HomeMy Public PortalAbout2020 Gulf Stream AFR
TOWN OF GULF STREAM, FLORIDA
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR’S REPORT THEREON
FISCAL YEAR ENDED SEPTEMBER 30, 2020
TOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2020
TABLE OF CONTENTS
Page
Independent Auditor's Report 1-3
Management’s Discussion and Analysis (required supplementary information) 4-13
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 14
Statement of Activities 15-16
Fund Financial Statements
Balance Sheet – Governmental Funds 17
Reconciliation of the Balance Sheet – Governmental Funds to
the Statement of Net Position 18
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds 19
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Funds to the Statement of Activities 20
Statement of Net Position – Proprietary Fund 21
Statement of Revenues, Expenses, and Changes in Fund Net Position –
Proprietary Fund 22
Statement of Cash Flows – Proprietary Fund 23
Statement of Fiduciary Assets and Liabilities – Agency Fund 24
Notes to the Financial Statements 25-55
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund 56-57
Notes to the Budgetary Required Supplemental Information 58
Schedule of Changes in Total OPEB Liability 59
Other Supplementary Information
Individual Fund Schedule
Schedule of Changes in Fiduciary Assets and Liabilities – Agency Fund 60
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 61-63
TOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2020
TABLE OF CONTENTS
(Continued)
Page
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 64-66
Independent Accountant’s Report on Compliance with Section 218.415,
Florida Statutes 67
Chief Financial Officer’s Affidavit in Accordance with Section 163.31801,
Florida Statutes 68
1
INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Gulf Stream,
Florida, as of and for the year ended September 30, 2020, and the related notes to the financial statements,
which collectively comprise the Town of Gulf Stream, Florida’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for 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.
2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Town of Gulf Stream, Florida, as of September 30,
2020, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 4 through 13, the budgetary comparison information on pages 56 through
58, and the Schedule of Changes in Total OPEB Liability on page 59 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town of Gulf Stream, Florida’s basic financial statements. The individual fund financial
statements are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The individual fund financial statements are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare the
financial statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the individual fund
financial statements are fairly stated in all material respects in relation to the basic financial statements as
a whole.
3
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 3, 2021,
on our consideration of the Town of Gulf Stream, Florida’s internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is solely to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the Town of Gulf Stream, Florida’s internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the Town of Gulf Stream, Florida’s internal control over financial
reporting and compliance.
West Palm Beach, Florida
June 3, 2021
Management’s Discussion and Analysis
4
The Town of Gulf Stream’s (the “Town”) discussion and analysis is designed to:
Assist the reader in focusing on significant financial issues
Provide an overview of the Town’s financial activity
Identify changes in the Town’s financial position
Identify any material deviations from the financial plan (approved budget)
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 $15,164,515 (net
position).
The governmental activities revenues were $5,960,454 at the close of fiscal year 2020.
The business-type activities revenues were $1,245,754 at the close of fiscal year 2020.
The total cost of all Town programs was $5,483,022 during the fiscal year 2020.
At the end of the 2020 fiscal year, unassigned fund balance for the General Fund was increased by
$767,833 and ending Fiscal Year 2020 with a total of $6,437,020 or 83% of total General Fund
expenditures which totaled $5,339,975 at the end of Fiscal Year 2020.
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 4-13)
Government-wide Financial Fund Financial Statements
Statements (pages 14-16) (Pages 17-24)
Notes to the Financial Statements
(Pages 25-55)
Required supplementary information.
(Other than MD&A) (Pages 56-59)
Management’s Discussion and Analysis
5
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 infrastructure, 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 11. 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.
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)
Management’s Discussion and Analysis
6
is the same as its business type activities, but provides more detail and additional information,
such as cash flows.
Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties
outside the government. Fiduciary funds are not included in the government-wide financial
statements because the resources of these funds are not available to support the City’s programs.
While fiduciary funds represent fiduciary responsibilities of the Town, these assets are restricted
in purpose and do not represent discretionary assets of the government. The Town reports a single
fiduciary fund, the Health Reimbursement Agency Fund.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Net Position
The Town’s combined net position for the fiscal year ending 2020 is reported at $15,164,515. Net position
of the Town’s governmental activities for the fiscal year ending 2020 is $10,682,155. The net position of
our business-type activities is reported at $4,482,360 for the fiscal year ending 2020. Overall, the financial
position of the total primary government increased $1,723,186 during the current fiscal year. Net position
for the governmental activities increased $1,288,324 and net position for the business-type activities
increased $434,862.
Town of Gulf Stream
Net Position
September 30, 2019 and 2020
Governmental Activities Business-type Activities Total
2019 2020 2019 2020 2019 2020
Current and Other Assets 8,086,123$ 8,554,919$ 2,447,978$ 2,620,141$ 10,534,101$ 11,175,060$
Capital Assets 2,623,829 3,269,122 1,641,867 2,805,023 4,265,696 6,074,145
Total Assets 10,709,952 11,824,041 4,089,845 5,425,164 14,799,797 17,249,205
Deferred Outflows of Resources 14,481 12,483 14,481 12,483
Current and Other Liabilities 418,265 537,233 41,294 38,269 459,559 575,502
Long Term Liabilities 888,233 596,552 1,053 1,095 889,286 597,647
Total Liabilities 1,306,498 1,133,785 42,347 39,364 1,348,845 1,173,149
Deferred Inflows of Resources 24,104 20,584 24,104 20,584
Net Investment in Capital Assets 2,623,829 2,980,620 1,641,867 1,901,583 4,265,696 4,882,203
Restricted - Dredging Projects 17,820 17,820 17,820 17,820
Restricted - Underground Utilities 371,464 375,792 371,464 375,792
Restricted - Infrastructure Projects 186,811 98,565 186,811 98,565
Restricted - Health reimbursement 57,000 57,000
Restricted - Repairs & replacements 664,336 796,888 664,336 796,888
Unrestricted 6,136,907 7,209,358 1,741,295 1,783,889 7,878,202 8,993,247
Total Net Position 9,393,831$ 10,682,155$ 4,047,498$ 4,482,360$ 13,441,329$ 15,164,515$
Management’s Discussion and Analysis
7
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).
At the end of Fiscal Year 2020, there was an increase in the total net position from Fiscal Year
2020 for governmental activities which totaled $1,288,324. The 2020 net position total for
governmental activities, which includes the General Fund, Special Assessment Fund, and
Infrastructure Surtax Fund, was $10,682,155. Expenses of the governmental activities decreased
$355,415 from Fiscal Year 2019 to Fiscal Year 2020. The decrease in expenses was primarily the
result of a pause in construction on the Undergrounding Project while negotiations between the
Town and AT&T regarding change orders necessary to complete the Project were taking place.
The increase in business-type net position was $434,862 from Fiscal Year 2019 to Fiscal Year
2020. There was a significant decrease from Fiscal Year 2019 to Fiscal Year 2020, primarily in
the purchase of water from the City of Delray Beach. There was a slight increase in revenue from
2019 to 2020 in investment earnings. The Town continues to collect what is known as a reserve
fee which will be used for future infrastructure repair and replacement cost. During Fiscal Year
2019 the Town began the design and planning for the first major water infrastructure project of
the 10 Year CIP (Capital Improvement Plan) which was approved by the Town Commission in
Fiscal Year 2018. Construction on the A1A Watermain Phase II Project began in Fiscal Year
2020. This included increasing the size of the watermain along A1A from Golfview Dr. to Sea
Road, Sea Road, North County Road, Bermuda Lane, and Little Club Road, as well as pavement
repaving and improvements.
Management’s Discussion and Analysis
8
Town of Gulf Stream
Changes in Net Position
For the Fiscal Years Ended September 30, 2019 and 2020
Governmental Activities Business-type Activities Total
2019 2020 2019 2020 2019 2020
Revenues
Program Revenues
Charges for Services 827,037$ 717,155$ 1,091,752$ 1,080,141$ 1,918,789$ 1,797,296$
Operating Grants & Contributions 35,573 31,933 35,573 31,933
Capital Grants and Contributions 136,084 132,552 136,084.00 132,552.00
General Revenues
Property Taxes 4,430,361 4,451,048 4,430,361 4,451,048
Infrastructure Surtax 73,489 69,563 73,489 69,563
Communications Taxes 58,432 59,246 58,432 59,246
Gas Taxes 37,134 33,125 37,134 33,125
Utility Service Taxes 232,024 235,037 232,024 235,037
Franchise Fees 147,907 148,073 147,907 148,073
Unrestricted Investment Earnings 83,721 107,747 20,710 33,061 104,431 140,808
Intergovernmental Revenues 117,370 107,347 117,370 107,347
Other 51,283 180 51,283 180
Total Revenues 6,094,331 5,960,454 1,248,546 1,245,754 7,342,877 7,206,208
Expenses
Governmental Activities
General Government 2,209,863 2,010,742 2,209,863 2,010,742
Police Department 1,568,359 1,640,933 1,568,359 1,640,933
Fire Protection 497,158 522,015 497,158 522,015
Streets 312,018 311,954 312,018 311,954
Sanitation 150,945 157,745 150,945 157,745
Physical Environment 270,410 15,107 270,410 15,107
Interest on Long-Term Debt 18,792 13,634 18,792 13,634
Business-Type Activities
Water 949,769 810,892 949,769 810,892
Total Expenses 5,027,545 4,672,130 949,769 810,892 5,977,314 5,483,022
Change in Net Position 1,066,786 1,288,324 298,777 434,862 1,365,563 1,723,186
Net Position - Beginning 8,327,045 9,393,831 3,748,721 4,047,498 12,075,766 13,441,329
Net Position - Ending 9,393,831$ 10,682,155$ 4,047,498$ 4,482,360$ 13,441,329$ 15,164,515$
Management’s Discussion and Analysis
9
The Town’s primary source of revenue continues to come from Property Taxes as seen in the
comparison of Fiscal Year Revenues from 2019 and 2020 in the chart below.
Management’s Discussion and Analysis
10
The Town’s expenses cover a range of services, and total expenses decreased from Fiscal Year
2019 to Fiscal Year 2020. The primary expense is for General Government which includes the
administration, finance and legal functions.
Management’s Discussion and Analysis
11
Financial Analysis of the Governmental Funds
As the Town of Gulf Stream completed the year, the General Fund reported a fund balance of $7,059,925,
an increase of $515,256 from the previous fiscal year. The increase was due primarily timing of
construction liabilities related to the Town’s 10 Year Capital Improvement Plan. The General Fund ended
the 2020 fiscal year with $5,085 in non-spendable fund balance (which includes inventories and prepaid
expenditures), $617,820 in restricted fund balance, which consisted of $17,820 reserved for dredging
projects and $600,000 for subsequent fiscal year’s expenditures, with $6,437,020 in unassigned fund
balance. The intent of the Town Commission is to proceed with a dynamic 10 Year Capital Improvement
Plan and use the fund balance to avoid incurring future debt.
Financial Analysis of the Proprietary Fund
Total net position of the water fund at the end of the fiscal year 2020 was $4,482,360. The net position of
the water fund increased $434,862 from the prior year. Water rates were not increased during Fiscal Year
2020. The Town has increased the net position of the Proprietary Fund, also known as the Water Fund,
with a combination of increased water sales revenue and increased investment revenue. The net position
of the Enterprise Fund will be used in conjunction with the fund balance of the General Fund to support
the 10 Year Capital Improvement Plan.
General Fund Budgetary Highlights
The Town Commission increased by resolution the budget for revenues and expenditures one time by
Resolution No. 20-12. This adjustment for $35,592 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 Town Commission also increased by resolution the budget for Legal Department expenditures and
decreased the Administration Department expenditures one time by Resolution No. 20-12. This Budget
Amendment was necessary due to unforeseen contracted legal expense incurred due to the ongoing
negotiations with AT&T regarding the completion of the Undergrounding Project.
The Town Commission has made it a budget priority to increase the fund balance of the General Fund.
The fund balance was severely depleted around 2014 due to ongoing legal battles. Since then, the
Commission has deemed it proper and appropriate to take necessary measures to restore the fund balance.
Now that the fund balance is at appropriate levels again, the Commission intends to use the fund balance
to finance the adopted 10 Year Capital Improvement Plan. Items included in the 10 Year CIP are water
infrastructure repairs and replacement, road repairs, smart meters, improved storm drainage and street
lighting. It is the Town’s wish to repair and replace the Town’s infrastructure without the need of issuing
debt.
Management’s Discussion and Analysis
12
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2020, the Town had invested $5,473,633 in a broad range of capital assets
including police equipment, buildings, and infrastructure and water improvements. Additional
information can be found in Note 5 to the financial statements.
Long-Term Liabilities
As of September 30, 2020, the Town had $597,647 in long-term liabilities as shown in the following table.
Additional information can be found in Note 6 to the financial statements.
Town of Gulf Stream
Capital Assets
(Net of Depreciation)
September 30, 2019 and 2020
Governmental Activities Business-type Activities Total
2019 2020 2019 2020 2019 2020
Net Capital Assets
Land 376,523$ 376,523$ $ $ 376,523$ 376,523$
Construction in Progress 38,483 756,712 58,909 600,512 97,392 1,357,224
Buildings 426,454 393,741 426,454 393,741
Water system improvements 1,561,196 1,498,485 1,561,196 1,498,485
Equipment 166,201 251,616 21,762 105,514 187,963 357,130
Intangible Assets 7,678 7,678
Infrastructure 1,606,443 1,482,852 1,606,443 1,482,852
Total Net Capital Assets 2,614,104$ 3,269,122$ 1,641,867$ 2,204,511$ 4,255,971$ 5,473,633$
Town of Gulf Stream
Long-Term Liabilities
September 30, 2019 and 2020
Governmental Activities Business-type Activities Total
2019 2020 2019 2020 2019 2020
Promissory Note 774,903$ 521,986$ $ $ 774,903$ 521,986$
OPEB 61,271 59,892 61,271 59,892
Compensated Absences 52,059 14,674 1,053 1,095 53,112 15,769
Total Long-Term Liabilities 888,233$ 596,552$ 1,053$ 1,095$ 889,286$ 597,647$
Management’s Discussion and Analysis
13
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
The Town Commission voted during Fiscal Year 2020 to begin taking necessary steps to mitigate
rising ocean levels and the impact of breached seawalls in the Gulf Stream Core District. After
the completion of the Core Drainage Project, the Town Commission voted in FY 2021 to approve
an environmental study on storm water drainage improvements.
The Town Commission voted to delay the Town’s 10 Year Capital Improvement Plan in Fiscal
Year 2021 to allow time for the storm water drainage to be completed. Projects will be deferred
one year. The recommendations of the study will be incorporated into the Town’s 10 Year Capital
Improvement Plan.
The Town is estimated to receive $413,919 in funds from the 2021 American Rescue Plan Act. At
this time, the Town intends to use the funds for infrastructure repairs, replacement and
maintenance.
The Town purchases water from the City of Delray Beach and then resells it to the residents in
Gulf Stream. The contract between The Town of Gulf Stream and the City of Delray Beach to
allow Gulf Stream to purchase water from Delray Beach will expire on June 17, 2023 and
negotiations have begun to renew the contract.
During the 2019 COVID Pandemic, the Town accelerated the plan to update, upgrade and secure
the technology processes and materials used to conduct business. The Town has taken steps to
ensure that the ability to remotely access the Town’s programs to ensure continuity of service to
the residents during times of crisis or the inability to access the island due to weather events. This
has had a financial impact on the Town as hardware maintenance and replacement has been
partially changed to contracts for cloud based services.
CONTACTING THE TOWN’S FINANCIAL MANAGEMENT
This financial report is designed to provide our residents and creditors with a general overview of the
Town’s finances and demonstrates the Town’s accountability for the money it receives and disburses. If
you have any questions about this report or need additional information, please contact the Town of Gulf
Stream, 100 Sea Road, Gulf Stream, FL 33483.
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
September 30, 2020
Primary Government
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents 8,320$ 1,750,566$ 1,758,886$
Investments 7,282,065 7,282,065
Accounts receivable 75,907 181,596 257,503
Inventories 3,716 3,716
Internal balances 108,909 (108,909)
Prepaid expenses 1,369 1,369
Restricted assets
Cash and cash equivalents 203,099 772,333 975,432
Investments 342,127 342,127
Accounts receivable 8,322 24,555 32,877
Assessments receivable 521,085 521,085
Capital assets
Non-depreciable 1,133,235 600,512 1,733,747
Depreciable (net of depreciation)2,135,887 2,204,511 4,340,398
Total assets 11,824,041 5,425,164 17,249,205
Deferred outflows of resources
OPEB items 12,483 12,483
Liabilities
Accounts payable 124,989 32,026 157,015
Contracts and retainage payable 288,502 302,928 591,430
Accrued liabilities 24,690 1,983 26,673
Litigation settlement payable 38,582 38,582
Unearned revenue 4,260 4,260
Payable from restricted assets
Accrued interest payable 5,470 5,470
Damage deposit bonds 55,000 55,000
Long-term liabilities
Payable within one year 272,060 1,095 273,155
Payable after one year 324,492 324,492
Total liabilities 1,133,785 342,292 1,476,077
Deferred inflows of resources
OPEB items 20,584 20,584
Net position
Net investment in capital assets 2,980,620 1,901,583 4,882,203
Restricted for dredging 17,820 17,820
Restricted for underground utilities 375,792 375,792
Restricted for infrastructure projects 98,565 98,565
Restricted for repairs, replacements
and improvements 796,888 796,888
Unrestricted 7,209,358 1,783,889 8,993,247
Total net position 10,682,155$ 4,482,360$ 15,164,515$
See notes to the financial statements
14
TOWN OF GULF STREAM, FLORIDA
Statement of Activities
For the Year Ended September 30, 2020
Charges for
Functions/Programs Expenses Services
Primary Government
Governmental activities
General government 2,010,742$ 419,319$
Police department 1,640,933 128,345
Fire protection 522,015
Streets 311,954
Sanitation 157,745 153,222
Physical environment 15,107 16,269
Interest on long-term debt 13,634
Total governmental activities 4,672,130 717,155
Business-type activities
Water 810,892 1,080,141
Total primary government 5,483,022$ 1,797,296$
15
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital Primary Government
Grants and Grants and Governmental Business-type
Contributions Contributions activities activities Total
12,543$ $ (1,578,880)$ $(1,578,880)$
(1,512,588) (1,512,588)
(522,015) (522,015)
(311,954) (311,954)
(4,523) (4,523)
19,390 20,552 20,552
(13,634) (13,634)
31,933 (3,923,042)(3,923,042)
132,552 401,801 401,801
31,933$ 132,552$ (3,923,042) 401,801 (3,521,241)
General revenues
Property taxes 4,451,048 4,451,048
Infrastructure surtax 69,563 69,563
Communications services taxes 59,246 59,246
Gas taxes 33,125 33,125
Utility service tax 235,037 235,037
Franchise taxes 148,073 148,073
Intergovernmental shared revenues 107,347 107,347
Unrestricted investment earnings 107,747 33,061 140,808
Miscellaneous revenues 180 180
Total general revenues 5,211,366 33,061 5,244,427
Change in net position 1,288,324 434,862 1,723,186
Net position - beginning 9,393,831 4,047,498 13,441,329
Net position - ending 10,682,155$ 4,482,360$ 15,164,515$
See notes to the financial statements.
16
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2020
Special Nonmajor Total
General Assessment Governmental Governmental
Fund Fund Fund Funds
Assets
Cash and cash equivalents 8,320$ 111,173$ 91,926$ 211,419$
Investments 7,354,885 269,307 7,624,192
Accounts receivable 75,907 1,683 6,639 84,229
Assessments receivable 521,085 521,085
Due from other funds 108,909 108,909
Inventories 3,716 3,716
Prepaid expenditures 1,369 1,369
Total assets 7,553,106$ 903,248$ 98,565$ 8,554,919$
Liabilities, deferred inflows of resources,
and fund equity
Liabilities
Accounts payable 124,989$ $ $ 124,989$
Contracts and retainage payable 288,502 288,502
Accrued liabilities 24,690 24,690
Deposits payable 55,000 55,000
Total liabilities 493,181 493,181
Deferred inflows of resources
Unavailable revenue 521,085 521,085
Total deferred inflows of resources 521,085 521,085
Fund equity
Nonspendable
Inventories 3,716 3,716
Prepaids 1,369 1,369
Restricted for
Dredging projects 17,820 17,820
Infrastructure projects 98,565 98,565
Underground utilities 382,163 382,163
Assigned to
Subsequnet year's expenditures 600,000 600,000
Unassigned 6,437,020 6,437,020
Total fund equity 7,059,925 382,163 98,565 7,540,653
Total liabilities, deferred inflows of resources,
and fund equity 7,553,106$ 903,248$ 98,565$ 8,554,919$
See notes to the financial statements
17
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2020
Fund balance of governmental funds 7,540,653$
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 6,485,982$
Less accumulated depreciation (3,216,860) 3,269,122
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.
Unavailable revenue 521,085
Litigation settlements not due and payable in the current period are
not reported in the governemntal funds (38,582)
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 (521,986)
Accrued interest payable (5,470)
Compensated absences (14,674)
Total other postemployment benefits liability (59,892) (602,022)
Deferred outlfows of resources and deferred inflows of resources
related to other postemployment benefit plans are applicable to
future periods and are not reported in the governmental funds.
Other postemployment plan related deferred outflows 12,483
Other postemployment plan related deferred inflows (20,584)
Net position of governmental activities 10,682,155$
See notes to the financial statements
18
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2020
Special Nonmajor Total
General Assessment Governmental Governmental
Fund Fund Fund Funds
Revenues
Taxes 4,778,456$ $ 69,564$ 4,848,020$
Intergovernmental revenue 107,650 107,650
Licenses and permits 561,950 561,950
Charges for services 158,664 158,664
Fines and forfeits 128,345 128,345
Investment earnings 107,747 16,800 2,590 127,137
Special assessments 252,962 252,962
Miscellaneous 12,419 16,269 28,688
Total revenues 5,855,231 286,031 72,154 6,213,416
Expenditures
Current
General and administrative 2,141,751 2,141,751
Police department 1,618,043 1,618,043
Fire protection 522,015 522,015
Streets 192,159 192,159
Sanitation 157,745 157,745
Physical environment 15,107 15,107
Capital outlay 708,262 160,400 868,662
Debt service
Principal 252,917 252,917
Interest 16,240 16,240
Total expenditures 5,339,975 284,264 160,400 5,784,639
Excess (deficiency) of revenues
over (under) expenditures 515,256 1,767 (88,246) 428,777
Net change in fund balance 515,256 1,767 (88,246) 428,777
Fund balance - beginning of the year 6,544,669 380,396 186,811 7,111,876
Fund balance - end of the year 7,059,925$ 382,163$ 98,565$ 7,540,653$
See notes to the financial statements
19
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, 2020
Net change in fund balance of governmental funds 428,777$
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets
is depreciated over their estimated useful life.
Expenditures for capital assets 868,662$
Less current year depreciation (223,369) 645,293
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 (252,962)
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 252,917
Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore, are
not reported as expenditures of governmental funds.
Change in litigation settlements payable 171,407
Change in accrued interest payable 2,606
Change in long-term compensated absences 37,385
Change in other postemployment liability and related deferred amounts 2,901
Change in net position of governmental activities 1,288,324$
See notes to the financial statements
20
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2020
Enterprise
Fund
Assets
Current assets
Cash and cash equivalents 1,750,566$
Accounts receivable, net 181,596
Restricted assets
Cash and cash equivalents 772,333
Accounts receivable 24,555
Total current assets 2,729,050
Noncurrent assets
Depreciable capital assets 3,460,156
Less acumulated depreciation (1,255,645)
Total noncurrent assets 2,204,511
Total assets 4,933,561
Liabilities
Current liabilities
Accounts payable 32,026
Contracts and retainage payable 302,928
Accrued liabilities 1,983
Compensated absences payable 1,095
Due to other funds 108,909
Unearned revenue 4,260
Total current liabilities 451,201
Total liabilities 451,201
Net position
Net investment in capital assets 1,901,583
Restricted for repairs, replacements and improvements 796,888
Unrestricted 1,783,889
Total net position 4,482,360$
See notes to the financial statements
21
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2020
Enterprise
Fund
Operating revenues
Charges for services 1,080,141$
Total operating revenues 1,080,141
Operating expenses
Personnel 87,364
Water purchases 561,253
Repairs and maintenance 21,290
Depreciation expense 73,943
Other expenses 67,042
Total operating expenses 810,892
Operating income 269,249
Nonoperating revenues
Interest income 33,061
Total nonoperating revenues 33,061
Income before capital contributions 302,310
Capital contributions
Reserve fees 132,552
Total capital contributions 132,552
Change in net position 434,862
Net position - beginning of the year 4,047,498
Net position - end of the year 4,482,360$
See notes to the financial statements
22
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2020
Enterprise
Fund
Cash flows from operating activities:
Receipts from customers 1,074,308$
Payments to employees (85,591)
Payments to suppliers (654,341)
Internal activity - payments to other funds 200,660
Net cash provided by operating activities 535,036
Cash flows from capital financing activities:
Reserve fees received 131,949
Acquisition and construction of fixed assets (333,659)
Net cash used by capital financing activities (201,710)
Cash flows from investing activities:
Interest and dividents on investments 33,061
Net cash provided by investing activities 33,061
Net increase in cash and cash equivalents 366,387
Cash and cash equivalents - beginning of the year 2,156,512
Cash and cash equivalents - end of the year 2,522,899$
Cash flows from operating activities:
Operating income 269,249$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 73,943
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable (5,833)
Increase (decrease) in:
Accounts payable (4,756)
Accrued liabilities 1,773
Due to other funds 200,660
Total adjustments 265,787
Net cash provided by operating activities 535,036$
See notes to the financial statements
23
TOWN OF GULF STREAM, FLORIDA
Statement of Fiduciary Assets and Liabilities
Agency Fund
September 30, 2020
Health
Reimbursement
Agency Fund
Assets
Cash and cash equivalents 165,197$
Total assets 165,197$
Liabilities
Due to employees 165,197$
Total liabilities 165,197$
See notes to the financial statements
24
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
25
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Gulf Stream, Florida (the “Town”) have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental units.
The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for
establishing governmental accounting and financial reporting principles. The Town’s significant
accounting policies are described below.
Reporting Entity
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to Chapter 31276,
1955 Laws of Florida. The Town operates under the Commission/Mayor form of government. The
Town's major operations include general government, public safety, streets, sanitation, 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
26
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 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 of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
27
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. The Town also reports the Infrastructure Surtax Special Revenue Fund as a nonmajor
governmental fund.
Proprietary Funds
Proprietary Funds are used to account for operations (a) that are financed and operated in a manner
similar to private business enterprises where the intent of the governing body is that the costs
(expenses, including depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges or (b) where the govern-
ing 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
28
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Proprietary Funds (Continued)
The Town reports one proprietary fund. The Municipal Water Enterprise Fund was established to
account for the provision of water services to Town residents. It is reported as a major fund.
Fiduciary Funds
Fiduciary funds are used to account for assets held in trust for others. Because these assets are
being held for the benefit of third parties and cannot be used to finance activities or obligations of
the government, they are not included in the government-wide financial statements. Fiduciary
funds are reported using the economic resources measurement focus and the accrual basis of
accounting. The Town reports the Health Reimbursement Agency Fund to account for funds held
on behalf of the Town’s employees.
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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
29
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. Capital
assets are defined by the Town as assets with an estimated life in excess of one year and an initial
value in excess of the capitalization thresholds presented below. Purchased capital assets are
recorded at fair value on the acquisition date. Donated capital assets, donated works of art and
similar items, and capital assets received in a service concession arrangement are reported at
acquisition value rather than fair value.
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
Intangible Assets 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. 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
Intangible Assets 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
30
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 40 hours 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 is 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
31
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. In 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 of Resources
A deferred outflow of resources is a consumption of net position that is applicable to a future
reporting period.
Deferred Inflows of Resources
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:
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
32
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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
33
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”.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
34
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 millage 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
1st 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
35
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and revenue and expenses during the
period reported. These estimates include assessing the collectability 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.
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.
In January 2017 the GASB issued Statement No. 84, Fiduciary Activities. This Statement will
improve guidance regarding the identification of fiduciary activities for accounting and financial
reporting purposes and how those activities should be reported. This Statement is effective for the
fiscal year ending September 30, 2021.
In May 2017 the GASB issued Statement No. 87, Leases. This Statement will increase the
usefulness of governments’ financial statements by requiring recognition of certain lease assets
and liabilities for leases that previously were classified as operating leases and recognized as
inflows of resources or outflows of resources based on the payment provisions of the contract. It
establishes a single model for lease accounting that is based on the foundational principle that
leases are financings of the right to use an underlying asset. This Statement is effective for the
fiscal year ending September 30, 2022.
In August 2018 the GASB issued Statement No. 90, Major Equity Interests. This Statement will
improve consistency and comparability of reporting a government’s majority equity interest in a
legally separate organization and to improve the relevance of financial statement information for
certain component units. This Statement is effective for the fiscal year ending September 30, 2021.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
36
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
In May 2019 the GASB issued Statement No. 91, Conduit Debt Obligations. This Statement will
provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in
practice associated with commitments extended by issuers, arrangements associated with conduit
debt obligations, and related note disclosures. This Statement is effective for the fiscal year ending
September 30, 2023.
In January 2020 the GASB issued Statement No. 92, Omnibus 2020. This Statement will enhance
comparability in accounting and financial reporting and improve the consistency of authoritative
literature by addressing practice issues that have been identified during the implementation and
application of certain GASB Statements. This Statement addresses a variety of topics. The
requirements of this Statement related to the effective date of Statement No. 87 and
Implementation Guide 2019-3, reinsurance recoveries, and terminology used to refer to derivative
instruments are effective upon issuance. The remaining requirements are effective for the fiscal
year ending September 30, 2022.
In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates. This
Statement addresses the accounting and financial reporting effects that result from the replacement
of interbank offered rates with other reference rates in order to preserve the reliability, relevance,
consistency, and comparability of reported information. This Statement is effective for the fiscal
year ending September 30, 2022.
In March 2020, the GASB issued Statement No. 94, Public-Private and Public-Public
Partnerships and Availability Payment Arrangements. This Statement will improve financial
reporting by addressing issues related to public-private and public-public arrangements. This
Statement also provides guidance for accounting and financial reporting for availability payment
arrangements. This Statement is effective for the fiscal year ending September 30, 2023.
In May 2020, the GASB issued Statement No. 96, Subscription-Based Information Technology
Arrangements. This Statement provides guidance on the accounting and financial reporting for
subscription-based information technology arrangements (SBITAs) for government end users
(governments). This Statement is effective for the fiscal year ending September 30, 2023.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
37
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria, and
Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred
Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession
of GASB Statement No. 32. The requirements of this Statement will result in more consistent
financial reporting of defined contribution pension plans, defined contribution OPEB plans, and
other employee benefit plans, while mitigating the costs associated with reporting those plans. This
Statement is effective for the fiscal year ending September 30, 2022.
NOTE 2 – DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2020, the carrying amount of the Town's deposits was $10,523,507, and the
bank balances totaled $10,872,394. 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
38
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
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:
Level 1: 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.
Investments
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, 2020, the Town held the following certificates of deposit:
Description Cost Days to Maturity
Flagler Bank CD $ 274,455 548
Legacy Bank CD 286,787 200
Synovus Bank CD 251,451 66
Bank United CD 261,066 65
$ 1,073,759
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
39
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
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.
NOTE 3 – RECEIVABLES
As of September 30, 2020, the Town’s receivables for the individual major funds, including
applicable allowances for uncollectible accounts, are as follows:
Special Nonmajor
General Assessment Governmental Water
Fund Fund Fund Fund
Taxes 33,726$ $ 6,639$ $
Accounts - billed 28,223 1,683 223,015
Accounts - unbilled 8,136
Other 18
Due from other governments 13,940
Special assessments 521,085
75,907 522,768 6,639 231,151
Allowance for uncollectibles (25,000)
Net receivables 75,907$ 522,768$ 6,639$ 206,151$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
40
NOTE 4 – INTERFUND RECEIVABLES AND PAYABLES
Individual interfund receivables and payables at September 30, 2020, are as follows:
Receivable Fund Payable Fund Amount
General Fund Enterprise Fund $108,909
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2020, was as follows:
Governmental Activities
Beginning
Balance
Additions
Deletions
Ending
Balance
Assets not being depreciated
Land $ 376,523 $ $ $ 376,523
Construction in progress 38,483 718,229 756,712
Total not being depreciated 415,006 718,229 1,133,235
Assets being depreciated
Buildings 1,240,621 1,240,621
Equipment 733,605 150,433 (54,669) 829,369
Intangible assets 10,237 10,237
Infrastructure 3,272,520 3,272,520
Total being depreciated 5,256,983 150,433 (54,669) 5,352,747
Total at historical cost 5,671,989 868,662 (54,669) 6,485,982
Accumulated depreciation
Buildings (814,167) (32,713) 846,880
Equipment (567,404) (65,018) 54,669 577,753
Intangible assets (512) (2,047) 2,559
Infrastructure (1,666,077) (123,591) 1,789,668
Total accumulated depreciation (3,048,160) (223,369) 54,669 3,216,860
Governmental activities, net $2,623,829 $ 645,293 $ $3,269,122
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
41
NOTE 5 – CAPITAL ASSETS (Continued)
Business-Type Activities
Beginning
Balance
Additions
Deletions
Ending
Balance
Assets not being depreciated
Construction in progress $ 58,909 $600,512 $(58,909) $ 600,512
Total not being depreciated 58,909 600,512 (58,909) 600,512
Assets being depreciated
Water system improvements 2,658,922 2,658,922
Equipment 105,738 94,984 200,722
Total being depreciated 2,764,660 94,984 2,859,644
Total at historical cost 2,823,569 695,496 (58,909) 3,460,156
Accumulated depreciation
Water system improvements (1,097,726) (62,711) (1,160,437)
Equipment (83,976) (11,232) (95,208)
Total accumulated depreciation (1,181,702) (73,943) (1,255,645)
Business-type activities, net $1,641,867 $621,553 $(58,909) $2,204,511
Depreciation expense was charged to functions and programs of the primary government as follows:
Governmental activities:
General government $ 42,501
Police department 61,005
Streets 119,863
Total governmental activities $223,369
Business-type activities:
Municipal water $ 73,943
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
42
NOTE 6 – 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 revenues 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
revenues means the revenue received by the Town from the imposition and collection of the special
assessments imposed by the Town pursuant to Resolution No. 011-12. The loan agreement includes
a provision that upon the occurrence of any event of default the bank may declare all obligations
under the Note to be immediately due and payable and upon such declaration the Note and the
accrued interest thereon shall become immediately due and payable.
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, 2020 principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $538,314. Principal and interest paid for the current fiscal year was
$269,157 and pledged special assessments were $252,962.
Annual debt service requirements to maturity for the Note from direct borrowings are as follows:
Year Ended
September 30 Principal Interest Payment
2021 $258,247 $10,910 $269,157
2022 263,739 5,418 269,157
$521,986 $16,328 $538,314
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2020, was $13,634
and total interest paid during the year was $16,240. No interest was capitalized in the Enterprise
Fund during the year.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
43
NOTE 6 – LONG-TERM LIABILITIES (Continued)
Changes in the Town’s long-term liabilities for the year ended September 30, 2020 are summarized
as follows:
Beginning
Ending
Due Within
Governmental Activities Balance Additions Deletions Balance One Year
Note from direct borrowings $774,903 $ $(252,917) $521,986 $258,247
OPEB 61,271 3,520 (4,899) 59,892
Compensated absences 52,059 91,492 (128,877) 14,674 13,813
Total Governmental Activities $888,233 $95,012 $(386,693) $596,552 $272,060
Beginning
Ending
Due Within
Business-type Activities Balance Additions Deletions Balance One Year
Compensated absences $1,053 $3,505 $(3,463) $1,095 $1,095
Compensated absences of the governmental activities are liquidated by the General Fund.
NOTE 7 – 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
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
44
NOTE 7 – DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN (Continued)
employment before satisfying the vesting requirement are used to reduce the Town’s current-period
contribution requirement.
For the fiscal year ended September 30, 2020, the Town recognized pension expense of $318,153
for the Plan, and as of the fiscal year end, the Town reported a payable in the amount of $4,299
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 8 – 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 9 – OTHER POSTEMPLOYMENT BENEFITS
Plan Description
The Town provides a single employer defined benefit other postemployment benefit plan (OPEB)
to all of its employees. The plan allows its employees and their beneficiaries to continue to obtain
healthcare benefits upon retirement. The benefits of the plan are in accordance with Florida Statutes,
which are the legal authority for the plan. A trust has not been established to fund the plan. The plan
has no assets and does not issue a separate financial report.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
45
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Contributions
The Town does not directly make a contribution to the plan on behalf of retirees. Retirees and their
beneficiaries pay the same group rates as are charged to the Town for active employees by its
healthcare insurance provider. However, the Town’s actuaries in their actuarial valuation, calculate
an offset to the cost of these benefits as an Employer Contribution, based upon an implicit rate
subsidy. This offset equals the total age-adjusted costs paid by the Town or its active employees for
coverage of the retirees and their dependents for the year net of the retiree’s own payments for the
year.
Plan Membership
The following table provides a summary of the participants in the plan as of October 1, 2019, the
latest valuation date:
Active plan members 17
Inactive plan members or beneficiaries currently receiving benefits 1
Inactive plan members or beneficiaries entitled to but not yet receiving benefits
18
Discount Rate
The Town does not have a dedicated trust to pay retiree healthcare benefits. For plans that do not
have assets held in a dedicated trust, the discount rate should equal the tax-exempt municipal bond
rate based on the S&P Municipal Bond 20-year High Grade Index as of the measurement date. As
of the measurement date of September 30, 2020, the rate was 2.14% based on the S&P Municipal
Bond 20-year High Grade Index at September 30, 2020. The S&P Municipal Bond 20-year High
Grade Index consists of 20-year tax exempt general obligation municipal bonds with an average
rating of AA/Aa or higher (or equivalent quality on another rating scale) on the Standard & Poor’s
Corporation’s and Moody’s Investors Service’s rating scales. The discount rate as of the beginning
of the measurement year was 3.58%.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
46
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
At September 30, 2020, the Town reported a total OPEB liability of $59,892. For the fiscal year
ended September 30, 2020, the Town recognized OPEB revenue of $2,901. As of September 30,
2020, the Town reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources will be
recognized in OPEB expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Assumption changes 255$ 20,329$
Demographic experience 12,228 255$
12,483$ 20,584$
Fiscal Year Ending
September 30 Amortization
2021 (1,522)
2022 (1,522)
2023 (1,522)
2024 (1,457)
2025 (1,357)
Thereafter (721)
(8,101)$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
47
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Actuarial Methods and Assumptions
Significant methods and assumptions were as follows:
Valuation date:October 1, 2019
Measurement date:September 30, 2020
Actuarial cost method:Entry Age Cost Method
Discount rate:2.14%
Cost-of-living increases:Retireecontributions,healthinsurancepremiums,andtheimpliedsubsidyhavebeen
assumed to increase in accordance with the healthcare cost trend rates.
Healthcare cost trend rates:Increasesinhealthcarecostsareassumedtobe6.50%forthe2019/20fiscalyear
graded down by 0.50% per year to 5.00% for the 2022/23 and later fiscal years.
Age-related morbidity:Healthcare costs are assumed to increase at the rate of 3.50% for each year of age.
Implied health subsidy:Becausetheinsurancecarrierchargesthesamemonthlyrateforhealthinsurance
regardlessofage,animpliedmonthlysubsidyof$250.00foreachoftheretireeand
theretiree'sspousehasbeenassumedatage60forthe2019/20fiscalyear;atother
ages,theimpliedsubsidywasdevelopedbasedontheagerelatedmorbidity
assumptionand,forotherfiscalyears,theimpliedsubsidywasincreasedin
accordance with the healthcare cost trend rates.
Mortality basis:Sex-distinctratessetforthinthePUB-2010MortalityTable(withoutincome
adjustment)forgeneralandpublicsafetyemployees,withfullgenerational
improvements in mortality using Scale MP-2020.
Retirement:Withrespecttogeneralemployees,retirementisassumedtooccuratage62withsix
yearsofserviceoratanyagewith30yearsofservice;withrespecttopolice
officers,retirementisassumedtooccuratage55with10yearsofserviceoratage
52 with 25 years of service.
Other decrements:AssumedemploymentterminationisbasedontheScale155table;assumeddisability
isbasedontheWyatt1985DisabilityStudy(Class1rateswereusedforgeneral
employees and Class 4 rates were used for police officers).
Health coverage election:25%ofemployeesareassumedtoelectmedicalcoverageuntilage65upon
retirementordisability;ofthoseelectingcoverageforthemselves,50%arealso
assumed to elect covearge for their spouse.
Spouses and dependents:Husbandsareassumedtobethreeyearsolderthanwives;retireesarenotassumed
to have any dependent children.
Changes:Sincethepriormeasurementdate,thediscountratewasdecreasedfrom3.58%per
annumto2.14%perannumandthemortalitybasiswaschangedfromthePUB-2010
MortalityTablewithgenerationalimprovementsinmortalityusingScaleMP-2017
tothePUB-2010MortalityTablewithgenerationalimprovementsinmortalityusing
Scale MP-2020.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
48
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Total OPEB Liability
The components of the total OPEB liability as of September 30, 2020 were as follows:
Total
OPEB
Description Liability
Balance September 30, 2019 61,271$
Changes for the year:
Service cost 4,294
Expected interest growth 1,329
Demographic experience 255
Benefit payments & refunds (7,002)
Assumptions changes (255)
Net change (1,379)
Balance September 30, 2020 59,892$
Covered-employee payroll 1,721,402$
Total OPEB liability as a percentage of
covered-employee payroll 3.48%
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
49
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following table presents the total OPEB liability of the Town calculated using the single discount
rate of 2.14% as well as what the Town’s total OPEB liability would be if it were calculated using a
discount rate one percentage point lower or one percentage point higher than the current rate.
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Trend Rates
The following table presents the total OPEB liability of the Town calculated using the assumed trend
rates (7.00% decreasing to 5.00%) as well as what the Town’s total OPEB liability would be if it
were calculated using a trend rate that is one percentage point lower or one percentage point higher
than the assumed trend rates.
1% Decrease Discount Rate 1% Increase
Discount Rate Sensitivity 1.14%2.14%3.14%
Total OPEB Liability 63,159$ 59,892$ 56,910$
Healthcare
Cost
1% Decrease Trend Rate 1% Increase
Healthcare Trend Rate Sensitivity 4.00% - 5.50%5.00% - 6.50 6.00% - 7.50%
Total OPEB Liability 55,734$ 59,892$ 64,648$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
50
NOTE 10 – INTERLOCAL AGREEMENTS
Interlocal Agreement for Fire and EMS Service - City of Delray 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 May 10,
2019, the Town Commission approved a 5-year extension of the agreement at the same conditions
as the prior agreement. For the fiscal year ended September 30, 2020, the Town paid an annual
service fee in the amount of $522,015. 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, 2021 will be $548,116.
Interlocal Agreement for Dispatch Service - City of Delray Beach
On October 30, 2017, the Town entered into a new agreement with the City of Delray Beach for
dispatch services. The term of the agreement is for five years beginning October 1, 2017 and ending
September 30, 2022. The basic service fee under the agreement was $55,961 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, 2020, the Town paid $58,496 pursuant to the agreement.
Interlocal Agreement for Water Purchase - City of Delray 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, 2019, the Town
paid $561,253 pursuant to the agreement.
Interlocal Agreement for Permitting and Inspection Services - City of Delray 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
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
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
51
NOTE 10 – INTERLOCAL AGREEMENTS (Continued)
Interlocal Agreement for Permitting and Inspection Services - City of Delray Beach (Continued)
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, 2020, the Town paid
$335,592 pursuant to the agreement.
NOTE 11 – COMMITMENTS
Solid Waste and Recycling Collection Franchise Agreement
On September 13, 2013, the Town made the fourth amendment the solid waste and recycling
collection franchise agreement with Waste Management Inc. of Florida (WMI). The fourth
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. On
September 14, 2018, the Town made the fifth amendment to the agreement that extended the term
of the agreement until March 30, 2019. On March 29, 2019, the Town made the sixth amendment
the agreement to extend the term of the agreement until March 31, 2024. The sixth amendment also
changed the index for use in making annual rate adjustments and provide new rates for services
commencing April 1, 2019.
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, 2020, the Town
made payments of $157,755 pursuant to the agreement.
Construction Commitments
Project
Balance to
Complete
Undergrounding Utilities Project – Phase II $ 925,000
A1A Water Main Improvement Project 846,953
Core Drainage Improvement Project 298,614
$2,070,567
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
52
NOTE 12 – RISK MANAGEMENT
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 year ended September 30, 2018. As discussed below, certain settled claims exceeded
insurance coverage during the fiscal years ended September 30, 2019 and 2020.
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.
In December 2018, the Town entered into a Settlement Agreement with a Town resident and
business entities affiliated with the resident relative to a number of these cases. The Agreement
resulted in the voluntary dismissal of six cases, the Town paying the plaintiff $15,000, the Town
consenting to judgment in four cases, and the parties continue to litigate one case. The only issue
that remained for determination in the four consent judgment cases is the amount the Town must
pay to the plaintiff as reasonable costs, including attorney’s fees. No award will be covered by the
Town’s liability coverage. In August 2019, the Town agreed to pay the plaintiff $6,000 to fully
and finally resolve all claims for one of the four cases, leaving three cases pending.
In July 2019, the Court entered its order awarding costs of enforcement in a case alleging violation
of the Public Records Law by the Town. That order resulted in a payment of $76,329 to the plaintiff
to cover all monies owed as part of this case. The Town has paid this amount in full.
In November 2019, the Court entered its order awarding costs of enforcement in a case alleging
violation of the Public Records Law by the Town. That order resulted in a payment of $133,660
to the plaintiff to cover all monies owed as part of this case. The Town has paid this amount in
full. The Town also paid the plaintiff $15,240 for time spent by its expert witness as a taxable cost.
The plaintiff nevertheless claimed it was entitled to additional expert witness costs for work by
associates of its expert witness. The Court held an evidentiary hearing and in January 2021 found
the plaintiff was entitled to no more than the $15,240 already paid by the Town. In February 2021,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
53
NOTE 12 – RISK MANAGEMENT (Continued)
the plaintiff appealed the Court’s orders on the reasonable costs of enforcement including expert
witness costs.
The amounts of any costs and fees award for the two remaining cases cannot be reasonably
determined at this time and will be the subject of evidentiary hearings before the trial court, absent
settlement. Accordingly, no provision for any liability that may result has been made in the
accompanying financial statements.
In March 2021, the Court issued an order awarding the plaintiff $38,582 in attorney’s fees and
costs in a case alleging violations of the Public Records Law by the Town. A liability and expense
in this amount are reported in the government-wide financial statements of the Governmental
Activities. After the Town paid the entirety of the award, the plaintiff filed a motion to amend the
order and to add prejudgment interest, which the Court denied on April 8, 2021. The plaintiff is
pursuing an appeal with potential awards of appellate attorney’s fees and costs available to the
plaintiff in the event the appeal is successful. Such awards would fall outside the scope of the
Town’s liability coverage. The amount of these costs cannot be reasonably determined at this time.
Accordingly, no provision for any liability that may result has been made in the accompanying
financial statements.
Other cases alleging violation of the Public Records Law by the Town are still pending on appeal
limited to the issue of the amount of fees, which have already been paid. In the event of success in
these cases, plaintiffs would be entitled to attorney’s fees for the appeal and any additional fees as
part of that success. 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.
The Town is a defendant in a lawsuit alleging breach of contract, fraud in the inducement, and
breach of fiduciary duty related to a 2013 settlement agreement. This matter is being handled by
the Town’s insurance carrier which is providing a defense through its attorneys. In the event of an
adverse outcome, the damages associated with the alleged contractual breach do not fall within the
scope of the Town’s liability insurance coverage. The likelihood of an unfavorable outcome and
the amount of potential loss cannot be reasonably determined at this time. Accordingly, no
provision for any liability that may result has been made in the accompanying financial statements.
The Town filed suit against a telecommunications company seeking specific performance of a
special construction agreement to complete the undergrounding of the Town’s overhead utilities.
The defendant provided a preliminary cost estimate of $420,582 for the work and later asserted
that its costs had increased by approximately one million dollars. The defendant counterclaimed
for declaratory relief and asserted that the Town had breached the agreement, which it asserted
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
54
NOTE 12 – RISK MANAGEMENT (Continued)
was an actual cost contract. In January 2021, the parties entered into a Mediated Settlement
Agreement. By that Agreement, the Town agreed to pay $695,000 to complete the undergrounding
project, and the contractor agreed that it would work to complete all remaining work within
designated time periods. The Town agreed to make its Settlement Payment within five business
days of receiving confirmation that all work has been completed. The parties will thereafter file a
Joint Stipulation of Dismissal and Proposed Order of Dismissal, voluntarily dismissing all claims
and counterclaims with prejudice. The parties agree to pay their own fees and costs. The lawsuit
filed by the town remains pending but has been administratively closed without prejudice to the
parties to file a stipulation of dismissal by June 11, 2021.
NOTE 13 – OPERATING LEASE
On June 11, 2018, the Town entered into an operating lease for a copier for use in Town Hall. The
lease is for a term of 36 months and requires minimum monthly payments of $457 that commenced
in July 2018. For the year ended September 30, 2020, the Town made payments of $7,752 pursuant
to the lease.
The following is a schedule of the Town’s required future minimum lease payments under the
agreement:
Minimum
Year Ended
September 30
Lease
Payments
2021 $4,113
NOTE 14 – 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2020
55
NOTE 14 – SPECIAL ASSESSMENT (Continued)
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 $2,885,049. See Note 6 for a
discussion of the related financing for the project.
TOWN OF GULF STREAM, FLORIDA
Required Supplemental Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual
General Fund
For the Year Ended September 30, 2020
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Taxes
Ad valorem taxes 4,453,484$ 4,453,484$ 4,451,048$ (2,436)$
Local option fuel taxes 34,000 34,000 33,125 (875)
Utility service taxes 218,000 218,000 235,037 17,037
Communications services taxes 60,000 60,000 59,246 (754)
Total taxes 4,765,484 4,765,484 4,778,456 12,972
Licenses and permits
Inspecction Fees 80,000 80,000 78,285 (1,715)
Franchise fees 119,500 119,500 148,073 28,573
Building permits 300,000 335,592 335,592
Total licenses and permits 499,500 535,092 561,950 26,858
Intergovernmental revenue
State revenue sharing proceeds 98,700 98,700 100,902 2,202
Shared revenue from other local units 2,700 2,700 6,445 3,745
Grants 303 303
Total intergovernmental revenue 101,400 101,400 107,650 6,250
Charges for services
Solid waste collection fees 156,000 156,000 153,222 (2,778)
Other 4,200 4,200 5,442 1,242
Total charges for services 160,200 160,200 158,664 (1,536)
Judgments, fines and forfeits
Judgments and fines 1,200 1,200 125,448 124,248
Violation of local ordinances 400 400 2,897 2,497
Total judgments, fines, and forfeits 1,600 1,600 128,345 126,745
Investment earnings 47,500 47,500 107,747 60,247
Miscellaneous revenues
Contributions 12,000 12,000 12,239 239
Other 16,000 16,000 180 (15,820)
Total miscellaneous revneues 28,000 28,000 12,419 (15,581)
Total revenues 5,603,684 5,639,276 5,855,231 215,955
continued
See notes to the budgetary comparison schedule
56
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, 2020
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures
Administration 1,705,502 1,705,502 1,385,321 320,181
Legal 721,007 757,192 756,275 917
Police 1,813,001 1,813,001 1,721,145 91,856
Fire Rescue 526,000 526,000 522,015 3,985
Streets 1,134,374 1,134,374 797,474 336,900
Sanitation 163,800 163,800 157,745 6,055
Total expenditures 6,063,684 6,099,869 5,339,975 759,894
Excess (deficiency) of revenues
over (under) expenditures (460,000)$ (460,593)$ 515,256 975,849$
Other financing sources (uses)
Transfers out (330,000)(330,000) 330,000
Total other financing sources (uses)(330,000) (330,000) 330,000
Net change in fund balance (790,000)$ (790,593)$ 515,256 1,305,849$
Fund balance, beginning of year 6,544,669
Fund balance, end of year 7,059,925$
See notes to the budgetary comparison schedule
57
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2020
NOTE 1 - BUDGETS AND BUDGETARY ACCOUNTING
1.
2.Public hearings are conducted to obtain taxpayer comments.
3.Prior to October 1st, the budget is legally enacted through the passage of a resolution.
4.
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
Formalbudgetaryintegrationisemployedwithintheaccountingsystemasamanagementcontrol
device.Appropriationsarelegallycontrolledatthedepartmentlevelandexpendituresmaynotlegally
exceedappropriationsatthatlevel.FortheyearendedSeptember30,2020,nodepartmentshadan
excess of expenditures over appropriations.
AbudgetarycomparisonscheduleispresentedfortheGeneralFund.Theproceduresforestablishing
budgetary data reflected in the budgetary comparison schedule are as follows:
PriortoAugust1st,theTownManagersubmitstotheTownCommissionaproposedoperating
budgetforthefiscalyearcommencingthenextOctober1st.Theoperatingbudgetincludes
proposed expenditures and the means of financing them.
The Town Manager is authorized to transfer budgeted amounts within any department.
However,anyrevisionsthatalterthetotalexpendituresofanydepartmentmustbeapprovedby
the Town Commission by a legally enacted ordinance.
AbudgetislegallyadoptedfortheGeneralFund.TheSpecialAssessmentSpecialRevenueFundis
not legally required to be budgeted and is not budgeted.
58
TOWN OF GULF STREAM, FLORIDA
Required Supplementary Information (RSI)
Schedule of Changes in Total Other Postemployment Benefits (OPEB) Liability
For the Fiscal Year Year Ended September 30, 2020
Actuarial Valuation Date 10/01/2016 10/01/2018 10/01/2019
Measurement Date of Total OPEB Liability 09/30/2018 09/30/2019 09/30/2020
Employer's Reporting Date 09/30/2018 09/30/2019 09/30/2020
2018 2019 2020
Total OPEB liability - beginning 66,172$ 69,996$ 61,271$
Changes for the year:
Service cost 5,843 4,139 4,294
Expected interest growth 2,558 2,562 1,329
Demographic experience 16,699 255
Benefit payments & refunds (3,487) (5,206) (7,002)
Assumption changes (1,090) (26,919) (255)
Net change in total OPEB liability 3,824 (8,725) (1,379)
Total OPEB liability - ending 69,996$ 61,271$ 59,892$
Covered-employee payroll 1,533,673$ 1,616,938$ 1,721,402$
Total OPEB liability as a percentage of
covered-employee payroll 4.56%3.79%3.48%
Changes in Assumptions
The discount rate changed as follows:
September 30, 2017 measurement date 3.35%
September 30, 2018 measurement date 3.64%
September 30, 2019 measurement date 3.58%
September 30, 2020 measurement date 2.14%
ThemortalitybasiswaschangedfromtheRP-2000MortalityTablewithgenerationalimprovementsin
mortalityusingScaleBBtothePUB-2010MortalityTablewithgenerationalimprovementsinmortality
usingScaleMP-2017fortheSeptember30,2019measurementdate.FortheSeptember30,2020
measurementdate,themortalitybasiswaschangedotthePUB-2010MortaityTablewithgenerational
improvements in mortality using Scale MP-2020.
Thisscheduleisintendedtoshowinformationfor10years.However,untilafull10-yeartrendis
compiled,informationwillbepresentedforthoseyearsforwhichinformationisavailable.Noassetsare
accumulatedinatrustthatmeetsthecriteriainGASBStatementNo.75,paragraph4,topayrelated
benefits.
59
TOWN OF GULF STREAM, FLORIDA
Schedule of Changes in Fiduciary Assets and Liabilities
Agency Fund
For the Year Ended September 30, 2020
Beginning Ending
Balance Receipts Disbursements Balance
Assets
Cash and cash equivalents -$ 203,624$ (38,427)$ 165,197$
Total assets -$ 203,624$ (38,427)$ 165,197$
Liabilities
Due to employees -$ 203,624$ (38,427)$ 165,197$
Total liabilities -$ 203,624$ (38,427)$ 165,197$
60
61
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
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, 2020, and the related notes to the
financial statements, which collectively comprise the Town of Gulf Stream, Florida’s basic
financial statements and have issued our report thereon dated June 3, 2021.
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) as a basis for designing
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 significant 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.
62
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that have not been identified. We did identify a deficiency in internal control
that we consider to be a material weakness, as described below.
Finding 2020-1
Condition: The Town did not reconcile the general ledger accounts for accounts receivable to
the subsidiary ledgers monthly.
Criteria: Accounts receivable accounts should be reconciled monthly.
Effect: Significant differences between the general ledger and subsidiary ledgers were not
detected and corrected on a timely basis.
Recommendation: We recommend that the Town reconcile the accounts receivable general
ledger accounts to the subsidiary ledger monthly.
Management Response: The Town has increased internal controls to reconcile credits and
adjustments to utility accounts to the general ledger. Procedures and staff used for billing,
adjusting and reconciliation have been increased in effort to increase internal controls. After
considerable efforts to map financial adjustments in the utility billing software to
corresponding adjustments to the general ledger, it was determined that uncollectable balances
on inactive accounts should be written off. Discussions with management and the commission
resulted in a decision that after reasonable efforts to collect outstanding debt on closed accounts
were unsuccessful, the staff may write off outstanding balances on inactive accounts as bad
debt. Staff believes that this, with the increased internal controls and reconciliation of
adjustments in the utility software and the financial software will result in a significant
decrease in any differences in the utility software accounts and the general ledger.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Gulf Stream, Florida’s
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the financial statements. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of noncompliance
or other matters that are required to be reported under Government Auditing Standards.
63
Town of Gulf Stream, Florida’s Response to Findings
The Town of Gulf Stream, Florida’s response to the findings identified in our audit is described
above. The Town of Gulf Stream, Florida’s response was not subjected to the auditing procedures
applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
West Palm Beach, Florida
June 3, 2021
64
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA
To the Honorable Mayor and Members of the Town Commission
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, 2020, and have issued our report thereon dated June 3, 2021.
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 Reporting Requirements
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 the Financial Statements Performed
in Accordance with Government Auditing Standards and Independent Accountant’s Report on an
examination conducted in accordance with AICPA Professional Standards, AT-C Section 315,
regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor
General. Disclosures in those reports, which are dated June 3, 2021, should be considered in
conjunction with this Management Letter.
65
Prior Audit Findings
Section 10.554(1)(i)1., 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
financial audit report.
Corrective actions have been taken to address findings and recommendations made in the
preceding 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. There are no component units
included in the Town of Gulf Stream, Florida’s financial statements.
Financial Condition and Management
Sections 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply
appropriate procedures and communicate the results of our determination as to whether or not the
Town of Gulf Stream, Florida met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and to identify 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.b. and 10.556(8), Rules of the Auditor General, we applied
financial condition assessment procedures for the Town of Gulf Stream, Florida. 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 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.
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we communicate any
recommendations to improve financial management. In connection with our audit, we did not have
any such recommendations.
66
Special District Component Units
Section 10.554(1)(i)5.c, Rules of the Auditor General, requires, if appropriate, that we
communicate the failure of a special district that is a component unit of a county, municipality, or
special district, to provide the financial information necessary for proper reporting of the
component unit, within the audited financial statements of the county, municipality, or special
district in accordance with Section 218.39(3)(b), Florida Statutes. In connection with our audit, we
did not note any special district component units that failed to provide the necessary information
for proper reporting in accordance with Section 218.39(3)(b), Florida Statues.
Additional Matters
Section 10.554(1)(i)3., Rules of the Auditor General, requires us to communicate noncompliance
with provisions 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 warrants the
attention of those charged with governance. In connection with our audit, we did not note any such
findings.
Single Audits
The Town of Gulf Stream, Florida expended less than $750,000 of federal awards and less than
$750,000 of state financial assistance for the fiscal year ended September 30, 2020 and was not
required to have a federal single audit or a state single audit.
Purpose of this Letter
Our Management Letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representatives, the Florida
Auditor General, Federal and other granting agencies, the Town Commission, and applicable
management, and is not intended to be and should not be used by anyone other than these specified
parties.
West Palm Beach, Florida
June 3, 2021
67
INDEPENDENT ACCOUNTANT’S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
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, 2020. Management of the Town of Gulf Stream, Florida is
responsible for the Town of Gulf Stream, Florida’s compliance with the specified requirements. Our
responsibility is to express an opinion on the Town of Gulf Stream, Florida’s compliance with the
specified requirements based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants. Those standards require that we plan and perform the
examination to obtain reasonable assurance about whether the Town of Gulf Stream, Florida complied, in
all material respects, with the specified requirements referenced above. An examination involves
performing procedures to obtain evidence about whether the Town of Gulf Stream, Florida complied with
the specified requirements. The nasture, timing, and extent of the procedures selected depend on our
judgement, including an assessment of the risk of material noncompliance, whether due to fraud or error.
We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for
our opinion.
Our examination does not provide a legal determination on the Town of Gulf Stream, Florida’s compliance
with the specified requirements.
In our opinion, the Town of Gulf Stream, Florida complied, in all material respects, with Section 218.415,
Florida Statutes for the year ended September 30, 2020.
This report is intended solely for the information and use of the Legislative Auditing Committee, members
of the Florida Senate and Florida House of Representatives, 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
June 3, 2021
IMPACT FEE AFFIDAVIT BEFORE ME, the undersigned authority, personally appeared Rebecca Tew, Chief Financial Officer of the Town of Gulf Stream, who being duly sworn, deposes and says on oath that: 1.I am the Chief Financial Officer of the Town of Gulf Stream which is alocal governmental entity of the State of Florida;2.The governing body of the Town of Gulf Stream adopted OrdinanceNo. 94-3 implementing an impact fee; and3.The Town of Gulf Stream has complied and, as of the date of thisAffidavit, remains in compliance with Section 163.31801, Florida Statutes.FURTHER AFFIANT SAYETH NAUGHT. STATE OF FLORIDA COUNTY OF PALM BEACH SWORN TO AND SUBSCRIBED before me this 2� day of_�-+---' 2021.,-j,
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;�v ���;:. Ro�:::: ROWAN BASEL (�. � �, Notar, PLC IC -State of Flonda '-� 0�_-' Corrrr1ss1or "GG 984730 ·· or n: ·· My Com - · ············· m. �xc,res Aug 28 2024 Bonded through Nation•· '<ot , A •· ary ssn. Personally known _JL_ or produced identification ___ _ Type of identification produced: 68