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Audit Report 09.30.1990 I , 1 1 1 ,1 1 I ,I 1 1 ,I 1 I I I I I I I I , FINANCIAL STATEMENTS AND ACCOMPANYING INFORMATION CITY OF OKEECHOBEE, FLORIDA September 30, 1990 r I I I - - - 0 0 0 0 0 - - - I I CON TEN T S ~-------- Independent Auditors' Report - - - - - - - - - - - - - - - - - - - - - I 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 - - - - - - Statement of Cash Flows - Proprietary Fund - - - - - - Notes to Combined Financial Statements - - - - - - - I I I I 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 - - - - Employee Pension Trust Funds - Combining Balance Sheets - - - - - - - - - - - - - - - - Combining Statements of Revenue, Expenses and Changes in Fund Balances - - - - - - - - - - - - - I I I I I I I I I Statistical Information: Summary of Insurance Coverage - Unaudited - - - - - - - - - - Schedule of Assessed Values, Tax Levies and Rates - Unaudited Schedule of Certain Revenue - Unaudited - - - - - - - - - - Schedule of Federal Financial Assistance - - - - - - Report on Internal Controls (Accounting and Administrative)-- Based on a Study and Evaluation Made as a Part of an Audit of the Combined Financial Statements and the Additional Tests Required by the Single Audit Act - - - - - - - - - - - - - Independent Auditors' Report on Internal Control Structure Independent Auditors' Report on Compliance with Laws and Regulations - - - - - - - - - - - - - - - - - - - - - _ Single Audit Report on Compliance with Requirements Applicable to Nonmajor Federal Financial Assistance Program Transactions Management Letter - - - - - - - - - - - - - - - - - - - - - - - - - - 0 0 0 0 0 - - - ~~~~ 1-2 3-4 5 6 7 8 9-27 28-29 30-31 32 33 34 35 36 37 38 39-40 41-44 45 46 47-48 I I I I I I I I CITY OF OKEECHOBEE, FLORIDA CITY COUNCIL AND ADMINISTRATIVE PERSONNEL September 30, 1990 ~.. CITY COUNCIL James E. Kirk Mayor, Chairman Danny Entry Councilmember Richard R. Collins Councilmember ADMINISTRATIVE I I I I I I I I I I I John J. Drago City Administrator Bonnie S. Thomas, CMC City Clerk Louis K. Tomey II Chief of Fire Larry Mobley Chief of Police Dowling Watford, Jr. Councilmember Jerry E. Walker Councilmember John Cook City Attorney L.C. Fortner, Jr. Public Utilities Director Charles Elders Director of Public Works Lola Parker Finance Director I I I I I I I I I I I I I I I I I I I Imml~!~&King 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 February 21, 1991 '-. 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, 1990, 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 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 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 combined 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 ass igned 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. -1- Member American Institute of Certified Public Accountants Division for CPA Firms - SEC and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: MeadvilIe, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart r I I The Honorable Mayor and Members of the City Council City of Okeechobee, Florida February 21, 1991 I I I In our opinion, except fqr the effects of the departure from generally accepted accounting principles in the 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, 1990 and the results of its operations and its cash flows of its proprietary fund type for the year then ended in conformity with generally accepted accounting principles. I I 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 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 s ta temen ts 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. I I I !I I /. ~ E/ L. N~J ~ Certified Public Accountants !I I I I I I I I -2- ~ COMBINED BALANCE SHEETS - ALL FUND TYPES AND ACCOUNT GROUPS CITY OF OKEECHOBEE, FLORIDA September 30, 1990 ~". 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 SERVICE FUND TRUST FUNDS ASSETS DEBT ONLY) ASSETS Cosh $ 681. 165 $ 57,957 $ 760,572 $ -0- $ -0- $ -0- $ 1.499,694 Investments -0- -0- -0- 2,246,415 -0- -0- 2,246,415 Receivables: Taxes 73,139 -0- -0- -0- -0- -0- 73,139 Accounts less a II owance of $35,523 18,878 -0- 224,958 -0- -0- -0- 243,836 Accrued Interest -0- 53 52,499 -0- -0- -0- 52,552 I Due from other government agencies 174,674 -0- 126 -0- -0- -0- 174,800 Due from other funds 22,243 -0- 1.027 -0- -0- -0- 23,270 Inventory 10,826 -0- -0- -0- -0- -0- 10,826 Restricted assets: Cash 2,480 -0- 1 ,897 ,77 4 -0- -0- -0- 1,900,254 Investments -0- -0- 1,927,294 -0- -0- -0- 1,927,294 Fixed assets -0- -0- 11,889,125 -0- 1,965,366 -0- 13,854,491 Unamortized bond expenses -0- -0- 304,531 -0- -0- -0- 304,531 Amount available in Debt Service Fund -0- -0- -0- -0- -0- 33,755 33,755 Amount to be provided for retirement of general long-term debt -0- -0- -0- -0- -0- 1,432,629 1,432,629 TOTAL ASSETS $ 983,405 $ 58,010 $17,057,906 $2,246,415 $1,965,366 $1,466,384 $23,777,486 See accompanying notes to combined financial statements -3- See accomponylng notes to combined financial statements -4- .. COMBINED STATEMENTS OF REVENUE. EXPENDITURES AND CHANGES IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 ~,. See accompanying notes to combined financial statements -5- COMBINED STATEMENTS OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GOVERNMENTAL FUNDS CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 TOTALS GENERAL FUND DEBT SERVICE FUND (MEMORANDUM ONLY) ACTUAL (ON VARIANCE VARIANCE ACTUAL (ON VARIANCE BUDGETARY FAVORABLE FAVORABLE BUDGET ARY FAVORABLE BUDGET BASIS) (UNFAVORABLE) BUDGET ACTUAL (UNFAVORABLE) BUDGET BASIS) (UNFAVORABLE) REVENUE Taxes $1,017 ,460 $1,041,342 $ 23,882 $ 47,420 $ 55,196 $ 7,776 $1,064,880 $1,096,538 $ 31,658 Intergovernmental 836,830 935,244 98,414 -0- -0- -0- 836,830 935,244 98,414 Charges for services 170,830 224,699 53,869 -0- -0- -0- 170,830 224,699 53,869 Licenses and permits 20,500 33,345 12,845 -0- -0- -0- 20,500 ,. 33,345 12,845 Fines and forfeitures 52,900 37,829 (15,071 ) -0- -0- -0- 52,900 37,829 (15,071 ) Interest Income 19,800 45,772 25,972 5,000 7,921 2,921 24,800 53,693 28,893 II. I sce II aneous 17 , 450 66,898 49,448 -0- -0- -0- 17 ,450 66,898 49,448 TOTAL REVENUE 2,135,770 2,385,129 249,359 52,420 63,117 10,697 2,188,190 2,448,246 260,056 EXPEND I TURES Public safety 1,031,770 1,048,237 (16,467) -0- -0- -0- 1,031,770 1,048,237 (16,467) General government 432,012 400,113 31,899 -0- -0- -0- 432,012 400,113 31,899 Transportation 545,200 431,541 113,659 -0- -0- -0- 545,200 431,541 113,659 Physical environment 144,000 186,377 (42,377 ) -0- -0- -0- 1,44,000 186,377 (42,377) Health and human services 36,188 41,810 (5,622) -0- -0- -0- 36,188 41,810 (5,622) Debt service 195,747 190,001 5,746 39,863 39,863 -0- 235,610 229,864 5,746 TOTAL EXPENDITURES 2,384,917 2,298,079 86,838 39,863 39,863 -0- 2,424,780 2,337,942 86,838 EXCESS OF REVENUE OVER EXPENDITURES (DEFICIENCY) $ (249,147) 87,050 $ 336.197 S 12.557 23,254 $ 10.697 $ (236.590) 110,304 $ 346,894 FUND EQUITY Beginning of year 723,188 10,501 733,689 Adjustment to conform with generally accepted accounting principles: Adlustment for encumbrances (16,488) -0- (16,488 ) End of year $ 793,750 $ 33,755 $ 827 .50S See accompanying notes to combined financial statements I I I I I I I I I I I I I I I I COMBINED STATEMENTS OF REVENUE. EXPENSES AND CHANGES IN FUND EQUITY _ PROPRIETARY FUND AND SIMILAR TRUST FUNDS CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 ~.. See accompanying notes to combined financial statements -7- I I I I I STATEMENT OF CASH FLOWS - PROPRIETARY FUND CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 '. CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Other operating cash received NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Net advances for interfUnd borrowing NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Net proceeds from sale of revenue bonds Proceeds from sale of equipment Acquisition and construction of capital assets Principal payments Interest paid Grant NET CASH PROVIDED BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment securities (net) Interest and dividends received NET CASH USED FOR INVESTING ACTIVITIES CASH Beginning of year End of year NET INCREASE IN CASH RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: System capacity and connection fees Other nonoperating revenue (net) Depreciation Changes in assets and liabilities: Increase in accounts receivable Increase in accounts payable Increase in other accrued liabilities NET CASH PROVIDED BY OPERATING ACTIVITIES See accompanying notes to combined financial statements -8- ~ PROPRIETARY FUND TYPE ENTERPRISE FUND $2,144,136 (376,072) (608,638) 574 . 119 1.733.545 6 .182 6.182 4,625,573 418 (621,578) (2,060,000) (594,462) 30.719 1.380.670 (1,488,306) 213.113 (1.275.193) 1,845,204 813.142 $2,658.346 $ 606,763 574,057 62 311,373 (107,029) 306,844 41 .475 $1,733,545 .. NOTES TO COMBINED FINANCIAL STATEMENTS CITY OF OKEECHOBEE, FLORIDA September 30, 1990 ~. 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 financial statements are the General Employee's Pension Trust Fund, the Police Officer's Pension Trust Fund and the Fire Fighters 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 respecti ve governing authorities with the exception of the City Administrator who maintains a preexisting pension trust fund. Additionally, the organizations exist for the benefit of the employees of the City. -9- NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 ~.. NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. BASIS OF PRESENTATION - FUND ACCOUNTING The aooounts of the City are organized on the basis of funds or aooount groups, eaoh of whioh is oonsidered a separate aooounting entity. The operations of eaoh fund are aooounted for with a separate set of self-balanoing aooounts that oomprise its assets, liabilities, fund balanoe, revenues and expenditures/expenses. Government resouroes are allooated to and aooounted for in individual funds based upon the purposes for whioh they are to be spent, and the means by whioh spending aotivities are oontrolled. The various funds are summarized by type in the oombined finanoial statements. The following fund types and aooount groups are used by the City: Governmental Fund Types Governmental funds are those through whioh most governmental funotions of the City are finanoed. The aoquisition, use and balanoes of the City's expendable finanoial resouroes and the related liabilities are aooounted for through governmental funds. The measurement foous is upon determination of ohanges in finanoial position, rather than upon net inoome 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 aooount for all finanoial resouroes exoept those required to be aooounted for in another fund. Debt Servioe Funds - The debt servioe fund is used to aooount for the aooumulation of resouroes for, and the payment of, general long-term debt prinoipal, interest and related oosts as approved by voter referendum. Proprietary Fund Type The proprietary fund is used to aooount for the City's ongoing organizations and aotivities whioh are similar to those often found in the private seotor. The measurement foous is upon determination of net inoome. The following is the City's proprietary fund type: Enterprise Fund - The enterprise fund is used to aooount for operations (a) that are finanoed and operated in a manner similar to private business enterprises where the intent of the governing body is that the oosts (expenses, inoluding -10- ~ I I I I I 'I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OK EECHOBEE , FLORIDA September 30, 1990 'c. 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. I I 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 with 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 Long-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. -11- I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) I CITY OF OK EECHOBEE , FLORIDA September 30, 1990 I "",". I NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS I 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. I I 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. I I 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 ($43,112 at September 30, 1990) are recorded at year end. I 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. -12- I I I I I I I I il I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 ~,. 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. -13- ... NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 'c. NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 6. ENCUMBRANCES The governmen tal 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, 1990, encumbrances in the general fund amounted to $2,245. 7. CASH AND 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 nQualified Public Depository,n 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 $3,438,032 with state qualified institutions as of September 30, 1990. The investment guidelines, as established by ordinance, allow surplus funds to be invested in the local government surplus funds trust fund, obligations of the U.S. government or agencies thereof, banking institutions within the state and other such institutions wi thin the guidelines of the state statutes, commercial paper with certain ratings, pre-refunded municipal obligations, banker's acceptances maturing within one year, investment agreements, direct and general long-term obligations of any state with proper credit rating and full faith and credit pledge, municipal obligations with proper credit rating and repurchase agreements with maturities of 30 days or less with organizations with certain stipulations and requirements. -14- r - - - - I I I I I I I I I I CITY OF OKEECHOBEE, FLORIDA NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) September 30, 1990 NOTE A - SUMMARY OF SIGNIF!CANT~CCOUNTING POLICIES (CONTINUED) 7. CASH AND INVESTMENTS (CONTINUED) No.3: The following is a list of the City's investments by categories of risks established by Governmental Accounting Standards Board Statement Securities which are uninsured and unregistered, with securities held by the counterparty's trust department or agent in the entity's name: Enterprise fund: Water and sewer fund: Bankers' acceptances (includes accrued interest of $52,499) Pension trust funds: Managed investment accounts Police officers' pension trust fund: Cash equivalents Government and agency securities Corporate stocks Cash and accrued income Fire fighters pension trust fund: Cash equivalents Government and agency securities Corporate stocks Cash and accrued income General employees pension trust fund: Cash equivalents Government and agency securities Corporate stocks Cash and accrued income Money market investments Police officers' pension trust fund Fire fighters pension trust fund General employees pension trust fund TOTALS -15- BOOK VALUE MARKET VALUE $1,979,793 $1,979,793 179,000 179,000 455,037 457,383 181,167 156,718 14.016 14.016 829,220 807,117 67,400 67,400 151,709 152,461 68,309 59,588 4.713 4.713 292,131 284 , 162 212,600 606,701 249,251 18.428 1.086.980 212,600 609,844 216,306 18,428 1.057,178 8,438 7,039 22.607 38.084 2.246.415 8,438 7,039 22,607 38.084 2.186,541 $4 . 1 66 .334 $4,226,208 r I I I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 "" NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 8. INVENTORY I I I Inventory consists of motor fuels which is stated at cost determined on the first-in, first-out method. 9. FIXED ASSETS I I I I I I 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 (n infrastructuren), 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, 1990, these charges amounted to $47,770. 11. VACATION AND SICK LEAVE I r I r 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 maxinrom 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. -16- .., NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 NOTE B - COMPARISON OF BUDGBT TO ~CTUAL 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 1989-90 budget. For purposes of preparing the combined statements of revenue, expenditures and changes in fund balances - budget and actual - governmental funds, the actual results of operations have been adjusted to a basis consistent with the City's budgeted revenues and expenditures, formulated on the encumbrance system of accounting. The adjustments for encumbrances shown on the combined statement of revenue, expenditures and changes in fund balances - budget and actual - governmental funds is as follows: GENERAL FUND Actual expenditures Encumbrances - September 30, 1990 Less prior year encumbrances paid Adjustment for encumbrances EXPENDITURES ON BUDGETARY BASIS $2,314,567 $ 2,245 (18.733) (16.488) $2,298,079 NOTE C - PROPERTY TAXES The City's property tax is levied annually on the real and personal property located in the City on January 1st of the prior year. The assessed value on which the 1989-90 levy was based was $119,797,054. 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, 1990 were 98.49% 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 1989-90 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, 1990 is summarized as follows: UTILITY PLANT CONSTRUCTION IN SERVICE IN PROGRESS TOTAL Balance September 30, 1989 Additions Retirements $10,182,658 69,520 (12,520) 10,239,658 2,798,082 $ 7,441,576 -18- $ 3,895,493 552,056 -0- 4,447,549 -0- t 4.447.549 $14,078,151 621,576 (12,520) 14,687,207 2,798,082 $11.889,125 Less accumulated depreciation Balance September 30, 1990 - I I I I I I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 '" NOTE D - FIXED ASSETS - PROPRIETARY FUND (CONTINUED) Included in the proprietary fund construction in progress is $794,668 which represents engineering fees and construction costs for the expansion to the wastewater treatment system. The balance of $3,652,881 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 1990, 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, 1990, the cost of assets acquired prior to October 1, 1981 was $4,042,428 (less $1,817,153 of accumulated depreciation). Depreciation expense recorded for these assets was $101,061 in 1990. NOTE E - CHANGES IN GENERAL FIXED ASSETS A summary of changes in general fixed assets follows: BALANCE BALANCE OCTOBER 1. 1989 ADDITIONS RETIREMENTS SEPTEMBER 30. 1990 Land and improvements $ 805,358 $ -0- $ -0- $ 805,358 Buildings and improvements 402,703 -0- -0- 402,703 Furnishings and equipment 430,991 30,842 36,623 425,210 Rolling stock 317,210 14,885 -0- 332,095 TOTALS $1,956,262 $ 45.727 $ 36.623 $1.965.366 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, 1990, the value assigned to general fixed assets acquired prior to October 1, 1981 was $869,153. -19- r . NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , NOTE F - LONG-TERM DEBT Long-term debt as of September 30, 1990 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% $ 185,000 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 1.211.237 $1,396.237 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 $106,761 $4,773,239 $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 rang1ng from 6% to 7.125% (issue includes $1,660,000 of Serial Bonds and $3,170,000 of Term Bonds); net of unamortized discount of $50,956 TOTAL PROPRIETARY FUND LONG-TERM DEBT 4,779,044 $9,552,283 -20- ~ I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA I September 30, 1990 I '~'. NOTE F - LONG-TERM DEBT (CONTINUED) I - ~ - ~ .~ ~ I I I 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 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, The 1987 Water and Sewer Refunding and Improvement Revenue Bonds 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, 1990 are as follows: 1987 1989 REVENUE REVENUE BONDS BONDS $ 141,597 $ 83,079 -0- 547,530 -0- 2,034.506 TOTALS $ 141,597 $2,665.115 MAXIMUM RESERVE Sinking Fund Capitalized interest Remaining in construction fund account , -21- ... I I I 1 I I I I I I I I I I I I I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 "'. NOTE F - LONG-TERM DEBT (CONTINUED) A summary of changes in all long-term debt for the year ended September 30, 1990 is as follows: PRCPRIEl'ARY FUID WA'lm AID samR REVENUE OOI{)S rot{) 1987 ANrICIPAT.IOO 1989 SERIES OOIE SERIES TOl'AL GENERAL I..DOO-Tm1 DEB!' rnNERAL OOLIGAT.IOO WI'ES OOIDS PAYABIE TarAL Balance at Septarber 30, 1989 $ 210,000 $1 ,300,000 $1,510,000 $4,940,000 $2,000 ,000 $ 4- tti,940,OOO Additioos 4- 4- 4- 4- 4- 4,830,000 4,830,000 Paynmts 25 ,000 88,763 113.763 60 ,000 2 .000 .000 4- 2 ,060 ,000 185 ,000 1 ,211,~ 1,396,~ 4,880 ,000 4- 4,830,000 9,710,000 less unanorti2ed baxi cliscoont 4- ..0- ..0- 106.761 ..0- 50 .956 157.717 Balance at Septarber 30, 1990 $ 185 .000 $1.211.'R7 $1 .396 .237 $4.773.239 $ 4- $4 .779 .044 $9.552.283 Amual pr:incipal recpiraImts for the next five years am thereafter are as follows: Year ED1ing - 1991 $ 25 ,000 $ 96 ,068 $ 121,068 $ 65 ,000 $ 4- $ ..0- $ 65 ,000 1992 30 ,000 103,974 133,974 70,000 ..0- 30 ,000 100,000 1993 30 ,000 112,532 142,532 75 ,000 ..0- 95 ,000 170,000 1994 30 ,000 121,793 151,793 75 ,000 ..0- 100,000 175 ,000 1995 35 ,000 131,817 166,817 80 ,000 ..0- 105 ,000 185,000 'Ihereafter 35 .000 645 .053 680 .053 4.515.000 ..0- 4 .500 .000 9,015.000 'IUI'ALS $ 185,000 $1,211.237 $1 .396 .237 $4 .880 .000 $ ..0- $4 .830 .000 $9.710,000 -22- I I I I I I I I I I I I I I I I I I I NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 '~'. NOTE F - LONG-TERM DEBT (CONTINUED) The annual requirements to amortize all debt outstanding as of September 30, 1990, including interest payments totalling $12,789,208 are as follows: GENERAL 1J)lG.TEFf1 DEE' GENERAL OBLIGAT.ICN oom> a:ms PAYABIE 'lUrAL PRCPRlEI'ARY FUID WA'Jm AID SE}ER REVENlE roms 1987 SERIES 'lUrAL TOl'AL l.(lG.'I'Eff1 DEB!' 1989 SERIES Year eOOing - 1991 $ 37,675 $ 195,753 $ 233,428 $ 434,571 $ 332,315 $ 766 ,886 $ 1,000 ,314 1992 40 ,956 195,753 236,709 435,771 361,415 m ,186 1,033,895 1993 38,894 195,753 234 ,647 436 ,509 422,665 859,174 1 ,093 ,821 1994 36,831 195,753 232 ,584 431 ,934 421 ,765 853,699 1 ,086 ,283 1995 39,769 195,753 235 ,522 432,049 420 ,486 852 ,535 1 ,088,057 'l'bereafter 37 ,362 783.012 820 .374 9.423.416 8 .349 ,285 17.772.701 18.593.CJ75 'lUl'AlS $ 231 ,487 $1.761.m $1.993.264 $11.594.250 $10.307.931 $21.902.181 ~.895.445 The annual changes in general long-term debt accrued vacation and medical leave benefits as of September 30, 1990 are as follows: OCTOBER 1. 1989 $ 51 ,403 INCREASE SEPTEMBER 30. 1990 $ 70.147 $ 18.744 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, 1990, $870,000 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 $ 22,243 -0- 1,027 $ 23,270 $ 1,027 22,243 -0- $ 23.270 -23- r ------, NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 'c. NOTE I - CONTRIBUTED CAPITAL The source and additions to contributed capital are as follows: SOURCE BALANCE OCTOBER 1. 1989 $ 421,758 338,761 747,310 417,740 619,572 100,000 275,000 1.915.854 $4,835,995 Connection fees Developers Federal grant Local Public Works Grant Federal Revenue Sharing Funds General Fund Okeechobee Beach Water Association Environmental Protection Agency Grant TOTALS NOTE J - PENSION PLANS ADDITIONS $ -0- -0- -0- -0- -0- -0- -0- 30.719 $ 30.719 BALANCE SEPTEMBER 30, 1990 $ 421,758 338,761 747,310 417,740 619,572 100,000 275,000 1.946,573 $4.866.714 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 $52,906 based on a covered payroll and a total payroll as follows: COVERED PAYROLL COVERED PAYROLL AS PERCENT OF TOTAL PAYROLL TOTAL PAYROLL General Police Fire $856,824 304,339 167,189 $875,219 460,075 190,462 97.9% 66.2% 87.8% 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 actuarially 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, 1990 are as follows: General Police Fire $318,644 132,477 33.949 TOTAL $485,070 -24- r .. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 "'. NOTE J - PENSION PLANS (CONTINUED) 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. .i 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 actuarially determined pension contribution for 1990, which consisted entirely of normal cost, was as follows: Police Fire General $ 3,056 5,503 38.705 TOTAL $ 47,264 The actual City and employees contribution by fund for the year ended September 30, 1990 was as follows: CITY EMPLOYEES General fund Proprietary fUnd $ 25,395 27.511 TOTALS $ 52,906 $ 48,755 22.500 $ 71.255 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 $23,001 and $53,703, respectively, during the year ended September 30, 1990. -25- l' NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 ,~. NOTE J - PENSION PLANS (CONTINUED) Historical information from 1987 through 1990 is presented issued report for the pension employees retirement system (PERS). for the year ended September 30, 1987 was the first year using the described herein, ten-year trend information is not available. ... in a separately As the valuation valua tion method 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. I I I I I I I I I I I I I The standardized measure of the pension benefit obligation and the net assets available for benefits at September 30, 1990 (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 non vested Total pension benefit obligation (2) Net assets available for benefits (at cost which approximates market) (1) Assets in excess of pension benefit obligation $ Percentage funded - (1) + (2) Contributions as an approximate percent of annual covered payroll: POLICE -0- 132,477 205,619 55.922 394,018 836.171 442.153 212% Employer -0-% Employee 6% Effect on the pension benefit obligation of current year changes in benefit provisions -26- $ 59.837 FIRE $ 7,677 33,949 34,074 32,690 108,390 298,646 $ 190.256 276% 1% -2! $ 2.388 GENERAL $ 11,425 318,644 566,726 23.771 920,566 1.107.639 $ 187.073 120% 6% -2! $ 189,954 I I I I I I I I I I I I I I I I I I I -. NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 NOTE J - PENSION PLANS (CONTINUED)' There were two changes in benefits since the previous actuarial valuation. Members may now retire with full benefits after 30 years of service, regardless of age. In addition, a preretirement death benefit of 50% of the value of vested accrued benefits was added to the plans. There have been no changes in actuarial assumptions or methods. 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. NOTE K - HOSPICE GRANT During the year ended September 30, 1990, the City was awarded Community Services Block Grants totalling $5,625. Hospice of the Treasure Coast-Okeechobee Branch was the subgrantee. The City received $3,748 under the grant award for the year ended September 30, 1990 and, upon presentation of invoices by Hospice, disbursed the funds. Also disbursed in the current year was $1,874 applicable to the prior year grant. NOTE L - ENVIRONMENTAL PROTECTION AGENCY GRANTS During 1990, grant funds totalling $30,719 were received to be used in connection with construction of the City's new wastewater treatment and collection system. NOTE M - COMMITMENTS In September, 1990, the City entered into a contract with Sharp Construction Company for the wastewater collection system phase I rework for $687,130. The City has an annual operating lease agreement for public safety vehicles amounting to approximately $59,423 for 1990 and $57,101 for 1991. -27- --.., GENERAL FUND SCHEDULE OF REVENUE - BUDGET AND ACTUAL CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 "'. VARIANCE FAVORABLE BUDGET ACTUAL ( UNF A VORABLE) TAXES Ad valorem taxes $ 479,360 $ 489,667 $ 10,307 Franchise fees 268,000 272,199 4,199 Utility service taxes 267,600 278,192 10,592 Public service taxes 2,500 1.284 (1,216) 1.017,460 1.041.342 23,882 INTERGOVERNMENTAL State shared revenue: Cigarette tax 95,000 95,956 956 Revenue sharing 175,300 176,013 713 Mobile home licenses 2,000 3,082 1,082 One-half cent sales tax 158,500 171,121 12,621 Alcoholic beverage licenses 1,200 4,326 3 , 126 Gasoline tax refund 1,500 1,575 75 Local option gasoline tax 289,510 294,645 5 ,135 Fire fighters supplement 1.320 1.320 -0- 724.330 748.038 23.708 Shared revenue from other local units: County occupational licenses 2,500 4,896 2,396 City share of 5 and 6 cent gas tax 110.000 182,310 72,310 112.500 187,206 74,706 836.830 935,244 98,414 CHARGES FOR SERVICES Sanitation fees 160,400 214,033 53,633 Highway maintenance contract 10,000 10,000 -0- Miscellaneous 430 666 236 170,830 224,699 53,869 LICENSES AND PERMITS Occupational licenses 20,500 33,345 12,845 -28- GENERAL FUND SCHEDULE OF REVENUE - BUDGET AND ACTUAL (CONTINUED) CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 ,~. -29- --. GENERAL FUND SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 'c. ENCUMBRANCES ACTUAL ON VARIANCE PRIOR BUDGETARY FAVORABLE BUDGET ACTUAL YEAR 1990 BASIS (UNFAVORABLE) PUBL I C SAFETY Law enforcement: Personal services $ 572,140 $ 553,964 $ -O- S -0- $ 553,964 $ 18,176 Operating expenses 143,490 175,596 762 -0- 174,834 (31.344) Capital outlay 10,200 16.340 -0- -0- 16.340 (6,140) 725.830 745.900 762 -0- 745,138 (19.308 ) Fire control: Personal services 244.560 233,406 -0- -0- 233,406 11 .154 Operating expenses 60,180 67.507 2.774 -0- 64.733 (4.553) Capital outlay 1.200 4.500 1.100 1.560 4.960 (3.760) 305.940 305.413 3,874 1.560 303.099 2.841 1.031.770 1.051.313 4.636 1.560 1,048,237 (16.467) ilGENERAL GOVERNMENT Legislative: Personal services 41.560 40,986 -0- -0- 40,986 574 Operating expenses 31.350 38.012 -0- -0- 38.012 (6.662) 72.910 78,998 -0- -0- 78.998 (6,088) Executive - city administrator: Personal services 68.410 64.828 -0- -0- 64.828 3,582 Operating expenses 11 ,000 8.298 -0- -0- 8,298 2,702 AI location of administrative charges (11.943) (11.943) -0- -0- (11,943) -0- 67,467 61.183 -0- -0- 61 . 183 6.284 Executive - city clerk: Personal services 50,670 49.219 -0- -0- 49.219 1.451 Operating expenses 7,900 11.165 1,803 198 9.560 (1,660) Capital outlay 1.500 1.647 -0- -0- 1.647 ( 147) 60.070 62,031 1.803 198 60,426 (356) Financial and administrative: Personal services 58,180 56,693 -0- -0- 56.693 1.487 Operating expenses 21.650 22,066 374 -0- 21.692 (42 ) Allocation of administrative charges (35.827) (35,827) -0- -0- (35,827) -0- 44.003 42,932 374 -0- 42,558 1,445 -30- ---. GENERAL FUND SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL (CONTINUED) CITY OF OKEECHOBEE, FLORIDA Yeor ended September 30, 1990 'c. -31- r -- I I I I I I I I I I t t I I I [ DEBT SERVICE FUND STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL CITY OF' OKEECHOBEE, FLORIDA Year ended September 30, 1990 'c -32- r -1IIlIIII EMPLOYEE PENSION TRUST FUNDS COMBINING BALANCE SHEETS CITY OF OKEECHOBEE, FLORIDA September 30, 1990 "'. POLICE FIRE FIGHTERS GENERAL OFFICERS' PENSION EMPLOYEES' PENSION TRUST TRUST PENSION TRUST FUND FUND FUND TOTAL ASSETS Investments $ 837,658 $ 299,170 $1.109.587 $2.246.415 LIABILITIES Accounts payable $ 1,487 $ 524 $ 1,948 $ 3,959 FUND BALANCES Reserved for employees' retirement 836.171 298.646 1.107.639 2.242,456 TOTAL LIABILITIES AND FUND BALANCES $ 837.658 $ 299.170 $1.109.587 $2.246.415 -33- r --------....... COMBINING STATEMENTS OF REVENUE. EXPENSES AND CHANGES IN FUND BALANCES - EMPLOYEE PENSION TRUST FUNDS CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 ,.. POLICE FIRE FIGHTERS GENERAL OFFICERS' PENSION EMF LOYEES ' PENSION TRUST TRUST PENSION TRUST FUND FUND FUND TOTAL OPERATING REVENUE State tax on insurance premiums $ 53,703 $ 23,001 $ -0- $ 76,704 Employer's contributions -0- 618 52,288 52,906 Employees' contributions 19,786 8,644 42,825 71 ,255 Investment income 56.409 19.974 76.729 153.112 TOTAL OPERATING REVENUE 129.898 52,237 171.842 353,977 OPERATING EXPENSES Employees' contribution refunds and interest 4,120 4,831 38,870 47,821 Contractual services 4,916 2,528 7,423 14,867 Administrative expense 1.400 1.184 780 3.364 TOTAL OPERATING EXPENSES 10.436 8.543 47,073 66.052 NET INCOME 119,462 43,694 124,769 287,925 FUND BALANCES Beginning of year 716.709 254,952 982,870 1.954,531 End of year $ 836,171 $ 298.646 $1.107.639 $2 .242 .456 -34- r -----..... SUMMARY OF INSURANCE COVERAGE - UNAUDITED CITY OF OKEECHOBEE, FLORIDA September 30, 1990 '.' DESCRIPTION COVERAGE COMMERCIAL PACKAGE Buildings and contents (90% coinsurance - $250 deductible) $3,365,229 LAW ENFORCEMENT LIABILITY Bodily injury, personal injury, property damage ($5,000 deductible) 1,000,000 500,000 WORKERS COMPENSATION AND EMPLOYER'S LIABILITY VEHICULAR EQUIPMENT Bodily injury and property damage Collision ($250 deductible) Comprehensive ($250 deductible) 1,000,000 ACV ACV SCHEDULED PROPERTY FLOATER ($250 DEDUCTIBLE) 609,800 PUBLIC OFFICIALS BONDS City clerk Other employees 20,000 20,000 PUBLIC OFFICIAL LIABILITY ($1.000 DEDUCTIBLE) 1,000,000 -35- r -- SCHEDULE OF ASSESSED VALUES. TAX LEVIES AND RATES - UNAUDITED CITY OF OKEECHOBEE, FLORIDA 1981-1990 ,~ ASSESSED VALUES REAL PERSONAL HOMESTEAD YEAR PROPERTY PROPERTY TOTAL EXEMPTION 1990 $100,715,930 $19,081,124 $119,797,054 $24,017,296 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 TAX LEVIES AND APPLICABLE RATES LEVIES RATES DEBT GENERAL DEBT GENERAL SERVICE GOVERNMENT YEAR SERVICE GOVERNMENT MILLS MILLS 1990 $56,753 $504,594 .390 4.150 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 -36- SCHEDULE OF CERTAIN REVENUE - UNAUDITED CITY OF OKEECHOBEE, FLORIDA 1981-1990 'c GENERAL FUND STATE REVENUE SHARING OCCUPATIONAL UTILITY FINES AND FRANCHISE YEAR (NOTE) LICENSES TAXES FORFEITURES FEE PERMITS INTEREST 1990 $443,090 $33,345 $278,192 $37,829 $272,199 $ -0- $45,772 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 PROPRIETARY FUND WATER AND SEWER IMPACT DELINQUENT INTEREST ON HYDRANT YEAR CHARGES FEES CHARGES MISCELLANEOUS INVESTMENTS TAP FEES RENTAL 1990 $2,116,074 $416,792 $73,334 $50,929 $305,306 $157,265 $12,240 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 NOTE - INCLUDES ADDITIONAL TWO CENT CIGARETTE TAX AND ONE-HALF CENT SALES TAX I I -37- SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 ,. CASH CASH OCTOBER SEPTEMBER 1, 1989 30, 1990 FEDERAL GRANTOR/ FEDERAL AWARD BEGINNING ENDING PROGRAM TITLE CFDA NO. AMOUNT BALANCE RECEIPTS DISBURSEMENTS BALANCE U.S. ENVIRONMENTAL PROTECTION AGENCY Water Management Division 66.418 $1,672,248 $ -0- $ 30,719 $ 30,719- $ -0- -Disbursements include expenditures from prior year which were reimbursed by grantors during the current fiscal year. -38- I , I I I l i I ( i i I i - I lIED I !:!~~~&King 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 February 21, 1991 Fax (407) 461-8872 The Honorable Mayor and ~ Members of the City Council City of Okeechobee, Florida Report on Internal Controls (Accountin~ and Administrative)-- Based on a Study and Evaluation Made as a Part of an Audit of the Combined Financial Statements and the Additional Tests Required by the Sin~le Audit Act We have audited the combined financial statements of the City of Okeechobee, Florida (City), for the year ended September 30, 1990, and have issued our report thereon dated February 21, 1991. As part of our audit, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in administering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, the Single Audit Act of 1984, and the provisions of Office of Management and Budget Circular A-128, "Audits of State and Local Governments." For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Internal Accounting Controls: . revenue/receipts . purchases/disbursements Controls Used in Administering Federal Programs: General Requirements: . Political activity . Civil rights Specific Requirements: . Type of service . Matching level The management of the City is responsible for establishing and maintaining internal control systems used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and judgment by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, maintained and fairly disclosed in reports. -39- Member American Institute of Certified Public Accountants Division for CPA Firms - SEC and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart f I I I I I I I I I I I I ------_._~~-----... The Honorable Mayor and Members of the City Council February 21, 1991 Because of inherent limitations in any system of internal accounting and administrative controls uSSld in administering federal financial assistance programs, errors or irregularitie~ may nevertheless occur and not be detected. Also projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. OUr study included all of the applicable control categories listed above. During the year ended September 30, 1990, the City had no major federal financial assistance programs and expended 100% of its total federal financial assistance under the Bureau of Local Government Wastewater Financial Assistance of the Florida Department of Environmental Regulation. With respect to internal control systems used in administering this nonmajor federal financial assistance program, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily and evaluating any weaknesses. OUr study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance program of the City. Accordingly, we do not express an opinion on the internal control systems used in administering the federal financial assistance program of the City. However, our study and evaluation and our audit disclosed no condition that we believe to be a material weakness in relation to a federal financial assistance program of the City. This report is intended solely for the use of the Mayor and City Council, management, Department of Environmental Regulation and the Auditor General for the State of Florida and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which upon acceptance by the City is a matter of public record. C~~~AC:O~1r -40- Imml!!~~~&King 2222 Colonial Road, Suite 200 Ft Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 !ebruary 21, 1991 '" 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, 1990 and have issued our report thereon dated February 21, 1991. 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, 1990, 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. -41- Memher American Institute of Certified Public Accountants Division for CPA Firms - SEC and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart r --- The Honorable Mayor and Members of the City Council February 21, 1991 For the purpose of this report, we have classified the significant internal control structure p.olicies 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, 1990 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. -42- I The Honorable Mayor and Members of the City Council February 21, 1991 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. This reconciliation was not performed throughout the year on a monthly basis because complete detail listings of customer accounts receivable were not prepared. Accounts receivable detail listings should be available monthly. Accurate recording of monthly revenue is necessary to ensure proper reconciliation of these accounts; during the year various revenue amounts were recorded incorrectly. 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. 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. 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 within 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. -43- r The Honorable Mayor and Members of the City Council February 21, 1991 We also noted other matters involving the internal control structure and its operation that we have rei?orted to the management of the City in a separate management letter dated February 21, 1991. This report is intended for the information of the Mayor and City Council, management, Department of Environmental Regulation 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~1!:d ~c:n!jr -44- r ---== Imml~~&King { 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 I February 21, 1991 '- The Honorable Mayor and Members of the City Council City of Okeechobee, Florida Independent Auditors' Report on Compliance with Laws and Re~ulations I We have audited the combined financial statements of the City of Okeechobee, Florida (City) as of and for the year ended September 30, 1990 and have issued our report thereon dated February 21, 1991. 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 21, 1991. 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. cf:!!:f;' P!!:::~u~t~~1r -45- Member American Institute of Certified Public Accountants Division for CPA Firms - SEC and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart .--- 11I8D1~~&King 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 Fefjruary 21, 1991 The Honorable Mayor and Members of the City Council City of Okeechobee, Florida Sin~le Audit Report on Compliance With ReQuirements Applicable to Nonmajor Federal Financial Assistance Pro~ram Transactions In connection with our audit of the 1990 combined financial statements of the City of Okeechobee, Florida (City), and with our study and evaluation of the City, internal control systems used to administer federal financial assistance programs, as required by Office of Management and Budget Circular A-128, "Audits of State and Local Governments," we selected certain transactions applicable to certain nonmajor federal financial assistance programs for the year ended September 30, 1990. As required by OMB Circular A-128, we have performed auditing procedures to test compliance with the requirements governing types of services allowed or unallowed; eligibility; and capital outlay reporting and recording requirements that are applicable to those transactions. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion of the City's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed 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 requirements. This report is intended for the information of the Mayor and City Council, management, Department of Environmental Regulation 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~1!.~ ~ou~t~O -46- Member American Institute of Certified Public Accountants Division for CPA Firms - SEC and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart Imml~~&King 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 February 21, 1991 , 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, 1990, and have issued our report thereon dated February 21, 1991. 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. l ( I [ Recommendations to Improve the City's Present Financial Man~ement Accountin~ Procedures and Internal Control CASH MANAGEMENT When available, discounts for prompt payment should be utilized. 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, 1989 had no action taken upon them during the fiscal year ended September 30, 1990. They are as noted in the Report on Internal Control Structure. Additional comments are as follows: Vacation Accrual During 1990, a few employees' vacation accrual balance 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. -47- Member American Institute of Certified Public Accountants Division for CPA Firms - SEe and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St_ Lucie, Stuart r The Honorable Mayor and Members of the City Council February 21, 1991 STATUS OF RECOMMENDATIONS MADE IN THE PRIOR YEAR MANAGEMENT LETTER (CONTINUED) I I ( OTHER MATTERS , Cash Large balances which are earning a to try to maximize City. are maintained in several different cash accounts low interest rate. Consideration should be given earning potential on all funds available to the ( I I I Department of Banking and Finance 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, 1991. 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. 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, J I. -:::> YJ..-. cf ~-' N~, I~ ~ Certified Public Accountants -48- r- I , COMBINING FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION CITY OF OKEECHOBEE, FLORIDA PENSION TRUST FUNDS September 30, 1990 - - - 0 0 0 0 0 - - - I ~Q.li.T~!!1~ Independent Auditors' Report - - - - - - - - - - ~A.Q..~ 1 Combining Balance Sheets - Pension Trust Funds - - - - - - - 2 Combining Statements of Revenue, Expenses and Changes in Fund Balances - Pension Trust Funds - - - - - - - Notes to Combining Financial Statements 3 4-9 Supplementary Information - - - - - - - - - - - - - - - - - 10-12 - - - 0 0 0 0 0 - - - I I r - 11I8Ji1~~&King 2222 Colonial Road, Suite 200 Ft. Pierce, Florida 34950 Telephone (407) 461-8833 Fax (407) 461-8872 February 21, 1991 , Board of Trustees Pension Trust Funds City of Okeechobee, Florida Independent Auditors' Report We have audited the accompanying financial statements of the pension trust funds of the City of Okeechobee, Florida as of and for the year ended September 30, 1990, 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. 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, 1990 and the results of its operations 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 limi ted procedures I which consisted principally of inquiries 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. c~ ~~un:!;:!g -1- Member American Institute of Certified Public Accountants Division for CPA Firms - SEe and Private Companies Practice Sections Other Offices - OHIO: Alliance, Boardman, Salem, Warren, Youngstown / PENNSYLVANIA: Meadville, New Castle, Sharon / FLORIDA: Naples, Port St. Lucie, Stuart --- COMBINING BALANCE SHEETS - PENSION TRUST FUNDS CITY OF OKEECHOBEE, FLORIDA September 30, 1990 POLICE GENERAL OFFICERS' FIRE FIGHTERS' EMPLOYEES' PENSION TRUST PENSION TRUST PENSION TRUST FUND FUND FUND TOTAL ASSETS Investments $ 837,658 $ 299 . 170 $1.109.587 $2,246.415 LIABILITIES Accounts payable $ 1.487 $ 524 $ 1.948 $ 3,959 FUND BALANCES Reserved for employees' retirement 836.171 298.646 1.107.639 2.242,456 TOTAL LIABILITIES AND FUND BALANCES $ 837.658 $ 2c)9.170 $1.109.587 $2.246,415 See accompanying notes to combining financial statements -2- - COMBINING STATEMENTS OF REVENUE. EXPENSES AND CHANGES IN FUND BALANCES - PENSION TRUST FUNDS CITY OF OKEECHOBEE, FLORIDA Year ended September 30, 1990 POLICE GENERAL OFFICERS' FIRE FIGHTERS' EMPLOYEES' PENSION TRUST PENSION TRUST PENSION TRUST FUND FUND FUND TOTAL OPERATING REVENUE State tax on insurance premiums $ 53,703 $ 23,001 $ -0- $ 76,704 Employer's contributions -0- 618 52,288 52,906 Employees' contributions 19,786 8,644 42,825 71,255 Investment income 56,409 19.974 76.729 153,112 TOTAL OPERATING REVENUE 129.898 52.237 171.842 353,977 OPERATING EXPENSES Employees' contribution refunds and interest 4,120 4,831 38,870 47,821 Contractual services 4,916 2,528 7,423 14,867 Administrative expense 1.400 1.184 780 3 ,364 TOTAL OPERATING EXPENSES 10.436 8.543 47.073 66,052 NET INCOME 119,462 43,694 124,769 287,925 FUND BALANCES Beginning of year 716.709 254.952 982.870 1,954.531 End of year $ 836,171 $ 298.646 $1.107,639 $2.242,456 See accompanying notes to combining financial statements -3- - NOTES TO COMBINING FINANCIAL STATEMENTS CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , 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 Funds are included in the financial statements of the City as an integral part of those financial statements. I I I I I I I I I I I I I NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS Basis of Accounting: The Funds' 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 $52,906 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 $856,824 304,339 167,189 $875,219 460,075 190,462 97.9% 66.2% 87.8% -4- ~ NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED) As of September 30, 1990, 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 2 Current employees: Vested Nonvested 6 J 15 1 J 10 26 28 ~ 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, 1990 are as follows: General Police Fire $318,644 132,477 33.949 TOTAL $485.070 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 ( 1 0 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. -5- NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED) After 5 years of servlce (10 years for fire and police) the pension benefit is accrued to date of term1nation and payable at normal retirement age if employee contributions are left in the fUnd. The actuarial determined pension contribution for 1990, which consisted entirely of normal cost, was as follows: Police Fire General $ 3,056 5,503 38.705 TOTAL $ 47,264 The actual City and employees contribution by fund for the year ended September 30, 1990 was as follows: CITY EMPLOYEES General Fund Proprietary Fund $ 25,395 27,511 TOTALS $ 52,906 $ 48,755 22.500 $ 71.255 Contributions as an approximate percent of annual covered payroll are as follows: POLICE FIRE GENERAL Employee -0-% 6% 1$ ---2! 6% ---2! City 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 $23,001 and $53,703, respectively, during the year ended September 30, 1990. The pension benefit obligation shown below is a standardized disclosure measurement established by Governmental Accounting Standards Board (GASB) Statement No.5 that, with some exceptions, must be covered by a pension employees retirement system (PERS). The standardized measurement ls 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. -6- r -- NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , NOTE C - PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED) The standardized measure of the pension benefit obligation and the net assets available for benefits at October 1, 1990 (the most recent valuation date) is as follows: POLICE FIRE GENERAL Pension benefit obligation: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them $ -0- $ 7,677 $ 11,425 Current employees: Accumulated employee contributions including allocated investment income 132,477 33,949 318,644 Employer - financed vested 205,619 34,074 566,726 Employer - financed nonvested 55.922 32.690 23.771 Total pension benefit obligation (2) 394,018 108,390 920,566 Net assets available for benefits (at cost which approximates market) (1) 836.171 298,646 1,107,639 Assets in excess of pension benefit obligation $ 442.153 $ 190.256 $ 187.073 Percentage funded - (1) + (2) 212% 276% 120% Effect on the pension benefit obligation of current year changes in benefit provisions $ 59,837 $ 2.388 $ 189.954 There were two changes in benefits since the previous actuarial valuation. Members may now retire with full benefits after 30 years of service, regardless of age. In addition, a preretirement death benefit of 50% of the value of vested accrued benefits was added to the plans. There have been no changes in actuarial assumptions or methods. -7- NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , NOTE C _. PLAN CONTRIBUTIONS AND OTHER INFORMATION (CONTINUED) Significant 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. Historical trend information for 1990, 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 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 Funds had deposits with qualifying institutions as of September 30, 1990 totalling $38,084 which is included in investments in the accompanying combining balance sheets. The plans follow the investment guidelines as established for the City. 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, commercial paper with certain ratings, pre-refunded municipal obligations, banker's acceptances maturing within one year, investment agreements, direct and general long-term obligations of any state with proper credit rating and full faith and credit pledge, municipal obligations with proper credit rating and repurchase agreements with maturities of 30 days or less with organizations with certain stipulations and requirements. -8- NOTES TO COMBINING FINANCIAL STATEMENTS (CONTINUED) CITY OF OKEECHOBEE, FLORIDA September 30, 1990 , NOTE D - CASH AND INVESTMENTS INVESTMENTS The following is a list of the City's pension trust fund investments by categories of risks established by GASB Statement No.3: Securities which are uninsured and unregistered, with securities held by the counterparty's trust department or agent in the entity's name: Police officers' pension trust fund: Cash equivalents Money market account Government and agency securities Corporate stocks Cash and accrued income Fire fighters pension trust fund: Cash equivalents Money market account Government and agency securities Corporate stocks Cash and accrued income General employees' pension trust fund: Cash equivalents Money market account Government and agency securities Corporate stocks Cash and accrued income TOTALS -9- BOOK VALUE $ 179,000 8,438 455,037 181,167 14.016 837.658 67,400 7,039 151 ,709 68,309 4.713 299.170 212,600 22,607 606,701 249,251 18.428 1.109.587 $2,246,415 MARKET VALUE $ 179,000 8,438 457,383 156,718 14.016 815,555 67,400 7,039 152,461 59,588 4.713 291.201 212,600 22,607 609,844 216,306 18.428 1.079,785 $2 . 186 .541 SUPPLEMENTARY INFORMATION CITY OF OKEECHOBEE, FLORIDA PENSION TRUST FUNDS September 30, 1990 HISTORICAL INFORMATION , For the years ended September 30, 1990, 1989, 1988 and 1987, the pension benefit obl1gation and net assets available for benefits expressed as percentages of the pension benefit obligation, was as follows: Net assets available for benefits (1) Pension benefit obl1gation (2) Percentage fUnded - (1) + (2) Assets in excess of pension benefit obligation Excess assets (as a percent of annual covered payroll) Contributions as an approximate percent of annual covered payroll: Employer Employee Annual covered payroll Net assets available for benefits (1) Pension benefit obligation (2) Percentage funded - (1) + (2) Assets in excess of pension benefit obligation Excess assets (as a percent of annual covered payroll) Contributions as an approximate percent of annual covered payroll: 1990 POLICE FIRE GENERAL $836 .171 $298,646 $1.107.639 $394,018 $108.390 $ 920.566 212% 276% 120% $442.153 $190.256 $ 187.073 145% 114% 22% -0-% a 6% 6% --2! --2! $304,339 $167.189 $ 856.824 1989 POLICE FIRE GENERAL $716.709 $254.952 $ 982.870 $289.681 $ 89.074 $ 697.530 247% 286% 141% $427,028 $165,878 $ 285.340 134% 110% -32! Employer -0-% 1S 6S Employee 5% --2! --2! Annual covered payroll $318,260 $150.344 $ 806.252 -10- - SUPPLEMENTARY INFORMATION (CONTINUED) CITY OF OKEECHOBEE, FLORIDA PENSION TRUST FUNDS September 30, 1990 , HISTORICAL INFORMATION (CONTINUED) 1988 POUCE FIRE GENERAL Net assets available for benefits (1) $594.801 $218.434 $849,780 Pension benefit obligation (2) $247,866 $ 88.874 $657.048 Percentage funded - (1) ~ (2) 240% 246% 129% Assets in excess of pension benefit obligation $346,935 $129.560 $192.732 Excess assets (as a percent of annual covered payroll) 128% .:ill 25% Contributions as an approximate percent of annual covered payroll: Employer -0-% 1% 6% Employee 5% --2! --2! Annual covered payroll $271.305 $167.453 $764.522 1987 POUCE FIRE GENERAL Net assets available for benefits (1) $495.312 $180.259 $716.949 Pension benefit obligation (2) $204.378 $ 85.005 $564.460 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% 21S Contributions as an approximate percent of annual covered payroll: Employer -0-% a 6% Employee 5% -2! -2! Annual covered payroll $267,361 $162,597 $76 7 . 1 6 7 -11- SUPPLEMENTARY INFORm TION (CONTINUED) CITY OF OKEECHOBEE, FLORIDA PENSION TRUST FUNDS September 30, 1990 , HISTORICAL INFORMATION (CONTINUED) REVENUE BY SOURCE Employee contributions State tax Investment income 1990 $ 19,786 53,703 56.409 TOTALS $129,898 POLICE 1989 1988 $ 15,863 53,086 55.570 $124.519 $ 14,335 51,543 38.814 $104.692 1981 $ 12,886 47,943 27,587 $ 88.416 EXPENSES BY TYPE Refunds Administrative expenses $ 4,120 $ 4,709 $ 26 $ 9,206 6.316 1.880 1,199 -0- TOTALS $ 10.436 $ 6.589 $ 1.225 $ 9.206 FIRE 1990 1989 1988 1987 $ 8,644 $ 7,738 $ 7,808 $ 7,706 618 418 421 419 23,001 21 , 138 18,381 14,875 19.974 19.774 14.075 10.081 TOTALS $ 52,237 $ 49.068 $ 40.685 $ 33.081 $ 4,831 $ 12,343 $ 505 $ 7,393 3.712 1.653 559 -0- TOTALS $ 8,543 $ 13 .996 $ 1.064 $ 7,393 GENERAL 1990 1989 1988 1981 $ 42,825 $ 39,627 $ 39,685 $ 37,406 52,288 53,884 48,632 45,679 76.729 78.678 57,098 41 ,896 TOTALS $171,842 $172 .189 $165.415 $124.981 $ 38,870 $ 40,175 $ 4,533 $ 21,340 8,203 4.532 2,443 -0- TOTALS $ 47,073 $ 44.707 $ 6.976 $ 21.340 REVENUE BY SOURCE Employee contributions Employer contributions State tax Investment income EXPENSES BY TYPE Refunds Administrative expenses REVENUE BY SOURCE Employee contributions Employer contributions Investment income EXPENSES BY TYPE Refunds Administrative expenses Contributions were made in accordance with actuarially determined contribution requirements. -12-