1988/1989 Fiscal Year
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FINANCIAL STATEMENTS AND ACCOMPANYING INFORMATION
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
CITY OF OKEECHOBEE, FLORIDA
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CITY COUNCIL AND ADMINISTRATIVE PERSONNEL
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Jim Kirk
Councilmember
Richard R. Collins
Councilmember
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John J. Drago
City Administrator
Bonnie S. Thomas, CMC
City Clerk
Louis K. Tomey II
Chief of Fire
Larry Mobley
Chief of Police
September 30, 1989
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CITY COUNCIL
Oakland R. Chapman
Mayor, Chairman
ADMINISTRATIVE
Dowling Watford, Jr.
Councilmember
Oscar Thomas
Councilmember
John Cook
City Attorney
L.C. Fortner, Jr.
Public Utilities Director
Charles Elders
Director of Public Works
Lola Parker
Finance Director
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Independent Auditors' Report
Combined Financial Statements:
Combined Balance Sheets - All Fund Types and Account Groups
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - All Governmental Fund Types
Combined Statements of Revenue, Expenditures and Changes
in Fund Balances - Budget and Actual - Governmental Funds
Combined Statements of Revenue, Expenses and Changes in
Fund Equity - Proprietary Fund and Similar Trust Funds
Combined Statements of Changes in Financial Position -
Proprietary Fund and Similar Trust Funds
Notes to Combined Financial Statements
Accompanying Information:
General Fund -
Schedule of Revenue - Budget and Actual
Schedule of Expenditures - Budget and Actual
Debt Service Fund -
Statement of Revenue and Expenditures - Budget and Actual
Pension Trust Funds -
Combining Balance Sheets
Combining Statements of Revenue, Expenses and
Changes in Fund Balances
Combining Statements of Changes in Financial Position
Statistical Information:
Summary of Insurance Coverage - Unaudited
Schedule of Assessed Values, Tax Levies and Rates - Unaudited
Schedule of Certain Revenue - Unaudited
Independent Auditors' Report on Internal Control Structure
Independent Auditors' Report on Compliance with Laws and Regulations
Management Letter
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3-4
5
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9-26
27-28
29-30
31
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33
34
35
36
37
38-40
41
42-48
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February 2, 1990
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Other Offices:
OHIO
Youngstown (Boardman)
Youngstown
Warren
Salem
Alliance
PENNSYLVANIA
New Castle
Sharon
Meadville
FLORIDA
Stuart
Naples
Port SI. Lucie
2222 Colonial Road
Suite 200
Ft, Pierce, FL 34950
Telephone (407) 461-8833
FAX # (407) 461-8872
The Honorable Mayor and Members
of the City Council
City of Okeechobee, Florida
Independent Auditors' Report
We have audited the accompanying combined financial statements of the City
of Okeechobee, Florida (City) as of and for the year ended September 30, 1989,
as listed in the table of contents. These combined financial statements are
the responsibility of the City's management. Our responsibility is to express
an opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As disclosed in Notes D and E to the financial statements, the City has
not maintained adequate detailed fixed asset records to support the cost of the
water and sewer utility plant in service in the proprietary fund and fixed
assets, included in the general fixed asset account group, with respect to the
stated cost of assets acquired prior to October 1, 1981. In addition,
depreciation in the proprietary fund is computed based on the assigned values.
In our opinion, generally accepted accounting principles require that fixed
assets be stated at cost and supported by adequate detailed records. It is not
practicable to determine the effects on the combined financial statements of
this departure from generally accepted accounting principles.
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MEM8ER AMERICAN INSTITUn: OF CERTIFIED PUBLIC ACCOUNTANTS DIVISION OF CPA FIRMS-SEC AND PRIVAn: COMPANIES PRACTICE SECTIONS
The Honorable Mayor and Members of the City Council
City of Okeechobee, Florida
February 2, 1990
In our opinion, except _ for the effects of the departure from generally
accepted accounting principles in ~he proprietary fund and general fixed asset
account group, as discussed in the preceding paragraph, the aforementioned
combined financial statements present fairly, in all material respects, the
financial position of the City of Okeechobee, Florida at September 30, 1989 and
the results of its operations and changes in financial position of its
proprietary and similar trust fund type for the year then ended in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
combined financial statements taken as a whole. The accompanying information
listed in the accompanying table of contents is presented for purposes of
additional analysis and is not a required part of the basic combined financial
statements. Such information, except for the portion marked "unaudited ," on
which we express no opinion, has been subjected to the auditing procedures
applied in the audit of the basic combined financial statements and, in our
opinion, except for the effects on the proprietary fund and general fixed asset
account group of not maintaining adequate detailed fixed asset records as
discussed in the third paragraph above, is fairly stated in all material
respects in relation to the combined financial statements taken as whole.
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Certified Public ACCOU~
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COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS
CITY OF OKEECHOBEE. FLORIDA
September 30. 1989
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FIDUCIARY
FUND TYPE ACCOUNT GROUPS
GOVERNMENTAL FUND TYPE PROPRIETARY EMPLOYEE GENERAL GENERAL TOTAL
DEBT FUND TYPE PENSION FIXED LONG-TERM (MEMORANDUM
GENERAL SERVICE ENTERPRISE TRUST FUNDS ASSETS DEBT ONLY)
ASSETS
Cash $ 525.558 $ 185.535 $ 120.515 $1.872.000 $ -0- $ -0- $ 2.703,608
Investments -0- 2,133 -0- 82,531 -0- -0- 84.664
Receivables:
Taxes 73.064 -0- -0- -0- -0- -0- 73.064
Accounts less
a II owance of
$35.523 32.041 -0- 117.929 -0- -0- -0- 149.970
Due from other
government
agencies 62.857 -0- 113 -0- -0- -0- 62.970
Due from other funds 175.155 -0- 7.222 -0- -0- -0- 182.377
Inventory 3.434 -0- -0- -0- -0- -0- 3,434
Restricted assets:
Cash 2.397 -0- 692.627 -0- -0- -0- 695,024
Investments -0- -0- 438.988 -0- -0- -0- 438,988
Fixed assets -0- -0- 11.586.277 -0- 1.956.262 -0- 13.542,539
Unamortized bond
expenses -0- -0- 159.393 -0- -0- -0- 159,393
Amount available in
Debt Service Fund -0- -0- -0- -0- -0- 10.501 10,501
Amount to be provided
for retirement of
general long-term
debt -0- -0- -0- -0- -0- 1,550.902 1.550,902
TOTAL ASSETS $ 874.506 $ 187.668 $13.123.064 $1.954.531 $1.956.262 $1,561.403 $19,657,434
See accompanying notes to combined financial statements
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COMBINED BALANCE SHEETS -
ALL FUND TYPES AND ACCOUNT GROUPS (CONTINUED)
CITY OF OKEECHOBEE. FLORIDA
September 30. 1989
,., FIDUCIARY
PROPR I ET ARY FUND TYPE ACCOUNT GROUPS
GOVERNMENTAL FUND TYPE FUND TYPE EMPLOYEE GENERAL GENERAL TOTAL
DEBT ENTERPRISE PENSION FIXED LONG-TERM ( MEMORANDUM
GENERAL SERV I CE FUND TRUST FUNDS ASSETS DEBT ONLY)
LI AB I LI 11 ES
Accounts payable $ 35.104 $ -0- $ 26,587 $ -0- $ -O- S -O- S 61,691
Customer deposits -0- -0- 253.975 -0- -0- -0- 253,975
Accrued liabilities 8.902 -0- 33.500 -0- -0- 51,403 93,805
Accrued interest 84.680 -0- -0- -0- -0- -0- 84,680
Payable from
restricted assets:
Accounts payable -0- -0- 3,125 -0- -0- -0- 3,125
Accrued interest
on bonds payable -0- -0- 110.805 -0- -0- -0- 110,805
Matured bonds and
interest coupons -0- 2,012 -0- -0- -0- -0- 2.012
Due to other funds 7.222 175.155 -0- -0- -0- -0- 182,377
Deferred revenue 15.410 -0- -0- -0- -0- -0- 15,410
Long-term debt -0- -0- 6,823.389 -0- -0- 1.510,000 8,333,389
TOTAL LIABILITIES 151.318 177.167 7,251.381 -0- -0- 1.561.403 9,141,269
FUND EQU I TY
Contributed capital -0- -0- 4,835.995 -0- -0- -0- 4.835,995
Investment in
general fixed
assets -0- -0- -0- -0- 1,956.262 -0- 1.956,262
Retained earnings:
Reserved for
revenue bond
retirement -0- -0- 593,612 -0- -0- -0- 593.612
Unreserved -0- -0- 442,076 -0- -0- -0- 442,076
Fund balances:
Reserved for:
Employees'
retirement -0- -0- -0- 1,954.531 -0- -0- 1,954,531
Debt service -0- 10,501 -0- -0- -0- -0- 10,501
Inventory 3,434 -0- -0- -0- -0- -0- 3,434
Encumbrances 19.974 -0- -0- -0- -0- -0- 19,974
Unreserved 699.780 -0- -0- -0- -0- -0- 699,780
TOTAL FUND EQUITY 723.188 10,501 5,871,683 1.954.531 1,956,262 -0- 10,516 , 165
TOTAL LIABILITIES
AND FUND EQUITY $ 874,506 $ 187,668 $13,123,064 $1.954,531 $1,956,262 $1,561,403 $19,657,434
See accompanying notes to combined financial statements
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COMBINED STATEMENTS OF REVENUE, EXPENDITURES AND
CHANGES IN FUND BALANCES -
ALL GOVERNMENTAL FUND TYPES
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
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See accompanying notes to combined financial statements
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REVENUE
Taxes
Intergovernmental
Charges for services
Licenses and permits
Fines and forfeitures
Interest Income
M I see II aneous
TOTAL REVENUE
EXPENDITURES
Public safety
General government
Transportation
Physical environment
Health and human services
Debt service
TOTAL EXPENDITURES
EXCESS OF REVENUE OVER.
EXPENDITURES (DEFICIENCY)
OTHER FINANCING SOURCE
Proceeds from note payable
EXCESS OF REVENUE AND OTHER
FINANCING SOURCE OVER
EXPENDITURES (DEFICIENCY)
FUND EQUITY
Beginning of year
Adlustment to conform with
generally accepted
accounting principles:
Adlustment for encumbrances
End of year
COMBINED STATEMENTS OF REVENUE. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - GOVERNMENTAL FUNDS
CITY OF OKEECHOBEE, FLORIDA
Yeo,r ended September 30. '989
TOTALS
GENERAL FUND DEBT SERVICE FUND (MEMORANDUM ONLY)
ACTUAL (ON VARIANCE VARIANCE ACTUAL (ON VARIANCE
BUDGETARY FAVORABLE FAVORABLE BUDGETARY FAVORABLE
BUDGET BASIS) (UNFAVORABLE) BUDGET ACTUAL (UNFAVORABLE) BUDGET BASIS) (UNFAVORABLE)
$ 985,030 $ 982.078 $ (2.952) $ 27.000 $ 42.336 $ 15.336 $1 .012,030 $1.024.414 $ 12,384
805.920 852.794 46.874 -0- -0- -0- 805.920 852.794 46,874
116.010 171.239 55.229 -0- -0- -0- 116,010 171,239 55.229
30.000 31,828 1 .828 -0- -0- -0- 30,000 31.828 1,828
52.750 46.911 (5,839) -0- -0- -0- 52.750 46,911 (5,839)
10,590 41,761 31.171 2.000 5,938 3.938 12,590 47.699 35.109
29,350 46,645 17 ,295 -0- -0- -0- 29,350 46.645 17 ,295
2.029.650 2,173,256 143,606 29,000 48.274 19,274 2,058.650 I' 2,221,530 162,880
932,755 925.158 7.597 -0- -0- -0- 932,755 925.158 7,597
391,944 381,896 10,048 -0- -0- -0- 391,944 381,896 10,048
725.280 529.899 195,381 -0- -0- -0- 725,280 529,899 195,381
11 5 .000 145,050 (30,050) -0- -0- -0- 11 5 , 000 145.050 (30,050)
47.376 52,811 (5.435) -0- -0- -0- 47,376 52,811 (5,435)
60.000 104,615 (44,615) 41,550 41,550 -0- 101.550 146,165 (44,615)
2,272,355 2,139.429 132,926 41,550 41,550 -0- 2,313.905 2,180,979 132,926
(242,705) 33,827 276,532 (12,550 ) 6.724 19,274 (255,255) 40,551 295,806
-0- 235.044 235,044 -0- -0- -0- -0- 235,044 235,044
$ (242,705) 268,871 $ 511,576 $ (12,550) 6,724 $ 19,274 $ (255,255) 275,595 $ 530,850
549,109 3,777 552,886
(94,792)
$ 723.188
-0-
$ 10.501
(94.792)
$ 733,689
See accompanying notes to combined financial statements
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COMBINED STATEMENTS OF REVENUE, EXPENSES AND
CHANGES IN FUND EQUITY -
PROPRIETARY FUND AND SIMILAR TRUST FUNDS
CITY OF OKEECHOBEE, FLORIDA
Year end~d September 30, 1989
OPERATING REVENUE
Charges for services
Contributions
Interest income
TOTAL OPERATING REVENUE
OPERATING EXPENSES
Personal services
Contractual services
Depreciation
Materials and operating supplies
Utilities
Insurance
Repairs and maintenance
Administrative supplies and expense
Contribution refunds
General fund administrative charge
Bad debts expense
TOTAL OPERATING EXPENSES
OPERATING INCOME
NONOPERATING REVENUE (EXPENSE)
Impact fees
Tap fees
Interest income
Interest expense
Other fiscal charges
Loss on disposition of equipment
Miscellaneous
Legal and engineering fees - lawsuit
NET INCOME (LOSS)
FUND EQUITY
Beginning of year
Capital contribution
End of year
PROPRIETARY
FUND TYPE
ENTERPRISE FUND
$1,697,220
-0-
-0-
1,697.220
582,414
54,314
306,001
351,732
137,239
52,437
80,611
24,608
-0-
47,770
11 ,181
1,648,307
48,913
212,077
35,211
61,811
(408,559)
(2,217)
(22,991)
1,887
(45,395)
(168.176)
(119,263)
5,974,163
5,854,900
16,783
$5,871,683
FIDUCIARY
FUND TYPE
EMPLOYEE
PENSION
TRUST FUNDS
$ -0-
191,754
154,022
345,776
-0-
7,518
-0-
-0-
-0-
-0-
-0-
547
57,227
-0-
-0-
65,292
280,484
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
280,484
1,674,047
1,954,531
-0-
$1,954.531
See accompanying notes to combined financial statements
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TOTALS
(MEMORANDUM
ONLY )
$1,697,220
191,754
154,022
2,042,996
582,414
61,832
306,001
351,732
137,239
52,437
80,611
25,155
57,227
47,770
11.181
1,713,599
329,397
212,077
35,211
61,811
(408,559)
(2,217)
(22,991)
1,887
(45,395)
(168,176)
,
161,221
7,648,210
7,908,431
16,783
$7,826.214
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COMBINED STATEMENTS OF CHANGES IN FINANCIAL POSITION _
PROPRIETARY FUND AND SIMILAR TRUST FUNDS
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See accompanying notes to combined financial statements
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Okeechobee (the City) was originally incorporated in 1915 and
its present charter was adopted in 1919 under Chapter 8318 of Special Acts of
1919. The City operates under the council form of government and provides the
following services as authorized by its charter: public safety, public works and
culture and recreation. The accounting policies of the City conform to generally
accepted accounting principles as applicable to governmental units. The
following is a summary of the more significant policies:
1. SCOPE OF REPORTING ENTITY
The accompanying financial statements include all organizations,
activities and functions over which the City maintains direct
manifestations of oversight responsibility, and those organizations
where other circumstances or relationships require their inclusion to
conform with generally accepted accounting principles. These
circumstances include special financing relationships and consideration
of the scope of public services provided by a particular organization
or agency.
This report includes all funds and account groups of the City.
The specific organizations and agencies included in the accompanying
financial statements, and a summary description of how the specific
elements of oversight responsibility, and other criteria, were
considered in the determination of whether or not to include the
organization in the financial statements are presented below.
The City of Okeechobee Pension Trust Funds
The three retirement plans included in the financ ial
statements are the General Employee's Pension Trust Fund, the
Police Officer's Retirement Trust Fund and the Firefighters Pension
Trust Fund. All are governed by a separate Board of Trustees
subject to the requirements of local ordinances and by applicable
provisions of Florida law.
The plans require participation by all employees in the
respective governing authorities with the exception of the City
Adminis tra tor who maintains a preexisting pension trust fund.
Additionally, the organizations exist for the benefit of the
employees of the City.
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. BASIS OF PRESENTATION - FUND ACCOUNTING
The accounts of the City are organized on the basis of funds or
account groups, each of which is considered a separate accounting
entity. The operations of each fund are accounted for with a separate
set of self-balancing accounts that comprise its assets, liabilities,
fund balance, revenues and expenditures/expenses. Government resources
are allocated to an accounted for in individual funds based upon the
purposes for which they are to be spent, and the means by which
spending activities are controlled. The various funds are summarized
by type in the combined financial statements. The following fund types
and account groups are used by the City:
Governmental Fund Types
Governmental funds are those through which most governmental
functions of the City are financed. The acquisition, use and
balances of the City's expendable financial resources and the
relatedm_liabi 1 ; tj es are accounted for through--sovernmental .funds.
The measurement focus is upon determination of changes in financial
position, rather than upon net income determination. The following
are the City's governmental fund types:
General Fund - The general fund is the general operating fund
of the City. It is used to account for all financial
resources except those required to be accounted for in
another fund.
Debt Service Funds - The debt service fund is used to account
for the accumulation of resources for, and the payment of,
general long-term debt principal, interest and related costs.
Proprietary Fund Type
The proprietary fund is used to account for the City's ongoing
organizations and activities which are similar to those often found
in the private sector. The measurement focus is upon determination
of net income. The following is the City's proprietary fund type:
Enterprise Fund - The enterprise fund is used to account for
operations (a) that are financed and operated in a manner
similar to private business enterprises where the intent of
the governing body is that the costs (expenses, including
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2. BASIS OF PRESENTATION - FUND ACCOUNTING (CONTINUED)
Proprietary Fund Type (Continued)
depreciation) of providing goods or services to the general
public on a continuing basis be financed or recovered
primarily through user charges or (b) where the governing
body has decided that periodic determination of revenues
earned, expenses incurred and/or net income is appropriate
for capital maintenance, public policy, management control
accountability or other purposes. The enterprise fund is a
water and sewer operation.
Fiduciary Fund Type
Fiduciary funds are used to account for assets held by the
City in a trustee capacity or as an agent for individuals, private
organizations, other governmental units and/or other funds. The
following is the City's proprietary fund type:
Trust Funds - Trust funds include pension trust funds.
Pension trust funds are accounted for essentially the same as
the proprietary fund since capital maintenance is critical.
3. ACCOUNT GROUPS
Account groups are used to establish accounting control and
accountability for the City's general fixed assets and general long-
term debt. The two account groups are not "funds." They are concerned
only with the measurement of financial position. They are not involved
wi th measurement of results of operations. The following are the
City's account groups:
General Fixed Assets Account Group
The account group is established to account for all fixed
assets of the City used for general purposes.
General Lon~-Term Debt Account Group
This account group is established to account for all long-term
debt of the City expected to be paid from governmental type funds.
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
4. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS
Basis of accounting refers to when revenues and expenditures or
expenses are recognized in the accounts and reflected in the financial
statements. The basis relates to the timing of measurements made,
regardless of the measurement focus applied.
All governmental funds are accounted for using the modified
accrual basis of accounting. Their revenues are generally recognized
when they become measurable and available as net current assets.
Expenditures are generally recognized when the related fund liability
is incurred. Exceptions to this general rule include accumulated
unpaid vacation and sick pay and principal and interest on general
long-term debt, which is recognized when due.
All proprietary funds and pension trust funds are accounted for on
the accrual basis of accounting. Their revenues are recognized when
earned and expenses are recognized when incurred. Unbilled water and
sewer utility service revenues ($27,074 at September 30, 1989) are
recorded at year end.
The accounting and reporting treatment applied to fixed assets and
long-term liabilities associated with a fund is determined by its
measurement focus. All governmental funds are accounted for on a
spending or "financial flow" measurement focus. This means that only
current assets and current liabilities are generally included on their
balance sheets. Their reported fund balance (net current assets) is
considered a measure of "available spendable resources."
Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other
financing uses) in net current assets. Accordingly, they are said to
present a summary of sources and uses of "available spendable
resources" during a period.
Special reporting treatments are also applied to governmental fund
inventories and prepaid expenses to indicate that they do not represent
"available spendable resources," even though they are a component of
net current assets. Such amounts are generally offset by fund balance
reserve accounts.
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
5. BUDGET AND BUDGETARY ACCOUNTING
The City enacts an annual budget for the governmental funds, by
ordinance, after conducting the required public hearings. The budget
adopted is on a basis consistent with generally accepted accounting
principles except encumbrances are presented as expenditures.
The City follows these procedures in establishing the budgetary
data reflected in the financial statements:
a. The City Administrator submits to the City Council a proposed
operating budget for the fiscal year commencing on October
1st. The operating budget includes proposed expenditures and
means of financing them.
b. Public hearings are conducted to obtain taxpayer comments.
c. The budget is legally enacted through the passage of an
ordinance by City Council on or before the fifteenth day of
September of the fiscal year currently ending.
d. The level of budgetary control is the department. The City
Administrator is authorized to transfer budgeted amounts
within departments of any fund. Revisions that alter the
budgeted totals of any department require approval of the
City Council. Unencumbered appropriations lapse at year end.
e. The reported budgetary data represents the final approved
budget after amendments adopted by the City Council.
f. The General Fund budget is adopted on a basis consistent with
generally accepted accounting principles, except encumbrances
are presented as expenditures.
g. Formal budget integration is not employed for Proprietary,
Debt Service or Trust funds because effective budgetary
control is achieved by alternate measures.
Budgeted amounts are as originally adopted, or as amended by the
City Council. Individual amendments were not material in relation to
the original appropriations which were amended.
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
6. ENCUMBRANCES
The governmental funds use encumbrance accounting under which
purchase orders, contracts and other commitments for the expenditure of
funds are recorded in order to reserve that portion of the applicable
appropriation. Encumbrances outstanding at year end are reported as a
reserve of fund balance because they do not constitute expenditures or
liabilities. As of September 30, 1989, encumbrances in the general
fund amounted to $19,974.
7. CASH AND CASH INVESTMENTS
Cash accounts for the City are maintained in interest-bearing
accounts.
Investments, consisting of certificates of deposit and money
market accounts, are stated at cost which approximates market. The
City is authorized to invest in the local government surplus funds
trust fund, obligations of the U.S. government or agencies thereof,
banking institutions within the state and other such institutions
within the guidelines of the state statutes.
Florida Statutes require state and local governmental units to
deposit monies with a financial institution classified as a "Qualified
Public Depository," which is a state insurance pool for banks and other
financial institutions. The pool requires each bank to render as
collateral a percentage of all state and local monies on deposit. Upon
default of a particular financial institution within the pool, the
pooled collateral is used to reinstate the state and local government
deposits. This pool is additional insurance above the federal
depository insurance. The City has deposits totalling $3,922,284 with
state qualified institutions as of September 30, 1989.
8. INVENTORY
Inventory consists of motor fuels which is stated at cost
determined on the first-in, first-out method.
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE J FLORIDA
September 30, 1989
'..
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
9. FIXED ASSETS
Fixed assets used in governmental funds are recorded as
expenditures in the governmental fund and capitalized at cost in the
General Fixed Assets Account Group. Assets contributed to the City are
recorded at their estimated fair value on the date donated. Public
domain general fixed assets ("infrastructure"), including unimproved
land, roads, bridges, curbs and gutters, streets and sidewalks,
drainage systems, and lighting systems are not capitalized. No
depreciation has been provided on governmental fund fixed assets.
Fixed assets used in enterprise funds are capitalized at cost in
such funds. Depreciation is provided in amounts sufficient to relate
the cost of the depreciable assets to operations over their estimated
service lives on the straight-line basis.
10. ALLOCATION OF ADMINISTRATIVE CHARGES
Certain administrative expenses are incurred by the City's general
fund on behalf of the City's enterprise fund. The general fund charges
for these services based upon management estimates. Reimbursement for
these services is recorded as an operating expense of the enterprise
fund and as a reduction of financial and administrative expense of the
general fund. For the year ended September 30, 1989, these charges
amounted to $47,770.
11. VACATION AND SICK LEAVE
Full-time and permanent employees accrue a paid vacation ranging
from 6 days after 6 months of continuous service up to 20 days after 15
years of service. Unused vacation may be accumulated up to a maximum
of 30 days.
Sick leave for employees is accumulated at the rate of 12 days per
year. Payment for unused sick leave upon termination of employment may
be made for employees with 10 years or more of continuous service at a
rate of 25% of the unused sick leave balance.
The amount of vacation leave to be paid from current financial
resources is included with accrued liabilities in the general fund and
the proprietary fund whereas the vested portion of sick leave and the
noncurrent balance of vacation leave is included under long-term debt.
A long-term liability of $51,403 has been recorded in the General Long-
-15-
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
'.',
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
11. VACATION AND SICK LEAVE (CONTINUED)
Term Debt Group of accounts, representing the City's commitment to fund
such costs from future operations for the general fund. A liability of
$31,955 is reflected within the enterprise fund for accrued vacation
and sick leave.
12. AMORTIZATION OF BOND EXPENSE
The cost of issuance of bonds is being amortized, on the straight-
line method, over the life of the bonds.
13. TOTAL COLUMNS ON COMBINED STATEMENTS
Total columns on the combined financial statements are captioned
"Memorandum Only" to indicate they are presented only to facilitate
financial analysis. Data in these columns do not present financial
position, results of operations or changes in financial position in
conformity with generally accepted accounting principles. Neither is
such data comparable to a consolidation. Interfund eliminations have
not been made in the aggregation of this data.
NOTE B - COMPARISON OF BUDGET TO ACTUAL RESULTS
The actual results of operations are presented in accordance with generally
accepted accounting principles which differ in certain respects from those
practices used in the preparation of the 1988-89 budget. For purposes of
preparing the combined statement of revenues and expenditures - budget and
actual - governmental fund types, the actual results of operations have been
adjusted to a basis consistent with the City's budgeted revenues and
expenditures, formulated on the encumbrance system of accounting.
The adjustments for encumbrances shown on the Combined Statement of Revenue,
Expenditures and Changes in Fund Balances - Budget and Actual is as follows:
GENERAL FUND
Actual expenditures
Encumbrances - September 30, 1989
Less prior year encumbrances paid
$2,234,221
$ 19,974
(114,766)
Adjustment for encumbrances
EXPENDITURES ON BUDGETARY BASIS
(94,792)
$2,139,429
-16-
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NOTES TO COMBINED FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,..
NOTE C - PROPERTY TAXES
The City's property tax is levied annually on the real and personal property
located in the City on January 1 st of the prior year. The assessed value on
which the 1988-89 levy was based was $109,784,356. The assessed values are
established by the Okeechobee County Property Appraiser. Tax collections by the
Okeechobee County Tax Collector begin normally in November of each year with a
due date of March 31 of the following year. Current tax collections for the year
ended September 30, 1989 were 98.88% of the total tax levied.
The City is permitted by state law to levy taxes up to 10 mills of assessed
valuation for the General Fund. The tax rate for the 1988-89 fiscal year was
4.15 mills.
NOTE D - FIXED ASSETS - PROPRIETARY FUND
The carrying value of fixed assets recorded in the proprietary fund as of
September 30, 1989 is summarized as follows:
UTILITY PLANT
IN SERVICE
CONSTRUCTION
IN PROGRESS
TOTAL
Balance September 30, 1988 $ 9,866,225 $ 2,360,450 $12,226,675
Additions 201,309 1,697,861 1,899,170
Transfers 162,818 (162,818) -0-
Retirements (47.694) -0- (47,694)
10,182,658 3,895,493 14,078,151
Less accumulated depreciation 2.491.874 -0- 2,491,874
Balance September 30, 1989 $ 7,690,784 $ 3,895.493 $11,586,277
Included in the above construction in progress is $316,352 which represents
engineering fees and construction costs for the expansion to the wastewater
treatment system. The balance of $3,579,141 in construction in progress is the
wastewater collection system for the wastewater treatment facilities. The
wastewater collection system portion of the project was stopped during 1986 prior
to completion. During 1989, no interest expense was capitalized on the
wastewater collection system since there was no construction activity.
The City has not maintained adequate detailed fixed asset records to support
the cost of the water and sewer utility plant in service for assets acquired
prior to October 1, 1981. At September 30, 1989, the cost of assets acquired
prior to October 1, 1981 was $4,051,067 (less $1,719,121 of accumulated
depreciation). Depreciation expense recorded for these assets was $101,277 in
1989.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
""
NOTE E - CHANGES IN GENERAL FIXED ASSETS
A summary of changes in general fixed assets follows:
BALANCE BALANCE
OCTOBER 1 , 1988 ADDITIONS RETIREMENTS SEPTEMBER 30 , 1989
Land and
improvements $ 805,358 $ -0- $ -0- $ 805,358
Buildings and
improvements 257,905 144,798 -0- 402,703
Furnishings and
equipment 438,083 47,202 54,294 430,991
Rolling stock 360,730 -0- 43,520 317,210
TOTALS $1,862,076 $ 192,000 $ 97,814 $1,956,262
The City has not maintained adequate detailed fixed asset records to support
the cost of general fixed assets acquired prior to October 1, 1981. At September
30, 1989, the value assigned to general fixed assets acquired prior to October 1,
1981 was $890,077.
NOTE F - LONG-TERM DEBT
Long-term debt as of September 30, 1989 is summarized as follows:
GENERAL LONG-TERM DEBT:
General Obligation Bonds:
$480,500 original issue General Obligation
Bonds, due in annual installments of
$15,000 to $35,000 through July 1, 1996;
interest rates ranging from 6.75% to 7.5%
$ 210,000
Notes payable:
8.23% capital improvement notes to a bank,
payment of $195,753, including interest,
due annually beginning December 1989
through December 1998; collateralized by
and payable from a pledge of the City's
share of one-half cent Florida State
sales tax
TOTAL GENERAL LONG-TERM DEBT
1,300,000
$1,510,000
-18-
. .
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
"'-:.
NOTE F - LONG-TERM DEBT (CONTINUED)
PROPRIETARY FUND LONG-TERM DEBT:
Revenue Bonds:
$5,000,000 original issue Water and Sewer
Refunding and Improvement Revenue Bonds,
Series 1987, due in annual installments
ranging from $60,000 to $405,000 through
January 1, 2017; interest ranging from
5~ to 7.875~ (issue includes $1,235,000
of Serial Bonds and $3,765,000 of Term
Bonds); net of unamortized discount of
$116,611
$4,823,389
$4,830,000 original issue Water and Sewer
Improvement Revenue Bonds, Series 1989,
due in annual installments ranging from
$30,000 to $370,000 through September 30,
2014; interest ranging from 6~ to
7.125% (issue includes $1,660,000 of
Serial Bonds and $3,170,000 of Term
Bonds)
TOTAL PROPRIETARY FUND LONG-TERM DEBT
2,000,000
$6,823,389
The Water and Sewer Improvement Revenue Bonds, Series 1989, were issued on
December 14, 1989 for the purpose of refunding the Water and Sewer Bond
Anticipation Note, Series 1989, outstanding in the principal amount of $2,000,000
at September 30, 1989.
The 1987 Water and Sewer Refunding and Improvement Revenue Bonds, Series
1987 and the Water and Sewer Improvement Revenue Bonds, Series 1989, are
collateralized by a pledge of the net revenues of the water and sewer system,
public service taxes, franchise revenues and state revenue sharing funds. The
bond covenants state among other things that the City may not lease, sell or
encumber the utility plant assets in any manner and that various funds are
required to be established and maintained for purposes of a sinking fund, reserve
fund and various other accounts.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
'.',
NOTE F - LONG-TERM DEBT (CONTINUED)
The 1987 Water and Sewer Revenue and Refunding Bond ordinance requires, among
other things, deposits on a monthly basis of amounts necessary to provide for
semiannual interest and annual principal requirements. The sinking and reserve
funds on deposit at September 30, 1989 are as follows:
MAXIMUM RESERVE
1987
REVENUE
BONDS
Sinking Fund
Reserve Fund
Remaining in construction fund account
$1 54 , 171
438,988
453
TOTAL $593,612
A summary of changes in all long-term debt for the year ended September 30,
1989 is as follows:
~ lDNG-TEIt1 DEB!'
<EmRAL
OIlJ:GATION KmS
Hll'nS PAYAIiE 'IDl'AL
PIDPRIEI'ARY FUND
WA'lER AND ~ JEVEmE Hll'nS
InND
1987 ANITCIPATION lDNG-TEIt1
SERIES tmE 'IDI'AL
'IUI'AL
DEB!'
B:U.ame at
Septarber 30, 1988 $ 235 ,000 $1,064,956 $1,299,956 $5 ,000 ,000 $ ..0- $5 ,000 ,000 $6 ,299 ,956
AdditiClls ..0- 235,044 235,044 ..0- 2,000 ,000 2,000 ,000 2,235 ,044
Paynmts 25 ,000 ..0- 25 ,000 60 ,000 ..0- 60 ,000 85 ,000
210,000 1,300,000 1,510,000 4 ,940 ,000 2,000 ,000 6,940 ,000 8,450,000
Less unanortized
bald <liroamt ..0- ..0- ..0- 116,611 ..0- 116,111 116,611
B:U.ame at
Septarber 30, 1989 $ 210,000 $1 .:m ,000 $1.510.000 $4.~.389 $2 .000 .000 $6,~ .~ $8 .::rn .389
Anma1 prioojpal
recpi.rEm:nts for
the next five years
am t.herEm'ter
are as follows:
Year ED:l.ir€ -
1990
1991
1992
1993
1994
Thereafter
$ 25 ,000 $ 88,763 $ 113,763 $ 60 ,000 $ ..0- $ 60 ,000 $ 173,763
25 ,000 96 ,068 121,068 65 ,000 ..0- 65,000 186 ,068
30 ,000 103,974 133,974 70,000 12,423 82 ,423 216,397
30 ,000 112,532 142,532 75 ,000 39 ,337 114,337 256 ,869
30 ,000 121,793 151,793 75 ,000 41 ,408 116,408 268 ,all
70 ,000 776,870 846 ,870 4,595,000 1,906,832 6 ,501 ,832 7,348,702
$ 210,000 $l,:m,OOO $1,510.000 $4,940.000 $2 ,000 ,000 $6 ,940 ,000 $8,450.000
-20-
'1Ul'AIB
,.
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,.,
NOTE F - LONG-TERM DEBT (CONTINUED)
The annual requirements to amortize all debt outstanding as of
September 30, 1989, including interest payments totalling $10,149,159 are as
follows:
GmERAL l.ON(P.'l'EFt1 DEB!'
<EmRAL
OILIGATION tm'ES
IDNnS PAYAIlE 'lUI'AL
PIDPm:EI'AKi FUND
WA'IER AID SEWER m:vEmE IDNDS
1987
SERIES
1989
SERIES
'IUI'AL
'IUI'AL
l.ON(P.'!'ED1
DEB!'
Year Ellding -
1990 $ 39,363 $ 195,753 $ 235,116 $ 432,934 $ 91,736 $ 524,670 $ 759,786
1991 ~,675 195,753 233,428 434,571 1~ ,605 572,176 805,604
1992 40 ,956 195,753 2,36,709 435,771 149,655 585 ,426 822,135
1993 38 ,894 195,753 234 ,647 436 ,509 175,016 611,525 846 ,172
1994 36,831 195,753 232,584 431,934 174,644 606 ,578 839,162
Ther€after 77 ,131 W8,765 1 ,055 ,896 9,855 ,465 3,614,939 13,470,404 14 ,526 ,:JX>
'lUI'AlS $ zro ,850 $1.~ S~ $2,228,380 $12,027,184 $4 ,343 ,595 $16,~O,779 $18 ,599 ,159
The annual changes in general long-term debt accrued vacation and medical
leave benefits as of September 30, 1989 are as follows:
OCTOBER 1, 1988
DECREASE
SEPTEMBER 30, 1989
$ 51,403
$ 64,246
$ 12.84~
NOTE G - PRIOR YEAR DEFEASANCE OF DEBT
In 1987, the City defeased the 1983 Series A Water and Sewer Revenue Bonds
by depositing sufficient funds in an irrevocable trust to provide for all future
debt service payments on the old bonds. Accordingly, the trust account assets
and the liability for the defeased bonds are not included in the City's financial
statements. At September 30, 1989, $900,000 of bonds outstanding are considered
defeased.
NOTE H - INTERFUND RECEIVABLES AND PAYABLES
The follOWing is a summary of amounts due from and due to other funds:
DUE FROM DUE TO
OTHER FUNDS OTHER FUNDS
General Fund
Debt Service Fund
Proprietary Fund
TOTAL ALL FUNDS
$175,155
-0-
7,222
$182,377
$ 7,222
175,155
-0-
$182,377
-21-
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
NOTE I - CONTRIBUTED CAPITAL
""
The source and additions to contributed capital are as follows:
BALANCE
OCTOBER 1, 1988 ADDITIONS
SOURCE
Connection fees
Developers
Federal grant
Local Public Works Grant
Federal Revenue Sharing Funds
General Fund
Okeechobee Beach Water Association
Environmental Protection Agency~rant
TOTALS
NOTE J - PENSION PLANS
$ 421,758
338,761
747,310
417,740
619,572
100,000
275,000
1,899,071
$4.819,212
$
-0-
-0-
-0-
-0-
-0-
-0-
-0-
16,783
16.783
BALANCE
SEPTEMBER 30, 1989
$ 421,758
338,761
747,310
417,740
619,572
100,000
275,000
1,915.854
$4,835,995
The City has three pension plans, under a single employer public employee
retirement system, covering substantially all the City's regular employees. Total
pension expense for the year was $54,302 based on a covered payroll and a total
payroll as follows:
General
Police
Fire
COVERED
PAYROLL
$806,252
318,260
150,344
$
COVERED
PAYROLL AS
OF PERCENT
TOTAL PAYROLL TOTAL PAYROLL
$832,108
439,109
170,049
96.9%
72.5%
88.4%
It is the City's policy to fund pension expense as determined by actuarial
valuation which provides for the accumulation of assets gradually over time so that
sufficient assets will be available to pay benefits when due. The significant
actuarially assumptions used to compute the actuarial determined contribution
requirement are the same as those used to compute the pension benefit obligation.
Mandatory employee contributions to the plans are at the rate of 5% of earnings.
Accumulated employee contributions at September 30, 1989 are as follows:
General
Police
Fire
$293,930
110,658
28,640
TOTAL $433,228
-22-
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
"
NOTE J - PENSION PLANS (CONTINUED)
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All regular employees working over 20 hours per week are eligible to
participate on the date of employment following attainment of age 18.
Participation is mandatory. Normal retirement is provided for at age 65 (60 for
fire and police) and 5 years of service ( 10 years for fire and police). The
benefit is calculated at 1.6% (2% for fire and police) of average monthly earnings
times years of continuous service with the City. Benefits are payable by monthly
annuity for 10 years certain and life thereafter with other options available.
Early retirement is provided for at age 60 (age 55 for fire and police) and 10
years of participation. Death and disability benefits are also available through
the plans.
Upon termination of employment with less than 5 years of service-(10 years for
fire and police) the plan refunds accumulated employee contributions.
After 5 years of service (10 years for fire and police) the pension benefit is
accrued to date of termination and payable at normal retirement age if employee
contributions are left in the fund.
The actuarial determined pension contribution for 1989, which consisted
entirely of normal cost, was as follows:
Police
Fire
General
$ 283
6,894
22,611
TOTAL $ 29,788
The actual City and employees contribution by fund for the year ended
September 30, 1989 was as follows:
CITY EMPLOYEES
General Fund
Proprietary Fund
$ 27,396
26,906
TOTALS $ 54,302
$ 41,251
21,977
$ 63,228
The plans covering the City's fire fighters and police officers are also
funded by the State of Florida from a tax on fire insurance premiums collected.
State contributions to these plans totalled $21,138 and $53,086, respectively,
during the year ended September 30, 1989.
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
I
September 30, 1989
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NOTE J - PENSION PLANS (CONTINUED)
I
For the years ended September 30, 1987 and 1988, the pension benefit
obligation and net assets available for benefits expressed as percentages of the
pension benefit obligation, was as follows:
1987
POLICE FIRE GENERAL
(2) $204,378 $ 85,005 $564,460
(1) $495,312 $180,259 $716.949
242% 212% 127%
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Pension benefit obligation
Net assets available for benefits
Percentage funded - (1) : (2)
I
Assets in excess of pension benefit
obligation (as a percent of annual
covered payroll)
114%
I
Employer contributions (as a percent
of annual covered payroll
-0-%
I
16%
21%
1%
61
1988
FIRE GENERAL
$ 88.874 $657.048
$218,434 $849,780
246% 129%
POLICE
I
Pension benefit obligation
(2) $247,866
(1) $594,801
240%
Net assets available for benefits
I
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Percentage funded - (1) : (2)
As the valuation for the year ended September 30, 1987 was the first year
using the valuation method described herein, ten-year trend information is not
available.
The pension benefit obligation shown below is a standardized disclosure
measurement established by GASB 5 that, with some exceptions, must be covered by a
PERS. The standardized measurement is the actuarial present value of credited
projected benefits. This pension valuation method reflects the present value of
pension benefits, adjusted for the effects of projected salary increases and step-
rate benefits, estimated to be payable in the future as a result of employee
service to date.
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-24-
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
"
NOTE J - PENSION PLANS (CONTINUED)
The standardized measure of the pension benefit obligation and the net assets
available for benefits at October 1, 1989 (the most recent valuation date) is as
follows:
Pension benefit obligation:
Retirees and beneficiaries currently
receiving benefits and terminated
employees entitled to benefits but
not yet receiving them
Current employees:
Accumulated employee contributions
including allocated investment income
Employer - financed vested
Employer - financed nonvested
Total pension benefit obligation
Net assets available for benefits (at
cost which approximates market)
Assets in excess of pension
benefit obligation
Percentage funded - (1) + (2)
Employer contributions (as a percent
of annual covered payroll
POLICE
FIRE
GENERAL
$ -0- $ 7 , 162 $ 20,271
110,658 28,640 293,930
146,297 31 , 120 355,168
32,726 22 , 152 28 ,161
(2) 289,681 89,074 697,530
(1) 716,709 254,952 982,870
$427 ,028 $165,878 $285,340
247% 286~ 14U
-0-% 1~ 6~
Principal actuarial assumptions used in the valuation above are summarized as
follows:
Mortality - The 1951 Group Annuity Mortality Table Projected
by Scale C to 1970 (regraduated); females set back 5 years.
Interest - 7% per year compounded annually, net of expenses.
Retirement age - 60 for police officers and fire fighters,
65 for all other employees, immediately if over assumed
retirement age.
Salary increases - 6% for police and general; i% for
fire fighters, until the assumed retirement age.
Funding method - Aggregate actuarial cost method.
-25-
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NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
'..
NOTE J - PENSION PLANS (CONTINUED)
In 1989, the actuarial funding method was changed from the frozen entry age
actuarial cost method to the aggregate actuarial cost method. This is a technical
change without a financial impact because the unfunded frozen actuarial accrued
liability is presently zero for all three groups. There were no other changes in
actuarial assumptions in 1989.
NOTE K - HOSPICE GRANT
The City applied for and received Community Services Block Grants totalling
$5,625. Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee. The
City received the funds and, upon presentation of invoices by Hospice, disbursed
the funds up to the total grant amount. Also disbursed in the current year was
$1,687 applicable to the prior year grant and $1,877 of the current grant has not
been received or disbursed as of September 30, 1989.
NOTE L - ENVIRONMENTAL PROTECTION AGENCY GRANTS
As of September 30, 1989, the City has been awarded grants totalling
$1,641,529 and $297,428 from the Environmental Protection Agency to be used in
connection with construction of the City's new wastewater treatment plant. During
1989, grant funds totalling $16,783 were received.
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GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
""
TAXES
Ad valorem taxes
Franchise fees
Utility service taxes
Public service taxes
VARIANCE
FAVORABLE
BUDGET ACTUAL (UNFAVORABLE)
$ 434,450 $ 450,490 $ 16,040
284,080 251,532 <32,548)
264,000 275,071 11,071
2,500 4,985 2,485
985,030 982.078 (2,952)
INTERGOVERNMENTAL
state shared revenue:
Cigarette tax
Revenue sharing
Mobile home licenses
One-half cent sales tax
Alcoholic beverage licenses
Gasoline tax refund
Local option gasoline tax
Fire fighters supplement
Shared revenue from other local units:
County occupational licenses
City share of 5 and 6 cent gas tax
98,000 95,841 (2,159)
173,300 176,013 2,713
2,000 2,629 629
155,000 167,780 12,780
1,200 1,463 263
2,100 2,082 ( 18)
260,000 - 306,498 46,498
1,320 1,322 2
692.920 753,628 60,708
3,000 4,745 1,745
110,000 94,421 (15,579)
113,000 99,166 (13 ,834)
805,920 852,794 46,874
115,000 163,363 48,363
1 .010 7,876 6,866
116,010 171,239 55,229
30,000 31,828 1,828
CHARGES FOR SERVICES
Sanitation fees
Miscellaneous
LICENSES AND PERMITS
Occupational licenses
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GENERAL FUND
SCHEDULE OF REVENUE - BUDGET AND ACTUAL (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
'..
VARIANCE
FAVORABLE
BUDGET ACTUAL (UNFAVORABLE)
FINES AND FORFEITURES
Court fines $ 52,000 $ 45,140 $ (6,860)
Police education 500 759 259
Code enforcement fines 250 352 102
Miscellaneous -0- 660 660
52,750 46,911 (5,839)
INTEREST INCOME 10,590 41,761 31,171
MISCELLANEOUS
Comprehensive Planning Grant 9,700 9,905 205
Hospice Grant -0- 5,435 5,435
Other 15,700 15,378 (322)
Sale of assets 500 3,822 3,322
Rents and royalties 3,350 3,070 (280)
Refunds of prior year expenditures 100 9,035 8,935
29,350 46,645 17,295
TOTAL REVENUE $2,029.650 $2,173,256 $ 143,606
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GENERAL FUND
SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
"
ENCUMBRANCES ACTUAL ON VARIANCE
PRIOR BUDGETARY FAVORABLE
BUDGET ACTUAL YEAR 1989 BASIS (UNFAVORABLE)
PUBL I C SAFETY
Law enforcement:
Personal services $ 545,770 $ 538,303 $ -0- $ -0- $ 538,303 S 7,467
Operating expenses 108,080 115.533 -0- 762 116,295 (8,215)
Capital outlay 15,435 50,004 38,319 1 .000 12,685 2,750
669,285 703,840 38,319 1,762 667,283 2,002
Fi re control:
Personal services 212,520 208,160 -0- -0- 208,160 4,360
Operating expenses 46,500 44 ,028 515 2,774 46,287 213
Capital outlay 4,450 14,276 11 ,948 1,100 3,428 1 ,022
263,470 266,464 12,463 3.874 257,875 5,595
932,755 970,304 50,782 5,636 925,158 7,597
GENERAL GOVERNMENT
Legislative:
Personal services 28,170 32,883 -0- -0- 32,883 (4,713)
Operating expenses 24,000 24,800 -0- -0- 24,800 (800)
52,170 57,683 -0- -0- 57,683 (5,513)
Executive - city administrator:
Personal services 64,900 65,127 -0- -0- 65,127 (227 )
Operating expenses 15,500 6,352 -0- -0- 6,352 9,148
Capital outlay 1,000 5,036 1,326 -0- 3,710 (2,710)
Allacation of administrative
charges (11,943) (11,943) -0- -0- (11,943) -0-
69,457 64 , 5 72 1,326 -0- 63,246 6,211
Executive - city clerk:
Personal services 48,350 48,581 -0- -0- 48,581 (231 )
Operating expenses 10.500 9,964 -0- 2,044 12,008 (1,508)
Capital outlay 700 700 -0- -0- 700 -0-
59,550 59,245 -0- 2,044 61,289 (1.739)
Financial and administrative:
Personal services 53,040 50,800 -0- -0- 50,800 2,240
Operating expenses 21.400 20.427 120 374 20.681 719
Capital outlay 1,450 4,635 3,185 -0- 1,450 -0-
Allocation of administrative
charges (35.827) (35.827) -0- -0- (35.827) -0-
40,063 40,035 3,305 374 37.104 2,959
-29-
$ 67,580 $ 67,806 $ -O- S -O- S 67,806 $ (226 )
83,624 80,114 -0- -0- 80,114 3.510
1,500 5.525 2.292 -0- 3,233 (1.733)
152,704 153,445 2,292 -0- 151,153 1,551
18,000 11 ,421 -0- -o- Il ,421 6,579
391,944 386,401 6,923 2,418 381,896 10,048
GENERAL FUND
SCHEDULE OF EXPENDITURES- BUDGET AND ACTUAL (CONTINUED)
CITY OF OKEECHOBEE. FLORIDA
Year ended September 30, 1989
,.,
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BU DG ET
ACTUAL
ENCUMBRANCES
PRIOR
YEAR 1989
GENERAL GOVERNMENT (CONTINUED)
General services:
Personal services
Operating expenses
Capital outlay
J ud i cia I :
Operating expenses
TRANSPORTATION
Rood and street facilities:
Personal services
Operating expenses
Capital outlay
203,630
410.650
111,000
725,280
200,407
165.047
209,586
575,040
-0-
3,031
54,030
57,061
-0-
920
11 .000
11,920
PHYSICAL ENVIRONMENT
Garbage/solid waste control
services:
Operating expenses 115,000 145,050 -0- -0-
HEALTH AND HUMAN SERVICES
Operating expenses 47,376 52,811 -0- -0-
DEBT SERVICE
Interest 60.000 104,615 -0- -0-
~
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!
ACTUAL ON
BUDGETARY
BASIS
200,407
162,936
166,556
529,899
145,050
52,811
104.615
TOTAL EXPENDITURES $2,272,355 $2,234,221 $114,766 $ 19,974 $2,139,429
-30-
VARIANCE
FAVORABLE
(UNFAVORABLE)
3,223
247,714
(55,556)
195,381
(30,050)
(5,435)
(44,615)
$132,926
I"
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DEBT SERVICE FUND
STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL
-31-
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PENSION TRUST FUNDS
COMBINING BALANCE SHEETS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,.,
POLICE GENERAL
OFFICERS' FIREMEN'S EMPLOYEES'
RETIREMENT RETIREMENT RETIREMENT
FUND FUND FUND TOTAL
ASSETS
Cash $690,000 $240,000 $942,000 $1,872,000
Investments in
money market accounts
at cost which
approximates market 26,709 14,952 40,870 82,531
$716,709 $254,952 $982,870 $1,954,531
FUND BALANCES
Reserved for employees'
retirement $716,709 $254,952 $982,870 $1,954,531
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PENSION TRUST FUNDS
COMBINING STATEMENTS OF REVENUE, EXPENSES
AND CHANGES IN FUND BALANCES
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
'..
POLICE GENERAL
OFFICERS' FIREMEN'S EMPLOYEES'
RETIREMENT RETIREMENT RETIREMENT
FUND FUND FUND TOTAL
OPERATING REVENUE
State tax on insurance
premiums $ 53,086 $ 21,138 $ -0- $ 74,224
Employer's contributions -0- 418 53,884 54,302
Employees' contributions 15,863 7,738 39,627 63,228
Interest income 55,570 19,774 78,678 154,022
TOTAL OPERATING REVENUE 124,519 49,068 172 ,189 345,776
OPERATING EXPENSES
Employees' contribution
refunds and interest 4,709 12,343 40,175 57,227
Contractual services 1,865 1,131 4,522 7,518
Administrative expense 15 522 10 547
TOTAL OPERATING EXPENSES 6,589 13,996 44,707 65,292
NET INCOME 117,930 35,072 127,482 280,484
FUND BALANCES
Beginning of year 598,779 219,880 855,388 1,674,047
End of year $716,709 $254,952 $982,870 $1,954,531
-33-
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PENSION TRUST FUNDS
COMBINING STATEMENTS OF CHANGES IN FINANCIAL POSITION
SOURCES OF WORKING CAPITAL
Net income
ELEMENTS OF INCREASE IN
WORKING CAPITAL
Cash
Investments
Accrued interest receivable
INCREASE IN WORKING CAPITAL
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
"
POLICE
OFFICERS'
RETIREMENT
FUND
$117,930
$104,000
17,908
(3,978)
$117,930
-34-
FIREMEN'S
RETIREMENT
FUND
$ 35,072
$ 27,000
9,518
(1 ,446)
$ 35,072
GENERAL
EMPLOYEES'
RETIREMENT
FUND
$127,482
$116,000
17,090
(5,608)
$127,482
".
TOTAL
$ 280,484
$ 247,000
44,516
(11,032)
$ 280,484
r
------,.-------~
SUMMARY OF INSURANCE COVERAGE - UNAUDITED
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
""
DESCRIPTION
COVERAGE
COMMERCIAL PACKAGE
Buildings and contents (90% coinsurance -
$500 deductible)
$3,238,470
LAW ENFORCEMENT LIABILITY
Bodily injury, personal ~nJury, property
damage ($5,000 deductible)
1,000,000
WORKERS COMPENSATION AND EMPLOYER'S LIABILITY
500,000
VEHICULAR EQUIPMENT
Bodily injury and property damage
Collision ($250 deductible)
Comprehensive ($250 deductible)
1,000,000
ACV
ACV
SCHEDULED PROPERTY FLOATER ($250 DEDUCTIBLE)
PUBLIC OFFICIALS BONDS
City clerk
Other employees
519,346
20,000
20,000
PUBLIC OFFICIAL LIABILITY ($1,000 DEDUCTIBLE)
1,000,000
-35-
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SCHEDULE OF ASSESSED VALUES, TAX LEVIES AND RATES - UNAUDITED
CITY OF OKEECHOBEE, FLORIDA
1980-1989
"
ASSESSED VALUES
REAL PERSONAL HOMESTEAD
YEAR PROPERTY PROPERTY TOTAL EXEMPTION
1989 $92,069,710 $17,714,646 $109,784,356 $23,841,771
1988 90,523,355 17,276,363 107,799,718 22,969,436
1987 85,234,122 15,026,483 100,260,605 21,793,353
1986 70,533,985 14,573,190 85,107,175 20,715,053
1985 59,835,384 14,042,767 73,878,151 19,504,959
1984 57,820,098 13,060,620 70,880,718 19,007,098
1983 54,725,644 12,102,101 66,827,745 17,665,060
1982 57,589,660 10,664,660 68,254,320 14,162,210
1981 57,036,510 10,475,123 67,511,633 14,061,980
1980 51,225,720 9,725,167 60,950,887 5,173,430
TAX LEVIES AND APPLICABLE RATES
LEVIES RATES
DEBT GENERAL
DEBT GENERAL SERVICE GOVERNMENT
YEAR SERVICE GOVERNMENT MILLS MILLS
1989 $52,114 $455,605 .390 4 . 150
1988 39,231 447,369 .300 4 . 150
1987 18,308 416,082 .150 4 . 150
1986 15,873 361,791 .150 4.251
1985 14,008 314,056 .150 4.251
1984 13,483 307,480 .150 4.338
1983 12,674 261 ,497 .150 3.913
1982 8,668 291,007 .127 4.250
1981 8,574 286,924 .127 4.250
1980 36,386 335,209 .58 5.500
-36-
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SCHEDULE OF CERTAIN REVENUE - UNAUDITED
CITY OF OKEECHOBEE, FLORIDA
1980-1989
Ii
, I ,.,
GENERAL FUND
STATE
REVENUE
SHARING OCCUPATIONAL UTILITY FINES AND FRANCHISE
YEAR (NOTE) LICENSES TAXES FORFEITURES FEE PERMITS INTEREST
1989 $439,634 $31 ,828 $275,071 $46,911 $251,532 $ -0- $41,761
1988 411,522 38,367 258,229 67,802 234,877 -0- 27,314
1987 409,809 44,888 219,661 49,071 214,036 -0- 21,618
1986 398,901 41,498 207,756 29,731 206,335 -0- 30,978
1985 349,607 38,484 196,168 28,092 208,614 16,268 31,791
1984 346,742 42 ,119 133,768 22,764 185,428 25,508 34,363
1983 329,260 40,138 118,812 20,493 152,921 14,836 25,091
1982 251,194 32,175 114,551 23,031 154,823 10,493 64 ,132
1981 257,325 22,228 108,286 13,813 137,759 23,459 69,536
1980 243,055 20,084 100,857 19,827 110,587 12,995 61 ,733
PROPRIETARY FUND
WATER
AND SEWER IMPACT DELINQUENT INTEREST ON HYDRANT
YEAR CHARGES FEES CHARGES MISCELLANEOUS INVESTMENTS TAP FEES RENTAL
1989 $1,580,078 $212,077 $37,945 $68,723 $ 61,811 $ 35,211 $ 12,360
1988 1,632,157 90,640 25,588 50,823 71,998 37,679 9,960
1987 1,386,432 111,964 31,119 31,401 62,864 40,078 9,480
1986 1,341,837 260,382 30,417 21,141 103,288 44,888 9,360
1985 1,130,500 212,012 20,671 8,583 233,511 110,181 7,320
1984 971,227 29,012 14,146 9,663 110,367 20,112 7,320
1983 842,440 26,775 17,372 11,219 52,912 25,163 27,000
1982 810,720 -0- 12,228 22,324 73,181 13,400 27,000
1981 652,264 -0- 9,580 6,647 70,738 24,525 27,000
1980 615,426 -0- 9,280 6,732 53,657 15,650 23,280
NOTE _ INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND ONE-HALF CENT SALES TAX
-37-
.
:Hit4~'!:!!!~~
Il8II
Fe~~uary 2, 1990
Other Offices:
OHIO
Youngstown (Boardman)
Youngstown
Warren
Salem
Alliance
PENNSYLVANIA
New Castle
Sharon
Meadville
FLORIDA
Stuart
Naples
Port SI. Lucie
2222 Colonial Road
Suite 200
Ft. Pierce, FL 34950
Telephone (407) 461-8833
FAX # (407) 461-8872
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
Independent Auditors' Report on Internal Control Structure
We have audited the combined financial statements of the City of
Okeechobee, Florida (City) as of and for the year ended September 30, 1989 and
have issued our report thereon dated February 2, 1990. Our audit report was
qualified because the City has not maintained adequate detailed fixed asset
records in support of the recorded costs of the water and sewer utility plant
in service in the proprietary fund or the amounts included in the general
fixed asset group of accounts.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the combined financial
statements are free of material misstatement.
In planning and performing our audit of the combined financial statements
of the City for the year ended September 30, 1989, we considered its internal
control structure in order to determine our auditing procedures for the
purpose of expressing our opinion on the combined financial statements and not
to provide assurance on the internal control structure.
The management of the City is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. The objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of combined financial statements
in accordance with generally accepted accounting principles. Because of
inherent limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected. Also, projection
of any evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in conditions or that
the effectiveness of the design and operation of policies and procedures may
deteriorate.
-38-
MEMBER AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS DIVISION OF CPA FIRMS-SEC AND PRIVATE COMPANIES PRACTICE SECTIONS
II"
The Honorable Mayor and
Members of the City Council
February 2, 1990
For the purpose of -this report, we have classified the significant
internal control structure 'policies and procedures in the following
categories:
. revenue/receipts
. purchases/disbursements
. payroll
Our consideration of the internal control structure included all of the
control categories listed above. The purpose of our consideration of the
internal control structure was to determine the nature, timing and extent of
the auditing procedures necessary for expressing an opinion on the combined
financial statements.
We noted certain matters involving the internal control structure and its
operation that we consider to be reportable conditions under standards
established by the American Institute of Certified Public Accountants.
Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control
structure that, in our judgment, could adversely, affect the entity's ability
to record, process, summarize, and report financial data consistent with the
assertions of management in the combined financial statements. Following are
the reportable conditions we noted:
Establishment of Fixed Asset Records and Controls
The City has not maintained adequate detailed fixed asset
records in support of the recorded costs of the water and sewer
utility plant in service or the amounts included in the general
fixed assets group of accounts and we were unable to obtain
sufficient supporting documentation to form an opinion with respect
to (a) the stated costs of property items acquired in years prior to
October 1, 1981 and (b) the accumulated depreciation applicable to
the water and sewer utility plant in service at September 30, 1989
or the depreciation expense for the year then ended.
Sound financial administration in safeguarding the City's
investment in fixed assets is of utmost importance in the exercise
of stewardship responsibilities. The responsibilities can be
effectively discharged only through adequate fixed asset accounting.
Once initial records are established, the City will want to
concurrently implement the kinds of controls and procedures enabling
it to maintain control over the fixed assets. These procedures
should include:
Control over the proper input into the records for all
fixed asset additions, sales, abandonments and transfers.
-39-
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The Honorable Mayor and
Members of the City Council
February 2, 1990
~
,I
II
I
I
I
II
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I
Establishment of Fixed Asset Records and Controls (Continued)
,,'
Periodic reconciliations of detail ledgers to the general
ledger.
Periodic inventory of fixed assets by location.
Verification that any asset traded in for a new asset is
properly removed from the records.
Accounts Receivable--Customer Accounts
Customer accounts receivable for garbage service and water and
sewer charges should be reconciled to the general ledger accounts on
a monthly basis. During 1989, this reconciliation was not
performed. There were no complete detail listings of customer
accounts receivable generated to make this reconciliation possible.
Accounts receivable detail listings should be available for each
month.
AdeQuate Explanation and Support of Adjusting Entries
Our review of journal entries disclosed that adjusting entries
were not supported or explained. We suggest that all adjusting
entries be handwritten with a detailed explanation of its purpose.
Data Processing System Integration
The City utilizes the services of an outside data processing
firm for compilation of financial information. Timely reports were
not available for management to properly analyze financial
condition. In addition, the financial reports received contained
account classification errors. We recommend the City require that
timely financial reports are issued and that upon receipt, the
reports are reviewed for errors with necessary corrective action
taken.
Collection Follow-Up Procedures
During 1989, the City established guidelines for review and
collection of past due accounts for garbage collection and water and
sewer billings. We recommend an aged accounts receivable listing be
reviewed by the Director of Public Utilities on a monthly basis and
appropriate actions for collection be taken.
-40-
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The Honorable Mayor and
Members of the City Council
February 2, 1990
Vacation Accrual
During 1989, various ekployees' vacation accrual exceeded the
maximum allowed for carryover. The City should encourage all
employees to use their vacation time annually with arrangements made
to have their work performed by someone else during their absence.
Internal control is strengthened because employees do not maintain
continuous control over their particular area of responsibility.
Also, this policy encourages the desirable practice of cross-
training of duties.
A material weakness is a reportable condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the combined financial statements being
audited may occur and not be detected with a timely period by employees in the
normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be
reportable conditions and, accordingly, would not necessarily disclose all
reportable conditions that are also considered to be material weaknesses as
defined above. However, we believe the reportable conditions described above
are not material weaknesses, with the exception of not maintaining adequate
detailed fixed asset records in support of the recorded costs of the water and
sewer utility plant in the proprietary fund or the amounts included in the
general fixed asset account group with respect to the stated cost of assets
acquired prior to October 1, 1981.
We also noted other matters involving the internal control structure and
its operation that we have reported to the management of the City, in a
separate management letter dated February 2, 1990.
This report is intended for the information of the Mayor and City
Council, management and the Auditor General for the State of Florida. This
restriction is not intended to limit the distribution of this report, which is
a matter of public record.
c~e~Ac:!:an~
-41-
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:Hit4~~~~
Il8II
,.,
Other Offices:
OHIO
Youngstown (Boardman)
Youngstown
Warren
Salem
Alliance
PENNSYLVANIA
New Castle
Sharon
Meadville
FLORIDA
Stuart
Naples
Port SI. Lucie
2222 Colonial Road
Suite 200
Ft. Pierce, FL 34950
Telephone (407) 461-8833
FAX # (407) 461-8872 February 2, 1990
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
Independent Auditors' Report on Compliance with Laws and ReRulations
We have audited the combined financial statements of the City of
Okeechobee, Florida (City) as of and for the year ended September 30, 1989 and
have issued our report thereon dated February 2, 1990. Our audit report was
qualified because the City has not maintained adequate detailed fixed asset
records in support of the recorded costs of the water and sewer utility plant
in service in the proprietary fund or the amounts included in the general
fixed asset group of accounts.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the combined financial
statements are free of material misstatement.
Compliance with laws, regulations, contracts and grants applicable to the
City is the responsibility of the City's management. As part of obtaining
reasonable assurance about whether the combined financial statements are free
of material misstatement, we performed tests of the City's compliance with
certain provisions of laws, regulations, contracts and grants. However, our
objecti ve was not to provide an opinion on overall compliance with such
provisions.
The results of our tests indicate that, with respect to the items tested,
the City complied, in all material respects, with the provisions referred to
in the preceding paragraph. With respect to items not tested, nothing came to
our attention that caused us to believe that the City had not complied, in all
material respects, with those provisions. However, the results of our
procedures disclosed immaterial instances of noncompliance with those
requirements that we have reported to the management of the City in a separate
communication dated February 2, 1990.
This report is intended for the information of the Mayor and City
CounCil, management and the Auditor General for the State of Florida. This
restriction is not intended to limit the distribution of this report, which is
a matter of public record.
i~d ~cco~}:~t~
-42-
MEMBER AMERICAN INSTlTUn: OF CERTIFIED PUBLIC ACCOUNTANTS DIVISION OF CPA FIRMS-SEC AND PRIVATE COMPANIES PRACTICE SECTIONS
.
:Hit4~~~~
Il8II
February 2, 1990
Other Offices:
OHIO
Youngstown (Boardman)
Youngstown
Warren
Salem
Alliance
PENNSYLVANIA
New Castle
Sharon
Meadville
FLORIDA
Stuart
Naples
Port SI. Lucie
2222 Colonial Road
Suite 200
Ft, Pierce, FL 34950
Telephone (407) 461-8833
FAX # (407) 461-8872
The Honorable Mayor and
Members of the City Council
City of Okeechobee, Florida
Mana~ement Letter
We have audited the combined financial statements of the City of
Okeechobee, Florida (City) for the year ended September 30, 1989, and have issued
our report thereon dated February 2, 1990. The following comments are submitted
in accordance with the Rules of the Auditor General of the State of Florida,
Chapter 10.550, Local Governmental Entity Audits.
Recommendations to Improve the City's Present Financial Mana~ement
AccountinR Procedures and Internal Control
PERSONNEL RECORDS
The City should obtain from each employee the necessary documentation for
personnel files which would include an I-9 form for status of employment
eligibili ty .
STATUS OF RECOMMENDATIONS MADE IN THE PRIOR YEAR MANAGEMENT LETTER
In addition to the item mentioned above, some of the comments in the letter
to management for the year ended September 30, 1988 had no action taken upon them
during the fiscal year ended September 30, 1989. They are as follows:
Establishment of Fixed Asset Records and Controls
The City has not maintained adequate detailed fixed asset records
in support of the recorded costs of the water and sewer utility plant
in service or the amounts included in the general fixed assets group of
accounts and we were unable to obtain sufficient supporting
documentation to form an opinion with respect to (a) the stated costs
of property items acquired in years prior to October 1, 1981 and (b)
the accumulated depreciation applicable to the water and sewer utility
plant in service at September 30, 1989 or the depreciation expense for
the year then ended.
-43-
MEMBER AMERICAN INSTlTUn: OF CERTIFIEO PUBLIC ACCOUNTANTS DIVISION OF CPA FIRMS-SEC AND PRIVAn: COMPANIES PRACTICE SECTIONS
.
The Honorable Mayor and
Members of the City Council
February 2, 1990
STATUS OF RECOMMENDATIONS MADE IN THE PRIOR YEAR MANAGEMENT LETTER (CONTINUED)
"
Establishment of Fixed Asset Controls (Continued)
Sound financial administration in safeguarding the City's
investment in fixed assets is of utmost importance in the exercise of
stewardship responsibilities. The responsibilities can be effectively
discharged only through adequate fixed asset accounting.
By maintaining fixed asset records, the City will realize several
benefits:
Fixed assets can be inventoried periodically to
ensure that they are properly controlled.
Responsibility for custody and effective use of
fixed assets can be clearly established.
Information regarding sources of supply, prices and
useful lives will be readily available. If
information regarding maintenance costs is also
included in the subsidiary ledgers, ratios of
cumulative maintenance costs to original costs can
be developed.
Records will be readily available to substantiate
the amount of grants used to finance expenditures
for fixed assets. Furthermore, the determination
of costs for building or equipment used is
facilitated. The latter is important to obtain
reimbursement for the use of buildings and
equipment in Federal and state aid programs.
Information is readily available both to determine
insurance needs and to substantiate losses
recoverable from insurance.
Information is available for the preparation of a
statement of general fixed assets.
Establishing fixed asset records when none existed before can be a
difficult and time consuming task. One approach is to:
1. Define clearly what constitutes the fixed asset
categories (e.g., land, buildings, improvements
other than bUildings, equipment), a fixed asset
(Le., minimum dollar value and useful life), and
the location "control" areas.
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The Honorable Mayor and
Members of the City Council
February 2, 1990
STATUS OF RECOMMENDATIONS MADE IN THE PRIOR YEAR MANAGEMENT LETTER (CONTINUED)
,.,
Establishment of Fixed Asset Controls (Continued)
2. Plan and perform a complete inventory of all fixed
assets. In creating the inventory records, obtain
as much of the information to be included in the
individual assets records as possible, e.g., asset
description, location, vendor or manufacturer and
acquisition date. Fixed asset identification tags
should be affixed at the time the physical
inventory is taken.
3. Assign values to each fixed asset according to
accepted principles. More specifically, the AICPA
Industry Audit Guide, "Audits of State and Local
Governmental Units," sets forth the basis for
valuing fixed assets of a governmental unit: "Such
assets should be recorded at historical costs, or
estimated historical cost, if the original cost is
not available, or in the case of gifts or
contributions, at the fair market value at the time
received."
Several procedures can be used to determine the
valuation:
Reference to the historical records, such
as vendors' invoices, contracts, purchase
orders, capital expenditure
authorizations, cancelled checks, gift
acknowledgements or other documents on
hand.
Correspondence with vendors, donors, etc.
Use of an asset valuation reasonably
reflective of historical value, provided
it is reliable, if historical or fair
market value is not available.
Historical cost as reasonably estimated
by employees for small items of
relatively low value, e.g., tools, office
furniture and equipment.
-45-
The Honorable Mayor and
Members of the City Council
February 2, 1990
STATUS OF RECOMllliNDATIONS MADE IN THE PRIOR YEAR MANAGEMENT LETTER (CONTINUED)
,.,
Establishment of Fixed Asset Controls (Continued)
Reliance on independent outside
appraisals for assets which cannot be
valued by one of the above methods or
some other reasonable method. It is
important to emphasize, however, that the
appraisal should be based upon estimated
historical cost, not on replacement cost
or some other basis.
Evaluation of fixed assets in the above
manner will enable the City to establish
reasonably accurate initial fixed asset
values.
I
Once initial records are established, the City will want to
concurrently implement the kinds of controls and procedures enabling it
to maintain control over the fixed assets. These procedures should
include:
Control over the proper input into the records for all fixed
asset additions, sales, abandonments and transfers.
Periodic reconciliations of detail ledgers to the general
ledger.
Periodic inventory of fixed assets by location.
Verification that any asset traded in for a new asset is
properly removed from the records.
Accounts Receivable--Customer Accounts
Customer accounts receivable for garbage service and water and
sewer charges should be reconciled to the general ledger accounts on a
monthly basis. During 1989. this reconciliation was not performed.
There were no complete detail listings of customer accounts receivable
generated to make this reconciliation possible. Accounts receivable
detail listings should be available for each month.
-46-
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The Honorable Mayor and
Members of the City Council
February 2, 1990
AdeQuate Explanation and Support of Adjustin~ Entries
Our review of journal'" entries disclosed that adjusting entries
were not supported or explained. We suggest that all adjusting entries
be handwritten with a detailed explanation of its purpose.
Data Processin~ System Inte~ration
The City utilizes the services of an outside data processing firm
for compilation of financial information. Timely reports were not
available for management to properly analyze financial condition. In
addition, the financ ial reports received contained accoun t
classifica tion errors. We recommend the City require that timely
financial reports are issued and that upon receipt, the reports are
reviewed for errors with necessary corrective action taken.
Collection Follow-Up Procedures
I
I
I
During 1989, the City established guidelines for review and
collection of past due accounts for garbage collection and water and
sewer billings. We recommend an aged accounts receivable listing be
reviewed by the Director of Public Utilities on a monthly basis and
appropriate actions for collection be taken.
Vacation Accrual
During 1989, various employees' vacation accrual exceeded the
maximum allowed for carryover. The City should encourage all employees
to use their vacation time annually with arrangements made to have
their work performed by someone else during their absence. Internal
control is strengthened because employees do not maintain continuous
control over their particular area of responsibility. Also, this
policy encourages the desirable practice of cross-training of duties.
OTHER MATTERS
Cash
Large balances are maintained in several different cash accounts
which are earning a low interest rate. Consideration should be given
to try to maximize earning potential on all funds available to the
City.
-47-
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The Honorable Mayor and
Members of the City Council
February 2, 1990
OTHER MATTERS (CONTINUED)
Department of Banki~ and Fihance
The City has not prepared or filed the financial report with the
Department of Banking and Finance as of this date. However, it is the
City's intention to prepare the financial report from the audited
financial statements. The financial report filed with the Department
of Banking and Finance is due March 31,1990.
Rules of the Auditor General
The City has complied with the provisions of Chapter 10.400, rules
of the Auditor General concerning the physical count and identification
of tangible personal property with the limitations as noted. Effort
should be taken to perform the count in a timely manner as the count
for the year ended September 30, 1989 was not completed until January,
1990.
CONCLUDING REMARKS
This letter is intended solely for the use of the Mayor and City Council,
management and the Auditor General for the State of Florida. This restriction is
not intended to limit the distribution of this letter, which is a matter of
public record.
Very truly yours,
C~~d ~c~t~
-48-
.,..
,
COMBINING FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
CITY OF OKEECHOBEE, FLORIDA
PENSION TRUST FUNDS
September 30, 1989
- - - 0 0 000 - - -
~~~'L~~'L~
Independent Auditors' Report - - - - - - - - - - - - - -
~~G~
1
Combining Balance Sheets - Employee Pension Trust Funds
2
Combining Statements of Revenue, Expenses and Changes
in Fund Balances Employee Pension Trust Funds - - - - - - 3
Combining Statements of Changes in Financial Position
in Financial Position - Employee Pension Trust Funds
4
Notes to Combining Financial Statements - - - -
5-9
Supplementary Information - - - - - - - -
10-11
- - - 0 0 0 0 0 - - -
-
:Hit4~~!finf
Il8II
F~bruary 2, 1990
Other Offices:
OHIO
Youngstown (Boardman)
Youngstown
Warren
Salem
Alliance
PENNSYLVANIA
New Castle
Sharon
Meadville
FLORIDA
Stuart
Naples
Port SI. Lucie
2222 Colonial Road
Suite 200
Ft, Pierce, FL 34950
Telephone (407) 461-8833
FAX # (407) 461-8872
Board of Trustees
Pension Trust Funds
City of Okeechobee, Florida
Independent Auditors' Report
We have audited the accompanying financial statements of the employees'
pension trust funds of the City of Okeechobee, Florida as of and for the year
ended September 30, 1989, as listed in the table of contents. These financial
statements are the responsibility of the plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
I
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As described more fully in Note A, the financial statements present only
the pension trust funds and are not intended to present fairly the financial
position and results of operations of the City of Okeechobee, Florida in
conformity with generally accepted accounting principles.
In our opinion, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial position of
the employee's pension trust funds of the City of Okeechobee, Florida as of
September 30, 1989 and the results of its operations and changes in its
financial position for the year then ended in conformity with generally
accepted accounting principles.
The historical pension information on pages 10-12 is not a required part
of the combining financial statements but is supplementary information required
by the Governmental Accounting Standards Board. We have applied certain
limited procedures, which consisted principally of inquires of management
regarding the methods of measurement and presentation of the supplementary
information. However, we did not audit the information and express no opinion
on it. Jk:&! lJ~r/7/.
Certified Public Accountants ~
-1-
MEMBER AMERICAN INSTlTUn: OF CERTIFIED PUBLIC ACCOUNTANTS DIVISION OF CPA FIRMS-SEC AND PRIVATE COMPANIES PRACTICE SECTIONS
r
~
COMBINING BALANCE SHEETS - EMPLOYEE PENSION TRUST FUNDS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,
POLICE
OFFICERS'
RETIREMENT
FUND
ASSETS
Cash
Investments in
money market accounts
at cost which
approximates market
$690,000
26,709
$716,709
FUND BALANCES
Reserved for employees'
retirement
$716,709
FIREMEN'S
RETIREMENT
FUND
$240,000
14,952
$254,952
$254,952
GENERAL
EMPLOYEES'
RETIREMENT
FUND
$942,000
40,870
$982,870
$982,870
TOTAL
$1,872,000
82,531
$1.954,531
$1.954,531
See accompanying notes to combining financial statements
-2-
COMBINING STATEMENTS OF REVENUE, EXPENSES
AND CHANGES IN FUND BALANCES - EMPLOYEE PENSION TRUST FUNDS
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
..
POLICE GENERAL
OFFICERS' FIRDfEN'S EMPLOYEES'
RETIREMENT RETIRDfENT RETIRDfENT
FUND FUND FUND TOTAL
OPERATING REVENUE
State tax on insurance
premiums $ 53,086 $ 21,138 $ -0- $ 74,224
Employer's contributions -0- 418 53,884 54,302
Employees' contributions 15,863 7,738 39,627 63,228
Interest income 55.570 19,774 78,678 154.022
TOTAL OPERATING REVENUE 124,519 49,068 172,189 345,776
OPERATING EXPENSES
Employees' contribution
refunds and interest 4,709 12,343 40 , 175 57 ,227
Contractual services 1,865 1,131 4,522 7,518
Administrative expense 15 522 10 547
TOTAL OPERATING EXPENSES 6,589 13,996 44,707 65.292
NET INCOME 117,930 35,072 127,482 280,484
FUND BALANCES
Beginning of year 598,779 219,880 855,388 1,674.047
End of year $716,709 $254,952 $982 ,870 $1,954,531
See accompanying notes to combining financial statements
-3-
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COMBINING STATEMENTS OF CHANGES IN FINANCIAL POSITION
EMPLOYEE PENSION TRUST FUNDS
CITY OF OKEECHOBEE, FLORIDA
Year ended September 30, 1989
,
POLICE GENERAL
OFFICERS' FIREMEN'S EMPLOYEES'
RETIREMENT RETIREMENT RETIREMENT
FUND FUND FUND TOTAL
SOURCES OF WORKING CAPITAL
Net income $117,930 $ 35,072 $127,482 $ 280,484
ELEMENTS OF INCREASE IN
WORKING CAPITAL
Cash $104,000 $ 27,000 $116,000 $ 247,000
Investments 17,908 9,518 17,090 44,516
Accrued interest receivable (3,978) (1,446) (5,608) (11.032)
INCREASE IN WORKING CAPITAL $117,930 $ 35,072 $127,482 $ 280,484
See accompanying notes to combining financial statements
-4-
r
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NOTES TO COMBINING FINANCIAL STATEMENTS
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,
NOTE A - REPORTING ENTITY
The Pension Trust Funds (Funds) of the City of Okeechobee, Florida (the City),
is a contributory pension trust established by a City ordinance for the benefit of
the City employees.
The accounts of the Fund are included in the financial statements of the City
as an integral part of those financial statements.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET HATTERS
Basis of Accounting:
The Fund's accounting records and financial statements are prepared using the
accrual basis of accounting.
Valuation of Investments:
Investments other than fixed income securities are reported at cost. Fixed
income securities are reported at amortized cost, with discounts or premiums
amortized on the straight-line method over the period remaining until maturity of
the issue. All investments are subject to adjustment for market declines judged to
be other than temporary. Interest income is recognized when earned. Gains and
losses from the sale or exchange of investments are recognized on the transaction
date.
There are no investments in, loans to, or leases with parties related to the
pension plans.
NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION
The City has three pension plans under a single employer public employee
retirement system covering substantially all the City's regular employees. The
plans were established by the City in accordance with city charter and state
statutes. Total pension expense for the year was $54,302 based on a covered
payroll and a total payroll as follows:
COVERED
PAYROLL
COVERED
PAYROLL AS
A PERCENT OF
TOTAL PAYROLL TOTAL PAYROLL
General
Police
Fire
$806,252
318,260
150,344
$832,108
439,109
170,049
96.9%
72.5%
88.4%
-5-
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NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED)
As of September 30, 1989, employee membership data related to the pension
plans were as follows:
POLICE
FIRE
GENERAL
Retirees and beneficiaries currently
receiving benefits and terminated
employees entitled to benefits but
not yet receiving them
-0-
1
-3
Current employees:
Vested
Nonvested
6
.J.Q
16
1
J
10
25
26
51
It is the City's policy to fund pension expense as determined by actuarial
valuation which provides for the accumulation of assets gradually over time so that
sufficient assets will be available to pay benefits when due. The significant
actuarial assumptions used to compute the actuarial determined contribution
requirement are the same as those used to compute the pension benefit obligation.
Mandatory employee contributions to the plans are at the rate of 5% of earnings.
Accumulated employee contributions at September 30, 1989 are as follows:
General
Police
Fire
$293,930
110,658
28,640
TOTAL $433,228
All regular employees working over 20 hours per week are eligible to
participate on the date of employment following attainment of age 18.
Participation is mandatory. Normal retirement is provided for at age 65 (60 for
fire and police) and 5 years of service (10 years for fire and police). The
benefit is calculated at 1.6% (2% for fire and police) of average monthly earnings
times years of continuous service with the City. Benefits are payable by monthly
annuity for 10 years certain and life thereafter with other options available.
Early retirement is provided for at age 60 (age 55 for fire and police) and 10
years of participation. Death and disability benefits are also available through
the plans.
Upon termination of employment with less than 5 years of service (10 years for
fire and police) the plan refunds accumulated employee contributions.
-6-
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NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED)
After 5 years of service (10 years for fire and police) the pension benefit is
accrued to date of termination and payable at normal retirement age if employee
contributions are left in the fund.
The actuarial determined pension contribution for 1989 t which consisted
entirely of normal cost, was as follows:
Police
Fire
General
$ 283
6,894
22,611
TOTAL $ 29,788
The actual City and employees contribution by fund for the year ended
September 30, 1989 was as follows:
CITY EMPLOYEES
General Fund
Proprietary Fund
$ 27,396
26,906
TOTALS $ 54,302
$ 41,251
21,977
$ 63,228
The plans covering the City's fire fighters and police officers are also
funded by the State of Florida from a tax on fire insurance premiums collected.
State contributions to these plans totalled $21,138 and $53,086, respectively,
during the year ended September 30, 1989.
The pension benefit obligation shown below is a standardized disclosure
measurement established by GASB 5 that, with some exceptions, must be covered by a
PERS. The standardized measurement is the actuarial present value of credited
projected benefits. This pension valuation method reflects the present value of
pension benefits, adjusted for the effects of projected salary increases and step-
rate benefits, estimated to be payable in the future as a result of employee
service to date.
The standardized measure of the pension benefit obligation and the net assets
available for benefits at October 1, 1989 (the most recent valuation date) is as
follows:
-7-
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NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED)
September 30, 1989
CITY OF OKEECHOBEE, FLORIDA
NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED)
Pension benefit obligation:
Retirees and beneficiaries currently
receiving benefits and terminated
employees entitled to benefits but
not yet receiving them
Current employees:
Accumulated employee contributions
including allocated investment income
Employer - financed vested
Employer - financed nonvested
Total pension benefit obligation
Net assets available for benefits (at
cost which approximates market)
Assets in excess of pension
benefit obligation
Percentage funded - (1) : (2)
Employer contributions (as a percent
of annual covered payroll
POLICE
FIRE
GENERAL
$ -0- $ 7 , 162 $ 20,271
110,658 28,640 293,930
146,297 31,120 355,168
32,726 22 , 152 28 .161
(2) 289,681 89,074 697,530
(1) 716,709 254.952 982,870
$427,028 $165,878 $285,340
247% 286% 141%
-0-% 1% 6%
Principal actuarial assumptions used in the valuation above are summarized as
follows:
Mortality - The 1951 Group Annuity Mortality Table Projected
by Scale C to 1970 (regraduated); females set back 5 years.
Interest - 7% per year compounded annually, net of expenses.
Retirement age - 60 for police officers and fire fighters,
65 for all other employees, immediately if over assumed
retirement age.
Salary increases - 6% for police and general; 7% for
fire fighters, until the assumed retirement age.
Funding method - Aggregate actuarial cost method.
-8-
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NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
September 30, 1989
,
NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED)
In 1989, the actuarial funding method was changed from the frozen entry age
actuarial cost method to the aggregate actuarial cost method. This is a technical
change without a financial impact because the unfunded frozen actuarial accrued
liability is presently zero for all three plans. There were no other changes in
actuarial assumptions in 1989.
Historical trend information for 1989, 1988 and 1987, related to the pension
plans is presented on pages 10 to 11. The information is presented to enable the
reader to assess the progress made by the city's plans in accumulating sufficient
assets to pay pension benefits as they become due.
NOTE D - CASH AND CASH INVESTMENTS
Florida Statutes require state and local governmental units to deposit monies
with a financial institution classified as a "Qualified Public Depository," which
is a multiple financial institution pool whereby groups of securities pledged by
the various financial institutions provide common collateral for their deposits of
public funds. This pool is additional insurance to the federal depository
insurance and allows for additional assessments against the member institutions,
providing full insurance for public deposits. The Fund had deposits with
qualifying institutions as of September 30, 1989 totalling $1,954,531.
Cash accounts are maintained in interest-bearing accounts. Investments,
consisting of money market accounts, are stated at cost which approximates market
value. The pension trust funds, are authorized to invest in the local government
surplus funds trust fund, obligations of the U.S. government or agencies thereof,
banking institutions within the state and other such institutions within the
guidelines of the state statutes.
-9-
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SUPPLEMENTARY INFORMATION
CITY OF OKEECHOBEE, FLORIDA
PENSION TRUST FUNDS
September 30, 1989
,
HISTORICAL INFORMATION
For the years ended September 30, 1989, 1988 and 1987, the pension benefit
obligation and net assets available for benefits expressed as percentages of the
pension benefit obligation, was as follows:
POLICE
1989
FIRE
GENERAL
Net assets available for benefits
(2) $289,681 $ 89,074 $697,530
(1) $716,709 t254.952 $982.870
247% 286$ 1l!11
Pension benefit obligation
Percentage funded - (1) : (2)
Assets in excess of pension benefit
obligation
$427,028 $165.878 $285,340
Excess assets (as a percent of annual
covered payroll)
134 % 110$ ..35!
Employer contributions (as a percent
of annual covered payroll
Annual covered payroll
-0-% 1$ 6$
$318,260 $150,344 $806,252
POLICE
1988
FIRE
GENERAL
Net assets available for benefits
(2) $247,866 $ 88,874 $657,048
(1) $594,801 $218.434 t849 ,780
240% 246$ 129$
Pension benefit obligation
Percentage funded - (1) : (2)
Assets in excess of pension benefit
obligation
$346,935 $129,560 $192,732
Excess assets (as a percent of annual
covered payroll)
128% J.11 25$
Employer contributions (as a percent
of annual covered payroll)
-0-% -1! 61
$271,305 $167,453 $764.522
Annual covered payroll
-10-
SUPPLEMENTARY INFORMATION (CONTINUED)
CITY OF OKEECHOBEE, FLORIDA
PENSION TRUST FUNDS
September 30, 1989
HISTORICAL INFORMATION (CONTINUED)
1987
POLICE FIRE GENERAL
Pension benefit obligation (2) $204,378 $ 85.005 $564.460
Net assets available for benefits (1) $495,312 $180,259 $716,949
Percentage funded - (1) : (2) 242% 212% 127%
Assets in excess of pension benefit
obligation $290,934 $ 92,254 $152,489
Excess assets (as a percent of annual
covered payroll) 114% 16% 21%
Employer contributions (as a percent
of annual covered payroll -0-% 1% 6%
Annual covered payroll $267,361 $162.597 $767,167
POLIcE FIRE <EGW.
REVEmES BY: ootJIrn 1989 1988 1987 1989 1988 1987 1989 1988 1987
Employee caltributicm $ 15,863 $ 14,335 $ 12,886 $ 7,738 $ 7,808 $ 7,706 $ 39 ,6Zl $ 39 ,685 $ 31 ,406
Eq>loyer caltrililtioos -0- -0- -0- 418 421 419 53 ,88Il 48,632 45,679
State tax 53 ,086 51 ,543 47,943 21 ,138 18,381 14,875 -0- -0- -0-
Investm3nt :imc:Ioo 55 sro 38.814 zr ,587 19,774 14,(jf5 10,081 78 ,678 '37,098 41,896
'lUl'AL $124,519 $104,692 $ 88.416 $ 49.068 $ 40 ,685 $ 33,081 $172.189 $165,415 $124,981
EXPENSES BY: TYPE
Ief\Dis $ 4,709 $ 26 $ 9,206 $ 12,343 $ 505 $ 7,393 $ 40,175 $ 4,533 $ 21 ,340
Admin1strative
expemes 1 ,800 1 ,199 -0- 1,653 559 -0- 4,532 2,443 -0-
'lUl'AL $ 6,589 $ 1 .225 $ 9.206 $ 13,996 $ 1 ,064 $ 7,393 $ 44.707 $ 6,976 $ 21,340
-11-