1984/1985 FY Audit Report 1
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CITY OF OKEECHOBEE, FLORIDA
FINANCIAL STATEMENTS
' SEPTEMBER 30, 1985
(WITH AUDITORS ' REPORT THEREON)
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ICITY OF OKEECHOBEE, FLORIDA
FINANCIAL STATEMENTS
ISEPTEMBER 30, 1985
CITY COUNCIL
Oakland Chapman
Mayor, Chairman
Andy Rubin Edward W. Douglas
Councilmember, Vice Chairman Councilmember
Richard R. Collins Oscar Thomas
Councilmember Councilmember
ADMINISTRATIVE
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Bonnie S. Thomas, CMC
ICity Clerk
Larry Mobley Jerald Bryant
IChief of Police City Attorney
Louis K. Tomey II Milton Davis
Chief of Fire Department Adminstrative Assist.
L. C. Fortner, Jr. Char)_F 71ders
I Public Utilities of Public
Di. erector Works
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CITY OF OKEECHOBEE, FLORIDA
Table of Contents
Page
• Auditors ' Report 1-2
-
Combined Balance Sheet All Fund types and Account Groups 3-4
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - All Governmental Fund Types 5
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual - General and
' Special Revenue Fund Types 6
Combined Statement of Revenues, Expenses, and Changes in
Retained Earnings/Fund Balances - All Proprietary
Fund Types and Pension Trust Funds 7
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Combined Statement of Changes in Financial Position -
All Proprietary Fund Types and Pension Trust Funds 8
Notes to Combined Financial Statements 9
I Supplementary Information to Financial Statements SCHEDULE
General Fund
Schedule of Revenues (Budget and Actual) 1
Schedule of Expenditures (Budget and Actual) 2
' Pension Trust Funds
Combining Balance Sheet 3
Combining Statement of Revenues, Expenses and
' Changes in Fund Balances 4
Combining Statement of Changes in Financial Position 5
Special Revenue Fund - Federal n 1.-c,nue sharing -
' Statement of Pevenues ?_rid 7,xrsndi uses . -•
(Budget and
Debt Service F and. -•- St?tei tent of Revenues =a_ nd
Expect i tures (Budget. and Ac i.uaa
' Water and Sewer Enterprise Func Schedule of
Changes in Reserve Accounts 8
I Statistical Information
Summary of Insurance Coverage 9
Schedule of Assessed Values, Tax Levies and Rates -
' Last Ten Years 10
Schedule of Certain Revenues and Utility Customers -
Last Ten Years 11
IManagement Letter
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' The Honorable Mayor and Members
of the City Council
City of Okeechobee, Florida
' We have examined the combined financial statements of the City of
Okeechobee, Florida as of and for the year ended September 30,
1985, as listed in the accompanying table of contents. Our
' examination was made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the
accounting records and such other auditing procedures as we
considered necessary in the circumstances, except as indicated in
the following paragraph.
The City has not maintained adequate detail records in support of
the cost of the water and sewer utility plant in service (carrying
value of $8,255, 631 at September 30, 1985) and land and
improvements, buildings and improvements, furnishings and
equipment, and rolling stock included in the general fixed assets
group of accounts (carrying value of $1, 697,410 at September 30,
1985) and we were unable to obtain sufficient supporting
' documentation to form an opinion with respect to the stated cost
of these items acquired in years prior to October 1, 1981 or the
accumulated deprcci tios ?pplicable to the water and sewer utility
plant in ser-vices: at September 30, 1985 or the provision for
deprF.I,n=._.ca. for the, year--then ended-. Accordingly, we are ',:liable
-- to express, and we do: not express_ an gpirion on the acccnipanying
financia; s.tatciient.s of the proprietary fund type and the general
' fixed assets .firout. of accounts.
In our opinion, except that, as described in the preceding
' paragraph, we do not express an opinion on the proprietary fund
type and general fixed assets group of accounts, the
aforementioned combined financial statements present fairly the
financial position of the City of Okeechobee, Florida, at
' September 30, 1985, and the results of its operations and the
changes in financial position of its fiduciary pension trust fund
types for the year then ended, in conformity with generally
' accepted accounting principles applied on a basis consistent with
that of the preceding year.
The Honorable Mayor and Members
' of the City Council
City of Okeechobee
Page 2
' Our examination was made for the purpose of forming an opinion on
the combined financial statements taken as a whole. The
supplementary information included in Schedules 1 through 11, as
listed in the accompanying table of contents, is presented for
' purposes of additional analysis and is not a required part of the
combined financial statements. Such information except for
Schedules 9 through 11 which we did not audit, has been subjected
' to the auditing procedures applied in the examination of the
combined financial statements and, in our opinion, except for
Schedules 9 through 11 on which we express no opinion, is fairly
' stated in all material respects in relation to the combined
financial statements taken a whole.
164.14119,0; }Y20c iSietwv
DiBartolomeo, McBee & Sloan
Certified Public Accountants
' December 4, 1985
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CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1985
Fiduciary
Proprietary Funds Account Groups
Governmental Fund Types Fund Employee General General Totals
Special Debt Water Pension Fixed Long- (Memorandum
ASSETS General Revenue Service and Sewer Trust Funds Assets Term Debt Only)
Cash $ 31,998 $ 1 $ 912 $ 169,177 $ - $ - $ - $ 202, 088
Investments 253,792 - 54,799 311,188 974,306 - - 1, 594, 085
Receivables (less allowances
for doubtful accounts)
Taxes (Notes 2 and 3) 73,915 - - - - - - 73,915
• Customer accounts, less
allowances of $1,475 10, 562 - - 116,990 - - - 127,552
Due from other governmental
agencies 41,967 17 ,789 - - - - - 59,756
Accrued interest - - 167 1,984 - - - 2,151
Due from other funds 146,265 - - 27,760 - - - 174, 025
Inventories 1,291 - - - - - - 1,291
Restricted assets
(Notes 7 and 8)
Cash - - - 22, 385 - - - 22,385
Investments - - - 2, 657,573 - - - 2,657,573
, Property, plant, and equipment,
`4 °a"y -;..:1 _ *"� - net (where applicable) of
accumulated depreciation
(Notes 4 and 5) - - - 8, 255,631 - 1,697,410 - 9,953,041
Amount available in Debt
Service Fund - - - - - - 53, 866 53,866
Amount to be pwvi red for
retire/Tent of general
. . 1-,ng-term debt - ,._` - _ =_. _ _ _. __ _ - _ - 438, 520 �_ 438, 520
TOTAL ASSETS $559,790 $17,790 S55, 876 $11,562,05.38 % .. 30 $1,697_,410 $4a2,386 $15,360, 248
See accompanying notes to combined financial statements
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CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS (CONTINUED)
SEPTEMBER 30, 1985
Fiduciary
Proprietary Funds Account Groups
• Government Fund Types Fund Employee General General Totals
Special Debt Water Pension Fixed Long- (Memorandum
LIABILITIES AND FUND EQUITY General Revenue Service and Sewer Trust Funds Assets Term Debt Only)
LIABILITIES
Accounts payable $ 63, 066 $ - $ - $ 77, 692 $ - $ - $ - $ 140,758
Customer deposits - - - 155,993 - - - 155,993
Accrued liabilities 11, 181 - - 19, 543 - - 84, 979 115,703
Payable From Restricted
Assets
Accrued interest on bonds
payable - - - 30, 337 - - - 30,337
Current portion of bonds
payable - - - 26, 000 - - - 26, 000
Accrued interest on Bond
Anticipation Notes Payable - - - 154,903 - - - 154,903
Bond Anticipation Notes
Payable (Note 4) - - - 2, 212,900 - - - 2, 212, 900
Matured bonds and interest
coupons - - 2, 012
Due to other funds 30, 025 - - 144, 000 _ _ 2,012
174, 025
Deferred revenues 20, 055 - - - -
- - 20, 055
Long-term indebtedness
(Note 5) - - - 3,497, 269 - - 407,407 3,904, 676
124,327 - 2, 012 6, 318, 637 492,386 6,937 ,362
FUND EQUITY
Contributed capital (Note 6) - - - 3,272,947 - - - 3,272,947
Investment in general fixed
assets - - - - - 1, 697,410 - 1, 697,410
- Retained Earnings
Reserved for -
s Revenue hr.rd =et,' ''...men:
Note 7 ' - - - 187,251 - - - 187,251
- Renewal am:. r"2;=_a� eii'ent - - - 35,000 - - 35, 000
Unreserved - - - 1,748, 853 - - - 1,748, 853
Fund Balances
Reserved for -
Employees ' retirement system - - - - 974,306 - - 974, 306
Debt service (Note 5) - - 53, 866 - - - - 53, 866
Inventories 1, 291 - - - - - - 1, 291
Encumbrances 7,230 - - - - - - 7, 230
Undesignated 426, 942 17 ,790 - - - - - 447,732
435,463 17 ,790 53, 866 5, 244, 051 974, 306 1, 697 ,410 - 8, 422, 886
TOTAL LIABILITIES AND
FUND EQUITY $559,790 $17 ,790 $55, 878 $11, 562 , 68t, `974, 306 $1, 697, 410 $492, 386 $15, 360, 248
See accompanying notes to combined financia] statements
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED SEPTEMBER 30, 1985
Totals
Special Debt (Memorandum
General Revenue Service Only)
REVENUES (Note 5)
Taxes (Note 2) $ 714,080 $ - $ 13,777 $ 727,857
Intergovernmental (Note 3) 549, 852 71,951 - 621,803
Charges for services 271,762 - - 271,762 Y
Licenses and permits 56,430 - - 56,430
Fines and forfeitures 28,092 - - 28, 092
Interest income 31,791 - 6,223 38,014
Miscellaneous 9,573 - - 9,573
1,661,580 71,951 20,000 1,753,531 I
EXPENDITURES I
Public safety 828,015 - - 828,015
General government 211,522 - - 211,521
Transportation 304,916 - - 304,916
Physical environment . 255,229 - - 255,229
Health and human services 22,238 - - 22,238
Parks and recreation 6,497 - - 6,497
Intragovernment service - public works 25,289 - - 25,289 1
Debt Service
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K.- ;4„a . . _1i ;s ' iti?'ix"> Principal retirement - - 20,000 20,000
Interest charges - - 21,787 21,787
Professional fees - - 500 500
1,653,705 - 42,287 1,695,992
Excess (deficiency) of revenues over expenditures 7,875 71,951 (22,287) 57,539
OTHFR FINANCING SOURCES (USES)
Operating t_ansiars in 77,0_@8 - _ ,u08
�..� ,.
�. Operating transfers out - (77,008) -- s .�.
r�,3,
77,008 77,008 - -
Excess (deficiency) of revenues and other financing
sources over expenditures and other uses 84, 883 (5,057) (22,287 ) 57,539
Fund balances, September 30, 1984 350,580 22, 847 76,153 449,580
Fund balances, September 30, 1985
$ 435,463 $ 17,790 $ 53, 866 $ 507,119
See accompanying notes to combined financial statements 1 I
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GENERAL AND SPECIAL REVENUE FUND TYPES
YEAR ENDED SEPTEMBER 30, 1985
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' General Fund Special Revenue Total (Memorandum Only)
Variance Variance Variance
Favorable Favorable Favorable
(unfavor- (Unfavor- (Unfavor-
Budget Actual able) Budget Actual able) Budget Actual able)
REVENUES
Taxes $ 683,320 $ 714,080 $ 30,760 $ - $ - $ - $ 683,320 $ 714,080 $ 30,160
Intergovernmental 505, 850 549,852 44,002 72,000 71,951 (49) 577, 850 621, 803 43,953
Charges for services 238,450 271,762 33,312 - - - 238,450 271,762 33,312
Licenses and permits 52,538 56,430 3,895 - - - 52,535 56,430 3,895
Fines and forfeitures 19, 800 28,092 8,292 - - - 19,800 28, 092 8,292
Interest income 20,000 31,791 11,791 - - - 20,000 31,791 11,791
Miscellaneous 4,250 9,573 5,323 - - - 4,250 9,573 5,323
1,524,205 1,661,580 137,375 72,000 71,951 149 1,596,205 1,733,531 137,326
EXPENDITURES
Public safety 857,694 828,015 29,679 - - - 857,694 833,279 29, 679
General government 229,044 211,521 17,523 - - - 229,044 211,849 17,523
Transportation 379,540 304,916 74,624 - - - 379,540 306,555 74,624
Physical environment 198,100 255,229 (57,129) - - - 198,100 255,229 (57,129)
Health and human services 19,425 22,238 (2, 813) - - - 19,425 22,238 (2, 813)
Parks and recreation 15,000 6,497 8,503 - - - 15,000 6,497 8,503
Intragovernment service -
:s.1-41.,_,.:.: _=, ," , •;.'-?;,z-,:r:,, ;<.'; '-''' ,.. public works 26,000 25,289 1,381 - - - 26,670 25,289 1,381
1,725,473 1,653,705 71,768 - - - 1,725,473 1,660,936 71,768
Excess (deficiency) of
revenues over expenditures (201,268) 7, 875 209,143 72,000 71,951 (49) (129,268) 72,595 290,094
OTHER FINANCING SOURCES (USES) _
• Operating tran_fers in 72, 000 77:008 5, 005- - - - _ - - - 72,000 77,008 5,008
_. _. ._.Operating_ tranefers out. - ; - (72-,000) (77,008 (5.0013) 02,00O (77,008) (5,008;
,- . __ __ 72,000 77,008 5, 04)8 (72,000) (77,0081 (5,008) - - -
Excess (deficiency) of revenues
and other financing sources
over expenditures and
other uses (129,268) 84, 883 214,151 - (5, 057) (5,057) (129,268) 72, 595 201, 863
Fund balances,
September 30, 1984 350,580 350,580 - 22, 847 22, 847 - 373,427 373,427 -
Fund balances,
September 30, 1985 $ 221,312 $ 435,463 $214,151 $ 22, 847 $ 17,790 $ (5, 057) $ 244,159 $ 446, 022 $201, 863
See accompanying notes to combined financial statements
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED
EARNINGS/FUND BALANCES - ALL PROPRIETARY FUND TYPES AND EMPLOYEE PENSION TRUST FUNDS 1
YEAR ENDED SEPTEMBER 30, 1985
Proprietary Fiduciary
Fund Funds
Employee Total
Water Pension (Memorandum
and Sewer Trust Funds Only)
OPERATING REVENUES
Charges for services $1,371,278 $ - $1,371,278
Interest income - 85,434 85,434
Contributions - 131,410 131,410
Other operating income 785 - 785
1,372,063 216, 844 1,588,907
OPERATING EXPENSES
Personal services 423,107 - 423,107
Contractual services 26,600 - 26,600
Depreciation 140,665 - 140,665
Materials and operating supplies 200,956 - 200,956
Utilities 107,295 - 107,295
Rentals and leases 590 - 590
Insurance 17,398 - 17,398
Repairs and maintenance 73,866 - 73, 866
Administrative supplies and expense 20,669 - 20,669
:,�,�•; :,.; Y,.... Contribution refunds - 25,016 25,016
--7:441:'4, :tea `�. .: ,.:x„ ',t.
Retirement benefits paid - 19,292 19,292
General Fund administative charge 55,715 - 55,715
1,066, 861 44,308 1,111,169
OPERATING INCOME 305,202 172,536 477,738
;ONOPERATING INCOME (EXPENSE)
_- Interest income : 2Z3,511 - 233.511 .$
:ntexegt expense (18,86t) - (18,860)
Other fi al charges (57, 182) - (57,182)
' Miscellaneous 23,798 _, 23,798
818,267 - 818,267
NET INCOME 486,469 172,536 659,005
Retained earnings/fund balance, September 30, 1984 1,484, 635 801,770 2,286,405
Retained earnings/fund balance, September 30, 1985 $1,971, 104 $974,306 $2,945,410
• See accompanying notes to combined financial statements
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION -
ALL PROPRIETARY FUND TYPES AND PENSION TRUST FUNDS
YEAR ENDED SEPTEMBER 30, 1985
Proprietary Fiduciary
Fund Funds
Employee Totals
Water Pension (Memorandum
and Sewer Trust Funds Only)
SOURCES OF WORKING CAPITAL
. Operations
Net income $ 486,469 $172, 536 $ 659,005
Items not requiring working capital
Depreciaition 140,665 - 140, 665
Amortization of bond discount 1,385 - 1,385
Working capital provided by operations 628,519 172,536 801,055
Proceeds from bond anticipation notes 2,212,900 - 2,212,900
Proceeds from bond issue 2,212,900 - 2,212,900
Contributed capital 1,184,026 - 1,184,026
6,238,345 172,536 6,410,881
USES OF WORKING CAPITAL
Retirement of revenue bonds 16,000 - 16, 000
Acquisition of property, plant, and equipment 4,836,972 - 4,836,972
Increase in restricted assets 2,371,364 - 2,371,364
Increase in current portion of bond anticipation notes payable 2,212,900 - 2,212,900
Increase in current portion of bonds payable 10,000 - 10,000
':yt°rte` -z _r -4 »-, _ �r- �: .rte.:.41-f.'4(1*�,,.x ,. - 9,447,-n6 - 9,447,236
INCREASE (DECREASE) IN WORKING CAPITAL ($3,208, 891) $172,536 ($3,036,355)
ELEMENTS OF NET INCREASE (DECRi ASx) IN ti RKING CAPITAL
Cash $ 80,230 $!35,770) $ 44,460
Investments (692,335) 2014; 306 (484,029)
Accounts receivable 7,139 - 7,139
Due from other funds 530 - 530
Accounts payable (43,405) - 43,405
Due to other funds (144,000) - (144,000)
Bond anticipation notes payable (2,212,900) - (2,212,900)
Bonds payable (10, 000) - (10,000)
Customers ' deposits (41,681) - (41,681)
Accrued liabilities (152,469) - (152,469)
INCREASE (DECREASE) IN WORKING CAPITAL ($3,208,891) $172, 536 ($3,036,355)
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See accompanying notes to combined financial statements '
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
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SEPTEMBER 30, 1985
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1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
I The City of Okeechobee was originally incorporated in 1915 and its
present charter was adopted in 1919 under Chapter 8318 of Special Acts
of 1919 . The City operates under the council form of government and
provides the following services as authorized by its charter: public
safety, public works, and culture and recreation.
It is the policy of the City of Okeechobee to conform its accounting
I policies to generally accepted accounting principles applicable to
governmental units. The following is a summary of the more
significant principles and practices used in the preparation of these
Ifinancial statements.
(a) BASIS OF PRESENTATION - FUND ACCOUNTING
IThe accounts of the City are organized on the basis of funds
or account groups, each of which is considered a separate
I accounting entity. The operations of each fund are
accounted for with a separate set of self-balancing accounts
that comprise its assets, liabilities, fund balance/retained
I earnings, revenues, and expenditures/expenses. The various
funds are summarized by type in the financial statements.
The following fund types and account groups are used by the
City:
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GOVERNMENTAL FUND TYPES
' (o velrn:ental Tool s arc this ? i_s',J4- 7:4 which most- -,
gover,_1entai fu.. Lions oz =tht: City -:i-k,.anc:ed._
The - ,_,
' :
acquisiLion, use, ;nd nala�_:,er _ r tl� :'itys
I expendable financial resources and he e?at.ed _
liabilities (except those accounted for in propri'tary
funds) are accounted for through governmental funds.
I The measurement focus is upon determination of changes
in financial position, rather than upon net income
determination. The following are the City's
Igovernmental fund types:
GENERAL FUND
IThe General Fund is the general operating fund
of the City. It is used to account for all
I financial resources except those required to be
accounted for in another fund.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTS POLICIES (CONTINUED)
SPECIAL REVENUE FUND
' Special Revenue Fund is used to account for the
proceeds of specific revenue sources (other than
special assessments, expendable trusts, or major
' capital projects) that are legally restricted to
expenditures for specified purposes.
DEBT SERVICE FUNDS
Debt Service Funds are used to account for the
' accumulation of resources for, and the payment
of, general long-term debt principal, interest,
and related costs.
PROPRIETARY FUND TYPE
A Proprietary Fund is used to account for the City's
ongoing organizations and activities which are similar
to those often found in the private sector. The
' measurement focus is upon determination of net income.
The following is the City's proprietary fund type:
' ENTERPRISE FUND
' The Enterprise Fur.; if-. :used, to :_account for
opc:ra:_i;,ns s.-i thy: are _,financed and -operated
in a : r' r rii i.l;.r to private business..
entezrrisea; -• '-71 c the: is tent_ of •-the. gover'n,ing
' body is that the ousts 'expanses, „_:including
depreciation) of proviallig gonuz or services to
the general public on a continuing basis be
' financed or recovered primarily through user
charges; or (b) where the governing body has
decided that periodic determination of revenues
' earned, expenses incurred, and/or net income is
appropriate for capital maintenance, public
policy, management control accountability, or
other purposes.
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ICITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
' SEPTEMBER 30, 1985
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FIDUCIARY FUND TYPE
' Fiduciary Funds are used to account for assets held by
the City in a trustee capacity for individuals and/or
' other funds.
' TRUST FUND
Trust Funds include pension trust funds and
pension trust funds are accounted for and
reported as proprietary funds since capital
maintenance is critical.
' The accrual basis of accounting is used by
proprietary funds and pension and
nonexpendable trust funds.
(b) BASIS OF ACCOUNTING
' All governmental funds are accounted for using the modified
accrual basis of accounting. Revenues are recognized when
they become measurable and available as a resource to
' finance operations of the current year. Uncollected ad
valorem taxes are not recorded as revenues because, although
measurable, . hc, -.- not available until collected. Accounts
rece a1 Q . nr refuse:_,:co- action and interest on investments
y�
1:ellord as revenues- ass -earned.
?!_a..Tn4iiture6 zre genera.11yxL:,,recognized, uncItIr the tnodific.'_
accrual in the= accounting period in which the
liability lz imcuried. Exceptions to the rule include
accumulated unpaid employee vacation and sick pay, which
' would not normally be liquidated with expendable available
resources within 60 days, principal and interest on general
long-term debt which is recognized when due, and
non-recognition of prepaid expenses to allocate expenditures
between years.
Proprietary Funds and Pension Trust Funds are accounted for
' on the accrual basis. Revenues are recognized when earned
and expenses are recognized when they are incurred.
Unbilled water and sewer utility service revenues ($26,075
at September 30, 1985) are recorded at year end.
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ICITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
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NOTE 1 - SUMMARY SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
' (c) BUDGETARY DATA
The City enacts an annual budget, by ordinance, after
conducting the required public hearings. The budget adopted
' is on a basis consistent with the accounting principles
followed by the City.
(d) ENCUMBRANCES
' Encumbrance accounting, under which purchase orders,
contracts, and other commitments for the expenditure of
funds are recorded in order to reserve that portion of the
applicable appropriation, is employed in the governmental
' funds. Open encumbrances are reported as reservations of
fund balances since the commitments will be honored through
subsequent years' budget appropriations. Encumbrances do
' not constitute expenditures or liabilities. As of September
30, 1985 encumbrances in the General Fund amounted to
$7,230.
(e) CASH
' Cash accounts for the City are maintained in
interest-bearing accounts.
' (f) INVESTMENTS
Investment-s, consisting of cei=if icat.,ss of deposit. and . ore-_
' n.rket-accounts, are stated at cost which appro .imates
_aar3cet.
' (g) INVENTORIES
Inventories of motor fuels are stated at cost determined on
a first-in, first-out basis.
' (h) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment acquired for general
governmental purposes are recorded as expenditures in the
General Fund and capitalized at cost in the general fixed
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
' assets group of accounts. No depreciation has been provided
on general fixed assets. The utility plant and equipment
utilized in the City's water and sewer system is stated at
cost.
Depreciation has been provided principally at a composite
rate of 2-1/2% per year for assets acquired prior to October
1, 1981. Assets acquired after October 1, 1981 are
depreciated by the straight-line method over their estimated
useful lives for periods of five to forty years. Interest
' costs on construction in progress for the City's sewer plant
are capitalized and added to the cost of construction and
will be amortized over the estimated useful life of the
plant (See Note 4) .
' (i) ALLOCATION OF ADMINISTRATIVE CHARGES
Certain administrative expenses are incurred by the City's
General Fund on behalf of the City's Water and Sewer Fund.
The General Fund charges for these services based upon
estimates of City management personnel . The reimbursement
for these services is recorded as an operations expense of
the Water and Sewer Fund and as a reduction of financial and
administrative expense of the General Fund. For the year
ended September 30, 1985, these charges amounted to $55,115.
(j) -VACATION Ata; '3 _1_1 LEAVE
Full-time and permanent employes accrue a Ywid vacation
ranging from six days after six months of conti_•.sous sc„=ric.e
up to 20 days after fifteen years of service. Unused
' vacation may be accumulated up to a maximum of thirty days.
Sick leave for employees is accumulated at the rate of 12
days per year. Payment for unused sick leave upon
termination of employment may be made for employees with 10
years or more of continuous service at a rate of 25% of the
unused sick leave balance.
(k) TOTAL COLUMNS ON COMBINED STATEMENTS
' The columns entitled "Totals (Memorandum Only) " included in
the combined financial statements section of this report are
' 13
' CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
' SEPTEMBER 30, 1985
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
' (k) TOTAL COLUMNS ON COMBINED STATEMENTS (CONTINUED)
presented only to facilitate financial analysis. These
total columns are not comparable to consolidated financial
' information as the basic reporting entity is by fund type
which utilizes differing bases of accounting. In addition,
interfund eliminations have not been made in the aggregation
of this data.
NOTE 2 - PROPERTY TAXES
The City's property tax is levied each October 1 on the assessed value
listed as of the prior January 1 for all real and tangible personal
' property located in the City. Assessed values are established by the
County Property Appraiser at 100 percent of estimated market value.
The assessed value for the list of October 1, 1984, upon which the
1984/85 levy was based, was $73, 878, 151.
Taxes are due no later than March 31 with discounting of taxes being
offered for early payment. Discounts range from 4% if taxes are paid
in November to 1% for taxes paid in February. Current tax collections
for the year ended September 30, 1985 were 98.5% of the tax levy.
' Property taxes levied for 1984/85 are recorded as receivables, net of
estimated uncollectibles. The net receivables collected during
1984/85 and expected to ^nl) :�-';-' in 1985/86 are recognized as
revenues in 1984/85. Prior 1,c.a levies. wece recorded using these same
' princirle„ and y:-.m:-an,rg J.ecPivables- are_=reeval:uat.pd e.%nually.
' NOTE 3 - PROP::'RTY, PLANT AND QUIPMENT=
The carrying value of property, plant, and equipment recorded in the
' water and sewer fund as of September 30, 1985 is summarized as
follows:
Utility plant in service -
' Balance, September 30, 1984 $ 4, 853, 891
Acquired during the year ended
September 30, 1985 (including
' additions to construction-in-
progress of $4,489, 229 4 , 836, 972
' 14
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
' SEPTEMBER 30, 1985
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
' TOTAL 9,690, 863
Less accumulated depreciation 1,435,232
NET BOOK VALUE $ 8,255, 631
The carrying value of property, plant and equipment at September 30,
1985 included $2, 880,343 in carrying value of assets acquired prior to
October 1, 1981. Depreciation expense for the year ended September
30, 1985 was $140,665.
Construction-in-progress additions for the current year included
' $250, 547 of capitalized interest associated with the new wastewater
collection and wastewater treatment systems presently being
constructed by the City (See Note 11) .
A summary of changes in General Fixed Assets for the year ended
September 30, 1985 is as follows:
' Balance Balance
10-1-84 Additions Retire-
ments 9-30-85
Land and improvements $ 760, 653 $44,705 $ - $ 805,358
Buildings and improve-
.:.Yn`� 257,905 257,905
��' cui.:,hings-and equipment 261,071 42,145 466 302,750
1 r:,lling stock _ 321,997 11, 000 1., 600 331 9S7
TOTAL
$1,601,626 $9 7. 850 $2, 066 $1, 697,' '
' NOTE 4 - BOND ANTICIPATION NOTES PAYABLE Retire-
On October 1, 1984, the City issued $2, 212, 900 in bond anticipation
notes, with a due date of October 1, 1985 in anticipation of receipt
' of proceeds from the sale of $2,212,900 in additional Water and Sewer
Revenue Bonds Series 1983 authorized by ordinance 487, enacted June
20, 1983, as amended. Charges relating to that sale are reflected as
fiscal charges in the water and sewer fund. Proceeds of the 1983
Series B Revenue Bonds were received on September 26, 1985 to allow
for repayment on the Bond Anticipation Notes on October 1, 1985. Those
proceeds were placed in a restricted cash account for Bond
' Construction proceeds; the balance at September 30, 1985 in that
account was $2,369, 047 .
' 15
I
ICITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
ISEPTEMBER 30, 1985
INOTE 5 - LONG-TERM DEBT
Long-term debt as of September 30, 1985 is summarized as follows:
IGENERAL LONG-TERM DEBT
$480, 500 original issue General
U Obligation Bonds, due in annual
installments of $15, 000 to $35,000
through July 1, 1996 $ 300, 000
I Notes payable:
7% capital improvement notes to a bank
due $9, 500 semiannually plus interest,
through May 1988 secured by and payable
I from a pledge of the City's share of one
half cent Florida State sales tax 57, 000
I 8% capital improvement note to a bank,
due $9,167 annually, plus interest, through
1988; collateralized by funds other than ad
Ivalorem taxes 27,499
8.5% installment note, due $1,123 monthly
including interest through January 1,
I 1987; secured by equipment with a carrying
value of $48,754 16,219
I 8.49% installment note, due $304 monthly
including interest through September 15,
1987; secured by equipment with a carrying
value of $10,500 6, 689
ITOTAL G:3N RAL LONG--TERM :EBT - $ 407 ,407 _
I
REVENUE BONDS
I $400, 000 original issue 1972 Water
and Sewer Serial Bonds, due in
annual installments of $5, 000
to $24, 000 through January 1, 2012;
Iinterest at 5% $ 348, 000
$1, 000, 000 original issue 1983 Water
I and Sewer Serial Bonds, Series A,
due in annual installments of
$10, 000 to $110, 000 through January 1,
I 2004 ; interest rate of 10-1/2%; net
of unamortized discount of $27 , 631 962, 369
I16
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
' SEPTEMBER 30, 1985
NOTE 5 - LONG-TERM DEBT (CONTINUED)
REVENUE BONDS (CONTINUED)
$2,212,900 original issue 1983 Water
and Sewer Bonds, Series B, due in annual
' installments ranging from $2,900 to
$105,200 through September 1, 2025;
interest rate of 9-1/8% (bond R-1) and
' 9-3/4% (bond R-2)
2,212,900
TOTAL REVENUE BONDS $3, 523,269
' Outstanding general obligation bonds above are redeemable at the
option of the City on any interest payment date by payment of a
premium of 3 percent through 1986; 2 percent between 1986-91 and 1
' percent after July 1, 1991. Interest is payable at 6.75 percent for
bonds maturing through 1990; at 6.875 percent for bonds maturing 1991
through 1995, and at 6.75 percent for bonds maturing in 1996.
' The 1972 water and sewer revenue bonds are secured by a pledge of the
net revenues of the water and sewer system and cigarette taxes. The
bonds are redeemable in whole or in part in inverse order on any
' interest date at par and accrued interest.
1983 Water and Sewer Revenue Bonds- Series: 3 and Series B, are secured
by a pledge of the net revenuea of tie water and sewer system, public
' c ry* :e taxers, fr .:h an4, state.:*revenue -wing funds. The
p midge', of al-id -lien pleas- -*ands rank on a parity .w-i.,t;, ,,:t`•e p?ed_e
of and lien on the p.� ztdger. tunda securey.paymen.t_..o.f,the outstand:-ng
1972 water and ser revenue bo z'q, Ford,th,e ,.k9 83 Series A, bondb
maturing after January 1, 199,E and ,pr-tor to January 1, 2000 are
redeemable by payment of a premium ranging from 3% to 1/2%. Bonds
maturing after January 1, 2000 are redeemable at par. For the 1983
Series B, bond principal payments maturing after September 1, 1992 and
prior to September 1, 2004 are redeemable by payment of a premium
ranging from 4% to 1%. Bond principal payments maturing after
' September 1, 2004 are redeemable at par.
The various bond indentures contain provisions which require
' maintenance and flow of monies through various specific funds, minimum
and maximum amounts to be maintained in various sinking funds and
restricted funds. The City is in compliance with all such significant
limitations and restrictions.
11 17
' CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
' SEPTEMBER 30, 1985
NOTE 5 - LONG-TERM DEBT (CONTINUED)
REVENUE BONDS (CONTINUED)
In conjunction with the issuing of the 1983, Series A, Water and Sewer
Revenue Bonds, the City entered into an escrow deposit agreement with
' Barnett Banks Trust Company, N.A. of Jacksonville,Florida for the
purpose of depositing sufficient funds in escrow to provide sufficient
funds to refund the remaining principal and interest payments of the
' 1958 Water and Sewer Revenue Bond issue and to pay all costs
associated with the management of the escrow account.
A summary of the changes in all long-term debt for the year ended
September 30, 1985 is as follows:
1
' 18
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 0 3 1985
NOTE 5 - LONG-TERM DEBT (CONTINUED)
Proprietary
Water and Sewer
General Long-Term Debt Revenue Bonds
General Total
Obligation Notes 1972 1983A 1983B Long-Term
Bonds Payable Total Series Series Series Total Debt
Balance, September 30, 1984 $320,000 $150, 142 $470,142 $354,000 $1,000,000 $ - $1,354,000 $1,824,142
Additions - - - - - 2,212,900 2,212,900 2,212,900
- Payments during the year 20,000 42,735 621,735 6,000 10,000 - 16,000 78,735
TOTAL 300,000 107,407 407,407 348,000 990,000 2,212,900 3,550,900 3,958,307
Less unamortized bond discount - - - - 27,631 - 27,631 27, 631
Balance, September 30, 1985 $300,000 $107,407 $407,407 $348,000 $ 962,369 $2,212,900 $3,523,269 $3,930, 676
Annual principal requirements
• ,-°,, '. .,. ; .: ,c"T' .Ny;,.. a . :__ for the next five years are
as follows:
Year ended September 30,
1986 $ 20,000 $ 43,973 $ 63,973 $ 6,000 $ 20,000 $ - $ 26,000 $ 89,973
1987 20,000 35,269 55,269 7,000 20,000 27,000 82,269
198R - 25,000 18,165 53,165 7,000 25,000 7 :100 39,100 92,265
'-`-'S 25,00C - 25,^0 7, 000 :;!-7,,i74.1 7,700 39,700 5`1,700
... '� 25,000 - 25,C00 8, ;..00 - 0,f:0C 8,500 46, 500 -- - ';1,50C, .
'2':�° ---185 000 - 185 000 313:006 :s:€�,������
._ . r-• .. ... _ __ _ . i -9; 600 3,372,- 0.0 3,557,600
TOTAL $300,000 $107,407 $407,407 $348,000 $ 990,000 $2,212,900 $3,550,900 $3,958,307
19
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
NOTE 5 - LONG-TERM DEBT (CONTINUED) Proprietary
Water and Sewer
General Lone-Term Debt Revenue Bonds
General Total
Obligation Notes 1983B 1983A 1972 Long-Term
Bonds_ Payable Total Series Series Series Total Debt
The annual requirements to amortize
all debt outstanding as of September 30,
1985, including interest payments
totalling $8,083,112 are as follows:
Year ended September 30,
1986 $ 40,437 $ 51,154 $ 91,591 $ 193,720 $ 122,900 $ 23,400 $ 340,020 $ 431, 611
1987 39,087 40,104 79,191 208,177 120, 800 24,100 353,077 432,268
1988 42,738 29,385 72,123 215,277 123,438 23,750 362,465 434, 588
1989 41,050 - 41,050 215,211 120, 813 23,400 359,424 400,474
1990 39,363 - 39,363 215,288 122,925 24,050 362,263 401,626
1991 37,675 - 37,675 215,291 119,775 23,650 358,716 396,391
1992 40,956 - 40,956 215,318 121,363 24,250 360,931 401, 887
1993 38,894 - 38, 894 215,260 117, 688 23, 800 356,748 395, 642
1994 36,831 - 36, 831 215,218 118,750 24,350 358,318 395, 149
1995 39,769 - 39,769 215,282 119,287 23,850 358,419 398,188
1996 37,362 - 37,362 215,333 119,300 24,350 358,983 396,345
1997 - - - 215,262 118,787 23, 800 357,849 357, 849
1998
- -
215,269 9 117 75-0 24,250 357,269 357,269
1999 - - - 215,235 116,187 23,650 355,072 355,072
. t._;:- ' , ';,"- - t ; s: 3• 2000 . - - - 215,250 118, 837 24,050 358,137 358,137
2001 - - - 215,197 115,700 23,400 354,297 354,297
2002 - - - 215,264 116,775 23,750 355,789 355,789
2003 - - - 215,225 116, 800 23,050 355,075 355,075
2004 - - - 215,269 115,775 23,350 354,394 354,394
. 2005 - - - 215,268 - 22,600 237,868 237, 868
2006 - - 215,205 - 22, 850 238, 055 23x, 055
2007 - - 215,259 - 23,050 238,3n? 238,309
'r;e'3 - - - - 215 {9.; -- 22, 200 -.A,..); 238, 393
2009 - - - 215,188 - 23,3`.10 23;... 1 238.488
2010 - - 215,207 - 24,350 239,55'i 339, 557
2011 - - - 215,313 - 24,300 239,613 239;6
2012 - - - 215,256 - 25,200 240,456 240,46 1
2013 - - . 215,310 - - 215,310 215,310
2014 - - - 215,318 - - 215,318 215, 318
2015 - - - 215,233 - - 215,233 215, 233
2016 - - - 215,307 - - 215,307 215, 307
2017 - - - 215,266 - - 215,266 215, 266
2018 - - - 215,252 - - 215, 252 215, 252
2019 - - - 215,291 - - 215,291 215, 291
2020 - - - 215,298 - - 215, 298 215, 298
2021 - - - 215, 286 - - 215, 286 215, 286
2022 - - - 215,263 - - 215,263 215, 263
2023 - - - 215,325 - - 215,325 215,325
2024 - - - 215,259 - - 215,259 215, 259
2025 - - - 215,221 - - 215, 221 215, 221
TOTAL $434, 162 $120, 643 $554, 805 $8, 581, 864 $2,263, 650 $641, 100 $11,486, 614 $12, 041,419
CITY OF OKEECHOBEE, FLORIDA
INOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1985
II
NOTE 6 - CONTRIBUTED CAPITAL
IIThe source and additions to contributed capital are as follows:
I Balance Balance
Source 10-1-84 Additions 9-30-85
I Connect: io�r, $ 266, 688 $ 110,182 $ 376, 870
Developers 338,761 338,761
"Federal grant 71 - 160 154,903 226, 063
- Local Public Works Jr ' .a 411 . 740 - 417 740
-",4*. _ ,:Federal-.Revenue Shartnn k u.-k 511), 5 7 2 - 61.:0,:02,,,
)General Fun*'. 100,000 - 100,000 • .,
Okeechz Leach Wester
Association 275,000 - 275, 000
Environmental Protection
Agency Grant - 918, 941 918,941
ITOTAL $2, 088,921 $1,184, 026 $3,272,947
INOTE 7 - REVENUE BOND RESERVE AND RETIREMENT FUNDS
I The 1972, 1983 Series A and 1983 Series B Water and Sewer Revenue Bond
ordinances require, among other things, deposits on a monthly basis,
of amounts necessary to provide for semi-annual and annual interest
I and annual principal requirements. In addition the 1972 Revenue Bond
ordinance requires a reserve of $23,400 while the 1983 Revenue Bond
ordinance requires a reserve equal to the maximum annual debt service
requirement on outstanding bonds, which was $124,750 for the Series A
II and $21,527 for the Series B at September 30, 1985. At September 30,
1985, the amounts required and the amounts on deposit are as follows:
I 1972 1983 1983
Series A Series B
Revenue Revenue Revenue
IBonds Bonds Bonds Total
Maximum reserve $23 ,400 $124,750 $21, 527 $169, 677
Deposits for bond principal
I and interest requirements 17 , 550 53, 981 - 71, 531
Balance of construction funds
required to be deposited
I in sinking fund 2, 380 - - 2, 380
Reserve balance -
September 30, 1985 $43, 330 $178,731 $21, 527 $243, 588
II
21
I
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
NOTE 7 - REVENUE BOND RESERVE AND RETIREMENT FUNDS (CONTINUED)
' At September 30, 1985, amounts included in restricted assets (cash and
investments) in the accompanying combined balance sheet for these
requirements totalled $275,535.
111 NOTE 8 - RENEWAL AND REPLA^ .M NT FUND
The 1983 Revenuekl ondi ordinance -6qui tU3' :ninthly depos. *s of $1 ,667
into a r_ene 1a'1'"and keglaceaeent.4,fund iint.i., a/,,•••Ls.tir'lated deposit? total
II X100, 00O3 . _�.. _. fund,,ma'y be used fow `osts �c,ei�u3oz�.s, o.11azge vi, nt ,
or additions to,-oriebibkacMOnt c piLal asset of the sewez sys cen
and emergency repairs. 'r_ oi tYmhw_r 30, 1985, $35,000 was required to
be on deposit. Investments included as restricted assets in the
accompanying combined balance sheet for the renewal and replacement
fund totalled $27,616 in a certificate of deposit and the balance
' included in a pooled funds money market account which totalled
$161,188.
' NOTE 9 - PENSION PLANS
The City has three pension plans covering substantially all the City's
regular employees. Total pension expense for the year was $41,757
including, with respect to the general employes benefit plan,
amortization of past service cost over a 33 year period. It is the
' City's policy to fund pension expense as determined by actuarial
valuation. Mandatory employee contributions to the plans are at the
rate of 5% of earnings. Accumulated employee contributions totalled
$230, 840 at September 30, 1985 as follows:
' General $ 144, 822
Police 65, 643
Fire 20,375
TOTAL $ 230, 840
The City's contribution by fund for the year ended September 30, 1985
was:
' General Fund $ 22, 807
Proprietary Fund 18, 950
TOTAL $ 41,757
' 22
CITY OF OKEECHOBEE, FLORIDA
111 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1985
' NOTE 9 - PENSION PLANS (CONTINUED)
At September 30, 1985, the net asset valuation by the autuary included
' $618 of employer contribution due in the General Employees Pension
Fund. The plans covering the City's firefighters and police officers
are also funded by the State of Florida from a tax on fire insurance
premiums collected. State contributions to these plans totalled
'
$9,566 and $28,795, respectively, dux-1z1,1 L 'e y'ar ended September 30,
1985.
' ,arnxim:L^Lr'y of i act,,azakel,.:.preasent`_. va3.Ue,. of,:::accurtiuI-.+ et'. r' bane is
ar . plan net asee:.:. a'si-oaf October- 1, 15tt5 ( -ie r-.:ce'lt
valuation date) is as follows:
General Police Fire
VESTED BENEFITS
Terminated members $ 7, 142 $ - $ -
Members currently receving
payments 12, 957 - -
' Other members 197 ,472 84, 285 23,196
217,571 84, 285 23,196
Nonvested benefits 2, 546 6,985 1,188
TOTAL ACTUARIAL PRESENT VALUE
OF ACCUMULATED PLAN BENEFITS $220, 117 $ 91,270 $ 24,384
1
NET ASSETS AVAILABLE FOR BENEFITS $502, 021 $346,497 $126,405
' ACTUARIAL ASSUMED INVESTMENT
RATE OF RETURN 7% 7% 7%
' Principal actuarial assumptions used in the valuation above are
summarized as follows:
' Mortality - The. 1951 Group Annuity Mortality
Table Projected by Scale C to 1970
(regraduated) ; females set back 5 years.
' Interest - 7% per year compounded annually, net
of expenses.
23
I
ICITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
ISEPTEMBER 30, 1985
INOTE 9 - PENSION PLANS (CONTINUED)
Retirement age - 60 for police officers and fire-
fighters, 65 for all other employees,
Iimmediately if over assumed retirement age.
Salary increases - 6% for police and general; 7%
I for firefighters, until the assumed retirement
age.
I Fur?ing .rnothod - Frozen_ ;try t ge actuarial cost
me t hc_d. .
INOTE 10 - HOSPICE GRANT
The City applied for and received a Community Services Block Grant of
I $2, 813 . Hospice of the Treasure Coast-Okeechobee Branch was the
subgrantee. The City received the funds and, upon presentation of
invoice by Hospice, would disburse the funds thereto accordingly, up
Ito the total amount of grant monies.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
IAs of September 30, 1985, the City has been awarded grants totalling
$1, 000, 000 from Farmers Home Administration and $1,339,700 from the
I Environmental Protection Agency to be used in connection with
construction of the City's new wastewater treatment plant. During the
current fiscal year, $154,903 was received from the Farmers Home
I Administration Grant and $918,941 from the Environmental Protection
Agency Grant.
In conjunction with the construction of its new wastewater treatment
I plant, the City has entered into contracts with Widell and Associates,
Inc. totalling $3,328, 057 for plant construction; Taddie Underground
Utility Company, Inc. and M & M Contracting Co. , a joint venture for
I wastewater collection system construction for $1, 816, 080; and Broome
Van Ostran and Associates, Inc. for related engineering services
totalling $286, 965.
I
I
I
I 24
SCHEDULE 1
I
I CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
I SCHEDULE OF REVENUES
(BUDGET AND ACTUAL)
IYEAR ENDED SEPTEMBER 30, 1985
Variance
favorable
I Budget Actual (unfavorable)
TAXES
Ad valorem taxes $ 298,320 $309,298 $ 10,978
I Franck:;sG iccR 171,500 208, 614 37,114
-..Utility sere c_e taxes 213, 500 196, 168 (17, 332)
_ . - - 683,220 714, 080 30,760
• INTERGOVERNMENT.., R 71117,1:�
- State shared ever ue
Ciarz::te tax 73,000 68, 913 (4,087)
I State revenue sharing
176, 000 176, 013 13
Mobile home licenses 1,500 932 (568)
1/2 cent sales tax 90, 000 104, 681 14, 681
I Alcoholic beverage licenses 2, 000 2, 210 210
Gasoline tax refund 1,200 4, 694 3,494
Local option gasoline tax 110,00b 131,162 21,162
453,700 488, 605 34,905
IShared Revenues from Other
Local Units
County occupational
I licenses 1, 500 2, 155 655
Dual tax - county 3, 500 9,237 5,737
1/2 cent sales tax -
I county 2,150 - (2, 150)
City share of 5th and
6th cent gas tax 45, 000 49, 855 4, 855
52, 150 61,247 9, 097
TOTAL INTERGOVERNMENTAL
REVENUES 505, 850 549, 852 44, 002
I CHARGES FOR SERVICES
Sanitation fees 237 ,300 269 , 972 32, 672
Miscellaneous 1, 150 1,790 640
I238,450 271,762 33,312
LICENSES AND PERMITS
Occupational licenses 30, 000 38, 484 8, 484
I Building permits 21, 035 16, 268 (4,756)
Competency cards 1, 500 _ 1 , 678 178
52, 535 56, 430 3, 895
IFINES AND FORFEITURES
Court fines 19 , 000 25, 287 6, 287
I Police education -750 2, 805 2, 055
Code enforcement fines 50 (50)
19 , 800 28, 092 8, 292
SCHEDULE 1
(CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUES (CONTINUED)
' (BUDGET AND ACTUAL)
YEAR ENDED SEPTEMBER 30, 1985
Variance
_ favorable
Actual (unfavorable)
II Tutereut - $ 20,0C,-)
.
S :z ,iii S 11,791
MISCELLANEOUS
' Hospice Grant (Note 10) - 2, 813 2, 813
Other 500 636 136
Sale of assets 500 712 212
' Rents and royalties 2,750 2, 580 (170)
Refunds of prior year
expenditures _ 500 2, 832 2,332
4,250 9, 573 5,323
' TOTAL $1,524,205 $1, 661,580 $137,375
1
1
I
II
SCHEDULE 2
CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
ISCHEDULE OF EXPENDITURES
(BUDGET AND ACTUAL)
IYEAR ENDED SEPTEMBER 30, 1985
I Variance
favorable
Budget Actual (unfavorable)
IPUBLIC SAFETY -
i law En .arc emei.t .
_:4,.: $ 406,910 $401,973 - ?
_' - _ `.'�rbona"1 �.°�w ic:c.s5 - `- . .�
Operating expense-..:,
- 4„83,3,81 81,47 .:.f;
Capital outlay 53,200I-I- : 49,'._9 4,081
543,491 332, bb4 $10,927
' Fire Control
Personal services 177,797 175,344 2,453
I Operating expenses 55,870 54,556 1,314
Capital outlay 27,309 20, 586 6,723
260,976 250,486 10,490
I Protective Inspections
Personal services 43,527 39,337 4,190
Operating expenses 8,200 5, 628 2,572
I Capital outlay 1, 500 -
44,965 1, 500
53,227 ,965 8,262
TOTAL PUBLIC SAFETY 857, 694 828, 015 29,679
IGeneral Government
Legislative
Personal services 36, 266 30,427 5, 839
I Operating expenses 22,322 30,129 (7, 807)
Capital outlay 1, 500 1, 500
60, 088 60, 556 (468)
IExecutive
Personal services 53, 311 38, 371 14, 940
Operating expenses 9, 590 10,480 (890)
I Capital outlay 1, 500 4,206 (2,706)
64,401 53, 057 11,344
I Financial and Administrative
Personal services 105, 215 103, 509 1,706
Operating expenses 37 ,370 39,740 (2, 370)
' Capital outlay 10,700 4,219 6, 481
Allocation of administrative
charges (60, 000) (55,715) (4 , 285)
93, 285 91,753 _ 1, 532
II
1
I
SCHEDULE 2
I (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
IIGENERAL FUND
SCHEDULE OF EXPENDITURES (CONTINUED)
(BUDGET AND ACTUAL)
IYEAR ENDED SEPTEMBER 30, 1985
II Variance
favorable
IIBudget Actual (unfavorable)
i3!':N RAL •` RY MFWr (CCrTINUi ) ,
Con rci'.i 1ve T l uni2?
II a - $ - $- -
:er=g-c:t+ ice
expenses 4,985 3,183 - 1,802
Capital outlay 700 - 70':,
1 5, 685 3, 183 2,502
Judicial
I Personal services - -
Operating expenses 4, 885 2,972 1,913
Capital outlay 700 700
5, 585 2,972 2,613
ITOTAL GENERAL GOVERNMENT 229,044 211, 521 17, 523
TRANSPORTATION
I Road and Street Facilities
Personal services 142,357 138,784 3, 573
Operating expenses 109, 885 120,085 (10,200)
Capital outlay 127,298 46, 047 81,251
I379,540 304,916 74,624
PHYSICAL ENVIRONMENT
I Garbage/Solid Waste Control
Services
Personal services - - -
I Operating expenses 198,100 255, 229 (52,129)
Capital outlay
198, 100 255,229 (57, 129)
I HUMAN SERVICES
Health
Personal services - -I Operating expenses 19,425 22, 238 (2, 813)
Capital outlay
19,425 22, 238 (2, 813)
I
I
ISCHEDULE 2
(CONTINUED)
ICITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
I SCHEDULE OF EXPENDITURES (CONTINUED)
(BUDGET AND ACTUAL) ,
IYEAR ENDED SEPTEMBER 30, 1985
IVariance
favorable
IBudget Actual (unfavorable)
CULTURE/RE
._ Parks and Recreation
't Personal service- i - $
;
Operating expenaG - -
Capita'. =purl 15, 000 6,497 8, 503
' 15, 000 6,497 8, 503
INTRAGOVERNMENT SERVICES
Public Works
IPersonal services 24,325 23,537 788
Operating expenses 2,345 1,752 593
Capital outlay - _ - -
' 26, 670 25,289 1,381
TOTAL EXPENDITURES $1,725,473 $1,653,705 $71,768
II
II
I
I
I
I
II
I
1
1
1 SCHEDULE 3
CITY OF OKEECHOBEE, FLORIDA
PENSION TRUST FUNDS
' COMBINING BALANCE SHEET
SEPTEMBER 30, 1985
1 Police General
officers ' Firemen's employees '
retirement retirement retirement
' ASSETS fu;r fund fund Total
Invesi:*nents in savings
1 c:err f >Bter and
mor._y market :accounts
(at cost, which
approximates market) $ 3A ", 4:;? X126,405 $501,403 $974,306
1
II Fund balances -
Reserved for
retirement $ 346,497 $126,405 $501,403 $974,306
i
1
1
1
i
1
1
1
1
SCHEDULE 4
' CITY OF OKEECHOBEE, FLORIDA
PENSION TRUST FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND BALANCES
IYEAR ENDED SEPTEMBER 30, 1985
Police General
officers ' Firemen's employees '
' retirement retirement "-et-Ir.-gm-lent
fund fund f�.T a Total
};z;;,^r,ITJES
State tai. on
;_nsurai:ce premiatac $ 28,795 $ 9;5x6:6 $ !C, 36i
Employer's
' contributions - 323 41,434 41,757
Employee 's
contributions 11, 806 5,988 33,498 51,292
' Interest earnings 30, 285 10, 856 44,293 85,434
70,886 26,733 119,225 216, 844
EXPENSES
Employees ' contribution
refunds 5, 182 2, 624 17,210 25, 016
Retirement benefits
' paid - - 19,292 19,292
5,182 2,624 36, 502 44,308
'
EXPENS
REVENUES OVER ES 65,704 24,109 82,723 172,536
Fund balances,
' September 30, 1984 280,793 102,297 418, 680 801,770
Fund balances,
September 30, 1985 $346,497 $126,406 $501,403 $974, 306
11
ISCHEDULE 5
CITY OF OKEECHOBEE, FLORIDA
I PENSION TRUST FUNDS
COMBINING STATEMENT OF CHANGES IN FINANCIAL POSITION
IIYEAR ENDED SEPTEMBER 30, 1985
I Police General
officers ' Firemen's employees '
retirement retirement retirement
1'-I Setil<LES 07 -i4oTerri
I fund fund fund Tot.v_ _ __
CAPTr1A'.
I F--; rl> of _.e.ve*"., ss
over expenses $65,704 $24,109 $ 82,723 ::$17.2, 53F
IUSES OF WORKING CAPITAL - - - -
INCREASE IN
IWORKING CAPITAL $65,704 $24,109 $ 82,723 $172, 536
I
ELEMENTS OF INCREASE
I (DECREASE) IN WORKING
CAPITAL
Cash $ (8,793) $ (5, 193) $ (21,780) $ (35,770)
IInvestments, at cost 74,497 29,306 104,503 208,306
INCREASE IN
IIWORKING CAPITAL $65,704 $24,109 $ 82,723 $172, 536
I
I
I
I
SCHEDULE 6
CITY OF OKEECHOBEE, FLORIDA
SPECIAL REVENUE FUND - FEDERAL REVENUE SHARING
STATEMENT OF REVENUES AND EXPENDITURES
(BUDGET AND ACTUAL)
' YEAR ENDED SEPTEMBER 30, 1985
Variance
favorable
Budget Actual (unfavorable)
REVENUES
' revenue sharing entitleI1e1ii.b °. -12- 001) 71,951 Y (4g)
Expenditures - - -
' 72, 000 71,951 (49)
' OTHER FINANCING USES
Operating transfers out 72, 000 77, 008 (5, 008)
EXPENDITURES OVER REVENUES $ - $ (5, 057) $ (5, 057)
tSCHEDULE 7
CITY OF OKEECHOBEE, FLORIDA
DEBT SERVICE FUND
STATEMENT OF REVENUES AND EXPENDITURES
(BUDGET AND ACTUAL)
IYEAR ENDED SEPTEMBER 30, 1985
Variance
favorable
' Rudget Actual (unfavorable)
REVENUES
>d v.lc rent taxes $ 13,';ic. a l . 777 ., S 67
' Interest incr,me _ - - o,223 6,223
s ;.i 6,290
I EXPENDITURES
Bond principal retirements 20, 000 20,000 -
Bond interest expense 21,788 21,787 1
Professional fees _ 500 500 -
42,288 42,287 1
EXPENDITURES OVER REVENUES $ (28,578) $ (22, 287) $6,291
SCHEDULE 8
CITY OF OKEECHOBEE, FLORIDA
WATER AND SEWER ENTERPRISE FUND
SCHEDULE OF CHANGES IN RESERVE ACCOUNTS
YEAR ENDED SEPTEMBER 30, 1985
Bond Reserve and
Retirement Fund _
Renewal
Total and Replace- Current Maximum
Reserved ment Fund Total Maturities Reserve
Balance - September 30, 1984 $217, 055 $15,000 $202, 055 $ 53,905 $148,150
ADDITIONS
From Operating Fund
Bond principal requirement 45, 027 - 45,027 23, 500 21,527
Bond interest requirement 121,688 - 121, 688 121,688 -
Renewal and replancement requirement 20,000 20, 000 - - -
Interest earned on investment 26,493 2,291 24,002 9, 601 14,401
Transfer to current maturities - - - 3,392 (3 ,392)
213,208 22,491 190,717 158, 181 32, 536
DEDUCTIONS
Payments For
Bond principal 16,000 - 16,000 16, 000 -
f ;4�_=. ..r Bond interest 122,175 - 122,175 122,175 -
Transfer to Revenue Fund 135,500 2,491 11,009 - 11, 009
151,675 2,491 149,184 138, 175 11, 009
278, 588 35, 000 243,588
$ 73,911 $169,677
LIABILITIES PAYABLE
From Restricted Assets
Cu;.•rent portion of :tends payable 26, 000 - 26, 000
Accrued interest 30,337 -• 30,337
56,337 �- - 56,337
Balance - September 30, 1985 $222,251 $35, 000 $187,251
1
I
i
' SCHEDULE 9
CITY OF OKEECHOBEE, FLORIDA
' SUMMARY OF INSURANCE COVERAGE
SEPTEMBEER 30, 1985
DESCRIPTION COVERAGE
FIRE AND EXTENDED COVERAGE
Buildings and contents (90 percent
cu insurance - $100 deductible) $1,954,350
COMPRISI G:1N -fX . LIAB?_T.ITY •
' Bodily izT—i y 500, 000
Proper�cv aar=g 500, 000
Par .taJ. :`.iijury liability 500,000
ILAW ENFORCEMENT LIABILITY
Bodily injury, personal injury
property damage ($1, 000 deductible) 1, 500, 000
IWorkers ' compensation and employer's liability Statutory rates
I VEHICULAR EQUIPMENT
Bodily injury and property damage 500, 000
Uninsured motorist 35, 000
Collision ($250 deductible) ACV
' Comprehensive ($250 deductible) ACV
Scheduled property floater ($250 deductible) 307, 897
PUBLIC OFFICIALS BONDS
City clerk 20, 000
Other employees 20, 000
Public official liability ($1, 000 deductible) 1, 500, 000
1
I
ISCHEDULE 10
CITY OF OKEECHOBEE, FLORIDA
ISCHEDULE OF ASSESSED VALUES, TAX LEVIES
AND RATES — LAST TEN YEARS
I
ASSESSED VALUES
IREAL PERSONAL HOMESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1985 $59, 835,384 $14, 042,767 $73, 878, 151 $19, 504,959
1984 57; s::0+. O98 13, 060,620 70, 880,718 19, 007, 098
1983 . , 54,77.85, :::4t 12, 102, 1n1 66, 827,745 17, 665, 060
1982 - :. 57,589; 1 ; .:r. S';;4, E60 68, 254,320 14 . 162,210
I1-981 57, 036,510 1E+,4?5. .'.3 .__-- h7,511, 63 Y4, ���:i. 980
T980 51,225,723 4_11': , 167 €O, 950, 7 5, 173,4i0
1979 34,756. 6 di 8,787, 6;,4 43, 544,354 5, 034,700
I1978 14-, 065,35C 8, 587, 844 42, 653,194 4,905,430
1977 28, 053,703 6, 872,990 34,926, 693 4,702, 690
1976 24,370, 665 7,241, 590 31, 612, 255 4, 585, 570
I
TAX LEVIES AND APPLICABLE RATES
I LEVIES RATES
DEBT GENERAL
DEBT GENERAL SERVICE GOVERNMENT
• YEAR SERVICE GOVERNMENT MILLS MILLS
I 1985 $14, 008 $314 , 056 $ .150 $4 .251
1984 13,483 307,480 .150 4.338
I1983 12 , 674 261,497 .150 3 .913
1982 8, 668 291, 007 .127 4.250
1981 8, 574 286,924 .127 4 .250
I1980 36, 386 335, 209 .58 5.500
1979 40, 248 179,780 . 83 4 . 137
1978 41, 852 168, 054 . 88 3 .940
1977 43 , 989 157 , 519 1.11 4 .510
I1976 35, 090 145,732 1 .11 4 .610
I
I
I
I
SCHEDULE 11
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUES AND UTILITY CUSTOMERS
LAST TEN YEARS
REVENUES - OTHER THAN PROPERTY TAXES - GENERAL FUND
State Fire
Revenue Depart-
Sharing Occupational Utility Fines and Franchise ment Anti-Recession
Year (Note) Licenses Taxes Forfeitures Fee Permits Interest Payment Fund Miscellaneous
1985 $349,607 $38,484 $196,168 $28, 092 $208,614 $16,268 $31,791 $ - $ - $ 9, 573
1984 346,742 42, 119 133,768 22,764 185,428 25,508 34,363 - - 31, 083
1983 329,260 40, 138 118, 812 20,493 152,921 14, 836 25, 091 - - 21, 985
1982 251, 194 32, 175 114,551 23, 031 154, 823 10,493 64,132 - - 43,250
1981 -- 257,325 22,228 108, 286 13, 813 137,759 23,459 69,536 - - 4,240
1980 243, 055 20, 084 100, 857 19, 827 110,587 12,995 61,733 - - 1, 671
1979 251, 212 20, 551 93, 107 18,125 93,232 10, 856 76, 173 - - 2, 035
1978 243,923 17, 974 92,458 18, 317 87,758 7,401 54,990 7,776 25, 863 7 , 076
1977 235, 839 18,783 82, 858 24, 817 72, 821 8,349 49, 860 35, 000 51, 084 16, 662
1976 243,536 17,491 80,779 46,477 54,324 9,065 43, 099 15, 000 - 3,737
Connec-
tion
Inter- Charges Water Water
Sewer Delin- est on (in Aid Meters Water Meters Total Un- Sewer
Service Water Impact quent Miscel- Invest- of cons- Hydrant in Oper- Meters nonoper- Water Metered Conn-
. . Year Charges _ Billings Fees Charges laneous ments truction _Rental ation Cut Off ation Meters Customer ections
. 1985 - $184,075 $946,425 $212,787 $20,671 t 8, 583 $233,511 :5110,181 . =,$ 7020 ,. : 3, 507 328 - 3, 835 - _512
1984 135,993 -- = 835,234 29,012 14, 573 9,663 110,7s7 20,112 7,320 3,27-5 336 _ - - 3, 611 _ -• 162
1983, 130,189-.... 712,251 26,775 20, 146 11,219 92,91.2 25,163 27-,000 - __3,,,102 370 - 3,472 --• 462
1982• 109,448 701,272 - 17,372 22,324 7;,1�'-1 13 . 400 27,000 3,129 130 13 3,272 -- 462 1
1981- 82,359 569,905 - 12,228 6,647 70,738 24,:125 27,000 2,979 222 13 3,214 - 459
1980 79,453 535,973 - 9,580 6,732 53,657 15, 650 23, 280 2,849 272 1 3,122 - 450
1979 66, 844 494, 849 - 9, 280 5, 557 33, 288 23,460 22,440 2,738 286 13 3, 037 - 430
1978 59,724 436,451 - 9, 140 3, 658 30,961 19,975 25, 000 2,612 236 19 2, 867 - 428
1977 59, 506 413, 666 - 10,220 2, 838 18,225 13,660 25, 000 2,454 281 6 2,741 10 424
1976 49, 867 357,349 - 7,404 47,046 14,289 10,956 25,000 2,394 268 1 2, 663 29 423
Note - Includes additional two-cent cigarette tax and 1/2 cent sales tax
1
The Honorable Mayor and
Members of City Council
City of Okeechobee, ?lori.cia
We are 7presenting, tom yei 2 r cc2 s a.Fi on, .0 r commenz.47 and
.1�c-oiiiinendations- regarding the .it�y^a:1 contr_Ols of, t`_?e
City.
these -comments and recr=o.,da i::ns came to our er.tion
during the course_ of our exai•:ination of the combined financial
I - statements of th. City of Okeechobee, Florida (the "City") for
the year ended September 30, 1985 which was reported upon on
December 4, 1985.
' As a result of our examination, we became aware of a material
weakness in the internal accounting control for the City's
general fixed asset group of accounts and property, plant, and
equipment of the City's water and sewer fund, which is discussed
in Exhibit I. This information should be considered in light of
Exhibit III which describes the purpose of our study and
' evaluation of internal accounting controls as part of our
examination, and such information is intended solely for the use
of your management in assessing the control environment.
The comments and recommendations presented in Exhibit II are
intended to improve the system of internal accounting control and
are divided into the following major objectives:
' Protecting Assets
Improving Operational Efficiency
We would like to take this opportunity to acknowledge the
courtesy and assistance extended to us by the personnel of the
City during the course of our examination.
At/~“
DiBartolomeo, McBee & Sloan
Certified Public Accountants
December 4, 1985
I
EXHIBIT I
I (CONTINUED)
ESTABLISHMENT OF FIXED ASSETS CONTROLS (CONTINUED)
I1 . Define clearly what constitutes the fixed assets
categories, (e.g. , land, buildings, improvements other
I than buildings, equipment) ; a fixed asset (i .e. , minimum
dollar value and useful life) ; and the location "control"
areas.
I 2 . Plan and perform a complete inventory of all fixed assets.
In creating the inventory records, obtain as much of the
information to be included in the individual assets
I records as is possible, e.g. , asset description, ' :.cation,
vendor or manufacturer and acquisition date. Fixc:c3 -sset`
ident.; ficatic)n tags should be affixed , at the i. mc= t.ue
I -- - physical inventory is taken. .
3 . Assign values to each fixed asset according to accP^._mod
principles. More specifically, the AICPA Tc.cius`r. Audit
I Guide, "Audits of State and Local Governmental Units, "
sets forth the basis for valuing fixed assets of a
governmental unit: "Such assets should be recorded at
I historical cost, or estimated historical cost, if the
original cost is not available, or, in the case of gifts
or contributions, at the fair market value at the time
I received. "
Several procedures can be used to determine the valuation.
I Reference to the historical records, such as
vendors ' invoices, contracts, purchase orders,
capital expenditure authorizations, cancelled
I checks, gift acknowledgements, or other
documents on hand.
I Correspondence with vendors, donors, etc.
Use of an asset valuation reasonably reflective
of historical value, provided it is reliable,
I if historical or fair market value is not
available.
I Historical cost as reasonably estimated by
employees for small items of relatively low
value, e.g. , tools, office furniture, and
I equipment.
Reliance on independent outside appraisals for
assets which cannot be valued by one of the
I above methods or some other reasonable method.
It is important to emphasize, however, that the
appraisal should be based upon estimated
I historical cost, not on replacement cost or
some other basis .
I
IEXHIBIT I
ESTABLISHMENT OF FIXED ASSETS CONTROLS
The City has not maintained adequate detailed records in support of
I the recorded cost of the water and sewer plant in service or the
amounts included in the general fixed assets group of accounts and
we were unable to obtain sufficient supporting documentation to
I form an opinion with respect to (a) the stated cost of property
items acquired in years prior to October 1, 1981 (b) the
accumulated depreciation applicable to the water and sewer utility
plant in service at September 30, 1985 or the provision for the
Iyear then ended.
Sound financial .. adminis'tration �n tiafcg:1�: y the City's
I -- •invc .momnt in fixed assets is of utmost i:up:rt nce :he •:Ixsrcise
of stewardship responsibilities. The YQs:cru ib.tl itims can be
effectively discharged only throuLn adequate =fixed assets
Iaccounting.
By maintaining fixed assets records, the City will realize several
benefits:
IFixed assets can be inventoried periodically to ensure
that they are properly controlled.
IResponsibility for custody and effective use of fixed
assets can be clearly established.
I Information regarding sources of supply, prices, and
useful lives will be readily available. If information
regarding maintenance costs is also included in the
II subsidiary ledgers, ratios of cumulative maintenance
costs to original costs can be developed.
I Records will be readily available to substantiate the
amount of grants used to finance expenditures for fixed
assets. Furthermore, the determination of costs for
I building or equipment use is facilitated. The latter is
important to obtain reimbursement for the use of
buildings and equipment in Federal and State aid programs.
I Information is readily available both to determine
insurance needs and to substantiate losses recoverable
from insurance.
IInformation is available for the preparation of a
Statement of General Fixed Assets.
I Establishing fixed assets records when none existed before can be a
difficult and time consuming task. One approach is to:
II
1
' EXHIBIT I
(CONTINUED)
ESTABLISHMENT OF FIXED ASSETS CONTROLS (CONTINUED)
Evaluation of fixed assets in the above manner will enable
' the City to establish reasonably accurate initial fixed
asset values .
' Once initial records are established, the City will want to
concurrently implement the kinds of controls and procedures
enabling it to maintain control over the fixed assets. These
' procedures should include:
C7o7_tr_o1 over the proper input into the records for. all ,.
tied Asset additions, sales,: abandonments, and.
Periodic reconciliations of detail ledgers to the ger:eral
' ledger.
Periodic inventory of fixed assets by location.
IVerification that any asset traded in for a new
acquisition is properly removed from the records.
CUSTOMER DEPOSITS
A detail listing of customer deposits in the water and sewer fund
should be generated from the computer at least quarterly. This
listing should be used to reconcile to the amount shown on the
general ledger for that account balance.
1
EXHIBIT II
' PROTECTING ASSETS
DATA PROCESSING DISASTER PLANNING
At the present time, the City does not have formal written policies
for safeguarding of processed information or alternative sources of
equipment support in the event of disaster.
' We recommend that a comprehensive contingency plan be developed,
documented and periodically tested to ensure continued data
processing services as needed in the event of a disaster.
' Consideration should be given to the following areas:
Asbu otion5 (potan"r.ial disasters, damage, etc. )
' Disaster- - ter:ave.. , ;-team, telephone n- ;tbers and
resr. ,nsih ; zti es .
' Ofr-oie storage of backup systems, and data
documentation and forms.
Inventory of hardware, software, and forms with
respective vendors for rebuilding the data center.
Location of off-site storage and access procedures.
' Application processing priorities, hardware requirements
for each and their approximate run times.
' Procedures for updating the contingency plan.
A written agreement would reduce the chance of misunderstanding
' between parties and thereby help ensure that alternative processing
capability is available should a disaster disable the City's
computer facility. The contract should cover matters such as:
Initial contract duration and renewal provisions.
' Circumstances constituting an emergency requiring backup.
Priority of contract arrangement relative to other similar
arrangements .
' Provision for periodic testing of the backup arrangement.
' Basis for backup consideration: fixed fee, usage fee,
mutual backup agreement or some combination thereof .
Specific hardware requirements.
Backup site manpower support expected, if any.
I Operating conditions under disaster and testing
conditions :
I
EXHIBIT II
(CONTINUED)
IDATA PROCESSING DISASTER PLANNING (CONTINUED)
Hours of operation.
INature (e.g. , dedicated processing)
I Minimum processing units to be supplied on a
daily basis (e.g. , four hours CPU) .
Process to negotiate extension of service.
i Nonmainframe .:-esoorce reo:i ements.
Software envirorr t to f'e .,,,pp-lie: by the .oackup site.
n_
"—Notificatio of _Aipending cilanges to either hardware or
Isoftware at LllC backup site.
Handling of proprietary information, programs, and data.
ISpecial security considerations, if any.
IIMPROVING OPERATIONAL EFFICIENCY
PURCHASE ORDERS
IThe present use of purchase orders is handled in a manner which
circumvents the actual purpose of such; purchase orders are
I prepared after the fact; usually from invoices or other supporting
documentation. The purchase orders should be used in a proper and
timely manner.
ICASH DISBURSEMENTS
I The City currently uses manual checks to pay some vendors '
invoices rather than process them through its accounts payable
system. When manual checks are employed to pay invoices, care
I should be taken to ensure that any outstanding purchase order is
removed from encumbrances . To alleviate problems which may occur
by the use of manual checks and the failure to properly relieve
I encumbrances, the City should consider increasing the frequency of
payment of accounts payable; whereby all checks could be computer
generated. This should also be done for all funds.
DATA PROCESSING SYSTEM INTEGRATION
I The City ' s utility and payroll software applications operate
independently from the City ' s general ledger software application
1
EXHIBIT II
(CONTINUED)
DATA PROCESSING SYSTEM INTEGRATION (CONTINUED)
necessitating manual accumulation of utility billings, adjustments
' and collections, and payroll information for posting to the
general ledger accounts. The City should consider having the
necessary software modifications to fully integrate its utility
' and payroll programs with the general ledger. Integration of the
various applications should reduce time in accumulating financial
information and decrease the likelihood of error in recording
information.
EMPLOYEE INSURANCE
' 't`h insuranc-e billings for emp.!u: - insurar_.;e coveras;e rtlould ;e
reconciled on a more timely be.sis to ali3w for adjustment:-
' VACATION ACCRUAL
' During the fiscal year various employees vaction accrual exceeded
the maximum allowed for carryover. City policy should encourage
all employees to use their vaction time annually. This practice
' allows for another employee to perform that job duty and is also
encouraged for basic internal operating control for the City.
BUDGET PREPARATION
In the preparation of its annual budgets for the various operating
' funds, the City currently follows the practice of relying on cash
surpluses to fund projected shortfalls between budgeted revenues
and expenditures.
As an example, for the years 1981 through 1985 available cash at
the beginning of the City ' s budget year and actual results for the
general fund are summarized below:
1981 :
' Beginning cash balances $ 569 , 396
Excess of expenditures over
revenues at year end 29 , 380
' 1982 :
Beginning cash balances 506 , 213
Excess of expenditures over
' revenues at year end 167 , 866
' EXHIBIT II
(CONTINUED)
' BUDGET PREPARATION (CONTINUED)
1983 :
Beginning cash balances 391, 177
' Excess of expenditures over
revenues at year end 62,485
' 1984:
Beginning cash balance 300, 616
Excess of revenues over
expenditures at year end 15,497
1985:
Beginning cash balance 3i!' ; ').25
xcess of revenues over
expenditures at year end
With the continued growth of the community and increased demands
for city services coupled with construction of a new wastewater
facility, the City should explore all possibilities for additional
' revenue sources and continue in its cost conscious efforts to
maximize services at the least cost to the City and its taxpayers.
The implementation of changes recommended in this letter can be
facilitated if management and Council:
Consider and establish priorities for implementing the
changes.
Develop an overall plan and method of implementation that
reflects the priorities.
Assign the responsibility for carrying out each change to
' a specific individual .
Establish time-frames for implementation of each change.
' Schedule progress reports from the responsible City
officials and conduct progress meetings to further
discuss progress and to resolve problems that arise.
I
EXHIBIT III
I INTERNAL CONTROL
As part of an examination of financial statements, we perform
study and evaluation of an entity's system of internal accounting
I control to the extent we consider necessary to evaluate the system
as required by generally accepted auditing standards. The purpose
of our study and evaluation is to determine the nature, timing and
' extent of the auditing procedures necessary for expressing an
opinion on an entity's financial statements. Our study and
evaluation is more limited than would be necessary to express an
opinion on the system of internal accounting control taken as a
whole.
The City':; management is responsible- for st-,,b iol7*'
:lintainirc system cf internal accounting con ,r�i . _Tr ,
I fulfill �g r%is r-ssponsihility;--estimates - and-_ judgIaents :ze,!k„ 6v
management are required to assess ,the expected lacT,�w its and
related costs of control procedures. Thy of a system
are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from
unauthorized use or disposition, and that transaction are executed
in accordance with management 's authorization and recorded
properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles.
' Because of inherent limitations in any system of internal
accounting control , errors or irrgularities may nevertheless occur
and not be detected. Also, projection of any evaluation of the
' system to future periods, is subject to the risk that procedures
may become inadequate because of changes in conditions or that the
degree of compliance with the procedures may deteriorate.
A study and evaluation made for the limited purpose describe above
would not necessarily disclose all material weaknesses in the
' system. Accordingly, an expression of an opinion on the system of
internal accounting control taken as a whole cannot be made.
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