Audit Report 09.30.2008 - r
fits ^
CITY OF OKEECHOBEE, FLORIDA
Financial Statements
Year Ended September 30, 2008
' CITY OF OKEECHOBEE, FLORIDA
' Table of Contents
As of September 30, 2008
'
Introductory Section Page
' Title Page 1
Table of Contents 2
City Officials 3
' Financial Section
Independent Auditors' Report 5
' Management's Discussion and Analysis 7
Basic Financial Statements
' Government-wide Financial Statements
• Statement of Net Assets - Governmental Activities 15
' • Statement of Activities - Governmental Activities 16
Fund Financial Statements
Governmental Funds
' • Balance Sheet 18
• Statement of Revenues, Expenditures, and Changes in Fund Balances 20
• Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 22
Fiduciary Funds (Component Units that are Fiduciary in Nature)
• Statement of Fiduciary Net Assets - Pension Trust Funds 23
' • Statement of Changes in Fiduciary Net Assets - Pension Trust Funds 24
Notes to Financial Statements 25
Required Supplementary Information Other Than Management's Discussion and Analysis
' • Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -
General Fund 44
• Notes to Required Supplementary Information 45
• Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 47
' • Independent Auditors' Management Letter 51
• Affidavit of Impact Fee Compliance 55
' 2,
' CITY OF OKEECHOBEE, FLORIDA
City Officials
' As of September 30, 2008
James E. Kirk
Mayor, Chairman
Roscoe Lowry Markham
Dowling R. Watford, Jr.
Clayton Williams
' Lydia Jean Williams
Council Members
John R. Cook
City Attorney
Brian Whitehall
' City Administrator
' Lane Gamiotea
City Clerk
' India Riedel
Account Supervisor
' Herbert Smith
Chief of Fire
Denny Davis
' Chief of Police
Donnie Robertson
Director of Public Works
' Oscar Bermudez
City Engineer
3
.r
Independent Auditors' Report
' The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
' We have audited the accompanying financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Okeechobee, Florida, as of and for the year ended September
30, 2008, which collectively comprise the City's basic financial statements as listed in the table of contents. These
' financial statements are the responsibility of the City of Okeechobee, Florida's management. Our responsibility is to
express opinions on these financial statements based on our audit. We did not audit the financial statements of the
fiduciary fund type and the discretely presented component unit. Those financial statements were audited by
' other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the
fiduciary fund type and the discretely presented component unit is based on the reports of the other auditors.
' We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
' reasonable assurance about whether the financial statements are free 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 the 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
opinions.
' In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund information of
the City of Okeechobee, Florida, as of September 30, 2008, and the respective changes in financial position thereof
for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated April 1, 2009, on our
' consideration of the City of Okeechobee, Florida's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
CertffwdPublic Accountants Y a =
215 Baytrec Drive Melbourne, FL 32940 p: (321) 255.0088 F (321) 259.8648
2221 Lee Road, Suite 15 1 Winter Park, FL 32789 1 p: (407) 422.16811 F (407) 423.1681
www.hoyman.com
- - 5
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
Page Two
Management's discussion and analysis (pages 7 through 12) and budgetary comparison information (pages 44
through 45) are not a required part of the basic financial statements but are supplementary information required by
accounting principles generally accepted in the United States of America. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the information and express no
opinion on it. r-*
Hoyman Dobson
Melbourne, Florida
April 1, 2009
i _
f
i
v
i
t.
6
1 CITY OF OKEECHOBEE.) FLORIDA
' Management's Discussion and Analysis
September 30, 2008
' Our discussion and analysis of the City of Okeechobee, Florida's (the City) financial performance provides an
overview of the City's financial activities for the year ended September 30, 2008. Please read it in conjunction
with the City's basic financial statements, which immediately follow this discussion.
FINANCIAL HIGHLIGHTS
The following are highlights of financial activity for the year ended September 30, 2008:
• The City's total assets exceeded its liabilities at September 30, 2008 by $18,564,845.
• The City's total revenues were $6,926,577 for the year ended September 30, 2008, compared to
' total expenses of $5,613,885, which resulted in a $1,312,692 increase in net assets.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The
1 basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to basic financial statements.
' A. Government-Wide Financial Statements
The government-wide financial statements, which consist of the following two statements, are designed to
' provide readers with a broad overview of the City's finances, in a manner similar to a private sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful
' indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net assets changed during the year. All
changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of
the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that
will only result in cash flows in future fiscal periods.
' The government-wide financial statements can be found on pages 15 and 16 of this report.
' B. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated
' for specific activities or objectives. The City's funds can be divided into two fund types: governmental funds and
fiduciary funds.
' Governmental funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
' spendable resources, as well as balances of spendable resources available at the end of the year. Such information
may be useful in evaluating a government's near-term financing requirements.
7
CITY OF OKEECHOBEE, FLORIDA
Management's Discussion and Analysis
September 30, 2008
B. Fund Financial Statements (continued)
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the City's near-tenor financing decisions. Both the governmental fund balance sheet and
the statement of revenues, expenditures and changes in fund balances provide reconciliations to facilitate this
comparison between governmental funds and governmental activities.
The basic governmental fund financial statements can be found on pages 18 through 22 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statement because the resources
of those funds are not available to support the City's own programs.
j The basic fiduciary fund financial statements can be found on pages 23 and 24 of this report.
C. Notes to Basic Financial Statements
The notes provide additional information that is essential for a full understanding of the data provided in the
government-wide and fund financial statements. The notes to basic financial statements can be found on pages
25 through 41 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of financial position. The following table
reflects the condensed government-wide statement of net assets.
City of Okeechobee
Statement of Net Assets
2008 2007
j Current and other assets $ 11,852,801 $ 10,965,592
j Capital assets 7,815,361 7,239,350
Total assets 19,668,162 18,204,942
Other liabilities 203,591 260,562
Noncurrent liabilities 899,726 692,227
Total liabilities 1,103,317 952,789
Net assets:
Invested in capital assets, net of related debt 7,220,632 6,817,917
Restricted 787,942 1,341,393
Unrestricted 10,556,271 9,092,843
Total net assets $ 18,564,845 $ 17,252,153
a 8.
' CITY OF OKEECHOBEE, FLORIDA
' Management's Discussion and Analysis
September 30, 2008
' Governmental Activities
' Total net assets increased by approximately $1.3 million primarily as a result of an approximately $1.5 million
increase in total assets, offset by the approximately $200,000 increase in non-current liabilities, due primarily to
the addition of the capital lease for the CAD system. The increase in total assets was due to an approximately
' $635,000 increase in cash and cash equivalents, combined with an approximately $576,000 increase in capital
assets, which was due largely to the completion of the commerce park project. The increase in cash resulted
mainly from revenues exceeding expenditures in the general fund.
The following table shows condensed revenue and expense data:
' City of Okeechobee, Florida
Statement of Activities
'
REVENUES: 2008 2007
' Program revenues:
Charges for services $ 777,979 $ 801,798
Operating grants and contributions 820,690 723,757
Capital grants and contributions 196,560 602,489
' General revenues:
Property taxes 2,205,807 2,168,099
Public utility taxes 802,096 838,959
' Franchise fees 545,528 571,394
Shared revenues 1,298,145 1,246,198
Investment income and other 279,772 1,072,465
' Total revenues 6,926,577 8,025,159
EXPENSES:
General government 1,186,333 1,161,038
Public safety 3,074,911 2,884,814
Transportation 611,782 765,519
' Physical environment 712,910 838,922
Interest on long-term debt 27,949 24,253
' Total expenses 5,613,885 5,674,546
Change in net assets 1,312,692 2,350,613
' NET ASSETS, beginning 17,252,153 14,901,540
NET ASSETS, ending $ 18,564,845 $ 17,252,153
9,
CITY OF OKEECHOBEE, FLORIDA
Management's Discussion and Analysis ^
F
September 30, 2008
Governmental Activities (continued) i
The City experienced a decrease of approximately 13.7% in total revenues - a $1.1 million decrease to $6.9
million. Capital grants and contributions decreased approximately $406,000 based on the completion of the _J
Commerce Park Street Project. The approximately $793,000 decrease in investment income and other revenue is
due primarily to the prior year sale of a commercial lot within the commerce park. There were no such lot sales in
the current year. Total expenses decreased approximately $61,000. A reduction in insurance costs from changing
plans, and a reduction in required pension contributions are major factors in decreasing expenses even with an
increase in salary and fuel costs.
FUND FINANCIAL ANALYSIS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental funds. The focus of the City's governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. In particular, unreserved fund balance may serve as a useful measure of a
government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$10,916,675, an increase of $922,193 in comparison with the prior year. Approximately 90.8 percent of this total
amount, $9,917,324, constitutes unreserved fund balance, which is available for spending at the government's
discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it
{ has already been committed 1) for public facilities of $785,345 and 2) for a variety of other restricted purposes of
$214,006.
i
The general fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund
balance of the general fund was $9,179,614 while total fund balance was $10,176,368. As a measure of the
I' general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total
1 fund expenditures. Unreserved fund balance and total fund balance represent approximately 131% and 145% of 7
total general fund expenditures, respectively.
a
The Community Development Capital Project fund has a fund balance of $6,574 from interest income as of
September 30, 2008. The community development project was being funded on a reimbursement basis with
j federal and state grant funds.
l
i
^
i
a
I ~
10
a s,
CITY OF OKEECHOBEE, FLORIDA
Management's Discussion and Analysis
September 30, 2008
' General Fund Budgetary Highlights
The amount appropriated for expenditures decreased from $8,070,939 to $7,030,370, a decrease of $1,040,569.
The amounts expended in the categories of police exceeded the budgeted amounts by a total of $201,955, which
was predominantly offset by an excess of actual versus budgeted capital lease proceeds. The variances between
' budgeted and actual items were due primarily to costs associated with the capital lease entered into for the CAD
system.
CAPITAL ASSETS AND LONG-TERM LIABILITIES
' Capital assets. The City's investment in capital assets as of September 30, 2008, amounts to $7,815,361 (net of
accumulated depreciation). This investment in capital assets includes land, buildings, improvements, equipment,
' and construction in progress. During the year, the City's net capital asset balance increased $576,011 from
$7,239,350.
Major changes to capital assets during the current fiscal year included the following:
• Entered into a lease for twenty-four police vehicles.
• Sold 24 used police vehicles.
• Purchase of equipment (2-dump trucks and a tractor).
' • Laser fiche expansion for records retention
• Completion of Commerce Park street project
• Asphalt and resurfacing of streets
• Entered into a lease/purchase for CAD system
• Commencement of additional storm water retention
• Apparatus and equipment for ladder truck
City's Capital Assets
' (net of depreciation)
2008 2007
Land $ 1,257,925 $ 1,257,925
' Buildings 1,198,599 1,252,517
Improvements other than
building 3,628,846 3,319,233
' Equipment 1,214,794 904,615
Construction in progress 515,197 505,060
Total $ 7,815,361 $ 7,239,350
Additional information on the City's capital assets can be found in note 4.C. on pages 34 through 35 of this
' report.
' 11.
CITY OF OKEECHOBEE, FLORIDA
Management's Discussion and Analysis
September 30, 2008
Long-term Liabilities
City's Outstanding Debt
Long-term Liabilities
2008 2007
Capital leases $ 594,729 $ 421,433
Compensated absences 304,997 270,794
Total $ 899,726 $ 692,227
The City's long-term liabilities increased $207,499 during the current fiscal year. The addition of a new capital
! lease for a replacement CAD system for public safety was the major increase for the long-term liabilities, as well
as the increased additional liability for compensated absences.
Additional information on the City's long-term debt can be found in notes 4.E. and 4.F. on pages 35 through 36
of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
~ r.
The City Council adopted the millage rate 6.7432 for budget year 2009 as compared to 6.5010 for 2008. With the
implementation of the additional homestead exemption up to $25,000 and the exemption of up to $25,000 of
tangible personal property tax for businesses, the taxable value prior to new construction decreased by $24.19
million. New construction values added $11.05 million, leaving a net decrease affect from last year of $13.14
1
million
Revenues for the fiscal year 2009 adopted budget for all funds of the City total approximately $17,700,000, an
increase from the prior year budget of approximately $2.0 million. These revenues represent restricted and
unrestricted fund balances including General, Public Facility, Capital Projects, and Special Law Enforcement
I
funds. The change in revenue is based mostly on the Capital Improvement Project Fund which includes the fund
balance for the prior year's sale of land as well as additional revenue. The New Local Option Gas Tax will be
{ received for the full fiscal year as well as the addition of the Ninth cent to the split of gas tax revenues between
! the city and the county which also will affect the transportation revenues.
Expenditures for the fiscal year 2009 adopted budget for all funds of the City total approximately $6,900,000, a
decrease of approximately 4.17% from the prior year budget for all funds of approximately $7,200,000. Changes
to the 2009 budget, coupled with a 7.7% decrease in expenditures in the 2008 budget, results in an 11.87%
decrease over a two-year period. The major changes occur in the General Fund and Public Facilities Fund.
REQUESTS FOR INFORMATION
A
This financial report is designed to provide a general overview of the City of Okeechobee's finances for all those
with an interest. Questions concerning any of the information provided in this report or requests for additional
information should be addressed to the City of Okeechobee, 55 S.E. Third Avenue, Okeechobee, Florida 34974.
12
1
1
BASIC FINANCIAL STATEMENTS
1
1
1
1
1
1
1
1
1
13.
n
i~
6r
I
THIS PAGE IS INTENTIONALLY LEFT BLANK.
j
i
i
i
~ i
J
y.1
11
V
i
r~
9
A
1
..i
i
i
a
ai
u
i '
i
u
I ~
14
' CITY OF OKEECHOBEE, FLORIDA
' Statement of Net Assets - Governmental Activities
September 30, 2008
' ASSETS
Cash and cash equivalents $ 10,498,823
Investments 217,697
' Accounts receivable 103,620
Due from other governments 310,677
Inventory 23,717
' Overfunded pension costs 698,267
Capital assets:
' Nondepreciable
Land 1,257,925
Construction in progress 515,197
Depreciable, net of accumulated depreciation
Buildings 1,198,599
Improvements other than buildings 3,628,846
' Equipment 1,214,794
Total assets 19,668,162
' LIABILITIES
Accounts payable 132,758
Accrued expenses 30,986
Unearned revenue 39,847
Noncurrent liabilities:
Due within one year 142,952
Due in more than one year 756,774
Total liabilities 1,103,317
NET ASSETS
Invested in capital assets, net of related debt 7,220,632
' Restricted for:
Law enforcement 2,597
Public facilities 785,345
' Unrestricted 10,556,271
Total net assets $ 18,564,845
The accompanying notes are an integral part of this fmancial statement. 15
CITY OF OKEECHOBEE, FLORIDA
Statement of Activities - Governmental Activities
Year Ended September 30, 2008
Program Revenues Net (Expense)
Operating Capital Revenue and ,
Charges for Grants and Grants and Changes in
Functions/Programs Expenses Services Contributions Contributions Net Assets
General government $ 1,186,333 $ 683,754 $ 212,951 $ - $ (289,628)
Public safety 3,074,911 30,911 - 44,552 (2,999,448) ;
Transportation 611,782 63,314 607,739 16,442 75,713
Physical environment 712,910 - - 135,566 (577,344)
Interest on long term debt 27,949 - - - (27,949)
Total governmental
activities $ 5,613,885 $ 777,979 $ 820,690 $ 196,560 (3,818,656)
General revenues
2,205,807
Property taxes
Public utility taxes 802,096
Franchise fees 545,528
Shared revenues not restricted to specific programs 1,298,145
Unrestricted investment earnings 272,246
i
Miscellaneous 7,526
Total general revenues 5,131,348
Change in net assets 1,312,692
Net assets, beginning 17,252,153
Net assets, ending $ 18,564,845
77
r.
The accompanying notes are an integral part of this financial statement. 16
U
1
i
i
i
1
1
1
1
1
THIS PAGE IS INTENTIONALLY LEFT BLANK.
1
1
i
i
i
1
1
i
i
17.
i
CITY OF OKEECHOBEE, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2008
Community
Development Nonmajor
General Capital Project Funds
ASSETS
Cash and cash equivalents $ 9,403,713 $ 361,377 $ 733,733
Investments 217,697 -
Accounts receivable 103,620 - '
Due from other governments 310,677 - '
Due from other funds 354,803 -
Inventory 23,717 - r--
Total assets $ 10,414,227 $ 361,377 $ 733,733
1
LIABILITIES AND FUND BALANCES
Liabilities ;
Accounts payable $ 132,758 $ - $
Accrued expenses 30,986 - -
Due to other funds - 354,803 -
Unearned revenue 39,847 -
± Deferred revenue 34,268
Total liabilities 237,859 354,803 -
Fund balances:
f Reserved for:
Encumbrances 187,692 - 6J
Inventory 23,717 - -
Law enforcement - - 2,597
Public facilities 785,345 - -
Unreserved, undesignated 9,179,614 6,574 731,136
Total fund balances 10,176,368 61574 733,733
Total liabilities and fund balances $ 10,414,227 $ 361,377 $ 733,733
Amounts reported for governmental activities in the statement s
of net assets are different because:
Negative net pension obligation resulting from overfunding of
the police officers' and firefighters' pension plans.
Deferred revenue recorded in the funds has been reversed and
recorded as revenue in governmental activities.
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds.
' Long-term liabilities, including capital leases and compensated
absences are not due and payable in the current period and,
therefore, are not reported in the funds.
Net assets of governmental activities
The accompanying notes are an integral part of this financial statement. 18
Total
' Governmental
Funds
' $ 10,498,823
217,697
' 103,620
310,677
354,803
' 23,717
$ 11,509,337
$ 132,758
' 30,986
354,803
39,847
34,268
592,662
187,692
' 23,717
2,597
785,345
9,917,324
10,916,675
698,267
' 34,268
7,815,361
'
(899,726)
$ 18,564,845
' 19
CITY OF OKEECHOBEE.) FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds
s
Year Ended September 30, 2008 "
Community
Development Nonmajor
General Capital Project Funds "
Revenues
Taxes $ 2,942,449 $ - $ -
Intergovernmental 2,412,307 13,096 -
Charges for services 436,366 - -
Permits and fees 701,544 - 60,994
Fines and forfeitures 41,311 - -
I
Investment earnings 197,214 6,574 13,483
Miscellaneous 7,526 - 4,470
Total revenues 6,738,717 19,670 78,947
Expenditures r'
Current:
u General government 1,095,829 - -
Public safety 2,880,477 - -
Transportation 638,623 - -
Physical environment 471,778 13,096 -
Capital outlay 1,409,485 - -
Debt service: - -
Principal retired 504,926
Interest 27,949 - -
Total expenditures 7,029,067 13,096 -
Excess (deficiency) of revenues
over (under) expenditures (290,350) 6,574 78,947
,
Other financing sources (uses)
Transfers in/(out) (7,007) 7,007 -
Capital lease proceeds 678,222 -
Proceeds from sale of capital assets 448,800 - -
Total other financing sources (uses) 1,120,015 7,007 -
Net change in fund balances 829,665 13,581 78,947
Fund balances (deficit), beginning of year 9,346,703 (7,007) 654,786
$
Fund balances, end of year 10,176,368 $ 6,574 $ 733,733
.
. i
L-
The accompanying notes are an integral part of this financial statement. 20
' Total
Governmental
Funds
$ 2,942,449
' 2,425,403
436,366
' 762,538
41,311
217,271
' 11,996
6,837,334
1,095,829
' 2,880,477
638,623
' 484,874
1,409,485
' 504,926
27,949
7,042,163
(204,829)
1
678,222
' 448,800
1,127,022
' 922,193
9,994,482
$ 10,916,675
' 21
CITY OF OKEECHOBEE, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
Year Ended September 30, 2008
Net change in fund balances - total governmental funds $ 922,193
Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report capital outlays as expenditures. However, in
the statement of activities, the cost of those assets is allocated over
their estimated useful lives as depreciation expense. This is the
' amount by which capital outlays exceeded depreciation in the current
period. 1,032,218
In the statement of activities, only the gain (loss) on the sale of capital assets
is reported, whereas in the governmental funds, the proceeds from the sale
j increase financial resources. Thus, the change in net assets differs from
the change in fund balance by the book value of the capital assets sold. (456,207)
The net effect of overfunded pension contributions that are reported as
expenditures in the fund financial statements and are recorded
as a net pension asset on the statement of net assets. (2,565)
The issuance of long-term debt (capital lease) provides current financial
resources to governmental funds, while the repayment of the principal r
of long-term debt consumes the current financial resources of
governmental funds. Neither transaction, however, has any effect on
net assets. This amount is the net effect of these differences in the
treatment of long-term debt and related items. (173,296)
I
Some revenue is recorded in the statement of activities, but since it does not
provide current financial resources is not reported as revenue in the funds. 34,268
Revenues related to the sale of fill dirt in the statement of activities that do
not provide current financial resources are not reported as revenues in
the funds. This is the amount of revenue related to the sale of fill dirt
recorded in the statement of activities in the prior year, and now being
reported as revenue in the governmental funds in the current year. (9,716)
t Compensated absences are reported in the statement of activities when earned.
As they do not require the use of current financial resources, they are not
reported as expenditures on governmental funds until they have matured.
This is the amount of compensated absences reported in the statement of
activities in the prior year that has matured in the current year. (34,203)
Change in net assets of governmental activities $ 1,312,692
22
CITY OF OKEECHOBEE, FLORIDA
' Statement of Fiduciary Net Assets - Pension Trust Funds
September 30, 2008
' COMPONENT
UNIT
' General
Pension Employees'
' Trust Funds Pension Trust
ASSETS
' Cash equivalents $ 202,906 $ 288,406
Investments:
Mutual funds 6,561,893 5,129,887
' Receivables 69,650 52,356
Total assets 6,834,449 5,470,649
' LIABILITIES
Accounts payable 11,793 16,753
' NET ASSETS
Held in trust for pension benefits $ 6,822,656 $ 5,453,896
The accompanying notes are an integral part of this financial statement. 23
CITY OF OKEECHOBEE, FLORIDA
Statement of Changes in Fiduciary Net Assets - Pension Trust Funds
Year Ended September 30, 2008
COMPONENT
UNIT
General
Pension Employees'
Trust Funds Pension Trust `y
ADDITIONS
Contributions:
State $ 196,875 $ -
City 137,694 342,256
Employees 68,957 184,174
Total contributions 403,526 526,430 17
Investment earnings:
I
Net depreciation in the
fair value of investments (939,528) (730,260)
Interest and dividends 78,355 63,676 e
Total investment earnings (861,173) (666,584)
Less investment expenses (46,040) (36,659)
Net investment loss (907,213) (703,243)
1
Total additions (reductions) (503,687) (176,813)
DEDUCTIONS
Benefits paid to participants 178,619 198,516
Refunds on termination 14,976 32,980
Administrative expenses 34,010 18,306
Total deductions 227,605 249,802
Change in net assets (731,292) (426,615)
Net assets held in trust for pension
j benefits, beginning of year 7,553,948 5,880,511
Net assets held in trust for pension
benefits, end of year $ 6,822,656 $ 5,453,896
.k
.rn
rib
The accompanying notes are an integral part of this financial statement. 24
' CITY OF OKEECHOBEE FLORIDA
' Notes to Financial Statements
September 30, 2008
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
' A. REPORTING ENTITY
The City of Okeechobee (the City) was originally incorporated in 1915 and its present charter was adopted in 1919
' under Chapter 8318 of Special Acts of 1919. The City operates under the council form of government and provides
the following services: general government, public safety, transportation, and physical environment.
' These financial statements present the primary government and its component units. Blended component units,
although legally separate entities, are, in substance, part of the government's operations and so data from these units
are combined with data of the primary government. The City has no blended component units. Discretely presented
component units are entities that are legally separate from the City, but whose relationship with the City are such
that the exclusion would cause the City's financial statements to be misleading or incomplete. The financial data of
these entities are reported in a separate column in the combined financial statements.
' Discretelv Presented Component Unit
' City of Okeechobee and Okeechobee Utility Authority Employees' Retirement System - Substantially all of the
City's general employees and the employees of the Okeechobee Utility Authority participate in this cost sharing,
multiple employer public employee retirement system. The plan was established by City Ordinance No. 655, as
amended and restated by City Ordinance No. 686.
Complete financial statements for this component unit may be obtained from the City's administrative offices
located at:
55 S. E. Third Avenue
Okeechobee, Florida 34974
' B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
' The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net
assets) report information on all of the nonfiduciary activities of the primary government. Governmental
activities are those which normally are supported by taxes and intergovernmental revenues. Likewise the primary
' government is reported separately from certain legally separate component units for which the primary
government is financially accountable.
' The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by
program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program reve-
nues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
' privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function. Taxes and other items not properly included
among program revenues are reported instead as general revenues.
25,
CITY OF OKEECHOBEE.) FLORIDA
Notes to Financial Statements
September 30, 2008
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the fiduciary fund financial statements. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as
1 revenue as soon as all eligibility requirements imposed by the provider have been met.
II
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues
to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded
j only when payment is due.
' Property taxes, franchise taxes, licenses, charges for services, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues of the current
fiscal period. All other revenue items are considered to be measurable and available only when cash is
received by the government.
The City reports the following major governmental funds:
The general fund is the City's primary operating fund. It accounts for all financial resources of the general
government, except those required to be accounted for in another fund. h
The community development capital project fund accounts for the assets, liabilities, revenues and
expenditures related to the construction of infrastructure and other improvements in the City of
Okeechobee, Florida.
I
Additionally, the City reports the following fund types:
v
The pension trust fund account is used to account for assets held by the City in a fiduciary capacity for the
ji police officers' and firefighters' pension plans. The funds are operated by carrying out specific terms of
statutes, ordinances and other governing regulations.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are
followed in the government-wide financial statements to the extent that those standards do not conflict with or
contradict guidance of the Governmental Accounting Standards Board.
n
The effect of interfund activity has been eliminated from the government-wide financial statements.
26,
CITY OF OKEECHOBEE.) FLORIDA
Notes to Financial Statements
September 30, 2008
' NOTE 1- SUIVEVIARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
' C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION (CONTINUED)
' Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally
dedicated resources are reported as general revenues rather than as program revenues. Likewise, general
' revenues include all taxes.
Expenses for compensated absences are allocated based on the assigned function of the related employee.
' When both restricted and unrestricted resources are available for use, it is the government's policy to use
restricted resources first, then unrestricted resources as they are needed.
' D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY
' 1. Cash and investments
The investment of municipal funds is authorized by local ordinance and Florida Statutes which allow the City to
' invest in the Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized
pursuant to the Florida Interlocal Cooperation Act, SEC registered money market funds with the highest credit
quality rating, interest-bearing time deposits or savings accounts in qualified public depositories, direct obligations
of the U.S. Treasury, commercial paper with certain ratings, pre-refunded municipal obligations, banker's
' acceptances maturing within one year, investment agreements, direct and general long-term and short-term
obligations of any state with proper credit rating and full faith and credit pledge, municipal obligations with
proper credit rating and repurchase agreements with maturities of 30 days or less with organizations with certain
' stipulations and requirements.
The City of Okeechobee, Florida invests certain surplus funds in an external investment pool, the Local Government
' Surplus Funds Trust Fund (the "State Pool"). The State Pool is administered by the Florida State Board of
Administration ("SBA"), who provides regulatory oversight. During the year ended September 30, 2008, the SBA
reported that the State Pool was exposed to potential risks due to indirect exposure in the sub-prime mortgage
' financial market. Consequently, the SBA placed some restriction on how participants could access portions of their
surplus funds and ultimately restructured the State Pool into two separate pools ("LPIG" and "Fund B").
' The LPIG has adopted operating procedures consistent with the requirements for a 20-like fund. The City of
Okeechobee, Florida's investment in the LPIG is reported at amortized cost. The fair value of the City's position in
the pool is equal to the value of pooled shares.
' The Fund B is reported at fair value, determined by the fair value per share of the pool's underlying portfolio.
' The City pools the investments of its governmental funds. Investment earnings of the pool are allocated to the
participating funds at the end of each month based on the ratio of each participant funds' investment to the total
pooled investment.
27
CITY OF OKEECHOBEE, FLORIDA
Notes to Financial Statements
r
September 30, 2008
NOTE 1- SUNIldARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED)
i
1. Cash and investments (continued)
Cash and cash equivalents include cash deposits, cash funds held in broker accounts, and investments held in the
Local Government Surplus Funds Trust Fund (LPIG).
Within the pension trust funds, plan assets are managed by Trusco Capital Management, Inc. The plans follow the
investment guidelines as established within the ordinance. The pension trust funds are allowed to invest in the State
Pool; obligations of the U.S. Government or agencies thereof; banking institutions within the state and other such
institutions within the guidelines of the state statutes which are insured by the Federal Deposit Insurance
' Corporation; investments agreements; direct and general long-term obligations of any state with proper credit rating
and full faith and credit pledge; municipal obligations with proper credit rating; annuity and life insurance contracts;
bonds issued by the State of Israel; and stocks, bonds, and commingled funds administered by National or State
banks or evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United
States, provided that the corporation is listed on a nationally recognized exchange and holds proper credit ratings as
set forth by a major credit rating service. These equity investments are not to exceed 60% of the assets of the
pension trust funds on a cost basis. Temporary investment funds held by the custodian in a money market fund are
classified as cash equivalents within the investment account.
a
Pension trust fund investments are reported at fair value. Short-term investments are reported at cost, which
approximates fair value. Securities traded on a national or international exchange are valued at the last reported
sales price. Mutual funds, comprised of proprietary funds and common and collective funds, are valued at net
asset value based on the underlying investments. Interest is recognized when earned. Gains and losses from the
i
sale or exchange of investments are recognized on the transaction date. The difference between the excess of air
value over cost represents unrealized gains.
2. Receivables and payables
All trade and property tax receivables are considered to be fully collectible.
The City's property tax is levied annually on the real and personal property located in the City on January 1st of
the prior year. Tax collections by the Okeechobee County tax collector begin in November of each year with a
due date of March 31 of the following year. All property taxes remaining unpaid at May 30 are subject to a tax
certificate sale. '
The City is permitted by state law to levy taxes up to 10 mills on assessed valuation for the General Fund. The tax
rate for the fiscal year was 6.501 mills.
ai
w~l
ti
•.i
28,
CITY OF OKEECHOBEE, FLORIDA
' Notes to Financial Statements
September 30, 2008
' NOTE 1- SUNEKARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
' D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED)
Z Receivables and payables (continued)
' The City Council determines the millage rates and adopts a tax levy by resolution prior to September 30 to fund the
next ensuing fiscal year's budget. The assessment of all properties and collection of municipal taxes are provided by
' the County's Property Appraiser and Tax Collector. The ad valorem tax calendar is as follows:
Lien date - January 1
' Levy date - Prior to September 30
Due date - November 1
Delinquent date - April 1
All property taxes remaining unpaid at May 30 are subject to a tax certificate sale by the Tax Collector.
3. Inventory
Inventories are valued at cost which approximates market, using the first-in/first-out (FIFO) method. The costs of
inventories are recorded as expenditures when used (consumption method).
4. Capital assets
' Capital assets, which include: property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the government-wide financial statements. Capital assets are
defined by the government as assets with an initial, individual cost of more than $750 and an estimated useful life
' in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
' The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets'
lives are not capitalized.
' Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant, and equipment is depreciated using the straight-line method over the following estimated useful
' lives:
Assets Years
Buildings 25-60
Building improvements 12-20
Vehicles 10
Equipment 5-15
29
CITY OF OKEECHOBEE.) FLORIDA
Notes to Financial Statements
September 30, 2008
^
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. ASSETS LIABILITIES, AND NET ASSETS OR EQUITY (CONTINUED)
5. Compensated absences
1
It is the government's policy to permit employees to accumulate earned but unused vacation and sick pay benefits.
All sick and vacation pay is accrued when incurred in the government-wide financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of employee ^
's resignations and retirements.
i
6. Unearned revenues
i
Unearned revenues include amounts collected before the revenue recognition criteria are met. The unearned
items consist primarily of license and permit revenues.
i
7. Deferred revenues
Deferred revenues include receivables which, under the modified accrual basis of accounting, are measurable
f
but not yet available to finance expenditures of the current fiscal period.
8. Long-term obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as
liabilities in the statement of net assets.
In the governmental fund financial statements, the face amount of debt issued is reported as other financing
sources.
9. Fund equity
in the fund financial statements, governmental funds report reservations of fund balance for amounts that are not
available for appropriation or are legally restricted by outside parties for use for a specific purpose. Reserves for
encumbrances represent amounts remaining on outstanding purchase orders and contracts that are not available for
appropriation. Reserves for inventory represent amounts paid from current resources for use in future years that are
not available for appropriation. Reserves for law enforcement and public facilities represent amounts that are legally
restricted by outside parties for specific purposes.
j .10. Change in presentation
In the fund financial statements, governmental funds reported approximately $571,000 of franchise fees as taxes in
the prior year. However, due to changes in the State Chart of Accounts, current year franchise fees of approximately
$545,000 are reported as permits and fees. ,.w
In the fund financial statements, governmental funds reported approximately $61,000 of business tax receipts as ;
permits and fees in the prior year. However, due to changes in the State Chart of Accounts, current year business tax
receipts of approximately $71,000 are reported as taxes.
30.
CITY OF OKEECHOBEE.) FLORIDA
' Notes to Financial Statements
September 30, 2008
' NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
' A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET ASSETS
' The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and
net assets governmental activities as reported in the government-wide statement of net assets. One element of that
reconciliation states that "deferred revenue recorded in the funds has been reversed and recorded as revenue in the
' governmental activities." The details of this $34,268 difference are as follows:
FEMA grant revenue - Tropical Storm Fay $ 15,976
Charges for services - maintenance contract with FDOT 18,292
Net adjustment to increase fund balance - total governmental funds
to arrive at net assets-governmental activities $ 34,268
' Another element of that reconciliation states that "long-term liabilities, including capital leases and compensated
absences, are not due and payable in the current period and therefore, are not reported in the funds." The details
of this $(899,726) difference are as follows:
Capital leases payable $ (594,729)
Compensated absences (304,997)
Net adjustment to reduce fund balance - total governmental funds
to arrive at net assets-governmental activities $ (899,726)
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a
' reconciliation between net changes in fund balances - total governmental funds and changes in net assets of
governmental activities as reported in the government-wide statement of activities. One element of that
reconciliation explains that "governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated useful lives and reported as
' depreciation expense." The details of this $1,032,218 difference are as follows:
Capital outlay $ 1,409,485
' Personnel costs related to self-constructed assets 26,841
Depreciation expense (404,108)
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities $ 1,032,218
' 31
CITY OF OKEECHOBEE, FLORIDA
Notes to Financial Statements r'
September 30, 2008
NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
(COTINUED)
I a
B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES (CONTINUED)
Another element of that reconciliation states that "the issuance of long-term debt (e.g., bonds, leases) provides
current financial resources to governmental funds, while the repayment of the principal of long-term debt ,
consumes the current financial resources of governmental funds." Neither transaction, however, has any effect on x
net assets. The details of this $(173,296) difference are as follows:
Debt issued or incurred:
$ (678,222) -i
Capital lease financing
Principal repayments 504,926
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities $ (173,296)
Another element of that reconciliation states that "some revenues are recorded in the statement of activities, but
since they do not provide current financial resources, are not reported as revenue in the funds." The details of this
$34,268 difference are as follows:
FEMA grant revenue - Tropical Storm Fay $ 15,976
Charges for services - maintenance contract with FDOT 18,292
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities $ 34,268
NOTE 3 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
As permitted by GASB Statement No. 34, Basic Financial Statements and Management Discussion and Analysis
for State and Local Governments, the City has elected to disclose all budgetary information in the notes to the
required supplementary information.
NOTE 4 - DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
At year end, the City's (Primary Government) carrying amount of deposits was $10,498,485 and the bank balance
was $10,602,400. Monies invested in amounts greater than the FDIC insurance coverage are secured by the banks
pledging securities with the State Treasurer in the multiple financial institutions collateral pool. See also previous
information outlined in Note 1.D.1 regarding the City's policies on cash and investments. In addition, the City
maintained $324 of petty cash. Effective October 3, 2008, the federal government temporarily increased the
FDIC deposit insurance from $100,000 to $250,000 per depositor through December 31, 2009, at which time it
will revert back to $100,000.
32
CITY OF OKEECHOBEE, FLORIDA
' Notes to Financial Statements
September 30, 2008
' NOTE 4 - DETAILED NOTES ON ALL FUNDS (CONTINUED)
' A. DEPOSITS AND INVESTMENTS (CONTINUED)
At September 30, 2008, the City had the following investments:
Primary government:
SBA (LGIP) $ 14
' SBA Fund B 217,697
Primary government total $ 217,711
Pension trust funds:
' Money market $ 491,312
Stock mutual fund 6,033,456
International stock mutual fund 868,264
' Bond mutual fund 4,790,060
Pension trust funds total $ 12,183,092
Credit risk
Fixed income securities have inherent financial risks, including credit risk and interest rate risk. Credit risk for fixed
1 income securities is the risk that the issuer will not fulfill its obligations. The City's investment policy and the
investment policies for the pension trust funds limit investments to securities with specific ranking criteria. As of
September 30, 2008, the City's investment in the LPIG was rated AAAm by Standard & Poors. As of September
30, 2008, the City's investment in Fund B was unrated. As of September 30, 2008, the City's pension trust funds
investment in bond mutual funds was unrated.
' Interest rate risk
Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect an
' investment's fair value. In accordance with Florida Statute 218.415(6), the City's policy is to match investment
maturities with known cash needs and anticipated cash flow requirements. The City's pension trust funds do not
address interest rate risk. As of September 30, 2008, the LPIG had a weighted average maturity of 8.5 days and
the Fund B had a weighted average life of 9.36 years. As of September 30, 2008, the City's pension trust funds
' investments in money market funds had a weighted average maturity of 33 days. As of September 30, 2008, the
City's pension trust funds investments in bond mutual funds had a weighted average maturity of 7 years with an
effective duration of 3.6 years.
' Concentration of credit risk
' Concentration of credit risk is an increased risk of loss that occurs as more investments are acquired from one
issuer (i.e. lack of diversification). The City's investment policy and the investment policies for the pension trust
funds do not specifically address concentration of credit risk.
1 33.
CITY OF OKEECHOBEE, FLORIDA
Notes to Financial Statements
September 30, 2008
NOTE 4 - DETAILED NOTES ON ALL FUNDS (CONTINUED)
I
B. RECEIVABLES
Receivables as of September 30, 2008 are as follows:
j Municipal Municipal Component Unit t
Police Officers' Firefighters' General "
Pension Pension Employees
{ General Fund Trust Trust Pension Trust
j Franchise/Utility taxes $ 95,049 $ - $ - $ -
Contributions - 41,444 28,206 52,356
Other 8,571 - - -
Receivables, net $ 103,620 $ 41,444 $ 28,206 $ 52,356
i C. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2008 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
' Capital assets, not being depreciated: $ 1,257,925
Land $ 1,257,925 $ - $
Construction in progress 505,060 515,197 (505,060) 515,197
!
Total capital assets, not being depreciated 1,762,985 515,197 (505,060) 1,773,122
Capital assets, being depreciated: 1,673,013
Buildings 1,673,013 - -
Improvements other than buildings 4,121,755 505,060 - 4,626,815
Equipment 1,855,269 921,129 (523,521) 2,252,877
Total capital assets being depreciated 7,650,037 1,426,189 (523,521) 8,552,705 17
Less accumulated depreciation for:
Buildings (420,496) (53,918) - (474 414)
Improvements other than buildings (802,522) (195,447) - (997,969) H
Equipment (950,654) (154,743) 67,314 (1,038,083)
Total accumulated depreciation (2,173,672) (404,108) 67,314 (2,510,466)
Total capital assets, being depreciated, net 5,476,365 1,022,081 (456,207) 6,042,239
it
Governmental activities capital assets, net $ 7,239,350 $ 1,537,278 $ (961,267) $ 7,815,361
Included in current year construction in progress additions are $26,841 of personnel costs related to self-
constructed assets, which are not included in capital outlay in the statement of revenues, expenditures, and
changes in fund balances.
1
tir
34,
CITY OF OKEECHOBEE, FLORIDA
' Notes to Financial Statements
September 30, 2008
NOTE 4 - DETAILED NOTES ON ALL FUNDS (CONTINUED)
' C. CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to functions/programs of the government as follows:
Governmental activities:
General government $ 17,138
' Public safety 156,781
Physical environment 230,189
Total depreciation expense - governmental activities $ 404,108
' D. INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
' The composition of interfund balances as of September 30, 2008, is as follows:
Due to/from other funds:
' Receivable Fund Payable Fund Amount
General Community Development Capital Project $ 354,803
The City's capital projects are partially funded by federal grants on a reimbursement basis. The City advanced
funds from the General Fund to the Capital Project Fund for the payment of the project costs.
' E. CAPITAL LEASE
The government has entered into lease agreements as lessee for fmancing the acquisition of certain computer
equipment and vehicles for the police, fire and public works departments. These lease agreements qualify as capital
leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease
' payments as of the inception dates.
The assets acquired through the capital lease are as follows:
1 Asset:
Vehicles $ 483,384
Equipment 194,838
Total assets 678,222
Less: Accumulated depreciation (39,233)
Total $ 638,989
' 35
CITY OF OKEECHOBEE.) FLORIDA
Notes to Financial Statements r
September 30, 2008
NOTE 4 - DETAILED NOTES ON ALL FUNDS (CONTINUED)
E. CAPITAL LEASE (CONTINUED)
Obligations of governmental activities under the capital lease at September 30, 2008, were as follows:
j Year Ending Sept. 30, Principal Interest Total
2009 $ 86,875 $ 29,510 $ 116,385
91,499 24,886 116,385
2010
2011 170,260 19,125 189,385 2012 204,269 9,447 213,716
2013 41,826 507 42,333
Total $ 594,729 $ 83,475 $ 678,204
F. CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended September 30, 2008, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental 17
activities:
Capital lease $ 421,433 $ 678,222 $ (504,926) $ 594,729 $ 86,875
Compensated absences 270,794 140,740 (106,537) 304,997 56,077
Long-term liabilities $ 692,227 $ 818,962 $ (611,463) $ 899,726 $ 142,952
i For the governmental activities, compensated absences and capital leases are generally liquidated by the general
fund.
NOTE 5 - v i riLri INFORMATION
A. RISK MANAGEMENT
but not limited to theft, damage or destruction of its
The City is exposed to various risks of loss, including,
buildings, equipment, records, and monetary assets, and liability for personal injury, property damage, and
consequences of employee and public official actions. The City participates in a non-assessable public risk pool to
cover significant loss exposure and purchases commercial insurance for third party pollution liability coverage. The
j pool maintains a loss reserve and purchases specific excess insurance, aggregate excess insurance and multiple
loss coverage from commercial carriers and underwriters.
`s
L.i
i
A
v
i
36,
~i
'
CITY OF OKEECHOBEE, FLORIDA
' Notes to Financial Statements
September 30, 2008
' NOTE 5 - OTHER INFORMATION (CONTINUED)
' B. RETIREMENT COMMITMENTS - DEFINED BENEFIT PLANS
Plan Descriptions - The City contributes to two single-employer defined benefit pension plans: City of Okeechobee
' Municipal Police Officers' Pension Trust Fund and City of Okeechobee Municipal Firefighters' Pension Trust Fund
(the Plans). The Plans provide retirement, disability, and death benefits to plan members and their beneficiaries.
Chapters 185 and 175 of the Florida Statutes establish the minimum benefits and the minimum standards for the
' operation and funding of the Police Officers' and the Firefighters' Municipal Pension Trust Funds, respectively. Per
City Ordinances Nos. 750 and 749, sole responsibility for administering the Plans is vested in the Board of Trustees
of each plan. The Boards cannot amend the provisions of the plans without the approval of the City. The Plans issue
' publicly available financial reports that include financial statements and required supplementary information. The
reports are available from the City of Okeechobee, Florida, 55 S.E. Third Avenue, Okeechobee, Florida 34974.
' Funding Policies - The contribution requirements of plan members and the City are established and may be
amended by City ordinance. Plan members are required to contribute 5% of their annual covered salary for the
Police Officers' and Firefighters' Municipal Trust Funds. The City is required to contribute an amount equal to the
' difference in each year between the total aggregate member contributions for the year, plus state contributions for
such year, and the normal cost for the year, as shown by the most recent actuarial valuation of the plan; the current
rate is 10.26% for the Police Officers' plan and 1.26% for the Firefighters' plan.
' The City recognized as revenues and expenditures on-behalf payments relating to pension contributions for its
public safety employees that the State of Florida paid to the Police Officers' and Firefighters' Plans in the amounts
of $134,181 and $62,694, respectively. These contributions are funded by an excise tax upon certain casualty
' insurance companies on their gross receipts of premiums from policy holders.
Annual Pension Cost - The annual required pension contributions for the Plans were determined as part of the
' October 1, 2008 actuarial valuations using the aggregate actuarial cost method. The aggregate actuarial cost method
does not identify or separately amortize unfunded actuarial liabilities. The actuarial assumptions included (a) 7%
investment rate of return (net of administrative expenses) for both the Police Officers' Trust and Firefighters' Trust
and (b) projected salary increases of 6% and 7% for the Police Officers' Trust and Firefighters' Trust, respectively.
Both (a) and (b) included an inflation component of 3.5% and 4% for the Police Officers' Trust and Firefighters'
Trust, respectively. The actuarial value of assets was determined using a method which recognizes actual investment
' return in excess of the assumed return evenly over a four year period.
37
CITY OF OKEECHOBEE, FLORIDA -
Notes to Financial Statements
September 30, 2008
NOTE 5 - OTHER INFORMATION (CONTINUED) B. RETIREMENT COMMITMENTS - DEFINED BENEFIT PLANS (CONTINUED)
Trend information for each of the City's defined benefit plans:
Annual Percentage Net
Year Pension Of APC Pension
Ended Cost (APC) Contributed Obligation
Municipal Police Officers' 9/30/06 $ 278,439 96 % $ (348,367)
9/30/07 255,926 96 (339,019)
9/30/08 235,107 96 (328,640)
17
Municipal Firefighters' 9/30/06 $ 80,824 96 % $ (357,774)
9/30/07 80,896 105 (361,813)
9/30/08 69,288 111 (369,627)
a
Pension Plan - Discretelv Presented Comoonent Unit
Plan Description - The City contributes to the City of Okeechobee and Okeechobee Utility Authority Employees'
Retirement System (the System), a cost-sharing multiple employer defined benefit pension plan administered by
the System's Board of Trustees. The System provides retirement, disability, and death benefits to plan members
and their beneficiaries. The Board of Trustees is authorized by City Ordinance No. 686 to establish and amend all
plan provisions. The System issues a publicly available financial report that includes financial statements and
required supplementary information. That report is available from the City of Okeechobee, Florida, 55 S.E. Third
Avenue, Okeechobee, Florida 34974.
Funding Policy - The contribution requirements of the plan members and the City are established and may be
amended by City ordinance. Plan members are required to contribute 6% of their covered annual salary. The City is
required to contribute at an actuarially determined rate; the current rate is 11.15% of covered payroll. The City's
contributions for the years ended September 30, 2008, 2007, and 2006 were $91,285, $87,634 and $81,262,
{ respectively, and were equal to the required contributions for each year.
1
i
a
i
i;
38.
9
a
'
CITY OF OKEECHOBEE, FLORIDA
' Notes to Financial Statements
September 30, 2008
' NOTE 5 - r, i rj&JOL INFORMATION (CONTINUED)
' B. RETIREMENT COMMITMENTS - DEFINED BENEFIT PLANS (CONTINUED)
Pension trust funds fiduciary net assets activity as of September 30, 2008 was as follows:
' COMPONENT
UNIT
' Police Total General
Firefighters' Officers' Pension Employees'
Pension Pension Trust Funds Pension
' ASSETS
Cash equivalents $ 52,951 $ 149,955 $ 202,906 $ 288,406
Investments:
Mutual funds 1,953,786 4,608,107 6,561,893 5,129,887
Receivables 28,206 41,444 69,650 52,356
Total assets 2,034,943 4,799,506 6,834,449 5,470,649
' LIABILITIES
Accounts payable 4,031 7,762 11,793 16,753
' NET ASSETS
Held in trust for pension
' benefits $ 2,030,912 $ 4,791,744 $ 6,822,656 $ 5,453,896
39,
CITY OF OKEECHOBEE, FLORIDA
Notes to Financial Statements
September 30, 2008
NOTE 5 - v i ri INFORMATION (CONTINUED)
B. RETIREMENT COMMITMENTS - DEFINED BENEFIT PLANS (CONTINUED)
Pension trust funds increase in fiduciary net assets activity as of September 30, 2008 was as follows:
-T
COMPONENT
UNIT
Police Total General
Firefighters' Officers' Pension Employees'
Pension Pension Trust Funds Pension
ADDITIONS
Contributions
State $ 62,694 $ 134,181 $ 196,875 $ -
City 16,014 121,680 137,694 342,256
Employees 23,074 45,883 68,957 184,174
Total contributions 101,782 301,744 403,526 526,430
Investment earnings:
Net depreciation in fair value
of investments (278,079) (661,449) (939,528) (730,260) 17
Interest and dividends 23,664 54,691 78,355 63,676
i Total investment earnings (254,415) (606,758) (861,173) (666,584)
Less investment expenses (13,732) (32,308) (46,040) (36,659)
Net investment loss (268,147) (639,066) (907,213) (703,243)
z~
Total additions (reductions) (166,365) (337,322) (503,687) (176,813)
j DEDUCTIONS
Benefits paid to participants 30,782 147,837 178,619 198,516
Refunds on termination 2,736 12,240 14,976 32,980
j
Administrative expenses 15,418 18,592 34,010 18,306
r.~
Total deductions 48,936 178,669 227,605 249,802
Change in net assets (215,301) (515,991) (731,292) (426,615)
Net assets held in trust for
f
pension benefits, beginning
of year 2,246,213 5,307,735 7,553,948 5,880,511
l
Net assets held in trust for
pension benefits, end of year $ 2,030,912 $ 4,791,744 $ 6,822,656 $ 5,453,896
1
40
' CITY OF OKEECHOBEE FLORIDA
' Notes to Financial Statements
September 30, 2008
NOTE 5 - v i nzR INFORMATION (CONTINUED)
' C. POSTEMPLOYMENT BENEFITS OTHER THAN PENSION
As required by Section 112.0801, Florida Statutes, former employees who have retired prior to October 1, 1987, as
' well as those who retire on or after such date, and their eligible dependents, have the option to participate in the
City's Group Health Insurance Plan. The City requires retirees to pay 100% of the premiums for retirees and their
dependents. However, inclusion of retirees into the Plan represents an implicit cost to the City, as the claims
' experience of active employees is commingled with the claims experience of retirees to determine total health care
costs per employee. The City funds this future implicit cost on a pay-as-you-go basis. As of September 30, 2008,
there are 3 participants (retirees) receiving benefits.
' D. CONCENTRATION - COLLECTIVE BARGAINING UNIT
Members of the City's fire department are covered by a collective bargaining agreement. The agreement with the
' employees covered by the International Association of Firefighter's (IAFF) extends through September 30, 2008.
The agreement was subsequently negotiated through September 30, 2009.
NOTE 6 -SUBSEQUENT EVENTS
' Long-term debt. The City entered into a 5 year capital purchase lease agreement for police vehicles on February 3,
2009. The City will make quarterly payments of $25,570, including principal and interest, through maturity. The
nominal annual interest rate is 4.85%.
41,
'i
_s
THIS PAGE IS INTENTIONALLY LEFT BLANK.
a
.p
u
t
42,
REQUIRED SUPPLEMENTARY INFORMATION u i niv R THAN
MANAGEMENT'S DISCUSSION AND ANALYSIS
43
CITY OF OKEECHOBEE, FLORIDA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
General Fund
Year Ended September 30, 2008
Actual Variance with
Original Final (on Budgetary Final Budget
Budget Budget Basis) Positive (Negative)
Revenues
Taxes $ 2,797,178 $ 2,910,246 $ 2,942,449 $ 32,203
Intergovernmental 2,367,545 2,412,065 2,412,307 242
Charges for services 417,532 418,100 436,366 18,266
Permits and fees 579,948 695,321 701,544 6,223
Fines and forfeitures 28,358 41,307 41,311 4
Investment earnings 160,000 205,232 197,214 (8,018)
Miscellaneous 1,500 13,825 7,526 (6,299)
Total revenues 6,352,061 6,696,096 6,738,717 42,621 v
Expenditures
Current:
F
General government:
Legislative 140,408 123,917 123,904 13
Executive 165,396 152,165 152,091 74
City Clerk 186,914 180,279 180,262 17
Financial Services 209,779 193,693 193,620 73
Legal Council 80,742 48,841 48,840 1
General Services 473,635 413,836 407,811 6,025
Total general government 1,256,874 1,112,731 1,106,528 6,203
Public safety:
Fire 1,299,061 1,169,109 1,168,992 117
Police 1,839,568 1,758,762 1,960,717 (201,955)
Total public safety 3,138,629 2,927,871 3,129,709 (201,838)
Transportation 1,225,520 1,128,198 1,073,662 54,536
Physical environment 1,457,555 833,044 831,179 1,865 a
Capital outlay 518,392 540,036 539,164 872
Debt service:
Principal 455,000 464,298 464,298
- '
Interest 18,969 24,192 24,192 -
Total debt service 473,969 488,490 488,490 -
Total expenditures 8,070,939 7,030,370 7,168,732 (138,362) -7
d
Deficiency of revenues under
expenditures (1,718,878) (334,274) (430,015) (95,741)
Other financing sources (uses)
Operating transfers in (out) - - (7,007) (7,007)
Capital lease proceeds 468,803 483,384 678,222 194,838
Sale of capital assets 441,500 448,800 448,800 -
Net other financing sources (uses) 910,303 932,184 1,120,015 187,831 fi
Excess (deficiency) of revenues and other `J
financing sources over (under) expenditures
and other financing uses (808,575) 597,910 690,000 92,090
Fund balances, beginning of year 9,346,703 9,346,703 9,346,703 -
Fund balances, end of year $ 8,538,128 $ 9,944,613 10,036,703 $ 92,090
Reconciliation of budgetary
to GAAP basis
Current year encumbrances 187,692
Prior year encumbrances (48,027)
Fund balance on GAAP basis $ 10,176,368
The accompanying notes to required supplementary information are an integral part of this financial schedule. 44
' CITY OF OKEECHOBEE.) FLORIDA
' Notes to Required Supplementary Information
September 30, 2008
' A. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with U.S. generally accepted accounting principles for all
governmental funds. All annual appropriations lapse at fiscal year end.
The City manager may make transfers of appropriations within a department as long as the total budget of the
' department is not increased. Transfers of appropriations between departments require the approval of the council.
The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations)
is the department level. The council made a supplemental budgetary appropriation during the year.
' Encumbrances accounting is employed in governmental funds. Encumbrances (e.g., purchase orders, contracts)
outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities
' because the commitments will be re-appropriated and honored during the subsequent year.
For the year ended September 30, 2008, expenditures exceeded the budgeted amounts for the Police department
' by $201,955. In addition, expenditures for transfers out exceeded the budgeted amounts by $7,007. These excess
expenditures were covered by available fund balance in the general fund.
45,
r.
;a
u
a
Y
J
h
Vr
~y
N
THIS PAGE IS INTENTIONALLY LEFT BLANK.
N
IAA
ui
i1
t
J
C
i
q
r L
..J
t k
~i
r 4
t
Yr~
46
Independent Auditors' Report on Internal Control Over Financial
rting and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards
' The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
' We have audited the financial statements of the governmental activities, each major fund, and the aggregate
remaining fund information of the City of Okeechobee, Florida, as of and for the year ended September 30, 2008,
which collectively comprise the City of Okeechobee, Florida's basic financial statements and have issued our report
thereon dated April 1, 2009. Our report was modified to include a reference to other auditors. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
' United States. Other auditors audited the financial statements of the fiduciary fund type and the discretely
presented component unit, as described in our report on the City of Okeechobee, Florida's financial statements.
This report does not include the results of the other auditors' testing of internal control over financial reporting or
' compliance and other matters that are reported on separately by those auditors.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Okeechobee, Florida's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of
' Okeechobee, Florida's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City of Okeechobee, Florida's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the preceding
paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might
be significant deficiencies or material weaknesses. However, as discussed below, we identified a certain deficiency
' in internal control over financial reporting that we consider to be a significant deficiency.
A control deficiency exists when the design or operation of a control does not allow management or employees, in
' the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A
significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the City's
ability to initiate, authorize, record, process or report financial data reliably in accordance with generally accepted
' accounting principles such that there is more than a remote likelihood that a misstatement of the City's financial
statements that is more than inconsequential will not be prevented or detected by the City's internal control. We
noted the following control deficiency that we consider to be a significant deficiency in internal control
financial reporting:"' _
Certifud Pubfic Accountants
215 Baytree Drive I Melbourne, FL 32940 ~ p: (321) 255.0088 ~ B (321) 259.8648
2221 Lee Road, Suite 15 1 Winter Park, FL 327891 p: (407) 422.16811 F (407) 423.1681
g
www.hoyman.com
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
Page Two
IC 2008-01 YEAR END ANALYTIC PROCEDURES
Context: Accounting procedures should be in place to provide reasonable assurance that the general ledger
is free of material misstatements.
Condition: During the audit, we noted significant improvements to the City's accounting procedures, as
evidenced by a lack of recurring issues identified during the previous year audit. However, management
does not currently perform year end analytic procedures related to significant line items in the City's fund
financial statements.
Effect: The lack of year end analytic procedures caused financial statement misstatements related to garbage
accounts receivable, fuel inventory, accounts payable, and certain payroll accruals. Adjusting journal entries
were required to correct such misstatements. The adjusting journal entries caused expenditures to exceed the
budgeted amounts for the Police department by $201,955 and expenditures for transfers out to exceed the
budgeted amounts by $7,007 for the year ended September 30, 2008.
Recommendation: We recommend management perform year end analytic procedures related to significant
line items in the City's fund financial statements. Specifically, management should compare key general
ledger account balances against prior year balances and against both the original and amended budget to
identify unusual relationships that may indicate adjusting journal entries necessary to prevent material
financial statement misstatements.
Management Response: Management concurs. The City has assumed additional duties with regard to
adjusting journal entries which in prior years, were submitted and provided by the auditors. This
methodology is, however, appropriate and consistent with GAAP principles. The City continues to seek
direction from the auditors to eventually accomplish the required year end entries. The City will perfect the
year end procedures to include these reviews and adjustments thereof.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected ;
by the City of Okeechobee, Florida's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be
significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also
considered to be material weaknesses. However, we do not believe that the significant deficiency described above
is a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Okeechobee, Florida's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those provisions
was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
t v.
48
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
Page Three
' We noted a certain other matter that we reported to management of the City of Okeechobee, Florida in a separate
letter, Independent Auditors' Management Letter, dated April 1, 2009.
The City of Okeechobee, Florida's responses to the findings identified in our audit are described above. We did not
audit the City's responses, and accordingly, we express no opinion on them.
This report is intended solely for the information and use of the City of Okeechobee, Florida and management, and
' the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than
these specified parties.
' Hoyman Dobson
Melbourne, Florida
April 1, 2009
' 49
it
r+
.u
1
THIS PAGE IS INTENTIONALLY LEFT BLANK.
4
17
9
G
V
~I
d
k
Li
. Y
a~
i
50
!'kGlfTi ~~Gl ►~o`rci
Independent Auditors'
Management Letter
The Honorable Mayor and Members of the City Council
' of the City of Okeechobee, Florida
We have audited the financial statements of the City of Okeechobee, Florida as of and for the fiscal year ended
' September 30, 2008, and have issued our report thereon dated April 1, 2009.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
' and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States. We have issued our Independent Auditors' Report on Compliance and
Internal Control over Financial Reporting. Disclosures in that report, which is dated April 1, 2009, should be
' considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor
General, which govern the conduct of local governmental entity audits performed in the State of Florida and,
unless otherwise required to be reported in the report on compliance and internal controls, this letter is required
to include the following information.
' ❖ Section 10.554(lxi)l., Rules of the Auditor General, requires that we determine whether or not corrective
actions have been taken to address significant findings and recommendations made in the preceding
' annual financial audit report. Corrective actions have been taken to address significant findings and
recommendations from the preceding annual financial audit report, except as noted below:
Internal Control and Compliance Findings:
2007-01 Accounting policies and procedures Repeated/revised as IC 2008-01
2007-02 Expenditures in excess of budget Repeated/revised as IC 2008-01
' 2007-03 Journal entries Cleared
Management Letter:
' 1. Review of travel expenditures Cleared
' ❖ Section 10.554(lxi)2., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415., Florida Statutes, regarding the investment of public funds. In connection
with our audit, we determined that the City of Okeechobee, Florida complied with Section 218 4'x
' Florida Statutes.
Certified FubticAccountantt
215 Baytree Drive Melbourne, FL 32940 p: (321) 255.0088 F (321) 259.8648 h
2221 Lee Road, Suite 15 1 Wmter Park, FL 32789 1 p: (407) 422.1681 f (407) 423.1681 v
' www.hoyman.com - - - ~ ~ - -
The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
Page Two
❖ Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter
any recommendations to improve financial management, accounting procedures, and internal controls. In ;
connection with our audit, we did not have any such recommendations.
❖ Section 10.554(l)(i)4., Rules of the Auditor General, requires that we address violations of provisions of
contracts and grant agreements or abuse that have an affect on the financial statements that is less than
material but more than inconsequential. In connection with our audit, we did not have any such findings. r-1
Section 10.554(lxi)5., Rules of the Auditor General, requires, based on professional judgment, the
reporting of the following matters that are inconsequential to the financial statements, considering both
quantitative and qualitative factors: (1) violations of laws, rules, regulations, and contractual provisions or r
abuse that have occurred, or were likely to have occurred,
and would have an immaterial effect on the
financial statements; (2) improper expenditures or illegal acts that would have an immaterial effect on the
financial statements; and (3) control deficiencies that are not significant deficiencies, including, but not
limited to; (a) improper or inadequate accounting procedures (e. g., the omission of required disclosures
from the financial statements); (b) failures to properly record financial transactions; and (c) other
inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the attention of,
the auditor. In connection with our audit, we had the following such finding:
ML 2008-1 TIMELINESS OF BUDGET AMENDMENTS
Context: Florida statutes section 166.241 allows for a Florida municipality to amend its budget at any time
within a fiscal year or within up to 60 days following the end of the fiscal year.
Condition: During the audit, we noted the City of Okeechobee, Florida amended its fiscal year 2008 budget
during January 2009, which is after the 60 day deadline.
Effect: The City is out of compliance with Florida statutes.
Recommendation: We recommend management review existing procedures and plan to ensure budget
amendments are made timely and within statutory requirements.
Management Response: Management has reviewed existing procedures and will submit if required,
amended budget within the statutory requirements.
❖ Section 10.554(l)(i)6., Rules of the Auditor General, requires that the name or official title and legal
authority for the primary government and each component unit of the reporting entity be disclosed in this
management letter, unless disclosed in the notes to the financial statements. The legal authority of the
City of Okeechobee, Florida is disclosed in the footnotes. The City of Okeechobee, Florida has no `r
component units.
❖ Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or
not the local government entity has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the special condition(s) met. In connection with our audit, we
determined that the City of Okeechobee, Florida did not meet any of the conditions described in Section
218.503(1), Florida Statutes.
Y.
52
i
' The Honorable Mayor and Members of the City Council
of the City of Okeechobee, Florida
' Page Three
❖ Section 10.554(lxi)7.b., Rules of the Auditor General, requires that we determine whether the annual
' financial report for the City of Okeechobee, Florida for the fiscal year ended September 30, 2008, filed
with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is
in agreement with the annual financial audit report for the fiscal year ended September 30, 2008. In
' connection with our audit, we determined that these two reports were in agreement.
❖ Sections 10.554(i)7.c. and 10.556(7), Rules of the Auditor General, require that we apply financial
' condition assessment procedures. In connection with our audit, we applied financial condition assessment
procedures. It is management's responsibility to monitor the entity's financial condition, and our financial
condition assessment was based in part on representations made by management and the review of
' financial information provided by same.
This management letter is intended solely for the information of the City of Okeechobee, Florida and management,
' and the Auditor General of the State of Florida, and is not intended to be and should not be used by anyone other
than these specified parties.
1
m,". Av&~
' Hoyman Dobson
Melbourne, Florida
April 1, 2009
53
n
~i
THIS PAGE IS INTENTIONALLY LEFT BLANK.
6.4
`i
54,
1
\~y . OF ' OK~FO
m
1 y
LL
O h
X1915 City o Okeechobee
1
1
AFFIDAVIT OF IMPACT FEE COMPLIANCE
1
1 The City of Okeechobee, Florida has complied with Section 163.31801 of Florida Statues
regarding accounting and reporting of impact fee collections and expenditures for Fiscal
1 Year 2008.
1 -
1
Brian Whi hall India Riedel
City A strator Finance Department
1
1
1 -
1
1
1
1
1
55,
1 55 S.E. Third Avenue • Okeechobee, Florida 34974-2903 • (863) 763-3372 • Fax: (863) 763-1686
1
G\~y of pkFFO
m
LL
T
1
1915* City o Okeechobee
1
1
AFFIDAVIT OF IMPACT FEE COMPLIANCE
1
1 The City of Okeechobee, Florida has complied with Section 163.31801 of Florida Statues
regarding accounting and reporting of impact fee collections and expenditures for Fiscal
1 Year 2008.
1
all India Riedel
Brian In ht
City A dfffmistrator Finance Department
1
1
1 -
1
1
1
1
1
55
1 55 S.E. Third Avenue • Okeechobee, Florida 34974-2903 • (863) 763-3372 • Fax: (863) 763-1686