Audit Report 09.30.1999
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GENERAL PURPOSE FINANCIAL STATEMENTS AND
ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
SEPTEMBER 30, 1999
Ei ..J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
Noel A. Chandler
Councilmember
Lowry Markham
Councilmember
Robert 1. Bradshaw
City Administrator
General Services Director
Bonnie S. Thomas, CMC
City Clerk
Lola Parker
Finance Coordinator
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John Cook
City Attorney
September 30,1999
CITY COUNCIL
James E. Kirk
Mayor, Chairman
ADMINISTRA nON
Dowling R. Watford, Jr.
Councilmember
Robert Oliver
Councilmember
Louis Keith Tomey II
Chief of Fire
Rehmund Farrenkopf
Chief of Police
Cleveland Lamb
Interim Director of Public Works
Ei ..J.D. GILBERT & COMPANY
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CITY OF OKEECHOBEE, FLORIDA
September 30,1999
TABLE OF CONTENTS
PAGE
Independent Auditors' Report... ....... ..........,.................................................. .............................................................. I
General Purpose Financial Statements;
Combined Balance Sheets - All Fund Types and Account Groups ......................................................................2
Combined Statement of Revenue, Expenditures and Changes in Fund Balances-
All Governmental Fund Types........ .....................,............. ............... ................................. ........................ ..........3
Statement of Revenue, Expenditures and Changes in Fund Balances _
Budget and Actual - Governmental Funds...........................................................................................................4
Statement of Changes in Plan Net Assets - Fiduciary Fund Type _
Employee Pension Trust Funds............................... ......... ......................,...,......... .....................,.............. ............5
Notes to Combined Financial Statements ....................................................................................................... 6- I 7
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and ActuaI.............................................................................................. 18-19
Schedule of Expenditures - Budget and ActuaI.............................................................................................20
Employee Pension Trust Funds _
Combining Statements of Plan Net Assets ..............,.....................................................................................2 I
Combining Statements of Changes in Plan Net Assets ............................................................,....................22
Required Supplementary Information....... ........... ...................................... ....... ............................................23
Schedule of Expenditures of Federal and State Financial Awards .....................................................................24
Unaudited Information:
Summary of Insurance Coverage - Unaudited ...................................................................................................25
Schedule of Assessed Values, Tax Levies and Rates - Unaudited...................................................................... 26
Schedule of Certain Revenue - Unaudited..........................................................................................................27
Other Reports;
Report on Compliance and on Internal Control over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards....... ,... ....... ................,...,... ,... ,... ,... ,............ ..............,......... ..... ............,...,... ,...28
Schedule of Findings and Questioned Costs ................................................................................................. 29-3 I
Management Letter......................................................... ............. ..................,...,................ .......................... 32-33
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West HiIIsboro Blvd., Suite 510, Deerfield Beach, Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
Toll Frea (888) 419-2727 . E-Mail cpasClljdgilbart.com
Independent Auditors' Report
We have audited the accompanying general purpose fmancial statements of the City ofOkeechobee, Florida
(City) as of September 30, 1999, and for the year then ended, as listed in the table of contents. These general purpose
fmancial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these
general purpose fmancial statements based on our audit. We did not audit the fmancial statements of the Employee
Pension Trust, which represent the amounts shown as the Fiduciary Fund Types. Those fmancial 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.
Except as discussed in the following paragraphs, 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
fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the general purpose fmancial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall general purpose
fmancial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis
for our opinion.
As disclosed in Note 5 to the general purpose fmancial statements, the City has not maintained adequate
detailed fixed asset records to support the cost of the fixed assets included in the general fixed asset account group with
respect to the stated cost of assets acquired prior to October I, 1981 and land disposed September 28, 1995. 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 for fixed assets acquired prior to October 31, 1981 and on 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 general fixed asset account group, as discussed in the preceding
paragraph, the general purpose fmancial statements referred to above present fairly, in all material respects, the fmancial
position of the City of Okeechobee, Florida as of September 30, 1999 and the results of its operations for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2000 on
our consideration of the City of Okeechobee's internal control over fmancial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts and grants.
Our audit was made for the purpose of forming an opinion on the general purpose fmancial statements taken
as a whole. The accompanying information listed in the table of contents, including the schedule of expenditures of
federal awards as required by the U.S. Office of Management and Budget Circular A-B3, "Audits of States, Local
Governments, and Non-Profit Organizations", is presented for purposes of additional analysis and is not a required part
of the general purpose fmancial 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 fmancial statements and, in our opinion, based upon our audit and the report of the other auditors, is fairly stated
in all material respects in relation to the general purpose financial statements taken as whole.
March 22, 2000
Cf&~~~
American Institute of Certified Public Accountants . Rorida Institut;e of Certified Public Accountanta
I CITY OF OKEECHOBEE, FLORIDA
COMBINED BALANCE SHEETS _
I ALL FUND TYPES AND ACCOUNT GROUPS
Septem ber 30, 1999
I Governmental Fiduciary
Fund Types Fund Types Account Groups
Employee General General Total
I Pension Fixed Long-Term (Memorandum
General Trust Assets Debt Only)
ASSETS
Cash $ 2,216,528 $ 49,566 $ 2,266,094
I Investments 2,621,595 8,554,531 11,176,126
Receivables:
Taxes 112,485 112,485
I Accounts less AIIowance of$5,861 17,795 17,795
Due from Other Government Agencies 180,175 13,084 193,259
Due from Other Funds 11 ,223 11,223
Inventory 10,641 10,641
I Restricted Assets-Cash 11,478 11,478
Fixed Assets 2,369,727 2,369,727
Amount Available in Debt Service Reserv 34,098 34,098
I Amount to be Provided for Retirement
of General Long-Term Debt 1,275,050 1,275,050
TOTAL ASSETS $ 5,170,697 $ 8,628,404 $ 2,369,727 $ 1,309,148 $ 17,477,976
I LIABILITIES
Accounts Payable $ 133,862 $ 21,446 $ $ $ 155,308
I Accrued Liabilities 41,497 177,191 218,688
Accrued Interest 22,882 22,882
Matured Bonds and Interest Coupons 2,012 2,012
Due to Other Funds II ,223 11,223
I Deferred Revenue 32,058 32,058
Long-Term Debt 1,131,957 1,131,957
I TOTAL LIABILITIES 243,534 21,446 1,309,148 1,574,128
FUND EQUITY
I Investment in General Fixed Assets 2,369,727 2,369,727
Fund Balance Reserved for Empoyees'
Pension Benefits 8,606,958 8,606,958
Fund Balances:
I Reserved for:
Debt Service 34,098 34,098
Public Facilities 960,016 960,016
I Emergency and Disaster Relief 510,678 510,678
Inventory 10,642 10,642
Encumbrances 26,027 26,027
Unreserved 3,385,702 3,385,702
I TOTAL FUND EQUITY 4,927,163 8,606,958 2,369,727 15,903,848
I TOTAL LIABILITIES AND
FUND EQUITY $ 5,170,697 $ 8,628,404 $ 2,369,727 $ 1,309,148 $ 17,477,976
I 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 _
ALL GOVERNMENTAL FUND TYPES
Revenue
Taxes
Intergovernmental
Charges for Services
Licenses and Permits
Fines and Forfeitures
Interest Income
Grants
Miscellaneous
Total Revenue
Expenditures
Current:
Public Safety
General Government
Transportation
Physical Environment
Debt Service:
Principal
Interest
Total Expenditures
Year Ended September 30,1999
Excess of Revenue over Expenditures
Fund Ba]ances, beginning of year
Fund Balances, end of year
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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GENERAL
$
],593,] ]7
],290,677
24] ,483
107,235
38,88]
242,473
6,945
7,278
3,528,089
] ,636,60]
573,4] 0
677,952
]87,477
] 72,08]
63,81 ]
3,3]],332
2]6,757
4,7] 0,406
$ 4,927,]63
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES _
BUDGET AND ACTUAL - GOVERNMENTAL FUND TYPES
Year Ended September 30,1999
General Fund
Actual (on Variance
Budgetary Favorable
Budget Basis) (Unfavorable)
REVENUE
Taxes $ 1,661,469 $ 1,593, ]]7 $ (68,352)
Taxes Intergovernmental 1,157,869 1,290,677 132,808
Charges for Services 225,720 241,483 15,763
Licenses and Permits 76,000 107,235 31,235
Fines and Forfeitures 22,225 38,881 16,656
Interest Income 210,425 242,473 32,048
Grants 14,500 6,945 (7,555)
Miscellaneous 15,400 7,278 (8,122)
TOTAL REVENUE 3,383,608 3,528,089 144,481
EXPENDITURES
Public Safety 1,828,258 1,642,602 185,656
General Government 603,299 574,660 28,639
Transporation 1,120,003 600,543 519,460
Physical Environment 192,000 187,477 4,523
Debt Service 239,365 237,436 1,929
TOTAL EXPENDITURES 3,982,925 3,242,718 740,207
EXCESS OF EXPENDITURES OVER REVENUE $ (599,317) 285,371 $ 884,688
FUND BALANCES
Beginning of Year 4,710,406
Adjustment to conform to generally accepted
accounting principles:
Adjustment for Encumbrances (70,158)
Adjustment for Interest 1,544
End of Year $ 4,927,163
The Notes to Combined Financial Statements
are an Integral Part of this Statement
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CITY OF OKEECHOBEE, FLORIDA
STATEMENT OF
CHANGES IN PLAN NET ASSETS _
FIDUCIARY FUND TYPE - EMPLOYEE PENSION TRUST FUNDS
Year Ended September 30,1999
Additions:
Contributions:
State Contribution
Employer Contributions
Emp]oyee Contributions
$
]4 ],5]2
44,207
]35,]52
Total Contributions
320,87]
Investment Income:
Net Appreciation in Fair Value ofInvestments
Interest and Dividends
530,584
295,074
825,658
Less: Investment Expenses
(62,567)
Investment Income, net
763,09]
Total Additions
],083,962
Deductions:
Benefits Paid to Participants
Refunds on Termination
Administrative Expenses
]]9,33]
45,558
3 ] ,772
Total Deductions
] 96,66]
Net Increase
887,30]
Net Assets Held in Trust for Pension Benefits:
Beginning of Year
7,719,657
End of Year
$
8,606,958
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 30,1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofOkeechobee (the City) was originally incorporated in 19]5 and its present charter was adopted in ]9]9
under Chapter 83 ] 8 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 fmancial 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 fmancing 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 fmancial 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 fmancial statements are presented below.
The City of Okeechobee Pension Trust Funds
The three retirement plans included in the fmancial statements are the General Employees' Pension Trust Fund,
the Municipal Police Officers' 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
oflocal ordinances and by applicable provisions of Florida law.
The plans require participation by all employees in the respective governing authorities. Additionally, the
organizations exist for the benefit of the employees of the City. The separate fmancial statements of the
pension plans can be obtained from the City.
B.
BASIS OF PRESENTATION - FUND ACCOUNTING AND ACCOUNT GROUPS
The accounts of the City are organized on the basis offunds 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 fmancial 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 fmancial 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:
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
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September 30,1999
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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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General Fund - The general fund is the general operating fund of the City. It is used to account for
all fmancial resources except those required to be accounted for in another fund.
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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:
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Employee Pension Trust Fund - Pension trust funds are used to account for net assets held in trust for
pension benefits. Because of the long-term nature of defmed benefit plans, fmancial statements alone
cannot provide sufficient information to accomplish the fmancial reporting objective. Therefore,
historical trend information is included as supplementary information.
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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:
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General Fixed Assets Account Group - The account group is established to account for all fixed assets
of the City used for general purposes. No depreciation is recorded on general fixed assets.
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General Long-Term Debt Account Group - This account group is used to account for long-term debt
to be fmanced from governmental fund types.
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Total Columns on Combined Statements
Total columns on the combined fmancial statements are captioned "Memorandum Only" to indicate they are
presented only to facilitate fmancial analysis. Data in these columns do not present fmancial position or results
of operations 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.
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c.
BASIS OF ACCOUNTING AND MEASUREMENT FOCUS
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Basis of accounting refers to the timing of the recognition of revenues and expenditures (or expenses) in the
accounts and in the fmancial statements. The basis of accounting is independent of the measurement focus,
which refers to objectives in recording of financial resources and expenditures or expenses.
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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 fmancial
resources.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The measurement focus is on current fmancial 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 fmancial resources".
Governmental fund operating statements present increases (revenues and other fmancing 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 fmancial resources during a period.
Special reporting treatment is also applied to governmental fund inventories to indicate that they do not
represent "expendable available fmancial resources", even though they are a component of net current assets.
Such amounts are offset by fund balance reserve accounts.
Pension Trust Funds
Pension trust funds are accounted for on the accrual basis of accounting. Therefore, revenues are recognized
when earned and expenses are recognized when incurred. 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 fmancial statements:
I.
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
fmancing 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.
The reported budgetary data represents the fmal approved budget after amendments adopted by the City
Council.
Formal budget integration is not employed for trust funds because effective budgetary control is achieved by
alternate measures.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 investments.
G.
INVESTMENTS
The governmental fund investments consist of nonnegotiable certificates of deposit which are valued at cost.
The fiduciary fund investments are reported at fair value. Short-term investments are reported at cost which
approximates market value. Securities traded on a national exchange are valued at the last reported sales price.
Interest income is recognized when earned. Gains and losses from the sale or exchange of investments are
recognized on the transaction date.
The fiduciary funds had no investments in, loans to, or leases with parties related to the pension plans as of or
for the year ended September 30, 1999.
H.
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.
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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.
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] 5 years of service. Unused vacation may be accumulated up to a maximum of 30
days.
Sick leave for employees is accumulated at the rate of ]2 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 50% of the unused sick leave balance.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The amount of vacation leave expected to be paid from current fmancial 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$183,655 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.
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 armual 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
Accrued Interest
Encumbrances - September 30, 1999
Less prior year encumbrances paid
Adjustment for encumbrances
$ 26,026
(96.184)
$3,3] 1,332
1,544
(70.158)
Expenditures on Budgetary Basis
$3.242.718
NOTE 3 - CASH AND INVESTMENTS
Florida Statutes require state and local governmental units to deposit monies with a fmancial institution classified as a
"Qualified Public Depository", which is a multiple fmancial institution pool whereby groups of securities pledged by
the various fmancial 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, 1999
totaling $3,281,541 which are included in cash and investments in the accompanying combined balance sheets in the
amount of$3,259,689.
At September 30, 1999, the City has $1,589,763 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 fair value of the position in the pool is the same
as the value of pool shares held.
The investments of the fiduciary fund type are managed by Invesco Capital Management, Inc. Cash equivalent
investments, consisting of money market accounts, are stated at cost which approximates market value.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 3 - CASH AND INVESTMENTS (Continued)
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 which are insured by
the Federal Deposit Insurance Corporation, 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.
The following is a list of the City's investments (excluding certificates of deposit of the general fund) 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
Accrued income
Historical
Cost
Market
Value
Municipal firefighters' pension trust fund:
Cash equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Accrued income
$ 75,913 $ 75,913
902,841 885,906
417,721 401,445
1,529,014 2,2]9,506
22.898 22.898
2.948,387 3,605,668
1,578 1,578
378,659 370,432
]50,136 144,225
599,150 839,455
7,3]7 7.3]7
1.136.840 ].363,007
42,414 42,414
940,087 923,]64
422,165 407,6]8
1,519,988 2,]93,215
] 9 .445 19.445
2,944.099 3.585,856
$7.029.326 $8.554,53 ]
Municipal general employees' pension trust fund:
Cash Equivalents
Government and agency securities
Corporate bonds
Corporate stocks
Cash and accrued income
Total Investments
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
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 1998-99 levy was based was $167,512,973. 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 3] of the following year. Tax collections for the year
ended September 30, 1999 were 87% of the total tax levied.
The City is permitted by state law to levy taxes up to ] 0 mills of assessed valuation for the general fund. The tax rate
for the 1998-99 fiscal year was 5.44 mills.
NOTE 5 - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
Balance
October 1. 1999 Additions
Other
Reductions
Balance
September 30, 1999
Retirements
Land and improvements
Buildings and improvements
Furnishings and equipment
$ 805,358
414,74]
],038,121
$
30,783
109.338
$
$
$ 805,358
445,524
1.1 ] 8.845
28,614
Totals
$2,258,220
$]40.12]
$28,614
$
$2.369,727
The City has not maintained adequate detailed fixed asset records to support the cost of general fixed assets acquired
prior to October 1, 1981. Additionally, the water towers and old sewer plants that were sold to the Okeechobee Utility
Authority on September 28, 1995 were located on land previously owned by the City and included in land and
improvements above. The cost of the land sold was not removed from the general fIxed asset group. At September 30,
1999, the value assigned to general fixed assets acquired prior to October 1, ]981 was $835,600.
NOTE 6 - LONG-TERM DEBT
Long-term debt as of September 30, 1999 is summarized as follows:
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
$ 941 ,7 I 7
5.527% note to a bank, payment of $40,000, including interest,
due annually through October I, 2003 with fmal payment due
October 2004 of $27,] 7 I; collateralized by annually budgeted
non-ad valorem revenues
190.240
$1.131.957
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 6 - LONG-TERM DEBT (Continued)
A summary of changes in all long-term debt for the year ended September 30, 1998 is as follows:
Balance at September 30, 1998
Payments
Net Change in Accrued Liabilities
Accrued
Liabilities
$183,655
(6.464)
Balance at September 30, 1999
$177.191
GENERAL LONG-TERM DEBT
Municipal Gas Tax
Promissory Revenue
Note Note
$218,]77 $],085,756
(27,937) (144,039)
$190.240
$941.717
Notes
Total
$1,303,933
(171,976)
$1.131.957
At September 30, 1998, the armual principal requirements and the armual requirements to amortize all debt outstanding,
(including interest payments aggregating $259,110) for the next five years and thereafter are as follows:
Gas Tax Revenue Note
Principal
and
Interest
$ ] 99,365
] 99,365
199,365
] 99,365
199,365
99,682
$],096.507
Year Ending
September 30.
2000
2001
2002
2003
2004
Thereafter
Municipal Promissory Note
Principal
and
Interest
$ 40,000
40,000
40,000
40,000
40,000
27.171
$227.17]
Principal
$151,767
159,963
]68,472
] 77,433
] 86,843
97,239
$941.717
Principal
$ 29,464
3 1 , 107
32,827
34,64 ]
36,457
25,744
$190,240
Principal
$ ] 8 ] ,23 ]
191,070
20] ,299
2 ]2,074
223,300
122,983
$1,131.957
Aggregate
Principal
and
Interest
$ 239,365
239,365
239,365
239,365
239,365
126,853
$1,323.678
The Water and Sewer Refunding and Improvement Revenue Bonds, Series] 987, the Water and Sewer Improvement
Revenue Bonds, Series ]989, and the Water and Sewer Improvement Revenue Bonds, Series I 992A 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 fmancial statements.
NOTE 7 - INTERFUND RECEIVABLES AND PAY ABLES
The following is a summary of amounts due from and due to other funds:
General fund
Fiduciary fund
Total all Funds
I3
Due from
Other Funds
$
I 1.223
$] 1.223
Due to
Other Funds
$11,223
$] 1.223
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 8 - PENSION PLANS
The City has three pension plans covering substantially all the City's regular employees. The City of Okeechobee,
Florida Municipal Police Officers' and Municipal Firefighters' plans are under a single employer public employee
retirement system. The City of Okeechobee, Florida and Okeechobee Utility Authority General Employees' Pension
Trust is under a cost sharing multiple employer public employee retirement system and also covers substantially all of
the employees of the Okeechobee Utility Authority. 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 $15,747 (the Utility Authority
contributed $28,460) based on a covered payroll and a total payroll as follows:
Police
Firefighters
General - City
General - Utility Authority
Covered
PaYToll
$6]5,832
264,778
537,669
98],396
Covered
Payroll as
Percent of
Total PaYToll
100.0%
82.6%
89.9%
87.1%
Total
PaYToll
$6]5,832
320,734
598,027
], I 26,697
The City and the Utility Authority fund the General pension plan at the rate of2.9% of covered payroll for participants.
The City funds the Police and Fire pension plans for any contribution deficit determined by actuarial valuation for the
Police and Firefighters' plans beyond the contributions by employees and the State Insurance premium tax contribution.
Employee contributions are at a rate of 6% of payroll (5% for police and fIrefighters).
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 60 (age 65 for general) and
10 years of service (5 years for general), or at 25 years of service (30 years for general) regardless of age. The benefit
is calculated at 3.0% for police and fIrefighters, and 2. I % for general, 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.
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 fmal compensation for service and nonservice
connected disabilities, respectively.
Early retirement is provided for at age 50 (55 for general) and 10 years of participation. Death and disability benefits
are also available through the plans. Upon termination of employment with less than 10 years of service (5 years for
general) the plan refunds accumulated employee contributions. After 10 years of service (5 years for general) 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 contributions for the year
ended September 30, 1999 were as follows:
Police
Firefighters
General
$59,823
(959)
]7,58]
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 8 - PENSION PLANS (Continued)
The employer and employee actual contributions for the year ended September 30, ] 999 were as follows:
Emplover Emplovee
City $15,747 $ 76,268
Utility Authority 28,460 58.884
Totals $44.207 $135,152
The plans covering the City's firefighters and police officers are also funded by the State of Florida from a tax on fire
insurance and casualty insurance premiums collected. State contributions to the firefighters and police officers plans
totaled $52,949 and $88,563, respectively, during the year ended September 30, 1999. Contributions were made in
accordance with applicable Florida Statutes and meet the actuarially determined contribution requirements. These
amounts have been included in intergovernmental revenues and current expenditures in the governmental fund type.
At September 30, 1999, the Plans included the following:
Terminated members entitled to, but not receiving benefits
Retirees currently receiving benefits
Total active current employees (vested) (not vested)
Police
]
4
19(7)(12)
10(3)(7)
Firefighters
1
General
I
7
60(27)(33)
Changes in benefits since the previous actuarial valuation were as follows:
· Normal retirement provided at 25 years of service (was 30) regardless of age for firefighters
· Early retirement at age 50 (was 55) with 10 years of service for police and firefighters
· Early retirement reduction factor 3% each year for police and firefighters and 2% for general
· Benefit rate changed from 2.7% to 3% for firefighters and from 2% to 2.1 % for general
Principal actuarial assumptions used in the most recent actuarial valuation are summarized as follows. There were two
changes in the assumptions in ] 999:
Mortality - The 1983 Group Annuity Mortality Table.
Interest - 7% per year compounded armually, 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) - $12,000 for Police, $10,000
for Firefighters and $1 ],000 for General.
Inflation rate - 4%
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 8 - PENSION PLANS (Continued)
At the end of ] 999, the funds had assets in excess of the actuarial accrued liabilities, therefore, the disclosure regarding
the amortization method used for any unfunded actuarial liabilities is not applicable. Detailed information regarding
funding is contained in the supplementary information accompanying the fmancial statements.
Three year historical information is disclosed in the accompanying supplementary information. Ten year historical
information is included in the stand-alone audited fmancial statements of each plan which are available from the City
of Okeechobee, 55 S.E. Third Avenue, Okeechobee, Florida 34974 (phone 863-763-3372).
NOTE 9 - GRANTS AND CONTRACTS
Local Law Enforcement Block Grants
During the year ended September 30, ] 999, the City was awarded a Local Law Enforcement Block Grant (99-CJ-A2-07-
57-02-079) of $6,945 for police intoxilyzer and video equipment. The City expended $4,860 of the monies in 1999.
Land Development Ree:ulation
In 1997, the City entered into a highway maintenance agreement (contract #BA-920) with the State of Florida
Department of Transportation for an annual amount of$28,880. The contract is renewable annually. In 1999, $28,880
was recorded as reimbursement for expenditures incurred by the City relating to the project under this contract.
NOTE 10 - COMMITMENTS
The City has contracts for engineering and maintenance projects at September 30, 1999 in the normal course of business.
In 1999, the City executed a three year lease for police and other City vehicles. Payments under the lease are due in
quarterly installments of $ I 5,000. The lease provides for termination based upon annual appropriations. The City
disposed of the vehicles and terminated the lease in February 2000. Rent expense under this and a previous lease was
$53,950 in ]999.
In October 1998, the City executed a five year lease for public safety communications equipment due in quarterly
installments of $1,2 I 9. The lease provides for termination based upon annual appropriations. Total rent expense under
this lease was $4,877 in ]999.
NOTE 11 - CONTINGENCIES
The City is exposed to various risks of loss, including, but not limited to theft, damage or destruction of its buildings,
equipment, records, and monetary assets, and liability for personal injury, property damage and consequences of
employee and public official actions. The City participates in a public risk pool to cover significant loss exposure, and
purchases commercial insurance for third party pollution liability coverage. There have been no significant reductions
in benefits and settlement amounts have not exceeded coverage for the current year or the three prior years.
In 1999, the City became a member of Public Risk Management of Florida (PRM), an intergovernmental risk
management pool. PRM is a non-assessable pool, funded by its approximately 43 members which are all public
agencies of the State of Florida. PRM maintains a loss reserve and purchases specific excess insurance, aggregate excess
insurance and multiple loss coverage from commercial carriers or underwriters. If losses in anyone fiscal year
extinguish all available funds provided by the pool, then the members are individually responsible for claims.
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CITY OF OKEECHOBEE, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
September 30,1999
NOTE 11 - CONTINGENCIES (Continued)
The City's workers' compensation coverage in fiscal year 1997 was provided by Government Risk Insurance Trust
(GRIT) which filed for bankruptcy on March] 7,2000. Because GRIT did not obtain reinsurance prior to July 1998,
the City could be responsible for claims for injuries sustained prior to that date. A City employee injured in 1997, may
have additional medical bills and lost wages from that incident and those costs could exceed $100,000. The City is
evaluating the potential liability, but no determination has been made of the future cost to the City.
NOTE 12 - DISPOSITION OF UTILITY
In November ] 994, 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, ] 995, 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 also 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 City has not maintained adequate detailed fixed asset records to
support the cost of assets disposed from the general fixed asset group; therefore, any effect on the fIxed asset account
group of this transfer cannot be determined.
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
Year Ended September 30,1999
Variance
Favorable
Budget Actual (Unfavorable)
TAXES
Ad valorem taxes $ 810,947 $ 728,460 $ (82,487)
Franchise fees 293,000 292,679 (321)
Utility service taxes 398,000 419,931 2 I ,93 I
Public service taxes ],500 10,536 9,036
Insurance premium taxes 158,022 ]41,511 (16,51 I)
1,66],469 1,593,]]7 (68,352)
mTERGOVERNMENTAL
State shared revenue:
Cigarette tax - .02 70,000 79,855 9,855
Revenue sharing ] 60,000 176,015 16,015
One-half cent sales tax 215,000 237,468 22,468
One-cent sales surtax 345,000 397,951 52,95 I
Mobile home licenses 2,500 4,933 2,433
Alcoholic beverage licenses 1,000 2,079 1,079
Gasoline tax refund 2,500 1,562 (938)
Local option gasoline tax 356,069 381,117 25,048
Local alternate fuel user fee 200 (200)
Firefighters supplement 600 600
1,152,869 1,281,580 ]28,7]1
Shared revenue from other local units:
County occupational licenses 5,000 9,097 4,097
1,157,869 1,290,677 132,808
CHARGES FOR SERVICES
Sanitation fees 192,000 208,348 16,348
Highway maintenance contract 28,880 28,880
Railroad maintenance contract 4,600 3,450 (1,150)
Miscellaneous 240 805 565
225,720 241,483 15,763
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CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL (CONTINUED)
Year Ended September 30,1999
Budget
Variance
Favorable
(Unfavorable)
Actual
LICENSES AND PERMITS
Occupational licenses and regulatory fees
Building permits and fees
43,000
33,000
53,570
53,665
] 0,570
20,665
76,000
107,235
31,235
mTERGOVERNMENTAL
Court fmes
Confiscated Property
Radio communication
Police education
Code enforcement fmes
Investigation cost reimbursement
20,000 23,053 3,053
6,510 6,510
1,500 7,550 6,050
125 529 404
500 1,]20 620
100 119 19
22,225 38,881 16,656
210,425 242,473 32,048
mTEREST mCOME
GRANTS
Comprehensive Plan Grant
Public Safety Grant
14,500
(14,500)
6,945
6,945
14,500
6,945
(7,555)
MISCELLANEOUS
Sale of assets
Police Accident Reports
Refunds of prior year expenditures
Miscellaneous and other
9,000 (2,161) (11,161)
400 501 101
500 2,009 ],509
5,500 6,929 1,429
15,400 7,278 (8,122)
$ 3,383,608 $ 3,528,089 $ 144,481
Total Revenue
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I CITY OF OKEECHOBEE, FLORIDA
GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
I September 30,1999
ENCUMBRANCES
I AND INTEREST ACTUAL ON VARIANCE
BUDGETARY FAVORABLE
BUDGET ACTUAL 1998 1999 BASIS (UNFAVORABLE)
PUBLIC SAFETY
I Law enforcement:
Personal services 878,367 883,391 883,391 (5,024)
Operating expenses 185,930 138,907 925 139,832 46,098
Capital outlay 5,800 4,695 4,695 1,105
Grants and aids 5,400 5,400 (5,400)
I 1,070,097 1,027,698 5,620 1,033,318 36,779
Fire control:
Personal services 583,361 537,120 537,120 46,241
Operating expenses 71,800 59,674 1,302 60,976 10,824
I Capital outlay 99,500 12,109 921 11,188 88,312
754,661 608,903 921 1,302 609,284 145,377
Emergency and disaster relief:
Capital outlay 3,500 3,500
I Total Public Safety 1,828,258 1,636,601 921 6,922 1,642,602 185,656
GENERAL GOVERNMENT
Legis]ative:
Personal services 41,812 41,929 41,929 (1 I 7)
I Operating expenses 33,500 32,342 32,342 1,158
75,312 74,271 74,271 1,041
Executive - city administrator:
Personal services 67,211 67,832 67,832 (621)
Operating expenses 13,550 18,930 18,930 (5,380)
I Capital outlay 2,000 255 255 1,745
82,761 87,017 87,017 (4,256)
Executive - city clerk:
Personal serivces 67,854 69,107 69,107 (1,253)
I Operating expenses 16,550 10,642 10,642 5,908
Capital outlay 34,998 37,783 1,250 39,033 (4,035)
119,402 117,532 1,250 118,782 620
Financial and administrative:
Personal services 64,902 76,960 76,960 (12,058)
I Operating expenses 35,100 36,933 36,933 (1,833)
Capital outlay 800 2,424 2,424 (1,624)
100,802 1I6,317 1I6,3l7 (15,515)
General services:
I Personal services 57,875 57,102 57,102 773
Operating expenses 125,447 85,873 85,873 39,574
Dapital outlay 12,000 11,271 11,27] 729
195,322 154,246 154,246 41,076
Judicial:
I Operating expenses 29,700 24,027 24,027 5,673
Total General Govemment 603,299 573,410 1,250 574,660 28,639
TRANSPORT A nON
I Road and street facilities:
Personal services 290,953 268,720 268,720 22,233
Operating expenses 271,950 183,189 8,945 640 174,884 97,066
Capita] outlay 557,100 226,043 86,318 17,214 156,939 400,161
Total Transportation 1,120,003 677,952 95,263 17,854 600,543 519,460
I PHYSICAl. ENVIRONMENT
Garbage/solid waste control services:
Operating expenses 192,000 187,477 187,477 4,523
I DEBT SERVICE
Principal 172,154 172,081 172,081 73
Interest 67,21I 63,811 (12,066) (10,522) 65,355 1,856
Total Debt Service 239,365 235,892 (12,066) (10,522) 237,436 1,<229
I TOTAL EXPENDITURES $ 3,982,925 $ 3,311 ,332 $ 84,1I8 $ 15,504 $ 3,242,718 740,207
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CITY OF OKEECHOBEE, FLORIDA
EMPLOYOEE PENSOIN TRUST FUNDS
COMBINING STATEMENTS OF PLAN NET ASSETS
Year Ended September 30,1999
Municipal Municipal
Police Fire- General
Officers' Fighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund Total
ASSETS
Cash $ 29,655 $ 5,250 $ 14,661 $ 49,566
Contributions Receivable 2,915 1,395 19,997 24,307
Investments (at fair value):
Cash Equivalents 75,913 1,578 42,414 119,905
Government and Agency Securities 885,906 370,432 923,164 2,] 79,502
Corporate Bonds 401,445 ] 44,225 407,618 953,288
Corporate Stocks 2,219,506 839,455 2,]93,215 5,252,]76
Accrued Income 22,898 7,317 ]9,445 49,660
Total Investments 3,605,668 1,363,007 3,585,856 8,554,531
Total Assets 3,638,238 1,369,652 3,620,514 8,628,404
LIABILITIES
Accounts Payable 8,200 5,125 8,121 21,446
Net Assets Held in Trust for
Pension Benefits $ 3,630,038 $ ],364,527 $ 3,612,393 8,606,958
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I CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
I COMBINING STATEMENTS OF CHANGE IN PLAN NET ASSETS
Year Ended September 30,1998
I
Municipal Municipal
I Police Fire- General
Officers' Fighters' Employees'
Pension Pension Pension
I Trust Fund Trust Fund Trust Fund Total
ADDITIONS
Contributions:
I State Contribution $ 88,563 $ 52,949 $ $ 141,512
Employer Contributions 600 43,607 44,207
I Employee Contributions 30,768 13,240 91,144 135,152
Total Contributions ] ]9,33] 66,789 ]34,75] 320,87]
I Investment Income:
Net Appreciation in Fair Value of
Investments 220,206 95,434 2] 4,944 530,584
I Interest and Dividends 126,134 46,455 122,485 295,074
346,340 141,889 337,429 825,658
I Less: Investment Expense (24,530) (10,355) (27,682) (62,567)
I Investment Income, net 321,810 13 ] ,534 309,747 763,091
Total Additions 441,141 ] 98,323 444,498 1,083,962
I DEDUCTIONS
Refunds on Termination 8,606 8,242 28,710 45,558
I Benefits Paid to Participants 68,462 50,869 119,331
Administrative Expenses 12,950 9,788 9,034 3 ] ,772
I Total Deductions 90,018 18,030 88,613 ]96,661
Net Increase 35],123 180,293 355,885 887,301
I NET ASSETS HELD IN TRUST FOR
PENSION BENEFITS
I Beginning of year 3,278,9]5 1,]84,234 3,256,508 7,719,657
End of year $ 3,630,038 $ 1,364,527 $ 3,612,393 $ 8,606,958
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CITY OF OKEECHOBEE, FLORIDA
EMPLOYEE PENSION TRUST FUNDS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
September 30,1999,1998 and 1997
Municipal
Police Municipal General
Officers' Firefighters' Employees'
Pension Pension Pension
Trust Fund Trust Fund Trust Fund
Actuarial Valuation Date 1999 1999 1999
Actuarial Value of Plan Assets $ 3,589,546 $ 1,340,127 $ 3,577,597
Actuarial Accrued Liability (AAL) - Entry Age 2,665,193 653,420 2,878,747
Total Overfunded AAL $ 924,353 $ 686,707 $ 698,850
Actuarial Value of Assets as a Percentage of
the AAL (Percent Funded) 134.7% 205.1% ]24.3%
Annual Covered Payroll $ 615,832 $ 264,778 $ ],5] 9,065
Ratio of Overfunded AAL to Annual Covered
Payroll (as a percentage) 150.1% 259.4% 46.0%
Actuarial Valuation Date 1998 1998 1998
Actuarial Value of Plan Assets $ 2,745,5]9 $ 1,000,779 $ 2,742,164
Actuarial Accrued Liability (AAL) - Entry Age 2,184,269 45],048 2, I 90,008
Total Overfunded AAL $ 561,250 $ 549,73 ] $ 552,156
Actuarial Value of Assets as a Percentage of
the AAL (Percent Funded) ]25.7% 221.9% ]25.2%
Annual Covered Payroll $ 601,783 $ 26] ,670 $ ],353,672
Ratio of Overfunded AAL to Annual Covered
Payroll (as a percentage) 93.3% 210.1% 40.8%
Actuarial Valuation Date 1997 1997 1997
Actuarial Value of Plan Assets $ 2,439,616 $ 838,725 $ 2,480,734
Actuarial Accrued Liability (AAL) - Entry Age 1,868,179 379,372 1,954,304
Total Overfunded AAL $ 571,437 $ 459,353 $ 526,430
Actuarial Value of Assets as a Percentage of
the AAL (Percent Funded) 130.6% 22 I.l % 126.9%
Annual Covered Payroll $ 628,66 ] $ 249,710 $ 1,262,308
Ratio of Overfunded AAL to Annual Covered
Payroll (as a percentage) 90.9% ]84.0% 41. 7%
NOTE: Additional historical and trend information is included in the stand-alone audited [mancial statements of
each plan. These statements are public ally available by contacting the City of Okeechobee, 55 S.E. Third A venue
Okeechobee, Florida 34974 (phone 863-763-3372).
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AND
STATE FINANCIAL AWARDS
Year Ended September 30,1999
Federal
CPDA No.
Cash (Receivable)
October I,
1998
Beginning
Balance
Expenditures
Federal or State
Grantor/
Program Title
I U.S. DEPARTMENT OF JUSTICE
Cash (Receivable)
September 30,
1999
Ending
Balance
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A ward
Amount
Receipts
Passed through State Department of
Community Affairs
Local Law Enforcement Block Grant
#99CJ -A2-07 -57 -02-079
$ 6,945 $
$ 6,945 $ 4,860 $
2,085
FLORIDA DEPARTMENT OF
COMMUNITY AFFAIRS
#98DR- I G-07-57-02-005
NA
$ 14,069 $ (10,551) $ 10,551 $
$
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL
AND STATE AWARDS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The Schedule of expenditures of federal and state awards is a summary of the activity in the City's federal and state award
programs presented on the accrual basis of accounting in accordance with generally accepted accounting principles.
NOTE 2 - LOCAL LAW ENFORCEMENT BLOCK GRANT
In accordance with the terms of the grant, the City has expended matching contributions totaling $695 during the year
ended September 30, 1999. The total required City matching funds are $722 for the project. The remaining funds must be
expended or encumbered by March 3], 2000.
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CITY OF OKEECHOBEE, FLORIDA
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
September 30,1999
PROPERTY:
Buildings ($500 deductible)
Contents ($500 deductible)
Business IncomelExtra Expense
DESCRIPTION
INLAND MARINE ($500 deductible):
Receivables and Valuable Papers
Street and Highway Equipment
Miscellaneous Property
Electronic Data Processing
BOILER AND MACHINERY ($1,000 deductible)
COMMERCIAL CRIME ($500 deductible):
Public Employees Faithful PerformancelEmployee Dishonesty
Forgery, Alteration, Theft, Distruction
GENERAL LIABILITY LIMIT
UMBRELLAIEXCESS
VEHICULAR EQUIPMENT:
Bodily Injury and Property Damage
Collison ($500 deductible)
Comprehensive ($500 deductible)
PUBLIC OFFICIAL LIABILITY (no deductible)
WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY
THIRD PARTY POLLUTION LIABILITY COVERAGE ($10,000 deductible)
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COVERAGE
$
$
$
1, I 66,200
355,100
2,000,000
$ 2,000,000
$ 189,500
$ 67,084
$ ] 00,000
$ 2,000,000
$
$
25,000
25,000
$
2,000,000
$
2,000,000
$
2,000,000
$
2,000,000
$
2,000,000
$
],000,000
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
1990 - 1999
FISCAL REAL PERSONAL HOMESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1999 $ 128,792,388 $ 39,720,585 $ 168,512,973 $ 27, I 95,529
1998 124,] 44, 705 34,967,816 159,1I2,52] 27, I 95,529
1997 ]24,437,676 31,9]2,944 156,350,620 27,180,431
]996 121,623,003 27,473,001 149,096,004 26,195,730
]995 112,605,782 27,593,835 140,199,617 26, 108,828
]994 1I2,759,343 23,222,652 135,98] ,995 25,365,390
1993 109,479,471 23,748,480 133,227,951 25,288,396
1992 1]2,820,753 22,702,940 135,523,693 24,745, I 81
1991 106,606,185 21,489,024 128,095,209 24,7] 8,577
1990 100,7] 5,930 ]9,08],124 ] 19,797,054 24,0]7,296
TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
DEBT GENERAL
FISCAL DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
]999 $ $ 823,915 .000 5.4399
1998 785,999 .000 4.9399
1997 616,02] .000 3.940
]996 46,604 602,080 .260 3.940
]995 23,470 675,914 .170 4.940
1994 48,006 664,734 .300 4.940
1993 6] ,82 I 552,896 .390 4.]50
1992 62,523 562,423 .390 4.150
]991 59,597 53 ],595 .390 4.]50
1990 56,753 504,594 .390 4.150
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF CERTAIN REVENUE - UNAUDITED
1990 - 1999
GENERAL FUND
State
Revenue
Sharing Occupational Utility Franchise Fines and
Year (Note) Licenses Taxes Fees Forfeitures Interest
1999 $ 493,338 $ 53,570 $ 419,931 $ 292,679 38,881 $ 242,473
1998 480,82 I 48,926 413,247 29],073 25,471 256,060
1997 469,287 47,914 395,437 323,254 38,782 267,825
1996 461,371 52,714 416,880 304,600 35,376 261,338
1995 449,994 40,366 398,522 285,257 33,691 82,613
1994 442,009 40,5 I 7 388,291 28],300 22,456 44,998
1993 446,009 36,973 370,882 278,668 28,654 24,438
1992 425,807 45,002 292,6] 5 272,414 44,615 29,246
199] 422,873 34,565 287,490 289,239 45,107 32,541
]990 443,090 33,345 278, I 92 272,199 37,829 45,772
NOTE -INCLUDES ADDITIONAL TWO CENT CIGAREITE TAX AND HALF-CENT SALES TAX
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West HiIIsboro Blvd.. Suite 510. Deertield Beach. Florida 33441 . (954) 419-1CXJO . Fax (954) 419-1040
Toll Free (BBB) 419-2727 . E-Mail cpasOjdgilbert.com
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the financial statements of the City of Okeechobee, Florida (City) as of and for the year ended
September 30, ] 999, and have issued our report thereon dated March 21, 2000, which was qualified as discussed therein.
Except as discussed in our auditors' report, we conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the City's fmancial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants,
noncompliance with which could have a direct and material effect on the determination of fmancial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required
to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over fmancial reporting in order to
determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to
provide assurance on the internal control over fmancial reporting. However, we noted certain matters involving the
internal control over fmancial reporting and its operation that we consider to be reportable conditions. Reportable
conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the
internal control over fmancial reporting that, in our judgment, could adversely affect the City's ability to record, process,
summarize and report fmancial data consistent with the assertions of management in the financial statements.
Reportable conditions are described in the accompanying schedule of fmdings and questioned costs as items 99- I
through 99-4.
A material weakness is a condition in which the design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the
financial statements being audited may Occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. Our consideration of the internal control over fmancial reporting would
not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would
not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, of the
reportable conditions described above, we consider items 98-1 and 98-2 to be material weaknesses. We also noted other
matters involving the internal control over financial reporting that we have reported to management of the City of
Okeechobee, Florida in a separate letter dated March 2 I, 2000.
This report is intended for the information of the audit committee, management and federal awarding agencies, pass-
through entities 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 2], 2000
CI~.~~~
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American Inat;itute of Certified Public Accountants . Florida Institute of Cer'tified Public Accountants
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CITY OF OKEECHOBEE, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended September 30,1999
SECTION I - SUMMARY OF AUDITORS' RESULTS
Financial Statements
Type of auditor's report issued: qualified
Internal control over financial reporting:
Material weakness(es) identified?
Reportable condition(s) identified
not considered to be material weaknesses?
-X....yes_no
-x""yes_none reported
Noncompliance material to fmancial statements noted?
_yes-X....no
Federal Awards
Internal Control over major programs:
Material weakness(es) identified?
Reportable condition(s) identified
not considered to be material weaknesses?
-yes-X....no
-yes-X....none reported
Type of auditor's report issued on compliance for
major programs: unqualified
Any audit fmdings disclosed that are required to be reported
in accordance with Circular A-B3, Section .51O(a)?
_yes-X....no
Identification of major program:
CFDA Number
None
Name of Federal Program or Cluster
Dollar threshold used to distinguish between Type A and
Type B programs:
$ 300,000
Auditee qualified as low-risk auditee?
-yes-X....no
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SECTION II - FINANCIAL STATEMENT FINDINGS
99-1 Fixed Asset Group
Condition: The City has not maintained adequate detailed fixed asset records in support of the recorded costs of the
assets included in the general fixed assets group of accounts. The City contracted with a firm to evaluate the historic
cost or donated value of all existing physical assets of the City. The project was not completed. The City did receive
an insurance valuation for buildings and equipment in 1999 that has not been compared to the recorded assets.
Context: 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, 198 I. We also could not obtain sufficient supporting
documentation to form an opinion as to the cost of assets removed upon disposition of the water and sewer utility or
the value of any assets transferred to the general fund on September 28, 1995.
Recommendation: The City should summarize all land owned, including date acquired, location and size of parcel (from
deed records) and determine a value for each parcel. The information developed should be used to evaluate the recorded
values. Additionally, the City should compare the insurance values for the buildings with recorded values. For
moveable property, a comprehensive list should be circulated to all departments and values assigned where historical
cost records are missing. Then, the City Council should consider a resolution to utilize insurance values or other
estimates to establish a reasonable record of all assets of the fixed asset group.
Management s response: See separate letter of response.
99-2 General Ledeer
Condition: The City has not performed appropriate reconciliation and balancing activities for general ledger balances.
During ] 998, the City implemented an in-house general ledger accounting system. In previous years, the City had
utilized a bookkeeping service. The implementation of this system did not include establishment of proper reconciling
and balancing procedures, which resulted in errors in the accounting records that were not detected in the normal course
of business. This situation has been ongoing.
Context: The general ledger was out of balance throughout the year, certain transactions were not properly recorded
and certain balance sheet accounts were not reconciled to supporting detail. The most significant problems were in
accounts receivable, revenue and payroll. All errors detected in the audit of the fmancial statements were corrected in
all material respects.
Recommendation: The City needs to establish specific daily and monthly balancing and reconciliation procedures. This
should include all balance sheet accounts and transaction processing. All such procedures should be documented and
properly filed.
Management s response: See separate letter of response.
99-3 Accouotioe Records
Condition: The City has not retained appropriate copies of and support for general ledger postings and monthly reports
in an organized manner. The City processes all accounting transactions, which include such items as cash receipts, cash
disbursements, payroll processing, and general journal entries.
Context: We encountered difficulties in verifYing transactions processed and correcting errors during the year because
the complete record of and support for certain transactions could not be located. This is a repeat comment from the prior
audit.
Recommendation: Reports should be generated documenting all transaction postings. These should be appropriately
filed along with any support necessary to explain the nature of any non routine adjustment. Additionally, complete
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general ledger transaction histories should be prepared annually for all funds of the City. The City should establish
appropriate filing procedures for all reports.
Management s response: See separate letter of response.
99-4 Cash Receiots
Condition: The City utilizes a receipt book to record all cash receipts. This record is supposed to be a chronological
record, documenting the dates cash is received by the City. We noted that the receipts do not consistently include the
date of receipt, but rather, the check date or some other date is frequently used.
Context: The failure to use the proper date in the receipt book defeats the purpose of the record. Additionally, the same
clerk who opens the mail is responsible for completing the receipt book and making the deposit. This does not provide
proper controls over the safeguarding of receipts.
Recommendation: The receipt book should document the date the monies were received. Additionally, the
responsibilities of opening the mail and making the deposit should be divided between two employees.
Management's Response: See separate letter of response.
SECTION III - FEDERAL A WARD FINDINGS AND QUESTIONED COSTS
No matters are reported.
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~.D. GILBERT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
600 West HiIIsbol'O Blvd., Suite 510, Deerfield Beach. Florida 33441 . (954) 419-1000 . Fax (954) 419-1040
Toll Free (8B8) 419-2727 . E-Meil cpaSGljdgilbert.com
Manal!ement Letter
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
We have audited the combined fmancial statements of the City of Okeechobee, Florida (City) for the year ended
September 30, 1999, and have issued our report thereon dated March 21, 2000. We did not audit the financial
statements of the Employee Benefit Trust included in the combined fmancial 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 schedule of fmdings and questioned costs.
Prior Year Irreeularities
There were no irregularities reported in the preceding fmancial audit to correct.
Status of Prior Year Recommendations
The items included in the ]998 "Schedule of Findings and Questioned Costs" have been repeated in the current year.
The City has addressed those items regarding cash receipts included in "recommendations for improvement" of the prior
year management letter, all other comments are repeated herein.
Consideration of Financial Emereencv
The City is not, nor at any time during the year ended September 20, ]999 was, in a state of financial emergency as a
consequence of conditions described in Chapter 2 I 8.503, Florida Statutes.
Florida Deoartment of Rankine and Finance Annual Financial Reoort
The annual financial report to be filed with the Florida Department of Banking and Finance pursuant to Section
2 I 8.32(1)(b) Florida Statutes is in agreement with the audited fmancial statements and is expected to be filed on a timely
basis.
Recommendations for Imorovement
City Use of Credit Card - We noted that the City employees use a bank credit card for certain expenses related to City
business. The City employees using the card do not always submit supporting documentation promptly, therefore, the
bills have not been paid in a timely fashion. This has resulted in unnecessary fmance charges to be incurred. The charge
card should be used only where a City check or vendor billing is not accepted. The City should take the necessary steps
to ensure that all expense reports and credit card receipts are filed promptly and that all credit card bills are paid by the
due date. In the meantime, to avoid additional fmance charges, the City should cancel the existing cards and obtain
cards that will provide purchase reports by card. Enough cards for the new account should be obtained so that each card
can be designated to a particular department, as this will assist in tracking purchases by department.
Accounts Receivable - Garbage - We noted that the fmance department does not regularly receive a complete aged
accounts receivable trial balance from the Okeechobee Utility Authority (OUA) for the City's garbage billings. While
the OUA prepares the billings for the City, it is the City that is ultimately responsible for the accuracy of the billings
and collection procedures. To maintain proper accountability, the City should obtain a complete aged accounts
receivable listing from the OUA on a quarterly basis. The City should also periodically review the billing procedures
and detail billing reports generated by the QUA to ensure that all customers are being billed and that billed amounts are
proper.
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General Ledger - We noted that transactions in the general ledger are not necessarily posted on the date they occur.
Instead, most entries carry a date of the end of the month or, in the case of postings from accounts payable, some other
date. Cash receipts should be posted using the date received and, generally, invoices should be posted based upon
invoice date and disbursements on the check date. Additionally, correcting entries should include a description of the
date of the original transaction, for proper tracking. The general ledger serves as the primary record of the financial
transactions of the City, and as such should contain a clear record of those transactions.
Pension Plans - The City is solely responsible for the administration of two of the employee pension plans (police and
fIre), and is primarily responsible for the third plan (general). The City has delegated its recordkeeping responsibilities
to the OUA, even though the OUA is a participating employer in only one of the plans. We recommend that the City
immediately take responsibility for the recordkeeping for the police and fIrefighters plans. Additionally, the City should
ensure that copies of the audited fmancial statements for all three plans are received directly from the auditor upon
issuance, and are retained in the official records of the City.
Federal Reporting - It came to our attention that there was duplicate reporting of federal income tax withholding for
employees who retired during ]999. The pension payment withholdings were reported on both the W-2 (wages) and
]099-R (pension) forms in error. The City filed corrected W-2 forms in February 2000 with the affected individuals.
Violations of Laws. Rules and Reeulations
We did not become aware of any violations of laws, rules, and regulations during the course of our audit.
Illeeal or Improper Expenditures
We did not become aware of any illegal or improper expenditures during the course of our examination.
* * *
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.
9-/9.~~~
April 8, 1999
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