HomeMy WebLinkAbout2001 - 2002CITY OF SEBASTIAN, FLORIDA
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VETERAN'S MEMORIAL
In honor of the men and women
who have served in the five branches of the
Armed Forces of the United States of America
Dedicated December 7, 2002
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For The Fiscal Year October 1, 2001
Through September 30, 2002
CITY OF
SEBASTIAN, FLORIDA
CITY OF
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HOME OF PELICAN ISLAND
m Comprehensive Annual Financial Report
For the Year Ended September 30, 2002
CITY COUNCIL
WalterW. Barnes ...............................Mayor
James A. Hill .......................................Vice -Mayor
JoeBarczyk.........................................Councilmember
Edward J. Majcher, Jr . ...................... Councilmember
Ray Coniglio........................................Councilmember
Prepared By: Mark C. Mason, CPA
Director of Finance
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CITY OF
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HOME OF PELICAN ISLAND
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INTRODUCTORY SECTION
This section contains the following subsections:
Table of Contents
Letter of Transmittal
Certificate of Achievement for Excellence in Financial
Reporting for the Fiscal Year Ended September 30,
2001
Organizational Chart
�, List of Officials
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CITY OF SEBASTIAN, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
SEPTEMBER 30, 2002
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
TitlePage.......................................................................................................................................................
i
Tableof Contents...........................................................................................................................................
iv
Letterof Transmittal......................................................................................................................................
vii
Certificate of Achievementtfor Excellence in Financial Reporting...............................................................
x
OrganizationalChart ......................................................................................................................................
xi
Listof Officials ..................... :........................................................................................................................
xii
FINANCIAL SECTION
IndependentAuditor's Report.......................................................................................................................
3
Management's Discussion and Analysis.......................................................................................................
5
Basic Financial Statements — Overview
Government -wide Financial Statements:
Statementof Net Assets ........ :...... .... .......................................................................................................
13
Statementof Activities...........................................................................................................................
14
Fund Financial Statements:
Balance Sheet —Governmental Funds....................................................................................................
15
Statement of Revenues, Expenditures, and Changes in Fund Balances —
GovernmentalFunds............................................................................................................:..............
16
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities.......................................................................
17
Statement of Net Assets — Proprietary Funds.........................................................................................
18
Statement of Revenues, Expenses, and Changes in Fund Net Assets — Proprietary Funds ........ :...........
19
Statement of Cash Flows — Proprietary Funds......................................................................................
20
Statement of Fiduciary Net Assets — Fiduciary Funds............................................................................
22
Statement of Changes in Fiduciary Net Assets —Fiduciary Fund —Pension Trust ................................
23
Notesto Financial Statements...................................................................................................................
24
Reouired Suonlementary Information:
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual— General Fund............................................................................................................................ 39
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual —Discretionary Sales Tax Special Revenue Fund...................................................................... 40
Notes to the Required Supplementary Information — Budget Comparisons .............................................. 41
Police Officers' Pension Plan — Schedule of Contributions from the Employer and other
ContributingEntities.............................................................................................................................. 42
Combinin? and Individual Nonmaior Financial Fund Statements and Budget to Actual Schedules
Combining Balance Sheet—Nonmajor Governmental Funds................................................................:...... 46
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances —Nonmajor
GovernmentalFunds.................................................................................................................................. 48
Schedule of Revenues, Expenditures, and Changes in Fund Balances —Budget and
Actual — Local Option Gas Tax Special Revenue Fund............................................................................. 50
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual — Riverfront Redevelopment Special Revenue Fund...................................................................... 51
Schedule of Revenues, Expenditures, and Changes in Fund Balances —Budget and
Actual — Recreation Impact Fee Special Revenue Fund............................................................................ 52
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Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual — Stormwater Utility Special Revenue Fund.................................................................................. 52
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual — Law Enforcement Forfeiture Special Revenue Fund................................................................... 53
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual — G.R.E.A.T. Program Special Revenue Fund............................................................................... 53
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual— Debt Service Fund....................................................................................................................... 54
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and
Actual — Road Paving Program Projects Fund...........................................................................................
55
Capital Assets Used in the Operations of Governmental Funds — Schedule by Function and Activity.........
56
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STATISTICAL SECTION (Unaudited)
Table
General Governmental Expenditures & Other Financing Uses by Function —
^
Last Ten Fiscal Years............................................................................................................
1
58
General Governmental Revenues & Other Financing Sources — Last Ten
FiscalYears...........................................................................................................................
2
60
Property Tax Levies and Collections — Last Ten Fiscal Years .................................................
3
62
Assessed and Estimated Actual Value of Property — Last Ten Fiscal Years ............................
4
64
PrincipalTaxpayers..................................................................................................................
5
66
Property Tax Rates — Direct and Overlapping Governments — Last Ten Fiscal Years .............
6
67
Special Assessments Billing and Collections —Last Ten Fiscal Years .....................................
7
68
Computation of Legal Debt Margin..........................................................................................
8
69
Ratio of Net General Obligation Bonded Debt to Assessed Value and Net
General Obligation Bonded Debt Per Capita........................................................................
9
70
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt
•
To Total General Government Expenditures........................................................................
10
70
Computation of Direct and Overlapping Bonded Debt — General Obligation Bonds ...............
11
71
Revenue Bond Coverage — Golf Course Bond — Last Ten Fiscal Years ...................................
12
72
...........................................
Demographic Statistics — Last Ten Fiscal Years ................... ........
13
73
Property Value, Construction and Bank Deposits — Last Ten Fiscal Years ..............................
14
74
Miscellaneous Statistics............................................................................................................
15
76
SINGLE AUDIT SECTION
Independent Auditor's Report on Compliance and on Internal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed in Accordance with
Governmental Auditine Standards.............................................................................................................
79
Independent Auditor's Report on Compliance and Interval Control over Compliance
Applicable to Each Major State Project.....................................................................................................
81
Schedule of Findings and Questioned Costs— State Projects........................................................................
83
Schedule of Expenditures of State Financial Assistance................................................................................
86
Independent Auditor's Management Letter ............................
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CITY OF
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CITY OF
BASTIAN
,I
HOME OF PELICAN ISLAND
1225 MAIN STREET • SEBASTIAN, FLORIDA 32958
^ TELEPHONE: (772) 589-5330 • FAX (772) 589-5570
_
February 12, 2003
Honorable Mayor and City Council
City of Sebastian, Florida
Dear Council Members:
We are submitting the Comprehensive Annual Financial Report of the City of Sebastian, Florida for the fiscal year
ended September 30, 2002, as prepared by the City's Finance department. Responsibility for both the accuracy of
the data presented and the completeness and fairness of the presentation, including all disclosures, rests with the
Management of the City.
The Comprehensive Annual Financial Report is presented in four sections:
I. Introductory section, including a table of contents, this letter of transmittal, the organizational chart,
and list of officials.
2. Financial section, including the Management Discussion and Analysis, basic financial statements
_ accompanied by our independent auditor's report, notes to financial statements, required
supplementary information, and the combining and individual fund financial statements and
schedules.
3. Statistical section, including selected financial and demographic information, generally presented for
the past 10 years.
4. Single audit section, including our independent auditor's reports and Schedule of Expenditures of
State Financial Assistance.
The report also complies in all material respects with the authoritative promulgations by the Governmental
Accounting Standards Board (GASB). An explanation of the City's accounting policies is contained in the Notes
to Financial Statements, which are an integral part of this Report. These Notes explain the basis of accounting,
_ funds and accounts used, and other significant accounting information.
U.S. generally accepted accounting principles require that management provide a narrative introduction, overview,
and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis
.� (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with
it. The City of Sebastian's MD&A can be found on page 5 following the report of the independent auditors.
INDEPENDENT AUDIT
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. This audit has been completed by the City's independent
Certified Public Accountants, Hoyman, Dobson & Company, P.A. Their opinion is included in this Report.
"An Equal OpporWity Employer"
Celebrating Our 75th Anniversary
REPORTING ENTITY
The City of Sebastian is located on the central east coast of Florida, "the Treasure Coast", in Indian River County.
The City is a Florida municipal corporation with a five -member City Council comprised of five council members
with a Mayor selected from the five members. The City operates under a Council -City Manager form of
government. The Director of Finance reports to the City Manager and they are responsible for the administration
of City finances. The City provides a wide range of services including general government administration, police
protection, public works, a golf course, and a general aviation airport.
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.
FACTORS AFFECTING FINANCIAL CONDITIONS
The information presented in the financial statements is perhaps best understood when it is considered from the ow
broader perspective of the specific environment within which the City of Sebastian operates.
Local Economv
The City of Sebastian currently enjoys a favorable economic environment and local indicators (building permits,
both commercial and residential) suggest continued stability. The region, though agricultural in nature, also
enjoys light industrial as well as a strong retail base which draws numerous visitors from around the area.
The region (which includes the City of Sebastian and the surrounding unincorporated area with the same county)
has a fluctuating labor force depending on agricultural demand and a strong retirement community. Although the
labor force fluctuates, unemployment in the region has been between 6.8% and 9.8% over the past several years.
Long-term Financial Planning
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.
U.S. Highway 1, which includes a substantial portion of the business district of the City of Sebastian, underwent
major renovations over the past year. This should have a considerable impact on tourism and commercial
opportunities. In addition, over the past year, three new commercial centers and doctor's offices have been built ..
along this major artery in the City.
FINANCIAL INFORMATION
Internal Accounting Controls
In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal
accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurances
regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability
of financial records for preparing financial statements and maintaining accountability for assets. The concept of
reasonable assurance recognizes that: (I) the cost of a control should not exceed the benefits likely to be derived,
and (2) the evaluation of costs and benefits requires estimates and judgements of management.
All internal control evaluations occur within this framework. We believe that the City's internal accounting
controls adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
Budgetary Control
on
Budgetary control is maintained at the budget account level by the encumbrance of estimated purchase amounts
prior to the release of purchase orders to vendors. Open encumbrances are reported as reservations of fund
balances as of September 30, 2002. Appropriations are approved on an annual basis and are subject to regular ..
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review by City Management and a quarterly review by the City Council. Monthly budget reports are submitted to
_ senior administrative officials and are available to the City Council.
Cash Manaeement
Cash temporarily idle during the year was invested in repurchase agreements and other obligations with maturities
less than one year. Funds were invested with the State Board of Administration which pools funds from local
governmental units and with local banks which are considered Qualified Public Depositories as described in the
Florida Security for Public Deposits Act. In addition, the City maintains a zero balance disbursement account
system whereby excess funds are cleared from the account at the end of each banking day and automatically
invested in an overnight repurchase agreement.
Risk Manaeement
so
All risk management activities are recorded in each particular fund, including general property liability insurance
premiums and related costs and workers compensation. The City administers both policies under the direction of
00 the Finance and Human Resources departments, respectively. In addition, the City has a Safety Committee that
reviews all worker compensation accidents and provides recommendations for corrective action.
Retirement Commitments
in Police Officers' Pension Plan —There were 34 active and retired members in the Police Officers' Pension Plan as
of September 30, 2002. This pension plan is a single employer, defined benefit plan and is administered by a
Board of Trustees. The actuarially determined funding requirements are based upon the market value of the
1° pension plan's investment portfolios. The City's policy of funding to meet the actuarially determined
requirements was met for 2002. Contributions to the pension plan totaled $153,21 1, which includes $8,620 from
the City, $61,714 from employees, and $82,877 from the State of Florida.
REPORTING ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a.Certificate of
4M Achievement for Excellence in Financial Reporting to the City of Sebastian for its comprehensive annual financial
report for the fiscal year ended September 30, 2001. The Certificate of Achievement is a prestigious national
award recognizing conformance with the highest standards for preparation of state and local government financial
as reports. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both U.S. generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive
annual financial report continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
ACKNOWLEDGEMENTS
The preparation of this report would not be possible without the dedicated service of the Finance department staff.
Their efforts toward improving the accounting and financial reporting systems has led to the improved quality of
information reported to the City Council, State and federal agencies and the citizens of the City of Sebastian. We
sincerely appreciate their contributions.
� Respe fu su ttted,
Mark C. Mason, CPA
Director of Finance
Terrence R. Moore
City Manager
OR
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Certificate of
Achievement _
for Excellence
in Financial -
Reporting -
Presented to
City of Sebastian,
Florida -
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended —
September 30, 2001
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement —
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting. —
President
Executive Director
m
CITY OF SEBASTIAN
ORGANIZATIONAL CHART
CITIZENS OF
SEBASTIAN
CITY COUNCIL BOARDS &
� COMMISSIONS
1
CITY
CITY
CITY
..
CLERK
MANAGER
ATTORNEY
_
I
I
POLICE
sal
FINANCE
PUBLIC WORKS
ADMINISTRATION
+--
HUMAN RESOURCES
ROADS & DRAINAGE
`-�
SCHOOL RESOURCE
->
ENGINEERING
BUILDING
MAINTENANCE
.,
UNIFORM
GROWTH MANAGEMENT
PARKS &
RECREATION
^I�
COMMUNITY
POLICING
-�I
BUILDING DEPARTMENT
CEMETERY
CODE
ENFORCEMENT
GOLF COURSE
DETECTIVE
AIRPORT
�®
SUPPORT
GENERAL SERVICES
.�
SERVICES I
�i
ADMINISTRATION
DISPATCH I
CENTRAL GARAGE
pq
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CITY OF SEBASTIAN, FLORIDA
CITY OFFICIALS
City Manager
TERRENCE R. MOORE
City Clerk
SALLY A. MAIO, CMC
City Attorney
RICH STRINGER
DEPARTMENT HEADS:
Director of Finance
MARK C. MASON, CPA
City Engineer
DAVID FISHER, P.E.
Police Chief
JAMES DAVIS
Public Works Director
TERRY HILL
Growth Management Director
TRACY HASS
Building Director
GEORGE BONACCI
Human Resources Director
JAMES SEXTON
Golf Course Manager
GREG GARDNER
Airport Manager
JASON MILEWSKI
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FINANCIAL SECTION
This section contains the following subsections:
➢ Independent Auditor's Report
➢ Management's Discussion and Analysis
➢ Government -wide Financial Statements
➢ Fund Financial Statements
➢ Notes to Financial Statements
➢ Required Supplementary Information
➢ Combined and Individual Fund Statements
and Schedules
i
HOYMAN, DOBSON & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
215 Bayfree Drive, Melbourne, Florida 32940, 321-255-0088, Fax 321-259-8648, www.hoyman.com
Charles W Hayman, Jt
Borboro J. Oswolt
Thomas L. Kirk
Karen E. Kirkland
Deborch A. Bradley
DIRECTOR EMERITUS
r♦ Roger W Dobson
Independent Auditor's Report Eugene K. Bjerning
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
We have audited the accompanying basic financial statements of the governmental activities, the business -
type activities, each major fund, and the aggregate remaining fund information of the City of Sebastian,
Florida, as of and for the year ended September 30, 2002, which collectively comprise the City's basic
financial statements as listed in the table of contents. These financial statements are the responsibility of the
City of Sebastian, Florida's, management. Our responsibility is to express an opinion 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 basic 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 provides a reasonable basis for our opinions.
In our opinion, the basic 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, 2002,
and the respective changes in financial position and cash flows, where applicable, thereof for the year then
ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated December 13,
2002, 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. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
,a
The management's discussion and analysis on pages 5-12 and the required supplementary information on
pages 39-43 are not a required part of the basic financial statements but are supplementary information
.� required by the Governmental Accounting Standards Board. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the information and
express no opinion on it.
Americor Institute of Certified Public Accountants • Florida Institute of Certified Public Accountants • SEC Practice Section of the A.I.C.PA_ • CPAmerica International
Honorable Mayor and Members of City Council
City of Sebastian
Page Two
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Sebastian, Florida's basic financial statements. The accompanying supplementary
information identified in the table of contents as the introductory section, combining and individual
nonmajor financial fund statements and budget to actual schedules, and the statistical section are presented
for purposes of additional analysis and are not a required part of the basic financial statements. The
combining and individual fund financial statements and schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion are fairly stated in all
material respects in relation to the basic financial statements taken as a whole. The introductory section and
the statistical section have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we express no opinion on them. —
The accompanying schedule of expenditures of state financial assistance is presented for purposes of
additional analysis as required by Section 215.97, Florida Statutes, and is also not a required part of the —
basic financial statements of the City of Sebastian, Florida. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated,
in all material respects, in relation to the basic financial statements taken as a whole. —
, Hoyman, Dobson &Company, A.
December 13, 2002
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OR
MANAGEMENT'S DISCUSSION AND ANALYSIS
The City of Sebastian's (the "City") discussion and analysis is designed to (a) assist the reader in focusing on
significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the
City's financial position, (d) identify any material deviations from the financial plan, and (e) identify individual
fund issues or concerns.
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current years activities,
resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter (beginning
on page vii) and the City's financial statements (beginning on page 13).
HIGHLIGHTS
Financial Highlights
OR
• The City's Net Assets increased by $3,096,106 primarily as a result of completing and capitalizing
$2,210,367 in capital improvement projects, purchases of capital equipment of $400,199 and the
so implementation of the Recreation Impact Fee and Stormwater Utility Fee which contributed $1,044,138
in additional revenue for capital improvements.
• The total cost of all the City's programs was $10,673,279, an increase of $1,561,842 or 17.1%.
• During the year, the City's governmental -type activities revenues increased $1,756,001 or 173% and
expenses increased 1,539,443 or 20.6%, over the previous year.
• The City's business -type activities revenue increased by $37,503 or 2.1% and expenses increased by
$22,399 or 1.4%.
• The City completed $556,015 in land purchases, representing 11.5 acres, for recreation.
• The City completed $704,306 in road reconstruction and repaving.
USING THIS ANNUAL REPORT
w
The annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of
Activities (on pages 13 and 14) provide information about the activities of the City as a whole and present a
longer -tern view of the City's finances. Fund financial statements begin on page 15. For governmental
activities, these statements tell how these services were financed in the short tern as well as what remains for
future spending. Fund financial statements also report the City's operations in more detail by providing
., information about the City's most significant funds. The remaining statements provide financial information
about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the
government.
Reporting the City as a Whole
Our analysis of the City as a whole begins on page 13. One of the most important questions asked about the
City's finances is, "Is the City as a whole better off or worse off as a result of the year's activities?" The
Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its
activities in a way that helps answer this question. These statements include all assets and liabilities using the
accrual basis of accounting, which is similar to the accounting used in most private -sector companies. All of the
current year's revenues and expenses are taken into account regardless of when cash is received or paid.
These two statements report the City's net assets and changes in them. You can think of the City's net assets —
the difference between assets and liabilities — as one way to measure the City's financial health, or financial
position. Over time, increases or clecreases in the City's net assets, is one indicator of whether its financial
5
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health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as .,
changes in the City's property tax base and the condition of the City's roads, to assess the overall health of the
City.
In the Statement of Net Assets and the Statement of Activities, we divide the City into two kinds of activities:
• Governmental activities — Most of the City's basic services are reported here, including the police, public
works and parks departments, and general administration. Property taxes, franchise fees, and state shared
revenue finance most of these activities.
• Business -type activities — The City charges a fee to customers to help it cover all or most of the cost of
certain services it provides. The City's Golf Course and Airport are reported here. ^
Reporting the City's Most Significant Funds
Our analysis of the City's major finds begins on page 15. The fund financial statements provide detailed
information about the most significant funds — not the City as a whole. Some funds are required to be established
by State law and by bond covenants. However, the City Council establishes many other funds to help it control ..
and manage money for particular purposes (like the road paving program) or to show that it is meeting legal
responsibilities for using certain taxes, grants, and other money (like the local option gas tax and infrastructure
sales surtax (a.k.a. Discretionary Sales Tax)). The City's two kinds of funds — governmental and proprietary —
use different accounting approaches.
• Governmental finds — Most of the City's basic services are reported in governmental funds, which focus ^
on how money flows into and out of those funds and the balances left at year-end that are available.for
spending. These funds are reported using an accounting method called modified accrual accounting,
which measures cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the City's general government ^
operations and the basic services it provides. Governmental fund information helps you determine
whether there are more or fewer financial resources that can be spent in the near future to finance the
City's programs. We describe the relationship (or differences) between governmental activities (reported ^
in the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliations
at the bottom of the fund financial statements.
• Proprietary funds — When the City charges customers for the services it provides — whether to outside
customers or to other units of the City — these services are generally reported in proprietary funds.
Proprietary funds are reported in the same way that all activities are reported in the Statement of Net ^
Assets and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary
funds) are the same as the business -type activities we report in the government -wide statements but
provide more detail and additional information, such as cash flows, for proprietary funds.
The City as Trustee
The City is the trustee, or fiduciary, for the Police Officers' Pension Plan. The City's fiduciary activities are
reported in separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets on page 22 and 23.
We exclude these activities from the City's other financial statements because the City cannot use these assets to
finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for ^
their intended purposes.
The City holds deposits for various individuals and businesses for contract performance that are then returned ..
when the contract has been completed. These deposits are accounted for in an Agency fund, where assets equal
liabilities.
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THE CITY AS A WHOLE
Financial Analysis of the City as a Whole
The City's combined net assets increased $3.1 million from $22.2 million to $253 million or 13.9%. Looking at
the net assets and net revenues of the governmental and business -type activities, the largest increase occurred in
the governmental -type activities. Our analysis focuses on net assets (Table 1) and changes in net assets (Table 2)
of the City's governmental and business -type activities.
Statement of Net Assets
GOVERNMENT -WIDE STATEMENTS
The following table reflects the condensed Statements of Net Assets:
Table 1
t�
Statements of Net Assets
as of September 30, 2002 and 2001
(in thousands)
O
Governmental Activities Business -type Activities
Total Primary Government
2002
2001 2002
2001
2002
2001
Current and other assets
S
10,157
S 8,400 $ 1,827
$
2,152
$
11,984
$
10,552
Capital assets
17,743
16,620 2,527
2,393
20,270
19,013
. Total assets
S
27,900
S 25,020 S 4,354
S
4,545
$
32,254
$
29,565
�r
Non -current liabilities
5
4,043
$ 4,251 S 2,278
S
2,371
$
6,321
$
6,622
Other liabilities
459
303 134
396
593
699
Total liabilities
$
4,502
$ 4554 $ 2,412
$
2,767
$
6,914
$
7,321
•
Net assets:
Invested in capital assets,
net of related debt
S
14,243
S 12,778 $ 364
S
151
$
14,607
$
12,929
Restricted
3,290
2,270 458
641
3,748
2,911
Unrestricted
5.865
5,418 1.120
986
6.985
6,404
Total net assets
S
23.398
$ 20,466 S 1,942
$
1,778
$
25,340
$
22,244
For more detail information see the Statement of Net Assets on page 13.
00
Net assets of the governmental -type activities increased $2.9 million or 14.3%. Unrestricted net assets -the part of
net assets that can be used to finance day-to-day operations without constraints established by debt covenants,
enabling legislation, or legal requirements -increased from $5.4 million to $5.9 million or $500,000, while
w� restricted net assets increased $1.0 million from $23 million to S3.3 million. Investment in capital assets, net of
related debt increased from $12.8 to $14.2 million or $1.6 million.
Unrestricted net assets increased as a result of communication services taxes exceeding anticipated amounts and
an increase in building permit fees exceeding anticipated amounts due to an increase in building activity resulting
from a decrease in interest rates. Restricted net assets increased from the implementation and receipt of net
revenue in excess of expenditures from the Stormwater Utility Fee ($720,814) and the Recreation Impact Fee
($258,455).
Net assets of the City's business -type activities increased by 9.3% ($1.942 million compared to $1.778 million) in
am fiscal year 2002. The increase results from capital contributions from the Florida Department of Transportation -
Aviation Section for capital improvements at the City's general aviation airport of $264,772, however, net assets
at the golf course decreased $7,127.
M 7
The following chart shows the revenue and expenses of the total primary government. ••
Table 2
Changes in Net Assets
For the Fiscal Years Ended September 30, 2002 and 2001
(in thousands) ..
Governmental
Business -type
Total Primary
Activities
Activities
Government
^
2002
2001
2002
2001
2002
2001
REVENUES
Program revenues:
Charges for services
$ 1,682
$ 792
$ 1,545
$ 1,282
$ 3,227
$ 2,074
^
Operating grants and contributions
958
902
51
124
1,009
1,026
Capital grants and contributions
2,734
2,444
214
299
2,948
2,743
General revenues:
^
Property taxes
2,616
2,557
-
-
2,616
2,557
Other taxes
1,750
1,905
1,750
1,905
Intergovernmental
2,069
1,336
-
-
2,069
1,336
..
Other
119
236
32
99
151
335
Total revenues
11,928
10,172
1.842
1,804
13,770
11,976
EXPENSES
..
General government
2,010
1,676
2,010
1,676
Public safety
2,946
2,527
-
-
2,946
2,527
Public works
2,767
2,082
-
-
2,767
2,082
Housing and community development
223
242
-
-
223
242
Culture and recreation
777
674
-
-
777
674
Cemetery
104
95
-
-
104
95
Golf Course
-
-
1,393
1,341
1,393
1,341
^
Airport
-
-
284
314
284
314
Interest on lone -term debt
169
161
-
-
169
161
Total expenses
8,996
7,437
1,677
1,655
10,673
9,112
�.
Change in net assets
$ 2,932
$ 2,715
$ 165
$ 149
$ 3,097
$ 2,864
Ending net assets
$ 23,398
$ 20,466
S 1,942
S 1,778
$ 25,340
$ 22,244
The City's total revenues increased by 15.0% ($1.794 million). The total cost of all programs increased by 17.1%
($1.562 million) with two new programs added this year. Even with this increase in expenses, the City was still
able to cover its costs. Our analysis below separately considers the operations of governmental and business -type
activities.
Governmental Activities
The cost of all governmental activities this year was $9.0 million compared to $7.5 million last year. However, as
shown in the Statement of Activities on page 14, the amount the City's taxpayers ultimately financed for these ^
activities through City taxes was only $4.4 million because some of the cost was paid by those who directly
benefited from the programs (S1.7 million) or by other governments and organizations that subsidized certain
programs with grants and contributions ($3.7 million). Overall the City's governmental program revenues
increased in fiscal year 2002 from $4.1 million to $5.4 million, principally based upon the implementation of the
Recreation Impact and Stormwater Utility Fees, which amounted to $258,455 and $785,683, respectively. The
City paid for the remaining "public benefit" portion of governmental activities with $4.4 million in taxes and with ..
other revenues, such as interest and general entitlements.
8
M
a„1 On the next page is a graphic illustration of the comparison for governmental activities revenue and expenses.
Governmental Activities for 2002 and 2001
2,600
2,000 _
A 2.500 -- - - --- _ - -
E 2,000 ---- --- - - --
Q 1.600 -- -' - — — — --------
10� A-. — —
rim
�ApV <4ij°�s b ` d � <o� oc K.^ lcry
,ea os's CA vos, � oy.. "d°jCm �,F` �`6.�p° �e«.� QJe�.�'°
Revenue/Expense types
❑ 2002 ■ 2001
Business -type Activities
Revenues of the City's business -type activities (see Table 2) increased by 2.1% ($1.842 million in fiscal year
2002 compared to $1.804 million in fiscal year 2001) and expenses rose 1.3%. The factors driving the results are:
• The City golf course, benefiting from a full year's operation (course was closed for four months in fiscal
year 2001 for renovations) increased its revenues by 19% and expenses rose 12.3%, to $1.4 million.
Higher costs due to an increase in debt service interest and personal services costs drove the increase.
• The City general aviation airport enjoys a continued interest by the Florida Department of Transportation -
Aviation Section to upgrade the airport facilities as evidenced by repeated support via grant funding.
Although revenues decreased by 11.8%, expenses decreased a corresponding amount, 9.6%, both
decreases due to the completion and adoption of the Airport Master Plan, resulting in a net increase in
assets.
on Following is a graphic comparison of the City's business -type activities.
1,800
1,600
A
1.400
_ 1,200
` 1,000
o`
E 800
w
600
aoo
200
Business -Type Activities Comparison
ee<<`�L
C�°i6yef° OQrt'q CoQ<� G°`<C°J<se'
so Revenue/Expense types
02002 ■2001
'" 9
THE CITY'S FUNDS
As the City completed the year, its governmental funds (as presented in the balance sheet on page 15) reported a
combined fund balance of $9.6 million, which is an increase of $1.6 million over the prior year of $8.0 million.
The primary reason for the overall increase is the addition of two new programs, the Recreation Impact Fee and
the Stormwater Utility Fee. In addition, the general fund received $446,237 in excess of anticipated revenue
primarily due to the Communications Services Tax implemented by the State of Florida in the current fiscal year.
General Fund Budgetary Highlights
Over the course of the year, the City Council revised the City budget three 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 the actual beginning balances (versus the amounts
originally estimated in July 2001). The second category includes the changes that the Council made during the
year to take into account the City's staff restructuring efforts. The principal amendment was to provide for a
larger distribution from the Communications Services Tax than originally calculated of $197,106. The
Communications Services Tax was implemented by the State of Florida in an effort to combine several disparate
communications franchise and utility tax rates throughout the State into one common rate for all. As a result, the
revenue received from the State exceeded original estimates based upon rates used for the various fees in the prior
year.
Even with these adjustments, the actual charges to appropriations (expenditures) were $224,109 below the final
budgeted amount.
The City's General fund balance of $3,922,747 reported on page 15 differs from the General fund's budgetary
balance of $3,055,620 reported in the budgetary comparison schedule on page 39. This is principally due to the
fact that the budgetary fund balance excludes $197,131 of encumbrances reported as expenditures for budgetary
purposes, as well as $669,996 of excess revenues over expenses exceeding the amended budget.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
M
M
r-,
..
OR
w
At the end of 2002 the City had $32,001,428 invested in a broad range of capital assets, including land, police and
public works equipment, buildings, park facilities, roads, bridges, and stormwater drainage structures. This
amount represents a net increase (including additions and deductions) of $1,745,555, or 5.8%, over last year. The ..
following table illustrates the changes in capital assets. See page 30 in the notes to the financial statements for
detailed changes in capital assets.
4111101
Table 3
Governmental
Business -type
Activities
Activities
Totals
2002
2001
2002
2001
2002
2001
Land S
4.488,173 S
3,748,585
s 9,060 S
9,060
$ 4,497,233 S
3,757,645
Buildings
2,556,708
2,310,816
333,189
344,114
2,889,997
2,654,930
Improvements
2,049,225
2,367,192
574,109
540,990
2,623,334
2,908,182
Equipm cut
4,570,141
4,384,243
486,016
450,633
5,056.157
4,834,878
Infrastructure
13,931,040
13,288 248
2,371,821
2,372,976
16,322,861
15,661,224
Construction -in
Process
264 456
356.079
347,490
82,935
611,946
439,014
Totals S
27,879,743 S
26,455,165
$ 4,121,685 S
3,800,708
S 32,001,428 $
30,255.873
A
A
10 so
ON
^ The City's fiscal year 2003 capital budget calls for another $4,841,868 in capital projects, principally for the
completion of airport improvements of $2,855,000, funded primarily by State and Federal Grants, and road
improvements of $762,000 funded by discretionary sales tax and local option gas tax revenue sources.
Debt
At September 30, 2002, the City had $5,791,998 in bonds, notes and capital leases outstanding versus $6,229,027
^ at September 30, 2001 — a decrease of 7.0%— as shown in the following table:
Table 4
w Governmental Business -type
Activities Activities Totals
2002 2001 2002 2001 2002 2001
w
Special assessment debt S 134.199 S 187,901 S - S - $ 134,299 $ 187,901
Revenue Note (backed by
local option gas tax) 2,593,939 2,773,847 - - 2,593,939 2,773,847
^
Capital lease obligation
(backed by City) 788,957 900,000 - 788,957 900,000
Revenue bond (backed by
w golf course revenue) - - 2,274,803 2,367,279 2,274,803 2,367,279
Totals $ 3,517,195 $ 3,861,748 $ 2,274,803 $ 2,367,279 S 5,791,998 $ 6,229,027
The decrease in debt is solely attributable to principal payments. The City did not issue any new debt in fiscal
year 2002. See note IV.H. on pages 34 and 35 for further information.
w The City's revenue refunding bond carries an AAA rating from Standard & Poor's, a rating it has held since 1992.
All of the City's other debt, primarily notes and a capital lease, are not rated.
Other obligations of the City include accrued vacation pay and sick leave.
IND
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
on The City's elected and appointed officials considered many factors when setting the fiscal year 2003 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 Wal-Mart Stores, Inc.® and Winn Dixie Stores, Inc.® The Indian River County
unemployment rate in 2002 was 9.8% up from 6.8% in the previous year and down from a high of 11.9% in 1992.
w This indicates that although business growth in the area has improved as evidenced by the construction of several
new commercial establishments in the area, the unemployment of faun workers continues to burden the
unemployment rate. Continued stability and the increase of annual residential building permits issued provides a
an trend for steady economic development in the area.
These indicators were taken into account when adopting the General Fund budget for fiscal year 2003. Amounts
available for appropriation in the General Fund budget are $9,403,970, an increase of 11.2% over the final fiscal
year 2002 budget of $8,130,544. Property taxes (benefiting from a 2002 increase in assessed valuations of
8.63%), public services taxes, and State shared revenue are expected to lead this increase. The City will use these
increases in revenues to finance programs we currently offer, implement an active recreation program, as well as,
the effect that we expect inflation to have on program costs. Budgeted expenditures, not including transfers out,
are expected to rise 9.1%, to $8,759,970 from $8,030,544 in fiscal year 2002. Increased wage and cost -of -living
adjustments and health insurance based on agreements reached with the police and general employee's unions in
.n fiscal year 2002 of roughly $981,320, including an increase of $125,358 in worker's compensation insurance are
the largest increments.
.,
If these estimates are realized, the City's budgetary fund balance is expected to increase moderately by the close .,
of fiscal year 2003.
As for the City's business -type activities, we expect the fiscal year 2003 results will also be moderate based upon
current and finure initiatives:
• The Golf Course results are anticipated to increase slightly as a result of rate increases for play.
The Airport is undergoing a reconstruction and economic development revitalization, as a result of master
planning initiatives, primarily funded with Federal Aviation Administration and Florida State grants. In
addition, the airport has entered into a lease agreement for T-hangers that is anticipated to increase
revenues by 35.2% upon completion of construction. The results of operations, however, are expected to
be modest for several years.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a r.
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 City Finance Department at City of
Sebastian, 1225 Main Street, Sebastian, Florida 32958. ..
M
OR
M
go
12
City of Sebastian, Florida
Statement of Net Assets
September 30, 2002
_. Governmental Business -type
Activities Activities
ASSETS
Cash and cash equivalents:
Cash in banks $
500,680 $
1,250
Equity in pooled investments
6,720,303
820,500
Receivables
699.272
58,751
Special assessment receivable
66,048
-
Inventory
19.220
13,203
Prepaid expenses
8,927
2,465
,.
Investments
1,003,750
-
Restricted assets:
�.r
Temporarily restricted:
Equity in pooled investments
722,054
819,308
Permanently restricted:
Cash in banks
200,000
-
Equity in pooled investments
199,225
-
Deferred charges
17,264
111,175
Capital assets (net of accumulated depreciation):
Land
4,488,173
9,060
Buildings
1,490,070
82,636
Improvements other than buildings
1,372,607
457,738
.�
Machinery and equipment
2,029,584
175,756
Infrastructure
8,097,873
1,454,775
-
Construction in progress
264,456
347,490
Total assets
27,899,506
4,354,107
O
LIABILITIES
_
Accounts payable and accrued liabilities
334,328
59,359
�.
Retainage payable
25,820
-
Accrued interest payable
34,149
3,549
Deferred revenues
57,952
71,308
Deposits
6,340
-
Noncurrent liabilities:
Due within one year
391,251
223,023
Due in more than one year
3,651,776
2,054,803
Total liabilities
4,501,616
2,412,042
NET ASSETS
Invested in capital assets, net of related debt
14,242,832
363,827
on
Restricted for:
Capital projects
-
21,919
Highways and streets
1,654,288
ON
Redevelopment
25,540
-
Recreation
258,455
-
Stormwater
720,814
-
OR
Law enforcement
20,764
-
Debt service
163,870
436,095
Perpetual care:
Expendable
46,714
-
ON
Nonexpendable
399,225
-
Unrestricted
5,865,388
1,120,224
Total net assets $
23,397,890 $
1,942,065
A
The accompanying notes to financial statements are an integral part of this financial statement.
F
Total
501,930
7,540,803
758,023
66,048
32,423
11,392
1,003,750
1,541,362
200,000
199,225
128,439
4,497,233
1,572,706
1,830,345
2,205,340
9,552,648
611,946
32,253,613
393,687
25,820
37,698
129,260
6,340
614,274
5,706,579
6,913,658
14,606,659
21.919
1,654,288
25.540
258,455
720,814
20,764
599,965
46,714
399,225
6,985,612
25,339,955
A
City of Sebastian, Florida
Statement of Activities
For the year ended September 30, 2002
Net (Expense) Revenue and
Program Revenues
Cbanges
in Net Assets
Operating
Capital
Charges for
Grants and
Grants and
Governmental
Business -type
Function/Program
Expenses
Services
Contributions
Contributions
Activities
Activities
Total
Governmental activities:
General government
$ 2,010,288 $
651,698
$ -
S -
$ (1,358,590)
$ - $
(1,358,590)
Public safety
2,945,701
146,361
123,667
35,782
(2,639,891)
-
(2,639,891)
Public works
2,766,797
785,683
834,562
2,204,351
1,057,799
-
1,057,799
(lousing and community development
223,207
24,869
-
-
(198,338)
-
(198,338)
Culture and recreation
777,019
24,563
-
493,946
(258,510)
-
(258,510)
Cemetery
104,241
48,450
-
-
(55,791)
-
(55,791)
Interest on long-term debt
168,749
-
-
-
(168,749)
-
(168,749)
Total governmental activities
8,996,002
1,681,624
958,229
2,734,079
(3,622,070)
-
(3,622,070)
Business -type activities:
Golf Course
1,393,551
1,365,027
490
-
-
(28,034)
(28,034)
Airport
283,726
179,373
50,597
214,175
-
160,419
160,419
Total business -type activities
1,677,277
1,544,400
51,087
214,175
-
132,385
132,385
Total government
$ 10,673,279 $
3,226,024
$ 1,009,316
$ 2,948,254
(3,622,070)
132,385
(3,489,685)
General Revenues:
Property taxes
2,615,939
-
2,615,939
Public utility taxes
983,236
-
983,236
Franchise fees
766,901
-
766,901
Intergovernmental
2,068,753
-
2,068,753
Unrestricted investment earnings
118,840
32,122
150,962
Total general revenues
6,553,669
32,122
6,595,791
Change in net assets
2,931,599
164,507
3,096,106
Net assets - beginning
20,466,291
1,777,558
22,243,849
Net assets- ending
$ 23,397,890
$ 1,942,065 $
25,339,955
The accompanying notes to financial statements
are an integral part
of this financial statement.
City of Sebastian, Florida
Balance Sheet
Governmental Funds
September 30, 2002
,^
Road
Other
Total
Discretionary Capital
Paving
Governmental
Governmental
General Sales Tax Improvements
Program
Funds
Funds
ASSETS
"^
Cash and cash equivalents:
Cash in banks S
500,680 $ $ - S
S
$ 500,680
Equity in pooled investments
2,315,917 429,770 1,534,787
-
2,439,829
6,720,303
..
Receivables
224,296 6 11,912
333
236,547
Due from other funds
2,294 -
-
2,294
Due from other governments
I86,700 160,903 49,751
65,371
462,725
Special assessments receivable
- - -
-
66,048
66,048
Inventory
19,220 - -
-
-
19,220
-
Prepaid items
8,927 - -
-
-
8,927
Investments
1,003,750
1,003,750
r•
Restricted assets:
Cash in banks
-
200,000
200,000
Equity in pooled investments
- -
590,083
331,196
921,279
we
Total assets $
4.261,784 $ 590,679 $ 1,596,450 $
590,083
S 3,102,777
$ 10,141,773
LIABILITIES AND FUND BALANCES
Liabilities:
so
Accounts payable $
274,745 S 92 $ 45,967 $
$ 43,751
$ 364,555
Retaimige payable
- - 4,973
-
20,847
25,820
Due to other funds
-
2,294
2,294
M
Deposits
6,340
-
6,340
Deferred revenues
57,952
66,048
124,000
Total liabilities
339,037 92 50,940
132,940
523,009
Fund balances:
Reserved for:
Encumbrances
197,131 - 289,674
425,518
191,600
1,103,923
Inventory
19,220 - -
-
-
19,220
Prepaid items
8,927 -
8,927
Donations
6,810 -
-
6,810
Debt service
- - -
-
131,971
131,971
Law enforcement
- - -
-
18,470
18,470
Cemetery care
-
445,939
445,939
Unreserved:
Designated for emergencies
350,000 - -
-
-
350,000
Designated for employee events
8,221 - -
-
-
8,221
Unreserved, reported in:
General fund
3,332.438 - -
-
-
3,332,438
Special revenue funds
- 590,587 -
-
1,217,701
1,808,288
Capital projects funds
- - 1,255,836
164,565
964,156
2.384.557
Total fund balances
3,922,747 590,587 _ 1,545,510
590,083
2,969.837
9.618,764
Total liabilities and fund balances S
4,261,784 $ 590,679 $ 1,596,450 $
590,083
$ 3,102.777
Amounts reported for governmental activities
in the statement of net assets (page 13) are different because:
OR
Capital assets used in governmental funds
are not financial resources and therefore are not reported in the funds.
17,742,763
Some liabilities, including compensated absences and notes and capital leases, are not due and payable in
the current
period and therefore are not reported in
the funds (Note II.A. page 28).
(3,963,637)
M
Net assets of governmental activities
$ 23,397,890
The accompanying notes to financial statements are an integral part of this financial statement.
•
15
City of Sebastian, Florida
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds .,
For the year ended September 30, 2002
REVENUES:
Taxes:
Property
Public utility
Sales
Motor fuel
Franchise fees
Licenses and permits
Intereovernmental
Impact tees
Charges for services
Fines
Special assessments
Investment earnings
Contributions and donations
Other revenue
Total revenues
EXPENDITURES:
Current:
General government
Public safety
Public works
Housing and community development
Culture and recreation
Cemetery
Debt Service:
Principal
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Sale of capital assets
Total other financing sources (uses)
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Road
Other
Total
,^
Discretionary
Capital
Paving
Governmental
Governmental
General
Sales Tax
Improvements
Program
Funds
Funds
S 2,526,275
$ -
$ -
S -
S 191,289
$ 2,717,564
983,236
-
983.236
1,133,431
1,861,589
-
-
-
2,995,020
142,798
-
665,718
808,516
766,901
-
766,901
578,695
-
578,695
1,058,567
342,748
163,771
1,565,086
-
255,775
255,775
300,321
823,349
1,123,670
120,652
6,375
127,027
-
31,756
31,756
105,229
31,896
-
17,238
52,204
206,567
37,872
3,613
-
14,851
56,336
61,985
-
602
62,587
7,815,962
1,893,485
346,361
17,238
2,205,690
12,278,736
1.947,262
-
-
-
283,608
2,230,870
2.572,696
15,830
2,588,526
1,684,990
150,181
101,437
1,936,608
327,911
-
-
-
-
327,911
�.
638,150
-
638,150
94,204
375
94,579
344,553
344,553
-
-
-
-
174,864
174,864
344,091
1,040,862
429,220
508,621
2.322,794
we
7,609,304
-
1,191,043
429,220
1,429,288
10,658,855
206,658
1,893,485
(844,682)
(411,982)
776,402
1,619,881
280,850
703,400
14,568
1,010,355
2,009,173
(100,000)
(1,626,320)
-
(282,853)
(2,009,173)
7,900
-
7,900
188,750
(1,626,320)
703,400
14.568
727,502
7,900
395,408
267,165
(141,282)
(397,414)
1,503904
1,627,781
3,527,339
323,422
1,686,792
987,497
1,465,933
7,990,983
ON
$ 3,922,747
$ 590,587
$ 1,545,510
$ 590,083
$ 2,969,837
$ 9,618,764
The accompanying notes to financial statements are an integral part of this financial statement.
16
"' City of Sebastian, Florida
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
To the Statement of Activities
For the year ended September 30, 2002
w
-- Net change in fund balances - total government funds $ 1,627,781
M 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. This is the amount by which capital outlay
(S2,322,794) exceeded depreciation ($1,240,899, net of loss on disposal of assets of $87,894) in the current period. In the
.� governmental funds, the proceeds from the sale ($7.900) increased financial resources. 1,122,610
Repayment of debt principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the
statement of net assets. This is the amount by which repayments reduced long-term liabilities (Note II.B. page 28). 344,553
w
Some expenses and revenues reported in the statement of activities do not add to or require the use of current financial
- resources and therefore are not reported as revenues or expenditures in governmental funds (Note II.B. page 28). (163,345)
w Change in net assets of governmental activities $ 2,931,599
w
ON
w
w
No
w
A
go
• The accompanying notes to financial statements are an integral part of this financial statement.
w 17
City of Sebastian, Florida
Statement of Net Assets
Proprietary Funds .�
September 30, 2002
Enterprise Funds
an
Golf Course
Airport
Totals
ASSETS
Current assets:
•
Cash and cash equivalents:
Cash in banks
$ 1,250
$ - $
1,250
Equity in pooled investments-
592,954
227,546
820,500
•
Accounts receivable
76
4,930
5,006
Due from other governments
-
53,745
53,745
Inventory
13,203
-
13,203
Prepaid expenses
1,725
740
2,465
•
Total current assets
609,208
286,961
996,169
Noncurrent assets:
•
Restricted asset- cash and cash equivalents:
Equity in pooled investments
458,014
361,294
819,308
Unamortized bond issue costs
111,175
-
111,175
Capital assets:
Land
-
9,060
9,060
Buildings
333,189
-
333,189
Improvements other than buildings
226,537
347,572
574,109
�.
Machinery and equipment
337,709
148,307
486,016
Infrastructure
1,615,848
755,973
2,371,821
Construction in process
-
347,490
347,490
Less accumulated depreciation
(1,265,580)
(328,650)
(1,594,230)
•
Total noncurrent assets
1,816,892
1,641,046
3,457,938
Total assets
2,426,100
1,928,007
4,354,107
ON
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities
22,979
36,380
59,359
Accrued interest payable
3,549
-
3,549
Current portion of long-term debt
222,718
305
223,023
Deferred revenue
70.989
319
71,308
Total current liabilities
320,235
37.004
357,239
•
Noncurrent liabilities:
Long-term debt
2,054.803
-
2.054,803
Total liabilities
2,375,038
37.004
2,412,042
•
NET ASSETS
Invested in capital assets,
'•
net of related debt
(915,925)
1,279,752
363,827
Restricted for:
Capital projects
21,919
-
21,919
Debt service
436,095
-
436,095
•
Unrestricted
508,973
611,251
1,120.224
Total net assets
$ 51,062
$ 1,891,003 $
1,942,065
on
•
The accompanying notes to financial statements are an integral part of this financial statement.
•
18
^
City of Sebastian, Florida
Statement of Revenues, Expenses and Changes in
Fund Net Assets
Proprietary Funds
^
For the
year ended September 30,
2002
Enterprise Funds
Golf Course
Airport
Totals
Operating revenues:
Charges for fees and rents:
Golf course fees
S 1,309,498 S
- S
1,309,498
Rents
29,798
167,061
196,859
Other revenue
26,221
12,312
38,533
Total operating revenues
1,365,517
179,373
1,544,890
A
_
Operating expenses: ,
Salaries, wages and employee benefits
279,735
67,829
347,564
Contractual services, materials and supplies
860,905
132,232
993,137
Depreciation
126,776
83,665
210,441
Amortization
13,099
-
13,099
Total operating expenses
1,280,515
283,726
1,564,241
Operating income (loss)
85,002
(104,353)
(19,351)
�t
Nonoperating revenues (expenses):
Investment earnings
20,907
11,215
32,122
tit
Interest expense
(112,803)
-
(112,803)
Loss on sale of fixed assets
(233)
-
(233)
^
Total nonoperating revenues (expenses)
(92,129)
11,215
(80,914)
-
Loss before capital contributions
(7,127)
(93,138)
(100,265)
Capital contributions
-
264,772
264,772
Change in net assets
(7,127)
171,634
164,507
Total net assets - beginning
58,189
1,719,369
1,777,558
Total net assets - ending
S 51,062 S
1,891,003 S
1,942,065
on
so
PR
The accompanying notes to financial statements
are an integral part of this financial
statement.
do
19
City of Sebastian, Florida ^
Statement of Cash Flows
Proprietary Funds ..
For the year ended September 30, 2002
Enterprise Funds
Golf Course
Airport
Totals
CASH FLOWS FROM OPERATING
^
ACTIVITIES:
Cash received from customers and users
S 1,296,401
$ 159,784 $
1,456,185
Cash payments to suppliers
(969,628)
(179,697)
(1,149,325)
�+
Cash payments for employee services
(277,474)
(67,972)
(345,446)
Other operating receipts
56,019
12,312
68,331
Payments for interfund services used
(38,088)
(32,114)
(70,202)
^
Net cash provided (used) by operating
activities
67,230
(107,687)
(40,457)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets
(45,337)
(299,863)
(345,200)
Receipts from capital grants
-
307,573
307,573
^
Principal paid on revenue bond maturities
(100,000)
-
(100,000)
Interest paid on revenue bonds
(104,481)
-
(104,481)
Net cash provided (used) by capital and
r�
related financing activities
(249,818)
7,710
(242,108)
CASH FLOWS FROM INVESTING
^
ACTIVITIES:
Interest on investments
20,972
11,251
32,223
Net cash provided by investing activities
20,972
11.251
32,223
^
Net decrease in cash and cash equivalents
(161,616)
(88,726)
(250,342)
Cash and cash equivalents, October 1
1,213,834
677,566
1,891,400
^
Cash and cash equivalents, September 30
S 1,052,218
$ 588,840 $
1,641,058
^
^
^
^
The accompanying notes to financial statements are an integral part of this financial statement.
W
20
City of Sebastian, Florida
Statement of Cash Flows
Proprietary Funds
For the year ended September 30, 2002
(Continued)
Enterprise Funds
Golf Course
Airport
Totals
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities:
Operating income (loss)
$
85,002
$
(104,353)
$
(19,351)
Adjustments not affecting cash:
w
Depreciation expense
126,776
83,665
210,441
Amortization
13,099
-
13,099
M
Changes in assets and liabilities:
Decrease (increase) in accounts receivable
71294
(4,696)
2,598
Decrease in prepaid expenses
113
2,295
2,408
w
Decrease in inventories
12,577
-
12,577
Decrease in accounts. payable
(159,501)
(81,874)
(241,375)
Increase (decrease) in compensated absences
4
(685)
(681)
M,
Increase in accrued wages and taxes
2,257
542
2,799
Decrease in deferred revenues
(20,391)
(2,581)
(22,972)
Total adjustments
(17,772)
(3,334)
(21,106)
Net cash provided (used) by operating activities
$
67,230
$
(107,687)
$
(40,457)
M
�1
Cash and cash equivalents reconciliation:
Cash and cash equivalents :
rrt
Cash in banks
$
1,250
$
-
$
1,250
Equity in pooled investments
592,954
227,546
820,500
Restricted asset - cash and cash equivalents:
Equity in pooled investments
458,014
361,294
819,308
r"
Cash and cash equivalents at September 30
$
1,052,218
$
588.840
$
1,641,058
M
n
A
The accompanying notes to financial statements are an integral part of this financial statement.
21
City of Sebastian, Florida
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2002
M
Pension
Trust
Agency
Police
Officers'
Performance
Pension
Deposits
ASSETS
Cash and cash equivalents:
Cash in banks
S 251,301
S
Equity in pooled investments
-
4,182
Receivables:
w
Employee contributions
2,265
-
Interest and dividends
26,737
-
Total receivables
29,002
-
Investments. at fair value
U.S. government obligations
862,488
-
Federal agency notes
944,862
-
Corporate bonds
20,568
-
Common stock
508,080
-
Total investments
2,335,998
-
Total assets
2,616,301
$
4,182
LIABILITIES
Refunds parable
-
S
4,182
Total liabilities
-
$
4,182
NET ASSETS
Held in trust for pension benefits
S 2,616,301
A
n
The accompanying notes to financial statements are an integral part of this financial statement.
City of Sebastian, Florida
Statement of Changes in Fiduciary Net Assets
• Fiduciary Fund - Pension Trust
For the year ended September 30, 2002
ADDITIONS
•
Contributions:
Employer
Plan members
_
State
Total contributions
am
Investment earnings:
Net decrease in fair value of investments
•
Interest and dividends
Total investment earnings
Less investment expenses
•
Net investment earnings
Total additions
+�
DEDUCTIONS
Benefits
•
Refunded contributions
Other expenses
•
Total deductions
Change in net assets
•
Net assets - beginning of year
•
Net assets - end of year
•
The accompanying notes to financial statements are an integral part of this financial statement.
23
Police
Officers'
Pension
$ 8,620
61,714
82,877
153,211
(48,448)
112,906
64,458
(19,732)
44,726
197,937
24,283
18,053
7,253
49,589
148,348
2,467,953
$ 2,616,301
CITY OF SEBASTIAN, FLORIDA
Notes to the Financial Statements
September 30, 2002
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Sebastian (the "City"), a Florida Municipal Corporation, was incorporated in 1924 under Sections 1826-1832 of the Revised ^
Florida Statutes. The City has a population of approximately 17,200 living in an area of approximately 135 square miles. The governing
body is a five member elected City Council with a mayor elected from the five members. The City Council appoints the City Manager
who is responsible for the administration of all City services. ^
The financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles as applied to
governmental units. The more significant of the City's accounting policies are described below:
A. Reporting Entitv
In evaluating the City as a reporting entity, management has included all component units in accordance with Governmental
Accounting Standards Board (GASB) Statement No. 14, "Defining the Financial Reporting Entity". The Financial Reporting Entity ..
consists of the City of Sebastian (the primary government) and its blended component units. Blended component units are legally
separate organizations for which the City Council is financially accountable. The component units discussed below are included in
the City's reporting entity.
r.
Blended Component Units
The following component units are blended with the primary government for financial statement purposes because the component ^
unit's governing body issubstantially the same as the City Council or because the component unit exclusively serves the City. The
financial statements of these component units may be obtained from the City Clerk of the City of Sebastian.
Community Redevelopment Agency (CRA) — The governing body of the CRA is the Sebastian City Council. The CRA is accounted ^
for in a special revenue fund entitled "Riverfront Redevelopment".
City of Sebastian Police Officers' Pension Plan — The City Council only appoints two of the five members of the governing board,
but it is financially responsible for funding the police officers' pension benefits. The City of Sebastian Police Officers' Pension Trust
Fund only exists to provide pension benefits to City of Sebastian police officers. It is accounted for as a Pension Trust fund entitled
"Police Officers' Pension".
B. Basic Financial Statements
^
The government -wide financial statements (i.e, the statement of net assets and the statement of changes in net assets) report
information on all of the nonffduciary activities of the primary government and its blended component units. For the most part, the
effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes ^
and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and
charges for support.
Separate fund financial statements arc provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter ^
are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise
funds are reported as separate columns in the fund financial statements.
GASB Statement No. 34 Basic Financial Statements and Management Discussion and Analvsis for State and Local Governments sets
forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the
governmental and enterprise funds combined) for the determination of major funds. The nonmajor funds are combined in a column
in the fund financial statements and detailed in the combining section. ^
C. Measurement Focus. Basis of Accounting, and Financial Statement Presentation
1. Economic Resources Measurement Focus and Accrual Basis of Accounting
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis
ofaccounting, as are the proprietary fund and fiduciary fund financial statements. This means that revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes
are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met.
M
24
In applying the "susceptible to accrual" concept to intergovernmental revenues pursuant to GASB Statement No. 33, Accounting
• and Financial Reporting for Nonexchanee Transactions as amended by GASB Statement No. 36, Recioient Reportine of Ccrmin
Shared Nonexchanee Revenues (the City may act as either provider or recipient), the provider should recognize liabilities and
expenses and the recipient should recognize receivables and revenue when the applicable eligibility requirements including time
No requirements. are :net. Resources transmitted before the eligibility requirements are met should, under most circumstances, be
reported as advances by the provider and deferred revenue by the recipient.
Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both
• the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or
contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following
subsequent private -sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The
government has elected not to follow subsequent private -sector guidance.
an
As a general rule the effect of interfand activity has been eliminated from the government -wide financial statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by
do 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.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
• ongoing operations. The principal operating revenues of the golf course fund are charges to customers for sales and services and
for the airport fund lease revenue. Operating expenses for enterprise funds include cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating
an
revenues and expenses.
2. Modified Accrual
• Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. "Available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this
purpose, the City considers revenues to be available if they are collected within sixty (60) days of the end of the current fiscal
• period. All material revenues, except for occupational licenses and property taxes, are considered measurable and available and
are thus susceptible to accrual. Occupational licenses are not considered available since neither a legally enforceable claim
exists nor were the related services provided before October 1, 2002. Expenditures are generally recognized under the modified
accrual basis of accounting when the related fund liability is incurred, if measurable. An exception to this general rule is
• principal and interest on general lung -term obligations, which are recognized when due.
Property taxes, public utility taxes, franchise fees, sales and fuel taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues in the current fiscal period. Only
• the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received
by the government.
• The government reports the following major governmental funds
The generalfund is the government's primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
The discretionary sales tar jmd accounts for the financial resources used for infrastructure improvements
and equipment purchases.
• The capital improvements fiord accounts for the accumulated resources associated with infrastructure
improvements such as drainage, parks and buildings.
The road paving program fiord accounts for the resources associated with debt for the purposes of
• reconstructing and paving roads.
The government reports the following major proprietary funds:
• The golf course frond accounts for the activities of the municipal golf course.
The airport find accounts for the activities of the municipality's general aviation airport.
25
Additionally, the government reports the following fund types:
The pension mar frond accounts for the activities of the Police Officer's Retirement System, which
accumulates resources for pension benefit payments to qualified police officers.
The performance deposits fund accounts for deposits placed by bidders and developers to guarantee
performance pursuant to bid or contract and for deposits for use of City owned buildings and parks to
guarantee performance pursuant to contract. These funds are held by the City as agent for individuals and
businesses.
When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first,
and then unrestricted resources as needed.
D. Assets. Liabilities and Fund Enuity
1. Cash and cash equivalents
M
Cash and cash equivalents represents all investments that are short term, highly liquid, and readily convertible to a specified
cash value. These investments generally have original maturities of three months or less. Cash equivalents consist of cash in
banks and on hand.
2. Euuity in nooled investments
Equity in pooled investments consists of investments in the Local Government Surplus Funds Trust Fund administered by the
Florida Slate Board of Administration. The State Board of Administration 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. In
accordance with the regulations of 2a-7 like pools, the City's share of investments held at the State Board of Administration are
reported at amortized cost, which approximates fair value. This pool is regulated by the State and the fair value of the position
in the pool is the same as the value of the pool share. Investment earnings of the pool 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.
Pursuant to Florida Statutes, interest income earned on Local Option Gas Tax funds is required to be earmarked for
transportation infrastructure improvements. Local Option Gas Tax funds held as investments in the Transportation Projects
fund, which are pan of an internal investment pool, are assigned and recorded in the Local Option Gas Tax Special Revenue
Fund in accordance with these legal restrictions.
pp
As of September 30, 2002, all funds participated in pooled cash investments except the Pension Trust and the Road Paving
Program.
3. Investments �.
Investments, including the Police Officers' Pension Fund, are stated at fair value, (quoted market price or the best available
information).
4. Interfund Receivables and Pavables
During the course of operations, transactions occur between individual funds that may result in amounts owed between funds.
Short-term interfund loans are reported as "due to and from other funds." Due to and from other funds are eliminated in the
Statement of Net Assets. There were no interfund loans between the Governmental funds and Proprietary funds as of September
30, 2002.
5. Receivables
Receivables consist of trade receivables, due from other governments and interest receivable (see Note N.C. on page 30 for
detail) and are recorded at gross amount. The City, as of September 30, 2002, has no allowance for doubtful accounts, since all M
receivables are considered collectible.
6. Inventory and Prenaid Items
M
Inventory is valued at cost using the average cost method. Inventory in the General fund consists of materials and supplies held
for consumption. The cost is recorded as an expenditure/expense at the time the individual inventory items are consumed.
Inventory in the Golf Course fund consists of supplies held for resale. on
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government -wide and fund financial statements.
on
P11
.N
7. Restricted Assets
an
Certain assets of the Governmental activities, representing equity in pooled investments, are classified as restricted on the
statement of net assets because they are limited as to use by Federal, State or local law.
A
Certain proceeds of the Golf Course enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are
classified as restricted assets on the statement of net assets because their use is limited by applicable bond covenants. The
"revenue bond renewal and replacement "account is used to report resources set aside to fund asset renewals and replacements.
• The "revenue bond airport rent" account is used to report resources set aside to subsidize potential deficiencies in lease
payments that could adversely affect debt service payments.
8. Canital Assets
•
Capital assets, which include land, buildings, improvements, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the
government -wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of
more than $300 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
charged to expense.
Capital asset depreciation is recognized using the straight-line method over the estimated useful lives as follows:
• Classification Ranee of Lives
Buildings and improvements 20-40 years
Public domain infrastructure 40-50 years
• System infrastructure I5-30 years
Improvements other than buildings 10-20 years
Machinery, equipment and other 5-15 years
Airport runways 25 years
•
9. Comnensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits and are accounted
.� for using the termination payment method. All vacation and sick leave amounts are accrued in the government -wide and
proprietary financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for
example, as a result of employee resignations and retirements.
• 10. Lone -Term Liabilities
In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and
• other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or
proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and
amortized over the life of the bonds using the straight-line method. Bonds payable are recorded net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and amortized over the life of the related debt. In
W the fund financial statements, governmental fund types recognize bond premium and discounts, as well as debt issuance costs,
during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt
issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
M
11. Fund Eouitv
In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for
• appropriation or are legally restricted by outside parties for use for a specific purpose. The nature and purpose of these reserves
are explained as follows:
Reserved for Encumbrances — represents encumbrances outstanding at year end that the City intends to
• honor as commitments.
Reservedfor Inventory— represents amounts held for future consumption.
Reservedfor Prepaid Items— represents amounts paid from current resources applicable to future years.
•
Reservedfor Donations— represents amounts received from donors for certain programs.
Reservedfor Debt Service — represents, in accordance with legal restrictions, amounts for payment of
• principal and interest maturing in later years.
27
..
Reserved for Law Enforcement — represents, in accordance with State Statutes, funds required to be spent
on drug education and awareness activities.
Reserved jar Cemetery Care — represents amounts restricted for use in cemetery maintenance.
Designations of unreserved fund balances are not required by law or accounting principles, but are further classifications of fund
equity to identify funds that are not earmarked for specific purposes.
II. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
A. Exnlanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government -wide
Statement of Net Assets
The governmental fund balance sheet includes a reconciliation behveen fimd balance -total governmental funds and net assets -
governmental activities as reported in the government -wide statement of net assets.
An element of that reconciliation explains that "some liabilities, including compensated absences and notes and capital leases, are not
due and payable in the current period and therefore are not reported in the funds." The details of this $3,963,637 difference are
identified as follows:
Notes Payable
$ 2,728,238
Less: Deferred charge for issuance costs (to be amortized over life of debt)
(8,220)
Accrued interest payable
34,149
Special assessment deferred revenue
(66,048)
Capital leases payable
788,957
Less: Deferred charge for issuance costs (to be amortized over life of debt)
(9,044)
Compensated absences
495,605
Net adjustment to reduce fimd balance -total governmental frmds to arrive at net assets -
governmental activities
$ 3,963,637
B. Exnlanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and
Changes in Fund Balances and the Government -wide Statement of Activities
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net
changes in find balances — total governmental funds and changes in net assets of governmental activities as reported in the
government -wide statement of activities.
One element of the reconciliation explains that "repayment of debt principal is an expenditure in governmental funds, but the
repayment reduces long-term liabilities in the statement of net assets. The details of this ($344,553) difference is as follows:
Principal repayments
Bank note debt $ 179,908
Special assessment debt 53,602
Lease debt 111,043
Net adjustment to decrease net changes in jtnd balances -total governmental funds to
arrive at changes in net assets ofgovernmental activities $ 344,553
Another element of that reconciliation states that "some expenses and revenues 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." The details of the
(5163,345) difference are as follows:
Accrued interest
Amortization of issuance costs
Special assessment revenue
Compensated absences
Net adjustment to decrease net changes in fund balances -total governmental funds to
arrive at changes in net assets ofgovernmental activities
6,115
(2,338)
(31,756)
(135,366)
$ (163,345)
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III. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
Budgets are prepared annually on a modified accrual basis with encumbrance accounting for all governmental funds except the capital
project funds, which are approved on a "life of the project basis", and the permanent fund, which is not budgeted. All annual
appropriations lapse at year end.
On or before the third Friday in May of each year, all agencies of the government submit requests for appropriations to the government's
00 City Manager so that a budget may be prepared. Before July 31, the proposed budget is presented to the government's council for review.
The council holds budget workshops and public hearings and a final budget must be prepared and adopted no later than September 30.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for theexpenditure 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,
on Special Revenue, Debt Service, and Capital Projects funds. Encumbrances outstanding at year end are carried forward to the next years'
budget and are reported as a reservation of fund balance in the current financial statements since they do not constitute actual expenditures
or liabilities.
on 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 asexpenditures 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
A with the City's legally adopted budget. (See page 41)
IV. DETAIL NOTES ON ALL FUNDS
A. Deposits
At September 30, 2002, the carping amount of the City of Sebastian's deposits with banks was $701,930 and the bank balance was
$701,930. 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 30% of the average daily balance for each month that all public deposits are in excess of any applicable deposit insurance. If the
public deposits exceed the total amount of the regulatory capital accounts of a bank or the regulatory net worth of a savings
association. the required collateral shall have a market value equal to 125%of the deposits.
B. Investments
Statutes, ordinances, and policies authorize the City to invest in the Local Government Surplus Trust Fund administered by the
Florida State Board of Administration, direct obligations of the United States or agencies thereof, interest bearing time deposits or
savings accounts, overnight repurchase agreements, mutual funds, stocks, and bonds.
The City's investments are categorized to give an indication of the level of risk assumed by the entity at September 30, 2002.
(1)—Includes investments that are insured or registered or for which the securities are held by the City or its
safekeeping agent in the City's name.
(2)—Includes investments that are uninsured or unregistered securities held by the pledging financial institution's
trust department or agent in the City's name.
(3)—Includes investments that are uninsured or unregistered securities held by the pledging financial institution or
its trust department or agent, but not in the City's name.
,. Category Reported Amount/
1 2 Fair Value
Prins wv Govemment
Repurchase Agreements S 627,490 S - S 627,490
U.S. Treasury Bonds 862,488 - 862,488
Common Stock 508,080 - 508,080
Corporate Bonds 20,568 - 20,568
Agency Notes - 1,949,612 1,948,612
Sub -total S 2,018,626 S 1,948,612 3,967,238
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Investments not subject to categorization:
Local Government Stu -plus
�+ Funds Trust Fund 8,658,081
Money Market Funds 251,302
Totallnvestntents S 12,876,621
29
C. Receivables
Receivables at September 30, 2002
for the government's
individual major
funds and nonmajor funds in the aggregate
are as follows:
Nonmajor
Discretionary
Capital
Golf
and Other
r.
General
Sales Tax
Improvements
Course
Airport
Funds
Total
Receivables:
Interest
$ 14,619
$ 6
$ -
$ 2
$ 5
$ 333
$ 14,965
Accounts
209,677
-
11,912
74
4,925
-
.�
226,588
Intergovernmental
186,700
160,903
49,751
-
53,745
65,371
516,470
Gross receivables
410,996
160,909
61,663
76
58,675
65,704
758,023
All receivables are anticipated to be collected.
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to
liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have
been received, but not yet earned. At September 30, 2002, the various components of deferred revenue and unearned revenue
reported in the'governmental funds were as follows:
Unavailable
Deferred
Special assessments not yet due (debt service fund)
$ 66,048
$
-
Occupationallicensesreceived in
advance (general fund)
-
57,952
Total deferred/unearned revenue
for governmental funds
$ 66,048
$ 57,952
D. Capital Assets
Capital asset activity for the year ended September 30, 2002 was as follows:
Beginning
Ending
Balance
Increases
Decreases Reclassifications
Balance
PW
Governmental activities:
Capital assets, not being depreciated:
Land
$ 3,748,585 $
606,009 $
(8,147) $
141,726 $
4,488,173
Construction in progress
356,079
194,137
(285,760)
-
264,456
Total capital insets, not being depreciated
4,104,664
800,146
(293,907)
141,726
4,752,629
Capital assets, being depreciated:
,.
Buildings
2,310,816
254,627
(10,235)
1,500
2,556,708.
Improvements other than buildings
2,367,192
204,529
(377,270)
(145,226)
2,049,225
Machinery and equipment
4,384,245
400,199
(212,803)
(1,500)
4,570,141
Infrastructure
13 288.248
989,770
(330,478)
3,500 _
13,951,040
Total capital assets being depreciated
22,350,501
1,849,125
(930,786)
(141,726)
23,127,114
Less accumulated depreciation for:
Builclin,,s
(1,011,353)
(64,029)
9,410
(666)
(1,066,638)
on
Improvements other than buildings
(925,090)
(87,394)
335,866
-
(676,618)
Machinery and equipment
(2,150,412)
(566,096)
175,285
666
(2,540,557)
Infrastructure
(5,748,157)
(435,486)
330,476
-
(5,853,167)
Total accumulated depreciation
(9,835,012)
(1,153,005)
851,037
-
(10,136,980)
Total capital assets, being depreciated, net
12,515,489
696,120
(79,749)
(141,726)
12,990,134
Governmental activities capital assets, net
$ 16,620,153 $
1,496,266 $
(373,656) $
- $
17,742,763
The reclassification identified above represents land misclassified
in prior years.
The underlying assets were not depreciated in prior
years.
OR
J�
Beginning
Ending
A
Balance
Increases
Decreases
Balance
Business -type activities:
Capital assets, not being depreciated:
Land $ 9,060
$ -
S - S
9,060
Construction in progress 82,935
268,889
(4,334)
347,490
Total capital assets, not being depreciated 91,995
268,889
(4,334)
356,550
Capital assets, being depreciated:
Buildings 344,114
(10,925)
333,189
Improvements other than buildings 540,990
39,231
(6,112)
574,109
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Machinery and equipment 450,633
65,746
(30,363)
486,016
lnfrastructurc 2,372,976
-
(1,155)
2,371,821
-
Total capital assets being depreciated 3,708,713
104,977
(48,555)
3,765,135
Lc>s accumulated depreciation for:
ON
Buildings (250,261)
(10,941)
10,649
(25U53)
_
Improvements other than buildings (74,725)
(47,558)
5,912
(116.371)
Machinery and equipment (273,324)
(60,421)
23,485
(310,260)
Infrastructure (809,469)
(108,775)
1,198
(917,046)
Total accumulated depreciation (1,407,779)
(227,695)
41,244
(1,594,230)
Total capital assets, being depreciated, net 2,300,934
(122,718)
(7,311)
2,170,905
Business -type activities capital assets, net S 2,392,929
$ 146,171
$ (11,645) $
2,527,455
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government
$. 64,934
Public safety
256,278
Public works, including depreciation of general infrastructure
assets
682,282
Housing and community development
8,284
Culture and recreation
135,609
Cemetery
5,618
Total depreciation expense -governmental activities
$ 1,153,005
Business -type activities:
Golf Course
$ 126,776
Airport
83,665
Total depreciation expense -business -type activities
$ 210,441
ON
Construction Commitments
The government has active construction projects as of September
30, 2002. The projects include street widening, paving and
reconstruction and airport facilities construction. At year end the government's
commitment
with contractors are as follows:
so
The residential street construction is being financed entirely with a
bank loan that will be repaid using local option
gas taxes. The
airport improvements are being funded by a combination of Federal Aviation Administration grants, Florida Department of
Transportation -Aviation Section grants and airport fund.
a1
Remaining
Proiect
Spent -to -date
Commitment
ON
Residential street construction $
3,127,336
$ 425,518
Airport improvements
336,771
333,342
am
Total S
3,464,107
S 758,860
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E. Interfund Balances
Interfund balances at September 30, 2002 consisted of the following amount:
Due to:
General fund
Total
Due from
Nonmajor
Governmental
Funds
$ 2,294
$ 2,294
$
$
Total
2,294
2,294
The balance of $2,294 due to the general fund from the G.R.E.A.T. Program fund resulted from a short-term loan made to establish
working capital prior to reimbursement of expenditures from the G.R.E.A.T. Program grant. The balance is anticipated to be
collected in the subsequent year.
F. Interfund Transfers
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget
requires to expend them and to (b) use unrestricted revenues collected in the General fund to finance various programs accounted for
in other funds in accordance with budgetary authorizations. Following is a schedule of Interfund Transfers:
Transfers In
Capital Road Notmajor
General Improvements Paving Governmental
Fund Fund Fund Funds Total
Transfers Out:
General fund
Discretionary sales tax fund
Nonmajor governmental funds
Total transfers out
G. Leases
Ooeratin2 Lenses -Lessee
$ - $
265,850
15,000
$ 280,850 $
- $ - $ 100,000 $ 100,000
603,484 - 756,986 1,626,320
99,916 14,568 153,369 282,853
703,400 $ 14,568 $ 1,010,355 $ 2,009,173
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 $172,250 for the fiscal ,year ended September 30, 2002. The
following is a schedule by years for future minimum rental payments required under operating leases in the Golf Course Proprietary
fund that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2002:
Year Endine Sentember 30.
2003
2004
2005
2006
2007
2008-2012
2013-2015
Totals
Golf Course
Golf
to: Airport Carts
S 120,000 S 52,250
120,000 99,388
120,000 -
175,000
175,000
1,025,000 -
750,000 -
$ 2,485,000 S 151,638
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2. Canital Leases -Lessee
The government has entered into a lease agreement as lessee for financing the acquisition of heavy construction equipment for its
public works department. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded
at the present value of its future minimum lease payments as of the inception date.
The assets acquired through the capital lease are as follows:
Governmental
Activities
Asset:
Machinery and equipment
S 859,859
Less: Accumulated depreciation
(138,618)
Total
$ 721,241
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The future minimum lease obligations and the net present value of
these minimum lease payments as of September 30, 2002 were as
follows:
Governmental
Year Endine Sentember 30,
Activities
2003
$ 154,693
2004
154,693
2005
154,693
d"
2006
154,693
2007
154,694
2008
154,694
Total minimum lease payments
928,160
Less: amount representing interest
(139,203)
Present value of minimum lease payments
$ 788,957
3. Oneratine Leases -Lessor
The airport is the lessor of various properties (land with a cost basis of $9,060) with lease terms varying from twenty to thirty
years. Following is a schedule by year of minimum future rental
income on noncancelable operating leases:
Year Endine September 30.
Amount
2003
$ 161,434
2004
161,434
2005
161,434
2006
216,434
2007
216,434
ON
2008-2012
1,232,169
2013-2017
949,969
2018-2022
86,785
2023 2027
77,134
2028-2031
50,105
Total minimum future rentals
$ 3,313,332
ON
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H. Long-term Obligations
1. Revenue Bonds/Notes
Revenue bonds/notes are secured by and payable from the revenues of the respective funds that issued them.
00
a. The City issued a ten (10) year, $527,993 Revenue Bond, Series 1996 for the purpose of financing the construction costs of
a waterline along the City's riverfront. The principal and interest are paid from special assessments received on an annual
basis. The City is obligated by a covenant to budget and appropriate in the event revenues collected and/or defaults occur
�.
which are less than debt service requirements. Currently the City has $23,802 in default assessments. These funds are
accumulated in the Debt Service fund.
b. The City entered into a fifteen (15) year loan agreement in 1998 with a local bank for $3,268,890 to provide financing to
..
repave certain roads in the City. The City pledged Local Option Gas Tax and Municipal Gas Tax to repay the note payable.
The funds are accumulated in the Local Option Gas Tax Special Revenue fund for repayment of principal and interest.
c. The City issued ten (10) year, $2,435,000 Golf Course Revenue Refunding Bonds, Series 2001 in March 2001. The City
has pledged Golf Course revenues along with a covenant to budget and appropriate for repayment of principal and interest.
2. Chanties in Long -terns Debt
The following is a summary of changes in Long -Term Debt of the City for the year ended September 30, 2002:
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Governmental activities:
OR
Bonds payable:
Special assessment debt
with government commitment $ 187,901 S - S 53,602 S 134,299 $ 56,684
Total bonds payable 187,901 - 53,602 134,299 56,684
Notes payable 2,773,847 - 179,908 2,593,939 187,911
Capital leases 900,000 - 111,043 788,957 116,429
Compensated absences 389,674 154,522 18,364 525,832 30,227
.�
Governmental activity
long-term liabilites $ 4,251,422 $ 154,522 $ 362,917 $ 4,043,027 S 391,231
Business -type activities:
Bonds payable:
Revenue bonds $ 2,435,000 $ - $ 100,000 $ 2,335,000 $ 220,000
Less deferred amounts:
ON
For issuance prentium/(discount) 7,177 - 798 6,379 -
Loss on refunding (74,898) - (8,322) (66,576) -
Total bonds payable 2,367,279 - 92,476 2,274,803 220,000
Compensated absences 3,704 - 681 3.023 3,023
Business -type activity
long-term liabilites $ 2,370,983 S - $ 93,157 S 2,277,826 S 223.023
Special revenue funds predominantly serve the governmental funds. Also, for the governmental activities, compensated
absences are generally liquidated by the general fund.
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3. Debt Service Requirements to Maturity
The annual requirement to amortize all bonded debt outstanding at September 30, 2002, including interest requirements, is as
follows:
Year
2003
2004
2005
2006
2007
2008-2012
2013-2014
Less unamortized
bond premium
loss on refunding
1. Restricted Assets:
Revenue
Bond
Series
1996
5.75%
S 56,684
59,944
17,671
Governmental Activities
Roadway
Improvement
Note
Payable
Interest
4.40%
Interest
S 7,722
$ 187,911
S 112,089
4,463
196,270
103,730
1,016
205,001
94,999
-
214,120
85,880
-
223,645
76,355
-
1,276,609
223,392
-
290,383
9,617
S 134,299 $ 13.201 S 2.593,939 S 706,062
_ Business -type Activities
Golf
Course
Refunding
Bonds
Series, 2001
4.20%
Interest
$ 220,000
$ 89,890
230,000
80,890
240,000
71,490
250,000
61,690
255,000
51,590
1,140,000
96,025
6,379
(66,576) -
$ 2.274,803 $ 451,575
Certain cash and claims to cash, that are legally restricted, have been shown as restricted in the statement of net assets as follows:
on
Govermental Business -type
Activities Activities
so Debt service $ 131,971 $ 458,014
Road paving 590,083
Acquisition and construction of
at noncurrent assets - 361,294
Cemetery perpetual care 399,225 -
$ 1,121,279 $ 819,308
V. OTHER INFORMATION
A. Property Tax
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, 2002, was 4.5904 mills. Total tax collections were approximately 95.9% of the total tax levy.
The tax levy of the City is established by City Council. Under Florida law, the assessment of all properties and the collection of
municipal taxes are provided by offices of the County's Property Appraiser and Tax Collector. Ad Valorem taxes are liened on
property values as of January I. The fiscal year for which taxes are levied begins October 1. Taxes are due November 1 and become
delinquent on April 1. All taxes unpaid as of May 30 are subject to a tax certificate sale. Property tar revenues are recognized in the
fiscal year for which they are levied and also become due and payable.
ru B. Grants from Other Governmental Units
Federal, State and local government grants represent an important source of supplementary funding used to finance infrastructure,
recreation, law enforcement, and environmental activities beneficial to the community. These grants are recorded in the General,
Capital Project, and Enterprise funds. A grant receivable is recorded when the City has a right to reimbursement under the related
grant. The grants normally specify the purpose for which the funds may be used and are subject to audit by the grantor agency or its
representative. The amount of grant revenue for fiscal year 2002 is on the following page:
•
>>
..
Primary Government Amount
COPS Grants $ 102,565
Local Law Enforcement Block Grant 10,906
General Construction 362,453
Airport 264,772
Total reporting entity $ 740,696
C. Police 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. Pension plan data is provided from an actuarial report dated October 1,
2000. Although the Police Officers' Pension Plan provides separate reporting, which may be obtained in the Finance department, it
is also a component unit (reporting as a Pension Trust Fund) of the City's financial reporting entity.
Employee membership data as of the latest actuarial data available related to the plan is as follows:
Police Pension
Plan 2000
Retirees and beneficiaries currently
receiving benefits 2
Terminated employees entitled to
refund of employee contribution
but not yet received 0
Fully, partially, and non -vested
active plan participants 32
Total M
OR
OR
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oft
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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 -overns 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 111 of the Sebastian City Code. The City Council has the authority
to amend funding requirements.
^
Funding Policy. The employer, employee, and State contribution requirements are applicable to the Plan and actuarially determined
on a bi-annual basis in accordance with Florida State Statute. Administration costs of the pension plan are financed by the plan. The
employee contribution rate, expressed as a percentage of compensation, was 5.0% for the 2001-2002 fiscal year. The employer
contribution rate, expressed as a percentage of compensation, was .7% for the 2001-2002 fiscal year. A tar is levied on property and ^
casualty insurance premiums and collected by the State which partially funds the Plan. The City is required to contribute the
remaining amounts to ensure that the Plan is actuarially sound.
The Citv's annual contributions exceeded the annual pension cost for the Police Officers' Pension Plan for the year ended September M
30. 2001 The City's contribution to the plan was $91,497, including State contribution of $82,877.
Required trend information for the Police Officers' Pension Plan was as follows:
Amount ^
Annual Pension Cost (APC)
1999
$ 82,645
2000
$ 0
2001
$ 10,057 ^
Percentage of APC contributed_
1999
116.00%
2000
204.00% r.
2001
124.00%
Since the employer contribution exceeded the annual pension costs, there is no uct pension obligation for the plan.
00
The annual required contribution for the Police Officers' Pension Plan was determined as part of the October I, 2000, actuarial
valuation using the aggregate actuarial cost method. This method does not identify or separately amortize unfunded actuarial accrued
liabilities. The actuarial assumptions included (a) an 8.0% rate of return (net of administrative costs) and (b) projected salary
increases of 7.5% per year, including inflation at 3%. There is no unfunded actuarial accrued liability as of September 30, 2002. ^
Reserves. All of the net assets of the Police Pension Plan are legally reserved for plan participant benefits.
^
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W
Basis of.accounting. Financial statements are prepared using the accrual basis of accounting. Plan member contributions are
M 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.
M Method Used to Value Investments and Concentration oj[nvesiments. 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
04 estimated fair value. Investments (excluding mutual funds and those issued or guaranteed by the U.S. government) held by the local
pension plan did not exceed five percent of the total plan assets.
on D. Insurance
The City is exposed to various risks of loss related to torts; theft of or damage to and destruction of assets; errors and omissions; and
natural disasters. The City purchases commercial insurance with various deductibles for different types of losses. The cost of this
■tr insurance is accounted for in the general fund, golf course fund and airport fund. Settled claims have not exceeded this commercial
coverage in the past three fiscal years.
E. Subsequent Events
1. Police Pension Plan
w Effective October 1, 2002, the City Council authorized an increase in the Pension Plan multiplier from 2% to 3%. This change
will increase the unfunded actuarial accrued liability (UAAL) from $0 to $719,810. The UAAL will be amortized over a thirty-
year period.
W 2. Land Purchase
w
On October 24, 2002. the City purchased 2.0 acres of land representing right-of-way for $162,215.
3. Road Paving and Reconstruction
a. On October 9, 2002, the City Council awarded contracts in the amount of $427,681 for road reconstruction and paving.
b. On October 23, 2002, the City Council awarded a contract in the amount of $282,019 for drainage and road improvements
for a secondary road off of County Road 512.
4. Airport Canital Imorovements
On October 23, 2002, the City Council awarded contracts for the following airport improvements:
a. Perimeter fencing in the amount of $365,312.
•n
b. Obstruction clearing for Runway 9/27 in the amount $188,963.
On December 11, 2002, the City Council authorized the purchase of an airport tenant's service center facility for $280,000 in
connection with clearing runway approach areas for the opening of Runway 9/27.
5. City Hall Construction and Police Denartnient Expansion
On December 11, 2002, the City Council awarded a contract in the amount of $607,078 to PEG Architects, Inc. for architectural
services in connection with the construction of a City Hall Building and the expansion and renovation of the City's Police
Department Facility.
6. Telenhone Svstem
The City installed a Voice Over IP (VOIP) telephone system in December 2002 for the amount of $138,144.
7. Bonded Debt
On December 11, 2002, the City Council authorized City staff to pursue $9,500,000 in bonds (supported by a Countywide 5.01
infrastructure sales tax) to fund the construction of a City Hall. expansion and renovation of the existing police station,
renovation of the existin_ City Hall to its original use as a Schoolhouse, and the construction of a park.
on
37
CITY OF
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
�s
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
General Fund
For the year ended September 30, 2002
Actual
Variance with
Budget Amounts
Amounts on
Final Budget -
a Budgetary
Positive
Original
Final
Basis
(Negative)
REVENUES:
so
Taxes:
Property
$ 2,555,605 $
2,503,513
$ 2,526,275
S 22,762
Public utility
936,237
961,252
983,236
21,984
Sales
1,112,252
1,1 12,252
1,133,431
21,179
A
Motor fuel taxes
144,264
144,264
142,798
(1,466)
Franchise tees
649,347
641,617
766,901
125,284
Licenses and permits
483,120
483,120
578.695
95,575
Intergovernmental
743,419
947,104
1,058,567
111,463
M
Charges for services
244,407
263,482
300,321
31,839
Fines
151,396
131,396
120,652
(30,744)
-
Investment earnings
157,338
88,795
105,229
16434
Contributions and donations
18,500
41,000
37,872
(3,I28)
•
Other revenue
26.930
26,930
61,985
35,055
Total revenues
7,222,815
7.369,725
7,815,962
446,237
EXPENDITURES:
M
Current:
General government:
Legislative
40.610
40,610
37,859
2,751
Manager
273,074
273,710
273,669
41
M
Clerk
278,589
285,991
278,759
7,232
Attorney
120,339
118,860
114,140
4,720
Finance
345,781
365,785
363,500
2,285
Human resources
181,331
193,070
179,599
13,471
,tom
Vehicle maintenance
154,366
156,227
142,443
13,784
Building
343,750
356,410
343,932
12,478
Nondepartmcntal
579,018
853,403
838,112
15,291
Total general government
2,316,858
2,644,066
2,572,013
72,053
A
Public safety -Police
2,721,314
2,710,662
2,647,283
63,379
Public works:
Engineering
325,371
337,911
323,195
14,716
Roads and drainage
1,146,475
1,169,681
1,142,016
27,665
M
Building maintenance
198,993
197,143
185,421
11.722
Total public works
1,670,839
1,704,735
1,650,632
54,103
Housing and community development
230,745
233,681
218,274
15,407
Culture and recreation
636,020
642,561
630,367
12,194
MR
Cemetery
96,739
94,839
87,866
6,973
Total expenditures
7,672,515
8,030,544
7,806,435
224,109
Excess (deficiency) of revenues over
A
expenditures
(449,700)
(660,819)
9,527
670,346
O"rilER FINANCING SOURCES (USES)
Transfers in
280,850
280,930
280,850am
-
Transfers out
(100,000)
(100,000)
(100,000)
-
Saleofcapitalassets
18,850
3,250
7,900
(350)
Total other financing sources (uses)
199,700
189,100
188,750
(350)
Net changes in fund balances
(250,000)
(471,719)
193,277
669,996
i1
Fund balances - beginning
3.527,339
3,527,339
3,527,339
-
Fundbalances- ending
$ 3,277,339 S
3,055,620
3,725,616
$ 669,996
Explanation of differences:
OR Encumbrances for equipment and supplies ordered but not received are reported in the year the orders
are placed for budgetary purposes, but are reported in the year the equipment and supplies are
received for GAAP purposes. 197,131
Amount reported as ending fund balance in the statement of revenues, expenditures and changes in fund
balance for the General fund. $ 3,922,747
The accompanying notes to required supplementary information are an inte.ral part of this schedule.
39
City of Sebastian, Florida
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Discretionary Sales Tax Special Revenue Fund ,.
For the year ended September 30, 2002
Actual Variance with
Budget Amounts Amounts on Final Budget -
a Budgetary Positive
Original Final Basis (Negative)
REVENUES:
.n
Taxes:
Sales S 1,859,575 S 1,859,575 $ 1,861,589 $ 2,014
Investment earnings 69.316 29,316 31,896 2,580
Total revenues 1,928,891 1,888,891 1,893,485 4,594
OTHER FINANCING USES
Transfers out (1,568,354) (1,626,320) (1,626,320) -
Net changes in fund balances 360.537 262,571 267,165 4,594
Fund balances - beginning 323,422 323,422 323,422
Fund balances -ending $ 683,959 $ 585,993 $ 590,587 $ 4,594
n
r_�
The accompanying notes to required supplementary information are an integral part of this schedule.
40
so
CITY OF SEBASTIAN, FLORIDA
Notes to the Required Supplementary Information — Budget Comparisons
OR September 30, 2002
M
A. Budeetary Basis
Annual budgets are adopted on a basis consistent with U.S. generally accepted accounting principles
for all governmental funds except the capital project funds, which are approved on a "life of the project
basis", and the permanent fund, which is not budgeted. Since all accounting principles applied for
purposes of developing data on a budgetary basis differ significantly from those used to present
financial statements in conformity with U.S. generally accepted accounting principles, a reconciliation
of the resultant timing differences has been provided on page 39. All annual appropriations lapse at
year end.
B. Bud¢etary Information
The appropriated budget is prepared by fund, function, and department. The government's department
heads, with the manager's approval, may make transfers of appropriations within a department or
division. Transfers of appropriations between departments and/or divisions require approval of the
council. The legal level of budgetary control (i.e., the level at which expenditures may not legally
exceed appropriations) is the department level. The council made three supplementary budgetary
appropriations throughout the year, including carryover appropriations from the prior year of $94,032,
an increase of $51,333 for a change in worker's compensation rating, and $82,111 for a planning
consultant to support revisions to the City's Comprehensive Plan. Other supplemental budgetary
appropriations made in the general fund were not material.
W
00
M
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..
REOUIRED SUPPLEMENTARY INFORMATION
Police Officers' Pension Plan
Governmental Accounting Standards Board Statements No. 25 and 27, Financial Reoortine for Defined Benefit
Pension Plans and Note Disclosures for Defined Contribution Plans and Accountine for Pensions by State and Local
Governmental Emolovers require supplementary information be reported on the local pension plans in addition to
that provided in the Notes to the Financial Statements. This information is presented in the following schedules:
SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
LAST SIX FISCAL YEARS
Annual
Fiscal
Required
City
Year
Contributions
Contribution
2001
78,703
29,134
2000
68,954
27,704
1999
129,435
103,548
1998
102,215
96,039
1997
12 t,571
90,798
1996
108,037
97,488
State
Percentage
Contribution
Contributed
68,646
124.24%
112,773
203.73%
46,790
116.15%
39,753
132.85%
36,089
104.37%
32,503
120.32%
The information presented in the required supplementary schedules was determined as part of the actuarial evaluation
at the date indicated. Additional information as of the latest actuarial valuation is as follows:
Contribution rates as of 9/30/O 1
City
0.8%
Plan Members
5.0%
Annual pension cost
$ 10,057
Contributions made
$ 29,134
Valuation date
10/111998
Actuarial cost method
Aggregate
Amortization method
N/A
Remaining amortization period
N/A
Asset valuation method
Market Value
Actuarial return assumptions
Investment rate of return
8.0%
Projected salary increase*
7.5%
* Includes inflation at
3.0%
Post Retirement COLA
0.0%
M
0"
M
M
■,
M
M
M
/.
OR
0"
OR
M
am
42
r
M
Development of Net Pension Obligation (NPO)
This 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 development of the Net Pension Obligation as of September 30, 2001 is as follows:
9/30/1999 9/30/2000 9/30/2001
Actuarially Determined Contribution (A)
S 82,645 $ - $ 10,057
am
Interest on NPO
(2,686) (4,818) (7,858)
Adjustment to (A)
(3,055) (5,479) (8,936)
so
Annual Pension Cost
76,904 (10,297) (6,737)
Contributions made
103,548 27,704 29,134
00
Increase in NPO
(26,644) (38,001) (35,871)
NPO be.ginnin,- of year
(33,577) (60,221) (98,222)
NPO end ofyear
$ (60,221) $ (98,222) $ (134,093)
M
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A
PM
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43
CITY OF
\ "'�
HOME OF PELICAN ISLAND
THIS PAGE INTENTIONALLY LEFT BLANK
44
.,
00
M
Nonmajor Governmental Funds
Special Revenue Funds
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for
particular purposes.
Local Option Gas Tax Fund — This fund is used to account for the government's share of motor fuel tax revenues
we that are legally restricted to transportation related expenditures within the government's boundaries.
Riverfront Redevelopment Fund — This fund is used to account for tax increment revenues that are legally
• restricted for the redevelopment of the City's riverfront area.
Recreation Impact Fee Fund — This fund is used to account for recreation impact fees that are restricted for use in
the expansion or construction of recreational facilities.
Stormwater Utility Fee Fund —This fund is used to account for fees collected on a per unit basis that are restricted
for the purposes of managing the City's Stormwater system.
Law Enforcement Forfeiture Fund — This fund is used to account for the receipt of forfeited cash and equipment
associated with police activities and is restricted to police related equipment purchases and community education
initiatives.
am
M
G.R.E.A.T. Program Fund — This fund is used to account for a federal law enforcement grant to be used for gang
resistance, education and training for school children from grade school through middle school.
Debt Service Fund
so Debt Service Fund — This fund is used to account for the receipt of special assessments and the associated
repayment of debt.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than
those financed by proprietary funds.
General Capital Projects Fund — This fund is used to account for the construction of non-stormwater related
improvements and general capital construction projects. Governmental resources and State grant revenues are
used to finance the improvements in this fund.
Transportation Improvements Fund — This fund is used to account for transportation related construction such as,
roads, intersections, and sidewalks and are funded with governmental resources, impact fees and State grants.
Permanent Fund
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not
principal, may be used for purposes that support the reporting government's programs.
Cemetery Permanent Fund — This fund is used to account for principal trust amounts received, sale of cemetery
lots and related interest income. One-half of the cemetery lot sales and the interest portion of the trust can be used
to maintain the community cemetery.
me
ON 45
City of Sebastian, Florida
Combining Balance Sheet
Nonmajor Governmental Funds ..
September 30, 2002
r�
Special Revenue Funds
Local Law
Option Riverfront Recreation Stormwater Enforcement
Gas Tax Redevelopment Impact Fee Utility Forfeiture
ASSETS
Cash and cash equivalents
Equity in pooled investments
S 197,909
$
38,205
$
258,455
$
712,511
S
20,534
PM
Receivables
9
-
-
-
1
Due from other governments
55,688
-
-
8,303
-
Special assessments receivable
-
-
-
-
Inventory
-
-
-
-
-
Prepaid items
-
-
-
-
-
Restricted assets:
Cash in banks
-
-
-
-
-
Equity in pooled investments
-
-
-
-
-
PM
Total assets
S 253,606
$
38,205
$
258,455
S
720,814
$
20,535
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
S 249
S
12,665
$
-
$
-
S
2,607
Retainage payable
-
-
-
-
-
Due to other funds
-
-
-
-
Deferred revenues
-
-
-
-
-
Total liabilities
249
12,665
-
-
2,607
Fund balances:
.�
Reserved for:
Encumbrances
17,775
22,690
-
-
-
Debt service
-
-
-
-
-
Law enforcement
-
-
-
-
17,928
Cemetery care
-
-
-
-
Unreserved
235,582
2,850
258,455
720,814
Total fund balances
253,357
25,540
258,455
720,814
17,928
Total liabilities and fund balances
$ 253,606
$
38,205
$
258,455
S
720,814
$
20,535
t�
t.t
wu
46
Permanent
Capital Projects Funds Fund Total
Debt General Other
G.R.E.A.T. Service Capital Transportation Governmental
Program Total Fund Projects Improvements Total Cemetery Funds
S 1,811 $ 1,229,425 S $ 304,794 S 859,214 $ 1,164,008 S 46,396 $ 2,439,829
- 10 - - - - 323 333
1,380 65,371 - - - - - 65,371
- 66,048 - - - - 66,048
- 200,000 200,000
- 131,971 - - - 199,225 331,196
$ 3,191 S 1.294,806 $ 198.019 $ 304,794 S 859,214 $ 1,164,008 S 445,944 $ 3,102,777
S 355 $ 15,876 S - $ 351 S 27,519 S 27,870 S
- 20,847 20,847
1,294 2,294 - - - -
- - 66,048 - - -
21649 18,170 66.048 351 48.366 48,717
5 $ 43,751
20,847
2,294
66,048
5 132,940
- 40,465
- 910
150,225
151,135
- 191,600
- -
131,971 -
-
-
- 131,971
542 18,470
- -
-
-
- 18,470
-
-
-
-
445,939 445,939
- 1217,701
- 303,533
660,623
964,156
- 2,181,857
542 1,276,636
810,848
1.115,291
445,939 2,969,837
131.971 304,443
$ 3,191 S 1,294,806
$ 198.019 $ 304,794 $
859,214 $
1,164,008 S
445,944 S 3,102,777
47
City of Sebastian, Florida
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the year ended September 30, 2002
REVENUES:
Taxes:
Property
Motor fuel
Intergovernmental
Impact fees
Charges for services
Fines
Special assessments
Investment earnings
Contributions and donations
Other revenue
Total revenues
EXPENDITURES:
Current:
General government
Public safety
Public works
Cemetery
Debt Service:
Principal
Interest
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Special Revenue Funds
Local Law
Option Riverfront Recreation Stormwater Enforcement
Gas Tax Redevelopment [in pact Fee Utility Forfeiture
S - $ 191,289 $ - $ - $ -
665,718 - - - -
- - 255,775 -
- 774,899 -
6,375
14,796 2,601 2,680 10,784 60
- - - - 14,851
680,514 193,890 258,455 785.683 21,286
174,006 44,532 - 64,869 -
- - - 5,044
23,396 8,427 - -
179,908 - - - -
120,092 -
3,890 7,444 - 11,585
501,292 60,403 - 64,869 16,629
179,222 133,487 258,455 720.814 4,657
(148,780) (114,484)-
(148,780) (114,484) - - -
30,442 19,003 258,455 720,814 4,657
222,915 6,537 - - 13,271
$ 253,357 $ 25,540 $ 258,455 $ 720,814 $ 17,928
W
M
M
am
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Capital Projects Funds
Debt General
G.R.E.A.T. Service Capital Transportation
Program Total Fund Projects Improvements Total
$ $ 191,289 $ $ $ $ $
665,718 - - - -
10,726 10,726 - 19,705 133340 153.045
255,775
774,899
6,375
31,756
30,921 10,273
- 14,851 -
602 602 -
11.328 E951.156 42.029
543
20,248
133,340
543
153,588
Permanent
Fund Total
Other
Governmental
Cemetery Funds
$ 191,289
665,718
163,771
255,775
48,450 823,349
- 6,375
- 31,756
10,467 52,204
- 14,851
602
58,917 2,205,690
- 283,407 201 - - - - 283,608
10,786 15,830 - - - - - 15,830
- 31,823 - 12,020 57,594 69,614 - 101,437
- _ 375 375
-
179,908
53,602
111,043
-
111,043
-
344,553
-
120,092
10,764
44,008
-
44,008
-
174,864
-
22,919
-
69,126
416,576
485,702
-
508,621
10,786
653,979
64,567
236,197
474,170
710,367
375
1.429,288
•
542
1,297,177
(22,538)
(215.949)
(340,830)
(556,779)
58,542
776,402
-
-
221,089
799,266
1,010,355
-
1,010,355
-
(263,264)
-
-
-
-
(19,589)
(282,853)
,.�
-
(263,264)
-
221,089
789.266
1,010,355
(19,589)
727.502
542
1,033,913
(22,538)
5,140
448,436
453,576
38,953
1,503,904
-
242,723
154,509
299,303
362,412
661,715
406,986
1,465,933
$ 542
$ 1,276,636 $
131,971 $
304,443 $
810,848 $
1,115,291 $
445,939 $
2.,969,837
49
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Local Option Gas Tax Special Revenue Fund
For the year ended September 30, 2002
REVENUES:
Motor fuel taxes
Investment earnings
Total revenues
EXPENDITURES:
Current:
Operating
Debt service:
Principal
Interest
Capital outlay
Total expenditures
Excess of revenues over expenditures
OTHER FINANCING USES
Transfers out
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Actual
Variance with
Budget Amounts
Amounts on
Final Budget -
a Budgetary
Positive
Original Final
Basis
(Negative)
$ 618,548 $ 618,548
S 665,718
S 47,170
17,610 10,203
14,796
4,593
636,158 628,751
680,514
51,763
187,378
233,489
215,177
18,311
179,907
179,907
179,908
(1)
120,093
120,093
120,092
1
3,890
3,890
-
487,378
537,378
519,067
18,311
148,780
91,373
161,447
70,074
(148,780)
(148,780)
(148,780)
-
-
(57,407)
12,667
70,074
222,915
222,915
222,915
-
$ 222,915 $
165,508
$ 235,582 $
70,074
50
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Riverfront Redevelopment Special Revenue Fund
For the year ended September 30, 2002
•
REVENUES:
•
Tar increment
Investment earnings
•
Otherrevenue
Total revenues
•
EXPENDITURES:
Current:
•
Operating
Capital outlay
Total expenditures
•
Excess of revenues over expenditures
OTHER FINANCING USES
•
Transfers out
Net changes in fund balances
•
Fund balances - beginning
Fund balances - ending
•
•
•
•
•
•
Budget Amounts
Original Final
Actual
Variance with
Amounts on
Final Budget -
a Budgetary
Positive
Basis
(Negative)
S 121,956 $ 191,289 $ 191,289 $
2,068 2,588 1,857
744 744
124,024 194,621 193,890
24,108 77,393
75,649 1,744
- 7,444
7,444 -
24,108 84,837
83,093 1,744
99,916 109,784
110,797 I,013
(99,916) (114,494) (114,484) -
(4,700) (3,687) 1,013
1,837 1,837 6,537 4,700
$ 1,837 S (2,863) $ 2,850 $ 5,713
51
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Recreation Impact Fee Special Revenue Fund
For the year ended September 30, 2002
REVENUES:
Investment earnings
Impact lees
Total revenues
Excess of revenues over expenditures
Fund balances - beginning
Fund balances - ending
Actual
Variance with
Budget Amounts
Amounts on
Final Budget -
a Budgetary
Positive
Original Final
Basis
(Negative)
$ 7,370 $
2,660
$ 2.680
S 20
195,000
195,000
255,775
60,775
202,370
197,660
258,455
60,795
202,370
197,660
258,455
60,795
$ 202,370 $
197,660
$ 258,455
$ 60,795
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Stormwater Utility Special Revenue Fund
For the year ended September 30, 2002
REVENUES:
Investment earnings
Charges for services
Total revenues
EXPENDITURES:
Current:
Operating
Capital outlay
Total expenditures
Excess of revenues over expenditures
Fund balances - beginning
Fund balances - ending
M
n
M
Actual
Variance with
Budget Amounts
Amounts on
Final Budget -
a Budgetary
Positive
Original Final
Basis
(Negative)
$ S 10,450
$ 10,784
$ 334
- 737,450
774,899
37,449
r+
747,900
785,683
37,783
w
38,811
64,869
(26,058)
38,811
64,869
(26,058)
709,089
720,814
11,725
$ - S 709,089
$ 720.814
$ 11,725
52
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Law Enforcement Forfeiture Special Revenue Fund
For the year ended September 30, 2002
REVENUES:
•
Investment earnings
Other revenue
Total revenues
•
_ EXPENDITURES:
Current:
• Operating
- Capital outlay
• Total expenditures
Excess of revenues over expenditures
Fund balances - beginning
• Fund balances - ending
Budget Amounts
Original Final
S 150 $ 150 S
3,000 6,000
3,150 6,150
Actual
Variance with
Amounts on
Final Budget -
a Budgetary
Positive
Basis
(Negative)
60
$ (90)
21,226
15,226
21,286
15,136
3,150
5,150
5,044
106
-
11,585
11,585
-
3,150
16,735
16,629
106
-
(10,585)
4,657
15,242
13.271
11271
13,271
-
S 13.271 S
2.686 $
17,928 5
15,242
• City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
G.R.E.A.T. Program Special Revenue Fund
•
on
REVENUES:
Intergovernmental
Investment earnings
Other revenue
go
Total revenues
EXPENDITURES:
•
Current.
Operating
Capital outlay
•
Total expenditures
Excess of revenues over expenditures
Fund balances - beginning
•
Fund balances -ending
I
Budget Amounts
Original Final
$ - S 11,640 S
600
12,240
S
Actual
Variance with
Amounts on
Final Budget -
a Budgetary
Positive
Basis
(Negative)
10,726
$ (914)
2
2
600
-
11,328
(912)
12,240 10.786 1,454
12,240 10,786 1,454
- 542 542
$ - S 542 $ 542
•
53
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget
and Actual
Debt Service Fund
For the year ended September 30, 2002
Actual
Variance with
^,
Budget Amounts
Amounts on
FinalBudget-
a Budgetary
Positive
Original Final
Basis
(Negative)
REVENUES:
_
Special assessments
$ 26,195 S 26,195 $
31,756
$ 5,561
Interest and other revenues
16.213 4,979
10,273
5.294
Total revenues
42,408 31.174
42,029
10,855
EXPENDITURES:
Current:
Operating
318 318
201
117
Debt service:
Principal
53,602 53,602
53,602
-
Interest
10,804 10,804
10,764
40
Total expenditures
64,724 64,724
64,567
157
nr
Excess of expenditures over revenues
(22,316) (33,550)
(22,538)
11,012
Fund balances - beginning
154,509 154,509
154,509
-
Fand balances - ending
S 132,193 $ 120,959 $
131,971
$ 11,012
r�
am
M
PM
54
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget
and Actual
Road Paving Program Projects Fund
•
From Inception and for the Year Ended September
30, 2002
•
•
Prior Current
Total to
Project
Years Year
Date
Authorization
REVENUES:
on
Paving loan
$ 3,304,855 $ $
3,304,855
$ 3,304,855
Intergovernmental
9,000
9,000
9,000
1°
Investment earnings
370,183 17,238
387,421
-
_
Developer contributions
8,434 -
8,434
8,434
on
Total revenues
3,692,472 17,238
3,709,710
3,322,289
•
EXPENDITURES:
Current:
Public works
81 -
81
109
•
Capital outlay:
Highways and streets
1.900,905 429,220
2,330,125
3.336,748
Total expenditures
1,900,986 429,220
2,330,206
3,336,857
•
Excess (deficiency) of revenues over
expenditures
1,791,486 (411,982)
1,379,504
(14,568)
•
OTHER FINANCING USES
Transfers -in
- 14,568
14,568
14,568
•
Net changes in fund balances
$ 1,791,486 (397,414) $
1,394,072
$ -
Fund balances- beginning
987,497
Fund balances - ending
$ 590,083
•
r�
•
•
•
•
55
Function and Activity
General government:
Legislative
City manager
City clerk
City attorney
Finance
Human resources
Growth management
Building department
Total general government
Police protection:
Administration
School resource
Road patrol
Community policing
Code enforcement
Investigations
Support Services
Communications
Total police protection
Public works:
Engineering
Building maintenance
Central garage
Parks and recreation
Roads and drainage
Cemetery
Total public works
Non -departmental
Total governmental funds
capital assets allocated to
functions
Construction in progress
Total governmental fund
capital assets
City of Sebastian, Florida
.R
Capital Assets Used in the Operation of Governmental
Funds
Schedule by Function and Activity
September 30, 2002
Improvements
Machinery
^
Other than
and
Land
Buildings Buildings
Equipment
Infrastructure
Totals
^
$ -
$ 15,293
$ -
$ 15,293
-
- -
21,790
-
21,790
.�
- -
86,790
86,790
- -
1,199
1,199
-
- -
103,109
-
103,109
^
-
- -
6,370
6,370
84,426 -
48,845
133,271
15,183 -
78,942
94,125
_
99,609 -
362,338
-
461,947
9,560
887,852 61,682
848,332
-
1,807,426
-
- -
1,526
-
1,526
^
-
366,750
-
366,750
-
10,025
10,025
- -
35,585
-
35,585
�.
-
7,774 -
44,017
-
51,791
-
851
-
851
-
- -
27,497
-
27,497
^
9560
895,626 61.682
1.334.583
-
2,301,451
-
145,201 96,493
144,614
-
386,308
33,971
289,712 16,118
67,071
50,671
457,543
-
76,941 8,668
90,398
-
176,007
^
1,672,116
261,459 1,290,122
477,869
758,936
4,460,502
-
98,249 531,475
2,020,361
13,119,960
15,770,045
272,190
47,519 37,972
32,321
21,473
411,475
_
1.978,277
919,081 1,980,848
2.832,634
13,951,040
21,661,880
2500,336
642.392 6.695
40,586
-
3,190,009
^
n
$ 4.488,173
$ 2,556,708 5 2,049,225
5 4,570,141
$ 13,951,040
$ 27,615,287
264,456
^
$ 27,879,743
01
STATISTICAL SECTION
The Statistical Schedules differ from the other financial statement
presentations because they generally disclose data for more than one
fiscal year. They also present non -accounting data such as social and
economic data andfinancialtrends of the City.
➢ General Governm_enta_I Expenditures & Other Financing Uses by Function - Last Ten
Fiscal Years
➢ General Governmental Revenues & Other Financing Sources - Last Ten Fiscal Years
➢ Property Tax Levies and Collections - Last Ten Fiscal Years
➢ Assessed and Estimated Actual Value of Property - Last Ten Fiscal Years
➢ Principal Taxpayers
➢ Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years
➢ Special Assessments Billing and Collections - Last Ten Fiscal Years
➢ Computation of Legal Debt Margin
➢ Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General
Obligation Bonded Debt Per Capita
➢. Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt To
Total General Government Expenditures
➢ Computation of Direct and Overlapping Bonded Debt - General Obligation Bonds
➢ Revenue Bond Coverage - Golf Course Bond - Last Ten Fiscal Years
➢ Demographic Statistics - Last Ten Fiscal Years
➢ Property Value, Construction and Bank Deposits - Last Ten Fiscal Years
➢ Miscellaneous Statistics
n
57
TABLE I
1 of2
Fiscal
Year
1993
1995
1996
1997
1998
1999
2000
2001
2002
CITY OF SEBASTIAN, FLORIDA
GENERAL GOVERNMENTAL EXPENDITURES
& OTHER FINANCING USES BY FUNCTION
LAST TEN FISCAL YEARS
t
General
Government
$ 1,147,M
1,271-1768
1,856,871
2,651,408,
1,944,089
1,439,181
1,816,090
(3)
1,934,610
2,087,382
2,558,781
Public
Safety
$ 1,650,850
1,785,073
1,585,901
1,627,955
1,706,546
1,842,266
2,122,823
(3)
2,129,662
2,316,796
2,588,526
Public
Works
$ 1,413,134
1,677,206
1,454,962
1,442,598
1,543,487
2,006,966
1,908,915
2,008,451
2,087,873
2,449,167
(1) This schedule lists expenditures of the General, Special Revenue, and Debt Service funds only.
(2) Represents Operating Transfers Out to Capital Projects Funds
(3) Code Enforcement Division previously reported under General Government, but is
now reported under Public. Safety
(4) Housing and Community Development expenditures related to CDBG Grant.
a
Debt
Service
I J 6,422
133,008
133,008
255,297
214,175
211,956
386,183
364,396
364,407
164,366
58
Capital
Outlay
$ 842,747
442,474
609,079
1,124,542
1,331,130
2,628,671
191,226
192,785
607,151
367,010
Other
Expenditures
(4)
4,830
(4)
617
Operating
Transfers Out
259
(2)
1,852,679
(2)
2,122,593
(2)
2,100,463
1,989,584
Total"'
$ 5,191,083
5,309,529
5,639,823
7,101,800
6,739,427
8,129,299
8,282,746
8,753,114
9,564,072
10,317,434
TABLE 1
2 of 2
59
TABLE 2
1 of2
CITY OF SEBASTIAN, FLORIDA
GENERAL GOVERNMENTAL REVENUES & OTHER FINANCING
SOURCES
LAST TEN FISCAL YEARS
_
Licenses
Fiscal
and Inter-
Charges for
.�
Year
Taxes
Permits Governmental
Services
1993
S 3,901,663
S 287,660 S 782,896
S 92,611
1994
4,230,835
347,786 934,210
166,095
1995
4,486,685
278,618 961,887
82,653
1996
4,931,996
321,149 1,166,881
74,657
1997
5,250,861
345,463 1,332,676
84,051
1998
5,612,313
388,936 1,366,428
51,196
1999
3,800,242
(3) 448,928 3,600,474 131
33,097
2000
4,018,521
475,345 3,725,671
159,701
2001
4,513,698
487,618 4,031,263
282,521
�+
2002
4,467,701
578,695 4,782,829
1,075,220
(1) This schedule lists revenues of the General, Special Revenue, and Debt Service funds only.
(2) No Special Assessments for these years.
(3) Local Option Gas Tax and Discretionary Sales Tax previously classified as taxes. The City does
not collect these taxes, but receives them from the State. Therefore, they are not included in Taxes.
�r
(4) Capital Projects and additional Special Revenue Funds established in Fiscal Year 1999
resulting in Operating Transfers In.
0"
L—M
M
TABLE2
2 of2
Interest and
Special
Operating
Fines
Other Revenues
Assessments
Transfers In
Total")
S 59,640
S 347,715
s (2)
$ -
S 5,472,185
57,257
205,169
(2)
-
5,941,352
67,774
441,312
174,060
-
6,492,989
82,477
417,495
135,336
-
7,129,991
59,198
461,249
68,474
7,601,972
71,194
510,007
30,522
-
8,030,596
89,697
314,910
44,964
278,855 t41
8,611,167
140,672
485,479
128,154
11,317
9,144,860
148,676
490,143
28,528
337,620
10,320,067
127,027
557,304
31,756
280,850
11,901,382
61
Coo
sn7 u�z
TABLES
1 of2 i3H5
CITY OF SEBASTIAN, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
J
J
Fiscal
Total Tax
Current Tax
Year
Levy
Collections
1993
$ 2,143,544
$ 1,934,066
1994
2,452,523
2,245,731
1995
2,510,166
2,294,209
1996
2,667,313
2,40,039
1997
2,727,083
2,513,627
19.98
2,909,597
2,679,819
1999
2,869,796
2,726,857
2000
2,422,756
2,283,898
2001
2,542,544
2,455,930
2002
= _' I 2,635,277
2,489,854
Source:
Indian River County Property Appraiser and Tax Collector
(1)
Does not include penalties and interest on delinquent
taxes.
Percent of
Current Tax
Collections
to Tax Levy(l)
90.2%
91.6%
91.4%
92.3%
92.2%
92.1%
95.0%
94.3%
96.6%
94.5%
62
w
,w
w
w
w
ON
w
w
w
as
w
TABLE 3
2 of 2
Percent of
Delinquent
Total Tax
Tax
Total Tax
Collections
Collections(')
Collections(')
to Tax Levy
$ 188,575
$ 2,122,641
99.0%
177,793
2,423,524
98.8%
167,181
2,461,390
98.1 %
156,752
2,619,791
98.2%
150,526
2,664,153
97.7%
130,803
2,810,622
96.6%
2,912
2,729,769
95.1 %
35,050
2,318,948
95.7%
51,690
2,507,620
98.6%
36,421
2,526,275
95.9%
26,878
2,152,3g3
qb,I° O
ON
63
TABLE 4
1 of 2
CITY OF SEBASTIAN, FLORIDA
..
ASSESSED AND ESTIMATED ACTUAL VALUE
OF PROPERTY"
LAST TEN FISCAL YEARS
Real Property
Personal Property
Fiscal
Assessed
Estimated
Assessed
Estimated
Year
Value
Actual Value
Value
Actual Value
1993
$ 452,669,880
$ 565,837,350 $
26,386,374 $
26,386,374
_
1994
484,794,820
605,993,525
25,954,533
25,954,533
1995
514,374,980
642,968,725
26,554,691
26,554,691
1996
531,461,580
664,326,975
24,774,960
24,774,960
1997
563,855,210
704,819,013
30,303,882
30,303,882
..
1998
587,811,960
734,764,950
31,210,876
31,210,876
1999
626,274,970
782,843,713
46,027,721
46,027,721
2000
656,619,860
820,774,825
42,216,162
41,533,985
2001
754,577,150
943,221,438
45,195,579
45,195,579
2002
829,224,615
1,036,530,769
45,355,170
45,355,170
Source: Indian River County Property Appraiser
(1) Total assessed value based on approximately 80 percent of estimated actual value
r.
M
00
61l
TABLE 4
2 of 2
Ratio of Total
Exemptions
Total
Total
Assessed Value
Real
Assessed
Estimated
To Total Estimated
Property
Value
Actual Value
Actual Value
$ 123,618,185
$ 479,056,254
$ 592,223,724
80.9%
146,957,174
510,749,353
631,948,058
80.8%
154,362,555
540,929,671
669,523,416
80.8%
161,007,095
556,236,540
689,101,935
80.7%
172,478,432
594,159,092
735,122,895
80.8%
177,515,747
619,022,836
765,975,826
80.8%
187,751,454
672,302,691
828,871,434
81.1%
190,327,263
698,836,022
862,308,810
81.0%
198,445,669
799,772,729
988,417,017
80.9%
205,977,066
874,579,785
1,081,885,939
80.8%
65
TABLE 5
CITY OF SEBASTIAN, FLORIDA
PRINCIPAL TAXPAYERS
SEPTEMBER 30, 2002
2002
Percentage of
Assessed
Total Assessed
Taxpayer
Type of Business
Valuation
Valuation
Wal-Mart Stores Inc.
Retail
$ 11,455,234
1.31%
Florida Power & Light
Utility/Electric
10,610,764
1.21%
BellSouth Communications
. Utility/Telephone
8,326,393
0.95%
BW US 1 Inc
Retail/Rentals
6,081,550
0.70%
Turner, James T.
MHP/Rentals
3,784,200
0.43%
Ruth Guest House, Inc.
Retail Rentals
3,748,510
0.43%
Oyster Point Resort Condo
Time Share/Rental
3,249,733
0.37%
Seb. Inlet Marina & Trd. Co., Inc.
Restaurant/Hotel
3,119,348
0.36%
Fisher, Henry A.
Real Estate
3,115,000
0.36%
Charter Communications
Utility/Cable
2,904,492
0.33%
Source: Indian River County Property Appraiser's Office.
m
TABLE 6
m
CITY OF SEBASTIAN, FLORIDA
.. PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
am
City of Sebastian
Indian River County School Board
..
Debt
Total
Total
Debt
Total
Fiscal
Operating Service
City
County(l)
Operating
Service
School
Year
Millage Millage
Millage
Millage
Millage
Millage
Millage
Other(')
1993
6.4410
6.4410
5.65490
(3)
(3)
9.56260
2.72080
1994
6.9000
6.9000
5.77090
8.59060
1.25400
9.84460
2.58730
1995
6.9000
6.9000
5.95235
8.98330
1.21500
10.19830
2.26023
1996
6.9000
6.9000
5.92350
9.11800
1.21000
10.34800
2.74083
1997
6.9000
6.9000
5.92330
9.15400
1.16500
10.31900
2.64544
1998
6.9000
6.9000
5.80800
9.00300
1.13700
10.14000
2.49690
1999
6.5000
6.5000
6.99230
8.61400
1.00000
9.61400
(3)
2000
5.0000
5.0000
6.78040
8.61400
1.00000
9.61400
1.52091
2001
5.0000
5.0000
6.80920
8.67700
0.88000
9.55700
1.62899
2002
4.5904
4.5904
6.61080
8.40200
0.68000
9.08200
1.61045
(1)
Millage includes General Fund,
M.S.T.U.s, Emergency
Services District
and Land Bonds.
(2)
All Special Taxing Districts.
(3)
Information not available.
go
Source: Indian River County Property Appraiser's Office
m
w
67
TABLE 7
CITY OF SEBASTIAN, FLORIDA
SPECIAL ASSESSMENTS BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
Special
Special
Fiscal
Assessments
Assessments
Year
Billings
Col lecteP
1993
(3)
(3)
1994
(3)
(3)
1995
(3)
(3)
1996
$ 135,336
$ 306,760
1997
59,925
68,474
1998
58,454
71,251
1999
200,860 12)
64,823
2000
214,686 (z)
128,230
2001
49,796
28,528
2002
39,234
31,756
(1)
Assessments collected which exceed current assessments
billed indicate prepayment
of assessments or payment of delinquent assessments,
including penalties.
(2)
Includes all annual assessments plus total assessments
on defaults
plus penalties and interest.
(3) There were no special assessments during these years
so
IN
CITY OF SEBASTIAN, FLORIDA
so COMPUTATION OF LEGAL DEBT MARGIN
SEPTEMBER 30, 2002
ww
go
Assessed valuations:
• Assessed value
Add back: exempt real property
Total assessed value
Legal debt margin:
OR
Debt limitation - 10 percent of total assessed value
Debt applicable to limitation:
Total bonded debt
Less: Special assessment bonds
• Revenue bonds
Amount available for repayment of general
obligation bonds
Total applicable to limitation
.R Legal debt margin
M
so
M
$ 3,517,195
(134,299)
TABLE 8
$ 623,247,549
205,977,066
$ 829,224,615
$ 82,922,462
3,382,896
$ 79,539,566
69
TABLE 9
itl�JC1�DIN:
CITY OF SEBASTIAN, FLORIDA
RATIO OF NET GENERAL OBLIGATION BONDED DEBT
TO ASSESSED VALUE AND NET GENERAL OBLIGATION
BONDED DEBT PER CAPITA
SEPTEMBER 30, 2002
The City of Sebastian has no general bonded debt.
CITY OF SEBASTIAN, FLORIDA
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES
FOR GENERAL OBLIGATION BONDED DEBT
TO TOTAL GENERAL GOVERNMENT EXPENDITURES
SEPTEMBER 30, 2002
The City of Sebastian has no general bonded debt.
70
CITY OF SEBASTIAN, FLORIDA
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT
GENERAL OBLIGATION BONDS
.. SEPTEMBER 30, 2002
so
m
am
go
.,
m
.,
m
The City of Sebastian has no overlapping bonded debt or general bonded debt.
TABLE 11
71
so
TABLE 12
CITY OF SEBASTIAN, FLORIDA
REVENUE BOND COVERAGE
GOLF COURSE BOND
LAST TEN FISCAL YEARS.
M
M
Net Revenue
Fiscal
Gross
Operating
Available for
Debt
Service Requirements
Year
Revenuesttl
1
Expenses 12
Debt Service
Principal
Interest
Total
Coverage
1993
$ 1,133,014
S 981,310
$ 151,704
S 80,000
S 126,655 S
206,655
p)
0.73
(4)
1994
1,178,875
891,881
286,994
80,000
123,855
203,855
(3)
1.41
(4)
1995
1,139,795
788,449
351,346
85,000
120,655
205,655
(3)
1.71
(4)
1996
1213,952
854,479
359,473
90,000
116,830
206,830
(3)
1.74
(4)
1997
1,356,609
884,286
472,323
95,000
112,600
207,600
t31
2.28
_
(4)
1998
1,351,368
926,174
425,194
100,000
107,850
207,850
t31
2.05
(4)
1999
1,414,976
982,772
432,204
105,000
102,650
207,650
r"
2.08
(4)
2000
1,471,743
1,004,760
466,983
110,000
96,980
206,980
(3)
2.26
(4)
2001
1,165,091 t$)
1,115,270 is)
49,821
--
--
--
(6)
--
(7)
2002
1,386,424
1,253,443
132,981
100,000
104,481
204,481
(e)
0.65
(7)
me
(I) Total revenues (including interest) and other non -operating revenues. .�
(2) Total operating expenses plus interest and exclusive of depreciation and amortization.
(3) Golf Course Bond, Series 1985 refunded in 1992 with Series 1992. w
(4) Required coverage is 1.0.
(5) Golf Course closed for four months for renovations.
(6) Golf Course Bond, Series 1992 refunded with Recreational Facilities Improvement and Refunding Revenue Bonds, Series 200 �w
Debt Service payment due October 1.
(7) Required coverage is 1.25. no
w
M
72
M
TABLE 13
CITY OF SEBASTIAN, FLORIDA
�+ DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
w
Fiscal
School
Unemployment
Year Population(])
EnrollmenJ'1
Rate(3)
1993 12,154
1,382
10.7%
1994 12,800
1,397
11.0%
1995 13,488
1,413
9.4%
A
1996 13,967
1,313
9.5%
1997 14,470
1,324
8.4%
1998 15,115
1,410
8.1%
1999 15,707
1,383
8.6%
2000 16,181 (4)
1,342
9.5%
2001 16,667
1,371
6.8%
2002 17,167
4,309
9.8%
Data Sources
(1) Bureau of Economics & Business Research University of Florida
(2) School District
(3) State Department of Labor - for Indian River County
(4) 2000 Census figure.
1_1
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73
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TABLE 14
1 of2
CITY OF SEBASTIAN, FLORIDA
PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS
LAST TEN FISCAL YEARS
No
Property Value(1)
Fiscal
Year
Commercial
Residential
Exemptions
Total
1993
$ 943,738
$ 19,612,746
$ 627,412
$ 21,183,896
1994
6,303,712
25,587,753
1,306,648
33,198,113
1995
141,544
19,538,885
996,617
20,677,046
1996
1,104,514
20,155,914
940,629
22,201,057 .,
1997
3,626,024
24,918,675
2,027,739
30,572,438
1998
3,142,469
25,549,287
1,044,055,
29,735,811
1999
4,177,601
27,941,640
1,150,494
33,269,735 ..
2000
6,873,360
27,420,413
2,278,255
36,572,028
2001
2,449,336
31,267,926
3,379,271
37,096,533
2002
2,615,694
37,266,992
1,401,672
41,284,358
(1) Estimated assessed value from Table 4 (estimated at 80% of estimated actual value)
(2) Source: City Building Department
(3) Source: Federal Deposit Insurance Corporation and Federal Savings and Loan Insurance Corporation
(4) Information not available
* Valuation fees paid.
OR
74
TABLE 14
2 of 2
M
ON
Commercial
Residential
Construction
121
Construction 121
Number of
Number of
Bank
Units
Value*
Units
Value*
Deposits"'*
4 $
27,517
267
$ 179,122
$ 252,032
0
46,305
351
233,502
308,643
10
23,192
238
179,816
318,583
9
30,621
240
183,177
331,765
II
42,111
335
216,196
293,368
0
42,628
276
223,511
312,097
11
46,236
282
248,702
(4)
9
53,368
283
253,218
157,103
16
48,558
328
269,862
394,824
8
42,583
451
420,649
394,894
1 75
TABLE 15
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CITY OF SEBASTIAN, FLORIDA
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 2002
Date of Incorporation
1924
Form of Government
Council/Manager
Number of employees (excluding police and fire):
107
Classified
85
Exempt
22
Area in Square Miles
13.5
.�
Name of Government facilities and services:
Miles of streets
140 Miles
Number of street lights
3,531
Culture and Recreation:
Community centers
2
Parks
10
^'
Park acreage
207.85
Golf courses
I
Swimming pools
0
Tennis courts
6
Police Protection:
Number of stations
1
Number of police personnel and officers
54
Number of patrol units
23
Number of law violations:
r.
Physical arrests
515
Traffic violations
2,528
Parking violations
207
.,
Facilities and services not included in the reporting entity
Fire Protection:
,
Number of stations
2
Number of tire personnel and officers
12
Number of calls answered
941
Number of inspections conducted
96
Sewage System:
Number of service connections
1,312
Water System:
Number of service connections
4,220
Number of fire hydrants
682
Education:
Number of elementary schools
2
Number of elementary school instructors
112
Number of secondary schools
2
Number of secondary school instructors
212
Source: City of Sebastian Police and Growth Management Departments.
FT.
SINGLE
P AUDIT
SECTION
The Single Audit Section contains various independent auditor's
reports and schedules as required by the Florida Single Audit Act,
Chapter 215.97, Florida Statutes for state and local governments that
receive state assistance.
➢ Report on Compliance and on Internal Control Over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance with Governmental Auditina Standards
➢ Independent Auditor's Report on Compliance and Internal Control
over Compliance Applicable to Each Major State Project
➢ Schedule of Findings and Questioned Costs - State Projects
➢ Schedule of Expenditures of State Financial Assistance
77
M
=AwHOYMAN, DOBSON & COMPANY, P.A.
�,CERTIFIED PUBLIC ACCOUN IAA TS
as 2158aytree Drive, Melbourne, Florida 32940, 321-255-0088, Fax 321-259-8648, www.hoyman.com
Charles W Hayman, Jr,
Barbara J. Oswalt
Thomas L. Kirk
Karen E Kirkland
Deborah A. Bradley
DIRECTOR 5MERITUS
Roger W Dobson
Eugene K. Bjerning
Independent Auditor's Report on Compliance and on Internal Control
Over Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
., We have audited the basic financial statements of the City of Sebastian, Florida as of and for the year ended
September 30, 2002, and have issued our report thereon dated December 13, 2002. 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.
Compliance
As part of obtaining reasonable assurance about whether the City of Sebastian, Florida's basic financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts and grants, 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 that are required to be reported under
Government Auditing Standards.
Internal Control Over Financial Reporting
�. In planning and performing our audit, we considered City of Sebastian, Florida's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion
on the basic financial statements and not to provide assurance on the internal control over financial
.. reporting. Our consideration of the internal control over financial reporting would not necessarily disclose
all matters in the internal control over financial reporting that might be material weaknesses. A material
weakness is a condition in which the design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that misstatements' in amounts that would be material in
relation to the basic financial statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We noted no matters involving
do the internal control over financial reporting and its operation that we consider to be material weaknesses.
79
• American Institute of Certified Public Accountants • Florida Institute of Certified Public Accountants • SEC Practice Section of the A I C PA. • CPAmerlca International
................ ........
Honorable Mayor and Members of City Council
City of Sebastian
Page Two
This report is intended solely for the information of the City of Sebastian, Florida and management, federal
and state awarding agencies and the State of Florida Office of the Auditor General and is not intended to be
and should not be used by anyone other than these specified parties.
Hoyman, Dobson & Company, P.A.
December 13, 2002
80
=,&HOYMAN, DOBSON & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUN FAN IS
215 Baytree Drive, Melbourne, Florido 32940, 321-2,55-0088, Fox 321-259-8648, www,hoymon.com
M
Charles W Hayman, Jr
Barbara J. Oswalt
Thomas l Khk
Koren E. Kirkland
Deborah A. Bradley
DIRECTOR EMERITUS
Roger W. Dobson
Eugene K. Bjerning
Independent Auditor's Report on Compliance and Internal
ow Control Over Compliance Applicable to Each Major State Project
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
Compliance
We have audited the compliance of the City of Sebastian, Florida with the types of compliance
requirements described in the Executive Office of the Governor's State Projects Compliance Supplement,
that are applicable to each of its major state projects for the year ended September 30, 2002. The City of
Sebastian, Florida's major state projects are identified in the summary of auditors' results section of the
accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws,
.� regulations, contracts, and grants applicable to each of its major state projects is the responsibility of City
of Sebastian, Florida's management. Our responsibility is to express an opinion on the City of Sebastian,
Florida's compliance based on our audit.
M
We conducted our audit in accordance with United States generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditine Standards, issued by the
Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Those
standards and Chapter 10.550, Rules of the Auditor General, require that we plan and perform the audit
to obtain reasonable assurance about whether non-compliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major state project occurred. An audit
includes examining, on a test basis, evidence about the City of Sebastian, Florida's compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination on the City of Sebastian, Florida's compliance with those requirements.
In our opinion, the City of Sebastian, Florida complied, in all material respects, with the requirements
referred to above that are applicable to each of its major state projects for the year ended September 30,
2002.
81
-American Institute of Certified Public Accountants • Florida Institute of Certified Public Accountants • SEC Practice Section of the A.I C.PA • CPAmerico Internationol
Honorable Mayor and Members of City Council
City of Sebastian r
Page Two
Internal Control Over Compliance r
The management of the City of Sebastian, Florida is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts, and grants
applicable to state projects. In planning and performing our audit, we considered the City of Sebastian,
Florida's internal control over compliance with requirements that could have a direct and material effect
on a major state project to determine our auditing procedures for the purpose of expressing our opinion r
on compliance and to test and report on internal control over compliance in accordance with Chapter
10.550, Rules of the Auditor General.
r
Our consideration of the internal control over compliance would not necessarily disclose all matters in
the internal control that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a relatively low r
level the risk that non-compliance with applicable requirements of laws, regulations, contracts, and
grants that would be material in relation to a major state project being audited may occur and not be
detected within a timely period by employees in the normal course of performing their assigned ,..
functions. We noted no matters involving the internal control over compliance and its operation that we
consider to be material weaknesses.
r
This report is intended solely for the information of the City of Sebastian, Florida and management, federal
and state awarding agencies and the State of Florida Office of the Auditor General and is not intended to be
and should not be used by anyone other than these specified parties. �.
A"-w, d1o4w 4 C
Hoyman, Dobson & Company, P!�
December 13, 2002
82
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CITY OF SEBASTIAN, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS — STATE PROJECTS
FISCAL YEAR ENDED SEPTEMBER 30, 2002
..
SECTION A — SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of Auditor's report issued:
Internal control over financial reporting:
Unqualified
.,
Material weakness(es) identified?
yes X
no
Reportable conditions(s) identified not considered
to be material weaknesses?
yes X
none reported
Noncompliance material to financial statements noted?
yes X
no
State Awards
Internal control over major projects:
Material weakness(es) identified?
yes X
no
Reportable conditions(s) identified not considered
to be material weaknesses?
X yes
none reported
.,
Type of Auditor's report issued on compliance
for major projects:
Unqualified
Identification of major projects:
w
Name of State Project
CSFA Number(s)
Expansion of Riverview Park
37.017
w
Barber Street Sports Complex
37.017
Riverview Park Expansion
37.017
Five Year Airport Master Plan
55.004
T Hangers and Lighting
55.004
Install Runway Lighting & Airfield Security
55.004
Golf Course Renovation, Water Line
Installation/Road Extension/Access Gates
55.004
Airfield Lighting Vault & Equipment
55.004
Rehab of Runway 9/27
55.004
Install Security Fencing
55.004
..
Clear Runway 9/27 Safety Area
55.004
Dollar threshold used to distinguish
between Tvpe A and Type B programs:
$ 138,262
SECTION B — FINDINGS - FINANCIAL STATEMENT
No matters were reported.
83
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SECTION C — FINDINGS AND QUESTIONED COSTS - MAJOR STATE PROJECTS
02-01 Florida Department of Environmental Protection - CSFA No. 37.017
Florida Recreation Development Assistance Program
Expansion of Riverview Park, State Project No. F02370 and
Riverview Park Expansion, State Project No. F03394
Criteria: As stated in the grant documents, "commencement documentation" must be filed with
the state agency prior to the commencement of project acquisition or development in accordance
with Chapter 62-D5.058(6)(f) of the Florida Administrative Code. Upon determining that the _
documentation complies, the state agency will then give notice to the City to commence with the
project acquisition and development and approve requests for payment.
Condition: The City did not file the required "commencement documentation" on a timely basis
for these two state projects. Thus, the City started the project before obtaining approval from the
State agency to begin.
Questioned costs: $598
Context: Although the commencement documentation was filed untimely, the state agency
ultimately approved the commencement of the Expansion of Riverview Park, State Project No.
F02370 and the request for payment. Therefore, there are no questioned costs associated with
this project. There was only $598 of expenditures made under the Riverview Park Expansion,
State Project No. F03394 during the year ended September 30, 2002. Approval from the state
agency for the commencement of this project and the request for payment is still pending.
Effect: By not filing the commencement documentation in a timely manner, the City is not in
compliance with the reporting requirements under the grants. In addition, the City assumes the
risk that the granting agency will not approve requests for payment for expenditures incurred
prior to obtaining the agency's approval to commence with the project.
Cause: The City has a written policy of general procedures for all grants outlining the .,
responsibilities of the parties involved. There is some monitoring performed by the Finance
department, but ultimately the department initiating the grant is responsible for the submission of
all required grant documentation to the state granting agency. Upon submission of grant
reporting documentation to the state agency, notification is to be sent to the Finance department
for notation in the grant file. In this case, the employee responsible failed to submit the required
documentation in a timely manner. However, the documentation has since been submitted.
Recommendation: All departments involved in initiating grants should read the applicable grant
document diligently and become familiar with all reporting requirements. The Finance
department should broaden their scope for monitoring each department's compliance with
reporting requirements. In addition, the Grant Administrator should expand the already existing
schedule used to monitor quarterly reports to include all reporting requirements for each grant.
This schedule should be in the form of a checklist to keep in each grant file in order to track that ..
all notifications are received from the departments for each reporting requirement.
Management Response: We acknowledge the omission of filing the commencement documents
for both grants in a timely fashion and will implement the recommendations provided by our
auditors forthwith. As part of the recommendation, an established set of procedures shall be
implemented setting forth the requirements from t initiation through
p g q gran g grant completion as set
forth in each grant contract.
84
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SECTION D — OTHER ISSUES
No Summary Schedule of Prior Audit Findings is required because there were no prior audit findings
related to State financial assistance projects.
85
CITY OF SEBASTIAN, FLORIDA
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE
FOR THE YEAR ENDED SEPTEMBER 30,
2002
.,
State Agency
State
.n
and
CSFA
State Contract/
State
Proiect Title
Number
Grant Number
Expenditures
DEPARTMENT OF ENVIRONMENTAL PROTECTION
Florida Recreation Development Assistance Program
Expansion of Riverview Park
37.017
* F02370
$ 199,008
Barber Street Sports Complex
37.017
* F01049
11,967
Riverview Park Expansion
37.017
* F03394
598
Total Department of Environmental Protection
211,573
FLORIDA FISH & WILDLIFE CONSERVATION COMMISSION
Division of Law Enforcement
_
Derelict Vessel Removal
77.005
FWC 00061
11,250
FLORIDA DEPARTMENT OF STATE
Division of Historical Resources
Architecture for City Hall
45.031
S1083
8,455
DEPARTMENT OF TRANSPORTATION
Joint Participation Agreement with Florida
Department of Transportation Aviation
".
Administration:
Five Year Airport Master Plan
55.004
* 407176-1-94-01
33,025
T Hangars and Lighting
55.004
* 407345-1-94-01
44,628
Install Runway Lighting & Airfield Security
55.004
* 408783-1-94-01
4,331
Golf Course Renovation, Water Line Installation/
55.004
* 236320-1-94-01
33,927
Road Extension/Access Gates
Airfield Lighting Vault & Equipment
B 855.004
411094-1-94-01
4,855
Rehab of Runway 9/27
55.004
* 412976-1-94-01
106,876
Install Security Fencing
55.004
* 412975-1-94-01
256
Clear Runway 9/27 Safety Areas
55.004
* 407552-1-94-01
1,698
Total Department of Transportation
229,596
Total expenditures of State Financial Assistance $ 460,874
Notes:
* Denotes major project
This schedule is prepared on the accrual basis of accounting.
86
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w
HOYMAN, DOBSON & COMPANY, P.A.
CERTIFII 1) PUBLIC ACCOUNTANTS
215 Boytree Drive, Melbourne, Florida 32940, 321-25,50088, Fox 321-259-8648, www.hoymon.com
Charles W Hoyman. Jc
Borbara J. Oswalt
-homes L Kirk
Karen E. Kirkland
Deborah A. Bradley
DIRECTOR DAERfNS
Roger Dobson
Eugene K. Blerning
w Independent Auditor's
Management Letter
w
Honorable Mayor and Members of City Council
City of Sebastian
w
Sebastian, Florida
We have audited the basic financial statements of the City of Sebastian, Florida, as of and for the fiscal
year ended September 30, 2002, and have issued our report thereon dated December 13, 2002.
w
We conducted our audit in accordance with United States generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditine Standards, issued by the
w Comptroller General of the United States. We have issued our Independent Auditor's Report on
Compliance and Internal Control over Financial Reporting, Independent Auditor's Report on Compliance
and Internal Control over Compliance Applicable to each Major State Project, and Schedule of Findings
and Questioned Costs. Disclosures in those reports and schedule, which are dated December 13, 2002,
should be considered in conjunction with this management letter.
w Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General.
Those rules (Section 10.554(1)(g)l.a.) require that we address in the management letter, if not already
addressed in the auditor's reports on compliance and internal controls or schedule of findings and
w questioned costs, whether or not inaccuracies, shortages, defalcations, fraud, and/or violations of laws,
rules, regulations, and contractual provisions reported in the preceding annual financial audit report have
been corrected. There were no inaccuracies, irregularities, shortages, defalcations, and/or violations of
w laws, rules, regulations, and contractual provisions disclosed in the preceding audit report:
The Rules of the Auditor General (Section 10.554(1)(g)l.b.) require that we address in the management
letter, if not already addressed in the auditor's reports on compliance and internal controls or schedule of
findings and questioned costs, whether or not recommendations made in the preceding annual' financial
audit report have been followed. There were no such recommendations made in the preceding annual
w financial audit report.
As required by the Rules of the Auditor General (Section 10.554(1)(g)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.
w
87
w
•American Institute of Certified Public Accountants • Flondo Institute of Certified Public Accountants • SEC Practice Section of the A. I.C,PA. • CPAmerico International
Honorable Mayor and Members of City Council
City of Sebastian
Page Two
The Rules of Auditor General (Section 10.554(1)(g)4.) require disclosure in the management letter of the
following matters if not already addressed in the auditor's reports on compliance and internal controls or
schedule of findings and questioned costs: (1) violations of laws, rules, regulations, and contractual
provisions that have occurred, or are likely to have occurred; (2) improper or illegal expenditures, (3)
improper or inadequate accounting procedures (e. g., the omission of required disclosures from the
financial statements); (4) failures to properly record financial transactions; and (5) other inaccuracies,
shortages, defalcations, and instances of fraud discovered by, or that come to the attention of, the auditor.
Our audit disclosed the following matter required to be disclosed:
Travel Policv
M
Finding: In January 2003, the Attorney General issued an opinion stating, "While a municipality may
legislate on the subject of per diem and subsistence allowances for governmental travelers, the rates ..
established by Section 112.061 (6), Florida Statutes, may not be exceeded." Under a previous
Attorney General opinion, municipalities were allowed to enact per diem and travel allowances that
vary from Section 112.061, Florida Statutes, pursuant to the Municipal Home Rule Powers Act (Ch.
73-129, Laws of Florida). The City in the past, acting under the "home rule" provisions, adopted per
diem and travel allowances in excess of Section 112.061, Florida Statutes. With the issuance of the
new Attorney General opinion, the City is no longer in compliance; however, the amount in question
is not considered to be significant.
Recommendation: In light of the recent change in the Attorney General's opinion, we recommend ..
that the City review their current ordinance and travel policy to determine what changes, if any, are
necessary.
Management resoonse: The City is currently working with the City Attorney to investigate this issue ..
and will determine what action, if any, should be taken by the City.
The Rules of the Auditor General (Section 10.54(1)(g)5.) also require that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be disclosed
in the management letter, unless disclosed in the notes to the financial statements. The legal authority ..
for the City of Sebastian, Florida is disclosed in the footnotes. The City of Sebastian, Florida's
component unit, the Police Officer's Pension Plan, was established under Section 58-46 through 58-54
Code of Ordinances in October 1989.
As required by the Rules of the Auditor General (Section 10.554(1)(g)6.a.), the scope of our audit
included a review of the provisions of Section 218.503(1), Florida Statutes, regarding financial
emergencies. In connection with our audit, we determined that the City of Sebastian, Florida is not in a
state of financial emergency as a consequence of the conditions described in Section 218.503(1), Florida
Statutes.
As required by the Rules of the Auditor General (Section 10.554(1)(g)6.b.), we determined that the
annual financial report for the City of Sebastian, Florida for the fiscal year ended September 30, 2002, �.
filed with the Department of Banking and Finance pursuant to Section 218.32, Florida Statutes, is in
agreement with the annual financial audit report for the fiscal year ended 2002.
88
0
_ Honorable Mayor and Members of City Council
City of Sebastian
Page Three
" As required by the Rules of the Auditor General (Section 10.5540)(g)6.c. and 10.556), 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.
This report is intended solely for the information of the City of Sebastian, Florida and management, federal
" and state awarding agencies and the State of Florida Office of the Auditor General and is not intended to be
and should not be used by anyone other than these specified parties.
Hoym n,1yDobson & Company, PA
December 13, 2002
"
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