2022-06-07 Ex 03Exhibit 3
6/7/2022
City Of Okeechobee, Florida
FINANCIAL STATEMENTS
September 30, 2021
City of Okeechobee, Florida ■
Table of Contents ■
For the year ended September 30, 2021
Introductory Section
TitlePage................................................................................................................................................1
Tableof Contents...................................................................................................................................2
CityOfficials...........................................................................................................................................3
Financial Section
IndependentAuditors' Report ..............................................................................................................5
Management's Discussion and Analysis...............................................................................................9
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position — Governmental Activities....................................................................19
Statement of Activities - Governmental Activities..........................................................................20
Fund Financial Statements
Governmental Funds
Balance Sheet —Governmental Funds........................................................................................21
Statement of Revenues, Expenditures and Changes in Fund
Balances —Governmental Funds............................................................................................22
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities.........................................23
Fiduciary Funds (Component Units that are Fiduciary in Nature)
Statement of Fiduciary Net Position - Pension Trust Funds.......................................................24
Statement of Changes in Fiduciary Net Position - Pension Trust Funds ....... .............................25
Notes to Financial Statements............................................................................................................27
Required Supplementary Information Other Than Management's Discussion and Analysis
Schedule of Revenues, Expenditures and Changes in Fund Balances —
Budget and Actual - General Fund..............................................................................................63
Required Pension Supplementary Information...............................................................................64
Schedule of Changes in Total OPEB Liability and Related Ratios....................................................75
Notes to Required Supplementary Information..............................................................................76
Reports on Internal Control and Compliance Matters
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards..............................................79
Independent Auditors' Management Letter....................................................................................83
Independent Accountants' Report on Compliance with Local Government
InvestmentPolicies.....................................................................................................................85
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City of Okeechobee.. Florida
City Officials
For the year ended SE!ptember 30, 2021
Dowling R. Watford, Jr.
Mayor, Chairman
Noel Candler
Monica Clark
Bob Jarriel
Bobby Keefe
Council Members
John F. Fumero
City Attorney
Gary Ritter
City Administrator
Lane Gamiotea
City Clerk
India Riedel
Finance Director
Herbert Smith
Chief of Fire
Donald Hagan
Chief of Police
David Allen
Director of Public Works
3-
A R R
Carr, Riggs & Ingram, LLC
RIGGS &
CRIC
215BaytreeDdve
I N G R A M
Melbourne, Florida 32940
CPAs and Advisors
(321)255-0088
(321) 259-8648 (fax)
www.cdcpa.com
INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
We have audited the accompanying financial statements of the governmental activities, each major
fund and the aggregate remaining fund information of the City of Okeechobee, Florida, as of and for
the year ended September 30, 2021, and the related notes to the financial statements, which
collectively comprise the City of Okeechobee, Florida's basic financial statements as listed in the
table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of there financial statements
in accordance with accounting principles generally accepted in the United :States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did
not audit the financial statements of the City of Okeechobee, Florida Municipal Police Officers'
Pension Trust Fund and City of Okeechobee, Florida Municipal Firefighters' Pension Trust Fund and
the City of Okeechobee Employees' Retirement System, which represent 100% of the assets, net
position and additions of the pension trust fiduciary funds. Those financial statements were audited
by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it
relates to the City of Okeechobee, Florida Municipal Police Officers' Pension Trust Fund and City of
Okeechobee, Florida Municipal Firefighters' Pension Trust Fund and the City of Okeechobee
Employees' Retirement System is based on the reports of the other auditors. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement. The financial statements of the City of Okeechobee, Florida Municipal
Police Officers' Pension Trust Fund, the City of Okeechobee, Florida Municipal Firefighters' Pension
Trust Fund, and the City of Okeechobee Employees' Retirement System were not audited in
accordance with Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the financial statements in order to
WE
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, based on our audit and the reports of other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, each major fund and the aggregate remaining fund information of the City
of Okeechobee, Florida, as of September 30, 2021, and the respective changes in financial position
thereof for the year then ended in conformity with accounting principles generally accepted in the
United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (pages 9 through 16), the budgetary comparison information
(page 63 and page 75), and the pension and other postemployment benefits information (pages 64
through 74 and pages 76 through 77) be presented to supplement the, basic financial statements.
Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express
an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Okeechobee, Florida's basic financial statements. The introductory
section is presented for purposes of additional analysis and is not a required part of the financial
statements.
The introductory section has not been subjected to the auditing procedures applied in the audit of
the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
M
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 2,
2022 on our consideration of the City of Okeechobee, Florida's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters. The purpose of that report is solely to describe the scope
of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the City of Okeechobee's internal
control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in coisidering the City of
Okeechobee, Florida's internal control over financial reporting and compliance.
, C,4ra,x,, L . L. c.
Melbourne, Florida
June 1, 2022
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City of Okeechobee, Florida
Management's Discussion and Analysis
Our discussion and analysis of the City of Okeechobee, Florida's ("the City's") financial performance
provides an overview of the City's financial activities for the year ended September 30, 2021.
Please read it in conjunction with the City's basic financial statements, which immediately follow
this discussion.
FINANCIAL HIGHLIGHTS
The following are highlights of financial activity for the year ended September 30, 2021:
• The City's total assets exceeded its liabilities at September 30, 2021 by $19,210,618.
• The City's total revenues were $6,688,886 for the year ended September 30, 2021,
compared to total expenses of $7,106,680, which resulted in a $417,794 decrease in
net position.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The basic financial statements are comprised of three components: 1) government -
wide financial statements, 2) fund financial statements and 3) notes to basic financial statements.
A. Government -Wide Financial Statements
The government -wide financial statements, which consist of the following two statements, are
designed to provide readers with a broad overview of the City's finances, in a manner similar to a
private sector business.
The statement of net position presents information on all of the City's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The statement of activities presents information showing how the City's net position changed
during the year. All changes in net position are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will only result in cas''i flows in future fiscal
periods.
The government -wide financial statements can be found on pages 19 and 20 of this report.
B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The City's funds can be divided into two fund
types: governmental funds and fiduciary funds.
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City of Okeechobee, Florida
Management's DiscLission and Analysis
B. Fund Financial Statements (Continued)
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements. However, unlike
the government -wide financial statements, governmental fund financial statements focus on near -
term inflows and outflows of spendable resources, as well as balances of spendable resources
available at the end of the year. Such information may be useful in evaluating a government's near -
term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long-term impact of the City's near -term financing
decisions. Both the governmental fund balance sheet and the statement of •evenues, expenditures
and changes in fund balances provide reconciliations to facilitate this comparison between
governmental funds and governmental activities.
The basic governmental fund financial statements can be found on pages 21 through 23 of this
report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the government. Fiduciary funds are not reflected in the government -wide financial
statements because the resources of those funds are not available to support the City's own
programs.
The basic fiduciary fund financial statements can be found on pages 24 and 25 of this report.
C. Notes to Basic Financial Statements
The notes provide additional information that is essential for a full understanding of the data
provided in the government -wide and fund financial statements. The notes to basic financial
statements can be found on pages 27 through 59 of this report.
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City of Okeechobee, Florida
Management's DiSCLISSion and Analysis
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of financial position. The
following table reflects the condensed government -wide statement of net position.
City of Okeechobee
Statement of Net Position
2021 2020
Current assets
$ 12,359,121 $
11,267,892
Capital assets
7,803,635
8,100,730
Noncurrent assets
2,984,444
1,563,303
Total assets
23,147,200
20,931,915
Deferred outflows
522,439
806,791
Unearned revenue
1,456,482
-
Current liabilities
594,515
317,048
Noncurrent liabilities
563,975
655,619
Total liabilities
2,614,972
972,667
Deferred inflows
1,844,049
1,137,637
Net position:
Net investment in capital assets
7,803,635
8,100,730
Restricted
2,886,133
1,062,845
Unrestricted
8,520,850
10,464,837
Total net position
$ 19,210,618 $
19,628,412
Governmental Activities
Total net position decreased by $417,794 primarily as a result of $2,215,285 increase in total
assets, an increase of $1,642,305 of total liabilities. In addition, deferred inflows related to pensions
increased $706,412 and was offset by a decrease of $284,352 of pension outflows. The increase in
total assets was primarily due to a $1,091,229 increase in current assets due to an increase of cash
and investments in the current year to fund operations, a $1,421,141 increase in noncurrent assets
due to an increase in net pension asset, and a decrease in capital assets of $297,095. The net
change in current and noncurrent liabilities was $1,642,305 as current liabilities increased by
$277,467 related to timing of payables and non -current liabilities decreased by $91,644 resulting
from a decrease in the compensated absences by $110,831 and an increase in the OPEB liability
obligation of $19,187. Unearned revenue increased by $1,456,482 due to grant funds received in
advance.
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City of Okeechobee, Florida
Management's Discussion and Analysis
The following table shows condensed revenue and expense data:
City of Okeechobee, Florida
Statement of Activities
2021 2020
REVENUES:
Program revenues:
Charges for services
$ 886,749
$ 788,165
Operating grants and contributions
677,032
615,305
Capital grants and contributions
184,814
-
General revenues:
Property taxes
2,447,037
2,305,548
Public utility taxes
864,924
840,461
Franchise fees
573,929
540,181
Shared revenues
862,744
1,622,322
Investment income
10,660
102,982
Other income
180,997
42,392
Total revenues
6,688,886
6,857,356
EXPENSES:
General government
Public safety
Transportation
Physical environment
Economic environment
Culture and recreation
908,374
1,738,663
4,378,379
4,131,405
1,186,087
840,233
631,903
919594
593
_
1,344
-
Total expenses 7,106,680 7,629,895
Change in net position (417,794) (772,539)
Net position, beginning of year
19,628,412
20,400,951
Net position, end of year $ 19,210,618 $ 19,628,412
- 1- 2
City of Okeechobee, Florida
Management's Discussion and Analysis
The City experienced a decrease of 2.4% in total revenues — a $168,470 de_-rease to $6.68 million.
The decrease is primarily due to a $759,578 decrease in Shared Revenues, offset by an increase of
Charges for Services, $98,584, Operating Grants and Contributions, $61,727 and Capital Grants and
Contributions, $184,814, and $92,322 decrease in Investment Income. Utility Tax and Franchise fee
revenues increased $24,463 and $33,748 respectfully, primarily based on higher consumer
consumption. An increase in the assessed taxable values and continuing millage rate of 7.6018
were the contributory factors in the increase of property tax revenue of $1,11,489 which offset the
decrease in revenues. An increase in Miscellaneous revenue $138,605, also shared in the offset of
the overall decrease in revenues for the year. The City experienced a de--rease of 6.9% in total
expenses — a $523,215 decrease to $7.1 million. The decrease is primarily due to a $830,289
decrease in expenses for general government. The $345,854 increase in transportation expense,
$287,691 increase in physical environment and $246,974 increase in public safety offset the overall
decrease in expenditures for the year. The combined decrease in expense and decrease in revenues
resulted in a decrease in net position of $417,794.
FUND FINANCIAL ANALYSIS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance -related legal requirements.
Governmental funds. The focus of the City's governmental funds is to provide information on
near -term inflows, outflows and balances of spendable resources. Such information is useful in
assessing the City's financing requirements. In particular, unassigned func balance may serve as
a useful measure of a government's net resources available for spending at the end of the fiscal
year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $10,322,239 a decrease of $579,348 in comparison with the prior year. Approximately
78% of this total amount $8,005,524, constitutes unassigned fund balance, which is available for
spending at the government's discretion. Assigned fund balances include $1,107,248 for subsequent
year's expenditures. Public facilities fund balance of $1,157,600 plus law enforcement $17,599 are
restricted funds based on their specific stipulated purpose. The remainder of fund balance is non -
spendable inventory of $34,268.
The general fund is the chief operating fund of the City. At the end of the current fiscal year, assigned
and unassigned fund balance of the general fund was $9,051,015 while total fund balance was
$10,242,883. As a measure of the general fund's liquidity, it may be useful to compare both assigned
and unassigned fund balance, and total fund balance to total fund expenditures. The total assigned
and unassigned fund balance and total fund balance represent approximately 111% and 126%
respectively of total general fund expenditures.
Revenues from grants were used in the construction of infrastructure and other improvements in
the City in the prior year.
-1.3-
City of Okeechobee, Florida
Management's Discussion and Analysis
General Fund Budgetary Highlights
The amount appropriated for expenditures in the original 20/21 budget decreased from $8,590,919
to $8,499,665 in the final 20/21 budget, a decrease of $91,254. The decrease in budgeted fire and
police public safety expenses, and transportation expenses contributed to the overall decrease in
expenditures. These decreases were offset by budget increases in general government, physical
environment and capital outlay.
CAPITAL ASSETS AND LONG-TERM LIABILITIES
Capital assets. The City's investment in capital assets as of September 30, 2021, amounted to
$7,803,635, (net of accumulated depreciation). This investment in capital assets includes land,
buildings, improvements, equipment and construction in progress. During ;:he year, the City's net
capital asset balance decreased $297,095.
The City's major additions of $739,115 to capital assets during the current Fiscal year included the
following:
• Completion of Centennial Park restroom & pavilion
• Completion of Fiberoptic cable installation
• Taylor Creek Stormwater conveyance
• Northwest 10th Street sidewalk improvements
• Replacement computers (4) -Police Department
• Streetlights (4) Commerce Park
• Replace (3) police vehicles including equipment for Police Department.
• Tasers (1) including harnesses, etc.; (1) Radar
• BIS Digital Recording System and monitors for Council Chamber
• Trees for City parks
• Added (11) laptops for council and various departments for use in council
chambers
• Bunker gear for fire personnel
• City Hall remodel and carpet for hallway, stairs and second floor
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City of Okeechobee, Florida
Management's Discussion and Analysis
• 20' Lowes Boat for Public Works
• Wacker 3" Trash pump
• Construction in progress included in WiFi equipment iin the parks, SE 61'
Street and Se 3 d Avenue improvements, Incode accounting software,
Centennial Park restroom & pavilion and fiber optic cable installation
City's Capital Assets
(net of depreciation)
2021 2020
Land
$ 1,378,744 $
1,378,744
Construction in progress
326,662
142,615
Buildings
1,163,458
1,093,014
Improvements other than buildings
3,882,510
3,846,839
Equipment
1,052,260
1,639,518
Total
$ 7,803,635 $
8,100,730
Additional information on the City's capital assets can be found in Note 3.C. on page 40 of this
report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The City Council adopted a millage rate of 7.6018 for budget year 2022. The adopted millage rate is
slightly higher than the roll -back rate of 7.3317. A $93,935 increase in budgeted ad valorem
revenue is largely due to the increase in new construction added to this year's assessed tax rolls
and increase in taxable values from the prior year.
Revenues for the fiscal year 2022 adopted budget for all funds of the City total approximately
$8,859,381, an increase from the prior year final budget of approximately $1,386,680. These
revenues include the General, Public Facility, Capital Projects and Special Law Enforcement fund
revenues.
The change in revenue is based mostly on the Expected increase in Ad Valorem Tax revenue,
intergovernmental revenue and expected grant revenue. However an expected decrease in money
revenues offsets the budgeted increase.
Expenditures for the fiscal year 2022 adopted budget for all funds of the City total approximately
$10,185,715, an increase of 17% or $1,686,050 from the prior year budget. The increase in
expenditures is based mostly on the increase in budgeted capital infrastructure expenditures
funded through the American Rescue Plan Act, general government public safety and
transportation related expenditures.
City of Okeechobee, Florida
Management's Discussion and Analysis
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Okeechobee's finances
for all those with an interest. Questions concerning any of the informatior, provided in this report
or requests for additional information should be addressed to the City of Okeechobee, 55 S.E. Third
Avenue, Okeechobee, Florida 34974.
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City of Okeechobee, Florida
Statement of Net Position - Governmental Activities
September 30, 2021
ASSETS
Cash and cash equivalents
$ 3,733,468
Investments
8,183,546
Accounts receivable
130,819
Due from other governments
277,020
Inventory
34,268
Capital assets:
Nondepreciable
Land
1,378,744
Construction in progress
326,663
Depreciable, net of accumulated depreciation
Buildings
1,163 458
Improvements other than buildings
3,882,510
Equipment
1,052,260
Net pension asset
2,984,444
Total assets
23,147,200
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflow - pensions
522,439
Total deferred outflows of resources
522,439
LIABILITIES
Accounts payable
390,730
Accrued expenses
141,570
Compensated absences - due within one year
62,215
Unearned revenue - American Rescue Plan Act
1,456,482
Noncurrent liabilities:
Due in more than one year
Compensated absences
356,907
OPEB liability
207,068
Total liabilities
2,614,972
DEFERRED INFLOWS OF RESOURCES
Deferred inflow - business tax receipts
48,100
Deferred inflow - pensions
1,795,949
Total deferred inflows of resources
1,844,049
NET POSITION
Net investment in capital assets
7,803,635
Restricted for:
Law enforcement
17,599
Public facilities
1,157,600
Pension benefits
1,710,934
Unrestricted
8,520,850
Total net position
$ 19,210,618
The accompanying notes are an integral part of these financial stctements
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City of Okeechobee, Florida
Statement of Activities - Governmental Activities
Year ended September30, 2021 Program Revenues Net (Expense)
Operating Capital Revenue and
Charges for Grants and Grants and Changes in
Functions/Programs Expenses Services Contributions Contributions Net Position
General government
$ 908,374
$ 303,343
$ - $ 194,814 $ (420,217)
Public safety
4,378,379
156,098
- - (4,222,281)
Transportation
1,186,087
427,308
677,032 - (81,747)
Physical environment
631,903
-
- - (631,903)
Economic environment
593
-
- - (593)
Culture & recreation
1,344
-
- - (1,344)
Total governmental
activities
$ 7,106,680
$ 886,749
$ 677,032 $ 184,814 (5,358,085)
General revenues:
Property taxes 2,447,037
Public utility taxes 864,924
Franchise fees 573,929
Shared revenues not restricted to specific programs 862,744
Unrestricted investment earnings 10,660
Miscellaneous 180,997
Total general revenues 4,940,291
Change in net position (417,794)
Net position, beginning of year 19,628,412
Net position, end of year $ 19,210,618
The accompanying notes are an integral part of these financial statements.
- 20 -
City of Okeechobee, Florida
Balance Sheet - Governmental Funds
Community Total
Development: Nonmajor Governmental
September30, 2021
General
Capital Project: Funds
Funds
ASSETS
Cash and cash equivalents
$ 3,645,809
$ 61,757 $ 25,902
$ 3,733,468
Investments
8,183,546
- -
8,183,546
Accounts receivable
130,819
- -
130,819
Due from other funds
8,303
- -
8,303
Due from other governments
277,020
- -
277,020
Inventory
34,268
- -
34,268
Total assets
12,279,765
61,757 25,902
12,367,424
LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES
Liabilities
Accounts payable
$ 390,730
$ - $ -
$ 390,730
Accrued expenses
141,570
- -
141,570
Due to other funds
-
- 8,303
8,303
Unearned revenue
1,456,482
- -
1,456,482
Total liabilities
1,988,782
- 8,303
1,997,085
Deferred inflows of resources:
Deferred revenue - business tax revenue
48,100
- -
48,100
Fund balances:
Nonspendable for:
Inventory
34,268
- -
34,268
Restricted for:
Public facilities
1,157,600
- -
1,157,600
Law enforcement
-
- 17,599
17,599
Assigned for:
Subsequent year's expenditures
1.,107,248
- -
1,107,248
Unassigned
7,943,767
61,757 -
8,005,524
Total fund balances
10,242,883
61,757 17,599
10,322,239
Total liabilities, deferred inflows of
resources and fund balances
$ 12:,279,765
$ 61,757 $ 25,902
Amounts reported for governmental activities in the statement of net
position are different because:
Deferred outflows of resources related to pensions are not
recognized in the governmental funds; however, they are recorded
in the statement of net position under full accrual accounting. 522,439
Deferred inflows of resources related to pensions are not recognized in
governmental funds; however, they are recorded in the statement
of net position under full accrual accounting. (1,795,949)
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds. 7,803,635
Net pension assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds. 2,984,444
Long-term liabilities, including the net OPEB obligation of $207,068
and compensated absences of $419,222 are not due and payable
in the current period and, therefore, are not reported in the funds. (626,190)
Net position of governmental activities $ 19,210,618
The accompanying notes are an integral part of these financial stcrtements.
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City of Okeechobee, Florida
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
Community Total
Development Nonmajor Governmental
Year ended September 30, 2021 General Capital Project Funds Funds
Revenues
Taxes
$ 3,295,724 $
- $ - $ 3,295,724
Intergovernmental
2,690,722
- 184,814 2,875,536
Charges for services
544,146
- - 544,146
Permits and fees
782,582
- - 782,582
Fines and forfeitures
129,557
- 2,134 131,691
Investment earnings
10,660
- - 10,660
Miscellaneous
88,566
- - 88,566
Total revenues
7,541,957
- 186,948 7,728,905
Expenditures
Current:
General government
1,733,388
- -
1,733,388
Public safety
4,351,200
- 525
4,351,725
Transportation
1,209,468
- -
1,209,468
Physical environment
311,,156
- 593
311,749
Recreation
1,344
- -
1,344
Capital outlay
554,301
- 184,814
739,115
Total expenditures
8,160,,857
- 3,85,932
8,346,789
Excess of revenues
over expenditures
(618,900)
- 1,016
(617,884)
Other financing sources (uses)
Transfers in
200,000
- -
200,000
Transfers out
-
(200,000) -
(200,000)
Proceeds from sale of capital assets
38,536
- -
38,536
Total other financing sources (uses)
238,536
(200,000) -
38,536
Net change in fund balances
(380,364)
(200,000) 1,016
(579,348)
Fund balances, beginning of year
10,623,247
261,757 16,583
10,901,587
Fund balances, end of year
$ 10,242,883 $
61,757 $ 17,599
$ 10,322,239
The accompanying notes are an integral part of these financial statements.
-22-
City of Okeechobee, Florida
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities
Year ended September 30, 2021
Net change in fund balances - total governmental funds $ (579,348)
Amounts reported for governmental activities in the statement of activities
are different because:
Capital assets used in government activities are not financial
resources and, therefore, are not reported in the funds.
Capital outlay $ 739,115
Depreciation expense (655,224)
83,891
In the statement of activities, only the gain (loss) on the sale of capital assets is
reported. However, in the governmental funds, the proceeds from the sale
increase financial resources. Thus, the change in net position differs from the
change in fund balance by the net book value of the disposed capital assets.
(381,075)
Pension contributions are reported as expenditures in the fund financial
statements and the change in net position asset and related outflows (inflows)
are reported on the statement of activities.
429,309
Other post employment benefits are reported as expenditures in the fund
financial statements and the change in net position asset and related outflows
(inflows) are reported on the statement of activities.
(19,187)
Compensated absences are reported in the statement of activities when earned.
Only compensated absences that require the use of current financial resources
are reported as expenditures in the governmental funds. This is the
difference between the two.
48,616
Change in net position of governmental activities $ (417,794)
The accompanying notes are an integral part of these financial statements.
-23-
September 30, 2021
ASSETS
City of Okeechobee, Florida
Statement of Fiduciary Net Position - Pension Trust Funds
Pension
Trust Funds
Cash equivalents
$ 232,909
Investments:
Mutual funds
230879,068
Receivables
70,110
Prepaid expenses
6,963
Total assets
241189,050
LIABILITIES
Accounts payable 22,741
Total liabilities 22,741
NET POSITION
Restricted for pension benefits $ 24,166,309
The accompanying notes are an integral part of these financial statements.
-24-
City of Okeechobee, Florida
Statement of Changes in Fiduciary Net Position - Pension Trust Funds
Pension
Year ended September 30, 2021 Trust Funds
ADDITIONS
Contributions:
State
$ 132,557
City
257,946
Employees
147,982
Total contributions
538,485
Investment earnings:
Net appreciation in the
fair value of investments
3,264,531
Interest and dividends
794,447
Total investment earnings
4,058,978
Less investment expenses
(63,116)
Net investment earnings
3,995,862
Total additions
4,534,347
DEDUCTIONS
Benefits paid to participants
701,513
Refunds on termination
46,990
DROP payments
415,651
Share plan distribution
12,416
Administrative expenses
130,402
Total deductions
1,306,972
Change in net position
3,227,375
Net position, beginning of year
20,938,934
Net position, end of year
$ 24,166,309
The accompanying notes are an integral part of these financial statements.
-25-
City of Okeechobee.. Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY
The City of Okeechobee (the "City") was originally incorporated in 1915 and its present charter was
adopted in 1919 under Chapter 8318 of Special Acts of 1919. The City operates under the council form
of government and provides the following services: general government, public safety, transportation
and physical environment.
These financial statements present the primary government and its component units. Blended
component units, although legally separate entities, are, in substance, part of the government's
operations and so data from these units are combined with data of the primary government.
Discretely presented component units are entities that are legally separate from the City, but whose
relationship with the City are such that the exclusion would cause the City's financial statements to be
misleading or incomplete. The City has no discretely presented component units.
The City reports the following component units:
Municipal Firefighters' Pension Trust Fund — The fund is under the supervision of a five member local
independent Board of Trustees who are selected for office under the provisions of Florida Statutes,
Chapter 175. The Board of Trustees cannot amend the provisions of the plan without the approval of
the City Council. This plan covers all full-time firefighters of the City. The City funds the plan, according
to any contribution deficit as determined by an actuarial valuation for the plan, beyond the
contributions by employees and the State Insurance (Premium Tax Contribution. It is accounted for in
the Pension Trust funds.
Municipal Police Officers' Pension Trust Fund — The fund is under the supervision of a five member
local independent Board of Trustees who are selected for office under the provisions of Florida
Statutes, Chapter 185. The Board of Trustees cannot amend the provisions of the plan without the
approval of the City Council. This plan covers all full-time sworn officers of the City. The City funds the
plan, according to any contribution deficit as determined by an actuarial valuation for the plan,
beyond the contributions by employees and the State Insurance Premium Tax Contribution. It is
accounted for in the Pension Trust funds.
The Employees' Retirement System of the City of Okeechobee, Florida — The fund is under the
supervision of a five member local independent Board of Trustees. The Board of Trustees cannot
amend the provisions of the plan without the approval of the City Council. This plan benefits the City
general employees. The City funds the plan. It is accounted for in the Pension Trust funds in 2021 as
the City does have fiduciary responsibility.
-27.
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e., the statement of net position and the statement of
changes in net position) report information on all of the nonfiduciary activities of the primary
government. Governmental activities are those which normally are supported by taxes and
intergovernmental revenues. Likewise the primary government is reported separately from certain
legally separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the deg,ee to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable with
a specific function. Program revenues include 1) charges to customers or applicants who purchase,
use or directly benefit from goods, services or privileges provided by a given function or segment
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not properly inc uded among program
revenues are reported instead as general revenues.
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the fiduciary fund financial
statements. Revenues are recorded when earned and expenditures are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied. Grants and similar items are recognized as revenue as soon as
all eligibility requirements imposed by the provider have been met.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. RevenLies are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is duE!.
Property taxes, franchise taxes, licenses, charges for services and interest associated with the
current fiscal period are all considered to be susceptible to accrual and so have been recognized
as revenues of the current fiscal period. All other revenue items are considered to be measurable
and available only when cash is received by the government.
- 28 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING,, AND FINANCIAL STATEMENT PRESENTATION
(Continued)
The City reports the following major governmental funds:
The general fund is the City's primary operating fund. It accounts for all Financial resources of
the general government, except those required to be accounted for in another fund.
The community development capital project fund accounts for the asset;, liabilities, revenues
and expenditures related to the construction of infrastructure and other improvements in the
City not including grant funds that are instead included in the appropriations grant capital
project fund.
The City reports the following nonmajor governmental funds:
The law enforcement special revenue fund accounts for the assets that are restricted to fund
certain expenditures of the City's police department.
The appropriations grant capital projects fund accounts for the financial resources related to
the construction of infrastructure and other improvements in the City provided by specific
grants and matching funds.
Additionally, the City reports the following fund types:
The pension trust fund account is used to account for assets held by the City in a fiduciary
capacity for the general employees', police officers' and firefighters' pension plans. The funds
are operated by carrying out specific terms Df statutes, ordinances and other governing
regulations.
The effect of interfund activity has been eliminated from the government -wide financial
statements.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services or privileges provided, 2) operating grants and contributions and 3) capital grants and
contributions. Internally dedicated resources are reported as general reventes rather than as pro-
gram revenues. Therefore, general revenues include all taxes.
Expenditures for compensated absences are allocated based on the assigned function of the related
employee.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed.
-29-
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION OR EQUITY
1. Cash and investments
The investment of municipal funds is authorized by local ordinance and Florida Statutes. This allows
the City to invest in the Local Government Surplus Funds Trust Fund or any intergovernmental
investment pool authorized pursuant to the Florida Irterlocal Cooperation Act, SEC registered money
market funds with the highest credit quality rating, interest -bearing time deposits or savings accounts
in qualified public depositories, direct obligations of the U.S. Treasury, commercial paper with certain
ratings, pre -refunded municipal obligations, banker's acceptances maturing within one year,
investment agreements, direct and general long-term and short-term obligations of any state with
proper credit rating and full faith and credit pledge, municipal obligations wilh proper credit rating
and repurchase agreements with maturities of 30 days or less with organizations with certain
stipulations and requirements.
The City invests certain surplus funds in an external investment pool, the Local Government Surplus
Funds Trust Fund (the "State Pool"). The State Pool is administered by the Florida State Board of
Administration ("SBA"), who provides regulatory oversight.
The Florida PRIME has adopted operating procedures consistent with the requirements for an
investment pool under GASB 150: Investments to be reported at amortized cost. The fair value of the
City's position in the pool is equal to the value of pooled shares. The funds can be withdrawn at any
time, and there are no unfunded commitments.
The City pools the investments of its governmental funds. Investment earnings of the pool are
allocated to the participating funds at the end of each month based on the ratio of each participant
funds' investment to the total pooled investment.
Cash and cash equivalents include cash deposits, cash funds held in broker accounts and investments
held in the Local Government Surplus Funds Trust Fund (Florida PRIME).
Within the firefighters', police officers' and general employees' pension trust funds, plan assets are
managed by Bowen, Hanes, and Company. The plans follow the investment guidelines as established
within the ordinance. The pension trust funds are allowed to invest in the State Pool; 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; investments 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; annuity and life insurance contracts; bonds issued by the State of Israel; and stocks, bonds, and
commingled funds administered by National or State banks or evidences of i idebtedness issued or
guaranteed by a corporation organized under the laws of the United States, provided that the
corporation is listed on a nationally recognized exchange and holds proper credit ratings as set forth
by a major credit rating service. These equity investments are not to exceed 60% of the assets of the
pension trust funds on a cost basis. Temporary investment funds held by the custodian in a money
market fund are classified as cash equivalents within the investment account.
-30-
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION OR EQUITY (Continued)
1. Cash and investments (continued)
Pension trust fund investments are reported at fair value. Securities traded on a national or
international exchange are valued at the last reported sales price. Shares of mutual funds, including
proprietary funds and common and collective funds, are valued at quoted market prices, which
represent the net asset value of shares held by the pension trust fund at year-end. Interest is
recognized when earned. Gains and losses from the sale or exchange of investments are recognized
on the transaction date. The difference between the excess of fair value over cost represents
unrealized gains.
2. Receivables and payables
All trade and property tax receivables are considered to be fully collectible
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. Tax collections by the Okeechobee County tax collector begin in
November of each year with a due date of March 31 of the following year. All property taxes
remaining unpaid at May 30 are subject to a tax certificate sale.
The City is permitted by State law to levy taxes up to 10 mills on assessed valuation. During a
Special Session in June 2007, the Florida Legislature adopted H131B, which limits municipal property
tax rates beginning in the 2008 fiscal year. This legislation established reductions in the millage rate
based on a calculated growth in per capita taxes between the 2002 and 2007 fiscal years. The
Legislature did authorize local governments to use the rolled back millage rate if approved by a
super majority vote of the governing body. The Okeechobee City Council levy for the fiscal year
ended September 30, 2021 was 7.6018 mills, which is 4.89% more than the rolled back rate.
The City Council determines the millage rates and aclopts a tax levy by resolution prior to September
30 to fund the next ensuing fiscal year's budget. The assessment of all properties and collection of
municipal taxes are provided by the County's Property Appraiser and Tax Collector. The ad valorem
tax calendar is as follows:
Lien date -
January 1
Levy date -
Prior to September 30
Due date -
November 1
Delinquent date -
April 1
3. Inventory
Inventories are valued at cost, which approximates market, using the first-in/--irst-out (FIFO) method.
The costs of inventories are recorded as expenditures when used (consumption method).
- 31 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION OR EQUITY (Continued)
4. Capital assets
Capital assets, which include: property, plant, equipment and infrastructure assets (e.g., roads,
bridges, sidewalks and similar items), are reported in the government -wide financial statements.
Capital assets are defined by the government as assets with an initial, individual cost of more than
$500 and an estimated useful life in excess of one year. Such assets are recorded at historical cost
or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
acquisition value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets' lives are not capitalized. Major outlays for capital assets and improvements are
capitalized as projects are constructed.
Property, plant and equipment are depreciated using the straight-line method over the following esti-
mated useful lives:
Assets Yea rs
Buildings
25-60
Building improvements
12-20
Vehicles
10
Equipment
5-15
5. Compensated absences
It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay
benefits. All sick and vacation pay is accrued when incurred in the government -wide financial
statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements.
6. Deferred inflows and outflows of resources
The deferred outflows and inflows related to pensions are an aggregate of items related to
pensions as calculated in accordance with GASB Statement No. 68, Accounting and Financial
Reporting for Pensions. Total deferred inflows of resources related to pensions were $1,795,949,
and total deferred outflows were $522,439 for the year ended September 30, 2021. Note 4-13
includes a complete discussion of retirement commitments.
Resources received before time requirements have been met, for example business tax revenues,
are classified as deferred inflows of resources.
7. Unearned revenue
Unearned revenue recorded on the governmental fund balance sheer: represents amounts
received before eligibility requirements are met.
-32-
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION OR EQUITY (Continued)
8. Long-term obligations
In the government -wide financial statements, long -germ debt and other long-term obligations are
reported as liabilities in the statement of net position. In the governmental fund financial
statements, the face amount of debt issued is reported as other financing sources.
9. Fund equity
The governmental fund financial statements present fund balances based Dn classifications that
comprise a hierarchy that is based primarily on the extent to which the City is bound to honor
constraints on the specific purposes for which amounts in the respective governmental funds can be
spent. The classifications used in the governmental fund financial statements are as follows:
Nonspendable Fund Balance — Amounts that are (a) not in spendable form or (b) legally or
contractually required to be maintained intact. "Not in spendable form" includes items that are not
expected to be converted to cash (such as inventories and prepaid amounts) and items such as long-
term amounts of loans and notes receivables, as well as property acquired for resale. The corpus (or
principal) of a permanent fund is an example of an arnount that is legally or contractually required to
be maintained intact.
Restricted Fund Balance — Amounts that can be spent only for specific purposes stipulated by (a)
external resource providers such as creditors (by debt covenants), grantors, contributors or laws or
regulations of other governments; or (b) imposed by law through constitutional provisions or
enabling legislation.
Committed Fund Balance — Amounts that can be used only for the specific purposes determined by a
formal action (resolution) of the Council, the Council's highest level of decision making authority.
Commitments may be changed or lifted only by the council taking the same formal action (resolution)
that imposed the constraint originally. The City had no committed fund balance at year end.
Assigned Fund Balance — Includes spendable fund balance amounts established by the City
Administrator or the Council that are intended to be used for specific purposes that are neither
considered restricted or committed.
Unassigned Fund Balance — Unassigned fund balance is the residual classification for the general
fund. This classification represents fund balance that has not been assigned to other funds and that
has not been restricted, committed or assigned to specific purposes within the general fund.
Unassigned fund balance may also include negative balances for any governmental fund if
expenditures exceed amounts restricted, committed or assigned for those specific purposes.
- 33 -
City of Okeechobee, Florida
Notes to Fin3ncial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NE'r POSITION OR EQUITY (Continued)
9. Fund equity (Continued)
The City would typically use restricted fund balances first, followed by committed resources and
then assigned resources, as appropriate opportunities arise, but reserves 1:he right to selectively
spend unassigned resources first to defer the use of these other classified funds.
10. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information 2 bout the fiduciary net
position of the City's Police Officers' and Firefighters' pension trust funds and the Florida Retirement
System Pension Plan and Health Insurance Subsidy Program and additions to/deductions from the
plans' fiduciary net position have been determined on the same basis as thE!y are reported by the
plans. For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with the benefit terms. Investments are reported at
fair value.
11. Other post -employment benefits
The City participates in a single employer, defined benefit, other post -employment plan. The City does
not have a trust for the plan, and there is no actuarially determined contribution. The OPEB liability is
determined in accordance with GASBC P52: Other Post -employment Benefits.
12. Use of estimates
The preparation of the financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions. This will affect the reported amounts of assets, liabilities, deferred inflows and
deferred outflows, the disclosure of contingent assets, liabilities, deferred inflows and deferred
outflows at the date of the financial statements, and the reported amounts of revenues and
expenditures/expenses during the reporting period. Actual results could differ from these
estimates.
13. Recently Issued and Implemented Accounting, Pronouncements
The Governmental Accounting Standards Board has issued statements that will become effective
in future years. These statements are as follows:
- 34 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NE-r POSITION OR EQUITY (Continued)
13. Recently Issued and Implemented Accounting Pronouncements (Continued)
In June 2017, the GASB issued Statement No. 87, Leases. The objective of this Statement is to
better meet the information needs of financial statement users by improving accounting and
financial reporting for leases by governments. This Statement increases the usefulness of
governments' financial statements by requiring recognition of certain lease! assets and liabilities
for leases that previously were classified as operating leases and recognized as inflows of
resources or outflows of resources based on payment provisions of the contract.
It establishes a single model for lease accounting based on the foundational principle that leases
are financings of the right to use an underlying asset. Under this Statement, a lessee is required
to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the
relevance and consistency of information about governments' leasing activities. The
requirements of this Statement are effective for reporting periods beginning; after June 15, 2021.
In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before the
End of a Construction Period. The objectives of this Statement are (1) to enhance the relevance
and comparability of information about capital assets and the cost of borrowing for a reporting
period and (2) to simplify accounting for interest cost incurred before the end of a construction
period. This Statement requires that interest cost incurred before the End of a construction
period be recognized as an expense in the period in which the cost is incurred for financial
statements prepared using the economic resources measurement focus. The requirements of
this Statement are effective for reporting periods beginning after December 15, 2020.
In May 2020, the GASB issued Statement No. 96), Subscription -Based Inj ormation Technology
Arrangements. This Statement provides guidance on the accounting and financial reporting for
subscription -based information technology arrangements (SBITAs) for government end users
(governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right -
to -use subscription asset —an intangible asset —and a corresponding subscription liability; (3)
provides the capitalization criteria for outlays other than subscription payments, including
implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the
extent relevant, the standards for SBITAs are based on the standards established in Statement
No. 87, Leases, as amended. The requirements of this Statement are Effective for reporting
periods beginning after June 15, 2022.
35 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. ASSETS, LIABILITIES, DEFERRED INFLOWS AND NET POSITION OR EQUITY (Continued)
13. Recently Issued and Implemented Accounting Pronouncements (Continued)
In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria. The primary
objectives of this Statement are to (1) increase consistency and comparability related to the
reporting of fiduciary component units in circumstances in which a potential component unit
does not have a governing board and the primary government performs the duties that a
governing board typically would perform; (2) mitigate costs associated with the reporting of
certain defined contribution pension plans, defined contribution other postemployment benefit
(OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other
employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and
(3) enhance the relevance, consistency, and comparability of the accounting and financial
reporting for Internal Revenue Code (IRC) Section 1157 deferred compensation plans (Section 457
plans) that meet the definition of a pension plan and for benefits provided through those plans.
The requirements of this Statement are effective for reporting periods be -inning after June 15,
2021.
The City is evaluating the requirements of the above statements and the impact on reporting.
Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
As permitted by GASB Statement No. 34, Basic Financial Statements and N'anagement Discussion
and Analysis for State and Local Governments, the City has elected to disclose all budgetary
information in the notes to the required supplemerrcary information.
Note 3: DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
As of September 30, 2021, $250,000 of the City's bank balances is covered by federal depository
insurance (FDIC). Monies invested in amounts greater than the insurance coverage are secured by
the qualified public depositories pledging securities with the State Treasurer in such amounts
required by the Florida Security for Public Depositories Act. In the event of a default or insolvency
of a qualified public depositor, the State Treasurer will implement procedures for payment of losses
according to the validated claims of the City pursuant to Section 280.08, Florida Statutes.
-36-
City of Okeechobee, Florida
Notes to Financial Statements
Note 3: DETAILED NOTES ON ALL FUNDS (Continued)
A. DEPOSITS AND INVESTMENTS (Continued)
At the close of the fiscal year, the City held investments in the Local Government Surplus Funds
Trust Fund ("Florida PRIME") external investment pool. The Florida PRIME is administered by the
Florida State Board of Administration ("SBA"), who provides regulatory oversight. Florida PRIME
currently meets all of the necessary criteria set forth in Section 150: Investment Pools (External) of
the GASB Codification to measure its investments zt amortized cost; therefore, the City's account
balance in the SBA is also reported at amortized cost.
Fair Value
GASBC 150: Investments, establishes a framework for measuring fair value. That framework provides a
fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3
measurements).
The three levels of the fair value hierarchy under GAS13C 150 are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the plan has the ability to access.
Level 2: Inputs to the valuation methodology includE!
• quoted prices for similar assets or liabilities in active markets;
• quoted prices for identical or similar assets or liabilities in inactive markets;
• inputs other than quoted prices that are observable for the asset or liability;
• inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be observable
for substantially the full term of the asset or liability.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
The asset or liability's fair value measurement level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement. Valuation techniques used
need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value.
There have been no changes in the methodologies used at September 30, 2021.
Level 1 investments noted in the following table are valued at quoted market p-ices.
Level 2 investments noted in the following table are valued at quoted prices for similar liabilities in
active markets.
-37
City of Okeechobee.. Florida
Notes to Financial Statements
Note 3: DETAILED NOTES ON ALL FUNDS (Continued)
A. DEPOSITS AND INVESTMENTS (Continued)
The money market fund is valued at amortized cost. They can be redeemed daily, and have no
unfunded commitments.
Mutual funds — equities are valued at quoted market prices.
Mutual funds —fixed income are valued using price models maximizing the use of observable inputs
for similar securities. This includes basing value on yield currently available on comparable securities
of issues with similar credit ratings.
At September 30, 2021, the City had the following investments and effective duration presented in
terms of years and levels:
Investment type Fair Value Less than 1 1-5 6 - 10 More than 10 Rating Agency Level
Primary government:
SBA (Florida Prime) $ 8,183,546 $ 8,183,546 $ $ $ AAAm S&P
Primary government total $ 8,183,546 $ 8,183,546 $ $ $
Pension trust funds:
Mutual funds- equities 14,393,407 14,393,407 Not rated - Ll
Mutualfunds- fixedincome 9,485,661 9,485,661 BBB -AA S&P L2
$ 23,879,068 $ $ $ 23,879,068 $
Cash Equivalents, at amortized cost
Money Market Fund 232,909
Total Cash Equivalents, at cost 232,909
Pension trust fund total $ 24,111,977
Credit risk
Credit risk for fixed income securities is the risk that the issuer will not fulfill its obligations. The City's
investment policy does not address credit risk; however, investments are limi Led to state sponsored
investment pools, which are diversified in their underlying portfolios so that potential losses will be
minimized. The investment policies for the firefighters', police officers' and general employees'
pension trust funds limit investments to securities with specific ranking criteria.
Interest rate risk
Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect
an investment's fair value. In accordance with Florida Statute 218.415(6), the City's policy is to
match investment maturities with known cash needs and anticipated cash flow requirements. The
City's pension trust funds do not address interest rate risk.
-38-
City of Okeechobee, Florida
Notes to Financial Statements
Note 3: DETAILED NOTES ON ALL FUNDS (Continued)
A. DEPOSITS AND INVESTMENTS (Continued)
Concentration of credit risk
Concentration of credit risk is an increased risk of loss that occurs as more investments are
acquired from one issuer (i.e. lack of diversification). The City's investment policy and the
investment policies for the firefighters', police officers' and general employees' pension trust funds
do not specifically address concentration of credit risk.
Foreign currency risk
The City's firefighters', police officers', and general employees' pension trust funds contain
investments in foreign corporate bonds; however, all of the investments are denominated in U.S.
dollars and are not exposed to foreign currency risk.
B. RECEIVABLES
Receivables as of September 30, 2021 are as follows:
Municipal
Police Officers'
General Pension
Fund Trust
Municipal
Firefighters' General
Pension Employees
Trust Pension Trust
Franchise/Utility taxes $ 108,902 $ - $ - $ -
Contributions - 31,211 5,960 32,939
Other 21,917 - - -
Receivables, net $ 130,819 $ 31,211 $ 5,960 $ 32,939
-39-
City of Okeechobee, Florida
Notes to Financial Statements
Note 3: DETAILED NOTES ON ALL FUNDS (Continued)i
C. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2021 was as follows:
Beginning
Balance
Increases
Decreases
Transfers Ending Balance
Governmental activities:
Capital assets, not being depreciated:
Land
$ 1,378,744 $
-
$ -
$ - 1,378,744
Construction in progress
142,615
326,663
-
(142,615) 326,663
Total capital assets, not being depreciated
1,521,359
326,663
-
1142,615) 1,705,407
Capital assets, being depreciated:
Buildings
2,328,204
21,839
-
127,275 2,477,318
Improvements other than buildings
8,096,745
233,469
-
15,340 8,472,758
Equipment
4,101,221
157,144
(711,287)
- 3,419,873
Total capital assets, being depreciated
14,526,170
412,452
(711,287)
142,615 14,369,949
Less accumulated depreciation for:
Buildings
(1,235,190)
(78,670)
-
- (1,313,860)
Improvements other than buildings
(4,249,906)
(340,342)
-
- (4,590,248)
Equipment
(2,461,703)
(236,212)
330,212
- (2,367,613)
Total accumulated depreciation
(7,946,799)
(655,224)
330,212
- (8,271,721)
Total capital assets, being depreciated net
6,579,371
(242,772)
(381,075)
142,615 6,098,228
Governmental activities capital assets net
$ 8,100,730
83,891
$ (381,075)
$ - $ 7,803,635
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government $ 116,804
Public safety 220,245
Physical environment 318,175
Total depreciation expense - governmental activities $ 655,224
-40-
City of Okeechobee, Florida
Notes to Financial Statements
Note 3: DETAILED NOTES ON ALL FUNDS (Continued)
D. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Interfund loans for short-term operating purposes resulted in a due to the General fund from the
Law Enforcement Trust fund of $8,302. All amounts are expected to be repaid within one year.
E. CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended September 30, 2021, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Compensated absences
$ 467,738
$ 363,649
$ (412,265)
$ 413,122 $ 62,215
Net OPEB liability
187,881
30,645
(11,458)
207,068 -
Long-term liabilities
$ 655,619
$ 394,294
$ (423,723)
$ 626,190 $ 62,215
For the governmental activities, compensated absences are generally liquidated by the general fund.
Note 4: OTHER INFORMATION
A. RISK MANAGEMENT
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 non -
assessable public risk pool to cover significant loss exposure and purchases commercial insurance for
third party pollution liability coverage. The pool maintains a loss reserve and purchases specific
excess insurance, aggregate excess insurance and multiple loss coverage frorn commercial carriers
and underwriters.
-41-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS
Plan Descriptions — The City contributes to two single -employer defined benefit: pension plans: City of
Okeechobee Municipal Police Officers' Pension Trust Fund and City of Okeechobee Municipal
Firefighters' Pension Trust Fund (the "Plans"). The Plans provide retirement:, disability and death
benefits to plan members and their beneficiaries. Chapters 185 and 175 of the Florida Statutes
establish the minimum benefits and the minimum standards for the operation and funding of the
Police Officers' and the Firefighters' Municipal Pension Trust Funds, respectively. Per City Ordinances
Nos. 750 and 749, sole responsibility for administering the Plans is vested in the Board of Trustees of
each plan. The Boards cannot amend the provisions of the plans without the approval of the City. The
Plans issue publicly available financial reports that include financial statements and required
supplementary information. The reports are available from the City of Okeeciobee, Florida, 55 S.E.
Third Avenue, Okeechobee, Florida 34974.
At September 30, 2021, the Police Officers' plan included 14 retirees or beneficiaries either receiving
or entitled to receive benefits, plus 3 survivor beneficiaries. The Police Officers' plan also includes 1
terminated member with vested benefits, and has 1 DROP participant. TherE! are 21 active current
employees of which 8 are vested and 13 are non -vested.
At September 30, 2021, the Firefighters' plan included 5 retirees receiving or entitled to receive
benefits, plus 1 beneficiary receiving benefits. The Plan also included 2 DROP participants. There is 1
active current employee who is vested.
Funding Policies — The contribution requirements of plan members and the City are established and
may be amended by City ordinance. Plan members are required to contribute 5% of their annual
covered salary for the Police Officers' and Firefighters' Municipal Trust Funds. The City is required to
contribute an amount equal to the difference in each year between the tonal aggregate member
contributions for the year, plus state contributions for such year, and the norrral cost for the year, as
shown by the most recent actuarial valuation of the plan; the current contribution rate as a
percentage of covered payroll is 11.9% for the Police Officers' plan and 12.C% for the Firefighters'
plan.
The City recognized as revenues and expenditures on -behalf payments relating to pension
contributions for its public safety employees that the State of Florida paid to the Police Officers' and
Firefighters' Plans in the amounts of $86,979 and $45,578, respectively. These contributions are
funded by an excise tax upon certain casualty insurance companies on their gross receipts of
premiums from policy holders.
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS
The City and employees contributions for the year er ded September 30, 2021, areas follows:
City Employees
Police Officers' $ 100,195 $ 56,261
Firefighters' $ 43,576 $ 18,140
Plan Investment Policies and Allocation of Plan Investments - Florida statutes and the plan investment
policy authorize the Trustees to invest funds in various investments. The general investment objective
of the fund is to preserve the purchasing power of the fund's assets and earn a reasonable rate of
return (after inflation) over the long term while minimizing, to the extent reasonable, the short-term
volatility of returns. Best estimates of arithmetic real rates of return for each major asset class
included in the pension plan's target asset allocation as of September 30, 2021, and the current target
and actual allocation of these investments at market, per the performance analysis report, is as
follows as of September 30, 2021:
Police Officers'
Actual Target
Investments Percent Percent
Domestic Equity
49.1%
50.0910
International Equity
14.9%
10.0%
Fixed Income
34.6%
40.0%
Cash Equivalents
1.4%
0.090
Total
100.0%
100.0°0
Firefighters'
Actual Target
Investments Percent Percert
Domestic Equity
45.9%
50.010
International Equity
15.6%
10.01u
Fixed Income
37.8%
40.01'o
Cash Equivalents
0.7%
0.0%
Total
100.0%
100.0%
Money -Weighted Rate of Return - For the year ended September 30, 2021, the annual money -
weighted rate of return on the Police Officers' persion plan investments was 18.76% and on the
Firefighters' pension plan investments was 19.3%. The money -weighted raise of return expresses
investment performance, net of plan investment expenses, as adjusted for the changing amounts
actually invested on a monthly basis.
-43-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS (Continued)
Net Pension Liability (Asset) — The City's net pension liability (asset) was measured as of September 30,
2020, and the total pension liability (asset) used to calculate net pension liability (asset) was
determined by an actuarial valuation as of September 30, 2021 for the Police Officers' and Firefighters
pension plan.
Total Pension Liability
Police Officers'
Firefighters'
Service cost
$ 279,173 $
117,980
Interest
615,045
275,148
Benefit changes
-
(945)
Difference between actual & expected experience
(76,855)
(85,233)
Assumption changes
(211,356)
(96,526)
Benefit payments, including refunds
(557,786)
(152,193)
Net change in total pension liability
48,221
58,231
Total pension liability - beginning
9,051,402
4,073,426
Total pension liability - ending (a)
$ 9,099,623 $
4,131,657
Plan Fiduciary Net Position
Contributions - employer (from City)
Contributions - employer (from State)
Contributions - members
Net investment income
Benefit payments, including refunds
Administrative expense
Other
Police Officers' Firefighters'
$ 126,811 $
86,196
90,650
52,670
53,051
20,552
1,170,587
507,378
(557,786)
(152,193)
(41,667)
(40,275)
(2,155)
652
Net change in plan fiduciary net position 839,491 474,980
Plan fiduciary net position - beginning 9,656,318 4,386,834
Plan fiduciary net position - ending (b) 10,495,809 4,861,814
Net pension liability (asset) - Ending (a) - (b) $ (1,396,186) $ (730,157)
Plan fiduciary net position as a percentage
or Total Pension Liability (Asset) 115.34% 117.67%
For the year ending September 30, 2021, the City recognized a pension expense of $(85,286) for the
Police Officers' Plan and $(8,140) for the Firefighters' Plan. On September ?0, 2021, the Sponsor
reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
-44-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS (Continued)
Police Officers'
Deferred Deferred
Outflow of Inflow of
Resources Resources
Difference between expected and actual experience $ 4,880 $ 325,555
Change in assumptions 31691 180,274
Net difference between projected and actual earnings on
pension plan investments - 315,035
Contributions subsequent to the measurement datE� 187,174 -
Total $ 195,745 $ 820,864
Firefighters'
Deferred
Outflow of
Resources
Deferred
Inflow of
Resources
Difference between expected and actual experience
$ 19,773 $
320,287
Change in assumptions
12,909
90,389
Net difference between projected and actual earnings on
pension plan investments
-
110,320
Contributions subsequent to the measurement date
91,154
-
Total
$ 123,836 $
520,996
Deferred outflows relating to subsequent contribul-ions of $187,174 and $91,154 for the Police
Officers' and Firefighters' Pension Plans, respectively will be recognized as a reduction in net pension
liability in the fiscal year ending September 20, 2021.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pension will be recognized in pension expense as follows:
Police Officers'
Year ended September 30:
2022
$ (283,675)
2023
(179,006))
2024
(115,700)
2025
(157,621)
2026
(42,384)
Thereafter
(33,907)
Total
$ (812,293)
-45
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Firefighters'
Year ended September 30:
2022
$ (110,048)
2023
(78,807)
2024
(78,085)
2025
(105,00:1)
2026
(51,844)
Thereafter
(64,529)
Total
$ (488,314)
Net Pension Liability of the City of Okeechobee — ThE! components of the net pension liability of the
City at September 30, 2021, as follows, is presented in accordance with GASB Statement No. 67, while
the net pensions recognized by the City in the current financial statements represents the net pension
liability measured as of September 30, 2020 which is allowed by GASB Statement No. 68.
Police Fire
Total pension liability $ 9,333,222 $ 4,278,589
Plan fiduciary net position (12,045,012) (5,639,241)
City's net pension asset $ (2,711,790) $ (1,360,652)
Plan fiduciary net position as a
percentage of total pension liability 129.06% 131.80%
Expected Long -Term Rate of Return - The long-term expected rate of return o-i pension investments
was determined using a building-block method in which best estimate ranges of future real rates of
return (expected returns, net of pension plan investment expenses and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of return
by weighting the expected future real rates of return by the target asset allocation percentage and by
adding expected inflation (2.5%) to arrive at a 5.65% projected long-term real rate of return net of
investment expenses. Best estimates of arithmetic real rates of return for Each major asset class
included in the pension plan's target asset allocation as of September 30, 2021 are summarized as
follows:
-46-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Police Officers'
Percent
Long -Term
Investments
Target
Rate of Return"
Domestic Equity
50.0%
7.5%
International Equity
1.0.0%
8.5%
Fixed Income
40.0%
2.5%
Cash Equivalents
0.0%
0.090
Total
100.0
*Net of long-term inflation assumption of 2.5%
Firefighters'
Percent
Long -Term
Investments
Target
Rate of Return*
Domestic Equity
50.0%
7.550
International Equity
1_0.0%
8.590
Fixed Income
40.0%
2.55'0
Cash Equivalents
0.0%
0.050
Total
100.0%
*Net of long-term inflation assumption of 2.5%
Discount Rate - The projection of cash flows used to determine the discount rate assumed that plan
member contributions will be made at the current contribution rate and that sponsor contributions
will be made at rates equal to the difference between actuarially determined contribution rates and
the member rate. Based on those assumptions, the pension plan's fiduciary net position was
projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine t)e total pension liability.
Sensitivity of the Net Pension Liability to Changes in Discount Rate - The following presents the pension
liability of the City, calculated using the discount rate of 7%, as well as what the City's net pension
liability would be if it were calculated using a discount rate that is 1% lower (6%) or 1% higher (8%)
than the current rate for Police Officers' and using a discount rate that is 1% lower (5%) or 1% higher
(7%) for Firefighters':
- 47 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Police Officers'
1% Decrease Current Discount 1% Increase
�5.00% 7.00% 8.00%
Sponsor's net pension liability (asset) $ (1,59!i,461) $ (2,711,790) $ (3,643,838)
Firefighters'
1% Decrease Current Discount 1% Increase
5.00% 6.00% 7.00%
Sponsor's net pension liability (asset) $ (843,843) $ (1,360,,652) $ (1,786,175)
The Employees' Retirement System (Fund) of the City of Okeechobee, Florida
Plan Description - Prior to October 1, 2016, both the Okeechobee Utility Authority (OUA) and the
general employees of the City of Okeechobee, Florida were covered by the City of Okeechobee and
Okeechobee Utility Authority Employee Retirement System. The plan was previously treated as a cost
sharing multiple -employer plan when combined with the Okeechobee Utility Authority. Effective
October 1, 2016, the City contributes to the Employees' Retirement Systern (Fund) of the City of
Okeechobee, Florida (the "System"), a single employer, defined benefit contributory pension trust
administered by the System's Board of Trustees. Substantially all of the City's regular employees
participate in this public employee retirement system. The System was established by City
Ordinance No. 655, as amended and restated by City Ordinance No. 686. The System provides
retirement, disability and death benefits to plan members and their beneficiaries. The Board of
Trustees is authorized by City Ordinance No. 686 to establish and amend all plan provisions. The
System issues a publicly available financial report that includes financial statements and required
supplementary information. That report is available from the City of Okeechobee, Florida, 55 S.E.
Third Avenue, Okeechobee, Florida 34974.
At September 30, 2021, the Plan included 20 retirees and/or beneficiaries currently receiving benefits
plus 7 terminated employees entitled to benefits but not yet receiving them, and 1 DROP participant.
There are 31 active current employees in the Plan, of which 13 are vested and 18 are non -vested.
Funding Policy - The contribution requirements of the plan members and the City are established and
may be amended by City ordinance. Plan members are required to contribute 6% of their covered
annual salary. The City is required to contribute at an actuarially determined rate; the current rate is
4.6% of covered payroll. The City's contributions for the year ended September 30, 2021, was
$114,175, which was $150 less than the actuarially required contribution for the year of $114,325.
Net Pension Liability (Asset) - For the year ending September 30, 2021, the City reported an asset of
$(858,101) for the Pension Plan's net pension (asset). The net pension liability (asset) was measured
as of September 30, 2021, and the total pension liability (asset) used to ca tulate the net pension
liability (asset) was determined by an actuarial valuation as of October 1, 2021.
-48-
City of Okeechobee, Florida
Notes to Firiancial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Gene -al
Total Pension Liability
Service cost
$ 184,223
Interest
315,828
Benefit changes
90,157
Difference between actual & expected experience
2,277
Assumption changes
(47,772)
Benefit payments, including refunds
(201,373)
Net change in total pension liability
343,340
Total pension liability - beginning
4,383,118
Total pension liability - ending (a)
4,726,458
Plan Fiduciary Net Position
Contributions - employer (from City)
118,781
Contributions - members
76,693
Net investment income
503,919
Benefit payments, including refunds
(201,373)
Administrative expense
(40,906)
Other
(652)
Net change in plan fiduciary net position
556,462
Plan fiduciary net position - beginning
51028,097
Plan fiduciary net position - ending (b)
5,584,559
Net pension liability (asset) - Ending (a) - (b)
$ (,358,101)
Plan fiduciary net position as a percertage
of Total Pension Liability (Asset)
118.16%
The City and employees contributions for the year ended September 30, 2021, are as follows.
City Employees
General $ 114,175 $ 73,581
- 49
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Money -Weighted Rate of Return - The annual money -weighted rate of return on plan investments
(calculated as the internal rate of return on plan investments, net of plan investment expense) was
19.17% for the year ended September 30, 2021. The money -weighted rate of return expresses
investment performance, net of plan investment expenses, as adjusted for the changing amounts
actually invested on a monthly basis.
For the year ending September 30, 2021 the City recognized a pension expense of $52,399 for the
General Employees' Retirement Plan. On September 30, 2021, the Sponsor reported deferred
outflows of resources and deferred inflows of resources related to pensions from the following
sources:
General
Deferred Deferred
Outflow of Inflow of
Resources Resources
Difference between expected and actual experience $ 18,223 $ 242,973
Change in assumptions 701,160 38,405
Net difference between projected and actual earnings on
pension plan investments - 172,711
Contributions subsequent to the measurement date 114,175 -
Total $ 202,858 $ 454,089
Deferred outflows relating to subsequent contributions of $114,175 for the General Pension Plan will
be recognized as a reduction in net pension liability in the fiscal year ending September 30, 2021.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pension will be recognized in pension expense as follows:
General
Year ended September 30:
2022
$ (132,053)
2023
(110,580)
2024
(42,6573)
2025
(79,220)
2026
(890)
Total
$ (365,406))
Net Pension Liability of the City of Okeechobee — The components of the net 3ension liability of the
City at September 30, 2021, as follows, is presented in accordance with GASB Statement No. 67, while
the net pensions recognized by the City in the current financial statements represents the net pension
liability measured as of September 30, 2020 which is allowed by GASB Statement No. 68.
-so-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS (Continued)
General
Total pension liability $ 4,912,707
Plan fiduciary net position (6,482,056)
City's net pension asset $ (1,569,349)
Plan fiduciary net position as a
percentage of total pension liability 131.94%
Plan Investment Policies and Allocation of Plan Investments - Florida statutes and the plan
investment policy authorize the Trustees to invest funds in various investments. The general
investment objective of the fund is to preserve the purchasing power of the fund's assets and earn
reasonable rate of return (after inflation) over the long term while minimizing, to the extent
reasonable, the short-term volatility of returns.
General
Percent
Percent
Investments
Actual
Target
Domestic Equity
56.7%
50.0%
International Equity
10.5%
10.0%
Fixed Income
30.7%
40.0%
Cash Equivalents
2.1%
0.0%
Total
100.0%
100.0%
Expected Long -Term Rate of Return - The long term expected rate of return on pension plan
investments was determined using a building-block method in which best estimate ranges of
expected future real rates of return (expected returns, net of pension plan investment expenses
and inflation) are developed for each major asset class. These ranges are combined to produce the
long term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic
real rates of return for each major asset class included in the pension plan's target asset allocation
and actual allocation as of September 30, 2021 are summarized in the following table:
General
Percent
Long -Term
Investments
Target
Rate of Return*
Domestic Equity
5.0.0%
7.5%
International Equity
10.0%
8.5%
Fixed Income
40.0%
2.5%
Cash Equivalents
0.0%
0.0%
Total
100.0%
5.6%
*Net of long-term inflation assumption of 2.5%
-51-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS (Continued)
Discount Rate - The discount rate used to measure the total pension liability was 7.00%. The
Pension Plan's fiduciary net position was projected to be available to make all projected future
benefit payments of the current plan members. Therefore, the long-term =xpected rate of return
on pension plan investments was applied to all periods of projected benefit payments to determine
the total pension liability.
Sensitivity of the City's Proportionate Share of the Net Pension Liability to Changes in Discount Rate
— The following represents the City's proportionate share of the net pension liability calculated
using the discount rate of 7% as well as what the City's proportionate share of the net pension
liability would be if it was calculated using a discount rate that is one percentage point lower (6%)
or one percentage point higher (8%) than the current rate:
General
1% Decrease Current Discount 1% Increase
6.00% 7.00% 8.00%
Sponsor's net pension liability (asset) $ (1,019,162) $ (1,569,349) $ (2,032,737)
Actuarial Assumptions — The total pension liability was determined by an actuarial valuation as of
October 1, 2021 using the following actuarial assumptions applied to all measurement periods.
Fire
Police
General
Actuarial Cost Method
Aggregate
Aggregate
Aggregate
Inflation
2.50%
2.50%
2.50%
Salary Increases
7.00%
6.00%
6.00%
Investment Rate of
Return
6.00%
7.00%
7.00%
100% when first eligible
100% when first eligible
100% when first eligible for
Retirement Age
for Normal Retirement or
for Normal Retirement or
Normal Retirement or
DROP entry
DROP entry
DROP entry
Cost of Living
.05% every odd year
.05% every odd year
None
-52.-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS — DEFINED BENEFIT PLANS (Continued)
Fire
Police
General
For healthy participants
For healthy participants
For healthy participants
during employment, PUB-
during employment, PUB-
during employment, PUB-
2010 Headcount Weighted
2010 Headcount WeightCcl
2010 Headcount Weighted
Safety Employee Female
Safety Employee Female
General Below Median
Mortality Table and Safety
Mortality Table and Safety
Employee Mortality Table,
Below Median Employee
Below Median Employee
separate rates for males
Male Mortality Table, both
Male Mortality Table, bolh
and females, set back 1
set forward 1 year, with
set forward 1 year, with
year for males, with fully
fully generational
fully generational
generational mortality
mortality improvements
mortality improvements
improvements projected to
projected to each future
projected to each future
each future decrement
decrement date with Scale
decrement date with Scale
date with Scale MP-2018.
MP-2018. For healthy
MP-2018. For healthy
For healthy participants
participants
Mortality
participants
post employment, PUB-
postem pto yment PUB-
postemployment, PUB-
2010 Headcount Weighted
2010 Headcount Weighted
2010 Headcount Weighted
General Below Median
Safety Healthy Retiree
Safety Healthy Retiree
Healthy Retiree Mortality
Female Mortality Table
Female Mortality Table
Table, separate rates for
and Safety Below Median
and Safety Below Median
males and females, set
Healthy Retiree Male
Healthy Retiree Male
back 1 year for males, with
Mortality Table, both set
Mortality Table, both set
fully generational mortality
forward 1 year, with fully
Forward 1 year, with fully
improvements projected to
generational mortality
;;enerational mortality
each future decrement
improvements projected
mprovements projected
date with Scale MP-2018.
to each future decrement
Ito each future decrement
For disabled participants,
date with Scale MP-2018.
date with Scale MP-2018.
PUB-2010 Headcount
For disabled participants,
For disabled participants,
Weighted General Disabled
80% PUB-2010 Headcount
80% PUB-2010 Headcouni
Retiree Mortality Table,
Weighted General
Weighted General
separate rates for males
Disabled Retiree Mortality
Disabled Retiree Mortality
and females, both set
Table/20% PUB-2010
-i able/20% PUB-2010
forward 3 years, without
Headcount Weighted
Headcount Weighted
projected mortality
Safety Disabled Retiree
Safety Disabled Retiree
improvements.
Mortality Table, separate
Mortality Table, separate
rates for males and
rates for males and
females, without
females, without
projected mortality
projected mortality
improvements.
improvements.
-53-
City of CAeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS— DEFINED BENEFIT PLANS (Continued)
Pension trust funds fiduciary net position activity as of September 30, 2021 was as follows:
Police General
Firefighters' Officers' Employees' Total Pension
Pension Pension Pension Trust Funds
ASSETS
Cash equivalents
$ 39,292
$ 101,137 $
92,480 $
232,909
Investments:
Mutual funds
5,599,271
11,918,687
6,361,110
23,879,068
Receivables
5,960
31,211
32,939
70,110
Prepaid expenses
2,110
2,594
2,259
6,963
Total assets
5,646,633
12,053,629
6,488,788
24,189,050
LIABILITIES
Accounts payable 7,393 8,617 6,731 22,741
Total liabilities 7,393 8,617 6,731 22,741
NET POSITION
Restricted for pension benefits $ 5,639,240 $ 12,045,012 $ 6,482,057 $ 24,166,309
54 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS- DEFINED BENEFIT PLANS (Continued)
Pension trust funds increase in fiduciary net position activity as of September 30, 2021 was as
follows:
Police General
Firefighte-s' Officers' Employees' Total Pension
Pension Pension Pension Trust Funds
ADDITIONS
Contributions
State
$ 45,578 $
86,979 $ - $
132,557
City
43,576
100,195 114,175
257,946
Employees
18,140
56,261 73,581
147,982
Total contributions
107,294
243,435 :187,756
538,485
Investment earnings:
Net appreciation in the fair value
of investments
740,218
1,601,018
923,295
3,264,531
Interest and dividends
187,159
402,190
:105,098
794,447
Total investment earnings
927,377
2,003,208
1,128,393
4,058,978
Less investment expenses
(21,000)
(22,616)
:19,500)
(63,116)
Net investment earnings
906137'17
1,980,592
1,1.08,893
3,995,862
Total additions
1,013,671
2,224,027
1,1.96,649
4,534,347
DEDUCTIONS
Benefits paid to participants
150,688
351,261
199,564
701,513
Refunds on termination
40,615
6,375
-
46,990
Share plan distribution
-
12,416
-
12,416
DROP payments
-
260,246
155,405
415,651
Administrative expenses
44,943
41,277
44,182
130,402
Total deductions
236,246
671,575
399,151
1,306,972
Change in net position
777,425
1,552,452
897,498
3,227,375
Net position, beginning of year
4,861,815
10,492,560
5,584,559
20,938,934
Net position, end of year
$ 5,639,240
$12,045,012 $
6,482,057 $
24,166,309
- 55 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
C. POSTEMPLOYMENT BENEFITS OTHER THAN PENSION
Plan description. The City of Okeechobee, Florida administers a single -employer defined benefit
healthcare plan (the "Plan") that provides medical insurance to its emplo��ees and their eligible
dependents. Pursuant to Section 112.0801 Florida Statutes, the City is required to provide eligible
retirees (as defined in the City's pension plans) the opportunity to participate in this Plan at the same
cost that is applicable to active employees. Benefit provisions for the Plan were established by City
Council on January 7, 1991 and may only be amended by City Council. The Cit,/ has not established a
trust or agency fund for the Plan. The City does not: issue stand-alone financial statements for this
Plan. All financial information related to the Plan is accounted for in the City's basic financial
statements.
Employees and their dependents may elect to remain in the Plan upon retirement up to age 65. After
age 65 the City's insurance coverage becomes secondary to the retiree's Medicare insurance. The Plan
has 1 retiree receiving benefits and has a total of 63 active participants and dependents.
Funding policy. The City is funding the plan on a pay-as-you-go basis. Employees and their dependents
are required to pay 100% of the insurance premiums charged by the carrier. There is an implied
subsidy in the insurance premiums for these employees because the premium charged for retirees is
the same as the premium charged for active employees, who are younger than retirees on average.
Contributions of plan members for the year ended September 30, 2021 totaled '>1,830.
Plan membership. Plan membership as of September 30, 2021 the measurement date) was:
Number of covered
individuals
Inactive members currently receiving benefits 1
Inactive members entitled to but not yet receiving benefits -
Active members 63
Tota 1 64
The OPEB liability was determined based on the following assumptions and information:
Employer's reporting date: September 30, 2021
Measurement date: September 30, 2020
Valuation date: September 30, 2019
-56-
City of Okeechobee, Florida
Notes to Fir ancial Statements
Note 4: OTHER INFORMATION (Continued)
C. POSTEMPLOYMENT BENEFITS OTHER THAN PENSION (Continued)
Actuarial assumptions and other inputs. On the September 30, 2020 measurement date, the
actuarial assumptions and other inputs applied include the following:
Inflation
Salary increases
Discount rate
Healthcare cost trend rates
Mortality
Changes
Change in Total OPEB Liability
2.25 percent
6.00 percent
2.41 percent
6.50 percen- for FY beginning 2020, 6.25 percent
for FY beginning 2021 and then gradually
decreasing to an ultimate trend of4.00 percent
RP-2000 Generational Combined Healthy
Participant, ,projected from the year 2000 using
Projection Scale AA
Changes in assumptions and other inputs
include the change in the discount ra:e from
2.75% as of the beginning of the measurement
period to 2.41% as of September 30, 2020. This
change is reflected in the Schedule of Changes in
Total OPEB Liability.
Increase (Decrease)
Total OPEB
Liability
(a)
Balance as of September 30, 2020
$ 187,881
Changes for the year:
Service cost
20,845
Interest
5,582
Changes in assumptions and other inputs
4,218
Benefit payments
(11,458)
Net changes
19,187
Balance as of September 30, 2021
$ 207,068
-57-
City of Okeechobee, Florida
Notes to Financial Statements
Note 4: OTHER INFORMATION (Continued)
C. POSTEMPLOYMENT BENEFITS OTHER THAN PENSION (Continued)
Sensitivity of the Total OPEB Liability — The followi ig table represents the City's total OPEB liability
calculated using the discount rate of 2.41%, as well as what the City's net OPEB liability would be if it
were calculated using a discount rate that is one percentage point lower (1.41%) or one percentage
point higher (3.41%) than the current rate:
Total OPEB Liability
Current
1% DEScrease Discount Rate 1% Increase
(1.41%) (2.41%) (3.41%)
$ 214,720 $ 207,068 $ 193,540
The following table represents the City's total OPEB liability calculated using the ultimate health care
cost trend rate of 4.00%, as well as what the City's total OPEB liability would be if it were calculated
using a health care cost trend that is one percentage point lower (3.00%) or one percentage point
higher (5.00%) than the current rate:
1% DE:crease Ultimate Trend 1% Increase
(3.00%) (4.00%) (5.00%)
Total OPEB Liability $ 173,636 $ 207,068 $ 248,239
D. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations generally apply to legal obligations associated with the retirement of a
tangible long-lived asset that result from the acquisition, construction, or development and the
normal operation of a long-lived asset. The City assesses asset retirement obligations on a periodic
basis. If a reasonable estimate of fair value can be made, the fair value of a liability for an asset
retirement obligation is recognized in the period in which it is incurred or a charge in estimate occurs.
The City has an above ground fuel storage tank which is regulated by Florida Administrative Code
(FAC) 62-762, and requires certain activities if use of the fuel storage tank is discontinued. The City has
determined it cannot reasonably estimate the fair value of the liability for disposal of this item and,
accordingly, has not recorded an asset retirement obligation for this matter.
58 -
City of Okeechobee, Florida
Notes to Financial Statements
Note 5: UNCERTAINTIES
In March 2020, the World Health Organization mace the assessment that the outbreak of a novel
coronavirus (COVID-19) can be characterized as a pandemic. As a result, broad domestic and
international stock market indices have declined and the City's fair value of investments has declined
similarly. Such declines in the fair value of investments held by the City may materially and adversely
impact the City's ability to achieve its investment objectives and therefore, its operational objectives.
In addition, the extent to which these events will affect the amounts reported in future financial
statements remains uncertain.
Note 6: SUBSEQUENT EVENTS
Management evaluated all events or transactions that occurred after September 30, 2021 through
June 1, 2022, the date the current year's financia statements were available to be issued. The
following events occurred:
In November 2021, the City approved a proposal from a Company, not to exceed $32,763 for the
purchase of park furnishings for Cattleman's Square Park.
In December 2021, the City approved an agreement for professional and custodial cleaning services in
the amount of $20,660 for 3 years each beginning January 1, 2022.
In January 2022, the City received a grant for $131,000 for South Park Street and downtown
landscaping.
In February 2022, the City approved a contract with a Company for $49,924 for City Commerce Center
improvements.
In April 2022, the City approved the purchase of a cleaner truck for $301,488 through the use of the
American Rescue Plan Act funds. In addition, two agreements were approved, one with a Company
for $52,710 for survey and design engineering for the SW 5th Avenue FDOT SCOP resurfacing project
and the other for $18,600 for professional services for the SE 4th Street Stormwater Improvement
Project.
In May 2022, the City approved to piggyback on the Broward County Storm Drain Cleaning, Repairs,
and Maintenance Agreement with a Company for 1he South 4th Street Pipe Lining Project in the
amount of $803,339.
- 59
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
-01-
City of Okeechobee, Florida
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - General Fund
Actual Variance with
Original Final (on 1udgetary Final Budget
Year ended September 30, 2021 Budget Budget Basis) Positive (Negative)
Revenues
Taxes
$ 3,155,759
$ 3,271,758
$ 3,295,724 $
23,966
Intergovernmental
2,660,904
2,637,540
2,690,722
53,182
Charges for services
493,910
540,600
544,146
3,546
Permits and fees
554,500
767,700
782,582
14,882
Fines and forfeitures
21,975
125,400
129,557
4,157
Investment earnings
96,000
11,000
10,660
(340)
Miscellaneous
3,100
80,203
88,566
8,363
Total revenues
6,986,.148
7,434,201
7,541,957
107,756
Expenditures
Current:
General government:
Legislative
213,771
208,800
205,511
3,289
Executive
252,322
296,980
291,161
5,819
City clerk
288,057
306,410
307,785
(1,375)
Financial services
333,055
332,525
309,197
23,328
Legal council
166,400
173,020
158,392
14,628
General services
515,573
483,110
479,326
3,784
Total general government
1,769,178
1,800,845
1,751,372
49,473
Public safety:
Fire
1,458,050
1,514,950
1,454,933
60,017
Police
3,084,217
2,961,470
2,870,149
91,321
Total public safety
4,542,267
4,476,420
4,325,082
151,338
Transportation
1,755,�174
1,440,300
1,407,721
32,579
Recreation
-
-
1,344
(1,344)
Physical environment
368,000
552,100
506,823
45,277
Capital outlay
155,900
230,000
204,889
25,111
Total expenditures
8,590,819
8,499,665
8.197,231
302,434
Excess (deficiency) of revenues under
(over) expenditures
(1,604,671)
(1,065,464)
(655,274)
410,190
Other financing sources (uses)
Operating transfers in
-
200,000
200,000
Sale of capital assets
6,000
38,500
38,536
36
Net other financing sources (uses)
6,000
38,500
238,536
200,036
Excess (deficiency) of revenues and other
financing sources over (under)
expenditures and other financing
sources (uses)
(1,598,671)
(1,026,964)
(416,738) '
610,226
Fund balances, beginning of year
10,623,247
10,623,247
10,623,247
-
Fund balances, end of year $ 9,024,576 $ 9,596,283
econcihation of budgetary
to GAAP basis
Current year encumbrances
Prior year encumbrances
Fund balance on GAAP basis
10,206,509 $ 610,226
308,610
(272,236)
$ 10,242,883
The accompanying notes to required supplementary information are an integral part of this schedule.
-63-
City of Okeechobee, Florida
Required Pension Supplementary Information
Police Officers'
Total Pension Liability
Service cost
2021 2020 2019
277,048 $ 279,173 $ 254,066
Interest
635,386
615,045
607,391
Difference between actual & expected experience
(48,536)
(76,855)
(153,927)
Assumption changes
-
(2'11,356)
-
Benefit payments
(630,299)
(557,786)
(502,852)
Refunds
-
-
(12,836)
Net change in total pension liability
233,599
118,221
191,842
Total pension liability - beginning
9,099,623
9,051,402
8,859,560
Total pension liability - ending (a)
9,333,222
9,099,623
9,051,402
Plan Fiduciary Net Position
Contributions - employer (from City)
Contributions - employer (from State)
Contributions - members
100,195
116,811
130,886
86,979
90,650
90,153
56,261
53,051
50,359
Net investment income
1,980,592
1,170,587
330,227
Benefit payments
(623,923)
(542,324)
(502,852)
Refunds
(6,376)
(1.5,462)
(12,836)
Administrative expense
(41,277)
(41,667)
(47,116)
Other
(3,248)
;2,155)
-
Net change in plan fiduciary net position
1,549,203
8-!9,491
38,821
Plan fiduciary net position - beginning
10,495,809
9,656,318
9,617,497
Plan fiduciary net position - ending (b)
12,045,012
10,495,809
9,656,318
Net pension liability (asset) - Ending (a) - (b)
$ (2,711,790)
$ (1,396,186)
$ (604,916)
Plan fiduciary net position as a percentage
of Total Pension Liability
Covered payroll"
Net pension liability as a percentage
of covered payroll
129.06%-R ' 1'�5.34% 106.68%
1,125,784 $ 1,061,193 $ 1,007,180
-240.88%-131.57%-60.06%
Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year
trend is complied, the City presents information for those years for which information is available.
* -The net pension liability recognized by the City in the current year financial statements represents the net position liability as
of September 30, 2020, which is allowed by GASB 68.
** Covered payroll was calculated by dividing the total member contributions for the fiscal year, net of any known buyback
contributions, by the member contribution rate of 5%.
Assumption changes:
- Effective 10/1/2016, the mortality rates were changed from the RP-2000 Combined Healthy Participant Mortality Tables,
using projection scale AA to the mortality rates used by the Florida Retirement System (FRS) for Special Risk Class members.
This change was made in compliance with Florida House Bill 1309, which requires all public pension plans in Florida to use the
same mortality rates used in either of the last two actuarial valuation reports of FRS effective no later than 10/1/2016.
- Use of Insurance Tax Premium Revenue (IPTR) received by the State is subject to the default rules of Senate Bill 172 (codified
in Chapter 2015-39) beginning with the IPTR received for the 2015 calendar year.
The accompanying notes to required supplementary information are an integral part of this schedule.
-64-
City of Okeechobee, Florida
Required Pension Supplementary Information
2018* 2017 2016 2015 2014
$ 258,622
$ 235,345 $
264,445
$ 247,353
$ 251,499
580,995
573,285
543,946
506,147
479,146
(276,621)
(270,100)
126,875
(219,850)
(784)
-
22,143
-
94,065
-
(281,028)
(255,731)
(468,694)
(203,855)
(201,397)
72,669
-
(25,003)
(321)
(26,953)
354,637
304,942
441,569
423,539
501,511
8,504,923
8,199,981
7,758,412
7,334,873
6,833,362
8,859,560
8,504,923
8,199,981
7,758,412
7,334,873
151,492
169,789
147,312
192,581
200,210
81,690
78,659
73,960
70,807
67,639
46,212
45,863
45,554
47,740
43,135
727,699
903,712
607,763
(95,964)
694,790
(281,028)
(255,731)
(468,694)
(203,855)
(201,397)
-
-
(25,003)
(321)
(26,953)
(45,827)
(41,855)
(32,120)
(30,198)
(18,097)
-
(3,284)
(6)
3,886
-
680,238
897,153
348,766
(15,324)
759,327
8,937,259
8,040,106
7,691,340
7,706,664
6,947,337
9,617,497
8,937,259
8,040,106
7,691,340
7,706,664
$ (757,937)
$ (432,336) $
159,875
$ 67,072
$ (371,791)
108.56% 105.08% 98.05% 99.14% 105.07%
$ 924,250 $ 917,260 $ 970,646 $ 911,189 $ 862,700
-82.01%-47.13% 16.47% 7.36%-43.10%
The accompanying notes to required supplementary information are an integral part of this schedule.
-65-
City of Okeechobee, Florida
Required Pension Supplementary Information
Firefighters'
2021
2020
2019
Total Pension Liability
Service cost '?
64,244 $
117,980
$ 145,856
Interest
247,616
275,148
271,341
Benefit changes
268,575
(945)
Difference between actual & expected experience
(242,201)
(85,233)
(132,896)
Assumption changes
-
(96,526)
-
Benefit payments
(191,302)
(152,193)
(141,381)
Refund
-
-
(9,052)
Other
-
-
-
Net change in total pension liability
146,932
58,231
133,868
Total pension liability - beginning
4,131,657
4,073,426
3,939,558
Total pension liability - ending (a)
4,278,589
4,131,657
4,073,426
Plan Fiduciary Net Position
Contributions - employer (from City)
43,576
86,196
83,988
Contributions - employer (from State)
45,578
52,670
52,810
Contributions - members
18,140
20,552
23,945
Net investment income
906,378
507,378
140,894
Benefit payments
(150,688)
(150,688)
(141,381)
Refunds
(40,614)
(1,505)
(9,052)
Administrative expense
(44,943)
(40,275)
(43,675)
Other
-
652
-
Net change in plan fiduciary net position
777,427
474,980
107,529
Plan fiduciary net position - beginning
4,861,814
4,386,834
4,279,305
Plan fiduciary net position - ending (b)
5,639,241
4,861,814
4,386,834
Net pension liability (asset) - Ending (a) - (b)
$ (1,360,652) $
(730,157)
$ (313,408)
Plan fiduciary net position as a percentage
of Total Pension Liability 131.80% 117.67% 107.69%
Covered payroll" 367,446 411,033 478,900
Net pension liability as a percentage
of covered payroll-370.30%-177.64%-65.44%
Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year
trend is complied, the City presents information for those years for which information is available.
* -The net pension liability recognized by the City in the current year financial statements represents the net position liability as
of September 30, 2020, which is allowed by GASB 68.
** Covered payroll was calculated by dividing the total member contributions for the fiscal year, net of any known buyback
contributions, by the member contribution rate of 5%.
Assumption changes:
- Effective 10/1/2016, the mortality rates were changed from the RP-2000 Combined Healthy Participant Mortality Tables,
using projection scale AA to the mortality rates used by the Florida Retirement System (FRS) for Special Risk Class members.
This change was made in compliance with Florida House Bill 1309, which requires all public pension plans in Florida to use the
same mortality rates used in either of the last two actuarial valuation reports of FRS effective no later than 10/1/2016.
- Use of Insurance Tax Premium Revenue (IPTR) received by the State is subject to the default rules of Senate Bill 172 (codified
in Chapter 2015-39) beginning with the IPTR received for the 2015 calendar year.
The accompanying notes to required supplementary information are an integrcI part of this schedule.
-66-
City of Okeechobee, Florida
Required Pension Supplementary Information
2018* 2017 2016 2015 2014
$ 136,825
$ 156,989 $
156,107
$ 144,773
$ 130,539
257,407
255,218
235,684
213,154
196,106
(162,443)
(91,659)
56,393
(19,771)
(741)
-
(13,449)
-
49,797
-
(107,105)
(106,572)
(102,590)
(96,939)
(142,060)
(16,027)
(20,437)
-
-
-
19,828
-
3,256
-
-
128,485
180,090
348,850
291,014
183,844
3,811,073
3,630,983
3,282,133
2,991,119
2,807,275
3,939,558
3,811,073
3,630,983
3,282,133
2,991,119
115,253
107,123
97,709
92,863
82,058
52,793
50,589
49,889
52,662
53,235
23,446
25,409
27,433
26,324
23,854
308,920
404,267
246,381
(44,021)
318,708
(107,105)
(106,572)
(102,590)
(96,939)
(142,060)
(16,027)
(20,437)
-
-
-
(59,878)
(34,933)
(31,639)
(27,132)
(16,233)
-
(6,375)
(1,766)
-
-
317,402
419,071
285,417
3,757
319,562
3,961,903
3,542,832
3,257,415
3,253,658
2,934,096
4,279,305
3,961,903
3,542,832
3,257,415
3,253,658
$ (339,747)
$ (150,830) $
88,151
$ 24,718
$ (262,539)
108.62%
103.96%
97.57%
99.25%
108.78%
$ 468,920 $
508,180 $
563,285 $
523,119 $
477,080
-72.45%
-29.68%
15.65%
4.73%
-55.03%
The accompanying notes to required supplementary information are an integral part of this schedule.
- 67 -
City of Okeechobee, Florida
Required Pension Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Last Six Fiscal Years
General Employees'
2021
2020
2019
Total Pension Liability
Service cost 'i
207,835 $
134,223
$ 152,255
Interest
333,141
315,828
295,453
Benefit changes
-
'90,157
Difference between actual & expected experience
242
2,277
(141,938)
Assumption changes
-
(47,772)
-
Benefit payments
(354,969)
(201,373)
(259,463)
Refunds
-
-
(346)
Other ***
-
-
-
Net change in total pension liability
186,249
343,340
45,961
Total pension liability - beginning
4,726,458
4,383,118
4,337,157
Transfer of pension liability for Okeechobee
Utility Authority *****
-
-
-
Total pension liability - ending (a)
4,912,707
4,726,458
4,383,118
Plan Fiduciary Net Position
Contributions - employer
114,175
118,781
115,324
Contributions - members
73,581
76,693
66,020
Net investment income
1,108,894
603,919
155,830
Benefit payments
(354,969)
(178,547)
(259,463)
Refunds
-
(22,826)
(346)
Administrative expense
(44,184)
(40,906)
(53,249)
Other****
_
(652)
-
Net change in plan fiduciary net position
897,497
5,56,462
24,116
Plan fiduciary net position - beginning
5,584,559
5,028,097
5,003,981
Transfer plan fiduciary net position to Okeechobee
Utility Authority*****
-
-
-
Plan fiduciary net position - ending (b)
6,482,056
5,584,559
5,028,097
Net pension liability (asset) - Ending (a) - (b) $ (1,569,349) $ (858,101) $ (644,979)
Plan fiduciary net position as a percentage
of Total Pension Liability 131.94%<— 118.16% 114.72%
Covered payroll** $ 1,229,302 $ 1,278,231 $ 1,100,333
Net pension liability as a percentage
of covered payroll-127.66%-67.13%-58.62%
The accompanying notes to required supplementary information are an integral part of this schedule.
-68-
City of Okeechobee, Florida
Required Pension Supplementary Information
2018* 2017 2016
$ 154,529
$ 136,373 $
421,387
284,633
91,058
763,785
20,956
-
(524,849)
-
133,790
-
(164,189)
(336,740)
(331,215)
(16,592)
(17,378)
(18,267)
-
2,641,019
-
279,337
2,648,122
310,841
4,057, 820
1,409, 698
11,400,112
- - (10,301,255)
4,337,157 4,057,820 1,409,698
75,793
94,009
446,184
60,312
56,405
183,145
394,042
477,649
825,935
(164,189)
(336,740)
(331,215)
(16,592)
(17,378)
(18,267)
(46,328)
(48,490)
(57,186)
-
3,117,018
(2,208)
303,038
3,342,473
1,046,388
4,700,943
1,358,470
10,238,992
- - (9,926,910)
5,003,981 4,700, 943 1,358,470
$ (666,824) $ (643,123) $ 51,228
115.37% 115.85% 96.37%
$ 1,005,204 $ 940,083 $ 911,233
-66.34%-68.41% 5.62%
The accompanying notes to required supplementary information are an integral part of this schedule.
-69-
City of Okeechobee, Florida
Required Pension Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Last Six Fiscal Years
Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is complied, the
City presents information for those years for which information is available.
* The net pension liability recognized by the City in the current year financial statements represents the net Dosition liability as of September 30,
2020, which is allowed by GASB 68.
** Covered Payroll was calculated by dividing the total member contributions for the fiscal year by the member contribution rate of 6%.
*** The Total Pension Liability, the Plan Fiduciary Net Position, and the Net Pension Liability as of September 30, 2015 were allocated based on the
portion of the Employer's Total Required Contribution (from October 1, 2015 Actuarial Valuation dated April 25, 2016). The October 1, 2015
Valuation determined the required employer contribution for the plan year end September 30, 2017.
**** Due to the change in nature of the Plan, from a cost sharing to a single employer plan (effective October 1, 2016). Also reflects $59, 910 post -
valuation adjustment to match audited financial statements.
***** Due to the change in nature of the Plan, from a cost sharing to a s ngle employer plan (effective October 1, 2016).
Assumption changes:
- Effective 10/1/2016, the mortality rates were changed from the RP-2000 Combined Healthy Participant Mortality Tables, using projection scale AA
to the mortality rates used by the Florida Retirement System (FRS) for Special Risk Class members. This change was made in compliance with Florida
House Bill 1309, which requires all public pension plans in Florida to use the same mortality rates used in either of the last two actuarial valuation
reports of FRS effective no later than 10/1/2016.
- Effective 10/1/2016, OUA employees are covered under a separately established Plan, the Okeechobee Uti ity Authority Employees' Retirement
System, and are no longer covered under the City of Okeechobee General Employees' Retirement System.
The accompanying notes to required supplementary information are an integral part of this schedule.
-70-
I
Schedule of Contributions
Last Eight Fiscal Years
City of Okeechobee, Florida
Required Pension Supplementary Information
Police Officers
9/30/2021
9/30/20213
9/30/2019
Actuarially determined contributions
$ 185,025 $
192,448 $
204,611
Contributions in relation to the actuarially
determined contributions
187,174
217,461.
221,039
Contribution deficiency (excess)
$ (2,149) $
(25,013) $
(16,428)
Covered payroll*
Contributions as a percentage of covered
payroll
$ 1,125,784 $ 1,061,193, $ 1,007,180
Firefighters
16.63% 20.499% 21.95%
9/30/2021
9/30/2023
9/30/2019
Actuarially determined contributions
$ 104,102 $
157,372' $
139,143
Contributions in relation to the actuarially
determined contributions
89,154
138,86E
136,798
Contribution deficiency (excess)
$ 14,948 $
18,506 $
2,345
Covered payroll*
Contributions as a percentage of covered
payroll
$ 367,446 $ 411,033. $ 478,900
24.26% 33.78S/o 28.57%
General Employees
9/30/2021 9/30/202D 9/30/2019
Actuarially determined contributions $ 114,325 $ 118,875 $ 114,875
Contributions in relation to the actuarially
determined contributions 114,175 118,781. 115,324
Contribution deficiency (excess) $ 150 $ 94. $ (449)
Covered payroll
Contributions as a percentage of covered
payroll
$ 1,229,302 $ 1,278,239. $ 1,100,333
9.29% 9.299/o 10.48%
Note: This schedule is presented to illustrate the requirement to show information for 10
years. However, until a full 10-year trend is compiled, the City presents information for those
years for which information is available.
* Based on payroll provided for actuarial valuations; Covered payroll was calculated by
dividing the total member contributions for the fiscal year, net of any known buyback
contributions, by the member contribution rate of 5%.
-72-
City of Okeechobee, Florida
Required Pension Supplementary Information
9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014
$ 212,571 $ 251,591 $ 219,093 $ 2153,240 $ 267,849
233,182
248,448
221,272
263,388 267,849
$ (20,611) $
3,143 $
(2,179) $
(148) $ -
$ 924,250 $
917,260 $
970,646 $
9:11,189 $ 862,700
25.23%
27.09%
22.80%
28.91% 31.05%
9/30/2018
9/30/2017
9/30/2016
9/30/2015
9/30/2014
$ 167,871
$ 170,269
$ 143,632
$ 1:38,914
$ 122,212
168,046
157,712
147,598
145,525
135,293
$ (175)
$ 12,557
$ (3,966)
$ (6,611)
$ (13,081)
$ 468,920
35.84%
$ 508,180
31.03%
$ 563,285
26.20%
$ 523,119
27.82%
$ 477,080
28.36%
9/30/2018
9/30/2017
9/30/2016
9/30/2015
9/30/2014
$ 75,793
$ 42,774
$ 49,115
$ 379,111
$ 379,099
75,793 94,009 110,448 3-79,111 379,099
$ - $ (51,235) $ (61,333) $ - $ -
$ 1,005,204 $
940,083 $
911,233
$3,135,961
$2,945,717
7.54%
10.00%
12.12%
12.09%
12.87%
-73-
Schedule of Investment Returns
Last Eight Fiscal Years
City of Okeechobee, Florida
Required Pension Supplementary Information
Police Officers'
9/30/2021 9/30/2020 9,130/2019 9/30/2018 9/30/201T 9/30/2016 9/30/2015 9/30/2014
Annual money -weighted rate of return
net of investment expense 18.76% 11.78% 3.10% 8.73% 10.68% 7.59% -1.65% 9.96%
Fire Fighters'
9/30/2021 9/30/2020 9,130/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Annual money -weighted rate of return
net of investment expense 19.30% 10.61% 2.39% 6.11% 10.76% 6.83% -2.19% 10.43%
General Employees'
9/30/2021 9/30/2020 9,130/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014
Annual money -weighted rate of return
net of investment expense 19.17% 11.37% 2.23% 7.55% 9.78% 7.78% -1.38% 10.60%
Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is
complied, the City presents information for those years for which information is available.
-74-
City of Okeechobee, Florida
Schedule of Changes in Total OPEB Liability and Related Ratios
Year Ending September 30,
2021
2020
2019
2018
Total OPEB liability
Service cost
$ 210,845 $
12,015 $
12,580 $
13,441
Interest
5,582
6,320
5,640
4,977
Difference between expected
and actual experience
-
6,792
-
-
Changes of assumptions or other inputs
4,218
14,710
(4,290)
(3,808)
Benefit payments
(11,458)
(9,915)
(9,081)
(17,198)
Net change in total OPEB liability
119,187
29,922
4,849
(2,588)
Total OPEB liability - beginning
187,881
157,959
153,110
155,698
Total OPEB liability - ending
$ 20-7,068 $
187,881 $
157,959 $
153,110
Covered employee payroll $ 3,359,887 $ 3,041,518 $ 2,984,722 $ 2,809,503
Total OPEB liability as a percentage of
covered employee payroll 6.16% 6.18% 5.29% 5.45%
* GASB 75 requires an employer to disclose a 10-year history. However,
full 10-year trend is compiled, information will be presented only for
years which information is available.
* The following
discount rate was used in each period:
9/30/2018 -
3.50%
9/30/2019 -
3.83%
9/30/2020 -
2.75%
9/30/2021 -
2.41%
-75-
City of Okeechobee, Florida
Notes to Required Supplementary Information
A. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with U.S. generally accepted accounting principles
for all governmental funds. All annual appropriations lapse at fiscal year-end.
The City Administrator may make transfers of appropriations within a department as long as the total
budget of the department is not increased. Trarsfers of appropriations between departments
required the approval of the council. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the department level. The council made
certain supplemental appropriations during the year.
Encumbrances accounting is employed in governmental funds. Encumbrances (e.g., purchase orders,
contracts) outstanding at year-end are reported as restricted or assigned fund balances and do not
constitute expenditures or liabilities because the commitments will be re -appropriated and honored
during the subsequent year.
76 -
City of Okeechobee, Florida
Notes to Required Supplementary Information
A. ADDITIONAL ACTUARIAL INFORMATION
Valuation Date: 10/01/2021
Notes: Actuarially determined contribution rates are calculated as of October 1, which is two years
prior to the end of the fiscal year in which contributions are reported.
Methods and Assumptions Used to Determine Contrilsutions Rates:
Actuarial Cost
Method:
Amortization
Method:
Remaining
Amortization
Period:
Asset Valuation
Method:
Salary Increases:
Inflation:
Investment Rate
of Return:
Retirement Age:
Mortality:
Police Officers' Pension Firefighters' Pension General Pension Plan
Plan Plan
Aggregate
N/A
N/A
4-year smoothed
market
6.00%
2.50%
7.00%
100% when first eligible
for Normal Retirement
or DROP entry
For healthy participants
during employment,
PUB-2010 Headcount
Weighted Safety
Employee Female
Mortality Table and
Safety Below Median
Employee Male
Mortality Table, both
set forward 1 year, with
fully generational
mortality improvements
projected to each future
decrement date with
Scale MP-2018.
Aggregate
N/A
N/A
4-year smoothed
market
7.00 9�o
2.5090
6.00 io
100% when first eligible
for Normal Retirement
or DROP entry.
For healthy participants
during employment,
PUB-2010 Headcount
Weig-ited Safety
Employee Female
Mortality Table and
Safety Below Median
Employee Male
Mortality Table, both
set fcrward 1 year, with
fully generational
mortality improvements
projected to each future
decre ment date with
Scale MP-2018.
Aggregate
N/A
N/A
4-year smoothed
market
6.00 %
2.50%
7.00%
100% when first eligible
for Normal Retirement
or DROP entry
For healthy participants
during employment,
PUB-2010 Headcount
Weighted General
Below Median
Employee Mortality
Table, separate rates for
males and females, set
back 1 year for males,
with fully generational
mortality improvements
projected to each future
decrement date with
Scz le MP-2018.
City of Okeechobee, Florida
Notes to Required Supplementary Information
Police Officers' Pension
Firefighters' Pension
General Pension Plan
Plan
Plan
Mortality For healthy participants
For healthy participants
Far healthy participants
(Continued): postemployment, PUB-
postemployment, PUB-
post employment, PUB-
2010 Headcount
2010 Headcount
2010 Headcount
Weighted Safety
Weighted Safety
Weighted General
Healthy Retiree Female
Healthy Retiree Female
Below Median Healthy
Mortality Table and
Mortality Table and
Retiree Mortality Table,
Safety Below Median
Safety Below Median
separate rates for males
Healthy Retiree Male
Healthy Retiree Male
and females, set back 1
Mortality Table, both
Mortality Table, both
year for males, with
set forward 1 year, with
set forward 1 year, with
fully generational
fully generational
fully generational
mortality improvements
mortality improvements
mortality improvements
projected to each future
projected to each future
projected to each future
decrement date with
decrement date with
decrement date with
Scale MP-2018. For
Scale MP-2018. For
Scale MP-2018. For
disabled participants,
disabled participants,
disabled participants,
PUB-2010 Headcount
80% PUB-2010
80% PUB-2010
Weighted General
Headcount Weighted
Headcount Weighted
Disabled Retiree
General Disabled
Gerneral Disabled
Mortality Table,
Retiree Mortality
Retiree Mortality
separate rates for males
Table/20% PUB-2010
Table/20% PUB-2010
and females, both set
Headcount Weighted
Headcount Weighted
forward 3 years,
Safety Disabled Retiree
Safety Disabled Retiree
without projected
Mortality Table,
Mortality Table,
mortality
separate rates for males
separate rates for males
improvements.
and females, without
and females, without
projected mortality
projected mortality
improvements.
improvements.
-78-
CRIC A R R
RIGGS &
INGRAM
CPAs and Advisors
Carr, Riggs & Ingram, LLC
215 Baytree Drive
Melbourne, Florida 32940
(321) 255-0088
(321) 259-8648 (fax)
ww`v.chcpa.com
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, each major fund and the aggregate remaining fund information of the City of
Okeechobee, Florida, as of and for the year ended September 30, 2021, and the related notes to
the financial statements, which collectively comprise the City of Okeechobee, Florida's basic
financial statements, and have issued our report thereon dated June 1, 2022. Other auditors audited
the financial statements of the City of Okeechobee, Florida Municipal Police Officers' Pension Trust
Fund and City of Okeechobee, Florida Municipal Firefighters' Pension Trust Fund and the City of
Okeechobee Employees' Retirement System, as described in our report on the City of Okeechobee,
Florida's financial statements. This report does not include the results of the other auditors' testing
of internal control over financial reporting or compliance and other matters that are reported on
separately by those auditors.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. However, as below, we did identify a certain
deficiency in internal control that we consider to be a material weaknesses.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements lNill not be prevented,
or detected and corrected, on a timely basis. We consider the deficiency identified as MW 2021-
001 to be a material weakness.
-79-
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is
less severe than a material weakness, yet important enough to merit attentior by those charged
with governance.
MW 2021-001 ACCOUNTS PAYABLE
Criteria: Expenditures need to be recorded in the period in which the expense vvas incurred.
Condition: One expenditure was recorded in the inco -rect period.
Cause: The expenditure was entered according to the invoice date instezd of the period the
services were rendered.
Effect: Accounts payable and expenditures were understated by $130,215 in the general fund.
Recommendation: The City should implement procedures to ensure all invoices received dated
shortly after year end are examined for the period in which services were rerdered or goods were
received.
Management Response: The City currently has procedures in place to identi�'y year end payables.
There was one item recorded in the wrong period based on the invoice date not date services
rendered. The city will scrutinize each invoice for date services rendered and or goods received and
apply the appropriate date for entry at year end for appropriate recording of account payables.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Okeechobee, Florida's financial
statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the financial statements. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
The City of Okeechobee's Responses to Findings
The City's responses to the findings identified in our audit are described above The City's responses
were not subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on them.
W-19111111111
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
IS i 11 A lr l Y �
Melbourne, Florida
June 1, 2022
81-
CRIC A R R Carr, Riggs & Ingram, LLC
RIGGS & 215 elbourreeodve
N G R A M Melbourne, Florida 32940
CPAs and Advisors (321)255-0088
(321) 259-8648 (fax)
www,cdcpa.com
INDEPENDENT AUDITORS' MANAGEMENT LETTER
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
Report on the Financial Statements
We have audited the financial statements of the City of Okeechobee, Florida as of and for the fiscal
year ended September 30, 2021, and have issued our report thereon dated June 1, 2022.
Auditors' Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States and Chapter 10.550, Rules of the
Auditor General.
Other Reporting Requirements
We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and
on Compliance and Other Matters Based on an Audit of the Financial Sta!',ements Performed in
Accordance with Government Auditing Standards and Independent Accountants' Report on an
examination conducted in accordance with AICPA Professional Standards, AT-C Section 315,
regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor
General. Disclosures in those reports, which are dated June 1, 2022, should be considered in
conjunction with this management letter.
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address Findings and recommendations made in the
preceding financial audit report. There were no recommendations made in the preceding financial
audit report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed
in this management letter, unless disclosed in thE! notes to the financial statements. The legal
authority of the City of Okeechobee, Florida and its component units are disclosed in the footnotes.
-83-
Financial Condition and Management
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate
procedures and communicate the results of our dE!termination as to whether or not the City of
Okeechobee, Florida met one or more of the conditions described in Secticin 218.503(1), Florida
Statutes, and to identify the specific conditions) me:. In connection with our audit, we determined
that the City of Okeechobee, Florida did not meet any of the conditions described in Section
218.503(1), Florida Statutes.
Pursuant to Sections 10.554(1)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied
financial condition assessment procedures for the City of Okeechobee, Florida. It is management's
responsibility to monitor the City of Okeechobee, Florida's financial condition, and our financial
condition assessment was based in part on representations made by management and review of
financial information provided by same.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any
recommendations to improve financial management In connection with our a udit, we did not have
any such recommendations.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance
with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but which
warrants the attention of those charged with governance. In connection with our audit, we did not
note any such findings.
Purpose of this Letter
Our management letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, Federal and other granting agencies, the members of the City Council, and applicable
management, and is not intended to be and should nct be used by anyone other than these specified
parties.
Melbourne, Florida
June 1, 2022
INM
CRIINGRAM
R
CPAs and Advisors
Carr, Riggs & Ingram, LLC
215 Baytree Drive
Melbourne, Florida 32940
(321) 255-0088
(321) 259-8648 (fax)
www.cdcpa.com
INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH LOCAL GOVERNMENT
INVESTMENT POLICIES
The Honorable Mayor and Members of the City Council
Of the City of Okeechobee, Florida
We have examined the City of Okeechobee, Florida's compliance with the requirements of Section
218.415, Florida Statutes, Local Government Investment Policies, during the year ended September 30,
2021. Management of the City of Okeechobee, Florida is responsible for thE! City of Okeechobee,
Florida's compliance with the specified requirements. Our responsibility is to express an opinion on
the City of Okeechobee, Florida's compliance with the specified requirements based on our
examination.
Our examination was conducted in accordance with attestation standards established by the
American Institute of Certified Public Accountants. Those standards requ re that we plan and
perform the examination to obtain reasonable assurance about whether thE- City of Okeechobee,
Florida complied, in all material respects, with the specified requirements referenced above. An
examination involves performing procedures to obtain evidence about vvhether the City of
Okeechobee, Florida complied with the specified requirements. The nature, timing, and extent of
the procedures selected depend on our judgment, including an assessment of the risks of material
noncompliance, whether due to fraud or error. We believe that the evidence obtained is sufficient
and appropriate to provide a reasonable basis for our opinion.
Our examination does not provide a legal determination on the City of Okeechobee, Florida's
compliance with specified requirements.
In our opinion, the City of Okeechobee, Florida complied, in all material respects, with the
requirements of Section 218.415, Florida Statutes, Local Government Investmert Policies, for the year
ended September 30, 2021.
This report is intended solely for the information and use of management and the State of Florida
Auditor General, is not intended to be, and should not be used by anyone other than these specified
parties.
Melbourne, Florida
June 1, 2022
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C A R R
c IR I RIGGS &
INGRAM
CPAS; and Advisors
Required Communications
C A R R
&RIGGS &
CRIINGRAM
CPAs and Advisors
June 1, 2022
Honorable Mayor and City Council
City of Okeechobee, Florida
55 S.E. Third Avenue
Okeechobee, FL 34974
Carr, Riggs & Ingram, LLC
215 Baytree Drive
Melboume, Florida 32940
(321) 255-0088
(321) 259-8648 (fax)
www.cricpa.com
We are pleased to present the results of our audit of the financial statements of the City of
Okeechobee, Florida (the "City") for the year ended September 30, 2021.
This report to the Honorable Mayor and City Council summarizes our audit, the report issued and
various analyses and observations related to the City's accounting and reporting. The document
also contains the communications required by our professional standards.
Our audit was designed, primarily, to express an opinion on the City's basic financial statements for
the year ended September 30, 2021. We considered the City's current and emerging needs, along
with an assessment of risks that could materially affect the financial statements, and aligned our
audit procedures accordingly. We conducted the audit with the objectivity and independence that
the City expects. We received the full support and assistance of City personnel.
At Carr, Riggs & Ingram, LLC (CRI), we are continually evaluating the qualit'r of our professionals'
work in order to deliver audit services of the highest quality that will 'neet or exceed your
expectations. We encourage you to provide any feedback you believe is appropriate to ensure that
we do not overlook a single detail as it relates to the quality of our services.
This report is intended solely for the information and use of the Honorable Mayor, City Council and
management of the City and should not be used by anyone other than these specified parties.
We appreciate this opportunity to work with you. 11- you have any questions or comments, please
contact me at 321.255.0088 or dgoode@cricpa.com.
Very truly yours,
Deborah A. Goode, CPA
Partner
Carr, Riggs & Ingram, LLC
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Required Communications ■
As discussed with management during our planning process, our audit plan represented an
approach responsive to the assessment of risk for the City. Specifically, we planned and performed
our audit to:
• Perform an audit, as requested by the Honorable Mayor and City Council, in accordance
with auditing standards generally accepted in the United States of America, in order to
express an opinion on the City's financial statements for the year ended September 30,
2021;
• Communicate directly with the Honorable Mayor and City Council and management
regarding the results of our procedures;
• Address with the Honorable Mayor, City Council and management any accounting and
financial reporting issues;
• Anticipate and respond to concerns of the Honorable Mayor, City Council and management;
and
• Other audit -related projects as they arise and upon request.
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Required Communications ■
Perform audit services, as requested by the City Council and management, in accordance with
auditing standards generally accepted in the United States of America, and the standards applicable
to financial audits contained in Government Auditing, Standards, issued by the Comptroller General
of the United States, in order to express an opinion on the City's financial statements for the year
ending September 30, 2021.
Auditors' responsibility under Generally Accepted
Auditing Standards, Government Auditing
Standards and Chapter 10.550, Rules of the Florida
Auditor General
As stated in our engagement letter dated July 30,
2018, our responsibility, as described by professional
standards, is to express an opinion about whether
the financial statements prepared by management
with your oversight are fairly presented, in all
material respects, in conformity with accounting
principles generally accepted in the United States of
America (GAAP) and Chapter 10.550 Rules of the
Florida Auditor General. Our audit of the financial
statements does not relieve you or management of
your responsibilities.
As part of our audit, we considered the internal
control of the City and compliance with laws and
regulations. Such considerations were solely for the
purpose of determining our audit procedures and
nct to provide any assurance concerning such
internal control and compliance with laws and
regulations.
Client's responsibility Management, with oversight from those charged
with governance, is responsible for establishing and
maintaining internal controls, including monitoring
ongoing activities; for the selection and application
of accounting principles; and for the fair presentation
in the financial statements of financial position,
results of operations, and cash flows in conformity
with the applicable framework. Management is
responsible for the design and implementation of
programs and controls to prevent and detect fraud.
Management is responsible for overseeing nonaudit
services by designating an individual, preferably from
senior management, with suitable skill, knowledge,
or experience; evaluate the adequacy and results of
those services; and accept responsibility for them.
Planned scope and timing of the audit
Our initial audit plan was nat significantly altered
during our fieldwork.
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Required Communications ■
MATTER • : • .
Management judgments and accounting
estimates
The process used by management in forming particularly
sensitive accounting estimates and the basis for the
auditors' conclusion regarding the reasonableness of
those estimates.
•• ••
Please see the following section titled "Accounting
Policies, Judgments and Sensitive Estimates and CRI
Comments On Quality."
Potential effect on the financial statements of
No such risks or exposures were noted.
any significant risks and exposures
Major risks and exposures facing the City and how they
are disclosed.
Significant accounting policies, including critical
Significant accounting policies are described in Note
accounting policies and alternative treatments
2 to the financial statements. No new accounting
within generally accepted accounting principles
policies were adopted and the application of existing
and the auditor's judgment about the quality of
policies was not changed during 2021. We noted no
accounting principles
transactions entered into by the City during the year
• The initial selection of and changes in significant
for which there is a lack of authoritative guidance or
accounting policies or their application; methods used
consensus. All significant transactions have been
to account for significant unusual transactions; and
recognized in the financial statements in the proper
effect of significant policies in controversial or
emerging areas for which there is a lack of
period.
authoritative guidance or consensus.
• The auditor should also discuss the auditors'
judgment about the quality, not just the acceptability,
Certain financial statement disclosures are
of the Company's accounting policies as applied in its
particularly sensitive because of their significance to
financial reporting. The discussion should include
financial statement users. The most sensitive
such matters as consistency of accounting policies
disclosures affecting the financial statements were:
and their application, and clarity and completeness of
the financial statements, including disclosures. Critical
The disclosure of pension trust funds in Note 4-13 to
accounting policies and practices applied by the
the financial statements due to the reported
Company in its financial statements and our
performance of plan assets.
assessment of management's disclosures regarding
such policies and practices (including any significant
The disclosure of Post -Employment Benefit
modifications to such disclosures proposed by us but
Obligations in Note 4-C to the financial statements
rejected by management), the reasons why certain
since this represents a future liability to the City.
policies and practices are or are not considered
critical, and how current and anticipated future
events impact those determinations;
• Alternative treatments within GAAP for accounting
They financial statement disclosures are neutral,
policies and practices related to material items,
consistent, and clear.
including recognition, measurement presentation
and disclosure alternatives, that have been discussed
with client management during the current audit
period, the ramifications of the use of such alternative
disclosures and treatments, and the treatment
preferred by the auditor; Furthermore, if the
accounting policy selected by management is not the
policy preferred by us, discuss the reasons why
management selected that policy, the policy preferred
by us, and the reason we preferred the other policy.
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Required Communications ■
MATTER•COMMUNICATED••
••
Significant difficulties encountered in the audit
We encountered no significant difficulties in dealing
Any significant difficulties, for example, unreasonable
with management in performing and completing our
logistical constraints or lack of cooperation by
audit.
management.
Disagreements with management
We are pleased to report that no such disagreements
Disagreements, whether or not subsequently resolved,
arose during the course of cur audit.
about matters significant to the financial accounting,
reporting, or auditing matter, that could be significant to
the financial statements or the auditors' report. This does
not include those that came about based on incomplete
facts or preliminary information.
Other findings or issues
None noted.
Matters significant to oversight of the financial reporting
practices by those charged with governance. For
example, an entity's failure to obtain the necessary type
of audit, such as one under Government Auditing
Standards, in addition to GAAS.
Matters arising from the audit that were
None noted.
discussed with, or the subject of correspondence
with management
Business conditions that might affect risk or discussions
regarding accounting practices or application of auditing
standards.
Corrected and uncorrected misstatements
See "Summary of Audit Adjustments" section.
All significant audit adjustments arising from the audit
whether or not recorded by the City, that could
individually or in the aggregate have a significant effect
on the financial statements. We should also inform the
City Council about uncorrected misstatements aggregated
by us during the current engagement and pertaining to
the latest period presented, that were determined by
management to be immaterial, both individually and in
the aggregate, to the financial statements taken as a
whole. Any internal control deficiencies that could have
prevented the misstatements.
Major issues discussed with management prior
Discussions occurred in the normal course of our
to retention
professional relationship and our responses were not
Any major accounting, auditing or reporting issues
a condition to our retention.
discussed with management in connection with our initial
or recurring retention.
Consultations with other accountants
To our knowledge, there were no such consultations
When management has consulted with other accountants
with other accountants.
about significant accounting or auditing matters.
Written representations
See "Management Representation Letter" section.
A description of the written representations the auditor
requested (or a copy of the representation letter).
IIE3
Internal control deficiencies
Any significant deficiencies or material weaknesses in the
design or operation of internal control that came to the
auditor's attention during the audit.
Fraud and illegal acts
Fraud involving senior management, the Plan
Administrator or those responsible for internal controls, or
causing a material misstatement of the financial
statements, where the auditor determines there is
evidence that such fraud may exist. Any illegal acts
coming to the auditor's attention involving senior
management and any other illegal acts, unless clearly
inconsequential.
Other information in documents containing
audited financial statements
The external auditors' responsibility for information in a
document containing audited financial statements, as well
as any procedures performed and the results.
Required) Communications
See the "Report on Internal Control" and "Management
Letter" included in the financial report package.
We are unaware of any fraud or illegal acts involving
management or causing material misstatement of
the financial statements.
Our responsibility related to documents (including
annual reports, websites,, etc.) containing the
financial statements is to read the other information
to consider whether:
• Such information is materially inconsistent
with the financial statements; and
• We believe such information represents a
material misstatement of fact.
We have not been provided any such items to date and
are unaware of any other documents that contain the
audited financial statements.
Required Supplementary Information We applied certain limited procedures to
The auditors' responsibility for required management's discussion and analysis and the
supplementary information accompanying the required supplementary information ("RSI") as listed
financial statements, as well as any procedures in the table of contents of the financial statements
performed and the results. that supplements the basic financial statements. Our
procedures consisted of inquiries of management
regarding the methods of preparing the information
and comparing the information for consistency with
management's responses to our inquiries, the basic
financial statements and other knowledge we
obtained during our audit of the basic financial
statements. We did not audit the RSI and do not
express an opinion or provide any assurance on the
RSI,.
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Accounting Policies, Judgments and Sensitive Estimates & CRI Comments on
Quality
We are required to communicate our judgments about the quality, not just th e acceptability, of the
City's accounting principles as applied in its financial reporting. We are also required to
communicate critical accounting policies and sensitive accounting estimates. Accounting estimates
are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance
to the financial statements and because of the possibility that future events affecting them may
differ significantly from those expected. The City Council may wish to monitor throughout the year
the process used to compute and record these accounting estimates. The table below summarizes
our communications regarding these matters.
A
1
ACCOUNTING POLICY
In-0-f _.__!��A
CRITICAL
CY?
I
JUDGMENTS &
SENSITIVE ESTIMAT
COMMENTSON QUALITY
OF ACCOUNTING POLICY
L & APPLICATION
Investments
Except as noted below, the
X
The City relies on
The City's policies are in
City reports their
investment valuation
accordance with all
investments at fair value.
information from the
applicable accounting
Money market investments
City's investment
guidelines and GASB.
and certain interest -earning
manager (investment
investment contracts with a
consultant) and from
remaining maturity of one-
information from
year or less at the date of
investment pool sponsors
purchase may be reported
based on financial market
at amortized cost.
information.
The City follows the
provisions of Section 150:
Investments, of the GASB
Codification when reporting
investments.
Depreciation
Based on the audit
X
Management's estimate
We evaluated the key
of Capital
procedures we performed
of the useful lives of
factors and assumptions
Assets
with respect to the City's
capital assets is based on
used to develop the
capital assets, we noted
the historical lives of
estimated useful lives in
that the City estimates the
similar assets and market
determining that they
useful lives of capital assets
prices.
are reasonable in relation
in accordance with all
to the financial
applicable standards and
statements taken as a
guidelines of GASB.
whole.
The City follows the
provisions of Section 1400:
Reporting Capital Assets, of
the GASB Codification when
reporting depreciation of its
capital assets.
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Accounting Policies, Judgments and Sensitive Estimates & CRI Comments on
Quality
JUDGMENTS&
ON QUALITY
COMMENTSCRITICAL
ACCOUNTING POLICY
POLICY?
SENSITIVE ESTIMAT�
OF ACCOUNTING POLICY
APPLICATIONAREA
Other Post- Based on the audit
X
Management's estimate
We evaluated the key
Employment procedures we performed
of the other
factors and assumptions
Benefits with respect to the City's
postemployment benefit
in determining they are
OPEB Plan, we noted that
liability is based on
reasonable in relation to
it appears the City
healthcare costs and
the financial statements
accounts for its OPEB
employment
taken as a whole.
liability and related costs in
assumptions developed
accordance with all
by management. A third
applicable standards and
party actuary utilized
guidelines of GASB.
these assumptions to
calculate the year-end
The City follows the
liability.
provisions of Section P52:
Postemployment Benefits
Other Than Pensions —
Reporting for Benefits Not
Provided Through Trusts,
of the GASB Codification
when reporting its OPEB
liability and related costs.
Pension Based on the audit
X
The estimate of current
The City is following the
Trust Funds procedures we performed
pension expense and
requirements of GASB 68
with respect to the City's
future net pension
and has noted in
pension funds, we noted
obligation are based on
footnote 4-B that the
that the City uses an
actuarially determined
liability of the City may
actuary to determine the
factors. The actuary
vary.
pension obligation in
estimates certain future
accordance with all
conditions in their
applicable standards and
conclusions. These
guidelines of GASB.
estimates include factors
such as market
The City follows the
performance and life
provisions of Section 1500:
expectancy. Actual
Reporting Liabilities, of the
results may differ from
GASB Codification when
projections.
reporting pension
liabilities.
Summary of Audit Adjustments
During the course of our audit, we accumulate differences between amounts recorded by the City
and amounts that we believe are required to be recorded under GAAP reporting guidelines. Those
adjustments are either recorded (corrected) by the City or passed (uncorrected). Uncorrected
misstatements or the matters underlying them could potentially cause future period financial
statements to be materially misstated, even if, in the auditors' judgment, such uncorrected
misstatements are immaterial to the financial statements under audit.
Below is a correcting journal entry that the City recorded:
To recognize Fire Services in A/P
001-0522.3401 Contractual services — temp firefighters
001-0522.3401 Contractual services — temp firefighters
001-0522-3400 Other contractual services
001-202.0000 Accounts Payable
Total
$ 5,604
27,000
97,611
$ 130,215
There were no adjustments, uncorrected, as a result of our audit procedures.
QUALITATIVE MATERIALITY CONSIDERATIONS
$ 130,215
$ 130,215
In evaluating the materiality of audit differences when they do arise, we consider both quantitative
and qualitative factors, for example:
• Whether the difference arises from an item capable of precise measurement or whether it
arises from an estimate, and, if so, the degree of imprecision inherent in the estimate.
• Whether the difference masks a change in earnings or other trends.
• Whether the difference changes a net decrease in assets to addition, or vice versa.
• Whether the difference concerns an area of the City's operating environment that has been
identified as playing a significant role in the City's operations or viabilit),i.
• Whether the difference affects compliance with regulatory requirements.
• Whether the difference has the effect of increasing management's compensation — for
example, by satisfying requirements for the award of bonuses or other forms of incentive
compensation.
• Whether the difference involves concealment of an unlawful transaction.
M
Draft Management Representation Letter ■
June 1, 2022
Carr, Riggs & Ingram, LLC
215 Baytree Drive
Melbourne, Florida 32940
This representation letter is provided in connection with your audit of the financial statements of
the City of Okeechobee, Florida, which comprise the respective financial position of the
governmental activities, each major fund, and the aggregate remaining fund information as of
September 30, 2021, and the respective changes in financial position for the year then ended and
the disclosures (collectively, the "financial statements"), for the purpose of expressing opinions as
to whether the financial statements are presented fairly, in all material respects, in accordance with
accounting principles generally accepted in the United States of America (U.S. ,GAAP).
Certain representations in this letter are described as being limited to matters that are material.
Items are considered material, regardless of size, if they involve an omission or misstatement of
accounting information that, in light of surrounding circumstances, makes it probable that the
judgment of a reasonable person relying on the information would be changed or influenced by the
omission or misstatement. An omission or misstatement that is monetarily small in amount could
be considered material as a result of qualitative factors.
We confirm, to the best of our knowledge and belief, as of June 2, 2022, the following
representations made to you during your audit.
Financial Statements
1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter
dated July 30, 2018, including our responsibility for the preparation and fair presentation of the
financial statements in accordance with U.S. GAAP and for preparation of the supplementary
information in accordance with the applicable criteria.
2) The financial statements referred to above are fairly presented in conformity with U.S. GAAP
and include all properly classified funds and other financial information of the primary
government and all component units required by generally accepted accounting principles to be
included in the financial reporting entity.
3) We acknowledge our responsibility for the design,, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
4) We acknowledge our responsibility for the design, implementation, and maintenance of internal
control to prevent and detect fraud.
5) Significant assumptions we used in making accounting estimates, including those measured at
fair value, are reasonable.
6) Related party relationships and transactions, including revenues, expenditures/expenses, loans,
transfers, leasing arrangements, and guarantees,, and amounts receivable from or payable to
related parties have been appropriately accounted for and disclosed in accordance with U.S.
GAAP.
W1Je
Draft Management Representation Letter ■ -
7) We are in agreement with the adjusting journal entry you have proposed, and it has been
posted to the City's accounts.
8) Adjustments or disclosures have been made for all events, including instances of
noncompliance, subsequent to the date of the financial statements that would require
adjustment to or disclosure in the financial statements.
9) The effects of all known actual or possible litigation, claims, and assessments have been
accounted for and disclosed in accordance with U.S. GAAP.
10) Guarantees, whether written or oral, under which the City is contingently liable, if any, have
been properly recorded or disclosed.
11) All workers compensation claims are being processed through the insurance company and all
applicable deductibles have been accrued.
Information Provided
12) We have provided you with:
a) Access to all information, of which we are aware, that is relevant to the preparation and fair
presentation of the financial statements, such as records (including information obtained
from outside of the general and subsidiary ledgers), documentation, and other matters [and
all audit or relevant monitoring reports, if any, received from funding sources].
b) Additional information that you have requested from us for the purpose of the audit.
c) Unrestricted access to persons within the City from whom you determined it necessary to
obtain audit evidence.
d) Minutes of the meetings of City Council or summaries of actions of recent meetings for
which minutes have not yet been prepared.
13) All material transactions have been recorded in the accounting records and are reflected in the
financial statements.
14) We have disclosed to you the results of our assessment of the risk that the financial statements
may be materially misstated as a result of fraud.
15) We have no knowledge of any fraud or suspected fraud that affects the City and involves—
• Management,
• Employees who have significant roles in internal control, or
• Others where the fraud could have a material effect on the financial statements.
16) We have no knowledge of any allegations of fraud or suspected fraud affecting the City's
financial statements communicated by employees, former employees, regulators, or others.
17) We have no knowledge of instances of noncompliance or suspected noncompliance with
provisions of laws, regulations, contracts, or grant agreements, or wa:>te or abuse, whose
effects should be considered when preparing financial statements.
18) We have disclosed to you all known actual or possible litigation, claims, ani assessments whose
effects should be considered when preparing the -Financial statements.
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Draft Management Representation Letter ■
19) We have disclosed to you the names of the City's related parties and all the related party
relationships and transactions, including any side agreements. There are none.
Government -specific
20) There have been no communications from regulatory agencies concerning noncompliance with,
or deficiencies in, financial reporting practices.
21) We have a process to track the status of audit findings and recommendations.
22) We have identified to you any previous audits, attestation engagements, and other studies
related to the objectives of the audit and whether related recommendations have been
implemented.
23) We have identified to you any investigations or legal proceedings that have been initiated with
respect to the period under audit.
24) We have provided our views on reported findings, conclusions, and recommendations, as well
as our planned corrective actions, for the report.
25) The City has no plans or intentions that may materially affect the carrying value or classification
of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fund
balance or net position.
26) We are responsible for compliance with the laws, regulations, and provisions of contracts and
grant agreements applicable to us, including tax or debt limits and debt contracts, and legal and
contractual provisions for reporting specific activities in separate funds.
27) There are no violations or possible violations of budget ordinances, laws and regulations
(including those pertaining to adopting, approving, and amending budgets), provisions of
contracts and grant agreements, tax or debt limits, and any related dE!bt covenants whose
effects should be considered for disclosure in the financial statements, or as a basis for
recording a loss contingency, or for reporting on noncompliance.
28) As part of your audit, you assisted with preparation of the financial statemients and disclosures.
We acknowledge our responsibility as it relates to those nonaudit services, including that we
assume all management responsibilities; oversee the services by designating an individual,
preferably within senior management, who possesses suitable skill, knowledge, or experience;
evaluate the adequacy and results of the services performed; and accept responsibility for the
results of the services. We have reviewed, approved, and accepted responsibility for those
financial statements and disclosures.
29) The City has satisfactory title to all owned assets, and there are no liens or encumbrances on
such assets nor has any asset been pledged as collateral.
30) The City has complied with all aspects of contractual agreements that would have a material
effect on the financial statements in the event of noncompliance.
31) The financial statements include all component units and other related organizations.
32) The financial statements include all fiduciary activities required by GASBS No. 84 .
33) The financial statements properly classify all funds and activities in accordance with
GASBS No. 34, as amended.
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Draft Management Representation Letter ■
34) All funds that meet the quantitative criteria in GASBS Nos. 34 and 37 for presentation as major
are identified and presented as such and all other funds that are presented as major are
particularly important to financial statement users.
35) Components of net position (net investment in capital assets; restricted; and unrestricted) and
classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned)
are properly classified and, if applicable, approved.
36) Provisions for uncollectible receivables have been properly identified and recorded.
37) Expenses have been appropriately classified in or allocated to functions and programs in the
statement of activities, and allocations have been made on a reasonable basis.
38) Revenues are appropriately classified in the statement of activities within program revenues
and general revenues.
39) Interfund, internal, and intra-entity activity and balances have been appropriately classified and
reported.
40) Deposits and investment securities and derivative instruments are properly classified as to risk
and are properly disclosed.
41) Receivables recorded in the financial statements represent valid claims against debtors for
transactions arising on or before the balance sheet date and have been reduced to their
estimated net realizable value.
42) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported,
and, if applicable, depreciated or amortized.
43) Capital assets have been evaluated for impairment as a result of significant and unexpected
decline in service utility. Impairment loss and insurance recoveries have been properly
recorded.
44) Provision has been made to reduce excess or obsolete inventories to their estimated net
realizable value.
45) We have appropriately disclosed the City's policy regarding whether to first apply restricted or
unrestricted resources when an expense is incurred for purposes for which both restricted and
unrestricted net position is available and have determined that net position is properly
recognized under the policy.
46) We acknowledge our responsibility for the required supplementary information (RSI). The RSI is
measured and presented within prescribed guidelines and the methods of measurement and
presentation have not changed from those used in the prior period. We Piave disclosed to you
any significant assumptions and interpretations underlying the measurement and presentation
of the RSI.
47) With respect to the introductory section ("supplementary information"):
a) We acknowledge our responsibility for presenting the supplementary information in
accordance with accounting principles generally accepted in the UnitE!d States of America,
and we believe the supplementary information, including its form and content, is fairly
presented in accordance with accounting principles generally accepted in the United States
of America. The methods of measurement and presentation of the supplementary
information have not changed from those used in the prior period, and we have disclosed to
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Draft Management Representation Letter ■
you any significant assumptions or interpretations underlying the measurement and
presentation of the supplementary information.
b) If the supplementary information is not presented with the audited financial statements, we
will make the audited financial statements readily available to the intended users of the
supplementary information no later than the date we issue the supplementary information
and the auditor's report thereon.
48) The City is in compliance with Florida Statute 218.415, local government investment policies, in
all respects.
a) We are responsible for establishing and maintaining effective internal control over
compliance.
b) We have performed an evaluation of the City's compliance with Florida Statute 218.415,
local government investment policies.
c) All relevant matters are reflected in the measurement or evaluation of City's compliance
with the specified requirements.
d) We are responsible for selecting the specified requirements and for determining that
the specified requirements are appropriate for our purposes.
e) We have provided you with all relevant information and access to information and
personnel in connection with your examination of compliance with Florida Statute
218.415, local government investment policies.
f) We have disclosed to you all known matters that may contradict the City's compliance
with the specified requirements and we have disclosed to you all communications from
regulatory agencies, internal auditors, other independent accountants or consultants,
and others regarding possible noncompliance with Florida Statute 218.415, local
government investment policies, including communications received between
September 30, 2021 and the date of the examination report.
g) We have responded fully to all inquiries made to us by you during the engagement
Signature:
Title: City Administrator
Signature:
Title: Finance Director
WEE