HomeMy WebLinkAbout2003 - 2004For the Fiscal Year
October 1, 2003
through
September 30, 2004
City of Sebastian Municipal Complex and Police Department Expansion
In 2003, the City of Sebastian issued two (2) series of infrastructure sales
surtax revenue bonds in the amounts of $9,500,000 and $2,125,000
respectively, to be used to finance the construction and equipping of a new
city hall complex, renovation and expansion of the police station, renovation
of an existing historic school building (old city hall), and construction of a
city hall park.
The groundbreaking ceremony was held on September 25, 2003. KEG
Architects, West Palm Beach, FL designed a Florida Mediterranean
Vernacular style City Hall and Police Station expansion. The new two-
story, 23,000 square foot City Hall design complements the current City Hall
building, which will be converted for community use. The Police Station is
a one-story 19,000 square foot facility. The new City Council chambers
features a state of the art broadcast and production center.
The total construction period for the new City Hall and Police Department
expansion was approximately 14 months. The Municipal Complex
Dedication Ceremony was held December 8, 2004 at the new city hall
courtyard area. Festivities included an open house for both buildings. Our
city staff as well as various past and present City Officials hosted this gala,
with tours of both buildings provided for staff family and citizens of our
community.
CITY OF
SEBASTIAN, FLORIDA
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Comprehensive Annual Financial Report
For the Year Ended September 30, 2004
CITY COUNCIL
Nathan McCollum .............................. Mayor
Joe Barczyk ......................................... Vice-Mayor
Ray Coniglio ........................................ Councilmember
Mike Heptinstall ................................. Councilmember
Lisanne Monier ................................... Councilmember
Prepared By: Shai Francis, CPA, CGFO
Director of Finance
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TNTRODUCTORY SECTTON
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,
2003
~ Organizational Chart
~ List of Officials
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CITY OF SEBASTIAN, FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
SEPTEMBER 30, 2004
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Title Page ....................................................................................................................................................... i
Table of Contents ........................................................................................................................................... iv
Letter of Transmittal ...................................................................................................................................... vii
Certificate of Achievement for Excellence in Financial Reporting ............................................................... xi
Organizational Chart ...................................................................................................................................... xii
List of Officials .............................................................................................................................................. xiii
FINANCIAL SECTION
Independent Auditor's Report ....................................................................................................................... 3
Management's Discussion and Analysis ....................................................................................................... 5
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets .......................................................................................................................... 15
Statement of Activities ........................................................................................................................... 16
Fund Financial Statements:
Balance Sheet - Governmental Funds .................................................................................................... 17
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds ........................................................................................................................... 18
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities ....................................................................... 19
Statement of Net Assets - Proprietary Funds ......................................................................................... 20
Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds .................... 21
Statement of Cash Flows - Proprietary Funds ....................................................................................... 22
Statement of Fiduciary Net Assets - Fiduciary Funds ............................................................................ 24
Statement of Changes in Fiduciary Net Assets - Fiduciary Fund .......................................................... 25
Notes to Financial Statements ................................................................................................................... 26
Required Supplementary, Information:
Schedule of Reveunes, Expenditures, and Changes in Fund Balances - Budget and
Actual - General Fund ............................................................................................................................ 44
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Discretionary Sales Tax Special Revenue Fund ....................................................................... 45
Notes to the Required Supplementary Information - Budget Comparisons .............................................. 46
Police Officers' Pension Plan - Schedule of Contributions from the Employer and other
Contributing Entities ............................................................................................................................... 47
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds ....................................................................... 50
Combiaing Statement of Revenues, Expenditures, and Changes in Fund Balances - Nomnajor
Governmental Funds .................................................................................................................................. 54
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Community Development Block Grant Fund ..............................................................................57
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Local Option Gas Tax Special Revenue Fund ............................................................................. 58
Schedule of Reveunes, Expenditures, and Changes in Fund Balances - Budget and
Actual - Riverfront Redevelopment Special Revenue Fund ...................................................................... 59
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Recreation Impact Fee Special Revenue Fund ............................................................................ 60
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Stormwater Utility Special Revenue Fund .................................................................................. 61
Schedule of Revenues, Expenditures, and Changes in Fund Balances -Budget and
Actual - Law Enforcement Forfeiture Special Revenue Fund ................................................................... 62
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Page
Schedule &Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - G.R.E.A.T. Program Special Revenue Fund ............................................................................... 62
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Special Assessment Revenue Bonds 1996 Debt Service Fund .................................................... 63
Schedule of Revenues, Expendim. res, and Changes in Fund Balances - Budget and
Actual - Stormwater Utility Revenue Bonds 2003 Debt Service Fund ..................................................... 64
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and
Actual - Discretionary Sales Surtax Revenue Bonds 2003 Debt Service Fund ......................................... 65
Statement of Changes in Assets and Liabilities - Agency Fund .................................................................... 66
Capital Assets Used in ~he Operation of Governmental Funds - Comparative
Schedule by Source .................................................................................................................................... 67
Capital Assets Used in the Operation of Governmental Funds - Schedule
by Function and Activity ........................................................................................................................... 68
Capital Assets Used in the Operation of Governmental Funds - Schedule of Changes
by Function and Activity ........................................................................................................................... 69
STATISTICAL SECTION (Unaudited)
Financial Trends
Net assets by Component - Last Four Fiscal Years .................................................................................. 73
Changes in Net Assets - Last Four Fiscal Years ...................................................................................... 74
Fund Balances, Governmental Funds - Last Ten Fiscal Years ................................................................. 76
Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years .............................................. 78
Program Revenues by Function/Program- Last Four Fiscal Years ......................................................... 80
Revenue Capacity
Tax Revenues by Source, Governmental Funds - Last Ten Fiscal Years ................................................. 81
Property Tax Rates, Direct and Overlapping Governments - Last Ten Fiscal Years ............................... 82
Assessed Valuation and Estimated Tree Values of Taxable Property Last Ten Fiscal Years ............... 84
Principal Taxpayers - Year 2004 and Year 1998 ..................................................................................... 86
Property Tax Levies and Collections - Last Ten Fiscal Years ................................................................. 87
Debt Capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years .................................................................. 88
Computation of Legal Debt Margin - September 30, 2004 ...................................................................... 89
Direct and Overlapping Governmental Activities Debt, General Obligation Bonds -
September 30, 2004 .............................................................................................................................. 89
Ratios of General Bonded Debt Outstanding and Legal Debt Margin - Last Six Fiscal Years ................ 90
Pledged Revenue Coverage - Last Ten Fiscal Years ................................................................................ 92
Economic and Demographic Information
Demographic and Economic Statistics - Last Ten Years ......................................................................... 94
Principal Employers Year 2003 and Five Years Ago ............................................................................ 96
Operating Information
Full-time Equivalent City Government Employees by Function/Program - Last Nine Fiscal Years ....... 97
Operating Indicators by Function/Program- Last Six Fiscal Years ......................................................... 98
Capital Asset Statistics by Function/Program- Last Six Fiscal Years ..................................................... 99
SINGLE AUDIT SECTION
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Governmental Auditing Standards ............................................................................................................. 103
Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program
and on Internal Contcol Over Compliance in Accordance with OMB Circular A-133 .............................. 105
Schedule of Findings and Questioned Costs - Federal Programs and State Projects .................................... 107
Schedule of Expenditures of Federal Awards and State Financial Assistance .............................................. 111
Independent Auditor's Management Letter ................................................................................................... 113
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CI'R Of
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1225 MAIN STREET" SEBASTIAN, FLORIDA 32958
TELEPHONE: (772) 589-5330 · FAX (772) 589-5570
February28, 2005
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, 2004, 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:
1. Introductory section, including a table of contents, this letter of transmittal, the organizational
chart, and list of officials.
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 and economic information,
generally presented for the past 10 years.
4. Single audit section, including our independent auditor's reports and Schedule of Expenditures
of Federal Awards and State Financial Assistance.
The report also complies in ail 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. The City's independent Certified Public
Accountants, Hoyman, Dobson & Company, P.A, has issued an unqualified ("clean') opinion on the City of
Sebastian's financial Statements for the year ended September 30, 2004. The independent auditor's report is
located on page 3 and 4.
REPORTING ENTIT~
The City of Sebastian is located on the central east coast of Florida, "the Treasure Coast", in Indian River
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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 he/she is 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 broader perspective of the specific environment within ~vhich the City of Sebastian operates.
Local Economy
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 6.5% and 9.7% over the
past ten 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.
Strong growth in the City continued and has provided the City funding for a high level of services to City
residents and visitors without increasing the property tax millage rote. Property tax revenues increased 15%
and the assessed value for real property has increased by 21.5%. Construction activity in fiscal year 2004 was
strong with 577 permits being issued for new construction with a value of$112 million. This was an increase
of 35.9% from last year and sets a new record for annual construction value.
Six major annexations ~vere adopted by City Council in fiscal year 2004, adding 484 acres to our city limits.
These properties will provide 1,118 residential single-family lots and 14 acres of commercial
development. There are three additional annexations currently under review. The annexations will have a
significant impact on the property tax base and property tax revenues. In fiscal year 2004, a site plan was
approved for an apartment complex containing 150 dwelling units, which is currently under construction. A
number of other commercial projects have been completed during the fiscal year including, two general retail
buildings, a hotel addition, a bait shop, a contractor trade building, an animal hospital, a mini-warehouse
building, a gym, and several buildings at the airport.
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
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(2) the reliability of financial records for preparing financial statements and maintaining accountability for
assets. The concept of reasonable assurance recognizes that: (1) 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 judgments 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
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, 2004. Appropriations are approved on an annual basis and are subject
to regular 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 Management
In accordance with Section 218.415, Florida Statutes, the City adopted an investment policy, which guides
the investment of City surplus funds. This policy establishes investment objectives, maturity and liquidity
requirements, portfolio composition, risk and diversification requirements, and authorized investments. The
primary objectives of the investment activities are to preserve capital and maintain sufficient liquidity to
meet anticipated cash flow needs. The secondary objective is to obtain competitive returns on the investment
of City's surplus funds. Surplus funds were invested in U.S. agency obligations, the Florida Local
Government Surplus Funds Trust Fund, and Certificate of Deposits. Funds were invested 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 checking account at the end of each banking day and automatically invested in an overnight
repurchase agreement. During fiscal year 2004, City investments had yields ranging from 1.972% to 3.075%.
The average yield of the portfolio as of September 30, 2004 was 2.683%.
Risk Management
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 the Finance and Human Resources departments, respectively. In addition, the City has a
Safety Committee that reviews all workers compensation accidents and provides recommendations for
corrective action.
Retirement Commitments
Police Officers' Pension Plan - There were 34 active and retired members in the Police Officers' Pension
Plan as of September 30, 2004. 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 pension plan's investment portfolios. The City's policy of funding to meet the
actuarially determined requirements was met for 2004. Contributions to the pension plan totaled $353,719,
which includes $174,780 from the City, $72,224 from employees, and $106,715 from the State of Florida.
Other Retirement Plans - The City offers a CWA/ITU Negotiated Plan for non-exempt employees and a 401
Plan for exempt employees. The CWA/ITU Negotiated Plan is a defined benefit plan. The contribution rate
from the City was 9% for fiscal year 2003-2004. Employees do not contribute to the plan. There is a five
years of service credit required for normal pension. The 401 Plan is a defined contribution plan. The
contribution rate from the City was 9% for fiscal year 2003-2004. Employees do not contribute to the plan.
There is no vesting period requirement.
MAJOR INITIATIVES
City Hall Municipal Complex - In 2003, the City of Sebastian issued two (2) series of infrastructure sales
surtax revenue bonds in the amounts of $9,500,000 and $2,125,000 respectively, to be used to finance the
Construction and equipping of a new city hall complex, renovation and expansion of the police station,
renovation of an existing historic school building (old city hall), and construction of a city hall park. The
total construction period for the new City Hall and Police Department expansion was approximately 14
months. The Municipal Complex Dedication Ceremony was held December 8, 2004. The contractors are
presently constructing the city hall park, to be followed by the renovation of the old city hall.
Airport- In 2004, the municipal airport had two (2) major projects underway totaling over $2.6 million. The
first major project is the rehabilitation of Runway 9/27, Phase II, which includes the refurbishment of the
existing pavement and the construction of a new parallel taxiway. The estimated costs for the project are
$1.2 million, with $1.1 million funded through the FAA, $61,500 funded through the FDOT, and $61,500
funded by the airport operating fund. Also under construction is the airport administration building with total
estimated costs of $1.9 million. This facility will house the public works, engineering and airport
administration staff, as well as a police evidence compound. The FDOT is providing $833,500 in assistance
for this project.
Stormwater Drainage Improvements - In 2003, the City of Sebastian issued one (1) series of stormwater
utility revenue bonds in the amount of $5,630,000, to be used for stormwater improvements in accordance
with the City's Stormwater Master Plan. There are eight (8) projects (problem areas) that have been selected
for stormwater drainage problems, ~vith the biggest project involving conversion of a canal to wet detention,
including dredging and seawall modification. Engineers are presently working on the design and permitting.
Louisiana Avenue Improvements - In 2003, the City of Sebastian was awarded a Community Development
Block Grant (CDBG) in the amount of $700,000. This neighborhood revitalization program is being utilized
for the engineering, realigning and reconstruction of Louisiana Avenue. As of 9/30/04, the notice to proceed
for construction to begin was being approved.
REPORTING ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Sebastian for its
comprehensive annual financial report for the fiscal year ended September 30, 2003. The Certificate of
Achievement is a prestigious national award-recognizing conformance with the highest standards for
preparation of state and local government financial reports. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized comprehensive annual
financial report. This report must satisfy both U.S. generally accepted accounting principles and applicable
legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
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.
ff~J~ffmes A. Davis
~./tinterim City Manager
Shai L. Francis, CPA, CGFO
Director of Finance
Certificate of
Achievement
for Excellence
~n Financial
Reporting
Presented to
City of Sebastian,
Florida
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2003
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
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CITY OF SEBASTIAN, FLORIDA
ORGANIZATIONAL CHART
CITY I
CLERK
POLICE i
ADMINISTRATION I
SCHOOL RESOURCE I
UNIFORM
I
COMMUNITY I
POLICING
ENFORCEMENT
DETECTIVE I
SUPPORT I
SERVICES
DISPATCH I
PROFESSIONAL
STANDARDS
I CITIZENS OF I
SEBASTIAN
[ CITY COUNCIL I
BOARDS & I
COMMISSIONS
CITY
MANAGER
CITY
ATTORNEY
MANAGEMENT
INFORMATION
SYSTEM
HUMAN RESOURCES I
ENGINEERING
STORMWATER I
GROWTH MANAGEMENTI
BUILDING DEPARTMENT i
GOLF COURSE
AIRPORT
GENERAL SERVICES
ADMINISTRATION
CENTRAL GARAGE
PUBLIC WORKS i
I
ROADS & DRAINAGE
I
MAINTENANCE
PARKS &
RECREATION
CEMETERY
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CITY OF SEBASTIAN, FLORIDA
CITY OFFICIALS
Interim City Manager
City Clerk
City Attorney
DEPARTMENT HEADS:
Police Chief
Director of Finance
City Engineer
Public Works Director
Growth Management Director
Building Director
Human Resources Director
Golf Course Manager
Airport Manager
JAMES A. DAVIS
SALLY A. MAIO, CMC
RICH STRINGER
JAMES A. DAVIS
SHAI L. FRANCIS, CPA, CGFO
DAVID W. FISHER, P.E.
TERRY HILL
TRACY HASS
WAYNE ESELT1NE
JAMES SEXTON
GREG GARDNER
JASON MILEWSKI
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FINANCIAL SECTION
This section contains the following subsections:
~ independent Auditor's Report
~ IVlanagement's Discussion and Analysis
~ Government-wide Financial Statements
~ Fund Financial Statements
~ Notes to Financial Statements
~ Required Supplementary Information
~ Combining and Individual Fund Statements
and Schedules
ClT~O~
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HOYMAN, DOBSON & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
215 8aytree Drive, Melbourne, Florida 32940, 321 255 0088, Fax 321 255>8648, vvww. hoyman.com
Independent Auditor's Report
Honorable Mayor end Members of City Council
City of Sebastian
Sebastian, Florida
Charles W Harman, ]I
Barbara J Oswah
Thomas L Kirk
Karen E Kilkland
Deborah A B'aoley
DIRECTOR EMERFUS
Roger W Dobson
Eugene K Bieming
We have audited the accompanying fmancial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Sebastien, Flotida,
as of and for the year ended September 30, 2004, which collectively comprise the City's basic £mancial
statements as listed in the table of contents. These £mencial statements are the responsibility of the City of
Sebastian, Flotida's, management. Our responsibility is to express opinions on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statemenls 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 end
significent 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 financial statements referred to above present fairly, in all material respects, the
respective finencial position of the governmental activities, the business-type activities, each major fund,
end the aggregate remaining fund information of the City of Sebastian, Flotida, as of September 30, 2004,
end the respective changes in financial position end 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 February 23,
2005, on our consideration of the City of Sebastian, Flotida's internal control over financial reporting end
our tests of its complience with certain provisions of laws, regulations, contracts and grant agreements end
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, end not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit
The management's discussion and analysis on pages 5-14 end the required supplementary information on
pages 4447 are not a required part of the basic financial statements but are supplementary information
required by accounting principles generally accepted in the United States of America. We have applied
certain limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion on it.
3
· American instilut~ of Certif, ed Public Accountants · Floridu Inslitule of Cectlf~ed Public Accouatal~ts · SEC Practice Secliol, of the A ! 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 introductory section, combining
and individual fund statements and 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 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 federal awards and state financial assistance is presented for
purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550 Rules of the
Auditor General, and is also not a required part of the basic financial statements of the City of Sebastian,
Florida~ Such information has been subjected to the auditing procedures applied in the audit of the basic
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, P.A.
February 23, 2005
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 15).
HIGHLIGHTS
Financial Highlights
· The assets of the City exceeded its liabilities at the close of the fiscal year 2004 by $34,126,822 (net
assets). Of this amount, $8,883,780 (unrestricted net assets) may be used to meet the government's on
going obligations to citizens and creditors.
· The city's total net assets increased by $5,568,351. The increase is mainly attributable to increases in tax
revenues, building permit fees, and airport grants.
· As of the close of current fiscal year, the City's governmental funds reported combined ending fund
balance of 19,473,662, an increase of $1,789,313 in comparison with the prior year. Approximately 65%
of this amount, $12,566,642, is available for spending at the City's discretion (unreserved, undesignated
fund balance).
· At the end of the current fiscal year, unreserved, undesignated fund balance for the general fund was
$2,416,042, or a 14% increase from prior year general fund unreserved and undesignated fund balance.
The key factor in this increase was the increase in tax revenue collections.
The City's total debt increased by $6,866,468 (44%) during the current fiscal year. The key factor in this
increase was the issuance of $2,125,000 Infrastructure Sales Surtax Revenue Bonds, Series 2003A and
$5,630,000 Stormwater Utility Revenue Bonds, Series 2003.
USING THIS ANNUAL REPORT
The annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of
Activities (on pages 15 and 16) provide information about the activities of the City as a whole and present a
longer-term view of the City's finances. Fund financial statements begin on page 17. For governmental
activities, these statements tell how these services were financed in the short term as well as what remains for
future spending. Fund financial statements also report the City's operations in more detail by providing
information about the City's most significant funds. The remaining statements provide financial information
about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the
government.
Reporting the City as a Whole
Our analysis of the City as a whole begins on page 15. One of the most important questions asked about the
City's finances is, "Is the City as a whole better off or worse off as a result of the year's activities?" The
Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its
activities in a way that helps answer this question. These statements include all assets and liabilities using the
accrual basis of accounting, which is similar to the accounting used in most private-sector companies. All of the
current year's revenues and expenses are taken into account regardless of when cash is received or paid.
5
These two statements report the City's net assets and changes in them. You can think of the City's net assets -
the difference between assets and liabilities - as one way to measure the City's financial health, or financial
position. Over time, increases or decreases in the City's net assets, is one indicator of whether its financial
health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as
changes in the City's property tax base and the condition of the City's roads, to assess the overall health of the
City.
In the Statement of Net Assets and the Statement of Activities, we divide the City into two kinds of activities:
Governmental activities - Most of the City's basic services are reported here, including the police, public
works, parks and recreation, and general administration. 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.
Fund Financial Statements
Our analysis of the City's major funds begins on page 17. The fund financial statements provide detailed
information about the most significant funds - not the City as a whole. Some funds are required to be established
by State law and by bond covenants. However, the City Council establishes many other funds to help it control
and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain
taxes, grants, and other money (like the local option gas tax and infrastructure sales surtax (a.k.a. Discretionary
Sales Tax)).
Governmental Funds
Most of the City's basic services are reported in governmental funds, which focus on how money flows into and
out of those funds and the balances left at year-end that are available for spending. These funds are reported using
an accounting method called modified accrual accounting, which measures cash and all other financial assets that
can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the
City's general government operations and the basic services it provides. Governmental fund information helps
you determine whether there are more or fewer financial resources that can be spent in the near future to finance
the City's programs. We describe the relationship (or differences) between governmental activities (reported in
the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliations at the
bottom of the fund financial statements.
The City maintains seventeen individual govemmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes
in fund balances for the general fund, discretionary sales tax special revenue fund, stormwater utility
improvements capital project fired, and public facility improvements capital project fund, all of which are
considered to be major funds. Data from the other thirteen governmental funds are combined into a single,
aggregated presentation. Individual fund data for each nonmajor governmental fund is provided in the form of
combining statements begins on page 48.
Annual budgets are adopted for all governmental funds except the capital project funds, which are approved on a
"life of the project basis", and the permanent fund, which is not budgeted. The budgetary comparison statements
have been provided for all governmental funds except capital project funds to demonstrate compliance with the
budget.
The basic governmental fund financial statements can be found on pages 17-19 of this report.
6
Proprietary Funds
When the City charges customers for the services it provides - whether to outside customers or to other units of
the City - these services are generally reported in proprietary funds. Proprietary funds are reported in the same
way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the
City's enterprise funds (a component of proprietary funds) are the same as the business-type activities we report
in the government-wide statements but provide more detail and additional information, such as cash flows, for
proprietary funds.
The basic proprietary fund £mancial statements can be found on page 20-23 of this report.
Fiduciary Funds
The City is the trustee, or fiduciary, for the Police Officers' Pension Plan. The City's fiduciary activities are
reported in separate Statements of Fiduciary Net Assets and Changes in Fiduciary Net Assets on page 24 and 25.
We exclude these activities from the City's other f'mancial statements because the City cannot use these assets to
finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for
their intended purposes.
The City holds deposits for various individuals and businesses for contract performance that are then returned
when the contract has been completed. These deposits are accounted for in an Agency fund, where assets equal
liabilities.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial stataments can be found on pages 26-
43 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary infom~ation concerning the City's major funds budget and actual comparison and progress in
funding its obligation to provide pension benefits to its employees. Required supplementary information can be
found on pages 44-47 of this report.
THE CITY AS A WHOLE
Financial Analysis of the City as a Whole
The City's combined net assets increased $5.5 million from $28.6 million to $34.1 million or 19%. Looking at
the net assets and net revenues of the governmental and business-type activities, the increase occurred in both the
governmental-type activities and the business-type activities. Our analysis focuses on net assets (Table 1) and
changes in net assets (Table 2) of the City's governmental and business-type activities.
GOVERNMENT-YVIDE STATEM~ENTS
Statement of Net Assets
The following table reflects the condensed Statements of Net Assets:
7
Table 1
Statements of Net Assets
as of September 30, 2004 and 2003
On thousands)
Governmental Activities Business-type Activities Total Primary Government
2004 2003 2004 2003 2004 2003
Current and other assets $ 22,069 $ 19,393 $ 3,079 $ 2,254 $ 25,148 $ 21,647
Capital assets 28,114 20,243 6,105 3,608 34,219 23,851
Total assets $ 50,183 $ 39,636 $ 9,184 $ 5,862 $ 59,367 $ 45,498
Non-current liabilities $ 19,561 $ 12,505 $ 1,663 S 1,832 $ 21,224 $ 14,337
Other liabilities 2,979 2,095 1,037 507 4,016 2,602
Total liabilities $ 22,540 $ 14,600 $ 2,700 $ 2,339 $ 25,240 $ 16,939
Invested in capital assets,
net of related debt $ 16,412 $ 16,339 $ 4,265 $ 1,546 $ 20,677 $ 17,885
Restricted 4,060 3,236 506 505 4,566 3,741
Unrestricted 7,171 5,461 1,713 1,472 8,884 6,933
Total net assets $ 27,643 $ 25,036 $ 6,484 $ 3,523 $ 34,127 $ 28,559
For more detail information see the Statement of Net Assets on page 15.
Total net assets of the governmental activities increased from $25.036 million to $27.643 million. Total net assets
for business-type activities increased fi:om $3.523 million to $6.484 million.
The increase in governmental activities current and other assets and long-term and current liabilities is primarily
due to the increase in tax revenue collections, building permit fees and issuance of the Series 2003A Infrastructure
Sales Surtax Revenue Bonds ($2.125 million) and Series 2003 Stormwater Utility Revenue Bonds. ($5.63
million). The bond proceeds from the Infi:astmcture Sales Surtax Revenue Bonds, Series 2003A will be used to
pay for construction of the new city hall complex, renovation and expansion of the police station, renovation of
the old city hall, and construction of a city hall park. The bond proceeds from the Stormwater Utility Revenue
Bonds, Series 2003 will be used to fund stormwater related capital projects in accordance with the City's
stormwater master plan. Governmental activities capital assets increased due to ongoing road paving, public
facilities, transportation, and stormwater and drainage projects.
The increase in net assets of the City's business-type activities is primarily due to capital grants from the Federal
Aviation Administration and the Florida Department of Transportation for the City's municipal airport. Net assets
- invested in capital assets, increased due to capitalization of the City's ongoing airport projects.
The following table shows the revenue and expenses of the total primary government.
Table 2
Changes in Net Assets
For the Fiscal Years Ended September 30, 2004 and 2003
(in thousands)
REVENUES
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Other taxes
Intergovernmental
Other
Total revenues
EXPENSES
General government
Public safety
Physical environment
Transportation
Economic environment
Culture and recreation
Golf Course
Airport
Interest and fiscal charges
Total expenses
Change in net assets before transfers
Transfers
Increase in net assets
Net assets - October 1, 2003
Net assets - September 30, 2004
Governmental Business-type Total Primary
Activities Activities Government
2004 2003 2004 2003 2004 2003
$ 2,936 $ 1,919 $ 1,850 $ 1,546 $ 4,786 $ 3,465
1,145 921 68 1,213 921
1,354 2,566 2,451 1,149 3,805 3,715
3,421 2,944 3,421 2,944
4,035 1,781 4,035 1,781
2,493 2,280 2,493 2,280
786 321 24 31 810 352
16,170 12,732 4,393 2,726 20,563 15,458
2,415 1,621
4,502 3,392
1,279 1,920
3,289 2,401
86 166
824 748
1,527 1,363
351 316
2~15 1,621
4,502 3,392
1,279 1,920
3,289 2,401
86 166
824 748
1,527 1,363
351 316
722 312
722 312
13,117 10,560 1,878 1,679 14,995 12,239
3,053 2,172 2,515 1,047 5,568 3,219
(446) (534) 446 534
2,607 1,638 2,961 1,581 5,568 3,219
25,036 23,398 3,523 1,942 28,559 25,340
$ 27,643 $ 25,036 $ 6,484 $ 3,523 $ 34,127 $ 28,559
Overall the total revenues increased $5.105 million fi:om the previous year. The total cost of all programs
increased by 22.5% ($2.756 million). Our analysis below separately considers the operations of governmental
and business-type activities.
Governmental Activities
Governmental activities revenues exceed expenses by $3.053 million. Total revenues increased approximately
$3,438 million from the previous year. Increases in property values generated an increase in property taxes. The
strong local economy plus population growth of the City contributed to increases in charges for services, sales
taxes and state shared revenues. The increase also includes the anticipated FEMA reimbursements and property
insurance reimbursements for the two major hurricanes, which impacted the City during the last month of
operations. Total expenses increased $2.557 million from the previous year. Increased spending during the last
month of operations due to the hurricanes for public safety (law enforcement) and transportation is primarily
responsible for the increase in expenses.
9
The following is a graphic illustration of the comparison for governmental activities revenue and expenses.
Governmental Activities for Fiscal Year 2004 and Fiscal Year 2003
5,000
4,500
4,000
3,500
3,000
2,500
2,000
500
Revenue/Expense types
Im ZOO4 120031
Business-type Activities
Revenues of the City's business-type activities (see Table 2) increased by 61% ($4.393 million in fiscal year 2004
compared to $2.726 million in fiscal year 2003) and expenses rose 11.85%. The City's Municipal Airport enjoys a
continued interest by the Florida Department of Transportation-Aviation Section to upgrade the alrporl facilities
as evidenced by repeated support via grant funding. Capital contributions increased by 113%, which eunstitutes a
major part of the program revenue increases.
Following is a graphic comparison of the City's business-type activities.
Business-Type Activities Comparison
2,500
2,000
1,500
5O0
i]2004 12003 ]
10
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable recourses. Such information is useful in assessing the City's financing requirements. In
particular, unreserved fund balance may serve as a useful measure of a government's net resources available for
spending at the end of the fiscal year.
As the City completed the fiscal year, its governmental funds (as presented in the balance sheet on page 17)
reported a combined fund balance of $19.5 million, which is an increase of $1.8 million over the prior year of
$17.7 million. Approximately 64.6% of this total amount ($12.6 million) constitutes unreserved, undesignated
fund balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved
or designated to indicate that it is not available for new spending because it has already been comrmtted 1) to
liquidate contracts and purchase orders of the prior period ($3.246,083), 2) to pay debt service ($468,744), 3) to
fund the advances from general fund to airport capital project ($1,000,000) 4) to fund the building code
enforcement reserve ($802,490), 5) to generate income to pay for the perpetual care of the municipal cemetery
($542,999), or 6) for a variety of other restricted purposes ($846,704).
The general fund is the chief operating fund of the City. At the end of the fiscal year, unreserved, undesignated
fund balance of the general fund was $2,416,042, while total fund balance reached $5,114,892. As a measure of
the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to
total fund expenditures. Unreserved, undesignated fund balance represents 23 percent of total general fund
expenditures, while total fund balance represents 49 percent of that same amount.
The fund balance of the City's general fund increased by $1,233,042 during the current fiscal year. Key factors in
this growth are as follows:
· Licenses and pernxits revenues increased significantly by $989,823, as a result of annexations and area
growth.
· Tax revenues increased by $491,468, as a result of property value and population increase.
The discretionary sales tax revenue special revenue fund has a total fund balance of $392,988, all of which is
unreserved and undesignated. The slight increase of the total fund balance from prior year ($330,656) is due to an
increase in discretionary sales surtax collection, which is population driven.
The stormwater utility improvements capital project fund has a total fund balance of $5,359,493. 15% of the
total fund balance is reserved for encumbrances. The remaining 85% is available for spending at the City's
discretion. The significant increase of the total fund balance from prior year ($19,793) is due to the debt proceeds
of the Stormwater Utihty Revenue Bonds, Series 2003.
The public facilities improvements capital project fund has a total fund balance of $2,364,545.94% of the total
fund balance is reserved for encumbrances. The remaining 6% is available for spending at the City's discretion.
The significant decrease of the total fund balance from prior year ($8,592,963) is due to the completion of the
municipal complex project.
11
Proprietary Funds
The City's proprietary funds provide the same type of information found in the government-wide financial
statements, but in more detail.
Unrestricted net assets of the golf course fund at the end of the fiscal year amounted to $661,077, and those for
the airport fund amounted to $1,051,580. The total growth in unrestricted net assets for both funds was $140,330
and $100,870, respectively. Other factors concerning the finances of these two funds have already been addressed
in the discussion of the City's business-type activities.
General Fund Budgetary Highlights
Over the course of the fiscal year, the City Council revised the City budget four times. These budget amendments
fall into two categories. The first category includes amendments and supplemental appropriations that were
approved shortly after the beginning of the year and reflect the actual beginning balances (versus the amounts
originally estimated in July 2003). The second category includes the changes that the Council made during the
year to take into account the City's staff restructuring efforts. During the fiscal year, the City amended the
general fund budget in the amount of $1,483,943 for tax revenues, encumbrances carried forward, and
intergovernmental revenues. Following are the main components of the increase:
· $979,628 supplemental appropriation to the public works department and police department for the debris
clean up, property damages, and emergency overtime costs associated with the two major hurricanes
impacted the City during the last month of it's operations;
· $136,414 supplemental appropriation to adequately fund management information system expenditures
and workers' comp insurance premiums; and
· $365,612 supplemental appropriation to all general fund departments for increase in insurance premiums
as well as the encumbered amount carried forward from the prior fiscal year.
The increase is possible because of additional anticipated revenues. Those revenues included grant revenues
associated with FEMA and the State for reimbursement of hurricane costs ($690,573), insurance reimbursements
associated with hurricane damages ($281,348), an increase in actual collection of property taxes ($78,949), an
increase in collection of the building permit fees ($53,369), and the encumbered amount carried forward from the
prior fiscal year ($281,860).
During the fiscal year, total general fund actual revenues exceeded f'mal amended budgetary estimates and total
general fund actual expenditures were less than the final amended budgetary estimates, therefore, eliminating the
need to draw upon existing fund balance.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2004 the City had $48,096,853 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 $11,416,042, or 31%, over last year.
The following table illustrates the changes in capital assets. See page 34 and page 35 in the notes to the financial
statements for detailed changes in capital assets.
12
Table 3
Land
Buildings
Improvements
Equipment
Infrastructure
Construction-in
Progress
Totals
Governmental Business-type
Activities Activities Totals
2004 2003 2004 2003 2004 2003
$ 4,653,603 $ 4,653,603 $ 9,060 $ 9,060 $ 4,662,663 $ 4,662,663
2,194,247 2,591,420 1,554,008 397,759 3,748,255 2,989,179
2,431,270 2,310,380 710,405 797,517 3,141,675 3,107,897
5,186,908 5,049,563 560,111 499,522 5,747,019 5,549,085
15,766,358 15,021,381 2,547,667 2,374,021 18,314,025 17,395,402
9,769,145 1,634,161 2,714,071 1,342,424 12,483,216 2,976,585
$ 40,001,531 $ 31,260,508 $ 8,095,322 $ 5,420,303 $ 48,096,853 $ 36,680,811
Governmental activities had the following major increases during the fiscal year:
An increase in construction in progress mainly due to the new City Hall Complex project and Police
Department expansion.
Business-t~e activities had the following major increases during the fiscal year: · An increase in construction in progress primarily due to the rehab of Runway 9-27 phase II and airport
Access Road projects.
· An increase in building primarily due to the completion of the airport T-Hangar project.
Debt
At September 30, 2004, the City had $21,265,049 in bonds, notes and capital leases outstanding versus
$14,718,499 at September 30, 2003 - an increase of 45% - as shown in the following table:
Table 4
Governmental Business-type
Activities Activities Totals
2004 2003 2004 2003 2004 2003
Special assessment debt with
govemmental comnzitmcnt $ $ 77,615
Infrastructure sales surtax revenue
bonds, Series 2003 9,015,000 9,500,000
Infrastructure sales surtax revenue
bonds, Series 2003A 2,125,000
Stormwater utility revenue bonds,
Series 2003 5,525,000
Notes payable (backed by local
option gas tax) 2,209,745 2,406,028
Capital lease obligation (backed
by City) 550,451 672,528
Recreational facilities
improvements and refunding
revenue bonds, series 2001
Totals
$ $ 77,615
9,015,000 9,500,000
2,125,000
5,525,000
2,209,745 2,406,028
550,451 672,528
1,839,853 2,062,328 1,839,853 2,062,328
$ 19,425,196 $ 12,656,171 $ 1,839,853 S 2,062,328 $ 21,265,049 $ 14,718,499
The increase in debt is solely atthbutable to the issuance of Infrastructure Sales Surtax Revenue Bonds, Series
2003A and Stormwater Utility Revenue Bonds, Series 2003. The Infrastructure Sales Surtax Revenue Bonds,
13
Series 2003A ($2,125,000) debt is to finance the additional construction costs of the new city hall complex, police
department expansion, old city hall renovation and construction of a city hall park. Since the Infrastructure Sales
Surtax Revenue Bonds, Series 2003A are insured by AAA rated insurance agencies, the bonds are rated AAA,
which is the highest rating given by rating agencies. The Stormwater Utility Revenue Bonds, Series 2003
($5,630,000) debt is to finance the City's stormwater projects in accordance with the City's stormwater master
plan. Since the Stormwater Utility Revenue Bonds, Series 2003 are insured by AAA rated insurance agencies, the
bonds are rated AAA, which is the highest rating given by rating agencies.
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.
Additional information on the City's long4erm debt can be found on pages 37 through 39 in the notes to the
financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The City's elected and appointed officials considered many factors when setting the fiscal year 2005 budget, tax
rates, and fees that will be charged for the business-type activities. One of those factors is the economy.
Sebastian's local economy consists largely of retail and service industries. Less than one percent is devoted to
industrial activities. Construction of new homes is the largest single business in the area. Some of the largest
retail stores include Publix Supermarket and Wal-Mart Stores, Inc.® The Indian River County unemployment rate
in 2004 was 7.6% up slightly from 7.5% in the previous year and down from a high of 11% in 1994. This
indicates that business growth in the area remains strong as evidenced by the construction of several new
commercial establishments in the area. Still, employment in the county fluctuates seasonally due to farm workers.
Continued stability and the increase of annual residential building permits issued provides a trend for steady
economic development in the area.
These indicators were taken into account when adopting the General Fund budget for fiscal year 2005. Amounts
available for appropriation in the General Fund budget are $11,121,267, an increase of 3.4% from the final fiscal
year 2004 budget of $10,749,985. This is mainly due to increases in estimated property taxes and public services
taxes to be received due to growth. The City will use these increases in revenues to finance programs we
currently offer, as well as, the effect that we expect inflation to have on program costs. Budgeted expenditures are
expected to increase 3.45%, to $11,121,267 in fiscal year 2005, from $10,749,985 in fiscal year 2004. This is due
to the significant health insurance premium increases. In addition, the police PBA union contract negotiations that
~vere not finalized at the end of September, had a significant impact on personnel cost projections, but were not
included in the FY 2004-2005 General Fund adopted budget. If these estimates are realized, we anticipate the
General Fund fiscal year 2005 result will be moderate.
As for the City's business-type activities, we expect the fiscal year 2005 results will also be moderate based upon
current and future initiatives:
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 are anticipated to increase
revenue 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, investors and creditors with a
general overview of the City's finances and to show the City's accountability for the money it receives. If you
have questions about this report or need additional information, contact the Finance Department at City of
Sebastian, 1225 Main Street, Sebastian, Florida 32958.
14
City of Sebastian, Florida
Statement of Net Assets
September 30, 2004
ASSETS
Cash and cash equivalents
Investments
Receivables
Special assessment receivable
Internal balances
Prepaid items
Inventory
Restricted assets:
Temporarily restricted:
Cash and cash equivalents
Investments
Permanently restricted:
Investments
Overfunded pension costs
Deferred charges
Capital assets not being depreciated:
Land
Construction in progress
Capital assets (net of accumulated depreciation):
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total assets
LIABILITIES
Accounts payable and other current
liabilities
Matured bonds payable
Accrued interest payable
Due to other government
Deferred revenues
Rent concession liability
Non-current liabilities:
Due within one year
Due in more than one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital projects
Debt service
Road projects
Perpetual care:
Expendable
Nonexpendable
Building code enforcement
Other purposes
Unrestricted
Total net assets
Governmental Business-type
Activities Activities Total
$ 552,009 $ 70,558 S 622,567
8,579,364 1,530,153 10,109,517
2,019,257 897,775 2,917,032
14,872 14,872
19,906 (19,906)
6,443 1,575 8,018
33,572 9,189 42,761
49,555 49,555
9,613,612 506,006 10,119,618
472,313 472,313
122,006 122,006
586,667 83,382 670,049
4,653,603 9,060 4,662,663
9,769,145 2,714,071 12,483,216
1,143,489 1,273,972 2,417,461
1,605,023 539,927 2,144,950
1,873,369 156,628 2,029,997
9,068,931 1,411,156 10,480,087
50,183,136 9,183,546 59,366,682
1,722,288 707,174 2,429,462
885,000 240,000 1,125,000
299,923 38,145 338,068
10,372 1,188 11,560
61,197 20,598 81,795
30,000 30,000
411,510 2,129 413,639
19,149,648 1,660,688 20,810,336
22,539,938 2,699,922 25,239,860
16,412,401 4,264,961 20,677,362
1,275,824 1,275,824
468,744 316,690 785,434
956,296 956,296
70,686 70,686
472,313 472,313
802,490 802,490
13,321 189,316 202,637
7,171,123 1,712,657 8,883,780
$ 27,643,198 $ 6,483,624 $ 34,126,822
The accompanying notes to financial statements are an integral part of this financial statement.
15
General
City of Sebastian, Florida
Balance Sheet
Governmental Funds
September 30, 2004
Stormwater
Discretionary Utility
Sales Tax
ASSETS
Cash and cash equivalents $ 81,796 $
Investments 4,568,314
Accounts receivables 491,316
Special assessments receivable 14,872
Due from other fimds 9,778
Due from other governments 1,117,849
Interest receivable 21,497
Inventory 33,572
Prepaid items 6,443
Advance to other fimds 19,906
Total assets
Public Other Total
Facilities Governmental Governmental
Improvements Improvements Funds Funds
19,i77 $ 15,971 $ 7,310 $ 477,310 $ 601,564
177,413 5,346,203 2,843,901 5,729,458 18,665,289
4,393 495,709
14,872
9,778
196,391 92,237 1,406,477
7 60,963 27,329 7,275 117,071
33,572
6,443
19,906
$ 6,365,343 $ 392,988 $ 5,423,137 $ 2,882,933 $ 6,306,280 $ 21,370,681
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 1,164,010
Retathage payable
Due to other governments
Advance frmn other funds 10,372
Deferred revenues 76,069
Total liabilities
Fund balances:
Reserved for:
Encumbrances 62,977
Advance to other funds 19,906
Debt service
Capital projects 980,094
Property and casualty 100,000
Cemetery care
Law enforcement
Emergency services 350,000
Equipment replacement 378,243
Building code enforcement 802,490
Unreserved:
Designated for employee events 5,140
Undesignated, reported in:
General fund
Special revenue fimds
Capital project funds
Total fund balances
Total liabilities and fund balances S
$ $ 63,644 $ 229,635 $ 54,758 $ 1,512,047
288,753 288,753
9,778 9,778
10,372
76,069
1,250,451 0 63,644 518,388 64,536 1,897,019
814,541 2,213,095
155,470 3,246~83
19,906
468,744 468,744
980,094
100,000
542,999 542,999
13,321 13,321
350,000
378,243
802,490
5,140
2,416,042 2,416,042
392,988 2,962,241 3,355,229
4,544,952 151,450 2,098,969 6,795,371
5,114,892 392,988 5,359,493 2,364,545 6,241,744 19,473,662
6,365,343 $ 392,988 $ 5,423,137 $ 2,882,933 $ 6,306,280
Amounts ~eported lbr governmental activities in the statement of net assets are different bemuse:
Capital assets used in governmental activities are not financial resources, therefore, are not reported in the funds. 28,113,560
Negative net pension obligation resulting from o v'er funding of the police officers' pension plan. 122,006
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds. (19,780,979)
Accrued long term debt interest expenses are not f'mancial uses, them/ore, are not reported in the funds. (299,923)
Special assessment receivables are not financial resources in the current period, therefore, are reported as deferred revenues. 14,872
Net assets o f governmental aetiviiles $ 27,643,198
The accompanying notes to fmancial statements are an integral part oft[ds financial statement.
17
City of Sebastian, Florida
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2004
Taxes:
Property
Public utility
Sales
Motor fuel
Franchise fees
Licenses and perm/ts
Intergovernmental
Impact fees
Charges for services
Fines
Special assessments
Investment earn/rigs
Contributions and donations
Other revenue
Total revenues
Stormwater Public
Discretionary Utility Facilities
General Sales Tax Improvements Improvements
Other Total
Governmental Governmental
Funds Funds
$ 3,169,976 $
1,854,632
2,180,913
770,600
1,867,920
2,844,245
118,965
108,788
87,650 15,976
16,344
353,892
$ $ $ 250,995 $
101,620 117,601
722,828
271,275
557,700
843,712
10,130
28,424
75,311
6,816
1,216
3,420,971
1,854,632
2,180,913
722,828
770,600
1,867,920
3,115,520
557,700
962,677
118,918
28,424
398,158
23,I60
355,108
I1,193,012 2,196,889 101,620 117,601 2,768,407 16,377,529
EXPENDITURES:
Current:
General government
Public safety
Physical envkoament
Transportation
Economic environment
Culture and recreation
Debt Service: Principal
Interest and fiscal charges
Capital projects
Total expenditures
2,269,504
4,138,381
978,843
2,280,756
769,042
152 2,269,656
21,238 4,159,619
164,062 1,142,905
633,179 2,913,935
86,041 86,041
2,177 771,219
985,974 985,974
887,564 887,564
168,880 8,352,519 160,840 8,682,239
10,436,526 168,880 8,352,519 2,941,227 21,899,152
756,486 2,196,889 (67,260) (8,234,918) (172,820) (5,521,623)
428,140 6,960 6,500 2,304,154 2,745,754
(6,500) (2,134,557) (1,050,541) (3,191,598)
5,400,000 2,000,000 356,780 7,756,780
421,640 (2,134,557) 5,406,960 2,006,500 1,610,393 7,310,936
1,178,126 62,332 5,339,700 (6,228,418) 1,437,573 1,789,313
3,881,850 330,656 19,793 8,592,963 4,859,087 17,684,349
54,916 (54,916)
$ 5,114,892 $ 392,988 $ 5,359,493 $ 2,364,545 $ 6,241,744 $ 19,473,662
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Debt proceeds
Total other fmanalng sources (uses)
Net changes in fund balances
Fund balzmces - begirming
Residual fund equity transfer
Fund balances - ending
The accompanying notes to financial statements are an integral part of this financial statement.
18
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, 2004
Net change in fund balances - total governmental funds
Amount reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlay as expenditures. However, in the statement of
activities, the cost of those assets is allocated over their estimated useful lives as depreciation
expense.
Governmental funds only report the disposal of assets to the extent proceeds are received fi'om
the sale. In the statement of activities, a gain or loss is reported for each disposal.
Overfunded pension conufibufions are reported as expenditures in the fund financial statements
and recorded as a net pension asset on the statement of net assets.
Debt proceeds provide current financial resources to governmental funds, but debt increases
long-term liabilities in the statement of net assets.
Repayment of bund principal, notes principal, and capital lease principal are expenditures in
lite governmental funds, but the payment reduces long-term liabilities in the statement of net
assets.
Some expenses reported in the statement of activities do not require the use of current financial
resources, therefore, are not reported as expenditures in the governmental funds.
Some revenues reported in the governmental funds have been reco~m~i/ed as revenues in the
prior fiscal year in the statement of activities.
Governmental funds report non-exchange transactions when the applicable eligibility
requ/rements have been met and resources are available. However, in the statement of
activities, non-exchange transactions are recognized when the eligibility requirements are met.
Change in net assets of governmental activities
1,789,313
8,164,720
(294,186)
11,174
(7,424,744)
985,974
(395,369)
(30,500)
(198,896)
$ 2,607,486
The accompanying notes to financial statements are an integral part of this financial statement.
19
ASSETS
Current assets:
Cash and cash equivalents
Investments
Restricted cash, cash equivalents and
investments:
Revenue bond covenant accounts
Accounts receivable
Due from other governments
Interest receivable
Inventory
Prepaid expenses
Total current assets
Noneurrent assets:
Deferred charges
Capital assets:
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in process
Less accumulated depreciation
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Advance from other fired
Due to other governments
Deferred revenues
Compensated absences
Retainage payable
Mamred interest payable
Matured bonds payable
Total current liabilities
Non-current liabilities:
Compensated absences
Rent concession liability
Bonds payable (net of unamortized premium
and deferred amount on refunding)
Total non-current liabilities
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt
Reslxicted for:
Debt service
Other purposes
Unrestricted
Total net assets
City of Sebastian, Florida
Statement of Net Assets
Proprietary Funds
September 30, 2004
Enterprise Funds
Golf Course Airport Totals
$ 19,030 $ 51,528 $ 70,558
458,631 1,071,522 1,530,153
506,006 506,006
165,709 11,924 177,633
67,576 652,563 720,139
1 2 3
9,189 9,189
1,575 1,575
1,227,717 1,787,539 3,015,256
83,382 83,382
9,060 9,060
333,189 1,220,820 1,554,009
147,406 562,999 710,405
316,633 243,477 560,110
1,616,948 930,719 2,547,667
2,714,071 2,714,071
(1,451,772) (538,736) (1,990,508)
1,045,786 5,142,410 6,188,196
2,273,503 6,929,949 9,203,452
18,337 633,469 651,806
19,906 19,906
858 330 1,188
13,779 6,819 20,598
548 1,581 2,129
55,368 55,368
38,145 38,145
240,000 240,000
311,667 717,473 1,029,140
42,349 18486 60,835
30,000 30,000
1,599,853 1,599,853
1,672,202 18,486 1,690,688
1,983,869 735,959 2,719,828
(877,449) 5,142,410 4,264,961
316,690 316,690
189,316 189,316
661,077 1,051,580 1,712,657
$ 289,634 $ 6,193,990 $ 6,483,624
The accompanying notes to financial statements are an integral part of this financial statement.
20
City of Sebastian, Florida
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
For the Year Ended September 30, 2004
Operating revenues:
Charges for fees and rents:
Golf course fees pledged as
security for revenue bonds
Rents
Other revenue
Total operating revenues
Operating expenses:
Salaries, wages and employee benefits
Contractual services, materials and supplies
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Interest income
Interest income pledged as security
for revenue bonds
Intergovernmental
Gain on disposal of fixed assets
Interest expense
Bond amortization expense
Loss on disposal of fixed assets
Total nonoperating revenues (expenses)
Income before capital contribution
and transfers
Capital contributions
Transfers in
Change in net assets
Total net assets - beginning
Total net assets - ending
Enterprise Funds
Golf Course Airport Totals
$ 1,447,314 $ $ 1,447,314
26,959 183,164 210,123
174,035 18,726 192,761
1,648,308 201,890 1,850,198
332,396 148,300 480,696
930,844 76,022 1,006,866
111,347 126,353 237,700
1,374,587 350,675 1,725,262
273,721 (148,785) 124,936
11,091 11,091
12,683 12,683
67,576 67,576
261 261
(83,815) (83,815)
(13,897) (13,897)
(54,752) (274) (55,026)
(71,944) 10,817 (61,127)
201,777 (137,968) 63,809
2,451,212 2,451,212
445,844 445,844
201,777 2,759,088 2,960,865
87,857 3,434,902 3,522,759
$ 289,634 $ 6,193,990 S 6,483,624
The accompanying notes to fmancial statements are an integral part of this financial statement.
21
City of Sebastian, Florida
Statement of Cash Flows
Proprietary Funds
For the Ycar Ended September 30, 2004
CASH FLOWS FROM OPERATING
ACTIVITIES:
Cash received from customers and users
Cash payments to suppliers
Cash payments for employee services
Net cash provided by operating
activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets
Receipts from capital grants
Receipt from capital transfers
Receipt from sale of assets
Receipt from advance from other fund
Principal paid on revenue bond maturities
Bond issuance costs
Interest paid on revenue bonds
Net cash provided (used) by capital and
related financing activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Interest on investments
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, October 1
Cash and cash equivalents, September 30
Enterprise Funds
Golf Course Airport Totals
$ 1,457,131 $ 223,792 $ 1,680,923
(903,036) (75,977) (979,013)
(292,722) (130,572) (423,294)
261,373 17,243 278,616
(4,500) (2,259,656) (2,264,156)
1,938,129 1,938,129
445,844 445,844
261 261
19,906 19,906
(230,000) (230,000)
7,525 7.525
(88,415) (88,415)
(315,129) 144,223 (170,906)
12,683 11,089 23,772
12,683 11,089 23,772
(41.073) 172,555 131,482
1,024,740 950.495 1,975,235
$ 983,667 $ 1,123,050 $ 2,106,717
The accompanying notes to f'mancial statements are an integral part of this f'mancial statement.
22
City of Sebastian, Florida
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2004
(Continued)
Enterprise Funds
Golf Coume Airport Totals
$ 273,721 $ (148,785) $ 124,936
Reconciliation of operating income (loss) to
net cash provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation expense
(Increase) Decrease in assets:
Accounts receivable
Prepaid expenses
Inventories
Increase (Decrease) in liabilities:
Accounts payable
Due to other governments
Rent concession liability
Customer deposits
Accrued compensated absences
Deferred revenues
Total adjustments
Net cash provided (used) by operating activities
111,347 126,353 237,700
(165,595) 15,602 (149,993)
2,129 250 2,379
1,279 1,279
660 660
(6,260) (205) (6,465)
30,000 30,000
(200) (200)
39,674 17,728 57,402
(25,582) 6,500 (19,082)
(12,348) 166,028 153,680
$ 261,373 $ 17,243$ 278,616
Cash and cash equivalents reconciliation:
Current assets:
Cash and cash equivalents
Investments
Restricted asset:
Investments
Cash and cash equivalents at September 30
$ 19,030 $ 51,528$ 70,558
458,631 1,071,522 1,530,153
506,006 506,006
$ 983,667 $ 1,123,050 $ 2,106,717
The accompanying notes to financial statements are an integral part of this financial statement.
23
City of Sebastian, Florida
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2004
Pension
Trust Agency
Police
Officers' Performance
Pension Deposits
ASSETS
Cash and cash equivalonts $ 202,202 $ 148,760
Receivables:
Interest and dividends 11,316
Total receivables 213,518 148,760
Investments, at fair value:
U.S. goverament obligations 694,255
Federal agency notes 675,404
Federal agencies - mortgage back 334,597
Common stock 1,607,634
Total Investments 3,311,890
Total assets 3,525,408 148,760
LIABILITIES
Refunds payable 148,760
Total liabilities 148,760
NET ASSETS
Held in trust for pension benefits $ 3,525,408 $
The accompanying notes to financial statements are an integral part of this financial statement.
24
City of Sebastian, Florida
Statement of Changes in Fiduciary Net Assets
Fiduciary Fund - Pension Trust
For the Year Ended September 30, 2004
ADDITIONS
Contributions:
Emp~y~
~anmembem
StYe
Total contributions
Investment earnings:
Net increase in fair value of investments
Interest and dividends
Total investment earnings
Less investment expenses
Net investment earnings
Total additions
Police
Officers'
Pension
S 174,780
72,224
106,715
353,719
101,820
94,946
196,766
(20,391)
176,375
530,094
DEDUCTIONS
Benefits
Refunded conl~ibutions
Administrative expenses
Total deducfions
Change in net assets
49,877
3,002
4,564
57,443
472,651
3,052,757
$ 3,525,408
Net assets - beginning of year
Net assets - end of year
The accompanying notes to financial statements are an integral part of this financial statement.
25
CITY OF SEBASTIAN, FLORIDA
Notes to the Financial Statements
September 30, 2004
I. SUMMARY OF SIGNI]?ICANT ACCOUNTING POLICIES
The City of Sebastian (the "City"), a Florida Municipal Corporation, war incorporated in 1924 under Sections 1826-1832 of the Revised
Florida Statutes. The City hara population of approximately 19,365 living in an area of approximately 14.556 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. Reoortine Entity
In evaluating the City as a reporting entity, management has included all component units in accordance with Governmental
Accounting Standards Board (GASB) Statement No. 14, "Defining the Financial Reporting Entity". The Financial Reporting Entity
consists of the City of Sebartian (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
thc City's reporting entity.
Blended Component Units
The following component units are blended with the primary government for financial statement purposes because the component
unit's governing body is substantially the same as the City Council or because the component unit exclusively serves the City. The
financial statements of these component units may be obtained from the Finance Department of the City of Sebastian.
Community Redevelopment Agency (CRA) - The governing body of the CRA is the Sebastian City Council. The CRA is accounted
for in a special revenue fund entitled "Riverfront Redevelopment".
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 ar a Pension Trast fund entitled
"Police Officers' Pension".
B. Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report
information on all of the nonfiduciary activities &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 fi.om business-type activities, which rely to a significant extent on fees and
charges for support.
Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter
are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise
funds are reported as separate columns in the fund financial statements.
GASB Statement No. 34 Basic Financial Statements and Management Discussion and Analysis for State and Local Governments sets
forth minimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fund category or the
governmental and enterprise funds combined) for the determination of major funds. The nonmajor funds are combined in a coltman
in the fund financial statements and detailed in the combining section.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
1. Economic Resources Measurement Focus and Accrual Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis
of accounting, as are the proprietary fund and fiduciary fund financial statements. This means that revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash fiows. Property taxes
are recognized ar revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon ar
all eligibility requirements imposed by the provider have been met.
26
In applying the "susceptible to accrual" concept to intergovemmantal revenues pursuant to GASB Statement No. 33, Accounting
and Financial Reporttha for Nonexchanee Transactions as amended by GASB Statement No. 36, Recipient Reporting of Certain
Shared Nunexchange Revenues (the City may act as either provider or recipient), the provider should recognize liabilities and
expenses and the recipient should recognize receivables and revenue when the applicable eligibility requirements including time
requirements, are met. Resources transmitted before the eligibility requirements are met should, under most cimumstances, 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.
As a general rule the effect ofinterfund activity has been eliminated from the government-wide financial statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by
program revenues. Direct expenses are those that 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 fimction 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 fi.om 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
revenues and expenses.
The agency fund reports only assets and liabilities; therefore, it does not have a measurement focus. However, it uses the accrual
basis of accounting to recognize receivables and payables.
2. Modified Accrual
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. "Available" means
collectible within the current period or soon enough thereafter to be axed to pay liabilities of the current period. For this
purpose, thc City considers revenues to be available if they are collected within sixty (60) days of the end of the current fiscal
period except grant revenues. The City considers grant revenues to be available if they are collected within one year of the end
of the current fiscal period. All material revenues, except for occupational licenses and property taxes, 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, 2004. 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 long-term obligations, which are recognized when due.
Property taxes, public utility taxes, franchise fees, sales and fuel taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues in the curmmt fiscal period. Only
the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received
by the City.
The government reports the following major governmental funds:
The general fund is the govemmant's primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
The discretionary sales tax fund accounts for the financial resources used for infrastructure improvements
and equipment purchases.
The stormwater utility improvements fund accounts for the resources associated with debt and stormwater
assessment fees for the purpose of constructing stormwater related improvements.
The public facilities improvements fund accounts for the resources associated with debt for the purposes of
constructing and equipping a new city hall complex and renovation and expansion of the police station.
The government reports the following major proprietary funds:
The golf course fund accounts for the activities of the municipal golf course.
27
The airport fund accounts for the activities of the municipality's general aviation airport.
Additionally, the government reports the following fund types:
The pension trust fund accounts for the activities of the Police Officer's Retirement System, which
accumulates resources for pension benefit payments to qualified police officers.
The performance deposits fund accounts for deposits placed by bidders and developers to guarantee
performance pursuant to bid or contract 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.
D. Assets~ Liabilities and Fund Equity
Cash and cash equivalents
Cash and cash equivalents represents all investments that are short term, highly liquid, and readily convertible to a specified
cash value. These investments generally have original maturities of three months or less. Cash equivalents consist of cash in
banks and on hand.
2. Investments
Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, common stock, guaranteed investment
contracts and the Local Government Surplus Funds Trust Fund Investment pool (Pool). The Local Government Surplus Funds
Trust Fund is administered by the Florida State Board of Administration, which is not a registrant with the Securities and
Exchange Commission. However, the Board has adopted operating procedures consistent with the requirements 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. Except for
the Pool, investments, including the Police Officers' Pension Fund, are reported at their fair value based on the quoted market
price or the best available information.
3. Interfund Receivables and Payables
During the course of operations, transactions occur between individual funds that may result in amounts owed between funds.
Short-term interfund loans are reported as "due to and from other funds." Due to and from other funds are eliminated in the
Statement of Net Assets. There were no interfund loans between the Governmental funds and Proprietary funds as of September
30, 2004.
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable
governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
As of September 30, 2004, the General Fund has an advance to the Airport Capital Project Fund in the amount of $19,906. The
advance is a loan authorized by the City Council to the Airport Capital Project Fund for capital improvements.
4. Receivables
Receivables consist of trade receivables, due from other governments and interest receivable (see Note IV.C. on page 33 for
detail) and are recorded at the net realizable value. The City, as of September 30, 2004, has no allowance for doubtful accounts,
since all receivables are considered collectible.
5. Inventory and Prepaid Items
Inventory is valued at cost using the average cost method. Inventory in the General fund consists of materials and supplies held
for consumption. The cost is recorded as an expenditure/expense at the time the individual inventory items are consumed.
Inventory in the Golf Course fund consists of supplies held for resale.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government-wide and fund financial statements.
6. Restricted Assets
Certain net assets of the City are classified as restricted assets on the statement of net assets because their use is limited either by
law through constitutional provision or enabling legislation; or by restrictions imposed externally by creditors, grantors,
contributors, or laws or regulations of other governments. In a fund with both restricted and unrestricted assets, qualified
expenses are considered to be paid frrst from restricted net assets and then from unrestricted net assets.
28
7. Capital Assets
Capital assets, which include lend, buildings, improvements, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities colunms in the
government-wide finencial statements. The City defines capital assets as assets with en initial, individual cost of more then
$750 and an estimated useful life in excess of one year. Such assets are recorded at historical cost, if purchased, end at fair
market value at date of girl, if donated. Major additions are capitalized while maintenance and repairs that do not improve or
extend the life of the respective assets are expensed.
All infrastructure assets acquired prior to the implementation of GASB Statement 34 were capitalized as pmjects were
completed or assets were acquired. Therefore, the initial capitalization of general infrastructure assets was not necessary.
Capital asset depreciation is recognized using the straight-line method over the estimated useful lives as follows:
Classification
Buildings and improvements
Public domain infrastructure
System infi~structure
Improvements other than buildings
Machinery, equipment and other
Airport runways
Renge of Lives
10-40 years
40-50 years
15-30 years
1040 years
5-15 years
20 years
8. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick leave benefits and are accounted
for using the termination payment method. All vacation and sick leave amounts are accrued in the government-wide and
proprietary finencial statements. A liability for these amounts is reported in governmental funds only if they have matured, for
example, as a result of employee resignations end retirements.
9. Long-Term Liabilities
In the government-wide financial statements, and proprietary fund types in the fund finencial 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 end discounts, as well as issuence costs, are deferred and
amortized over the hfe of the bonds using the straight-line method. Bonds payable are recorded net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and amortized over the life of the related debt. In
the fund finencial statements, governmental fund types recognize bond premium and discounts, as well as debt issuence costs,
during the current period. The face amount of debt issued is reported as other financing soumes. Premiums received on debt
issuences are reported as other financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
10. Fund EquiW
In the fund financial statements, governmental funds report reservations of fund balence 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 outstending at year-end that the City intends to
honor as commitments.
Reserved for advance to other funds - represents long-term interfund loen.
Reserved for debt service - represents, in accordence with legal restrictions, amounts for payment of
principal and interest maturing in later years.
Reserved for capitalprojects - represents amounts restricted for capital projects.
Reserved for property and casual~ - represents amounts restricted for property and casualty claims.
Reserved for cemetery care - represents amounts restticted for use in cemetery maintenence.
Reserved for law enforcement - represents, in accordence with State Statutes, funds required to be spent
on drug education and awareness activities.
Reserve for emergency services - represents amount restricted for natural disasters.
Reserve for equipment replacement - represents amounts restricted for the replacement of capital assets.
Reserve for buiMtng code enforcement - represents, in accordence with Florida Statutes, amount
restricted to be spent on building code enforcement.
Designations of unreserved fund balances are not required by law or accounting principles, hut are further classifications of fund
equity to identify funds that are not earmarked for specific purposes.
29
II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. Explanation of Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement
of Net Assets
The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds end net assets-
governmental activities as reported in the government-wide statement of net assets.
"Total fund balances" of the City's governmental funds ($19,473,662) differs from "net assets" of governmental activities
($27,643,198) reported in the statement of net assets. This difference primarily results from the long-term economic focus of the
statement of net assets versus the current financial resources focus of the governmental fund balence sheet. The effect of the
differences is illustrated below.
Capital related items
When capital assets (property, plant, equipment) that are to be used in the governmental activities are purchased or constructed, the
cost of those assets are reported as expenditures in governmental funds. However, the statement of net assets included those capital
assets among the assets of the City as a whole.
Cost of capital assets $ 40,001,531
Accumulated depreciation (11,887,971)
Total 5; 28.113~56~0
Net oension obligation
When net pension obligation is a negative amount, the amount is presented as an asset on the statement of net assets.
Negative net pension obligation 5; 122~00~6
Long-term debt ~ensactions
Long-term liabilities applicable to the City's governmental activities are not due end payable in the current period and accordingly
are not reported as fund liabilities (both current end long-term) are reported in the statement of net assets. Balences at September 30,
2004 were:
Bonds payable:
Infrastructure sales surtax revenue bonds,
Series 2003 (9,015,000)
Less: Deferred charge for issuance costs 263,156 $(8,751,844)
Infi'astmcture sales surtax revenue bonds,
Series 2003A (2,125,000)
Less: Deferred charge for issuance costs 102,947
(2,022,053)
Stormwater utility revenue bonds,
Series 2003 (5,525,000)
Less: Deferred charge for issuance costs 193,227
Less: Deferred charge for bond discounts 14,581
(5,317,192)
Notes payable (2,209,745)
Less: Deferred charge for issuence costs 6,726
(2,203,019)
Capital lease payable (550,452)
Less: Deferred charge for issuance costs 6,030
(544,422)
Compensated absences (942,449)
Total $( 19.780.979~
Accrued interest
Accrued liabilities in the statement of net assets differs from the amount reported in governmental funds due to accrued interest on
bonds payable, notes payable, and capital lease.
Bonds $ (276,536)
Notes (9,197)
Capital lease (14,190)
Total $ (299.923~
Deferred revenues
Deferred revenues in the statement of net assets differ from the amount reported in the governmental funds due to special assessment
receivables. Governmental fund financial statements report tmeamed revenues or revenues which are measurable but not available as
deferred revenues. However, deferred revenues in goveramental funds are susceptible to full accrual on government-wide fmanalal
statements.
Deferred revenues reduced $ 14.87~2
30
B. Explanation of Differences Between the Governmental Fund Statement of Revenues, Expenditures~ and Changes
in Fund Balances and the Government-wide Statement of Activities
The "net change in fund balances" for govemmental funds ($1,789,313) differs fi.om the "change in net assets" for governmental
activities ($2,607,486) reported in the statement of activities. The differences arise primarily fi.om the long-term economic focus of
the statement of activities versus the current financial resources focus of the governmental funds. The effect of the differences is
illustrated below.
Capital related items
When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those
assets are reported as expenditures in governmental funds. However, in the statement of activities, the costs of those assets is
allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balances decrease by the amount of
financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year.
Capital outlay $ 9,502,883
Depreciation expense (1.338A63~
Difference $ 8A64.72~0
In the statement of activities, only the gain and loss on the sale of capital assets are reported. However, in the governmental funds, the
proceeds from the sale increase financial resources.
Gain on sale of fixed assets
Loss on sale of fixed assets
Net adjustment
$ 31,674
(325,860)
$ (294.186~
Pension obligation
When net pension obligation is a negative amount, the amount represents over funding and reduces the expenses in the statement of
activities.
Increase in negative net pension obligation S; 1 L 17~4
Long-term debt lransactions
In the statement of activities, debt proceeds increase long-term liabilities. However, in the governmental funds, debt proceeds are
treated as other financing resources since they provide current financial resources to governmental funds.
Debt proceeds $ (7,755,000)
Less: Deferred charges for issuance costs and bond discount 330.256
Net adjustment 5; (7.424.744~
Repayments of bond principal, notes payable principal, and capital lease principal are reported as expenditures in the governmental
funds and, thus, have the effecx of redualng fund balance because current financial resources have been used. However, the principal
payments reduce the liabilities in the statement of net assets and do not result in an expense in the statement of activities.
Bond principal payment made
Notes payable principal payment made
Capital lease principal payment made
Total
$ 667,615
196,283
122,076
$ 985.97_4
Some expenses reported in the statement of antivitias do not require the use of current financial resources, therefore, are not reported
as expenditures in governmental funds.
Net change in compensated absences
Net accrued bond interest expense
Net accrued notes interest expense
Net accrued capital lease interest expense
Amortization of issuance costs
Net adjustment
$ (230,670)
(127,414)
817
3,146
(41,248)
$ (395.369~
Special assessment revenues
Revenues collected on special assessments are reported in the governmental funds. However, in the statement of activities, the
assessment revenues are recognized when they are earned.
S (30.500~
Accrued grant revenues
Some grant revenues are not recognized in the current period because the resources are not available; therefore, these revenues are
not reported in the fund.
Net change in accrued grant revenues
$ (198.896~
31
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
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 ~vorkshops and public hearings and a final budget must be prepared and adopted no later than September 30.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in
order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General,
Special Revenue, Debt Service, and Capital Projects funds. Encumbrances outstanding at year end are carried forward 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.
Actual results of operations presented in accordance with U.S. generally accepted accounting principles (GAAP basis) and the City's
accounting policies do not recognize encumbrances as expenditures until the period in which the actual goods or services are received and
a liability is incurred. It is necessary to include budgetary encumbrances to reflect actual revenues hnd expenditures on a basis consistent
with the City's legally adopted budget. (See page 44)
IV. DETAIL NOTES ON ALL FUNDS
A. Deposits
At September 30, 2004, the carrying amount of the City of Sebastian's deposits with banks was $818,952 and the bank balance was
$838,421. All the deposits were covered by the FDIC or collateralized in accordance with the "Florida Security for Public Deposits
Act". Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral having a market value equal
to 50% of the average dally 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, 2004.
(l)~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 nan~e.
(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 Fair
1 Value
Primary Govermment
U.S. Treasury Securities $ 694,255 $ 694,255
Common Stock 1,607,634 1,607,634
U.S. Government Agencies 4,009,610 4,009,610
Sub-total $ 6,311,499 6,311,499
Investments not subject to categorization:
Local Government Surplus
Funds Trust Fund
Certificate of Deposits
Guaranteed Investment Contracts
Total Investments
9,492,876
1,500,000
6,708,963
$ 24,013,338
32
C. Receivable and Payable Balances
Receivables
Receivables at September 30, 2004 were as follows:
Governmental activities:
General
Discretionary sales tax
Stormwater utility improvements
Public facilities improvements
Other governmental
Total - governmental activities
Business-type activities:
Golf course
Airport
Total - business-type activities
All receivables are anticipated to be collected.
Payables
Payables at September 30, 2004 were as follows:
GovemmentaI activities:
General
Discretionary sales tax
St on-nwater utility improvements
Public facilities improvements
Other govermnental
Total - governmental activities
Business-type activities:
Golf course
Airport
Total - business-type activities
Due From
Other
Interest Accounts Governments Total
$ 21,497 $ 491,316 $ 1,117,849 $ 1,630,662
7 196,391 196,398
60,963 60,963
27,329 4,393 31,722
7,275 92,237 99,512
$ 117,071 $ 495,709 $ 1,406,477 $ 2,019,257
$ 1 $ 165,709 $ 67,576 $ 233,286
2 11,924 652,563 664,489
$ 3 $ 177,633 $ 720,139 $ 897,775
Salaries
and
Vendors Retainage Benefits Total
8 810,703 $ $ 274,795 $ 1,085,498
63,644 63,644
229,635 288,753 518,388
54,758 54,758
$ 1,158,740 $ 288,753 $ 274,795 $ 1,722,288
$ 10,523 $ $ 7,814 $ 18,337
627,890 55,368 5,579 688,837
$ 638,413 $ 55,368 $ 13,393 $ 707,174
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, 2004, the various components of deferred revenue and unearned revenue
reported in the governmental funds were as follows:
Special assessments not yet due (General fund)
Occupational licenses received in advance (General Fund)
Total deferred/unearned revenue for governmental funds
Unavailable Defe~ed
$ 14,872 $
61,197
$ 14,872 $ 61,197
33
D, Capital Assets
Capital asset activity for the year ended September 30, 2004 was as follows:
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infi'astmcture
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
Beginning Ending
Balance Increases Decreases Balance
$ 4,653,603 $ $ $ 4,653,603
1,634,161 8,682,239 (547,255) 9,769,145
6,287,764 8,682,239 (547,255) 14,422,748
2,591,420 4,952 (402,125) 2,194,247
2,310,380 235,023 (114,133) 2,431,270
5,049,563 378,656 (241,311) 5,186,908
15,021,381 780,942 (35,965) 15,766,358
2~,972,744 1,399,573 (793,534) 25,578,783
(1,136,884) (63,455) 149,581 (1,050,758)
(777,658) (105,169) 56,580 (826,247)
(2,928,050) (611,038) 225,549 0,313,539)
(6,174,890) (558,501) 35,964 (6,697,427)
(11,017,482) (1,338,163) 467,674 (11,887,971)
13,955,262 61310 (325,860) 13,690,812
20,243,026 $ 8,743,649 $ (873,115) $ 28,113,560
Beginning Ending
Balance Increases Decreases Balance
9,060 $ $ $ 9,060
1,342,424 1,637,674 (266,027) 2,714,071
1,351,484 1,637,674 (266,027) 2,723,131
397,758 1,156,250 1,554,008
797,517 (87,112) 710,405
499,523 86,451 (25,863) 560,111
2,374,021 174,996 (1,350) 2,547,667
4,068,819 1,417,697 (114,325) 5,372,191
(261,710) (18,326) (280,036)
(157,264) (45,319) 32,105 (170,478)
(367,527) (61,799) 25,843 (403,483)
(1,025,605) (112,256) 1,350 (1,136,511)
(1,812,106) (237,700) 59,298 (1,990,508)
2,256,713 1,179,997 (55,027) 3,381,683
3,608,197 $ 2,817,671 $ (321,054) $ 6,104,814
Business-type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infras~ucture
Total accumulated depreciation
Total capital assets, being depreciated, net
Busineas-type activities capital assets, net
34
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government $ 85,879
Public safety 260,711
Transportation 685,966
Physical environment 154,357
Cultural and recreation 151,250
Total depreciation expense-governmental activities $ 1,338,163
Business-type activities:
Golf Course $ 111,347
Airport 126,353
Total depreciation expense-business-type activities $ 237,700
Construction Commitments
The government has active construction projects as of September 30, 2004. The projects include realignment & reconstruction of
Louisiana Avenue, construction and renovation of the City Hall Municipal Complex and construction end rehabilitation of facilities
at the Municipal Airport.
Proiect
Lousianna Avenue improvements
Public facility municipal complex
Rehab Runway 9-27 Phase II
Municipal airport administration building
Remaining Major
Spent-to date Commitment Funding Source
159,514 $ 908,702 CDBG Grant
8,743,542 2,213,095 Revenue Bonds
563,029 618,360 FAA Grant
296,900 1,639,618 FDOT Grant
Total $ 9,762,985 $ 5,379,775
E. Interfund Balances
Interfund balances at September 30, 2004 consisted of the following amount:
Due to General Fund from:
Nonmajor governmental funds:
G.R.E.A.T. Program Fund $ 9,134
Community Development Block Grant 644
Total $ 9,778
The balance of $9,778 due to the general fund from the G.R.E.A.T. Program Fund and Community Development block Grant Fund
represents short-term cash loans that will be repaid within the next twelve months.
F. .Interfund Transfers
Transfers are used to 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget
requires to expend them, 2) utilize unrestricted revenues collected in the General fund to finance various programs accounted for in
other funds in accordance with budgetary authorizations, and 3) utilize discretionary sales tax revenues for infrastructure
improvements and equipment purchases which must be accounted for in other funds. Following is a schedule of futerfund Transfers:
35
General
Transfers Out: Fund
General fund $
Discretionary sales tax fund 198,162
Nonmajor governmental funds 229,978 6,960
Total transfers out
Transfers In
Stormwater Public Airport
Utility Facility Nonmajor Capital
Improvements Improvements Governmental Project
Fund Fund Funds Fund
$ $ 6,500
Total
$ $ $ 6,500
1,761,395 175,000 $ 2,134,557
542,759 270,844 $ 1,050,541
$ 428,140 $ 6,960 $ 6,500 $ 2,304,154 $ 445,844 $ 3,191,598
G. Leases
1. Operating Leases-Lessee
The City is obligated under certain leases for land and golf carts accounted for as operating leases. Operating leases do not give rise
to properly rights or lease obligations. Total costs for such leases were $172,250 for the fiscal year ended September 30, 2004. 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, 2004:
Golf Course
Golf
Year Endin~ September30. to: Airport Carts
2005 120,000 52,250
2006 175,000 52,250
2007 175,000 107,988
2008 175,000
2009 175,000
2010-2014 1,175,000
2015 250,000
Totals $ 2,245,.._~000 $ 212,488
The operating lease has been accrued on a systematic and rational basis in connection with the airport land-operating lease. As of
September 30, 2004, S30,000 has been accrued as rental costs and rent concession liability in Golf Course Fund.
2. Capital Leases-Lessee
The government has entered into a lease agreement as lessee for financing the acquisition of heavy constmetion 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 $ 859,859
Less: Accumulated depreciation (339,308)
Total $ 520,551
The future minimum lease obligations and the net present value of these minimum lease payments as of September 30, 2004 were as
follows:
36
Governmental
Year Ending September 30, Activities
2005 154,693
2OO6 154,694
2007 154,694
2008 154,694
Total minimum lease payments 618,775
Less: amount representing int crest (68,322)
Present value of minimum lease payments $ 550,453
3. Operating 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 noncencelable operating leases:
Year Ending Sentember30. Amount
2005 179,454
2006 234,454
2007 234,454
2008 234,454
2009 234,454
2010-2014 1,472,270
2015-2019 504,944
2020-2024 196,636
2025-2029 193,670
2030-2034 98,878
Tot~minimumfuture rentfls $ 3,583,668
H. Low,-term Oblieations
1. Revenue Bonds/Notes
Revenue bonds/notes are secured by and payable from the revenues of the respective f~nds that issued them~
The City issued a ten (10) year, $527,993 Revenue Bonds, Series 1996 for the purpose of financing the construction costs
of a waterline along the City's riverfront. The principal end interest are paid from special assessments received on an
annual basis. The City is obligated by a covenant to budget end appropriate in the event revenues collected and/or defaults
occur which are less than debt service requirements. As of September 30, 2004, the City has $3,849 in default assessments.
In fiscal year 2004, the Series 1996 Revenue Bonds were defeased. Remaining receivable end deferred revenue balances
were transferred to the General Fund as a residual equity trensfer.
The City entered into a fifteen (15) year loan agreement in 1998 with a local benk for $3,268,890 to provide financing to
repave certain roads in the City. The City pledged Local Option Gas Tax end 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.
The City issued a ten (10) year, $2,435,000 Recreational Facilities Improvement end Refunding Revenue Bonds, Series
2001 in March 2001. The City has pledged Golf Course revenues along with a covenant to budget end appropriate for
repayment of principal and interest.
The City issued a fifteen (15) year, $9,500,000 Infrastructure Sales Surtax Revenue Bonds, Series 2003 in April 2003. The
City has pledged Infi'astructure Sales Surtax revenues for repayment of principal and interest.
The City issued a fifteen (15) year, $2,I25,000 Infrastructure Sales Surtax Revenue Bonds, Series 2003A in December
2003. The City has pledged Infrastructure Sales Surtax revenues for repayment of principal end interest.
The City issued a nineteen (19) year, $5,630,000 Sturmwater Utility Revenue Bonds, Series 2003 in November 2003. The
City has pledged Stormwater Fee Revenues along with a covenent to budget and appropriate for repayment of principal and
interest.
37
2. Bond Coverage
a. The City has covenanted in the Recreational Facilities Improvement end Refunding Revenue Bonds, Series 2001 Bond
Resolution to fix, establish end maintain such rates, fees, rentals and other charges and collect such fees, rates, rentals, and
other charges for the product, services, facilities and use of its facilities, and revise the same from time to time, whenever
necessary, as will always provide in each fiscal year net revenues equal to at least one hundred twenty-five percent (125%)
of the annual debt service becoming due in such fiscal year.
The following table indicates the degree of compliance with the bond resolution covenants in the Golf Course Fund at
September 30, 2004.
Opeaning and maintenance
expenses (excluding depreciation expense)
Panount of revenue over
dhect operating expenses
Debt service requirement
Percent coverage for the year
ended September 30, 2004
$ 1,728,828
1,263,240
$ 465,588
$ 306,290
152%
City menagement continues to monitor the Golf Course operation and intends to adjust rates whenever necessary to meet
the bond coverage requirement.
The City has covenanted in the Stormwater Utility Revenue Bonds, Series 2003 Bond Resolution to fix, establish, maintain
and collect stormwater fees, and revise the same from time to time whenever necessary, so as to always provide in each
fiscal year stormwater fee revenues and investment earnings equal to at least 1.35% of the annual debt service becoming
due in each fiscal year.
The following table indicates the degree of complience with the bond resolution covenants in the stormwater utility fund at
September 30, 2004.
Gross revenues available for compliance
Debt service requirement
$ 779,724
$ 209,386
372%
percent coverage for the year
ended September 30, 2004
Changes in Long-term Liabilities
The following is a summary of changes in Long-Term Liabilities of the City for the year ended September 30, 2004:
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Governmental activities:
Bonds payable:
Special Assessment Bonds with
Governmental Coramitment, Series 1996 $ 77,615 $ $ 77,615 $ $
Infrastructure Sales Surtax Revenue
Bonds, Series 2003 9,500,000 485,000 9,015,000 525,000
Infraslxueture Sales Surtmx Revenue
Bonds, Series 2003A 2,125,000 2,125,000 125,000
Stormwater Utility Revenue Bonds,
Series 2003 5,630,000 105,000 5,525,000 235,000
Total bonds payable 9,577,615 7,755,000 667,615 16,665,000 885,000
Notes payable 2,406,028 196,283 2,209,745 205,002
Capital leases 672,528 122,076 550,452 127,996
Compensated absences 758,445 640,918 378,402 1,020,961 78,512
Governmental activity
long-term liabilites $ 13,414,616 $ 8,395,918 $ 1,364,376 $ 20,446,158 $ 1,296,510
38
Beginning Ending Due within
Balance Additions Reductions Balance One Year
Business-type activities:
Bonds payable:
Recreational Facilities Improvement and
Refunding Revenue Bonds, Series 2001 $ 2,115,000 $ $ 230,000 $ 1,885,000 $ 240,000
Less deferred amount:
Issuance premium 5,582 797 4,785
Loss on refunding (58,254) (8,322) (49,932)
Total bonds payable 2,062,328 222,475 1,839,853 240,000
Compensated absences 5,562 71,307 13,905 62,964 2,129
Business-type activity
Iong-termliabilites $ 2,067,890 $ 71,307 $ 236,380 $ 1,902,817 $ 242,129
For the govemmental activities, compensated absences are generally liquidated by the general fund,
4. Debt Service Requirements to Maturity
The annual requirement to amortize all bonded debt outstanding at September 30, 2004, including interest requirements, is as
follows:
Governmental Activities
Roadway Infrastructure Infrastructure Stormwater
Improvement SalesSurtax SalesSurtax Utility
Note Revenue Bonds, Revenue Bonds, Revenue Bonds,
Payable Series 2003 Series 2003A Series 2003
Yea~r 4.40% Interest 2% to 4.125% Interest 2% to 4% Interest 2% to 4.5% Interest
2005 $ 205,002 $ 94,998 $ 525,000$ 308,856 $ 125,000 $ 71,987$ 235,000 206,672
2006 214,121 85,880 535,000 298,356 130,000 69,488 235,000 201,973
2007 223,646 76,354 550,000 286,319 130,000 66,888 240,000 197,272
2008 233,594 66,406 565,000 269,819 135,000 63,800 245,000 191,873
2009 243,986 56,015 585,000 252,869 135,000 60,088 255,000 185,135
20010-2014 1,089,396 110,584 3,220,000 957,973 755,000 229,424 1,405,000 790,263
2015-2019 3,035,000 310,506 715,000 72,600 1,705,000 494,120
2020-2022 1,205,000 110,025
$ 2209,745 $ 490,237 $ 9,015,000 $ 2,990,866 $ 2,125,000 $ 634,275 $ 5,525,000 $ 2,377,333
Business-type Activities
Golf Course
Refunding
Bonds,
Series 2001
4% to 4.2% Interest
2005 240,000 76,290
2006 250,000 66,690
2007 255,000 56,690
2008 270,000 46,490
2009 280,000 35,690
2010-2011 590,000 37,090
Less unamortized
Bond premium 4485
Loss on refunding (49,932)
$ 1,839,853 $ 318,940
39
I. Restricted Assets:
Certain cash and claims to cash, that are legally restricted, have been shown as restricted in the statement of net assets as follows:
Debt service
Road paving
Capital projects
Building code enforcement
Renewal and replacement
Rent
Cemetery perpetual care
Law enforcement
Total
Govermental Business-type
Activities Activities
$ 468,744 $ 316,690
956,296
1,275,824
802,490
542,999
13,321
69,316
120,000
$ 4,059,674 $ 506,006
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, 2004, was 4.5904 mills. Total tax collections were approximately 98.7¥0 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 nf January 1. 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 tax revenues are recognized in the
fiscal year for which they are levied and also become due and payable.
B. Grants from Other Governmental Units
Federal, State and local goverrm~ent 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 and expects to
receive the grant within a year under the related grant. The ~ants normally specify the purpose for which the funds may be used and
are subject to audit by the grantor agency or its representative.
In September of 2004, the City was impacted by two hurricanes. The actual costs of clean up, overtime, and other costs associated
with hurricanes for the fiscal year ended September 30, 2004 were $1,027,779. The City has received funding agreements for both
hurricanes from State of Florida Department of Community Affair, which guarantee grant funds from FEMA and the State to
reimburse the City's qualified costs. Total receivable and grant revenue accrued for the fiscal year ended September 30, 2004 is
$985,347, which represents the reimbursable amount. The receivable is reflected in due from other governments and the revenue is
included in various related line items under program revenues - operating grants and contributions on the statement of activities and
grant revenues in fund financial statements. The expenditures/expenses have been recorded in respective functional areas of the
govemmant-wide statement of activities as follows:
Public Safety $ 148,214
Transportation 808,432
Golf Course 71,133
Total $1.027.77~9
The City believes they v,411 be able to obtain the full reimbursement for the accrued amount within twelve months after fiscal year
ended September 30, 2004.
40
The following is the amount of grant revenue for fiscal year 2004.
Primarg Government Amount
General government $ 16,144
Public safety 190,678
Physical environment 63,431
Transportation 1,670,534
Caltural/Recreation 557,700
Airport 2,451,212
Golf course 67,576
Total reporting entity $ 5,017,275
C. Police Pension Plan - Defined Benefit Plan
Plan Description. The Police Officers' Pension Plan is a Florida Statute Chapter 185 single-employer defined benefit plan. Only
City police officers participate in the Police Pension Plan. The state provides a contribution to the Police Pension Plan through a
distribution of thnds collected fi.om insurance premium taxes. The Pension plan data provided in these Financial Statements are fi.om
the actuarial report dated October 1, 2002. Although the Police Officers' Pension Plan provides separate reporting, which may be
obtained in the Finance department, it is also a component unit (reporting as a Pension Trust Fund) of the City's financial reporting
entity.
Employee membership data as of the actuarial report for period ending October 1, 2002, dated December 29, 2003 is as follows:
Police Pension
Plan 2002
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 29
Total 31
Benefit Provisions and Contribution Requirements. The Police Officers' Pension Plan provides retirement and disability benefits to
plan members and beneficiaries. This plan is administered by a separate local Board of Trustees. Chapter 185, Florida Statutes, as
amended governs all benefit provisions of the plan. Contribution requirements, in accordance with Chapter 185, Florida Statutes, are
established by City ordinance, as provided in Chapter 58, Article III of the Sebastian City Code. The City Council has the authority
to amend funding requirements.
Funding Policy. The employer, employee, and State contribution requirements are applicable to the Plan and actuarially determined
on a bi-annual basis in accordance with Flor/da 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 2003-2004 fiscal year. The employer
contribution rate, expressed as a percentage of compensation, was 12.1% for the 2003-2004 fiscal year. The employer contribution is
S174,780 and the State contribution is $106,715, which represents state shared revenue that is levied on property and casualty
insurance premiums and collected by the State. The State contribution was recognized and recorded in the general fund and the
corresponding expenditure was recorded as public safety expenditure. The City is required to contribute the remaining amounts to
ensure that the Plan is actuarially sound.
Required trend information for the Police Officers' Pension Plan was as follows:
Amount
Actuariall¥ Determined Contribution
2001 $ 12,094
2002 $ 0
2003 $140,721
Percentage of APC contributed
2001 241.00%
2002 100.00%
2003 109.00%
Since the employer contribution exceeded the annual pension costs, there is no net pension obligation for the plan.
The annual required contribution for the Police Officers' Pension Plan was determined as part of the October 1, 2002, actuarial
valuation using the aggregate actuarial cost method. This method does not identify or separately amortize unfunded actuarial accrued
liabilities. The actaadal assumptions included (a) an 8.0% rote of return (net of administrative costs) and (b) projected salary
increases of 6% per year, including inflation at 3%. There is no unfunded actuarial accrued liability as of September 30, 2004.
41
Reserves. AIl of the net assets of the Police Pension Plan are legally reserved for plan participant benefits.
Basis of Accounting. Financial statements are prepared using the accrual basis of accounting. Plan member contributions are
recognized in the period in which the contributions are due. Employer contributions are recognized when due, and the employer has
made formal comm/tmant to provide the contributions. Benefits and refunds are recognized when due and payable in accordance
with the terms of the plan.
Method Used to Value Investments and Concentration of Investments. Investments are ~'p6rted at fair value. Short-term investments
are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last
reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest payments, and are
discounted at prevailing interest rates for similar instruments. Investments that do not have an established market are reported at
estimated fair value. Investments in securities of a single organization (excluding mutual funds and those issued or guaranteed by the
U.S. government) held by the pension plan did not exceed five percent of the total plan assets.
Development of Net Pension Obligation (NPO)
This municipal Defared 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 actaarially determined required contributions for all years fi.om 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, 2003 is as follows:
Actuarially Determined Contribution (A)
Interest on NPO
Adjustment to (A)
Annual Pension Cost
Coatributions made
Increase in Nrpo
NP0 beginning of year
NP0 end of year
9/30/2001 9/30/2002 9/30/2003
$ 12,094 $ $ 140,721
(6,981) (8,268) (8,867)
7,939 9,402 10,083
13,052 1,134 141,937
29,134 8,620 153,111
(16,082) (7,486) (11,174)
(87,264) (103,346) (110,832)
$ (103,346) $ (110,832) $ (122,006)
D. CWA / ITU Negotiated Pension Plan - Defined Benefit Plan
Plan Description: The CWA/ITU Negotiated Pension Plan (NPP), which began in 1967, is a multi-employer, defined benefit plan.
The Plan is available to uny Communication Workers of America (CWA) bargaining unit member, and benefits are portable from one
contributing employer to another.
Benefits
Normal Pension: Minimum age 65:5 years of Service Credit required if any portion of service credit was eumed atler January 1,
1989. 10 years of Service Credit required if employees' coverage ended before January 1, 1989. Once the Service Credit amount is
accrued, the employee is vested and cannot lose the right to a pension.
Early Pension: Minimum age 60:20 years of Service Credit required if employed after January 1, 1989. 25 years of Service Credit
required if employment ended before January 1, 1993. Pension mounts are permanently reduced based on age on the effective date,
because the payments are expected to be made for a longer period of time.
Disability Pension: No minimum age and the pension mount is not reduced for age; there must be a Social Security Disability
Award, 10 years of actual Service Credit and a contribution for covered employment must have been made within five calendar years
preceding the entitlement date to Social Security Disability Pension. An application must be filed with the Plan within 6 mouths of
the Social Security Notice of Award date to receive pension retroactive to the Social Security entitlement date.
Lump Sum Disability Benefit: If the employee is in receipt of a Social Security Disability Award and is vested, but not immediately
eligible to receive any pension described above, the employee may be eligible for a lump sum equal to total contributions credited on
the employees behalf (or 36 times the Normal Pension amount, if greater). If the employee is immediately eligible for a pension but
42
not yet receiving one, the employee can still qualify for a lump sum if the employee submits two physicians' switten statements that
the disability will lead to death within one year of the date of application.
Death Benefit: If the employee dies before becoming a pensioner and has at lease $250 contributed on the en~ployees' behalf, a lump
sum death benefit equal to total contributions credited on the employees' behalf or 36 times the Normal Pension amount, if greater,
will be paid to employees' beneficiary. If the employee is married at the time of death, the spouse will have the choice of a lump sum
or a monthly survivor benefit.
Withdrawal Benefit: If the employee did not earn enough Service Credit to qualify for a Normal Pension, the employee may be
eligible for a lump sum withdrawal benefit, based on total contributions, after the employee has incurred a break in service.
Benefit Provisions and Contribution Requirements: The NPP provides retirement and disability benefits to plan members and
beneficiaries. The plan is administered at the Plan Office in Colorado Springs, Colorado. Contribution requirements are established
by the CWA contract, effective date October 1, 2003, which is negotiated every 3 years, and approved by City Council
Funding Policy: Administration costs of the pension plan are financed by the plan. The employer contribution rate, expressed as a
percentage of compensation, was 9.00% for the 2003-2004 fiscal year. Employees do not contribute to this plan. Contributions to the
CWA Pension Plan for the fiscal years ended September 30, 2002, 2003 and 2004 were $173,716, $190,422 and $205,056
respectively, which are equal to 100% of the required contribution for each year.
E. 401 Plan - Defined Contribution Plan
Plan Description: The ICMA Retirement Corporation's 401 Retirement Plan is a Defined Contribution Plan "qualified" under
Section 401(a) of the lntemal Revenue Code. Each participant has a plan account to which contributions are made. Plan benefits are
based on the total amount of money in the employees' account at retirement or other eligible event. The Plan is available to all
management staff of the City of Sebastian, and may be roiled over to another "qualified" employer plan that accepts rollovers, or
Traditional IRA's.
Benefits
Periodic Payments: Retirement benefits can be paid monthly, quarterly, semi-annual (at six-month intervals only) or annual
payments until assets are fully paid out.
Rollover: Retirement benefits can be rolled over to another employer plan (including a 457 deferred compensation plan) that accepts
rollovers, or to a Traditional IRA.
Lump Sum: Retirement benefits can paid either partially or by total distribution of the employees' account balance.
Annuities: Retirement benefits can be utilized to purchase an annuity.
Benefit Provisions and Contribution Requirements: The 401 provides retirement benefits to plan members and beneficiaries. The
plan is administered by the ICMA Retirement Corporation. Contribution requirements are established by the City of Sebastian,
Management Benefit Package, revised October 1, 2003, and approved by the City Manager.
Funding Policy: Administration costs of the pension plan are financed by the plan. The employer contribution rate, expressed as a
percentage of compensation, was 9.00% for the 2003-2004 fiscal year. Employees do not contribute to this plan. Contributions to
the 401 Defined Contribution Plan for the fiscal years ended September 30, 2002, 2003 and 2004 were $96,397, $113,653 and
$125,745 respectively, which are equal to 100% of the required contribution for each year.
F. Insurance
The City is exposed to various risks of loss related to torts; theft of or damage to and destruction of assets; errors and omissions; and
natural disasters. The City purchases commercial insurance with various deductibles for different types of losses. The cost of this
insurance is accounted for in the general fund, golf course fund and airport fund. Settled claims have not exceeded this commercial
coverage in the past three fiscal years. In September of 2004, the City was impacted by two hurricanes. Insurance reimbursements
related to the hurricanes recorded as of September 30, 2004 in the general fund and golf course fund are $283,788 and $163,677
respectively, for a total of $447,465. A total of $413,677 has been recorded subsequent to year-end and prior to issuance of this
report.
G. Subsequent Events
On October 4, 2004, a Si,000,000 certificate of deposit was liquidated without penalty to fund emergency operations due to the
hurricanes.
On October 27, 2004, City Council approved contract award to Dickarson Florida, Inc. in the amount of $1,225,708 to rehabilitate
taxiway 'A' and construct aircraft parking apron.
43
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
General Fund
For the Year Ended September 30, 2004
Budget Amounts
Original Final
Actual Variance with
Amounts on Final Budget -
a Budgetary Positive
Basis (Negative)
REVENUES:
Taxes:
Property $ 3,056,093 $ 3,135,042 $ 3,169,976 $ 34,934
Public utility 1,800,002 1,800,002 1,854,632 54,630
Franchise fees 748,840 748,840 770,600 21,760
Licenses and permits 998,587 1,078,466 1,867,920 789,454
Intergovernmental 1,701,954 2,392,527 2,844,245 451,718
Charges for services 183,454 186,454 118,965 (67,489)
Fines 126,064 126,064 108,788 (17,276)
Investment earnings 75,948 75,948 87,650 11,702
Contributions and donations 20,060 20,060 16,344 (3,716)
Other revenue 56,302 337,650 353,892 16,242
Total revenues 8,767,304 9,901,053 11,193,012 1,291,959
EXPENDITURES:
Current:
General government 2,285,506 2,333,822 2,178,488 155,334
Public safety 3,768,722 4,148,824 4,126,858 21,966
Physical environment 935,326 1,065,866 978,843 87,023
Transportation 1,436,008 2,134,110 2,247,191 (113,081)
Culture and recreation 694,297 779,514 773,725 5,789
Total expenditures 9,119,859 10,462,136 10,305,105 157,031
Excess (deficiency) of revenues
over (under) expenditures
(352,555) (561,083) 887,907 1,448,990
OTHER FINANCING
SOURCES (USES)
Transfers in 367,556 429,390 428,140
Transfers out (6,500) (6,500)
(1,250)
Total other financing sources (uses)
367,556 422,890 421,640 (1,250)
15,001 (138,193) 1,309,547 1~47,740
3,881,850 3,881,850 3,881,850
54,916 54,916
$ 3,896,851 $ 3,743,657 5,246,313 1,502,656
Net changes in fund balances
Fund balances - beginning
Residual fund equity transfer
Fund balances - ending
Explanation of differences:
Encumbrances for equipment and supplies ordered but not received are reported in the year
the orders are placed for budgetary purposes, but are reported in the year the equipment and
supplies are received for GAAP purposes.
Cun'ent year encumbrances
Prior year encumbrances
Amount reported as ending fund balance in the statement of revenues, expenditures and
changes in fund balance for the General fund.
62,977
(194,398)
$ 5,114,892
The accompanying notes to required supplementary information are an integral part of this schedule.
44
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, 2004
Taxes:
Sales
]nveslmeni earnings
Total revenues
OTHER FINANCING USES
Transfers out
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Budget Amounts
Actual Variance with
Amounts on Final Budget -
a Budgetary Positive
Original Final Basis ('Negative)
$ 2,043,599 $ 2,093,829 $ 2,180,913 $ 87,084
29,609 29,609 15,976 (13,633)
2,073,208 2,123,438 2,196,889 73,451
(2,044,399) (2,134,557) (2,134,557)
28,809 (11,119) 62,332 73,451
330,656 330,656 330,656
$ 359,465 $ 319,537 $ 392,988 $ 73,451
Ttte accompanying notes to required supplementary information are an inte~cal part of'chis schedule.
45
CITY OF SEBASTIAN, FLORIDA
Notes to the Required Supplementary Information - Budget Comparisons
September 30, 2004
A. Budgetary Basis
Annual budgets are adopted for all governmental fi~uds except the capital project funds, which are
approved on a "life of the project basis", and the permanent fund, ~vlfich 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 44. All
annual appropriations lapse at year-end.
B. Budgetary 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 fund level. The council made four supplementary budgetary
appropriations throughout the year. The 1st quarter budget amendment highlighted a net increase of
$365,612, which represents fund balance carried over from prior fiscal year to fund the health
insurance premium increase and outstanding encumbrances, and increase in building permit fees to
fund additional personnel. The 3rd quarter budget amendment highlighted a net increase of $113,684,
which represents increases in property tax and state shared revenue to reflect actual collections. The
4th quarter budget amendment highlighted a net increase of $979,628, which represents the initial
FEMA and State reimbursement estimate and property insurance reimbursement due to hurricanes.
Other supplemental budgetary appropriations made in the general fund were not material.
C. Budgeted Expenditures Exceeded Revenues
Budgeted expenditures exceeded revenues in the general fund and discretionary sales tax special
revenue fund. However, this is pursuant to the legally adopted budget to expend available fund equity
(cash carry forward) and does not constitute a deficit.
46
REQUIRED SUPPLEMENTARY INFORMATION
Police Officers' Pension Plan
Goverm~ental Accounting Standards Board Statements No. 25 and 27, Financial Reporting for Defined Benefit
Pension Plans and Note Disclosures for Defined Contribution Plans and Accounting for Pensions by State and Local
Governmental Employers require supplementary infomaation be reported on the local pension plans in addition to
that provided in the Notes to the Financial Statements. This information is presented in the following schedules:
SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER
AND OTHER CONTRIBUTING ENTITIES
LAST SIX FISCAL YEARS
Annual
Fiscal Required City State Percentage
Year Contributions Contribution Contribution Contributed
2003 233,435 153,111 92,714 105.31%
2002 61,342 8,620 82,877 149.16%
2001 80,740 29,134 68,646 121.10%
2000 68,954 27,704 112,773 203.73%
1999 129,435 103,548 46,790 116.15%
1998 102,215 96,039 39,753 132.85%
The information presented in the required supplementary schedules ~vas 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 9/30/03
city
Plan members
Ammal pension cost
Contributions made
Valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial remm assumptions
Investment rate of return
Projected salary increase*
* Includes inflation at
Post retirement COLA
10.7%
5.0%
$ 140,721
$ 153,111
10/1/2000
Aggregate
N/A
N/A
Market Value
8.0%
6.0%
3.0%
0.0%
47
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.
Community Development Block Grant Fund - This fund is used to account for the Small Cities Grant for
infrastructure improvements in the Louisiana Avenue area of the City.
Local Option Gas Tax Fund - This fund is used to account for the government's share of motor fuel tax revenues
that are legally restricted to transportation related expenditures within the government's boundaries.
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.
G.R.E.A.T. Program Fund - This fund is used to account for a federal law enforcement grant to be used for gang
resistance, education and training for school children from grade school through middle school.
Debt Service Fund
Debt service funds are used to account for the accunaulation of pledged funds that are legally restricted to pay
debts.
Special Assessment Revenue Bonds Debt Service Fund - This fund is used to account for the receipt of special
assessments and the associated repayment of debt.
Storn~water Utility Revenue Bonds Debt Service Fund - This fund is used to account for the accumulation of
stormwater utility fees pledged to pay the principal, interest, and fiscal charges on the Stormwater Utility Revenue
Bonds.
Discretionary Sales Surtax Revenue Bonds Debt Service Fund - This fund is used to account for the accumulation
of discretionary sales tax monies pledged to pay the principal, interest, and fiscal charges on the Discretionary
Sales Surtax Revenue bonds.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than
those financed by proprietary funds.
48
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.
Capital Improvements Fund - This fund is used to account for the accumulated resources associated with
infrastructure improvements such as parks and building.
Transportation Improvements Fund - This fund is used to account for transportation related construction such as,
roads, intersections, and sidewalks and is funded with governmental resources, impact fees and State grants.
Road Paving Program Fund - This fund accounts for the resources associated with debt for the purposes of
reconstructing and paving roads.
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.
49
City of Sebastian, Florida
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2004
ASSETS
Cash and cash equivalents
Investments
Due from other governments
Interest receivable
Special Revenue Funds
Community Local Law
Development Option Riverfront Recreation Stormwater Enforcement
Block Grant Gas Tax Redevelopment Impact Fee Utility Forfeiture
$ $ 19,422 $ 576 $ 28,862 $ 50,179 $ 16,082
193,310 91,040 869,658 1,660,832
644 81,431 1,028
83 2,018 80 1
$ 644 $ 294,246 $ 91,616 $ 900,538 $ 1,712,119 $ 16,083
Total assets
LIABILITIES AND FU1ND BALANCES
Liabilities:
Accounts payable $
Retainage payable
Due to other funds
644
$ 15,293 $ 791 S 98 $ 125S 1,148
Total liabilities 644 15,293 791 98 125 1,148
Fund balances:
Reserved for:
Encumbrances
Debt service
Cemetery care
Law enforcement
Unreserved
Total fund balances
Total liabilities and fund balances S
19,971
258,982
90,825 900,440 1,711,994
2,348
12,587
278,953 90,825 900,440 1,711,994 14,935
644 $ 294,246 $ 91,616 $ 900,538 $ 1,712,119 $ 16,083
50
Debt Service Funds
Stormwater Discretionary
Utlity Sales Surtax
G.R.E.A.T. Revenue Revenue
Program Total Bonds 2003 Bonds 2003 Total
$ 734 $ 115,855 $ 20,060 $ 29,495 $ 49,555
2,814,840 615 418,572 419,187
9,134 92,237
2,182 1 1 2
$ 9,868 $ 3,025,114 $ 20,676 $ 448,068 $ 468,744
$ $ 17,455 $ $
9,134 9,778
9,134 27,233
734
22,319
13,321
2,962,241
20,676 448,068 468,744
734 2,997,881 20,676 448,068 468,744
$ 9,868 $ 3,025,114 $ 20,676 $ 448,068 $ 468,744
51
City of Sebastian, Florida
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2004
(Continued)
ASSETS
Cash and cash equivalents
Investments
Due from other governments
Interest receivable
Capital Projects Funds
Total assets $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $
Retainage payable
Due to other funds
Total liabilities
Fund balances:
Reserved for:
Encumbrances
Debt service
Cemetery care
Law enforcement
Unreserved
Total fund balances
Total liabilities and fund balances $
Fund
Total
General Other
Capital Cap,al Transportation Governmental
Projects lmprovemen~ Improvemen~ Total Cemetery Funds
S $ 160,355 $ 143,639 $ 303,994 $ 7,906 S 477,310
1,130,646 834,471 1,965,117 530,314 5,729,458
92,237
158 158 4,933 7,275
$ 1,291,001 $ 978,268 $ 2,269,269 $ 543,153 $ 6,306,280
$ 15,177 $ 21,972 $ 37,149 $ $
154
54,604
154
9,778
15,177 21,972 37,149 154 64,536
92,560 40,591 133,151 155,470
468,744
542,999 542,999
13,321
1,183,264 915,705 2,098,969 5,061,210
1,275,824 956,296 2,232,120 542,999 6,241,744
$ 1,291,001 S 978,268 $ 2,269,269 $ 543,153 $ 6,306,280
52
HOI'AE OF PELICAI'~I ISLA£ND
THIS PAGE INTENTIONALLY LEFT BLANK
53
City of Sebastian, Florida
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2004
REVENUES:
Taxes:
Property
Motor fuel
Intergovemmental
Impact fees
Charges for services
Fines
Special assessments
Investment earnings
Contributions and donations
Other revenue
Special Revenue Funds
Community Local Law
Development Option Riverfront Recreation Stormwater Enforcement
Block Grant Gas Tax Redevelopment Impact Fee Utility Forfeiture
$ $ $ 250,995 $ $ $
722,828
63,300 21,086
557,700
12,447 2,737 8,987
757,712
10,130
21,512
6,816
500 716
Total revenues 63,300 756,361 253,732 566,687 779,724 17,662
15,678 206,883
EXPENDITURES:
Current:
General government
Public safety
Physical environment
Transportation
Economic environment
Cultural recreation
Debt Service:
Principal
Interest and fiscal charges
Capital projects
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Debt proceeds
Total other financing sources (uses)
Net changes in fund balances
Fund balances - beginning
Residual fund equity transfer
Fund balances - ending
196,283
103,717
86,041
2,177
13,050
10,959
15,678 506,883 86,041 2,177 13,050 10,959
47,622 249,478 167,691 564,510 766,674 6,703
(47,622) (211,672) (135,750) (363,943)
(47,622) (211,672) (135,750) (363,943)
37,806 167,691 428,760 402,731 6,703
241,147 (76,866) 471,680 1,309,263 8,232
$ S 278,953 $ 90,825 $ 900,440 $ 1,711,994 $ 14,935
54
Debt Service Funds
Special Stormwater Discretionary
Assessment Utility Sales Surtax
G.R.E.A.T. Revenue Revenue Revenue
Program Total Bonds 1996 Bonds 2003 Bonds 2003 Total
$ $ $ $ S $
11,105
250,995
722,828
95,491
557,700
757,712
10,130
45,683
6,816
1,216
28,424 28,424
12,690 499 3,395 16,584
11,105 2,448,571 41,114 499 3,395 45,008
10,279
21,238
13,050
222,561
86,041
2,177
152 152
196,283 77,615 105,000 485,000 667,615
103,717 4,376 314,210 432,643 751,229
10,279 645,067 82,143 419,210 917,643 1,418,996
826 1,803,504 (41,029) (418,711) (914,248) (1,373,988)
209,387 842,702 1,052,089
(758,987)
230,000 126,780 356,780
(758,987) 439,387 969,482 1,408,869
826 1,044,517 (41,029) 20,676 55,234 34,881
(92) 1,953,364 95,945 392,834 488,779
(54,916) (54,916)
$ 734 $ 2,997,881 $ S 20,676 $ 448,068 $ 468,744
55
City of Sebastian, Florida
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2004
(Continued)
REVENUES:
Taxes:
Property
Motor fuel
Intergovernmental
Impact fees
Charges for services
Fines
Special assessments
Investment earnings
Contributions and donations
Other revenue
Capital Projects Funds
General
Capital Capital Transportation Road
Projects Improvements Improvements Paving
Fund
Total Cemetery
Total
Other
Governmental
Funds
$ $ $ $ $ $
175,784
175,784
1,771 476 2,247
86,000
10,797
$ 250,995
722,828
271,275
557,700
843,712
10,130
28,424
75,311
6,816
1,216
Totalrevenues 175,784 1,771 476 178,031 96,797 2,768,407
EXPENDITURES:
Current:
General government
Public safety
Physical environment
Transportation
Economic environment
Cultural recreation
Debt Service:
Principal
Interest and fiscal charges
Capital outlay
147,562
410,618
147,562
410,618
152
21,238
3,450 164,062
633,179
86,041
2,177
122,076 I22,076 985,974
32,618 32,618 887,564
42,511 118,329 160,840 160,840
154,694 190,073 528,947 873,714 3,450 2,941,227
(154,694) (14,289) (527,176) 476 (695,683) 93,347 (172,820)
154,693 569,750 527,622 1,252,065 2,304,154
(207,056) (70,748) (277,804) (13,750) (1,050,541)
356,780
Totalexpenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING
SOURCES (USES)
Transfers in
Transfers out
Debt proceeds
Total other financing sources (uses)
Net changes in fund balances
Fund balances - beginning
Residual fund equity transfer
Fund balances - ending
(52,363) 499,002 527,622 974,261 (13,750) 1,610,393
(207,057) 484,713 446 476 278,578 79,597 1,437,573
207,057 791,1ll 912,205 43,169 1,953,542 463,402 4,859,087
43,645 (43,645) (54,916)
$ $ 1,275,824 $ 956,296 $ $ 2,232,120 $542,999 $ 6,241,744
56
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Community Development Block Grant
For the Year Ended September 30, 2004
REVENUES:
Intergovernmental
Total revenues
EXPENDITURES:
Current:
Transportation
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
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 700,000 $ 63,300 $ (636,700)
700,000 63,300 (636,700)
56,000 15,678 40,322
56,000 15,678 40,322
644,000 47,622 (596,378)
(644,000) (47,622) 596,378
$ $ $
57
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, 2004
Motor fuel taxes
Intergovernmental
Investment earnings
Total revenues
EXPENDI'IIJRES:
Current:
Transportation
Debt service:
Principal
Interest and fiscal charges
Total expend/tures
Excess of revenues over expenditures
OIItI~R FIS)3'CII~G USES
Transfers out
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 705,595 S 722,828 $ 17,233
32,016 21,086 (10,930)
10,533 12,447 1,914
748,144 756,361 8,217
237,117 206,883 30,234
196,271 196,283 (12)
103,729 103,717 12
537,117 506,883 30,234
211,027 249,478 38,451
(211,672) (211,672)
(645) 37,806 38,451
241,147 241,147
$ 240,502 $ 278,953 $ 38,451
58
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, 2004
Investment oar~ngs
Total revenues
EXPENDITURES:
Curcent:
Economic enviranment
Total expenditures
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ 244,495 $ 250,995 S 6,500
2,735 2,737 2
247,230 253,732 6,502
209,987 86,041 123,946
209,987 86,041 123,946
Excess of revenues over expenditures
Fund balances - begimfing
Fund balances - ending
37,243 167,691
(76,866') (76,866)
130,448
$ (39,623) $ 90,825 $ 130,448
59
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, 2004
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
REVENUES:
Impact fees $ 286,010 $ 557,700 $ 271,690
Investment earaings 2,953 8,987 6,034
Total revenues 288,963 566,687 277,724
EXPEIVDITURES:
Current:
Economic environment
Total expenditures
Excess of revenues over expenditures
Ollrt~R HI~ANCING USES
Transfers out
Net changes in fund balances
Fund balances - beginning
Fu~d balances - ending
2,178 2,177 1
2,178 2,177 1
286,785 564,510 277,725
(135,750) (135,750)
151,035 428,760 277,725
471,680 471,680
$.~.~622,715 $ 900,440 $ 277,725
60
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, 2004
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
REVENUES:
Charges for services $ 772,781 $ 757,712 $ (15,069)
Investment earnings l 3,098 21,512 8,414
Miscellaneous 500 500
Total revenues 785,879 779,724 (6,155)
EXPENDITURES:
Current:
Physical environment 13,950 13,050 900
Total expenditures 13,950 13,050 900
Excess of revenues over expenditures
OTHER FINANCING USES
Transfers out
Total other financing uses
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
771,929 766,674 (5,255)
(363,943) (363,943)
(363,943) (363,943)
407,986 402,731 (5,255)
1,309,263 1,309,263
$ 1,717,249 $ 1,711,994 $ (5,255)
61
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, 2004
Fines
Contributions
Miscellaneous
Total revenues
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
10,000 $ 10,130 $ 130
4,600 6,816 2,216
27 716 689
14,627 17,662 3,035
EXPENDITURES:
Cunent:
Public safety
Total expenditures
Excess of revenues over expenditures
Ftmd balances - beginning
Fund balances - ending
14,300 10,959 3,341
14,300 10,959 3,341
327 6,703
8,232 8,232
6,376
$ 8,559 $ 14,935 $ 6,376
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
G.R.E.A.T. Program Special Revenue Fund
For the Year Ended September 30, 2004
REVENUES:
Intergovernmental
Total revenues
Actual Variance with
Amounts on Final Budget -
FinaI a Budgetary Positive
Budget Basis (Negative)
$ 11,104 $ 11,105 $ 1
11,104 11,105 1
11,104 10,279 825
11,104 10,279 825
826 826
(92) (92)
$ (92) $ 734 $ 826
EXI~ENDITURE S:
Current:
Public safety
Total expenditures
Excess of revenues over expenditures
Fund balances - beginning
Fund balances - ending
62
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Special Assessment Revenue Bonds 1996
For the Year Ended September 30, 2004
REVENUES:
Special assessments
Investment eamings and other revenues
Total revenues
EXPENDITURES:
General govenm~ent
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditures
Fund balances - beginning
Residual fund equity transfer
Fund balances - ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
18,680 $ 28,424 $ 9,744
2,674 12,690 10,016
21,354 41,114 19,760
160 152 8
77,615 77,615
4,463 4,376 87
82,238 82,143 95
(60,884) (41,029) 19,855
95,945 95,945
(35,061) (54,916) (19,855)
$ $ $
63
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Stormwater Utility Revenue Bonds 2003
For the Year Ended September 30, 2004
REVENUES:
Investment earnings
Total revenues
EXPENDITURES:
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditures
OTHER FINANCING SOURCES
Transfers in
Debt proceeds
Total other financing sources
Net changes in fund balances
Fund balances - beginning
Fund balances - ending
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
$ $ 499 $ 499
499 499
105,000 105,000
334,387 314,210 20,177
439,387 419,210 20,177
(439,387) (418,711) (19,678)
209,387 209,387
230,000 230,000
439,387 439,387
20,676 (19,678)
$ $ 20,676 $ (19,678)
64
City of Sebastian, Florida
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Discretionary Sales Surtax Revenue Bonds 2003
For the Year Ended September 30, 2004
Actual Variance with
Amounts on Final Budget -
Final a Budgetary Positive
Budget Basis (Negative)
REVENUES:
Investment earnings $ $ 3,395 $ 3,395
Total revenues 3,395 3,395
EXPENDITURES:
Current:
Physical environment
Debt service: Principal
Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditares
OTHER FINANCING SOURCES
Transfers in
Debt proceeds
Total other financing sources
Net changes in fund balances
Fund balances - beginning
300 300
485,000 485,000
464,482 432,643 31,839
949,782 917,643 32,139
(949,782) (914,248) (28,744)
842,702 842,702
126,780 126,780
969,482 969,482
19,700 55,234 (28,744)
392,834 392,834
$ 412,534 S 448,068 $ (28,744)
Fund balances - ending
65
City of Sebastian, Florida
Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2004
ASSETS
Cash and cash equivalents
Total assets
Balance Balance
October 1, September 30,
2003 AddHions Deletions 2004
$ 2,752 $ 247,010 $101,002 $ 148,760
$ 2,752 $ 247,010 $101,002 $ 148,760
LIABILITIES
Accounts payable
Deposits refunds payable
Performance deposits held in escrow
Total liabilities
250 $ 100,540 $ 100,790 $
392 392
2,110 247,920 101,270 148,760
$ 2,752 $ 348,460 $ 202,452 $ 148,760
66
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedule By Source
September 30, 2004
Governmental Funds capital assets:
Land
Buildings and structures
Improvement other than buildings
Machinery and equipment
Infrastructure
Capital projects
Total capital assets
Inveslment in governmental Funds capital assets by sources:
Federal grants
State grants
County grants
General fund
Law enforcement trust fund
Recreational impact fee
Cemetery trust fund
Donations
Sales taxes
Motor fuel taxes
Revenue bond debt
Capital projects
Total investment in capital assets
FY 2003 FY 2004
4,653,603 $ 4,653,603
2,591,420 2,194,246
2,310,380 2,431,270
5,049,563 5,186,908
15,021,381 15,766,359
1,634,161 9,769,145
$ 31,260,508 $ 40,001,531
903,074 $ 903,074
868,172 1,005,706
712,211 712,211
10,727,762 10,324,160
57,174 58,377
164,063
186,395 186,395
2,332,158 2,319,828
6,418,349 6,917,821
4,158,145 4,377,844
3,262,907 3,262,907
1,634,161 9,769,145
$ 31,260,508 $ 40,001,531
67
Function and Activity
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Schedule by Function and Activity
September 30, 2004
Improvements Machinery
Other than and
Land Buildings Buildings Equipment Infrastructure Totals
General government:
Legislative
City manager
City clerk
City attorney
Finance
MIS
Human resources
Growth management
Building department
Non-departmental
Subtotal
$ $ S 1,100 $ $ $
85,553
15,183
631,324
16,081
22,075
74,728
2,114
62,541
95,405
6,982
22,700
77,537
173,635
2,662,551 50,026
2,662,551 732,060 51,126 553,798 3,999,535
17,181
22,075
74,728
2,114
62,54i
95,405
6,982
108,253
92,720
3,517,536
Public safety:
Administration
School resource
Road patrol
Community policing
Code enforcement
Professional Smd.
Investigations
Support services
Communications
Subtotal
Transportation:
Engineering
Central garage
Roads and drainage
9,560
9,560
78
528,191 61,682
7,774
96,627
46,866
1,047,273
134,796
33,227
18,607
146,787
58,304
73,362
696,060
46,866
1,047,273
134,796
33,227
18,607
154,561
58,304
73,362
535,965 61,682 1,655,849 2,263,056
146,361 120,529 174,566 441,534
111,654 82,419 94,435 288,508
208,918 661,808 979,075 14,338,477 16,188,278
Subtotal
78 466,933 864,756 1,248,076 14,338,477 16,918,320
Physical Environment:
Stormwater
Cemetery
1,309,269 129,282 1,438,551
272,190 47,519 78,354 34,190 21,473 453,726
Subtotal
Culture~Recreafiun:
Parks and recreation
272,190 47,519 78,354 1,343,459 150,755 1,892,277
1,709,224 411,770 1,375,352 385,726 1,277,126 5,159,198
1,709,224 411,770 1,375,352 385,726 1,277,126 5,159,198
Subtotal
Total
Construction in progress
Total
$ 4,653,603 $ 2,194,247 $ 2,431,270 $ 5,186,908 $ 15,766,358 $ 30,232,386
9,769,145
$ 40,001,531
68
Function and Activity
General government:
Legislative
City manager
City clerk
City attorney
Finance
MIS
Human resources
Growth management
Building deparm~ent
Non-departmental
City of Sebastian, Florida
Capital Assets Used in the Operation of Governmental Funds
Schedule of Changes By Function and Activity
September 30, 2004
Governmental Governmental
Funds Funds
Capital Assets Transfers Transfers Capital Assets
October 1, 2003 Additions Deletions In Out September 30, 2004
18,493 $ $ $ 788 $ 2,100 $ 17,181
22,075 22,075
72,705 2,100 1,514 1,591 74,728
2,114 2,114
61,676 4,789 3,924 62,541
72,731 30,073 4,335 3,571 6,635 95,405
5,820 1,162 6,982
12t,876 11,478 4,033 6,178 108,253
93,224 4,515 5,019 92,720
3,531,700 40,738 26,574 3,517,536
Subtotal 4,002,414 38,124 56,551 40,995 25,447 3,999,535
Public Safley:
Adminish'ation
School resource
Road patrol
Community policing
Code enforcement
Professional Smd.
Investigations
Support services
Communications
t,259,519 15,305 400,056 30,940 209,648 696,060
47,817 24,329 25,280 46,866
806,022 187,689 17,740 139,924 68,622 1,047,273
109,074 1,701 16,196 58,925 18,708 134,796
35,585 2,358 33,227
18,607 18,607
120,570 38,315 52,146 89,909 42,087 154,561
52,102 6,202 58,304
77,211 7,463 11,312 73,362
2,507,900 243,010 486,138 376,299 378,015 2,263,056
381,110 60,379 4,889 6,216 1,282 441,534
296,545 2,175 8,162 2,050 288,508
15,558,359 457,864 60,165 233,337 1,116 16,188,279
16,236,014 520,418 73,216 239,553 4,448 16,918,321
1,467,788 4,058 33,295 1,438,551
452,740 21,066 431,674
451,277 13,120 2,000 12,67l 453,726
2,371,805 17,178 54,361 2,000 444,345 1,892,277
4,508,214 580,844 123,269 195,408 2,000 5,159,197
4,508,214 580,844 123,269 195,408 2,000 5,159,197
29,626,347 1,399,574 793,535 854,255 854,255 30,232,386
1,634,161 8,682,239 547,255 9,769,145
Subtotal
Transportation:
Engineering
Central garage
Roads and drainage
Subtotal
Physical Envirorm~ent:
Stormwater
Building maintenance
Cemetery
Subtotal
Culture & Recreation:
Perks and recreation
SubtotM
Total
Constructioninprogress
Total
$._~.~31~260,508 $ 10,081,813 $ 1,340,790 $ 854~255 $ 854,255 $ 40,001,531
69
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70
Statistical Section
This part of the City of Sebastian, Florida's comprehensive annual financial report
presents detailed information as a context for understanding what the information in the
financial statements, note disclosures, and required supplementary information says
about the city's overall financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how
the city's financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the city's most
significant local revenue source, the property tax, and the municipal sales tax.
Debt Capacity
These schedules present information to help the reader assess the affordability
of the city's cun'ent levels of outstanding debt and the city's abihty to issue
additional debt in the future.
Economic and Demographic Information
These schedules offer economic and demographic indicators to help the reader
maderstand the environment within which the city's financial activities take
place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the city's financial report relates to the
services the city provides and the activities it performs.
Pate(s/
73-80
81-87
88-93
94-96
9%99
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The city implemented
GASB Statement 34 in 2001; schedules presenting government-wide information include
information beginning in that year.
71
CI~OF
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72
City of Sebastian, Florida
Net Assets by Component
Last Four Fiscal Years
(accrual basis of accounting)
2004 2003 2002 2001
Governmental Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
$ 16,412,401 $ 16,339,222 $ 14,242,832 $12,778,007
4,059,674 3,235,266 3,289,670 2,270,654
7,171,123 (1) 5,461,224 5,865,388 5,417,630
Total Governmental Activities Net Assets
$ 27,643,198 $ 25,035,712 $ 23,397,890 $20,466,291
$ 4,264,961 $ 1,545,867 $ 363,827 $ 150,722
506,006 505,435 458,014 640,973
1,712,657 1,471,457 1,120,224 985,863
$ 6,483,624 $ 3,522,759 $ 1,942,065 $ 1,777,558
$ 20,677,362 $ 17,885,089 $ 14,606,659 $12,928,729
4,565,680 3,740,701 3,747,684 2,911,627
8,883,780 6,932,681 6,985,612 6,403,493
$ 34,126,822 $ 28,558,471 $ 25,339,955 $22,243,849
Business-Type Activities
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Business-Type Activities Net Assets
Primary government
Invested in Capital Assets, Net of Related Debt
Restricted
Unrestricted
Total Prima~y Government Net Assets
(1) The large increase for unrestricted net assets from 2003 to 2004 is mainly due to increase in State revenue
sharing and tax revenues.
73
City of Sebastian, Florida
Changes in Net Assets
Last Four Fiscal Years
(accrual basis of accounting)
Program Revenues
Governmental Activities:
Charges for Services:
General Government
Public Safety
Physical Environment
Economic Development
Cultural/Recreation
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Activities Program Revenues
Business-Type Activities:
Charges for Services:
Golf Course
Airport
Operating Grants and Contributions
Capital Grants and Contributions
Total Business-Type Activities Program Revenues
Total Primary Government Program Revenues
Expenses
Governmental Activities:
General Government
Public Safety
Physical Environment
Transportation
Economic Development
Cultural/Recreation
Interest and Fiscal Charges
Total Governmental Activities Expenses
Business-Type Activities:
Golf Course
Airport
Total Business-Type Activities Expenses
Total Primary Government Expenses
2004 2003 2002 2001
$ 376,327 $
1,660,032
850,887
48,590
1,144,528
1,353,959
247,774 $ 172,135 $ 183,502
824,821 625,924 554,350
799,637 785,683
24,869 18,753
46,736 73,013 35,050
920,829 958,229 902,001
640,894 872,490 581,941
$ 5,434,323 $ 3,480,691 $ 3,512,343 $ 2,275,597
$ 1,648,308 $ 1,377,245 $ 1,365,027 $ 1,088,104
201,890 168,451 179,373 193,649
67,576 51,087 123,673
2,451,212 1,149,437 214,175 299,334
$ 4,368,986 $ 2,695,133 $ 1,809,662 $ 1,704,760
$ 9,803,309 $ 6,175,824 $ 5,322,005 $ 3,980,357
2,414,865 $ 1,620,616 $ 2,010,288 $ 1,676,383
4,502,109 3,391,831 2,945,701 2,526,514
1,279,257 1,920,200 508,616 452,116
3,288,532 2,401,037 2,258,181 1,630,098
86,041 166,024 223,207 241,692
823,974 747,910 881,260 768,802
722,007 312,367 168,749 160,954
$ 13,116,785 $10,559,985 $ 8,996,002 $ 7,456,559
$ 1,527,051 $ 1,363,359 $ 1,393,551 $ 1,341,001
350,949 315,941 283,726 313,877
$ 1,878,000 $ 1,679,300 $ 1,677,277 $ 1,654,878
$ 14,994,785 $12,239,285 $10,673,279 $ 9,111,437
74 (continued)
City of Sebastian, Florida
Changes in Net Assets (continued)
Last Four Fiscal Years
(accrual basis of accounting)
Net (Expense)/Revenue
Governmental Activities
Business-Type Activities
Total Primary Government Net Expense
2004 2003 2002 2001
$ (7,682,462) $(7,079,294) $ (5,483,659) $(5,180,962)
2,490,986 1,015,833 132,385 49,882
$ (5,191,476) $(6,063,461) $ (5,351,274) $(5,131,080)
General Revenues and Other Changes in Net Assets
Goveramental Activities:
Property Taxes, Levied for General Purposes $ 3,420,971 $ 2,944,456 $ 2,615,939 $ 2,557,333
Sales and Use Taxes 4,035,545 3,705,922 2,844,825 3,013,293
Franchise Fees 770,600 756,194 766,901 753,024
State Shared Revenues 1,721,956 1,523,524 2,068,753 1,336,046
Interest Earnings 398,158 241,358 118,840 236,307
Miscellaneous 388,562 79,662
Transfers (445,844) (534,000)
Total Governmental Activities
Business-Type Activities:
Interest Earnings
Miscellaneous
Transfers
Total Business-Type Activities
Total Primary Government
Change in Net Assets
Governmental Activities
Business-Type Activities
Total Primary Government Change in Net Assets
$ 10,289,948 $ 8,717,116 $ 8,415,258 $ 7,896,003
$ 23,774 $ 21,789 $ 32,122 $ 99,521
261 9,072
445,844 534,000
$ 469,879 $ 564,861 $ 32,122 $ 99,521
$ 10,759,827 $ 9,281,977 $ 8,447,380 $ 7,995,524
$ 2,607,486 $ 1,637,822 $ 2,931,599 $ 2,715,041
2,960,865 1,580,694 164,507 149,403
$ 5,568,351 $ 3,218,516 $ 3,096,106 $ 2,864,444
75
City of Sebastian, Florida
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
General Fund
Reserved
Unreserved
Total General Fund
All Other Governmental Funds
Reserved
Unreserved, Reported in:
Special Revenue funds
Capital Projects funds
Other Funds
Total All Other Governmental Funds
Total Governmental Funds
2004 2003 2002 2001
$ 2,693,710 $ 1,402,398 $ 232,088 $ 121,256
2,421,182 2,479,452 3,690,659 3,406,083
$ 5,114,892 $ 3,881,850 $ 3,922,747 $ 3,527,339
$ 4,208,170 $ 1,596,981 $ 1,503,172 $ 1,306,269
3,355,229 2,211,585 1,808,288 548,174
6,795,371 9,993,933 (1} 2,384,557 2,609,201
$ 14,358,770 $ 13,802,499 $ 5,696,017 $ 4,463,644
$ 19,473,662 $ 17,684,349 $ 9,618,764 $ 7,990,983
(1) The large increase m unreserved fund balance reported m capital projects funds from 2002 to
2003 is due to the issuance of City's Infrastructure Sales Surtax Revenue Bonds, Series 2003.
76
2000 1999 1998 1997 1996 1995
$ 64,341 $ 43,113 $ 3,303,761 $ 7,940 $ 6,666 $ 3,091
2,786,252 2,699,955 3,468,381 3,710,621 3,072,721 2,611,066
$ 2,850,593 $ 2,743,068 $ 6,772,142 $ 3,718,561 $ 3,079,387 2,614,157
$ 2,021,740 $ 605,270
456,461 217,969
1,562,299 4,027,673
$ 168,093 $ 167,980 $ 144,320 $ 746,553
175,505
$ 4,040,500 $ 4,850,912 $ 168,093 $ 167,980 $ 144,320 $ 746,553
$ 6,891,093 $ 7,593,980 $ 6,940,235 $ 3,886,541 $ 3,223,707 $ 3,360,710
77
City of Sebastian, Florida
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Property and Other Local Taxes
Franchise Fees
Charges for Services
Licenses, Permits and Fees
Fines and Forfeitures
Intergovernmental
Impact Fees
Special Assessments
Interest
Miscellaneous
Total Revenues
Expenditures
Current:
General Government
Public Safety
Physical Environment
Transportation
Economic Environment
Cultural and Recreation
Debt service:
Principal Retirement
Interest and Fiscal Charges
Capital Projects
Total Expenditures
Excess of Revenues Over (Underj Expenditures
Other Financing Sources (Uses)
Debt Proceeds
Lease Proceeds
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Debt Service as a Percentage of Noncapital Expenditures
2004 2003 2002
$8,179,344 $7,325,932 $6,228,107
770,600 756,194 766,901
962,677 921,119 1,123,670
1,867,920 878,097 578,695
118,918 119,752 127,027
3,115,520 1,785,237 2,841,315
557,700 395,850 255,775
28,424 22,560 31,756
398,158 241,358 206,567
378,268 91,078 126,823
16,377,529 12,537,177 12,286,636
2,269,656 2,001,823 2,230,870
4,159,619 3,689,170 2,588,526
1,142,905 1,392,071 508,616
2,913,935 1,646,304 1,427,992
86,041 166,024 327,911
771,219 672,179 732,729
985,974 361,024 344,553
887,564 158,043 174,864
8,682,239 3,350,954 2,322,794
21,899,152 13,437,592 10,658,855
(5,521,623) (900,415) 1,627,781
7,756,780 9,500,000
2,745,754 2,992,908 2,009,173
(3,191,598) (3,526,908) (2,009,173)
7,310,936 8,966,000
$1,789,313 $8,065,585 $1,627,781
15.2% 5.4% 6.3%
78
2001 2000 1999 1998 1997 1996 1995
$6,223,280 $6,273,070 $5,837,968 $5,612,313 $5,250,861 $4,931,996 $4,486,685
753,024
300,046 159,70I 33,097 74,485 84,051 74,657 82,653
487,618 475,345 448,928 388,936 345,463 321,149 278,618
148,676 I40,672 89,697 72,723 59,198 82,477 67,774
1,968,416 2,318,091 1,865,375 1,697,747 1,332,676 1,166,881 961,887
28,528 128,154 44,964 30,522 68,474 135,336
417,707 689,395 512,407 290,406 261,548 260,414 297,780
196,311 246,774 650
10,523,606 10,431,202 8,833,086 8,167,132 7,402,271 6,972,910 6,175,397
1,647,858 1,946,702 1,837,031 2,074,479 1,879,432 2,625,066 1,986,873
2,482,393 2,129,662 2,122,823 1,847,503 1,706,546 1,627,955 1,585,901
452,116 345,844 412,990 82,699 79,528 80,941 78,945
1,084,401 1,228,234 1,007,426 1,160,404 1,273,318 1,187,354 1,189,014
273,927 617 4,830 8,492 64,657 26,342
612,038 555,584 488,499 348,546 190,651 174,303 187,003
222,954 212,860 225,243 182,434 173,471 227,526 103,659
152,093 151,536 160,940 29,522 40,704 27,771 29,349
3,402,365 4,713,604 1,915,620 2,640,389 1,331,130 1,124,542 609,079
10,330,145 11,284,643 8,175,402 8,374,468 6,739,437 7,101,800 5,769,823
193,461 (853,441) 657,684 (207,336) 662,834 (128,890) 405,574
900,000 3,261,030 527,993
34,942
2,130,744 2,134,510 1,861,364 258 2,720 4,030 3,800
(2,130,744) (2,134,510) (1,861,364) (258) (2,720) (4,030) (3,800)
900,000 3,261,030 562,935
$1,093,461 $ (853,441) $ 657,684 $3,053,694 $ 662,834 $ 434,045 $ 405,574
5.4% 5.5% 6.2% 3.7% 4.0% 4.3% 2.6%
79
City of Sebastian, Florida
Program Revenues by Function/Program
Last Four Fiscal Years
(accrual basis of accounting)
Function/Program
Governmental Activities:
General Government
Publc Safety
Physical Environment
Transportation
Economic Environment
Cultural/Recreation
Total Governmental Activities
Business-type activities:
Golf Course
Airport
Total Business-Type Activities
Total Primary Government
2004 2003 2002 2001
$ 392,471 $ 1,095,902 $ 172,135 $ 226,786
1,850,710 929,952 785,373 633,230
914,318 1,136,507 785,683 779,837
1,670,534 1,580,076 3,038,913 2,285,809
24,869 18,753
606,290 663,459 566,959 168,335
$ 5,434,323 $ 5,405,896 $ 5,373,932 $ 4,112,750
$ 1,715,884 $ 1,377,245 $ 1,365,517 $ 1,088,104
2,653,102 1,317,888 444,145 616,656
$ 4,368,986 $ 2,695,133 $ 1,809,662 $ 1,704,760
$ 9,803,309 $ 8,101,029 $ 7,183,594 $ 5,817,510
80
City of Sebastian, Florida
Tax Revenues by Source, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year Property Taxes
Public Utility Sales Tax Motor Fuel Total
2004 $ 3,420,971 $ 1,854,632 $ 2,180,913 $ 722,828 $ 8,179,344
2003 $ 2,944,456 $ 1,780,717 $ 1,925,205 $ 675,554 $ 7,325,932
2002 $ 2,717,564 (1) $ 983,236 $ 1,861,589 $ 665,718 $ 6,228,107
2001 $ 2,608,989 $ 1,151,685 $ 1,861,608 $ 600,998 $ 6,223,280
2000 $ 2,323,566 (2) $ 1,044,595 $ 1,704,749 $ 549,800 $ 5,622,710
1999 $ 2,734,068 (3) $ 413,045 $ 1,553,672 $ 484,054 $ 5,184,839
1998 $ 2,810,622 $ 370,170 $ 1,412,207 $ 440,843 $ 5,033,842
1997 $ 2,664,153 $ 345,977 $ 1,244,543 $ 453,858 $ 4,708,531
1996 $ 2,619,790 $ 335,240 $ 1,059,291 $ 381,131 $ 4,395,452
1995 $ 2,461,390 (4) (4) (4) $ 2,461,390
(1) Fiscal Year 2002 property tax revenue reflects a change in the property tax millage rate from 5.0000 to 4.5904.
(2) Fiscal Year 2000 property tax reveane reflects a change in the property tax millage rate from 6.5000 to 5.0000.
(3) Fiscal Year 1999 property tax revenue reflects a change in the property tax millage rate from 6.9000 to 6.5000.
Millage Rate represents the dollar of tax per one thousand dollars of taxable valuation.
(4) Information not available
81
City of Sebastian, Florida
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
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(2)
1995 6.9000 -- 6.9000 8.21258 8.98330 1.21500 10.19830
1996 6.9000 -- 6.9000 8.66433 9.13800 1.21000 10.34800
1997 6.9000 -- 6.9000 8.56874 9.15400 1.16500 10.31900
1998 6.9000 -- 6.9000 8.30490 9.00300 1.13700 10.14000
1999 6.5000 -- 6.5000 8.33160 8.61400 1.00000 9.61400
2000 5.0000 -- 5.0000 8.24360 8.61400 1.00000 9.61400
2001 5.0000 -- 5.0000 8.24860 8.67700 0.88000 9.55700
2002 4.5904 -- 4.5904 8.08410 8.40200 0.68000 9.08200
2003 4.5904 -- 4.5904 7.93960 8.17900 0.53100 8.71000
2004 4.5904 -- 4.5904 7.35050 8.01900 0.48000 8.49900
2.26023
2.74083
2.64544
2.49690
(3)
1.52091
1.62899
1.61045
1.69278
1.43027
(1) Millage includes General Fund, M.S.T.U.s, Emergency Services District and Land Bonds.
(2) All Special Taxing Districts.
(3) Information not available.
Source: Indian River County Property Appraiser's Office
82
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83
City of Sebastian, Florida
Assessed Valuation and Estimated True Values of Taxable Proper~y
Last Ten Fiscal Years
Real Property Personal Property
Fiscal Assessed Estimated Assessed Estimated
Year Value Actual Value Value Actual Value
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
2003 946,293,950 1,182,867,438 48,613,628 48,613,628
2004 1,157,275,164 1,446,593,955 51,330,277 51,330,277
Source: Indian River County Property Appraiser
(1) Total assessed value based on approximately 80 percent of estimated actual value.
84
Exemptions
Real
Property
Total
Assessed
Value
Total
Estimated
Actual Value
154,362,555
161,007,095
172,478,432
177,515,747
187,751,454
190,327,263
198,445,669
205,977,066
217,554,663
228,262,825
$ 540,929,671
556,236,540
594,159,092
619,022,836
672,302,691
698,836,022
799,772,729
874,579,785
994,907,578
1,208,605,441
$ 669,523,416
689,101,935
735,122,895
765,975,826
828,871,434
862,308,810
988,417,017
1,081,885,939
1,231,481,066
1,497,924,232
85
City of Sebastian, Florida
Principal Taxpayers
Year 2004 and Year 1998
2004 1998
Real Percentage Real Percentage
Property of Total Property of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
Florida Power & Light $ 13,513,562 1 1.11% $ 6,448,890 3 1.02%
Wal-Mart Stores Inc. 11,685,269 2 0.96% 7,843,080 2 1.24%
BellSouth Communications 8,096,914 3 0.66% 7,930,440 1 1.26%
BW US 1 [nc 6,289,500 4 0.52% ....
Ruth Guest House, [nc. 3,923,550 5 0.32% ....
Turner, James T. 3,784,200 6 0.31% ....
Seb. Inlet Marina & Trd. Co., Inc. 3,512,390 7 0.29% ....
Oyster Point Resort Condo 3,224,000 8 0.26% ....
Sandy Pines LTD 3,008,500 9 0.25% ....
512 Commerce Center LLC 2,736,990 10 0.22% ....
Lynch, Robert N. (Bishop) .... 3,665,790 4 0.58%
Park Place IvlHP Ltd .... 2,737,650 5 0.43%
Grace's Landing Ltd .... 2,111,580 6 0.34%
Falcon Cable Media .... 1,618,367 7 0.26%
Winn Dixie Stores Inc. -- -- 1,586,073 8 0.25%
Sebastian Center Ltd .... 1,316,420 9 0.21%
Ringhaver Equipment .... 780,155 10 0.12%
$ 59,774,875 4.90% $ 36,038,445 5.71%
Total Assessed Valuation
$1,218,125,068
$ 630,218,290
(1) Principal property tax payers for nine years ago is not available. The information is available from 1998
and forward.
Source: Indian River Comaty Property Appraiser's Office
86
City of Sebastian, Florida
Proper~ Tax Levies And Collections
Last Ten Fiscal Years
Year
Percent of
Total Current Current Tax Delinquent Total
Tax Tax Collections Tax Tax
Levy Collections To Tax Levy Collections (1) Collections
Percent of
Total Tax
Collections
To Tax Levy
2004 $3,216,940 $3,130,521 97
2003 2,862,650 2,725,515 95
2002 2,635,277 2,489,854 94
2001 2,542,544 2,455,930 97
2000 2,422,756 2,283,898 94
1999 2,869,796 2,726,857 95
1998 2,909,597 2,679,819 92
1997 2,727,083 2,513,627 92
1996 2,667,313 2,463,039 92
1995 2,510,166 2,294,209 91
% $
34,247 $ 3,164,768
26,908 2,752,423
36,421 2,526,275
51,690 2,507,620
35,050 2,318,948
2,912 2,729,769
130,803 2,810,622
150,526 2,664,153
156,752 2,619,791
167,181 2,461,390
98.38
96.15
95.86
98.63
95.72
95.12
96.60
97.69
98.22
98.06
Source: Indian fiver County Property Appraiser and Tax Collector
(1) Does not include penalties and interest on delinquent taxes.
87
City of Sebastian, Florida
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Govermnental Activities
Business-type
Activities
Water Line Roadway Infrastructure Stormwater Golf Course
Assessment Imrpovement Sales Tax Utility Revenue Revenue
Bonds Notes Bonds Bonds Bonds
Total
Primary Per
Government Capita
2004 $ $ 2,209,745
2003 77,615 2,406,028
2002 134,299 2,593,939
2001 187,901 2,773,847
2000 238,589 2,946,113
1999 286,521 3,111,041
1998 322,044 3,268,890 (2)
1997 367,764 158,250
1996 415,303 (3) 276,566
1995 387,279
$ 11,I40,000
9,500,000
$ 5,525,000
S 1,885,000 $20,759,745 S 1,072
2,115,000 11,615,000 630
2,335,000 2,335,000 136
2,435,000 2,435,000 146
1,500,000 (1) 1,500,000 93
1,610,000 1,610,000 103
1,715,000 1,715,000 113
1,815,000 1,815,000 125
1,910,000 1,910,000 137
2,085,000 2,085,000 155
(1) Golf Course Revenue Bonds, Series 1996 was refunded in 200I.
(2)The City issued a $3,268,890 promissory note to finance costs of roadway improvements in 1998.
(3) The City issued a $527,993 Revenue Bonds in 1996 for the the costs to construct a
waterline along the riverfront.
88
City of Sebastian, Florida
Computation of Legal Debt Margin
September 30, 2004
Assessed Valuation
Assessed taxable real property value
Add back: exempt real property
Total assessed value of real property
$ 929,012,339
228,262,825
$ 1,157,275,164
Legal debt margin:
Debt limitation - 5 percent of total assessed real property value (1)
Debt applicable to limitation
Total bonded debt $
Less: revenue bonds
Total applicable to limitation
19,425,196
(16,665,000)
$ 57,863,758
2,760,196
$ 55,103,562
Legal debt margin
(1) City adopted financial policies states the City will limit its total outstanding general obligation debt to
five percent of the assessed valuation of real property.
City of Sebastian, Florida
Direct and Overlapping Govermnental Activities Debt
General Obligation Bonds
September 30, 2004
The City of Sebastian has no overlapping general obligation bonded debt.
89
City of Sebastian, Florida
Ratios of General Bonded Debt Outstanding and Legal Debt Margin
Last Six Fiscal Years
2004 2003 2002 2001
$57,863,758 $ 47,314,698 $ 82,922,462 $ 75,457,715
2,760,196 3,078,556 3,382,896 3,673,847
$55,103,562 $ 44,236,142 $ 79,539,566 $ 71,783,868
Debt Limit (1)
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
4.77% 6.51% 4.08% 4.87%
(1) Under the City's adopted financial policies, the City's outstanding general obligation debt should not
exceed 5% of the assessed valuation of real property. The percentage was dropped from 10% to 5% in fiscal
year 2003.
*Data from 1995 through 1998 not available
90
2,000 1999
$ 65,661,986 $ 62,627,497
2,946,113 3,111,041
$ 62,715,873
$ 59,516,456
4.49% 4.97%
91
City of Sebastian, Florida
Pledged-Revenue Coverage
Last Ten Fiscal Years
Recreational Facilities Improvement and Refunding Revenue Bonds, Series 2001
Less: Net
Fiscal Gross Operating Available Debt Service
Year Revenues(1) Expenses (2) Revenue Principal Interest Total Coverage
1995 1,139,795 788,449 351
1996 1,213,952 854,479 359
1997 1,356,609 884,286 472
1998 1,351,368 926,174 425
1999 1,414,976 982,772 432
2000 1,471,743 1,004,760 466
2001 1,165,091 (s) 1,163,741
2002 1,386,424 1,140,640
2003 1,400,154 1,088,052
2004 1,728,828 1,263,240
346 85,000 120,655 205,655 (3)
473 90,000 116,830 206,830 (3)
323 95,000 112,600 207,600 (3)
194 100,000 107,850 207,850 (3)
204 105,000 102,650 207,650 (3)
983 110,000 96,980 206,980 (3)
1,350 ......
245,784 100,000 94,290 194,290
312,102 220,000 85,490 305,490
465,588 230,000 76,290 306,290
1.71 (4)
1.74 (4)
2.28 (4)
2.05 (4)
2.08 (4)
2.26 (4)
(?)
1.27 (7)
1.02 (7)
1.52
Note: Detail regarding the City's outstanding debt can be found in the notes to the financial statements.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total revenues (including charges for services, rems, and interest) and other non-operating revenues.
Total direct operating expenses and exclusive of depreciation and amortization.
Golf Course Bond, Series 1985 refunded in 1992 with Series 1992.
Required coverage is 1.0.
Golf Course closed for four months for renovations.
Golf Course Bond, Series 1992 refunded with Recreational Facilities Improvement and Refunding
Revenue Bonds, Series 2001.
Required coverage is 1.25.
Total revenues consist of stormwater utility fees and interest.
Required coverage is 1.35.
92
Stormwater Utility Revenue Bonds, Series 2003
Gross
Revenues®
Debt Service
Principal Interest Total
Coverage®
779,724
$ 105,000 $ 104,386 $ 209,386
3.72
93
City of Sebastian, Florida
Demographic and Economic Statistics
Last Ten Years
Year Population
Total
Personal
Income (1)
2004 19,365 (5)
2003 18,425 (5)
2002 17,167 683,761,610
2001 16,667 622,045,774
2000 16,181 576,415,763
1999 15,707 612,164,618
1998 15,115 568,626,300
1997 14,470 526,216,020
1996 13,967 479,221,737
1995 13,488 434,677,776
Educational
Per Capita Median Attainment:
Personal Household Median Bachelor's Degree
Income (1) Income (1) Age (2) or higher (2)
(5) (5) (5) (5)
(5) (5) (5) (5)
$39,830 (5) (5) (5)
$37,322 (5) (5) (5)
$35,623 $40,063 49.2 23.1%
$38,974 $37,947 (5) (5)
$37,620 $37,398 (5) (5)
$36,366 $35,895 (5) (5)
$34,311 (5) (5) (5)
$32,227 $33,667 (5) (5)
Sources:
(1) Florida Research & Economic Database
(2) U.S. Census Bureau
(3) Indian River County School Board
(4) Indian River County Property Appraiser
(5) Information not available
94
School Unemployment Total Assessed
Enrollment (3) Rate (1) Property Value (4)
4,917 7.6 %
4,340 7.5
4,309 7.8
1,371 7.4
1,342 6.5
1,383 7.5
1,410 7.9
1,324 8.1
1,313 9.0
1,413 9.7
$ 1,208,605,441
994,907,578
874,579,785
799,772,729
698,836,022
672,302,691
619,022,836
594,159,092
556,236,540
540,929,671
95
City of Sebastian, Florida
Principal Employers
Year 2003 and Five Years Ago
2003
Employer
Publix Supermarket
The New Piper Aircraft
Hale Indian River Groves
Wal-Mart
John's Island
Indian River Estate
Gracewood Fruit Packing
Visiting Nurse Association
Grand Harbor Management
Disney's Vero Beach Resort
Macho Products, Inc.
Total
Total Cotmty Employments
1999(1)
Number of
Employees
Percentage
of Total County
Employment
931 1.76%
688 1.30
650 1.23
505 0.95
500 0.94
399 0.75
330 0.62
297 0.56
290 0.55
289 0.55
200 0.38
5,079 9.60%
52,931
Employer
Employees
Percentage
ofTotalCounty
Employment
The new Piper Aircraft
Publix Supermarket
Wal-Mart
Sun Ag. Inc.
Winn-Dixie
Hale Indian River Groves
Gracewood Fruit Packing
Dodgettown Complex
John's Island
Graves Brothers
Total
1,249 2.87 %
792 1.82
774 1.78
550 1.26
520 1.19
505 1.16
500 1.15
438 1.00
415 0.95
400 0.92
6,143 14.09 %
Total County Employees
43,592
(1) Data before 1999 not available.
Source: Indian River County Chamber of Commerce
* Principal employers information available for Indian River County only.
96
City of Sebastian, Florida
Full-Time Equivalent City Government Employees by Function/Program
Last Nine Fiscal Years
2004 2003 2002 2001 2000 1999 1998 1997 1996
Function/pro~ram
General Government:
City Council 2.5 2.5
City Manager 4 4
City Clerk 4 4
City Attomey 1 1
Finance 5 5
Mgmt Information Svcs 2 2
Human Resources 3 3
Growth Management 4 4
Public Safety:
Police Department 56.5 54.5
Building Department 8 7
Transportation:
Roads & Drainage 14.5 15.5 (1)
Central Garage 3 3
Airport 2.5 2.5
Physical Environment:
Engineering 8 7.5
Stormwater Utility 12 12 (1)
Cultural/Recreation:
Parks & Recreation 17.5 16.5
Cemetery 2 2
Golf Course 13.5 13.5
2.5 2.5 2.5 2.5 2.5 2.5 2.5
4 4 3 3 3 3 4
5 5 5 5 5 5 5
1 1 1 0 0 0 0
6 6 5 5 5 5 7
0 0 0 0 0 0 0
3 3 3 2 2 2 2
4 4 4 6 0 0 0
53 52.5 50 47 45 43 40.5
7 6 6 6 0 0 0
27.5 26.5 27.5 24 22 27 26
3 3 3 3.5 3.5 3.5 3.5
1.5 1 0.5 0.5 0.5 0.5 0
8 6.5 6.5 6 6 6.5 6
1 0 0 0 0 0 0
14 14 10 10 10 5 5
2 2 2 2 2 2 2
14.5 12.5 12.5 11.5 11.5 11.5 11.5
Totals: 163 159.5 157 149.5 141.5 134 118 117 115
(1) Eleven employees were moved from roads & drainage to stormwater starting fiscal year 2003.
Source: City of Sebastian, Florida 1996-2004 Annual Budgets
Method: Using 1.0 for each full-time employee, and 0.50 for each part-time and seasonal employee
*Data from 1995 not available
97
City of Sebastian, Florida
Operating Indicators by Function/Program
Last Six Fiscal Years
Function/program 2004 2003 2002 2001 2000 1999
General Government
Number of Armexafien Approved
Acres of Annexed Property
Purchase Orders Issued
Public Safety
Police Department
Physical Arrest
Traffic Violations
Parking Violations
Building Department
Construction Permits Issued
Estimated Value of Construction (in
millions)
Transportation
Road Maintenance (man hours)*
Asphalt for road maintenance (tons)
Concrete for road maintenance (yards)
Physical Environment
Cemetery
Cemeterg Internments
Grave Deeds Sold
Stormwater
Mile of Swales Maintained
Mile of Ditches Maintained
Road Crossing Maintained
Catch Basins/Culverts
Recreation
Recreation Center attendance
Number of Discount Cards
Number of Golf Course Memberships
Average dfflly golf revenue
6 3 0 1 1 0
484 80 0 80 6 0
408 372 357 411 406 397
653 557 515 627 738 481
5,431 1,939 2,528 2,781 3,562 2,413
3,801 632 207 198 305 53
577 544 363 315 317 210
$ 112.3 $ 82.7 $ 38.9 $ 29.0 (1) $ 9.8
878 850 827 (1) (I) (1)
88 79 75 (1) (1) (1)
283 277 275 (1) (1) (1)
69 81 73 78 77 52
86 45 54 67 85 34
280 280 280 280 (1) (1)
50 50 50 50 (1) (1)
30 30 30 30 (1) (1)
275 275 250 248 (1) (1)
15,155 15,367 (1) (1) (1) (1)
993 855 890 746 791 (1)
116 137 169 190 212 (1)
$9,258 $8,498 $8,451 $7,227 $8,348 $4,996
(1) Information not available
Sources: City of Sebastian Police Department, Growth Management, Public Works, Engineering
Department, Golf Course, and Building Department.
*Data from 1995 through 1998 not available
98
City of Sebastian, Florida
Capital Asset Statistics by Function/Program
Last Six Fiscal Years
Function/program 2004 2003 2002 2001 2000 1999
General Government
Square Footage Occupied 5,516 5,516 5,516 5,516 5,516 5,516
Departmental Vehicles 2 2 2 3 3 3
Public Safety
Police Stations 1 1 1 1 1 1
Square Footage of Police Department 8,700 8,700 8,700 8,700 8,700 8,700
Square Footage of Building Departmer 1,716 1,716 1,716 1,716 1,716 1,716
Police Vehicles 47 42 40 33 32 24
Building Inspector Vehicles 4 4 5 4 3 2
Transportation
Streets (miles) 156 149.6 140.0 140.0 140.0 140.0
Number of Streetlights (per light bill) 3,543 3,543 3,531 3,531 3,319 1,156
Airport 1 1 1 1 1 1
Public Service Vehicles 24 18 22 19 16 16
Physical Environment
Public Service Vehicles 6 7 4 4 4 4
Recreation
Number of Parks 12 12 10 10 10 9
Recreation Centers 2 2 2 2 2 2
Park Acreage 223.37 223.37 207.85 196.47 196.47 194.38
Recreation Center Square Footage 4,859 4,859 4,859 4,859 4,859 4,859
Park Maintenance Vehicles 8 6 6 5 5 5
Golf Course 1 1 1 1 1 1
Golf Course Maintenance Vehicles 0 0 0 0 0 0
Sources: City of Sebastian Finance Department and Growth Management Department
*Data from 1995 through 1998 not available
99
HOME OF PELICAN ISLAND
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100
STNGLE AUDTT SECTI'ON
The Single' Audit Section contains various independent auditor's
reports and schedules as required by the Florida Single Audit Act,
Chapter 215.97, Florida Statutes for state and local governments that
receive state assistance.
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Hatters Based on an
Audit of Financial Statements Performed in Accordance with
Governmental Auditing Standards
Independent Auditor's Report on Compliance with requirements
Applicable to Each Major Program and on Internal Control over
Compliance in Accordance with OIVlB Circular A-133
Schedule of Findings and Questioned Costs - Federal Programs
and State Projects
Schedule of Expenditures of Federal Awards and State Financial
Assistance
101
HOME OF PELI~ ISLA, J~ID
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102
HOYMAN, DOBSON & COMPANY~ P.A.
21.5 Boytree Drive, Melbourne, Floridc~ 32940, 321-2550088, Fax 321-259-8648, vvvvvv hoyman corn
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
Charles W Hoyme% JI
Barbara J. Oswalt
Thomas L Kirk
Karen E Kirkland
Deborah A Bradley
DIRECTOR, EMERIIbS
Roger W Dobson
Eugene K Bjerning
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Sebastian, Florida as of
and for the year ended September 30, 2004, which collectively comprise the City's basic financial statements,
and have issued our report thereon dated February 23, 2005. 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 Compttoller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Sebastian, Florida's internal control over
financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and not to provide an opinion on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in the
internal control that might be material weaknesses. A material weakness is a reportable condition in which
the design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the
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 the internal
control over financial reporting and its operation that we consider to be material weaknesses. However, we
noted certain matters that we reported to management of the City of Sebastian in a separate letter,
Independent Auditor's Management Letter Comments, dated February 23, 2005.
Compliance and Other Matters
As pa~ of obtaining reasonable assurance about whether the City of Sebastian, Florida's f'mancial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on compliance
with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intend~cl solely for the information and use of the City of Sebastian, Florida and management,
federal and state awarding agencies and pass-through entities, and the State of Florida Office of the Auditor
General and is not intended to be and should not be used by anyone other than these specified parties.
Hoyman, Dobson & Company, P.A.
February 23, 2005
· American institute oJ Certified Pubhc ,Accountants · pJorrcJa ~ns ,' ute ar Cert~[ect Publ, c Accoun,anls · $~C Prachce Section of fhe A.I.C.P.A · CPAmerica J,nternalionoJ
TH]S PAGE IS INTENTIONALLY LEFT BLANK.
104
HOYMAN, DOBSON & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
215 Baylree Drive, Melbourne, Florida 32940, 321-255-0088, Fax 321-259-8648, vvvvw hoyman com
Independent Auditor's Report on Compliance with Requirements Applicable
To Each Major Program and on Internal Control Over Compliance
in Accordance with OMB Circular A-133
Charles W Hoyman~ Jc
B~'b~:'a J Oswalr
Thomas [ Kirk
K,o'en E. Kirkland
Deborah A Bradley
DIRECTOR EMERITUS
Roger W Dooson
Eugene K. Biernlng
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
Compliance
We have audited the compliance of the City of Sebastian, Flotida with the types of compliance requirements
described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement~
and the requirements described in the Executive Office of the Governor's State Projects Compliance
Supplement, that are applicable to each of its major federal programs and state projects for the year ended
September 30, 2004. The City of Sebastian, Florida's major federal programs and state projects are identified
in the summary of auditor's 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
federal programs and state projects is the responsibility of the City of Sebastian, Florida's management. Our
responsibility is to express an opinion on the City of Sebastian, Florida's compliance based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America; the standards applicable to financial audits contained in Government Auditing Standards. issued by
the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments,
and Non-Profit Oreanizations; and Chapter 10.550, Rules of the Auditor General. Those standards, OMB
Circular A-133, 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 federal program or 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 federal programs and state projects for the year
ended September 30, 2004. However, we noted a certain matter that we reported to management of the City
of Sebastian in a separate letter, Independent Auditor's Management Letter Comments, dated February 23,
2005.
Honorable Mayor and Members of City Council
City of Sebastian
Page Two
Internal Control Over Compliance
The management of the City of Sebastian, Florida is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts, and grants
applicable to federal programs and 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 federal program or state project to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on internal
control over compliance in accordance with OMB Circular A-133 and Chapter 10.550, Rules of the
Auditor General.
Our consideration of the internal control over compliance would not necessarily disclose all matters in
the internal control that might be material weaknesses. A material weakness is a condition in which the
design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that non-compliance with applicable requirements of laws, regulations, contracts, and
grants caused by error or fraud that would be material in relation to a major federal program or state
project being audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving the internal control over
compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the City of Sebastian, Florida and management,
federal and state awarding agencies and pass-through entities, and the State of Florida Office of the Auditor
General and is not intended to be and should not be used by anyone other than these specified parties.
Hoyman, Dobson & Company, PA
February 23, 2005
106
CITY OF SEBASTIAN, FLORIDA
Schedule of Findings and Questioned Costs -
Federal Programs And State Projects
Fiscal Year Ended September 30, 2004
SECTION I - SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of Auditor's report issued:
Internal control over financial reporting: Unqualified
Material weakness(es) identified? yes
Reportable conditions(s) identified not considered
to be material weaknesses? yes
Noncompliance material to financial statements noted? yes
Federal A wards
Internal control over major programs and projects:
Material weakness(es) identified? yes
Reportable conditions(s) identified not considered
to be material weaknesses? yes
Type of Auditor's report issued on compliance
for major programs and proiects: Unqualified
Identification ofmaior programs:
Name of Federal Program
U.S. Department of Transportation - Airport Improvement
Program
Department of Homeland Security - Federal Emergency
Management Agency
Dollar threshold used to distinguish between
Type A and Type B programs
Auditee qualified as low-risk auditee?
X no
X none repo~ed
X no
X no
X none reported
Federal CFDA No.
20.106
97.036
$300,000
yes X
no
107
CITY OF SEBASTIAN, FLORIDA
Schedule of Findings and Questioned Costs (Continued)
Federal Programs And State Projects
Fiscal Year Ended September 30, 2004
State A wards
Internal control over maior proiects:
Material weakness(es) identified?
Reportable conditions(s) identified not considered
To be material weaknesses?
Type of auditor's report issued on compliance for
major projects:
Any audit findings disclosed that are required
to be reported in accordance with Chapter 10.550,
Rules of the Auditor General?
yes X no
yes X none reported
Unqualified
yes X
no
Identification of major proiects:
Name of State Proiect
Florida Department of Transportation -
T Hangers and Lighting
Infrastructure Improvements
Rehab of Runway 9/27
Install Security Fencing
Clear Runway 9/27 Safety Areas
Construct Administration Building
Wetland and Environmental Mapping & Reports
Construct T-Hangers
Reactivate Runway 9/27, Phase II
Install Security Upgrades
Purchase Maintenance Equipment
Rehab Taxiway A and Apron and Construct
Administration Building Apron
State CSFA No.
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
55.004
Dollar threshold used to distinguish
Between Type A and Type B Projects:
$300,000
SECTION H - FINANCIAL STATEMENT FINDINGS
No matters were reported.
108
CIIY OF SEBASTIAN, FLORIDA
Schedule of Findings and Questioned Costs (Continued)
Federal Programs And State Projects
Fiscal Year Ended September $0, 2004
SECTION III - FLNDENGS AND QUESTIONED COSTS - MAJOR FEDERAL PROGRAMS
No matters were reported.
SECTION IV - FINDINGS AND QUESTIONED COSTS - MAJOR STATE PROJECTS
No matters were reported.
109
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110
CITY OF SEBASTIAN, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
Federal / State Agency
Pass-through Entity
Federal Program / State Proiect
CFDA Contract
CSFA Grant
No~ No.__:.
Expenditures
State
Matching
U.S. Department of Justice
Dffect Prograras:
Of flee of Justice Programs
COPS SRO Grant
Bulletproof Vest Parmership
Gang Resistance Educafion & Training (G.H.E.A.T.)
Indirect Programs:
Passed through Florida Department of Law Enforcement
Local Law Enforcement Block Grant
Total U.S. Department of Justice
U.S. Department of Treasury
Direct Programs
Gang Resistance Education & Training (G.R.E.A.T.)
Total U.S. Department of Treasury
U.S. Department of Transportation
Direct Programs:
Federal Aviation Administration - Airport Improvement Program
Airfield Fencing / Access Control
Clear Runway 9/27 Safety Areas
Rehabilitate Runway 9/27; Construct Taxiway "B"
Rehabilitate Taxiway A; Construct General Aviation Terminal Apron
Indirect Program: Pass thru Indian River County
Federal Highway Administration
Disaster Relief Funding
Total U.S. Department of Transportation
16.710 2001SHWX0298
16.607 N/A
21.053 2004-JV-FX-0136
16.592 04-C J-TN- 1040-02-125
21.053 ATC03000250
20.106 3-12-0145-003-2002
20.106 3-12-0145-003-2002
20.106 3-12-0145-004-2003
20.106 3-12-0145-005-2004
20.205 FL4)4-04
8,816 $
3,245
165,927
9,165
506,727
49,712
82,496
814,027
Department of Homeland Security
Indirect Program - Pass thra Florida Department of Community Affairs
Federal Emergency Management Agency
Hurricane Frances
Hurricane Jeanne
Total Department of Homeland Security
TOTAL EXPENDITURES OF FEDERAL AWARDS:
97.036 FEMA-1545 -DR-FL
97.036 FEMA-156l -DR-FL
581,264 29,255
219,223 9,530
800~487 38,785
$ 1,646,854 $
111
CITY OF SEBASTIAN, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE (CONTINUED)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
Federal / State Agency
Pass-through Entity
Federal Program / State Proiect
CFDA Contract
CSFA Grant
Expenditures
Department of Community Affairs
Direct Projects:
Small Cities Communit~ Development Block Grant
Lousiana Avenue Improvement Program
Total Department of Community Affairs
Department of Transportation
Direct Projects:
District Maintenance
Lig~tlag Malatenance ~aid Compensation Agreement
Total Department of Transportation
TOTAL EXPENDITURES OF STATE FINANCIAL ASSISTANCE:
This schedule is prepared on the accrual basis of accounling.
14.228 03DB-IA-10-40-02-N34
55.004 407345-1-94-01
55.004 236320-1-94-01
55.004 412976-1-94-01
55.004 407552-I-94-01
55.004 412382-1-94-01
55.004 407632-1-94-01
55.004 409864-1-94-01
55.004 412384-1~94-01
55.004 412373-1-94-01
55.004 415214-1-94-01
55.004 415216-1-94-01
55.023 405122-1-72-10
$ 63,300
63~300
405,925
10,993
4,996
5O9
124,817
14,757
500,000
28,151
43,405
32,000
1,308
$ 1,578~257
The accompanying notes are an integral part of the schedule.
112
HOYMAN, DOBSON & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
215 Bc~ytree Drive, Melbourne, Florida 32940, 321-255-0088, Fox 321-259-8648, v,/ww hoymon cam
Chares W~ Hoyman, JI
Barbara J. O~,,valt
Thomas L. Kr.<
Karen E Kirkland
Deborah A Bradley
D RECTOR EMERIEUS
Roger W Dobson
Eugene K Bjerning
Independent Auditor's
Management Letter
Honorable Mayor and Members of City Council
City of Sebastian
Sebastian, Florida
We have audited the financial statements of the City of Sebastian, Florida, as of and for the fiscal year
ended September 30, 2004, and have issued our report thereon dated February 23, 2005.
We conducted our audit in accordance with United States generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States and OMB Circular A-133 Audits of States, Local Governments,
and Non-Profit Organizations. We have issued our Independent Auditors Report on Internal Control over
Financial Reporting and on Compliance and Other Matters, Independent Auditor's Report on Compliance
with Requirements Applicable to Each Major Program and on Internal Control Over Compliance with OMB
Cimular A-133 and Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule,
which are dated February 23, 2005, should be considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General.
Those rules (Section 10.554(lXg)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
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 findings of this nature in the prior year audit report.
The Rules of the Auditor General (Section 10.554(lXg)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. The status of the findings from the prior year management letter is as
follows:
Finding Status
I. Grant compliance - certified payrolls Cleared
2. Grant compliance - periodic reviews Repeated as #1
3. Budget compliance Corrected
4. Noncompliance with debt covenant Corrected
113
· gmerical~ Jr~stilute of Certd~ed Public Accountants · Florida Inslitule o[ Certified Public Accountants · SEC Pioctice 5ectior~ of the A !. CP.A · C?America International
Honorable Mayor and Members of City Council
City of Sebastian
Page Two
As required by the Rules of the Auditor General (Section 10.554(I)(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 Melbourne, Florida complied with Section
218.415, Florida Statutes.
The Rules of the Auditor General (Section 10.554(I)(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.
We noted the following matters:
1. Grant Compliance
Finding: While obtaining an understanding of internal controls over major federal programs, it came
to our attention that management has not implemented a system to periodically conduct independent
reviews of procurement and contracting activities to determine whether policies and procedures are
being followed as intended.
Recommendation: Although we noted no significant issues during our testing, we recommend that the
City implement some type of independent review of procurement and contracting activities, at regular
intervals, to ensure that all policies and procedures are being followed.
Management response: The Purchasing Department concurs with your recommendation. The
Purchasing Department staff is currently looking into the possibility of implementation of independent
review of procurements and contracting activities at regular intervals to ensure that all policies and
procedures are being followed.
2. Information Technology - Logical Access Controls
A. Finding: The City of Sebastian does not have a dedicated person to perform certain functions
that would normally be performed by a security officer such as user administration management and
system access review. The number of exceptions we noted supports this finding and the fact that the
IT personnel are thinly stretched.
Recommendation: We believe that the reviewing of application and system logs is an important
contributor to the bank's information security program and should be performed on a regular basis by
an assigned employee in order to identify suspicious activities or system errors.
Management response: We concur with your finding. City has hired a part-time IT technician
starting February 2005. One full-time IT personnel will be requested and programmed in the FY
2005-06 budget year.
114
Honorable Mayor and Members of City Council
City of Sebastian
Page Three
B. Finding: We noted that there were certain ADMIN shares on the four servers we assessed that
were configured to grant EVERYONE full access. For example, on the PURCHASE server the share
USERDATA, which contains text files with unencrypted credit card information and other financial
statements, granted the EVERYONE group Full Access.
Recommendation: We recommend that the access to application processing parameter databases or
data files are restricted to authorized personnel through proper logical controls such as user profiles,
passwords, and network rights configuration and management.
Management response: We concur with your finding. Since January 2005, the security for the Bank
of America software Infospan has been tightened and restricted to authorized personnel only.
C. Finding: We noted that the password policy was the Microsoft default policy which is weak. We
were informed that the reason for the current policy is due to administrative burden but it is
important to note the security risk associated with this policy.
Recommendation: We recommend that password policies clearly outline the intervals within which
system or network passwords must be changed and not set to 'qqever change" as were some user
accounts at the time of our review. Furthermore, we suggest that the current policy is modified to
adapt tighter security.
Management response: We concur with your finding. An information system password policy will
be developed and implemented to address this issue.
D. Finding: We noted that users were assigned IDs and passwords to access the network and various
applications but were also informed that no review was performed of those access rights once
assigned to ensure that individuals have access only to those applications or files that are necessary
to perform their duties.
Recommendation: We recommend that the City of Sebastian review all user access privileges and
group memberships at least once every year in each application and the network. Reviews should
include everyone who uses the system, including users who are given special privileges. This should
be documented, including personnel responsible for the review, and stored in a secure location. It is
important that those users, who need to have certain restrictions on the G/L, are reviewed
periodically for accuracy.
Management response: We concur with your finding. A review will be conducted at least once a
year to ensure individuals have access only to the applications or files that are necessary to perform
their duties.
E. Finding: We noted from the list of terminated employees we reviewed that only one still had an
active account on the network. We also noted that there were some accounts that had either NEVER
accessed the organization's network or had not done so for over 30 days which poses the risk of these
accounts being used to access the organization's systems without being noticed.
115
Honorable Mayor and Members of City Council
City of Sebastian
Page Four
Recommendation: We recommend that policies governing the termination of employees clearly
outline how to handle the password for terminated employees. The account should at a minimum be
disabled and the password changed, The security officer should also pexform periodic reviews of the
active accounts on the network and in the various applications.
Management response: We concur with your finding. A policy will be developed to address the
issues concerning access to the system of terminated employees.
3. Information Technology - Operations
A. Finding: We noted that there were no significant monitoring activities to ensure network
administrative functions comply with organizational procedures and policies. Of the four servers we
assessed they were missing many security patches, had potentially unnecessary services (FTP, SMTP,
WWW, and Telnet) ming, and had some improper configurations and unnecessary applications
requiring security patches such as Media Player installed.
Recommendation: Since there is such a reliance on IT for the bank's survival it is important that ail
areas of the infrastmcture is monitored for soundness and regularly monitored. Formal reporting and
controlling measures should be implemented to ensure compliance with procedures. We recommend
that procedures are established to monitor and report systems deficiencies. The procedure should
specify standard tools and guidelines for their use. We recommend that the SNMP service is disabled
from all network servers and/or devices where it is not needed or change the name of the community
string, establish a procedure to manage the seeurily patches, and remove any unnecessary applications,
utilities or services from the servers.
Management response:: We concur with your finding. Increasing MIS staff should address this issue.
B. Finding: We were informed that the backup tapes were removed from the tape drives only once a
week and once a month a full backup for the LAN and the SCO box were taken off-site permanently.
Recommendation: We recommend that a more comprehensive backup procedure is implemented that
includes daily removal of the SCO backup tape. The media should be sent to a secure, off-premise
storage; alternatively, onsite backup tapes should be stored in a secured fire proof media safe. The
procedure should also include provision for scheduled testing of the backup. We recommend that this
test be performed quarterly and immediately after backup media is replaced. Finally the improved
procedure should be documented.
Management response: To remove the SCO backup tape daily will not be cost effective. Currently
the tapes are being stored off site weekly. A procedure will be developed and implemented for
scheduled testing of the backup.
5. FEMA Expenditure
Finding: The City has spreadsheets and backup to support all of the hurricane expenditures that we
tested. However, the timesheet for one of the forty payroll items we selected did not support the 12
hours of overtime included in the FEMA expenditures. This appears to be an isolated incident and does
not affect the amount requested from FEMA since the City has additional expenditures they incurred to
offset this amount.
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Honorable Mayor and Members of City Council
City of Sebastian
Page Five
Recommendation: Since the City has payroll costs in excess of mounts claimed, no action is
necessary
Management Response: We concur with the finding. There is no corrective action necessary as
indicated in the recommendation.
The Rules of the Auditor General (Section 10.554(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 Cily of Sebastian, Florida's component
unit, the Police Officer's Pension Plan, was established under Section 5846 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, Flor/da 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, 2004,
filed with the Department of Financial Services pursuant to Section 218.32, Florida Statutes, is in
agreement with the annual financial audit report for the fiscal year ended September 30, 2004.
As required by the Rules of the Auditor General (Section 10.554(1)(g)6.c. and 10.556), we applied
f'mancial 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 and use of the City of Sebastian, Florida and management,
federal and state awarding agencies and pass through entities, and the State of Florida Office of the Auditor
General and is not intended to be and should not be used by anyone other than these specified parties.
Hoyman, Dobson & l~ompany, PA
February 23, 2005
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