HomeMy Public PortalAbout2016 AFRTOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2016
TABLE OF CONTENTS
Pages
Independent Auditor's Report 1-3
Management's Discussion and Analysis (required supplementary information) 4-11
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position
12
Statement of Activities
13-14
Fund Financial Statements
Balance Sheet—Governmental Funds
15
Reconciliation of the Balance Sheet—Governmental Funds to
the Statement of Net Position
16
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds
17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Funds to the Statement of Activities
18
Statement of Net Position — Proprietary Fund
19
Statement of Revenues, Expenses, and Changes in Fund Net Position —
Proprietary Fund
20
Statement of Cash Flows — Proprietary Fund
21
Notes to the Financial Statements
22-44
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
Budget and Actual — General Fund 45
Notes to the Budgetary Required Supplemental Information 46
Other Reports
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 47-48
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 49-51
Independent Accountant's Report on Compliance with Section 218.415,
Florida Statutes 52
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NOWLEN, HOLT & MINER, P.A.
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INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
Report on the Financial Statements
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We have audited the accompanying financial statements of the governmental activities, the business -
type activities, and each major fund, of the Town of Gulf Stream, Florida, as of and for the year ended
September 30, 2016, and the related notes to the financial statements, which collectively comprise the
Town's basic financial statements as listed in the table of contents.
Management's Responsibilityfor the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. 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 from material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Basis for Qualified Opinions
The Town has not recognized the other postemployment benefits (OPEB) expense and obligation in the
financial statements of the governmental activities, business -type activities, and the Enterprise Fund as
required in accordance with accounting principles generally accepted in the United States of America 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 postemployment benefits required by standards.
Qualified Opinions
In our opinion, except for the effects of the matter described in the "Basis for Qualified Opinions"
paragraph, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, business -type activities, and Enterprise Fund
of the Town of Gulf Stream, Florida, as of September 30, 2016, and the respective changes in financial
position, and where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Unmodified Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the General Fund and the Special Assessment Fund of the Town of Gulf
Stream, Florida, as of September 30, 2016, and the respective changes in financial position thereof for
the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the Town implemented Governmental Accounting
Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application and GASB
Statement No. 76, The Hierarchy of Generally Accepted Principles for State and Local Governments
during the year ended September 30, 2016. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 4 through 11 and 45 through 46
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 the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
2
Management has omitted the Schedule of Funding Progress for Other Postemployment Benefits that
accounting principles generally accepted in the United States of Amend require to be presented to
supplement the basic financial statements. Such missing intimated, although not a part of the basic
bacteria statements, is required by the Governmental Accepting Standards Board who considers it to
be an essential pffi of financial repenting for placing the basic financial statements in an appropriate
operational, economic orhistorical context Our opinion on bhebasic financial statements is not affected
hybris missing information.
Otho' Reporting RegnGed by GavemmentAudiling SLmdmd
In accordance with O rnmeN AUMnng StamlarG, we have 0 so issued our red ort dated April 11,2017,
on our vsideraton of the Town of Gulf Stream, Florida's internal control over financial reporting and
on w tests of its compliance with certan provisions of laws, regulations contacts, and grant
agreements and other mattes. The purpose of that report is to describe the scope of our losing of
internal control over financial reporting and compliance seethe results ofthattesang and notm provide
an opinion on internal control over financial reporting or on compliance Thatreport is an integral pffi
of an audit performed in accordance word Govamment Audltlng StarJards in considering the Town of
Gulf Strearn, Florida's internal control over financial reporting and compliance
n4wlLn Al, MkftI ,P&
West Patch Beach Florida
April 11, 2017
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 year's
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 plus deferred outflows of resources of the Town of Gulf Stream exceeded its
liabilities plus deferred inflows of resources at the close of the most recent fiscal year by
$10,764,924 (net position).
➢ The governmental activities revenues were $6,095,960 at the close of fiscal year 2016.
➢ The business -type activities revenues were $1,187,617 at the close of fiscal year 2016.
➢ The total cost of all Town programs was $5,231,977 during the fiscal year 2016.
➢ At the end of the 2016 fiscal year, unassigned fund balance for the general fund was $2,571,676
or 61% of total general fund expenditures.
USING THIS REPORT
As the Town of Gulf Stream strives for transparency in government, the following graphic is provided
for your review to help you navigate this document.
MD&A
BASIC
FINANCIAL
STATEMENTS
REQUIRED
SUPPLEMENTAL
INFORMATION
Management's Discussion & Analysis
(Required supplemental information) (pages 4-11)
Government -wide Financial Fund Financial Statements
Statements (pages 12-14) (Pages 15-21)
Notes to the Financial Statements
(Pages 22-44)
Required supplementary information
(Other than MD&A)(Pages 45-46)
4
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
Position includes all of the government's assets, deferred outflows of resources, liabilities, and deferred
inflows of resources. 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 position and how it has changed. Net
position is the difference between the Town's (a) assets plus deferred outflows of resources and (b)
liabilities plus deferred inflows of resources. It is one way to measure the Town's financial health or
financial position. Over time, increases or decreases in the Town's net position 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 Position and the Statement of Activities, we divide the Town into two kinds of
activities:
➢ Governmental 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 10. 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 governmental funds,
which focus 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.
5
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 Position
The Town's combined net position for the fiscal year ending 2016 is reported at $10,767,924. Net
position of the Town's governmental activities for the fiscal year ending 2016 is $7,608,882. The net
position of our business -type activities is reported at $3,156,042 for the fiscal year ending 2016. Overall
the financial position of the total primary government increased $2,051,600 during the current fiscal
year. Net position for the governmental activities increased $1,765,734 and net position for the business -
type activities increased $285,866.
Town of Gulf Stream
Net Position
September 30, 2015 and 2016
Deferred hfiovs of Resources 3,968 5,286 3,968 5,286
Net Investment in Capital Assets
Govom ntsl Activities
Business -type Activities
Total
1,755,043
3,929,084
2015
2016
2015
2016
2015
2016
Correct and Other Assets
$ 5,928,977 $
7,366,745
$ 1,210,932 $
1,446,101 $
7,139,909 $
8,812,846
CapMAssets
2,108,528
2,098,515
1,820,556
1,755,043
3,929,084
3,853,558
Total Assets
8,037,505
9,465,260
3,031,488
3,201,144
11,068,993
12,666,404
Correct and Other LvbRes
348,860
244,498
160,227
43,985
509,087
288,483
Long Tenn LvbRes
1,841,529
1,606,594
1,085
1,117
1,842,614
1,607,711
Total LvbRes
1190,389
1,851,092
161,312
45,102
2,351,701
1,896,194
Deferred hfiovs of Resources 3,968 5,286 3,968 5,286
Net Investment in Capital Assets
2,108,528
2,098,515
1,820,556
1,755,043
3,929,084
3,853,558
Reshieted - Dredgug Projects
17,820
17,820
17,820
17,820
Reshicted- Underground Utilities
2,446,436
2,364,841
2,446,436
2,364,841
Reshicted - Trmcsportation
16,454
16,454
Reshicted- Repai's, replacements, and iWoo ments
256,830
370,379
256,830
370,379
Unreshicted
1,253,910
3,127,706
792,790
1,030,620
2,046,700
4,158,326
Total Net Position
$ 5,843,148 $
7,608,882 $
2,870,176 $
3,156,042 $
8,713,324 $
10,764,924
6
Management's Discussion and Analysis
Changes in Net Position
The Statement of Activities presents information showing how the government's net position changed
during the most recent fiscal year. All changes in net position 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 increase in net position for governmental activities totaled $1,765,734. The increase in net
position was primarily due to an intentional effort to increase by $562,423 the Town's financial
reserves which had been depleted by years of unprecedented and unbudgeted legal expenses.
Other factors that attributed to the increase in net position were budgeted funds for legal
expenses that were not utilized due to a change in legal direction during the fiscal year and
budgeted funds which will be reserved for future street infrastructure projects that were not
started during the current fiscal year.
➢ The increase in business -type net position was $285,866. The increase in net position was due
to the slight increase of water rates by 4% and increasing the Reserve fee to $30.00 per month.
Town of Gulf Stream
Changes in Net Position
For the Fiscal Years Ended September 30, 2015 and 2016
Expenses
Governmental Activities
Business type Activities
Total
2015
2016
2015
2016
2015
2016
Revenues
General Goverrurent
1,620,270
1,916,345
Prog an Revenues
1,916,345
Police Dep attrent
1,394,742
1,477,923
Charges for Services $
275,237 $
768,568 $
1,089,717 $
1,185,466 $
1,364,954 $
1,954,034
Operatng Grants &Contributors
24,284
26,194
248,481
247,853
24,284
26,194
Capital Grants and Contrbutions
247,853
Sanitation
138,341
137,602
General Revenues
137,602
Physical F=orurert
737,662
87,085
Propeny Taxes
3,287,456
4,651,641
38,671
33,954
3,287,456
4,651,641
Contr uications Taxes
60,656
56,632
60,656
56,632
Gas Taxes
34,723
35,531
34,723
35,531
Uhlty Service Taxes
223,761
212,626
4,587,180
4,330,226
223,761
212,626
Franchise Fees
154,349
142,398
(291,651)
1,765,734
154,349
142,398
Unrestricted lnvestrrentEarnngs
107,115
46,321
6,134,799
2,151
107,115
48,472
INergovernrental Revenues
47,781
112,114
5,843,148 $
7,608,882 $
47,781
112,114
Other
80,167
43,935
80,167
43,935
Total Revenues
4,295,529
6,095,960
1,089,717
1,187,617
5,385,246
7,283,577
Expenses
Govenunental Activities
General Goverrurent
1,620,270
1,916,345
1,620,270
1,916,345
Police Dep attrent
1,394,742
1,477,923
1,394,742
1,477,923
Fire Protection
409,013
429,464
409,013
429,464
Streets
248,481
247,853
248,481
247,853
Sanitation
138,341
137,602
138,341
137,602
Physical F=orurert
737,662
87,085
737,662
87,085
Interest on Long -Tern Debt
38,671
33,954
38,671
33,954
Business -Type Acuities
Water
872,361
901,751
872,361
901,751
Total Expenses
4,587,180
4,330,226
872,361
901,751
5,459,541
5,231,977
Change nNet Posbbn
(291,651)
1,765,734
217,356
285,866
(74,295)
2,051,600
Net Position- Beghning
6,134,799
5,843,148
2,652,820
2,870,176
8,787,619
8,713,324
Net Position- Ending $
5,843,148 $
7,608,882 $
2,870,176 $
3,156,042 $
8,713,324 $
10,764,924
7
Management's Discussion and Analysis
Approximately three fourths of the Town's revenue comes from Property Taxes. Please see chart below.
Revenues — Governmental Revenues by Source
Unrestricted
Investment Communications
Franchise Fees Earnings Taxes Gas Taxes
2% 1% 1% 0%
-iEergowerrtmerki
Other
al Revenues 1G'
2%
Utility
T�
hargei
Servic
139
axes
Management's Discussion and Analysis
The Town's expenses cover a range of services, with 34% related to public safety. Please see chart
below.
Governmental Expenses by Function
Sanitation Phvsi€al Environment
InterestonLorg
. Term
Streets 3"€ 2�
6% Debt
I%
Fire Protection
10'Y
Ralire department
3C" .
0
General Government
44%
Management's Discussion and Analysis
Financial Analysis of the Governmental Funds
As the Town of Gulf Stream completed the year, the general fund reported a fund balance of
$3,264,648, an increase of $1,852,758 from the previous fiscal year. The increase was due primarily to
increased tax revenue and an intentional desire of the town commission to replenish the Town's
financial reserves for future infrastructure projects including a town hall expansion and a large scale
road repair and maintenance project. The general fund ended the 2016 fiscal year with $4,152 in non -
spendable fund balance, $688,820 in restricted fund balance, which consisted of $671,000 reserved for
the Undergrounding Assessment Revenue shortage, and $2,571,676 in unassigned fund balance. Though
the revenues exceeded the expenditures for the current fiscal year, the Town's financial reserves have
been restored to the commission's desired level to help minimize the necessity of incurring long term
debt for planned future infrastructure projects.
Financial Analysis of the Proprietary Fund
Total net position of the water fund at the end of the fiscal year 2016 was $3,156,042. The net position
of the water fund has increased slightly from last year. Water rates were raised slightly by 4% and the
Reserve fee increased to $30.00 per month and was implemented for Fiscal Year 2015-2016.
General Fund Budgetary Highlights
Over the course of the year, The Town Commission increased by resolution the budget for revenues and
expenditures one time by Resolution No. 16-13. This adjustment for $200,798 was to account for the
increase in building permit inspection revenue and expenditure with the City of Delray Beach which
contractually performs the Town of Gulf Stream's building inspections. The adjustment did increase the
total budgeted revenues and expenditures by $200,798. Actual total expenditures were $1,775,551 less
than the final budget amounts due to unused budgeted contingency funds, street capital outlay funds, and
administrative legal funds as discussed previously in this document. Revenues were $77,207 more than
the final budget amounts consisting of primarily of unanticipated contributions from the Civic
Association, an increase in Zoning Administrative Review Fees, and other miscellaneous unbudgeted
revenues.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2016, the Town had invested $3,853,558 in a broad range of capital assets
including police equipment, buildings, infrastructure and water improvements. Additional information
can be found in Note 4 to the financial statements.
10
Net Capital Assets
Land
Construction in Progress
Buildings & Improvements
Equipment
Ioffastrucu re
Total Net Capital Assets
Long -Term Liabilities
Management's Discussion and Analysis
Town of Gulf Stream
Capital Assets
(Net of Depreciation)
September 30, 2015 and 2016
Governmental Activities Business -type Activities Total
2015 2016 2015 2016 2015 2016
$ 376,523 $
376,523 $ - $
- $ 376,523 $
376,523
5,235
15,212
5,235
15,212
164,532
186,008 1,812,926
1,749,659 1,977,458
1,935,667
196,150
215,929 7,630
5,384 203,780
221,313
1,366,088
1,304,843
1,366,088
1,304,843
$ 2,108,528 $
2,098,515 $ 1,820,556 $
1,755,043 $ 3,929,084 $
3,853,558
As of September 30, 2016 the Town had $1,607,711 in long-term liabilities as shown in the following
table. Additional information can be found in Note 5 to the financial statements.
Town of Gulf Stream
Long -Term Liabilities
September 30, 2015 and 2016
Governmental Activities Business -type Activities Total
2015 2016 2015 2016 2015 2016
Promissory Note $ 1,735,914 $ 1,503,137 $ - $ - $ 1,735,914 $ 1,503,137
Compensated Absences 105,615 103,457 1,085 1,117 106,700 104,574
Total Long- Tenn Liabilities $ 1,841,529 $ 1,606,594 $ 1,085 $ 1,117 $ 1,842,614 $ 1,607,711
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
For the 2017 fiscal year, general fund revenue projections are increased.
➢ The millage rate was decreased to 4.490 mills from 5.0000 mills, which is less than the rolled -
back rate by 3.74%.
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.
11
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
September 30, 2016
Primary Government
Governmental Business -type
Assets
Cash and cash equivalents
$ 537,013
$ 752,151
$ 1,289,164
Investments
1,894,749
1,894,749
Equity in pooled investments
3,292,811
117,611
3,410,422
Accounts receivable
69,211
199,492
268,703
Other receivable
1,524
1,524
Assessments receivable
1,502,285
1,502,285
Inventories
2,003
3,096
5,099
Prepaid expenses
2,149
3,372
5,521
Restricted assets
Equity in pooled investments
65,000
346,285
411,285
Accounts receivable
24,094
24,094
Capital assets
Non -depreciable
391,735
391,735
Depreciable (net of depreciation)
1,706,780
1,755,043
3,461,823
Total assets
9,465,260
3,201,144
12,666,404
Liabilities
Accounts payable
98,609
35,979
134,588
Accrued liabilities
65,224
2,235
67,459
Accrued interest payable
15,665
15,665
Payable from restricted assets
Damage deposit bonds
65,000
65,000
Unearned revenue
5,771
5,771
Long-term liabilities
Payable within one year
304,060
1,117
305,177
Payable after one year
1,302,534
1,302,534
Total liabilities
1,851,092
45,102
1,896,194
Deferred inflows of resources
Unearned revenue
5,286
5,286
Net position
Net investment in capital assets
2,098,515
1,755,043
3,853,558
Restricted for dredging projects
17,820
17,820
Restricted for underground utilities
2,364,841
2,364,841
Restricted for repairs, replacements
and improvements
370,379
370,379
Unrestricted
3,127,706
1,030,620
4,158,326
Total net position
$ 7,608,882
$ 3,156,042
$ 10,764,924
See notes to the financial statements
12
TOWN OF GULF STREAM, FLORIDA
Statement of Activities
For the Year Ended September 30, 2016
Functions/Programs
Primary Government
Governmental activities
General government
Police department
Fire protection
Streets
Sanitation
Physical environment
Interest on long-term debt
Total governmental activities
Business -type activities
Water
Total primary government
13
Charges for
Expenses Services
$ 1,916,345
1,477,923
429,464
247,853
137,602
87,085
33,954
4,330,226
$ 622,801
1,403
139,898
4,466
901,751 1,185,466
$ 5,231,977 $ 1,954,034
General revenues
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared revenues
Unrestricted investment earnings
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning
Net position - ending
4,651,641
56,632
35,531
212,626
142,398
112,114
46,321
43,935
5,301,198
1,765,734
2,151
2,151
285,866
4,651,641
56,632
35,531
212,626
142,398
112,114
48,472
43,935
5,303,349
2,051,600
5,843,148 2,870,176 8,713,324
$ 7,608,882 $ 3,156,042 $ 10,764,924
See notes to the financial statements
14
Net (Expense) Revenue and
'rogram Revenues
Changes in Net Position
Operating Capital
Primary Government
Grants and Grants and
Governmental Business -type
Contributions Contributions
activities activities
Total
$ 26,194 $
$ (1,267,350) $ $
(1,267,350)
(1,476,520)
(1,476,520)
(429,464)
(429,464)
(247,853)
(247,853)
2,296
2,296
(82,619)
(82,619)
(33,954)
(33,954)
26,194
(3,535,464)
(3,535,464)
283,715
283,715
$ 26,194 $
(3,535,464) 283,715
(3,251,749)
General revenues
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared revenues
Unrestricted investment earnings
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning
Net position - ending
4,651,641
56,632
35,531
212,626
142,398
112,114
46,321
43,935
5,301,198
1,765,734
2,151
2,151
285,866
4,651,641
56,632
35,531
212,626
142,398
112,114
48,472
43,935
5,303,349
2,051,600
5,843,148 2,870,176 8,713,324
$ 7,608,882 $ 3,156,042 $ 10,764,924
See notes to the financial statements
14
TOWN OF GULF STREAM, FLORIDA
Balance Sheet- Governmental Funds
September 30, 2016
See notes to the financial statements
15
Special
Total
General
Assessment
Governmental
Fund
Fund
Funds
Assets
Cash and cash equivalents
$
52,244
$
484,769
$
537,013
Investments
1,894,749
1,894,749
Equity in pooled investments
3,292,811
3,292,811
Accounts receivable
69,211
69,211
Assessments receivable
1,502,285
1,502,285
Other receivable
1,524
1,524
Inventories
2,003
2,003
Prepaid expenditures
2,149
2,149
Restricted assets
Equity in pooled investments
65,000
65,000
Total assets
$
3,483,418
$
3,883,327
$
7,366,745
Liabilities, deferred inflows of resources,
and fund equity
Liabilities
Accounts payable
$
83,260
$
15,349
$
98,609
Accrued liabilities
65,224
65,224
Payable from restricted assets
Deposit payable
65,000
65,000
Total liabilities
213,484
15,349
228,833
Deferred inflows of resources
Unearned revenue
5,286
5,286
Unavailable revenue
1,502,285
1,502,285
Total deferred inflows of resources
5,286
1,502,285
1,507,571
Fund equity
Nonspendable
Inventories
2,003
2,003
Prepaids
2,149
2,149
Restricted for
Dredging projects
17,820
17,820
Underground utilities
2,365,693
2,365,693
Assigned to
Subsequnetyear's expenditures
671,000
671,000
Unassigned
2,571,676
2,571,676
Total food equity
3,264,648
2,365,693
5,630,341
Total liabilities, deferred inflows of resources,
and fund equity
$
3,483,418
$
3,883,327
$
7,366,745
See notes to the financial statements
15
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2016
Fund balance of governmental funds
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
Less accumulated depreciation
Revenue is recognized when earned in the government wide statements
regardless of when it is collected. Governmental funds recognize
revenue when it is both measurable and available.
5,630,341
$ 4,673,942
(2,575,427) 2,098,515
Unavailable revenue 1,502,285
Long-term liabilities, including accrued interest payable, are not due
and payable in the current period and therefore, are not reported in
governmental funds.
Note payable (1,503,137)
Accrued interest payable (15,665)
Compensated absences (103,457)
Net position of governmental activities $ 7,608,882
See notes to the financial statements
16
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2016
Expenditures
Current
Special
Total
General and administrative
General
Assessment
Governmental
Police department
Fund
Fund
Funds
Revenues
429,464
429,464
Taxes
$ 4,971,227
$
$ 4,971,227
Intergovernmental revenue
151,814
151,814
Licenses and perm its
737,126
87,085
737,126
Charges for services
140,841
140,841
Fines and forfeits
1,403
1,403
Investment earnings
8,917
37,404
46,321
Special assessments
232,771
232,771
Miscellaneous
42,762
4,466
47,228
Total revenues
6,054,090
274,641
6,328,731
Expenditures
Current
General and administrative
1,861,299
1,861,299
Police department
1,432,211
1,432,211
Fire protection
429,464
429,464
Streets
148,176
148,176
Sanitation
137,602
137,602
Physical environment
87,085
87,085
Capital outlay
192,580
192,580
Debt service
Principal
232,777
232,777
Interest
36,380
36,380
Total expenditures
4,201,332
356,242
4,557,574
Excess (deficiency) of revenues
over (under) expenditures
1,852,758
(81,601)
1,771,157
Net change in fund balance
1,852,758
(81,601)
1,771,157
Fund balance- beginning of the year
1,411,890
2,447,294
3,859,184
Fund balance - end of the year
$ 3,264,648
$ 2,365,693
$ 5,630,341
See notes to the financial statements
17
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2016
Net change in fund balance of governmental funds $ 1,771,157
Amounts reported for governmental activities in the statement of
activities are differert because:
Governmental finds 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
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
Governmental funds include revenues collected within 60 days
of year end as deferred revenue. Government -wide reporting
recognizes revenues when they are earned, regardless of when
they are collected
Special assessments
The repayment of the principal of long term debt consumes
financial resources of governmental funds, but it does not
have any effect on net position
Principal payments on debt
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 goverr¢nental funds.
Change in accrued interest payable
Change in long-term compensated absences
Change in net position of governmental activities
$ 169,739
174,961 (5,222)
See notes to the financial statements
18
(4,791)
(232,771)
232,777
2,426
2,158
$ 1,765,734
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2016
Assets
Current assets
Cash and cash equivalents
Equity in pooled investments
Accounts receivable, net
Prepaid expenses
Inventories
Restricted assets
Equity in pooled investments
Accounts receivable
Total current assets
Noncurrentassets
Depreciable capital assets
Less acumulated depreciation
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Accounts payable
Accrued liabilities
Compensated absences payable
Unearned revenue
Total current liabilities
Total liabilities
Net position
Net investment in capital assets
Restricted for repairs, replacements and improvements
Unrestricted
Total net position
See notes to the financial statements
19
Enterprise
Fund
$ 752,151
117,611
199,492
3,372
3,096
346,285
24,094
1,446,101
2,730,300
(975,257)
1,755,043
3,201,144
35,979
2,235
1,117
5,771
45,102
02
1,755,043
370,379
1,030,620
S 3,156,042
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2016
Operating revenues
Charges for services
Total operating revenues
Operating expenses
Personnel
Water purchases
Repairs and maintenance
Management fees
Depreciation expense
Payment in lieu of taxes
Other expenses
Total operating expenses
Operating income
Nonoperating revenues
Interest income
Total nonoperating revenues
Income before capital contributions
Capital contributions
Connection fees
Reserve fees
Total capital contributions
Change in net position
Net position - beginning of the year
Net position - end of the year
See notes to the financial statements
20
Enterprise
Fund
$ 1,071,387
1,071,387
77,270
562,610
16,726
90,000
65,513
39,700
49,932
901,751
169,636
2,151
171,787
530
114,079
285,866
2,870,176
$ 3,156,042
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2016
Cash flows from operating activities:
Receipts from customers
Payments to employees
Payments to suppliers
Internal activity - payments to other funds
Net cash provided by operating activities
Cash flows from capital financing activities:
Reserve fees received
Connection fees received
Net cash provided by capital financing activities
Cash flows from investing activities:
Interest and dividents on investments
Sale (Purchase) of investments
Net cash used by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of the year
Cash and cash equivalents - end of the year
Cash flows from operating activities:
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable
Prepaid expenses
Inventory
Increase (decrease)in:
Accounts payable
Accrued liabilities
Unearned revenue
Total adjustments
Net cash provided by operating activities
See notes to the financial statements
21
Enterprise
Fund
$ 1,047,610
(75,003)
(749,358)
(129,700)
93,549
103,923
530
104,453
2,151
551,998
554,149
752,151
$ 752,151
$ 169,636
65,513
(23,081)
(3,372)
1,063
(117,781)
2,267
(696)
(76,087)
$ 93,549
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
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.
Reportl nQ 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, physical
environment, and water services.
As required by generally accepted accounting principles, these financial statements include the
Town (the primary government) and its component units. Component units are legally separate
entities for which the Town is financially accountable. The Town is financially accountable if
a) The Town appoints a voting majority of the organization's governing board and (1) the
Town is able to impose its will on the organization or (2) there is a potential for the
organization to provide specific financial benefits to or impose specific financial burdens on
the Town, or
b) the organization is fiscally dependent on the Town and (1) there is a potential for the
organization to provide specific financial benefits to the Town or (2) impose specific
financial burdens on the Town.
Organizations for which the Town is not financially accountable are also included when doing so is
necessary in order to prevent the Town's financial statements from being misleading.
Based upon application of the above criteria, management of the Town of Gulf Stream has
determined that no component units exist which would require inclusion in this report. Further, the
Town is not aware of any entity that would consider the Town to be a component unit.
22
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
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 position and the statement of
activities) report information on all of the non -fiduciary activities of the primary government.
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 govemment-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.
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.
23
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
The Town reports the General Fund and The Special Assessment Fund as major governmental
funds. The General Fund is the general operating fund of the Town, and it is used to account for all
financial resources except those required to be accounted for in another fund. The Special
Assessment Fund is a special revenue fund used to account for financial resources relating to the
underground utility project.
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,
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.
24
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Proprietary Funds (Continued)
The Town reports the Municipal Water Fund as a major proprietary fund. The Municipal Water
Fund was established to account for the provision of water services to Town residents.
Cash and Cash Equivalents
Cash and cash equivalents include amounts on deposit in demand accounts. For the purposes of the
statement of cash flows, the Town considers amounts on deposit in demand accounts to be cash
equivalents.
Investments
Investments are stated at fair value. Fair value is defined as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. Fair value is a market-based measurement, not an entity -specific
measurement. For some assets and liabilities, observable market transactions or market
information might be available; for others, it might not be available. However, the objective of
fair value measurement in both cases is the same, that is, to determine the price at which an
orderly transaction to sell the asset or to transfer the liability would take place between market
participants at the measurement date under current market conditions. Fair value is an exit price
at the measurement date from the perspective of a market participant that controls the asset or is
obligated for the liability. The Town categorizes investments reported at fair value in accordance
with the fair value hierarchy established by GASB Statement No. 72, Fair Value Measurement
and Application.
Accounts Receivable
Trade and other receivable are shown net of an allowance for estimated uncollectible amounts.
Charges for solid waste collection and water usage are billed on a bi-monthly cycle. The Town
recognizes revenue and the related receivables for the estimated unbilled usage at year end.
25
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets
Capital assets, which include property, plant, 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 and in the Water Enterprise Fund.
Effective October 1, 2011, the Town increased the capitalization threshold from $1,000 for all
classes of capital assets to the following amounts:
Buildings
$5,000
Equipment
5,000
Infrastructure
10,000
Water Infrastructure
10,000
The change was made prospectively, and all capital assets placed into service prior to October 1,
2011 will remain capitalized. 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 nonspendable fund balance which indicates that it does not constitute "available spendable
resources" even though it is a component of net current assets.
26
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
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.
27
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Unearned Revenues
The government reports unearned revenue on its government wide statement of net position,
proprietary statement of net position, and governmental funds balance sheet. Unearned revenue
arises when the government receives resources prior to revenue recognition. hi subsequent periods,
when revenue recognition criteria are met the liability for unearned revenue is removed and revenue
is recognized.
Unavailable Revenue
The Town reports unavailable revenue on its governmental funds balance sheet for resource inflows
that do not qualify for recognition as revenue in a governmental fund because they are not yet
considered available. In subsequent periods when the resources are considered available the liability
for unavailable revenue is removed and revenue is recognized.
Deferred Outflows ofResources
A deferred outflow of resources is a consumption of net position that is applicable to a future
reporting period.
Deferred Inflows ofResources
A deferred inflow of resources is an acquisition of net position that is applicable to a future
reporting period.
Long -Term Liabilities
In the government -wide financial statements and proprietary fund financial statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business -type activities, or proprietary fund statement of net position.
Fund Balance
In the fund financial statements, governmental funds report fund balance classifications that
comprise a hierarchy based primarily on the extent to which the Town is bound to honor constraints
on the specific purposes for which amounts in those funds can be spent. Fund balance is reported
under the following categories:
28
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fund Balance (Continued)
1. Nonspendable fund balances — Includes amounts that cannot be spent
because they are either (a) not in spendable form or (b) legally or
contractually required to be maintained intact. The "not in spendable form"
criterion includes items that are not expected to be converted to cash, for
example, inventories and prepaid amounts. It also includes the long-term
amount of loans and notes receivable, as well as property acquired for resale.
However, if the use of the proceeds from the collection of those receivables
or from the sale of those properties is restricted, committed, or assigned,
then they should be included in the appropriate fund balance classification
(restricted, committed, or assigned), rather than the nonspendable fund
balance. The corpus (or principal) of a permanent fund is an example of an
amount that is legally or contractually required to be maintained intact.
2. Restricted fund balance — Includes amounts that are restricted to specific
purposes when constraints placed on the use of resources are either
(a) externally imposed by creditors (such as through debt covenants),
grantors, contributors, or laws or regulations of other governments, or
(b) imposed by law through constitutional provisions or enabling legislation.
3. Committed fund balance — Includes amounts that can be used only for
specific purposes pursuant to constraints imposed by an ordinance, the
Town's highest level of decision making authority. Those committed
amounts cannot be used for any other purpose unless the Town removes or
changes the specified use by taking the same type of action (an ordinance) it
employed to previously commit those amounts.
4. Assigned fund balance — Includes amounts intended to be used by the Town
for specific purposes, but are neither restricted nor committed. Intent should
be expressed by the Town Commission or the Town Manager to which the
Town Commission has delegated authority to assign amounts to be used for
specific purposes. The authority for making an assignment is not required to
be the Town's highest level of decision making authority. Constraints
imposed on the use of assigned amounts are more easily removed or
modified than those imposed on amounts classified as committed.
29
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fund Balance (Continued)
5. Unassigned fund balance — Includes the residual classification for the general
fund. This classification represents fund balance that has not been assigned to
other funds and that has not been restricted, committed, or assigned to
specific purposes within the general fund. The general fund should be the
only fund that reports a positive unassigned fund balance amount. In other
governmental funds, it may be necessary to report a negative unassigned fund
balance if expenditures incurred for specific purposes exceeded the amounts
restricted, committed, or assigned to those purposes.
When an expenditure is incurred for purposes for which both restricted and unrestricted
(committed, assigned, or unassigned) amounts are available, it is the Town's policy to reduce
restricted amounts first. When an expenditure is incurred for purposes for which amounts in any of
the unrestricted fund balance classifications could be used, it is the Town's policy to reduce
committed amounts first, followed by assigned amounts, and then unassigned amounts.
Net Position
Net position is the residual of all other elements presented in a statement of financial position. It
is the difference between (a) assets plus deferred outflows of resources and (b) liabilities and
deferred inflows of resources. Net position is displayed in following three components:
1. Net investment in capital assets — Consists of capital assets including
restricted capital assets, net of accumulated depreciation and reduced by
the outstanding balances of any bonds, notes or other borrowings that are
attributable to the acquisition, construction or improvement of those
assets.
2. Restricted net position — Consists of net position with constraints placed
on the use either by: (a) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or (b) law
through constitutional provisions of enabling legislation.
3. Unrestricted net position — All other net position that does not meet the
definition of "restricted" or "net investment in capital assets".
30
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Budgetary Data
Formal budgetary integration is employed as a management control device during the year for the
General Fund and the Municipal Water Fund. Appropriations are legally controlled at the
department level. All budgets are legally enacted and are adopted on a basis consistent with
generally accepted accounting principles. Budgeted amounts are as originally adopted, or as
emended by appropriate action. The Special Assessment Special Revenue Fund is not budgeted
because it is not legally required to be budgeted.
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.
31
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use ofEstimates
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.
Implementation of Governmental Accounting Standards Board Statements
The Town implemented the following Governmental Accounting Standards Board Statements
during the fiscal year ended September 30, 2016:
In February 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application.
This Statement provides guidance for determining a fair value measurement for financial
reporting purposes and also provides guidance for applying fair value of certain investments and
disclosures related to all fair value measurements. The adoption of this statement resulted in
improved disclosures related to the fair value measurement of investments.
In June 2015 the GASB issued Statement No. 76, The Hierarchy of Generally Accepted
Accounting Principles for State and Local Governments. This Statement identifies — in the
current governmental financial reporting environment — the hierarchy of generally accepted
accounting principles. The adoption of this statement did not impact the Town's financial
statements.
Recently Issued Accounting Pronouncements
A brief description of new accounting pronouncements that might have a significant impact on
the Town's financial statements is presented below. Management is currently evaluating the
impact of adoption of these statements in the Town's financial statements.
32
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recentiv Issued Accounting Pronouncements (Continued)
In June 2015 the GASB issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This Statement improves accounting and
financial reporting by state and local governments for postemployment benefits other than
pensions. It also improves information provided by state and local governmental employers about
financial support for OPEB that is provided by other entities. This Statement is effective for the
fiscal year ending September 30, 2018.
In August 2015 the GASB issued Statement No. 77, Tax Abatement Disclosures. This Statement
improves financial reporting by giving users of financial statements essential information that is
not consistently or comprehensively reported to the public at present. This Statement is effective
for the fiscal year ending September 30, 2017.
In December 2015 the GASB issued Statement No. 78, Pensions Provided Through Certain
Multiple -Employer Defined Benefit Pension Plans. This Statement addresses a practice issue
regarding the scope and applicability of Statement No. 68, Accounting and Financial Reporting
for Pensions. This Statement is effective for the fiscal year ending September 20, 2017.
In December 2015 the GASB issued Statement No. 79, Certain External Investment Pools and
Pool Participants. This Statement establishes criteria for an external investment pool to qualify
for making an election to measure all of its investments at amortized cost for financial reporting
purposes. This Statement is effective for the fiscal year ending September 20, 2017.
In March 2016, the GASB issued Statement No. 82, Pension Issues — an amendment of GASB
Statements No. 67, No. 68, and No. 73. This Statement addresses issues regarding the
presentation of payroll -related measures in required supplementary information, the selection of
assumptions and the treatment of deviations from the guidance in an Actuarial Standard of
Practice for financial reporting purposes, and the classification of payments made by employers
to satisfy employee (plan member) contribution requirements. This statement is effective for the
fiscal year ending September 30, 2017.
33
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 2 — DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2016, the carrying amount of the Town's deposits was $7,005,420 and the
bank balances totaled $7,155,665. The Town also had cash on hand of $200. Town's deposits
include checking accounts, money market checking accounts, and certificates of deposit. The
certificates of deposit and money market accounts are reported as investments in the balance sheet
and statement of net position.
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 other
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.
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.
Fair Value Hierarchy
GASB Statement No. 72, Fair Value Measurement and Application, requires governments to
disclose the fair value hierarchy for each type of asset or liability measured at fair value in the
notes to the financial statements. The standard also requires governments to disclose a description
of the valuation techniques used in the fair value measurement and any significant changes in
valuation techniques. GASB 72 establishes a three-tier fair value hierarchy. The hierarchy is
based on valuation inputs used to measure the fair value as follows:
34
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Fair Value Hierarchv (Continued)
Level l: Inputs are directly observable, quoted prices in active markets for
identical assets or liabilities.
Level 2: Inputs are other than quoted prices included within Level 1 that are for
the asset or liability, either directly or indirectly. These inputs are
derived from or corroborated by observable market data through
correlation or by other means.
Level 3: Inputs are unobservable inputs used only when relevant Level 1 and
Level 2 inputs are unavailable.
The level in which an asset is assigned is not indicative of its quality but an indication of the
source of valuation inputs.
Certificates of deposit are exempt from reporting under the fair value hierarchy, and their fair
value is measured at cost. As of September 30, 2016, the Town held the following certificates of
deposit:
Description Cost Days to Maturity
Bank of America CD $ 264,285 301
Flagler Bank CD 255,914 548
$ 520,199
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.
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.
35
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 3 — RECEIVABLES
As of September 30, 2016, the Town's receivables for the individual major funds, including
applicable allowances for uncollectible accounts, are as follows:
Taxes
Accounts - unbilled
Accounts - billed
Other
Due from other governments
Special assessments
Subtotal
Allowance for uncollectibles
Net receivables
NOTE 4 — CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2016, was as follows:
Beginning
Business -Type Activities Balance Additions Deletions
Assets being depreciated
Water system improvements $2,658,922 $
Equipment 71,378
Total at historical cost 2,730,300
Accumulated depreciation
Water system improvements 845,996 63,267
Equipment 63,748 2,246
Total accumulated depreciation 909,744 65,513
Business -type activities, net $1,820,556 $(65,513)
36
Ending
Balance
$ $2,658,922
71,378
2,730,300
909,263
65,994
975,257
$ $1,755,043
Special
General
Assessment
Water
Fund
Fund
Fund
Total
$ 29,673
$
$
$ 29,673
3,808
3,808
24,620
244,778
269,398
159
1,524
1,683
14,759
14,759
1,502,285
1,502,285
69,211
1,503,809
248,586
1,821,606
(25,000)
(25,000)
$ 69,211
$ 1,503,809
$ 223,586
$ 1,796,606
Capital asset activity for the year ended September 30, 2016, was as follows:
Beginning
Business -Type Activities Balance Additions Deletions
Assets being depreciated
Water system improvements $2,658,922 $
Equipment 71,378
Total at historical cost 2,730,300
Accumulated depreciation
Water system improvements 845,996 63,267
Equipment 63,748 2,246
Total accumulated depreciation 909,744 65,513
Business -type activities, net $1,820,556 $(65,513)
36
Ending
Balance
$ $2,658,922
71,378
2,730,300
909,263
65,994
975,257
$ $1,755,043
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 4 — CAPITAL ASSETS (Continued)
Beginning
Governmental Activities Balance Additions
Assets not being depreciated
Land $ 376,523
Construction in progress 5,235
Total not being depreciated 381,758
Assets being depreciated
9,977
9,977
Ending
Deletions Balance
$ $ 376,523
15,212
391.735
Buildings
892,705
51,831
(11,056)
933,480
Equipment
589,942
78,146
668,088
Infrastructure
2,650,854
29,785
2,680,639
Total being depreciated
4,133,501
159,762
(11,056)
4,282,207
Total at historical cost
4,515,259
169,739
(11,056)
4,673,942
Accumulated depreciation
Buildings
728,173
25,564
(6,265)
747,472
Equipment
393,792
58,367
452,159
Infrastructure
1,284,766
91,030
1,375,796
Total accumulated depreciation
2,406,731
174,961
(6,265)
2,575,427
Governmental activities, net $2,108,528 $ (5,222) $ (4,791) $2,098,515
Depreciation expense was charged to functions and programs of the primary government as
follows:
Governmental activities:
General government $ 61,026
Police department 33,932
Streets 80,003
Total governmental activities $ 174,961
Business -type activities:
Municipal water $ 65,513
37
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 5 — LONG-TERM LIABILITIES
Governmental Activities
On September 6, 2012, the Town issued its Promissory Note, Undergrounding Project in the
principal amount of $2,427,895 to provide funds for the project of undergrounding the electric,
cable television, and telephone utility facilities serving the municipality. Such debt shall not be a
general obligation of the Town. The Town covenants that, so long as the Note shall remain unpaid
or any other amounts are owed by the Town under the Note, it will appropriate in its annual budget,
by amendment, if required, from pledged funds and available non ad valorem revenues, amounts
sufficient to pay principal and interest on the Note as they become due. The covenant to budget and
appropriate does not create a lien upon or pledge of the available non ad valorem revenues. Pledged
funds consist of amounts on deposit in the note proceeds fund and the payment fund and special
assessments.
Principal and interest payments on the Note are due in annual installments commencing on April 1,
2013 and on each April 1 thereafter until final maturity on April 1, 2022. The Note bears interest at
the rate of 2.09%. At September 30, 2016, principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $1,614,877. Principal and interest paid for the current fiscal year
was $269,157 and pledged special assessments were $232,777.
Annual debt service requirements to maturity are as follows:
Year Ended
September 30
Principal
Interest
Payment
2017
$ 237,741
$ 31,416
$ 269,157
2018
242,710
26,447
269,157
2019
247,783
21,374
269,157
2020
252,961
16,196
269,157
2021
258,248
10,909
269,157
2022
263,694
5,398
269,092
$ 1,503,137
$ 111,740
$ 1,614,877
38
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 5 — LONG-TERM LIABILITIES (Continued)
Changes in the Town's long-term liabilities for the year ended September 30, 2016 are summarized
as follows:
Beginning
Business -type Activities Balance
Compensated absences
Ending Due Within
Additions Deletions Balance One Year
$ 1,085 $ 32 $ $ 1,117 $ 1,117
Compensated absences of the governmental activities are liquidated by the General Fund.
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2016, was
$33,954 and total interest paid during the year was $36,380. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
On November 28, 1990, the Town passed Resolution No. 90-8, 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. For the fiscal year ended September 30, 2016, the Town recognized
39
Beginning
Ending
Due Within
Govenimental Activities
Balance Additions
Deletions
Balance
One Year
Promissory Note
$1,735,914 $
$232,777
$1,503,137
$237,741
Compensated absences
105,615 67,086
69,244
103,457
66,319
Total Govenimental Activities
$1,841,529 $ 67,086
$ 302,021
$1,606,594
$304,060
Beginning
Business -type Activities Balance
Compensated absences
Ending Due Within
Additions Deletions Balance One Year
$ 1,085 $ 32 $ $ 1,117 $ 1,117
Compensated absences of the governmental activities are liquidated by the General Fund.
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2016, was
$33,954 and total interest paid during the year was $36,380. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
On November 28, 1990, the Town passed Resolution No. 90-8, 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. For the fiscal year ended September 30, 2016, the Town recognized
39
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN (Continued)
pension expense of $262,302 for the Plan, and as of the fiscal year end, the Town reported a
payable in the amount of $10,269 for outstanding contributions to the Plan. There were no
forfeitures for the fiscal year.
Because the Town does not hold or administer funds for the Plan, it does not meet the criteria for
inclusion in the Town's financial statements as a fiduciary fund. The Plan does not issue a stand
alone financial report.
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.
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.
NOTE 8 — OTHER POSTEMPLOYMENT BENEFITS (OPEB)
The Town was required to implement Governmental Accounting Standards Board Statement 45
(GASB 45), Accounting and Financial Reporting by Employers for Postemployment 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 postemployment benefits under GASB
Statement 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 postemployment benefits required by standards.
40
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 9 — INTERLOCAL AGREEMENTS
Interlocal Agreement for Fire and EMS Service - City ofDelrav Beach
On July 14, 2009, the Town entered into an agreement with the City of Delray Beach whereby the
City will provide the Town with fire and emergency medical services. The term of the agreement is
for 10 years beginning on October 1, 2009, and extending through September 30, 2019. On October
4, 2011, the agreement was amended to increase the service fee for additional areas annexed into
the Town. The Town paid an annual service fee of $429,464 for the fiscal year ended September
30, 2016. The annual service fees for future years will be the current year fee 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. The annual service for the fiscal year ending September
30, 2017 will be $450,937.
Interlocal Agreement for Dispatch Service - City ofDelrav Beach
On October 1, 2012, 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, 2017. The basic service fee under
the agreement was $54,036 for the initial contract year. Each year thereafter the basic service fee
shall be adjusted from the previous year in an amount based upon the All Urban Consumers -United
States Consumer Price Index for April. For the year ended September 30, 2016, the Town paid
$54,502 pursuant to the agreement.
Interlocal Agreement for Water Purchase - City ofDelrav Beach
In June 1998, the Town entered into an agreement with the City of Delray Beach for the purchase of
treated, potable water. The term of the agreement is for a period of twenty-five years. Under the
terms of the agreement, the Town is to pay the City the prevailing water rate charged by the City to
non-residential users plus a surcharge of 25%. For the year ended September 20, 2016, the Town
paid $562,610 pursuant to the agreement.
Interlocal Agreement for Permitting and Inspection Services - City ofDelrav Beach
In November 2009, the Town entered into an agreement with the City of Delray Beach to provide
the Town with the expertise and assistance of the City of Delray Beach Community Improvement
Department (the "Department") for the inspection and permitting of certain construction projects
within the Town's limits for compliance with the Florida Building Code ( the "Code"). Under the
terms of the agreement the Department shall review and process all plans, checking for compliance
41
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 9 — INTERLOCAL AGREEMENTS (Continued)
Interlocal Agreement for Permitting and Inspection Services -City ofDelray Beach (Continued)
with the Code and to determine the subsidiary permits necessary and the amount of fees. For
processing and the inspection service, the City shall receive one hundred percent of the permit fee.
The fees shall be collected by the City. The agreement shall be of a continuing nature unless
cancelled by either party for any reason and without penalty, on not less than sixty days written
notice. In March 2010, the agreement was amended to add that the City shall collect the appropriate
County impact fees for Town permits issued by the City. The City shall retain a 3.4%
administrative fee for all Town impact fee assessments. For the year ended September 30, 2016, the
Town paid $480,797 pursuant to the agreement.
NOTE 10—COMMITMENTS
Solid Waste and Recychng Collection Franchise Agreement
On September 13, 2013, the Town amended the solid waste and recycling collection franchise
agreement with Waste Management Inc. of Florida (WMI). The amendment extended the term of
the agreement until September 30, 2018, and eliminated the fuel surcharge provision. 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, 2016, the
Town made payments of $137,602 pursuant to the agreement.
42
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 10—COMMITMENTS (Continued)
Construction Commitments
Undergrounding — Phase II, Wilco
Undergrounding — Phase II, Comcast
Project Management and Support
NOTE 11— RISK MANAGEMENT
Authorized
Amount
Amount
Completed
at 09/30/16
Balance to
Complete
at 09/30/16
$2,890,597
$ $2,890,597
160,312
160,312
408,206
338,722 69,484
$3,459,115
$338,722 $3,120,393
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; injuries to employees, and natural disasters for which the Town
carries commercial insurance. 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. The Town has not significantly reduced insurance coverage during
the past three fiscal years. There were no settled claims which exceeded insurance coverage
during the fiscal years ended September 30, 2014, 2015, and 2016.
Florida Statues limit the Town's maximum loss for most liability claims to $200,000 per person
and $300,000 per occurrence under the Doctrine of Sovereign Immunity. However, under certain
circumstances, a plaintiff can seek to recover damages in excess of statutory limits by introducing a
claims bill to the Florida Legislature. The limits addressed in Florida Statutes do not apply to claims
filed in Federal courts.
The Town is involved in various litigation and claims arising in the course of operations. The
Town is a defendant in several lawsuits alleging violation by the Town of the State of Florida's
Public Records Law. hi the event of success in these cases, plaintiffs would be entitled to
attorney's fees. The likelihood of unfavorable outcomes and the amounts of potential losses
cannot be reasonably determined at this time. Accordingly, no provision for any liability that may
result has been made in the accompanying financial statements.
43
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2016
NOTE 12 — OPERATING LEASE
On May 31, 2013, the Town entered into an operating lease for a copier for use in Town Hall. The
lease is for a term of 60 months and requires minimum monthly payments of $501 that commenced
in July 2013. For the year ended September 30, 2016, the Town made payments of $10,048
pursuant to the lease.
The following is a schedule of the Town's required future minimum lease payments under the
agreement:
2017 $ 6,012
2018 4,509
$10,521
NOTE 13 — SPECIAL ASSESSMENT
On June 30, 2011, the Town adopted Resolution 011-11 levying non -ad valorem special
assessments on properties specially benefitted by a capital improvement project to place
underground the overhead electric, cable television, and telephone utility facilities that serve a
portion of the Town and its inhabitants. The special assessments were calculated using a
methodology that fairly and reasonably apportions the cost of the project among the benefitted
parcels in proportion to the benefits to such parcels. The calculation methodology used an
equivalent benefit unit assigned for three categories: (1) improved safety (2) improved reliability
and (3) improved aesthetics.
Property owners were given the option to pay the entire amount of the assessment in advance of the
Town obtaining financing for the project. The special assessments are subject to prepayment only
on or before November 1, 2011. Assessments that are not prepaid shall be payable in not less than
10 and not more than 20 yearly installments. The special assessments shall bear interest not
exceeding 10% per annum over the term of the financing obtained by the Town and will include
annual costs related to administration and collection not to exceed 5%. The total assessable cost
was $5,518,144, and the Town received prepayments in the amount of $2,885,049. See Note 5 for a
discussion of the related financing for the project.
44
Minimum
Year Ended
Lease
September 30
Payments
2017 $ 6,012
2018 4,509
$10,521
NOTE 13 — SPECIAL ASSESSMENT
On June 30, 2011, the Town adopted Resolution 011-11 levying non -ad valorem special
assessments on properties specially benefitted by a capital improvement project to place
underground the overhead electric, cable television, and telephone utility facilities that serve a
portion of the Town and its inhabitants. The special assessments were calculated using a
methodology that fairly and reasonably apportions the cost of the project among the benefitted
parcels in proportion to the benefits to such parcels. The calculation methodology used an
equivalent benefit unit assigned for three categories: (1) improved safety (2) improved reliability
and (3) improved aesthetics.
Property owners were given the option to pay the entire amount of the assessment in advance of the
Town obtaining financing for the project. The special assessments are subject to prepayment only
on or before November 1, 2011. Assessments that are not prepaid shall be payable in not less than
10 and not more than 20 yearly installments. The special assessments shall bear interest not
exceeding 10% per annum over the term of the financing obtained by the Town and will include
annual costs related to administration and collection not to exceed 5%. The total assessable cost
was $5,518,144, and the Town received prepayments in the amount of $2,885,049. See Note 5 for a
discussion of the related financing for the project.
44
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, 2016
Variance with
See notes to budgetary comparison schedule
45
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Taxes
Ad valorem taxes
$ 4,652,390
$ 4,652,390
$ 4,651,641
$ (749)
Local option fuel taxes
33,017
33,017
35,531
2,514
Utility service taxes
194,000
194,000
212,626
18,626
Communications services taxes
59,568
59,568
56,632
(2,936)
Local business tax
19,114
19,114
14,797
(4,317)
Total taxes
4,958,089
4,958,089
4,971,227
13,138
Licenses and permits
Inspecction Fees
90,000
90,000
113,931
23,931
Franchise fees
133,000
133,000
142,398
9,398
Building permits
280,000
480,798
480,797
(1)
Total licenses and permits
503,000
703,798
737,126
33,328
Intergovemmental revenue
State revenue sharing proceeds
104,610
104,610
102,420
(2,190)
Shared revenue from other local units
7,886
7,886
9,694
1,808
Payment in lieu of taxes
39,700
39,700
39,700
Total intergovernmental revenue
152,196
152,196
151,814
(382)
Charges for services
Solid waste collection fees
142,000
142,000
139,898
(2,102)
Other
15,000
15,000
943
(14,057)
Total charges for services
157,000
157,000
140,841
(16,159)
Judgments, fines and forfeits
Judgments and fines
1,800
1,800
1,403
(397)
Total judgments, fines, and forfeits
1,800
1,800
1,403
(397)
Investment earnings
4,000
4,000
8,917
4,917
Miscellaneous revenues
Contributions
26,194
26,194
Other
16,568
16,568
Total miscellaneous revneues
42,762
42,762
Total revenues
5,776,085
5,976,883
6,054,090
77,207
Expenditures
General and administrative
2,762,308
2,963,106
1,901,765
1,061,341
Police
1,657,358
1,657,358
1,512,057
145,301
Fire
430,464
430,464
429,464
1,000
Streets
782,955
782,955
220,444
562,511
Sanitation
143,000
143,000
137,602
5,398
Total expenditures
5,776,085
5,976,883
4,201,332
1,775,551
Excess (deficiency) of revenues
over (under) expenditures
$
$
1,852,758
$ 1,852,758
Fund balance, beginning of year
1,411,890
Fund balance, end of year
$ 3,264,648
See notes to budgetary comparison schedule
45
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2016
NOTE 1 - BUDGETS AND BUDGETARY ACCOUNTING
A budget is legally adopted for the General Fund. The Special Assessment Special Revenue Fund is
not legally required to be budgeted and is not budgeted.
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 1st, the Town Manager submits to the Town Commission a proposed operating
budget for the fiscal year commencing the next October 1st. 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 1st, 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 ordinance.
5. Budgets are adopted on a basis consistent with generally accepted accounting principles.
6. Appropriations along with encumbrances lapse at September 30th.
NOTE 2 - BUDGET AND ACTUAL COMPARISONS
Formal budgetary integration is employed within the accounting system as a management control
device. Appropriations are legally controlled at the department level and expenditures may not legally
exceed appropriations at that level. For the year ended September 30, 2016, no departments had an
excess of expenditures over appropriations.
46
NIH NOWLEN, HOLT & MINER, P.A.
& M CERTUTEDPUBLICACCOUNTALMCS EVER B.N Ml
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INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL BELLE CLARE OFFICE
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OVER FINANCIAL REPORTING AND ON COMPLIANCE AND P SSTOFRC BO a
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL BFLLEGI-AD , B-ORIIi58+15983-08 P
STATEMENTS PERFORMED IN ACCORDANCE WITH FAIL ISEn�eezae
GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business -type activities, and each major fund of the
Town of Gulf Stream, Florida, as of and for the year ended September 30, 2016, and the related
notes to the firtancial statements, which collectively comprise the Town of Gulf Stream's basic
financial statements and have issued our report thereon dated April 11, 2017. The opinions on
the governmental activities, business -type activities, and Enterprise Fund were 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.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of
Gulf Stream, Florida's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Town of Gulf Stream, Florida's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Town of Gulf Stream, Florida's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. A sign cant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
47
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Our consideration of intemal control was for the limited purpose described in the first paragraph
of has section and was not designed to identify all deficiencies in interest control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in interest control that we consider to be matured w®Icnesses.
However, material wealmesses may etistthathave not been identified.
GompHarreaud Omer platters
As part of obtaining reasonable assurance about whether the Town of Gulf Stream, Florida's
financial statements are flee fiom material misstatement we performed tests of its compliance
with certain provisions of laws, regulations, contacts, 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 will 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 othermatters that are required to be reported
under Oowrnmem Aud]nng SRadards.
Purpose olmis Report
The purpose of this report is solely to describe the scope of our testing of interest control and
compliance and the results of that testing and not to provide an opinion on the effectiveness of
the entity's interest control or on compliance Tltis report is an integral part of an audit
performed in accordance Asti Government Auditing Standards in considering the entity's
interest control and compliance Accordingly, this communication is not suitable for any order
purpose
West Palm Beach Florida
April 11, 2017
40
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MANAGEMENT LETTER IN ACCORDANCE WITH
ww M
THE RULES OF THE AUDITOR GENERAL RIDNARD EBOT,G. GFA
OF THE STATE OF FLORIDA
BELLE BLADE OFFICE
NO SE, 2M STREET
POSTOFRCEBOx338
BELLE GLADE, FLORIDA 3343p-0330
TELEPHONE 150119383012
The Honorable Mayor and Members of the Town Commission FAX 1sen99Be2ne
Town of Gulf Stream, Florida
Report on the Financial Statements
We have audited the financial statements of the Town of Gulf Stream, Florida, as of and for the
fiscal year ended September 30, 2016, and have issued our report thereon dated April 11, 2017.
The Town has not recognized the other postemployment benefits (OPEB) expense and obligation
in the financial statements of the governmental activities, business -type activities, and Enterprise
Fund as required in accordance with accounting principles generally accepted in the United States
of America, 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 postemployment benefits required by
accounting principles generally accepted in the United States of America.
Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and Chapter 10.550 Rules of the
Auditor General.
Other Reports
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 and Independent Accountant's Report on an
examination conducted in accordance withAICPA Professional Standards, Section 601, regarding
compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General.
Disclosures in those reports, which are dated April 11, 2017, should be considered in conjunction
with this Management Letter.
49
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Prior Audit Findings
Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
annual financial audit report. Corrective actions have been taken to address findings and
recommendations made in the preceding annual financial audit report.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this Management Letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements.
Financial Condition
Section 10.554(1)(i)5.a. and 10.5560, Rules of the Auditor General, require that we apply
appropriate procedures and report the results of our determination as to whether or not the Town of
Gulf Stream, Florida 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.
Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), 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
provided by same. Our assessment was done as of the fiscal year end. The results of our
procedures did not disclose any matters that are required to be reported.
Annual Financial Report
Section 10.554(1)(i)5.b. and 10.5560, Rules of the Auditor General, require that we apply
appropriate procedures and report the results of our determination as to whether the annual
financial report for the Town of Gulf Stream, Florida for the fiscal year ended September 30, 2016,
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, 2016. In connection with our audit, we determined that the two reports were in
agreement.
50
Special District Cmapou®t Units
Section 10 554(l)O5.d, Rules of me Auditor Genoa, requires that we determine whether erne[ a
special district that is a component wit of a county, municipality, or soonsl district provided the
financial information necessary for proper reporting of the component unit within the asdiRd
financial statements of the cowry, municipality, or special district in accordance with Section
21039(3)(b), Florida Stabutes
Based on the application of mtena in publications cited in section Io 553, Rules of the Auditor
General, there are no special mavct compon®twits of theTown of Gulf Stream, Ronda
Oflier Matters
Section 10554(1)(1)2., Rules of the Auditor Genera, requires that we address in the Maagement
Letter my recommendations to improve minnow management In correction wim ow audit we
did not have my such recommendations.
Section 10 554(pQ3, Rules of the Auditor Genera, requires that we address noncompliance with
previsions of contracts or grant agreements, or abuse, that have occurred, or are likely to have
occurred, that have an effect on the financial statements that is less than material but which
warrants the attention of those charged with governance In connection win our audit, we did not
have my such findings.
SimWe Audits
'Hae Town expended less than $750000 of federal awards and less than $750,000 of state minnow
anstance for the yew ended September 30, 2016, and was not required to have a federal single
audit ora state angle audit
Purpose of this Lestr
Ow Management Letter ia intended setey for the information and use of the Legislative Auditing
Committee members of the Flonda Senate and the Ronda House of Representative the Ronda
Auditor Genera, Federal and state awardivg agencies, pass-through entities, management of the
Town of Gulf Stream, and members of the Town Commission, and is not intended to be and
shomd notbe used by anyone otherthan these specified parties.
lk U,PA.
West Patch Beach Ronda
April 11, 2017
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INDEPENDENT ACCOUNTANT'S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
BELLEGI.ADE OFFICE
=GE 2M STREET
POST OFFICE BOX 336
BELLE GLADE, FLORIDA �
TELEPHONE 156119363612
FAX 156119968206
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have examined the Town of Gulf Stream, Florida's compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2016. Management is responsible for the Town of Gulf
Stream, Florida's compliance with those requirements. Our responsibility is to express an opinion on the
Town of Gulf Stream, Florida's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the Town of Gulf Stream, Florida's compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a legal determination on
the Town of Gulf Stream, Florida's compliance with specified requirements.
In our opinion, the Town of Gulf Stream, Florida complied, in all material respects, with the
aforementioned requirements for the year ended September 30, 2016.
This report is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and Florida House of Representative, the Florida Auditor General,
applicable management, and the Town Commission, and is not intended to be and should not be used by
anyone other than these specified parties.
West Palm Beach, Florida
April 11, 2017
52
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AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL