OUA Audit Report 9-30-2023OKEECHOBEE UTILITY AUTHORITY
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR'S REPORT THEREON
SEPTEMBER 30, 2023
OKEECHOBEE UTILITY AUTHORITY
SEPTEMBER 30, 2023
TABLE OF CONTENTS
Pages
Independent Auditor's Report
1 - 3
Management's Discussion and Analysis (required supplementary information)
4 - 9
Basic Financial Statements:
Statement of Net Position
10-11
Statement of Revenues, Expenses, and Changes in Net Position
12
Statement of Cash Flows
13-14
Statement of Fiduciary Net Position
15
Statement of Changes in Fiduciary Net Position
16
Notes to Financial Statements
17-44
REQUIRED SUPPLEMENTAL INFORMATION
Schedule of Changes in Total OPEB Liability
45
Schedule of Changes in Net Pension Liability and Related Ratios
46-47
Schedule of Employer Contributions and Investment Returns
48
Notes to the Schedule of Contributions
49
OTHER INFORMATION
Schedule of Revenues and Expenses
50
Information Required by Section 218.39(3)(c), Florida Statutes
51
Budgetary Schedule
52
OKEECHOBEE UTILITY AUTHORITY
SEPTEMBER 30, 2023
TABLE OF CONTENTS
(Continued)
OTHER REPORTS
Pages
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and on Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 53-54
Independent Auditor's Report on Compliance for the Major
State Project and on Internal Control Over Compliance
Required by Chapter 10.550, Rules of the Auditor General 55-57
Schedule of Expenditures of State Financial Assistance
Schedule of Findings and Questioned Costs
WIV
59-60
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 61-63
Independent Accountant's Report on Compliance with
Section 218.415, Florida Statutes
MIA
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGE CENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT AUDITOR'S REPORT
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
EVERETT B. NOWLEN (1930-1964), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP®, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP®, CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
Report on the Audit of the Financial Statements FAX (561) 996-6248
Opinions
We have audited the accompanying financial statements of the proprietary fund and aggregate
remaining fund information of the Okeechobee Utility Authority, as of and for the year ended
September 30, 2023, and the related notes to the financial statements, which collectively comprise the
Okeechobee Utility Authority's basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the Okeechobee Utility Authority, as of September 30, 2023, and the
respective changes in financial position and cash flows thereof for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
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 the Okeechobee Utility
Authority 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.
Responsibilities of Managementfor 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 Okeechobee
Utility Authority'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.
1
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
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 Okeechobee Utility Authority'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 Okeechobee Utility Authority's ability to
continue as a going concern for a reasonable period of time.
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 4 through 9 the schedule of changes in the total
OPEB liability on page 45, and the pension schedules on pages 46 through 49 be presented to
supplement the basic financial statements. Such information is the responsibility of management and,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
2
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Okeechobee Utility Authority's basic financial statements. The
accompanying schedule of expenditures of state financial assistance, presented as required by
Chapter 10.550, Rules of the Auditor General, is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other
records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, schedule of expenditures of state
financial assistance is fairly stated, in all material respects, in relation to the basic financial statements
as a whole.
Other Information
Management is responsible for the other information included in the annual report. The schedule of
revenues and expenses on page 50 is presented for purposes of additional analysis, and the
information on pages 51 and 52 is presented for compliance with Section 218.39(3)(c), Florida
Statutes and Section 10.554(1)(i)6, Rules of the Auditor 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
June 4, 2024, on our consideration of the Okeechobee Utility Authority'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 Okeechobee Utility Authority'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 Okeechobee Utility
Authority's internal control over financial reporting and compliance.
West Palm Beach, Florida
June 4, 2024
3
Okeechobee Utility Authority
Management's Discussion and Analysis
For the Fiscal Year Ended September 30, 2023
Management's Discussion and Analysis (MD&A) is intended to provide an objective analysis of the
Okeechobee Utility Authority (the "Authority") financial activities for fiscal year ended September
30, 2023. The analysis provides summary financial information for the Authority and should be read
in conjunction with the audited financial statements.
FINANCIAL HIGHLIGHTS
■ The Authority's assets exceeded its liabilities at September 30, 2023, by $71.6 million (Net
Position). Of this amount, approximately $11.5 million is its unrestricted net position (Table 1).
■ The Authority's operating revenues increased $947,966 over FY2022 and operating expenses
increased by $884,512 from FY2022 (Table 2).
■ Operating expenses were $661,366 less than budget.
■ The Authority received $8,369,570 in capital grant funding from the Florida Department of
Environmental Protection to help pay for the 1) Septic to Sewer project referred to as the
Southwest Wastewater Service Area, and 2) expanding the wastewater collection system for Pine
Ridge Park community.
■ The Authority's total capital assets, before accumulated depreciation, increased by approximately
$2.3 million from FY2022 (Table 3).
OVERVIEW OF THE FINANCIAL STATEMENTS
This management discussion and analysis (MD&A) is intended to serve as an introduction to the
Authority's financial statements. Since the Authority is a special district involved solely in the
provision of water and wastewater services within the service area of the utility system, its operations
are accounted for in a Proprietary Fund, specifically an Enterprise Fund. Enterprise Funds are used
to report business -type functions, which recover all or a significant portion of their costs through user
fees and charges. Over time, significant changes in the Authority's net position serve as a useful
indicator of whether its financial health is improving or deteriorating. To fully assess the financial
health of any entity, the reader must also consider other non-financial factors such as changes in
economic conditions, customer growth, and legislative mandates.
The Okeechobee Utility Authority Employees' Retirement System is a component unit of the
Authority as it is fiscally dependent on and imposes a specific financial burden. It is reported in the
Authority's financial statements as a Fiduciary Fund, the Employee's Pension Trust Fund. Fiduciary
Funds are not included in the government -wide financial statements because the Authority cannot use
these assets to finance its operations. Therefore, there are no government -wide financial statements,
as they would be redundant to the fund financial statements.
REQUIRED FINANCIAL STATEMENTS
The financial statements report information about the Authority using accounting methods similar to
those used by private business entities. The costs of providing goods or services are primarily
recaptured through user charges for water and wastewater services. The full accrual basis of
accounting is used whereby revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows.
The Statement of Net Position includes the Authority's assets, deferred outflows of resources,
liabilities, and deferred inflows of resources. It provides information about the nature and amounts of
investments in resources (assets) and the obligations to creditors (liabilities). It also provides the
basis for evaluating the capital structure of the Authority and assessing the liquidity and financial
flexibility of the Authority. The current year's revenues and expenses are accounted for in the
Statement of Revenues, Expenses and Changes in Net Position. This statement measures the results
of the Authority's operations over the past year and may be used to determine whether the Authority
is efficiently recovering all its costs through its user fees and other charges. These two statements
help the reader understand the Authority's profitability and credit worthiness.
The third required financial statement is the Statement of Cash Flows. The primary purpose of this
statement is to provide information about the Authority's cash receipts and cash payments during the
reporting period. This statement reports cash receipts, cash payments, and net changes in cash
resulting from operating, investing and financing activities. Answers to questions regarding sources
of cash, uses of cash, and changes in cash balances during the reporting period may be found in the
Statement of Cash Flows.
The Notes to the Financial Statements provide additional information that is essential to a full
understanding of the financial statements.
FINANCIAL ANALYSIS OF THE AUTHORITY AS A WHOLE
The Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position
report information about the Authority's activities in a way that reflects whether the Authority is
improving or deteriorating as a result of the fiscal year's activities. These two statements report the
net position of the Authority and changes in the net position. Viewing the Authority's net position
helps one to evaluate the financial health and financial position of the Authority. Net position is the
difference between assets and deferred outflows of resources (what is owned) and liabilities and
deferred inflows of resources (what is owed).
5
The Authority's total net position increased $11,109,592. The condensed analysis below focuses on
the Authority's net position (Table 1) and changes in net position from fiscal year 2022 to fiscal year
2023.
Net Capital Assets
Restricted Assets
Current and Other Assets
Total Assets
Total Deferred Outflows
Noncurrent Liabilities
Liabilities Payable from
Restricted Assets
Current Liabilities
Total Liabilities
Total Deferred Inflows
Net Investment in Capital Assets
Restricted for Capital Projects
Restricted for Debt Service
Restricted for Rate Stabilization
Unrestricted Net Position
Total Net Position
Net Position
FY2023
FY2022
Net Change
Percent
$ 71,898,816
$ 64,217,117
$ 7,681,699
11.96%
3,914,591
4,123,270
(208,679)
-5.06%
13,801,154
10,937,477
2,863,677
26.18%
89,614,561
79,277,864
10,33 6,697
13.04%
1,348,649
2431,783
(883,134)
-39.57%
14,173,731
16,508,708
(2,334,977)
-14.14%
649,424
727,474
(78,050)
-10.73%
4,113,187
3,203,036
910,151
28.42%
18,936,342
20,439,218
(1,502,876)
-7.35%
426,765
579,918
(153,153)
-26.41%
56,144,496
47,732,477
8,412,019
17.62%
2,380,369
2,284,179
96,190
4.21%
192,139
496,506
(304,367)
-61.30%
1,339,359
1,339,359
-
0.00%
11,543,740
8,637,990
2,905,750
33.64%
$ 71,600,103
$ 60,490,511
$ 11,109,592
18.37%
rel
A comparison of the Authority's revenues and expenses for the fiscal years ended September 30,
2023 and September 30, 2022 is as follows (Table 2):
Revenue
Water System Revenue
Wastewater System Revenue
Miscellaneous Revenue
Non -Operating Revenue
Total Revenue
Expenses
Operating Expenses
Non -Operating Expenses
Total Expenses
Excess Revenue over Expenses
Table 2
Revenues and Expenses
FY2023
$ 7,711,973
4,726,216
354,829
440,180
FY2022 Net Change
$ 7,285,294
4,306,134
253,624
74,475
$ 426,679
420,082
101,205
365,705
13,233,198 11,919,527 1,313,671
Percent
5.86%
9.76%
39.90%
491.04%
11.02%
10,848,939
9,964,427
884,512
8.88%
420,187
472,215
(52,028)
-11.02%
11,269,126
10,436,642
832,484
7.98%
Before Capital Contributions
1,964,072
1,482,885
481,187 32.45%
Capital Contributions
9,145,520
2,855,345
6,290,175 220.29%
Total Change in Net Position
11,109,592
4,338,230
6,771,362 156.09%
Beginning Net Position
60,490,511
56,152,281
4,338,230 7.73%
Ending Net Position
$ 71,600,103 $ 60,490,511 $ 11,109,592 18.37%
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2023, the Authority had $71,898,816 after accumulated depreciation
invested in a broad range of utility capital assets including land, ground water plant, surface water
plant, water main system, wastewater plant, lift stations, sanitary sewer system, force mains,
equipment and construction in process.
7
The Authority's total capital assets increased after accumulated depreciation from last year by
approximately $7,681,699 as reflected in the following table (Table 3):
Table 3
Changes in Capital Assets
Land and Easements
Buildings
Equipment
Distribution & Collection System
Lease Accumulated Depreciation
Construction in Process
FY2023 FY2022
$ 2,906,861
$ 2,906,861
1,108,764
1,108,764
4,558,090
4,398,318
104,175,164
102,080,440
112,748,879
110,494,383
(54,157,837)
(51,571,917)
58,591,042
58,922,466
13,307,774
5,294,651
Net Change
159,772
2,094,724
2,254,496
(2,585,920)
(331,424)
8,013,123
$ 71,898,816 $ 64,217,117 $ 7,681,699
The Authority plans each year for capital improvement projects. Some projects are completed within
the fiscal year, and other projects take longer than a year to complete. In fiscal year ended September
30, 2023 Lakeview and Orange Loop wastewater projects were completed.
Table 4 below reflects future major additions and the costs incurred as of September 30, 2023.
Table 4
Capital Improvement Projects
SW Wastewater Area Septic to Sewer $ 9,206,981
Treasure Island 198,812
Pine Ridge Park Wastewater expansion 3,307,001
SW 5th Ave WW collection Study 231,193
SWSA Okee-Tantie Project III 337,296
Other Projects 26,491
Total Ongoing CIP Projects $13,307,774
See Notes to the Financial Statements (Note 6) for additional information related to capital assets.
M.
Debt Management
On September 30, 2023, the Authority had State Revolving Loans and notes payable outstanding in
the amount of $14,809,351. The total principal repaid in FY2023 was $2,113,253. See Notes to the
Financial Statements (Note 7) for additional information related to State Revolving Loans and notes
payable.
ECONOMIC FACTORS AND ASSESSMENT OF GROWTH
The Authority began operations in 1995. Since 1995, the net increase in new customer accounts has
been modest on an annual basis. In the most recent fiscal year ended September 30, 2023, capital
connection charge revenues for 65 water and 38 wastewater residential connections were received.
Florida's rural central areas do not experience the same rate of growth as both the Atlantic and Gulf
coastal areas. Given current economic environment, a modest growth in the number of connections is
anticipated to be realized from new construction on vacant sites in the existing developed sections of
the Authority's service area rather than through planned new developments.
The City of Okeechobee is approximately forty-five minutes to one hour from the Atlantic coast. The
main east and west access highways to the Atlantic coastal area are State Road 70 and State Road
710. As such, the Okeechobee Utility Authority's service area is within a commutable range of the
Atlantic coast and its life style.
The Authority's current water treatment plants with a total treatment capacity of six million gallons
per day (6mgd) can accommodate approximately twenty-four thousand (24,000) residential water
connections, which is greater than the existing customer base of approximately nine thousand eight
hundred fifty-seven (9,857) residential connections. The Authority's current wastewater treatment
plant with three million gallons per day (3mgd) of total treatment capacity can accommodate
approximately twelve thousand (12,000) additional wastewater customers, which is greater than the
existing customer base of approximately four thousand six hundred seventeen (4,617). In the near-
term projection of five years, this available capacity is more than adequate to accommodate the
projected level of customer growth.
This MD&A report is designed to provide a general overview of the Okeechobee Utility Authority's
financial health for those interested in the Authority's financial condition. Questions concerning the
information provided in this report or requests for additional information should be addressed to
the Finance Director, 100 SW 5th Avenue, Okeechobee, Florida, 34974-4221. An audit of the
financial statements for the Authority may be obtained at the Main Office of the Authority.
9
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OKEECHOBEE UTILITY AUTHORITY
Statement of Net Position - Proprietary Fund
September 30, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Restricted assets:
Cash and cash equivalents - customer deposits
Receivables:
Grants
Accounts receivable, less allowance for
uncollectible accounts of $102,005
Inventories
Prepaid expenses
Total current assets
NONCURRENT ASSETS
Restricted assets:
Cash and cash equivalents
Capital assets:
Land
Utility plants
Less accumulated depreciation
Construction in progress
Total capital assets
Total noncurrent assets
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Pension related items
Deferred loss on bond refunding, net
TOTAL DEFERRED OUTFLOWS OF RESOURCES
10
$ 6,677,160
649,424
4,193,186
1,605,332
618,503
57,549
13,801,154
3,914,591
2,906,861
109,842,018
112,748,879
(54,157,837)
58,591,042
13,307,774
71,898,816
75,813,407
89,614,561
1,012,621
336,028
1,348,649
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Construction and retainage payable
Accrued expenses
Bonds payable (current)
Accrued compensated absences (current)
Unearned connection fees
Payable from restricted assets:
Accrued interest
Customer deposits
Total current liabilities
NONCURRENT LIABILITIES
Long-term portion of bonds payable
Long-term portion of compensated absences
Net pension liability
Total OPEB liability
Unearned revenues:
Developer fees
Total noncurrent liabilities
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Pension related items
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for debt service
Restricted for rate stabilization
Unrestricted
TOTAL NET POSITION
See notes to the financial statements.
11
$ 336,585
1,241,463
182,935
2,153,620
99,137
96,723
2,724
649,424
4,762,611
12,655,731
231,320
629,748
232,530
424,402
14,173,731
18,936,342
426,765
56,144,496
2,380,369
192,139
1,339,359
11,543,740
$ 71,600,103
OKEECHOBEE UTILITY AUTHORITY
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Fund
For the Fiscal Year Ended September 30, 2023
OPERATING REVENUE
Water system charges for services $ 7,711,973
Wastewater system charges for services 4,726,216
Penalties and late charges 120,236
Miscellaneous 234,593
Total operating revenues 12,793,018
OPERATING EXPENSES
Water services
1,945,537
Wastewater services
1,265,071
Maintenance
2,487,015
Meter reader
283,605
Administrative and general
2,166,390
Depreciation and amortization
2,701,321
Total operating expenses
10,848,939
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest revenue
Interest expense
Operating grants
Total nonoperating revenues (expenses)
INCOME BEFORE CAPITAL CONTRIBUTIONS
CAPITAL CONTRIBUTIONS
Capital grants
Water capital connection fees
Wastewater capital connection fees
Developer contributions for capital projects
Total capital contributions
INCREASE IN NET POSITION
NET POSITION, BEGINNING OF PERIOD
NET POSITION, END OF PERIOD
See notes to the financial statements.
12
1,944,079
350,097
(420,187)
90,083
19,993
1,964,072
8,369,570
98,855
184,628
492,467
9,145,520
11,109,592
60,490,511
$ 71,600,103
OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund
For the Fiscal Year Ended September 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 12,622,722
Payments to suppliers (4,397,872)
Payments to employees (3,024,460)
Payments for employee benefits (651,730)
Net cash provided (used) by operating activities 4,548,660
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets
(8,649,090)
Note and loan principal payments
(2,113,253)
Note and loan interest paid
(318,753)
Capital connection fees received
302,107
Captial grants
5,569,038
Net cash (used) by capital and related financing activities (5,209,951)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 350,097
Net cash provided by investing activities 350,097
Net increase (decrease) in cash and cash equivalents (311,194)
Cash and cash equivalents at beginning of year 11,552,369
Cash and cash equivalents at end of year $ 11,241,175
See notes to the financial statements.
13
OKEECHOBEE UTILITY AUTHORITY
Statement of Cash Flows - Proprietary Fund (continued)
For the Fiscal Year Ended September 30, 2023
CASH AND CASH EQUIVALENTS CLASSIFIED AS:
Current assets
Restricted assets
Total
ADJUSTMENTS TO RECONCILE OPERATING INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating Income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Change in net pension asset/liability and related deferred amounts
Change in total OPEB liability
Operating grants
Depreciation and amortization
Change in assets and liabilities:
(Increase) decrease in accounts receivable
(Increase) decrease in inventory
(Increase) decrease in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in compensated absences
Increase (decrease) in deposits
Increase (decrease) in due to other governments
Total adjustments
Net cash provided (used) by operating activities
Noncash investing, capital and financing activities
Developer contributions
Construction contracts payable
See notes to the financial statements.
14
$ 6,677,160
4,564,015
$ 11,241,175
$ 1,944,079
382,034
14,355
90,083
2,701,321
(185,555)
(951)
20,846
(336,045)
(45,413)
71,856
(74,824)
(33,126)
2,604,581
$ 4,548,660
$ 492,467
$ 1,241,463
OKEECHOBEE UTILITY AUTHORITY
Statement of Fiduciary Net Position
Pension Trust Fund
September 30, 2023
ASSETS
Cash and cash equivalents
Contributions receivable
Employee
Prepaids
Investments: (at fair value)
Mutual funds- fixed income
Mutial funds - international equity
Mutial funds - domestic equity
Total investments
TOTAL ASSETS
LIABILITIES
Accounts payable
TOTAL LIABILITIES
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFITS
See notes to the financial statements.
15
$ 137,196
17,757
1,800
3,940,108
958,533
5,363,189
10,261,830
10,418,583
9,815
9,815
$ 10,408,768
OKEECHOBEE UTILITY AUTHORITY
Statement of Changes in Fiduciary Net Position
Pension Trust Fund
For the Fiscal Year Ended September 30, 2023
ADDITIONS
Contributions
Plan members $ 140,788
Investment income
Net appreciation in fair value of investments
897,058
Interest and dividends
310,962
Administrative expenses
1,208,020
Less: investment expenses
(22,000)
Net investment income
1,186,020
TOTAL ADDITIONS 1,326,808
DEDUCTIONS
Benefits paid to participants
430,060
Refunds due on terminations
54,195
Administrative expenses
60,595
TOTAL DEDUCTIONS 544,850
NET INCREASE 781,958
FIDUCIARY NET POSITION - RESTRICTED FOR PENSION BENEFITS
Beginning of year 9,626,810
End of year $ 10,408,768
See notes to the financial statements.
16
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Okeechobee Utility Authority (the "Authority") have been
prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to
governmental units. The Governmental Accounting Standards Board (GASB) is the accepted
standard setting body for establishing governmental accounting and financial reporting
principles. The Authority's significant accounting policies are described below.
Reporting Entity
The Okeechobee Utility Authority is an independent special district created pursuant to an
Interlocal Agreement (the "Agreement"), dated November 10, 1994, between the City of
Okeechobee (the "City") and the County of Okeechobee (the "County") in accordance with the
provisions of Chapters 163 and 189, Florida Statutes.
As required by generally accepted accounting principles, these financial statements include the
Authority (the primary government) and its component units. Component units are legally
separate entities for which the Authority is financially accountable. The Authority is financially
accountable if-
a)
i
a) the Authority appoints a voting majority of the organization's governing board and
(1) the Authority is able to impose its will on the organization or (2) there is a potential
for the organization to provide specific financial benefits to or impose specific financial
burdens on the Authority, or
b) the organization is fiscally dependent on the Authority and (1) there is a potential for the
organization to provide specific financial benefits to the Authority or (2) impose specific
financial burdens on the Authority.
Organizations for which the Authority is not financially accountable are also included when
doing so is necessary in order to prevent the Authority's financial statements from being
misleading.
Based upon application of the above criteria, the Authority has determined that there is one
legally separate entity to consider as a component unit. The Okeechobee Utility Authority
Employees' Retirement System is a component unit as it is fiscally dependent on and imposes a
specific financial burden on the Authority. It is reported in the Authority's financial statements
as a Fiduciary Fund, the Employees' Pension Trust Fund.
17
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Reporting Entity (Continued)
The Authority was created in order to regionalize the water and wastewater services being
provided to the residents and customers within the service area of the utility system and to assist
in addressing environmental issues concerning the quality and supply of water for Lake
Okeechobee and South Florida. The Authority has broad powers with respect to the operation
and maintenance of the utility system.
The Authority services both residential and commercial customers and its service area includes
the City and County of Okeechobee and extends into part of the unincorporated section of
Glades County.
The Authority began operations on September 28, 1995 and is governed by a Board of Directors
comprised of five (5) members and three (3) alternates. The Board of Directors has financial
accountability and control over all activities relating to the operations of the Authority.
Basis of Presentation
The Authority is accounted for as a proprietary type enterprise fund. Enterprise funds are used to
account for activities that are financed and operated in a manner similar to private business
enterprises. Enterprise funds are used in the following situations: 1) the activity is financed with
debt that is secured solely by a pledge of the net revenues from fees and charges of the activity;
2) laws or regulations require that all costs of providing services, including capital costs, be
recovered from fees and charges; or 3) fees and charges are designed to recover the costs of the
activity, including capital costs.
Measurement Focus and Basis of Accounting
These financial statements are prepared using the economic resources measurement focus and
the accrual basis of accounting in accordance with U.S. generally accepted accounting principles.
Under the accrual basis of accounting, revenues are recognized when earned; expenses are
recognized when incurred. The assets, deferred outflows, liabilities, deferred inflows, and net
position of the Authority are reported in a self -balancing set of accounts, which include restricted
and unrestricted resources, representing funds available for support of the Authority's operations.
The Employees' Pension Trust Fund also uses the accrual basis of accounting and the economic
resources measurement focus.
11:
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from non-operating items. The
Authority's operating revenues and expenses consist of revenues earned and expenses incurred
relating to the operation and maintenance of its system, including administrative expenses and
depreciation of capital assets. All other revenues and expenses not meeting the definition above
are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Authority's policy
to use restricted resources first, then unrestricted resources as they are needed.
Budget Process
Pursuant to the interlocal agreement, the Authority is required to adopt a budget and provide a
copy to the City and the County. The Authority adopted its final budget relating to the fiscal year
ended September 30, 2023 on September 15, 2022.
Deposits and Investments
Cash and cash equivalents include amounts on deposit in demand accounts, money market
accounts, and money market mutual funds. For the purposes of the statement of cash flows, the
Authority considers all highly liquid investments and certificates of deposit with an original
maturity of three months or less when purchased to be cash equivalents.
Investments are reported at fair value as required by generally accepted accounting principles.
The fair value of an investment is the amount that the Authority could reasonably expect to
receive for it in a current sale between a willing buyer and a willing seller, other than in a forced
or liquidation sale. The Authority categorizes its investments according to the fair value
hierarchy established by GASB Statement No. 72. The hierarchy is based on observable and
unobservable inputs used in establishing the fair value of a financial asset or liability. Purchases
and sales of investments are recorded on the trade date.
19
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounts Receivable
Accounts receivable consist of both billed and unbilled receivables. Unbilled receivables
represent the estimated amount of accounts receivable for services that have not been billed as of
the statement of financial position date. The amounts are a result of a timing difference between
the Authority's fiscal year end and the date the various utility cycles are subsequently billed.
Inventories
Inventories are recorded at cost using the first -in, first -out method.
Utility Plant
Property, plant, and equipment are stated at cost for items constructed or purchased. Donated
capital assets, donated works of art and similar items, and capital assets received in a service
concession arrangement are recorded at acquisition value. The Authority capitalizes all land
purchases. The capitalization policy for other assets is an initial useful life of more than one year
and an individual cost of $5,000.
Depreciation of exhaustible utility fixed assets, including those acquired through
intergovernmental grants externally restricted to capital acquisition, is charged as an expense
against operations. Depreciation of the various assets is computed over the assets' estimated
useful lives using the straight-line method. The estimated useful lives range as follows:
Distribution and collection plants 10-60 years
Buildings 15-25 years
Equipment 3-10 years
nearned Revenues
Unearned revenues primarily represent water and wastewater capital connection and inspection
fees and service payments that are paid in advance by customers. These fees will be recognized
as income in subsequent years as the services are performed.
20
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred Outflow of Resources
In addition to assets, the Statement of Net Position reports a separate section for Deferred
Outflows of Resources. Deferred Outflows of Resources represent the usage of net assets
applicable to future periods and will not be recognized as an expense until the future period to
which it applies. The Authority has two items that qualify for reporting in this category. The first
is the deferred amount on bond refunding. The deferred loss on current and advance refunding of
bonds is being charged to operations through the year 2030 based on the effective interest
method. The second is deferred pension items in connection with its pension plan. These
deferred pension charges amortized in a systematic and rational method as pension expense in
future periods.
Deferred Inflows of Resources
In addition to liabilities, the Statement of Net Position reports a separate section for Deferred
Inflows of Resources. Deferred Inflows of Resources represent the acquisition of net assets
applicable to future periods and will not be recognized as revenue until the future period to
which it applies. The Authority currently reports deferred pension items in connection with its
pension plan. These deferred pension charges are amortized in a systematic and rational method
as pension expense in future periods.
Compensated Absences
The Authority's policy is to allow each employee eligible for vacation leave to accumulate up to
thirty (30) days. Employees are paid unused vacation leave at current hourly rates upon
retirement or at termination. Employees of the Authority, with ten (10) years or more of
continuous service, receive payment for unused sick leave at a rate of fifty percent (50%) of
current hourly rates upon retirement or at termination. This also applies to employees at normal
retirement, regardless of length of service.
Accrued liabilities, based on hourly salary rates at September 30, 2023, are reflected in the
accounts of the Authority for vested (not contingent on an employee's future services) vacation
and sick leave benefits.
21
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Position
Net position is the result of assets and deferred outflows of resources less liabilities and deferred
inflows of resources. Net position is classified in three components:
Net investment in capital assets
This category consists of the Authority's capital assets net of accumulated depreciation and
reduced by the outstanding balances of any bonds or notes that are attributable to the acquisition,
construction, or improvements of those assets.
Restrirted
This category of the net position consists of constraints placed on the net position by external
constraints imposed by creditors (such as through debt covenants), grantors, contributors or laws
or regulations of other governments or constraints imposed by law through constitutional
provisions or enabling legislation.
Unrestricted
This category represents all other Authority net position that do not meet the definition of net
investment in capital assets, restricted for capital projects, or restricted for debt service as defined
earlier.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions. This will affect the reported
amounts of assets, deferred inflows and outflows, and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates.
22
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS
Authority Deposits
As of September 30, 2023, the amount of deposits in "Qualified Public Depositories" was
$11,336,242 and the book balance was $11,238,425. The Authority also had $2,750 in petty cash
for a total carrying amount of $11,241,175.
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasurer requires all Florida qualified public depositories to deposit with the Treasurer or
banking institution eligible collateral. In the event of the failure of a qualified public depository,
the remaining public depositories would be responsible for covering any resulting losses. The
Authority's deposits at year end are considered insured for custodial credit risk purposes.
Authority Investments
The Authority categorizes its investments according to the fair value hierarchy established
GASB Statement No. 72, Fair Value Measurement and Application. The hierarchy is based on
valuation inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted
prices in active markets for identical assets; Level 2 inputs are significant other observable inputs
to include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
The Authority's investment policy authorizes investments in money market and savings
accounts, certificates of deposits, money market funds; bonds, notes, bills and other obligations
of the U.S. Government; repurchase agreements; securities issued or guaranteed by certain
federal agencies and instrumentalities, Local Government Surplus Trust Fund or any
intergovernmental investment fund authorized pursuant to the Florida Interlocal Cooperation
Act, commercial paper, securities issued by the Authority, any guaranteed investment contract
within the limitations established by Florida Statutes, and any other investment vehicle
authorized by Florida law and determined by the investment officer and the Board of Directors to
be a prudent investment.
23
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Authority Investments (Continued)
The Authority did not have any investments as of September 30, 2023.
Credit Risk
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill its
obligations. The Authority's investment policies limit its investments to high quality investments
to control credit risk.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Authority does not have a formal investment policy that limits investment
maturities as a means of managing exposure to fair value losses arising from increasing interest
rates.
Cash and cash equivalents are presented in the balance sheet as of September 30, 2023, as
follows:
Current cash and cash equivalents $ 6,677,160
Current restricted cash and cash equivalents 649,424
Restricted cash and cash equivalents 3,914,591
Total cash and cash equivalents and investments 11,241,175
General Employees' Pension Trust Fund
Salem Trust Company periodically holds uninvested cash in its capacity as custodian for the
Plan. These funds exist temporarily as cash in the process of collection from the sale of securities
and for the payments of benefits and expenses. The pension plan's policy for the allocation of
invested assets is established by the Plan's Board of Trustees (BOT) which pursues an
investment strategy that reduces risk through a prudent diversification of the portfolio across a
selection of distinct asset classes. The policy discourages the use of cash equivalents, except for
liquidity purposes and refrains from shifting asset class allocations over short time spans.
Investment management fees are calculated quarterly as a percentage of the fair market value of
the Plan's managed assets, where applicable. The plan uses mutual funds as the investment
vehicle for fixed income, international equity and domestic equity investments for further
diversification. These investments are recommended and monitored by the investment
performance monitor.
24
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
General Employees' Pension Trust Fund (Continued)
The Plan's Investment Policy allows the following investments:
1. Annuity and life insurance contracts with life insurance companies in amounts
sufficient to provide, in whole or in part, the benefits to which all of the Members in
the Plan shall be entitled under the provisions of the Plan and pay the initial and
subsequent premium thereon.
2. Time or savings accounts of a national bank, a state bank insured by the Bank
Insurance Fund or a savings/building and loan association insured by the Savings
Association Insurance Fund which is administered by the Federal Deposit
Insurance Corporation or a state or federal chartered credit union whose share
accounts are insured by the National Credit Union Share Insurance Fund.
3. Obligations of the United States or obligations guaranteed as to principal and
interest by the government of the United States or by an agency of the government
of the United States.
4. Stocks, commingled or mutual funds, bonds or other evidences of
indebtedness, provided that:
(a) Except as provided in subparagraph (b), all individually held securities and all
securities in a commingled or mutual fund must be issued or guaranteed by a
corporation organized under the laws of the United States, and state or
organized territory of the United States, or the District of Columbia.
(b) Up to 25% of the assets of the Fund may be invested in foreign
securities.
(c) The BOT shall not invest more than 5% of its assets in the common stock,
capital stock, or convertible securities of any one issuing company, nor shall
the aggregate investment in any one issuing company exceed 5% of the
outstanding capital stock of that company.
5. Equities:
(a) Must be traded on a national exchange or electronic network; and
(b) Not more than 5% of the Plan's assets, at the time of purchase, shall be
invested in the common stock, capital stock or convertible stock of any one
issuing company, nor shall the aggregate investment in any one issuing
company exceed 5% of the outstanding capital stock of the company; and
(c) All individually held securities, except foreign securities which are limited to
15% of the market value of the assets, and all securities in a commingled or
mutual fund must be issued or guaranteed by a corporation organized under
the laws of the United States, any state or organized territory of the United
States, or the District of Columbia.
(d) Commingled funds issued by national or state banks.
25
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
General Employees' Pension Trust Fund (Continued)
6. Fixed Income:
(a) 85% of the fixed income investments shall have a minimum rating of
investment grade or higher as reported by a major credit rating service such as
Standard and Poor's with a rating of AAA to BBB-; and
(b) The value of bonds issued by any single corporation shall not exceed 3% of the
total fund; and
7. Money Market:
(a) The money market fund or STIF options provided by the Plan's Custodian; and
(b) Have a minimum rating of Al/P1, or its equivalent, by a major credit rating
service such as Standard and Poor's.
8. Pooled Funds:
Investments made by the Board may include pooled funds. For purposes of this
policy pooled funds may include, but are not limited to, mutual funds, commingled
funds, exchange -traded funds, and real estate limited partnerships. Pooled funds
may be governed by separate documents which may include investments not
expressly permitted in this Investment Policy Statement. In the event of investment
by the Plan into a pooled fund, the prospectus or governing policy of that pooled
fund, as updated from time to time, shall be treated as an addendum to this
Investment Policy Statement. The Investment Consultant shall periodically review
with the Board any material changes in the prospectus or governing policy of a
pooled fund.
Investments in corporate common stock and convertible bonds shall not exceed 70% of the
market value of plan assets. Foreign investments are not to exceed 15% of the market value of
the assets. No investments are permitted in illiquid investments as described in Chapter 215.47,
F.S. nor any direct investment in "Scrutinized Companies" identified in the periodic publication
by the State Board of Administration.
Temporary investment funds held by the custodian in a money market fund are classified as cash
equivalents within the investment account.
The Plan carried no particular security investment that individually represented 5% or more of
the Plan's net assets available for benefits as of September 30, 2023. Investments not evidenced
by securities that exist in physical or book -entry form include investments in mutual funds,
domestic investment funds or a commingled pooled trust fund. The Plan's independently
managed investments are segregated into a separate account. The investment manager is
monitored by the Board of Trustees and an investment performance monitor. The Plan has no
instrument that, in whole or in part, is accounted for as a derivative instrument under GASB
statement No. 53, Accounting and Financial Reporting for Derivative Instruments during the
current year.
26
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
General Employees' Pension Trust Fund (Continued)
The Plan invests in mortgage-backed securities representing interests in pools of mortgage loans
as part of its interest rate risk management strategy. The mortgage-backed securities are not used
to leverage investments in fixed income portfolios. The mortgage-backed securities held by the
Plan are guaranteed by federally sponsored agencies such as the Government National Mortgage
Association. These investments are inside of the fixed income open-end mutual fund that the
plan holds.
The Plan invests in a variety of investment vehicles. Investments in general are exposed to
various risks, such as interest rate, credit, and overall volatility risk. Due to the level of risk
associated with certain investments, it is reasonably possible that changes in the values of
investments will occur in the near term and such changes could materially affect the amounts
reported in the statement of fiduciary net position.
For a more detailed and comprehensive list of available investments, the Investment Policy
Statement, as approved by the Board of Trustees, should be referenced. The gain or loss on
financial instruments is recognized in the changes in net position as part of investment income.
The following the historical cost and fair value as of September 30, 2023:
Money Market Mutual Funds
Mutual Funds — Domestic Equity
Mutual Funds — International Equity
Mutual Funds - Fixed Income
2023
Historical
Cost
Fair
Value
$ 137,196
$ 137,196
5,363,189
3,333,666
958,533
931,140
3,940,108
4,617,038
$ 10,399,026 $ 9,019,040
The money market mutual funds consist of investments with financial institutions in open end,
institutional, money market funds complying with Securities and Exchange Commission (SEC)
Rule 2a7. Rule 2a7 allows SEC registered mutual funds to use amortized cost rather than fair
value to report net assets used to compute share prices if certain conditions are met. Those
conditions include restrictions on the types of investments held, restrictions on the term -to -
maturity of individual investments and the dollar -weighted average of the portfolio, requirements
for portfolio diversification, and requirements for divestiture considerations in the event of
security downgrades and defaults, and required actions if the fair value of the portfolio deviates
from amortized cost by a specified amount. Money market mutual funds are exempt from the
GASB 72 fair value hierarchy disclosures and are recorded as cash and cash equivalents on the
Statement of Fiduciary Net Position.
27
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
General Employees' Pension Trust Fund (Continued)
Investment Measurement at Fair Value
The Plan categorizes its investments according to the fair value hierarchy established GASB
Statement No. 72, Fair Value Measurement and Application. The hierarchy is based on valuation
inputs used to measure the fair value of the asset as follows: Level 1 inputs are quoted prices in
active markets for identical assets; Level 2 inputs are significant other observable inputs to
include quoted prices for similar assets in active and non-active markets; Level 3 inputs are
significant unobservable inputs.
The Plan categorizes its fair value measurement within the fair value hierarchy established by
generally accepted accounting principles. The Plan has the following fair value measurements as
of September 30, 2023:
Fair Value Measurement
Balance Level
Investments by fair value level
Mutual Funds — Domestic Equity $ 5,363,189 $ 5,363,189
Mutual Funds — International Equity 958,533 958,533
Mutual Funds - Fixed Income 3,940,108 3,940,108
$ 10,261,830 $ 10,261,830
Level Level
Credit risk — Credit risk is the risk that an issuer or other counter parry to an investment will not
fulfill its obligations. Credit risk does not apply to the Plan's investments at this time.
Interest rate risk — Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks.
At September 30, 2023, the fixed income mutual fund was invested in high quality bonds and other
fixed income securities including U.S. Government obligations, mortgage and asset-backed
securities, corporate and municipal bonds, collateralized mortgage obligations, short-term
instruments, and the other investments A rated by Standard & Poor's, Moody's Investor Services or
Fitch. To a lesser extent the fund may also invest in fixed income securities rated Baa or lower.
Concentrations of credit risk— Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. Not more than five (5) percent of the Plan's
assets shall be invested in the common stock or capital stock of any one issuing company.
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
General Employees' Pension Trust Fund (Continued)
Investment Measurement at Fair Value (Continued)
Investing in Foreign Markets — Investing in foreign markets may involve special risks and
considerations not typically associated with investing in companies in the United States of
America. These risks include revaluation of currencies, high rates of inflation, repatriation
restrictions on income and capital, and future adverse political, social, and economic
developments. Moreover, securities of foreign governments may be less liquid, subject to
delayed settlements, taxation on realized or unrealized gains, and their prices are more volatile
than those of comparable securities in U.S. companies.
NOTE 3 — INVENTORY
Inventory was comprised of the following at September 30, 2023:
Chemicals $ 66,122
Parts and supplies 552,381
Total inventory $ 618,503
NOTE 4 — RESTRICTED ASSETS
Restricted assets consist of the following accounts as of September 30, 2023:
Renewal, replacement & improvement $ 593,477
Capital connection water 628,657
Capital connection wastewater and treatment plant 764,539
Fire hydrant 393,696
Total restricted for capital projects 2,380,369
Debt service 194,863
Rate stabilization 1,339,359
Customer deposits 649,424
Total restricted assets 4,564,015
29
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 5 — UNRESTRICTED NET POSITION
Unrestricted net position consists of the following as of September 30, 2023:
Designated:
Capital improvement project
Operating reserve
Emergency funding
Total designated
Undesignated
Total unrestricted net position
NOTE 6 — CAPITAL ASSETS
Beginning
Balance
Capital assets not beim depreciated
Land
$ 2,906,861
Construction in progress
5,294,651
Total capital assets not being
depreciated
8,201,512
Capital assets being depreciated
Buildings
1,108,764
Equipment
4,398,318
Land lease
481,605
Distribution and
collection plant
101,598,836
Total capital assets being
depreciated
107,587,523
Less accumulated depreciation
Buildings
(696,669)
Equipment
(3,693,466)
Land lease
(341,804)
Distribution and
collection plan
(46,839,979)
Total accumulated
depreciation
(51,571,918)
Total capital assets being
depreciated, net
56,015,605
A aa4;—
$ 1,736,677
1,449,189
682,569
3,868,435
7,675,305
11.543.740
Ending
Deletions Balance
9,534,839 (1,521,716)
9,534,839 (1,521,716)
275,173
2,094,724
(115,402)
$ 2,906,861
13.307.774
16,214,635
1,108,764
4,558,089
481,605
103,693,560
2,369,897 (115,402) 109,842,018
(40,498)
(181,053)
(12,600)
(2,467,170)
(737,167)
115,402 (3,759,117)
(354,404)
(49,307,149)
(2,701,321) 115,402 (54,157,837)
(331,424)
55,684,181
Total capital assets, net $ 64,217,117 $ 9,203,415 $(1,521,716) $ 71,898,816
30
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 7 — LONG-TERM LIABILITIES
Loans Payable from Direct Borrowings and Direct Placements
Pledged Revenues
Net Revenues from operating the System, Pledged Capital Connection Charges, Special
Assessments, and earnings and investment income are pledged for the payment of the Capital
Improvement Refunding Revenue Notes, Series 2020 and the Loan Agreement WW615100.
Capital Improvement Refunding Revenue Notes, Series 2020
On April 1, 2020, the Authority issued $16,390,000 Capital Improvement Refunding Revenue
Notes, Series 2020 with Truist Bank (the Senior Debt). The notes were issued to provide funds
to refund the Capital Improvement Refunding Revenue Note, Series 2017.
The Series 2020 Notes are comprised of $7,340,000 Series 2020A and $9,050,000 Series 2020B
as follows:
Mandatory
Original Face Redemption
Series Amount Interest Rate Beginning October 1 Maturity
2020A $7,340,000 1.79% 2020 October 1, 2025
2020B 9,050,000 2.05% 2020 October 1, 2030
Principal and interest is to be paid semiannually on each April 1 and October 1, through October
1, 2030. As of September 30, 2023, the balance due on Series 2020A and 2020B is $2,755,000
and $8,500,000, respectively.
The Authority is to 1) establish rates and collect fees to provide Net Revenues of at least 1.10
times the Annual Debt Service Requirement for the Notes, 2) maintain a Debt Service Account
that is funded monthly to fund semi-annual Debt Service Payments, and 3) maintain a Renewal
Replacement and Improvement Account of 5% of Gross Revenues of the preceding fiscal year.
In the event of default in the payment of interest or principal of any of the bonds or any other
event of default and such default is not cured in sixty days, any Holder shall be entitled to the
appointment of a receiver to manage the System in an appropriate judicial proceeding.
31
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 7 — LONG-TERM LIABILITIES (Continued)
Loans Payable from Direct Borrowings and Direct Placements (Continued)
Loan Agreement WW615100
The Authority was approved for a construction loan of $10,210,183, with an interest rate of
1.86%, by the Florida Department of Environmental Protection (the Department) under the State
Revolving Fund Loan Program (The Junior Debt). The amount outstanding as of September 30,
2023, was $3,554,351. According to the loan agreement, 40 semi-annual payments of principal
and interest commenced on September 15, 2009, in the amount of $341,431. This loan is junior,
inferior, and subordinate in all regards in right of payment and security to the Capital
Improvement Refunding Revenue Note, Series 2020A and Capital Improvement Refunding
Revenue Note, Series 202013.
The Authority is to 1) establish rates and collect fees to provide Net Revenues of at least 1.15
times the Annual Debt Service Requirement for the Notes, 2) maintain a Debt Service Account
that is funded monthly to fund semi-annual Debt Service Payments, and 3) satisfy the debt
service coverage requirements of the Senior Debt.
Upon an event of default and subject to the rights of others having prior liens on the Pledged
Revenues the Department may (1) apply to a court of competent jurisdiction, cause to appoint a
receiver to manage the System, or (2) may accelerate the repayment schedule or increase the
interest rate on the unpaid principal of the loan.
Debt service requirements to amortize long term debt at September 30, 2023 are as follows:
Year Ended
Principal
Interest
Total
2024
$ 2,153,620
$ 279,859
$ 2,433,479
2025
2,212,198
240,170
2,452,368
2026
2,182,993
198,899
2,381,892
2027
2,235,008
155,108
2,390,116
2028
2,302,247
110,171
2,412,418
2029-2030
3,723,285
90,476
3,813,761
Total
$ 14,809,351
$ 1,074,683
$ 15,884,034
32
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 7 — LONG-TERM LIABILITIES (Continued)
Changes in Long -Term Liabilities
A summary of changes in long-term liabilities is as follows:
Notes payable
Compensated absences
Net pension liability
Total OPEB liability
Total long-term
liabilities
Interest Expense
Beginning
Balance Additions Reductions
$ 16,922,604
258,601
875,759
218,175
$ $ (2,113,253)
227,387 (155,531)
(246,011)
14,355
Ending Due Within
Balance One year
$14,809,351 $ 2,153,620
330,457 99,137
629,748
232,530
$ 18,275,139 $ 241,742 $ (2,514,795) $16,002,086 $ 2,252,757
Interest expense for the year ended September 30, 2023 was $420,187, which consisted of
$101,936 amortization of deferred costs from the issuance of bonds in prior years and interest costs
incurred of $318,251. Total interest paid during the year was $318,753.
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM
General Information
The Employees' Retirement System of the Okeechobee Utility Authority (the System) is a
single -employer, defined benefit contributory pension trust established by the Authority in
Resolution 2016-03 for the benefit of the Authority employees. The System is under the
supervision of a five -member local independent board of trustees, two of whom shall be a legal
resident within the Authority's jurisdictional boundaries, who shall be appointed by the
Okeechobee Utility Authority Board; two of whom shall be Employee Members employed by
the Authority and elected by Member employees; and one of whom shall be the Executive
Director of the Authority or his designee. Any changes to the plan requires approval by the
Board of the Authority.
The System issues a publicly available financial report that includes financial statements, ten-
year historical trend information, and other required supplementary information. That report
may be obtained by writing to the attention of the Assistant Finance Director, Okeechobee
Utility Authority, 100 SW. 5th Avenue, Okeechobee, FL 34974-4221.
33
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
Basis of Accounting
The retirement system is reported on the accrual basis of accounting. Plan members
contributions are recognized as revenues in the period that the contributions are due. Employer
contributions are recognized when due and the employer has made a formal commitment to
provide the contributions. Benefits and refunds are recognized when due and payable in
accordance with the terms of the plan. The plan's fiduciary net position has been determined on
the same basis used by the pension plan. Investments are reported at fair value
Plan Description
The pension plan provides retirement, death and disability benefits for its participants. Each
person employed by the Authority as a full-time employee becomes a member of the Plan as a
condition of their employment except that the Executive Director of the Utility Authority, may
opt out of the Plan within 60 days of employment. All employees are eligible to participate on
the date of employment following attainment of age 18. Participation is mandatory. Normal
retirement is provided for at age 65 and 5 years of service, or at 30 years of service regardless of
age. The benefit is calculated at 2.1% of average monthly earnings times the last 5 years of
continuous service with the employer. Benefits are payable by monthly annuity for 10 years
certain and life thereafter with other options available. Early retirement is provided for at age 55
and 10 years of participation. Death and disability benefits are also available through the plans.
The early retirement reduction factor is 2% per year.
Upon termination of employment, with less than 5 years of service, the plan refunds accumulated
employee contributions. After 5 years of service, the pension benefit is accrued to date of
termination and payable at normal retirement age if employee contributions are left in the fund.
The Plan contains a deferred retirement option plan (DROP) whereupon the employee could
retire from the pension plan but continue employment with the Utility Authority for an additional
maximum period of up to five years. The retirement benefit is immediately calculated and the
monthly benefit is allocated to the DROP account. An election is made to either earn interest at
the rate of 6.5% per annum or credited or debited with an investment return or loss
approximating the other assets in the fund. Once a participant elects this option, he is no longer
eligible for disability or pre -retirement benefits. At September 30, 2023, there was $176,079 in
the DROP, this amount is included in both the Total Pension Liability and the Plan Fiduciary Net
Position. The Plan's guidelines for the DROP are designed to adhere to IRS regulations.
Additional information about the DROP can be obtained from the ordinance.
The Plan is administered by its Board of Trustees. Any changes to benefit provisions requires
approval by the Board of the Authority.
34
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
Members of the plan consisted of the following at September 30, 2022:
Retired Plan Members or Beneficiaries
currently receiving benefits 28
Inactive Plan Members entitled to but
not yet receiving benefits 3
Drop Participants -
Active Plan Members 50
Total 81
Contributions
Contributions are made in accordance with applicable Florida Statutes and meeting the
actuarially determined contribution requirements as based on the benefit structure established
within the Plan as approved by the plan sponsor. The employer is required to contribute an
amount equal to the difference between the normal cost, as calculated for the plan year from the
applicable actuarial valuation, less the member contributions for the current year. The Authority
is required to fund the plan according to any contribution deficit as determined by actuarial
valuation for the plan beyond the contributions by employees and the regular employer
contributions by the Okeechobee Utility Authority. After applying the allocable prepaid
contribution from the beginning of the year, the employer contribution was sufficient to meet the
required annual contribution, prepaid employer contributions.
Based on the October 1, 2021 actuarial valuation the required contribution was 5.6% of covered
payroll. Employee contributions are at the rate of 6% of payroll and there was no required
employer contribution.
The significant actuarial assumptions used to compute the actuarially determined contribution
requirement are the same as those used to compute the pension benefit obligation. The funding
policy for the Plan is to make an actuarially determined pension contribution in an amount, such
that when combined with the participants' contributions, all participants' benefits will be fully
provided for by the time they attain retirement age.
Investments Concentrations. The plan did not hold investments in any one organization that
represents 5 percent or more of the Pension Plan's fiduciary net position.
35
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of October 1, 2022
updated to September 30, 2023, using the following actuarial assumptions.
Inflation 2.5%
Salary increases From 7.5% to 4.25%, based on the age of the employee
Retirement rate 100% at 30 years of service; 80% when eligible for early
retirement, 60% one year later, 100% two years later; participants
eligible for early retirement are assumed to retire at the rate of 5%
per year.
Withdrawal rate From 20% to 5%, based on the age of the employee
Mortality For healthy participants PUB -2010 Headcount Weighted General
Below Median Employee Mortality Table, separate rates for males
and females, set back 1 year for males, with fully generational
mortality improvements projected to each future decrement date
with Scale MP -2018.
For disabled participants, PUB -2010 Headcount Weighted General
Disabled Retiree Mortality Table, separate rates for males and
females, both set forward 3 years, without projected mortality
improvements
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 the pension
plan's target asset allocation as of September 30, 2023, are summarized in the following table:
*Net of long-term inflation assumption of 2.5%
36
Long -Term
Target
Real Rate of
Asset Class
Allocation
Return*
Domestic Equity
50%
7.5%
International Equity
10%
8.5%
Fixed Income
40%
2.5%
Cash Equivalents
0%
0.0%
Total
100%
*Net of long-term inflation assumption of 2.5%
36
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
Rate of Return.
For the year ended September 30, 2023, the annual money -weighted rate of return on Pension
Plan investments, net of pension plan investment expense, was 11.97 percent The money -
weighted rate of return expresses investment performance, net of investment expense, adjusted
for the changing amounts actually invested.
niecniint Rate
The discount rate used to measure the total pension liability was 6.75%. 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 plans' 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.
The components of the net pension liability at September 30, 2023, were as follows:
Description
Balances at September 30, 2022
Changes due to:
Service cost
Interest
Differences between expected
and actual experience
Change of Assumptions
Employer contributions
Employee contributions
Benefit payments and refunds
Net investment income
Administrative expenses
Total changes
Balances at September 30, 2023
Total
Fiduciary
Net
Pension
Net
Pension
Liability
Position
Liability
(a)
(b)
(a) -(b)
$ 10,502,569
$ 9,626,810
$ 875,759
222,802
222,802
713,303
713,303
84,097
84,097
140,788
(140,788)
(484,255) (484,255)
1,186,020
(1,186,020)
(60,595)
60,595
535,947 781,958
(246,011)
$ 11,038,516 $ 10,408,768
$ 629,748
37
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
The change in assumptions was due to updating investment return, salary increase factors,
withdrawal rates and retirement rates.
The Plan fiduciary net position was 94.29% of the total pension liability as of
September 30, 2023.
Sensitivity of the Net Position Liability to Changes in the Discount Rate
The following represents the Authority's net pension liability calculated using the discount rate
of 6.75%, as well as what the Authority's net pension liability would be if it were calculated
using a discount rate that is one percentage point lower (5.75%) or one percentage point higher
(7.75%) than the current rate:
1% Decrease Current Rate 1% Increase
5.75% 6.75% 7.75%
Net pension liability 2,039,067 $ 629,748 (533,413)
Pension expense and deferred outflows and inflows of resources
For the fiscal year ended September 30, 2023, the Authority recognized a pension expense of
$382,034. In addition, the Authority reported deferred outflows of resources and deferred
inflows of resources related to the Plan from the following sources:
Description
Difference between expected and actual
experience
Change of assumptions
Net difference between projected and actual
earnings on plan investments
Total
W.
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 176,597 $ 145,323
1,545 281,442
834,479
$ 1,012,621 $ 426,765
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 8 — EMPLOYEE RETIREMENT SYSTEM (Continued)
The amounts reported as deferred outflows of resources and deferred inflows of resources related
to the plan will be recognized in pension expense as follows:
Year ended September 30:
Amount
2024
$ 82,661
2025
157,834
2026
460,548
2027
(121,414)
2028
6,227
Thereafter
$ 585,856
Payables to the Pension Plan
At September 30, 2023, the Authority had a payable of $17,757 for outstanding employee
contributions to the Pension Plan for the fiscal year ended September 30, 2023.
NOTE 9 — OTHER POSTEMPLOYMENT BENEFITS (OPEB)
General Information about the OPEB Plan
Effective October 1, 2017, the Authority implemented Governmental Accounting Standards
Board Statement 75 (GASB 75), Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions. Retirees of the Authority pay an amount equal to the actual
premium for health insurance charged by the carrier. The premium charged includes an implied
subsidy, as the amount charged for all participants (active employee or retiree) is the same,
regardless of age. Under GASB 75, an implied subsidy is considered other post -employment
benefits (OPEB).
The following describes the Authority's OPEB Provisions:
Plan Description
The Authority provides a single employer defined benefit health care plan to all of its employees
and the plan is administered by the Authority. The plan has no assets and does not issue a
separate financial report.
Benefits Provided
The plan allows its employees and their beneficiaries, to continue to obtain health and dental
benefits upon retirement. Normal retirement is provided for at age 65 and 5 years of service, or
at 30 years of service regardless of age. The benefits of the plan are in accordance with Florida
Statutes, which are the legal authority for the plan. The plan has no assets and does not issue a
separate financial report.
39
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 9 — OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)
Employees Covered by Benefit Terms
At September 30, 2023, the following employees were covered by benefit terms:
Participants
Active employees 57
Inactive employees currently receiving benefits 5
Inactive employees entitled to but not receiving benefits -
Total 62
Contribution Requirements: The Authority does not make direct contributions to the plan on
behalf of retirees. Retirees and their beneficiaries pay the same group health rates as active
employees. However, the Authority's actuaries, in their actuarial valuation, calculate an offset to
the cost of these benefits as an employer contribution, based upon an implicit rate subsidy. This
offset equals the total annual age-adjusted costs paid by the Authority, or its active employees,
for coverage of the retirees and their dependents net of the retiree's own payments for the year.
Total OPEB Liability
The Authority's total OPEB liability of $232,530 was measured as of September 30, 2023, and
was determined by the actuarial valuation as of that date.
Actuarial Assumptions and Methods
The total OPEB liability was determined using the following actuarial assumptions and other
methods:
Valuation Date: September 30, 2023
Discount Rate: 4.45% per annum
Average Retirement Age 62
Age adjustment factor 2.120737
Health Care Trend Rate: Medical — 10.0% initially trending to 4.20% in 10 years
Pharmacy — 5.20% initially trending to 4.20% in 10 years
Dental — 3.50% initially trending to 3.00% in 10 years
Vision — 3.00%
.o
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 9 — OTHER POSTEMPLOYMENT BENEFITS (OPEB) (Continued)
Actuarial Assumptions and Methods (Continued)
Actuarial Cost Method: Entry Age Normal
Plan Participation Percentage: 20%
Mortality Rates: Pub -2010 Public Retirement Plans Mortality Tables,
with mortality improvement projected for 10 years.
The valuation was prepared using the Alternate Method in accordance with GASB 75.
Dkennnt Rate
The Authority does not have a dedicated Trust to pay retiree healthcare benefits. Per GASB 75,
the discount rate is a yield or index rate for 20 -year, tax-exempt municipal bonds. As a result, the
calculation used a rate of 2.27%.
Changes in the Total OPEB Liability
Balance at September 30, 2022
Changes for the Year:
Service Cost
Interest Cost
Changes of Assumptions and Other Inputs
Differences Between Expected and
Actual Experience
Benefit Payments
Net Change in Total OPEB Liability
Balance at September 30, 2023
Changes in Assumptions
The discount rate was 3.35% at 9/30/22 and 4.45% at 9/30/23
Total OPEB
Liability
$ 218,175
2,384
7,394
(20,994)
25,571
14,355
$ 232,530
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the Authority, and the Authority's total OPEB
liability if it were calculated using a discount rate that is 1 -percentage -point lower or 1 -
percentage -point higher (versus the current discount rate):
1.0% Decrease Discount Rate 1.0% Increase
(3.45% (4.45%) (4.45%
Total OPEB Liability $ 251,476
41
$ 232,530 $ 216,032
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 9 — OTHERPOST EMPLOYMENT BENEFITS (OPEB) (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Trend Rates
The following presents the total OPEB liability of the Authority, and the Authority's total OPEB
liability if it were calculated using healthcare cost trends that are 1 -percentage -point lower or 1 -
percentage -point higher (versus the current healthcare cost trend rates):
Healthcare cost
1.0% Decrease Trend Rates 1.0% Increase
Total OPEB Liability $ 211,481 $ 232,530 $ 256,823
OPEB Expense
For the year ended September 30, 2023, the Authority recognized OPEB expense of $14,355.
NOTE 10 — CONTINGENCIES
The Authority is involved in various litigations and claims arising in the course of operations. It
is the opinion of legal counsel that the likelihood of unfavorable outcomes and the amounts of
potential losses cannot be reasonably determined at this time. Accordingly, no provision for any
liability, that may result, has been made in the accompanying financial statements.
In the opinion of management, no present claims exist that would, in the event of an adverse
resolution, result in liabilities in excess of the Authority's insurance coverage.
NOTE 11— COMMITMENTS
As at September 30, 2023, the Authority had commitments on outstanding engineering and
construction contracts for improvements to the system of approximately $24,335,600.
Subsequent to September 30, 2023, the Authority established an interim finance agreement
(bridge finance) with South State Bank (SSB)for the sum of $7,508,000 for the financing of
South West Service Area Sceptic to Sewer Improvement Project. Upon exhaustion of the interim
finance (SSB), the United States Department of Agriculture (USDA) will assume liability and
issuing OUA a 40 -year loan facility.
NOTE 12 — RISK MANAGEMENT
The Okeechobee Utility Authority is exposed to various risks of loss related to torts; theft of,
damage to, and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. During the 2023 fiscal year, coverage was maintained via membership renewal with
Preferred Governmental Insurance Trust ("PGIT"), a public entity risk pool.
42
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 12 — RISK MANAGEMENT (Continued)
As of September 30, 2023, the Authority's management is of the opinion that the PGIT is able to
pay claims incurred to date and that the Authority will not be liable to pay any submitted claims.
The Okeechobee Utility Authority continues to carry commercial insurance for the following
risks: pollution liability, health, life, and disability. Settled claims resulting from these risks
have not exceeded commercial insurance coverage in any of the past three fiscal years.
Florida Statutes limit the Authority's maximum loss for most liability claims to $200,000 per
person and $300,000 per occurrence under the Doctrine of Sovereign Immunity. However, under
certain circumstances, a plaintiff can seek to recover damages in excess of statutory limits by
introducing a claims bill to the Florida Legislature. The limits addressed in Florida Statutes do
not apply to claims filed in Federal courts.
NOTE 13— NEW ACCOUNTING STANDARDS
The Authority implemented the following Governmental Accounting Standards Board (GASB)
Statements during the fiscal year ended September 30, 2023:
GASB Statement No. 96, Subscription -Based Information Technology Arrangements. This
Statement provides guidance on the accounting and financial reporting for subscription -based
information technology arrangements (SBITAs) for government end users (governments). This
Statement did not have a significant impact for the fiscal year ending September 30, 2023.
Recently Issued Accounting Pronouncements
Below is a brief description and effective date of new accounting standards that could have a
significant impact on the Authority's financial statements. Management is currently evaluating
the impact of the adoption of these statements on the Authority's financial statements.
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections.
The requirements of this Statement will improve the clarity of the accounting and financial
reporting requirements for accounting changes and error corrections, which will result in greater
consistency in application in practice. In turn, more understandable, reliable, relevant, consistent,
and comparable information will be provided to financial statement users for making decisions
or assessing accountability. In addition, the display and note disclosure requirements will result
in more consistent, decision useful, understandable, and comprehensive information for users
about accounting changes and error corrections. The requirements of this Statement are effective
for accounting changes and error corrections made in fiscal years ending September 30, 2024,
and all reporting periods thereafter.
43
OKEECHOBEE UTILITY AUTHORITY
Notes to Financial Statements
September 30, 2023
NOTE 13 — NEW ACCOUNTING STANDARDS (Continued)
Recently Issued Accounting Pronouncements (Continued)
In June 2022, the GASB issued Statement No. 101, Compensated Absences. The unified
recognition and measurement model in this Statement will result in a liability for compensated
absences that more appropriately reflects when a government incurs an obligation. In addition,
the model can be applied consistently to any type of compensated absence and will eliminate
potential comparability issues between governments that offer different types of leave. The
model also will result in a more robust estimate of the amount of compensated absences that a
government will pay or settle, which will enhance the relevance and reliability of information
about the liability for compensated absences. The requirements of this Statement are effective for
fiscal years ending September 30, 2025, and all reporting periods thereafter.
In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures. The
requirements of this Statement will improve financial reporting by providing users of financial
statements with essential information that currently is not often provided. The disclosures will
provide users with timely information regarding certain concentrations or constraints and related
events that have occurred or have begun to occur that make a government vulnerable to a
substantial impact. As a result, users will have better information with which to understand and
anticipate certain risks to a government's financial condition. The requirements of this Statement
are effective for fiscal years ending September 30, 2025, and all reporting periods thereafter.
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Schedule of Changes in the Total OPEB Liability
Last Ten Fiscal Years
Service cost
Interest on total OPEB liability
Effect of economic/demographic
gains or losses
Effect of assumption changes
Net change in total OPEB Liability
Total OPEB liability - beginning
Total OPEB liability - ending
Covered employee payroll
Total OPEB liability as a percentage of
covered employee payroll
2018 2019 2020 2021 2022
$ 2,113 $ 3,493 $ 4,304 $ 1,959 $ 1,938
1,636 3,107 2,436 1,247 1,077
26,276 (22,138) (31,610) (8,767) (21,630)
(11,009) 4,796 4,176 419 191,267
19,016 (10,742) (20,694) (5,142) 172,652
63,085 82,101 71,359 50,665 45,523
$ 82,101 $ 71,359 $ 50,665 $ 45,523 $ 218,175
$ 2,339,518 $ 2,384,400 $ 2,565,609 $ 2,653,458 $ 2,721,351
3.51% 2.99% 1.97% 1.72% 8.02%
Change of Assumptions
Discount rate (2.51% at 10/1/17) 3.63% 3.22% 2.37% 2.27% 3.35%
In 2022 the average retirement age went from 62 to 65 and the plan participation percentage went from 18% to 20%.
Service cost $ 2,384
Interest on total OPEB liability 7,394
Effect of economic/demographic
gains or losses 25,571
Effect of assumption changes (20,994)
Net change in total OPEB Liability 14,355
Total OPEB liability - beginning 218,175
Total OPEB liability - ending $ 232,530
Covered employee payroll $ 3,013,686
Total OPEB liability as a percentage of 7.72%
covered employee payroll
Change of Assumptions
Discount rate 4.45%
There are no assets accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101
to pay related benefits for the OPEB plan.
This schedule is intended to show information for 10 years. However, until a full 10 -year trend is compiled,
information will be presented for those years for which information is available.
M
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Employees' Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios
Last Ten Fiscal Years
Total pension liability:
Service cost
Interest
Differences between expected and
actual experience
Change of assumptions
Benefit payments, including
refunds of employee contributions
Net change in total pension liability
2017 2018 2019 2020 2021
$ 285,610 $ 282,926 $ 269,093 $ 285,901 $ 296,197
723,860 595,025 616,927 655,548 682,179
181,813 (383,010) (36,680) (51,853)
109,828 (171,663)
(206,413) (319,132) (300,238) (328,601) (366,966)
912,885 740,632 202,772 576,168 387,894
Total pension liability - beginning
7,423,763
8,336,648
9,077,280
9,280,052
9,856,220
Total pension liability - ending (a)
$
8,336,648
$
9,077,280
$
9,280,052
$ 9,856,220
$ 10,244,114
Plan fiduciary net position
Contributions - employer
$
287,362
$
325,097
$
336,605
$ 317,039
$ 286,486
Contributions - employees
130,765
129,178
128,067
133,961
138,622
Net investment income
831,485
703,480
327,727
1,067,073
1,998,482
Benefit payments, including
refunds of employee contributions
(206,413)
(319,132)
(300,238)
(328,601)
(366,966)
Administrative expenses
(52,151)
(72,819)
(59,018)
(52,827)
(50,818)
Net change in plan fiduciary net position
991,048
765,804
433,143
1,136,645
2,005,806
Plan fiduciary net position - beginning
6,815,775
7,806,823
8,572,627
9,005,770
10,142,415
Plan fiduciary net position - ending (b)
$
7,806,823
$
8,572,627
$
9,005,770
$ 10,142,415
$ 12,148,221
Net pension liability (asset) (a) - (b)
$
529,825
$
504,653
$
274,282
$ (286,195)
$ (1,904,107)
Plan fiduciary net position as a percentage
of the total pension liability 93.64% 94.44% 97.04% 102.90% 118.59%
Covered payroll $ 2,179,417 $ 2,152,963 $ 2,134,469 $ 2,232,670 $ 2,310,371
Net pension liability (asset) as a percentage of
covered payroll 24.31% 23.44% 12.85% (12.82)% (82.42)%
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authority
Employees' Retirement System, a cost-sharing multiple -employer defined benefit plan. Effective October 1, 2016, the Authority
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single -employer
defined benefit plan with the same contribution and benefit provisions as the prior plan.
This schedule is intended to show information for 10 years. However, until a full 10 -year trend is compiled,
information will be presented for those years for which information is available.
Change of Assumptions
For the year ending 9/30/17, the assumed rates of mortality were changed.
For the year ending 9/30/21, the assumed rates of mortality were changed.
I,
2022 2023
$ 208,256
$ 222,802
678,774
713,303
139,219
84,097
(303,559)
(464,235)
(484,255)
258,455
535,947
10,244,114
10,502,569
$10,502,569
$11,038,516
$ 191,107
126,005 140,788
(2,314,490) 1,186,020
(464,235)
(484,255)
(59,798)
(60,595)
(2,521,411)
781,958
12,148,221 9,626,810
$ 9,626,810 $10,408,768
$ 875,759 $ 629,748
91.66% 94.29%
$ 2,100,081 $ 2,346,467
41.70% 26.84%
Change of Assumptions
For the year ending 9/30/22, the investment return, salary increase factors, withdrawal rates and retirement rates were changed.
WA
OKEECHOBEE UTILITY AUTHORITY
Required Supplemental Information
Schedule of Employer Contributions
Fiscal Year Actuarially
Ended Determined Actual
September 30 Contribution Contribution
Last Ten Fiscal Years
Contribution Authority's Actual Contribution
Excess Covered as a Percentage of
(Deficiency) Payroll Covered Payroll
2017
$ 303,157
$ 287,362 $ (15,795)
$ 2,179,417
13.19%
2018
302,922
325,097 22,175
2,152,963
15.10%
2019
335,965
336,605 640
2,134,469
15.77%
2020
317,039
317,039 -
2,232,670
14.20%
2021
286,486
286,486 -
2,310,371
12.40%
2022
191,107
191,107 -
2,100,081
9.10%
2023
-
- -
2,346,467
N/A
* Excess contributions from previous years totaling $15,795 were applied to satisfy the full contribution requirement.
Schedule of Annual Money -Weighted Rate of Return, Net of Investment Expense
Fiscal Year
Ending
September 30
2017
10.83%
2018
8.11%
2019
3.21%
2020
11.53%
2021
18.77%
2022
(19.73%)
2023
11.97%
NOTE: Prior to October 1, 2016, the Authority participated in the City of Okeechobee and Okeechobee Utility Authority'
Employees' Retirement System, a cost-sharing multiple -employer defined benefit plan. Effective October 1, 2016, the Authority
withdrew from that plan and started the Okeechobee Utility Authority Employees' Retirement System, a single -employer
defined benefit plan with the same contribution and benefit provisions as the prior plan.
This schedule is intended to show information for 10 years. However, until a full 10 -year trend is
compiled, information will be presented for those years for which information is available.
M.
OKEECHOBEE UTILITY AUTHORITY
Notes to the Schedule of Contributions
September 30, 2023
Actuarially determined contribution rates are calculated as of September 30, two years prior to the
end of the fiscal year in which contributions are reported. The contributions for the fiscal year
ended September 30, 2023, were determined by the actuarial valuation as of October 1, 2021 using
the methods and assumptions below.
Valuation Date October 1, 2021
Actuarial Cost Method Aggregate
Amortization Method N/A
Remaining Amortization Period N/A
Asset Valuation Method 4 -year smoothed market
Inflation 2.50%
Salary Increases 6.00%
Cost of Living Adjustments None
Investment Rate of Return 7.00%
Retirement age 100% when first eligible for normal
retirement or DROP entry
Mortality For healthy participants during
employment, RP 2000
Combined Healthy Participant
Mortality Tables, with 50%
White Collar / 50% Blue
Collar Adjustment for males
and 100% White Collar for
females. Fully generational
mortality improvements
projected to each future
decrement date with Scale BB.
Me
OKEECHOBEE UTILITY AUTHORITY
Schedule of Revenues and Expenses
For the Fiscal Year Ended September 30, 2023
Unaudited
50
Water
Wastewater
Unallocated
Total
OPERATING REVENUE
Water system charges for services
$ 7,711,973
$
$
$ 7,711,973
Wastewater system charges for services
4,726,216
4,726,216
Penalties and late charges
120,236
120,236
Miscellaneous
234,593
234,593
Total operating revenues
7,711,973
4,726,216
354,829
12,793,018
OPERATING EXPENSES
Personnel Costs
641,828
599,444
2,931,210
4,172,482
Electricity
246,310
190,565
154,481
591,356
General Repair and Maintenance Expenses
260,839
214,438
612,737
1,088,014
Repair & Maintenance Expenses Equipment
104,092
23,480
127,572
Monitoring and Testing
17,750
30,818
48,568
Residual Disposal
107,085
107,085
Chemicals
648,527
114,019
132,839
895,385
Maintenance Supplies
18,524
6,166
52,349
77,039
Office Supplies
2,338
834
13,458
16,630
Miscellaneous
5,329
1,702
7,367
14,398
Administrative Costs
393,672
393,672
Accounting and Audit Fees
22,000
22,000
Legal Fees
84,649
84,649
Property, Liability and Casualty Insurance
397,226
397,226
Professional Services
111,542
111,542
Depreciation and amortization
1,674,883
1,026,438
2,701,321
Total operating expenses
3,620,420
2,291,509
4,937,010
10,848,939
OPERATING INCOME
4,091,553
2,434,707
(4,582,181)
1,944,079
NONOPERATING REVENUES (EXPENSES)
Interest revenue
350,097
350,097
Interest expense
(420,187)
(420,187)
Operating grants
90,083
90,083
Total nonoperating revenues (expenses)
19,993
19,993
INCOME BEFORE CAPITAL CONTRIBUTIONS
$ 4,091,553
$ 2,434,707
$ (4,562,188)
$ 1,964,072
50
OKEECHOBEE UTILITY AUTHORITY
Information Required by Section 218.39(3)(c), Florida Statutes
For the Fiscal Year Ended September 30, 2023
Unaudited
As required by Section 218.39(3)(c), Florida Statutes, the Authority reported:
Required Information
Reported
The total number of district employees compensated in the last pay period of the
District's fiscal year 2023:
56
The total number of independent contractors to whom nonemployee compensation
was paid in the last month of the District's fiscal year 2023:
Not Applicable
All compensation earned by or awarded to employees, whether paid or accrued,
regardless of contingency for fiscal year 2023:
$ 3,013,686
All compensation earned by or awarded to nonemployee independent contractors,
whether paid or accrued, regardless of contingency for fiscal year 2023:
Not Applicable
Each construction project with a total cost of at least $65,000 approved by the
District that was scheduled to begin on or after October 1 of the fiscal year 2023,
together with the total expenditures for such project:
Project Budget
Expenditures
Treasure Island Septic to Sewer Project $ 33,180,385
$ 198,812
A budget variance based on the budget adopted under Section 189.016(4), Florida
Statutes, before the beginning of the fiscal year 2023 being reported if the District
amends a final adopted budget under Section 189.016(6), Florida Statutes:
See Page 52
The millage rate of ad valorem taxes imposed by the District for fiscal year 2023:
Not Applicable
The rate of non -ad valorem special assessments imposed by the District for fiscal
year 2023:
Not Applicable
51
OKEECHOBEE UTILITY AUTHORITY
Budgetary Schedule
For the Fiscal Year Ended September 30, 2023
Unaudited
Original Final
Budget Budget
Variance with
Final Budget
Postive
Actual (Negative)
OPERATING REVENUE
545,627
1,944,079
32,432
32,432
Water system charges for services
$ 7,429,780
$ 7,429,780
$ 7,711,973
$ 282,193
Wastewater system charges for services
4,425,602
4,425,602
4,726,216
300,614
Penalties and late charges
124,619
124,619
120,236
(4,383)
Miscellaneous
75,931
75,931
234,593
158,662
Total operating revenues
12,055,932
12,055,932
12,793,018
737,086
OPERATING EXPENSES
Water services - labor
Water services - O & M
Wastewater services - labor
Wastewater services - O & M
Maintenance - labor
Maintenance - O & M
Meter reader - labor
Meter reader - O & M
Administrative and general - labor
Administrative and general - O & M
Depreciation and amortization
Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest revenue
Interest expense
Operating grants
Total nonoperating revenues (expenses)
642,482
1,459,025
609,265
742,500
1,384,916
1,156,406
245,989
49,950
1,212,132
1,295,040
2,712,600
11,510,305
642,482
1,459,025
609,265
742,500
1,384,916
1,156,406
245,989
49,950
1,212,132
1,295,040
2,712,600
11,510,305
641,828
1,303,709
599,444
665,627
1,546,072
940,943
256,318
27,287
1,128,820
1,037,570
2,701,321
10,848,939
545,627
545,627
1,944,079
32,432
32,432
350,097
(318,753)
(318,753)
(420,187)
Capital grants
90,083
(286,321)
(286,321)
19,993
654
155,316
9,821
76,873
(161,156)
215,463
(10,329)
22,663
83,312
257,470
11,279
661,366
1,398,452
317,665
(101,434)
90,083
306,314
INCOME BEFORE CAPITAL CONTRIBUTIONS
259,306
259,306
1,964,072
1,704,766
CAPITAL CONTRIBUTIONS
Capital grants
8,369,570
8,369,570
Water capital connection fees
10,775
10,775
98,855
88,080
Wastewater capital connection fees
10,056
10,056
184,628
174,572
Developer contributions for capital projects
492,467
492,467
Total capital contributions
20,831
20,831
9,145,520
9,124,689
INCREASE IN NET POSITION $
280,137
$ 280,137
$ 11,109,592
$ 10,829,455
52
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
WEST PALM BEACH OFFICE
JANET R. BARICEVICH, RETIRED, CPA
NORTHBRIDGE CENTRE
TERRY L. MORTON, JR., CPA
515 N. FLAGLER DRIVE, SUITE 1700
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
POST OFFICE BOX 347
EDWARD T HOLT, JR., PFS, CPA
WEST PALM BEACH, FLORIDA 33402-0347
BRIAN J. BRESCIA, CFP®, CPA
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP®, CPA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL ' KI PAN, CPA
WILLIAM C. SKER, CPA
RICHARD E. BOTTS, CPA
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
OFFICE
STATEMENTS PERFORMED IN ACCORDANCE WITH 6ELLE 333 S EL2nDd STREET
POST OX 338
GOVERNMENT AUDITING STANDARDS BELLE GLADE, 3
LORID 33 0 0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
We have audited, in accordance with the 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
proprietary fund and aggregate remaining fund information of the Okeechobee Utility Authority as
of and for the year ended September 30, 2023, and the related notes to the financial statements,
which collectively comprise the Okeechobee Utility Authority's basic financial statements, and
have issued our report thereon dated June 4, 2024.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Okeechobee
Utility Authority'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 Okeechobee Utility Authority's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Okeechobee Utility Authority'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.
53
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Okeechobee Utility Authority'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.
West Palm Beach, Florida
June 4, 2024
54
IIA
110
F-910
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGE CENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
FOR THE MAJOR STATE PROJECT
AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY CHAPTER 10.550,
RULES OF THE AUDITOR GENERAL
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on Compliance for the Major State Project
Opinion on the Major State Project
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP-, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP®, CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
FAX (561)996-6248
We have audited Okeechobee Utility Authority's compliance with the types of compliance
requirements described in the Department of Financial Services' State Projects Compliance
Supplement that could have a direct and material effect on the Okeechobee Utility Authority's
major State Project for the year ended September 30, 2023. The Okeechobee Utility Authority's
major State Project is identified in the summary of auditor's results section of the accompanying
schedule of findings and questioned costs.
In our opinion, the Okeechobee Utility Authority complied, in all material respects, with the
types of compliance requirements referred to above that could have a direct and material effect
on its major State Project for the year ended September 30, 2023.
Basis for Opinion on the Major State Project
We conducted our audit of compliance 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. Our responsibilities under those standards and the
Chapter 10.550, Rules of the Auditor General are further described in the Auditor's
Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the Okeechobee Utility Authority and to meet our other
ethical responsibilities, in accordance with 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 opinion on compliance for the major State Project. Our audit does not provide a legal
determination of the Okeechobee Utility Authority's compliance with the compliance
requirements referred to above.
55
AMERICAN INSTITUTE OF CERTIFI ED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS - CPAMERICA INTERNATIONAL
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements
applicable to the Okeechobee Utility Authority's State Project.
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with
the compliance requirements referred to above occurred, whether due to fraud or error, and
express an opinion on Okeechobee Utility Authority's compliance based on our audit.
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,
Government Auditing Standards, and the Chapter 10.550, Rules of the Auditor General will
always detect material noncompliance when it exists. The risk of not detecting material
noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is considered
material if there is a substantial likelihood that, individually or in the aggregate, it would
influence the judgment made by a reasonable user of the report on compliance about Okeechobee
Utility Authority's compliance with the requirements of the major State Project as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government
Auditing Standards, and the Chapter 10.550, Rules of the Auditor General, we:
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material noncompliance, 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 Okeechobee Utility Authority's
compliance with the compliance requirements referred to above and performing such
other procedures as we considered necessary in the circumstances.
• Obtain an understanding of Okeechobee Utility Authority's internal control over
compliance relevant to the audit in order to design audit procedures that are appropriate
in the circumstances and to test and report on internal control over compliance in
accordance with the Chapter 10.550, Rules of the Auditor General, but not for the
purpose of expressing an opinion on the effectiveness of Okeechobee Utility Authority's
internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we identified during the audit.
56
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a State Project on a timely basis. A material weakness in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a State Project will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a State Project that is less severe than a material weakness in internal control over
compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
the Auditor's Responsibilities for the Audit of Compliance section above and was not designed
to identify all deficiencies in internal control over compliance that might be material weaknesses
or significant deficiencies in internal control over compliance. Given these limitations, during
our audit we did not identify any deficiencies in internal control over compliance that we
consider to be material weaknesses, as defined above. However, material weaknesses or
significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not
suitable for any other purpose.
West Palm Beach, Florida
June 4, 2024
57
I .Nk
OKEECHOBEE UTILITY AUTHORITY
Schedule of Expenditures of State Financial Assistance
For the Fiscal Year Ended September 30, 2023
CSFA
State Grantor/Program Title Number
Florida Department of Environmental Protection
Statewide Water Quality Restoration Projects 37.039
Total State Financial Assistance
NOTE 1 - BASIS OF PRESENTATION
Contract State
Number Expenditures
LP47012 $ 145,155
LPQ0008 5,100,289
LPQ0017 2,714,495
7,959,939
S 7,959,939
The above schedule of expenditures of state financial assistance includes State grant activity of the
Okeechobee Utility Authority and is presented in accordance with the requirements of the Florida Single
Audit Act. Therefore, some amounts presented in the schedule may differ from amounts presented in, or used
in the preparation of the basic financial statements. Because the Schedule presents only a portion of the
operations of the Okeechobee Utility Authority it is not intended to and does not present the financial
position, changes in financial position, or cash flows of the Okeechobee Utility Authority.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Expenditures are recognized on the accrual basis of accounting. Such expenditures are recognized following
the cost principles contained in the Florida Department of Financial Services' State Projects Compliance
Supplement, wherein certain types of expenditures are not allowed or are limited as to reimbursement. The
Okeechobee Utility Authority did not have any loan programs.
NOTE 3 - CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by those agencies.
Any disallowed claims, including amounts already received, might constitute a liability of the Okeechobee
Utility Authority for the return of those funds. In the opinion of management, all grant expenditures were in
compliance with the terms of the grant agreements and applicable State laws and regulations.
W.
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2023
SECTION I—SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued on whether the financial
statements audited were prepared in accordance with GAAP:
Internal control over financial reporting:
• Material weakness identified?
• Reportable condition identified that is not considered
to be a material weakness?
Noncompliance material to financial statements noted`?
State Financial Assistance
Internal control over major projects:
• Material weakness identified?
• Reportable condition identified that is not considered
to be a material weakness?
Type of auditor's report issued on compliance for major
proj ect:
Any audit findings disclosed that are required to be reported in
accordance with Chapter 10.550, Rules of the Auditor
General?
Identification of Maior State Proiect
CSFA Number Name of State Project
Unmodified Opinion
No
No
No
No
None reported
Unmodified
No
Florida Department of Environmental Protection
37.039 • Statewide Water Quality Restoration Projects
Dollar threshold used to distinguish between $750,000
type A and type B programs:
59
OKEECHOBEE UTILITY AUTHORITY
Schedule of Findings and Questioned Costs
September 30, 2023
SECTION II — FINANCIAL STATEMENT FINDINGS
None
SECTION III— STATE PROJECTS FINDINGS AND QUESTIONED COSTS
Major State Project
Florida Department of Environmental Protection
Statewide Water Quality Restoration Projects — CSFA 37.039
None
SECTION IV— SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
None
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
WEST PALM BEACH OFFICE
JANET R. BARICEVICH, RETIRED, CPA
NORTHBRIDGE CENTRE
TERRY L. MORTON, JR., CPA
515 N. FLAGLER DRIVE, SUITE 1700
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
POST OFFICE BOX 347
EDWARD T HOLT, JR., PFS, CPA
WEST PALM BEACH, FLORIDA 33402-0347
BRIAN J. BRESCIA, CFP®, CPA
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP®, CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
OFFICE
MANAGEMENT LETTER IN ACCORDANCE WITH 6ELLE 333 S EL2nDd STREET
POST OX 338
THE RULES OF THE AUDITOR GENERAL BELLE GLADE, 3
LORID 3300338
OF THE STATE OF FLORIDA TELEPHONE (561) 996-5612
FAX (561) 996-6248
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
Report on the Financial Statements
We have audited the financial statements of the Okeechobee Utility Authority, as of and for the
fiscal year ended September 30, 2023, and have issued our report thereon dated June 4, 2024.
Auditor's 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 Auditor's 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; Independent Auditor's Report on Compliance
for the Major State Project and on Internal Control over Compliance; Schedule of Findings and
Questioned Costs; and Independent Accountant's 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 and schedule, which are dated June 4, 2024, should be considered in conjunction with
this Management Letter.
61
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Prior Audit Findings
Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
financial audit report. There were no findings or recommendations in the prior year that required
corrective actions.
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. This
information is disclosed in Note 1 to the financial statements.
Financial Condition and Management
Sections 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
Okeechobee Utility Authority has 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 Okeechobee Utility Authority did not meet any of the conditions
described in Section 218.503(1), Florida Statutes, during the fiscal year ended September 30, 2023.
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 Authority. It is management's responsibility to
monitor the Okeechobee Utility Authority'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. Our assessment was done as of the fiscal year end. The results of
our procedures did not disclose any matters that are required to be reported.
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.
Special District Component Units
Section 10.554(1)(i)5.c, Rules of the Auditor General, requires, if appropriate, that we
communicate the failure of a special district that is a component unit of a county, municipality, or
special district, to provide the financial information necessary for proper reporting of the
component unit, within the audited financial statements of the county, municipality, or special
district in accordance with Section 218.39(3)(b), Florida Statutes.
Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor
General, there are no special district component units of the Okeechobee Utility Authority.
62
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 warrants the
attention of those charged with governance. In connection with our audit, we did not note any such
findings.
As required by Section 218.39(3)(c), Florida Statutes, and Section 10.554(1)(i)6, Rules of the
Auditor General, the Authority reported the required information in the Other Information Section
on pages 51 and 52.
Single Audits
The Okeechobee Utility Authority expended less than $750,000 of federal awards and more than
$750,000 of state financial assistance for the fiscal year ended September 30, 2023 and was
required to have a state single audit.
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, and applicable management, and is not
intended to be and should not be used by anyone other than these specified parties.
West Palm Beach, Florida
June 4, 2024
63
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGE CENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W W.NHMCPA.COM
INDEPENDENT ACCOUNTANT'S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
The Honorable Chairman and Members of the
Okeechobee Utility Authority Board
Okeechobee, Florida
EVERETT B. NOWLEN (1930-1984), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, RETIRED, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT, CVA, ABV, CFF, CPA
ALEXIA G. VARGA, CFE, CPA
EDWARD T HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP®, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP®, CPA
WEI PAN, CPA
WILLIAM C. KISKER, CPA
RICHARD E. BOTTS, CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
We have examined the Okeechobee Utility Authority's compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2023. Management of the Okeechobee Utility Authority is
responsible for the Okeechobee Utility Authority's compliance with the specified requirements. Our
responsibility is to express an opinion on the Okeechobee Utility Authority's compliance with the
specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the AICPA.
Those standards require that we plan and perform the examination to obtain reasonable assurance about
whether the Okeechobee Utility Authority complied, in all material respects, with the specified
requirements referenced above. An examination involves performing procedures to obtain evidence
about whether the Okeechobee Utility Authority 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 we
obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the examination engagement.
Our examination does not provide a legal determination on the Okeechobee Utility Authority's
compliance with the specified requirements.
In our opinion, the Okeechobee Utility Authority complied, in all material respects, with Section
218.415, Florida Statutes for the year ended September 30, 2023.
This report is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and Florida House of Representatives, the Florida Auditor General,
applicable management, and the Board of Supervisors, and is not intended to be and should not be used
by anyone other than these specified parties.
West Palm Beach, Florida
June 4, 2024
Ism
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL