unanticipated items or project costs that were above or below budgeted amounts. 23
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ················ Capital Assets (Net of Depreciation) Governmental Activities Business-type Activities Total 2012 2011
2012 2011 2012 2011 Land $ 8 ,007,437 $ 8 ,007,437 $ 9,060 $ 9,060 $ 8 ,016,497 $ 8 ,016,497 Buildings 8,537,630 8,922,248 5,269,576 5,438,009 13,807,206 14,360,257 Improvements 3,606,536
3,546,201 1,092,661 1,209,096 4,699,197 4,755,297 Equipment 1,177,489 1,302,227 107,650 183,168 1,285,139 1,485,395 Infrastructure 21,220,735 20,793,242 4,699,834 5,011,228 25,920,569
25,804,470 Construction in progress 163,429 1,207,848 3,042 -166,471 1,207,848 Total capital assets, net $ 42,713,256 $ 43,779,203 $ 11,181,823 $ 11,850,561 $ 53,895,079 $ 55,629,764
Capital Assets. At the end of fiscal year 2012 the City had $53,895,079 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 decrease (including additions and deductions) of $1,734,685, or 3.2%, over last year. The
following table illustrates the changes in capital assets. $3,450 supplemental appropriation to Discretionary Sales Tax Fund for additional 1/4 round expenditures. $150,000 supplemental
appropriation to Discretionary Sales Tax Fund for the Davis Street Sewer Project. $125,000 supplemental appropriation to Discretionary Sales Tax Fund for parking improvements for North
Indian River Drive. $4,527 reduction in Recreation Impact Fee Fund for projects completed under budget. During the fiscal year, total general fund actual revenues were less than final
amended budgetary estimates and total general fund actual expenditures were less than the final amended budgetary estimates. The shortfall in anticipated revenues was mainly due to a
decline in franchise fees and public utility taxes received from Florida Power and Light Company. A positive overall variance on expenditures resulted in a lower draw on existing fund
balances than would have otherwise occurred. $26,189 reduction in Recreation Impact Fee Fund for completed or deferred projects. $38,014 reduction in Discretionary Sales Tax Fund for
projects completed under budget. $3,644 supplemental appropriation to add funding for the telephone system project. $20,000 amendment to fund the Four Chaplains Memorial Project. $4,475
supplemental appropriation to reflect the use of insurance proceeds to repair damaged fencing at the airport. $6,000 supplemental appropriation to use new rent revenue toward ground
maintenance at the airport. $2,370,485 amendment to the Local Option Gas Tax Fund to account for the bank note refinancing. $23,300 reduction in the Discretionary Sales Tax Fund to reflect
deferral of the painting of City Hall. $904 supplemental appropriation to Recreation Impact Fee Fund for a required lift station vent. $25,000 supplemental appropriation to Recreation
Impact Fee Fund to provide restrooms at the dog park. $139,263 supplemental appropriation to General Fund to reflect state monies provided for Police Pension Plan use. $4,125 supplemental
appropriation to the Airport Fund to reflect the use of proceeds from equipment sales for equipment repairs. Capital Asset and Debt Administration 24
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis ······· General Obligation and Revenue Bonds Governmental Activities Business-type Activities Total 2012 2011 2012 2011
2012 2011 Revenue bonds $ 8,925,000 $ 10,000,000 $ -$ -$ 8 ,925,000 $1 0,000,000 Notes payable 2,296,000 2,246,000 --2,296,000 2,246,000 Total capital assets, net $ 11,221,000 $ 12,246,000
$ -$ -$ 11,221,000 $ 12,246,000 Economic Factors and Next Year’s Budget and Rates To address another important area, an increase in the stormwater fee was also adopted. It is anticipated
that the increase from $4 a month per Equivalent Residential Unit (ERV) to $5 would enable this special revenue fund to sustain operations and cover the cost of equipment replacement.
Long-Term Debt. At the end of the current fiscal year, the City had total installment debt outstanding of $11,221,000. Of this amount, $2,296,000 (20.4 percent ) comprises debt not backed
by the full faith and credit of the government. The remainder of the City debt represents bonds secured solely by specified revenue sources (i.e., revenue bonds). The City’s total installment
debt decreased by $1,025,000 (9.1 percent) during the current fiscal year. The net decrease was mainly attributable to annual principal payments. The Infrastructure Sales Surtax Revenue
Bonds, Series 2003 and Series 2003A and the Stormwater Utility Revenue Bonds, Series 2003 were initially insured by AAA rated insurance agencies and rated AAA, which is the highest rating
given by rating agencies. However, ratings on the insurance agencies have been downgraded. 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. The City's elected and appointed officials considered many factors when setting the fiscal year 2013 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, lnc.® The Indian River County unemployment rate in September 2012 was 10.2 percent down from 13.6 percent in the previous year, which is a positive sign and analogous to the
economic pattern existing throughout the state and nation. The City experienced another significant decline in property values (6.3 percent) for 2013. Even after reducing the General
Fund expenditures by more than $250,000, it was determined that a millage increase would be sensible. The rate was increased from 3.3041 to 3.7166, which provided sufficient funds to
discontinue transfers from the Local Option Gas Tax Fund. This allowed those funds to be allocated to street paving projects. Business-type activities had the following major changes
during the fiscal year: A decrease in buildings mainly due to the amount of depreciation. A decrease in other categories due to the amount of depreciation. Governmental activities had
the following major changes during the fiscal year: A decrease in buildings mainly due to the amount of depreciation. An increase in improvements mainly due to amenities added at Schumann
Park. A decrease in equipment mainly due to the amount of depreciation. An increase in infrastructure mainly due to construction of Powerline Road. A decrease in construction-in-progress
mainly due to the completion of construction on Powerline Road. 25
CITY OF SEBASTIAN, FLORIDA Management's Discussion and Analysis This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general
overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report or need additional information, contact the Administrative
Services Department at City of Sebastian, 1225 Main Street, Sebastian, Florida 32958. The Golf Course reported a small operating income, mostly due to a rate change effective February
2, 2012. A provision of that rate increase requires that 5% of the added revenues are to be used only for major capital repairs or improvements. Even so, a temporary interfund loan from
General Fund was made at the end of the year to provide sufficient cash flow. It is expected that with a reasonably good level of revenues in the coming year, the current loan can be
repaid. Requests for Information General Fund also made a temporary interfund loan to the Airport in order to provide sufficient cash flow. It is expected that repayment will be made
in the coming year. Sizable operating losses are the result of depreciation on capital assets. With some increases in building permit fees and reduction of operating expenses, the Building
Enterprise Fund reported a positive change in net assets. While the economy is still weak, there are some signs of renewed activity in the local housing market which are encouraging.
26
BASIC FINANCIAL STATEMENTS 27
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Statement of Net Assets September 30, 2012 Governmental Business-type Activities Activities Total Assets Cash and cash equivalents $ 579,716 $ 101,215 $ 680,931 Temporarily restricted
cash and cash equivalents 2,494,010 -2,494,010 Investments 6,509,441 594,113 7,103,554 Permanently restricted investments 254,806 -254,806 Receivables, net 772,347 14,512 786,859 Internal
balances 858,061 (858,061) -Prepaid expenses 105,027 13,198 118,225 Inventories 65,423 33,467 98,890 Net pension asset 132,133 -132,133 Deposits held in escrow 14,010 1,602 15,612 Deferred
bond issuance costs 283,024 -283,024 Capital assets not being depreciated 8,170,866 12,102 8,182,968 Capital assets being depreciated, net 34,542,390 11,169,721 45,712,111 Total assets
54,781,254 11,081,869 65,863,123 Liabilities Accounts payable and other current liabilities 265,703 34,577 300,280 Accrued interest payable 183,778 -183,778 Unearned revenues -132,557
132,557 Long-term liabilities: Due within one year 1,425,933 922 1,426,855 Due in more than one year 11,316,479 195,078 11,511,557 Net other postemployment benefits liability 289,183
27,210 316,393 Total liabilities 13,481,076 390,344 13,871,420 Net assets Invested in capital assets, net of related debt 31,500,173 11,181,823 42,681,996 Restricted for: Debt service
1,744,486 -1,744,486 Capital 17,354 -17,354 Perpetual care: Expendable 247,793 -247,793 Nonexpendable 737,182 -737,182 Other expenses 3,445,962 -3,445,962 Unrestricted (deficit) 3,607,228
(490,298) 3,116,930 Total net assets $ 41,300,178 $ 10,691,525 $ 51,991,703 The accompanying notes are an integral part of these basic financial statements. CITY OF SEBASTIAN, FLORIDA
Primary Government 29
Statement of Activities For the Year Ended September 30, 2012 Program Revenues Operating Capital Net Charges Grants and Grants and (Expense) Functions /Programs Expenses for Services
Contributions Contributions Revenue Primary government Governmental activities: General government $ 2,640,677 $ 214,488 $ 16,062 $ -$ (2,410,127) Public safety 5,025,274 66,474 161,918
-(4,796,882) Physical environment 2,007,902 876,693 --(1,131,209) Transportation 1,800,432 -9,353 550,702 (1,240,377) Economic environment 170,960 --13,998 (156,962) Cultural and recreation
1,239,512 66,954 -226,565 (945,993) Interest and fiscal charges 562,496 ---(562,496) Total governmental activities 13,447,253 1,224,609 187,333 791,265 (11,244,046) Business-type activities:
Golf course 1,394,731 1,394,844 48 -161 Airport 1,166,588 491,367 5 150,083 (525,133) Building 397,295 419,705 6,510 -28,920 Total business-type activities 2,958,614 2,305,916 6,563
150,083 (496,052) Total primary government $ 16,405,867 $ 3,530,525 $ 193,896 $ 941,348 $ (11,740,098) CITY OF SEBASTIAN, FLORIDA 30
CITY OF SEBASTIAN, FLORIDA Statement of Activities For the Year Ended September 30, 2012 Primary Government Governmental Business-type Activities Activities Total Changes in net assets
Net revenue (expense) $ (11,244,046) $ (496,052) $ (11,740,098) General revenues: Property taxes, levied for general purposes 3,063,495 -3,063,495 Sales and use taxes 4,852,413 -4,852,413
Franchise fees 1,124,568 -1,124,568 State shared revenues not restricted to specific programs 1,934,733 -1,934,733 Interest earnings 82,129 -82,129 Miscellaneous 201,538 4,125 205,663
Transfers 22,489 (22,489) -Total general revenues and transfers 11,281,365 (18,364) 11,263,001 Change in net assets 37,319 (514,416) (477,097) Net assets, beginning of year 41,262,859
11,205,941 52,468,800 Net assets, end of year $ 41,300,178 $ 10,691,525 $ 51,991,703 The accompanying notes are an integral part of these basic financial statements. 31
CITY OF SEBASTIAN, FLORIDA Balance Sheet Governmental Funds September 30, 2012 Local Option Discretionary Riverfront General Gas Tax Sales Tax Redevelopment Assets Cash and cash equivalents
$ 89,330 $ 137,841 $ 296,346 $ 709 Investments 4,184,204 4,974 946,725 484,168 Accounts receivable, net 244,651 ---Accrued interest receivable 3,005 ---Due from other funds 105,550 ---Due
from other governments 242,012 47,459 220,009 -Inventories 65,423 ---Prepaid expenses 105,027 ---Deposits held in escrow 14,010 ---Advance to other funds 200,000 -552,511 -Total assets
$ 5,253,212 $ 190,274 $ 2,015,591 $ 484,877 Liabilities Accounts payable and accrued liabilities $ 222,670 $ -$ 19 $ 5,982 Due to other governments 28,370 ---Total liabilities 251,040
-1 9 5,982 Fund balances Nonspendable 370,450 -552,511 -Restricted -190,274 1,463,061 478,895 Committed 2,861,708 ---Assigned 35,707 ---Unassigned 1,734,307 ---Total fund balances 5,002,172
190,274 2,015,572 478,895 Total liabilities and fund balances $ 5,253,212 $ 190,274 $ 2,015,591 $ 484,877 The accompanying notes are an integral part of these basic financial statements.
32
Discretionary Sales Surtax Nonmajor Total Revenue Bonds Governmental Governmental 2003 Funds Funds $ 1,555,411 $ 994,089 $ 3,073,726 -1,144,176 6,764,247 --244,651 -997 4,002 --105,550
-10,453 519,933 --65,423 --105,027 --14,010 --752,511 $ 1,555,411 $ 2,149,715 $ 11,649,080 $ -$ 8,662 $ 237,333 --28,370 -8,662 265,703 -737,182 1,660,143 1,555,411 684,185 4,371,826
-719,686 3,581,394 --35,707 --1,734,307 1,555,411 2,141,053 11,383,377 $ 1,555,411 $ 2,149,715 $ 11,649,080 33
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CITY OF SEBASTIAN, FLORIDA Reconciliation Fund Balances for Governmental Funds to Net Assets of Governmental Activities September 30, 2012 Fund balances -total governmental funds $ 11,383,377
Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources, and therefore
are not reported in the fund statement. Capital assets not being depreciated 8,170,866 Capital assets being depreciated, net 34,542,390 Some items are recorded as revenues and expenditures
in the fund statements when paid or when received. These items are recorded on the government-wide statements when incurred in the case of expenditures and when revenues are earned.
Net pension asset 132,133 Accrued interest receivable 3,761 Certain liabilities, such as bonds payable, are not due and payable in the current period, and therefore are not reported
in the funds. Bonds and notes payable (11,213,083) Unamortized bond issuance costs 283,024 Compensated absences (1,435,586) Termination benefits (2,543) Other postemployment benefits
(289,183) Contamination liability (91,200) Accrued interest on long-term debt (183,778) Net assets of governmental activities $ 41,300,178 The accompanying notes are an integral part
of these basic financial statements. 35
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2012 Local Option Discretionary General
Gas Tax Sales Tax Revenue Taxes: Property $ 2,808,426 $ -$ -Public utility 2,387,553 --Sales --2,464,240 Motor fuel -550,702 -Franchise fees 1,124,568 --Licenses and permits 22,431 --Intergovernmenta
l 2,078,685 9,353 -Impact fees ---Charges for services 290,950 --Fines 52,307 --Investment earnings 28,046 5,062 27,165 Contributions and donations 34,031 --Other revenue 165,285 --Total
revenue 8,992,282 565,117 2,491,405 Expenditures Current: General government 2,398,207 --Public safety 4,511,563 --Physical environment 1,030,021 --Transportation 934,006 274,405 -Economic
environment ---Culture and recreation 876,502 --Debt service: Principal -2,246,000 -Interest and fiscal charges -84,742 -Capital outlay 34,985 --Total expenditures 9,785,284 2,605,147
-Revenue over (under) expenditures (793,002) (2,040,030) 2,491,405 Other financing sources (uses) Issuance of long-term debt -2,296,000 -Transfers in 692,716 742 22,489 Transfers out
-(125,000) (2,121,764) Total other financing sources (uses) 692,716 2,171,742 (2,099,275) Net changes in fund balances (100,286) 131,712 392,130 Fund balances, beginning of year 5,102,458
58,562 1,623,442 Fund balances, end of year $ 5,002,172 $ 190,274 $ 2,015,572 The accompanying notes are an integral part of these basic financial statements. 36
Discretionary Sales Surtax Nonmajor Total Riverfront Revenue Bonds Governmental Governmental Redevelopment 2003 Funds Funds $ 255,069 $ -$ -$ 3,063,495 ---2,387,553 ---2,464,240 ---550,702
---1,124,568 ---22,431 ---2,088,038 --58,500 58,500 --867,125 1,158,075 --5,268 57,575 1,445 4,995 19,803 86,516 --182,060 216,091 11,998 -24,605 201,888 268,512 4,995 1,157,361 13,479,672
2,438 -9,700 2,410,345 --12,239 4,523,802 --12,328 1,042,349 ---1,208,411 138,531 --138,531 ---876,502 -795,000 280,000 3,321,000 -227,367 160,290 472,399 --1,732,073 1,767,058 140,969
1,022,367 2,206,630 15,760,397 127,543 (1,017,372) (1,049,269) (2,280,725) ---2,296,000 -1,016,206 1,962,612 3,694,765 (104,458) -(1,321,054) (3,672,276) (104,458) 1,016,206 641,558
2,318,489 23,085 ( 1,166) ( 407,711) 37,764 455,810 1,556,577 2,548,764 11,345,613 $ 478,895 $ 1,555,411 $ 2,141,053 $ 11,383,377 37
Reconciliation Net Changes in Fund Balances of Governmental Funds to Change in Net Assets of Governmental Activities For the Year Ended September 30, 2012 Net change in fund balances
-total governmental funds $ 37,764 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay 1,767,058 Depreciation
expense (2,826,862) Loss on the sale of capital assets (6,143) Some interest revenues reported in the statement of activities do not constitute current financial resources, therefore,
are not reported as revenues in governmental funds Interest revenues (4,387) Bond proceeds provide current financial resources to governmental funds in the period issued, but issuing
bonds increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities
in the statement of net assets. Proceeds from the issuance of debt (2,296,000) Principal payments on long-term liabilities 3,321,000 Some expenses reported in the statement of activities
do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in accrued interest payable on long-term debt 32,860
Capitalization of issuance costs 30,091 Amortization of deferred issuance costs /discounts (126,007) Change in the accrual for compensated absences 82,179 Change in the accrual for pension
benefits (9,204) Change in the accrual for other postemployment benefits 26,126 Change in the accrual for termination benefits 8,844 Change in net assets of governmental activities $
37,319 The accompanying notes are an integral part of these basic financial statements. CITY OF SEBASTIAN, FLORIDA 38
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual -General Fund For the Year Ended September 30, 2012 Actual Over Original
Final (Under) Final Budget Budget Actual Budget Revenue Taxes: Property $ 2,782,335 $ 2,782,335 $ 2,808,426 $ 26,091 Public utility 2,550,000 2,550,000 2,387,553 (162,447) Franchise
fees 1,352,200 1,352,200 1,124,568 (227,632) Licenses and permits 36,150 36,150 22,431 (13,719) Intergovernmental 1,880,400 2,019,663 2,078,685 59,022 Charges for services 284,603 300,061
290,950 (9,111) Fines 74,000 74,000 52,307 (21,693) Investment earnings 92,000 92,000 28,046 (63,954) Contributions and donations 33,376 33,376 34,031 655 Other revenue 149,400 151,122
165,285 14,163 Total revenue 9,234,464 9,390,907 8,992,282 (398,625) Expenditures Current: General government 2,441,589 2,455,888 2,398,207 (57,681) Public safety 4,429,395 4,568,658
4,511,563 (57,095) Physical environment 1,118,626 1,101,684 1,030,021 (71,663) Transportation 965,567 960,667 934,006 (26,661) Culture and recreation 875,287 878,279 876,502 (1,777)
Capital outlay 30,000 25,379 34,985 9,606 Total expenditures 9,860,464 9,990,555 9,785,284 (205,271) Revenue over (under) expenditures (626,000) (599,648) (793,002) (193,354) Other financing
sources Transfers in 687,000 660,648 692,716 32,068 Net changes in fund balances 61,000 61,000 (100,286) (161,286) Fund balances, beginning of year 5,102,458 5,102,458 5,102,458 -Fund
balances, end of year $ 5,163,458 $ 5,163,458 $ 5,002,172 $ (161,286) The accompanying notes are an integral part of these basic financial statements. 39
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual -Local Option Gas Tax For the Year Ended September 30, 2012 Actual Over Original
Final (Under) Final Budget Budget Actual Budget Revenue Taxes: Motor fuel $ 585,900 $ 585,900 $ 550,702 $ (35,198) Intergovernmental 9,353 9,353 9,353 -Investment earnings 3,000 3,000
5,062 2,062 Total revenue 598,253 598,253 565,117 (33,136) Expenditures Current: Transportation 257,719 291,601 274,405 (17,196) Debt service: Principal 176,000 2,263,118 2,246,000 (17,118)
Interest and fiscal charges 89,792 89,792 84,742 (5,050) Total expenditures 523,511 2,644,511 2,605,147 (39,364) Revenue over (under) expenditures 74,742 (2,046,258) (2,040,030) 6,228
Other financing sources Issuance of long-term debt -2,296,000 2,296,000 -Transfers in --742 742 Transfers out (125,000) (300,000) (125,000) 175,000 Net changes in fund balances (50,258)
(50,258) 131,712 181,970 Fund balances, beginning of year 58,562 58,562 58,562 -Fund balances, end of year $ 8,304 $ 8,304 $ 190,274 $ 181,970 The accompanying notes are an integral
part of these basic financial statements. 40
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual -Discretionary Sales Tax Special Revenue Fund For the Year Ended September
30, 2012 Actual Over Original Final (Under) Final Budget Budget Actual Budget Revenue Taxes: Sales $ 2,356,000 $ 2,356,000 $ 2,464,240 $ 108,240 Investment earnings 24,150 24,150 27,165
3,015 Total revenues 2,380,150 2,380,150 2,491,405 111,255 Other financing sources (uses) Transfers in --22,489 22,489 Transfers out (2,390,391) (2,996,807) (2,121,764) 875,043 Total
other financing sources (uses) (2,390,391) (2,996,807) (2,099,275) 897,532 Net changes in fund balances (10,241) (616,657) 392,130 1,008,787 Fund balances, beginning of year 1,623,442
1,623,442 1,623,442 -Fund balances, end of year $ 1,613,201 $ 1,006,785 $ 2,015,572 $ 1,008,787 The accompanying notes are an integral part of these basic financial statements. 41
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual -Riverfront Redevelopment Special Revenue Fund For the Year Ended September
30, 2012 Actual Over Original Final (Under) Final Budget Budget Actual Budget Revenue Taxes: Property $ 259,066 $ 259,066 $ 255,069 $ (3,997) Investment earnings 4,650 4,650 1,445 (3,205)
Other revenue --11,998 11,998 Total revenues 263,716 263,716 268,512 4,796 Expenditures Current: General government --2,438 2,438 Economic environment 126,022 126,022 138,531 12,509
Total expenditures 126,022 126,022 140,969 14,947 Revenues over (under) expenditures 137,694 137,694 127,543 (10,151) Other financing uses Transfers out (160,000) (160,594) (104,458)
56,136 Net changes in fund balances (22,306) (22,900) 23,085 45,985 Fund balances, beginning of year 455,810 455,810 455,810 -Fund balances, end of year $ 433,504 $ 432,910 $ 478,895
$ 45,985 The accompanying notes are an integral part of these basic financial statements. 42
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual -Discretionary Sales Surtax Revenue Bonds 2003 Debt Service Fund For the
Year Ended September 30, 2012 Actual Over Original Final (Under) Final Budget Budget Actual Budget Revenue Investment earnings $ 22,400 $ 22,400 $ 4,995 $ (17,405) Expenditures Debt
service: Principal 795,000 795,000 795,000 -Interest and fiscal charges 227,333 227,333 227,367 34 Total expenditures 1,022,333 1,022,333 1,022,367 34 Revenues over (under) expenditures
(999,933) (999,933) (1,017,372) (17,439) Other financing sources Transfers in 997,391 997,391 1,016,206 18,815 Net changes in fund balances (2,542) (2,542) (1,166) 1,376 Fund balances,
beginning of year 1,556,577 1,556,577 1,556,577 -Fund balances, end of year $ 1,554,035 $ 1,554,035 $ 1,555,411 $ 1,376 The accompanying notes are an integral part of these basic financial
statements. 43
CITY OF SEBASTIAN, FLORIDA Statement of Net Assets Proprietary Funds September 30, 2012 Golf Course Airport Building Total Assets Current assets: Cash and cash equivalents $ 2,610 $
10,109 $ 88,496 $ 101,215 Investments 28,168 -565,945 594,113 Accounts receivable -13,498 -13,498 Interest receivable --1,014 1,014 Inventory 13,405 20,062 -33,467 Deposits held in escrow
493 616 493 1,602 Prepaid items 3,463 7,751 1,984 13,198 Total current assets 48,139 52,036 657,932 758,107 Noncurrent assets: Capital assets: Land -9,060 -9,060 Buildings 331,228 6,009,114
-6,340,342 Improvements other than buildings 261,937 1,641,309 -1,903,246 Machinery and equipment 230,912 608,779 56,150 895,841 Infrastructure 1,100,951 6,428,352 -7,529,303 Construction
in process -3,042 -3,042 Less accumulated depreciation (1,406,013) (4,036,848) (56,150) (5,499,011) Total noncurrent assets 519,015 10,662,808 -11,181,823 Total assets 567,154 10,714,844
657,932 11,939,930 Liabilities Current liabilities: Accounts payable and accrued liabilities 15,343 5,126 6,840 27,309 Due to other funds 65,000 40,550 -105,550 Due to other governments
5,629 641 998 7,268 Unearned revenues 57,722 6,825 68,010 132,557 Accrued compensated absences --922 922 Total current liabilities 143,694 53,142 76,770 273,606 Non-current liabilities:
Compensated absences, net of current portion 57,551 50,719 86,808 195,078 Advance from other fund -752,511 -752,511 Net other postemployment benefit obligation 7,593 12,656 6,961 27,210
Total non-current liabilities 65,144 815,886 93,769 974,799 Total liabilities 208,838 869,028 170,539 1,248,405 Net assets Invested in capital assets, net of related debt 519,015 10,662,808
-11,181,823 Unrestricted (deficit) (160,699) (816,992) 487,393 (490,298) Total net assets $ 358,316 $ 9,845,816 $ 487,393 $ 10,691,525 The accompanying notes are an integral part of
these basic financial statements. Business-type Activities -Enterprise Funds 44
CITY OF SEBASTIAN, FLORIDA Statement of Revenue, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended September 30, 2012 Golf Course Airport Building Total Operating
revenue Charges for fees and rents: Building permit fees $ -$ -$ 419,705 $ 419,705 Golf course fees 1,351,767 --1,351,767 Rents 27,771 345,316 -373,087 Other revenue 15,306 146,051 -161,357
Total operating revenue 1,394,844 491,367 419,705 2,305,916 Operating expenses: Salaries, wages and employee benefits 283,746 207,794 311,653 803,193 Contractual services, materials
and supplies 1,030,293 251,548 87,618 1,369,459 Depreciation 80,692 688,332 357 769,381 Total operating expenses 1,394,731 1,147,674 399,628 2,942,033 Operating income (loss) 113 (656,307)
20,077 (636,117) Nonoperating revenues (expenses) Interest income 48 5 6,510 6,563 Interest expense -(16,581) -(16,581) Gain on disposal of capital assets -4,125 -4,125 Total nonoperating
revenues (expenses) 48 (12,451) 6,510 (5,893) Income (loss) before capital contributions 161 (668,758) 26,587 (642,010) Capital contributions -150,083 -150,083 Transfers out -(22,489)
-(22,489) Change in net assets 161 (541,164) 26,587 (514,416) Net assets, beginning of year 358,155 10,386,980 460,806 11,205,941 Net assets, end of year $ 358,316 $ 9,845,816 $ 487,393
$ 10,691,525 The accompanying notes are an integral part of these basic financial statements. Business-type Activities -Enterprise Funds 45
CITY OF SEBASTIAN, FLORIDA Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2012 Golf Course Airport Building Total Cash flows from operating activities Cash
received from customers and users $ 1,387,273 $ 1,084,303 $ 412,593 $ 2,884,169 Cash payments to suppliers (1,019,092) (450,527) (88,827) (1,558,446) Cash payments for employee services
(282,895) (219,657) (313,902) (816,454) Net cash provided (used) by operating activities 85,286 414,119 9,864 509,269 Cash flows from noncapital financing activities Repayment of loan
from other fund -(22,489) -(22,489) Interest paid on advance from other fund -(16,581) -(16,581) Intragovernment payments (35,000) (450,490) -(485,490) Net cash provided (used) by noncapital
financing activities (35,000) (489,560) -(524,560) Cash flows from capital and related financing activities Acquisition and construction of capital assets (25,311) (75,334) -(100,645)
Proceeds from sale of assets -4,125 -4,125 Receipt from capital contributions -150,083 -150,083 Net cash provided (used) by capital and related financing activities (25,311) 78,874 -53,563
Cash flows from investing activities Sale (purchase) of investments (28,168) -25,362 (2,806) Interest received on investments 48 5 6,510 6,563 Net cash provided by investing activities
(28,120) 5 31,872 3,757 Net decrease in cash and cash equivalents (3,145) 3,438 41,736 42,029 Cash and cash equivalents, beginning of year 5,755 6,671 46,760 59,186 Cash and cash equivalents,
end of year $ 2,610 $ 10,109 $ 88,496 $ 101,215 continued… Business-type Activities -Enterprise Funds 46
CITY OF SEBASTIAN, FLORIDA Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2012 Golf Business-type Activities -Enterprise Funds Cash flow from operating activities:
Operating income (loss) $ 113 $ (656,307) $ 20,077 $ (636,117) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation expense 80,692
688,332 357 769,381 Change in: Accounts receivable -11,683 -11,683 Interest receivable --(997) (997) Inventories (1,980) (17,276) -(19,256) Due from other governments -579,883 -579,883
Deposits held in escrow (493) (616) (493) (1,602) Prepaid expenses 4,754 1,979 (209) 6,524 Accounts payable 9,217 (59,582) (638) (51,003) Due to other governments (790) (322) (362) (1,474)
Retainage payable -(123,778) -(123,778) Unearned revenues (7,078) 1,986 (5,622) (10,714) Accrued compensated absences 1,394 (11,213) (1,877) (11,696) Net other postemployment benefit
obligation (543) (650) (372) (1,565) Total adjustments 85,173 1,070,426 (10,213) 1,145,386 Net cash provided (used) by operating activities $ 85,286 $ 414,119 $ 9,864 $ 509,269 concluded
The accompanying notes are an integral part of these basic financial statements. 47
CITY OF SEBASTIAN, FLORIDA Statement of Fiduciary Net Assets Fiduciary Funds September 30, 2012 Pension Trust Agency Police Officers' Performance Pension Deposits Assets Cash and cash
equivalents $ 697,401 $ 11,930 Receivables: Interest and dividends 30,565 -Investments, at fair value: Local government surplus trust funds investment pools -220,000 United States treasury
obligations 585,445 -United States government agency notes 914,340 -Corporate and foreign bonds 2,206,336 -Municipal obligations 35,481 -Common equity securities 4,377,464 -Total investments
8,119,066 220,000 Total assets 8,847,032 231,930 Liabilities Refunds payable -$ 231,930 Net assets Held in trust for pension benefits $ 8,847,032 The accompanying notes are an integral
part of these basic financial statements. 48
CITY OF SEBASTIAN, FLORIDA Statement of Changes in Fiduciary Net Assets Fiduciary Fund -Pension Trust For the Year Ended September 30, 2012 Police Officers' Pension Additions Contributions:
Employer $ 450,666 Plan members 99,621 State 139,263 Total contributions 689,550 Investment earnings: Net increase in fair value of investments 887,672 Interest and dividends 217,994
Total investment earnings 1,105,666 Investment expenses (49,570) Net investment earnings 1,056,096 Total additions 1,745,646 Deductions Benefits 392,946 Refunded contributions 16,486
Administrative expenses 16,036 Total deductions 425,468 Change in net assets 1,320,178 Net assets, beginning of year 7,526,854 Net assets, end of year $ 8,847,032 The accompanying notes
are an integral part of these basic financial statements. 49
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NOTES TO FINANCIAL STATEMENTS 51
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Government-wide and Fund Financial Statements The government-wide financial statements
(i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the
most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business type activities, which rely to a significant extent on fees and charges for support. The 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 21,995 living in an area of approximately 14.6 square miles. The governing
body is a five member elected City Council with a mayor elected from the five members. The City Council appoints the City Manager who is responsible for the administration of all City
services. The financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s
accounting policies are described below. Reporting Entity As required by generally accepted accounting principles, these financial statements present the government and its component
units, entities for which the City is financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and
as such, data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the combined
financial statements to emphasize that they are legally separate from the government. The City has no discretely presented component units. Blended Component Units 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. 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 a non-major fund. City of Sebastian Police Officers'
Pension Plan – The City Council only appoints two of the five members of the governing board, but it is financially responsible for funding the police officers' pension benefits. The
City of Sebastian Police Officers' Pension Trust Fund only exists to provide pension benefits to City of Sebastian police officers. It is accounted for as a Pension Trust fund entitled
"Police Officers' Pension". 52
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported
using the economic resources measurement focus and the accrual basis of accounting , as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows . Property taxes are recognized as revenues in the year for which they are levied.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported
using the current financial resources measurement focus and the modified accrual basis of accounting . Revenues are recognized as soon as they are both measurable and available. Revenues
are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government
considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, and expenditure-driven grants which must be collected within one year.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences
and claims and judgments, are recorded only when payment is due. Property taxes, intergovernmental revenue, licenses, and interest associated with the current fiscal period are all considered
to be susceptible to accrual and as such have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when
cash is received by the government. The City reports the following major governmental funds: The General Fund is the government’s primary operating fund. It accounts for all the financial
resources of the general government, except those accounted for and reported in another fund. The Local Option Gas Tax Fund accounts for the financial resources used for infrastructure
improvements and equipment purchases. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues.
Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or directly
benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements
of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided
for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds
and major individual enterprise funds are reported as separate columns in the fund financial statements. Agency funds are custodial in nature and do not present results of operations
or have a measurement focus. 53
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 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 City 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 Agency Fund accounts for deposits placed by bidders and developers to guarantee performance pursuant to bid or contract. These funds are held
by the City as agent for individuals and businesses. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions
to this general rule are payments in lieu of taxes and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported
for the various functions concerned. The General Fund provides certain central services to other funds of the City which are presented as program expenses in the funds receiving services.
The related General Fund revenue has been netted against program expense in the government-wide statement of activities. 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 Discretionary Sales Surtax Revenue Bonds 2003 Fund accounts for the accumulation of pledged funds that are legally restricted to pay the bonded debt
obligations of the Discretionary Sales Surtax Revenue Bonds, Series 2003 and Series 2003A. Special revenue funds are used to account for and report the proceeds of specific revenue sources
that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Debt service funds are used to account for and report financial resources
that are restricted, committed, or assigned to expenditure for principal and interest. Capital projects funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. The permanent fund is used to record
the activity and balance of the Cemetery Trust which provides funds for perpetual care of cemetery lots. The City reports the following major proprietary funds: 54
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Assets, Liabilities and Equity Deposits and investments Internal balances Transactions between funds that are representative
of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances
to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances
outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” The City considers cash
on hand and demand deposits, restricted cash deposits, and short-term investments with maturities of three months or less when purchased to be cash for the statement of cash flows. Cash
in excess of current requirements is invested in various interest-bearing securities and disclosed as part of the City's investments. Investments consist of U.S. Treasury Securities,
U.S. Government Agency Securities, common stock, guaranteed investment contracts and the Local Government Surplus Funds Trust Fund Investment pool (Pool A and Pool B). The Local Government
Surplus Funds Trust Fund is administered by the Florida State Board of Administration, which is not a registrant with the Securities and Exchange Commission. However, the Board has adopted
operating procedures consistent with the requirements for a 2a-7 fund or accounts in Pool A. In accordance with the regulations of 2a-7 like pools, the City's share of investments held
at the State Board of Administration in Pool A are reported at amortized cost, which approximates fair value. This pool is regulated by the State and the fair value of the position in
the pool is the same as the value of the pool share. Investment earnings of Pool A are allocated to the participating funds at the end of each month based upon the ratio of each participant's
investment to the total pooled investments. Investments in Pool B are reported at fair value and as income and returns of principal become available, they are transferred to Pool A.
Other investments, including the Police Officers' Pension Fund, are reported at their fair value based on the quoted market price or the best available information. Restricted net assets
are assets that are subject to restrictions beyond the government’s control. The restrictions may be externally imposed or imposed by law. When both restricted and unrestricted resources
are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. Advances between funds are offset by nonspendable
fund balance in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Proprietary funds distinguish
operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with
a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise
funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses. 55
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Restricted assets Receivables and payables Other assets Capital assets All trade and property tax receivables are shown net of
an allowance for uncollectibles, as applicable. Amounts due from other governments include amounts due from grantors for specific programs and capital projects. Program grants and capital
grants for capital assets are recorded as receivables and revenues at the time reimbursable project costs are incurred. Revenues received in advance of project costs being incurred are
deferred. Receivables consist of trade receivables, due from other governments and interest receivable and are recorded at the net realizable value. The City, as of September 30, 2012,
has no allowance for doubtful accounts, since all receivables are considered collectible. Inventories are valued at cost using the average cost method. Inventory in the General fund
consists of materials and supplies held for consumption. The cost is recorded as an expenditure/expense at the time the individual inventory items are consumed. Inventory in the Golf
Course Fund consists of supplies held for resale. 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. Certain payments
to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Certain amounts reported
as cash and cash equivalents are classified as restricted assets. These include balances in the debt service funds that are set aside to meet bonded debt requirements, balances in the
capital projects funds to be used for the payment of project costs and balances in the Cemetary Fund that are either not permitted to be spent or can only be spent for items incidental
to cemetary expansions. The amount of the Cemetary Fund investments is also classified as restricted assets and reported as permanently restricted investments. Costs associated with
the issuance or refunding of bonds payable are reported as assets the in proprietary funds and government-wide statements. These costs are amortized over the life of the related debt
utilizing the straight-line method. 56
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Years Buildings and improvements 10-40 Public domain infrastructure 40-50 System infrastructure 15-30 Improvements other than
buildings 10-40 Machinery, equipment and other 5-15 Airport runways 20 Compensated absences Long-term obligations The costs of normal maintenance and repairs that do not add to the value
of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during
the construction phase of capital assets of business-type activities, if any, is included as part of the capitalized value of the asset constructed. It is the City's policy to permit
employees to accumulate earned but unused vacation and sick leave benefits and these are accounted for using the termination payment method. All vacation and sick leave amounts are accrued
in the government-wide and proprietary financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee
resignations and retirements. In 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. Capital assets are depreciated using
the straight-line method over the following estimated useful lives: In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance
costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
57
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Fund equity Use of Estimates 2. BUDGETARY INFORMATION Actual results of operations presented in accordance with U.S. generally
accepted accounting principles (GAAP basis) and the City's accounting policies do not recognize encumbrances as expenditures until the period in which the actual goods or services are
received and a liability is incurred. It is necessary to include budgetary encumbrances to reflect actual revenues and expenditures on a basis consistent with the City's legally adopted
budget. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable
appropriation, is employed as an extension of formal budgetary integration in the General, Special Revenue, Debt Service, and Capital Projects funds. Encumbrances outstanding at year
end are carried forward and reappropriated to the next year's budget. When the government incurs an expenditure for purposes for which various fund balance classifications can be used,
it is the government’s policy to use restricted fund balance first, then committed fund balance, assigned fund balance, and finally unassigned fund balance. On or before the third Friday
in May of each year, all agencies of the government submit requests for appropriations to the government's City Manager so that a budget may be prepared. Before July 3I, the proposed
budget is presented to the government's council for review. The council holds budget workshops and public hearings and a final budget must be prepared and adopted no later than September
30. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Governmental funds report nonspendable fund balance
for amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted fund balance is reported
when externally imposed constraints are placed on the use of resources by grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported for
amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council (the government’s highest level of decision-making authority).
A formal resolution of the City Council is required to establish, modify, or rescind a fund balance commitment. The City reports assigned fund balance for amounts that are constrained
by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The City Council has delegated the authority to assign fund balance to the City
Manager or his/her designee. Unassigned fund balance is the residual classification for the general fund. Budgets are prepared annually on a modified accrual basis with encumbrance accounting
for all governmental funds except the capital project funds, which are approved on a "life of the project basis", and the permanent fund, which is not budgeted. All annual appropriations
lapse at year end. 58
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 3. DEPOSITS AND INVESTMENTS Statement of Net Assets Cash and cash equivalents $ 680,931 Temporarily restricted cash and cash
equivalents 2,494,010 Investments 7,103,554 Permanently restricted investments 254,806 Statement of Fiduciary Net Assets Police Officers' Pension: Cash and cash equivalents 697,401 Investments
8,119,066 Agency funds: Cash and cash equivalents 11,930 Investments 220,000 Total $ 19,581,698 Deposits and investments Bank deposits: Checking and savings accounts $ 3,881,842 Investments:
Investments, at fair value 7,578,360 Police officers' pension fund investments 8,119,066 Cash on hand 2,430 Total $ 19,581,698 Following is a reconciliation of deposit and investment
balances as of September 30, 2012: Custodial Credit Risk -Deposits. Custodial credit risk is the risk that, in the event of a bank failure, the City's deposits might not be returned.
At September 30, 2012, the carrying amount of the City of Sebastian's deposits with banks was $3,184,441 and the bank balance was $3,272,660. 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. 59
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Fair Value Less Than 1 From 1-3 From 4-6 Over 7 General investments Local government surplus funds trust fund ("SBA") $ 3,571,010
$ 3,571,010 $ -$ -$ -United States Treasuries 2,002,180 2,002,180 ---United States Agencies 2,005,170 2,005,170 ---7,578,360 7,578,360 ---Police officers' pension fund investments United
States Treasuries 585,445 -160,053 -425,392 United States Agencies 914,340 -376,924 106,101 431,315 Municipal Obligations 35,481 ---35,481 Domestic corporate bonds 2,206,336 51,901 751,858
372,512 1,030,065 Domestic corporate equities equities 4,377,464 4,377,464 ---8,119,066 4,429,365 1,288,835 478,613 1,922,253 Total fair value $ 15,697,426 $ 12,007,725 $ 1,288,835 $
478,613 $ 1,922,253 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. Section 218.415, Florida Statutes,
limits the types of investments that the City can invest in unless specially authorized in the City's investment policy. The City's formal investment policy, for all investments except
the Pension Trust Fund, allows for the following investments: Florida Local Government Surplus Funds Trust Fund, United States Government Securities, United States Government Agencies,
Federal Instrumentalities, Interest Bearing Time Deposit or Saving Accounts, Repurchase Agreements, Commercial Paper, High Grade Corporate Notes, Bankers' Acceptances, State and/or Local
Government Taxable and/or Tax-Exempt Debt, Registered Investment Companies (Money Market Mutual Funds), and Intergovernmental Investment Pool. Custodial Credit Risk -Investments. On
April 23, 2003, Sebastian City Council formally adopted an investment policy pursuant to Section 218.415, Florida Statutes that established permitted investments, asset allocation limits
and issuer limits, credit ratings requirements and maturity limits for all investments except the Pension Trust Funds. The City maintains a common cash and investment pool for the use
of all funds, except the Pension Trust Funds, which are held with third party trustees and are governed by rules established by Florida Statute Chapter 185. Investment holdings during
the year included United States Government Agencies which were reported at fair value in accordance with GASB Statement No.31 "Accounting and Financial Reporting for Certain Investments
and for External Investment Pools". These investments were held in trust by the City's bank depository in the City's name or by the Custodian of the Pension Trust Funds. As of September
30, 2012, the City had the following investments and effective duration presented in terms of years: Investment Maturity (Years) Investment Type 60
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Investment in the City's pension trust funds are limited by State Statutes Chapter 185 and by an investment policy adopted by
the fund's Board of Trustees on June 24, 2005. The allowable investment instruments include: United States government and agency issues, bankers acceptances and certificates of deposit
by United States banks, savings accounts with banks or other financial institutions incorporated in the United States and commercial paper rated A-2 or P-2 or higher by Moody's or Standard
and Poors. In addition, common stocks of corporations listed on a recognized national stock exchange, plus issues convertible into common stock are also allowed. No more than ten percent
(10%) of the cost value of total assets may be invested in foreign securities. As of September 30, 2012, the City had $3,571,022 invested in the State Board of Administration's Local
Government Surplus Trust Funds Investment Pool, which consist of accounts in Pool A and Pool B. $3,392,874 is in Pool A and $178,148 is in Pool B. Pool A had a rating by Standard and
Poor's Rating Services as "AAAm" on September 30, 2012 and amounts may be withdrawn without penalty. Pool B participants are prohibited from making withdrawals. Pool B is not rated by
any nationally recognized statistical rating agency. Additional information regarding the Local Government Surplus Funds Trust Fund may be obtained from the State Board of Administration.
Mutual funds shall be rated "m" or "AAm-G" or better by Standard & Poor's, or the equivalent by another rating agency. State and/or local government taxable and/or tax-exempt debt, general
obligation and/or revenue bonds, rated at least "Aa" by Moody's and "AA" by Standard & Poor's for long-term debt, or rated at least "MIG-2" by Moody's and 'SP-2" by Standard & Poor's
for short-term debt. Bankers' acceptances issued by a domestic bank or a federally chartered domestic office of a foreign bank, which are eligible for purchase by the Federal Reserve
System, at the time of purchase, the short-term paper is rated, at a minimum, "P-I" by Moody's Investors Services and "A-I" Standard & Poor's. Commercial paper of any United States company
that is rated, at the time of purchase, "Prime-1" by Moody's and "A-I" by Standard & Poor's (prime commercial paper). Corporate notes issued by corporations organized and operating within
the United States or by depository institutions licensed by the United States that have a long tern1 debt rating, at the time of purchase, at a minimum "Aa" by Moody's and a minimum
long term debt rating of "A A" by Standard & Poor's. As of September 30, 2012, the City's investment securities, for all investments except the Pension Trust Fund, were all individually
rated AA+ by Standard & Poor's and Aaa by Moody's Investor Services. Credit Risk. The City investment policy that covers all investments, except the Pension Trust Fund, permits for investments
in the following investments, which are limited to credit quality ratings from nationally recognized agencies as follows: 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. 61
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Local government surplus funds trust fund ("SBA") $ 3,571,010 47.12% $ -0.00% 2,002,180 26.42% 585,445 7.21% 2,005,170 26.46%
914,340 11.26% -0.00% 35,481 0.44% -0.00% 2,206,336 27.17% -0.00% 4,377,464 53.92% $ 7,578,360 100.00% $ 8,119,066 100.00% Amount Percentage of Portfolio Amount Percentage of Portfolio
Custodial Credit Risk. The City's investment policy pursuant to Section 218.415(18), Florida Statutes requires securities, with the exception of certificates of deposits, shall be held
with a third party custodian; and all securities purchased by, and all collateral obtained by the City should be properly designated as an asset of the City. The securities must be held
in an account separate and apart from the assets of the financial institution. A third party custodian is defined as any bank depository chartered by the Federal Government, the State
of Florida, or any other state or territory of the United States which has a branch or principal place of business in the State of Florida as defined in Section 658.12, Florida Statutes,
or by a national association organized and existing under the laws of the United States, which is authorized to accept and execute trusts and which is doing business in the State of
Florida. Certificates of deposits maintained by book-entry at the issuing bank shall clearly identify the City as the owner. 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. Issuer United States treasuries United States agencies
Municipal obligations Domestic corporate bonds A maximum of 100% of available funds may be invested in the SBA and in the United States Government Securities, 50% of available funds
may be invested in United States Government agencies with a 25% limit on individual issuers, 80% of available funds may be invested in Federal Instrumentalities with a 40% limit on individual
issuers, 25% of available funds may be invested in non-negotiable interest bearing time certificates of deposits with a 15% limits on individual issuers, 50% of available funds may be
invested in repurchase agreements excluding one (1) business day agreements and overnight sweep agreements with a 25% limit on anyone institution, 25% of available funds may be directly
invested in prime commercial paper with a 10% limit on individual issuers, 15% of available funds may be directly invested in corporate notes with a 5% limit on individual issuers, 25%
of available funds may be directly invested in Bankers' Acceptances with a 10% limit on individual issuers, 20% of available funds may be invested in taxable and tax-exempt debts, 50%
of available funds may be invested in money market mutual fund with a 25% limit on individual issuers, 10% of available funds may be invested in intergovernmental investment pools. 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. As of September 30, 2012, the City had the following issuer concentration based on fair value: Domestic corporate equities Total General Investments
Pension Investments 62
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 4. RECEIVABLES Governmental Activities Business-type Activities Accounts $ 244,651 $ 1 3,498 Due from other governments 5 19,933
-Interest 7,763 1,014 $ 772,347 $ 1 4,512 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Governmental Activities Business-type Activities Accounts payable $ 9 3,056 $ 1 3,416 Accrued liabilities
1 44,277 13,893 Due to other governments 28,370 7,268 $ 265,703 $ 3 4,577 6. INTERFUND RECEIVABLES AND PAYABLES AND TRANSFERS Due from Other Funds Due to Other Funds General Fund $ 105,550
$ -Golf Course -65,000 Airport -40,550 $ 105,550 $ 105,550 Advance from Other Funds Advance to Other Funds General Fund $ -$ 200,000 Discretionary Sales Tax -5 52,511 Airport 7 52,511
-$ 752,511 $ 752,511 Receivables are comprised of the following at year-end: Accounts payable and accrued liabilities are comprised of the following at year-end: The composition of interfund
balances as of September 30, 2012, was as follows: Due to and from primary government funds Advances to and from primary government funds 63
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Local Option Gas Tax Discretionary Sales Tax Riverfront Development Airport Nonmajor Governmental Funds Totals General Fund $
125,000 $ 2,069 $ 6 0,000 $ -$ 505,647 $ 692,716 Discretionary Sales Tax ---22,489 -22,489 Local Option Gas Tax 742 742 Discretionary Sales Surtax Revenue Bonds 2003 -1 ,016,206 ---1,016,206
Nonmajor governmental funds -1 ,103,489 44,458 -8 14,665 1,962,612 $ 125,000 $ 2,121,764 $ 104,458 $ 22,489 $ 1,321,054 $ 3,694,765 For the year ended September 30, 2012, interfund transfers
consisted of the following: Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is required or allowed to expend them and (2) move
receipts restricted to or allowed for debt service from the funds collecting the receipts to the debt service fund as required by bond covenants. The balance of $752,511 advanced to
the airport fund from the discretionary sales tax fund is to be repaid over a thirty year period in accordance with Resolution No. R-08-20 for the initial $285,000 advance and with Resolution
No. R-10-22 authorizing an additional $290,000 advance. In relationship to these advances, $22,289 has been repaid as of September 30, 2012. The balance of $200,000 advanced to the airport
from general fund represents a cash loan made in 2007 without any specified terms for repayment. These balances resulted from the time lag between the dates that (1) interfund goods
and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Transfers out Transfers
In 64
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 7. CAPITAL ASSETS Beginning Balance Additions Disposals Transfers Ending Balance Governmental activities Capital assets, not
being depreciated: Land $ 8,007,437 $ -$ -$ -$ 8,007,437 Construction in progress 1 ,207,848 1 38,631 (1,183,050) 163,429 9 ,215,285 1 38,631 -(1,183,050) 8 ,170,866 Capital assets,
being depreciated: Buildings 12,370,759 27,020 --12,397,779 Non-building improvements 5 ,992,537 3 51,058 (12,609) -6,330,986 Machinery and equipment 8 ,028,080 4 50,258 (310,973) -8,167,365
Infrastructure 33,628,446 8 00,091 -1 ,183,050 35,611,587 60,019,822 1 ,628,427 (323,582) 1 ,183,050 62,507,717 Less accumulated depreciation for: Buildings (3,448,511) (411,638) --(3,860,149)
Non-building improvements (2,446,336) (287,823) 9,709 -(2,724,450) Machinery and equipment (6,725,853) (571,753) 3 07,730 -(6,989,876) Infrastructure ( 12,835,204) (1,555,648) --(14,390,852)
( 25,455,904) (2,826,862) 3 17,439 -( 27,965,327) Total capital assets being depreciated, net 34,563,918 (1,198,435) (6,143) 1 ,183,050 34,542,390 Governmental activities capital assets,
net $ 43,779,203 $ ( 1,059,804) $ (6,143) $ -$ 42,713,256 Capital asset activity for the primary government for the year ended September 30, 2012, was as follows: At September 30, 2012,
the City's governmental activities had outstanding commitments through construction contracts of approximately $1,288,217. 65
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Beginning Balance Additions Disposals Transfers Ending Balance Business-type activities Capital assets, not being depreciated:
Land $ 9,060 $ -$ -$ -$ 9,060 Construction in progress -3,042 --3,042 9,060 3,042 --12,102 Capital assets, being depreciated: Buildings 6 ,335,323 5,019 --6,340,342 Non-building improvements
1 ,909,804 2,980 (9,538) -1,903,246 Machinery and equipment 9 35,283 28,811 (68,253) -895,841 Infrastructure 7 ,468,512 60,791 --7,529,303 16,648,922 97,601 (77,791) -16,668,732 Less
accumulated depreciation for: Buildings (897,314) (173,452) --(1,070,766) Non-building improvements (700,708) (119,415) 9,538 -(810,585) Machinery and equipment (752,115) (104,329) 68,253
-(788,191) Infrastructure (2,457,284) (372,185) --(2,829,469) (4,807,421) (769,381) 77,791 -(5,499,011) Total capital assets being depreciated, net 11,841,501 (671,780) --11,169,721
Business-type activities capital assets, net $ 11,850,561 $ ( 668,738) $ -$ -$ 11,181,823 Depreciation of governmental activities by function General government $ 276,612 Public safety
5 38,475 Transportation 9 73,603 Physical environment 6 42,596 Economic environment 3 63,147 Cultural and recreation 32,429 Total governmental activities $ 2,826,862 Depreciation of
business-type activities by function Golf course $ 8 0,692 Airport 6 88,332 Building 357 Total business-type activities $ 769,381 Depreciation expense was charged to functions/programs
of the primary government as follows: 66
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 8. LONG-TERM DEBT ···· Gross Revenue Available for Compliance Debt Service Requirement % Coverage for Fiscal Year End $ 810,382
$ 439,248 184% Bond Coverage 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. The following table indicates the degree of compliance with the bond resolution covenants in the Stormwater
Utility Fund at September 30, 2012. 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. 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. The City entered into a nine (9) year loan agreement in 2012 with a local bank for
$2,296,000 to provide financing to repave certain roads in the City and payoff an outstanding loan. The City pledged Local Option Gas Tax revenues to repay the note payable. The funds
are accumulated in the Local Option Gas Tax Special Revenue fund for repayment of principal and interest. Revenue bonds/notes are secured by and payable from the revenues of the respective
funds that issued them. 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. 67
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Beginning Balance Additions Deductions Ending Balance Due Within One Year Governmental activities Bonds payable $ 10,000,000
$ -$ (1,075,000) $ 8,925,000 $ 1,110,000 Notes payable 2,246,000 2,296,000 (2,246,000) 2,296,000 197,000 12,246,000 2,296,000 (3,321,000) 11,221,000 1,307,000 Discount on bonds payable
(8,750) -833 (7,917) -Compensated absences 1,517,765 496,207 (578,386) 1,435,586 116,390 Termination benefits 11,387 -(8,844) 2,543 2,543 Pollution remediation 91,200 --91,200 -Totals
governmental activities $ 13,857,602 $ 2,792,207 $ (3,907,397) $ 12,742,412 $ 1,425,933 Bonds payable 2003 Infrastructure Sales Surtax Revenue Bonds, due in annual installments of $645,000
to $805,000 plus interest at 2.0% to 4.5% through 2018. $ 4,390,000 2003A Infrastructure Sales Surtax Revenue Bonds, due in annual installments of $150,000 to $185,000 plus interest
at 2.0% to 4.0% through 2018. 1,030,000 2003 Stormwater Utility Revenue Bonds, due in annual installments of $280,000 to $420,000 plus interest at 2.0% to 4.5% through 2022. 3,505,000
Total $ 8,925,000 Notes payable Florida Gas Tax Revenue Note, due in annual installments of $97,000 to $121,000 plus interest at 1.94% through 2023. $ 2,296,000 Beginning Balance Additions
Deductions Ending Balance Due Within One Year Business-type activities Compensated absences $ 207,697 $ 26,263 $ (37,960) $ 196,000 $ 922 The following is a summary of governmental activities
long-term debt transactions for the year ended September 30, 2012: The following is a summary of business-type activities long-term debt transactions for the year ended September 30,
2012: 68
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Year Ended September 30, Principal Interest 2013 $ 1,307,000 $ 405,315 2014 1,358,000 3 57,295 2015 1,407,000 3 09,625 2016 1,456,000
2 59,334 2017 1,510,000 2 06,167 2018-2022 4,062,000 3 90,306 2023 121,000 1,173 $ 11,221,000 $ 1,929,215 For the governmental activities, compensated absences, the unfunded OPEB obligation
and termination benefits are generally liquidated by the general fund. For the business-type activities, compensated absences and unfunded OPEB obligations are allocated to and liquidated
by the golf course, airport or building funds. A pollution remediation obligation was recorded for a Florida Department of Environmental (FDEP) Order dated March 10, 1997. This was related
to an incident of petroleum contamination at the Public Works Department on April 22, 1991. The City was named as the party responsible for the cleanup but FDEP determined the discharge
is eligible under the Petroleum Cleanup Participation Program and will not compel site rehabilitation prior to funding becoming available from that program. The program has a funding
cap of $400,000, with a 25% required cost share percentage. The City must also pay for a limited contamination assessment report sufficient to determine the extent of the contamination
and cleanup. Based on the information available, the City estimated its expenditure to be $91,200 dependent on the extent of work that is eventually required and recorded a long-term
liability of $91,200. Annual debt service requirements to maturity for long-term debt are as follows: Governmental Activities 69
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 9. LEASES Year Ended September 30, Airport Golf Carts 2013 $ 135,000 $ 160,890 2014 135,000 -2015 135,000 -Total $ 405,000 $
160,890 Year Ended September 30, Governmental Activities 2013 $ 67,641 2014 69,008 2015 70,430 2016 71,909 2017 76,903 2018-2022 389,087 2023-2027 354,943 2028-2032 414,315 2033-2037
486,551 2038-2042 574,436 2043-2047 681,362 2048-2052 811,454 2053-2055 560,802 Total $ 4,628,841 Operating Leases -Lessor The City is the lessor in two communication tower leases with
terms of up to fifty-five years. The towers have a cost of $39,285 and a carrying value of $6,810. For fiscal year 2012, total depreciation expense for the leased tower is $1,865. Following
is a schedule by year of minimum future rental income on noncancelable operating leases: Operating 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 $197,935 for the fiscal year ended September 30,
2012. These include the Airport Fund's lease obligation for the property used as the City's golf course. The following is a schedule by years for future minimum rental payments required
under operating leases in the Golf Course fund that have initial or remaining noncancelable lease terms in excess of one year at September 30, 2012: Business-type Activities 70
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Year Ended September 30, Business-type Activities 2013 $ 344,628 2014 351,748 2015 334,194 2016 202,821 2017 201,800 2018-2022
1,143,309 2023-2027 1,059,772 2028-2032 516,822 2033-2036 271,328 Total $ 4,426,422 10. PROPERTY TAXES 11. CONTINGENT LIABILITIES Various suits and claims are currently pending against
the City. It is impossible for the City to accurately quantify the exposure involved given the jury's latitude in assessing compensatory and punitive damages, and the court's latitude
in awarding attorney's fees. The City intends to vigorously defend against these lawsuits and believes it has a good chance of prevailing on their merits. The City is contingently liable
with respect to lawsuits and other claims incidental to the ordinary course of its operations. In the opinion of management and based on the advice of legal counsel, the ultimate disposition
of lawsuits will not have a material adverse effect on the financial position of the City. The Airport Fund is the lessor of various properties (land with a cost basis of $9,060) with
lease terms varying from twenty to thirty years. These include the lease to the Golf Course Fund requiring annual payments of $135,000 through 2015. Following is a schedule by year of
minimum future rental income on noncancelable operating leases: Future minimum rental commitments are as follows: The City is permitted by State law to levy taxes up to 10 mills on assessed
valuation. The millage rate levied by the City for the fiscal year ended September 30, 2012, was 3.3041 mills. Total tax collections were approximately 96.4% of the total tax levy. The
tax levy of the City is established by City Council. Under Florida law, the assessment of all properties and the collection of municipal taxes are provided by offices of the County's
Property Appraiser and Tax Collector. Ad Valorem taxes are levied on property values as of January 1. The fiscal year for which taxes are levied begins October 1. Taxes are due November
I and become delinquent on April 1. All taxes unpaid as of May 30 are subject to a tax certificate sale. Property tax revenues are recognized in the fiscal year for which they are levied
and also become due and payable. 71
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 12. RISK MANAGEMENT 13. BENEFIT PLANS Defined Benefit Pension Plan Retirees and beneficiaries currently receiving benefits 9
Disability retirees 2 Terminated employees not currently receiving benefits 3 Fully, partially, and non-vested active plan participants 3 3 4 7 Police Officer's Pension Plan Plan Description.
The Police Officers' Pension Plan is a Florida Statute Chapter 185 single-employer defined benefit plan. Only City police officers participate in the Police Pension Plan. The state provides
a contribution to the Police Pension Plan through a distribution of funds collected from insurance premium taxes. The Pension plan data provided in these Financial Statements are from
the actuarial valuation as of October 1, 2010 to determine the required contribution for the fiscal year ending September 30, 2012. 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. 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. 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. Amounts received or receivable from grantor agencies are subject to audit and adjustment by
grantor agencies, principally the federal and state governments. Any disallowed claims, including amounts already collected, may constitute a liability to the applicable funds. The amount,
if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. As of September 30,
2012, employee membership data was as follows: 72
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Years Ended September 30, Annual Pension Cost (APC) Percentage Contributed Net Pension Asset 2010 $ 706,678 99.30% $ 141,338
2011 740,912 99.39% 136,816 2012 594,612 99.21% 132,133 Basis of Accounting. Financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized
in the period in which the contributions are due. Employer contributions are recognized when due, and the employer has made formal commitment to provide the contributions. Benefits and
refunds are recognized when due and payable in accordance with the terms of the Plan. Method Used to Value Investments. Investments are reported at fair value. Short-term investments
are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates.
Mortgages are valued on the basis of future principal and interest payments, and are discounted at prevailing interest rates for similar instruments. Investments that do not have an
established market are reported at estimated fair value. Investments in securities of a single organization (excluding mutual funds and those issued or guaranteed by the U.S. government)
held by the pension plan did not exceed five percent of the total plan assets. Funding Policy. The employer, employee, and State contribution requirements are applicable to the Plan
and actuarially determined on a frequency of at least every 3 years in accordance with Florida State Statute. Administration costs of the pension plan are financed by the Plan. For the
2011-2012 fiscal year, the employee contribution rate, expressed as a percentage of compensation, was 5.0% and the employer contribution rate was 22.1%. The employer contribution amounted
to $450,666. The State contribution was $139,263, 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. Reserves. All of the net assets of the Police Pension Plan are legally reserved for plan participant benefits. For the year ended
September 30, 2012 the City’s annual pension cost was $594,612, however actual contributions equaled $589,929, decreasing the net pension asset. The required contribution was determined
as part of the October 1, 2010 actuarial valuation using the frozen entry age actuarial cost method. The actuarial assumptions included: a rate of return on the investment of present
and future assets of 8.0% and projected salary increases of 6.0% per year, including inflation at 3.0%. The actuarial value of plan assets was determined using techniques that smooth
the effects of short-term volatility in the market value of investments over a five-year period. The plan's unfunded actuarial accrued liability is being amortized as a level percentage
of projected payroll on an closed basis. The remaining amortization period at October 1, 2012, the date of the latest actuarial valuation, was 28 years. Three-Year Trend Information
73
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Development of Net Pension Asset September 30, 2012 Actuarially determined contribution $ 563,804 Interest on net pension asset
(10,945) Adjustment to actuarially determined contribution 41,753 Annual pension cost 594,612 Contributions made 589,929 Decrease in net pension asset (4,683) Net pension asset, beginning
of year 136,816 Net pension asset, end of year $ 132,133 Negotiated Defined Benefit Pension Plan The schedule of funding progress, presented as RSI following the notes to the financial
statements, presents multi-year trend information about whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits. Communication Workers of America /International Typographical Union The municipal Defined Benefit Plan has been subject to the minimum funding standards 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 following table shows the components
of the City's annual pension cost for the year ended September 30, 2012, the amount actually contributed to the plan, and the changes in the City's net pension asset: As of October 1,
2012, the most recent actuarial valuation date, the plan was 90.30 percent funded. The actuarial accrued liability for benefits was $9,793,255, and the actuarial value of assets was
$8,843,096, resulting in an unfunded actuarial accrued liability (UAAL) of $950,159. The covered payroll (annual payroll of active employees covered by the plan) was $1,893,717, and
the ratio of the UAAL to the covered payroll was 50.17 percent. Funded Status and Funding Progress Plan Description. The Communication Workers of America /International Typographical
Union Negotiated Pension Plan (NPP), which began in 1967, is a multi-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. 74
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Withdrawal Benefit. If the employee did not earn enough Service Credit to qualify for a Normal Pension, the employee may be eligible
for a lump sum withdrawal benefit, based on total contributions, after the employee has incurred a break in service. Benefit Provisions and Contribution Requirements: The NPP provides
retirement and disability benefits to plan members and beneficiaries. The plan is administered at the Plan Office in Colorado Springs, Colorado. Contribution requirements are established
by the CWA contract, effective date October 1, 2011, which is negotiated every 3 years, and approved by City Council. Funding Policy. Administration costs of the pension plan are financed
by the plan. The employer contribution rate, expressed as a percentage of compensation, was 9.00% for the 2011-2012 fiscal year. Employees do not contribute to this plan. Contributions
to the CWA Pension Plan for the fiscal years ended September 30, 2010, 2011 and 2012 were $234,219, $223,113 and $210,258 respectively, which are equal to 100% of the required contribution
for each year. 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
I, 1993. Pension amounts are permanently reduced based on age on the effective date, because the payments are expected to be made for a longer period of time. Disability Pension. No
minimum age and the pension amount is not reduced for age; there must be a Social Security Disability Award, 10 years of actual Service Credit and a contribution for covered employment
must have been made within 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. Normal Pension. Minimum age
65: 5 years of Service Credit required if any portion of service credit was earned after January 1, 1989. 10 years of Service Credit required if employees' coverage ended before January
1, 1989. Once the Service Credit amount is accrued, the employee is vested and cannot lose the right to a pension. Benefit Provisions and Contribution Requirements. The NPP provides
retirement and disability benefits to plan members and beneficiaries. The plan is administered at the Plan Office in Colorado Springs, Colorado. Contribution requirements are established
by the CWA contract, effective date October 1, 2011, which is negotiated every 3 years, and approved by City Council. Death Benefit. If the employee dies before becoming a pensioner
and has at lease $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. 75
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 14. OTHER POSTEMPLOYMENT BENEFITS Employees are eligible to receive a partial subsidy from the Retiree Medical Plan upon retirement,
if they are enrolled in the active medical plan immediately prior to retiring and achieved at least 20 years of service in a full time capacity. If eligible, the City pays 50% of the
costs of single coverage group health insurance for up to 2 years after retirement. No employee has ever received the subsidy. Plan description. Pursuant to Section 112.0801, Florida
Statutes, the City is required to permit participation in the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the
cost at which coverage is available for active employees. The City, by policy, has elected to provide qualified retirees with partial subsidy. In this respect, the City operates a single-employer
plan. Defined Contribution 401(a) Plan Plan Description. The ICMA Retirement Corporation's 401 Retirement Plan is a Defined Contribution Plan "qualified" under Section 401(a) of the
Internal Revenue Code. Each participant has a plan account to which contributions are made. Plan benefits are based on the total amount of money in the employees' account at retirement
or other eligible event. The Plan is available to all management staff and may be rolled over to another "qualified" employer plan that accepts rollovers, or Traditional IRA's. Lump
Sum. Retirement benefits can be paid either partially or by total distribution of the employees' account 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, 2006, and approved by the City Manager. Funding Policy. The administration
costs of the pension plan are financed by the Plan. The employer contribution rate, expressed as a percentage of compensation, was 9.0% for the 2011-12 fiscal year. Employees do not
contribute to this Plan. Contributions to the 401 Defined Contribution Plan for the fiscal years ended September 30, 2010, 2011, and 2012 were $126,377, $132,656 and $109,864, respectively,
which are equal to 100% of the required contribution for each year. 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. 76
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Annual required contribution $ 26,851 Interest on net OPEB obligation 13,037 Adjustment to annual required contribution (12,455)
Net OPEB cost 27,433 Contributions made (36,955) Increase in net OPEB obligation (9,522) Net OPEB obligation, beginning of year 325,915 Net OPEB obligation, end of year $ 316,393 Year
Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation 2010 $ 27,174 119% $ 339,765 2011 27,475 150% 334,548 2012 27,433 135% 316,393 Funding Policy. Based
on GASB Statement 43 and 45, which set forth the guidelines for treatment of other postemployment benefits, the City had an actuary calculate future funding requirements in 2010. The
actuary's 2010 estimate, using the Projected Unit Credit Method, produced an unfunded obligation of $339,765 and an annual required contribution of $26,851. The City elected to fund
the OPEB obligation on a pay-as-you-go basis. The entire unfunded obligation was recognized in the government-wide financial statements. The enterprise fund portion ($27,210) was also
recognized in the enterprise fund financial statements. As such, a separate audited GAAP basis postemployment benefit plan report is not available. In 2011 and 2012, the City recorded
a decrease of the government-wide obligation of $5,217 and $26,126, respectively, based on the annual required contribution reduced by the expected future benefit payments. The additional
enterprise fund portion was calculated as $11,470 in 2011 and a decrease $986 in 2012. The following table shows the components of the City's annual OPEB cost for the year ended September
30, 2012, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Annual OPEB Cost and Net OPEB Obligation The City’s annual OPEB cost, the percentage
of annual OPEB cost contributed to the Plan, and the net OPEB obligation for fiscal year 2012 and the previous two years were as follows: Three-Year Trend Information The City's annual
other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. 77
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements Termination Benefits The actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability
of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the
future. Calculations are based on the types of benefits provided with the plan at the time of each valuation and on the pattern of sharing of costs between the employer and plan members
to that point. Calculations reflect a long-term perspective and assumptions used include techniques designed to reduce short-term volatility in actuarial accrued liabilities and actuarial
value of assets. The schedule of funding progress shown below is required to present multi-trend information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liability for benefits. The City elected to fund the OPEB on a pay-as-you-go basis and consequently, reports a zero balance for the actuarial
value of assets. The City offered its employees an early retirement incentive program in 2006-2007 fiscal year. The eligibility requirements were that the employee was either an exempt
management employee or an hourly employee including police officers with at least 15 years of service in a full time capacity and within three years of reaching the age of 65 (the age
eligible for Medicare benefit). The benefits include a one time lump sum payment based on the year of service and single coverage group health insurance for up to 3 years after retirement.
The lump sum payment was calculated by multiplying $1,000 for each full year of service. The group health insurance will terminate when the retiree reaches the age of 65 and eligible
for Medicare benefits. As of September 30, 2012, the total accrued termination benefits for the governmentwide financial statements were $2,543. No portion of the accrued termination
benefits related to the enterprise funds. The required contribution was determined as part of the October 1, 2009 actuarial valuation using the projected unit credit actuarial cost method.
The actuarial assumptions included (a) 4 percent investment rate of return (net of administrative expenses), (b) a 3 percent payroll growth rate, (c) a 3 percent inflation rate, and
(d) an annual healthcare trend rate of 9 percent initially, reduced by decrements to an ultimate rate of 5 percent in 2017. The actuarial assumptions utilized the RP-2000 Combined Healthy
Mortality Table projected to 2010. The plan's unfunded actuarial accrued liability is being amortized as a level dollar of projected payroll on an open basis. The remaining amortization
period at October 1, 2009 was 30 years. Funded Status and Funding Progress As of October 1, 2009, the date of the most recent actuarial valuation, the actuarial accrued liability for
benefits was $280,582, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $6,426,614, and the ratio of the UAAL to the covered
payroll was 4 percent. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer
and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members
to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the
actuarial value of assets, consistent with the long-term perspective of the calculations. 78
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 15. FUND BALANCES -GOVERNMENTAL FUNDS General Fund LOGT Discretionary Sales Tax Riverfront Redevelopment DST Revenue Bonds Nonmajor
Funds Total Nonspendable: Inventory $ 65,423 $ -$ -$ -$ -$ -$ 6 5,423 Prepaids 105,027 -----105,027 Long-term advances 200,000 -552,511 ---752,511 Permanent fund corpus -----737,182
737,182 Total nonspendable 370,450 -552,511 --737,182 1,660,143 Restricted for: Debt service ----1,555,411 182,579 1,737,990 Special revenue -190,274 1,463,061 478,895 -236,459 2,368,689
Capital projects -----17,354 17,354 Expendable portion of -cemetery fund corpus -----247,793 247,793 Total restricted -190,274 1,463,061 478,895 1,555,411 684,185 4,371,826 Committed
for: Working capital 2,861,708 ----719,686 3,581,394 Assigned for: General employee events 3,741 -----3,741 Law enforcement grants 4,650 -----4,650 Greer donations for police 27,316
-----27,316 Total assigned 35,707 -----35,707 Unassigned 1,734,307 -----1,734,307 Total fund balances, governmental funds $ 5,002,172 $ 190,274 $ 2 ,015,572 $ 478,895 $ 1 ,555,411 $
2 ,141,053 $ 11,383,377 In accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, the City classifies fund balances based primarily on
the extent to which it is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Detailed information on fund balances of governmental funds
is as follows:79
CITY OF SEBASTIAN, FLORIDA Notes to Financial Statements 16. INVESTED IN CAPITAL ASSETS NET OF RELATED DEBT Governmental Activities Business-type Activities Capital assets: Capital assets
not being depreciated $ 8,170,866 $ 12,102 Capital assets being depreciated, net 34,542,390 11,169,721 42,713,256 11,181,823 Related debt: Total bonds and notes payable 11,221,000 -Net
bond premium/discount (7,917) -11,213,083 -Invested in capital assets, net of capital -related debt $ 31,500,173 $ 11,181,823 The composition of net assets invested in capital
assets, net of related debt as of September 30, 2012, was as follows: 80
REQUIRED SUPPLEMENTARY INFORMATION 81
CITY OF SEBASTIAN, FLORIDA Required Supplementary Information Employees' Retirement Plan Schedule of Funding Progress Single-employer Pension Trust Fund Actuarial Accrued UAAL as a Actuarial
Liability Unfunded Percentage Actuarial Value of (AAL) -AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a /b) (c) ((b-a) /c)
10/1/2004 $ 3,536,724 $ 4,251,736 $ 715,012 83.18% $ 1,480,974 48.28% 10/1/2006 4,711,294 5,389,815 678,521 87.41% 1,769,613 38.34% 10/1/2008 5,474,816 6,127,531 652,715 89.35% 2,143,131
30.46% 10/1/2010 7,086,302 8,029,402 943,100 88.25% 2,205,042 42.77% 10/1/2012 8,843,096 9,793,255 950,159 90.30% 1,893,717 50.17% Schedule of Employer Contributions Single-employer
Pension Trust Fund Annual Year Ended Required City State Percentage September 30, Contributions Contribution Contribution Contributed 2007 $ 407,011 $ 294,534 $ 117,621 101.26% 2008
456,928 376,769 122,800 109.33% 2009 557,439 404,104 137,782 97.21% 2010 701,998 566,910 134,852 99.97% 2011 736,420 602,943 133,477 100.00% 2012 559,868 436,386 123,482 100.00% 82
CITY OF SEBASTIAN, FLORIDA Required Supplementary Information Other Postemployment Benefits Plan Schedule of Funding Progress Other Postemployment Benefits Plan Actuarial Accrued Actuarial
Liability Unfunded Actuarial Value of (AAL) -AAL Funded Valuation Assets Entry Age (UAAL) Ratio Date (a) (b) (b-a) (a /b) 9/30/2010 $ -$ 306,554 $ 306,554 0.0% 9/30/2011 -316,393 316,393
0.0% 9/30/2012 -280,582 280,582 0.0% Schedule of Employer Contributions Other Postemployment Benefits Plan Annual Year Ended Required Percentage September 30, Contributions Contributed
9/30/2010 $ 26,557 119% 9/30/2011 26,868 150% 9/30/2012 26,851 135% 83
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COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 85
CITY OF SEBASTIAN, FLORIDA Combining Balance Sheet Nonmajor Governmental Funds September 30, 2012 Law Parking Recreation Stormwater Enforcement In-Lieu-of Impact Fee Utility Forfeiture
Assets Cash and cash equivalents $ -$ 5,723 $ 40,452 $ 9,315 Investments 26,465 687,625 115,690 59,590 Interest receivable --997 -Due from other governments --10,453 -Total assets $
26,465 $ 693,348 $ 167,592 $ 68,905 Liabilities Accounts payable and accrued liabilities $ -$ 127 $ 38 $ -Fund balances: Nonspendable ----Restricted --167,554 68,905 Committed 26,465
693,221 --Total fund balances 26,465 693,221 167,554 68,905 Total liabilities and fund balances $ 26,465 $ 693,348 $ 167,592 $ 68,905 Special Revenue Funds 86
Debt Service Permanent Stormwater Total Utility General Stormwater Nonmajor Revenue Capital Capital Transportation Utility Governmental Bonds 2003 Projects Improvements Improvements
Improvements Cemetery Funds $ 182,579 $ -$ 2,643 $ 23,208 $ -$ 730,169 $ 994,089 -----254,806 1,144,176 ------997 ------10,453 $ 182,579 $ -$ 2,643 $ 23,208 $ -$ 984,975 $ 2,149,715
$ -$ -$ 2,643 $ 5,854 $ -$ -$ 8,662 -----737,182 737,182 182,579 --17,354 -247,793 684,185 ------719,686 182,579 --17,354 -984,975 2,141,053 $ 182,579 $ -$ 2,643 $ 23,208 $ -$ 984,975
$ 2,149,715 Capital Projects Funds87
CITY OF SEBASTIAN, FLORIDA Combining Statement of Revenue, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds For the Year Ended September 30, 2012 Law Parking Recreation
Stormwater Enforcement In-Lieu-of Impact Fee Utility Forfeiture Revenue Impact fees $ -$ 58,500 $ -$ -Charges for services --803,983 -Fines ---5,268 Investment earnings 57 4,388 7,017
815 Contributions and donations ----Other revenue 13,776 -2,003 8,476 Total revenue 13,833 62,888 813,003 14,559 Expenditures Current: General government ----Public safety ---12,239
Physical environment --8,348 -Debt Service: Principal ----Interest and fiscal charges ----Capital outlay ----Total expenditures --8,348 12,239 Revenue over (under) expenditures 13,833
62,888 804,655 2,320 Other financing sources (uses) Transfers in --3,493 -Transfers out -(217,854) (1,090,750) -Total other financing sources (uses) -(217,854) (1,087,257) -Net change
in fund balances 13,833 (154,966) (282,602) 2,320 Fund balances, beginning of year 12,632 848,187 450,156 66,585 Fund balances, end of year $ 26,465 $ 693,221 $ 167,554 $ 68,905 Special
Revenue Funds 88
Debt Service Permanent Stormwater Total Utility General Stormwater Nonmajor Revenue Capital Capital Transportation Utility Governmental Bonds 2003 Projects Improvements Improvements
Improvements Cemetery Funds $ -$ -$ -$ -$ -$ -$ 58,500 -----63,142 867,125 ------5,268 175 ----7,351 19,803 --14,001 168,059 --182,060 -----350 24,605 175 -14,001 168,059 -70,843 1,157,361
-9,700 ----9,700 ------12,239 ----3,980 -12,328 280,000 -----280,000 160,290 -----160,290 -406,647 261,138 565,056 499,232 -1,732,073 440,290 416,347 261,138 565,056 503,212 -2,206,630
(440,115) (416,347) (247,137) (396,997) (503,212) 70,843 (1,049,269) 439,674 416,347 247,138 362,587 493,373 -1,962,612 --(2,568) (742) (3,493) (5,647) (1,321,054) 439,674 416,347 244,570
361,845 489,880 (5,647) 641,558 ( 441) -( 2,567) (35,152) (13,332) 65,196 (407,711) 183,020 -2,567 52,506 13,332 919,779 2,548,764 $ 182,579 $ -$ -$ 17,354 $ -$ 984,975 $ 2,141,053 Capital
Projects Funds 89
CITY OF SEBASTIAN, FLORIDA Schedule of Revenue, Expenditures and Changes in Fund Balance -Budget and Actual Parking In-Lieu-Of Special Revenue Fund For the Year Ended September 30, 2012
Actual Over Final (Under) Final Budget Actual Budget Revenue Investment earnings $ 10 $ 57 $ 47 Other revenue 13,790 13,776 (14) Net change in fund balance 13,800 13,833 33 Fund balance,
beginning of year 12,632 12,632 -Fund balance, end of year $ 26,432 $ 26,465 $ 33 90
CITY OF SEBASTIAN, FLORIDA Schedule of Revenue, Expenditures and Changes in Fund Balance -Budget and Actual Recreation Impact Fee Special Revenue Fund For the Year Ended September 30,
2012 Actual Over Final (Under) Final Budget Actual Budget Revenue Impact fees $ 20,000 $ 58,500 $ 38,500 Investment earnings 8,500 4,388 (4,112) Total revenue 28,500 62,888 34,388 Other
financing sources (uses) Transfers in 415,463 -(415,463) Transfers out (443,963) (217,854) 226,109 Total other financing sourced (uses) (28,500) (217,854) (189,354) Net change in fund
balances -(154,966) (154,966) Fund balance, beginning of year 848,187 848,187 -Fund balance, end of year $ 848,187 $ 693,221 $ (154,966) 91
CITY OF SEBASTIAN, FLORIDA Schedule of Revenue, Expenditures and Changes in Fund Balance -Budget and Actual Stormwater Utility Special Revenue Fund For the Year Ended September 30, 2012
Actual Over Final (Under) Final Budget Actual Budget Revenue Charges for services $ 815,000 $ 803,983 $ (11,017) Investment earnings 3,450 7,017 3,567 Other revenue -2,003 2,003 Total
revenue 818,450 813,003 (5,447) Expenditures Current: Physical environment 100 8,348 8,248 Revenue over (under) expenditures 818,350 804,655 (13,695) Other financing uses Transfers in
271,249 3,493 (267,756) Transfers out (1,089,599) (1,090,750) (1,151) Net change in fund balance -(282,602) (282,602) Fund balance, beginning of year 450,156 450,156 -Fund balance, end
of year $ 450,156 $ 167,554 $ (282,602) 92
CITY OF SEBASTIAN, FLORIDA Schedule of Revenue, Expenditures and Changes in Fund Balances -Budget and Actual Law Enforcement Forfeiture Special Revenue Fund For the Year Ended September
30, 2012 Actual Over Final (Under) Final Budget Actual Budget Revenue Fines $ 8,000 $ 5,268 $ (2,732) Investment earnings 125 815 690 Contributions 2,000 -(2,000) Other revenue -8,476
8,476 Total revenue 10,125 14,559 4,434 Expenditures Current: Public safety -12,239 12,239 Net change in fund balance 10,125 2,320 (7,805) Fund balance., beginning of year 66,585 66,585
-Fund balance, end of year $ 76,710 $ 68,905 $ (7,805) 93
CITY OF SEBASTIAN, FLORIDA Schedule of Revenue, Expenditures and Changes in Fund Balance -Budget and Actual Stormwater Utility Revenue Bonds 2003 Debt Service Fund For the Year Ended
September 30, 2012 Actual Over Final (Under) Final Budget Actual Budget Revenue Investment earnings $ 1,100 $ 175 $ (925) Expenditures Debt service: Principal 280,000 280,000 -Interest
and fiscal charges 160,123 160,290 167 Total expenditures 440,123 440,290 167 Revenue over (under) expenditures (439,023) (440,115) (1,092) Other financing sources Transfers in 439,023
439,674 651 Net change in fund balances -(441) (441) Fund balance, beginning of year 183,020 183,020 -Fund balance, end of year $ 183,020 $ 182,579 $ (441) 94
AGENCY FUND 95
CITY OF SEBASTIAN, FLORIDA Combining Statement of Changes in Assets and Liabilities Agency Fund For the Year Ended September 30, 2012 Balance Balance October 1, September 30, 2011 Additions
Deletions 2012 Performance Deposits Assets Cash and cash equivalents $ 11,930 $ -$ -$ 11,930 Investments, at fair value 220,000 --220,000 Total assets $ 231,930 $ -$ -$ 231,930 Liabilities
Performance deposits held in escrow $ 231,930 $ -$ -$ 231,930 96
CAPITAL ASSETS 97
CITY OF SEBASTIAN, FLORIDA Comparative Schedule by Source Capital Assets Used in the Operation of Governmental Funds September 30, 2012 2012 2011 Governmental funds capital assets Land
$ 8,007,437 $ 8,007,437 Buildings and structures 12,397,779 12,370,759 Non-building improvements 6,330,986 5,992,537 Machinery and equipment 8,167,365 8,028,080 Infrastructure 35,611,587
33,628,446 Construction in progress 163,429 1,207,848 Total governmental funds capital assets $ 70,678,583 $ 69,235,107 Investment in governmental funds capital assets (by sources) Federal
grants $ 6,381,544 $ 6,202,067 State grants 907,755 907,755 County grants 713,359 713,359 General Fund 11,031,201 11,280,701 Law enforcement trust fund 36,380 55,764 Recreational impact
fee 1,726,191 1,516,679 Stormwater utility fee 4,895,946 4,895,946 Riverfront redevelopment 1,932,055 1,932,055 Cemetery trust fund 240,255 236,479 Donations 3,371,802 3,196,121 Sales
taxes 16,347,884 14,159,551 Motor fuel taxes 6,811,354 6,811,354 Revenue bond debt 16,119,428 16,119,428 Capital projects 163,429 1,207,848 Total investment in governmental funds capital
assets $ 70,678,583 $ 69,235,107 98
Schedule of Activities by Function Capital Assets Used in the Operation of Governmental Funds September 30, 2012 Machinery Non-Building and Functions /Programs Land Buildings Improvements
Equipment Infrastructure Total General government: Legislative $ -$ -$ -$ 4,245 $ -$ 4,245 City manager ---1,612 -1,612 City clerk ---20,350 -20,350 Finance --1,100 53,622 -54,722 MIS
-5,844 53,131 644,562 -703,537 Facilities maintenance -133,430 15,665 86,841 -235,936 Growth management -85,555 -44,582 -130,137 Non-departmental 3,634,769 6,184,990 126,636 204,375
52,699 10,203,469 Total general government 3,634,769 6,409,819 196,532 1,060,189 52,699 11,354,008 Public safety: Special operations ---122,484 -122,484 Administration 9,560 3,347,152
89,320 273,812 -3,719,844 School resource ---69,943 -69,943 Road patrol ---2,536,820 -2,536,820 Community policing ---17,086 -17,086 Code enforcement ---42,047 -42,047 Investigations
--1,700 198,139 -199,839 Support services ---53,111 -53,111 Communications --16,404 205,713 -222,117 Building department ---41,284 -41,284 Total public safety 9,560 3,347,152 107,424
3,560,439 -7,024,575 Transportation: Central garage -130,489 82,419 162,962 674 376,544 Roads and drainage 47,125 162,044 972,302 967,170 15,318,030 17,466,671 Total transportation 47,125
292,533 1,054,721 1,130,132 15,318,704 17,843,215 Economic environment: Non-departmental 2,308,392 1,040,589 ---3,348,981 Physical environment: Stormwater 1,850 1,748,721 18,459,728
20,210,299 Cemetery 272,190 82,019 78,354 60,585 22,717 515,865 Total physical environment 272,190 82,019 80,204 1,809,306 18,482,445 20,726,164 Culture/recreation: Parks and recreation
1,735,401 1,225,667 4,892,105 607,299 1,757,739 10,218,211 Total $ 8,007,437 $ 12,397,779 $ 6,330,986 $ 8,167,365 $ 35,611,587 70,515,154 Construction in progress 163,429 Total $ 70,678,583
CITY OF SEBASTIAN, FLORIDA 99
Schedule of Changes in Activities by Function Capital Assets Used in the Operation of Governmental Funds September 30, 2012 Capital Assets Capital Assets October 1, Transfers Transfers
September 30, Functions /Programs 2011 Additions Deletion In Out 2012 General government: Judicial $ 4,245 $ -$ -$ -$ -$ 4,245 City manager 1,612 ----1,612 City clerk 25,817 --879 6,346
20,350 Administrative services 59,511 ---4,789 54,722 MIS 627,192 71,102 5,014 11,136 879 703,537 Facilities maintenance 217,345 2,414 -16,177 -235,936 Growth management 120,906 -2,425
11,656 -130,137 Non-departmental 10,203,469 ----10,203,469 Total general government 11,260,097 73,516 7,439 39,848 12,014 11,354,008 Public safety: Special operations 127,484 -5,000
--122,484 Administration 3,728,994 -9,150 --3,719,844 School resource 69,943 ----69,943 Road patrol 2,545,372 118,705 113,462 -13,795 2,536,820 Community policing 42,139 -25,053 --17,086
Code enforcement 31,749 24,620 --14,322 42,047 Investigations 233,056 28,737 9,872 -52,082 199,839 Support services 59,026 -5,915 --53,111 Communications 226,212 1,996 6,091 --222,117
Building department 37,980 --18,323 15,019 41,284 Total public safety 7,101,955 174,058 174,543 18,323 95,218 7,024,575 Transportation: Central garage 355,673 20,871 ---376,544 Roads
and drainage 16,083,434 1,385,469 21,952 31,377 11,657 17,466,671 Total transportation 16,439,107 1,406,340 21,952 31,377 11,657 17,843,215 Economic environment: Non-departmental 3,348,981
----3,348,981 Physical environment: Stormwater 19,588,795 640,814 19,310 --20,210,299 Cemetery 512,089 8,800 5,024 --515,865 Total physical environment 20,100,884 649,614 24,334 --20,726,164
Culture/recreation: Parks and recreation 9,776,235 507,949 95,314 29,341 -10,218,211 Total 68,027,259 2,811,477 323,582 118,889 118,889 70,515,154 Construction in progress 1,207,848
138,631 1,183,050 --163,429 Total $ 69,235,107 $ 2,950,108 $ 1,506,632 $ 118,889 $ 118,889 $ 70,678,583 CITY OF SEBASTIAN, FLORIDA 100
INTERNAL CONTROL AND COMPLIANCE 101
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Honorable Mayor and Members of City Council City of Sebastian Sebastian, Florida Internal Control Over Financial Reporting Management of the City of Sebastian, Florida is responsible
for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the City of Sebastian, Florida's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing
an opinion on the effectiveness of the City of Sebastian, Florida's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City
of Sebastian, Florida's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of
deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund
information of the City of Sebastian, Florida (the "City") as of and for the year ended September 30, 2012, which collectively comprise the City's basic financial statements, and have
issued our report thereon dated March 13, 2013. 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. 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 GOVERNMENT AUDITING STANDARDS March 13, 2013 5070 North Highway A1A
Suite 250 Vero Beach, FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 103
This report is intended solely for the information and use of management, the Florida auditor general and state awarding agencies and pass-through entities, the City Council, others
within the organization, and federal and state awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
However, it is a matter of public record, and its distribution is not limited. Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies,
or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and
Other Matters As part of obtaining reasonable assurance about whether the City of Sebastian, Florida's financial 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 financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 104
Honorable Mayor and Members of City Council City of Sebastian Sebastian, Florida The Rules of the Auditor General (Section 10.554(1)(i)4) require that we address violations of provisions
of contracts or grant agreements or abuse that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but more than
inconsequential. In connection with our audit, we did not identify any such findings. INDEPENDENT AUDITORS' MANAGEMENT LETTER March 13, 2013 We have audited the financial statements
of the City of Sebastian, Florida as of and for the fiscal year ended September 30, 2012 and have issued our report thereon dated March 13, 2013. We conducted our audit in accordance
with United States generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of
the United States; and the Florida Single Audit Act. We have issued our Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standard and Rules of the Auditor General. Disclosures in those reports and schedule, which are dated March 13, 2013, 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)(i)1) require that we address in the management letter, if not already addressed in the auditors’ reports on Compliance and Internal Control or Schedule of Findings
and Questioned Costs, whether or not recommendations made in the preceding annual financial audit report have been followed. There were no findings or comments in the prior year. As
required by the Rules of the Auditor General (Section 10.554(1)(i)2), the scope of our audit included a review of the provisions of Section 218.415, Florida Statutes, regarding the investment
of public funds. In connection with our audit, we determined that the City of Sebastian, Florida complied with Section 218.415, Florida Statutes. The Rules of the Auditor General (Section
10.554(1)(i)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 identify any such recommendations. 5070 North Highway A1A Suite 250 Vero Beach, FL 32963 Ph: 772.234.8484 Fx: 772.234.8488 105
As required by the Rules of the Auditor General (Section 10.554(1)(i)7.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 financial condition assessment was based in part on representations made by management and the review of financial information provided by the
same. Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States
of America require us to indicate that this letter is intended solely for the information and use of management and the Florida Auditor General of the State of Florida, and is not intended
to be and should not be used by anyone other than these specified parties. The Rules of the Auditor General (Section 10.554(1)(i)5) provide that the auditor may, based on professional
judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions
of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did
not have any such findings. The Rules of the Auditor General (Section 10.554(1)(i)6) 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 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 notes to the financial statements. The City of Sebastian, Florida’s component unit, the Police Officer’s Pension Plan, was established under Section 58-46
through 58-54 Code of Ordinances in October 1989. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.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 financial
emergency conditions described in Section 218.503(1), Florida Statutes. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.b.), we determined that the annual financial
report for the City of Sebastian, Florida for the year ended September 30, 2012, 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 year ended September 30, 2012. As required by the Rules of the Auditor General (Section 10.554(1)(i)7.b.), we determined that
the annual financial report for the City of Sebastian, Florida for the year ended September 30, 2012, 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 year ended September 30, 2012. 106
STATISTICAL SECTION 107
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CITY OF SEBASTIAN, FLORIDA Statistical Section Table of Contents Page Financial Trends These schedules contain trend information to help the reader understand and evaluate how the City’s
financial condition, performance and well-being have changed over time. 110 Revenue Capacity These schedules contain information to help the reader assess the City’s ability to generate
its most significant local revenue source, the property tax. 122 Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels
of outstanding debt and its ability to issue additional debt in the future. 128 Demographic and Economic Information These schedules present various demographic and economic indicators
to help the reader understand the environment within which the City operates and how they affect the City’s financial activities. 136 Operating Information These schedules contain information
about the City’s operations and resources to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities
it performs. 140 This part of the City’s Comprehensive Annual Financial Report presents detailed information to assist the user in understanding what the financial statements, note disclosures
and required supplementary information say about the overall economic condition of the City of Sebastian, Florida. Sources: Unless otherwise noted, the information in these schedules
is derived from the Comprehensive Annual Financial Report for the relevant year. The City implemented GASB Statement No. 34 in 2001; schedules presenting government-wide information
include data beginning in that year. 109
CITY OF SEBASTIAN, FLORIDA Net Assets by Component Last Ten Fiscal Years 2012 2011 2010 2009 Governmental activities Invested in capital assets, net of related debt $ 31,500,173 $ 31,541,953
$ 28,938,587 $ 26,744,896 Restricted 6,192,777 5,668,155 8,757,043 8,197,018 Unrestricted 3,607,228 4,052,751 3,889,011 4,502,440 Total governmental activities net assets $ 41,300,178
$ 41,262,859 $ 41,584,641 $ 39,444,354 Business-type activities Invested in capital assets, net of related debt $ 11,181,823 $ 11,850,561 $ 11,389,704 $ 10,725,676 Restricted ---98,320
Unrestricted (490,298) (644,620) (342,340) 86,517 Total business-type activities net assets $ 10,691,525 $ 11,205,941 $ 11,047,364 $ 10,910,513 Primary Government Invested in capital
assets, net of related debt $ 42,681,996 $ 43,392,514 $ 40,328,291 $ 37,470,572 Restricted 6,192,777 5,668,155 8,757,043 8,295,338 Unrestricted 3,116,930 3,408,131 3,546,671 4,588,957
Total primary government net assets $ 51,991,703 $ 52,468,800 $ 52,632,005 $ 50,354,867 12 The large increases in unrestricted net assets from 2003 to 2004 and from 2004 to 2005 are
mainly due to increase in State revenue The large increases in unrestricted net assets from 2005 to 2006 are mainly due to increase in tax revenues, franchise fees, and interest earnings.
Fiscal Year 110
Table I -Unaudited 2008 2007 2003 $ 24,133,550 $ 21,469,456 $ 17,579,683 $ 17,103,399 $ 16,412,401 $ 16,339,222 9,215,801 9,419,129 5,068,583 5,395,879 4,059,674 3,235,266 5,035,184
5,249,998 11,293,877 2 9,081,345 1 7,171,123 1 5,461,224 $ 38,384,535 $ 36,138,583 $ 33,942,143 $ 31,580,623 $ 27,643,198 $ 25,035,712 $ 9,111,251 $ 8,895,501 $ 8,798,612 $ 7,459,945
$ 4,264,961 $ 1,545,867 570,149 570,890 560,581 574,105 506,006 505,435 753,076 1,303,886 1,896,539 738,519 1,712,657 1,471,457 $ 10,434,476 $ 10,770,277 $ 11,255,732 $ 8,772,569 $ 6,483,624
$ 3,522,759 $ 33,244,801 $ 30,364,957 $ 26,378,295 $ 24,563,344 $ 20,677,362 $ 17,885,089 9,785,950 9,990,019 5,629,164 5,969,984 4,565,680 3,740,701 5,788,260 6,553,884 13,190,416 9,819,864
8,883,780 6,932,681 $ 48,819,011 $ 46,908,860 $ 45,197,875 $ 40,353,192 $ 34,126,822 $ 28,558,471 Fiscal Year 2006 2005 2004 111
CITY OF SEBASTIAN, FLORIDA Changes in Net Assets Last Ten Fiscal Years 2012 2010 2009 Expenses Governmental activities: General government $ 2,640,677 $ 2,766,575 $ 3,309,381 $ 3,169,851
Public safety 5,025,274 5,546,632 5,720,933 5,420,585 Physical Environment 2,007,902 1,558,974 1,947,605 1,347,771 Transportation 1,800,432 2,263,367 1,863,551 3,437,724 Economic environment
170,960 208,518 135,885 167,470 Culture and recreation 1,239,512 1,227,198 1,240,383 1,073,249 Interest on debt 562,496 546,103 566,410 730,100 Total governmental activities expenses
13,447,253 14,117,367 14,784,148 15,346,750 Business-type activities: Golf Course 1,394,731 1,355,266 1,388,158 1,477,299 Airport 1,166,588 1,188,788 1,067,525 1,079,869 Building 1 397,295
470,406 496,800 533,641 Total business-type activities expenses 2,958,614 3,014,460 2,952,483 3,090,809 Total primary government expenses $ 16,405,867 $ 17,131,827 $ 17,736,631 $ 18,437,559
Program Revenue Governmental activities: Charges for services: General government $ 214,488 $ 197,945 $ 203,915 $ 220,073 Public safety 66,474 92,350 118,368 95,606 Physical environment
876,693 868,059 881,338 908,829 Culture and recreation 66,954 61,353 62,046 66,540 Operating grants and contributions 187,333 196,534 210,050 228,002 Capital grants and contributions
791,265 838,242 3,178,618 1,865,174 Total governmental activities program revenue 2,203,207 2,254,483 4,654,335 3,384,224 Business-type activities: Charges for services: Golf Course
1,394,844 1,382,421 1,335,647 1,406,956 Airport 491,367 485,229 468,698 438,485 Building 1 419,705 401,021 356,264 358,947 Operating grants and contributions 6,563 ---Capital grants
and contributions 150,083 900,340 904,853 1,356,914 Total business-type activities program revenue 2,462,562 3,169,011 3,065,462 3,561,302 Total primary government program revenue $
4,665,769 $ 5,423,494 $ 7,719,797 $ 6,945,526 Net (expense) revenue Governmental activities $ (11,244,046) $ (11,862,884) $ (10,129,813) $ (11,962,526) Business-type activities (496,052)
154,551 112,979 470,493 Total primary government net (expense) revenue $ (11,740,098) $ (11,708,333) $ (10,016,834) $ (11,492,033) 2011 Fiscal Year 112
Table II -Unaudited 2008 2007 2005 2004 2003 $ 3,375,178 $ 3,083,609 $ 3,129,723 $ 3,262,276 $ 2,414,865 $ 1,620,616 5,226,512 5,377,107 4,191,295 4,816,614 4,502,109 3,391,831 1,805,755
1,695,066 2,193,589 1,283,889 1,279,257 1,920,200 2,111,360 2,276,497 2,173,071 4,034,900 3,288,532 2,401,037 113,101 605,510 98,661 32,128 86,041 166,024 1,420,734 1,237,398 1,208,288
1,260,395 823,974 747,910 634,891 667,950 706,303 740,372 722,007 312,367 14,687,531 14,943,137 13,700,930 15,430,574 13,116,785 10,559,985 1,488,472 1,533,900 1,558,338 1,464,532 1,527,051
1,363,359 1,099,653 1,046,994 801,967 519,235 350,949 315,941 605,422 905,452 936,793 ---3,193,547 3,486,346 3,297,098 1,983,767 1,878,000 1,679,300 $ 17,881,078 $ 18,429,483 $ 16,998,028
$ 17,414,341 $ 14,994,785 $ 12,239,285 $ 353,836 $ 422,897 $ 533,482 $ 370,609 $ 376,327 $ 247,774 85,009 92,853 140,545 1,356,385 1,660,032 824,821 903,285 891,021 887,819 828,907 850,887
799,637 83,378 85,945 72,472 56,199 48,590 46,736 786,016 192,676 407,898 2,802,511 1,144,528 920,829 835,607 1,014,481 1,301,438 1,781,954 1,353,959 640,894 3,047,131 2,699,873 3,343,654
7,196,565 5,434,323 3,480,691 1,438,233 1,652,288 1,580,407 1,381,817 1,648,308 1,377,245 523,989 344,813 375,768 434,818 201,890 168,451 347,189 408,875 1,220,823 -----6,998 13,582
67,576 -494,098 500,428 1,056,562 2,289,986 2,451,212 1,149,437 2,803,509 2,906,404 4,240,558 4,120,203 4,368,986 2,695,133 $ 5,850,640 $ 5,606,277 $ 7,584,212 $ 11,316,768 $ 9,803,309
$ 6,175,824 $ (11,640,400) $ (12,243,264) $ (10,357,276) $ (8,234,009) $ (7,682,462) $ (7,079,294) (390,038) (579,942) 943,460 2,136,436 2,490,986 1,015,833 $ (12,030,438) $ (12,823,206)
$ (9,413,816) $ (6,097,573) $ (5,191,476) $ (6,063,461) continued… 2006 Fiscal Year 113
CITY OF SEBASTIAN, FLORIDA Changes in Net Assets Last Ten Fiscal Years 2012 2010 2009 General revenue and other changes in net assets Governmental Activities: Property taxes, levied
for general purposes $3,063,495 $ 3,453,778 $ 4,164,128 $ 4,801,924 Sales and use taxes 4,852,413 4,751,021 4,765,200 4,670,106 Franchise fees 1,124,568 1,184,686 1,228,692 1,327,253
State shared revenues not restricted to specific programs 1,934,733 1,868,555 1,825,215 1,821,347 Investment earnings 82,129 111,943 144,432 261,203 Miscellaneous 201,538 171,119 149,453
140,512 Transfers 22,489 -(7,020) -Total governmental activities 11,281,365 11,541,102 12,270,100 13,022,345 Business-type activities: Investment earnings -4,026 15,658 5,544 Miscellaneous
4,125 -1,194 -Transfers (22,489) -7,020 -Total business-type activities (18,364) 4,026 23,872 5,544 Total primary government general revenue $ 11,263,001 $ 11,545,128 $ 12,293,972 $
13,027,889 Change in net assets Governmental activities $ 37,319 $ (321,782) 3 $ 2,140,287 $ 1,059,819 Business-type activities (514,416) 158,577 136,851 476,037 Total primary government
change in net assets $ (477,097) $ (163,205) $ 2,277,138 $ 1,535,856 123 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. The large increases in transfers from 2005 to 2006 are mainly due to the one time transfer of building reserve to building fund due to the reclassification
of fund type for the building operation. The reduction in the change in net assets for governmental funds can be attributed to less income being received resulting in a smaller spread
between revenues and expenditures, thereby using net assets for revenue shortfalls. Fiscal Year 2011 114
2008 2007 2005 2004 2003 $ 5,149,047 $ 5,089,841 $ 4,645,050 $ 4,017,555 $ 3,420,971 $ 2,944,456 4,753,718 4,776,691 4,907,906 4,718,691 4,035,545 3,705,922 1,199,762 1,106,698 1,253,749
886,390 770,600 756,194 1,989,606 2,083,523 2,242,292 2,138,020 1,721,956 1,523,524 634,919 1,147,931 827,224 398,518 398,158 241,358 159,300 192,300 256,780 118,760 388,562 79,662 -42,720
(1,414,205) (106,500) (445,844) (534,000) 13,886,352 14,439,704 12,718,796 12,171,434 10,289,948 8,717,116 54,237 137,207 125,498 45,709 23,774 21,789 ---300 261 9,072 -(42,720) 1,414,205
2 106,500 445,844 534,000 54,237 94,487 1,539,703 152,509 469,879 564,861 $ 13,940,589 $ 14,534,191 $ 14,258,499 $ 12,323,943 $ 10,759,827 $ 9,281,977 $ 2,245,952 $ 2,196,440 $ 2,361,520
$ 3,937,425 $ 2,607,486 $ 1,637,822 (335,801) (485,455) 2,483,163 2,288,945 2,960,865 1,580,694 $ 1,910,151 $ 1,710,985 $ 4,844,683 $ 6,226,370 $ 5,568,351 $ 3,218,516 concluded Fiscal
Year 2006 115
CITY OF SEBASTIAN, FLORIDA Fund Balances, Governmental Funds Last Ten Fiscal Years 2010 Governmental funds General fund: Nonspendable $ 370,450 $ 346,995 $ 352,248 $ 357,696 Committed
2,861,708 2,949,139 3,063,585 3,083,463 Assigned 35,707 21,911 31,656 1,983 Unassigned 1,734,307 2 1,784,413 2 2,164,910 2,324,972 Total General fund 5,002,172 5,102,458 5,612,399 5,768,114
All other governmental funds: Nonspendable 1,289,693 1,494,779 859,463 830,029 Restricted 4,371,826 4,748,376 7,897,580 8,557,389 1 Committed 719,686 ---Total all other governmental
funds 6,381,205 6,243,155 8,757,043 9,387,418 Total governmental funds $ 11,383,377 $ 11,345,613 $ 14,369,442 $ 15,155,532 12 Reduction in unassigned fund balance to fund operation The
significant reduction in restricted fund balance reported in all other governmental funds from 2008 to 2009 is a result of the significant completion of the Indian River Drive/Main Street
and Pedestrian Bridge projects, along with the significant construction completed on the Collier Canal Retrofit project. 2012 2011 2009 Fiscal Year 116
Table III -Unaudited 2008 2007 2006 $ 381,528 $ 368,609 $ 106,192 $ 160,964 $ 59,921 $ 141,667 3,502,560 3,742,617 4,844,674 5,546,959 2 5,411,621 2 3,924,363 2 33,453 19,055 9,856 3,761
5,140 7,706 2,390,641 2,260,507 1,518,350 391,783 2 (361,790) 2 (191,886) 2 6,308,182 6,390,788 6,479,072 6,103,467 5,114,892 3,881,850 771,927 694,506 656,160 578,367 542,999 463,402
12,446,260 12,926,545 14,783,299 13,392,801 2 13,815,771 13,339,097 ------13,218,187 13,621,051 15,439,459 13,971,168 14,358,770 13,802,499 $ 19,526,369 $ 20,011,839 $ 21,918,531 $ 20,074,635
$ 19,473,662 $ 17,684,349 Fiscal Year2005 2004 2003 117
CITY OF SEBASTIAN, FLORIDA Changes in Fund Balances For Governmental Funds For the Last Ten Fiscal Years 2012 2011 2010 2009 Revenues Taxes $ 8,465,990 $ 8,762,729 $ 9,525,074 $ 10,065,806
Franchise fees 1,124,568 1,184,686 1,228,692 1,327,253 Charges for services 22,431 1,121,967 1,154,739 1,186,161 Licenses, fees and permits 2,088,038 23,646 33,182 29,151 Fines and penalties
58,500 81,534 90,948 88,938 Intergovernmental 1,158,075 2,249,447 4,572,550 3,270,854 Impact fees 57,575 42,250 26,000 13,975 Special assessments 86,516 --3,849 Investment earnings 216,091
103,795 228,216 250,914 Other revenues 201,888 224,823 169,039 176,430 Total revenues 13,479,672 13,794,877 17,028,440 16,413,331 Expenditures Current: General government 2,410,345 2,539,211
2,699,289 2,976,896 Public safety 4,523,802 5,030,708 4,938,147 4,926,714 Physical environment 1,042,349 1,166,309 1,210,823 1,448,067 Transportation 1,208,411 1,217,521 1,405,310 1,696,254
Economic environment 138,531 188,918 129,352 167,470 Culture and recreation 876,502 903,836 977,780 1,148,408 Debt service: Principal 3,321,000 1,203,000 2,142,190 1,218,995 Interest
472,399 521,152 577,593 706,093 Capital outlay 1,767,058 4,048,051 6,189,026 6,495,271 Total expenditures 15,760,397 16,818,706 20,269,510 20,784,168 Revenue over (under) expenditures
$ (2,280,725) $ (3,023,829) $ (3,241,070) $ (4,370,837) Other Financing Sources (Uses) Issuance of long-term debt 2,296,000 -2,462,000 -Transfers in 3,694,765 5,376,658 4,486,626 5,196,376
Transfers out (3,672,276) (5,376,658) (4,493,646) (5,196,376) Total other financing sources (uses) 2,318,489 -2,454,980 -Net change in fund balances $ 37,764 $ (3,023,829) $ (786,090)
$ (4,370,837) Debt service as a percentage of noncapital expenditures 27.1% 13.5% 19.3% 13.5% Fiscal Year 118
Table IV -Unaudited 2008 2007 2006 2005 2004 2003 $ 10,504,155 $ 10,554,617 $ 10,269,451 $ 9,483,664 $ 8,179,344 $ 7,325,932 1,199,762 1,106,698 1,253,749 886,390 770,600 756,194 1,209,617
1,271,102 517,605 936,530 962,677 921,119 163,471 186,875 244,370 1,587,675 1,867,920 878,097 65,246 71,314 77,776 95,699 118,918 119,752 2,674,761 2,463,628 2,852,293 5,561,695 3,115,520
1,785,237 32,825 56,875 337,675 385,775 557,700 395,850 --819,286 11,023 28,424 22,560 647,312 1,062,043 827,224 398,518 398,158 241,358 461,553 244,629 294,695 144,057 378,268 91,078
16,958,702 17,017,781 17,494,124 19,491,026 16,377,529 12,537,177 3,087,789 2,999,652 2,494,863 2,974,736 2,231,532 1,977,033 4,677,618 4,700,447 3,813,908 4,349,639 3,950,228 3,427,711
1,368,593 1,301,719 1,850,642 910,794 1,125,727 1,247,452 1,545,045 1,733,697 1,672,983 3,616,076 2,863,397 1,610,761 113,101 80,279 98,661 32,128 86,041 166,024 1,079,379 975,087 926,846
995,406 747,131 629,835 1,326,182 1,284,418 1,248,378 1,218,023 985,974 361,024 611,554 643,305 678,682 711,736 887,564 158,043 3,634,910 5,242,590 1,451,060 3,975,015 9,021,558 3,859,709
17,444,171 18,961,194 14,236,023 18,783,553 21,899,152 13,437,592 $ (485,469) $ (1,943,413) $ 3,258,101 $ 707,473 $ (5,521,623) $ (900,415) ----7,756,780 9,500,000 5,679,896 5,158,296
3,785,981 3,745,265 2,745,754 2,992,908 (5,679,896) (5,115,576) (5,200,186) (3,851,765) (3,191,598) (3,526,908) -42,720 (1,414,205) (106,500) 7,310,936 8,966,000 $ (485,469) $ (1,900,693)
$ 1,843,896 $ 600,973 $ 1,789,313 $ 8,065,585 14.0% 14.1% 15.1% 13.0% 14.5% 5.4% Fiscal Year 119
CITY OF SEBASTIAN, FLORIDA Program Revenues by Function/Program Last Ten Fiscal Years 2012 2011 2010 Program Revenue Governmental activities: General government $ 230,550 $ 243,039 $
209,144 $ 226,003 Public safety 228,392 234,437 304,630 299,119 Physical environment 876,693 930,018 881,338 1,408,829 Transportation 560,055 743,383 614,305 612,335 Economic environment
13,998 -2,556,872 6,000 Culture and recreation 293,519 103,606 88,046 831,938 Total governmental activities 2,203,207 2,254,483 4,654,335 3,384,224 Business-type activities: Charges
for services: Golf Course 1,394,892 1,382,421 1,335,647 1,406,955 Airport 641,455 1,385,569 1,373,551 1,795,399 2 Building 1 426,215 401,021 356,264 358,948 Total business-type activities
2,462,562 3,169,011 3,065,462 3,561,302 Total primary government $ 4,665,769 $ 5,423,494 $ 7,719,797 $ 6,945,526 12 2009 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. The significant increase in business-type activities for the airport from 2008 to 2009 is
mainly due to capital grant funding from the Florida Department of Transportation and the Federal Aviation Administration. Fiscal Year 120
Table V -Unaudited 2008 2007 2006 2005 2004 2003 $ 377,305 $ 450,267 $ 579,591 $ 587,527 $ 392,471 $ 1,095,902 515,997 249,756 306,702 1,537,557 1,850,710 929,952 1,256,277 891,021 890,092
898,821 914,318 1,136,507 619,949 721,103 900,365 3,392,883 1,670,534 1,580,076 --30,059 ---277,603 387,726 636,845 779,777 606,290 663,459 3,047,131 2,699,873 3,343,654 7,196,565 5,434,323
5,405,896 1,438,233 1,652,288 1,587,405 1,395,399 1,715,884 1,377,245 1,018,087 845,241 1,432,330 2,724,804 2,653,102 1,317,888 347,189 408,875 1,220,823 ---2,803,509 2,906,404 4,240,558
4,120,203 4,368,986 2,695,133 $ 5,850,640 $ 5,606,277 $ 7,584,212 $ 11,316,768 $ 9,803,309 $ 8,101,029 Fiscal Year 121
CITY OF SEBASTIAN, FLORIDA Table VI -Unaudited Tax Revenue by Source Governmental Funds For the Last Ten Fiscal Years (Rate per $1,000 of assessed value) Fiscal Year Ended Property Public
Sales Motor Millage Tax Year September 30 Taxes Utility Tax Fuel Total Rate 2002 2003 $ 2,944,456 $ 1,780,717 $ 1,925,205 $ 675,554 $ 7,325,932 4.5904 2003 2004 3,420,971 1,854,632 2,180,913
722,828 8,179,344 4.5904 2004 2005 4,017,555 2,005,124 2,713,567 747,418 9,483,664 4.5904 2005 2006 4,645,050 2,183,164 2,724,742 716,495 10,269,451 3.9325 2006 2007 5,089,841 2,216,381
2,560,310 688,085 10,554,617 3.0519 2007 2008 5,149,047 2,250,781 2,502,937 601,390 10,504,155 2.9917 2008 2009 4,801,924 2,341,458 2,328,648 593,776 10,065,806 3.3456 2009 2010 4,164,128
2,437,050 2,328,150 595,746 9,525,074 3.3456 2010 2011 3,453,778 2,392,345 2,358,676 557,930 8,762,729 3.3041 2011 2012 3,063,495 2,387,553 2,464,240 550,702 8,465,990 3.3041 122
CITY OF SEBASTIAN, FLORIDA Table VII -Unaudited Direct and Overlapping Property Tax Rates For the Last Ten Fiscal Years (Rate per $1,000 of taxable value) Tax Fiscal Basic Debt Total
Total Basic Debt Year Year Rate Service Direct County 1 Rate Service Total Other 2 2002 2003 4.5904 0.0000 4.5904 8.0302 8.1020 0.6300 8.7320 1.43875 2003 2004 4.5904 0.0000 4.5904 7.9396
8.1790 0.5310 8.7100 1.69278 2004 2005 4.5904 0.0000 4.5904 7.3505 8.0190 0.4800 8.4990 1.43029 2005 2006 3.9325 0.0000 3.9325 5.6904 7.8800 0.3600 8.2400 1.60850 2006 2007 3.0519 0.0000
3.0519 5.3661 7.1630 0.2800 7.4430 1.47940 2007 2008 2.9917 0.0000 2.9917 5.1485 7.2680 0.2700 7.5380 1.38160 2008 2009 3.3456 0.0000 3.3456 6.2861 6.7600 0.2800 7.0400 1.11204 2009
2010 3.3456 0.0000 3.3456 6.2693 7.2960 0.3000 7.5960 1.33570 2010 2011 3.3041 0.0000 3.3041 6.2860 7.9200 0.3000 8.2200 1.35050 2011 2012 3.3041 0.0000 3.3041 6.9590 7.8940 0.3500 8.2440
1.35460 Note: 1 Millage includes General Fund, MSTUs, Emergency Services District and Land Bonds 2 All Special Taxing Districts Source: Indian River County Property Appraiser's Office
Tax rates are uniformly applied to taxable values based on a single millage rate determined by each taxing entity. The millage rate is expressed as $1.00 per $1,000 of the taxable value.
City Direct Rates Overlapping Rates County School Board 123
CITY OF SEBASTIAN, FLORIDA Actual Value of Taxable Property For the Last Ten Fiscal Years Tax Fiscal Assessed Estimated Assessed Estimated Year Year Value Actual Value Value Actual Value
2002 2003 $ 829,224,615 $ 1,036,530,769 $ 45,355,170 $ 45,355,170 2003 2004 946,293,950 1,182,867,438 48,613,628 48,613,628 2004 2005 1,157,275,164 1,446,593,955 51,330,277 51,330,277
2005 2006 1,526,923,406 1,908,654,258 51,827,624 51,827,624 2006 2007 2,124,615,672 2,655,769,590 55,913,696 55,913,696 2007 2008 2,054,408,055 2,568,010,069 64,899,942 64,899,942 2008
2009 1,933,934,630 2,417,418,288 62,476,508 62,476,508 2009 2010 1,650,311,449 2,062,889,311 56,920,223 56,920,223 2010 2011 1,392,267,434 1,740,334,293 55,234,086 55,234,086 2011 2012
1,273,059,710 1,591,324,639 48,922,492 48,922,492 Source: Indian River County Property AppraiserReal Property Personal Property 61.8% 63.1% 65.4% 66.7% 68.5% 67.8% 53.2% 54.2% 55.0%
53.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fiscal Year Ratio of Taxable to Actual Value 124
Table VIII -Unaudited Less: Total Total Ratio of Tax-Exempt Taxable Estimated Taxable to Property Value Actual Value Actual Value $ 205,977,066 $ 668,602,719 $ 1,081,885,939 61.8% 217,554,663
777,352,915 1,231,481,066 63.1% 228,262,825 980,342,616 1,497,924,232 65.4% 271,466,364 1,307,284,666 1,960,481,882 66.7% 322,318,753 1,858,210,615 2,711,683,286 68.5% 334,302,515 1,785,005,482
2,632,910,011 67.8% 676,808,522 1,319,602,616 2,479,894,796 53.2% 558,090,532 1,149,141,140 2,119,809,534 54.2% 460,752,786 986,748,734 1,795,568,379 55.0% 444,524,142 877,458,060 1,640,247,130
53.5% 125
CITY OF SEBASTIAN, FLORIDA Table IX -Unaudited Principal Property Tax Payers Current Year and Nine Years Ago Taxable Taxable Assessed Assessed Taxpayer Value Rank Value Rank Florida
Power & Light (Utility/Electric) $ 13,828,553 1 1.58 % $ 12,489,790 1 1.87 % Wal-Mart Stores, Inc. (Retail) 8,432,070 2 0.96 11,554,614 2 1.73 Park Place Community, LLC (Rental/Retail)
6,684,799 3 0.76 --------BW US 1, Inc. (Commercial) 6,147,300 4 0.70 6,290,380 4 0.94 IPF/Sebastian, LLC (Retail) 5,214,160 5 0.59 --------Bellsouth Communications (Utility/Telephone)
5,202,931 6 0.59 8,029,404 3 1.20 Hartwell Groves, Inc. (Commercial) 4,236,520 7 0.48 --------Sebastian Medical Suites (Healthcare) 3,891,480 8 0.44 --------Sebastian Inlet Marina &
Trading Co, Inc. (Restaurant/Hotel) 3,321,780 9 0.38 3,763,948 7 0.56 Angel Enterprises LLC (Retail) -WinnDixie CR512 Shopping Center 3,283,720 10 0.37 --------Ruth Guest House, Inc.
(Rental/Retail) ----------3 ,925,780 5 0.59 James T Turner (MHP/Rental) ----------3 ,784,200 6 0.57 Oyster Point Resort Condo (Time Share/Rental) ----------3 ,419,345 8 0.51 Comcast
of Florida, Inc. (Communications) ----------2 ,949,876 9 0.44 Sandy Pines LTD (Rental) ----------2 ,789,640 10 0.42 $ 60,243,313 6.85 % $ 58,996,977 8.83 % Total Taxable Value $ 877,458,060
$ 668,602,719 Source: Indian River County Property Appraiser 2012 Fiscal Year 2003 Fiscal Year Percentage Percentage of Total City of Total City Taxable Taxable Assessed Assessed Value
Value 6.85% 93.15%Concentration of 2012 Taxpayers Top Ten Taxpayers All Other Taxpayers 126
CITY OF SEBASTIAN, FLORIDA Table X -Unaudited Property Tax Levies and Collections For the Last Ten Fiscal Years Taxes Levied Collections Tax Fiscal for the in Subsequent Year Year Fiscal
Year Amount Years Amount 2002 2003 $ 2,862,650 $ 2,725,515 95.21 % 26,908 $ 2,752,423 96.15 % 2003 2004 3,216,940 3,130,521 97.31 34,247 3,164,768 98.38 2004 2005 3,888,488 3,723,912
95.77 1,712 3,725,624 95.81 2005 2006 4,426,281 4,300,217 97.15 39 4,300,256 97.15 2006 2007 4,747,938 4,537,100 95.56 9,429 4,546,529 95.76 2007 2008 4,919,994 4,634,338 94.19 2,906
4,637,244 94.25 2008 2009 4,441,535 4,225,106 95.13 1,694 4,226,800 95.17 2009 2010 3,844,658 3,716,797 96.67 17,723 3,734,520 97.14 2010 2011 3,260,316 3,144,864 96.46 11,294 3,156,158
96.81 2011 2012 2,899,209 2,799,146 96.55 9,279 2,808,425 96.87 Source: Indian River County Property Appraiser and Department of Revenue, Certification of Final Taxable Value, DR-422.
of Levy of Levy Collected within the Fiscal Year of the Levy Total Collections to Date Percentage Percentage -2 4 6 8 10 12 14 16 18 20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Millions Fiscal Year Total Tax Collections 127
CITY OF SEBASTIAN, FLORIDA Ratios of Outstanding Debt By Type For the Last Ten Fiscal Years Water Line Roadway Infrastructure Heavy Stormwater Golf Course Fiscal Assessment Improvement
Sales Tax Equipment Utility Revenue Revenue Year Bonds Notes Bonds Lease Bonds Bonds 2003 $ 77,615 $ 2,406,028 $ 9,500,000 $ 672,528 $ -$ 2,115,000 2004 -2,209,745 11,140,000 550,452
5,525,000 1,885,000 2005 -2,004,718 10,490,000 422,455 5,290,000 1,395,000 2006 -1,790,544 9,825,000 288,251 5,055,000 1,140,000 2007 -1,566,839 9,145,000 147,538 4,815,000 870,000 2008
-1,333,197 8,445,000 -4,570,000 590,000 2009 -1,089,203 7,725,000 -4,315,000 300,000 2010 -2,414,000 6,980,000 -4,055,000 -2011 -2,246,000 6,215,000 -3,785,000 -2012 -2,296,000 5,420,000
-3,505,000 -(1) Information not yet available Business-Type Governmental Activities Activities -20.00 40.00 60.00 80.00 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Millions Fiscal
Year Primary Government Debt 128
Table XI -Unaudited Total Primary Per Government Capita $ 14,771,171 0 .30 % $ 802 21,310,197 0 .36 1,100 19,602,173 0 .31 978 18,098,795 0 .25 835 16,544,377 0 .22 738 14,938,197 0
.19 652 13,429,203 0 .21 591 13,449,000 0 .20 587 12,246,000 0 .17 558 11,221,000 (1) 510 Income Percentage of Personal 129
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CITY OF SEBASTIAN, FLORIDA Table XII -Unaudited Ratios of General Bonded Debt Outstanding For the Last Ten Fiscal Years Fiscal Applicable Legal Per Year Debt Limit to Limit Debt Margin
Capita 2003 $ 33,430,136 $ 2,406,028 $ 31,024,108 7.20% $ 1,684 2004 38,867,646 2,209,745 36,657,901 5.69% 1,893 2005 49,017,131 2,004,718 47,012,413 4.09% 2,345 2006 65,364,233 1,790,544
63,573,689 2.74% 2,934 2007 92,910,531 1,566,840 91,343,691 1.69% 4,073 2008 89,250,574 1,333,197 87,917,377 1.49% 3,835 2009 65,980,131 1,089,203 64,890,928 1.65% 2,856 2010 57,457,057
2,414,000 55,043,057 4.20% 2,401 2011 49,337,437 2,246,000 47,091,437 4.55% 2,147 2012 43,872,903 2,296,000 41,576,903 5.23% 1,890 Note: Details regarding the city's outstanding debt
can be found in the notes to the financial statements. Debt Limit General Bonded Debt Outstanding Percentage of 131
CITY OF SEBASTIAN, FLORIDA Legal Debt Margin Information For the Last Ten Fiscal Years 2012 2011 2010 Debt Limit $ 43,872,903 $ 49,337,437 $ 57,457,057 Total net debt applicable to limit
2,296,000 2,246,000 2,414,000 Legal debt margin $ 41,576,903 $ 47,091,437 $ 55,043,057 Total net debt applicable to the limit as a percentage of debt limit 5.23% 4.55% 4.20% Assessed
value $ 1,321,982,202 Less: Exempt property (444,524,142) 877,458,060 Debt limit (5% of assessed value) 1 43,872,903 Debt applicable to limit: General obligations 11,221,000 Less: Revenue
bonds (8,925,000) Total net debt applicable to limit 2,296,000 Legal debt margin $ 41,576,903 1 Legal Debt Margin as a Percentage of Debt Limit Legal Debt Margin Calculation for Fiscal
Year 2012 Under the City's adopted financial policies, the City's outstanding general obligation debt should not exceed 5% of the assessed valuation of taxable property. The percentage
was dropped from 10% to 5% in fiscal year 2003. Fiscal Year 132
Table XIII -Unaudited 2009 2008 2007 2006 2005 2004 2003 $ 65,980,131 $ 89,250,274 $ 92,910,531 $ 65,364,233 $ 49,017,131 $ 38,867,646 $ 33,430,136 1,089,203 1,333,197 1,566,840 1,790,544
2,004,718 2,209,745 2,406,028 $ 64,890,928 $ 87,917,077 $ 91,343,691 $ 63,573,689 $ 47,012,413 $ 36,657,901 $ 31,024,108 1.65% 1.49% 1.69% 2.74% 4.09% 5.69% 7.20% Fiscal Year 133
CITY OF SEBASTIAN, FLORIDA Pledged-Revenue Coverage For the Last Ten Fiscal Years Less: Net Fiscal Gross Operating Available Year Revenue 1 Expenses 2 Revenue Principal Interest Total
Coverage 3 2003 $ 1,400,154 $ 968,052 $ 432,102 $ 220,000 $ 89,890 $ 309,890 1.39 2004 1,497,053 1,108,770 388,283 230,000 80,890 310,890 1.25 2005 1,395,436 1,023,002 372,434 240,000
71,490 311,490 1.20 2006 1,628,015 1,165,411 462,604 250,000 61,690 311,690 1.48 2007 1,701,171 1,218,382 482,789 255,000 51,590 306,590 1.57 2008 1,455,749 1,174,169 281,580 270,000
41,090 311,090 0.91 2009 1,408,535 1,178,144 230,391 570,000 49,860 619,860 0.37 2010 1,341,555 1,129,651 211,904 300,000 21,700 321,700 0.66 2011 -------2012 -------continued… 12345
Required coverage was 1.25. Final payment was made on September 30, 2010. Total revenues consist of stormwater utility fees and interest. Required coverage is 1.35. Total direct operating
expenses excludes depreciation, amortization, annual Airport lease payment and one time hurricane repair cost. Recreational Facilities Improvement and Refunding Revenue Bonds, Series
2001 Debt Service Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements. Total revenues including charges for services, rents and interest.
134
Table XIV -Unaudited Gross Revenues 4 Principal Interest Total Coverage 5 $ -$ -$ -$ --779,724 105,000 104,386 209,386 3.72 792,886 240,000 206,673 446,673 1.78 908,576 235,000 201,973
436,973 2.08 932,183 240,000 197,273 437,273 2.13 856,568 245,000 191,873 436,873 1.96 814,419 255,000 185,135 440,135 1.85 858,664 260,000 177,485 437,485 1.96 816,415 270,000 169,035
439,035 1.86 810,382 280,000 159,248 439,248 1.84 concluded Stormwater Utility Revenue Bonds, Series 2003 Debt Service 135
CITY OF SEBASTIAN, FLORIDA Demographic and Economic Statistics For the Last Ten Calendar Years Personal Per Income Capita (thousands Personal School Year Population of dollars) 1 Income
1 Enrollment 2 2003 18,425 $ 4,831,037 $ 40,162 $ 40,291 $ 4,340 6.8 % 2004 19,365 5,071,395 40,677 41,522 4,917 6.7 2005 20,048 6,386,893 50,369 44,450 5,258 4.7 2006 21,666 7,217,157
55,817 45,034 5,604 4.1 2007 22,426 7,810,408 59,419 47,563 5,117 5.5 2008 22,924 7,669,062 57,107 48,267 5 4,710 7.9 2009 22,722 7,610,327 56,303 43,685 5 3,751 13.0 2010 22,922 N/A
N/A N/A 5,167 14.4 2011 21,929 N/A N/A N/A 5,228 12.9 2012 21,995 4 4 4 5,208 11.3 Sources: 1234 Information not yet available. 5 Indian River County Property Appraiser Indian River
County School Board Florida Research & Economic Database (FRED). Information available for Indian River County Only. The school population appears to have declined as a result of loss
of job opportunities. Our community lost many construction jobs as a result of the declining economy. Note: School enrollment consists of Sebastian River High School, Sebastian River
Middle School, Liberty Magnet, Treasure Coast Elementary, Pelican Island Elementary, Sebastian Elementary and Sebastian Charter Junior High School. Median Household Income 1 Unemployment
Rate 1 136
Table XV -Unaudited Property Total Taxes Taxable Per Property Capita Value 3 5.3 % $ 159.81 $ 668,602,719 4.7 1 76.66 777,352,915 3.8 2 00.40 980,342,616 3.4 2 14.39 1,307,284,666 4.1
2 26.96 1,858,210,615 6.3 2 24.61 1,785,005,482 10.5 2 11.33 1,319,602,616 11.9 1 81.67 1,149,141,140 10.6 1 57.50 986,748,734 8.6 1 39.28 877,458,060 State Unemployment Rate 137
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CITY OF SEBASTIAN, FLORIDA Table XVI -Unaudited Principal Employers Current Year and Nine Years Ago Employees Rank Employees Rank School District of Indian River County (Government)
2,013 1 3.55 % 1,945 1 3.82 % Indian River Medical Center (Healthcare) 1,608 2 2.83 1,100 3 2.16 Indian River County (Government) 1,354 3 2.39 1,333 2 2.62 Publix Supermarkets (Food/Beverage)
1,006 4 1.77 801 4 1.57 Wal-Mart (Retail) 727 5 1.28 540 8 1.06 Piper Aircraft, Inc. (Manufacturer) 700 6 1.23 752 5 1.48 Sebastian River Medical Center (Healthcare) 569 7 1.00 500 9
0.98 John's Island (Residential/Resort) 550 8 0.97 500 9 0.98 City of Vero Beach (Government) 492 9 0.87 607 7 1.19 Visiting Nurse Association (Healthcare) 399 10 0.70 Gracewood Fruit
Packing (Agriculture) 700 6 1.38 Hale Indian River Groves (Agriculture) 500 9 0.98 Sun Ag, Inc. 475 10 0.93 9,418 16.59 % 9,753 19.15 % Total Average County Employees 56,732 50,904 Source:
Indian River County Community Development Report. Note: Principal employrs information available for Indian River County Only. Employer Percentage of Total County Employment 2012 Percentage
of Total County Employment 2003 139
CITY OF SEBASTIAN, FLORIDA Full-Time Equivalent City Government Employees By Function For the Last Ten Fiscal Years 2012 2009 2008 2007 General government City council 2.5 2.5 2.5 2.5
2.5 2.5 City manager 2.0 2.0 2.5 2.5 2.5 2.0 City clerk 3.0 3.0 3.0 3.0 3.0 4.0 City attorney ---4 2.0 2.0 2.0 Administrative 5.0 5.0 5.0 ---Finance ---2 5.0 5.0 5.0 Management information
3.0 4.0 3.0 3.0 3.0 3.0 Human resources ---2 2.0 3.0 3.0 Facilities maintenance 3.0 2.0 2.0 2.0 2.0 2.0 Planning & Zoning 5 3.0 4.0 5.0 5.0 5.0 5.0 Public safety Police 55.0 58.0 58.0
59.0 58.0 57.0 Building 4.0 5.0 5.0 5.0 6.0 11.0 Code enforcement 3.0 3.0 4 2.5 2.5 2.5 3.0 Transportation Roads and drainage 10.0 12.0 12.0 3 10.0 10.0 11.5 Central garage 3.5 2.5 3.5
3.5 2.5 3.5 Airport 3.0 3.0 3.0 3.0 3.0 3.0 Physical environment Cemetery 1.0 1.0 2.0 2.0 2.0 2.0 Engineering ---3 7.0 7.0 9.0 Stormwater utility 9.0 12.0 12.0 11.0 13.0 13.0 Culture
and recreation Parks and recreation 20.0 21.0 23.0 23.5 23.5 23.5 Golf course 10.0 10.5 10.5 9.0 9.0 12.5 Total 140.0 150.5 154.5 162.5 164.5 177.5 Source: City of Sebastian, Florida
2002-2012 Annual Budgets Method: Using 1.0 for each full-time employee and 0.5 for each part-time and seasonal employee. 12 Finance and Human Resources were combined to form Administrative
starting FY 2010. 34 City attorney position was contracted out and assistant went full time to code enforcement. 5 Growth Management was renamed to Planning Zoning to better describe
their function. Engineering department was dismantled, intern program was ceased. 2 employees were transferred to Roads and Drainage and 1 employee was transferred to Stormwater. Function
2011 2010 Full-time Equivalent Employees Code enforcement division was transferred out of the Police department in FY 2006 and transferred back in FY 2009. 140
Table XVII -Unaudited 2005 2004 2003 2.5 2.5 2.5 2.5 2.0 5.0 4.0 4.0 4.5 4.0 4.0 4.0 2.0 2.0 1.0 1.0 ----6.0 5.0 5.0 5.0 3.0 2.0 2.0 2.0 3.0 3.0 3.0 3.0 2.0 2.0 -4.0 4.0 4.0 4.0 4.0
58.0 1 59.0 56.5 54.5 11.0 9.0 8.0 7.0 3.0 1 ---12.5 12.5 14.5 11.5 3.5 3.0 3.0 3.0 3.5 3.5 2.5 2.5 2.0 2.0 2.0 2.0 8.0 8.0 8.0 7.5 13.0 13.0 12.0 12.0 24.5 23.5 17.5 16.5 12.5 12.5
13.5 13.5 180.5 175.5 163.0 159.5 2006 Full-time Equivalent Employees 141
CITY OF SEBASTIAN, FLORIDA Operating Indicators By Function For the Last Ten Fiscal Years 2012 2011 2010 2009 General government Number of annexations approved --1 3 Acres of annexed
property --5.90 26.00 Purchase orders issued 201 228 216 288 Public Safety Police Physical arrests 441 500 487 543 Traffic violations 4,319 5,941 4,083 4,849 Parking violations 167 242
87 50 Building Construction permits issued 1 66 51 36 23 Estimated value of construction (in millions) $ 14.7 $ 10.2 $ 6.6 $ 5.1 Transportation Road maintenance (man hours) 500 700 1,264
600 Asphalt for road maintenance (tons) 50 50 103 328 Concrete for road maintenance (yards) 2 ----Physical environment Cemetery Cemetery internments 65 54 66 74 Grave deeds sold 38 34
33 39 Stormwater Mile of swales maintained 280 280 280 280 Mile of ditches maintained 50 50 50 50 Road crossing maintained 50 40 40 30 Culture and recreation Program participants 9,713
8,649 11,701 13,465 Number of discount cards 786 735 844 879 Number of golf course memberships 88 94 96 95 Average daily golf revenue $ 3,822 $ 3,787 $ 3,673 $ 4,000 Sources: City of
Sebastian Police Department, Growth Management, Public Works, Golf Course and Building Department. 1 New commercial and residential only. 2 All road maintenance utilized asphalt, no
concrete curbing was installed. Function Fiscal Year 142
Table XVIII -Unaudited 2008 2007 2006 2005 2004 2003 -1 1 1 6 3 -3.87 3.30 25.55 484.00 80.00 254 284 293 369 408 372 662 697 744 786 653 557 4,418 7,221 6,291 5,457 5,431 1,939 208
289 880 303 3,801 632 55 104 506 774 577 544 $ 13.3 $ 22.5 $ 88.3 $ 114.7 $ 112.3 $ 82.7 538 888 512 100 878 850 358 210 127 125 88 79 --300 -283 277 68 69 76 79 86 81 46 49 56 56 69
45 280 280 280 280 280 280 50 50 50 50 50 50 30 30 30 30 30 30 12,910 14,177 8,004 5,504 7,498 N/A 950 1,004 2,690 1,000 993 855 97 108 119 85 116 137 $ 3,988 $ 4,661 $ 4,441 $ 3,844
$ 4,551 $ 3,836 Fiscal Year 143
CITY OF SEBASTIAN, FLORIDA Capital Asset Statistics By Function For the Last Ten Fiscal Years 2012 2011 2010 2009 General Government Square footage occupied 21,500 21,500 21,500 21,500
Departmental vehicles 1 3 3 3 Public safety Police stations 1 1 1 1 Police department Square footage 25,600 25,600 25,600 25,600 Building department Square footage 2,500 2,500 2,500
2,500 Police vehicles 66 67 63 63 Building inspector vehicles 3 3 3 4 Transportation Streets (miles) 156 156 156 156 Streetlights 1 1,228 1,236 1,230 1,240 Airport 1 1 1 1 Public service
vehicles 17 19 22 18 Physical environment Public service vehicles 9 9 15 7 Culture and recreation Parks 18 18 18 18 Recreation centers 2 2 2 2 Park acreage 315.01 315.01 315.01 233.79
Recreation center square footage 4,859 4,859 4,859 4,859 Park maintenance vehicles 13 14 13 13 Golf course 1 1 1 1 Sources: City of Sebastian Administrative Services Department and Park
and Recreation Division 1 This number represents actual unmetered street lights in the City (source: Florida Power & Light -January billing). Function Fiscal Year 144
Table XIX -Unaudited 2008 2007 2006 2005 2004 2003 21,500 21,500 21,500 21,500 5,516 5,516 3 3 3 5 2 2 1 1 1 1 1 1 25,600 25,600 25,600 25,600 8,700 8,700 2,500 2,500 2,500 2,500 1,716
1,716 62 57 53 52 47 42 4 5 6 5 4 4 156 156 156 156 156 150 1,229 1,309 3,808 3,555 3,543 3,543 1 1 1 1 1 1 23 21 19 14 24 18 11 10 12 13 6 7 15 14 14 12 12 12 2 2 2 2 2 2 233.79 229.37
229.37 223.37 223.37 223.37 4,859 4,859 4,859 4,859 4,859 4,859 13 12 11 10 8 6 1 1 1 1 1 1 Fiscal Year 145
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March 13, 2013
To the Citizens of the City of Sebastian, Florida:
TheCityofSebastian,FloridaislocatedinIndianRiverCountyapproximatelymidwaythroughtheeast
coastoftheFloridaPeninsula(betweenMelbourneandVeroBeach)inanareaknownastheTreasure
Coast.ItisrecognizedastheHomeofPelicanIsland,thefirstdesignatedwildliferefugeintheUnited
States,aMillenniumCity,andaTreeCityUSA.ItwasfirstincorporatedastheTownofSebastianin
1924.Inthelate1950sGeneralDevelopmentCorporationpurchasedthelandfromtheMacklefamily
of Miami and began the development of a planned community that is now the City of Sebastian.
WearesubmittingtheComprehensiveAnnualFinancialReportoftheCityofSebastian,Floridaforthe
fiscalyearendedSeptember30,2012.Statelawrequiresthateverygeneral-purposelocalgovernment
publishwithinsixmonthsofthecloseofeachfiscalyearacompletesetofauditedfinancial
statements.ThisreportispublishedtofulfillthatrequirementforthefiscalyearendedSeptember
30, 2012.
Managementassumesfullresponsibilityforthecompletenessandreliabilityoftheinformation
containedinthisreport,basedonacomprehensiveframeworkofinternalcontrolthatisestablished
forthispurpose.Becausethecostofinternalcontrolshouldnotexceedanticipatedbenefits,the
objectiveistoprovidereasonable,ratherthanabsolute,assurancethatthefinancialstatementsare
free of any material misstatements.
Chapter218.39,FloridaStatutesrequiresthatthefinancialstatementsoftheCityofSebastianbe
auditedbyacertifiedpublicaccountantselectedbytheCityCouncil.TheCity’sindependentCertified
PublicAccountants,RehmannRobson,hasissuedanunqualified("clean")opinionontheCityof
Sebastian’sfinancialstatementsfortheyearendedSeptember30,2012.Theindependentauditors’
reportislocatedonpage13and14.Management’sdiscussionandanalysis(MD&A)immediatelyfollows
theindependentauditors’reportandprovidesanarrativeintroduction,overview,andanalysisofthe
basicfinancialstatements.TheMD&Acomplementsthisletteroftransmittalandshouldbereadin
conjunction with it.
Profile of the Government
TheCityhasapopulationof21,995livinginanareaofapproximately14.6squaremiles.TheCityis
empoweredtolevyapropertytaxonbothrealandpersonalpropertylocatedwithinitsboundaries.It
alsoisempoweredbystatestatutetoextenditscorporatelimitsbyannexation,whichithasdone
from time to time.
3
TheCityisaFloridamunicipalcorporationwithafive-memberCityCouncil.Councilmembersservea
two-yearterm.AnnualelectionsareheldonthefirstTuesdayfollowingthefirstMondayinNovember
andtwomembersareelectedineven-numberedyearsandthreemembersareelectedinodd-
numberedyears.Electionsarenon-partisanandat-large.MayorandViceMayorareelectedfrom
amongthemembersofeverynewlyseatedCouncilataSpecialmeetingfollowingtheelectioneach
year. The City has operated under a Council-City Manager form of government since 1989.
TheCityprovidesawiderangeofservicesincludinggeneralgovernmentadministration,police
protection,theconstructionandmaintenanceoflocalroads,publicworks,recreationalandcultural
activities,agolfcourse,ageneralaviationairport,andabuildingdepartmenttoenforcebuilding
codes.
ThisreportincludesallfundsoftheCity.InevaluatingtheCityasareportingentity,wehaveincluded
allcomponentunitsforwhichtheCityCouncilisfinanciallyaccountable.Thecomponentunitshave
beenblendedwiththefinancialstatementspresentedforthePrimaryGovernmentbecausethe
componentunit’sgoverningbodyisthesameastheCityCouncilorbecausethecomponentunit
exclusivelyservestheCity.TheblendedcomponentunitsaretheRiverfrontRedevelopmentAgency
and the Sebastian Police Officer’s Pension Trust Fund.
Local Economy
Theregion(whichincludestheCityofSebastianandthesurroundingunincorporatedareawithinthe
samecounty)hasafluctuatinglaborforcedependingonagriculturaldemandandisastrong
retirementcommunity.Althoughthelaborforcefluctuates,unemploymentintheregionsteadily
declinedthrough2006butthenincreasedforthenextfiveyearstoarangeof13-14%.AsofOctober
12,2012,theFloridaResearch&EconomicDatabasereportedaslightlyimprovedunemploymentrate
of10.2%.Theoverallunemploymentratefortheareahashistoricallybeengreaterthanthatofthe
StateofFlorida.Thishighnumberisrepresentativeofthegeneraleconomicdifficultiesbeing
experienced in the area and the lack of job creation.
ThelargestmajoroccupationalgroupisOfficeandAdministrativeSupportOccupations(24.7%),
followedbySalesandRelatedOccupations(17.3%)andFoodPreparationandServingRelated
Occupations(12.4%).AccordingtotheU.S.CensusBureau(2000),86%ofthepopulationage25or
olderarehighschoolgraduatesand23.1%holdabachelor’sdegreeorhigher.Theareamedianagefor
2010was50.1pertheU.SCensusBureauandaveragewageis$34,684peryear,assuminga40-hour
work-week,pertheFloridaResearch&EconomicDatabase.ThegeographicalareaoftheCityof
Sebastian,justnorthoftheTreasureCoast,housesanumberofhigh-techindustriesincludingNASA
andvariousaerospaceindustry-relatedbusinesses.Inthepast,thisattractedaworkforcewitha
higherthanaverageeducationandtechnicalskillstothevicinitybutwiththeendoftheSpaceShuttle
program, the loss of these activities has affected job availability.
TheCouncilisrequiredtoadoptafinalbudgetnolaterthanthecloseofthefiscalyear.Thisannual
budgetservesasthefoundationfortheCity’sfinancialplanningandcontrol.Thebudgetisprepared
byfund,function(e.g.,transportation),anddepartment(e.g.,publicworks).Shiftsinappropriations
withinfundtotalsmaybedoneadministrativelyontheauthorityoftheCityManager.Totalfund
appropriation changes and use of contingency appropriations must be approved by the City Council.
4
ThevotersofIndianRiverCountyinNovember2003extendedtheInfrastructureSalesSurtaxinthe
amountof$.01per$1.00saleforanadditionalfifteenyearsandsevenmonthsbeginninginJanuary
2004.ThisInfrastructureSalesSurtaxisestimatedtoprovidetheCityinexcessof$40milliondollars
overthelifeoftheextensionfortheCity’semergencyvehicleandcapitalimprovementneeds.In
addition,theCityhasfundedanumberofothercapitalprojectswithimpactfeesandhasactively
pursuedgrantfundingforsomemajortransportationandenvironmentalimprovements.Ithasalso
employedtheuseofaCommunityRedevelopmentAgencythatisfundedbymeansoftax-increment
financing.
Themillagewasheldat3.3041forfiscalyear2012,althoughtheCityexperiencedanothersizable
declineintaxablevalue.Constructionactivityinfiscalyear2012continuedtobelow,withjust66
permitsbeingissuedfornewconstructioninfiscalyear2012withavalueof$14.7million.Thedecline
is primarily attributed to the slowdown of the housing market.
Generalfundunassignedfundbalanceandamountscommittedbythefinancialpoliciesresolution
basedon30%ofthegeneralfundexpendituresbudget,totaled48%ofthegeneralfundexpenditures
budget.TheCityhasbeensteadfastandrefusedtospenddownthesebalancesduetouncertainty
aboutthefutureduetotheslowdownofbuildingactivityandbecausetheCityunderstandsreliance
onaccumulatedfundbalancestofundoperatingexpendituresisnotaprudentfiscalstrategy.Tothis
end,thebudgetforfiscalyear2013incorporatesasmallmillageincreaseandplansfornoreduction
of fund balances.
Long-Term Financial Planning
Administration
Major Initiatives
Therewereseveralsignificantinitiativesduringthepastfiscalyear.Throughrequestforproposals,
theCitydeterminedtorefinancethe2010BankNotetoprovidemorestreetrepavingfundsanda
reductionintheinterestrate.Alsowithacompetitivebiddingprocess,theCitytransitionedall
bankingservicestoanewmaindepositorybankandachievedlowerbankservicefeesandahigher
interestrateonovernightdeposits.Additionally,theCitysuccessfullyparticipatedinrating
surveillanceactivitiesbyStandard&Poor’sandretained“A+”bondratingsontheStormwaterUtilities
RevenueBondsandtheDiscretionarySalesTaxRevenueBonds.Duringthebudgetprocessforfiscal
year2013,thereweresomenotableactionsconsideredimportanttomaintaininghealthybalancesin
uncommittedGeneralFundreserves.TheCityexperiencedfurtherreductionsintaxableproperty
values,aswellaslowercollectionsofelectricfranchisefeesandutilitytaxes.Therefore,some
measureswererequiredtobringprojectedrevenuestothelevelofspendingconsiderednecessary.
Theseincludedcontinuingmandatorymonthlyunpaidfurloughdaysandofferingnowageincreasesfor
theemployees;approvingamillageincreasesufficienttoreplacea$100,000annualtransferthathas
beenmadepreviouslyfromthelocaloptiongastaxes;andincreasingstormwaterfeestoaratethat
allowstheStormwaterFundtoreplaceequipmentandcontinuethe$500,000annualtransferto
General Fund.
5
Duringtheyear,significantchangeswerenegotiatedandapprovedbytheCityCounciltoensurethe
futureaffordabilityofthePoliceOfficer’sPensionPlan.NewPoliceOfficerswillcontribute8%oftheir
salariesandaccruea2.5%retirementbenefitforeachyearofservice,whilethoseemployedbefore
October1,2012willhavetheircontributionincreasefrom5%to8%ofsalariesandcontinuetoaccrue
a3.0%retirementbenefitforeachyearofservice.ThePoliceDepartmentcontinuestoparticipatein
theaccreditationprogramofferedbythecommissionforFloridaLawEnforcementAccreditation.The
designationencouragesthePoliceDepartmenttoestablishgoalsandobjectiveswithprovisionsfor
periodicupdating;constantreevaluationofwhetherdepartmentalresourcesarebeingemployedin
accordancewithagencygoals,objectivesandmission;constantreevaluationofdepartmentalpolicies
andproceduresasdocumentedinthedepartment’swrittendirectivesystem;toaccommodate
correctionofinternaldeficienciesandinefficienciesbeforetheybecomepublicproblems;andthe
opportunitytoreorganizewithouttheappearanceofpersonalattacks.Standardsandperformance
measurementsresultingfromtheaccreditationprocesswillcontinuetoguidebothSebastianPolice
Department and city administration in alleviating potentially adverse conditions.
Public Safety
Stormwater
TheCitycontinuesworkingontransportationimprovements.The2012banknoterefundedthe2010
banknoteandalsoprovided$175,000ofadditionalfundsforstreetrepaving.Fundshavealsobeen
allocatedfromdiscretionarysalestaxesandthecommunityredevelopmentagencytodevelopa
vehicleandboatparkingareaontheriverfront.Discretionarysalestaxeswillalsofundenhancements
tothe“presidentialstreets”withinthecommunityredevelopmentagencyarea.Otherprojectsbeing
plannedforfutureyearsincluderepairstothebridgeonBarberStreetandworkingwiththeCountyto
make intersection improvements.
TheSebastianMunicipalAirport’sinfrastructureisbeingdevelopedwiththeintentofattracting
economicdevelopmentandstimulatingthebusinessclimateinordertocreatejobsinthecommunity.
Infiscalyear2013,aseparatebudgetwasapprovedforexpensesmadetowardpromotingeconomic
development.ThecurrentMasterPlanservesastheguidingdocumentforairportplanning.Land
leasesareaprimarysourceofairportrevenuesandover150acresofpropertyisavailableforlease,
forbothaviationandnon-aviationbusinesses.Alsoimportantaresalesfromaself-servefueling
facility.
TheAirport’slimitedresourcescontinuetobeleveragedbyaggressivelyseekingandobtaininggrants
availablefromtheFloridaDepartmentofTransportation(FDOT)andFederalAviationAdministration
(FAA) to provide the funding needed to develop the necessary infrastructure. Planned improvements in
fiscalyear2013includedevelopmentoftheMainStreetAccessRoadandconstructingparallellighted
taxiwaysandendofrunwayidentificationlighting.Theseandotherventureswillhelpattractbusiness
to the Airport and thereby improve the financial positions of the Airport and City as a whole.
Airport
Traffic & Transportation
ThemainfocusofStormwatereffortexpendedforthepastfiscalyearhascontinuedtobeonthe
City'sStormwaterManagementProgram,includingcapitalprojects,maintenance,citizenresponseand
education,andforwardplanning.Infiscalyear2007,Citybeganaprogramtoupgradethecurrent
swalesystembyinstallingquarter-roundpiping.TheCityalsostartedoutsourcingtheswaleandditch
maintenanceworktoenableCitycrewstofocusondifferentStormwatermaintenancepractices.
Duringfiscalyear2012,drainageimprovementscontinuedwiththeinstallationofquarter-roundpiping
inadditionalareasoftheCity.Forfiscalyear2013,arateincreasefrom$4.00to$5.00permonthper
ERU(equivalentresidentialunit)wasapprovedinordertocontinuethequarter-roundprogramand
provide funding for equipment replacements.
6
CITY OF SEBASTIAN, FLORIDA
Organizational Chart
8
CITY OF SEBASTIAN, FLORIDA
GFOA Certificate of Achievement
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10
FINANCIAL SECTION
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12
INDEPENDENT AUDITORS' REPORT
March 13, 2013
Honorable Mayor and City Council
City of Sebastian, Florida
Wehaveauditedtheaccompanyingfinancialstatementsofthegovernmentalactivities,thebusiness-
typeactivities,eachmajorfund,andtheaggregateremainingfundinformationoftheCityof
Sebastian,Florida(the“City”),asofandfortheyearendedSeptember30,2012,whichcollectively
comprisetheCity’sbasicfinancialstatementsaslistedinthetableofcontents.Thesefinancial
statementsaretheresponsibilityofthemanagementoftheCityofSebastian,Florida.Our
responsibility is to express opinions on these financial statements based on our audit.
WeconductedourauditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStates
ofAmericaandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditing
Standards,issuedbytheComptrollerGeneraloftheUnitedStates.Thosestandardsrequirethatwe
planandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsare
freeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingthe
amountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccounting
principlesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverall
financialstatementpresentation.Webelievethatourauditandthereportoftheotherauditors
provides a reasonable basis for our opinions.
Inouropinion,basedonouraudit,thefinancialstatementsreferredtoabovepresentfairly,inall
materialrespects,therespectivefinancialpositionofthegovernmentalactivities,thebusiness-type
activities,eachmajorfund,andtheaggregateremainingfundinformationoftheCityofSebastian,
FloridaasofSeptember30,2012,andtherespectivechangesinfinancialpositionandcashflows,where
applicable,thereofandtherespectivebudgetarycomparisonfortheGeneralFundandeachmajor
specialrevenuefundfortheyearthenendedinconformitywithaccountingprinciplesgenerally
accepted in the United States of America.
InaccordancewithGovernmentAuditingStandards,wehavealsoissued,ourreportdatedMarch13,
2013,onourconsiderationoftheCityofSebastian,Florida’sinternalcontroloverfinancialreporting
andourtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrants,
agreementsandothermatters.Thepurposeofthatreportistodescribethescopeofourtestingof
internalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting,andnotto
provideanopinionontheinternalcontroloverfinancialreportingoroncompliance.Thatreportisan
integralpartofanauditperformedinaccordancewithGovernmentAuditingStandardsandshouldbe
considered in assessing the results of our audit.
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
13
The introductory and statistical sections, as listed in the table of contents, are presented for purposes
of additional analysis and are not a required part of the basic financial statements. Such information has
not been subjected to the auditing procedures applied in the audit of the basic financial statements,
and accordingly, we do not express an opinion or provide any assurance on it.
Ourauditwasconductedforthepurposeofformingopinionsonthefinancialstatementsthat
collectivelycomprisetheCity’sbasicfinancialstatements.Thecombiningandindividualnonmajorfund
financialstatementsandschedulesarepresentedforpurposesofadditionalanalysisandarenota
requiredpartofthebasicfinancialstatements.Suchinformationistheresponsibilityofmanagement
andwasderivedfromandrelatesdirectlytotheunderlyingaccountingandotherrecordsusedto
preparethebasicfinancialstatements.Theinformationhasbeensubjectedtotheauditingprocedures
appliedintheauditofthebasicfinancialstatementsandcertainadditionalprocedures,including
comparingandreconcilingsuchinformationdirectlytotheunderlyingaccountingandotherrecords
usedtopreparethebasicfinancialstatementsortothebasicfinancialstatementsthemselves,and
otheradditionalproceduresinaccordancewithauditingstandardsgenerallyacceptedintheUnited
StatesofAmerica.Inouropinion,theinformationisfairlystatedinallmaterialrespectsinrelationto
the basic financial statements as a whole.
AccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethatthe
management’sdiscussionandanalysisandtheschedulesoffundingprogressandemployercontributions
asnotedinthetableofcontentsbepresentedtosupplementthebasicfinancialstatements.Such
information,althoughnotapartofthebasicfinancialstatements,isrequiredbytheGovernmental
AccountingStandardsBoard,whoconsidersittobeanessentialpartoffinancialreportingforplacing
thebasicfinancialstatementsinanappropriateoperational,economic,orhistoricalcontext.Wehave
appliedcertainlimitedprocedurestotherequiredsupplementaryinformationinaccordancewith
auditingstandardsgenerallyacceptedintheUnitedStatesofAmerica,whichconsistedofinquiriesof
managementaboutthemethodsofpreparingtheinformationandcomparingtheinformationfor
consistencywithmanagement’sresponsestoourinquiries,thebasicfinancialstatements,andother
knowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinion
orprovideanyassuranceontheinformationbecausethelimitedproceduresdonotprovideuswith
sufficient evidence to express an opinion or provide any assurance.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS
15
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Financial Highlights
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·
·
·
Overview of the Financial Statements
SincetheManagement'sDiscussionandAnalysis(MD&A)isdesignedtofocusonthecurrentyearsactivities,resulting
changesandcurrentlyknownfacts,pleasereaditinconjunctionwiththeTransmittalLetterandtheCity'sfinancial
statements.
TheassetsoftheCityexceededitsliabilitiesatthecloseofthefiscalyear2012by$51,991,703(netassets).Of
thisamount,$3,648,188(unrestrictednetassets)maybeusedtomeettheCity'son-goingobligationstocitizens
and creditors.
TheCity'stotalnetassetsdecreasedby$477,097resultingfromanincreaseof$37,319fromgovernmental
activities and an decrease of $514,416 from business-type activities.
Governmental funds reported a combined ending fund balance of $11,383,377, a increase of $37,764 from the prior
year.Approximately15%ofthisamount,$1,734,307isunassignedandavailableforspending,adecreaseof
$50,106 from fiscal year 2011 due to total General Fund revenue being less than expenditures and transfers.
Thegolfcoursefundreportedafurtherreductioninthedeficitinunrestrictednetassets,primarilyduetono
longerhavingdebtservicepayments.Theairportdeficitistheresultofinvestmentincapitalassetsthatwill
ultimatelybebeneficial.Thebuildingenterprisefundreportedanincreaseinnetassetsforthefirsttimein
several years, as a result of an improved levels of construction activity.
Theannualreportconsistsofaseriesoffinancialstatements.TheStatementofNetAssetsandtheStatementof
ActivitiesprovideinformationabouttheactivitiesoftheCityasawholeandpresentalonger-termviewoftheCity's
finances.Forgovernmentalactivities,thefundfinancialstatementstellhowtheseserviceswerefinancedintheshort
termaswellaswhatremainsforfuturespending.FundfinancialstatementsalsoreporttheCity'soperationsinmore
detailbyprovidinginformationabouttheCity'smostsignificantfunds.Thenotestothefinancialstatementsprovide
additionalinformationthatisessentialtoafullunderstandingofthedataprovidedinthegovernment-wideandfund
financial statements.
Bothofthegovernment-widefinancialstatementsdistinguishfunctionsoftheCitythatareprincipallysupportedby
taxesandintergovernmentalrevenues(governmentalactivities)fromotherfunctionsthatareintendedtorecoverall
orasignificantportionoftheircoststhroughuserfeesandcharges(business-typeactivities).Thegovernmental
activitiesoftheCityincludegeneralgovernment,publicsafety,culturalandrecreation,andgeneraladministration.
The business-type activities of the City include the golf course, airport, and building operations.
Government-wideFinancialStatements.Thegovernment-widefinancialstatementsaredesignedtoprovidereaders
with a broad overview of the City’s finances, in a manner similar to a private-sector business.
ThestatementofnetassetspresentsinformationonalloftheCity’sassetsandliabilities,withthedifference
betweenthetworeportedasnetassets.Overtime,increasesordecreasesinnetassetsmayserveasauseful
indicator of whether the financial position of the City is improving or deteriorating.
Thestatementofactivitiespresentsinformationshowinghowthegovernment’snetassetschangedduringthemost
recentfiscalyear.Allchangesinnetassetsarereportedassoonastheunderlyingeventgivingrisetothechange
occurs,regardlessofthetimingofrelatedcashflows.Thus,revenuesandexpensesarereportedinthisstatement
forsomeitemsthatwillonlyresultincashflowsinfuturefiscalperiods(e.g.,uncollectedtaxesandearnedbut
unused vacation leave).
TheCityofSebastian's(the"City")discussionandanalysisisdesignedto(a)assistthereaderinfocusingonsignificant
financialissues,(b)provideanoverviewoftheCity'sfinancialactivity,(c)identifychangesintheCity'sfinancial
position,(d)identifyanymaterialdeviationsfromthefinancialplan,and(e)identifyindividualfundissuesor
concerns.
16
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
TheCitymaintainsfifteenindividualgovernmentalfunds.Informationispresentedseparatelyinthegovernmental
fundsbalancesheetandinthegovernmentalfundsstatementofrevenues,expenditures,andchangesinfundbalances
fortheGeneralFund,LocalOptionGasTax,DiscretionarySalesTaxFund,RiverfrontRedevelopmentFundand
DiscretionarySalesSurtaxRevenueBonds2003Fund,allofwhichareconsideredtobemajorfunds.Datafromthe
othertengovernmentalfundsarecombinedintoasingle,aggregatedpresentation.Individualfunddataforeachof
thesenonmajorgovernmentalfundsisprovidedintheformofcombiningstatementsandscheduleselsewhereinthis
report.
TheCityadoptsanannualappropriatedbudgetforitsGeneralFundandspecialrevenuefunds.Budgetarycomparison
statements have been provided for these funds to demonstrate compliance with this budget.
FundFinancialStatements.Afundisagroupingofrelatedaccountsthatisusedtomaintaincontroloverresources
thathavebeensegregatedforspecificactivitiesorobjectives.TheCity,likeotherstateandlocalgovernments,uses
fundaccountingtoensureanddemonstratecompliancewithfinance-relatedlegalrequirements.Allofthefundsof
the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
GovernmentalFunds.Governmentalfundsareusedtoaccountforessentiallythesamefunctionsreportedas
governmentalactivitiesinthegovernment-widefinancialstatements.However,unlikethegovernment-widefinancial
statements,governmentalfundfinancialstatementsfocusonnear-terminflowsandoutflowsofspendableresources,
aswellasonbalancesofspendableresourcesavailableattheendofthefiscalyear.Suchinformationmaybeuseful
in evaluating a government’s near-term financing requirements.
Becausethefocusofgovernmentalfundsisnarrowerthanthatofthegovernment-widefinancialstatements,itis
usefultocomparetheinformationpresentedforgovernmentalfundswithsimilarinformationpresentedfor
governmentalactivitiesinthegovernment-widefinancialstatements.Bydoingso,readersmaybetterunderstandthe
long-termimpactofthegovernment’snear-termfinancingdecisions.Boththegovernmentalfundbalancesheetand
thegovernmentalfundstatementofrevenues,expenditures,andchangesinfundbalancesprovideareconciliationto
facilitate this comparison between governmental funds and governmental activities.
ProprietaryFunds.TheCitymaintainsonetypeofproprietaryfunds.Enterprisefundsareusedtoreportthesame
functionspresentedasbusiness-typeactivitiesinthegovernment-widefinancialstatements.TheCityusesenterprise
funds to account for the golf course, airport, and buildings department.
Proprietaryfundsprovidethesametypeofinformationasthegovernment-widefinancialstatements,onlyinmore
detail.Theproprietaryfundfinancialstatementsprovideseparateinformationforthegolfcourse,airport,and
buildings department, which are considered to be major funds of the City.
FiduciaryFunds.Fiduciaryfundsareusedtoaccountforresourcesheldforthebenefitofpartiesoutsidethe
government.Fiduciaryfundsarenotreflectedinthegovernment-widefinancialstatementsbecausetheresourcesof
thosefundsarenotavailabletosupporttheCity’sownprograms.Theaccountingusedforfiduciaryfundsismuchlike
that used for proprietary funds.
17
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Net Assets
Governmental ActivitiesBusiness-type ActivitiesTotal
201220112012201120122011
Current and other assets12,067,998$ 12,664,876$ 758,107$ 1,289,505$ 12,826,105$ 13,954,381$
Capital assets, net42,713,256 43,779,203 11,181,823 11,850,561 53,895,079 55,629,764
Total assets54,781,254 56,444,079 11,939,930 13,140,066 66,721,184 69,584,145
Long-term liabilities12,742,412 14,172,911 196,000 236,472 12,938,412 14,409,383
Other liabilities738,664 1,008,309 1,052,405 1,697,653 1,791,069 2,705,962
Total liabilities13,481,076 15,181,220 1,248,405 1,934,125 14,729,481 17,115,345
Net assets:
Invested in capital assets,
net of related debt31,500,173 31,541,953 11,181,823 11,850,561 42,681,996 43,392,514
Restricted6,192,777 5,668,155 - - 6,192,777 5,668,155
Unrestricted3,607,228 4,052,751 (490,298) (644,620) 3,116,930 3,408,131
Total net assets41,300,178$ 41,262,859$ 10,691,525$ 11,205,941$ 51,991,703$ 52,468,800$
NotestotheFinancialStatements.Thenotesprovideadditionalinformationthatisessentialtoafullunderstanding
of the data provided in the government-wide and fund financial statements.
OtherInformation.Inadditiontothebasicfinancialstatementsandaccompanyingnotes,thisreportalsopresents
certain required supplementary information.
Government-Wide Financial Analysis
Aspreviouslystated,netassetsmayserveovertimeasausefulindicatorofagovernment’sfinancialposition.Inthe
case of the City, assets exceeded liabilities by $51,991,703 at the close of the most recent fiscal year.
AsubstantialportionoftheCity’snetassets,$42,681,996(82percent),reflectsitsinvestmentincapitalassets(e.g.,
land,buildings,machineryandequipment),lessanyrelatedoutstandingdebtusedtoacquirethoseassets.TheCity
usesthesecapitalassetstoprovideservicestocitizens;consequently,theseassetsarenotavailableforfuture
spending.AlthoughtheCity’sinvestmentinitscapitalassetsisreportednetofrelateddebt,itshouldbenotedthat
theresourcesneededtorepaythisdebtmustbeprovidedfromothersourcessincethecapitalassetsthemselves
cannot be used to liquidate these liabilities.
AnadditionalportionoftheCity’snetassetsof$5,661,519(11percent)representsresourcesthataresubjectto
externalrestrictionsonhowtheymaybeused.TheCitymayusetheremainingbalanceofunrestrictednetassetsof
$3,681,688 (7 percent) to meet its ongoing obligations to citizens and creditors.
Attheendofthecurrentfiscalyear,theCityisabletoreportpositivebalancesinallthreecategoriesofnetassets,
forthegovernmentasawholeandforitsseparategovernmentalactivities.Unrestrictednetassetswerenegativefor
business-type activities, but improved over the prior year for each of the individual enterprise funds.
18
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Change in Net Assets
Governmental ActivitiesBusiness-type ActivitiesTotal
201220112012201120122011
Revenues
Program revenues:
Charges for services1,224,609$ 1,219,707$ 2,305,916$ 2,268,671$ 3,530,525$ 3,488,378$
Operating grants187,333 196,534 6,563 - 193,896 196,534
Capital grants791,265 838,242 150,083 900,340 941,348 1,738,582
General revenues:
Property taxes3,063,495 3,453,778 - - 3,063,495 3,453,778
Other taxes4,852,413 4,751,021 - - 4,852,413 4,751,021
Intergovernmental1,934,733 1,868,555 - - 1,934,733 1,868,555
Other1,408,235 1,467,748 4,125 4,026 1,412,360 1,471,774
Total revenues13,462,083 13,795,585 2,466,687 3,173,037 15,928,770 16,968,622
Expenses
General government2,640,677 2,766,575 - - 2,640,677 2,766,575
Public safety5,025,274 5,546,632 - - 5,025,274 5,546,632
Physical environment 2,007,902 1,558,974 - - 2,007,902 1,558,974
Transportation1,800,432 2,263,367 - - 1,800,432 2,263,367
Economic environment170,960 208,518 - - 170,960 208,518
Cultural and recreation 1,239,512 1,227,198 - - 1,239,512 1,227,198
Interest and fiscal charges562,496 546,103 - - 562,496 546,103
Golf course- - 1,394,731 1,355,266 1,394,731 1,355,266
Airport- - 1,166,588 1,188,788 1,166,588 1,188,788
Building- - 397,295 470,406 397,295 470,406
Total expenses13,447,253 14,117,367 2,958,614 3,014,460 16,405,867 17,131,827
Change in net assets,
before transfers14,830 (321,782) (491,927) 158,577 (477,097) (163,205)
Transfers22,489 - (22,489) - - -
Change in net assets37,319 (321,782) (514,416) 158,577 (477,097) (163,205)
Net assets, beginning
of year41,262,859 41,584,641 11,205,941 11,047,364 52,468,800 52,632,005
Net assets end, of year41,300,178$ 41,262,859$ 10,691,525$ 11,205,941$ 51,991,703$ 52,468,800$
TheCity’snetassetsdecreasedby$477,097duringthecurrentfiscalyear.Increasesinongoingexpensesinexcessof
increasesinongoingrevenuesresultedinadecreaseinnetassets.Theprimaryreasonforthedecreaseinnetassetsis
related to a decrease in general property tax revenues.
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CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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·
·
Expenses and Program Revenues - Governmental Activities
Revenues by Source - Governmental Activities
A decrease in general revenues and transfers of $259,736
A decrease in expenses of $670,114
GovernmentalActivities.GovernmentalactivitiesincreasedtheCity’snetassetsby$37,319ascomparedtotheprior
year decrease of $321,782. Key elements of this increase are as follows:
A decrease in program revenues of $51,276
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
General
government
Public safetyPhysical
environment
TransportationEconomic
environment
Cultural and
recreation
Interest and
fiscal charges
Expenses
Program Revenues
Charges for services
9%Operating grants
1%
Capital grants
6%
Property taxes
23%
Other taxes
45%
Intergovernmental
14%
Other
2%
20
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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·
·
Expenses and Program Revenues - Business-type Activities
Revenues by Source - Business-type Activities
Business-typeActivities.Business-typeactivitiesdecreasedtheCity’snetassetsby$514,417,ascomparedtothe
prior year increase of $158,577. The key elements of this decrease are as follows:
A decrease in expenses of $58,178.
A decrease in revenues and transfers of $19,951.
A decrease in program revenues of $711,218.
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Golf courseAirportBuilding
Expenses
Program Revenues
Charges for services
94%
Capital grants
6%
Other
0%
21
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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Investment earnings were over-estimated as a result in the overall decline in interest rates.
Intergovernmentalrevenuehadapositivebudgetaryvariancefromhigherthananticipatedreceiptsfrom
municipal revenue sharing and local half-cent sales taxes transmitted by the state.
Generalfundexpenditureshadanoverallpositivebudgetaryvarianceof$205,270,ofwhichthegreatestportions
relatedtogeneralgovernment,($57,681),publicsafety($57,095),andphysicalenvironment($71,663).
Unanticipatedcapitalpurchaseswerenecessaryinseveraldepartments,howeverthesewerecoveredbysavings
from operating accounts.
ThegeneralfundisthechiefoperatingfundoftheCity.Attheendofthecurrentfiscalyear,unassignedfundbalance
ofthegeneralfundwas$1,734,307whiletotalfundbalanceamountedto$5,002,172.Asameasureofthegeneral
fund’sliquidity,itmaybeusefultocomparebothunassignedfundbalanceandtotalfundbalancetototalfund
expenditures.Unassignedfundbalancerepresents18percentoftotalGeneralFundexpenditures,whiletotalfund
balance represents 51 percent of that same amount.
Financial Analysis of the City’s Funds
Asnotedearlier,theCityusesfundaccountingtoensureanddemonstratecompliancewithfinance-relatedlegal
requirements.
GovernmentalFunds.ThefocusoftheCity’sgovernmentalfundsistoprovideinformationonnear-terminflows,
outflows,andbalancesofspendableresources.SuchinformationisusefulinassessingtheCity’sfinancing
requirements.Inparticular,unassignedfundbalancemayserveasausefulmeasureofagovernment’snetresources
available for spending at the end of the fiscal year.
Asoftheendofthecurrentfiscalyear,theCity’sgovernmentalfundsreportedcombinedending fundbalancesof
$11,383,377,anincreaseof$37,764fromtheprioryear.Ofthisamount,15percent($1,734,307)constitutes
unassignedfundbalance,whichisavailableforspendingattheCity’sdiscretion.Theremainderoffundbalanceis
assignedtoindicatethatitisnotavailablefornewspendingbecauseitisclassifiedasoneofthefollowing:A)
Nonspendablefor1)inventoriesandprepaids,2)long-termcashadvances,or3)isnonspendableaspermanentfund
corpusforcemeteryperpetualcare;B)Restrictedforcapitalprojectsorduetodebtserviceandspecialrevenuefund
designations;C)iscommittedforworkingcapitalpertheCity'sFundBalancepolicy;orD)hasbeenassignedforother
specific uses in the City’s general operations.
ThefundbalanceoftheCity’sgeneralfunddecreasedby$100,286duringthecurrentfiscalyear.Keyfactorsinthis
change are as follows:
Expenditures decreased $804,564 due to reductions in employees and cuts in other operating accounts.
Thegeneralfundbudgetedforanincreaseinfundbalanceof$61,000andtheactualdecreaseinfundbalancewas
$100,286. Significant changes in budgetary variances are as follows:
All other revenues increased by $3,673.
Charges for services increased by $30,112.
Intergovernmental increased by $76,653.
Propertytaxrevenueshadapositivebudgetaryvarianceof$26,091,withover96%ofthetaxrollbeingcollected.
Only 95% of the tax roll is budgeted as being collected, per Florida statutes.
Thedecreaseinfundbalancewasprimarilytheresultofshortfallsinthecollectionsofpublicutilitytaxesand
franchise fees that we significantly over estimated.
Transfers in from other funds decreased by $44,011 because less was transferred from the local option gas tax
Property tax revenues decreased by $347,742 due to reductions in taxable property values.
Investment earnings decreased $25,139 due to lower rates of return.
Fines decreased by $28,347.
Franchise fees decreased by $60,118.
22
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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TheRiverfrontRedevelopmentFundendedtheyearwith$478,895infundbalance.Unanticipatedexpensesexceeded
budget, but transfers out for pending construction projects were less than budgeted.
TheendoftheyearfundbalanceoftheLocalOptionGasTaxFundincreasedto$190,274duetorefinancingthebank
note and providing additional funds for street paving.
OtherfactorsconcerningthefinancesofthesethreefundshavealreadybeenaddressedinthediscussionoftheCity's
business-type activities.
Budgetary Highlights
TheDiscretionarySalesSurtaxRevenueBonds2003Fundhasatotalfundbalanceof$1,555,411,allofwhichis
restricted for debt service on the bonds.
$2,129 supplemental appropriation for replacing a badge printer.
$1,722 supplemental appropriation to reflect the use of insurance proceeds to repair a damaged truck.
$150,000increasetoappropriationsintheDiscretionarySalesTaxFundforanewprojecttomakestreet
improvements.
$13,800 amendment to establish budgetary accounts for the Parking-in-Lieu-of Fund.
Thetotalnetassetsoftheairportfundattheendofthefiscalyearamountedto$9,845,816,whiletheunrestricted
netassets(deficit)amountedto($816,992).Comparedtotheprioryearinthesamecategory,netassetshave
increasedby$541,164whiletheunrestrictednetassets(deficit)wasreducedby$71,834.Thereductioninthe
unrestrictednetassets(deficit)ismainlyduetoareductioninamountsinvestedincapitalassetsresultingfrom
depreciation expense.
Thetotalnetassetsofthebuildingfundattheendofthefiscalyearamountedto$487,393,allofwhichwas
unrestrictednetassets.Thisisanincreaseof$26,587fromtheprioryear,whichwasprimarilyduetooperating
revenue exceeding operating expenses for the year.
Thetotalnetassetsofthegolfcoursefundattheendofthefiscalyearamountedto$358,316,whiletheunrestricted
netassets(deficit)amountedto($160,699).Comparedtotheprioryearinthesamecategory,netassetsare$161
morethantheprioryear,whiletheunrestrictednetassets(deficit)wasreducedby$55,542fromtheprioryear.This
is mainly because of a reduction in the amounts invested in capital assets, resulting from depreciation expense.
TheDiscretionarySalesTaxrevenuespecialrevenuefundhasatotalfundbalance$2,015,572,anincreasefromthe
$1,623,442totalfundbalanceoftheprioryear.Fundsareintentionallybeingaccumulatedforprojectsthatare
planned in future years.
ProprietaryFunds.TheCity’sproprietaryfundfinancialstatementsprovidethesametypeofinformationfoundinthe
government-wide financial statements, but in more detail.
$631,192supplementalappropriationtoDiscretionarySalesTax,RiverfrontRedevelopmentandRecreationImpact
FeeFundstocovertransfersforopenpurchaseordersandcapitalprojectsthatwerecarriedforwardfromthe
prior fiscal year.
Duringtheyear,theCityCouncilrevisedtheCitybudgetfourtimes.Thesebudgetamendmentsfallintothree
categories.Thefirstcategoryincludesamendmentsandsupplementalappropriationsthatwereapprovedshortlyafter
thebeginningoftheyearandreflectfundbalancescarriedoverfromthepriorfiscalyeartoreappropriatetransfersto
covercertainpurchaseordersandcapitalprojects.Thesecondcategoryincludesadjustmentsforunanticipated
revenues.Thethirdcategoryincludessupplementalappropriationstocoverunanticipateditemsorprojectcoststhat
were above or below budgeted amounts.
23
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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Capital Assets (Net of Depreciation)
Governmental ActivitiesBusiness-type ActivitiesTotal
201220112012201120122011
Land8,007,437$ 8,007,437$ 9,060$ 9,060$ 8,016,497$ 8,016,497$
Buildings8,537,630 8,922,248 5,269,576 5,438,009 13,807,206 14,360,257
Improvements3,606,536 3,546,201 1,092,661 1,209,096 4,699,197 4,755,297
Equipment1,177,489 1,302,227 107,650 183,168 1,285,139 1,485,395
Infrastructure21,220,735 20,793,242 4,699,834 5,011,228 25,920,569 25,804,470
Construction in progress163,429 1,207,848 3,042 - 166,471 1,207,848
Total capital assets, net42,713,256$ 43,779,203$ 11,181,823$ 11,850,561$ 53,895,079$ 55,629,764$
CapitalAssets.Attheendoffiscalyear2012theCityhad$53,895,079investedinabroadrangeofcapitalassets,
includingland,policeandpublicworksequipment,buildings,parkfacilities,roads,bridges,andstormwaterdrainage
structures.Thisamountrepresentsanetdecrease(includingadditionsanddeductions)of$1,734,685,or3.2%,over
last year. The following table illustrates the changes in capital assets.
$3,450 supplemental appropriation to Discretionary Sales Tax Fund for additional 1/4 round expenditures.
$150,000 supplemental appropriation to Discretionary Sales Tax Fund for the Davis Street Sewer Project.
$125,000supplementalappropriationtoDiscretionarySalesTaxFundforparkingimprovementsforNorthIndian
River Drive.
$4,527 reduction in Recreation Impact Fee Fund for projects completed under budget.
Duringthefiscalyear,totalgeneralfundactualrevenueswerelessthanfinalamendedbudgetaryestimatesandtotal
generalfundactualexpenditureswerelessthanthefinalamendedbudgetaryestimates.Theshortfallinanticipated
revenueswasmainlyduetoadeclineinfranchisefeesandpublicutilitytaxesreceivedfromFloridaPowerandLight
Company.Apositiveoverallvarianceonexpendituresresultedinalowerdrawonexistingfundbalancesthanwould
have otherwise occurred.
$26,189 reduction in Recreation Impact Fee Fund for completed or deferred projects.
$38,014 reduction in Discretionary Sales Tax Fund for projects completed under budget.
$3,644 supplemental appropriation to add funding for the telephone system project.
$20,000 amendment to fund the Four Chaplains Memorial Project.
$4,475 supplemental appropriation to reflect the use of insurance proceeds to repair damaged fencing at the
airport.
$6,000 supplemental appropriation to use new rent revenue toward ground maintenance at the airport.
$2,370,485 amendment to the Local Option Gas Tax Fund to account for the bank note refinancing.
$23,300 reduction in the Discretionary Sales Tax Fund to reflect deferral of the painting of City Hall.
$904 supplemental appropriation to Recreation Impact Fee Fund for a required lift station vent.
$25,000 supplemental appropriation to Recreation Impact Fee Fund to provide restrooms at the dog park.
$139,263 supplemental appropriation to General Fund to reflect state monies provided for Police Pension Plan use.
$4,125supplementalappropriationtotheAirportFundtoreflecttheuseofproceedsfromequipmentsalesfor
equipment repairs.
Capital Asset and Debt Administration
24
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
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General Obligation and Revenue Bonds
Governmental ActivitiesBusiness-type ActivitiesTotal
201220112012201120122011
Revenue bonds8,925,000$ 10,000,000$ -$ -$ 8,925,000$ 10,000,000$
Notes payable2,296,000 2,246,000 - - 2,296,000 2,246,000
Total capital assets, net11,221,000$ 12,246,000$ -$ -$ 11,221,000$ 12,246,000$
Economic Factors and Next Year’s Budget and Rates
Toaddressanotherimportantarea,anincreaseinthestormwaterfeewasalsoadopted.Itisanticipatedthatthe
increasefrom$4amonthperEquivalentResidentialUnit(ERV)to$5wouldenablethisspecialrevenuefundtosustain
operations and cover the cost of equipment replacement.
Long-TermDebt.Attheendofthecurrentfiscalyear,theCityhadtotalinstallmentdebtoutstandingof
$11,221,000.Ofthisamount,$2,296,000(20.4percent )comprisesdebtnotbackedbythefullfaithandcreditofthe
government.TheremainderoftheCitydebtrepresentsbondssecuredsolelybyspecifiedrevenuesources(i.e.,
revenue bonds).
TheCity’stotalinstallmentdebtdecreasedby$1,025,000(9.1percent)duringthecurrentfiscalyear.Thenet
decrease was mainly attributable to annual principal payments.
TheInfrastructureSalesSurtaxRevenueBonds,Series2003andSeries2003AandtheStormwaterUtilityRevenue
Bonds,Series2003wereinitiallyinsuredbyAAAratedinsuranceagenciesandratedAAA,whichisthehighestrating
givenbyratingagencies.However,ratingsontheinsuranceagencieshavebeendowngraded.AlloftheCity'sother
debt,primarilynotesandacapitallease,arenotrated.OtherobligationsoftheCityincludeaccruedvacationpayand
sick leave.
TheCity'selectedandappointedofficialsconsideredmanyfactorswhensettingthefiscalyear2013budget,taxrates,
andfeesthatwillbechargedforthebusiness-typeactivities.Oneofthosefactorsistheeconomy.Sebastian'slocal
economyconsistslargelyofretailandserviceindustries.Lessthanonepercentisdevotedtoindustrialactivities.
Constructionofnewhomesisthelargestsinglebusinessinthearea.SomeofthelargestretailstoresincludePublix
SupermarketandWal-MartStores,lnc.®TheIndianRiverCountyunemploymentrateinSeptember2012was10.2
percentdownfrom13.6percentinthepreviousyear,whichisapositivesignandanalogoustotheeconomicpattern
existing throughout the state and nation.
TheCityexperiencedanothersignificantdeclineinpropertyvalues(6.3percent)for2013.Evenafterreducingthe
GeneralFundexpendituresbymorethan$250,000,itwasdeterminedthatamillageincreasewouldbesensible.The
ratewasincreasedfrom3.3041to3.7166,whichprovidedsufficientfundstodiscontinuetransfersfromtheLocal
Option Gas Tax Fund. This allowed those funds to be allocated to street paving projects.
Business-type activities had the following major changes during the fiscal year:
A decrease in buildings mainly due to the amount of depreciation.
A decrease in other categories due to the amount of depreciation.
Governmental activities had the following major changes during the fiscal year:
A decrease in buildings mainly due to the amount of depreciation.
An increase in improvements mainly due to amenities added at Schumann Park.
A decrease in equipment mainly due to the amount of depreciation.
An increase in infrastructure mainly due to construction of Powerline Road.
A decrease in construction-in-progress mainly due to the completion of construction on Powerline Road.
25
CITY OF SEBASTIAN, FLORIDA
Management's Discussion and Analysis
Thisfinancialreportisdesignedtoprovideourcitizens,taxpayers,customers,investorsandcreditorswithageneral
overviewoftheCity'sfinancesandtoshowtheCity'saccountabilityforthemoneyitreceives.Ifyouhavequestions
aboutthisreportorneedadditionalinformation,contacttheAdministrativeServicesDepartmentatCityofSebastian,
1225 Main Street, Sebastian, Florida 32958.
TheGolfCoursereportedasmalloperatingincome,mostlyduetoaratechangeeffectiveFebruary2,2012.A
provisionofthatrateincreaserequiresthat5%oftheaddedrevenuesaretobeusedonlyformajorcapitalrepairsor
improvements.Evenso,atemporaryinterfundloanfromGeneralFundwasmadeattheendoftheyeartoprovide
sufficientcashflow.Itisexpectedthatwithareasonablygoodlevelofrevenuesinthecomingyear,thecurrentloan
can be repaid.
Requests for Information
GeneralFundalsomadeatemporaryinterfundloantotheAirportinordertoprovidesufficientcashflow.Itis
expectedthatrepaymentwillbemadeinthecomingyear.Sizableoperatinglossesaretheresultofdepreciationon
capital assets.
Withsomeincreasesinbuildingpermitfeesandreductionofoperatingexpenses,theBuildingEnterpriseFund
reportedapositivechangeinnetassets.Whiletheeconomyisstillweak,therearesomesignsofrenewedactivityin
the local housing market which are encouraging.
26
BASIC FINANCIAL STATEMENTS
27
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28
Statement of Net Assets
September 30, 2012
GovernmentalBusiness-type
ActivitiesActivitiesTotal
Assets
Cash and cash equivalents579,716$ 101,215$ 680,931$
Temporarily restricted cash and cash equivalents2,494,010 - 2,494,010
Investments6,509,441 594,113 7,103,554
Permanently restricted investments254,806 - 254,806
Receivables, net772,347 14,512 786,859
Internal balances858,061 (858,061) -
Prepaid expenses105,027 13,198 118,225
Inventories65,423 33,467 98,890
Net pension asset132,133 - 132,133
Deposits held in escrow 14,010 1,602 15,612
Deferred bond issuance costs283,024 - 283,024
Capital assets not being depreciated8,170,866 12,102 8,182,968
Capital assets being depreciated, net34,542,390 11,169,721 45,712,111
Total assets54,781,254 11,081,869 65,863,123
Liabilities
Accounts payable and other current liabilities265,703 34,577 300,280
Accrued interest payable183,778 - 183,778
Unearned revenues- 132,557 132,557
Long-term liabilities:
Due within one year1,425,933 922 1,426,855
Due in more than one year11,316,479 195,078 11,511,557
Net other postemployment benefits liability289,183 27,210 316,393
Total liabilities 13,481,076 390,344 13,871,420
Net assets
Invested in capital assets, net of related debt31,500,173 11,181,823 42,681,996
Restricted for:
Debt service1,744,486 - 1,744,486
Capital17,354 - 17,354
Perpetual care:
Expendable247,793 - 247,793
Nonexpendable 737,182 - 737,182
Other expenses3,445,962 - 3,445,962
Unrestricted (deficit)3,607,228 (490,298) 3,116,930
Total net assets41,300,178$ 10,691,525$ 51,991,703$
The accompanying notes are an integral part of these basic financial statements.
CITY OF SEBASTIAN, FLORIDA
Primary Government
29
Statement of Activities
For the Year Ended September 30, 2012
Program Revenues
OperatingCapitalNet
ChargesGrants andGrants and(Expense)
Functions / ProgramsExpensesfor ServicesContributionsContributionsRevenue
Primary government
Governmental activities:
General government2,640,677$ 214,488$ 16,062$ -$ (2,410,127)$
Public safety5,025,274 66,474 161,918 - (4,796,882)
Physical environment2,007,902 876,693 - - (1,131,209)
Transportation1,800,432 - 9,353 550,702 (1,240,377)
Economic environment170,960 - - 13,998 (156,962)
Cultural and recreation 1,239,512 66,954 - 226,565 (945,993)
Interest and fiscal charges 562,496 - - - (562,496)
Total governmental activities13,447,253 1,224,609 187,333 791,265 (11,244,046)
Business-type activities:
Golf course1,394,731 1,394,844 48 - 161
Airport1,166,588 491,367 5 150,083 (525,133)
Building397,295 419,705 6,510 - 28,920
Total business-type activities2,958,614 2,305,916 6,563 150,083 (496,052)
Total primary government 16,405,867$ 3,530,525$ 193,896$ 941,348$ (11,740,098)$
CITY OF SEBASTIAN, FLORIDA
30
CITY OF SEBASTIAN, FLORIDA
Statement of Activities
For the Year Ended September 30, 2012
Primary Government
GovernmentalBusiness-type
ActivitiesActivitiesTotal
Changes in net assets
Net revenue (expense)(11,244,046)$ (496,052)$ (11,740,098)$
General revenues:
Property taxes, levied for general purposes3,063,495 - 3,063,495
Sales and use taxes4,852,413 - 4,852,413
Franchise fees1,124,568 - 1,124,568
State shared revenues not restricted to specific programs1,934,733 - 1,934,733
Interest earnings82,129 - 82,129
Miscellaneous201,538 4,125 205,663
Transfers 22,489 (22,489) -
Total general revenues and transfers11,281,365 (18,364) 11,263,001
Change in net assets37,319 (514,416) (477,097)
Net assets, beginning of year41,262,859 11,205,941 52,468,800
Net assets, end of year41,300,178$ 10,691,525$ 51,991,703$
The accompanying notes are an integral part of these basic financial statements.
31
CITY OF SEBASTIAN, FLORIDA
Balance Sheet
Governmental Funds
September 30, 2012
Local
Option DiscretionaryRiverfront
GeneralGas TaxSales TaxRedevelopment
Assets
Cash and cash equivalents89,330$ 137,841$ 296,346$ 709$
Investments4,184,204 4,974 946,725 484,168
Accounts receivable, net244,651 - - -
Accrued interest receivable3,005 - - -
Due from other funds105,550 - - -
Due from other governments242,012 47,459 220,009 -
Inventories65,423 - - -
Prepaid expenses 105,027 - - -
Deposits held in escrow14,010 - - -
Advance to other funds200,000 - 552,511 -
Total assets5,253,212$ 190,274$ 2,015,591$ 484,877$
Liabilities
Accounts payable and accrued liabilities222,670$ -$ 19$ 5,982$
Due to other governments28,370 - - -
Total liabilities251,040 - 19 5,982
Fund balances
Nonspendable370,450 - 552,511 -
Restricted - 190,274 1,463,061 478,895
Committed2,861,708 - - -
Assigned 35,707 - - -
Unassigned1,734,307 - - -
Total fund balances5,002,172 190,274 2,015,572 478,895
Total liabilities and fund balances5,253,212$ 190,274$ 2,015,591$ 484,877$
The accompanying notes are an integral part of these basic financial statements.
32
Discretionary
Sales SurtaxNonmajorTotal
Revenue BondsGovernmentalGovernmental
2003FundsFunds
1,555,411$ 994,089$ 3,073,726$
- 1,144,176 6,764,247
- - 244,651
- 997 4,002
- - 105,550
- 10,453 519,933
- - 65,423
- - 105,027
- - 14,010
- - 752,511
1,555,411$ 2,149,715$ 11,649,080$
-$ 8,662$ 237,333$
- - 28,370
- 8,662 265,703
- 737,182 1,660,143
1,555,411 684,185 4,371,826
- 719,686 3,581,394
- - 35,707
- - 1,734,307
1,555,411 2,141,053 11,383,377
1,555,411$ 2,149,715$ 11,649,080$
33
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34
CITY OF SEBASTIAN, FLORIDA
Reconciliation
Fund Balances for Governmental Funds
to Net Assets of Governmental Activities
September 30, 2012
Fund balances - total governmental funds11,383,377$
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets used in governmental activities are not financial resources,
and therefore are not reported in the fund statement.
Capital assets not being depreciated 8,170,866
Capital assets being depreciated, net34,542,390
Some items are recorded as revenues and expenditures in the fund statements when paid or when
received. These items are recorded on the government-wide statements when incurred in the case of
expenditures and when revenues are earned.
Net pension asset132,133
Accrued interest receivable 3,761
Certain liabilities, such as bonds payable, are not due and payable
in the current period, and therefore are not reported in the funds.
Bonds and notes payable(11,213,083)
Unamortized bond issuance costs283,024
Compensated absences(1,435,586)
Termination benefits(2,543)
Other postemployment benefits(289,183)
Contamination liability(91,200)
Accrued interest on long-term debt(183,778)
Net assets of governmental activities 41,300,178$
The accompanying notes are an integral part of these basic financial statements.
35
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2012
Local
Option Discretionary
GeneralGas TaxSales Tax
Revenue
Taxes:
Property2,808,426$ -$ -$
Public utility2,387,553 - -
Sales- - 2,464,240
Motor fuel- 550,702 -
Franchise fees1,124,568 - -
Licenses and permits22,431 - -
Intergovernmental 2,078,685 9,353 -
Impact fees- - -
Charges for services290,950 - -
Fines52,307 - -
Investment earnings28,046 5,062 27,165
Contributions and donations34,031 - -
Other revenue165,285 - -
Total revenue8,992,282 565,117 2,491,405
Expenditures
Current:
General government2,398,207 - -
Public safety4,511,563 - -
Physical environment1,030,021 - -
Transportation934,006 274,405 -
Economic environment- - -
Culture and recreation876,502 - -
Debt service:
Principal- 2,246,000 -
Interest and fiscal charges- 84,742 -
Capital outlay34,985 - -
Total expenditures9,785,284 2,605,147 -
Revenue over (under) expenditures(793,002) (2,040,030) 2,491,405
Other financing sources (uses)
Issuance of long-term debt- 2,296,000 -
Transfers in692,716 742 22,489
Transfers out- (125,000) (2,121,764)
Total other financing sources (uses)692,716 2,171,742 (2,099,275)
Net changes in fund balances(100,286) 131,712 392,130
Fund balances, beginning of year5,102,458 58,562 1,623,442
Fund balances, end of year5,002,172$ 190,274$ 2,015,572$
The accompanying notes are an integral part of these basic financial statements.
36
Discretionary
Sales SurtaxNonmajorTotal
RiverfrontRevenue BondsGovernmentalGovernmental
Redevelopment2003FundsFunds
255,069$ -$ -$ 3,063,495$
- - - 2,387,553
- - - 2,464,240
- - - 550,702
- - - 1,124,568
- - - 22,431
- - - 2,088,038
- - 58,500 58,500
- - 867,125 1,158,075
- - 5,268 57,575
1,445 4,995 19,803 86,516
- - 182,060 216,091
11,998 - 24,605 201,888
268,512 4,995 1,157,361 13,479,672
2,438 - 9,700 2,410,345
- - 12,239 4,523,802
- - 12,328 1,042,349
- - - 1,208,411
138,531 - - 138,531
- - - 876,502
- 795,000 280,000 3,321,000
- 227,367 160,290 472,399
- - 1,732,073 1,767,058
140,969 1,022,367 2,206,630 15,760,397
127,543 (1,017,372) (1,049,269) (2,280,725)
- - - 2,296,000
- 1,016,206 1,962,612 3,694,765
(104,458) - (1,321,054) (3,672,276)
(104,458) 1,016,206 641,558 2,318,489
23,085 (1,166) (407,711) 37,764
455,810 1,556,577 2,548,764 11,345,613
478,895$ 1,555,411$ 2,141,053$ 11,383,377$
37
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Assets of Governmental Activities
For the Year Ended September 30, 2012
Net change in fund balances - total governmental funds37,764$
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.
Capital outlay1,767,058
Depreciation expense(2,826,862)
Loss on the sale of capital assets(6,143)
Some interest revenues reported in the statement of activities do not constitute current
financial resources, therefore, are not reported as revenues in governmental funds
Interest revenues(4,387)
Bond proceeds provide current financial resources to governmental funds
in the period issued, but issuing bonds increases long-term liabilities in the
statement of net assets. Repayment of bond principal is an expenditure in the
governmental funds, but the repayment reduces long-term liabilities in the
statement of net assets.
Proceeds from the issuance of debt(2,296,000)
Principal payments on long-term liabilities 3,321,000
Some expenses reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in
governmental funds.
Change in accrued interest payable on long-term debt32,860
Capitalization of issuance costs 30,091
Amortization of deferred issuance costs / discounts(126,007)
Change in the accrual for compensated absences 82,179
Change in the accrual for pension benefits(9,204)
Change in the accrual for other postemployment benefits 26,126
Change in the accrual for termination benefits8,844
Change in net assets of governmental activities 37,319$
The accompanying notes are an integral part of these basic financial statements.
CITY OF SEBASTIAN, FLORIDA
38
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Budget and Actual - General Fund
For the Year Ended September 30, 2012
Actual Over
OriginalFinal(Under) Final
BudgetBudgetActualBudget
Revenue
Taxes:
Property2,782,335$ 2,782,335$ 2,808,426$ 26,091$
Public utility2,550,000 2,550,000 2,387,553 (162,447)
Franchise fees1,352,200 1,352,200 1,124,568 (227,632)
Licenses and permits36,150 36,150 22,431 (13,719)
Intergovernmental1,880,400 2,019,663 2,078,685 59,022
Charges for services284,603 300,061 290,950 (9,111)
Fines74,000 74,000 52,307 (21,693)
Investment earnings 92,000 92,000 28,046 (63,954)
Contributions and donations33,376 33,376 34,031 655
Other revenue149,400 151,122 165,285 14,163
Total revenue9,234,464 9,390,907 8,992,282 (398,625)
Expenditures
Current:
General government2,441,589 2,455,888 2,398,207 (57,681)
Public safety4,429,395 4,568,658 4,511,563 (57,095)
Physical environment1,118,626 1,101,684 1,030,021 (71,663)
Transportation965,567 960,667 934,006 (26,661)
Culture and recreation875,287 878,279 876,502 (1,777)
Capital outlay30,000 25,379 34,985 9,606
Total expenditures9,860,464 9,990,555 9,785,284 (205,271)
Revenue over (under) expenditures(626,000) (599,648) (793,002) (193,354)
Other financing sources
Transfers in687,000 660,648 692,716 32,068
Net changes in fund balances61,000 61,000 (100,286) (161,286)
Fund balances, beginning of year5,102,458 5,102,458 5,102,458 -
Fund balances, end of year5,163,458$ 5,163,458$ 5,002,172$ (161,286)$
The accompanying notes are an integral part of these basic financial statements.
39
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Budget and Actual - Local Option Gas Tax
For the Year Ended September 30, 2012
Actual Over
OriginalFinal(Under) Final
BudgetBudgetActualBudget
Revenue
Taxes:
Motor fuel585,900$ 585,900$ 550,702$ (35,198)$
Intergovernmental9,353 9,353 9,353 -
Investment earnings3,000 3,000 5,062 2,062
Total revenue598,253 598,253 565,117 (33,136)
Expenditures
Current:
Transportation257,719 291,601 274,405 (17,196)
Debt service:
Principal176,000 2,263,118 2,246,000 (17,118)
Interest and fiscal charges89,792 89,792 84,742 (5,050)
Total expenditures523,511 2,644,511 2,605,147 (39,364)
Revenue over (under) expenditures74,742 (2,046,258) (2,040,030) 6,228
Other financing sources
Issuance of long-term debt- 2,296,000 2,296,000 -
Transfers in- - 742 742
Transfers out(125,000) (300,000) (125,000) 175,000
Net changes in fund balances(50,258) (50,258) 131,712 181,970
Fund balances, beginning of year58,562 58,562 58,562 -
Fund balances, end of year8,304$ 8,304$ 190,274$ 181,970$
The accompanying notes are an integral part of these basic financial statements.
40
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Budget and Actual - Discretionary Sales Tax Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
OriginalFinal(Under) Final
BudgetBudgetActualBudget
Revenue
Taxes:
Sales2,356,000$ 2,356,000$ 2,464,240$ 108,240$
Investment earnings24,150 24,150 27,165 3,015
Total revenues2,380,150 2,380,150 2,491,405 111,255
Other financing sources (uses)
Transfers in- - 22,489 22,489
Transfers out(2,390,391) (2,996,807) (2,121,764) 875,043
Total other financing sources (uses)(2,390,391) (2,996,807) (2,099,275) 897,532
Net changes in fund balances(10,241) (616,657) 392,130 1,008,787
Fund balances, beginning of year1,623,442 1,623,442 1,623,442 -
Fund balances, end of year1,613,201$ 1,006,785$ 2,015,572$ 1,008,787$
The accompanying notes are an integral part of these basic financial statements.
41
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Budget and Actual - Riverfront Redevelopment Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
OriginalFinal(Under) Final
BudgetBudgetActualBudget
Revenue
Taxes:
Property259,066$ 259,066$ 255,069$ (3,997)$
Investment earnings4,650 4,650 1,445 (3,205)
Other revenue- - 11,998 11,998
Total revenues263,716 263,716 268,512 4,796
Expenditures
Current:
General government- - 2,438 2,438
Economic environment126,022 126,022 138,531 12,509
Total expenditures126,022 126,022 140,969 14,947
Revenues over (under) expenditures137,694 137,694 127,543 (10,151)
Other financing uses
Transfers out(160,000) (160,594) (104,458) 56,136
Net changes in fund balances(22,306) (22,900) 23,085 45,985
Fund balances, beginning of year455,810 455,810 455,810 -
Fund balances, end of year433,504$ 432,910$ 478,895$ 45,985$
The accompanying notes are an integral part of these basic financial statements.
42
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenditures and Changes in Fund Balances
Budget and Actual - Discretionary Sales Surtax Revenue Bonds 2003 Debt Service Fund
For the Year Ended September 30, 2012
Actual Over
OriginalFinal(Under) Final
BudgetBudgetActualBudget
Revenue
Investment earnings22,400$ 22,400$ 4,995$ (17,405)$
Expenditures
Debt service:
Principal795,000 795,000 795,000 -
Interest and fiscal charges227,333 227,333 227,367 34
Total expenditures1,022,333 1,022,333 1,022,367 34
Revenues over (under) expenditures(999,933) (999,933) (1,017,372) (17,439)
Other financing sources
Transfers in997,391 997,391 1,016,206 18,815
Net changes in fund balances(2,542) (2,542) (1,166) 1,376
Fund balances, beginning of year1,556,577 1,556,577 1,556,577 -
Fund balances, end of year1,554,035$ 1,554,035$ 1,555,411$ 1,376$
The accompanying notes are an integral part of these basic financial statements.
43
CITY OF SEBASTIAN, FLORIDA
Statement of Net Assets
Proprietary Funds
September 30, 2012
Golf
CourseAirportBuildingTotal
Assets
Current assets:
Cash and cash equivalents2,610$ 10,109$ 88,496$ 101,215$
Investments28,168 - 565,945 594,113
Accounts receivable- 13,498 - 13,498
Interest receivable- - 1,014 1,014
Inventory13,405 20,062 - 33,467
Deposits held in escrow493 616 493 1,602
Prepaid items3,463 7,751 1,984 13,198
Total current assets 48,139 52,036 657,932 758,107
Noncurrent assets:
Capital assets:
Land- 9,060 - 9,060
Buildings331,228 6,009,114 - 6,340,342
Improvements other than buildings261,937 1,641,309 - 1,903,246
Machinery and equipment230,912 608,779 56,150 895,841
Infrastructure1,100,951 6,428,352 - 7,529,303
Construction in process- 3,042 - 3,042
Less accumulated depreciation(1,406,013) (4,036,848) (56,150) (5,499,011)
Total noncurrent assets519,015 10,662,808 - 11,181,823
Total assets567,154 10,714,844 657,932 11,939,930
Liabilities
Current liabilities:
Accounts payable and accrued liabilities15,343 5,126 6,840 27,309
Due to other funds65,000 40,550 - 105,550
Due to other governments5,629 641 998 7,268
Unearned revenues57,722 6,825 68,010 132,557
Accrued compensated absences- - 922 922
Total current liabilities 143,694 53,142 76,770 273,606
Non-current liabilities:
Compensated absences, net of current portion57,551 50,719 86,808 195,078
Advance from other fund- 752,511 - 752,511
Net other postemployment benefit obligation7,593 12,656 6,961 27,210
Total non-current liabilities65,144 815,886 93,769 974,799
Total liabilities208,838 869,028 170,539 1,248,405
Net assets
Invested in capital assets, net of related debt519,015 10,662,808 - 11,181,823
Unrestricted (deficit)(160,699) (816,992) 487,393 (490,298)
Total net assets358,316$ 9,845,816$ 487,393$ 10,691,525$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
44
CITY OF SEBASTIAN, FLORIDA
Statement of Revenue, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended September 30, 2012
Golf
CourseAirportBuildingTotal
Operating revenue
Charges for fees and rents:
Building permit fees-$ -$ 419,705$ 419,705$
Golf course fees1,351,767 - - 1,351,767
Rents27,771 345,316 - 373,087
Other revenue15,306 146,051 - 161,357
Total operating revenue1,394,844 491,367 419,705 2,305,916
Operating expenses:
Salaries, wages and employee benefits283,746 207,794 311,653 803,193
Contractual services, materials and supplies1,030,293 251,548 87,618 1,369,459
Depreciation80,692 688,332 357 769,381
Total operating expenses1,394,731 1,147,674 399,628 2,942,033
Operating income (loss)113 (656,307) 20,077 (636,117)
Nonoperating revenues (expenses)
Interest income 48 5 6,510 6,563
Interest expense- (16,581) - (16,581)
Gain on disposal of capital assets- 4,125 - 4,125
Total nonoperating revenues (expenses)48 (12,451) 6,510 (5,893)
Income (loss) before capital contributions161 (668,758) 26,587 (642,010)
Capital contributions- 150,083 - 150,083
Transfers out- (22,489) - (22,489)
Change in net assets161 (541,164) 26,587 (514,416)
Net assets, beginning of year358,155 10,386,980 460,806 11,205,941
Net assets, end of year358,316$ 9,845,816$ 487,393$ 10,691,525$
The accompanying notes are an integral part of these basic financial statements.
Business-type Activities - Enterprise Funds
45
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2012
Golf
CourseAirportBuildingTotal
Cash flows from operating activities
Cash received from customers and users1,387,273$ 1,084,303$ 412,593$ 2,884,169$
Cash payments to suppliers(1,019,092) (450,527) (88,827) (1,558,446)
Cash payments for employee services(282,895) (219,657) (313,902) (816,454)
Net cash provided (used) by operating activities85,286 414,119 9,864 509,269
Cash flows from noncapital financing activities
Repayment of loan from other fund- (22,489) - (22,489)
Interest paid on advance from other fund- (16,581) - (16,581)
Intragovernment payments(35,000) (450,490) - (485,490)
Net cash provided (used) by noncapital
financing activities(35,000) (489,560) - (524,560)
Cash flows from capital and related
financing activities
Acquisition and construction of capital assets(25,311) (75,334) - (100,645)
Proceeds from sale of assets- 4,125 - 4,125
Receipt from capital contributions- 150,083 - 150,083
Net cash provided (used) by capital and
related financing activities(25,311) 78,874 - 53,563
Cash flows from investing activities
Sale (purchase) of investments(28,168) - 25,362 (2,806)
Interest received on investments48 5 6,510 6,563
Net cash provided by investing activities(28,120) 5 31,872 3,757
Net decrease in cash and cash equivalents(3,145) 3,438 41,736 42,029
Cash and cash equivalents, beginning of year5,755 6,671 46,760 59,186
Cash and cash equivalents, end of year2,610$ 10,109$ 88,496$ 101,215$
continued…
Business-type Activities - Enterprise Funds
46
CITY OF SEBASTIAN, FLORIDA
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2012
Golf
Business-type Activities - Enterprise Funds
Cash flow from operating activities:
Operating income (loss) 113$ (656,307)$ 20,077$ (636,117)$
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:
Depreciation expense80,692 688,332 357 769,381
Change in:
Accounts receivable- 11,683 - 11,683
Interest receivable- - (997) (997)
Inventories(1,980) (17,276) - (19,256)
Due from other governments- 579,883 - 579,883
Deposits held in escrow(493) (616) (493) (1,602)
Prepaid expenses4,754 1,979 (209) 6,524
Accounts payable9,217 (59,582) (638) (51,003)
Due to other governments(790) (322) (362) (1,474)
Retainage payable- (123,778) - (123,778)
Unearned revenues(7,078) 1,986 (5,622) (10,714)
Accrued compensated absences1,394 (11,213) (1,877) (11,696)
Net other postemployment benefit obligation(543) (650) (372) (1,565)
Total adjustments85,173 1,070,426 (10,213) 1,145,386
Net cash provided (used) by operating activities85,286$ 414,119$ 9,864$ 509,269$
concluded
The accompanying notes are an integral part of these basic financial statements.
47
CITY OF SEBASTIAN, FLORIDA
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2012
Pension
TrustAgency
Police
Officers'Performance
PensionDeposits
Assets
Cash and cash equivalents697,401$ 11,930$
Receivables:
Interest and dividends30,565 -
Investments, at fair value:
Local government surplus trust funds investment pools- 220,000
United States treasury obligations585,445 -
United States government agency notes 914,340 -
Corporate and foreign bonds2,206,336 -
Municipal obligations35,481 -
Common equity securities4,377,464 -
Total investments8,119,066 220,000
Total assets8,847,032 231,930
Liabilities
Refunds payable- 231,930$
Net assets
Held in trust for pension benefits8,847,032$
The accompanying notes are an integral part of these basic financial statements.
48
CITY OF SEBASTIAN, FLORIDA
Statement of Changes in Fiduciary Net Assets
Fiduciary Fund - Pension Trust
For the Year Ended September 30, 2012
Police
Officers'
Pension
Additions
Contributions:
Employer450,666$
Plan members99,621
State139,263
Total contributions689,550
Investment earnings:
Net increase in fair value of investments887,672
Interest and dividends217,994
Total investment earnings1,105,666
Investment expenses(49,570)
Net investment earnings1,056,096
Total additions1,745,646
Deductions
Benefits392,946
Refunded contributions16,486
Administrative expenses16,036
Total deductions425,468
Change in net assets1,320,178
Net assets, beginning of year7,526,854
Net assets, end of year8,847,032$
The accompanying notes are an integral part of these basic financial statements.
49
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50
NOTES TO FINANCIAL STATEMENTS
51
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Government-wide and Fund Financial Statements
Thegovernment-widefinancialstatements(i.e.,thestatementofnetassetsandthestatementof
activities)reportinformationonallofthenonfiduciaryactivitiesoftheprimarygovernmentandits
componentunits.Forthemostpart,theeffectofinterfundactivityhasbeenremovedfromthese
statements.Governmentalactivities,whichnormallyaresupportedbytaxesandintergovernmental
revenues,arereportedseparatelyfrombusinesstypeactivities,whichrelytoasignificantextentonfees
and charges for support.
TheCityofSebastian(the"City"),aFloridaMunicipalCorporation,wasincorporatedin1924underSections
1826-1832oftheRevisedFloridaStatutes.TheCityhasapopulationof21,995livinginanareaof
approximately14.6squaremiles.ThegoverningbodyisafivememberelectedCityCouncilwithamayor
electedfromthefivemembers.TheCityCouncilappointstheCityManagerwhoisresponsibleforthe
administration of all City services.
ThefinancialstatementsoftheCityhavebeenpreparedinconformitywithgenerallyacceptedaccounting
principles(GAAP)asappliedtogovernmentalunits.TheGovernmentalAccountingStandardsBoard(GASB)
istheacceptedstandardsettingbodyforestablishinggovernmentalaccountingandfinancialreporting
principles. The more significant of the City’s accounting policies are described below.
Reporting Entity
Asrequiredbygenerallyacceptedaccountingprinciples,thesefinancialstatementspresentthe
governmentanditscomponentunits,entitiesforwhichtheCityisfinanciallyaccountable.Blended
componentunits,althoughlegallyseparateentities,are,insubstance,partofthegovernment’soperations
andassuch,datafromtheseunitsarecombinedwithdataoftheprimarygovernment.Discretely
presentedcomponentunits,ontheotherhand,arereportedinaseparatecolumninthecombined
financialstatementstoemphasizethattheyarelegallyseparatefromthegovernment.TheCityhasno
discretely presented component units.
Blended Component Units
Thefollowingcomponentunitsareblendedwiththeprimarygovernmentforfinancialstatementpurposes
becausethecomponentunit'sgoverningbodyissubstantiallythesameastheCityCouncilorbecausethe
component unit exclusively serves the City.
CommunityRedevelopmentAgency(CRA)–ThegoverningbodyoftheCRAistheSebastianCityCouncil.
TheCRAisaccountedforinaspecialrevenuefundentitled"RiverfrontRedevelopment".F.S.Section
163.387(8)requiresanindependentauditofthefundeachfiscalyearandareportofsuchaudit.TheCity
haspresentedtheCRAasamajorfundoftheCitytosatisfythisrequirementsimplyduetothescopeof
the audit for a major fund is broader than a non-major fund.
CityofSebastianPoliceOfficers'PensionPlan–TheCityCouncilonlyappointstwoofthefivemembersof
thegoverningboard,butitisfinanciallyresponsibleforfundingthepoliceofficers'pensionbenefits.The
CityofSebastianPoliceOfficers'PensionTrustFundonlyexiststoprovidepensionbenefitstoCityof
Sebastian police officers. It is accounted for as a Pension Trust fund entitled "Police Officers' Pension".
52
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Thegovernment-widefinancialstatementsarereportedusingtheeconomicresourcesmeasurementfocus
andtheaccrualbasisofaccounting,asaretheproprietaryfundandfiduciaryfundfinancialstatements.
Revenuesarerecordedwhenearnedandexpensesarerecordedwhenaliabilityisincurred,regardlessof
thetimingofrelatedcashflows.Propertytaxesarerecognizedasrevenuesintheyearforwhichtheyare
levied.Grantsandsimilaritemsarerecognizedasrevenueassoonasalleligibilityrequirementsimposed
by the provider have been met.
Governmentalfundfinancialstatementsarereportedusingthecurrentfinancialresourcesmeasurement
focusandthemodifiedaccrualbasisofaccounting.Revenuesarerecognizedassoonastheyareboth
measurableandavailable.Revenuesareconsideredtobeavailablewhentheyarecollectiblewithinthe
currentperiodorsoonenoughthereaftertopayliabilitiesofthecurrentperiod.Forthispurpose,the
governmentconsidersrevenuestobeavailableiftheyarecollectedwithin60daysoftheendofthe
currentfiscalperiod,andexpenditure-drivengrantswhichmustbecollectedwithinoneyear.Expenditures
generallyarerecordedwhenaliabilityisincurred,asunderaccrualaccounting.However,debtservice
expenditures,aswellasexpendituresrelatedtocompensatedabsencesandclaimsandjudgments,are
recorded only when payment is due.
Propertytaxes,intergovernmentalrevenue,licenses,andinterestassociatedwiththecurrentfiscalperiod
areallconsideredtobesusceptibletoaccrualandassuchhavebeenrecognizedasrevenuesofthecurrent
fiscalperiod.Allotherrevenueitemsareconsideredtobemeasurableandavailableonlywhencashis
received by the government.
The City reports the following major governmental funds:
TheGeneralFundisthegovernment’sprimaryoperatingfund.Itaccountsforallthefinancial
resources of the general government, except those accounted for and reported in another fund.
TheLocalOptionGasTaxFundaccountsforthefinancialresourcesusedforinfrastructure
improvements and equipment purchases.
Thestatementofactivitiesdemonstratesthedegreetowhichthedirectexpensesofagivenfunctionor
segmentareoffsetbyprogramrevenues.Directexpensesarethosethatareclearlyidentifiablewitha
specificfunctionorsegment.Programrevenuesinclude(1)chargestocustomersorapplicantswho
purchase,use,ordirectlybenefitfromgoods,services,orprivilegesprovidedbyagivenfunctionor
segmentand(2)grantsandcontributionsthatarerestrictedtomeetingtheoperationalorcapital
requirementsofaparticularfunctionorsegment.Taxesandotheritemsnotproperlyincludedamong
program revenues are reported instead as general revenues.
Separatefinancialstatementsareprovidedforgovernmentalfunds,proprietaryfundsandfiduciaryfunds,
eventhoughthelatterareexcludedfromthegovernment-widefinancialstatements.Majorindividual
governmentalfundsandmajorindividualenterprisefundsarereportedasseparatecolumnsinthefund
financial statements.
Agency funds are custodial in nature and do not present results of operations or have a measurement focus.
53
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
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.
TheBuildingFundaccountsfortheactivitiesassociatedwiththebuildingpermitandinspection
program.
Additionally, the City reports the following fund types:
ThePensionTrustFundaccountsfortheactivitiesofthePoliceOfficer'sRetirementSystem,which
accumulates resources for pension benefit payments to qualified police officers.
ThePerformanceDepositsAgencyFundaccountsfordepositsplacedbybiddersanddevelopersto
guaranteeperformancepursuanttobidorcontract.ThesefundsareheldbytheCityasagentfor
individuals and businesses.
Asageneralrule,theeffectofinterfundactivityhasbeeneliminatedfromthegovernment-widefinancial
statements.Exceptionstothisgeneralrulearepaymentsinlieuoftaxesandvariousotherfunctionsofthe
government.Eliminationofthesechargeswoulddistortthedirectcostsandprogramrevenuesreported
forthevariousfunctionsconcerned.TheGeneralFundprovidescertaincentralservicestootherfundsof
theCitywhicharepresentedasprogramexpensesinthefundsreceivingservices.TherelatedGeneral
Fund revenue has been netted against program expense in the government-wide statement of activities.
TheDiscretionarySalesTaxFundaccountsforthefinancialresourcesusedforinfrastructure
improvements and equipment purchases.
TheRiverfrontRedevelopmentFundaccountsfortaxincrementrevenuesthatarelegallyrestricted
for the redevelopment of the City's riverfront area.
TheDiscretionarySalesSurtaxRevenueBonds2003Fundaccountsfortheaccumulationofpledged
fundsthatarelegallyrestrictedtopaythebondeddebtobligationsoftheDiscretionarySalesSurtax
Revenue Bonds, Series 2003 and Series 2003A.
Specialrevenuefundsareusedtoaccountforandreporttheproceedsofspecificrevenuesources
thatarerestrictedorcommittedtoexpenditureforspecifiedpurposesotherthandebtserviceor
capital projects.
Debtservicefundsareusedtoaccountforandreportfinancialresourcesthatarerestricted,
committed, or assigned to expenditure for principal and interest.
Capitalprojectsfundsareusedtoaccountforandreportfinancialresourcesthatarerestricted,
committed,orassignedtoexpenditureforcapitaloutlays,includingtheacquisitionorconstructionof
capital facilities and other capital assets.
ThepermanentfundisusedtorecordtheactivityandbalanceoftheCemeteryTrustwhichprovides
funds for perpetual care of cemetery lots.
The City reports the following major proprietary funds:
54
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Assets, Liabilities and Equity
Deposits and investments
Internal balances
Transactionsbetweenfundsthatarerepresentativeoflending/borrowingarrangementsoutstandingatthe
endofthefiscalyeararereferredtoaseither“dueto/fromotherfunds”(i.e.,thecurrentportionof
interfundloans)or“advancesto/fromotherfunds”(i.e.,thenon-currentportionofinterfundloans).All
otheroutstandingbalancesbetweenfundsarereportedas“dueto/fromotherfunds.”Anyresidual
balancesoutstandingbetweenthegovernmentalactivitiesandbusiness-typeactivitiesarereportedinthe
government-wide financial statements as “internal balances.”
TheCityconsiderscashonhandanddemanddeposits,restrictedcashdeposits,andshort-terminvestments
withmaturitiesofthreemonthsorlesswhenpurchasedtobecashforthestatementofcashflows.Cashin
excessofcurrentrequirementsisinvestedinvariousinterest-bearingsecuritiesanddisclosedaspartofthe
City's investments.
InvestmentsconsistofU.S.TreasurySecurities,U.S.GovernmentAgencySecurities,commonstock,
guaranteedinvestmentcontractsandtheLocalGovernmentSurplusFundsTrustFundInvestmentpool(Pool
AandPoolB).TheLocalGovernmentSurplusFundsTrustFundisadministeredbytheFloridaStateBoard
ofAdministration,whichisnotaregistrantwiththeSecuritiesandExchangeCommission.However,the
Boardhasadoptedoperatingproceduresconsistentwiththerequirementsfora2a-7fundoraccountsin
PoolA.Inaccordancewiththeregulationsof2a-7likepools,theCity'sshareofinvestmentsheldatthe
StateBoardofAdministrationinPoolAarereportedatamortizedcost,whichapproximatesfairvalue.This
poolisregulatedbytheStateandthefairvalueofthepositioninthepoolisthesameasthevalueofthe
poolshare.InvestmentearningsofPoolAareallocatedtotheparticipatingfundsattheendofeachmonth
basedupontheratioofeachparticipant'sinvestmenttothetotalpooledinvestments.InvestmentsinPool
Barereportedatfairvalueandasincomeandreturnsofprincipalbecomeavailable,theyaretransferred
toPoolA.Otherinvestments,includingthePoliceOfficers'PensionFund,arereportedattheirfairvalue
based on the quoted market price or the best available information.
Restrictednetassetsareassetsthataresubjecttorestrictionsbeyondthegovernment’scontrol.The
restrictionsmaybeexternallyimposedorimposedbylaw.Whenbothrestrictedandunrestrictedresources
areavailableforuse,itisthegovernment’spolicytouserestrictedresourcesfirst,thenunrestricted
resources as they are needed.
Advancesbetweenfundsareoffsetbynonspendablefundbalanceinapplicablegovernmentalfundsto
indicate they are not available for appropriation and are not expendable available financial resources.
Proprietaryfundsdistinguishoperatingrevenuesandexpensesfromnonoperatingitems.Operating
revenuesandexpensesgenerallyresultfromprovidingservicesandproducinganddeliveringgoodsin
connectionwithaproprietaryfund’sprincipalongoingoperations.Theprincipaloperatingrevenuesofthe
enterprisefundsarechargestocustomersforsalesandservices.Operatingexpensesforenterprisefunds
includethecostofsalesandservices,administrativeexpenses,anddepreciationoncapitalassets.All
revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
55
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Restricted assets
Receivables and payables
Other assets
Capital assets
All trade and property tax receivables are shown net of an allowance for uncollectibles, as applicable.
Amountsduefromothergovernmentsincludeamountsduefromgrantorsforspecificprogramsandcapital
projects.Programgrantsandcapitalgrantsforcapitalassetsarerecordedasreceivablesandrevenuesat
thetimereimbursableprojectcostsareincurred.Revenuesreceivedinadvanceofprojectcostsbeing
incurredaredeferred.Receivablesconsistoftradereceivables,duefromothergovernmentsandinterest
receivableandarerecordedatthenetrealizablevalue.TheCity,asofSeptember30,2012,hasno
allowance for doubtful accounts, since all receivables are considered collectible.
Inventoriesarevaluedatcostusingtheaveragecostmethod.InventoryintheGeneralfundconsistsof
materialsandsuppliesheldforconsumption.Thecostisrecordedasanexpenditure/expenseatthetime
theindividualinventoryitemsareconsumed.InventoryintheGolfCourseFundconsistsofsuppliesheldfor
resale.
Capitalassets,whichincludeland,buildings,improvements,equipment,andinfrastructureassets(e.g.,
roads,bridges,sidewalks,andsimilaritems)arereportedintheapplicablegovernmentalorbusiness-type
activitiescolumnsinthegovernment-widefinancialstatements.TheCitydefinescapitalassetsasassets
withaninitial,individualcostofmorethan$750andanestimatedusefullifeinexcessofoneyear.Such
assetsarerecordedathistoricalcost,ifpurchased,andatfairmarketvalueatdateofgift,ifdonated.
Majoradditionsarecapitalizedwhilemaintenanceandrepairsthatdonotimproveorextendthelifeofthe
respective assets are expensed.
Certainpaymentstovendorsreflectcostsapplicabletofutureaccountingperiodsandarerecordedas
prepaid items in both the government-wide and fund financial statements.
Certainamountsreportedascashandcashequivalentsareclassifiedasrestrictedassets.Theseinclude
balancesinthedebtservicefundsthataresetasidetomeetbondeddebtrequirements,balancesinthe
capitalprojectsfundstobeusedforthepaymentofprojectcostsandbalancesintheCemetaryFundthat
areeithernotpermittedtobespentorcanonlybespentforitemsincidentaltocemetaryexpansions.The
amountoftheCemetaryFundinvestmentsisalsoclassifiedasrestrictedassetsandreportedas
permanently restricted investments.
Costsassociatedwiththeissuanceorrefundingofbondspayablearereportedasassetstheinproprietary
fundsandgovernment-widestatements.Thesecostsareamortizedoverthelifeoftherelateddebt
utilizing the straight-line method.
56
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Years
Buildings and improvements10-40
Public domain infrastructure40-50
System infrastructure15-30
Improvements other than buildings10-40
Machinery, equipment and other5-15
Airport runways20
Compensated absences
Long-term obligations
Thecostsofnormalmaintenanceandrepairsthatdonotaddtothevalueoftheassetormateriallyextend
asset lives are not capitalized.
Majoroutlaysforcapitalassetsandimprovementsarecapitalizedasprojectsareconstructed.Interest
incurredduringtheconstructionphaseofcapitalassetsofbusiness-typeactivities,ifany,isincludedas
part of the capitalized value of the asset constructed.
ItistheCity'spolicytopermitemployeestoaccumulateearnedbutunusedvacationandsickleave
benefitsandtheseareaccountedforusingtheterminationpaymentmethod.Allvacationandsickleave
amountsareaccruedinthegovernment-wideandproprietaryfinancialstatements.Aliabilityforthese
amountsisreportedingovernmentalfundsonlyiftheyhavematured,forexample,asaresultofemployee
resignations and retirements.
Inthegovernment-widefinancialstatementsandproprietaryfundtypesinthefundfinancialstatements,
longtermdebtandotherlongtermobligationsarereportedasliabilitiesintheapplicablegovernmental
activities, business type activities, or proprietary fund type statement of net assets.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Inthefundfinancialstatements,governmentalfundtypesrecognizebondpremiumsanddiscounts,aswell
asbondissuancecosts,duringthecurrentperiod.Thefaceamountofdebtissuedisreportedasother
financingsources.Premiumsreceivedondebtissuancesarereportedasotherfinancingsourceswhile
discountsondebtissuancesarereportedasotherfinancinguses.Issuancecosts,whetherornotwithheld
from the actual debt proceeds received, are reported as debt service expenditures.
57
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Fund equity
Use of Estimates
2.BUDGETARY INFORMATION
ActualresultsofoperationspresentedinaccordancewithU.S.generallyacceptedaccountingprinciples
(GAAPbasis)andtheCity'saccountingpoliciesdonotrecognizeencumbrancesasexpendituresuntilthe
periodinwhichtheactualgoodsorservicesarereceivedandaliabilityisincurred.Itisnecessaryto
includebudgetaryencumbrancestoreflectactualrevenuesandexpendituresonabasisconsistentwiththe
City's legally adopted budget.
Encumbranceaccounting,underwhichpurchaseorders,contracts,andothercommitmentsforthe
expenditureofmoniesarerecordedinordertoreservethatportionoftheapplicableappropriation,is
employedasanextensionofformalbudgetaryintegrationintheGeneral,SpecialRevenue,DebtService,
andCapitalProjectsfunds.Encumbrancesoutstandingatyearendarecarriedforwardandreappropriated
to the next year's budget.
Whenthegovernmentincursanexpenditureforpurposesforwhichvariousfundbalanceclassificationscan
beused,itisthegovernment’spolicytouserestrictedfundbalancefirst,thencommittedfundbalance,
assigned fund balance, and finally unassigned fund balance.
OnorbeforethethirdFridayinMayofeachyear,allagenciesofthegovernmentsubmitrequestsfor
appropriationstothegovernment'sCityManagersothatabudgetmaybeprepared.BeforeJuly3I,the
proposedbudgetispresentedtothegovernment'scouncilforreview.Thecouncilholdsbudgetworkshops
and public hearings and a final budget must be prepared and adopted no later than September 30.
Thepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedinthe
UnitedStatesofAmericarequiresmanagementtomakeestimatesandassumptionsthataffecttheamounts
reportedinthefinancialstatementsandaccompanyingnotes.Actualresultsmaydifferfromthose
estimates.
Governmentalfundsreportnonspendablefundbalanceforamountsthatcannotbespentbecausetheyare
either(a)notinspendableformor(b)legallyorcontractuallyrequiredtobemaintainedintact.Restricted
fundbalanceisreportedwhenexternallyimposedconstraintsareplacedontheuseofresourcesby
grantors,contributors,orlawsorregulationsofothergovernments.Committedfundbalanceisreported
foramountsthatcanonlybeusedforspecificpurposespursuanttoconstraintsimposedbyformalactionof
theCityCouncil(thegovernment’shighestlevelofdecision-makingauthority).Aformalresolutionofthe
CityCouncilisrequiredtoestablish,modify,orrescindafundbalancecommitment.TheCityreports
assignedfundbalanceforamountsthatareconstrainedbythegovernment’sintenttobeusedforspecific
purposes,butareneitherrestrictednorcommitted.TheCityCouncilhasdelegatedtheauthoritytoassign
fundbalancetotheCityManagerorhis/herdesignee.Unassignedfundbalanceistheresidual
classification for the general fund.
Budgetsarepreparedannuallyonamodifiedaccrualbasiswithencumbranceaccountingforall
governmentalfundsexceptthecapitalprojectfunds,whichareapprovedona"lifeoftheprojectbasis",
and the permanent fund, which is not budgeted. All annual appropriations lapse at year end.
58
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
3.DEPOSITS AND INVESTMENTS
Statement of Net Assets
Cash and cash equivalents680,931$
Temporarily restricted cash and cash equivalents2,494,010
Investments7,103,554
Permanently restricted investments254,806
Statement of Fiduciary Net Assets
Police Officers' Pension:
Cash and cash equivalents697,401
Investments8,119,066
Agency funds:
Cash and cash equivalents11,930
Investments220,000
Total19,581,698$
Deposits and investments
Bank deposits:
Checking and savings accounts3,881,842$
Investments:
Investments, at fair value7,578,360
Police officers' pension fund investments8,119,066
Cash on hand2,430
Total19,581,698$
Following is a reconciliation of deposit and investment balances as of September 30, 2012:
CustodialCreditRisk-Deposits.Custodialcreditriskistheriskthat,intheeventofabankfailure,the
City'sdepositsmightnotbereturned.AtSeptember30,2012,thecarryingamountoftheCityof
Sebastian'sdepositswithbankswas$3,184,441andthebankbalancewas$3,272,660.Allthedepositswere
coveredbytheFDICorcollateralizedinaccordancewiththe"FloridaSecurityforPublicDepositsAct".
UndertheAct,everyqualifiedpublicdepositoryshalldepositwiththeTreasurereligiblecollateralhavinga
marketvalueequalto50%oftheaveragedailybalanceforeachmonththatallpublicdepositsarein
excessofanyapplicabledepositinsurance.Ifthepublicdepositsexceedthetotalamountoftheregulatory
capitalaccountsofabankortheregulatorynetworthofasavingsassociation,therequiredcollateralshall
have a market value equal to 125% of the deposits.
59
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Fair ValueLess Than 1From 1-3From 4-6Over 7
General investments
Local government surplus
funds trust fund ("SBA")3,571,010$ 3,571,010$ -$ -$ -$
United States Treasuries2,002,180 2,002,180 - - -
United States Agencies2,005,170 2,005,170 - - -
7,578,360 7,578,360 - - -
Police officers' pension fund investments
United States Treasuries 585,445 - 160,053 - 425,392
United States Agencies914,340 - 376,924 106,101 431,315
Municipal Obligations35,481 - - - 35,481
Domestic corporate bonds2,206,336 51,901 751,858 372,512 1,030,065
Domestic corporate equities
equities 4,377,464 4,377,464 - - -
8,119,066 4,429,365 1,288,835 478,613 1,922,253
Total fair value15,697,426$ 12,007,725$ 1,288,835$ 478,613$ 1,922,253$
FloridaStatutesChapter185regulatesthetypesofinvestmentthatmaybeheldbythePolicePension
TrustFund.TheinvestmentguidelineshavebeenaugmentedbyCityordinancethathaveadoptedspecific
investment policies. Compliance with the policies and guidelines has been evaluated by the pension board.
Section218.415,FloridaStatutes,limitsthetypesofinvestmentsthattheCitycaninvestinunlessspecially
authorizedintheCity'sinvestmentpolicy.TheCity'sformalinvestmentpolicy,forallinvestmentsexcept
thePensionTrustFund,allowsforthefollowinginvestments:FloridaLocalGovernmentSurplusFundsTrust
Fund,UnitedStatesGovernmentSecurities,UnitedStatesGovernmentAgencies,FederalInstrumentalities,
InterestBearingTimeDepositorSavingAccounts,RepurchaseAgreements,CommercialPaper,HighGrade
CorporateNotes,Bankers'Acceptances,Stateand/orLocalGovernmentTaxableand/orTax-ExemptDebt,
Registered Investment Companies (Money Market Mutual Funds), and Intergovernmental Investment Pool.
CustodialCreditRisk-Investments.OnApril23,2003,SebastianCityCouncilformallyadoptedan
investmentpolicypursuanttoSection218.415,FloridaStatutesthatestablishedpermittedinvestments,
assetallocationlimitsandissuerlimits,creditratingsrequirementsandmaturitylimitsforallinvestments
exceptthePensionTrustFunds.TheCitymaintainsacommoncashandinvestmentpoolfortheuseofall
funds,exceptthePensionTrustFunds,whichareheldwiththirdpartytrusteesandaregovernedbyrules
established by Florida Statute Chapter 185.
InvestmentholdingsduringtheyearincludedUnitedStatesGovernmentAgencieswhichwerereportedat
fairvalueinaccordancewithGASBStatementNo.31"AccountingandFinancialReportingforCertain
InvestmentsandforExternalInvestmentPools".TheseinvestmentswereheldintrustbytheCity'sbank
depository in the City's name or by the Custodian of the Pension Trust Funds.
As of September 30, 2012, the City had the following investments and effective duration presented in terms
of years:
Investment Maturity (Years)
Investment Type
60
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
InvestmentintheCity'spensiontrustfundsarelimitedbyStateStatutesChapter185andbyaninvestment
policyadoptedbythefund'sBoardofTrusteesonJune24,2005.Theallowableinvestmentinstruments
include:UnitedStatesgovernmentandagencyissues,bankersacceptancesandcertificatesofdepositby
UnitedStatesbanks,savingsaccountswithbanksorotherfinancialinstitutionsincorporatedintheUnited
StatesandcommercialpaperratedA-2orP-2orhigherbyMoody'sorStandardandPoors.Inaddition,
commonstocksofcorporationslistedonarecognizednationalstockexchange,plusissuesconvertibleinto
commonstockarealsoallowed.Nomorethantenpercent(10%)ofthecostvalueoftotalassetsmaybe
invested in foreign securities.
AsofSeptember30,2012,theCityhad$3,571,022investedintheStateBoardofAdministration'sLocal
GovernmentSurplusTrustFundsInvestmentPool,whichconsistofaccountsinPoolAandPoolB.
$3,392,874isinPoolAand$178,148isinPoolB.PoolAhadaratingbyStandardandPoor'sRatingServices
as"AAAm"onSeptember30,2012andamountsmaybewithdrawnwithoutpenalty.PoolBparticipantsare
prohibitedfrommakingwithdrawals.PoolBisnotratedbyanynationallyrecognizedstatisticalrating
agency.AdditionalinformationregardingtheLocalGovernmentSurplusFundsTrustFundmaybeobtained
from the State Board of Administration.
Mutualfundsshallberated"m"or"AAm-G"orbetterbyStandard&Poor's,ortheequivalentbyanother
ratingagency.Stateand/orlocalgovernmenttaxableand/ortax-exemptdebt,generalobligationand/or
revenuebonds,ratedatleast"Aa"byMoody'sand"AA"byStandard&Poor'sforlong-termdebt,orratedat
least"MIG-2"byMoody'sand'SP-2"byStandard&Poor'sforshort-termdebt.Bankers'acceptancesissuedby
adomesticbankorafederallychartereddomesticofficeofaforeignbank,whichareeligibleforpurchase
bytheFederalReserveSystem,atthetimeofpurchase,theshort-termpaperisrated,ataminimum,"P-I"
byMoody'sInvestorsServicesand"A-I"Standard&Poor's.CommercialpaperofanyUnitedStatescompany
thatisrated,atthetimeofpurchase,"Prime-1"byMoody'sand"A-I"byStandard&Poor's(prime
commercialpaper).CorporatenotesissuedbycorporationsorganizedandoperatingwithintheUnited
StatesorbydepositoryinstitutionslicensedbytheUnitedStatesthathavealongtern1debtrating,atthe
timeofpurchase,ataminimum"Aa"byMoody'sandaminimumlongtermdebtratingof"AA"byStandard
& Poor's.
AsofSeptember30,2012,theCity'sinvestmentsecurities,forallinvestmentsexceptthePensionTrust
Fund, were all individually rated AA+ by Standard & Poor's and Aaa by Moody's Investor Services.
CreditRisk.TheCityinvestmentpolicythatcoversallinvestments,exceptthePensionTrustFund,permits
forinvestmentsinthefollowinginvestments,whicharelimitedtocreditqualityratingsfromnationally
recognized agencies as follows:
InterestRateRisk.TheCity'sinvestmentpolicylimitsinterestrateriskbyattemptingtomatch
investmentmaturitieswithknowncashneedsandanticipatedcashflowrequirements.Investment
maturitiesshallnotexceedthirty-six(36)months.Investmentsofconstructionfundsshallhaveaterm
appropriate to the need for funds and in accordance with debt covenants.
61
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local government surplus funds
trust fund ("SBA")3,571,010$ 47.12%-$ 0.00%
2,002,180 26.42%585,445 7.21%
2,005,170 26.46%914,340 11.26%
- 0.00%35,481 0.44%
- 0.00%2,206,336 27.17%
- 0.00%4,377,464 53.92%
$ 7,578,360 100.00% $ 8,119,066 100.00%
Amount
Percentage of
PortfolioAmount
Percentage of
Portfolio
CustodialCreditRisk.TheCity'sinvestmentpolicypursuanttoSection218.415(18),FloridaStatutes
requiressecurities,withtheexceptionofcertificatesofdeposits,shallbeheldwithathirdparty
custodian;andallsecuritiespurchasedby,andallcollateralobtainedbytheCityshouldbeproperly
designatedasanassetoftheCity.Thesecuritiesmustbeheldinanaccountseparateandapartfromthe
assetsofthefinancialinstitution.Athirdpartycustodianisdefinedasanybankdepositorycharteredby
theFederalGovernment,theStateofFlorida,oranyotherstateorterritoryoftheUnitedStateswhichhas
abranchorprincipalplaceofbusinessintheStateofFloridaasdefinedinSection658.12,FloridaStatutes,
orbyanationalassociationorganizedandexistingunderthelawsoftheUnitedStates,whichisauthorized
toacceptandexecutetrustsandwhichisdoingbusinessintheStateofFlorida.Certificatesofdeposits
maintained by book-entry at the issuing bank shall clearly identify the City as the owner.
TheCity'spensiontrustfundsinvestmentpolicyadoptedbythefund'sBoardofTrusteeshasestablished
assetallocationandissuerlimitsonthefollowinginvestments,whicharedesignedtofocuson
performance.Amaximumof100%ofavailablefundsmaybeinvestedinfixedincomesecuritiesanda
maximum of 50% of available funds may be invested in equity securities.
Issuer
United States treasuries
United States agencies
Municipal obligations
Domestic corporate bonds
Amaximumof100%ofavailablefundsmaybeinvestedintheSBAandintheUnitedStatesGovernment
Securities,50%ofavailablefundsmaybeinvestedinUnitedStatesGovernmentagencieswitha25%limit
onindividualissuers,80%ofavailablefundsmaybeinvestedinFederalInstrumentalitieswitha40%limit
onindividualissuers,25%ofavailablefundsmaybeinvestedinnon-negotiableinterestbearingtime
certificatesofdepositswitha15%limitsonindividualissuers,50%ofavailablefundsmaybeinvestedin
repurchaseagreementsexcludingone(1)businessdayagreementsandovernightsweepagreementswitha
25%limitonanyoneinstitution,25%ofavailablefundsmaybedirectlyinvestedinprimecommercialpaper
witha10%limitonindividualissuers,15%ofavailablefundsmaybedirectlyinvestedincorporatenotes
witha5%limitonindividualissuers,25%ofavailablefundsmaybedirectlyinvestedinBankers'
Acceptanceswitha10%limitonindividualissuers,20%ofavailablefundsmaybeinvestedintaxableand
tax-exemptdebts,50%ofavailablefundsmaybeinvestedinmoneymarketmutualfundwitha25%limit
on individual issuers, 10% of available funds may be invested in intergovernmental investment pools.
ConcentrationofCreditRisk.TheCity'sinvestmentpolicyhasestablishedassetallocationandissuerlimits
onthefollowinginvestments,whicharedesignedtoreduceconcentrationofcreditriskoftheCity's
investment portfolio.
As of September 30, 2012, the City had the following issuer concentration based on fair value:
Domestic corporate equities
Total
General InvestmentsPension Investments
62
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
4.RECEIVABLES
Governmental
Activities
Business-type
Activities
Accounts244,651$ 13,498$
Due from other governments519,933 -
Interest7,763 1,014
772,347$ 14,512$
5.ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Governmental
Activities
Business-type
Activities
Accounts payable93,056$ 13,416$
Accrued liabilities144,277 13,893
Due to other governments28,370 7,268
265,703$ 34,577$
6.INTERFUND RECEIVABLES AND PAYABLES AND TRANSFERS
Due from
Other Funds
Due to Other
Funds
General Fund105,550$ -$
Golf Course- 65,000
Airport- 40,550
105,550$ 105,550$
Advance from
Other Funds
Advance to
Other Funds
General Fund-$ 200,000$
Discretionary Sales Tax- 552,511
Airport752,511 -
752,511$ 752,511$
Receivables are comprised of the following at year-end:
Accounts payable and accrued liabilities are comprised of the following at year-end:
The composition of interfund balances as of September 30, 2012, was as follows:
Due to and from primary government funds
Advances to and from primary government funds
63
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Local Option
Gas Tax
Discretionary
Sales Tax
Riverfront
DevelopmentAirport
Nonmajor
Governmental
FundsTotals
General Fund125,000$ 2,069$ 60,000$ -$ 505,647$ 692,716$
Discretionary
Sales Tax- - - 22,489 - 22,489
Local Option
Gas Tax742 742
Discretionary
Sales Surtax
Revenue
Bonds 2003- 1,016,206 - - - 1,016,206
Nonmajor
governmental
funds- 1,103,489 44,458 - 814,665 1,962,612
125,000$ 2,121,764$ 104,458$ 22,489$ 1,321,054$ 3,694,765$
For the year ended September 30, 2012, interfund transfers consisted of the following:
Transfersareusedto:(1)moverevenuesfromthefundthatisrequiredtocollectthemtothefundthatis
requiredorallowedtoexpendthemand(2)movereceiptsrestrictedtoorallowedfordebtservicefrom
the funds collecting the receipts to the debt service fund as required by bond covenants.
Thebalanceof$752,511advancedtotheairportfundfromthediscretionarysalestaxfundistoberepaid
overathirtyyearperiodinaccordancewithResolutionNo.R-08-20fortheinitial$285,000advanceand
withResolutionNo.R-10-22authorizinganadditional$290,000advance.Inrelationshiptotheseadvances,
$22,289hasbeenrepaidasofSeptember30,2012.Thebalanceof$200,000advancedtotheairportfrom
general fund represents a cash loan made in 2007 without any specified terms for repayment.
Thesebalancesresultedfromthetimelagbetweenthedatesthat(1)interfundgoodsandservicesare
providedorreimbursableexpendituresoccur,(2)transactionsarerecordedintheaccountingsystem,and
(3) payments between funds are made.
Transfers out
Transfers
In
64
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
7.CAPITAL ASSETS
Beginning
BalanceAdditionsDisposalsTransfers
Ending
Balance
Governmental activities
Capital assets, not being depreciated:
Land8,007,437$ -$ -$ -$ 8,007,437$
Construction in progress1,207,848 138,631 (1,183,050) 163,429
9,215,285 138,631 - (1,183,050) 8,170,866
Capital assets, being depreciated:
Buildings12,370,759 27,020 - - 12,397,779
Non-building improvements5,992,537 351,058 (12,609) - 6,330,986
Machinery and equipment8,028,080 450,258 (310,973) - 8,167,365
Infrastructure33,628,446 800,091 - 1,183,050 35,611,587
60,019,822 1,628,427 (323,582) 1,183,050 62,507,717
Less accumulated depreciation for:
Buildings(3,448,511) (411,638) - - (3,860,149)
Non-building improvements(2,446,336) (287,823) 9,709 - (2,724,450)
Machinery and equipment(6,725,853) (571,753) 307,730 - (6,989,876)
Infrastructure(12,835,204) (1,555,648) - - (14,390,852)
(25,455,904) (2,826,862) 317,439 - (27,965,327)
Total capital assets
being depreciated, net34,563,918 (1,198,435) (6,143) 1,183,050 34,542,390
Governmental activities
capital assets, net43,779,203$ (1,059,804)$ (6,143)$ -$ 42,713,256$
Capital asset activity for the primary government for the year ended September 30, 2012, was as follows:
AtSeptember30,2012,theCity'sgovernmentalactivitieshadoutstandingcommitmentsthrough
construction contracts of approximately $1,288,217.
65
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Beginning
BalanceAdditionsDisposalsTransfers
Ending
Balance
Business-type activities
Capital assets, not being depreciated:
Land9,060$ -$ -$ -$ 9,060$
Construction in progress- 3,042 - - 3,042
9,060 3,042 - - 12,102
Capital assets, being depreciated:
Buildings6,335,323 5,019 - - 6,340,342
Non-building improvements1,909,804 2,980 (9,538) - 1,903,246
Machinery and equipment935,283 28,811 (68,253) - 895,841
Infrastructure7,468,512 60,791 - - 7,529,303
16,648,922 97,601 (77,791) - 16,668,732
Less accumulated depreciation for:
Buildings(897,314) (173,452) - - (1,070,766)
Non-building improvements(700,708) (119,415) 9,538 - (810,585)
Machinery and equipment(752,115) (104,329) 68,253 - (788,191)
Infrastructure(2,457,284) (372,185) - - (2,829,469)
(4,807,421) (769,381) 77,791 - (5,499,011)
Total capital assets
being depreciated, net11,841,501 (671,780) - - 11,169,721
Business-type activities
capital assets, net11,850,561$ (668,738)$ -$ -$ 11,181,823$
Depreciation of governmental activities by function
General government276,612$
Public safety538,475
Transportation973,603
Physical environment642,596
Economic environment363,147
Cultural and recreation32,429
Total governmental activities2,826,862$
Depreciation of business-type activities by function
Golf course80,692$
Airport688,332
Building357
Total business-type activities769,381$
Depreciation expense was charged to functions/programs of the primary government as follows:
66
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
8.LONG-TERM DEBT
·
·
·
·
Gross Revenue
Available for
Compliance
Debt Service
Requirement
% Coverage for
Fiscal Year End
810,382$ 439,248$ 184%
Bond Coverage
TheCityhascovenantedintheStormwaterUtilityRevenueBonds,Series2003BondResolutiontofix,
establish,maintainandcollectstormwaterfees,andrevisethesamefromtimetotimewhenever
necessary,soastoalwaysprovideineachfiscalyearstormwaterfeerevenuesandinvestmentearnings
equaltoatleastonehundredthirty-fivepercent(135%)oftheannualdebtservicebecomingdueineach
fiscal year.
Thefollowingtableindicatesthedegreeofcompliancewiththebondresolutioncovenantsinthe
Stormwater Utility Fund at September 30, 2012.
TheCityissuedafifteen(15)year,$9,500,000InfrastructureSalesSurtaxRevenueBonds,Series2003
inApril2003.TheCityhaspledgedInfrastructureSalesSurtaxrevenuesforrepaymentofprincipaland
interest.
TheCityissuedafifteen(15)year,$2,125,000InfrastructureSalesSurtaxRevenueBonds,Series2003A
inDecember2003.TheCityhaspledgedInfrastructureSalesSurtaxrevenuesforrepaymentof
principal and interest.
TheCityenteredintoanine(9)yearloanagreementin2012withalocalbankfor$2,296,000to
providefinancingtorepavecertainroadsintheCityandpayoffanoutstandingloan.TheCitypledged
LocalOptionGasTaxrevenuestorepaythenotepayable.ThefundsareaccumulatedintheLocal
Option Gas Tax Special Revenue fund for repayment of principal and interest.
Revenuebonds/notesaresecuredbyandpayablefromtherevenuesoftherespectivefundsthatissued
them.
TheCityissuedanineteen(19)year,$5,630,000StormwaterUtilityRevenueBonds,Series2003in
November2003.TheCityhaspledgedStormwaterFeeRevenuesalongwithacovenanttobudgetand
appropriate for repayment of principal and interest.
67
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Beginning
BalanceAdditionsDeductions
Ending
Balance
Due Within
One Year
Governmental activities
Bonds payable10,000,000$ -$ (1,075,000)$ 8,925,000$ 1,110,000$
Notes payable2,246,000 2,296,000 (2,246,000) 2,296,000 197,000
12,246,000 2,296,000 (3,321,000) 11,221,000 1,307,000
Discount on bonds payable(8,750) - 833 (7,917) -
Compensated absences1,517,765 496,207 (578,386) 1,435,586 116,390
Termination benefits11,387 - (8,844) 2,543 2,543
Pollution remediation91,200 - - 91,200 -
Totals governmental
activities13,857,602$ 2,792,207$ (3,907,397)$ 12,742,412$ 1,425,933$
Bonds payable
2003 Infrastructure Sales Surtax Revenue Bonds, due in annual
installments of $645,000 to $805,000 plus interest at 2.0%
to 4.5% through 2018.4,390,000$
2003A Infrastructure Sales Surtax Revenue Bonds, due in annual
installments of $150,000 to $185,000 plus interest at 2.0%
to 4.0% through 2018.1,030,000
2003 Stormwater Utility Revenue Bonds, due in annual
installments of $280,000 to $420,000 plus interest at 2.0%
to 4.5% through 2022.3,505,000
Total8,925,000$
Notes payable
Florida Gas Tax Revenue Note, due in annual installments of
$97,000 to $121,000 plus interest at 1.94%
through 2023.2,296,000$
Beginning
BalanceAdditionsDeductions
Ending
Balance
Due Within
One Year
Business-type activities
Compensated absences207,697$ 26,263$ (37,960)$ 196,000$ 922$
Thefollowingisasummaryofgovernmentalactivitieslong-termdebttransactionsfortheyearended
September 30, 2012:
Thefollowingisasummaryofbusiness-typeactivitieslong-termdebttransactionsfortheyearended
September 30, 2012:
68
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
September 30,PrincipalInterest
20131,307,000$ 405,315$
20141,358,000 357,295
20151,407,000 309,625
20161,456,000 259,334
20171,510,000 206,167
2018-20224,062,000 390,306
2023121,000 1,173
11,221,000$ 1,929,215$
Forthegovernmentalactivities,compensatedabsences,theunfundedOPEBobligationandtermination
benefitsaregenerallyliquidatedbythegeneralfund.Forthebusiness-typeactivities,compensated
absencesandunfundedOPEBobligationsareallocatedtoandliquidatedbythegolfcourse,airportor
building funds.
ApollutionremediationobligationwasrecordedforaFloridaDepartmentofEnvironmental(FDEP)Order
datedMarch10,1997.ThiswasrelatedtoanincidentofpetroleumcontaminationatthePublicWorks
DepartmentonApril22,1991.TheCitywasnamedasthepartyresponsibleforthecleanupbutFDEP
determinedthedischargeiseligibleunderthePetroleumCleanupParticipationProgramandwillnot
compelsiterehabilitationpriortofundingbecomingavailablefromthatprogram.Theprogramhasa
fundingcapof$400,000,witha25%requiredcostsharepercentage.TheCitymustalsopayforalimited
contaminationassessmentreportsufficienttodeterminetheextentofthecontaminationandcleanup.
Basedontheinformationavailable,theCityestimateditsexpendituretobe$91,200dependentonthe
extent of work that is eventually required and recorded a long-term liability of $91,200.
Annual debt service requirements to maturity for long-term debt are as follows:
Governmental Activities
69
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
9.LEASES
Year Ended
September 30,AirportGolf Carts
2013135,000$ 160,890$
2014135,000 -
2015135,000 -
Total405,000$ 160,890$
Year Ended
September 30,
Governmental
Activities
201367,641$
201469,008
201570,430
201671,909
201776,903
2018-2022389,087
2023-2027354,943
2028-2032414,315
2033-2037486,551
2038-2042574,436
2043-2047681,362
2048-2052811,454
2053-2055560,802
Total4,628,841$
Operating Leases - Lessor
TheCityisthelessorintwocommunicationtowerleaseswithtermsofuptofifty-fiveyears.Thetowers
haveacostof$39,285andacarryingvalueof$6,810.Forfiscalyear2012,totaldepreciationexpensefor
theleasedtoweris$1,865.Followingisaschedulebyyearofminimumfuturerentalincomeon
noncancelable operating leases:
Operating Leases - Lessee
TheCityisobligatedundercertainleasesforlandandgolfcartsaccountedforasoperatingleases.
Operatingleasesdonotgiverisetopropertyrightsorleaseobligations.Totalcostsforsuchleaseswere
$197,935forthefiscalyearendedSeptember30,2012.TheseincludetheAirportFund'sleaseobligation
forthepropertyusedastheCity'sgolfcourse.Thefollowingisaschedulebyyearsforfutureminimum
rentalpaymentsrequiredunderoperatingleasesintheGolfCoursefundthathaveinitialorremaining
noncancelable lease terms in excess of one year at September 30, 2012:
Business-type Activities
70
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Year Ended
September 30,
Business-type
Activities
2013344,628$
2014351,748
2015334,194
2016202,821
2017201,800
2018-20221,143,309
2023-20271,059,772
2028-2032516,822
2033-2036271,328
Total4,426,422$
10.PROPERTY TAXES
11.CONTINGENT LIABILITIES
VarioussuitsandclaimsarecurrentlypendingagainsttheCity.ItisimpossiblefortheCitytoaccurately
quantifytheexposureinvolvedgiventhejury'slatitudeinassessingcompensatoryandpunitivedamages,
andthecourt'slatitudeinawardingattorney'sfees.TheCityintendstovigorouslydefendagainstthese
lawsuitsandbelievesithasagoodchanceofprevailingontheirmerits.TheCityiscontingentlyliablewith
respecttolawsuitsandotherclaimsincidentaltotheordinarycourseofitsoperations.Intheopinionof
managementandbasedontheadviceoflegalcounsel,theultimatedispositionoflawsuitswillnothavea
material adverse effect on the financial position of the City.
TheAirportFundisthelessorofvariousproperties(landwithacostbasisof$9,060)withleaseterms
varyingfromtwentytothirtyyears.TheseincludetheleasetotheGolfCourseFundrequiringannual
paymentsof$135,000through2015.Followingisaschedulebyyearofminimumfuturerentalincomeon
noncancelable operating leases:
Future minimum rental commitments are as follows:
TheCityispermittedbyStatelawtolevytaxesupto10millsonassessedvaluation.Themillagerate
leviedbytheCityforthefiscalyearendedSeptember30,2012,was3.3041mills.Totaltaxcollections
were approximately 96.4% of the total tax levy.
ThetaxlevyoftheCityisestablishedbyCityCouncil.UnderFloridalaw,theassessmentofallproperties
andthecollectionofmunicipaltaxesareprovidedbyofficesoftheCounty'sPropertyAppraiserandTax
Collector.AdValoremtaxesareleviedonpropertyvaluesasofJanuary1.Thefiscalyearforwhichtaxes
areleviedbeginsOctober1.TaxesaredueNovemberIandbecomedelinquentonApril1.Alltaxesunpaid
asofMay30aresubjecttoataxcertificatesale.Propertytaxrevenuesarerecognizedinthefiscalyear
for which they are levied and also become due and payable.
71
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
12.RISK MANAGEMENT
13.BENEFIT PLANS
Defined Benefit Pension Plan
Retirees and beneficiaries currently receiving benefits 9
Disability retirees 2
Terminated employees not currently receiving benefits 3
Fully, partially, and non-vested active plan participants33
47
Police Officer's Pension Plan
PlanDescription.ThePoliceOfficers'PensionPlanisaFloridaStatuteChapter185single-employerdefined
benefitplan.OnlyCitypoliceofficersparticipateinthePolicePensionPlan.Thestateprovidesa
contributiontothePolicePensionPlanthroughadistributionoffundscollectedfrominsurancepremium
taxes.ThePensionplandataprovidedintheseFinancialStatementsarefromtheactuarialvaluationasof
October1,2010todeterminetherequiredcontributionforthefiscalyearendingSeptember30,2012.
AlthoughthePoliceOfficers'PensionPlanprovidesseparatereporting,whichmaybeobtainedinthe
Financedepartment,itisalsoacomponentunit(reportingasaPensionTrustFund)oftheCity'sfinancial
reporting entity.
BenefitProvisionsandContributionRequirements.ThePoliceOfficers'PensionPlanprovidesretirement
anddisabilitybenefitstoplanmembersandbeneficiaries.ThisPlanisadministeredbyaseparatelocal
BoardofTrustees.Chapter185,FloridaStatutes,asamendedgovernsallbenefitprovisionsofthePlan.
Contributionrequirements,inaccordancewithChapter185,FloridaStatutes,areestablishedbyCity
ordinance,asprovidedinChapter58,ArticleIIIoftheSebastianCityCode.TheCityCouncilhasthe
authority to amend funding requirements.
TheCityisexposedtovariousrisksoflossrelatedtotorts;theftofordamagetoanddestructionofassets;
errorsandomissions;andnaturaldisasters.TheCitypurchasescommercialinsurancewithvarious
deductiblesfordifferenttypesoflosses.Thecostofthisinsuranceisaccountedforinthegeneralfund,
golfcoursefund,airportfund,andbuildingfund.Settledclaimshavenotexceededthiscommercial
coverage in the past three fiscal years.
Amountsreceivedorreceivablefromgrantoragenciesaresubjecttoauditandadjustmentbygrantor
agencies,principallythefederalandstategovernments.Anydisallowedclaims,includingamountsalready
collected,mayconstitutealiabilitytotheapplicablefunds.Theamount,ifany,ofexpendituresthatmay
bedisallowedbythegrantorcannotbedeterminedatthistime,althoughtheCityexpectssuchamounts,if
any, to be immaterial.
As of September 30, 2012, employee membership data was as follows:
72
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Years Ended
September 30,
Annual Pension
Cost (APC)
Percentage
Contributed
Net Pension
Asset
2010706,678$ 99.30%141,338$
2011740,912 99.39%136,816
2012594,612 99.21%132,133
BasisofAccounting.Financialstatementsarepreparedusingtheaccrualbasisofaccounting.Planmember
contributionsarerecognizedintheperiodinwhichthecontributionsaredue.Employercontributionsare
recognizedwhendue,andtheemployerhasmadeformalcommitmenttoprovidethecontributions.
Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan.
MethodUsedtoValueInvestments.Investmentsarereportedatfairvalue.Short-terminvestmentsare
reportedatcost,whichapproximatesfairvalue.Securitiestradedonanationalorinternationalexchange
arevaluedatthelastreportedsalespriceatcurrentexchangerates.Mortgagesarevaluedonthebasisof
futureprincipalandinterestpayments,andarediscountedatprevailinginterestratesforsimilar
instruments.Investmentsthatdonothaveanestablishedmarketarereportedatestimatedfairvalue.
Investmentsinsecuritiesofasingleorganization(excludingmutualfundsandthoseissuedorguaranteed
by the U.S. government) held by the pension plan did not exceed five percent of the total plan assets.
FundingPolicy.Theemployer,employee,andStatecontributionrequirementsareapplicabletothePlan
andactuariallydeterminedonafrequencyofatleastevery3yearsinaccordancewithFloridaState
Statute.AdministrationcostsofthepensionplanarefinancedbythePlan.Forthe2011-2012fiscalyear,
theemployeecontributionrate,expressedasapercentageofcompensation,was5.0%andtheemployer
contributionratewas22.1%.Theemployercontributionamountedto$450,666.TheStatecontributionwas
$139,263,whichrepresentsstatesharedrevenuethatisleviedonpropertyandcasualtyinsurance
premiumsandcollectedbytheState.TheStatecontributionwasrecognizedandrecordedinthegeneral
fundandthecorrespondingexpenditurewasrecordedaspublicsafetyexpenditure.TheCityisrequiredto
contribute the remaining amounts to ensure that the Plan is actuarially sound.
Reserves. All of the net assets of the Police Pension Plan are legally reserved for plan participant benefits.
FortheyearendedSeptember30,2012theCity’sannualpensioncostwas$594,612,howeveractual
contributionsequaled$589,929,decreasingthenetpensionasset.Therequiredcontributionwas
determinedaspartoftheOctober1,2010actuarialvaluationusingthefrozenentryageactuarialcost
method.Theactuarialassumptionsincluded:arateofreturnontheinvestmentofpresentandfuture
assetsof8.0%andprojectedsalaryincreasesof6.0%peryear,includinginflationat3.0%.Theactuarial
valueofplanassetswasdeterminedusingtechniquesthatsmooththeeffectsofshort-termvolatilityinthe
marketvalueofinvestmentsoverafive-yearperiod.Theplan'sunfundedactuarialaccruedliabilityis
beingamortizedasalevelpercentageofprojectedpayrollonanclosedbasis.Theremainingamortization
period at October 1, 2012, the date of the latest actuarial valuation, was 28 years.
Three-Year Trend Information
73
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Development of Net Pension Asset
September 30,
2012
Actuarially determined contribution $ 563,804
Interest on net pension asset (10,945)
Adjustment to actuarially determined contribution 41,753
Annual pension cost 594,612
Contributions made 589,929
Decrease in net pension asset (4,683)
Net pension asset, beginning of year 136,816
Net pension asset, end of year $ 132,133
Negotiated Defined Benefit Pension Plan
Thescheduleoffundingprogress,presentedasRSIfollowingthenotestothefinancialstatements,
presentsmulti-yeartrendinformationaboutwhethertheactuarialvalueofPlanassetsisincreasingor
decreasing over time relative to the actuarial accrued liability for benefits.
Communication Workers of America / International Typographical Union
ThemunicipalDefinedBenefitPlanhasbeensubjecttotheminimumfundingstandardssincetheadoption
ofthe"FloridaProtectionofPublicEmployeeRetirementBenefitAct"(PartVIIofChapter112,Florida
Statutes)in1980.Accordingly,thesponsorhasfundedtheactuariallydeterminedrequiredcontributions
forallyearsfromOctober1,1987,throughthetransitiondate,October1,1997.Thus,theNPOonOctober
1, 1997, is $0.
ThefollowingtableshowsthecomponentsoftheCity'sannualpensioncostfortheyearendedSeptember
30, 2012, the amount actually contributed to the plan, and the changes in the City's net pension asset:
AsofOctober1,2012,themostrecentactuarialvaluationdate,theplanwas90.30percentfunded.The
actuarialaccruedliabilityforbenefitswas$9,793,255,andtheactuarialvalueofassetswas$8,843,096,
resultinginanunfundedactuarialaccruedliability(UAAL)of$950,159.Thecoveredpayroll(annualpayroll
ofactiveemployeescoveredbytheplan)was$1,893,717,andtheratiooftheUAALtothecoveredpayroll
was 50.17 percent.
Funded Status and Funding Progress
PlanDescription.TheCommunicationWorkersofAmerica/InternationalTypographicalUnionNegotiated
Pension Plan (NPP), which began in 1967, is a multi-employer, defined benefit plan. The Plan is available to
anyCommunicationWorkersofAmerica(CWA)bargainingunitmember,andbenefitsareportablefromone
contributing employer to another.
74
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
WithdrawalBenefit.IftheemployeedidnotearnenoughServiceCredittoqualifyforaNormalPension,
theemployeemaybeeligibleforalumpsumwithdrawalbenefit,basedontotalcontributions,afterthe
employeehasincurredabreakinservice.BenefitProvisionsandContributionRequirements:TheNPP
providesretirementanddisabilitybenefitstoplanmembersandbeneficiaries.Theplanisadministeredat
thePlanOfficeinColoradoSprings,Colorado.ContributionrequirementsareestablishedbytheCWA
contract, effective date October 1, 2011, which is negotiated every 3 years, and approved by City Council.
FundingPolicy.Administrationcostsofthepensionplanarefinancedbytheplan.Theemployer
contributionrate,expressedasapercentageofcompensation,was9.00%forthe2011-2012fiscalyear.
Employeesdonotcontributetothisplan.ContributionstotheCWAPensionPlanforthefiscalyearsended
September30,2010,2011and2012were$234,219,$223,113and$210,258respectively,whichareequalto
100% of the required contribution for each year.
EarlyPension.Minimumage60:20yearsofServiceCreditrequiredifemployedafterJanuary1,1989.25
yearsofServiceCreditrequiredifemploymentendedbeforeJanuaryI,1993.Pensionamountsare
permanentlyreducedbasedonageontheeffectivedate,becausethepaymentsareexpectedtobemade
for a longer period of time.
DisabilityPension.Nominimumageandthepensionamountisnotreducedforage;theremustbea
SocialSecurityDisabilityAward,10yearsofactualServiceCreditandacontributionforcovered
employmentmusthavebeenmadewithinfivecalendaryearsprecedingtheentitlementdatetoSocial
SecurityDisabilityPension.AnapplicationmustbefiledwiththePlanwithin6monthsoftheSocial
Security Notice of Award date to receive pension retroactive to the Social Security entitlement date.
LumpSumDisabilityBenefit.IftheemployeeisinreceiptofaSocialSecurityDisabilityAwardandis
vested,butnotimmediatelyeligibletoreceiveanypensiondescribedabove,theemployeemaybeeligible
foralumpsumequaltototalcontributionscreditedontheemployeesbehalf(or36timestheNormal
Pensionamount,ifgreater).Iftheemployeeisimmediatelyeligibleforapensionbutnotyetreceiving
one,theemployeecanstillqualifyforalumpsumiftheemployeesubmitstwophysicians'written
statements that the disability will lead to death within one year of the date of application.
NormalPension.Minimumage65:5yearsofServiceCreditrequiredifanyportionofservicecreditwas
earnedafterJanuary1,1989.10yearsofServiceCreditrequiredifemployees'coverageendedbefore
January1,1989.OncetheServiceCreditamountisaccrued,theemployeeisvestedandcannotlosethe
right to a pension.
BenefitProvisionsandContributionRequirements.TheNPPprovidesretirementanddisabilitybenefitsto
planmembersandbeneficiaries.TheplanisadministeredatthePlanOfficeinColoradoSprings,Colorado.
ContributionrequirementsareestablishedbytheCWAcontract,effectivedateOctober1,2011,whichis
negotiated every 3 years, and approved by City Council.
DeathBenefit.Iftheemployeediesbeforebecomingapensionerandhasatlease$250contributedonthe
employees'behalf,alumpsumdeathbenefitequaltototalcontributionscreditedontheemployees'behalf
or36timestheNormalPensionamount,ifgreater,willbepaidtoemployees'beneficiary.Iftheemployee
ismarriedatthetimeofdeath,thespousewillhavethechoiceofalumpsumoramonthlysurvivor
benefit.
75
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
14.OTHER POSTEMPLOYMENT BENEFITS
EmployeesareeligibletoreceiveapartialsubsidyfromtheRetireeMedicalPlanuponretirement,ifthey
areenrolledintheactivemedicalplanimmediatelypriortoretiringandachievedatleast20yearsof
serviceinafulltimecapacity.Ifeligible,theCitypays50%ofthecostsofsinglecoveragegrouphealth
insurance for up to 2 years after retirement. No employee has ever received the subsidy.
Plandescription.PursuanttoSection112.0801,FloridaStatutes,theCityisrequiredtopermit
participationinthehealthinsuranceprogrambyretireesandtheireligibledependentsatacosttothe
retireethatisnogreaterthanthecostatwhichcoverageisavailableforactiveemployees.TheCity,by
policy,haselectedtoprovidequalifiedretireeswithpartialsubsidy.Inthisrespect,theCityoperatesa
single-employer plan.
Defined Contribution 401(a) Plan
PlanDescription.TheICMARetirementCorporation's401RetirementPlanisaDefinedContributionPlan
"qualified"underSection401(a)oftheInternalRevenueCode.Eachparticipanthasaplanaccountto
whichcontributionsaremade.Planbenefitsarebasedonthetotalamountofmoneyintheemployees'
accountatretirementorothereligibleevent.ThePlanisavailabletoallmanagementstaffandmaybe
rolled over to another "qualified" employer plan that accepts rollovers, or Traditional IRA's.
LumpSum.Retirementbenefitscanbepaideitherpartiallyorbytotaldistributionoftheemployees'
account balance.
Annuities. Retirement benefits can be utilized to purchase an annuity.
BenefitProvisionsandContributionRequirements.The401providesretirementbenefitstoplanmembers
andbeneficiaries.TheplanisadministeredbytheICMARetirementCorporation.Contribution
requirementsareestablishedbytheCityofSebastian,ManagementBenefitPackage,revisedOctober1,
2006, and approved by the City Manager.
FundingPolicy.TheadministrationcostsofthepensionplanarefinancedbythePlan.Theemployer
contributionrate,expressedasapercentageofcompensation,was9.0%forthe2011-12fiscalyear.
EmployeesdonotcontributetothisPlan.Contributionstothe401DefinedContributionPlanforthefiscal
yearsendedSeptember30,2010,2011,and2012were$126,377,$132,656and$109,864,respectively,
which are equal to 100% of the required contribution for each year.
PeriodicPayments.Retirementbenefitscanbepaidmonthly,quarterly,semi-annual(atsix-month
intervals only) or annual payments until assets are fully paid out.
Rollover.Retirementbenefitscanberolledovertoanotheremployerplan(includinga457deferred
compensation plan) that accepts rollovers, or to a Traditional IRA.
76
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Annual required contribution $ 26,851
Interest on net OPEB obligation 13,037
Adjustment to annual required contribution (12,455)
Net OPEB cost 27,433
Contributions made (36,955)
Increase in net OPEB obligation (9,522)
Net OPEB obligation, beginning of year 325,915
Net OPEB obligation, end of year $ 316,393
Year Ended
Annual OPEB
Cost
Percentage of
Annual OPEB
Cost
Contributed
Net OPEB
Obligation
201027,174$ 119%339,765$
201127,475 150%334,548
201227,433 135%316,393
FundingPolicy.BasedonGASBStatement43and45,whichsetforththeguidelinesfortreatmentofother
postemploymentbenefits,theCityhadanactuarycalculatefuturefundingrequirementsin2010.The
actuary's2010estimate,usingtheProjectedUnitCreditMethod,producedanunfundedobligationof
$339,765andanannualrequiredcontributionof$26,851.TheCityelectedtofundtheOPEBobligationona
pay-as-you-gobasis.Theentireunfundedobligationwasrecognizedinthegovernment-widefinancial
statements.Theenterprisefundportion($27,210)wasalsorecognizedintheenterprisefundfinancial
statements.Assuch,aseparateauditedGAAPbasispostemploymentbenefitplanreportisnotavailable.In
2011and2012,theCityrecordedadecreaseofthegovernment-wideobligationof$5,217and$26,126,
respectively,basedontheannualrequiredcontributionreducedbytheexpectedfuturebenefitpayments.
The additional enterprise fund portion was calculated as $11,470 in 2011 and a decrease $986 in 2012.
ThefollowingtableshowsthecomponentsoftheCity'sannualOPEBcostfortheyearendedSeptember30,
2012, the amount actually contributed to the plan, and changes in the City's net OPEB obligation:
Annual OPEB Cost and Net OPEB Obligation
TheCity’sannualOPEBcost,thepercentageofannualOPEBcostcontributedtothePlan,andthenetOPEB
obligation for fiscal year 2012 and the previous two years were as follows:
Three-Year Trend Information
TheCity'sannualotherpostemploymentbenefit(OPEB)costiscalculatedbasedontheannualrequired
contributionoftheemployer(ARC).TheARCrepresentsaleveloffundingthat,ifpaidonanongoingbasis,
isprojectedtocovernormalcosteachyearandamortizeanyunfundedactuarialliabilities(orfunding
excess) over a period not to exceed thirty years.
77
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
Termination Benefits
Theactuarialvaluationsinvolveestimatesofthevalueofreportedamountsandassumptionsaboutthe
probabilityofeventsfarintothefuture.Actuariallydeterminedamountsaresubjecttocontinualrevision
asactualresultsarecomparedtopastexpectationsandnewestimatesaremadeaboutthefuture.
Calculationsarebasedonthetypesofbenefitsprovidedwiththeplanatthetimeofeachvaluationandon
thepatternofsharingofcostsbetweentheemployerandplanmemberstothatpoint.Calculationsreflect
along-termperspectiveandassumptionsusedincludetechniquesdesignedtoreduceshort-termvolatility
inactuarialaccruedliabilitiesandactuarialvalueofassets.Thescheduleoffundingprogressshownbelow
isrequiredtopresentmulti-trendinformationaboutwhethertheactuarialvalueofplanassetsis
increasingordecreasingovertimerelativetotheactuarialaccruedliabilityforbenefits.TheCityelected
tofundtheOPEBonapay-as-you-gobasisandconsequently,reportsazerobalancefortheactuarialvalue
of assets.
TheCityoffereditsemployeesanearlyretirementincentiveprogramin2006-2007fiscalyear.The
eligibilityrequirementswerethattheemployeewaseitheranexemptmanagementemployeeoranhourly
employeeincludingpoliceofficerswithatleast15yearsofserviceinafulltimecapacityandwithinthree
yearsofreachingtheageof65(theageeligibleforMedicarebenefit).Thebenefitsincludeaonetime
lumpsumpaymentbasedontheyearofserviceandsinglecoveragegrouphealthinsuranceforupto3
yearsafterretirement.Thelumpsumpaymentwascalculatedbymultiplying$1,000foreachfullyearof
service.Thegrouphealthinsurancewillterminatewhentheretireereachestheageof65andeligiblefor
Medicarebenefits.AsofSeptember30,2012,thetotalaccruedterminationbenefitsforthegovernment-
widefinancialstatementswere$2,543.Noportionoftheaccruedterminationbenefitsrelatedtothe
enterprise funds.
TherequiredcontributionwasdeterminedaspartoftheOctober1,2009actuarialvaluationusingthe
projectedunitcreditactuarialcostmethod.Theactuarialassumptionsincluded(a)4percentinvestment
rateofreturn(netofadministrativeexpenses),(b)a3percentpayrollgrowthrate,(c)a3percent
inflationrate,and(d)anannualhealthcaretrendrateof9percentinitially,reducedbydecrementstoan
ultimaterateof5percentin2017.TheactuarialassumptionsutilizedtheRP-2000CombinedHealthy
MortalityTableprojectedto2010.Theplan'sunfundedactuarialaccruedliabilityisbeingamortizedasa
leveldollarofprojectedpayrollonanopenbasis.TheremainingamortizationperiodatOctober1,2009
was 30 years.
Funded Status and Funding Progress
AsofOctober1,2009,thedateofthemostrecentactuarialvaluation,theactuarialaccruedliabilityfor
benefitswas$280,582,allofwhichwasunfunded.Thecoveredpayroll(annualpayrollofactiveemployees
covered by the plan) was $6,426,614, and the ratio of the UAAL to the covered payroll was 4 percent.
Actuarial Methods and Assumptions
Projectionsofbenefitsforfinancialreportingpurposesarebasedonthesubstantiveplan(theplanas
understoodbytheemployerandplanmembers)andincludethetypesofbenefitsprovidedatthetimeof
eachvaluationandthehistoricalpatternofsharingofbenefitcostsbetweentheemployerandplan
memberstothatpoint.Theactuarialmethodsandassumptionsusedincludetechniquesthataredesigned
toreducetheeffectsofshort-termvolatilityinactuarialaccruedliabilitiesandtheactuarialvalueof
assets, consistent with the long-term perspective of the calculations.
78
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
15.FUND BALANCES - GOVERNMENTAL FUNDS
General FundLOGT
Discretionary
Sales Tax
Riverfront
Redevelopment
DST Revenue
Bonds
Nonmajor
FundsTotal
Nonspendable:
Inventory65,423$ -$ -$ -$ -$ -$ 65,423$
Prepaids105,027 - - - - - 105,027
Long-term advances200,000 - 552,511 - - - 752,511
Permanent fund corpus- - - - - 737,182 737,182
Total nonspendable370,450 - 552,511 - - 737,182 1,660,143
Restricted for:
Debt service- - - - 1,555,411 182,579 1,737,990
Special revenue- 190,274 1,463,061 478,895 - 236,459 2,368,689
Capital projects- - - - - 17,354 17,354
Expendable portion of -
cemetery fund corpus- - - - - 247,793 247,793
Total restricted- 190,274 1,463,061 478,895 1,555,411 684,185 4,371,826
Committed for:
Working capital2,861,708 - - - - 719,686 3,581,394
Assigned for:
General employee events3,741 - - - - - 3,741
Law enforcement grants4,650 - - - - - 4,650
Greer donations for police27,316 - - - - - 27,316
Total assigned35,707 - - - - - 35,707
Unassigned1,734,307 - - - - - 1,734,307
Total fund balances,
governmental funds5,002,172$ 190,274$ 2,015,572$ 478,895$ 1,555,411$ 2,141,053$ 11,383,377$
InaccordancewithGASBStatementNo.54,FundBalanceReportingandGovernmentalFundType
Definitions,theCityclassifiesfundbalancesbasedprimarilyontheextenttowhichitisboundtoobserve
constraintsimposedupontheuseoftheresourcesreportedingovernmentalfunds.Detailedinformationon
fund balances of governmental funds is as follows:
79
CITY OF SEBASTIAN, FLORIDA
Notes to Financial Statements
16.INVESTED IN CAPITAL ASSETS NET OF RELATED DEBT
Governmental
Activities
Business-type
Activities
Capital assets:
Capital assets not being depreciated8,170,866$ 12,102$
Capital assets being depreciated, net34,542,390 11,169,721
42,713,256 11,181,823
Related debt:
Total bonds and notes payable11,221,000 -
Net bond premium/discount(7,917) -
11,213,083 -
Invested in capital assets, net of
capital - related debt31,500,173$ 11,181,823$
Thecompositionofnetassetsinvestedincapitalassets,netofrelateddebtasofSeptember30,2012,was
as follows:
80
REQUIRED SUPPLEMENTARY INFORMATION
81
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Employees' Retirement Plan
Schedule of Funding Progress
Single-employer Pension Trust Fund
Actuarial
AccruedUAAL as a
ActuarialLiabilityUnfundedPercentage
ActuarialValue of(AAL) -AALFundedCoveredof Covered
ValuationAssetsEntry Age(UAAL)RatioPayrollPayroll
Date(a)(b)(b-a)(a / b)(c)((b-a) / c)
10/1/20043,536,724$ 4,251,736$ 715,012$ 83.18%1,480,974$ 48.28%
10/1/20064,711,294 5,389,815 678,521 87.41%1,769,613 38.34%
10/1/20085,474,816 6,127,531 652,715 89.35%2,143,131 30.46%
10/1/20107,086,302 8,029,402 943,100 88.25%2,205,042 42.77%
10/1/20128,843,096 9,793,255 950,159 90.30%1,893,717 50.17%
Schedule of Employer Contributions
Single-employer Pension Trust Fund
Annual
Year EndedRequiredCityStatePercentage
September 30,ContributionsContributionContributionContributed
2007407,011$ 294,534$ 117,621$ 101.26%
2008 456,928 376,769 122,800 109.33%
2009557,439 404,104 137,782 97.21%
2010 701,998 566,910 134,852 99.97%
2011736,420 602,943 133,477 100.00%
2012 559,868 436,386 123,482 100.00%
82
CITY OF SEBASTIAN, FLORIDA
Required Supplementary Information
Other Postemployment Benefits Plan
Schedule of Funding Progress
Other Postemployment Benefits Plan
Actuarial
Accrued
ActuarialLiabilityUnfunded
ActuarialValue of(AAL) -AALFunded
ValuationAssetsEntry Age(UAAL)Ratio
Date(a)(b)(b-a)(a / b)
9/30/2010-$ 306,554$ 306,554$ 0.0%
9/30/2011- 316,393 316,393 0.0%
9/30/2012- 280,582 280,582 0.0%
Schedule of Employer Contributions
Other Postemployment Benefits Plan
Annual
Year EndedRequiredPercentage
September 30,ContributionsContributed
9/30/201026,557$ 119%
9/30/201126,868 150%
9/30/201226,851 135%
83
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84
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
85
CITY OF SEBASTIAN, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2012
Law
Parking RecreationStormwaterEnforcement
In-Lieu-ofImpact FeeUtilityForfeiture
Assets
Cash and cash equivalents-$ 5,723$ 40,452$ 9,315$
Investments26,465 687,625 115,690 59,590
Interest receivable- - 997 -
Due from other governments- - 10,453 -
Total assets26,465$ 693,348$ 167,592$ 68,905$
Liabilities
Accounts payable and accrued liabilities-$ 127$ 38$ -$
Fund balances:
Nonspendable- - - -
Restricted- - 167,554 68,905
Committed26,465 693,221 - -
Total fund balances26,465 693,221 167,554 68,905
Total liabilities and
fund balances26,465$ 693,348$ 167,592$ 68,905$
Special Revenue Funds
86
Debt ServicePermanent
StormwaterTotal
UtilityGeneralStormwaterNonmajor
RevenueCapitalCapital TransportationUtilityGovernmental
Bonds 2003ProjectsImprovementsImprovementsImprovementsCemeteryFunds
182,579$ -$ 2,643$ 23,208$ -$ 730,169$ 994,089$
- - - - - 254,806 1,144,176
- - - - - - 997
- - - - - - 10,453
182,579$ -$ 2,643$ 23,208$ -$ 984,975$ 2,149,715$
-$ -$ 2,643$ 5,854$ -$ -$ 8,662$
- - - - - 737,182 737,182
182,579 - - 17,354 - 247,793 684,185
- - - - - - 719,686
182,579 - - 17,354 - 984,975 2,141,053
182,579$ -$ 2,643$ 23,208$ -$ 984,975$ 2,149,715$
Capital Projects Funds
87
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Revenue, Expenditures
and Changes in Fund Balances - Nonmajor Governmental Funds
For the Year Ended September 30, 2012
Law
Parking RecreationStormwaterEnforcement
In-Lieu-ofImpact FeeUtilityForfeiture
Revenue
Impact fees-$ 58,500$ -$ -$
Charges for services- - 803,983 -
Fines- - - 5,268
Investment earnings57 4,388 7,017 815
Contributions and donations- - - -
Other revenue 13,776 - 2,003 8,476
Total revenue13,833 62,888 813,003 14,559
Expenditures
Current:
General government- - - -
Public safety- - - 12,239
Physical environment- - 8,348 -
Debt Service:
Principal- - - -
Interest and fiscal charges- - - -
Capital outlay- - - -
Total expenditures- - 8,348 12,239
Revenue over (under) expenditures13,833 62,888 804,655 2,320
Other financing sources (uses)
Transfers in- - 3,493 -
Transfers out- (217,854) (1,090,750) -
Total other financing sources (uses)- (217,854) (1,087,257) -
Net change in fund balances13,833 (154,966) (282,602) 2,320
Fund balances, beginning of year12,632 848,187 450,156 66,585
Fund balances, end of year 26,465$ 693,221$ 167,554$ 68,905$
Special Revenue Funds
88
Debt ServicePermanent
StormwaterTotal
UtilityGeneralStormwaterNonmajor
RevenueCapitalCapital TransportationUtilityGovernmental
Bonds 2003ProjectsImprovementsImprovementsImprovementsCemeteryFunds
-$ -$ -$ -$ -$ -$ 58,500$
- - - - - 63,142 867,125
- - - - - - 5,268
175 - - - - 7,351 19,803
- - 14,001 168,059 - - 182,060
- - - - - 350 24,605
175 - 14,001 168,059 - 70,843 1,157,361
- 9,700 - - - - 9,700
- - - - - - 12,239
- - - - 3,980 - 12,328
280,000 - - - - - 280,000
160,290 - - - - - 160,290
- 406,647 261,138 565,056 499,232 - 1,732,073
440,290 416,347 261,138 565,056 503,212 - 2,206,630
(440,115) (416,347) (247,137) (396,997) (503,212) 70,843 (1,049,269)
439,674 416,347 247,138 362,587 493,373 - 1,962,612
- - (2,568) (742) (3,493) (5,647) (1,321,054)
439,674 416,347 244,570 361,845 489,880 (5,647) 641,558
(441) - (2,567) (35,152) (13,332) 65,196 (407,711)
183,020 - 2,567 52,506 13,332 919,779 2,548,764
182,579$ -$ -$ 17,354$ -$ 984,975$ 2,141,053$
Capital Projects Funds
89
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenue, Expenditures
and Changes in Fund Balance - Budget and Actual
Parking In-Lieu-Of Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
Final(Under) Final
BudgetActualBudget
Revenue
Investment earnings10$ 57$ 47$
Other revenue13,790 13,776 (14)
Net change in fund balance13,800 13,833 33
Fund balance, beginning of year 12,632 12,632 -
Fund balance, end of year 26,432$ 26,465$ 33$
90
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenue, Expenditures
and Changes in Fund Balance - Budget and Actual
Recreation Impact Fee Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
Final(Under) Final
BudgetActualBudget
Revenue
Impact fees20,000$ 58,500$ 38,500$
Investment earnings8,500 4,388 (4,112)
Total revenue28,500 62,888 34,388
Other financing sources (uses)
Transfers in415,463 - (415,463)
Transfers out(443,963) (217,854) 226,109
Total other financing sourced (uses)(28,500) (217,854) (189,354)
Net change in fund balances- (154,966) (154,966)
Fund balance, beginning of year848,187 848,187 -
Fund balance, end of year 848,187$ 693,221$ (154,966)$
91
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenue, Expenditures
and Changes in Fund Balance - Budget and Actual
Stormwater Utility Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
Final(Under) Final
BudgetActualBudget
Revenue
Charges for services815,000$ 803,983$ (11,017)$
Investment earnings3,450 7,017 3,567
Other revenue- 2,003 2,003
Total revenue818,450 813,003 (5,447)
Expenditures
Current:
Physical environment100 8,348 8,248
Revenue over (under) expenditures818,350 804,655 (13,695)
Other financing uses
Transfers in271,249 3,493 (267,756)
Transfers out(1,089,599) (1,090,750) (1,151)
Net change in fund balance- (282,602) (282,602)
Fund balance, beginning of year450,156 450,156 -
Fund balance, end of year 450,156$ 167,554$ (282,602)$
92
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenue, Expenditures
and Changes in Fund Balances - Budget and Actual
Law Enforcement Forfeiture Special Revenue Fund
For the Year Ended September 30, 2012
Actual Over
Final(Under) Final
BudgetActualBudget
Revenue
Fines8,000$ 5,268$ (2,732)$
Investment earnings125 815 690
Contributions2,000 - (2,000)
Other revenue- 8,476 8,476
Total revenue10,125 14,559 4,434
Expenditures
Current:
Public safety- 12,239 12,239
Net change in fund balance10,125 2,320 (7,805)
Fund balance., beginning of year66,585 66,585 -
Fund balance, end of year 76,710$ 68,905$ (7,805)$
93
CITY OF SEBASTIAN, FLORIDA
Schedule of Revenue, Expenditures
and Changes in Fund Balance - Budget and Actual
Stormwater Utility Revenue Bonds 2003 Debt Service Fund
For the Year Ended September 30, 2012
Actual Over
Final(Under) Final
BudgetActualBudget
Revenue
Investment earnings 1,100$ 175$ (925)$
Expenditures
Debt service:
Principal280,000 280,000 -
Interest and fiscal charges160,123 160,290 167
Total expenditures440,123 440,290 167
Revenue over (under) expenditures(439,023) (440,115) (1,092)
Other financing sources
Transfers in439,023 439,674 651
Net change in fund balances- (441) (441)
Fund balance, beginning of year 183,020 183,020 -
Fund balance, end of year 183,020$ 182,579$ (441)$
94
AGENCY FUND
95
CITY OF SEBASTIAN, FLORIDA
Combining Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2012
BalanceBalance
October 1, September 30,
2011AdditionsDeletions2012
Performance Deposits
Assets
Cash and cash equivalents11,930$ -$ -$ 11,930$
Investments, at fair value220,000 - - 220,000
Total assets 231,930$ -$ -$ 231,930$
Liabilities
Performance deposits held in escrow 231,930$ -$ -$ 231,930$
96
CAPITAL ASSETS
97
CITY OF SEBASTIAN, FLORIDA
Comparative Schedule by Source
Capital Assets Used in the Operation of Governmental Funds
September 30, 2012
20122011
Governmental funds capital assets
Land8,007,437$ 8,007,437$
Buildings and structures12,397,779 12,370,759
Non-building improvements6,330,986 5,992,537
Machinery and equipment8,167,365 8,028,080
Infrastructure35,611,587 33,628,446
Construction in progress163,429 1,207,848
Total governmental funds capital assets70,678,583$ 69,235,107$
Investment in governmental funds capital assets (by sources)
Federal grants6,381,544$ 6,202,067$
State grants 907,755 907,755
County grants713,359 713,359
General Fund11,031,201 11,280,701
Law enforcement trust fund36,380 55,764
Recreational impact fee1,726,191 1,516,679
Stormwater utility fee4,895,946 4,895,946
Riverfront redevelopment1,932,055 1,932,055
Cemetery trust fund240,255 236,479
Donations3,371,802 3,196,121
Sales taxes16,347,884 14,159,551
Motor fuel taxes6,811,354 6,811,354
Revenue bond debt16,119,428 16,119,428
Capital projects163,429 1,207,848
Total investment in governmental funds capital assets 70,678,583$ 69,235,107$
98
Schedule of Activities by Function
Capital Assets Used in the Operation of Governmental Funds
September 30, 2012
Machinery
Non-Buildingand
Functions / ProgramsLandBuildingsImprovementsEquipmentInfrastructureTotal
General government:
Legislative-$ -$ -$ 4,245$ -$ 4,245$
City manager- - - 1,612 - 1,612
City clerk- - - 20,350 - 20,350
Finance- - 1,100 53,622 - 54,722
MIS- 5,844 53,131 644,562 - 703,537
Facilities maintenance- 133,430 15,665 86,841 - 235,936
Growth management- 85,555 - 44,582 - 130,137
Non-departmental3,634,769 6,184,990 126,636 204,375 52,699 10,203,469
Total general government3,634,769 6,409,819 196,532 1,060,189 52,699 11,354,008
Public safety:
Special operations- - - 122,484 - 122,484
Administration9,560 3,347,152 89,320 273,812 - 3,719,844
School resource- - - 69,943 - 69,943
Road patrol- - - 2,536,820 - 2,536,820
Community policing- - - 17,086 - 17,086
Code enforcement- - - 42,047 - 42,047
Investigations- - 1,700 198,139 - 199,839
Support services- - - 53,111 - 53,111
Communications- - 16,404 205,713 - 222,117
Building department- - - 41,284 - 41,284
Total public safety9,560 3,347,152 107,424 3,560,439 - 7,024,575
Transportation:
Central garage- 130,489 82,419 162,962 674 376,544
Roads and drainage47,125 162,044 972,302 967,170 15,318,030 17,466,671
Total transportation47,125 292,533 1,054,721 1,130,132 15,318,704 17,843,215
Economic environment:
Non-departmental2,308,392 1,040,589 - - - 3,348,981
Physical environment:
Stormwater1,850 1,748,721 18,459,728 20,210,299
Cemetery272,190 82,019 78,354 60,585 22,717 515,865
Total physical environment272,190 82,019 80,204 1,809,306 18,482,445 20,726,164
Culture/recreation:
Parks and recreation1,735,401 1,225,667 4,892,105 607,299 1,757,739 10,218,211
Total8,007,437$ 12,397,779$ 6,330,986$ 8,167,365$ 35,611,587$ 70,515,154
Construction in progress163,429
Total70,678,583$
CITY OF SEBASTIAN, FLORIDA
99
Schedule of Changes in Activities by Function
Capital Assets Used in the Operation of Governmental Funds
September 30, 2012
Capital AssetsCapital Assets
October 1,TransfersTransfersSeptember 30,
Functions / Programs2011AdditionsDeletionInOut2012
General government:
Judicial4,245$ -$ -$ -$ -$ 4,245$
City manager1,612 - - - - 1,612
City clerk25,817 - - 879 6,346 20,350
Administrative services59,511 - - - 4,789 54,722
MIS627,192 71,102 5,014 11,136 879 703,537
Facilities maintenance217,345 2,414 - 16,177 - 235,936
Growth management120,906 - 2,425 11,656 - 130,137
Non-departmental10,203,469 - - - - 10,203,469
Total general government11,260,097 73,516 7,439 39,848 12,014 11,354,008
Public safety:
Special operations127,484 - 5,000 - - 122,484
Administration3,728,994 - 9,150 - - 3,719,844
School resource69,943 - - - - 69,943
Road patrol2,545,372 118,705 113,462 - 13,795 2,536,820
Community policing42,139 - 25,053 - - 17,086
Code enforcement31,749 24,620 - - 14,322 42,047
Investigations233,056 28,737 9,872 - 52,082 199,839
Support services59,026 - 5,915 - - 53,111
Communications226,212 1,996 6,091 - - 222,117
Building department37,980 - - 18,323 15,019 41,284
Total public safety7,101,955 174,058 174,543 18,323 95,218 7,024,575
Transportation:
Central garage355,673 20,871 - - - 376,544
Roads and drainage16,083,434 1,385,469 21,952 31,377 11,657 17,466,671
Total transportation16,439,107 1,406,340 21,952 31,377 11,657 17,843,215
Economic environment:
Non-departmental3,348,981 - - - - 3,348,981
Physical environment:
Stormwater19,588,795 640,814 19,310 - - 20,210,299
Cemetery512,089 8,800 5,024 - - 515,865
Total physical environment20,100,884 649,614 24,334 - - 20,726,164
Culture/recreation:
Parks and recreation9,776,235 507,949 95,314 29,341 - 10,218,211
Total68,027,259 2,811,477 323,582 118,889 118,889 70,515,154
Construction in progress1,207,848 138,631 1,183,050 - - 163,429
Total69,235,107$ 2,950,108$ 1,506,632$ 118,889$ 118,889$ 70,678,583$
CITY OF SEBASTIAN, FLORIDA
100
INTERNAL CONTROL AND COMPLIANCE
101
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102
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
Internal Control Over Financial Reporting
ManagementoftheCityofSebastian,Floridaisresponsibleforestablishingandmaintainingeffective
internalcontroloverfinancialreporting.Inplanningandperformingouraudit,weconsideredtheCity
ofSebastian,Florida'sinternalcontroloverfinancialreportingasabasisfordesigningourauditing
proceduresforthepurposeofexpressingouropinionsonthefinancialstatements,butnotforthe
purposeofexpressinganopinionontheeffectivenessoftheCityofSebastian,Florida'sinternalcontrol
overfinancialreporting.Accordingly,wedonotexpressanopinionontheeffectivenessoftheCityof
Sebastian, Florida's internal control over financial reporting.
Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallow
managementoremployees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,or
detectandcorrectmisstatementsonatimelybasis.Amaterialweaknessisadeficiency,or
combinationofdeficiencies,ininternalcontrolsuchthatthereisareasonablepossibilitythata
materialmisstatementoftheentity’sfinancialstatementswillnotbeprevented,ordetectedand
corrected on a timely basis.
Wehaveauditedthefinancialstatementsofthegovernmentalactivities,thebusiness-typeactivities,
eachmajorfund,andtheaggregateremainingfundinformationoftheCityofSebastian,Florida(the
"City")asofandfortheyearendedSeptember30,2012,whichcollectivelycomprisetheCity'sbasic
financialstatements,andhaveissuedourreportthereondatedMarch13,2013.Weconductedour
auditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthe
standardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards,issuedbythe
Comptroller General of the United States.
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 GOVERNMENT AUDITING STANDARDS
March 13, 2013
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
103
Thisreportisintendedsolelyfortheinformationanduseofmanagement,theFloridaauditorgeneral
andstateawardingagenciesandpass-throughentities,theCityCouncil,otherswithintheorganization,
andfederalandstateawardingagenciesandpass-throughentitiesandisnotintendedtobeandshould
notbeusedbyanyoneotherthanthesespecifiedparties.However,itisamatterofpublicrecord,and
its distribution is not limited.
Ourconsiderationofinternalcontroloverfinancialreportingwasforthelimitedpurposedescribedin
thefirstparagraphofthissectionandwasnotdesignedtoidentifyalldeficienciesininternalcontrol
overfinancialreportingthatmightbedeficiencies,significantdeficiencies,ormaterialweaknesses.We
didnotidentifyanydeficienciesininternalcontroloverfinancialreportingthatweconsidertobe
material weaknesses, as defined above.
Compliance and Other Matters
AspartofobtainingreasonableassuranceaboutwhethertheCityofSebastian,Florida'sfinancial
statementsarefreeofmaterialmisstatement,weperformedtestsofitscompliancewithcertain
provisionsoflaws,regulations,contracts,andgrantagreements,noncompliancewithwhichcouldhave
adirectandmaterialeffectonthedeterminationoffinancialstatementamounts.However,providing
anopiniononcompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,we
donotexpresssuchanopinion.Theresultsofourtestsdisclosednoinstancesofnoncomplianceor
other matters that are required to be reported under Government Auditing Standards.
104
Honorable Mayor and
Members of City Council
City of Sebastian
Sebastian, Florida
TheRulesoftheAuditorGeneral(Section10.554(1)(i)4)requirethatweaddressviolationsof
provisionsofcontractsorgrantagreementsorabusethathaveoccurred,orarelikelytohaveoccurred,
thathaveaneffectonthefinancialstatementsthatislessthanmaterialbutmorethan
inconsequential. In connection with our audit, we did not identify any such findings.
INDEPENDENT AUDITORS'
MANAGEMENT LETTER
March 13, 2013
We have audited the financial statements of the City of Sebastian, Florida as of and for the fiscal year
ended September 30, 2012 and have issued our report thereon dated March 13, 2013.
WeconductedourauditinaccordancewithUnitedStatesgenerallyacceptedauditingstandards;the
standardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbythe
ComptrollerGeneraloftheUnitedStates;andtheFloridaSingleAuditAct.WehaveissuedourReport
onInternalControlOverFinancialReportingandonComplianceandOtherMattersBasedonanAuditof
FinancialStatementsPerformedinAccordancewithGovernmentAuditingStandardandRulesofthe
AuditorGeneral.Disclosuresinthosereportsandschedule,whicharedatedMarch13,2013,shouldbe
considered in conjunction with this management letter.
Additionally,ourauditwasconductedinaccordancewiththeprovisionsofChapter10.550,Rulesof
theAuditorGeneral,whichgoverntheconductoflocalgovernmentalentityauditsperformedinthe
state of Florida and require that certain items be addressed in this letter.
TheRulesoftheAuditorGeneral(Section10.554(1)(i)1)requirethatweaddressinthemanagement
letter,ifnotalreadyaddressedintheauditors’reportsonComplianceandInternalControlorSchedule
ofFindingsandQuestionedCosts,whetherornotrecommendationsmadeintheprecedingannual
financial audit report have been followed. There were no findings or comments in the prior year.
AsrequiredbytheRulesoftheAuditorGeneral(Section10.554(1)(i)2),thescopeofourauditincluded
areviewoftheprovisionsofSection218.415,FloridaStatutes,regardingtheinvestmentofpublic
funds.Inconnectionwithouraudit,wedeterminedthattheCityofSebastian,Floridacompliedwith
Section 218.415, Florida Statutes.
TheRulesoftheAuditorGeneral(Section10.554(1)(i)3)requirethatweaddressinthemanagement
letteranyfindingsandrecommendationstoimprovefinancialmanagement,accountingprocedures,
and internal controls. In connection with our audit, we did not identify any such recommendations.
5070 North Highway A1A
Suite 250
Vero Beach, FL 32963
Ph: 772.234.8484
Fx: 772.234.8488
105
AsrequiredbytheRulesoftheAuditorGeneral(Section10.554(1)(i)7.cand10.556(7)),weapplied
financialconditionassessmentprocedures.Itismanagement’sresponsibilitytomonitortheentity’s
financialcondition,andourfinancialconditionassessmentwasbasedinpartonrepresentationsmade
by management and the review of financial information provided by the same.
PursuanttoChapter119,FloridaStatutes,thismanagementletterisapublicrecordanditsdistribution
isnotlimited.AuditingstandardsgenerallyacceptedintheUnitedStatesofAmericarequireusto
indicatethatthisletterisintendedsolelyfortheinformationanduseofmanagementandtheFlorida
AuditorGeneraloftheStateofFlorida,andisnotintendedtobeandshouldnotbeusedbyanyone
other than these specified parties.
TheRulesoftheAuditorGeneral(Section10.554(1)(i)5)providethattheauditormay,basedon
professionaljudgment,reportthefollowingmattersthathaveaninconsequentialeffectonfinancial
statements,consideringbothquantitativeandqualitativefactors:(1)violationsofprovisionsof
contractsorgrantagreements,fraud,illegalacts,orabuse,and(2)deficienciesininternalcontrolthat
are not significant deficiencies. In connection with our audit, we did not have any such findings.
TheRulesoftheAuditorGeneral(Section10.554(1)(i)6)alsorequirethatthenameorofficialtitleand
legalauthorityfortheprimarygovernmentandeachcomponentunitofthereportingentitybe
disclosedinthemanagementletter,unlessdisclosedinthenotestothefinancialstatements.The
legalauthorityfortheCityofSebastian,Floridaisdisclosedinthenotestothefinancialstatements.
TheCityofSebastian,Florida’scomponentunit,thePoliceOfficer’sPensionPlan,wasestablished
under Section 58-46 through 58-54 Code of Ordinances in October 1989.
AsrequiredbytheRulesoftheAuditorGeneral(Section10.554(1)(i)7.a),thescopeofouraudit
includedareviewoftheprovisionsofSection218.503(1),FloridaStatutes,regardingfinancial
emergencies.Inconnectionwithouraudit,wedeterminedthattheCityofSebastian,Floridahasnot
met any of the financial emergency conditions described in Section 218.503(1), Florida Statutes.
AsrequiredbytheRulesoftheAuditorGeneral(Section10.554(1)(i)7.b.),wedeterminedthatthe
annualfinancialreportfortheCityofSebastian,FloridafortheyearendedSeptember30,2012,filed
withtheDepartmentofFinancialServicespursuanttoSection218.32(1)(a),FloridaStatutes,isin
agreement with the annual financial audit report for the year ended September 30, 2012.
AsrequiredbytheRulesoftheAuditorGeneral(Section10.554(1)(i)7.b.),wedeterminedthatthe
annualfinancialreportfortheCityofSebastian,FloridafortheyearendedSeptember30,2012,filed
withtheDepartmentofFinancialServicespursuanttoSection218.32(1)(a),FloridaStatutes,isin
agreement with the annual financial audit report for the year ended September 30, 2012.
106
STATISTICAL SECTION
107
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108
CITY OF SEBASTIAN, FLORIDA
Statistical Section Table of Contents
Page
Financial TrendsTheseschedulescontaintrendinformationtohelpthereader
understandandevaluatehowtheCity’sfinancialcondition,
performance and well-being have changed over time.110
Revenue CapacityTheseschedulescontaininformationtohelpthereaderassess
theCity’sabilitytogenerateitsmostsignificantlocalrevenue
source, the property tax. 122
Debt CapacityTheseschedulespresentinformationtohelpthereaderassess
theaffordabilityoftheCity’scurrentlevelsofoutstandingdebt
and its ability to issue additional debt in the future. 128
Demographic and
Economic Information
Theseschedulespresentvariousdemographicandeconomic
indicatorstohelpthereaderunderstandtheenvironmentwithin
whichtheCityoperatesandhowtheyaffecttheCity’sfinancial
activities. 136
Operating InformationTheseschedulescontaininformationabouttheCity’soperations
andresourcestohelpthereaderunderstandhowtheinformation
intheCity’sfinancialreportrelatestotheservicestheCity
provides and the activities it performs. 140
ThispartoftheCity’sComprehensiveAnnualFinancialReportpresentsdetailedinformationtoassistthe
userinunderstandingwhatthefinancialstatements,notedisclosuresandrequiredsupplementary
information say about the overall economic condition of the City of Sebastian, Florida.
Sources:Unlessotherwisenoted,theinformationintheseschedulesisderivedfromtheComprehensive
AnnualFinancialReportfortherelevantyear.TheCityimplementedGASBStatementNo.34in2001;
schedules presenting government-wide information include data beginning in that year.
109
CITY OF SEBASTIAN, FLORIDA
Net Assets by Component
Last Ten Fiscal Years
2012201120102009
Governmental activities
Invested in capital assets, net of related debt31,500,173$ 31,541,953$ 28,938,587$ 26,744,896$
Restricted6,192,777 5,668,155 8,757,043 8,197,018
Unrestricted3,607,228 4,052,751 3,889,011 4,502,440
Total governmental activities net assets41,300,178$ 41,262,859$ 41,584,641$ 39,444,354$
Business-type activities
Invested in capital assets, net of related debt11,181,823$ 11,850,561$ 11,389,704$ 10,725,676$
Restricted- - - 98,320
Unrestricted(490,298) (644,620) (342,340) 86,517
Total business-type activities net assets10,691,525$ 11,205,941$ 11,047,364$ 10,910,513$
Primary Government
Invested in capital assets, net of related debt42,681,996$ 43,392,514$ 40,328,291$ 37,470,572$
Restricted6,192,777 5,668,155 8,757,043 8,295,338
Unrestricted3,116,930 3,408,131 3,546,671 4,588,957
Total primary government net assets51,991,703$ 52,468,800$ 52,632,005$ 50,354,867$
1
2
The large increases in unrestricted net assets from 2003 to 2004 and from 2004 to 2005 are mainly due to increase in
State revenue
The large increases in unrestricted net assets from 2005 to 2006 are mainly due to increase in tax revenues, franchise
fees, and interest earnings.
Fiscal Year
110
Table I - Unaudited
200820072003
24,133,550$ 21,469,456$ 17,579,683$ 17,103,399$ 16,412,401$ 16,339,222$
9,215,801 9,419,129 5,068,583 5,395,879 4,059,674 3,235,266
5,035,184 5,249,998 11,293,877 2 9,081,345 1 7,171,123 1 5,461,224
38,384,535$ 36,138,583$ 33,942,143$ 31,580,623$ 27,643,198$ 25,035,712$
9,111,251$ 8,895,501$ 8,798,612$ 7,459,945$ 4,264,961$ 1,545,867$
570,149 570,890 560,581 574,105 506,006 505,435
753,076 1,303,886 1,896,539 738,519 1,712,657 1,471,457
10,434,476$ 10,770,277$ 11,255,732$ 8,772,569$ 6,483,624$ 3,522,759$
33,244,801$ 30,364,957$ 26,378,295$ 24,563,344$ 20,677,362$ 17,885,089$
9,785,950 9,990,019 5,629,164 5,969,984 4,565,680 3,740,701
5,788,260 6,553,884 13,190,416 9,819,864 8,883,780 6,932,681
48,819,011$ 46,908,860$ 45,197,875$ 40,353,192$ 34,126,822$ 28,558,471$
Fiscal Year
200620052004
111
CITY OF SEBASTIAN, FLORIDA
Changes in Net Assets
Last Ten Fiscal Years
201220102009
Expenses
Governmental activities:
General government2,640,677$ 2,766,575$ 3,309,381$ 3,169,851$
Public safety5,025,274 5,546,632 5,720,933 5,420,585
Physical Environment2,007,902 1,558,974 1,947,605 1,347,771
Transportation1,800,432 2,263,367 1,863,551 3,437,724
Economic environment170,960 208,518 135,885 167,470
Culture and recreation1,239,512 1,227,198 1,240,383 1,073,249
Interest on debt562,496 546,103 566,410 730,100
Total governmental activities expenses13,447,253 14,117,367 14,784,148 15,346,750
Business-type activities:
Golf Course1,394,731 1,355,266 1,388,158 1,477,299
Airport1,166,588 1,188,788 1,067,525 1,079,869
Building 1 397,295 470,406 496,800 533,641
Total business-type activities expenses2,958,614 3,014,460 2,952,483 3,090,809
Total primary government expenses16,405,867$ 17,131,827$ 17,736,631$ 18,437,559$
Program Revenue
Governmental activities:
Charges for services:
General government214,488$ 197,945$ 203,915$ 220,073$
Public safety66,474 92,350 118,368 95,606
Physical environment876,693 868,059 881,338 908,829
Culture and recreation66,954 61,353 62,046 66,540
Operating grants and contributions187,333 196,534 210,050 228,002
Capital grants and contributions791,265 838,242 3,178,618 1,865,174
Total governmental activities program revenue2,203,207 2,254,483 4,654,335 3,384,224
Business-type activities:
Charges for services:
Golf Course1,394,844 1,382,421 1,335,647 1,406,956
Airport491,367 485,229 468,698 438,485
Building 1 419,705 401,021 356,264 358,947
Operating grants and contributions6,563 - - -
Capital grants and contributions 150,083 900,340 904,853 1,356,914
Total business-type activities program revenue2,462,562 3,169,011 3,065,462 3,561,302
Total primary government program revenue4,665,769$ 5,423,494$ 7,719,797$ 6,945,526$
Net (expense) revenue
Governmental activities(11,244,046)$ (11,862,884)$ (10,129,813)$ (11,962,526)$
Business-type activities(496,052) 154,551 112,979 470,493
Total primary government net
(expense) revenue(11,740,098)$ (11,708,333)$ (10,016,834)$ (11,492,033)$
2011
Fiscal Year
112
Table II - Unaudited
20082007200520042003
3,375,178$ 3,083,609$ 3,129,723$ 3,262,276$ 2,414,865$ 1,620,616$
5,226,512 5,377,107 4,191,295 4,816,614 4,502,109 3,391,831
1,805,755 1,695,066 2,193,589 1,283,889 1,279,257 1,920,200
2,111,360 2,276,497 2,173,071 4,034,900 3,288,532 2,401,037
113,101 605,510 98,661 32,128 86,041 166,024
1,420,734 1,237,398 1,208,288 1,260,395 823,974 747,910
634,891 667,950 706,303 740,372 722,007 312,367
14,687,531 14,943,137 13,700,930 15,430,574 13,116,785 10,559,985
1,488,472 1,533,900 1,558,338 1,464,532 1,527,051 1,363,359
1,099,653 1,046,994 801,967 519,235 350,949 315,941
605,422 905,452 936,793 - - -
3,193,547 3,486,346 3,297,098 1,983,767 1,878,000 1,679,300
17,881,078$ 18,429,483$ 16,998,028$ 17,414,341$ 14,994,785$ 12,239,285$
353,836$ 422,897$ 533,482$ 370,609$ 376,327$ 247,774$
85,009 92,853 140,545 1,356,385 1,660,032 824,821
903,285 891,021 887,819 828,907 850,887 799,637
83,378 85,945 72,472 56,199 48,590 46,736
786,016 192,676 407,898 2,802,511 1,144,528 920,829
835,607 1,014,481 1,301,438 1,781,954 1,353,959 640,894
3,047,131 2,699,873 3,343,654 7,196,565 5,434,323 3,480,691
1,438,233 1,652,288 1,580,407 1,381,817 1,648,308 1,377,245
523,989 344,813 375,768 434,818 201,890 168,451
347,189 408,875 1,220,823 - - -
- - 6,998 13,582 67,576 -
494,098 500,428 1,056,562 2,289,986 2,451,212 1,149,437
2,803,509 2,906,404 4,240,558 4,120,203 4,368,986 2,695,133
5,850,640$ 5,606,277$ 7,584,212$ 11,316,768$ 9,803,309$ 6,175,824$
(11,640,400)$ (12,243,264)$ (10,357,276)$ (8,234,009)$ (7,682,462)$ (7,079,294)$
(390,038) (579,942) 943,460 2,136,436 2,490,986 1,015,833
(12,030,438)$ (12,823,206)$ (9,413,816)$ (6,097,573)$ (5,191,476)$ (6,063,461)$
continued…
2006
Fiscal Year
113
CITY OF SEBASTIAN, FLORIDA
Changes in Net Assets
Last Ten Fiscal Years
201220102009
General revenue and other changes in net assets
Governmental Activities:
Property taxes, levied for general purposes3,063,495$ 3,453,778$ 4,164,128$ 4,801,924$
Sales and use taxes4,852,413 4,751,021 4,765,200 4,670,106
Franchise fees1,124,568 1,184,686 1,228,692 1,327,253
State shared revenues not restricted
to specific programs1,934,733 1,868,555 1,825,215 1,821,347
Investment earnings82,129 111,943 144,432 261,203
Miscellaneous201,538 171,119 149,453 140,512
Transfers22,489 - (7,020) -
Total governmental activities11,281,365 11,541,102 12,270,100 13,022,345
Business-type activities:
Investment earnings- 4,026 15,658 5,544
Miscellaneous4,125 - 1,194 -
Transfers(22,489) - 7,020 -
Total business-type activities(18,364) 4,026 23,872 5,544
Total primary government general revenue11,263,001$ 11,545,128$ 12,293,972$ 13,027,889$
Change in net assets
Governmental activities37,319$ (321,782)$ 3 2,140,287$ 1,059,819$
Business-type activities(514,416) 158,577 136,851 476,037
Total primary government change in net assets(477,097)$ (163,205)$ 2,277,138$ 1,535,856$
1
2
3
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.
The large increases in transfers from 2005 to 2006 are mainly due to the one time transfer of building reserve to
building fund due to the reclassification of fund type for the building operation.
The reduction in the change in net assets for governmental funds can be attributed to less income being received
resulting in a smaller spread between revenues and expenditures, thereby using net assets for revenue shortfalls.
Fiscal Year
2011
114
20082007200520042003
5,149,047$ 5,089,841$ 4,645,050$ 4,017,555$ 3,420,971$ 2,944,456$
4,753,718 4,776,691 4,907,906 4,718,691 4,035,545 3,705,922
1,199,762 1,106,698 1,253,749 886,390 770,600 756,194
1,989,606 2,083,523 2,242,292 2,138,020 1,721,956 1,523,524
634,919 1,147,931 827,224 398,518 398,158 241,358
159,300 192,300 256,780 118,760 388,562 79,662
- 42,720 (1,414,205) (106,500) (445,844) (534,000)
13,886,352 14,439,704 12,718,796 12,171,434 10,289,948 8,717,116
54,237 137,207 125,498 45,709 23,774 21,789
- - - 300 261 9,072
- (42,720) 1,414,205 2 106,500 445,844 534,000
54,237 94,487 1,539,703 152,509 469,879 564,861
13,940,589$ 14,534,191$ 14,258,499$ 12,323,943$ 10,759,827$ 9,281,977$
2,245,952$ 2,196,440$ 2,361,520$ 3,937,425$ 2,607,486$ 1,637,822$
(335,801) (485,455) 2,483,163 2,288,945 2,960,865 1,580,694
1,910,151$ 1,710,985$ 4,844,683$ 6,226,370$ 5,568,351$ 3,218,516$
concluded
Fiscal Year
2006
115
CITY OF SEBASTIAN, FLORIDA
Fund Balances, Governmental Funds
Last Ten Fiscal Years
2010
Governmental funds
General fund:
Nonspendable370,450$ 346,995$ 352,248$ 357,696$
Committed2,861,708 2,949,139 3,063,585 3,083,463
Assigned35,707 21,911 31,656 1,983
Unassigned1,734,307 2 1,784,413 2 2,164,910 2,324,972
Total General fund5,002,172 5,102,458 5,612,399 5,768,114
All other governmental funds:
Nonspendable1,289,693 1,494,779 859,463 830,029
Restricted4,371,826 4,748,376 7,897,580 8,557,389 1
Committed 719,686 - - -
Total all other governmental funds6,381,205 6,243,155 8,757,043 9,387,418
Total governmental funds11,383,377$ 11,345,613$ 14,369,442$ 15,155,532$
1
2 Reduction in unassigned fund balance to fund operation
The significant reduction in restricted fund balance reported in all other governmental funds from 2008 to 2009 is a result
of the significant completion of the Indian River Drive/Main Street and Pedestrian Bridge projects, along with the
significant construction completed on the Collier Canal Retrofit project.
200920112012
Fiscal Year
116
Table III - Unaudited
200820072006
381,528$ 368,609$ 106,192$ 160,964$ 59,921$ 141,667$
3,502,560 3,742,617 4,844,674 5,546,959 2 5,411,621 2 3,924,363 2
33,453 19,055 9,856 3,761 5,140 7,706
2,390,641 2,260,507 1,518,350 391,783 2(361,790) 2(191,886) 2
6,308,182 6,390,788 6,479,072 6,103,467 5,114,892 3,881,850
771,927 694,506 656,160 578,367 542,999 463,402
12,446,260 12,926,545 14,783,299 13,392,801 2 13,815,771 13,339,097
- - - - - -
13,218,187 13,621,051 15,439,459 13,971,168 14,358,770 13,802,499
19,526,369$ 20,011,839$ 21,918,531$ 20,074,635$ 19,473,662$ 17,684,349$
Fiscal Year
200520042003
117
CITY OF SEBASTIAN, FLORIDA
Changes in Fund Balances For Governmental Funds
For the Last Ten Fiscal Years
2012201120102009
Revenues
Taxes 8,465,990$ 8,762,729$ 9,525,074$ 10,065,806$
Franchise fees1,124,568 1,184,686 1,228,692 1,327,253
Charges for services22,431 1,121,967 1,154,739 1,186,161
Licenses, fees and permits2,088,038 23,646 33,182 29,151
Fines and penalties58,500 81,534 90,948 88,938
Intergovernmental1,158,075 2,249,447 4,572,550 3,270,854
Impact fees57,575 42,250 26,000 13,975
Special assessments86,516 - - 3,849
Investment earnings216,091 103,795 228,216 250,914
Other revenues201,888 224,823 169,039 176,430
Total revenues13,479,672 13,794,877 17,028,440 16,413,331
Expenditures
Current:
General government2,410,345 2,539,211 2,699,289 2,976,896
Public safety4,523,802 5,030,708 4,938,147 4,926,714
Physical environment1,042,349 1,166,309 1,210,823 1,448,067
Transportation1,208,411 1,217,521 1,405,310 1,696,254
Economic environment138,531 188,918 129,352 167,470
Culture and recreation876,502 903,836 977,780 1,148,408
Debt service:
Principal3,321,000 1,203,000 2,142,190 1,218,995
Interest472,399 521,152 577,593 706,093
Capital outlay1,767,058 4,048,051 6,189,026 6,495,271
Total expenditures15,760,397 16,818,706 20,269,510 20,784,168
Revenue over (under) expenditures(2,280,725)$ (3,023,829)$ (3,241,070)$ (4,370,837)$
Other Financing Sources (Uses)
Issuance of long-term debt2,296,000 - 2,462,000 -
Transfers in3,694,765 5,376,658 4,486,626 5,196,376
Transfers out(3,672,276) (5,376,658) (4,493,646) (5,196,376)
Total other financing sources (uses)2,318,489 - 2,454,980 -
Net change in fund balances37,764$ (3,023,829)$ (786,090)$ (4,370,837)$
Debt service as a percentage of
noncapital expenditures27.1%13.5%19.3%13.5%
Fiscal Year
118
Table IV - Unaudited
200820072006200520042003
10,504,155$ 10,554,617$ 10,269,451$ 9,483,664$ 8,179,344$ 7,325,932$
1,199,762 1,106,698 1,253,749 886,390 770,600 756,194
1,209,617 1,271,102 517,605 936,530 962,677 921,119
163,471 186,875 244,370 1,587,675 1,867,920 878,097
65,246 71,314 77,776 95,699 118,918 119,752
2,674,761 2,463,628 2,852,293 5,561,695 3,115,520 1,785,237
32,825 56,875 337,675 385,775 557,700 395,850
- - 819,286 11,023 28,424 22,560
647,312 1,062,043 827,224 398,518 398,158 241,358
461,553 244,629 294,695 144,057 378,268 91,078
16,958,702 17,017,781 17,494,124 19,491,026 16,377,529 12,537,177
3,087,789 2,999,652 2,494,863 2,974,736 2,231,532 1,977,033
4,677,618 4,700,447 3,813,908 4,349,639 3,950,228 3,427,711
1,368,593 1,301,719 1,850,642 910,794 1,125,727 1,247,452
1,545,045 1,733,697 1,672,983 3,616,076 2,863,397 1,610,761
113,101 80,279 98,661 32,128 86,041 166,024
1,079,379 975,087 926,846 995,406 747,131 629,835
1,326,182 1,284,418 1,248,378 1,218,023 985,974 361,024
611,554 643,305 678,682 711,736 887,564 158,043
3,634,910 5,242,590 1,451,060 3,975,015 9,021,558 3,859,709
17,444,171 18,961,194 14,236,023 18,783,553 21,899,152 13,437,592
(485,469)$ (1,943,413)$ 3,258,101$ 707,473$ (5,521,623)$ (900,415)$
- - - - 7,756,780 9,500,000
5,679,896 5,158,296 3,785,981 3,745,265 2,745,754 2,992,908
(5,679,896) (5,115,576) (5,200,186) (3,851,765) (3,191,598) (3,526,908)
- 42,720 (1,414,205) (106,500) 7,310,936 8,966,000
(485,469)$ (1,900,693)$ 1,843,896$ 600,973$ 1,789,313$ 8,065,585$
14.0%14.1%15.1%13.0%14.5%5.4%
Fiscal Year
119
CITY OF SEBASTIAN, FLORIDA
Program Revenues by Function/Program
Last Ten Fiscal Years
201220112010
Program Revenue
Governmental activities:
General government230,550$ 243,039$ 209,144$ 226,003$
Public safety228,392 234,437 304,630 299,119
Physical environment876,693 930,018 881,338 1,408,829
Transportation560,055 743,383 614,305 612,335
Economic environment13,998 - 2,556,872 6,000
Culture and recreation293,519 103,606 88,046 831,938
Total governmental activities 2,203,207 2,254,483 4,654,335 3,384,224
Business-type activities:
Charges for services:
Golf Course1,394,892 1,382,421 1,335,647 1,406,955
Airport641,455 1,385,569 1,373,551 1,795,399 2
Building 1 426,215 401,021 356,264 358,948
Total business-type activities 2,462,562 3,169,011 3,065,462 3,561,302
Total primary government 4,665,769$ 5,423,494$ 7,719,797$ 6,945,526$
1
2
2009
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.
The significant increase in business-type activities for the airport from 2008 to 2009 is mainly due to capital grant
funding from the Florida Department of Transportation and the Federal Aviation Administration.
Fiscal Year
120
Table V - Unaudited
200820072006200520042003
377,305$ 450,267$ 579,591$ 587,527$ 392,471$ 1,095,902$
515,997 249,756 306,702 1,537,557 1,850,710 929,952
1,256,277 891,021 890,092 898,821 914,318 1,136,507
619,949 721,103 900,365 3,392,883 1,670,534 1,580,076
- - 30,059 - - -
277,603 387,726 636,845 779,777 606,290 663,459
3,047,131 2,699,873 3,343,654 7,196,565 5,434,323 5,405,896
1,438,233 1,652,288 1,587,405 1,395,399 1,715,884 1,377,245
1,018,087 845,241 1,432,330 2,724,804 2,653,102 1,317,888
347,189 408,875 1,220,823 - - -
2,803,509 2,906,404 4,240,558 4,120,203 4,368,986 2,695,133
5,850,640$ 5,606,277$ 7,584,212$ 11,316,768$ 9,803,309$ 8,101,029$
Fiscal Year
121
CITY OF SEBASTIAN, FLORIDA Table VI - Unaudited
Tax Revenue by Source
Governmental Funds
For the Last Ten Fiscal Years
(Rate per $1,000 of assessed value)
Fiscal Year
EndedPropertyPublicSalesMotorMillage
Tax YearSeptember 30TaxesUtilityTaxFuelTotalRate
200220032,944,456$ 1,780,717$ 1,925,205$ 675,554$ 7,325,932$ 4.5904
200320043,420,971 1,854,632 2,180,913 722,828 8,179,344 4.5904
200420054,017,555 2,005,124 2,713,567 747,418 9,483,664 4.5904
200520064,645,050 2,183,164 2,724,742 716,495 10,269,451 3.9325
200620075,089,841 2,216,381 2,560,310 688,085 10,554,617 3.0519
200720085,149,047 2,250,781 2,502,937 601,390 10,504,155 2.9917
200820094,801,924 2,341,458 2,328,648 593,776 10,065,806 3.3456
200920104,164,128 2,437,050 2,328,150 595,746 9,525,074 3.3456
201020113,453,778 2,392,345 2,358,676 557,930 8,762,729 3.3041
201120123,063,495 2,387,553 2,464,240 550,702 8,465,990 3.3041
122
CITY OF SEBASTIAN, FLORIDA Table VII - Unaudited
Direct and Overlapping Property Tax Rates
For the Last Ten Fiscal Years
(Rate per $1,000 of taxable value)
TaxFiscal BasicDebtTotalTotalBasicDebt
YearYearRateServiceDirectCounty 1 RateServiceTotalOther 2
200220034.5904 0.00004.5904 8.0302 8.1020 0.6300 8.7320 1.43875
200320044.5904 0.00004.5904 7.9396 8.1790 0.5310 8.7100 1.69278
200420054.5904 0.00004.5904 7.3505 8.0190 0.4800 8.4990 1.43029
200520063.9325 0.00003.9325 5.6904 7.8800 0.3600 8.2400 1.60850
200620073.0519 0.00003.0519 5.3661 7.1630 0.2800 7.4430 1.47940
200720082.9917 0.00002.9917 5.1485 7.2680 0.2700 7.5380 1.38160
200820093.3456 0.00003.3456 6.2861 6.7600 0.2800 7.0400 1.11204
200920103.3456 0.00003.3456 6.2693 7.2960 0.3000 7.5960 1.33570
201020113.3041 0.00003.3041 6.2860 7.9200 0.3000 8.2200 1.35050
201120123.3041 0.00003.3041 6.9590 7.8940 0.3500 8.2440 1.35460
Note:
1 Millage includes General Fund, MSTUs, Emergency Services District and Land Bonds
2 All Special Taxing Districts
Source: Indian River County Property Appraiser's Office
Tax rates are uniformly applied to taxable values based on a single millage rate determined by each taxing entity. The millage rate is expressed as $1.00
per $1,000 of the taxable value.
City Direct RatesOverlapping Rates
County School Board
123
CITY OF SEBASTIAN, FLORIDA
Actual Value of Taxable Property
For the Last Ten Fiscal Years
TaxFiscalAssessedEstimatedAssessedEstimated
YearYearValueActual ValueValueActual Value
20022003829,224,615$ 1,036,530,769$ 45,355,170$ 45,355,170$
20032004946,293,950 1,182,867,438 48,613,628 48,613,628
200420051,157,275,164 1,446,593,955 51,330,277 51,330,277
200520061,526,923,406 1,908,654,258 51,827,624 51,827,624
200620072,124,615,672 2,655,769,590 55,913,696 55,913,696
200720082,054,408,055 2,568,010,069 64,899,942 64,899,942
200820091,933,934,630 2,417,418,288 62,476,508 62,476,508
200920101,650,311,449 2,062,889,311 56,920,223 56,920,223
201020111,392,267,434 1,740,334,293 55,234,086 55,234,086
201120121,273,059,710 1,591,324,639 48,922,492 48,922,492
Source: Indian River County Property Appraiser
Real PropertyPersonal Property
61.8%
63.1%65.4%66.7%68.5%
67.8%
53.2%54.2%
55.0%53.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2003200420052006200720082009201020112012
Fiscal Year
Ratio of Taxable to Actual Value
124
Table VIII - Unaudited
Less:TotalTotalRatio of
Tax-ExemptTaxableEstimatedTaxable to
PropertyValueActual ValueActual Value
205,977,066$ 668,602,719$ 1,081,885,939$ 61.8%
217,554,663 777,352,915 1,231,481,066 63.1%
228,262,825 980,342,616 1,497,924,232 65.4%
271,466,364 1,307,284,666 1,960,481,882 66.7%
322,318,753 1,858,210,615 2,711,683,286 68.5%
334,302,515 1,785,005,482 2,632,910,011 67.8%
676,808,522 1,319,602,616 2,479,894,796 53.2%
558,090,532 1,149,141,140 2,119,809,534 54.2%
460,752,786 986,748,734 1,795,568,379 55.0%
444,524,142 877,458,060 1,640,247,130 53.5%
125
CITY OF SEBASTIAN, FLORIDA Table IX - Unaudited
Principal Property Tax Payers
Current Year and Nine Years Ago
TaxableTaxable
AssessedAssessed
TaxpayerValueRankValueRank
Florida Power & Light (Utility/Electric)13,828,553$ 11.58 %12,489,790$ 11.87 %
Wal-Mart Stores, Inc. (Retail)8,432,070 20.96 11,554,614 21.73
Park Place Community, LLC (Rental/Retail)6,684,799 3 0.76 --------
BW US 1, Inc. (Commercial)6,147,300 40.70 6,290,380 40.94
IPF/Sebastian, LLC (Retail)5,214,160 50.59 --------
Bellsouth Communications (Utility/Telephone)5,202,931 60.59 8,029,404 31.20
Hartwell Groves, Inc. (Commercial)4,236,520 70.48 --------
Sebastian Medical Suites (Healthcare)3,891,480 8 0.44 --------
Sebastian Inlet Marina & Trading Co, Inc.
(Restaurant/Hotel)3,321,780 90.38 3,763,948 70.56
Angel Enterprises LLC (Retail) -
WinnDixie CR512 Shopping Center3,283,720 100.37 --------
Ruth Guest House, Inc. (Rental/Retail)----------3,925,780 5 0.59
James T Turner (MHP/Rental)----------3,784,200 60.57
Oyster Point Resort Condo (Time Share/Rental)----------3,419,345 80.51
Comcast of Florida, Inc. (Communications)----------2,949,876 90.44
Sandy Pines LTD (Rental)----------2,789,640 100.42
60,243,313$ 6.85 %58,996,977$ 8.83 %
Total Taxable Value877,458,060$ 668,602,719$
Source: Indian River County Property Appraiser
2012 Fiscal Year2003 Fiscal Year
PercentagePercentage
of Total Cityof Total City
TaxableTaxable
AssessedAssessed
ValueValue
6.85%
93.15%
Concentration of 2012 Taxpayers
Top Ten TaxpayersAll Other Taxpayers
126
CITY OF SEBASTIAN, FLORIDA Table X - Unaudited
Property Tax Levies and Collections
For the Last Ten Fiscal Years
Taxes LeviedCollections
TaxFiscal for thein Subsequent
YearYearFiscal YearAmountYearsAmount
200220032,862,650$ 2,725,515$ 95.21 %26,908 2,752,423$ 96.15 %
200320043,216,940 3,130,521 97.31 34,247 3,164,768 98.38
200420053,888,488 3,723,912 95.77 1,712 3,725,624 95.81
200520064,426,281 4,300,217 97.15 39 4,300,256 97.15
200620074,747,938 4,537,100 95.56 9,429 4,546,529 95.76
200720084,919,994 4,634,338 94.19 2,906 4,637,244 94.25
200820094,441,535 4,225,106 95.13 1,694 4,226,800 95.17
200920103,844,658 3,716,797 96.67 17,723 3,734,520 97.14
201020113,260,316 3,144,864 96.46 11,294 3,156,158 96.81
201120122,899,209 2,799,146 96.55 9,279 2,808,425 96.87
Source: Indian River County Property Appraiser and Department of Revenue, Certification of Final Taxable Value, DR-422.
of Levyof Levy
Collected within the
Fiscal Year of the LevyTotal Collections to Date
PercentagePercentage
-
2
4
6
8
10
12
14
16
18
20
2003200420052006200720082009201020112012
Millions
Fiscal Year
Total Tax Collections
127
CITY OF SEBASTIAN, FLORIDA
Ratios of Outstanding Debt By Type
For the Last Ten Fiscal Years
Water LineRoadwayInfrastructureHeavyStormwaterGolf Course
Fiscal AssessmentImprovementSales TaxEquipmentUtility RevenueRevenue
YearBondsNotesBondsLeaseBondsBonds
200377,615$ 2,406,028$ 9,500,000$ 672,528$ -$ 2,115,000$
2004- 2,209,745 11,140,000 550,452 5,525,000 1,885,000
2005- 2,004,718 10,490,000 422,455 5,290,000 1,395,000
2006- 1,790,544 9,825,000 288,251 5,055,000 1,140,000
2007- 1,566,839 9,145,000 147,538 4,815,000 870,000
2008- 1,333,197 8,445,000 - 4,570,000 590,000
2009- 1,089,203 7,725,000 - 4,315,000 300,000
2010- 2,414,000 6,980,000 - 4,055,000 -
2011- 2,246,000 6,215,000 - 3,785,000 -
2012- 2,296,000 5,420,000 - 3,505,000 -
(1)
Information not yet available
Business-Type
ActivitiesGovernmental Activities
-
20.00
40.00
60.00
80.00
2003200420052006200720082009201020112012
Millions
Fiscal Year
Primary Government Debt
128
Table XI - Unaudited
Total
PrimaryPer
GovernmentCapita
14,771,171$ 0.30 %802$
21,310,197 0.36 1,100
19,602,173 0.31 978
18,098,795 0.25 835
16,544,377 0.22 738
14,938,197 0.19 652
13,429,203 0.21 591
13,449,000 0.20 587
12,246,000 0.17 558
11,221,000 (1)
510
Income
Percentage
of Personal
129
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130
CITY OF SEBASTIAN, FLORIDA Table XII - Unaudited
Ratios of General Bonded Debt Outstanding
For the Last Ten Fiscal Years
Fiscal Applicable LegalPer
YearDebt Limitto LimitDebt MarginCapita
200333,430,136$ 2,406,028$ 31,024,108$ 7.20%1,684$
200438,867,646 2,209,745 36,657,901 5.69%1,893
200549,017,131 2,004,718 47,012,413 4.09%2,345
200665,364,233 1,790,544 63,573,689 2.74%2,934
200792,910,531 1,566,840 91,343,691 1.69%4,073
200889,250,574 1,333,197 87,917,377 1.49%3,835
200965,980,131 1,089,203 64,890,928 1.65%2,856
201057,457,057 2,414,000 55,043,057 4.20%2,401
201149,337,437 2,246,000 47,091,437 4.55%2,147
2012 43,872,903 2,296,000 41,576,903 5.23%1,890
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Debt Limit
General Bonded Debt Outstanding
Percentage of
131
CITY OF SEBASTIAN, FLORIDA
Legal Debt Margin Information
For the Last Ten Fiscal Years
201220112010
Debt Limit43,872,903$ 49,337,437$ 57,457,057$
Total net debt applicable to limit2,296,000 2,246,000 2,414,000
Legal debt margin41,576,903$ 47,091,437$ 55,043,057$
Total net debt applicable to the
limit as a percentage of debt limit5.23%4.55%4.20%
Assessed value1,321,982,202$
Less: Exempt property(444,524,142)
877,458,060
Debt limit (5% of assessed value) 1 43,872,903
Debt applicable to limit:
General obligations11,221,000
Less: Revenue bonds(8,925,000)
Total net debt applicable to limit2,296,000
Legal debt margin41,576,903$
1
Legal Debt Margin as a Percentage of Debt Limit
Legal Debt Margin Calculation for Fiscal Year 2012
Under the City's adopted financial policies, the City's outstanding general obligation debt should not exceed 5%
of the assessed valuation of taxable property. The percentage was dropped from 10% to 5% in fiscal year 2003.
Fiscal Year
132
Table XIII - Unaudited
2009200820072006200520042003
65,980,131$ 89,250,274$ 92,910,531$ 65,364,233$ 49,017,131$ 38,867,646$ 33,430,136$
1,089,203 1,333,197 1,566,840 1,790,544 2,004,718 2,209,745 2,406,028
64,890,928$ 87,917,077$ 91,343,691$ 63,573,689$ 47,012,413$ 36,657,901$ 31,024,108$
1.65%1.49%1.69%2.74%4.09%5.69%7.20%
Fiscal Year
133
CITY OF SEBASTIAN, FLORIDA
Pledged-Revenue Coverage
For the Last Ten Fiscal Years
Less:Net
Fiscal GrossOperatingAvailable
YearRevenue 1 Expenses 2 RevenuePrincipalInterestTotal Coverage 3
20031,400,154$ 968,052$ 432,102$ 220,000$ 89,890$ 309,890$ 1.39
20041,497,053 1,108,770 388,283 230,000 80,890 310,890 1.25
20051,395,436 1,023,002 372,434 240,000 71,490 311,490 1.20
20061,628,015 1,165,411 462,604 250,000 61,690 311,690 1.48
20071,701,171 1,218,382 482,789 255,000 51,590 306,590 1.57
20081,455,749 1,174,169 281,580 270,000 41,090 311,090 0.91
20091,408,535 1,178,144 230,391 570,000 49,860 619,860 0.37
20101,341,555 1,129,651 211,904 300,000 21,700 321,700 0.66
2011- - - - - - -
2012- - - - - - -
continued…
1
2
3
4
5
Required coverage was 1.25. Final payment was made on September 30, 2010.
Total revenues consist of stormwater utility fees and interest.
Required coverage is 1.35.
Total direct operating expenses excludes depreciation, amortization, annual Airport lease payment and one time hurricane repair cost.
Recreational Facilities Improvement and Refunding Revenue Bonds, Series 2001
Debt Service
Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements.
Total revenues including charges for services, rents and interest.
134
Table XIV - Unaudited
Gross
Revenues 4 PrincipalInterestTotalCoverage 5
-$ -$ -$ -$ -
779,724 105,000 104,386 209,386 3.72
792,886 240,000 206,673 446,673 1.78
908,576 235,000 201,973 436,973 2.08
932,183 240,000 197,273 437,273 2.13
856,568 245,000 191,873 436,873 1.96
814,419 255,000 185,135 440,135 1.85
858,664 260,000 177,485 437,485 1.96
816,415 270,000 169,035 439,035 1.86
810,382 280,000 159,248 439,248 1.84
concluded
Stormwater Utility Revenue Bonds, Series 2003
Debt Service
135
CITY OF SEBASTIAN, FLORIDA
Demographic and Economic Statistics
For the Last Ten Calendar Years
PersonalPer
IncomeCapita
(thousandsPersonalSchool
YearPopulationof dollars) 1 Income 1 Enrollment 2
200318,425 4,831,037$ 40,162$ 40,291$ 4,340$ 6.8%
200419,365 5,071,395 40,677 41,522 4,917 6.7
200520,048 6,386,893 50,369 44,450 5,258 4.7
200621,666 7,217,157 55,817 45,034 5,604 4.1
200722,426 7,810,408 59,419 47,563 5,117 5.5
200822,924 7,669,062 57,107 48,267 5 4,710 7.9
200922,722 7,610,327 56,303 43,685 5 3,751 13.0
201022,922 N/AN/AN/A5,167 14.4
201121,929 N/A N/A N/A 5,228 12.9
201221,995 444
5,208 11.3
Sources:
1
2
3
4 Information not yet available.
5
Indian River County Property Appraiser
Indian River County School Board
Florida Research & Economic Database (FRED). Information available for Indian River County Only.
The school population appears to have declined as a result of loss of job opportunities. Our community lost
many construction jobs as a result of the declining economy.
Note:SchoolenrollmentconsistsofSebastianRiverHighSchool,SebastianRiverMiddleSchool,LibertyMagnet,
TreasureCoastElementary,PelicanIslandElementary,SebastianElementaryandSebastianCharterJuniorHigh
School.
Median
Household
Income 1
Unemployment
Rate 1
136
Table XV - Unaudited
PropertyTotal
TaxesTaxable
PerProperty
CapitaValue 3
5.3%159.81$ 668,602,719$
4.7176.66 777,352,915
3.8200.40 980,342,616
3.4214.39 1,307,284,666
4.1226.96 1,858,210,615
6.3224.61 1,785,005,482
10.5211.33 1,319,602,616
11.9181.67 1,149,141,140
10.6157.50 986,748,734
8.6139.28 877,458,060
State
Unemployment
Rate
137
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138
CITY OF SEBASTIAN, FLORIDA Table XVI - Unaudited
Principal Employers
Current Year and Nine Years Ago
EmployeesRankEmployeesRank
School District of Indian River County (Government)
2,013 13.55 %1,945 13.82 %
Indian River Medical Center (Healthcare)
1,608 22.83 1,100 32.16
Indian River County (Government)
1,354 32.39 1,333 22.62
Publix Supermarkets (Food/Beverage)
1,006 41.77 801 41.57
Wal-Mart (Retail)
727 5 1.28 540 8 1.06
Piper Aircraft, Inc. (Manufacturer)
700 61.23 752 51.48
Sebastian River Medical Center (Healthcare)
569 71.00 500 90.98
John's Island (Residential/Resort)
550 80.97 500 90.98
City of Vero Beach (Government)
492 90.87 607 71.19
Visiting Nurse Association (Healthcare)
399 10 0.70
Gracewood Fruit Packing (Agriculture)
700 61.38
Hale Indian River Groves (Agriculture)
500 90.98
Sun Ag, Inc.475 100.93
9,418 16.59%9,753 19.15%
Total Average County Employees56,732 50,904
Source: Indian River County Community Development Report.
Note: Principal employrs information available for Indian River County Only.
Employer
Percentage of
Total County
Employment
2012
Percentage of
Total County
Employment
2003
139
CITY OF SEBASTIAN, FLORIDA
Full-Time Equivalent City Government Employees By Function
For the Last Ten Fiscal Years
2012200920082007
General government
City council2.5 2.5 2.5 2.5 2.5 2.5
City manager2.0 2.0 2.5 2.5 2.5 2.0
City clerk3.0 3.0 3.0 3.0 3.0 4.0
City attorney- - - 4 2.0 2.0 2.0
Administrative5.0 5.0 5.0 - - -
Finance- - - 2 5.0 5.0 5.0
Management information3.0 4.0 3.0 3.0 3.0 3.0
Human resources- - - 2 2.0 3.0 3.0
Facilities maintenance3.0 2.0 2.0 2.0 2.0 2.0
Planning & Zoning 5 3.0 4.0 5.0 5.0 5.0 5.0
Public safety
Police55.0 58.0 58.0 59.0 58.0 57.0
Building4.0 5.0 5.0 5.0 6.0 11.0
Code enforcement3.0 3.0 4 2.5 2.5 2.5 3.0
Transportation
Roads and drainage10.0 12.0 12.0 3 10.0 10.0 11.5
Central garage3.5 2.5 3.5 3.5 2.5 3.5
Airport3.0 3.0 3.0 3.0 3.0 3.0
Physical environment
Cemetery1.0 1.0 2.0 2.0 2.0 2.0
Engineering- - - 3 7.0 7.0 9.0
Stormwater utility9.0 12.0 12.0 11.0 13.0 13.0
Culture and recreation
Parks and recreation20.0 21.0 23.0 23.5 23.5 23.5
Golf course10.0 10.5 10.5 9.0 9.0 12.5
Total 140.0 150.5 154.5 162.5 164.5 177.5
Source: City of Sebastian, Florida 2002-2012 Annual Budgets
Method: Using 1.0 for each full-time employee and 0.5 for each part-time and seasonal employee.
1
2 Finance and Human Resources were combined to form Administrative starting FY 2010.
3
4 City attorney position was contracted out and assistant went full time to code enforcement.
5 Growth Management was renamed to Planning Zoning to better describe their function.
Engineering department was dismantled, intern program was ceased. 2 employees were transferred to Roads and
Drainage and 1 employee was transferred to Stormwater.
Function20102011
Full-time Equivalent Employees
Code enforcement division was transferred out of the Police department in FY 2006 and transferred back in FY 2009.
140
Table XVII - Unaudited
200520042003
2.5 2.5 2.5 2.5
2.0 5.0 4.0 4.0
4.5 4.0 4.0 4.0
2.0 2.0 1.0 1.0
- - - -
6.0 5.0 5.0 5.0
3.0 2.0 2.0 2.0
3.0 3.0 3.0 3.0
2.0 2.0 - 4.0
4.0 4.0 4.0 4.0
58.0 1 59.0 56.5 54.5
11.0 9.0 8.0 7.0
3.0 1- - -
12.5 12.5 14.5 11.5
3.5 3.0 3.0 3.0
3.5 3.5 2.5 2.5
2.0 2.0 2.0 2.0
8.0 8.0 8.0 7.5
13.0 13.0 12.0 12.0
24.5 23.5 17.5 16.5
12.5 12.5 13.5 13.5
180.5 175.5 163.0 159.5
2006
Full-time Equivalent Employees
141
CITY OF SEBASTIAN, FLORIDA
Operating Indicators By Function
For the Last Ten Fiscal Years
2012201120102009
General government
Number of annexations approved- - 1 3
Acres of annexed property- - 5.90 26.00
Purchase orders issued201 228 216 288
Public Safety
Police
Physical arrests441 500 487 543
Traffic violations4,319 5,941 4,083 4,849
Parking violations167 242 87 50
Building
Construction permits issued 1 66 51 36 23
Estimated value of construction (in millions)
14.7$ 10.2$ 6.6$ 5.1$
Transportation
Road maintenance (man hours)
500 700 1,264 600
Asphalt for road maintenance (tons)
50 50 103 328
Concrete for road maintenance (yards) 2- - - -
Physical environment
Cemetery
Cemetery internments65 54 66 74
Grave deeds sold38 34 33 39
Stormwater
Mile of swales maintained280 280 280 280
Mile of ditches maintained50 50 50 50
Road crossing maintained50 40 40 30
Culture and recreation
Program participants9,713 8,649 11,701 13,465
Number of discount cards786 735 844 879
Number of golf course memberships88 94 96 95
Average daily golf revenue3,822$ 3,787$ 3,673$ 4,000$
Sources: City of Sebastian Police Department, Growth Management, Public Works, Golf Course and Building Department.
1 New commercial and residential only.
2 All road maintenance utilized asphalt, no concrete curbing was installed.
Function
Fiscal Year
142
Table XVIII - Unaudited
200820072006200520042003
- 1 1 1 6 3
- 3.87 3.30 25.55 484.00 80.00
254 284 293 369 408 372
662 697 744 786 653 557
4,418 7,221 6,291 5,457 5,431 1,939
208 289 880 303 3,801 632
55 104 506 774 577 544
13.3$ 22.5$ 88.3$ 114.7$ 112.3$ 82.7$
538 888 512 100 878 850
358 210 127 125 88 79
- - 300 - 283 277
68 69 76 79 86 81
46 49 56 56 69 45
280 280 280 280 280 280
50 50 50 50 50 50
30 30 30 30 30 30
12,910 14,177 8,004 5,504 7,498 N/A
950 1,004 2,690 1,000 993 855
97 108 119 85 116 137
3,988$ 4,661$ 4,441$ 3,844$ 4,551$ 3,836$
Fiscal Year
143
CITY OF SEBASTIAN, FLORIDA
Capital Asset Statistics By Function
For the Last Ten Fiscal Years
2012201120102009
General Government
Square footage occupied21,500 21,500 21,500 21,500
Departmental vehicles1 3 3 3
Public safety
Police stations1 1 1 1
Police department Square footage25,600 25,600 25,600 25,600
Building department Square footage2,500 2,500 2,500 2,500
Police vehicles66 67 63 63
Building inspector vehicles3 3 3 4
Transportation
Streets (miles)
156 156 156 156
Streetlights 1 1,228 1,236 1,230 1,240
Airport1 1 1 1
Public service vehicles17 19 22 18
Physical environment
Public service vehicles9 9 15 7
Culture and recreation
Parks18 18 18 18
Recreation centers2 2 2 2
Park acreage315.01 315.01 315.01 233.79
Recreation center square footage4,859 4,859 4,859 4,859
Park maintenance vehicles13 14 13 13
Golf course1 1 1 1
Sources: City of Sebastian Administrative Services Department and Park and Recreation Division
1 This number represents actual unmetered street lights in the City (source: Florida Power & Light - January billing).
Function
Fiscal Year
144
Table XIX - Unaudited
200820072006200520042003
21,500 21,500 21,500 21,500 5,516 5,516
3 3 3 5 2 2
1 1 1 1 1 1
25,600 25,600 25,600 25,600 8,700 8,700
2,500 2,500 2,500 2,500 1,716 1,716
62 57 53 52 47 42
4 5 6 5 4 4
156 156 156 156 156 150
1,229 1,309 3,808 3,555 3,543 3,543
1 1 1 1 1 1
23 21 19 14 24 18
11 10 12 13 6 7
15 14 14 12 12 12
2 2 2 2 2 2
233.79 229.37 229.37 223.37 223.37 223.37
4,859 4,859 4,859 4,859 4,859 4,859
13 12 11 10 8 6
1 1 1 1 1 1
Fiscal Year
145
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146