Audit Report 09.30.1994GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1994
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
Danny P. Entry
Councilmember
Mike G. O'Connor
Councilmember
John J. Drago
City Administrator
General Services Director
Bonnie S. Thomas, CMC
City Clerk
Robert M. Delorme
Finance Director
John Cook
City Attorney
September 30, 1994
CITY COUNCIL
James E. Kirk
Mayor, Chairman
Dowling R. Watford, Jr.
Councilmember
Jerry E. Walker
Councilmember
ADMINISTRATION
Louis Keith Tomey II
Chief of Fire
Larry Mobley
Chief of Police
Charles Elders
Director of Public Works
Wayne Jones
Public Utilities Director
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
September 30, 1994
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1 -2
General Purpose Financial Statements:
Combined Balance Sheets - All Fund Types and
Account Groups 3
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - All Governmental Fund Types 4
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - Budget and Actual - Governmental Funds 5
Combined Statements of Revenue, Expenses and Changes in
Fund Equity - Proprietary Fund and Similar Trust Funds 6 -7
Statement of Cash Flows - Proprietary Fund 8 -9
Notes to Combined Financial Statements 10 -30
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and Actual 31 -32
Schedule of Expenditures - Budget and Actual 33
Debt Service Fund -
Statement of Revenue and Expenditures - Budget and
Actual 34
Employee Pension Trust Funds -
Combining Balance Sheets 35
Combining Statements of Revenue, Expenses and Changes
in Fund Balances 36
Historical Information (Unaudited) 37
Unaudited Information:
Summary of Insurance Coverage - Unaudited 38
Schedule of Assessed Values, Tax Levies and Rates -
Unaudited 39
Schedule of Certain Revenue - Unaudited 40
Schedule of Federal and State Financial Assistance 41
C J.D. GILBERT & COMPANY
Other Reports:
Independent Auditors' Report on Compliance with Laws
and Regulations 42
Single Audit Report on Compliance with General
Requirements Applicable to Federal Financial
Assistance Programs 43
Single Audit Report on Compliance with Specific
Requirements Applicable to Nonmajor Federal Financial
Assistance Programs 44
Single Audit Combined Report on the Internal Control
Structure 45 -48
Management Letter 49 -50
C J.D. GILBERT & COMPANY
J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Independent Auditors' Report
We have audited the accompanying general purpose financial statements of the City of
Okeechobee, Florida (City) as of September 30, 1994, and for the year then ended, as listed in the
table of contents. These general purpose financial statements are the responsibility of the City's
management. Our responsibility is to express an opinion on these general purpose financial
statements based on our audit. We did not audit the financial statements of the Employee Pension
Trust, which represent the amounts shown as the Fiduciary Fund Types. Those financial statements
were audited by other auditors whose report thereon has been furnished to us, and our opinion,
insofar as it relates to the amounts included for the Fiduciary Fund Types - Employee Pension Trust,
is based solely on the report of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards and
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 general purpose financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose
financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall general purpose financial statement
presentation. We believe that our audit and the report of other auditors provide a reasonable basis
for our opinion.
As disclosed in Notes 5 and 6 to the general purpose financial statements, the City has not
maintained adequate detailed fixed asset records to support the cost of the water and sewer utility
plant in service in the proprietary fund and fixed assets included in the general fixed asset account
group with respect to the stated cost of assets acquired prior to October 1, 1981. Depreciation
expense and accumulated depreciation in the proprietary fund have been computed based on these
recorded costs. Due to the inadequate records, we were unable to satisfy ourselves, in accordance
with generally accepted auditing standards, as to the propriety of the recorded cost, accumulated
depreciation and depreciation expense for fixed assets acquired prior to October 31, 1981. It is not
practicable to determine the effects on the general purpose financial statements of this departure from
generally accepted accounting principles.
American Institute of Certified Public Accountants • Member - Private Companies Practice Section
In our opinion, based on our audit and the report of other auditors, except for the effects of
the departure from generally accepted accounting principles in the proprietary fund and general fixed
asset account group, as discussed in the preceding paragraph, the general purpose financial
statements referred to above present fairly, in all material respects, the financial position of the City
of Okeechobee, Florida as of September 30, 1994 and the results of its operations and the cash flows
of its proprietary fund type for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements taken as a whole. The accompanying information listed in the table of contents is
presented for purposes of additional analysis and is not a required part of the general purpose
financial statements of the City. Such information, except for the portion marked "unaudited ", on
which we express no opinion, has been subjected to the auditing procedures applied in the audit of
the general purpose financial statements and, in our opinion, based upon our audit and the report of
the other auditors, except for the effects on the proprietary fund and general fixed asset account
group of not maintaining adequate detailed fixed asset records as discussed in the third paragraph
above, is fairly stated in all material respects in relation to the general purpose financial statements
taken as whole.
March 7, 1995
2'1D
J.D. Gilbert & Company, CPAs
J.D. GILBERT & COMPANY
ASSETS
Cash
Investments
Receivables:
Taxes
Accounts less Allowance of $49,572
Due from Other Government Agencies
Due from Other Funds
Inventory
Restricted Assets -
Cash
Investments
Accrued Interest
Fixed Assets
Unamortized Bond Expenses
Amount Available in Debt Service Fund
Amount to be Provided for Retirement
of General Long -Term Debt
TOTAL ASSETS
LIABILITIES
Accounts Payable
Accrued Liabilities
Accrued Interest
Payable from Restricted Assets:
Accounts Payable
Customer Deposits
Accrued Interest on Bonds Payable
Matured Bonds and Interest Coupons
Due to Other Funds
Deferred Revenue
Long -Term Debt
TOTAL LIABILITIES
FUND EQUITY
Contributed Capital
Investment in General Fixed Assets
Retained Earnings:
Reserved for Revenue Bond
Retirement
Unreserved
Fund Balances:
Reserved for:
Employees' Retirement
Debt Service
Inventory
Encumbrances
Unreserved
TOTAL FUND EQUITY
TOTAL LIABILITIES AND FUND
EQUITY
CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
Governmental
September 30, 1994
Fund Types
General
$1,440,843
89,626
106,832
153,178
10,332
2,193
$1,803,004
54,342
45,231
20,969
114,828
21,480
$256,850
10,332
35,680
1,500,142
1,546,154
Proprietary
Fund Types
Debt
Service Enterprise
Fiduciary
Fund Types
Employee
Pension
Trust
$4,355 $710,679 $37,039
- - 3,454,566
115
111,470
255,117
3,358
1,260,784
1,703,519
6,774
18,717,925
432,482
Account Groups
General General
Fixed Long-Term
Assets Debt
2,062,963
$115,940 $23,090,638 $3,491,605 $2,062,963
81,914
38,372
306,040
373,063
251,998
2,012
14,496,688
$2,012 $15,548,075
113,928
5,752,536
732,034
1,057,993
7,861
$7,861
3,483,744
2,062,963
113,928 7,542,563 3,483,744 2,062,963
Total
(Memorandum
Only)
$2,192,916
3,454,566
89,741
361,949
153,178
114,828
10,332
1,262,977
1,703,519
6,774
20,780,888
- 432,482
115,940 115,940
1,668,065 1,668,065
$1,784,005 $32,348,155
120,731
1,663,274
$1,784,005
$144,117
204,334
20,969
306,040
373,063
251,998
2,012
114,828
21,480
16,159,962
$17,598,803
$5,752,536
2,062,963
732,034
1,057,993
3,483,744
113,928
10,332
35,680
1,500,142
$14,749,352
$1,803,004 $115,940 $23,090,638 $3,491,605 $2,062,963 $1,784,005 $32,348,155
The Notes to Combined Financial Statements
are an Integral Part of this Statement
3
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 1994
TOTALS
DEBT (MEMORANDUM
GENERAL SERVICE ONLY)
Revenues
Taxes $1,327,094 $ 47,460 $1,374,554
Intergovernmental 928,527 - 928,527
Charges for Services 217,127 217,127
Licenses and Permits 40,517 - 40,517
Fines and Forfeitures 22,456 - 22,456
Interest Income 44,998 956 45,954
Miscellaneous 48.258 48.258
Total Revenue 2.628.977 48.416 2,677393
Expenditures
Current:
Public Safety 1,203,798 - 1,203,798
General Government 369,796 - 369,796
Transportation 610,248 610,248
Physical Environment 178,103 178,103
Health and Human Services 41,010 - 41,010
Debt Service:
Principal 178,519 30,000 208,519
Interest 82,001 6,831 88,832
Professional Fees 500 500
Total Expenditures 2,661475 37.331 2,700.806
Excess of Revenue Over Expenditures
(Expenditures Over Revenue) ( 34,498) 11,085 (23,413)
Other Financing Source:
Proceeds of Long Term Notes 849,048 - 849,048
Fund Balances Beginning of Year 731.604 102.843 834.447
Fund Balances End of Year $1,546,154 $113,928 $1,660,082
The Notes to Combined Financial Statements
are an Integral Part of this Statement
4
C J.D. GILBERT & COMPANY
1 CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GOVERNMENTAL FUND TYPES
Year Ended September 30, 1994
1 Totals
General Fund Debt Service Fund (Memorandum only)
Actual (on Variance Variance Actual (on Variance -
Budgetary Favorable Favorable Budgetary Favorable
Budget Basis) (Unfavorable) Budget Actual (Unfavorable) Budget Basis) (Unfavorable)
IREVENUE
Taxes $1,264,615 $1,327,094 $62,479 $39,980 $47,460 $7,480 $1,304,595 $1,374,554 $69,959
Intergovern-
mental 859,728 928,527 68,799 859,728 928,527 68,799
Charges for
services 191,400 217,127 25,727 191,400 217,127 25,727
111
Licenses and
permits 37,500 40,517 3,017 37,500 40,517 3,017
Fines and
forfeitures 28,830 22,456 (6,374) - - - 28,830 22,456 (6,374)
Interest Income 18,580 44,998 26,418 800 956 156 19,380 45,954 26,5742
Miscellaneous 55,800 48,258 (7,542) 55,800 48,258 (7,542)
TOTAL REVENUE 2,456,453 2,628,977 172,524 40,780 48,416 7,636-
,636 2,497,233 2,677,393 180,160
EXPENDITURES
I
Public safety 1,220,480 1,208,313 12,167 1,220,480 1,208,313 12,167
General
government 394,275 373,001 21,274 394,275 373,001 21,274
Transporta-
tion 732,360 634,264 98,096 732,360 634,264 98,096
IPhysical
environment 175,500 178,103 (2,603) 175,500 178,103 (2,603)
Health and human
services 42,625 41,010 1,615 - - - 42,625 41,010 1,615
Debt service 195,753 260,520 (64,767) 37,831 37,331 500 233,584 297,851 (64,267)
I TOTAL
EXPENDITURES 2,760,993 2,695,211 65,782 37,831 37,331 500 2,798,824 2,732,542 66,282
EXCESS OF
IREVENUE OVER
EXPENDITURES ($304,540) (66,234) $238,306 $2,949 11,085 $8,136 ($301,591) (55,149) 246,442
' OTHER FINANCING
SOURCES:
Proceeds of Long
Term Notes 849,048 849,048
IFUND BALANCES
Beginning of
year 731,604 102,843 834,447
Adjustment to
conform to
Igenerally
accepted
accounting
principles:
Adjustment for
Iencumbrances 31,736 31,736
End of year $1,546,154 $113,928 $1,660,082
IThe Notes to Combined Financial Statements
are an Integral Part of this Statement
5
IC J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN RETAINED EARNINGS/FUND BALANCES -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS
Operating Revenues:
Charges for Services
Contributions
Investment Income
Total Operating Revenues
Year Ended September 30, 1994
Proprietary Fiduciary
Fund Type Fund Type
Employee Totals
Pension (Memorandum
Enterprise Trust Only)
$2,784,101 $ - $2,784,101
194,447 194,447
268.943 268.943
2.784.101 463,390 3.247.491
Operating Expenses:
Personal Services 727,008 - 727,008
Professional Services 278,449 53,788 332,237
Materials and Operating Supplies 308,737 - 308,737
Utilities 168,162 168,162
Insurance 65,394 65,394
Repairs and Maintenance 242,030 242,030
Administrative Supplies and Expense 17,688 - 17,688
Bad Debts 3,012 3,012
Depreciation 544,778 - 544,778
Benefit Payments 29,501 29,501
Contribution Refunds 21,502 21,502
General Fund Administrative Charge 100.000 100.000
Total Operating Expenses 2.455.258 104.791 2.560.049
Operating Income 328.843 358.599 687.442
The Notes to Combined Financial Statements
are an Integral Part of this Statement
6
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN RETAINED EARNINGS/FUND BALANCES -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS (CONTINUED)
Year Ended September 30, 1994
Proprietary Fiduciary
Fund Type Fund Type
Employee Totals
Pension (Memorandum
Enterprise Trust Only)
Nonoperating Revenues (Expenses):
System Capacity Fees $ 79,774 $ - $ 79,774
Connection Fees 54,795 - 54,795
Interest Revenue 308,523 308,523
Interest Expense, net of interest capitalized
of $110,000 (915,231) (915,231)
Other Fiscal Charges (34,771) (34,771)
Loss on Disposition and Demolition of
Fixed Assets (130,072) (130,072)
Miscellaneous 2,547 2,547
Nonoperating Expenses, net (634,435) (634.435)
Net Income (Loss) (305,592) 358,599 53,007
Fund Equity, Beginning of Year 7.730.104 3.125.145 10.855.249
7,424,512 3,483,744 10,908,256
Capital Contribution 118.051 118,051
Fund Equity, End of Year $7,542,563 $3,483,744 $11,026,307
The Notes to Combined Financial Statements
are an Integral Part of this Statement
7
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE
Year Ended September 30, 1994
Increase (Decrease) in Cash and Restricted Cash
Proprietary
Fund Type
Enterprise
Cash Flows from Operating Activities
Cash received from customers $2,974,447
Cash payments for goods and services (1,362,229)
Cash payments for employee services (730,440)
Other operating cash received 11.547
Net Cash Provided by Operating Activities 893.325
Cash Flows from Noncapital Financing Activities
Net cash advanced on interfund borrowing (1,668)
Net Cash Used in Noncapital Financing Activities (1.668)
Cash Flows from Noncapital Financing Activities
Acquisition and construction of capital assets (4,354,260)
Principal payments on revenue bond maturities (175,000)
Interest paid on revenue bonds (1,013,369)
Other Fiscal Charges (988)
Grant proceeds 188,959
Net Cash Used in Capital and Related Financing Activities (5354.658)
Cash Flows from Investing Activities
Purchase of Investments (27,877)
Sale of Investments 2,945,690
Interest and dividends on cash, time deposits and investments 315.217
Net Cash Used in Investing Activities 3.233.030
Net Decrease in Cash and Restricted Cash (1,229,971)
Cash and Restricted Cash at Beginning of Year 3201.434
Cash and Restricted Cash at End of Year $1,971,463
The Notes to Combined Financial Statements
are an Integral Part of this Statement
8
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE (CONTINUED)
Year Ended September 30, 1994
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Proprietary
Fund Type
Enterprise
Operating Income $328,843
Adjustments to reconcile operating income to net
cash provided by operating activities:
System capacity and connection fees 134,569
Other nonoperating revenues, net 2,547
Loss on Disposition and Demolition of Fixed Assets (130,072)
Depreciation 544,778
Changes in Assets and Liabilities:
Decrease in Accounts Receivable 42,495
Decrease in Accounts Payable (42,699)
Increase in Other Liabilities 12,864
Net Cash Provided by Operating Activities $893,325
Schedule of Non -Cash Capital and Related Financing Activities
Amortization of Premium on Restricted Investments
Amortization of Debt Issuance and Bond Discounts
The Notes to Combined Financial Statements
are an Integral Part of this Statement
9
$ 6,694
$ 48,334
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Okeechobee (the City) 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. The accounting policies of the City conform to generally
accepted accounting principles as applicable to governmental units. The following is a summary of
the more significant policies:
A. SCOPE OF REPORTING ENTITY
The accompanying financial statements include all organizations, activities and functions
over which the City maintains direct manifestations of oversight responsibility, and those
organizations where other circumstances or relationships require their inclusion to conform
with generally accepted accounting principles. These circumstances include special
financing relationships and consideration of the scope of public services provided by a
particular organization or agency.
This report includes all funds and account groups of the City. The specific organizations and
agencies included in the accompanying financial statements, and a summary description of
how the specific elements of oversight responsibility, and other criteria, were considered in
the determination of whether or not to include the organization in the financial statements
are presented below.
The City of Okeechobee Pension Trust Funds
The three retirement plans included in the financial statements are the Municipal General
Employee's Pension Trust Fund, the Municipal Police Officer's Pension Trust Fund and the
Municipal Firefighters' Pension Trust Fund. All are governed by a separate Board of
Trustees, as appointed by the City Council, subject to the requirements of local ordinances
and by applicable provisions of Florida law.
10
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The plans require participation by all employees in the respective governing authorities with
the exception of the City Administrator who maintains a preexisting pension trust fund.
Additionally, the organizations exist for the benefit of the employees of the City.
B. BASIS OF PRESENTATION - FUND ACCOUNTING AND ACCOUNT GROUPS
The accounts of the City are organized on the basis of funds and account groups, each of
which is considered a separate accounting entity. The operations of each fund are accounted
for with a separate set of self - balancing accounts that comprise its assets, liabilities, fund
equity, revenues and expenditures /expenses. Government resources are allocated to and
accounted for in individual funds based upon the purposes for which they are to be spent, and
the means by which spending activities are controlled. The various funds are summarized
by type in the combined financial statements. The following fund types and account groups
are used by the City:
Governmental Fund Types
Governmental funds are those through which most governmental functions of the City are
financed. The acquisition, use and balances of the City's expendable financial resources and
related liabilities are accounted for through governmental funds. The measurement focus is
upon determination of changes in financial resources, rather than upon net income
determination. The following are the City's governmental fund types:
General Fund - The general fund is the general operating fund of the City. It is used
to account for all financial resources except those required to be accounted for in
another fund.
Debt Service Fund - The debt service fund is used to account for the accumulation
of resources for, and the payment of, principal, interest and certain related costs of
general long -term debt.
11
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Proprietary Fund Type
The 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 fund is used to account for operations that are
financed and operated in a manner similar to a private business enterprise where the
intent of the governing body is that the costs (i.e., expenses, including depreciation)
of providing water and sewer services to the general public on a continuing basis be
financed or recovered primarily through user charges.
Fiduciary Fund Type
Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an
agent for individuals, private organizations, other governmental units or other funds. The
following is the City's fiduciary fund type:
Employee Pension Trust Fund - Pension trust funds are accounted for essentially the
same as the proprietary fund since a primary focus is on capital maintenance.
Account Groups
Account groups are used to establish accounting control and accountability for the City's
general fixed assets and general long -term debt. The two account groups are not "funds ".
They are not involved with measurement of results of operations. The following are the
City's account groups:
General Fixed Assets Account Group - The account group is established to account
for all fixed assets of the City used for general purposes (i.e., excludes fixed assets
used for proprietary fund purposes). No depreciation is recorded on general fixed
assets.
12
1
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
General Long -Term Debt Account Group - This account group is used to account for
long -term debt to be financed from governmental fund types.
Total Columns on Combined Statements
Total columns on the combined financial statements are captioned "Memorandum Only" to
indicate they are presented only to facilitate financial analysis. Data in these columns do not
present financial position, results of operations or cash flows in conformity with generally
accepted accounting principles. Neither is such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data.
C. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS
Basis of accounting refers to the timing of the recognition of revenues and expenditures (or
expenses) in the accounts and in the financial statements. The basis of accounting is
independent of the measurement focus, which refers to objectives in recording of financial
resources and expenditures or expenses.
Governmental Fund Types
Governmental funds are accounted for using the modified accrual basis of accounting.
Therefore, revenues are generally recognized when they become measurable and available
as current assets. Expenditures are generally recognized when the related fund liability is
incurred. Exceptions to this general rule include accumulated unpaid compensated absences
and unmatured principal and interest on general long -term debt; these expenditures are
recognized when due or when expected to be paid with expendable available financial
resources.
The measurement focus is on current financial resources. The accounting and reporting
treatment applied to fixed assets and long -term liabilities associated with a fund is
determined by its measurement focus. This means that only current assets and current
liabilities are generally included on governmental fund balance sheets. Their reported
governmental fund balance (net current assets) is considered a measure of "expendable
available financial resources ".
13
C J.D. GILBERT & COMPANY
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental fund operating statements present increases (revenues and other financing
sources) and decreases (expenditures and other financing uses) in net current assets.
Accordingly, they are said to present a summary of sources and uses of current financial
resources during a period.
Special reporting treatment is also applied to governmental fund inventories to indicate that
they do not represent "expendable available financial resources ", even though they are a
component of net current assets. Such amounts are offset by fund balance reserve accounts.
Proprietary and Pension Trust Funds
Proprietary funds and pension trust funds are accounted for on the accrual basis of
accounting. Therefore, revenues are recognized when earned and expenses are recognized
when incurred. Estimated unbilled water and sewer utility service revenues are recorded as
receivables at September 30 in the proprietary fund. The measurement focus is on the flow
of economic resources. Therefore, all assets and liabilities associated with the operation of
these funds are included on the balance sheet.
D. BUDGET AND BUDGETARY ACCOUNTING
The City enacts by ordinance, an annual budget for the revenues and expenditures of the
governmental funds. The budget is prepared on a basis consistent with generally accepted
accounting principles except encumbrances are presented as expenditures.
The City follows these procedures in establishing the budgetary data included in the financial
statements:
1. The City Administrator submits to the City Council a proposed operating budget for
the fiscal year commencing on October 1st. The operating budget includes proposed
expenditures and means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through the passage of an ordinance by City Council on
or before the fifteenth day of September of the fiscal year currently ending.
14
J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
4. The level of budgetary control is the department. The City Administrator is authorized
to transfer budgeted amounts within departments of any fund; revisions to budgeted
totals of any department require approval of the City Council. Unencumbered
appropriations lapse at year end.
The reported budgetary data represents the final approved budget after amendments adopted
by the City Council.
Formal budget integration is not employed for proprietary or trust funds because effective
budgetary control is achieved by alternate measures.
E. ENCUMBRANCES
The governmental funds use encumbrance accounting under which purchase orders, contracts
and other commitments related to unperformed contracts for goods and services which will
require expenditure of funds are recorded at year end as a reserve of fund balance. They do
not constitute expenditures or liabilities, but are recorded to reserve that portion of the
applicable appropriation.
F. CASH AND TIME DEPOSITS
Cash accounts for the City are maintained in interest - bearing accounts which may include
local government surplus funds trust fund and certificates of deposit with maturity dates of
three months or less. These deposits are carried on the balance sheet under the caption
"cash ". Certificates of Deposit purchased with initial maturities of greater than three months
are included in time deposits.
G. INVENTORY
Inventory consists of motor fuels which is stated at cost determined on the first -in, first out
method. Inventory is considered an expenditure or expense when used.
H. FIXED ASSETS
Fixed assets used in governmental funds are recorded as expenditures in the governmental
fund and capitalized at cost in the General Fixed Assets Account Group. Assets contributed
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
to the City are recorded at their estimated fair value on the date donated. Public domain
general fixed assets ( "infrastructure ", including unimproved land, roads, bridges, curbs and
gutters, streets and sidewalks, drainage systems, and lighting systems) are not capitalized.
No depreciation has been provided on governmental fund fixed assets.
Fixed assets used in the enterprise fund are capitalized at cost, which includes ancillary
charges necessary for asset acquisition. The City capitalizes net interest costs and interest
earned as part of the cost of constructing various water and sewer projects, when material.
Depreciation is provided in amounts sufficient to relate the cost of the depreciable assets to
operations over their estimated service lives on the straight -line basis.
I. ALLOCATION OF ADMINISTRATIVE CHARGES
Certain administrative expenses are incurred by the City's general fund on behalf of the
City's enterprise fund. The general fund charges for these services based upon management
estimates. Reimbursement for these services is recorded as an operating expense of the
enterprise fund and as a reduction of general government expenditures of the general fund.
For the year ended September 30, 1994, these charges aggregated $100,000.
The enterprise fund's maintenance facility, water towers, and water and sewer plants, except
for the new sewer plant, are located on city -owned real estate which is not recorded in the
enterprise fund. Additionally, the enterprise fund's administrative staff offices are located
in City Hall. No interfund charges have been recorded for rental of either the land or the
office space. The general fund also does not receive any franchise fee from the enterprise
fund for the operation of the utility plant; such franchise fee if charged, would be based upon
revenue of the water and sewer operation.
J. COMPENSATED ABSENCES
Full -time and permanent employees accrue a paid vacation ranging from 6 days after 6
months or continuous service up to 20 days after 15 years of service. Unused vacation may
be accumulated up to a maximum of 30 days.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
The amount of vacation leave for the proprietary fund and the amount of vacation leave
expected to be paid from current financial resources of the general fund are included with
accrued liabilities. The vested portion of sick leave and the remaining balance of vacation
leave for the general fund is included under long -term debt. A long -term liability of
$120,731 has been recorded in the General Long -Term Debt Group of accounts, representing
the City's commitment to fund such costs from future operations for the general fund. A
liability of $35,809 is reflected within the enterprise fund for accrued vacation and sick
leave.
K. AMORTIZATION OF BOND EXPENSE
The cost of issuance of bonds is being amortized, on an accelerated method, over the life of
the bonds.
NOTE 2 - COMPARISON OF BUDGET TO ACTUAL RESULTS
The actual results of operations are presented in accordance with generally accepted accounting
principles which differ in certain respects from those practices used in the preparation of the 1993 -94
budget. For purposes of preparing the combined statements of revenue, expenditures and changes
in fund balances - budget and actual - governmental funds, the actual results of operations have been
adjusted to a basis consistent with the City's budgeted revenues and expenditures, formulated on the
encumbrance system of accounting.
The adjustments for encumbrances shown on the combined statements of revenue, expenditures and
changes in fund balances - budget and actual - governmental funds is as follows:
GENERAL FUND
Actual expenditures
Encumbrances - September 30, 1994 $35,680
Less prior year encumbrances paid (3.944)
Adjustment for encumbrances
Expenditures on Budgetary Basis
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$2,663,475
31.736
$2,695,211
C J.D. GILBERT & COMPANY
CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 3 - CASH AND INVESTMENTS
Florida Statutes require state and local governmental units to deposit monies with a financial
institution classified as a "Qualified Public Depository", which is a multiple financial institution pool
whereby groups of securities pledged by the various financial institutions provide common collateral
for their deposits of public funds. This pool is additional insurance to the federal depository
insurance and allows for additional assessments against the member institutions, providing full
insurance for public deposits. The City had deposits with qualifying institutions at September 30,
1994 totalling $649,728 which are included in cash in the accompanying combining balance sheets.
At September 30, 1994, the City has $2,806,165 invested in the Florida State Board of
Administration Local Government Surplus Funds Trust Fund investment pool. These funds are
recorded at cost which approximates market value, and are included in cash in the accompanying
balance sheet.
The investments of the fiduciary fund type are managed by Invesco Mim, Inc. Investments,
consisting of money market accounts, are stated at cost which approximates market value.
The investment guidelines, as established by local ordinance and Florida Statutes, allow surplus
funds to be invested in the local government surplus funds trust fund, obligations of the U.S.
government or agencies thereof, banking institutions within the state and other such institutions
within the guidelines of the state statutes, commercial paper with certain ratings, pre - refunded
municipal obligations, banker's acceptances maturing within one year, investment agreements, direct
and general long -term obligations of any state with proper credit rating and full faith and credit
pledge, municipal obligations with proper credit rating and repurchase agreements with maturities
of 30 days or less with organizations with certain stipulations and requirements.
The City's investments are categorized by type to give an indication of the level of credit risk
assumed by the City at year end. Category 1 includes investments that are insured or registered or
for which the securities are held by the City or its agent in the City's name. Category 2 includes
uninsured and unregistered investments for which the securities are held by the City's custodian in
the City's name. Category 3 includes uninsured and unregistered investments for which the
securities are held by the counterparty's trust department or agent, but not in the City's name.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 3 - CASH AND INVESTMENTS (Continued)
The following is a list of the City's investments by categories of risks established by Governmental
Accounting Standards Board Statement No. 3:
Category 1:
Enterprise Fund - U.S. Government Securities
Category 3:
Enterprise Fund - Money Market Fund
Book Market
Value Value
$1,646.543 $1.628.192
56.976 56.976
Pension trust funds:
Municipal police officers' pension trust fund:
Cash equivalents 43,242 43,242
Government and agency securities 459,932 441,440
Asset -based securities 84,941 82,492
Corporate bonds 76,110 71,736
Corporate stocks 625,342 699,961
Cash and accrued income 88.917 88.917
1.378,484 1.427.788
Municipal firefighters' pension trust fund:
Cash equivalents 38,543 38,543
Government and agency securities 172,798 166,121
Asset -based securities 23,111 22,375
Corporate bonds 27,073 25,428
Corporate stocks 214,024 240,085
Cash and accrued income 3.261 3.261
478.810 495.813
Municipal general employees' pension trust fund:
Government and agency securities 892,836 871,406
Asset - backed securities 99,961 97,062
Corporate bonds 116,978 109,962
Corporate stocks 537,157 633,378
Cash, accrued income, and settlements payable (net) (49.660) (49,660)
1.597,272 1.662.148
Total Investments
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$5,158,085 $ 5,270,917
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 4 - PROPERTY TAXES
The City's property tax is levied annually on the real and personal property located in the City on
January 1st of the prior year. The assessed value on which the 1993 -94 levy was based was
$135,981,995. The assessed values are established by the Okeechobee County Property Appraiser.
Tax collections by the Okeechobee County Tax Collector begin normally in November of each year
with a due date of March 31 of the following year. Tax collections for the year ended September
30, 1994 were 97% of the total tax levied.
The City is permitted by state law to levy taxes up to 10 mills of assessed valuation for the general
fund. The tax rate for the 1993 -94 fiscal year was 4.94 mills.
NOTE 5 - FIXED ASSETS - PROPRIETARY FUND
The carrying value of fixed assets recorded in the proprietary fund as of September 30, 1994 is
summarized as follows:
Utility Plant Construction
In Service In Progress
Total
Balance September 30, 1993 $17,252,117 $2,129,456 $19,381,573
Additions 1,586,325 2,338,406 3,924,731
Disposals (14,778) - (14,778)
Transfers 3.939.121 (3,939,121) -
22,762,785 528,741 23,291,526
Less Accumulated Depreciation 4.573.601 4.573.601
Balance September 30, 1994 $18,189,184 $ 528,741 $18,717,925
Included in the proprietary fund construction in progress is $490,580 represents engineering fees and
construction costs for the expansion to the wastewater treatment system.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 5 - FIXED ASSETS - PROPRIETARY FUND (Continued)
The City has not maintained adequate detailed fixed asset records to support the cost of the water
and sewer utility plant in service for assets acquired prior to October 1, 1981. At September 30,
1994, the cost of assets acquired prior to October 1, 1981 was $4,032,978 (less $2,221,633 of
accumulated depreciation). Depreciation expense recorded for these assets was $103,505 in 1994.
NOTE 6 - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
Land and improvements
Buildings and improvements
Furnishings and equipment
Rolling stock
Totals
Balance Balance
October 1. 1993 Additions Retirements September 30. 1994
$ 805,358
402,703
513,420
332.095
$2,053,576
$ $ $ 805,358
- 402,703
20,887 9,500 524,807
332.095
$20,887 $9,500 $2,064,963
The City has not maintained adequate detailed fixed asset records to support the cost of general fixed
assets acquired prior to October 1, 1981. At September 30, 1994, the value assigned to general fixed
assets acquired prior to October 1, 1981 was $852,904.
NOTE 7 - LONG -TERM DEBT
Long -term debt as of September 30, 1994 is summarized as follows:
GENERAL LONG -TERM DEBT
General Obligation Bonds:
$480,500 original issue General Obligation Bonds, due in
remaining annual installments of $30,000 to $35,000 through
July 1, 1996; interest rates ranging from 6.75% to 6.875%
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$ 70,000
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 7 - LONG -TERM DEBT (Continued)
Notes Payable:
5.25% gas tax revenue note to a bank, payment of $99,682,
including interest, due semi - annually through December 30,
2004; collateralized by and payable from a pledge of the City's
share of the local option gas tax, municipal tax on motor fuels
and motor fuel rebate 1.593.274
Total General Long -Term Debt $1,663,274
PROPRIETARY FUND LONG -TERM DEBT
Revenue Bonds:
$5,000,000 original issue Water and Sewer Refunding and
Improvement Revenue Bonds, Series 1987, due in remaining
annual principal installments ranging from $80,000 to $405,000
through January 1, 2017; interest ranging from 5.75% to 7.875%
(issue included $1,235,000 of Serial Bonds and $3,765,000 of
Term Bonds); net of unamortized discount of $74,650
$4,830,000 original issue Water and Sewer Improvement Revenue
Bonds, Series 1989, due in remaining annual principal installments
ranging from $105,000 to $370,000 through January 1, 2015;
interest ranging from 6% to 7.125% (issue included $1,535,000 of
Serial Bonds and $3,295,000 of Term Bonds); net of unamortized
discount of $42,170
$5,495,000 original issue Water and Sewer Improvement Revenue
Bonds, Series 1992A, due in annual principal installments ranging
from $125,000 to $430,000 from January 1, 1995 through 2017;
interest ranging from 3.9% to 6.5% (issue included $995,000 of
Serial Bonds and $4,500,000 of Term Bonds); net of unamortized
discount of $81,492
$ 4,520,350
4,562,830
5,413.508
Total Proprietary Fund Long -Term Debt $14,496,688
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 7 - LONG -TERM DEBT (Continued)
The Water and Sewer Refunding and Improvement Revenue Bonds, Series 1987, the Water and
Sewer Improvement Revenue Bonds, Series 1989, and the Water and Sewer Improvement Revenue
Bonds, Series 1992A are collateralized by a pledge of the net revenues of the water and sewer
system, certain public service taxes, certain franchise revenues and certain state revenue sharing
funds. The bond covenants state, among other things, that various funds are required to be
established and maintained for purposes of a sinking fund, reserve fund and various other accounts
and that the City may lease, sell or encumber the utility system assets as a whole (upon approval of
the bond insurer and the registered owners of two- thirds or more of the principal amount of the 1987
and 1989 bonds) only to a government authority or agency which the City may create to act on its
behalf.
Additional covenants contain provisions which restrict the issuance of additional revenue bonds
unless the pledged revenues are equal to or greater than 125% of maximum bond service requirement
coming due in any subsequent year and the net revenues, as adjusted, are not less than 80% of the
maximum bond service requirement coming due in any subsequent year on present outstanding
bonds and additional bonds issued.
The 1987, 1989 and 1992 Water and Sewer Refunding and Improvement Revenue Bonds ordinances
require, among other things, deposits on a monthly basis of amounts necessary to provide for
semiannual interest and annual principal requirements. The sinking and reserve funds on deposit
at September 30, 1994 are as follows:
1987 1989 1992
Revenue Revenue Revenue
Bonds Bonds Bonds
Sinking Fund $148,652 $158,429 $174,954
Reserve Fund 489,832
Totals $148,652 $158,429 $664,786
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 7 - LONG -TERM DEBT (Continued)
A summary of changes in all long -term debt for the year ended September 30, 1994 is as follows:
PROPRIETARY FUND
GENERAL LONG -TERM DEBT WATER AND SEWER REVENUE BONDS
GENERAL
OBLIGATION NOTES 1987 1989 1992
BONDS PAYABLE TOTAL SERIES SERIES SERIES TOTAL
Balance at September 30, $100,000 $898,663 $998,663 $4,670,000 $4,705,000 $5,495,000 $14,870,000
1993
Proceeds - 1,650,000 1,650,000 -
Payments 30,000 955,389 985,389 75,000 100,000 175,000
70,000 1,593,274 1,663,274 4,595,000 4,605,000 5,495,000 14,695,000
Less unamortized bond
discount 74,650 42,170 81,492 198,312
Balance at September 30,
1994 $70,000 $1,593,274 1,663,274 $4,520,350 $4,562,830 $5,413,508 $14,496,688
Annual principal require-
ments for the next five
years and thereafter
are as follows:
Year ending -
1995 $35,000 $117,230 $152,230 $80,000 $105,000 $125,000 $310,000
1996 35,000 123,261 158,261 85,000 115,000 130,000 330,000
1997 130,021 130,021 95,000 120,000 135,000 350,000
1998 136,937 136,937 100,000 130,000 140,000 370,000
1999 144,221 144,221 105,000 135,000 145,000 385,000
Thereafter 941,604 941,604 4,130,000 4,000,000 4,820,000 12,950,000
TOTALS $70,000 $1,593,274 $1,663,274 $4,595,000 $4,605,000 $5,495,000 $14,695,000
The annual requirements to amortize all debt outstanding as of September 30, 1994, including interest payments aggregating $14,812,060 are
as follows:
PROPRIETARY FUND
GENERAL LONG -TERM DEBT WATER AND SEWER REVENUE BONDS
GENERAL TOTAL
OBLIGATION NOTES 1987 1989 1992 LONG -TERM
BONDS PAYABLE TOTAL SERIES SERIES SERIES TOTAL DEBT
Year Ending -
1995 $39,769 $199,365 $239,134 $432,049 $420,486 $457,233 $1,309,768 $1,548,902
1996 37,362 199,365 236,727 431,683 423,692 457,065 1,312,440 1,549,167
1997 - 199,365 199,365 435,649 421,348 456,264 1,313,261 1,512,626
1998 199,365 199,365 433,918 423,440 454,798 1,312,156 1,511,521
1999 199,365 199,365 431,639 419,992 452,705 1,304,336 1,503,701
Thereafter 1,096,507 1,096,507 7,690,527 6,660,213 8,097,170 22,447,910 23,544,417
TOTALS $77,131 $2,093,332 $2,170,463 9,855,465 $8,769,171 $10,375,235 $28,999,871 $31,170,334
The annual changes in general long -term debt accrued vacation and medical leave benefits as of September 30, 1994 are as follows:
OCTOBER 1. 1993 INCREASE SEPTEMBER 30. 1994
$115,062 $5,669 $120,731
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 8 - PRIOR YEAR DEFEASANCE OF DEBT
In 1987, the City defeased the 1983 Series A Water and Sewer Revenue Bonds by depositing
sufficient funds in an irrevocable trust to provide for all future debt service payments on the old
bonds. Accordingly, the trust account assets and the liability for the defeased bonds were not
included in the City's financial statements. In January 1994, the defeased bonds of $730,000 were
retired by payment to the bondholders.
NOTE 9 - INTERFUND RECEIVABLES AND PAYABLES
The following is a summary of amounts due from and due to other funds:
General fund
Debt service fund
Proprietary fund
Total all Funds
NOTE 10 - CONTRIBUTED CAPITAL
The source and additions to contributed capital are as follows:
Due from Due to
Other Funds Other Funds
$ $114,828
111,470
3,358
$114,828 $114,828
Balance Balance
October 1, September 30,
1993 Additions 1994
Connection fees $ 421,758 $ - $ 421,758
Developers 338,761 338,761
Federal Grant 1,515,081 118,051 1,633,132
Local Public Works Grant 417,740 417,740
Federal Revenue Sharing Funds 619,572 619,572
General Fund 100,000 100,000
Okeechobee Beach Water Association 275,000 275,000
Environmental Protection Agency Grant 1,946,573 1.946.573
Totals $5,634,485 $118,051 $5,752,536
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 11 - SEGMENT INFORMATION
The City maintains one enterprise fund, a water and sewer operation. Working capital at September
30, 1994 for this fund was $338,700.
NOTE 12 - PENSION PLANS
The City has three pension plans, under a single employer public employee retirement system,
covering substantially all the City's regular employees. The plans were established by the City in
accordance with the City charter and state statutes. Total pension contribution by the City for the
year was $10,535 based on a covered payroll and a total payroll as follows:
Covered
Payroll as
Covered Total Percent of
Pam Payroll Total Payroll
General $996,860 $1,159,369 86.0%
Police 453,365 453,365 100.0%
Fire 221,000 255,480 86.5%
The City funds the pension plans at the rate of 1% of covered payroll for General plan participants
and any contribution deficit determined by actuarial valuation for the Police and Fire plans beyond
the contributions by employees and the State Insurance premium tax contribution.
All regular employees working over 20 hours per week are eligible to participate on the date of
employment following attainment of age 18. Participation is mandatory. Normal retirement is
provided for at age 65 (60 for fire and police) and 5 years of service (10 years for fire and police),
or at 30 years of service (25 for police) regardless of age. The benefit is calculated at 1.75% (2.7%
for fire and 3.0% for police) of average monthly earnings times years of continuous service with the
City. Benefits are payable by monthly annuity for 10 years certain and life thereafter with other
options available.
Also, the Police Officers' benefits are based on total compensation, normal retirement is available
at 25 years of service, regardless of age, and the disability benefits are 42% and 25% of average final
compensation for service and nonservice connected disabilities, respectively.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 12 - PENSION PLANS (Continued)
Early retirement is provided for at age 60 (age 55 for fire and police) and 10 years of participation.
Death and disability benefits are also available through the plans. Upon termination of employment
with less than 5 years of service (10 years for fire and police) the plan refunds accumulated
employee contributions. After 5 years of service (10 years for fire and police) the pension benefit
is accrued to date of termination and payable at normal retirement age if employee contributions are
left in the fund.
The significant actuarial assumptions used to compute the actuarially determined contribution
requirement are the same as those used to compute the pension benefit obligation. The actuarially
determined pension contribution for the year ended September 30, 1994, which consisted entirely
of normal cost, was as follows:
General $ 606
Police $30,848
Fire $15,216
The City and employees contributions by fund for the year ended September 30, 1994 were as
follows:
City Employees
General fund $ 5,374 $57,700
Proprietary fund 5.161 25 797
Totals $10,535 $83,497
The plans covering the City's fire fighters and police officers are also funded by the State of Florida
from a tax on fire insurance premiums collected. State contributions to the fire fighters and police
officers plans totalled $30,242 and $70,173, respectively, during the year ended September 30, 1994.
The pension benefit obligation shown below is a standardized disclosure measurement established
by the Governmental Accounting Standards Board (GASB) Statement number 5 that, with some
exceptions, must be covered by a Public Employee Retirement System. The standardized
measurement is the actuarial present value of credited projected benefits. This pension valuation
method reflects the present value of pension benefits, adjusted for the effects of projected salary
increases an step -rate benefits, estimated to be payable in the future as a result of employee service
to date.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 12 - PENSION PLANS (Continued)
The standardized measure of the pension benefit obligation and the net assets available for benefits
at September 30, 1994 (the most recent valuation date) is as follows:
Pension benefit obligation:
Retirees and beneficiaries currently
receiving benefits and terminated
employees entitled to benefits but
not yet receiving them
Police Fire General
Value No. Value No. Value No.
$ 8,574 1 $ 323,278 3
Current employees:
Accumulated employee
contributions including
allocated investment income 225,035 62,780 416,220
Employer - financed vested 743,595 8 102,217 2 416,068 28
Employer - financed nonvested 130.722 8 49.929 8 31.232 24
Total pension benefit
obligation 1,099,352 16 223,500 10 1,186,798 52
Net assets available for benefits
(at cost which approximates
market -see market value
information at Note 3) 1,386.318 484.817 1.612.609
Assets in excess of pension
benefit obligation $ 286,966 $261,317 $ 425,811
There were no changes in actuarial assumptions and methods since the previous actuarial valuation.
Principal actuarial assumptions used in the most recent actuarial valuation are summarized as
follows:
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 12 - PENSION PLANS (Continued)
Mortality - The 1983 Group Annuity Mortality Table.
Interest - 8% per year compounded annually, after paying
investment management fees.
U Retirement age - 60 for police officers and firefighters, 65 for all other employees, or
immediately if over assumed retirement age.
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Salary increases - 6% for police and general; 7% for firefighters, until the assumed retirement
age.
Funding method - Aggregate actuarial cost method.
Administrative expense (other than investment management fees) - $9,000 for each group.
Three year historical information is disclosed in the accompanying supplementary information.
NOTE 13 - GRANTS AND CONTRACTS
Hospice
During the year ended September 30, 1994, the City was awarded a Community Services Block
Grant (94SB- 40- 07 -57 -02 -076) totalling $5,786 for local community health and human services
assistance. Hospice of the Treasure Coast - Okeechobee Branch was the subgrantee. The City
received $4,822 under this and a previous grant during the year ended September 30, 1994 and, upon
presentation of invoices by Hospice, disbursed the funds.
Land Development Regulation
The City entered into a highway maintenance agreement (contract #B -7696) with the State of Florida
Department of Transportation in the amount of $15,218. In 1994, $15,218 was recorded as
reimbursement for
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1994
NOTE 13 - GRANTS AND CONTRACTS (Continued)
Community Development Block Grant
In September 1994, the City was awarded a $575,000 Community Development Block Grant
(CDBG) (contract number 95DB- 65- 07- 57- 02 -C37) for rehabilitation of commercial buildings in
the City.
In 1994, the City received a final payment of $70,908 under a previous CDBG through the State of
Florida Department of Community Affairs. These monies were included in accounts receivable at
September 30, 1993.
NOTE 14 - COMMITMENTS
During 1994, the City had rent expenditures of $20,100 under a one year operating lease agreement
executed July, 1994 for public safety and other vehicles. Lease commitments under this agreement
aggregate $20,250 for 1995. Rent expenditures for the year ended September 30, 1994, under a prior
operating lease for vehicles aggregated $54,000.
The City's waste water treatment plant is located on 407 acres of land in Okeechobee County. The
land is leased from the Board of Trustees of the Internal Improvement Trust Fund of the State of
Florida under a 50 year lease agreement dated December 23, 1983.
The City had contracts for engineering and construction projects in process at September 30, 1994
that occurred for water and wastewater system expansion and in the normal course of business
amounting to approximately $1,700,000.
NOTE 15 - CONTINGENCIES
The City is named as a defendant in a lawsuit brought by the Okeechobee Beach Water Association
(OBWA), a private water provider, to establish certain rights and obligations to a service territory,
together with other issues. There are no claims for damages in the case.
In November 1994, the City entered into an interlocal agreement with Okeechobee County, Florida
(the County) creating the Okeechobee Utility Authority (the Authority). The Authority was
established for the purpose of acquiring, owning, operating and maintaining a regional water and
wastewater system for Okeechobee County and areas currently in the service area of the OBWA.
The Authority has entered into interim operational agreements with the City and OBWA to service
their respective service areas until closing. At closing, it is the intent of the parties that the Authority
acquire the City's utility system including all assets and liabilities. The City or County may
withdraw from the Authority at any time prior to closing by giving ninety days notice. Such action
would dissolve the Authority and any obligation of the city to sell its utility system.
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30, 1994
Variance
Favorable
Budget Actual (Unfavorable)
TAXES
Ad valorem taxes $ 658,315 $ 655,543 $ (2,772)
Franchise fees 285,900 281,300 (4,600)
Utility service taxes 319,400 388,291 68,891
Public service taxes 1.000 1.960 960
1.264,615 1.327,094 62.479
INTERGOVERNMENTAL
State shared revenue:
Cigarette tax - Two Cent 74,000 78,892 4,892
Revenue sharing 168,000 176,013 8,013
One -half cent sales tax 170,000 187,104 17,104
Mobile home licenses 2,000 3,369 1,369
Alcoholic beverage licenses 800 2,557 1,757
Gasoline tax refund 1,500 1,744 244
Local option gasoline tax 283,528 317,893 34,365
Local Alternate Fuel User Fee 300 333 33
Fire fighters supplement 600 600
700.728 768.505 67.777
Shared revenue from other local units:
County occupational licenses 4,000 7,438 3,438
City share of 5 and 6 cent gas tax 115,000 99,564 (15,436)
City share of 9th cent gas tax 40.000 53.020 13.020
159.000 160.022 1,022
859.728 928.527 68,799
CHARGES FOR SERVICES
Sanitation fees 175,600 201,023 25,423
Highway maintenance contract 15,200 15,218 18
Miscellaneous 600 886 286
191,400 217.127 25.727
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
(CONTINUED)
Year Ended September 30, 1994
Variance
Favorable
Budget Actual (Unfavorable)
LICENSES AND PERMITS
Occupational licenses and Regulatory fees 37,500 40.517 3.017
FINES AND FORFEITURES
Court fines 28,000 21,843 (6,157)
Police education 500 359 (141)
Code enforcement fines 330 254 (76)
28.830 22,456 (6,374)
INTEREST INCOME 18,580 44.998 26.418
MISCELLANEOUS
Hospice Grant 5,600 4,822 (778)
Miscellaneous Improvements 3,000 17,196 14,196
Sale of assets 30,000 12,216 (17,784)
Rents and royalties 100 490 390
Refunds of prior year expenditures 100 4,594 4,494
Miscellaneous and other 17.000 8.940 (8.060)
55.800 48,258 (7.542)
Total Revenue $2,456,453 $2,628,977 $172,524
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1994
ENCUMBRANCES ACTUAL ON VARIANCE
BUDGET ACTUAL 1993 1994 BUBASISARY FAVORABLE
(UNFAVORABLE
PUBLIC SAFETY
Law enforcement:
Personal services $677,690 $690,206 $690,206 ($12,516)
Operating expenses 165,430 143,273 - 143,273 22,157
Capital outlay 4,495 4,523 8,415 12,938 (8,443)
847,615 838,002 8,415 846,417 1,198
Fire control:
Personal services 301,665 302,122 - 302,122 (457)
Operating expenses 71,200 63,674 3,900 59,774 11,426
372,865 365,796 3,900 361,896 10,969
Total Public Safety 1,220,480 1,203,798 3,900 8,415 1,208,313 12,167
GENERAL GOVERNMENT
Legislative:
Personal services 42,425 42,420 42,420 5
Operating expenses 11,000 10,005 10,005 995
Allocation of administrative charges (18,000) (18,000) (18,000) 0
35,425 34,425 34,425 1,000
Executive - city administrator:
Personal services 74,510 67,923 67,923 6,587
Operating expenses 16,000 10,698 10,698 5,302
Allocation of administrative charges (29,000) (29,000) (29,000) 0
61,510 49,621 49,621 11,889
Executive - city clerk:
Personal services 58,790 57,788 57,788 1,002
Operating expenses 12,150 15,142 15,142 (2,992)
Allocation of administrative charges (12,000) (12,000) (12,000) 0
58,94 60,930 60,930 (1,990)
Financial and Administrative:
Personal services 65,300 75,344 75,344 (10,044)
Operating expenses 25,400 22,587 3,249 25,836 (436)
Allocation of administrative charges (20,000) (20,000) (20,000 )
0
70,700 77,931 3,249 81,180 (10,480)
General services:
Personal services 85,450 85,357 - 85,357 93
Operating expenses 83,250 66,439 44 66,395 16,855
Allocation of administrative charges (21,000) (21,000) - ( 21,000 )
0
147,700 130,796 44 130,752 16,948
Judicial:
Operating expenses 20,000 16,093 16,093 3,907
Total General Government 394,275 369,796 44 3,249 373,001 21,274
TRANSPORTATION
Road and street facilities:
Personal services 230,710 225,760 225,760 4,950
Operating expenses 214,950 185,491 185,491 29,459
Capital outlay 286,700 198,997 24,016 223,013 63,687
Total Transportation 732,360 610,248 24,016 634,264 98,096
PHYSICAL ENVIRONMENT
Garbage /solid waste control services:
Operating expenses 175,500 178,103 178,103 (2,603)
HEALTH AND HUMAN SERVICES
Operating expenses 42,625 41,010 - 41,010 1,615
DEBT SERVICE
Principal 121,793 178,519 178,519 (56,726)
Interest 73,960 82,001 82,001 (8,041)
Total Debt Service 195,753 260,520 260,520 (64,767)
TOTAL EXPENDITURES $2,760,993 $2,663,475 $3,944 $35,680 $2,695,211 $65,782
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CITY OF OKEECHOBEE, FLORIDA
DEBT SERVICE FUND
STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1994
Variance
Favorable
Budget Actual (Unfavorable)
REVENUE
Ad valorem taxes $39,980 $47,460 $7,480
Interest income 800 956 156
Total Revenue 40.780 48.416 7.636
EXPENDITURES
Bond principal retirements 30,000 30,000
Bond interest expense 6,831 6,831
Professional fees 1,000 500 500
Total Expenditures 37.831 37.331 500
Excess of Revenue Over Expenditures $ 2,949 $11,085 $8,136
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CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING BALANCE SHEETS
September 30, 1994
Municipal Municipal Municipal
Police Fire- General
Officers ' Fighters' Employees'
Pension Pension Pension
Trust Trust Trust
Fund Fund Fund Total
ASSETS
Cash $ 10,889 $ 7,315 $ 18,835 $ 37,039
Investments 1,378.484 478.810 1.597.272 3,454.566
LIABILITIES
Accounts payable
$1,389,373 $486,125 $1,616,107 $3,491,605
$ 3,055 $ 1,308 $ 3,498 $ 7,861
FUND BALANCES
Reserved for
employees'
retirement 1.386.318 484.817 1.612,609 3.483.744
Total Liabilities
and Fund Balances $1,389,373 $486,125 $1,616,107 $3,491,605
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CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
COMBINING STATEMENTS OF REVENUE, EXPENSES
AND CHANGES IN FUND BALANCES
Year Ended September 30, 1994
Municipal Municipal Municipal
Police Fire- General
Officers' Fighters' Employees'
Pension Pension Pension
Trust Trust Trust
Fund Fund Fund
Total
OPERATING REVENUE
State tax on insurance premiums $ 70,173 $ 30,242 $ $ 100,415
Employer's contributions 603 9,932 10,535
Employees' contributions 22,395 11,174 49,928 83,497
Investment income 73,441 26,069 92,697 192,207
Gain on sale of securities 35.073 17.498 24.165 76.736
Total Operating Revenue 201.082 85.586 176.722 463,390
OPERATING EXPENSES
Employees' contribution refunds
and interest 5,185 16,317 21,502
Retirement benefits 29,501 29,501
Professional services 18.413 11.956 23.419 53,788
Total Operating Expenses 18.413 17.141 69.237 104,791
Net Income 182,669 68,445 107,485 358,599
FUND BALANCES
Beginning of year 1.203.649 416.372 1.505.124 3,125,145
End of year $1,386,318 $484,817 $1,612,609 $3,483,744
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CITY OF OKEECHOBEE
EMPLOYEE PENSION TRUST FUNDS
HISTORICAL INFORMATION
September 30,1994,1993 and 1992
(Unaudited)
For the years ended September 30, 1994, 1993 and 1992, the pension benefit obligation and net assets
available for benefits and net assets available for benefits expressed as percentages of the pension benefit
obligation, were as follows:
1994
Police Fire General
Net assets available for benefits as a percentage of
pension benefit obligation 126% 217% 136%
Assets in excess of pension benefit obligation as a
percentage of covered payroll 63 % 118% 43 %
Contributions as an approximate percent of annual
covered payroll:
Employer < 1% 1%
Employee 5% 5% 5%
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Police Fire General
Net assets available for benefits as a percentage of
pension benefit obligation 136% 226% 137%
Assets in excess of pension benefit obligation as a
percentage of covered payroll 78 % 117% 47 %
Contributions as an approximate percent of annual
covered payroll:
Employer - <1% 1 %
Employee 5% 5% 5%
1992
Police Fire General
Net assets available for benefits as a percentage of
pension benefit obligation 243 % 298 % 142 %
Assets in excess of pension benefit obligation as a
percentage of covered payroll 181% 127 % 47 %
Contributions as an approximate percent of annual
covered payroll:
Employer - <1% 6 %
Employee 5% 5% 5%
Historical information from 1987 through 1994 is presented in a separately issued report for the pension
employees retirement system (PERS). As the valuation for the year ended September 30, 1987 was the
first year using the valuation method described herein, ten -year trend information is not available.
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CITY OF OKEECHOBEE, FLORIDA
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
Year Ended September 30, 1994
DESCRIPTION COVERAGE
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance - $250 deductible) $3,807,075
Scheduled Property Floater ($250 deductible) $306,042
Public Employees Faithful Performance Blanket ($250 deductible) $20,000
General Liability Limit $1,000,000
Excess Liability Limit $1,000,000
LAW ENFORCEMENT LIABILITY
Bodily injury, personal injury, property damage ($5,000 deductible) $1,000,000
WORKERS COMPENSATION AND EMPLOYER'S LIABILITY $1,000,000
VEHICULAR EQUIPMENT
Bodily injury and property damage $1,000,000
Collision ($250 deductible)
Comprehensive ($250 deductible)
Uninsured Motorist $350,000
PUBLIC OFFICIAL LIABILITY ($5,000 Deductible) $1,000,000
THIRD PARTY POLLUTION LIABILITY COVERAGE ($500 deductible) $1,000,000
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
FISCAL
YEAR
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
FISCAL
YEAR
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1985 -1994
ASSESSED VALUES
REAL
PROPERTY
$112,759,343
109,479,471
112,820,753
106,606,185
100,715,930
92,069,710
90,523,355
85,234,122
70,533,985
59,835,384
PERSONAL
PROPERTY
$23,222,652
23,748,480
22,702,940
21,489,024
19,081,124
17,714,646
17,276,363
15,026,483
14,573,190
14,042,767
HOMESTEAD
TOTAL EXEMPTION
$135,981,995 $25,365,390
133,227,951 25,288,396
135,523,693 24,745,181
128,095,209 24,718,577
119,797,054 24,017,296
109,784,356 23,841,771
107,799,718 22,969,436
100,260,605 21,793,353
85,107,175 20,715,053
73,878,151 19,504,959
TAX LEVIES AND APPLICABLE RATES
LEVIES
DEBT GENERAL
SERVICE GOVERNMENT
$48,006 $664,734
$61,821 $552,896
62,523 562,423
59,597 531,595
56,753 504,594
52,114 455,605
39,231 447,369
18,308 416,082
15,873 361,791
14,008 314,056
RATES
DEBT GENERAL
SERVICE GOVERNMENT
MILLS MILLS
.300
.390
.390
.390
.390
.390
.300
.150
.150
.150
4.940
4.150
4.150
4.150
4.150
4.150
4.150
4.150
4.251
4.251
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YEAR
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
STATE
REVENUE
SHARING
(NOTE)
$442,009
446,009
425,807
422,873
443,090
439,634
411,522
409,809
398,901
349,607
WATER
AND SEWER
YEAR CHARGES
1994 $2,658,135
1993 2,583,642
1992 2,511,531
1991 2,268,283
1990 2,116,074
1989 1,580,078
1988 1,632,157
1987 1,386,432
1986 1,341,837
1985 1,130,500
CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUE - UNAUDITED
OCCUPATIONAL
LICENSES
1985 -1994
GENERAL FUND
UTILITY
TAXES
FINES AND
FORFEITURES
FRANCHISE
FEE PERMITS INTEREST
$40,517 $388,291 $22,456 $281,300 $44,998
36,973 370,882 28,654 278,668 24,438
45,002 292,615 44,615 272,414 29,246
34,565 287,490 45,107 289,239 32,541
33,345 278,192 37,829 272,199 45,772
31,828 275,071 46,911 251,532 41,761
38,367 258,229 67,802 234,877 27,314
44,888 219,661 49,071 214,036 21,618
41,498 207,756 29,731 206,335 30,978
38,484 196,168 28,092 208,614 16,268 31,791
PROPRIETARY FUND
IMPACT DELINQUENT
FEES CHARGES
$79,774 $58,404
85,583 41,674
197,767 56,280
62,200 58,313
416,792 73,334
212,077 37,945
90,640 25,588
111,964 31,119
260,382 30,417
212,012 20,671
MISCELLANEOUS
$56,907
55,476
44,771
49,346
50,929
68,723
50,823
31,401
21,141
8,583
INTEREST ON HYDRANT
INVESTMENTS TAP FEES RENTAL
$308,523
209,247
131,433
268,588
305,306
61,811
71,998
62,864
103,288
233,511
$54,795 $13,200
64,595 13,320
99,782 13,200
30,126 13,200
157,265 12,240
35,211 12,360
37,679 9,960
40,078 9,480
44,888 9,360
110,181 7,320
NOTE - INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND ONE -HALF CENT SALES TAX
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE
Year Ended September 30, 1994
CASH CASH
OCTOBER 1, SEPTEMBER 30
FEDERAL OR STATE 1993 1994
GRANTOR/ FEDERAL AWARD BEGINNING ENDING
PROGRAM TITLE CFDA NO. AMOUNT BALANCE RECEIPTS DISBURSEMENTS BALANCE
U.S. DEPARTMENT
OF AGRICULTURE
Farmers Home
Administration 10.418 $1,000,000 $ $118,052 $118,052 $
U.S. DEPARTMENT
OF HOUSING AND
URBAN DEVELOPMENT
Passed through State
Department of
Community Affairs
#91 DB- 57- 07- 57 -02 -N 12
#95DB- 65- 07- 57- 02 -C37
U.S. DEPARTMENT
OF HEALTH AND
HUMAN SERVICES
Passed through State
Department of
Community Affairs
#93SB- 1N- 07 -57 -02 -076
#94S B- 40- 07 -57 -02 -076
14.219 $575,000 $5,000 $70,908 $70,908
$575,000
13.792 $5,786
13.792 $5,786
$966
$3,856
$966 $
$3,856 $
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J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Independent Auditors' Report on Compliance
with Laws and Regulations
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the general purpose financial statements of the City of Okeechobee, Florida
(City) as of and for the year ended September 30, 1994 and have issued our report thereon dated
March 7, 1995. We did not audit the financial statements of the Employee Benefit Trust, which are
included in the general purpose financial statements as the Fiduciary Fund type. Our audit report
was qualified because the City has not maintained adequate detailed fixed asset records in support
of the recorded costs of the water and sewer utility plant in service in the proprietary fund or the
amounts included in the general fixed asset group of accounts.
We conducted our audit in accordance with generally accepted auditing standards and
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 combined financial statements are free of material misstatement.
Compliance with laws, regulations, contracts and grants applicable to the City is the
responsibility of the City's management. As part of obtaining reasonable assurance about whether
the combined financial statements are free of material misstatement, we performed tests of the City's
compliance with certain provisions of laws, regulations, contracts and grants. However, our
objective was not to provide an opinion on overall compliance with such provisions. Accordingly,
we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested, the City complied, in
all material respects, with the provisions referred to in the preceding paragraph. With respect to
items not tested, nothing came to our attention that caused us to believe that the City had not
complied, in all material respects, with those provisions.
This report is intended for the information of the Mayor and City Council, management, and
the Department of Community Affairs and the Auditor General of the State of Florida. This
restriction is not intended to limit the distribution of this report, which is matter of public record.
March 7, 1995
ct?i/
J.D. Gilbert & Company, CPAs
American Institute of Certified Public Accountants4 2 Member - Private Companies Practice Section
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all CERTIFIED PUBLIC ACCOUNTANTS
J.D. GILBERT & COMPANY
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Single Audit Report on Compliance with the General
Requirements Applicable to Federal Financial Assistance Programs
To the Honorable Mayor
and City Council
City of Okeechobee, Florida
We have audited the general purpose financial statements of the City of Okeechobee, Florida,
as of and for the year ended September 30, 1994, and have issued our report thereon dated March
7, 1995.
We have applied procedures to test the City of Okeechobee, Florida's compliance with the
following requirements applicable to its federal financial assistance programs, which are identified
in the Schedule of Federal Financial Assistance, for the year ended September 30, 1994: political
activity, civil rights, cash management, federal financial reports, allowable costs /cost principles, and
administrative requirements.
Our procedures were limited to the applicable procedures described in the Office of
Management and Budget's Compliance Supplement for Single Audits of State and Local
Governments. Our procedures were substantially less in scope than an audit, the objective of which
is the expression of an opinion on the City of Okeechobee, Florida's compliance with the
requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material
instances of noncompliance with the requirements listed in the second paragraph of this report. With
respect to items not tested, nothing came to our attention that caused us to believe that the City of
Okeechobee, Florida, had not complied, in all material respects, with those requirements.
This report is intended for the information of the audit committee, management, and the
Department of Community Affairs and the Auditor General of the State of Florida. However, this
report is a matter of public record and its distribution is not limited.
March 7, 1995
J.D. Gilbert & Company, CPAs
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J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Single Audit Report on Compliance with Specific Requirements
Applicable to Nonmajor Federal Financial Assistance Programs
To the City Council
City of Okeechobee, Florida
We have audited the general purpose financial statements of the City of Okeechobee, Florida,
as of and for the year ended September 30, 1994, and have issued our report thereon dated March
7, 1995.
In connection with our audit of the general purpose financial statements of the City of
Okeechobee, Florida, and with our consideration of the City of Okeechobee, Florida's control
structure used to administer federal financial assistance programs, as required by Office of
Management and Budget (OMB) Circular A -128, "Audits of State and Local Governments," we
selected certain transactions applicable to certain nonmajor federal financial assistance programs for
the year ended September 30, 1994. As required by OMB Circular A -128, we have performed
auditing procedures to test compliance with the requirements governing types of services allowed
or unallowed; eligibility; and special tests and provisions (if any) that are applicable to those
transactions. Our procedures were substantially less in scope than an audit, the objective of which
is the expression of an opinion on the City of Okeechobee, Florida's compliance with these
requirements. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material
instances of noncompliance with the requirements listed in the preceding paragraph. With respect
to items not tested, nothing came to our attention that caused us to believe that the City of
Okeechobee, Florida, had not complied, in all material respects, with those requirements.
This report is intended for the information of the audit committee, management, and the
Department of Community Affairs and the Auditor General of the State of Florida. However, this
report is a matter of public record and its distribution is not limited.
March 7, 1995
J.D. Gilbert & Company, CPAs
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LLD. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Single Audit Combined Report on the Internal Control Structure
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the general purpose financial statements of the City of Okeechobee, Florida
(City), as of and for the year ended September 30, 1994, and have issued our report thereon dated
March 7, 1995. We did not audit the financial statements of the Employee Benefit Trust, which are
included in the combined financial statements as the Fiduciary Fund Types. Our audit report was
qualified because the City has not maintained adequate detailed fixed asset records in support of the
recorded costs of the water and sewer utility plant in service in the proprietary fund or the amounts
included in the general fixed asset group of accounts.
We conducted our audits in accordance with generally accepted auditing standards;
Government Auditing Standards, issued by the Comptroller General of the United States; and Office
of Management and Budget (OMB) Circular A -128, Audits of State and Local Governments. Those
standards and OMB Circular A -128 require that we plan and perform the audit to obtain reasonable
assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended September 30, 1994, we considered
the City's internal control structure in order to determine our auditing procedures for the purpose of
expressing our opinion on the City's general purpose financial statements and to report on the
internal control structure in accordance with OMB Circular A -128. This report also addresses our
consideration of internal control structure policies and procedures relevant to compliance with
requirements applicable to federal financial assistance programs.
The management of the City is responsible for establishing and maintaining an internal
control structure. In fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of internal control structure policies and
procedures. The objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, that transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of combined financial statements in accordance with
generally accepted accounting principles, and that federal financial assistance programs are managed
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The Honorable Mayor and
Members of the City Council
March 7, 1995
in compliance with applicable laws and regulations. Because of inherent limitations in any internal
control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and
not be detected. Also, projection of any evaluation of the structure to future periods is subject to the
risk that procedures may become inadequate because of changes in conditions or that the
effectiveness of the design and operation of policies and procedures may deteriorate.
For the purpose of this report, we have classified the significant internal control structure
policies and procedures in the following categories:
Activity Cycles:
• Revenue /receipts
• Purchases /disbursements
• Payroll /personnel
General Requirements:
• Political activity
• Civil rights
• Davis -Bacon Act
• Federal financial reports
Specific Requirements
• Type of services
• Matching
• Special Reporting Requirements
• Special Tests and Provisions
For all of the internal control structure categories listed above, we obtained an understanding
of the design of relevant policies and procedures and determined whether they have been placed in
operation, and we assessed control risk.
During the year ended September 30, 1994, the City had no major federal financial assistance
programs and expended its federal financial assistance under the nonmajor federal financial
assistance programs listed in the schedule of federal financial assistance.
We performed tests of controls, as required by OMB Circular A -128, to evaluate the
effectiveness of the design and operation of internal control structure policies and procedures that
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The Honorable Mayor and
Members of the City Council
March 7, 1995
we considered relevant to preventing or detecting material noncompliance with specific
requirements, general requirements, and requirements governing claims for advances and
reimbursements that are applicable to the aforementioned nonmajor programs. Our procedures were
less in scope than would be necessary to render an opinion on these internal control structure policies
and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we
consider to be a reportable condition under standards established by the American Institute of
Certified Public Accountants. Reportable conditions involve matters coming to our attention relating
to significant deficiencies in the design or operation of the internal control structure that, in our
judgment, could adversely affect the City's ability to record process, summarize, and report financial
data consistent with the assertions of management in the combined financial statements or to
administer federal financial assistance programs in accordance with applicable laws and regulations.
A material weakness is a reportable condition in which the design or operation of one or
more of the internal control structure elements does not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be material in relation to the combined financial
statements being audited or that noncompliance with laws and regulations that would be material
to a federal financial assistance program may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters
in the internal control structure that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also considered to be material weaknesses as
defined above. However, we noted the following matter involving the internal control structure and
its operation that we consider to be a material weakness as defined above. These conditions were
considered in determining the nature, timing, and extent of procedures to be performed in our audit
of the general purpose financial statements of the City, and of its compliance with requirements
applicable to its federal financial assistance programs for the year ended September 30, 1994 and
this report does not affect our report thereon dated March 7, 1995.
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The Honorable Mayor and
Members of the City Council
March 7, 1995
Fixed Asset Records and Controls
The City has not maintained adequate detailed fixed asset records in support of the
recorded costs of the water and sewer utility plant in service or the amounts included
in the general fixed assets group of accounts. We were unable to obtain sufficient
supporting documentation to form an opinion with respect to the stated costs of
property items acquired in years prior to October 1, 1981 nor the related accumulated
depreciation applicable to the water and sewer utility plant in service at September
30, 1994 and the depreciation expense for the year then ended.
The City has contracted with a firm to evaluate the historic cost or donated value of
all existing physical assets of the City. The project is not yet completed. Once
complete records are established the City should ensure that additional acquisitions
and disposals are properly recorded and accounted for. Additionally, a physical
inventory of fixed assets should be performed at least every two years.
We also noted other matters involving the internal control structure and its operation that we
have reported to the management of the City in a separate letter dated March 7, 1995.
This report is intended for the information of the Mayor and City Council, management, and
the Department of Community Affairs and the Auditor General for the State of Florida. This
restriction is not intended to limit the distribution of this report, which is a matter of public record.
March 7, 1995
J.D. Gilbert & Company, CPAs
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J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 • (305) 419 -1000 • Fax (305) 419 -1040
Management Letter
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined financial statements of the City of Okeechobee, Florida (City)
for the year ended September 30, 1994, and have issued our report thereon dated March 7, 1995.
We did not audit the financial statements of the Employee Benefit Trust included in the combined
financial statements. The following comments are submitted in accordance with the Rules of the
Auditor General of the State of Florida, Chapter 10.550. Additional comments on the internal
control structure appear in a separate letter report.
Recommendations for Improvement
Cash Disbursements - In our review of cash disbursements, we noted several breaks in the
sequence of issuing checks. To ensure proper accountability for cash disbursements, checks
should be issued in numerical sequence, and all missing checks should be accounted for.
We also noted that certain interfund transfers are not recorded simultaneously on the records
of both funds. To ensure proper reporting, all interfund transfers and payments should be
identified to ensure interfund activities balance.
Accounts Receivable - In our review of proprietary fund accounts receivable, we noted a
large discrepancy between the general ledger balance and the detail listing of customer
accounts. To ensure proper accounting, the general ledger should be reconciled to the detail
monthly.
In our review of general fund accounts receivable, we noted that significant categories of
receivables were not segregated, and no comprehensive list of receivables was prepared to
support the recorded balance. To ensure proper recording of receivables, either segregated
general ledger accounts or detailed schedules should be maintained.
Accounts Payable and Encumbrances - In our review of accounts payable and
encumbrances, we noted that encumbrances were recorded as accounts payable in both the
general and proprietary funds. Encumbrances of the general fund are to be recorded as fund
balance encumbrances and encumbrances are not to be recorded in the proprietary fund. We
also noted that procedures over identification of accounts payable related to proprietary fund
construction projects are not adequate to identify all liabilities. To ensure proper reporting
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of liabilities, the City should establish procedures to identify all unpaid engineering and
contractor fees at the end of each reporting period. Balances recorded in accounts payable
should also be supported by a detailed list of unpaid invoices.
Prior Year Irregularities
There were no irregularities reported in the preceding financial audit to correct.
Status of Prior Year Recommendations
Rules of the Auditor General - As noted in the "Single Audit Combined Report on Internal
Control Structure ", the City is still in the process of improving controls over fixed assets.
Consideration of Financial Emergency
The City is not, nor at any time during the year ended September 30, 1994 was, in a state of financial
emergency as a consequence of conditions described in Chapter 218.503, Florida Statutes.
Violations of Laws. Rules and Regulations
We did not become aware of any violations of laws, rules, and regulations during the course of our
audit.
Illegal or Improper Expenditures
We did not become aware of any illegal or improper expenditures during the course of our
examination.
Florida Department of Banking and Finance Annual Financial Report
The annual financial report to be filed with the Florida Department of Banking and Finance pursuant
to Section 218.32(1)(b) Florida Statutes is in agreement with the audited financial statements and
is expected to be filed on a timely basis.
This letter is intended solely for the use of the Mayor and City Council, management and the
Auditor General of the State of Florida. This restriction is not intended to limit the distribution of
this letter, which is a matter of public record.
March 7, 1995
J.D. Gilbert & Company, CPAs
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