HomeMy Public PortalAbout2010 AFRTOWN OF GULF STREAM, FLORIDA
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR'S REPORT THEREON
SEPTEMBER 30, 2010
TOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2010
TABLE OF CONTENTS
Pages
Independent Auditor's Report 1-2
Management's Discussion and Analysis (required supplementary information) 3 - 10
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Assets
11
Statement of Activities
12-13
Fund Financial Statements
Balance Sheet — Governmental Fund
14
Reconciliation of the Balance Sheet — Governmental Fund to
the Statement of Net Assets
15
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Fund
16
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Fund to the Statement of Activities
17
Statement of Net Assets — Proprietary Fund
18
Statement of Revenues, Expenses, and Changes in Net Assets —
Proprietary Fund
19
Statement of Cash Flows — Proprietary Fund
20
Notes to the Financial Statements
21-38
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
Budget and Actual — General Fund 39
Notes to the Budgetary Required Supplemental Information 40
Other Reports
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 41-42
Management Letter in Accordance With the Rules of the Auditor General
of the State of Florida 43-46
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTH;IM PUBLIC ACCOUNTANTS
EVERETT B. NOWLEN (1030-1964), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, CPA
ROBERT W. HENDRK JR.,CPA
WEST PALM BEACH OFFICE
JANET R. BARICEVICH, CPA
215 FIFTH STREET, SUITE 700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
'1 PHONE (561) 659-3060
FAX (561) 835-0626
KATHLEEN A MINER, CPA
W W WNHMCPA.COM
TERRY L MORTON, , CPA
T
N. RONALD BENNETT, CPA
J. MICHAEL STEVENS, CPA
ALEXIA G. VARGA, CPA
BRIAN J. BRESCV6 CFP-, CPA
KORA D. PETERSON, CPA
EDWARD T. HOLT, JR., CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
INDEPENDENT AUDITOR'S REPORT
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (581) 096-5812
FAX (561) 988248
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
Town of Gulf Stream, Florida as of and for the year ended September 30, 2010 which collectively
comprise the Town's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the Town of Gulf Stream's management. Our responsibility is
to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards 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 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.
The Town has not recognized the other postemployment benefits (OPEB) expense and obligation
in the governmental activities financial statements as required in accordance with U.S. generally
accepted accounting principles as provided in Governmental Accounting Standards Board
Statement No. 45. The effects of that departure on the financial statements are not reasonably
determinable. The Town also has not disclosed the descriptive information about other post
employment benefits required by standards.
In our opinion, except for the effects of the omission of the OPEB expense and obligation for the
governmental activities as described in the preceding paragraph, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the
governmental activities of the Town of Gulf Stream, Florida, as of September 30, 2010, and the
respective changes in financial position thereof for the year then ended in conformity with U. S.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
generally accepted accounting principles.
In addition, in our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the business -type activities, each major fund, and the
aggregate remaining fund information of the Town of Gulf Stream, Florida, as of September 30,
2010, and the respective changes in financial position and cash flows, where applicable, thereof for
the year then ended in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 7,
2011, on our consideration of the Town of Gulf Stream's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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 read in conjunction with this report in considering the results of our audit.
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis on pages 3 through 10 and the budgetary comparison
information on pages 39 and 40 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for
placing financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express and opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance
Management has omitted the Schedule of Funding Progress for Other Post Employment Benefits
that accounting principles generally accepted in the United States of America require to be
presented to supplement the basic financial statements. Such missing information, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. Our opinion on the basic
financial statements is not affected by this missing information.
West Palm Beach, Florida
April 7, 2011
2
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Management's Discussion and Analysis
The Town of Gulf Stream's (the "Town") discussion and analysis is designed to:
A. Assist the reader in focusing on significant financial issues
B. Provide an overview of the Town's financial activity
C. Identify changes in the Town's financial position
D. Identify any material deviations from the financial plan (approved budget)
E. Identify individual fund issues or concerns
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current
years activities, resulting changes and currently known facts, please read it in conjunction with
the Town's financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
➢ The assets of the Town of Gulf Stream exceeded its liabilities at the close of the most
recent fiscal year by $5,853,605(net assets). Of this amount, $1,463,293 (unrestricted net
assets) may be used to meet the government's ongoing obligations to citizens and
creditors.
➢ The government activities revenues were $2,598,495 at the close of fiscal year 2010.
➢ The business -type activities revenues were $961,402 at the close of fiscal year 2010.
➢ The total cost of all Town programs was $3,561,883 during the fiscal year 2010.
➢ At the end of the 2010 fiscal year, unreserved fund balance for the general fund was
$1,425,867 or 57% of total general fund expenditures.
USING THIS REPORT
In light of the fact that this is a very different presentation from the pre -GASB 34 Statements, the
following graphic is provided for your review.
MD&A
BASIC
FINANCIAL
STATEMENTS
REQUIRED
SUPPLEMENTAL
INFORMATION
Management's Discussion & Analysis
(Required supplemental information)
Government -wide financial Fund Financial Statements
statements (new)(pages 11-13) (Refocused)(Pages 14-20)
Notes to the financial statements (Expanded/
Restructured) (Pages 21-38)
Required supplementary information
(Other than MD&A) (Expanded) (Pages 39-40)
Management's Discussion and Analysis
The financial statement's focus is on both the Town as a whole (government -wide) and on the
major individual funds. Both perspectives (government -wide and major fund) allow the user to
address relevant questions, broaden a basis for comparison (year to year or government to
government), and enhance the Town's accountability.
Government -Wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad
overview of the Town of Gulf Stream's finances, in a manner similar to a private -sector
business. The Statement of Net Assets includes all of the government's assets and liabilities. All
of the current year's revenues and expenses are accounted for in the statement of activities
regardless of when cash is received or paid.
The two government -wide statements report the Town's net assets and how they have changed.
Net assets, the difference between the Town's assets and liabilities, is one way to measure the
Town's financial health or financial position. Over time, increases or decreases in the Town's
net assets are indicators of whether its financial health is improving or deteriorating. You will
need to consider other non-financial factors, however, such as changes in the Town's property
tax base and the condition of the Town's roads, to assess the overall health of the Town.
In the Statement of Net Assets and the Statement of Activities, we divide the Town into two
kinds of activities:
➢ Government activities — Most of the Town's basic services are reported here, including
the police, public services and general administration. Property taxes, franchise fees and
state shared revenue finance most of these activities.
➢ Business -type activities — The Town charges a fee to customers to help it cover all or
most of the cost of certain services it provides.
Fund Financial Statements
Our analysis of the Town's major funds begins on page 5. The fund financial statements provide
detailed information about the most significant funds — not the Town as a whole. Funds are
accounting devices that the Town uses to keep track of specific sources of funding and spending
for a particular purpose.
➢ Governmental Funds — Most of the Town's basic services are included in a
governmental fund, which focuses on (1) how cash and other financial assets can be
readily converted to cash flow and (2) the balances left at year-end that are available for
spending. Consequently, the governmental fund statements provide a short-term view
that helps you determine whether there are more or fewer financial resources that can be
spent in the near future to finance the Town's programs.
Management's Discussion and Analysis
➢ Proprietary Funds — Services for which the Town charges customers a fee are generally
reported in proprietary funds. Proprietary funds, like the government -wide statements,
provide both long and short-term financial information.
■ The Town's enterprise fund (one type of proprietary fund) is the same as its
business type activities, but provides more detail and additional information,
such as cash flows.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Net Assets
The Town's combined net assets for the fiscal year ending 2010 are reported at $5,853,605. Net
assets of the Town's governmental activities for the fiscal year ending 2010 are $3,692,402. The
net assets of our business -type activities are reported at $2,161,203 for the fiscal year ending
2010. Overall the financial position of the total primary government is better than the prior year,
with a slight decrease in net assets for the governmental activities and a slight increase for the
business type activities.
Town of Gulf Stream
Statement of Net Assets
As of September 30, 2010
5
Governmental
Business -Type
Total Primary
Activities
Activities
Government
2009
2010
2009
2010
2009
2010
Current and other Assets
$ 1,446,993
$ 1,552,077
$ 116,005
$ 174,190
$ 1,562,998
$ 1,726,267
Capital Assets
2,429,660
2,291,718
2,081,048
2,080,774
4,510,708
4,372,492
TOTAL ASSETS
3.876,653
3,843,795
2,197,053
2,254,964
6,073,706
6,098,759
Current and Other Liabilities
108,755
131,725
90,700
93,761
199,455
225,486
Long term liabilities outstanding
18,660
19,668
18,660
19,668
TOTAL LIABILITIES
127,415
151,393
90,700
93,761
218,115
245,154
Net Assets:
Invested in capital assets, net of
Related debt
2,429,660
2,291,718
2,126,938
2,080,774
4,556,598
4,372,492
Restricted
17,820
17,820
17,820
17,820
Unrestricted
1,301,758
1,382,864(20,585)8_0
429
1,281,173
1,463,293
TOTAL NET ASSETS
$ 3,749,238
2 4 2
2 10
2 1 1
$ 5 855501
$
5
Management's Discussion and Analysis
Changes in Net Assets
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal 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 the future fiscal periods (i.e., uncollected taxes and earned but unused vacation
leave).
➢ The decrease in net assets for governmental activities totaled $56,836. The decrease in
net assets was primarily due to increased depreciation as opposed to minimal capital
asset acquisitions.
➢ The increase in business -type net assets was $54,850. The increase in net assets was due
in part to increased revenue and increased asset acquisitions.
IN
Town of Gulf Stream's Changes in Net Assets
Governmental
Business -Type
Total Primary
Activities
Activities
Government
2009
2010
2009 2010
2009
2010
Revenues:
Program Revenues:
Charges for services:
$ 193,146
$ 189,973
$ 914,783 $ 961,402
$ 1,107,929
$ 1,151,375
Operating & Capital Grants
18,095
22,054
18,095
22,054
General Revenues:
Property Taxes
2,042,370
1,972,342
2,042,370
1,972,342
Communication Taxes
73,507
64,143
73,507
64,143
Gas Taxes
29,598
28,678
29,598
28,678
Utility Service Tax
66,807
66,807
Franchise Fees
132,705
118,277
132,705
118,277
Unrestricted Investment Earnings
66,083
31,113
66,083
31,113
Intergovernmental Revenues
72,683
73,082
72,683
73,082
Other
22,139
32,026
22,139
32,026
Transfers
(1,268,567)
1,268,567
_
Total Revenues
$ 1,381,759
12,598,495
$2,183,350961 402
$ 3,565,109
$ 3,559,897
Governmental
Business -Type
Total Primary
Activities
Activities
Government
2009
2010
2009 2010
2009
2010
Expenses:
Governmental Type Activities:
General Government
$ 661,758
$ 691,214
$ $
$ 661,758
$ 691,214
Police department
1,317,232
1,341,437
1,317,232
1,341,437
Fire protection
161,958
286,250
161,958
286,250
Streets
218,314
224,477
218,314
224,477
Sanitation
122,836
111,953
122,836
111,953
Business -Type Activities:
Water
910,395 906,552
910,395
906,552
Total Expenses
2,482,098
2,655,331
910,395 906,552
3,392,493
3,561,883
Change in Net Assets
(1,100,339)
(56,836)
1,272,955 54,850
172,616
(1,986)
Net Assets - Beginning
4,849,577
3,749,238
833,398 2,106,353
5,682,975
5,855,591
Net Assets - Ending
$ 3,749,238
$ 3,692,402
$2,106,353 $2,161,203
$ 5,855,591
$5,853,605
IN
Management's Discussion and Analysis
More than half the Town's revenue comes from property taxes. (Please see chart below.)
Charge
Intergovern
9%
Revenues — Governmental Revenues by Source
Other
7
Management's Discussion and Analysis
The Town's expenses cover a range of services, with 62% related to public safety. (Please see
chart below.)
Expenses — Governmental Expenses by Function
C
Fire
Financial Analysis of the Governmental Fund on the Fund Basis
,51%
As the Town of Gulf Stream completed the year, the general fund reported a fund balance of
$1,464,211, an increase of $82,795 from the previous fiscal year. The increase was due to
constraints in all functional spending, especially capital improvements.
The general fund ended the 2010 fiscal year with $38,344 in reserved fund balances and with
$1,425,867 in unreserved fund balances.
N.
Management's Discussion and Analysis
Financial Analysis of the Proprietary Fund
Total net assets of the water fund at the end of the fiscal year 2010 were $2,161,203. The net
assets of the water fund have increased slightly from last year. Water rates were not changed and
there were not any major improvements.
General Fund Budgetary Highlights
Over the course of the year, The Town Commission revised the budget once. With these
adjustments, actual expenditures were $136,272 less than the final budget amounts. Revenues
were $66,525 more than the final budget amounts.
CAPITAL ASSET AND DEBT ADMINSTRATION
Capital Assets
At the end of fiscal year 2010, the Town had invested $4,372,492 in a broad range of capital
assets including police equipment, buildings, infrastructure and water improvements. Additional
information can be found in Note 3 of the notes to the financial statements. Some changes
shown below in the categories are a result of the reclassification of some assets.
Land
Buildings & Improvements
Equipment
Infrastructure
TOTALS
Town of Gulf Stream's Capital Assets
(Net of depreciation)
as of September 30, 2010
Governmental Business -Type
Activities Activities
2009 2010 2009 2010
$ 376,523 $ 376,523 $ $
320,586 282,749 2,072,262 2,069,193
132,305 110,318 8,786 11,581
1,600,246 1,522,128
TOTAL
2009 2010
$ 376,523 $ 376,523
2,392,848 2,351,942
141,091 121,899
1,600,246 1,522,128
2,429,660 $2,291,718 $ 2,081,048 $2,080,774 $4,510,708
X
$4372,492
Management's Discussion and Analysis
Debt
As of September 30, 2010 the Town had $63,527 in long term compensated absences as shown
in the following table: Additional information can be found in note 6 of the notes to the financial
statements.
Town of Gulf Stream's Outstanding Debt
As of September 30, 2010
Governmental Business -Type
Activities Activities Total
2009 2010 2009 2010 2009 2010
Compensated Absences 61,838 $63,527 $ 61,838 $63,527
TOTALS $ 61.838 $6.3,527 S $ $ 61,838 $63,527
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
For the 2011 fiscal year, general fund revenue projections are comparable to the previous year.
➢ The budget is balanced by using reserves from the 2010 fiscal year.
➢ There is not a change in user rate fees for fiscal year 2011.
➢ The millage rate was reduced to 2.8655 mills, which is less than the rolled -back rate.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our residents and creditors with a general overview
of the Town's finances and demonstrates the Town's accountability for the money it receives and
disburses. If you have any questions about this report or need additional information, please
contact the Town of Gulf Stream, 100 Sea Road, Gulf Stream, FL 33483.
10
TOWN OF GULF STREAM, FLORIDA
Statement of Net Assets
September 30, 2010
Assets
Cash and cash equivalents
Investments
Accounts receivable
Inventories
Internal balances
Prepaid expenses
Capital assets
Non -depreciable
Depreciable (net of depreciation)
Total assets
Liabilities
Liabilities
Accounts payable
Accrued liabilities
Damage deposit bonds
Deferred revenue
Compensated absences payable
Payable within one year
Payable after one year
Total liabilities
Net assets
Investment in capital assets, net of related debt
Restricted for dredging projects
Unrestricted
Total net assets
Total liabilities and net assets
Primary Government
Governmental Business -type
$ 80,711
$
$ 80,711
1,362,489
1,362,489
68,591
190,426
259,017
5,199
19,668
5,199
19,762
(19,762)
93,761 245,154
15,325
3,526
18,851
376,523
376,523
1,915,195
2,080,774
3,995,969
$ 3,843,795
$ 2,254,964
$ 6,098,759
$ 53,869
$ 48,261 $ 102,130
23,195
23,195
45,500 45,500
10,802
10,802
43,859
43,859
19,668
19,668
$ 3,843,795
151,393
93,761 245,154
2,291,718
2,080,774
4,372,492
17,820
17,820
1,382,864
80,429
1,463,293
3,692,402
2,161,203
5,853,605
$ 3,843,795
$ 2,254,964
$ 6,098,759
See notes to the financial statements.
TOWN OF GULF STREAM, FLORIDA
Statement of Activities
For the Year Ended September 30, 2010
Functions/Programs
Primary Government
Governmental activities
General government
Police department
Fire protection
Streets
Sanitation
Total governmental activities
Business -type activities
Water
Total primary government
12
Charges for
Expenses Services
$ 691,214
$ 75,836
1,341,437
1,506
286,250
224,477
111,953
112,631
2,655,331
189,973
906,552
961,402
$ 3,561,883 $ 1,151,375
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Operating Capital Primary Government
Grants and Grants and Governmental Business -type
Contributions Contributions activities activities Total
$ 22,054 $ $ (593,324) $ $ (593,324)
(1,339,931) (1,339,931)
(286,250) (286,250)
(224,477) (224,477)
678 678
22,054 (2,443,304) (2,443,304)
54,850 54,850
$ 22,054 $ (2,443,304) 54,850 (2,388,454)
General revenues
Property taxes
Communications services taxes
Gas taxes
Utility service ta)i
Franchise fees
Intergovernmental shared revenues
Unrestricted investment earnings
Miscellaneous revenues
Total general revenues
Change in net assets
Net assets - beginning
Net assets - ending
1,972,342
1,972,342
64,143
64,143
28,678
28,678
66,807
66,807
118,277
118,277
73,082
73,082
31,113
31,113
32,026
32,026
2,386,468
2,386,468
(56,836) 54,850
(1,986)
3,749,238 2,106,353
5,855,591
$ 3,692,402 $ 2,161,203
$ 5,853,605
See notes to the financial statements.
13
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Fund
September 30, 2010
Assets
General
Fund
Cash and cash equivalents
$ 80,711
Investments
1,362,489
Accounts receivable
68,591
Due from other funds
19,762
Inventories
5,199
Prepaid expenditures
15,325
Total assets
$ 1,552,077
Liabilities and fund equity
Liabilities
Accounts payable $ 53,869
Accrued Liabilities 23,195
Deferred revenue 10,802
Total liabilities 87,866
Fund equity
Reserved for:
Inventories 5,199
Prepaid expenditures 15,325
Dredging projects 17,820
Unreserved - undesignated 1,425,867
Total fund equity 1,464,211
Total liabilities and fund equity $ 1,552,077
See notes to the financial statements.
14
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Fund
to the Statement of Net Assets
September 30, 2010
Fund balance - governmental fund $ 1,464,211
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore, are not reported in the governmental fund.
Governmental capital assets $ 4,071,219
Less accumulated depreciation (1,779,501) 2,291,718
Long-term liabilities are not due and payable in the current
period and therefore, are not reported in the governmental fund.
Compensated absences (63,527)
Net assets of governmental activities $ 3,692,402
See notes to the financial statements.
15
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Fund
For the Year Ended September 30, 2010
General
Fund
Revenues
Taxes
$ 2,055,551
Intergovernmental revenue;
195,803
Licenses and permits
167,668
Charges for services
112,631
Fines and forfeits
1,506
Investment earnings
31,113
Miscellaneous
34,223
Total revenues 2,598,495
Expenditures
Current
General and administrative
629,148
Police department
1,272,508
Fire protection
286,250
Streets
156,730
Sanitation
111,953
Capital outlay
59,111
Total expenditures 2,515,700
Excess (deficiency) of revenue;
over (under expenditures; 82,795
Net change in fund balance 82,795
Fund balance - beginning of the year 1,381,416
Fund balance - end of the yea: $ 1,464,211
See notes to the financial statements.
16
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance of the Governmental Fund to the Statement of Activities
For the Year Ended September 30, 2010
Net change in fund balance - governmental fund $ 82,795
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 depreciated over their estimated useful life.
Expenditures for capital assets
Less current year depreciation
$ 59,111
(171,016) (111,905)
Gains and losses on the disposal of fixed assets are not reported
in the governmental funds but are reported in the statement of
activities
Net book value of fixed asset disposals
(26,037)
Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore, are
not reported as expenditures of governmental funds.
Change in long-term compensated absences
Change in net assets of statement of activities
(1,689)
$ (56,836)
See notes to the financial statements.
17
TOWN OF GULF STREAM, FLORIDA
Statement of Net Assets
Proprietary Fund
September 30, 2010
Assets
Current assets
Accounts receivable
Prepaid expenses
Total current assets
Noncurrent assets
Depreciable capital assets
Less acumulated depreciation
Total noncurrent asset,,
Total assets
Liabilities
Current liabilitie:
Accounts payable
Due to other funds
Damage deposit bonds
Total current liabilitie
Total liabilitie;
Net assets
Investment in capital assets, net of related deb
Unrestricted
Total net assets
See notes to the financial statements.
18
Enterprise
Fund
$ 190,426
3,526
193,952
2,658,379
(577,605)
2,080,774
2,274,726
48,261
19,762
45,500
113,523
113,523
2,080,774
80,429
$ 2,161,203
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses and Changes
in Net Assets
Proprietary Fund
For the Year Ended September 30, 2010
Operating revenues
Charges for services
Total operating revenue,
Operating expenses
Water purchases
Repairs and maintenance
Management fees
Depreciation expense
Payment in lieu of taxes
Other expenses
Field visit service
Total operating expense;
Operating income
Change in net assets
Net assets - beginning of the yea:
Net assets - end of the yeaj
See notes to the financial statements
19
Enterprise
Fund
$ 961,402
961,402
552,355
182,058
65,000
62,516
29,900
8,035
6,688
906,552
54,850
54,850
2,106,353
$ 2,161,203
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2010
Cash flows from operating activities
Receipts from customer
Damage deposit bonds receive(
Payments to suppliers
Internal activity - payments to other fund
Net cash provided by operating activities
Cash flows from capital financing activities
Acquisition and construction of fixed asset!
Internal activity - payments to other fund.
Net cash used by capital financing activities
Net increase (decrease) in cash and cash equivalent
Cash and cash equivalents - beginning of the yea
Cash and cash equivalents - end of the yea
Cash flows from operating activities
Operating income
Adjustments to reconcile operating income b
net cash provided by operating activities
Depreciation
Changes in assets and liabilities
Increase (decrease)in
Accounts payable
Deposits
Decrease (increase) in
Accounts receivablf
Prepaid expenditureE
Total adjustments
Net cash provided by operating activities
See notes to the financial statements.
20
Enterprise
Fund
$ 929,599
4,500
(780,730)
(65,000)
88,369
(62,242)
(26,127)
(88,369)
$ 54,850
62,516
(1,439)
4,500
(31,803)
(255)
33,519
$ 88,369
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Gulf Stream, Florida (the "Town") have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental
units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting
body for establishing governmental accounting and financial reporting principles. The Town's
significant accounting policies are described below.
Reporting Entity
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to Chapter 31276,
1955 Laws of Florida. The Town operates under the Commission/Mayor form of government.
The Town's major operations include general government, public safety, streets, sanitation, and
water services.
In accordance with Statement 14 of the Government Accounting Standards Board, the underlying
concept of the governmental financial reporting entity is that governmental organizations are
responsible to elected governing officials; therefore, financial reporting should report the elected
officials' accountability for those organizations. Furthermore, the financial statements of the
reporting entity should allow users to distinguish between the primary governments and its
component units if any, by communicating information about the component units and their
relationships with the primary government. A component unit is a legally separate organization for
which the elected officials of the primary government are financially accountable. Determining
factors of financial accountability include appointment of a voting majority, imposition of will,
financial benefit or burden on a primary government, or fiscal dependency. In addition, component
units can be other organizations for which the nature and significance of their relationship with a
primary government are such that exclusion would cause the reporting entity's financial statements
to be misleading or incomplete.
Based upon application of these criteria, the Town of Gulf Stream has determined that there are no
additional governmental departments, agencies, institutions, commissions, public authorities or
other governmental organizations operating within the jurisdiction of the Town that would be
required to be included in the Town's financial statements.
21
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the non -fiduciary activities of the primary government.
For the most part, the effect of inter -fund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business -type activities, which rely on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund
financial statements.
Measurement Focus, Basis ofAccountinZ 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 proprietary fund financial statements.
Revenues are recorded when earned and expenses recorded when a liability is incurred, regardless
of the timing of related cash flows. The Town does not accrue property tax revenues since the
collection of these taxes coincides with the fiscal year in which levied, and since the Town
consistently has no material uncollected property taxes at year end. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met.
When both restricted and unrestricted resources are available for use, it is the Town's policy to use
restricted resources first, then unrestricted resources as they are needed.
22
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
As a general rule the effect of inter -fund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are payments -in -lieu of taxes and other
charges between the Town's water and sewer function and various other functions of the Town.
Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
Governmental Funds
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 afterwards to pay liabilities of the
current period. The Town considers revenues collected within 60 days of the year end to be
available to pay liabilities of the current period. Expenditures are generally recorded when a
liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures relating to compensated absences and claims and judgments are recorded only
when payment is due.
Fines and permit revenues are not susceptible to accrual because generally, they are not measurable
until received in cash. Property taxes, franchise taxes, licenses, interest revenue, intergovernmental
revenues, and charges for services associated with the current fiscal period are all considered to be
susceptible to accrual and 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
Town.
The Town reports the following major governmental fund:
The General Fund is the general operating fund of the Town. It is used to account for all financial
resources except those required to be accounted for in another fund.
Proprietary Funds
Proprietary Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises - where the intent of the governing body is that the
costs (expenses, including 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,
23
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Proprietary Funds (Continued)
and net income is appropriate for capital maintenance, public policy, management control,
accountability, or other purposes. Proprietary funds distinguish operating revenues and expenses
from non-operating items. Operating revenues and expenses generally result from providing
services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. Operating expenses report on the costs to maintain the proprietary systems,
the cost of sales and services, administrative expenses and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.
The Town reports the following major proprietary funds:
The Town has established the Municipal Water Fund to account for the provision of water services
to Town residents.
Government Accounting Standards Board (GASB) Statement #20, Accounting and Financial
Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Funds,
provides proprietary activities with a choice of authoritative guidance issued after November 30,
1989. The Town of Gulf Stream, Florida has elected to follow GASB pronouncements
exclusively after that date.
Cash and Cash Equivalents
Cash and cash equivalents include amounts on deposit in demand accounts and money market
accounts. For the purposes of the statement of cash flows, the Town considers all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents.
Investments
Investments in the Local Government Surplus Funds Trust Fund, a 2a -7 -like pool, are carried at
fair value. A 2a -7 -like pool is not registered with the SEC as an investment company, but
nevertheless, has a policy that it will, and does, operate in a manner consistent with the SEC's rule
2a-7 of the Investment Company Act of 1940, which comprises the rules governing money market
funds. Thus, this pool operates essentially as a money market fund. Investments in certificates of
deposits are carried at amortized cost that approximates market, because these investments are
considered to be nonparticipating interest earning investment contracts that are not affected by
changes in interest rates.
24
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounts Receivable
Accounts receivable of the General Fund and the Municipal Water Fund consists of billed and
unbilled receivables.
Capital Assets
Capital assets, which include plant, property, equipment, and infrastructure assets (e.g. roads,
bridges, and sidewalks) are reported in the applicable governmental or business -type activities
columns in the governmental -wide financial statements. Capital assets are defined by the
government as assets with an estimated life in excess of one year and an initial cost of more than
$1,000. Such assets are recorded at cost or the fair market value of the assets at the time of
purchase or contribution. The Town is a Phase 3 government under GASB 34 and has elected
not to report major general infrastructure assets retroactively. Depreciation has been provided
over the useful lives using the straight line method. The estimated useful lives are as follows:
Buildings
10-30 years
Equipment
3-15 years
Infrastructure
25-50 years
Water Infrastructure
40-50 years
Inventory
Inventories consist of expendable supplies held for consumption which are carried at cost (first -in,
first -out). The Town accounts for inventories using the consumption method, under which
expenditures are recognized only when inventory items are used. Reported inventory is equally
offset by a fund balance reserve which indicates that it does not constitute "available spendable
resources" even though it is a component of net current assets.
Compensated Absences
Compensated absences are absences for which employees will be paid, such as vacation, sick
leave, and sabbatical leave. A liability for compensated absences that is attributable to services
already rendered and that is not contingent on a specific event that is outside the control of the
government and its employees is accrued as employees earn the rights to the benefits.
Compensated absences that relate to future services or that are contingent on a specific event that
is outside the control of the government and its employees are accounted for in the period in
which such services are rendered or such events take place. All vacation, sick leave, and
sabbatical leave is accrued when incurred in the government -wide and proprietary fund financial
25
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Compensated Absences (Continued)
statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements. Town employees
may accumulate up to 5 days of vacation leave and 120 days of sick leave. Accumulated vacation is
payable to employees upon termination or retirement at the rate of pay on that date. Sick leave can
only be used for paid time off and is not paid to any employee upon termination.
Interest Cost
Interest costs in governmental funds are charged to expenditures as incurred. Construction period
interest incurred in governmental funds is not capitalized. Construction period interest incurred in
proprietary funds is capitalized and included in the cost of the assets in accordance with generally
accepted accounting principles.
Interfund Transactions
Transactions between funds consist of loans, services provided, reimbursements, or transfers. The
current portion of interfund loans are reported in the fund financial statements as "due from other
funds" and "due to other funds" while the non-current portion of interfund loans are reported as
"advances to other funds" and "advances from other funds". Any residual balances outstanding
between the governmental activities and business -type activities are reported in the government -
wide financial statements as "internal balances". Services deemed to be reasonably equivalent in
value, are treated as revenue and expenditures/expenses. Reimbursements occur when one fund
incurs a cost, charges the appropriate benefiting fund and reduces its related cost. All other
interfund transactions are presented as transfers.
Deferred Revenues
The government reports deferred revenue on its government wide statement of net assets,
proprietary statement of net assets, and governmental funds balance sheet. Deferred revenues arise
when a potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to incurring
qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or
when the government has a legal claim to the resources, the liability for deferred revenue is
removed and revenue is recognized.
26
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fund Balances
The Town has established certain reservations and designations of governmental fund balances.
Reserves represent those portions of fund balances not considered as available for future
appropriation or legally segregated for a specific future use. Designated fund balances represent
tentative plans for future use of financial resources.
The following is a list of all reserves used by the Town and a description of each:
Reserved for inventories — An account used to segregate a portion of fund
balance to indicate that inventories do not represent available, expendable
resources even though it is a component of assets.
Reserved for prepaids — An account used to segregate a portion of fund
balance to indicate that prepaids do not represent available, expendable
resources even though it is a component of assets.
Reserved for dredging projects — An account used to indicate that a portion
of the General Fund's fund balance is legally restricted for the payment of
dredging projects.
Budgetaly Data
Formal budgetary integration is employed as a management control device during the year for the
General Fund and the Municipal Water Fund. All budgets are legally enacted.
Budgets are adopted on a basis consistent with generally accepted accounting principles.
Budgeted amounts are as originally adopted, or as amended by appropriate action. One
amendment was made during the year.
27
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property Taxes
Under Florida law, the assessment of all properties and the collection of all county, municipal,
and school board property taxes are consolidated in the offices of the County Property Appraiser
and County Tax Collector. The laws of the State regulating tax assessment are also designed to
assure a consistent property valuation method statewide.
The tax levy of the Town is established by the Town Commission prior to October 1 of each
year, and the Palm Beach County Property Appraiser incorporates the Town's millages into the
total tax levy, which includes Palm Beach County and Palm Beach County School Board tax
requirements.
All property is reassessed according to its fair market value January 1 of each year, which is also
the lien date. Each assessment roll is submitted to the Executive Director of the State
Department of Revenue for review to determine if the rolls meet all the appropriate requirements
of state statutes.
All taxes are due and payable on November 1 of each year or as soon thereafter as the
assessment roll is certified and delivered to the Tax Collector. All unpaid taxes become
delinquent on April 1 following the year in which they are assessed. Discounts are allowed for
early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in
the month of January and 1% in the month of February. The taxes paid in March are without
discount.
Delinquent taxes on real property bear interest of 18% per year. On or prior, to June 1 following
the tax year, certificates are sold for all delinquent taxes on real property. After the sale, tax
certificates bear interest of 18% per year or any lower rate bid by the buyer. Application for a
tax
deed on any unredeemed tax certificates may be made by the certificate holder after a period of
two years.
Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied
either by seizure and sale of the property or by the five year statute of limitations.
W.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and revenue and expenses during the
period reported. These estimates include assessing the collectibility of accounts receivable, the use
and recoverability of inventory, and useful lives and impairment of tangible and intangible assets,
among others. Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary. Actual
results could differ from the estimates.
NOTE 2 - DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2010, the carrying amount of the Town's deposits was $1,440,377 and the
bank balances totaled $1,507,440. The Town also had cash on hand of $200. Town deposits
include checking accounts, money market accounts, and certificates of deposit. The Town had two
money market accounts with a total bank balance and carrying amount of $805,115. The
certificates of deposit and money market accounts are reported as investments in the balance sheet.
As of September 30, 2010, the Town held the following certificates of deposit:
Days to Maturity Fair Value
294 $259,558
323 255,165
325 40,027
554 750
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasure requires all Florida qualified public depositories to deposit with the Treasure or another
banking institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The Town's
deposits are considered insured for custodial credit risk purposes.
29
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued)
Investments
Florida statutes authorize the Town to invest in the Local Government Surplus Funds Trust Fund
administered by the State Treasurer, negotiable direct obligations of or obligations unconditionally
guaranteed by the U.S. Government, interest-bearing time deposits in financial institutions located
in Florida and organized under Federal or Florida laws, obligations of the Federal Farm Credit
Banks, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank or its district
banks, or obligations guaranteed by the Government National Mortgage Association, and
obligations of the Federal National Mortgage Association.
The State Board of Administration is part of the Local Governments Surplus Funds Trust Fund
and is governed by Chapter 19-7 of the Florida Administrative Code. These rules provide
guidance and establish the general operating procedures for the administration of the Local
Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor General
performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the board has adopted operating
procedures consistent with the requirements for a 2a-7 fund.
On December 4, 2007, based on recommendations from an outside financial advisor, the State
Board of Administration restructured the Pool into two separate pools. Pool A, (Local
Government Surplus Funds Trust Fund Investment Pool) consisted of all money market
appropriate assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted
on a payment, paid more slowly than expected, and/or had any significant credit and liquidity
risk. At the time of the restructuring, all current pool participants had their existing balances
proportionately allocated into Pool A and Pool B. On August 3, 2009 the SBA announced
"Florida PRIME" as the highly enhanced version of the SBA's prior Local Government
Investment Pool.
At September 30, 2010, Florida PRIME was assigned a "AAA(m)" principal stability fund rating
by the Standard and Poor's Ratings. Florida PRIME is considered a SEC 20 -like fund, thus, the
account balance should also be considered its fair value. Fund B is not considered a SEC 2a7 -
like fund and is not rated by any nationally recognized rating agency.
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2010 was
52 days. A portfolio's WAM reflects the average maturity in days based on final maturity or
reset date, in the case of floating rate instruments. WAM measures the sensitivity of Florida
PRIME to interest rate changes.
30
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 2 - DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
The weighted average life (WAL) of Fund B at September 30, 2010 was 7.49 years. A
portfolio's WAL is the dollar weighted average length of time until securities held reach
maturity. WAL is based on legal final maturity dates for Fund B as of September 30, 2010.
Additional information regarding the Local Government Surplus Funds Trust Fund may be
obtained from the State Board of Administration.
As of September 30, 2010, the Town held the following investments:
Weighted
Average Fair
Maturi Value
State Board of Administration Investment Pool
Florida PRIME 52 days $ 685
Fund B 7.49 years 1,938
2 623
The investments in the State Board of Administration Pool are reported as investments in the
balance sheet.
Credit Risk
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill their
obligations. The Town's investment policies limit its investments to high quality investments to
control credit risk. At September 30, 2010, Florida PRIME was rated "AAA(m) by Standard and
Poor's Ratings Services. Fund B is not rated by any nationally recognized rating agency.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Town does not have a formal investment policy that limits investment maturities
as a means of managing exposure to fair value losses arising from increasing interest rates.
31
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 3 - CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2010, was as follows:
32
Beginning
Ending
Balance
Additions
Deletions
Balance
Governmental Activities:
Capital assets not
being depreciated:
Land
$ 376,523
$
$
$ 376,523
Capital assets being depreciated:
Buildings
835,145
4,070
839,215
Infrastructure
2,394,167
2,394,167
Equipment
458,346
55,041
(52,073)
461,314
Total at historical cost
$ 4,064,181
$ 59,111
$(52,073)
$4,071,219
Less accumulated depreciation for:
Buildings
$ 514,559
$ 41,907
$
$ 556,466
Infrastructure
793,921
78,118
872,039
Equipment
326,041
50,9912(
6,036)
350,996
Total accumulated
depreciation
$ 1,634,521
$ 171,016
$(26,030
$1,779,501
Governmental activities capital
assets, net
2,429.660
111905)
S2,291,718
32
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 3 - CAPITAL ASSETS (Continued)
Beginning
Balance
Business -Type Activities:
Capital assets not being depreciated: $
Capital assets being depreciated:
Water system improvements 2,540,406
Equipment 55,731
Total at historical cost $2,596,137
Additions Deletions
57,825
4,417
$ 62,242
Less accumulated depreciation for:
Water system improvements $ 468,144 $ 60,894
Equipment 46,945 1,622
Total accumulated
depreciation $ 515,089 $ 62,516
Business -type activities capital
assets, net 2 081 048 274
Ending
Balance
M
2,598,231
60,148
$2,658,379
$ 529,038
48,567
$ 577,605
2 080 774
Depreciation expense was charged to functions and programs of the primary government as
follows:
Governmental activities:
General government $ 61,521
Police department 419748
Streets 67,747
Total depreciation expense for
governmental activities 111L,016
Business -type activities:
Municipal Water 62 516
At September 30, 2010 there were $354,496 of fully depreciated governmental capital assets and
$108,021 of fully depreciated business -type capital assets.
33
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 4 - PROPRIETARY FUND ACCOUNTS RECEIVABLE
The Water Enterprise Fund had $190,426 in water billings receivable as of September 30, 2010.
The Town has not established a reserve for doubtful accounts relating to this accounts receivable
because the Town's long-term water billing collection rate is approximately 100%. The amount of
unbilled revenue at year end was insignificant.
NOTE 5 - INTERFUND RECEIVABLES AND PAYABLES
Individual interfund receivables and payables at September 30, 2010, were as follows:
Receivable Fund Payable Fund Amount
General Fund Water Fund 19 762
The outstanding balance between funds results from the time lag between the dates that interfund
goods and services are provided or reimbursable expenditures occur and payments between funds
are made.
NOTE 6 - LONG-TERM LIABILITIES
The Town's long-term liabilities consist solely of compensated absences. The change in long-term
liabilities is as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Compensated absences 61 838 13 377 (11.6881 63 527 43 859
NOTE 7 - DEFERRED COMPENSATION PLAN
The Town offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all Town employees, permits them to defer a
portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death, or unforeseeable emergency.
34
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 7 - DEFERRED COMPENSATION PLAN (Continued)
Assets of the plan are invested in either mutual funds or insurance contracts. In 1998, the Plan was
amended to conform to changes in the Internal Revenue Code brought about by the Small Business
Job Protection Act of 1996 (the "Act"). The Act requires that eligible deferred compensation plans
established and maintained by governmental employers be amended to provide that all assets of the
plan be held in trust, or under one or more appropriate annuity contracts or custodial accounts, for
the exclusive benefit of plan participants and their beneficiaries. As a result of this change, plan
assets are no longer subject to the claims of the Town's general creditors.
Because the Town has little administrative involvement and does not perform the investing
function for funds in the Plan, the Town's activities do not meet the criteria for inclusion in the
fiduciary funds of a government. Consequently, the Plan was removed from the Town's financial
statements.
NOTE 8 - DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
The Town passed Resolution 90-8 on November 28, 1990, authorizing the establishment of a
401(a) plan (the "Plan"). All full-time employees are eligible to participate in the Plan upon
completion of six months of service and attaining age 18. This defined contribution pension plan is
administered by the International City Management Association Retirement Corporation. In a
defined contribution plan, benefits depend solely on amounts contributed to the Plan plus
investment earnings. The plan requires that the Town and the employees contribute an amount
equal to 20.92% and 8.0%, respectively, of the employee's base salary each month. The Town's
contribution for each employee and investment earnings allocated to the employee's account vest at
a rate of 20% per year of service completed. Employees are eligible for normal retirement upon
attainment of the age of 59-1/2. Town contributions and interest forfeited by employees who leave
employment before satisfying the vesting requirement are used to reduce the Town's current -period
contribution requirement. Plan assets are not considered the Town's assets; therefore, they are not
included in the Town's basic financial statements. The Plan does not issue a stand alone financial
report.
The Town's total payroll for the fiscal year ended September 30, 2010, was $1,140,197, with
covered payroll of $1,042,498. The Town's required and actual contribution for the year was
$218,090 equaling 20.92% of covered payroll. The employees' contribution for the year was
$83,401 equaling 8.0% of covered payroll.
The investments are held in various mutual funds and employees can direct employer and
employee contributions made on their behalf.
35
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 9 - INTERLOCAL AGREEMENTS
Interlocal EMS Service Agreement with the City o Delray Beach
On July 14, 2009, the Town entered into an agreement with the City of Delray Beach whereby the
City of Delray Beach will provide the Town with emergency medical services. The term of the
agreement was for 10 years beginning on October 1, 2009, and extending through September 30,
2019. The annual service fee the Town paid under the agreement was $286,250 in the current
fiscal year. The annual service fees for future years will be the current year fee of $286,250,
adjusted annually based on the "All Urban Customers — United States April Consumer Price Index"
or an increase of five percent (5.0%), whichever is greater.
Interlocal Dispatch Service Agreement with the City o Delray Beach
On October 1, 2007 the Town entered into a new agreement with the City of Delray Beach for
dispatch services. The agreement shall automatically renew for five one year renewals unless either
party notifies the other in writing of their intent not to renew at least 90 days prior to the start of the
renewal term. The agreement shall terminate on September 30, 2012. The annual service fee the
Town paid under the agreement was $50,090 for the fiscal year ended September 30, 2010. The
service fees for subsequent years shall be adjusted from the previous year based on the "All Urban
Consumers — United States April Consumer Price Index".
NOTE 10 - OPERATING LEASE
On July 24, 2008, the Town entered into an operating lease for a copier for use in the Town Hall.
The lease is for 60 months and requires monthly payments of $531 that commenced in August
2008. For the year ended September 30, 2010, the Town made payments of $6,372 pursuant to the
lease.
The following is a schedule of the Town's required future minimum lease payments under the
agreement:
Year Ended Minimum
September 30 Lease Payments
2011
$ 6,372
2012
6,372
2013
5,310
Total 18 054
36
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 11— COMMITMENTS
On August 18, 2008, the Town amended the solid waste and recycling collection franchise
agreement with Waste Management Inc. of Florida (WMI). The agreement terminates on
September 30, 2013. Under the terms of the agreement, the Town informs WMI of the total number
of residential and multi -family units that have a Certificate of Occupancy each year on September
1. WMI bills all multi -family units that are serviced by a container. The monthly charges for the
remainder of the units that are serviced by means other than by containers are paid by the Town.
WMI bills the Town monthly for these services at the then current rate as adjusted from time to
time by the terms and conditions of the agreement. For the year ended September 30, 2010, the
Town made payments of $111,953 pursuant to the agreement.
NOTE 12 — OTHER POST EMPLOYMENT BENEFITS (OPEB)
The Town was required to implement Governmental Accounting Standards Board Statement 45
(GASB 45), Accounting and Financial Reporting by Employers for Post Employment Benefits
Other than Pensions for fiscal year ending September 30, 2010. Retirees of the Town pay an
amount equal to the actual premium for health insurance charged by the carrier, but there is an
implied subsidy in the healthcare insurance premium charged for active employees, who are
younger than retirees on average. This implied subsidy constitutes other post employment benefits
under GASB 45.
The Town elected not to apply GASB 45. The effects of that departure on the financial statements
are not reasonably determinable. The Town also has not disclosed the descriptive information
about other post employment benefits required by standards.
NOTE 13 - RISK MANAGEMENT
The Town is exposed to various risks of loss related to torts as well as theft of, damage to, and
destruction of assets. The Town is also exposed to errors and omissions, injuries to employees, and
natural disasters. The Town purchases commercial insurance to cover the various risks. Retention
of risks is limited to those risks that are uninsurable and deductibles ranging from $250 to $2,500
per occurrence. Review of the past three years claims reveals settled claims have not exceeded
insurance coverage.
37
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2010
NOTE 14 — NEW PRONOUNCEMENTS
The Town is required to implement Governmental Accounting Standards Board Statement 54
(GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions for the fiscal
year ending September 30, 2011. The objective of this is to increase the usefulness, including
understandability of governmental fund balance information. The impact of the implementation
of GASB 54 has not been determined.
W.
TOWN OF GULF STREAM, FLORIDA
Required Supplemental Information
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
General Fund
For the Year Ended September 30, 2010
Variance with
39
Final Budget
Budgeted
Amount,,
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues
Ad valorem taxes
$ 1,951,470
$ 1,951,470
$ 1,972,342
$ 20,872
Local option fuel taxes
30,000
30,000
28,678
(1,322)
Utility service taxes
66,807
66,807
Communications services taxes
69,000
69,000
64,143
(4,857)
Local business tax
20,500
20,500
16,402
(4,098)
Building permits
39,000
39,000
49,391
10,391
Franchise fees
135,700
135,700
118,277
(17,423)
State revenue sharing proceed;
59,900
59,900
61,689
1,789
Shared revenue from other local unit
11,393
11,393
Payment in lieu of taxes
29,900
29,900
29,900
Charges for services
132,000
132,000
112,631
(19,369)
Judgments and fines
4,000
4,000
1,506
(2,494)
Investment earnings
39,000
39,000
31,113
(7,887)
Miscellaneous revenue!
21,500
21,500
34,223
12,723
Total revenues
2,531,970
2,531,970
2,598,495
66,525
Expenditures
General and administrative
636,613
676,113
648,284
27,829
Police
1,303,639
1,318,639
1,312,483
6,156
Fire
289,000
289,000
286,250
2,750
Streets
231,720
231,720
156,730
74,990
Sanitation
136,000
136,500
111,953
24,547
Contingency
36,788
Total expenditures
2,633,760
2,651,972
2,515,700
136,272
Excess (deficiency) of revenue
over (under) expenditure;
$ (101,790)
$ (120,002)
82,795
$ 202,797
Fund balance, beginning of yea:
1,381,416
Fund balance, end of yea:
$ 1,464,211
39
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2010
NOTE 1 - BUDGETS AND BUDGETARY ACCOUNTING
As required by GASB Statement No. 34, a budgetary comparison schedule is presented for the General
Fund. The procedures for establishing budgetary data reflected in the budgetary comparison schedule
are as follows:
1. Prior to August 1, the Town Manager submits to the Town Commission a proposed operating
budget for the fiscal year commencing the next October 1. The operating budget includes
proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. Prior to October 1, the budget is legally enacted through the passage of an ordinance.
4. The Town Manager is authorized to transfer budgeted amounts within any department.
However, any revisions that alter the total expenditures of any department must be approved by
the Town Commission by a legally enacted resolution.
5. Budgets are adopted on a basis consistent with generally accepted accounting principles.
6. Appropriations along with encumbrances lapse at September 30.
M
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIM PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
215 FIFTH STREET, SLATE 700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) SM -M6
W W WNHMCPA.COM
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 A UDITING STANDARDS
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
EVERETT B. NOWLEN (1030-1964), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, CPA
ROBERT W. HENDRK JR.,CPA
JANET R. BARICEVICH, CPA
KATHLEENA. MINER, CPA
TERRY L MORTON, JR., CPA
N. RONALD BENNETT, CPA
J. MICHAEL STEVENS, CPA
ALEXIA G. VARGA, CPA
BRIAN J. BRESCV6 CFP-, CPA
KORA D. PETERSON, CPA
EDWARD T. HOLT, JR., CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 096-5612
FAX (561) 886-6248
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the Town of Gulf
Stream, Florida, as of and for the year ended September 30, 2010, which collectively comprise
the Town of Gulf Stream's basic financial statements and have issued our report thereon dated
April 7, 2011. The report on the governmental activities was qualified because the Town has not
recognized the other postemployment benefits (OPEB) expense and obligation which is required
in accordance with U.S. generally accepted accounting principles as provided in Governmental
Accounting Standards Board Statement No. 45. We conducted our audit in accordance with
auditing standards generally accepted in
applicable to financial audits contained
Comptroller General of the United States.
Internal Control Over Financial Reporting
the United States of America and the standards
in Government Auditing Standards, issued by the
In planning and performing our audit, we considered the Town of Gulf Stream, Florida's internal
control over financial reporting as a basis for designing our auditing procedures for the purpose
of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Town of Gulf Stream, Florida's internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Gulf
Stream, Florida's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis.
41
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies, or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Gulf Stream, 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.
We noted certain matters that we reported to management of the Town of Gulf Stream, Florida in
the accompanying Management Letter in Accordance with the Rules of the Auditor General
dated April 7, 2011.
This report is intended solely for the information and use of management, the Town Commission,
others within the entity, the Florida Auditor General, federal and state awarding agencies, and
pass-through entities and is not intended to be and should not be used by anyone other than these
specified parties.
*XVMX, PAL
West Palm Beach, Florida
April 7, 2011
42
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIM PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
215 FIFTH STREET, SLATE 700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) SM -M6
W W WNHMCPA.COM
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
EVERETT B. NOWLEN (1030-1964), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, CPA
ROBERT W. HENDRK JR.,CPA
JANET R. BARICEVICH, CPA
KATHLEENA. MINER, CPA
TERRY L MORTON, JR., CPA
N. RONALD BENNETT, CPA
J. MICHAEL STEVENS, CPA
ALEXIA G. VARGA, CPA
BRIAN J. BRESCV6 CFP-, CPA
KORA D. PETERSON, CPA
EDWARD T. HOLT, JR., CPA
BELLE GLADE OFFICE
333 S.E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 096-5612
FAX (561) 886-6248
We have audited the financial statements of the Town of Gulf Stream, Florida, as of and for the
year ended September 30, 2010, and have issued our report thereon dated April 7, 2011.
The Town has not recognized the other post -employment benefits (OPEB) expense and obligation
in the governmental activities financial statements as required in accordance with U.S. generally
accepted accounting principles as provided in Government Accounting Standards Board Statement
No. 45. The effects of that departure on the financial statements are not reasonably determinable.
The Town also has not disclosed the descriptive information about other post employment benefits
required by standards.
We conducted our audit in accordance with United States generally accepted auditing standards,
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 Auditor's
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. Disclosures in that report, which is dated April 7, 2011 should be considered in
conjunction with this Management Letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General, which governs the conduct of local government entity audits performed in the State of
Florida. This letter includes the following information, which is not included in the
aforementioned auditor's reports.
43
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
PRIOR YEAR COMMENTS
Rules of the Auditor General require 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.
There were no items in the prior year that required a response by management.
CURRENT YEAR COMMENTS
Investment of Public Funds
Rules of the Auditor General require our audit to include a review of the Town's
compliance with Section 218.415, Florida Statutes, regarding the investment of public
funds. In connection with our audit, the results of our procedures did not disclose any
instances of noncompliance with Section 218.415, Florida Statutes.
Current Year Recommendations
Rules of the Auditor General require that we address in the Management Letter any
recommendations to improve financial management. In connection with our audit, we did
not have any recommendations that are required to be reported in this letter.
Violations of Laws, Regulations, Contracts and Grant Provisions or Abuse
Rules of the Auditor General require that we address violations of provisions of contract or
grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an
effect on the financial statements that is less than material but more than inconsequential.
In connection with our audit, we did not have any such findings.
Matters Inconsequential to the Financial Statements
Rules of the Auditor General provide that the auditor may, based on professional judgment,
report the following matters that have an inconsequential effect on financial statements,
considering both quantitative and qualitative factors: (1) violations of provisions of
contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in internal
control that are not significant deficiencies. In connection with our audit, we did not have
any such findings.
Oversight Unit and Component Units
Rules of the Auditor General require that the name or official title and legal authority for
the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements, but has been repeated here.
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to
Chapter 31276, Laws of Florida, 1955. Based upon the application of criteria defined in
publications cited in Chapter 10.553, Rules of the Auditor General, the Town has
determined that there are no component units related to the Town.
Consideration of Financial Emergency Criteria
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 specific condition(s) met. In
connection with our audit, we determined that the Town of Gulf Stream, Florida did not
meet any of the conditions described in Section 218.503(1), Florida Statutes.
Annual Financial Report
Rules of the Auditor General require that we determine whether the annual financial report
for the Town of Gulf Stream, Florida for the fiscal year ended September 30, 2010, 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, 2010. In connection with our audit, we noted that the two reports were in
substantial agreement.
Financial Condition Assessment Procedures
Pursuant to Rules of the Auditor General, we applied financial condition assessment
procedures. It is management's responsibility to monitor the Town of Gulf Stream,
Florida's financial condition, and our financial condition assessment was based in part on
representations made by management and the review of financial information provide by
management. The results of our procedures did not disclose any matters that are required
to be reported.
Excess of Expenditures Over Appropriations
As indicated in Note 1 to the Budgetary Required Supplementary Information for the year
ended September 30, 2010 there were no departments that had expenditures in excess of
appropriations.
Single Audits
The Town expended less than $500,000 of federal awards and less than $500,000 of state
financial assistance for the year ended September 30, 2010. The Town was not required to
have a federal single audit or a state single audit.
45
Response to Management Letter
There were no items that required a response by management.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information and use of management,
the Town Commission, others within the entity, the Florida Auditor General, federal and state
awarding agencies, and pass-through entities and is not intended to be and should not be used by
anyone other than these specified parties.
West Palm Beach, Florida
April 7, 2011
46