Audit Report 09.30.1995
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GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1995
Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
September 30, 1995
CITY COUNCIL
James E. Kirk
Mayor, Chairman
Noel A. Chandler
Councilmember
Dowling R. Watford, Jr.
Councilmember
Mike G. O'Connor
Councilmember
Robert Oliver
Councilmember
ADMINISTRATION
John 1. Drago
City Administrator
General Services Director
Louis Keith Tomey II
Chief of Fire
Bonnie S. Thomas, CMC
City Clerk
Larry Mobley
Chief of Police
Robert M. Delorme
Finance Director
Charles Elders
Director of Public Works
John Cook
City Attorney
Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
September 30, 1995
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10-28
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and Actual ............................... 29-30
Schedule of Expenditures - Budget and Actual. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31
Debt Service Fund -
Statement of Revenue and Expenditures - Budget and
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 32
Employee Pension Trust Funds -
Combining Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 33
Combining Statements of Revenue, Expenses and Changes
in Fund Balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34
Historical Information (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 35
Unaudited Information:
Summary ofInsurance Coverage - Unaudited .............................. 36
Schedule of Assessed Values, Tax Levies and Rates-
Unaudited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 37
Schedule of Certain Revenue - Unaudited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 38
Schedule of Federal and State Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 39
Ei .J.D. GILBERT & COMPANY
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Other Reports:
Independent Auditors' Report on Compliance with Laws
and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 40
Single Audit Report on Compliance with General
Requirements Applicable to Federal Financial
Assistance Programs ................................................... 41
Single Audit Report on Compliance with Specific
Requirements Applicable to Nonmajor Federal Financial
Assistance Programs ................................................... 42
Single Audit Combined Report on the Internal Control
Structure .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43-46
Management Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47-48
Ei .J.D. GILBERT & COMPANY
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..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510. Deerfield Beach. Florida 33441 . (9541 419-1000 . Fax (9541 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, 1995, 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 and on the
loss recorded from the disposition of the utility operations in 1995. It is not practicable to determine
the effects on the general purpose financial statements of this departure from generally accepted
accounting principles.
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, 1995 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.
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
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In accordance with "Government Auditing Standards", we have also issued a report dated
March 7, 1996 on our consideration of the City of Okeechobee' s internal control structure and a
report dated March 7, 1996 on its compliance with laws and regulations.
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.
~\)~~C~~
U J.D. Gilbert & Company, CPAs U
March 7, 1996
Ei ..J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
September 30, 1995
Proprietary Fiduciary
Governmental Fund Types Fund Types Fund Types Account Groups
Employee General General Total
Debt Pension Fixed Long-Term (Memorandum
General Service Enterprise Trust Assets Debt Only)
ASSETS
Cash $4,622,046 $35,615 $571,648 $33,228 $5,262,537
Investments 3,754,636 3,754,636
Receivables:
Taxes 86,191 5 86,196
Accounts less Allowance of$5,861 25,013 25,013
Due from Other Government Agencies 146,559 146,559
Due from Other Funds 357,672 70,989 1,150 429,811
Inventory 10,726 10,726
Prepaid Expenses 10,529 10,529
Restricted Assets-
Cash 5,575 5,575
Fixed Assets 2,097,701 2,097,701
Amount Available in Debt Service Fund 106,609 106,609
Amount to be Provided for Retirement
of General Long-Term Debt 1,530,398 1,530,398
TOTAL ASSETS $5,253,782 $106,609 $582,177 $3,789,014 $2,097,701 $1,637,007 $13,466,290
LIABILITIES
Accounts Payable 97,180 105,108 18,308 $220,596
Accrued Liabilities 19,386 47,258 125,971 192,615
Accrued Interest 19,426 19,426
Matured Bonds and Interest Coupons 2,012 2,012
Due to Other Funds 429,811 429,811
Deferred Revenue 35,300 35,300
Long-Term Debt 1,511,036 1,511,036
TOTAL LIABILITIES $171,292 $2,012 $582,177 $18,308 $0 $1,637,007 $2,410,796
FUND EOUlTY
Investment in General Fixed Assets 2,097,701 2,097,701
Fund Balances:
Reserved for:
Employees' Retirement 3,770,706 3,770,706
Debt Service 104,597 104,597
Inventory 10,726 10,726
Encumbrances 12,798 12,798
Unreserved 5,058,966 5,058,966
TOTAL FUND EQUITY $5,082,490 $104,597 $3,770,706 $2,097,701 $11,055,494
TOTAL LIABILITIES AND FUND
EQUITY $5,253,782 $106,609 $582,177 $3,789,014 $2,097,701 $1,637,007 $13,466,290
The Notes to Combined Financial Statements
an Integral Part of this Statement
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Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
Year Ended September 30, 1995
DEBT
SERVICE
TOTALS
(MEMORANDUM
ONLY)
Revenues
Taxes
Intergovernmental
Charges for Services
Licenses and Permits
Fines and Forfeitures
Interest Income
CDB Grant
Miscellaneous
GENERAL
$1,369,120
1,030,652
220,829
40,366
33,691
82,613
23,094
38.825
$ 28,514
2,423
$1,397,634
1,030,652
220,829
40,366
33,691
85,036
23,094
38.825
Total Revenue
2.839.190
30.937
2.870.127
Expenditures
Current:
Public Safety
General Government
Transportation
Physical Environment
Economic Environment
Health and Human Services
Debt Service:
Principal
Interest
Professional Fees
1,201,944
351,259
742,524
183,334
19,861
40,670
1,201,944
351,259
742,524
183,334
19,861
40,671
117,238
80,584
35,000
4,768
500
152,238
85,352
500
Total Expenditures
2.737.414
40.268
2.777.682
Excess of Revenue Over Expenditures
(Expenditures Over Revenue)
101,776
(9,331)
92,445
Other Financing Source:
Transfer from Proprietary Fund
3,434,560
3,434,560
Fund Balances, beginning of year
1.546.154
113.928
1.660.082
Fund Balances, end of year
$5 082 490
$104597
$5 187087
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - GOVERNMENTAL FUND TYPES
Year Ended September 30, 1995
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 )
REVENUE
Taxes $1,309,560 $1,369,120 $59,560 $23,470 $28,514 $5,044 $1,333,030 $1,397,634 $64,604
Intergovern-
mental 917,043 1,030,652 113,609 917,043 1,030,652 113,609
Charges for
services 212,700 220,829 8,129 212,700 220,829 8,129
Licenses and
permits 36,500 40,366 3,866 36,500 40,366 3,866
Fines and
forfeitures 23,600 33,691 10,091 23,600 33,691 10,091
Interest Income 19,080 82,613 63,533 1,000 2,423 1,423 20,080 85,036 64,956
CDB grant 575,000 23,094 (551,906) 575,000 23,094 (551,906)
MiscelIaneous 24,900 38,825 13,925 24,900 38,825 13,925
TOTAL REVENUE 3,118,383 2,839,190 (279,193) 24,470 30,937 6,467 3,142,853 2,870,127 (272.726)
EXPENDITURES
Public satety 1,236,080 1,198,844 37,236 1,236,080 1,198,844 37,236
General
govenunent 417,250 348,010 69,240 417,250 348,010 69,240
Transporta-
tion 1,355,680 725,991 629,689 1,355,680 725,991 629,689
Physical
enviromnent 180,000 183,334 (3,334) 180,000 183,334 (3,334)
Economic
enviromnent 575,000 19,861 555,139 575,000 19,861 555,139
Health and human
services 41,000 40,670 330 41,000 40,670 330
Debt service 199.365 197,822 1,543 40,769 40,268 501 240,134 238,090 2,044
TOTAL
EXPENDITURES 4,004,375 2,714,532 1,289,843 40,769 40,268 501 4,045,144 2,754,800 1,290,344
EXCESS OF
REVENUE OVER
(UNDER)
EXPENDITURES ($885.992) $124,658 $1,010.650 ($16,299) ($9,331) $6.968 ($902,291 ) $115,327 51,017,618
OTHER FINANCING
SOURCES:
Transfer from
Proprietary Fund 3,434,560 3,434,560
FUND BALANCES
Beginning of
year 1,546,154 113,928 1,660,082
Adjustment to
conform to
generally
accepted
accounting
principles:
Adjustment for
encumbrances (22,882) (22,882)
End of year $5.082.490 $104.597 $5.187.087
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
COMBINED STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN RETAINED EARNINGS/FUND BALANCES -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS
Year Ended September 30, 1995
Proprietary Fiduciary
Fund Type Fund Type
Employee Totals
Pension (Memorandum
Enterprise Trust Only)
Operating Revenues:
Charges for Services $3,356,716 $ $3,356,716
Contributions 198,905 198,905
Investment Income 224.878 224.878
Total Operating Revenues 3.356.716 423.783 3.780.499
Operating Expenses:
Personal Services 792, 106 792, 106
Professional Services 277,486 57,673 335,159
Materials and Operating Supplies 321,915 321,915
Utilities 179,353 179,353
Insurance 51,355 51,355
Repairs and Maintenance 266,646 266,646
Administrative Supplies and Expense 13,224 13,224
Engineering Services 77,767 77,767
Depreciation 653,915 653,915
Benefit Payments 30,840 30,840
Contribution Refunds 48,308 48,308
General Fund Administrative Charge 100.000 100.000
Total Operating Expenses 2.733.767 136.821 2.870.588
Operating Income 622.949 286.962 909.911
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei .J.D. GILBERT & COMPANY
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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 30,1995
Nonoperating Revenues (Expenses):
System Capacity Fees
Connection Fees
Interest Revenue
Interest Expense
Other Fiscal Charges
Loss on Disposition and Demolition of
Fixed Assets
Miscellaneous
Nonoperating Expenses, net
Income (Loss) before Disposition
Loss on Disposition of Utility Operations
Net Income (Loss)
Fund Equity, beginning of year
Capital Contribution
Transfer to General Fund
Fund Equity, end of year
Proprietary
Fund Type
Enterprise
$ 129,245
81,251
143,024
(1,010,114)
(30,225)
(5,017)
1.108
(690.728)
(67,779)
(4.194.523)
(4,262,303)
7.542.563
3,280,260
154,300
(3.434.560)
$
Fiduciary
Fund Type
Employee
Pension
Trust
Totals
(Memorandum
Only)
$
$ 129,245
81,25 1
143,024
(1,010,114)
(30,225)
(5,017)
1.108
(690.728)
219,183
(4.1 94.523)
(3,975,341)
1 1.026.307
6,718,753
154,300
(3.434.560)
$ 3 770 706
286,962
286,962
3.483.744
3,770,706
$3 770 706
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE
Year Ended September 30,1995
Increase (Decrease) in Cash and Restricted Cash
Cash Flows from Ooeratin2 Activities
Cash received from customers
Cash payments for goods and services
Cash payments for employee services
Other operating cash received
Proprietary
Fund Type
Enterprise
$3,448,938
(1,613,579)
(760,024)
1.106
Net Cash Provided by Operating Activities
1.076.441
Cash Flows from Noncaoital Financin2 Activities
Net cash advanced on interfund transfers
(3.001.225)
(3.001.225)
Net Cash Used in Noncapital Financing Activities
Cash Flows from Caoital and Related Financin2 Activities
Acquisition and construction of capital assets
Principal payments on revenue bond maturities
Interest paid on revenue bonds
Other fiscal charges
Grant proceeds
Disposition of Assets to OUA, net
(1,381,225)
(310,000)
(1,005,276)
(3,775)
154,300
1. 707.460
Net Cash Used in Capital and Related Financing Activities
(838.516)
Cash Flows from Investin2 Activities
Sale of Investments
Interest and dividends on cash, time deposits and investments
1,213,688
149.797
Net Cash Provided by Investing Activities
1.363.485
Net Decrease in Cash and Restricted Cash
(1,399,815)
Cash and Restricted Cash at Beginning of Year
1.971.463
Cash at End of Year
$ 571 648
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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Ei .J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF CASH FLOWS - PROPRIETARY FUND TYPE (CONTINUED)
Year Ended September 30, 1995
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Proprietary
Fund Type
Enterprise
Operating Income
Adjustments to reconcile operating income to net
cash provided by operating activities:
System capacity and connection fees
Other nonoperating revenues, net
Loss on Disposition and Demolition of Fixed Assets
Depreciation
Changes in Assets and Liabilities:
Increase in Accounts Receivable
Increase in Prepaid Expenses
Decrease in Accounts Payable
Increase in Other Liabilities
$ 622,949
210,496
1,108
(5,017)
653,915
(143,752)
(10,529)
(306,040)
53.311
Net Cash Provided by Operating Activities
$1.076442
Schedule of Non-Cash Capital and Related Financing Activities
Amortization of Debt Issuance and Bond Discounts
$ 46,415
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofOkeechobee (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.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
On September 28, 1995, the City disposed of its enterprise fund, as more fully described in
Note 13.
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.
General Long- Term Debt Account Group - This account group is used to account for
long-term debt to be financed from governmental fund types.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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" .
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
revenue 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 1 st. 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.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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, 1995, these charges aggregated $100,000.
The enterprise fund's maintenance facility, water towers, and water and sewer plants, except
for the new sewer plant, were located on city-owned real estate which is not recorded in the
enterprise fund. Additionally, the enterprise fund's administrative staff offices were located
in City Hall. No interfund charges have been recorded for rental of either the land or the
office space. The general fund also did 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 of30 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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The amount of vacation leave expected to be paid from current financial resources of the
general fund is 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 $125,971 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 $44,524 is reflected within the enterprise fund for accrued
vacation and sick leave; this accrual was paid to the Okeechobee Utility Authority in October
1995.
K. AMORTIZATION OF BOND EXPENSE
The cost of issuance of bonds was amortized, on an accelerated method, over the life of the
bonds. At September 28, 1995, the City bonds were defeased and the unamortized portion
of the discount was removed.
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 1994-95
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, 1995
Less prior year encumbrances paid
Adjustment for encumbrances
$2,737,414
$12,798
(35.680)
(22.882)
Expenditures on Budgetary Basis
$2.714.532
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
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, 1995 totaling
$3,397,899 which are included in cash in the accompanying combined balance sheets in the amount
of$3, 113, 101.
At September 30, 1995, the City has $2,086,168 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. Cash equivalent
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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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
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 3:
Pension trust funds:
Municipal police officers' pension trust fund:
Cash equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
Book
Value
Market
Value
17,076
564,546
76,110
885,706
9.338
1.552.776
17,076
621,905
71,226
1,105,187
9.338
1.824.732
Municipal firefighters' pension trust fund:
Cash equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
8,523
185,592
27,073
303,912
3.153
528.253
8,523
202,562
25,485
379,852
3.153
619.575
Municipal general employees' pension trust fund:
Cash Equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
36,224
836,854
116,978
671,003
12.548
1.673.607
36,224
916,797
110,998
884,145
12.548
1.960.712
Total Investments
$3.754.636
$ 4.405.019
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 4 - PROPERTY TAXES
The City's property tax is levied annually on the real and personal property located in the City on
January 1 st of the prior year. The assessed value on which the 1994-95 levy was based was
$140,199,617. 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,
1995 were 96% 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 1994-95 fiscal year was 4.94 mills.
NOTE 5 - FIXED ASSETS - PROPRIETARY FUND
The activity in fixed assets of the proprietary fund for the year ended September 30, 1995 is
summarized as follows:
Utility Plant Construction
In Service In Progress Total
Balance September 30, 1994 $22,762,785 $528,741 $23,291,526
Additions 1,242,075 209,453 1,451,528
Disposals (70,273) (70,273)
Transfers 492,143 (492,143)
Disposition of Assets September 28, 1995 (24.497.003) (175.778) (24.672.781)
Balance September 30, 1995 $ $ $
All assets of the utility were transferred to the Okeechobee Utility Authority effective September 28,
1995, as more fully described in Note 13.
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. Depreciation expense
recorded for these assets was $103,505 in 1995.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 6 - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
Totals
Balance Balance
October 1. 1994 Additions Retirements September 30. 1995
$ 805,358 $ $ $ 805,358
402,703 402,703
524,807 37,238 4,500 557,545
332.095 - - 332.095
- -
$2 064 963 $37 238 WQQ $2097 701
Land and improvements
Buildings and improvements
Furnishings and equipment
Rolling stock
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, 1995, 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, 1995 is summarized as follows:
GENERAL LONG-TERM DEBT
General Obligation Bonds:
$480,500 original issue General Obligation Bonds, due in
remaining annual installment of$35,000 on July 1, 1996;
interest rate of6.75%
$ 35,000
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
1.476.036
Total General Long-Term Debt
$1.511 036
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 7 - LONG- TERM DEBT (Continued)
A summary of changes in alllong-tenn debt for the year ended September 30, 1995 is as follows:
Balance at September 30,
1994
Payments
NOTES
PAYABLE
$1,593,274
GENERAL LONG-TERM DEBT
GENERAL
OBUGATION
BONDS
$70,000
35,000
35,UUU
117,238
1,476,U36
Less amounts defeased upon
disposition of utility
Balance at September 30,
1995
$35,000
$1,476,036
Annual principal requirements for the next five years and thereafter as follows:
Year ending -
1996 $35,000
1997
1998
1999
2000
Thereafter
TOTALS $35,000
TOTAL
$1,663,274
152,238
1,) 1l,U36
1,511,036
$123,261
130,021
136,937
144,221
151,767
789,829
$1,476,036
PROPRIETARY FUND
WATER AND SEWER REVENUE BONDS
1987 1989 1992
SERIES SERIES SERIES TOTAL
$4,595,000 $4,605,000 $5,495,000 $14,695,000
80,000 105,000 125,000 310,000
4,515,UUU 4,5UU,UUU 5,37U,UUU 14,3115,UUO
(4,515,000) (4,500,000) (5,370,000) (14,385,000)
$ $ $ $
$158,261
130,021
136,937
144,221
151,767
789,829
$1,511,036
The arumal requirements to amortize all debt outstanding as of September 30, 1995, including interest payments aggregating $420,293 are as follows:
GENERAL LONG-TERM DEBT
GENERAL
OBLIGATION NOTES
BONDS PAYABLE TOTAL
Year ending -
1996
1997
1998
1999
2000
Thereafter
TOTALS
$37,362
$37,362
$199,365
199,365
199,365
199,365
199,365
897,142
$1,893,967
$236,727
199,365
199,365
199,365
199,365
897,142
$1,931,329
The annual changes in generallong-tenn debt accroed vacation and medical leave benefits as of September 30, 1995 are as follows:
OCTOBER l. 1994
$120,731
INCREASE
$5.240
SEPTEMBER 30.1995
$125.971
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 were defeased on September 28, 1995 upon the transfer of the water and sewer
system to the Okeechobee Utility Authority. Monies were deposited in an irrevocable trust to
provide for all future debt service payments on these bonds. Accordingly, trust assets and liabilities
for the defeased bonds are not included in the city's financial statements.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 8 - INTERFUND RECEIVABLES AND PAY ABLES
The following is a summary of amounts due from and due to other funds:
General fund
Debt service fund
Proprietary fund
Fiduciary Fund
Total all Funds
NOTE 9 - CONTRIBUTED CAPITAL
Due from
Other Funds
$ 357,672
70,989
1.150
$429811
The source and additions to contributed capital are as follows:
Connection fees
Developers
Federal Grant
South Florida Water Management District
Local Public Works Grant
Federal Revenue Sharing Funds
General Fund
Okeechobee Beach Water Association
Environmental Protection Agency Grant
Totals
Balance
October 1,
1994
$ 421,758
338,761
1,633,132
Additions
$
Due to
Other Funds
$
429,811
$429.811
Balance
September 28,
1995
$ 421,758
338,761
1,633,132
154,300
417,740
619,572
100,000
275,000
1.946,573
$5.906.836
Contributed capital offset the recorded loss on dispisiton of the utility operations before the remaining
net equity was transferred to the General Fund.
NOTE 10 - PENSION PLANS
154,300
417,740
619,572
100,000
275,000
1.946,573
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
$5 752.536
$154.300
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 10 - PENSION PLANS (Continued)
General
Police
Fire
Covered
Payroll
$1,092,611
482,552
218,217
Total
Payroll
$1,118,324
482,552
241,557
Covered
Payroll as
Percent of
Total Payroll
97.7%
100.0%
90.3%
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 montWy earnings times years of continuous service with the
City. Benefits are payable by montWy 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.
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.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 10 - PENSION PLANS (Continued)
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, 1995, which consisted entirely of
normal cost, was as follows:
General
Police
Fire
$11,086
$45,898
$17,435
The City and employees contributions by fund for the year ended September 30, 1995 were as
follows:
City Employees
General fund $ 6,499 $58,851
Proprietary fund 5.713 28.522
Totals $12.212 $87.373
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 totaled $23,090 and $76,230, respectively, during the year ended September 30, 1995.
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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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 10 - PENSION PLANS (Continued)
The standardized measure of the pension benefit obligation and the net assets available for benefits
at September 30, 1995 (the most recent valuation date) is as follows:
Police Fire General
Value No. Value No. Value No.
Pension benefit obligation:
Retirees and beneficiaries
currently receiving benefits
and terminated employees
entitled to benefits but not
yet receiving them $ - $ 9,280 1 $ 320,691 4
-
Current employees:
Accumulated employee
contributions including
allocated investment income 249,034 69,855 416,220
Employer-financed vested 858,959 9 111,211 2 416,068 28
Employer-financed nonvested 129.683 ~ 52.839 ~ 31.232 24
Total pension benefit
obligation
1,247,676
17
243,185
10
1,398,631
57
Net assets available for benefits
(at cost which approximates
market-see market value
information at Note 3) 1.558.817
531.513
1.680.376
Assets in excess of pension
benefit obligation $ 311.141
$288.328
$281745
The Municipal General Employees' Pension Trust Fund was amended to include the Okeechobee
Utility Authority employees effective September 28, 1995. 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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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 10 - PENSION PLANS (Continued)
Mortality - The 1983 Group Annuity Mortality Table.
Interest - 8% per year compounded annually, after paying investment management fees.
Retirement age - 60 for police officers and firefighters, 65 for all other employees, or
immediately if over assumed retirement age.
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 11 - GRANTS AND CONTRACTS
Hospice
During the year ended September 30, 1995, the City was awarded a Community Services Block
Grant (95SB-4M-07-57-02-063) totaling $7,038 for local community health and human services
assistance. Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee. The City
received $5,449 under this and a previous grant during the year ended September 30, 1995 and, upon
presentation of invoices by Hospice, disbursed the funds.
Land Development Reimlation
The City entered into a highway maintenance agreement (contract #B-9499) with the State of Florida
Department of Transportation in the amount of $15,903. In 1995, $15,903 was recorded as
reimbursement for expenditures incurred by the City relating to the project under this and a previous
contract.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30, 1995
NOTE 11 - GRANTS AND CONTRACTS (Continued)
Community DeveloDment 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.
NOTE 12 - COMMITMENTS
The City has contracts for engineering and maintenance projects at September 30, 1995 in the normal
course of business.
The City's waste water treatment plant was located on 407 acres ofland 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.
NOTE 13 - DISPOSITION OF UTILITY
In November 1994, the City entered into an interlocal agreement with Okeechobee County, Florida
(the County) creating the Okeechobee Utility Authority (OUA). The OUA was established for the
purpose of acquiring, owning, operating and maintaining a regional water and wastewater system for
Okeechobee County and areas in the service area of the Okeechobee Beach Water Association.
On September 28, 1995, the City transferred its water and sewer utility plant and related equipment,
accounts receivable, customer deposits and prepayments, and monies on deposit in the bond sinking
and reserve funds to the OUA in exchange for $3,000,000. The City retained obligations for accounts
payable and accrued vacation and sick pay as of September 28, 1995 which were paid from funds
retained by the city. The City transferred certain real property that was not recorded in the fixed
assets of the proprietary fund. Certain other real property relating to the water and sewer utility
operations was not transferred, but perpetual easements were granted to the OUA. The proprietary
fund recognized a $4,194,523 loss on disposition of the utility operations, which was based in part
upon the depreciated carrying value of the assets. As disclosed in Notes 5 and 6 to these financial
statements, the City has not maintained adequate detailed fixed asset records to support the cost of
the water and sewer utility plant or the general fixed asset group; therefore, the effect of this
departure on the recorded loss on disposition of the utility plant and any effect on the fixed asset
account group cannot be determined.
In accordance with the terms of an Interlocal Agreement between the City and OUA, the OUA will
utilize office space, the maintenance barn, financial services and police dispatch services of the City
for one year for an aggregate annual fee of $100,000. These services can be discontinued upon
proper notice prior to the expiration of the agreement.
28
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30, 1995
Variance
Favorable
Budget Actual (Unfavorable )
TAXES
Ad valorem taxes $ 682,000 $ 683,389 $ (1,389)
Franchise fees 283,560 285,256 1,696
Utility service taxes 343,000 398,522 55,522
Public service taxes 1.000 1.952 952
1.309.560 1.369.120 59.559
INTERGOVERNMENTAL
State shared revenue:
Cigarette tax - Two Cent 81,000 81,993 993
Revenue sharing 170,000 176,013 6,013
One-half cent sales tax 190,000 191,988 1,988
Mobile home licenses 2,500 2,943 443
Alcoholic beverage licenses 9,800 1,925 1,025
Gasoline tax refund 1,500 812 688
Local option gasoline tax 303,243 364,613 61,370
Local Alternate Fuel User Fee 300 243 57
Fire fighters supplement 600 600
750.043 821.130 72.577
Shared revenue from other local units:
County occupationallicenses 4,000 9,178 5,178
City share of 5 and 6 cent gas tax 120,000 147,469 27,469
City share of 9th cent gas tax 43.000 52.878 9.878
167.000 160.022 42.525
917.043 1.030.652 113.612
CHARGES FOR SERVICES
Sanitation fees 197,000 203,704 6,704
Highway maintenance contract 15,200 15,903 703
Miscellaneous 500 1.222 722
212.700 220.829 8.129
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
(CONTINUED)
Year Ended September 30, 1995
Variance
Favorable
Budget Actual (Unfavorable )
LICENSES AND PERMITS
Occupational licenses and Regulatory fees 36.500 40.366 3.866
FINES AND FORFEITURES
Court fines 23,000 28,435 5,435
Police education 300 417 117
Code enforcement fines 300 881 581
Investigation Cost Reimbursement 3.958 3.958
23.600 33.691 10.091
INTEREST INCOME 19.080 82.613 63.533
CDB GRANT 575.000 23.094 55 1.906
MISCELLANEOUS
Hospice Grant 5,600 5,449 (151)
Miscellaneous Improvements 3,000 15,284 12,284
Sale of assets 5,000 9,755 4,755
Rents and royalties 400 490 90
Refunds of prior year expenditures 500 114 (386)
Miscellaneous and other IOAOO 7.733 (2.666)
24.900 38.825 13.926
Total Revenue $3.118.383 $2.839.190 $(279.190)
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GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
Year Ended September 30, 1995
ENCUMBRANCES ACTUAL ON VARIANCE
BUDGETARY FAVORABLE
BUDGET ACTUAL 1994 1995 BASIS (UNFAVORABLE)
PUBLIC SAFETY
Law enforcement:
Personal services $693,760 $676,370 $676,370 $17,390
Operating expenses 165,940 147,689 5,314 153.003 12,937
Capital outlay 9.902 8,415 1,487 (1,487)
859,700 833,961 8,415 5,314 830.860 28.840
Fire control:
Personal services 305,480 297,156 297,156 8,324
Operating expenses 70,900 70,827 70,827 73
376.380 367.983 367.983 8.397
Total Public Safety 1,236,080 1 ,201 ,944 8,415 5,314 1 ,198,843 37.237
GENERAL GOVERNMENT
Legislative:
Personal services 42,425 38,928 38,928 3.497
Operating expenses 17,625 9,965 9,965 7,660
Allocation of administrative charges (18,000) (18.000) (18.000) 0
42.050 30.893 30,893 11 ,157
Executive - city administrator:
Personal services 74,200 71,426 71,426 2,n4
Operating expenses 25,700 10,273 10,273 15,427
Allocation of administrative charges (29,000) (29,000) (29.000) 0
70.900 52.699 52.699 18.201
Executive - city clerk:
Personal services 59,130 58,438 58,438 692
Operating expenses 14,150 14,421 14,421 (271 )
Allocation of administrative charges (12,000) (12.000) (12,000) 0
61 ,280 60,859 60,859 421
Financial and Administrative:
Personal services 69,270 64,724 64,724 4,546
Operating expenses 28,400 25,853 3,249 22,604 5,796
Allocation of administrative charges (20.000) (20.000) (20.000) 0
n,670 70,5n 3,249 67,328 10,342
General services:
Personal services 88,100 76,792 76,792 11 ,308
Operating expenses 78,250 67,457 67.457 10,793
Allocation of administrative charges (21 ,000) (21,000) (21 ,000) 0
145,350 123,249 123.249 22.101
Judicial:
Operating expenses 20.000 12.982 12.982 7,018
Total General Government 417,250 351,259 3,249 348,010 69,240
TRANSPORTATION
Road and street facilities:
Personal services 230,980 230,908 230,908 72
Operating expenses 214,950 184,496 184,496 30,454
Capital outlay 909.750 327.120 24.016 7,484 310.588 599.162
Total Transportation 1,355,680 742,524 24,016 7.484 725,992 629,688
PHYSICAL ENVIRONMENT
Garbage/solid waste control services:
Operating expenses 180,000 183,334 183,334 (3,334)
ECONOMIC ENVIRONMENT
COB Grant 575,000 19,861 19,861 555,139
HEALTH AND HUMAN SERVICES
Operating expenses 41,000 40,670 40,670 330
DEBT SERVICE
Principal 117,230 117,238 117,238 (8)
Interest 82.135 80.584 80,584 1 ,551
Total Debt Service 199.365 197,822 197,822 1.543
TOTAL EXPENDITURES $4,004.375 $2,737,414 $35.680 $12.798 $2,714,532 $1.289.843
31 Ei .J.D. GILBERT & COMPANY
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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 $23,470 $28,514 $5,044
Interest income 1.000 2.423 1.423
Total Revenue 24.470 30.937 6.467
EXPENDITURES
Bond principal retirements 35,000 35,000
Bond interest expense 4,769 4,768 1
Professional fees 1.000 500 500
Total Expenditures 40.769 40.268 501
Excess of Expenditures over Revenues $(16.299) $(9331) $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 $ 13,757 $ 6,760 $ 12,711 $ 33,228
Investments 1,552,776 528,253 1,673,607 3,754,636
Accrued Contribution
Receivable 1.150 1.150
$1.566.533 $535.013 $1.687.468 $3.789014
LIABILITIES
Accounts payable
$
7,716
$ 3,500
$
7,092 $
18,308
FUND BALANCES
Reserved for
employees'
retirement
1.558.817
531.513
1.680.376 3.770.706
Total Liabilities
and Fund Balances
$1.566.533
$535.013
$1.687.468 $3.789.014
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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, 1995
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 $ 76,230 $ 23,090 $ $ 99,320
Employer's contributions 588 11,624 12,212
Employees' contributions 23,949 10,945 52,479 87,373
Investment income 79,961 27,267 95,230 202,458
Gain on sale of securities 13.966 3.293 5.161 22.420
Total Operating Revenue 194.106 65.183 164.494 423.783
OPERATING EXPENSES
Employees' contribution refunds
and interest 7,009 41,299 48,308
Retirement benefits 30,840 30,840
Professional services 2 1. 607 1 1.478 24.588 57.673
Total Operating Expenses 21.607 18.487 96.727 136.821
Net Income 172,499 46,696 67,767 286,962
FUND BALANCES
Beginning of year 1.386.318 484.817 1.612.609 3.483.744
End of year $1.558.817 $531.513 $1.680.376 $3.770.706
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CITY OF OKEECHOBEE
EMPLOYEE PENSION TRUST FUNDS
HISTORICAL INFORMATION
September 30, 1995, 1994 and 1993
(Unaudited)
For the years ended September 30, 1995, 1994 and 1993, 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:
lqq'i
Eire GeneT~1
219% 120%
132% 26%
<1% 1%
~ i%
Iqq4
Eire GeneT~1
217% 136%
118% 43%
<1% 1%
~ ~
lqq1
Eire GeneT~ I
226% 137%
117% 47%
<1% 1%
i% ~
Eolice
Net assets available for benefits as a percentage of
pension benefit obligation 125 %
Assets in excess of pension benefit obligation as a
percentage of covered payroll 59 %
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee ~
Eolice
Net assets available for benefits as a percentage of
pension benefit obligation 126 %
Assets in excess of pension benefit obligation as a
percentage of covered payroll 63 %
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee i%
Eolice
Net assets available for benefits as a percentage of
pension benefit obligation 136%
Assets in excess of pension benefit obligation as a
percentage of covered payroll 78 %
Contributions as an approximate percent of annual
covered payroll:
Employer
Employee i%
Historical information from 1987 through 1995 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, 1995
DESCRIPTION
COVERAGE
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance - $250 deductible)
Scheduled Property Floater ($250 deductible)
Public Employees Faithful Performance Blanket ($250 deductible)
General Liability Limit
Excess Liability Limit
$3,807,075
$307,542
$20,000
$1,000,000
$1,000,000
LAW ENFORCEMENT LIABILITY
Bodily injury, personal injury, property damage ($2,500 deductible)
$1,000,000
WORKERS COMPENSATION AND EMPLOYER'S LIABILITY
$1,000,000
VEHICULAR EQUIPMENT
Bodily injury and property damage
Collision ($250 deductible)
Comprehensive ($250 deductible)
$1,000,000
PUBLIC OFFICIAL LIABILITY ($2,500 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
1986 - 1995
ASSESSED VALVES
FISCAL REAL PERSONAL HOl\1ESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1995 $112,605,782 $27,593,835 $140,199,617 $26,108,828
1994 112,759,343 23,222,652 135,981,995 25,365,390
1993 109,479,471 23,748,480 133,227,951 25,288,396
1992 112,820,753 22,702,940 135,523,693 24,745,181
1991 106,606,185 21,489,024 128,095,209 24,718,577
1990 100,715,930 19,081,124 119,797,054 24,017,296
1989 92,069,710 17,714,646 109,784,356 23,841,771
1988 90,523,355 17,276,363 107,799,718 22,969,436
1987 85,234,122 15,026,483 100,260,605 21,793,353
1986 70,533,985 14,573,190 85,107,175 20,715,053
TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
DEBT GENERAL
FISCAL DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
1995 $23,470 $675,914 .170 4.940
1994 48,006 664,734 .300 4.940
1993 61,821 552,896 .390 4.150
1992 62,523 562,423 .390 4.150
1991 59,597 531,595 .390 4.150
1990 56,753 504,594 .390 4.150
1989 52,114 455,605 .390 4.150
1988 39,231 447,369 .300 4.150
1987 18,308 416,082 .150 4.150
1986 15,873 361,791 .150 4.251
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SCHEDULE OF CERTAIN REVENUE - UNAUDITED
1986 - 1995
GENERAL FUND
STATE
REVENUE
SHARING OCCUPATIONAL UTILITY FINES AND FRANCHISE
YEAR (NOTE) LICENSES TAXES FORFEITURES FEE INTEREST
1995 $449,994 $40,366 $398,522 $33,69 I $285,257 $82,613
1994 442,009 40,517 388,291 22,456 281,300 44,998
1993 446,009 36,973 370,882 28,654 278,668 24,438
1992 425,807 45,002 292,615 44,615 272,414 29,246
1991 422,873 34,565 287,490 45,107 289,239 32,541
1990 443,090 33,345 278,192 37,829 272,199 45,772
1989 439,634 31,828 275,071 46,911 251,532 41,761
1988 411,522 38,367 258,229 67,802 234,877 27,314
1987 409,809 44,888 219,661 49,071 214,036 21,618
1986 398,901 41,498 207,756 29,731 206,335 30,978
PROPRIETARY FUND
AND SEWER IMPACT DELINQUENT INTEREST ON HYDRANT
YEAR CHARGES FEES CHARGES MISCELLANEOUS INVESTMENTS TAP FEES RENTAL
1995 $3,206,132 $81,251 $68,305 $69,947 $143,024 $81,251 $13,440
1994 2,658,135 79,774 58,404 56,907 308,523 54,795 13,200
1993 2,583,642 85,583 41,674 55,476 209,247 64,595 13,320
1992 2,511,531 197,767 56,280 44,771 131,433 99,782 13,200
1991 2,268,283 62,200 58,313 49,346 268,588 30,126 13,200
1990 2,116,074 416,792 73,334 50,929 305,306 157,265 12,240
1989 1,580,078 212,077 37,945 68,723 61,811 35,211 12,360
1988 1,632,157 90,640 25,588 50,823 71,998 37,679 9,960
1987 1,386,432 111,964 31,119 31,401 62,864 40,078 9,480
1986 1,341,837 260,382 30,417 21,141 103,288 44,888 9,360
NOTE - INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND ONE-HALF CENT SALES TAX
38
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SCHEDULE OF FEDERAL AND STATE FINANCIAL ASSISTANCE
Year Ended September 30, 1995
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 HOUSING AND
URBAN DEVELOPMENT
Passed through State
Department of
Community Affairs
#95DB-65-07-57 -02-C3 7 14.219 $575,000 $23,094 $19,861 $3,233
U.S. DEPARTMENT
OF HEALTH AND
HUMAN SERVICES
Passed through State
Department of
Community Affairs
#94SB-40-07-57-02-076
#95 SB-4M -07 -57 -02-063
13.792
13.792
$5,786
$7,038
$ -
$ -
$1,930
$3,519
$1,930
$3,519
$
$
39
Ei ..J.D. GILBERT & COMPANY
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510. Deerfield Beach. Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
Indeoendent Auditors' Reoort on Comoliance
with Laws and Reimlations
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, 1995 and have issued our report thereon dated
March 7 , 1996. 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 oflaws, 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 disclosed no instances of non compliance that are requried to be
reported herein under "Government Auditing Standards".
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 a matter of public record.
Q.Jf)MJ-v~
tf6. Gilbert & Company, CPAsru (1
March 7, 1996
40
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
---------------
~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd.. Suite 510. Deerfield Beach. Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
Sin1!le Audit ReDort on ComDliance with the General
Requirements Applicable to Federal Financial Assistance Pro1!rams
To the Honorable Mayor
and City Council
City of Okeechobee, Florida
We have audited the general purpose financial statements of the City ofOkeechobee, Florida,
as of and for the year ended September 30, 1995, and have issued our report thereon dated March
7, 1996.
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, 1995: 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.
Qffl.~y(J~~
fD. Gilbert & Company,~p~~- i/
March 7, 1996
41
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
---------------
..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954) 419-1040
Sin2"le Audit Report on Compliance with Specific Requirements
Applicable to Nonmajor Federal Financial Assistance Proerams
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, 1995, and have issued our report thereon dated March
7, 1996.
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, 1995. 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.
O.~~r~
J~. Gilbert & Company, CPAs
March 7, 1996
42
American Institute of Certified Public Accountants . Member - Private Companies Practice Section
---------------
..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
Sin2"le Audit Combined Reoort 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 ofOkeechobee, Florida
(City), as of and for the year ended September 30, 1995, and have issued our report thereon dated
March 7, 1996. 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 audit 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, 1995, 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 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.
43
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
---------------
The Honorable Mayor and
Members of the City Council
March 7, 1996
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 in order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and not to provide an opinion on the internal
control structure. Accordingly, we do not express such an opinion..
During the year ended September 30, 1995, 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 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.
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Ei ..J.D. GILBERT & COMPANY
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The Honorable Mayor and
Members of the City Council
March 7, 1996
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, 1995 and this
report does not affect our report thereon dated March 7, 1996.
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. We also could not obtain
sufficient supporting documentation to form an opinion as to the amount of loss
recorded upon disposition of the water and sewer utility or the value of any assets
transfered to the general fund.
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Ei ..J.D. GILBERT & COMPANY
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The Honorable Mayor and
Members of the City Council
March 7, 1996
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, 1996.
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.
J~~Y~C~
March 7, 1996
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Ei ..J.D. GILBERT & COMPANY
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..J.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West Hillsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000' Fax (954) 419-1040
Manaeement Letter
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined financial statements of the City ofOkeechobee, Florida (City)
for the year ended September 30, 1995, and have issued our report thereon dated March 7, 1996.
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 Imorovement
Finance Department - In performing our audit procedures, we noted that certain amounts
recorded in the general ledger are not reconciled to supporting documentation. Discrepancies
were noted in accounts receivable, accounts payable, various revenue accounts, fund transfers
and other balance sheet accounts and expenditures. The discrepancies noted occurred
throughout the year and were caused by miscoding of cash receipts and disbursements.
Miscoding of transactions can be caused by a misunderstanding of the transaction or by
human error; proper internal controls over the maintenance of the general ledger should
detect such miscodings in a timely manner. To maintain proper accountability in financial
reporting and to facilitate preparation of the annual budget, the finance director should
reconcile supporting schedules to the general ledger accounts on a monthly basis.
Payroll Time Books - In our review of a sample of payroll disbursements, we noted that the
employee time records did not have documentation of approval by a supervisor in all
instances. To ensure that employees are paid in accordance with City policies, a supervisor
should review and indicate approval of all time books prior to payroll processing.
Prior Year Irrel!ularities
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.
47
American Institute of Certified Public Accountants
Member - Private Companies Practice Section
---------------
The City has addressed those items included in "recommendations for improvement" of the
prior year's management letter.
Consideration of Financial Emerl!encv
The City is not, nor at any time during the year ended September 30, 1995 was, in a state of financial
emergency as a consequence of conditions described in Chapter 218.503, Florida Statutes.
Violations of Laws. Rules and Rel!ulations
We did not become aware of any violations oflaws, rules, and regulations during the course of our
audit.
Illel!al or Improper Expenditures
We did not become aware of any illegal or improper expenditures during the course of our
examination.
Florida Department of Bankim! 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.
o.,i)~t-~
~. Gilbert & Company, CP~ tJ
March 7, 1996
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Ei ..J.D. GILBERT & COMPANY