2023-06-06 VI. A. CRI 2022 Audited Financials, Exhibit 2 • •
Exhibit 2
06/06/2023
cRi CRICARR
RIGGS &
�` INGRAM
CPAs and Advisors
Required Communications
• •
ARRRI CR Carr,Riggs&Ingram,LLC
RIGGS & 215 Baytree Drive
I N G RA M Melbourne,FL 32940
CPAs and Advisors
321.255.0088
386.336.4189(fax)
CRIcpa.com
May 19, 2023
Honorable Mayor and City Council
City of Okeechobee, Florida
55 S.E.Third Avenue
Okeechobee, FL 34974
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, 2022.
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, 2022. 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 quality of our professionals'
work in order to deliver audit services of the highest quality that will meet 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. If you have any questions or comments, please
contact me at 321.255.0088 or dgoode@cricpa.com.
Very truly yours,
Adit-Niz 4. "oh.
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 audit services, as requested by the Honorable Mayor and City Council, 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, 2022;
• 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;
• 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 ■
We have audited the financial statements of the City of Okeechobee, Florida for the year ended
September 30, 2022, and have issued our report thereon dated May 19, 2023. Professional
standards require that we provide you with the following information related to our audit:
MATTER TO BE COMMUNICATED AUDITORS' RESPONSE
Auditors' responsibility under Generally Accepted As stated in our engagement letter dated July 12,
Auditing Standards,Government Auditing 2022, our responsibility, as described by professional
Standards and Chapter 10.550, Rules of the Florida standards, is to express an opinion about whether
Auditor General 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
not 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 not significantly altered
during our fieldwork.
During planning, we realized that our engagement
letter improperly excluded the presumptive risk of
management's override of controls due to fraud as
an area of significant risk of material misstatement.
We did consider this in our audit plan.
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Required Communications ■
MATTER TO BE COMMUNICATED AUDITORS' RESPONSE
Management judgments and accounting Please see the following section titled "Accounting
estimates Policies,Judgments and Sensitive Estimates and CRI
The process used by management in forming particularly Comments on Quality."
sensitive accounting estimates and the basis for the
auditors' conclusion regarding the reasonableness of
those estimates.
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. New accounting
within generally accepted accounting principles policies were adopted during the fiscal year as a
and the auditor's judgment about the quality of result of the following recently issued accounting
accounting principles pronouncement:
• The initial selection of and changes in significant
accounting policies or their application;methods used
to account for significant unusual transactions;and
• Statement No. 87, Leases
effect of significant policies in controversial or
emerging areas for which there is a lack of
authoritative guidance or consensus.
• The auditor should also discuss the auditors' We noted no transactions entered into by the City
judgment about the quality,not just the acceptability, during the year for which there is a lack of
of the Company's accounting policies as applied in its authoritative guidance or consensus. All significant
financial reporting. The discussion should include transactions have been recognized in the financial
such matters as consistency of accounting policies statements in the proper period.
and their application,and clarity and completeness of
the financial statements, including disclosures. Critical
accounting policies and practices applied by the
Company in its financial statements and our Certain financial statement disclosures are
assessment of management's disclosures regarding particularly sensitive because of their significance to
such policies and practices(including any significant financial statement users. The most sensitive
modifications to such disclosures proposed by us but disclosures affecting the financial statements were:
rejected by management), the reasons why certain
policies and practices are or are not considered The disclosure of pension trust funds in Note 4-B to
critical, and how current and anticipated future the financial statements due to the reported
events impact those determinations; performance of plan assets.
• Alternative treatments within GAAP for accounting
policies and practices related to material items, The disclosure of Post Employment Benefit
including recognition, measurement, presentation Obligations in Note 4-C to the financial statements
and disclosure alternatives, that have been discussed since this represents a future liability to the City.
with client management during the current audit
period, the ramifications of the use of such alternative
disclosures and treatments, and the treatment The financial statement disclosures are neutral,
preferred by the auditor; Furthermore, if the consistent, and clear.
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 TO BE COMMUNICATED AUDITORS' RESPONSE
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 our 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).
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Required Communications ■
MATTER TO BE COMMUNICATED AUDITORS' RESPONSE
Internal control deficiencies See the "Report on Internal Control" and
Any significant deficiencies or material weaknesses in the "Management Letter" included in the financial report
design or operation of internal control that came to the package.
auditor's attention during the audit.
Fraud and illegal acts We are unaware of any fraud or illegal acts involving
Fraud involving senior management, the Plan management or causing material misstatement of
Administrator or those responsible for internal controls, or the financial statements.
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 Our responsibility related to documents (including
audited financial statements annual reports, websites, etc.) containing the
The external auditors' responsibility for information in a financial statements is to read the other information
document containing audited financial statements, as well to consider whether:
as any procedures performed and the results.
• 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.
Significant unusual accounting transactions No significant unusual accounting transactions were
Auditor communication with governance to include noted during the year.
auditors'views on policies and practices management
used, as well as the auditors'understanding of the
business purpose.
Required Supplementary Information We applied certain limited procedures to
The auditors' responsibility for required supplementary management's discussion and analysis and the
information accompanying the financial statements, as required supplementary information ("RSI") as listed
well as any procedures performed and the results.
in the table of contents of the financial statements
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 the 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.
CRITICAL JUDGMENTS& COMMENTS ON QUALITY
AREA ACCOUNTING POLICY OF ACCOUNTING POLICY
POLICY? SENSITIVE ESTIMATE
&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 II
CRITICAL JUDGMENTS& COMMENTS ON QUALITY
AREA ACCOUNTING POLICY OF ACCOUNTING POLICY
POLICY? SENSITIVE ESTIMATE &APPLICATION
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.
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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.
The following adjustments were passed (uncorrected) by the City.
It was noted during testing that the amounts for four copier leases were not recorded as right-of-
use assets and offset with a corresponding liability which is an understatement of assets and
understatement of liabilities in the amount of$23,848.
It was noted during testing that the amount for accrued retirement had been duplicated in the prior %
year in the amount of $11,913. The effect was an overstatement of net position and an
understatement of expenses for the amount.
QUALITATIVE MATERIALITY CONSIDERATIONS
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 viability.
• 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.
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Draft Management Representation Letter ■
May 19, 2023
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, 2022, 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 May 19, 2023, 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 12, 2022, 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.
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Draft Management Representation Letter ■
7) 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.
8) The effects of all known actual or possible litigation, claims, and assessments have been
accounted for and disclosed in accordance with U.S. GAAP.
9) Guarantees, whether written or oral, under which the City is contingently liable, if any, have
been properly recorded or disclosed.
10) All workers compensation claims are being processed through the insurance company and all
applicable deductibles have been accrued.
Information Provided
11) 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.
12) All material transactions have been recorded in the accounting records and are reflected in the
financial statements.
13) 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.
14) 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.
15) 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.
16) We have no knowledge of instances of noncompliance or suspected noncompliance with
provisions of laws, regulations, contracts, or grant agreements, or waste or abuse, whose
effects should be considered when preparing financial statements.
17) There are no known actual or possible litigation, claims, and assessments whose effects should
be considered when preparing the financial statements.
18) 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.
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Draft Management Representation Letter ■
1.
Government-specific
19) There have been no communications from regulatory agencies concerning noncompliance with,
or deficiencies in, financial reporting practices.
20) 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.
21) We have identified to you any investigations or legal proceedings that have been initiated with
respect to the period under audit.
22) 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.
23) 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.
24) We are not aware of any identified or suspected fraud and noncompliance with provisions of
laws, regulations, contracts, and grant agreements that we believe have a material effect on the
financial statements.
25) 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 debt 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.
26) As part of your audit, you assisted with preparation of the financial statements 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.
27) The effect of the uncorrected misstatements are immaterial, both individually and in the
aggregate, to the financial statements as a whole. The uncorrected misstatements are attached
to the representation letter as Exhibit A.
28) 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.
29) 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.
30) The financial statements include all component units and other related organizations.
31) The financial statements include all fiduciary activities required by GASBS No. 84, as amended.
32) 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 ■
33) 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.
34) 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.
35) Provisions for uncollectible receivables have been properly identified and recorded.
36) 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.
37) Revenues are appropriately classified in the statement of activities within program revenues
and general revenues.
38) Interfund, internal, and intra-entity activity and balances have been appropriately classified and
reported.
39) Deposits and investment securities and derivative instruments are properly classified as to risk
and are properly disclosed.
40) 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.
41) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported,
and, if applicable, depreciated or amortized.
42) 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.
43) Provision has been made to reduce excess or obsolete inventories to their estimated net
realizable value.
44) 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.
45) 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 have disclosed to you
any significant assumptions and interpretations underlying the measurement and presentation
of the RSI.
46) 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.
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Draft Management Representation Letter ■
11
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: Signature:
Title: City Administrator Title: Finance Director
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Draft Management Representation Letter ■
II
Exhibit A
The following adjustments were passed (uncorrected) by the City.
It was noted during testing that the amounts for four copier leases were not recorded as right-of-
use assets and offset with a corresponding liability which is an understatement of assets and
understatement of liabilities in the amount of$ 23,848.
It was noted during testing that the amount for accrued retirement had been duplicated in the prior
year in the amount of $11,913. The effect was an overstatement of net position and an
understatement of expenses for the amount.
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Fk _
City Of Okeechobee, Florida
FINANCIAL STATEMENTS
September 30, 2022
• •
City of Okeechobee, Florida ■
Table of Contents ■
For the year ended September 30, 2022
Introductory Section
Title Page 1
Table of Contents 2
City Officials 3
Financial Section
Independent Auditors' 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 66
Schedule of Changes in Total OPEB Liability and Related Ratios 78
Notes to Required Supplementary Information 79
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 81
Independent Auditors' Management Letter 83
Independent Accountants' Report on Compliance with Local Government
Investment Policies 85
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City of Okeechobee, Florida
City Officials
For the year ended September 30, 2022
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
Donald Hagan
Chief of Police
David Allen
Director of Public Works
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Carr,Riggs&Ingram,LLC
4`` cRi CARR
215 Baytree Drive
R I G G S & Melbourne,Flo da 32940
INGRAM
321 255 0088
CPAs and Advisors 386.336.4189(fax)
CRlcpa.com
INDEPENDENT AUDITORS' REPORT
To the City Council
City of Okeechobee, Florida
Report on the Audit of the Financial Statements
Opinions
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, 2022, 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.
In our opinion, based on our report and the report of the 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, 2022 and the respective changes in financial position,
and, where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
We did not audit the financial statements of the pension trust funds of the City of Okeechobee,
Florida. Those statements were audited by other auditors whose report has been furnished to us,
and our opinions, insofar as it relates to the amounts included for the governmental activities of the
City of Okeechobee, Florida, is based solely on the report of the other auditors.
Basis for Opinions
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. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of City of
Okeechobee, Florida and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As described in Note 2 to the financial statements, in fiscal year 2022, the District adopted new
accounting guidance, GASB Statement No. 87 Leases. Our opinion is not modified with respect to
this matter.
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Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and 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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City of
Okeechobee, Florida's ability to continue as a going concern for twelve months beyond the financial
statement date, including any currently known information that may raise substantial doubt shortly
thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement,whether due to fraud or error, and to issue an auditor's
report that includes our opinions. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
generally accepted auditing standards and Government Auditing Standards will always detect a
material misstatement when it exists. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they
would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government
Auditing Standards,we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City of Okeechobee, Florida's internal control.
Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City of Okeechobee, Florida's ability to
continue as a going concern for a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on (pages 10-17), the budgetary comparison on (pages 65-
66), and the pension and other postemployment benefits information on (pages 67 through 81) 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 and the other auditors 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
Management is responsible for the other information included in the annual report. The other
information comprises the introductory sections but does not include the basic financial statements
and our auditor's report thereon. Our opinions on the basic financial statements do not cover the
other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information
and the basic financial statements, or the other information otherwise appears to be materially
misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists,we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 19,
2023, 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, Florida'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 considering the City of
Okeechobee, Florida's internal control over financial reporting and compliance.
Cam, f l I
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Melbourne, Florida
May 19, 2023
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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, 2022.
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, 2022:
• The City's total assets exceeded its liabilities at September 30, 2022 by$20,679,327
• The City's total revenues were $6,900,399 for the year ended September 30, 2022,
compared to total expenses of$5,431,690, which resulted in a $1,468,709 increase
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 cash 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 Discussion 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 revenues, 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 60 of this report.
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City of Okeechobee, Florida
Management's Discussion 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
2022 2021
Current assets $ 14,701,977 $ 12,359,121
Capital assets 7,637,011 7,803,635
Noncurrent assets 5,641,791 2,984,444
Total assets 27,980,779 23,147,200
Deferred outflows 334,124 522,439
Unearned revenue 2,912,965 1,456,482
Current liabilities 586,484 532,300
Long-term liabilities 609,282 626,190
Total liabilities 4,108,731 2,614,972
Deferred inflows 3,526,845 1,844,049
Net position:
Net investment in capital assets 7,637,011 7,803,635
Restricted 3,795,194 2,886,133
Unrestricted 9,247,122 8,520,850
Total net position $ 20,679,327 $ 19,210,618
Governmental Activities
Total net position increased by $1,468,709 primarily as a result of $4,833,579 increase in total
assets and an increase of $1,493,759 in total liabilities. In addition, deferred inflows related to
pensions increased $1,682,796 and was offset by a decrease of$188,315 of pension outflows. The
increase in total assets was primarily due to a $2,342,856 increase in current assets due to an
increase of cash and investments in the current year from operations, a $2,657,347 increase in
noncurrent assets due to an increase in net pension asset, and a decrease in capital assets of
$166,624. The net change in current and noncurrent liabilities was $37,276 as current liabilities
increased by$54,184 related to timing of payables and non-current liabilities decreased by$16,908
resulting from an increase in the OPEB liability obligation of $51,472 and a decrease in
compensated absences of$68,380. Unearned revenue increased by $1,456,483 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
2022 2021
REVENUES:
Program revenues:
Charges for services $ 870,044 $ 886,749
Operating grants and contributions 731,401 677,032
Capital grants and contributions 167,379 184,814
General revenues:
Property taxes 2,598,998 2,447,037
Public utility taxes 892,962 864,924
Franchise fees 650,583 573,929
Shared revenues 885,732 862,744
Investment income 72,356 10,660
Other income 30,944 180,997
Total revenues 6,900,399 6,688,886
EXPENSES:
General government 587,220 908,374
Public safety 3,040,360 4,378,379
Transportation 1,174,516 1,186,087
Physical environment 629,594 631,903
Economic environment - 593
Culture and recreation - 1,344
Total expenses 5,431,690 7,106,680
Change in net position 1,468,709 (417,794)
Net position, beginning of year 19,210,618 19,628,412
Net position, end of year $ 20,679,327 $ 19,210,618
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City of Okeechobee, Florida
Management's Discussion and Analysis
The City experienced an increase of 3.1% in total revenues, a $211,513 increase to $6.9 million. The
increase is primarily due to a $151,961 increase in property tax, with the contributing factors being
an increase in the assessed taxable values and continuing millage rate of 7.6018. Increases in
franchise fee revenue of $76,654 due to an increase in cost per watt and usage within the City,
increases in investment income of $61,696 and $54,369 in operating grant revenues plus shared
revenues increase of $22,988 and utility tax revenue of $28,038 all contributed to the increase in
revenues for the year. A decrease in other income of$150,053,capital grants of$17,435 and charges
for services of$16,705 also shared in the offset of the overall increase in revenues for the year. The
City experienced a decrease of 23.6% in total expenses—a $1,674,990 decrease to$5.4 million.The
decrease is primarily due to a $1,338,019 decrease in expenses for public safety due to the loss of
the fire department, $321,154 decrease in general government due to overall decreases in
expenditures, decrease of $11,571 in transportation expense, and decrease of $2,309 in physical
environment. The combined decrease in expense and increase in revenues resulted in a increase
in net position of$1,468,709.
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 fund 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 $11,154,633 an increase of $832,394 in comparison with the prior year. Approximately
74% of this total amount $8,232,863, constitutes unassigned fund balance, which is available for
spending at the government's discretion. Assigned fund balances include $1,579,534 for subsequent
year's expenditures. Public facilities fund balance of$1,279,892 plus Community Development fund
balance of$61,757 less $10,096 for other non-major funds which are restricted funds based on their
specific stipulated purpose.The remainder of the fund balance is non-spendable inventory of$44,007.
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 $9,779,073 while total fund balance was
$11,102,972. 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 133% and 151%
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.
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City of Okeechobee, Florida
Management's Discussion and Analysis
General Fund Budgetary Highlights
The amount appropriated for expenditures in the original 21/22 budget decreased from $9,749,215
to $7,636,227 in the final 21/22 budget. Actual (on a budgetary basis) expenditures of$7,344,353
were less than the budgeted expenditures by $291,874. The decrease in budgeted fire and police
public safety expenses, transportation expenses, physical environment, capital outlay and general
government expenses contributed to the overall decrease in expenditures.
CAPITAL ASSETS AND LONG-TERM LIABILITIES
Capital assets. The City's investment in capital assets as of September 30, 2022, amounted to
$7,637,011, (net of accumulated depreciation). This investment in capital assets includes land,
buildings, improvements, equipment and construction in progress. During the year, the City's net
capital asset balance decreased $166,624.
The City's major additions of$542,057 to capital assets during the current fiscal year included the
following:
• Infrastructure projects, including:
o SE 4th Street Drainage Project
o SE 6th Street pavement Improvements
o SE 3rd Avenue Pavement Improvements
• Completion of WiFi project for City parks
• Acquisition of Land (1003 SW 3rd Ave, and a small parcel of donated land)
• Replacement computers (4) -Police Department;Added Power DMS
Software
• Dual fuel generators
• Video conferencing equipment for meetings
• Completion of implementation of accounting software
• Tractor with arm attachment.
• Tasers(1) including harnesses, etc.
• Picnic tables, trash receptacles purchased for city parks
• Cattleman's Square improvements continues as construction in progress
• Stormwater System GIS Map is a continuing project
• Chamber of Commerce Building carpeting
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City of Okeechobee, Florida
Management's Discussion and Analysis
City's Capital Assets
(net of depreciation)
2022 2021
Land $ 1,435,648 $ 1,378,744
Construction in progress 151,898 326,662
Buildings 1,089,269 1,163,458
Improvements other than buildings 3,750,547 3,882,510
Equipment 1,209,649 1,052,260
Total $ 7,637,011 $ 7,803,635
Additional information on the City's capital assets can be found in Note 3.C. on page 41 of this
report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The City Council adopted a millage rate of 6.8987 for budget year 2023. The adopted millage rate is
the roll-back rate of 6.8987. A $68,826 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 2023 adopted budget for all funds of the City total approximately
$8,283,167, a decrease from the prior year final budget of approximately$576,214.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 charges for services revenue. However, an expected decrease in
other tax revenues offsets the budgeted increase.
Expenditures for the fiscal year 2023 adopted budgets for all funds of the City total approximately
$10,273,675, an increase of .87% or $87,960 from the prior year budget. The increase in
expenditure is based mostly on the increase in budgeted expenditures in public safety and
transportation.With a minimal increase in budgeted capital infrastructure expenditure.
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 information 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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BASIC FINANCIAL STATEMENTS
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City of Okeechobee, Florida
Statement of Net Position - Governmental Activities
September 30, 2022
ASSETS
Cash and cash equivalents $ 5,830,981
Investments 8,253,220
Accounts receivable 163,376
Due from other governments 410,393
Inventory 44,007
Capital assets:
Nondepreciable
Land 1,435,648
Construction in progress 151,898
Depreciable, net of accumulated depreciation
Buildings 1,089,269
Improvements other than buildings 3,750,547
Equipment 1,209,649
Net pension asset 5,641,791
Total assets 27,980,779
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflow-pensions 334,124
Total deferred outflows of resources 334,124
LIABILITIES
Accounts payable 420,185
Accrued expenses 166,299
Compensated absences-due within one year 11,696
Unearned revenue-American Rescue Plan Act 2,912,965
Noncurrent liabilities:
Due in more than one year
Compensated absences 339,046
OPEB liability 258,540
Total liabilities 4,108,731
DEFERRED INFLOWS OF RESOURCES
Deferred inflow-business tax receipts 47,895
Deferred inflow- pensions 3,478,950
Total deferred inflows of resources 3,526,845
NET POSITION
Net investment in capital assets 7,637,011
Restricted for:
Law enforcement 18,337
Public facilities 1,279,892
Pension benefits 2,496,965
Unrestricted 9,247,122
Total net position $ 20,679,327
The accompanying notes are an integral part of these financial statements.
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City of Okeechobee, Florida
Statement of Activities - Governmental Activities
Year ended September 30,2022 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 $ 587,220 $ 262,354 $ - $ 166,869 $ (157,997)
Public safety 3,040,360 168,568 - 510 (2,871,282)
Transportation 1,174,516 439,122 731,401 - (3,993)
Physical environment 629,594 - - - (629,594)
Total governmental
activities $ 5,431,690 $ 870,044 $ 731,401 $ 167,379 (3,662,866)
General revenues:
Property taxes 2,598,998
Public utility taxes 892,962
Franchise fees 650,583
Shared revenues not restricted to specific programs 885,732
Unrestricted investment earnings 72,356
Miscellaneous 30,944
Total general revenues 5,131,575
Change in net position 1,468,709
Net position, beginning of year 19,210,618
Net position,end of year $ 20,679,327
The accompanying notes are an integral part of these financial statements.
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City of Okeechobee, Florida
Balance Sheet - Governmental Funds
4Community Total
Development Nonmajor Governmental
September 30, 2022 General Capital Project Funds Funds
ASSETS
Cash and cash equivalents $ 5,760,627 $ 31,757 $ 38,597 $ 5,830,981
Investments 8,253,220 - - 8,253,220
Accounts receivable 163,376 - - 163,376
Due from other funds 18,303 30,000 - 48,303
Due from other governments 410,393 - - 410,393
Inventory 44,007 - - 44,007
Total assets $ 14,649,926 $ 61,757 $ 38,597 $ 14,750,280
LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES
Liabilities
Accounts payable $ 419,795 $ - $ 390 $ 420,185
Accrued expenses 166,299 - - 166,299
Due to other funds - - 48,303 48,303
Unearned revenue 2,912,965 - - 2,912,965 I
Total liabilities 3,499,059 - 48,693 3,547,752
Deferred inflows of resources:
Deferred revenue- business tax receipts 47,895 - - 47,895
Fund balances:
Nonspendable for:
Inventory 44,007 - - 44,007
Restricted for:
Public facilities 1,279,892 - - 1,279,892
Law enforcement - - 18,337 18,337
Assigned for:
Subsequent year's expenditures 1,589,534 - - 1,589,534
Unassigned - 8,189,539 61,757 (28,433) 8,222,863
Total fund balances 11,102,972 61,757 (10,096) 11,154,633
Total liabilities,deferred inflows of
resources and fund balances $ 14,649,926 $ 61,757 $ 38,597
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. 334,124
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. (3,478,950)
Capital assets used in governmental activities are not financial resources
and,therefore, are not reported in the funds. 7,637,011
Net pension assets used in governmental activities are not financial
resources and,therefore, are not reported in the funds. 5,641,791
Long-term liabilities, including the net OPEB obligation of$258,540
and compensated absences of$350,742 are not due and payable
in the current period and,therefore, are not reported in the funds. (609,282)
Net position of governmental activities $ 20,679,327
The accompanying notes are an integral part of these financial statements.
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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, 2022 General Capital Project Funds Funds
Revenues
Taxes $ 3,477,894 $ - $ - $ 3,477,894
Intergovernmental 3,080,961 - - 3,080,961
Charges for services 572,072 - - 572,072
Permits and fees 826,371 - - 826,371
Fines and forfeitures 47,708 - 813 48,521
Investment earnings 72,356 - - 72,356
Miscellaneous 18,041 - - 18,041
Total revenues 8,095,403 - 813 8,096,216
Expenditures
Current:
General government 1,610,318 - - 1,610,318
Public safety 3,660,088 - 75 3,660,163
Transportation 1,270,396 - - 1,270,396
Physical environment 278,166 - 25,138 303,304
Capital outlay 538,252 - 3,295 541,547
Total expenditures 7,357,220 - 28,508 7,385,728
Excess(deficiency) of revenues
over(under) expenditures 738,183 - (27,695) 710,488
Other financing sources(uses)
Proceeds from sale of capital assets 121,906 - - 121,906
Net change in fund balances 860,089 - (27,695) 832,394
Fund balances, beginning of year 10,242,883 61,757 17,599 10,322,239
Fund balances, end of year $ 11,102,972 $ 61,757 $(10,096) $ 11,154,633
The accompanying notes are an integral part of these financial statements.
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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, 2022
Net change in fund balances-total governmental funds $ 832,394
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 $ 541,547
Depreciation expense (623,369) (81,822)
Donation of capital assets increase net assets in the statement of activities but are
not reported in the governmental funds because they are not financial resources. 510
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. (85,312)
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. 786,031
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. (51,472)
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. 68,380
Change in net position of governmental activities $ 1,468,709
The accompanying notes are an integral part of these financial statements.
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City of Okeechobee, Florida
Statement of Fiduciary Net Position - Pension Trust Funds
Pension
September 30,2022 Trust Funds
ASSETS
Cash equivalents $ 238,381
Investments:
Mutual funds 18,322,267
Receivables 22,459
Prepaid expenses 909
Total assets 18,584,016
LIABILITIES
Accounts payable 28,621
Total liabilities 28,621
NET POSITION
Restricted for pension benefits $ 18,555,395
The accompanyingnotes are an integralpart ofthese financial statements.
9
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City of Okeechobee, Florida
Statement of Changes in Fiduciary Net Position - Pension Trust Funds
Pension
Year ended September 30,2022 Trust Funds
ADDITIONS •
Contributions:
State $ 128,545
City 157,116
Employees 124,548
Total contributions 410,209
Investment earnings:
Net depreciation in the
fair value of investments (5,301,029)
Interest and dividends 724,350
Total investment loss (4,576,679)
Less investment expenses (62,476)
Net investment loss (4,639,155)
Total additions (4,228,946)
DEDUCTIONS
Benefits paid to participants 783,510
Refunds on termination 5,367
DROP payments 450,263
Administrative expenses 142,828
Total deductions 1,381,968
Change in net position (5,610,914)
Net position, beginning of year 24,166,309
Net position,end of year $ 18,555,395
The accompanying notes are an integral part of these financial statements.
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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 2022 as
the City does have fiduciary responsibility.
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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 degree 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 included 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. Revenues 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.
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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 assets, 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 of 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 revenues 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.
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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 Interlocal 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 with 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 indebtedness 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.
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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 HB1B, 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, 2022 was 7.6018 mills, which is 4.89%more than the rolled back rate.
The City Council determines the millage rates and adopts 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/first-out (FIFO) method.
The costs of inventories are recorded as expenditures when used (consumption method).
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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 Years
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 $3,478,950,
and total deferred outflows were $334,124 for the year ended September 30, 2022. Note 4-B
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 sheet represents amounts
received before eligibility requirements are met.
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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-term 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 on 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 amount 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.
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•
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)
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 the 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 about 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 they 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:
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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)
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. The City implemented this pronouncement but
its guidance has no significant impact on the City's financial statements or its current accounting
practices.
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. The City
implemented this pronouncement but its guidance has no significant impact on the City's
financial statements or its current accounting practices.
GASB Statement No. 96, Subscriptions-Based Information Technology Arrangements, 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.
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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 457 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 beginning after June 15,
2021. The City implemented this pronouncement but its guidance has no significant impact on
the City's financial statements or its current accounting practices.
GASB Statement No. 100, Accounting Changes and Error Corrections, this Statement establishes
accounting and financial reporting requirements for (a) accounting changes and (b) the
correction of an error in previously issued financial statements (error correction). This Statement
defines accounting changes as changes in accounting principles, changes in accounting estimates,
and changes to or within the financial reporting entity and describes the transactions or other
events that constitute those changes. This Statement prescribes the accounting and financial
reporting for (1) each type of accounting change and (2) error corrections. This Statement
requires that (a) changes in accounting principles and error corrections be reported retroactively
by restating prior periods, (b) changes to or within the financial reporting entity be reported by
adjusting beginning balances of the current period, and (c) changes in accounting estimates be
reported prospectively by recognizing the change in the current period. This Statement requires
disclosure in notes to financial statements of descriptive information about accounting changes
and error corrections, such as their nature. In addition, information about the quantitative
effects on beginning balances of each accounting change and error correction should be
disclosed by reporting unit in a tabular format to reconcile beginning balances as previously
reported to beginning balances as restated. Furthermore, this Statement addresses how
information that is affected by a change in accounting principle or error correction should be
presented in required supplementary information (RSI) and supplementary information (SI). The
requirements of this Statement are effective for accounting changes and error corrections made
in fiscal years beginning after June 15, 2023, and all reporting periods thereafter.
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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)
GASB Statement No. 101, Compensated Absences, the objective of this Statement is to better
meet the information needs of financial statement users by updating the recognition and
measurement guidance for compensated absences. That objective is achieved by aligning the
recognition and measurement guidance under a unified model and by amending certain
previously required disclosures. The requirements of this Statement are effective for fiscal years
beginning after December 15, 2023, and all reporting periods thereafter.
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 Management Discussion
and Analysis for State and Local Governments, the City has elected to disclose all budgetary
information in the notes to the required supplementary information.
Note 3:DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
As of September 30, 2022, $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.
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• •
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 at 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 GASBC 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, 2022.
Level 1 investments noted in the following table are valued at quoted market prices.
Level 2 investments noted in the following table are valued at quoted prices for similar liabilities in
active markets.
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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, 2022,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) $ 8,253,220 $ 8,253,220 $ - $ - $ - AAAm S&P -
Primary government total $ 8,253,220 $ 8,253,220 $ - $ - $ -
Pension trust funds:
Mutual funds-equities 10,027,837 - - 10,027,837 - Not rated - L1
Mutual funds-fixed income 8,294,430 - - 8,294,430 - BBB-AA S&P L2
$ 18,322,267 $ - $ - $ 18,322,267 $ -
Cash Equivalents,at amortized cost
Money Market Fund 238,381
Total Cash Equivalents,at cost 238,381
Pension trust fund total $ 18,560,648
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 limited 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.
-39-
110 •
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, 2022 are as follows:
Municipal Municipal
Police Officers' Firefighters' General
General Pension Pension Employees
Fund Trust Trust Pension Trust
Franchise/Utility taxes $ 134,670 $ -
Contributions - 9,922 681 11,856
Other 28,798 - - -
Receivables, net $ 163,376 $ 9,922 $ 681 $ 11,856
-40-
. •
City of Okeechobee, Florida
Notes to Financial Statements
Note 3:DETAILED NOTES ON ALL FUNDS(Continued)
C. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2022 was as follows:
Beginning
Balance Increases Decreases Transfers Ending Balance
Governmental activities:
Capital assets,not being depreciated:
Land $ 1,378,744 $ 88,742 $ (31,838) $ - $ 1,435,648
Construction in progress 326,663 151,897 - (326,662) 151,898
Total capital assets,not being depreciated 1,705,407 240,639 (31,838) (326,662) 1,587,546
Capital assets,being depreciated:
Buildings 2,477,318 4,404 - - 2,481,722
Improvements other than buildings 8,472,758 22,426 - 198,254 8,693,438
Equipment 3,419,873 274,588 (659,979) 128,408 3,162,890
Total capital assets,being depreciated 14,369,949 301,418 (659,979) 326,662 14,338,050
Less accumulated depreciation for:
Buildings (1,313,860) (78,593) - - (1,392,453)
Improvements other than buildings (4,590,248) (352,643) - - (4,942,891)
Equipment (2,367,613) (192,133) 606,505 - (1,953,241)
Total accumulated depreciation (8,271,721) (623,369) 606,505 - (8,288,585)
Total capital assets,being depreciated,net 6,098,228 (321,951) (53,474) 326,662 6,049,465
Governmental activities capital assets,net $ 7,803,635 $ (81,312) $ (85,312) $ - $ 7,637,011
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government $ 126,688
Public safety 156,305
Physical environment 340,376
Total depreciation expense-governmental activities $ 623,369
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• •
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$18,303 and a due to the Community Development Capital Projects
fund from the Industrial Development fund of$30,000.
Due from:
Nonmajor Funds Total
Due to:
General Fund $ 18,303 $ 18,303
Community Development Capital Project 30,000 $ 30,000
Total $ 48,303
E. CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended September 30, 2022,was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Compensated absences $ 419,122 $ 188,683 $ (257,063) $ 350,742 $ 11,696
Net OPEB liability 207,068 87,464 (35,992) 258,540 -
Long-term liabilities $ 626,190 $ 276,147 $ (293,055) $ 609,282 $ 11,696
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 from commercial carriers
and underwriters.
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• •
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 Okeechobee, Florida, 55 S.E.
Third Avenue,Okeechobee, Florida 34974.
At September 30, 2022, the Police Officers' plan included 11 retirees or beneficiaries either receiving
or entitled to receive benefits, plus 3 survivor beneficiaries. The Police Officers' plan also includes 2
terminated member with vested benefits, and has 3 DROP participants. There are 20 active current
employees of which 7 are vested and 13 are non-vested.
At September 30, 2022, the Firefighters' plan included 7 retirees receiving or entitled to receive
benefits, plus 1 beneficiary receiving benefits. The Plan has no DROP participants. There are no active
current employees who are vested.The Plan has 5 terminated members with vested benefits.
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 total aggregate member
contributions for the year, plus state contributions for such year, and the normal 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 6.4%for the Police Officers' plan and 5.3%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 $89,462 and $39,083, respectively. These contributions are
funded by an excise tax upon certain casualty insurance companies on their gross receipts of
premiums from policy holders.
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• •
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 ended September 30, 2022, are as follows:
City Employees
Police Officers' $ 70,877 $ 54,837
Firefighters' $ 569 $ 250
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, 2022, and the current target
and actual allocation of these investments at market, per the performance analysis report, is as
follows as of September 30, 2022:
Police Officers'
Actual Target
Investments Percent Percent
Domestic Equity 49.1% 50.0%
International Equity 14.9% 10.0%
Fixed Income 34.6% 40.0%
Cash Equivalents 1.4% 0.0%
Total 100.0% 100.0%
Firefighters'
Actual Target
Investments Percent Percent
Domestic Equity 45.9% 50.0%
International Equity 15.6% 10.0%
Fixed Income 37.8% 40.0%
Cash Equivalents 0.7% 0.0%
Total 100.0% 100.0%
Money-Weighted Rate of Return - For the year ended September 30, 2022, the annual money-
weighted rate of return on the Police Officers' pension plan investments was -20.1% and on the
Firefighters' pension plan investments was -20.53%. 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.
-44-
• •
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,
2021, and the total pension liability (asset) used to calculate net pension liability (asset) was
determined by an actuarial valuation as of September 30, 2022 for the Police Officers' and
Firefighters' pension plan.
Total Pension Liability Police Officers' Firefighters'
Service cost $ 277,048 $ 64,244
Interest 635,386 247,616
Benefit changes - 268,575
Difference between actual &expected experience (48,536) (242,201)
Benefit payments, including refunds (630,299) (191,302)
Net change in total pension liability 233,599 146,932
Total pension liability-beginning 9,099,623 4,131,657
Total pension liability-ending(a) $ 9,333,222 $ 4,278,589
Plan Fiduciary Net Position Police Officers' Firefighters'
Contributions-employer(from City) $ 100,195 $ 43,576
Contributions-employer(from State) 86,979 45,578
Contributions-members 56,261 18,140
Net investment income 1,980,592 906,378
Benefit payments, including refunds (630,299) (191,302)
Administrative expense (41,277) (44,943)
Other (3,248)Net change in plan fiduciary net position 1,549,203 777,427
Plan fiduciary net position- beginning 10,495,809 4,861,814
Plan fiduciary net position -ending(b) 12,045,012 5,639,241
Net pension liability(asset)-Ending(a)-(b) $ (2,711,790) $ (1,360,652)
Plan fiduciary net position as a percentage
or Total Pension Liability(Asset) 129.06% 131.80%
For the year ending September 30, 2022, the City recognized a pension expense of$(369,793)for the
Police Officers' Plan and $9,954 for the Firefighters' Plan. On September 30, 2022, the Sponsor
reported deferred outflows of resources and deferred inflows of resources related to pensions from
the following sources:
-45-
• •
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 $ - $ 228,075
Change in assumptions - 149,192
Net difference between projected and actual earnings on
pension plan investments - 1,200,159
Contributions subsequent to the measurement date 160,339 -
Total $ 160,339 $ 1,577,426
Firefighters'
Deferred Deferred
Outflow of Inflow of
Resources Resources
Difference between expected and actual experience $ 12,449 $ 423,538
Change in assumptions 6,761 76,329
Net difference between projected and actual earnings on
pension plan investments - 558,952
Contributions subsequent to the measurement date 39,652 -
Total $ 58,862 $ 1,058,819
Deferred outflows relating to subsequent contributions of $160,339 and $39,652 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 30, 2023.
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:
2023 $ (439,718)
2024 (376,412)
2025 (418,333)
2026 (303,095)
2027 (39,868)
Total $ (1,577,426)
-46-
• •
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:
2023 $ (278,203)
2024 (277,481)
2025 (243,846)
2026 (175,550)
2027 (39,019)
Thereafter (25,510)
Total $ (1,039,609)
Net Pension Liability of the City of Okeechobee —The components of the net pension liability of the
City at September 30, 2022, 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 30,2021 which is allowed by GASB Statement No.68.
Police Fire
Total pension liability $ 9,829,173 $ 3,720,263
Plan fiduciary net position (9,486,273) (4,007,139)
City's net pension liability(asset) $ 342,900 $ (286,876)
Plan fiduciary net position as a
percentage of total pension liability(asset) 96.51% 107.71%
Expected Long-Term Rate of Return -The long-term expected rate of return on 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, 2022 are summarized as
follows:
-47-
• .
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 10.0% 8.5%
Fixed Income 40.0% 2.5%
Real Estate 0.0% 4.5%
Cash Equivalents 0.0% 0.0%
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% 7.5%
International Equity 10.0% 8.5%
Domestic Fixed Income 40.0% 2.5%
Global Fixed Income 0.0% 3.5%
Cash Equivalents 0.0% 0.0%
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 the 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':
-48-
• •
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
6.00% 7.00% 8.00%
Sponsor's net pension liability(asset) $ (1,512,796) $ 342,900 $ 632,799
Firefighters'
1% Decrease Current Discount 1% Increase
5.00% 6.00% 7.00%
Sponsor's net pension liability(asset) $ 192,035 $ (286,876) $ (679,303)
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 System (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, 2022,the Plan included 19 retirees and/or beneficiaries currently receiving benefits
plus 6 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
7.4% of covered payroll. The City's contributions for the year ended September 30, 2022, was
$85,670,which agreed to the actuarially required contribution for the year of$85,670.
Net Pension Liability (Asset) - For the year ending September 30, 2022, the City reported an asset of
$(1,569,322)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 calculate the net pension
liability(asset)was determined by an actuarial valuation as of October 1, 2022.
-49-
• •
City of Okeechobee, Florida
Notes to Financial Statements
Note 4:OTHER INFORMATION (Continued)
B. RETIREMENT COMMITMENTS—DEFINED BENEFIT PLANS(Continued)
General
Total Pension Liability
Service cost $ 207,835
Interest 333,141
Difference between actual &expected experience 242
Benefit payments, including refunds (354,969)
Net change in total pension liability 186,249
Total pension liability-beginning 4,726,458
Total pension liability-ending(a) 4,912,707
Plan Fiduciary Net Position
Contributions-employer(from City) 114,175
Contributions- members 73,581
Net investment income 1,108,894
Benefit payments, including refunds (354,969)
Administrative expense (44,184)
Net change in plan fiduciary net position 897,497
Plan fiduciary net position- beginning 5,584,559
Plan fiduciary net position-ending(b) 6,482,056
Net pension liability(asset)- Ending(a)-(b) $ (1,569,349)
Plan fiduciary net position as a percentage
of Total Pension Liability(Asset) 131.94%
The City and employees contributions for the year ended September 30,2022,are as follows.
City Employees
General $ 85,670 $ 69,461
-50-
• •
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 -
19.81% for the year ended September 30, 2022. 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, 2022 the City recognized a pension expense of$149,027 for the
General Employees' Retirement Plan. On September 30, 2022, 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 $ 9,547 $ 143,503
Change in assumptions 19,706 29,038
Net difference between projected and actual earnings on
pension plan investments - 670,164
Contributions subsequent to the measurement date 85,670 -
Total $ 114,923 $ 842,705
Deferred outflows relating to subsequent contributions of$85,670 for the General Pension Plan will
be recognized as a reduction in net pension liability in the fiscal year ending September 30,2022.
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:
2023 $ (255,608)
2024 (187,686)
2025 (224,248)
2026 (145,917)
2027 7
Total $ (813,452)
Net Pension Liability of the City of Okeechobee —The components of the net pension liability of the
City at September 30, 2022, 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 30,2021 which is allowed by GASB Statement No.68.
-51-
• •
City of Okeechobee, Florida
Notes to Financial Statements
Note 4:OTHER INFORMATION(Continued)
B. RETIREMENT COMMITMENTS—DEFINED BENEFIT PLANS(Continued)
General
Total pension liability $ 4,948,186
Plan fiduciary net position (5,061,980)
City's net pension liability(asset) $ (113,794)
Plan fiduciary net position as a
percentage of total pension liability(asset) 102.30%
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 48.9% 50.0%
International Equity 10.2% 10.0%
Fixed Income 39.5% 40.0%
Cash Equivalents 1.4% 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, 2022 are summarized in the following table:
General
Percent Long-Term
Investments Target Rate of Return*
Domestic Equity 50.0% 7.5%
International Equity 10.0% 8.5%
Fixed Income 40.0% 2.5%
Cash Equivalents 0.0% 0.0%
Total 100.0%
*Net of long-term inflation assumption of 2.5%
-52-
• •
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 expected 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) $ 433,749 $ (113,794) $ (574,702)
Actuarial Assumptions —The total pension liability was determined by an actuarial valuation as of
October 1, 2022 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
6.00% 7.00% 7.00%
Return
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
-53 -
• •
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 Weighted 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, both and females,set back 1 year
set forward 1 year,with set forward 1 year,with for males,with fully
fully generational mortality fully generational mortality generational mortality
improvements projected improvements projected improvements projected to
to each future decrement to each future decrement each future decrement date
date with Scale MP-2018. date with Scale MP-2018. with Scale MP-2018. For
For healthy participants For healthy participants healthy participants post
postemployment, PUB- postemployment, PUB- employment, PUB-2010
Mortality 2010 Headcount Weighted 2010 Headcount Weighted Headcount Weighted
Safety Healthy Retiree Safety Healthy Retiree General Below Median
Female Mortality Table Female Mortality Table Healthy Retiree Mortality
and Safety Below Median and Safety Below Median Table,separate rates for
Healthy Retiree Male Healthy Retiree Male males and females,set back
Mortality Table, both set Mortality Table, both set 1 year for males,with fully
forward 1 year,with fully forward 1 year,with fully generational mortality
generational mortality generational mortality improvements projected to
improvements projected improvements projected each future decrement date
to each future decrement to each future decrement with Scale MP-2018. For
date with Scale MP-2018. date with Scale MP-2018. disabled participants, PUB-
For disabled participants, For disabled participants, 2010 Headcount Weighted
80% PUB-2010 Headcount 80%PUB-2010 Headcount General Disabled Retiree
Weighted General Weighted General Mortality Table,separate
Disabled Retiree Mortality Disabled Retiree Mortality rates for males and
Table/20%PUB-2010 Table/20% PUB-2010 females, both set forward 3
Headcount Weighted Headcount Weighted years,without projected
Safety Disabled Retiree Safety Disabled Retiree mortality improvements.
Mortality Table,separate Mortality Table,separate
rates for males and rates for males and
females,without projected females,without projected
mortality improvements. mortality improvements.
-54-
• •
City of Okeechobee, 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, 2022 was as follows:
Police General
Firefighters' Officers' Employees' Total Pension
Pension Pension Pension Trust Funds
ASSETS
Cash equivalents $ 52,567 $ 135,517 $ 50,297 $ 238,381
Investments:
Mutual funds 3,965,296 9,350,426 5,006,545 18,322,267
Receivables 681 9,922 11,856 22,459
Prepaid expenses - - 909 909
Total assets 4,018,544 9,495,865 5,069,607 18,584,016
LIABILITIES
Accounts payable 11,403 9,592 7,626 28,621
Total liabilities 11,403 9,592 7,626 28,621
NET POSITION
Restricted for pension benefits $ 4,007,141 $ 9,486,273 $ 5,061,981 $ 18,555,395
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0 •
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, 2022 was as
follows:
Police General
Firefighters' Officers' Employees' Total Pension
Pension Pension Pension Trust Funds
ADDITIONS
Contributions
State $ 39,083 $ 89,462 $ - $ 128,545
City 569 70,877 85,670 157,116
Employees 250 54,837 69,461 124,548
Total contributions 39,902 215,176 155,131 410,209
Investment earnings:
Net depreciation in the fair value
of investments (1,225,864) (2,696,279) (1,378,886) (5,301,029)
Interest and dividends 167,635 377,581 179,134 724,350
Total investment earnings (1,058,229) (2,318,698) (1,199,752) (4,576,679)
Less investment expenses (21,000) (21,976) (19,500) (62,476)
Net investment loss (1,079,229) (2,340,674) (1,219,252) (4,639,155)
Total additions (1,039,327) (2,125,498) (1,064,121) (4,228,946)
DEDUCTIONS
Benefits paid to participants 192,881 372,018 218,611 783,510
Refunds on termination - 5,367 - 5,367
DROP payments 355,505 - 94,758 450,263
Administrative expenses 44,386 55,856 42,586 142,828
Total deductions 592,772 433,241 355,955 1,381,968
Change in net position (1,632,099) (2,558,739) (1,420,076) (5,610,914)
Net position, beginning of year 5,639,240 12,045,012 6,482,057 24,166,309
Net position,end of year $ 4,007,141 $ 9,486,273 $ 5,061,981 $ 18,555,395
-56-
• •
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 employees 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 City 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 53 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 30,2022 totaled $1,791.
Plan membership. Plan membership as of September 30, 2021 the measurement date)was:
Number of covered
individuals
Inactive members currently receiving benefits 2
Inactive members entitled to but not yet receiving benefits -
Active members 53
Total 55
The OPEB liability was determined based on the following assumptions and information:
Employer's reporting date: September 30,2022
Measurement date: September 30, 2021
Valuation date: September 30, 2021
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• •
City of Okeechobee, Florida
Notes to Financial Statements
Note 4:OTHER INFORMATION(Continued)
C. POSTEMPLOYMENT BENEFITS OTHER THAN PENSION (Continued)
Actuarial assumptions and other inputs.On the September 30,2021 measurement date,the
actuarial assumptions and other inputs applied include the following:
Inflation 2.25 percent
Salary increases 6.00 percent
Discount rate 2.19 percent
Healthcare cost trend rates 6.00 percent for FY beginning 2022,5.75 percent
for FY beginning 2023 and then gradually
decreasing to an ultimate trend of 3.75 percent
Mortality PUB 2010 mortality tables published by the
Society of Actuaries with generational mortality
improvements using Scale MP-2018
Changes Changes in assumptions and other inputs
include the change in the discount rate from
2.41%as of the beginning of the measurement
period to 2.19%as of September 30, 2021.This
change is reflected in the Schedule of Changes in
Total OPEB Liability
Change in Total OPEB Liability
Increase (Decrease)
Total OPEB
Liability
(a)
Balance as of September 30, 2021 $ 207,068
Changes for the year:
Service cost 23,718
Interest 5,415
Differences between expected and actual
experience of the Total OPEB 58,331
Changes in assumptions and other inputs (23,809)
Benefit payments (12,183)
Net changes 51,472
Balance as of September 30, 2022 $ 258,540
-58-
• •
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 following table represents the City's total OPEB liability
calculated using the discount rate of 2.19%, 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 (1.19%) or one percentage
point higher(3.19%)than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(1.19%) (2.19%) (3.19%)
Total OPEB Liability $ 263,856 $ 258,540 $ 248,008
The following table represents the City's total OPEB liability calculated using the ultimate health care
cost trend rate of 3.75%, 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 (2.75%) or one percentage point
higher(4.75%)than the current rate:
1% Decrease Ultimate Trend 1% Increase
(2.75%) (3.75%) (4.75%)
Total OPEB Liability $ 234,713 $ 258,540 $ 287,119
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 change 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.
-59-
• •
City of Okeechobee, Florida
Notes to Financial Statements
Note 5:SUBSEQUENT EVENTS
Management evaluated all events or transactions that occurred after September 30, 2022 through
May 19, 2023, the date the current year's financial statements were available to be issued. The
following events occurred:
In October 2022, the City approved the purchase of four 2023 Dodge Charges in the amount of
$145,748.
In November 2022, The City approved the purchase of a Caterpillar Backhoe Loader in the amount of
$135,276.
In November 2022, the City approved the purchase of a 2023 Ford F-250 truck in the amount of
$40,778 for the Public Works department.
In January 2023, the City was awarded a grant in the amount of$660,000 for improvements to City
Hall.
In February 2023, the City approved a piggyback agreement on a contract with a company for the
South 4th Street Lining Project in the amount of$1,000,000.
-60-
• •
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
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• •
City of Okeechobee, Florida
Schedule of Revenues, Expenditures and Changes in Fund Balances-
Budget and Actual-General Fund
Actual Variance with
Original Final (on Budgetary Final Budget
Year ended September30,2022 Budget Budget Basis) Positive(Negative)
Revenues
Taxes $ 3,286,790 $ 3,404,000 $ 3,477,894 $ 73,894
Intergovernmental 3,931,201 2,956,268 3,080,961 124,693
Charges for services 547,720 564,340 572,072 7,732
Permits and fees 577,800 761,120 826,371 65,251
Fines and forfeitures 31,450 42,970 47,708 4,738
Investment earnings 9,400 70,600 72,356 1,756
Miscellaneous 3,020 16,100 18,041 1,941
Total revenues 8,387,381 7,815,398 8,095,403 280,005
Expenditures --
Current:
General government:
Legislative 182,835 154,700 152,910 1,790
Executive 268,005 248,600 242,051 6,549
City clerk 300,087 255,900 223,657 32,243
Financial services 337,930 310,800 289,105 21,695
Legal council 190,400 176,700 184,486 (7,786)
General services 558,794 501,800 494,280 7,520
Total general government 1,838,051 1,648,500 1,586,489 62,011
Public safety:
Fire ,1,070,865 834,950 825,797 9,153
Police --3,149,173 2,962,677 2,866,087 96,590
Total public safety 4,220,038 3,797,627 3,691,884 105,743
Transportation 1,394,125 1,310,700 1,274,221 36,479
Physical environment - 1,978,201 462,400 411,555 50,845
Capital outlay ,- 318,800 417,000 380,204 36,796
Total expenditures 9,749,215 7,636,227 7,344,353 291,874
Excess(deficiency)of revenues under
(over)expenditures (1,361,834) 179,171 751,050 571,879
Other financing sources(uses)
Operating transfers in - - - -
Sale of capital assets -4- 121,000 121,000 121,906 906
Net other financing sources(uses) 121,000 121,000 121,906 906
Excess(deficiency)of revenues and other
financing sources over(under)
expenditures and other financing
sources(uses) (1,240,834) 300,171 872,956 572,785
Fund balances, beginning of year -r10,242,883 10,242,883 10,242,883 -
Fund balances,end of year % $ 9,002,049 $ 10,543,054 11,115,839 $ 572,785
Reconciliation of budgetary
to GAAP basis
Current year encumbrances 295,742
Prior year encumbrances (308,609)
Fund balance on GAAP basis $ 11,102,972
The accompanying notes to required supplementanformation are an integral part of this schedule.
ti63- j
. i
City of Okeechobee, Florida
Schedule of Revenues, Expenditures and Changes in Fund Balances—
Budget and Actual—General Fund
A. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with U.S. generally accepted accounting principles
for all governmental fund. The Community Development Capital Projects fund is budgeted but the
budget to actual is not required to be presented for the capital projects fund. 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. Transfers 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.
The accompanying notes to required supplementary information are an integral part of this schedule.
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
Police Officers'
2022 2021 2020
Total Pension Liability
Service cost $ 300,327 $ 277,048 $ 279,173
Interest 642,970 635,386 615,045
Difference between actual &expected experience (69,960) (48,536) (76,855)
Assumption changes - - (211,356)
Benefit payments (377,386) (630,299) (557,786)
Refunds - -Net change in total pension liability 495,951 233,599 48,221
Total pension liability-beginning 9,333,222 9,099,623 9,051,402
Total pension liability-ending(a) 9,829,173 9,333,222 9,099,623
Plan Fiduciary Net Position
Contributions-employer(from City) 70,877 100,195 126,811
Contributions-employer(from State) 89,462 86,979 90,650
Contributions- members 54,837 56,261 53,051
Net investment income (2,340,675) 1,980,592 1,170,587
Benefit payments (372,018) (623,923) (542,324)
Refunds (5,367) (6,376) (15,462)
Administrative expense (55,855) (41,277) (41,667)
Other - (3,248) (2,155)
Net change in plan fiduciary net position (2,558,739) 1,549,203 839,491
Plan fiduciary net position- beginning 12,045,012 10,495,809 9,656,318
Plan fiduciary net position-ending(b) 9,486,273 12,045,012 10,495,809
Net pension liability(asset)- Ending(a)-(b) $ 342,900 $ (2,711,790) $ (1,396,186)
Plan fiduciary net position as a percentage
of Total Pension Liability 96.51% 129.06% 115.34%
Covered payroll** $ 1,097,275 $ 1,125,784 $ 1,061,193
Net pension liability as a percentage
of covered payroll 31.25% -240.88% -131.57%
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.
-66.-
i
• •
City of Okeechobee, Florida
Required Pension Supplementary Information
2019 2018* 2017 2016 2015 2014
$ 254,066 $ 258,622 $ 235,345 $ 264,445 $ 247,353 $ 251,499
607,391 580,995 573,285 543,946 506,147 479,146
(153,927) (276,621) (270,100) 126,875 (219,850) (784)
- - 22,143 - 94,065 -
(502,852) (281,028) (255,731) (468,694) (203,855) (201,397)
(12,836) 72,669 - (25,003) (321) (26,953)
191,842 354,637 304,942 441,569 423,539 501,511
8,859,560 8,504,923 8,199,981 7,758,412 7,334,873 6,833,362
9,051,402 8,859,560 8,504,923 8,199,981 7,758,412 7,334,873
130,886 151,492 169,789 147,312 192,581 200,210
90,153 81,690 78,659 73,960 70,807 67,639
50,359 46,212 45,863 45,554 47,740 43,135
330,227 727,699 903,712 607,763 (95,964) 694,790
(502,852) (281,028) (255,731) (468,694) (203,855) (201,397)
(12,836) - - (25,003) (321) (26,953)
(47,116) (45,827) (41,855) (32,120) (30,198) (18,097)
- - (3,284) (6) 3,886 -
38,821 680,238 897,153 348,766 (15,324) 759,327
9,617,497 8,937,259 8,040,106 7,691,340 7,706,664 6,947,337
9,656,318 9,617,497 8,937,259 8,040,106 7,691,340 7,706,664
$ (604,916) $ (757,937) $ (432,336) $ 159,875 $ 67,072 $ (371,791)
106.68% 108.56% 105.08% 98.05% 99.14% 105.07%
$ 1,007,180 $ 924,250 $ 917,260 $ 970,646 $ 911,189 $ 862,700
-60.06% -82.01% -47.13% 16.47% 7.36% -43.10%
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
Firefighters'
2022 2021 2020
Total Pension Liability
Service cost $ 18,570 $ 64,244 $ 117,980
Interest 225,789 247,616 275,148
Benefit changes - 268,575 (945)
Difference between actual &expected experience (254,300) (242,201) (85,233)
Assumption changes - - (96,526)
Benefit payments (548,385) (191,302) (152,193)
Refund - - -
Other - - -
Net change in total pension liability (558,326) 146,932 58,231
Total pension liability-beginning 4,278,589 4,131,657 4,073,426
Total pension liability-ending(a) 3,720,263 4,278,589 4,131,657
Plan Fiduciary Net Position
Contributions-employer(from City) 569 43,576 86,196
Contributions-employer(from State) 39,083 45,578 52,670
Contributions-members 250 18,140 20,552
Net investment income (1,079,229) 906,378 507,378
Benefit payments (548,385) (150,688) (150,688)
Refunds - (40,614) (1,505)
Administrative expense (44,387) (44,943) (40,275)
Other - - 652
Net change in plan fiduciary net position (1,632,099) 777,427 474,980
Plan fiduciary net position-beginning 5,639,241 4,861,814 4,386,834
Plan fiduciary net position -ending(b) 4,007,142 5,639,241 4,861,814
Net pension liability(asset)- Ending(a)-(b) $ (286,879) $ (1,360,652) $ (730,157)
Plan fiduciary net position as a percentage
of Total Pension Liability 107.71% 131.80% 117.67%
Covered payroll** 4,990 367,446 411,033
Net pension liability as a percentage
of covered payroll -5749.08% -370.30% -177.64%
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.
• •
City of Okeechobee, Florida
Required Pension Supplementary Information
2019 2018* 2017 2016 2015 2014
$ 145,856 $ 136,825 $ 156,989 $ 156,107 $ 144,773 $ 130,539
271,341 257,407 255,218 235,684 213,154 196,106
(132,896) (162,443) (91,659) 56,393 (19,771) (741)
- - (13,449) - 49,797 -
(141,381) (107,105) (106,572) (102,590) (96,939) (142,060)
(9,052) (16,027) (20,437) - - -
- 19,828 - 3,256 - -
133,868 128,485 180,090 348,850 291,014 183,844
3,939,558 3,811,073 3,630,983 3,282,133 2,991,119 2,807,275
4,073,426 3,939,558 3,811,073 3,630,983 3,282,133 2,991,119
83,988 115,253 107,123 97,709 92,863 82,058
52,810 52,793 50,589 49,889 52,662 53,235
23,945 23,446 25,409 27,433 26,324 23,854
140,894 308,920 404,267 246,381 (44,021) 318,708
(141,381) (107,105) (106,572) (102,590) (96,939) (142,060)
(9,052) (16,027) (20,437) - - -
(43,675) (59,878) (34,933) (31,639) (27,132) (16,233)
- - (6,375) (1,766) - -
107,529 317,402 419,071 285,417 3,757 319,562
4,279,305 3,961,903 3,542,832 3,257,415 3,253,658 2,934,096
4,386,834 4,279,305 3,961,903 3,542,832 3,257,415 3,253,658
$ (313,408) $ (339,747) $ (150,830) $ 88,151 $ 24,718 $ (262,539)
107.69% 108.62% 103.96% 97.57% 99.25% 108.78%
478,900 $ 468,920 $ 508,180 $ 563,285 $ 523,119 $ 477,080
-65.44% -72.45% -29.68% 15.65% 4.73% -55.03%
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
General Employees'
2022 2021 2020
Total Pension Liability
Service cost $ 185,154 $ 207,835 $ 184,223
Interest 333,968 333,141 315,828
Benefit changes - - 90,157
Difference between actual &expected experience (170,274) 242 2,277
Assumption changes - - (47,772)
Benefit payments (218,611) (354,969) (201,373)
Refunds (94,758) - -
Other*** - - -
Net change in total pension liability 35,479 186,249 343,340
Total pension liability- beginning 4,912,707 4,726,458 4,383,118
Transfer of pension liability for Okeechobee
Utility Authority***** - - -
Total pension liability-ending(a) 4,948,186 4,912,707 4,726,458
Plan Fiduciary Net Position
Contributions-employer 85,670 114,175 118,781
Contributions- members 69,461 73,581 76,693
Net investment income (1,219,252) 1,108,894 603,919
Benefit payments (218,611) (354,969) (178,547)
Refunds (94,758) - (22,826)
Administrative expense (42,586) (44,184) (40,906)
Other**** - - (652)
Net change in plan fiduciary net position (1,420,076) 897,497 556,462
Plan fiduciary net position-beginning 6,482,056 5,584,559 5,028,097
Transfer plan fiduciary net position to Okeechobee
Utility Authority***** - - -
Plan fiduciary net position-ending(b) 5,061,980 6,482,056 5,584,559
Net pension liability(asset)- Ending(a)-(b) $ (113,794) $ (1,569,349) $ (858,101)
Plan fiduciary net position as a percentage
of Total Pension Liability 102.30% 131.94% 118.16%
Covered payroll** $ 1,157,694 $ 1,229,302 $ 1,278,231
Net pension liability as a percentage
of covered payroll -9.83% -127.66% -67.13%
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
2019 2018* 2017 2016
$ 152,255 $ 154,529 $ 136,373 $ 421,387
295,453 284,633 91,058 763,785
(141,938) 20,956 - (524,849)
- - 133,790 -
(259,463) (164,189) (336,740) (331,215)
(346) (16,592) (17,378) (18,267)
- - 2,641,019 -
45,961 279,337 2,648,122 310,841
4,337,157 4,057,820 1,409,698 11,400,112
- - - (10,301,255)
4,383,118 4,337,157 4,057,820 1,409,698
115,324 75,793 94,009 446,184
66,020 60,312 56,405 183,145
155,830 394,042 477,649 825,935
(259,463) (164,189) (336,740) (331,215)
(346) (16,592) (17,378) (18,267)
(53,249) (46,328) (48,490) (57,186)
- - 3,117,018 (2,208)
24,116 303,038 3,342,473 1,046,388
5,003,981 4,700,943 1,358,470 10,238,992
- - - (9,926,910)
5,028,097 5,003,981 4,700,943 1,358,470
$ (644,979) $ (666,824) $ (643,123) $ 51,228
114.72% 115.37% 115.85% 96.37%
$ 1,100,333 $ 1,005,204 $ 940,083 $ 911,233
-58.62% -66.34% -68.41% 5.62%
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City of Okeechobee, Florida
Required Pension Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Last Seven 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 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 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 single 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 Utility Authority Employees'Retirement
System,and are no longer covered under the City of Okeechobee General Employees'Retirement System.
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THIS PAGE IS INTENTIONALLY LEFT BLANK.
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
Schedule of Contributions
Last Nine Fiscal Years
Police Officers
9/30/2022 9/30/2021 9/30/2020 9/30/2019
Actuarially determined contributions $ 158,267 $ 185,025 $ 192,448 $ 204,611
Contributions in relation to the actuarially
determined contributions 160,339 187,174 217,461 221,039
Contribution deficiency(excess) $ (2,072) $ (2,149) $ (25,013) $ (16,428)
Covered payroll* $ 1,097,275 $ 1,125,784 $ 1,061,193 $1,007,180
Contributions as a percentage of covered
payroll 14.61% 16.63% 20.49% 21.95%
Firefighters
9/30/2022 9/30/2021 9/30/2020 9/30/2019
Actuarially determined contributions $ 46,153 $ 104,102 $ 157,372 $ 139,143
Contributions in relation to the actuarially
determined contributions 39,652 89,154 138,866 136,798
Contribution deficiency(excess) $ 6,501 $ 14,948 $ 18,506 $ 2,345
Covered payroll* $ 4,990 $ 367,446 $ 411,033 $ 478,900
Contributions as a percentage of covered
payroll 794.63% 24.26% 33.78% 28.57%
General Employees
9/30/2022 9/30/2021 9/30/2020 9/30/2019
Actuarially determined contributions $ 85,670 $ 114,325 $ 118,875 $ 114,875
Contributions in relation to the actuarially
determined contributions 85,670 114,175 118,781 115,324
Contribution deficiency(excess) $ - $ 150 $ 94 $ (449)
Covered payroll $ 1,157,694 $ 1,229,302 $ 1,278,231 $1,100,333
Contributions as a percentage of covered
payroll 7.40% 9.29% 9.29% 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%.
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• •
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 $ 263,240 $ 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 $ 911,189 $ 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 $ 138,914 $ 122,212
168,046 157,712 147,598 145,525 135,293
$ (175) $ 12,557 $ (3,966) $ (6,611) $ (13,081)
$ 468,920 $ 508,180 $ 563,285 $ 523,119 $ 477,080
35.84% 31.03% 26.20% 27.82% 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 94,009 110,448 379,111 379,099
$ - $ (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%
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
Schedule of Investment Returns
Last Nine Fiscal Years
Police Officers'
9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Annual money-weighted rate of return
net of investment expense -20.10% 18.76% 11.78% 3.10% 8.73%
Fire Fighters'
9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Annual money-weighted rate of return
net of investment expense -20.53% 19.30% 10.61% 2.39% 6.11%
General Employees'
9/30/2022 9/30/2021 9/30/2020 9/30/2019 9/30/2018
Annual money-weighted rate of return
net of investment expense -19.81% 19.17% 11.37% 2.23% 7.55%
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.
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• •
City of Okeechobee, Florida
Required Pension Supplementary Information
9/30/2017 9/30/2016 9/30/2015 9/30/2014
10.68% 7.59% -1.65% 9.96%
9/30/2017 9/30/2016 9/30/2015 9/30/2014
10.76% 6.83% -2.19% 10.43%
9/30/2017 9/30/2016 9/30/2015 9/30/2014
9.78% 7.78% -1.38% 10.60%
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City of Okeechobee, Florida
Schedule of Changes in Total OPEB Liability and Related Ratios
Year Ending September 30, 2022 2021 2020 2019 2018
Total OPEB liability
Service cost $ 23,718 $ 20,845 $ 12,015 $ 12,580 $ 13,441
Interest 5,415 5,582 6,320 5,640 4,977
Difference between expected
and actual experience 58,331 - 6,792 - -
Changes of assumptions or other inputs (23,809) 4,218 14,710 (4,290) (3,808)
Benefit payments (12,183) (11,458) (9,915) (9,081) (17,198)
Net change in total OPEB liability 51,472 19,187 29,922 4,849 (2,588)
Total OPEB liability-beginning 207,068 187,881 157,959 153,110 155,698
Total OPEB liability-ending $ 258,540 $ 207,068 $ 187,881 $ 157,959 $ 153,110
Covered employee payroll $ 2,472,843 $ 3,359,887 $ 3,041,518 $ 2,984,722 $ 2,809,503
Total OPEB liability as a percentage of
covered employee payroll 10.46% 6.16% 6.18% 5.29% 5.45%
*GASB 75 requires an employer to disclose a 10-year history. However,until a
full 10-year trend is compiled, information will be presented only for those
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%
9/30/2022-2.19%
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• •
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 Contributions Rates:
Police Officers' Pension Firefighters' Pension General Pension Plan
Plan Plan
Actuarial Cost
Aggregate Aggregate Aggregate
Method:
Amortization N/A N/A N/A
Method:
Remaining
Amortization N/A N/A N/A
Period:
Asset Valuation 4-year smoothed 4-year smoothed 4-year smoothed
Method: market market market
Salary Increases: 6.00% 7.00% 6.00%
Inflation: 2.50% 2.50% 2.50%
Investment Rate
7.00% 6.00% 7.00%
of Return:
Retirement Age: 100%when first eligible 100%when first eligible 100%when first eligible
for Normal Retirement for Normal Retirement for Normal Retirement
or DROP entry or DROP entry. or DROP entry
Mortality: For healthy participants For healthy participants For healthy participants
during employment, during employment, during employment,
PUB-2010 Headcount PUB-2010 Headcount PUB-2010 Headcount
Weighted Safety Weighted Safety Weighted General
Employee Female Employee Female Below Median
Mortality Table and Mortality Table and Employee Mortality
Safety Below Median Safety Below Median Table,separate rates for
Employee Male Employee Male males and females, set
Mortality Table, both Mortality Table, both back 1 year for males,
set forward 1 year,with set forward 1 year,with 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.
Scale MP-2018. Scale MP-2018.
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• •
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 For 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 General 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.
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• •
Carr,Riggs&Ingram,LLC
CARRcRi 215 Baytree Drive
IR I G G S & Melbourne,Flo ida 32940
I
N G R A M 321 255 0088
CPAs and Advisors 386.336.4189(fax)
CRlcpa.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, (the "City") as of and for the year ended September 30, 2022, 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 May 19, 2023. 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.
Report on 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.
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 will not be prevented,
or detected and corrected, on a timely basis. 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 attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or, significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
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•
Report on 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.
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.
� -
, L.L.c.c,Priqu�,
Melbourne, Florida
May 19,2023
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• •
Carr,Riggs&Ingram,LLC
215 Baytree Drive
CARR RIGGS &
Melbourne,Florida 32940
N G R A M 321 255 0088
386 336 4189(fax)
CPAs and Advisors CRlcpa.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, 2022, and have issued our report thereon dated May 19, 2023.
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 Statements 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 May 19, 2023, 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. Corrective actions have been taken to address findings and
recommendations made in the preceding financial audit report. Finding 2021-001 is cleared. The
finding originated in fiscal year 2021.
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.
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• •
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 determination as to whether or not the City of
Okeechobee, Florida met one or more of the conditions described in Section 218.503(1), Florida
Statutes, and to identify the specific condition(s) met. 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 audit, 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 not be used by anyone other than these specified
parties.
3vo,` uv'Y txn , 1 L.C.
Melbourne, Florida
May 19, 2023
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• •
Carr,Riggs&Ingram,LLC
215 Baytree Drive
CARR RIGGS & :2:::;032940
cRi N G R A M
386 336 4189(fax)
CPAs and Advisors CRlcpa.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,
2022. 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 require 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 whether 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 Investment Policies, for the year
ended September 30, 2022.
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.
et1r• f L.L.C.
Melbourne, Florida
May 19, 2023
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