HomeMy Public PortalAbout2021 Gulf Stream AFR
TOWN OF GULF STREAM, FLORIDA
FINANCIAL STATEMENTS WITH INDEPENDENT
AUDITOR’S REPORT THEREON
FISCAL YEAR ENDED SEPTEMBER 30, 2021
TOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2021
TABLE OF CONTENTS
Page
Independent Auditor's Report 1-2
Management’s Discussion and Analysis (required supplementary information) 3-12
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 13
Statement of Activities 14-15
Fund Financial Statements
Balance Sheet – Governmental Funds 16
Reconciliation of the Balance Sheet – Governmental Funds to
the Statement of Net Position 17
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds 18
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Funds to the Statement of Activities 19
Statement of Net Position – Proprietary Fund 20
Statement of Revenues, Expenses, and Changes in Fund Net Position –
Proprietary Fund 21
Statement of Cash Flows – Proprietary Fund 22
Notes to the Financial Statements 23-53
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund 54-55
Notes to the Budgetary Required Supplemental Information 56
Schedule of Changes in Total OPEB Liability 57
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 58-59
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 60-62
Independent Accountant’s Report on Compliance with Section 218.415,
Florida Statutes 63
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, 2021, 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,
2021, 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.
Change in Accounting Principle
As discussed in Note 16 to the financial statements, the Town adopted Governmental Accounting
Standards Board Statement No. 84, Fiduciary Activities, during the fiscal year ended September 30, 2021.
The net position/fund balance of the governmental activities and the General Fund as of October 1, 2020
have been restated. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis on pages 3 through 12, the budgetary comparison information on pages 54 through
56, and the Schedule of Changes in Total OPEB Liability on page 57 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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 27, 2022,
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 27, 2022
Management’s Discussion and Analysis
3
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 $16,214,856 (net
position).
The governmental activities revenues were $6,448,302 at the close of fiscal year 2021.
The business-type activities revenues were $1,225,205 at the close of fiscal year 2021.
The total cost of all Town programs was $6,788,363 during the fiscal year 2021.
At the end of the 2021 fiscal year, unassigned fund balance for the General Fund was increased by
$1,204,106 and ending Fiscal Year 2021 with a total of $7,641,126 or 134% of total General Fund
expenditures which totaled $5,695,280 at the end of Fiscal Year 2021.
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 3-12)
Government-wide Financial Fund Financial Statements
Statements (pages 13-15) (Pages 16-22)
Notes to the Financial Statements
(Pages 23-53)
Required supplementary information.
(Other than MD&A) (Pages 54-57)
Management’s Discussion and Analysis
4
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 10. The fund financial statements provide detailed
information about the most significant funds – not the Town as a whole. Funds are accounting devices
that the Town uses to keep track of specific sources of funding and spending for a particular purpose.
Governmental Funds – Most of the Town’s basic services are included in governmental funds,
which focus on (1) how cash and other financial assets can be readily converted to cash flow and
(2) the balances left at year-end that are available for spending. Consequently, the governmental
fund statements provide a short-term view that helps you determine whether there are more or
fewer financial resources that can be spent in the near future to finance the Town’s programs.
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
5
is the same as its business type activities, but provides more detail and additional information,
such as cash flows.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Net Position
The Town’s combined net position for the fiscal year ending 2021 is reported at $16,214,856. Net position
of the Town’s governmental activities for the fiscal year ending 2021 is $11,530,110. The net position of
our business-type activities is reported at $4,684,746 for the fiscal year ending 2021. Overall, the financial
position of the total primary government increased $885,144 during the current fiscal year. Net position
for the governmental activities increased $682,758 and net position for the business-type activities
increased $202,386.
Town of Gulf Stream
Net Position
September 30, 2020 and 2021
Governmental Activities Business-type Activities Total
2020 2021 2020 2021 2020 2021
Current and Other Assets 8,720,116$ 8,823,725$ 2,620,141$ 1,897,856$ 11,340,257$ 10,721,581$
Capital Assets 3,269,122 3,741,064 2,805,023 2,910,496 6,074,145 6,651,560
Total Assets 11,989,238 12,564,789 5,425,164 4,808,352 17,414,402 17,373,141
Deferred Outflows of Resources 12,483 10,230 12,483 10,230
Current and Other Liabilities 537,233 491,414 38,269 122,511 575,502 613,925
Long Term Liabilities 596,552 521,160 1,095 1,095 597,647 522,255
Total Liabilities 1,133,785 1,012,574 39,364 123,606 1,173,149 1,136,180
Deferred Inflows of Resources 20,584 32,335 20,584 32,335
Net Investment in Capital Assets 2,980,620 3,661,120 1,901,583 2,910,007 4,882,203 6,571,127
Restricted - Employee Benefits 165,197 177,328 165,197 177,328
Restricted - Dredging Projects 17,820 17,820 17,820 17,820
Restricted - Underground Utilities 378,792 16,540 378,792 16,540
Restricted - Infrastructure Projects 98,565 188,348 98,565 188,348
Restricted - Repairs & Replacements 796,888 933,596 796,888 933,596
Unrestricted 7,206,358 7,468,954 1,783,889 841,143 8,990,247 8,310,097
Total Net Position 10,847,352$ 11,530,110$ 4,482,360$ 4,684,746$ 15,329,712$ 16,214,856$
Management’s Discussion and Analysis
6
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 2021, there was an increase in the total net position from Fiscal Year 2020 for
governmental activities which totaled $682,758. The 2021 net position total for governmental activities,
which includes the General Fund, Special Assessment Fund, and Infrastructure Surtax Fund, was
$11,530,110. Expenses of the governmental activities increased $1,054,987 from Fiscal Year 2020 to
Fiscal Year 2021. The increase in expenses was the result in the Town Commission pursuing rising tides
and correcting drainage issues in the Town’s Core District. Widening of specific streets, outfall valve
replacements and finishing the Phase II of the A1A Watermain Replacement Project were the highlights
of the infrastructure repairs and improvements.
There was a significant increase in expenses for the Streets Department in Fiscal Year 2021. Part of Phase
II of the A1A Watermain Replacement Project involved repaving/redesigning parts of the streets in the
most northern district of the Town. Due to the Town’s very narrow streets, a large portion of the
watermains had to go underneath the street. These road repairs along with the drainage improvements
resulted in the large increase from Fiscal Year 2020 to Fiscal Year 2021.
The increase in business-type net position was $202,386 from Fiscal Year 2020 to Fiscal Year 2021. The
Town received the first distribution of American Rescue Plan Act of 2021 funds allotted to the Town as
the end of the fiscal year. The Town dedicated those funds to improving the Town’s aging water
infrastructure to ensure clean water distribution to the residents of the Town. The largest water
infrastructure project for the Town is scheduled for design in 2022 and construction beginning Fiscal Year
2022-2023.
The Town also purchased and installed smart meters for all of the meters in Town. Smart meters, or digital
meters, are much more accurate in the consumption calculation, assists residents and staff to identify water
leaks more quickly and help the Town in determining if excessive water usage is related to overwatering.
The meters were completely installed and operational for the last water billing in Fiscal Year 2020-2021.
The staff immediately saw improvements in water consumption and reporting. The purchase and
installation of the smart meters almost entirely accounts for the increase in spending from 2020 to 2021.
Management’s Discussion and Analysis
7
Town of Gulf Stream
Changes in Net Position
For the Fiscal Years Ended September 30, 2020 and 2021
Governmental Activities Business-type Activities Total
2020 2021 2020 2021 2020 2021
Revenues
Program Revenues
Charges for Services 717,155$ 1,170,157$ 1,080,141$ 1,067,886$ 1,797,296$ 2,238,043$
Operating Grants & Contributions 31,933 24,549 31,933 24,549
Capital Grants and Contributions 132,552 138,298 132,552.00 138,298.00
General Revenues
Property Taxes 4,451,048 4,459,374 4,451,048 4,459,374
Infrastructure Surtax 69,563 88,704 69,563 88,704
Communications Taxes 59,246 58,855 59,246 58,855
Gas Taxes 33,125 37,386 33,125 37,386
Utility Service Taxes 235,037 249,103 235,037 249,103
Franchise Fees 148,073 154,978 148,073 154,978
Unrestricted Investment Earnings 107,747 71,662 33,061 19,021 140,808 90,683
Intergovernmental Revenues 107,347 133,159 107,347 133,159
Other 180 375 180 375
Total Revenues 5,960,454 6,448,302 1,245,754 1,225,205 7,206,208 7,673,507
Expenses
Governmental Activities
General Government 2,010,742 2,214,659 2,010,742 2,214,659
Police Department 1,679,360 1,679,080 1,679,360 1,679,080
Fire Protection 522,015 548,610 522,015 548,610
Streets 311,954 776,528 311,954 776,528
Sanitation 157,745 162,738 157,745 162,738
Physical Environment 15,107 375,772 15,107 375,772
Interest on Long-Term Debt 13,634 8,157 13,634 8,157
Business-Type Activities
Water 810,892 1,022,819 810,892 1,022,819
Total Expenses 4,710,557 5,765,544 810,892 1,022,819 5,521,449 6,788,363
Change in Net Position 1,249,897 682,758 434,862 202,386 1,684,759 885,144
Net Position - Beginning, as restated 9,597,455 10,847,352 4,047,498 4,482,360 13,644,953 15,329,712
Net Position - Ending 10,847,352$ 11,530,110$ 4,482,360$ 4,684,746$ 15,329,712$ 16,214,856$
Management’s Discussion and Analysis
8
The Town’s primary source of revenue continues to come from Property Taxes as seen in the
comparison of Fiscal Year Revenues from 2020 and 2021 in the chart below.
Management’s Discussion and Analysis
9
The Town’s expenses cover a range of services, and total expenses decreased from Fiscal Year
2020 to Fiscal Year 2021. The primary expense is for General Government which includes the
administration, finance and legal functions.
Management’s Discussion and Analysis
10
Financial Analysis of the Governmental Funds
As the Town of Gulf Stream completed the year, the General Fund reported a fund balance of $7,863,684,
an increase of $683,562 from the previous fiscal year. The increase was due primarily timing of
construction liabilities related to the Town’s 10 Year Capital Improvement Plan. Also, the Town received
a distribution of ARPA funds that was not anticipated. The Town ended the fiscal year with $27,410 in
non-spendable fund balance (which includes inventories and prepaid expenditures), $195,148 in restricted
fund balance, which consisted of $17,820 reserved for dredging projects and $177,328 for employee
benefits, with $7,641,126 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 2021 was $4,684,746. The net position of
the water fund increased $202,386 from the prior year. Water rates were not increased during Fiscal Year
2021. 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 continues to battle lawsuits regarding to public record requests from prior to 2015. The Town
still is actively and aggressively defending itself in these multiple lawsuits. More information can be found
in Note 12.
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. Though the Town did not anticipate inflation increasing as rapidly as it has during Fiscal Year 2022,
the Town’s prudent and conservative approach to spending and saving has been very beneficial during
this period of economic instability. The Town paid the final payment on the Undergrounding Note in
April of 2022. The Town has no outstanding debt and is prepared to continue the 10 Year CIP without
delay.
There was a tremendous amount of turnover for the police department during Fiscal Year 2021 and it
continued into Fiscal Year 2022. The police department voted to unionize. At the time of this publication,
no contract had been agreed upon and negotiations will continue during the budget process for Fiscal Year
2023. The police department continues to have unfilled budgeted positions; however, this is a trend
affecting multiple law enforcement jurisdictions.
Management’s Discussion and Analysis
11
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2021, the Town had invested $6,651,560 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, 2021, the Town had $327,255 in long-term liabilities as shown in the following table.
Additional information can be found in Note 6 to the financial statements.
Town of Gulf Stream
Capital Assets
(Net of Depreciation)
September 30, 2020 and 2021
Governmental Activities Business-type Activities Total
2020 2021 2020 2021 2020 2021
Net Capital Assets
Land 376,523$ 376,523$ $ $ 376,523$ 376,523$
Construction in Progress 756,712 600,512 1,357,224
Buildings 393,741 382,018 393,741 382,018
Water system improvements 1,498,485 2,479,511 1,498,485 2,479,511
Equipment 251,616 282,128 105,514 430,985 357,130 713,113
Intangible Assets 7,678 5,631 7,678.00 5,631
Infrastructure 1,482,852 2,694,764 1,482,852 2,694,764
Total Net Capital Assets 3,269,122$ 3,741,064$ 2,204,511$ 2,910,496$ 5,473,633$ 6,651,560$
Town of Gulf Stream
Long-Term Liabilities
September 30, 2020 and 2021
Governmental Activities Business-type Activities Total
2020 2021 2020 2021 2020 2021
Promissory Note 521,986$ 263,739$ $ $ 521,986$ 263,739$
OPEB 59,892 45,306 59,892 45,306
Litigation Settlement 38,582 195,000 38,582 195,000
Compensated Absences 14,674 17,115 1,095 1,095 15,769 18,210
Total Long-Term Liabilities 635,134$ 521,160$ 1,095$ 1,095$ 636,229$ 522,255$
Management’s Discussion and Analysis
12
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.
The Town has already received the first funds distribution and will hold the funds until
construction on the Core District Infrastructure Project begins.
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. The Town was notified during Fiscal Year 2022
that the City of Delray Beach will increase their water rates over the next five Fiscal Years. The
first increase will be 5.32% and will start in August of 2022. More information can be found at
https://www.delraybeachfl.gov/government/city-departments/utilities/water-rates. As the Town
purchases water from the City of Delray Beach, the Town will adjust their water rates accordingly
beginning in Fiscal Year 2023.
The Town of Gulf Stream has contracted the City of Delray Beach since 2012 to act in the capacity
of the Town’s Building Official and Florida Building Code permitting department. During Fiscal
Year 2022, the City of Delray Beach notified the Town that the current contract was no longer
sustainable for their city and would have to restructure the fees, services and procedures if the
Town wanted to continue with the interlocal agreement. The Town is analyzing all options as to
the best service for the Town residents.
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, 2021
Primary Government
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents 533,647$ 938,720$ 1,472,367$
Investments 7,411,906 7,411,906
Accounts receivable 92,357 214,781 307,138
Inventories 7,805 7,805
Internal balances 189,241 (189,241)
Prepaid expenses 19,605 19,605
Restricted assets
Cash and cash equivalents 187,338 910,412 1,097,750
Investments 102,964 102,964
Accounts receivable 16,027 23,184 39,211
Assessments receivable 262,835 262,835
Capital assets
Non-depreciable 376,523 376,523
Depreciable (net of depreciation)3,364,541 2,910,496 6,275,037
Total assets 12,564,789 4,808,352 17,373,141
Deferred outflows of resources
OPEB items 10,230 10,230
Liabilities
Accounts payable 51,578 113,494 165,072
Contracts and retainage payable 79,944 489 80,433
Accrued liabilities 29,162 1,053 30,215
Unearned revenue 248,013 7,475 255,488
Payable from restricted assets
Accrued interest payable 2,717 2,717
Damage deposit bonds 80,000 80,000
Long-term liabilities
Payable within one year 280,854 1,095 281,949
Payable after one year 240,306 240,306
Total liabilities 1,012,574 123,606 1,136,180
Deferred inflows of resources
OPEB items 32,335 32,335
Net position
Net investment in capital assets 3,661,120 2,910,007 6,571,127
Restricted for employee benefits 177,328 177,328
Restricted for dredging 17,820 17,820
Restricted for underground utilities 16,540 16,540
Restricted for infrastructure projects 188,348 188,348
Restricted for repairs, replacements
and improvements 933,596 933,596
Unrestricted 7,468,954 841,143 8,310,097
Total net position 11,530,110$ 4,684,746$ 16,214,856$
See notes to the financial statements
13
TOWN OF GULF STREAM, FLORIDA
Statement of Activities
For the Year Ended September 30, 2021
Charges for
Functions/Programs Expenses Services
Primary Government
Governmental activities
General government 2,214,659$ 970,939$
Police department 1,679,080 24,365
Fire protection 548,610
Streets 776,528
Sanitation 162,738 161,396
Physical environment 375,772 13,457
Interest on long-term debt 8,157
Total governmental activities 5,765,544 1,170,157
Business-type activities
Water 1,022,819 1,067,886
Total primary government 6,788,363$ 2,238,043$
14
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
12,250$ $ (1,231,470)$ $(1,231,470)$
(1,654,715) (1,654,715)
(548,610) (548,610)
(776,528) (776,528)
(1,342) (1,342)
12,299 (350,016) (350,016)
(8,157) (8,157)
24,549 (4,570,838)(4,570,838)
138,298 183,365 183,365
24,549$ 138,298$ (4,570,838) 183,365 (4,387,473)
General revenues
Property taxes 4,459,374 4,459,374
Infrastructure surtax 88,704 88,704
Communications services taxes 58,855 58,855
Gas taxes 37,386 37,386
Utility service tax 249,103 249,103
Franchise taxes 154,978 154,978
Intergovernmental shared revenues 133,159 133,159
Unrestricted investment earnings 71,662 19,021 90,683
Miscellaneous revenues 375 375
Total general revenues 5,253,596 19,021 5,272,617
Change in net position 682,758 202,386 885,144
Net position - beginning, as restated 10,847,352 4,482,360 15,329,712
Net position - ending 11,530,110$ 4,684,746$ 16,214,856$
See notes to the financial statements.
15
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2021
Special Nonmajor Total
General Assessment Governmental Governmental
Fund Fund Fund Funds
Assets
Cash and cash equivalents 533,647$ 13,620$ 173,718$ 720,985$
Investments 7,509,726 5,144 7,514,870
Accounts receivable 92,357 1,397 14,630 108,384
Assessments receivable 262,835 262,835
Due from other funds 189,241 189,241
Inventories 7,805 7,805
Prepaid expenditures 19,605 19,605
Total assets 8,352,381$ 282,996$ 188,348$ 8,823,725$
Liabilities, deferred inflows of resources,
and fund equity
Liabilities
Accounts payable 51,578$ $ $ 51,578$
Contracts and retainage payable 79,944 79,944
Accrued liabilities 29,162 29,162
Due to other funds
Unearned revenue 248,013 248,013
Deposits payable 80,000 80,000
Total liabilities 488,697 488,697
Deferred inflows of resources
Unearned revenue
Unavailable revenue 262,835 262,835
Total deferred inflows of resources 262,835 262,835
Fund equity
Nonspendable
Inventories 7,805 7,805
Prepaids 19,605 19,605
Restricted for
Employee benefits 177,328 177,328
Dredging projects 17,820 17,820
Infrastructure projects 188,348 188,348
Underground utilities 20,161 20,161
Unassigned 7,641,126 7,641,126
Total fund equity 7,863,684 20,161 188,348 8,072,193
Total liabilities, deferred inflows of resources,
and fund equity 8,352,381$ 282,996$ 188,348$ 8,823,725$
See notes to the financial statements
16
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2021
Fund balance of governmental funds 8,072,193$
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 7,162,639$
Less accumulated depreciation (3,421,575) 3,741,064
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 262,835
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 (263,739)
Accrued interest payable (2,717)
(195,000)
Compensated absences (17,115)
Total other postemployment benefits liability (45,306) (523,877)
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 10,230
Other postemployment plan related deferred inflows (32,335)
Net position of governmental activities 11,530,110$
See notes to the financial statements
17
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2021
Special Nonmajor Total
General Assessment Governmental Governmental
Fund Fund Fund Funds
Revenues
Taxes 4,804,718$ $ 88,704$ 4,893,422$
Intergovernmental revenue 133,159 133,159
Licenses and permits 733,663 733,663
Charges for services 173,028 173,028
Fines and forfeits 24,365 24,365
Investment earnings 71,662 11,219 1,079 83,960
Special assessments 258,250 258,250
Miscellaneous 393,247 13,458 406,705
Total revenues 6,333,842 282,927 89,783 6,706,552
Expenditures
Current
General and administrative 2,033,202 2,033,202
Police department 1,604,392 1,604,392
Fire protection 548,610 548,610
Streets 595,658 595,658
Sanitation 162,738 162,738
Physical environment 375,772 375,772
Capital outlay 750,680 750,680
Debt service
Principal 258,247 258,247
Interest 10,910 10,910
Total expenditures 5,695,280 644,929 6,340,209
Excess (deficiency) of revenues
over (under) expenditures 638,562 (362,002) 89,783 366,343
Net change in fund balance 638,562 (362,002) 89,783 366,343
Fund balance - beginning of the year, as restated 7,225,122 382,163 98,565 7,705,850
Fund balance - end of the year 7,863,684$ 20,161$ 188,348$ 8,072,193$
See notes to the financial statements
18
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, 2021
Net change in fund balance of governmental funds 366,343$
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 754,277$
Less current year depreciation (279,361) 474,916
Gains and losses on the disposal of fixed assets are not reported
in the governmental funds but are reported in the statement of
activities
Net book value of fixed asset disposals (2,974)
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 (258,250)
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 258,247
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 (156,418)
Change in accrued interest payable 2,753
Change in long-term compensated absences (2,441)
Change in other postemployment liability and related deferred amounts 582
Change in net position of governmental activities 682,758$
See notes to the financial statements
19
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2021
Enterprise
Fund
Assets
Current assets
Cash and cash equivalents 938,720$
Accounts receivable, net 214,781
Restricted assets
Cash and cash equivalents 910,412
Accounts receivable 23,184
Total current assets 2,087,097
Noncurrent assets
Depreciable capital assets 4,268,418
Less acumulated depreciation (1,357,922)
Total noncurrent assets 2,910,496
Total assets 4,997,593
Liabilities
Current liabilities
Accounts payable 113,494
Contracts and retainage payable 489
Accrued liabilities 1,053
Compensated absences payable 1,095
Due to other funds 189,241
Unearned revenue 7,475
Total current liabilities 312,847
Total liabilities 312,847
Net position
Net investment in capital assets 2,910,007
Restricted for repairs, replacements and improvements 933,596
Unrestricted 841,143
Total net position 4,684,746$
See notes to the financial statements
20
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2021
Enterprise
Fund
Operating revenues
Charges for services 1,067,886$
Total operating revenues 1,067,886
Operating expenses
Personnel 84,560
Water purchases 751,126
Repairs and maintenance 17,789
Depreciation expense 102,277
Other expenses 67,067
Total operating expenses 1,022,819
Operating income 45,067
Nonoperating revenues
Interest income 19,021
Total nonoperating revenues 19,021
Income before capital contributions 64,088
Capital contributions
Connection fees 1,590
Reserve fees 136,708
Total capital contributions 138,298
Change in net position 202,386
Net position - beginning of the year 4,482,360
Net position - end of the year 4,684,746$
See notes to the financial statements
21
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2021
Enterprise
Fund
Cash flows from operating activities:
Receipts from customers 1,037,916$
Payments to employees (88,490)
Payments to suppliers (754,514)
Internal activity - payments to other funds 83,332
Net cash provided by operating activities 278,244
Cash flows from capital financing activities:
Reserve fees received 138,079
Connection fees received 1,590
Acquisition and construction of fixed assets (1,110,701)
Net cash used by capital financing activities (971,032)
Cash flows from investing activities:
Interest and dividents on investments 19,021
Net cash provided by investing activities 19,021
Net increase in cash and cash equivalents (673,767)
Cash and cash equivalents - beginning of the year 2,522,899
Cash and cash equivalents - end of the year 1,849,132$
Cash flows from operating activities:
Operating income 45,067$
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 102,277
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable (33,185)
Increase (decrease) in:
Accounts payable 81,468
Accrued liabilities (930)
Due to other funds 83,332
Unearned revenue 3,215
Total adjustments 236,177
Net cash provided by operating activities 281,244$
See notes to the financial statements
22
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
23
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, 2021
24
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, 2021
25
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, 2021
26
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, 2021
27
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, 2021
28
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 not capitalized in accordance with Governmental Accounting Boards Statement
No. 89.
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, 2021
29
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, 2021
30
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, 2021
31
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, 2021
32
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, 2021
33
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.
Implementation of Accounting Pronouncements
The Town implemented the following Governmental Accounting Standards Board Statements
during the current fiscal year.
GASB Statement No. 84, Fiduciary Activities. This Statement improves guidance regarding the
identification of fiduciary activities for accounting and financial reporting purposes and how those
activities should be reported.
GASB 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. The Town implemented the
provisions of this statement related to GASB Statements No. 14 and No. 84 in the current fiscal
year. The provisions related to Section 457 deferred compensation plans will be implement for the
fiscal year ending September 30, 2022.
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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
34
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
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 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
35
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
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.
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.
In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The requirements of this
Statement will enhance comparability in the application of accounting and financial reporting
requirements and will improve the consistency of authoritative literature. Consistent authoritative
literature enables governments and other stakeholders to more easily locate and apply the correct
accounting and financial reporting provisions, which improves the consistency with which such
provisions are applied. The comparability of financial statements also will improve as a result of
this Statement. Better consistency and comparability improve the usefulness of information for
users of state and local government financial statements. The requirements of this Statement are
effective as follows:
· The requirements related to extension of the use of LIBOR, accounting for SNAP
distributions, disclosures of nonmonetary transactions, pledges of future revenues by
pledging governments, clarification of certain provisions in Statement 34, as amended, and
terminology updates related to Statement 53 and Statement 63 are effective for upon
issuance (fiscal year ending September 30, 2022).
· The requirements related to leases, public-private and public-public partnerships, and
subscription-based information technology arrangements are effective for fiscal years
ending September 30, 2023, and all reporting periods thereafter.
· The requirements related to financial guarantees and the classification and reporting of
derivative instruments within the scope of Statement 53 are effective for fiscal years ending
September 30, 2024, and all reporting periods thereafter.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
36
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections.
The requirements of this Statement will improve the clarity of the accounting and financial reporting
requirements for accounting changes and error corrections, which will result in greater consistency
in application in practice. In turn, more understandable, reliable, relevant, consistent, and comparable
information will be provided to financial statement users for making decisions or assessing
accountability. In addition, the display and note disclosure requirements will result in more
consistent, decision useful, understandable, and comprehensive information for users about
accounting changes and error corrections. The requirements of this Statement are effective for
accounting changes and error corrections made in fiscal years ending September 30, 2024, and all
reporting periods thereafter. Earlier application is encouraged
In June 2022, the GASB issued Statement No. 101, Compensated Absences. The unified recognition
and measurement model in this Statement will result in a liability for compensated absences that
more appropriately reflects when a government incurs an obligation. In addition, the model can be
applied consistently to any type of compensated absence and will eliminate potential comparability
issues between governments that offer different types of leave. The model also will result in a more
robust estimate of the amount of compensated absences that a government will pay or settle, which
will enhance the relevance and reliability of information about the liability for compensated
absences. The requirements of this Statement are effective for fiscal years ending September 30,
2025, and all reporting periods thereafter. Earlier application is encouraged.
NOTE 2 – DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2021, the carrying amount of the Town's deposits was $10,084,787, and the
bank balances totaled $10,097,903. 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.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
37
NOTE 2 – DEPOSITS AND INVESTMENTS (Continued)
Investments
Florida statutes authorize the Town to invest in the Local Government Surplus Funds Trust Fund
administered by the State Treasurer, negotiable direct obligations of or obligations unconditionally
guaranteed by the U.S. Government, interest-bearing time deposits in financial institutions located
in Florida and organized under Federal or Florida laws, obligations of the Federal Farm Credit Banks,
the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank or its district banks,
or obligations guaranteed by the Government National Mortgage Association, and obligations of the
Federal National Mortgage Association.
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 level in which an asset is
assigned is not indicative of its quality but an indication of the source of valuation inputs 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.
Certificates of deposit are exempt from reporting under the fair value hierarchy, and their fair value
is measured at cost. As of September 30, 2021, the Town held the following certificates of deposit:
Description Cost Days to Maturity
Flagler Bank CD $ 278,153 183
Legacy Bank CD 289,883 230
Synovus Bank CD 251,451 66
$ 819,487
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
38
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, 2021, 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 34,439$ $ 14,630$ $
Accounts - billed 26,685 247,965
Due from other governments 31,233 1,397
Special assessments 262,835
92,357 264,232 14,630 247,965
Allowance for uncollectibles (10,000)
Net receivables 92,357$ 264,232$ 14,630$ 237,965$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
39
NOTE 4 – INTERFUND RECEIVABLES AND PAYABLES
Individual interfund receivables and payables at September 30, 2021, are as follows:
Receivable Fund Payable Fund Amount
General Fund Enterprise Fund $189,241
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2021, was as follows:
Governmental Activities
Beginning
Balance
Additions
Deletions
Ending
Balance
Assets not being depreciated
Land $ 376,523 $ $ $ 376,523
Construction in progress 756,712 624,422 (1,381,134)
Total not being depreciated 1,133,235 624,422 (1,381,134) 376,523
Assets being depreciated
Buildings 1,240,621 14,963 (4,235) 1,251,349
Equipment 829,369 105,038 (73,385) 861,022
Intangible assets 10,237 10,237
Infrastructure 3,272,520 1,390,988 4,663,508
Total being depreciated 5,352,747 1,510,989 (77,620) 6,786,116
Total at historical cost 6,485,982 2,135,411 (1,458,754) 7,162,639
Accumulated depreciation
Buildings (846,880) (26,686) 4,235 (869,331)
Equipment (577,753) (71,552) 70,411 (578,894)
Intangible assets (2,559) (2,047) (4,606)
Infrastructure (1,789,668) (179,076) (1,968,744)
Total accumulated
depreciation
(3,216,860) (279,361) 74,646 (3,421,575)
Governmental activities, net $3,269,122 $1,856,050 $(1,384,108) $3,741,064
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
40
NOTE 5 – CAPITAL ASSETS (Continued)
Business-Type Activities
Beginning
Balance
Additions
Deletions
Ending
Balance
Assets not being depreciated
Construction in progress $ 600,512 $766,087 $(1,366,599) $
Total not being depreciated 600,512 766,087 (1,366,599)
Assets being depreciated
Water system improvements 2,658,922 1,068,506 3,727,428
Equipment 200,722 340,268 540,990
Total being depreciated 2,859,644 1,408,774 4,268,418
Total at historical cost 3,460,156 2,174,861 (1,366,599) 4,268,418
Accumulated depreciation
Water system improvements (1,160,437) (87,480) (1,247,917)
Equipment (95,208) (14,797) (110,005)
Total accumulated
depreciation
(1,255,645) (102,277) (1,357,922)
Business-type activities, net $2,204,511 $2,072,584 $(1,366,599) $2,910,496
Depreciation expense was charged to functions and programs of the primary government as follows:
Governmental activities:
Streets $181,058
Police department 69,360
General government 28,943
Total governmental activities $279,361
Business-type activities:
Municipal water $102,277
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
41
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, 2021 principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $269,157. Principal and interest paid for the current fiscal year was
$269,157 and pledged special assessments were $258,250.
Annual debt service requirements to maturity for the Note from direct borrowings are as follows:
Year Ended
September 30 Principal Interest Payment
2022 $263,739 $5,418 $269,157
$263,739 $5,418 $269,157
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2021, was $8,157
and total interest paid during the year was $10,910. No interest was capitalized in the Enterprise
Fund during the year.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
42
NOTE 6 – LONG-TERM LIABILITIES (Continued)
Changes in the Town’s long-term liabilities for the year ended September 30, 2021 are summarized
as follows:
Beginning
Ending
Due Within
Governmental Activities Balance Additions Deletions Balance One Year
Note from direct borrowings $521,986 $ $(258,247) $263,739 $263,739
OPEB 59,892 5,318 (19,904) 45,306
Litigation settlement 38,582 195,000 (38,582) 195,000
Compensated absences 14,674 93,112 (90,671) 17,115 17,115
Total Governmental Activities $635,134 $293,430 $(407,404) $521,160 $280,854
Beginning
Ending
Due Within
Business-type Activities Balance Additions Deletions Balance One Year
Compensated absences $1,095 $1,095 $(1,095) $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 employment
before satisfying the vesting requirement are used to reduce the Town’s current-period contribution
requirement.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
43
NOTE 7 – DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN (Continued)
For the fiscal year ended September 30, 2021, the Town recognized pension expense of $332,467
for the Plan, and as of the fiscal year end, the Town reported no payables for outstanding
contributions to the Plan. There were $12,655 of forfeitures during the current fiscal year, and the
balance of forfeitures was $64,340 as of September 30, 2021.
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, 2021
44
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, 2020, the
latest valuation date:
Active plan members 17
Inactive plan members or beneficiaries currently receiving benefits
Inactive plan members or beneficiaries entitled to but not yet receiving benefits
17
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, 2021, the rate was 2.43% based on the S&P Municipal
Bond 20-year High Grade Index at September 30, 2021. 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 2.14%.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
45
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, 2021, the Town reported a total OPEB liability of $45,306. For the fiscal year
ended September 30, 2021, the Town recognized an OPEB expense of $1,246. As of September 30,
2021, the Town reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources will be
recognized in OPEB expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Assumption changes 185$ 20,428$
Demographic experience 10,045 11,907
10,230$ 32,335$
Fiscal Year Ending
September 30 Amortization
2022 (4,072)$
2023 (4,072)
2024 (4,007)
2025 (3,907)
2026 (3,271)
Thereafter (2,776)
(22,105)$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
46
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Actuarial Methods and Assumptions
Significant methods and assumptions were as follows:
Valuation date:October 1, 2020
Measurement date:September 30, 2021
Actuarial cost method:Entry Age Cost Method
Discount rate:2.43%
Cost-of-living increases:Retireecontributions,healthinsurancepremiums,andtheimpliedsubsidyhavebeen
assumed to increase in accordance with the healthcare cost trend rates.
Healthcare cost trend rates:Increasesinhealthcarecostsareassumedtobe8.50%forthe2020/21fiscalyear
graded down by 0.50% per year to 5.00% for the 2027/28 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$225.00foreachoftheretireeand
theretiree'sspousehasbeenassumedatage60forthe2020/21fiscalyear;atother
ages,theimpliedsubsidywasdevelopedbasedontheage relatedmorbidity
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;assumed
disabilityisbasedontheWyatt1985DisabilityStudy(Class1rateswereusedfor
general employees and Class 4 rates were used for police officers).
Health coverage election:25%ofemployeesareassumedtoelectmedicalcoverageunderthePPOplanuntil
age65uponretirementordisability;ofthoseelectingcoverageforthemselves,50%
are also assumed to elect coverage for their spouse.
Spouses and dependents:Husbandsareassumedtobethreeyearsolderthanwives;retireesarenotassumed
to have any dependent children.
Changes:Sincethepriormeasurementdate,thediscountratewasincreasedfrom2.14%per
annumto2.43%perannum;thehealthcarecosttrendrateswereincreasedfrom
6.00%forthe2020/21fiscalyeargradeddownto5.00%to8.50%forthe2020/21
fiscalyeargradeddownto5.00%;theimpliedmonthlysubsidyatage60forthe
2020/21 fiscal year was decreased from $266.25 to $225.00.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
47
NOTE 9 – OTHER POSTEMPLOYMENT BENEFITS (Continued)
Total OPEB Liability
The components of the total OPEB liability as of September 30, 2021 were as follows:
Total
OPEB
Description Liability
Balance September 30, 2020 59,892$
Changes for the year:
Service cost 3,793
Expected interest growth 1,525
Demographic experience (13,647)
Benefit payments & refunds (1,828)
Assumptions changes (4,429)
Net change (14,586)
Balance September 30, 2021 45,306$
Covered-employee payroll 1,737,443$
Total OPEB liability as a percentage of
covered-employee payroll 2.61%
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
48
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 2.43% 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 (8.50% 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 1.43%2.43%3.43%
Total OPEB Liability 48,141$ 45,306$ 42,725$
Healthcare
Cost
1% Decrease Trend Rate 1% Increase
Healthcare Trend Rate Sensitivity 7.50% - 4.00%8.50% - 5.00%9.50% - 6.00%
Total OPEB Liability 41,640$ 45,306$ 49,534$
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
49
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, 2021, the Town paid an annual
service fee in the amount of $548,116. 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.
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, 2021, the Town paid $60,243 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, 2021, the Town
paid $751,126 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, 2021
50
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, 2021, the Town paid
$446,666 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, 2021, the Town
made payments of $162,738 pursuant to the agreement.
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. Certain settled claims exceed insurance coverage during the fiscal years ended
September 30, 2019, 2020, and 2021.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
51
NOTE 12 – RISK MANAGEMENT (Continued)
Florida Statutes 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 five remaining lawsuits alleging violations by the Town of the State of
Florida’s Public Records Law. Two cases remain pending before the trial court for a fee award.
The first case stalled when the Plaintiff entity filed for bankruptcy. Prior to that, Plaintiff’s expert
testified that a reasonable fee award would be approximately $37,000. However, a fee award for
this case cannot be reasonably determined at this time. For the second case, the Town will argue
that a proper fee award is in the $130,000 range, that costs should be limited to approximately
$25,000, and that interest should be denied or limited to the $40,000 range. As a result, the Town
will attempt to limit its exposure to approximately $195,000. A liability and expense in this amount
are reported in the government-wide financial statements of the Governmental Activities.
Three other cases alleging violations of the Public Records Law by the Town were still pending
on appeal limited to the issue of the amount of fees, which have already been paid. The Court
rejected each of Plaintiff’s claims in each appeal, except for approximately $6,000 in attorney’s
fees on a specific, limited issue in one case.
Nonetheless, the Plaintiff has not yet exhausted his appellate remedies in these three cases. He
filed motions in three different cases in June of 2022, seeking a certification that would permit a
higher level of review by the Florida Supreme Court on the issue of whether he is entitled to an
additional fee award for litigating the amount of his claim for attorney’s fees. While an adverse
outcome is unlikely, in the event of an adverse outcome before the Florida Supreme Court,
potential awards of additional attorney’s fees and costs under section 119.12, Florida Statutes,
would become available to the Plaintiff and would fall outside the scope of the Town’s liability
coverage. As a result, these cases still pose a risk of financial exposure to the Town. The amount
of additional exposure is currently unknown and will require additional discovery. Accordingly,
no provision for any liability that may result has been made in the accompanying financial
statements.
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2021
52
NOTE 13 – OPERATING LEASE
In July 2021, the Town entered into an operating lease for two copiers. The lease is for a term of 36
months and requires minimum monthly payments $503 that commenced in July 2021. For the year
ended September 30, 2021, the Town made payments of $2,368 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
2022 $6,036
2023 6,036
2024 4,527
$16,599
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.
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
Notes to the Financial Statements
September 30, 2021
53
NOTE 15 – HEALTH REIMBURSEMENT ARRANGEMENT
The Town provides a Section 105 Health Reimbursement Arrangement Plan (HRA) to full time
employees covered by the Town’s group medical plan. The plan will reimburse participants for in-
network and out-of-network medical, dental, vision, prescription and other medical expenses under
Section 213(d) of the Internal Revenue Code that they are required to pay under the group health
plan. Eligible expenses cannot also be reimbursed by another plan nor paid pre-tax by another health
plan coverage or program. Participants will be reimbursed for up to $3,000 for eligible expenses for
each plan year. This amount will be prorated for mid-year new hires. Unused amounts remaining in
a participant’s account at the end of the coverage period will carry forward into the next coverage
period to be used for future eligible expenses. The plan will cover the participant, spouse, and
dependents who are also covered under the participant’s group medical plan. Dependents include
natural and adopted children, stepchildren, and foster children. The plan permits a participant to elect
out of the plan annually.
The Town will make contributions of $3,000 annually to an HRA account for each participant,
prorated for mid-year new hires. For the year ended September 30, 2021, the Town made
contributions of $58,000 to the HRA account, and participants were reimbursed $45,869 for eligible
expenses they paid. As of September 30, 2021, the balance in the HRA account was $177,328.
NOTE 16 – CHANGE IN ACCOUNTING PRINCIPLE
As discussed in Note 1, the Town implemented GASB Statement No. 84, Fiduciary Activities, during
the current fiscal year. In the prior fiscal year, the Health Reimbursement Arrangement discussed in
Note 15 was accounted for in an agency fund. GASB Statement No. 84 eliminated the use of agency
funds. The HRA is now accounted for in the General Fund. The cumulative effect of applying this
statement has been reported as a restatement of the beginning net position of the governmental
activities on the entity-wide financial statements and the fund balance of the General Fund on the
fund financial statements. A reconciliation of the prior period ending net position and fund balance
to the current year beginning net position and fund balance are as follows.
Governmental
Activities General Fund
Balance at September 30, 2020, as reported 10,682,155$ 7,059,925$
Adjustment for adoption of GASB 84 165,197 165,197
Balance at September 30, 2020, as restated 10,847,352$ 7,225,122$
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, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Taxes
Ad valorem taxes 4,456,805$ 4,456,805$ 4,459,374$ 2,569$
Local option fuel taxes 29,000 29,000 37,386 8,386
Utility service taxes 218,000 218,000 249,103 31,103
Communications services taxes 57,000 57,000 58,855 1,855
Total taxes 4,760,805 4,760,805 4,804,718 43,913
Licenses and permits
Inspecction Fees 70,000 70,000 132,019 62,019
Franchise fees 121,800 121,800 154,978 33,178
Building permits 300,000 425,437 446,666 21,229
Total licenses and permits 491,800 617,237 733,663 116,426
Intergovernmental revenue
State revenue sharing proceeds 92,700 92,700 126,939 34,239
Shared revenue from other local units 1,650 1,650 6,220 4,570
Grants
Total intergovernmental revenue 94,350 94,350 133,159 38,809
Charges for services
Solid waste collection fees 156,000 156,000 161,396 5,396
Other 3,200 3,200 11,632 8,432
Total charges for services 159,200 159,200 173,028 13,828
Judgments, fines and forfeits
Judgments and fines 1,200 1,200 20,436 19,236
Violation of local ordinances 2,500 2,500 3,929 1,429
Total judgments, fines, and forfeits 3,700 3,700 24,365 20,665
Investment earnings 51,500 51,500 71,662 20,162
Miscellaneous revenues
Contributions 12,000 12,000 12,250 250
Other 15,200 15,200 380,997 365,797
Total miscellaneous revneues 27,200 27,200 393,247 366,047
Total revenues 5,588,555 5,713,992 6,333,842 619,850
continued
See notes to the budgetary comparison schedule
54
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, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Expenditures
Administration 1,680,213 1,805,650 1,612,020 193,630
Legal 1,324,245 524,245 485,275 38,970
Police 1,944,470 1,944,470 1,670,154 274,316
Fire Rescue 549,126 549,126 548,611 515
Streets 521,157 1,261,866 1,216,482 45,384
Sanitation 169,344 169,344 162,738 6,606
Total expenditures 6,188,555 6,254,701 5,695,280 559,421
Excess (deficiency) of revenues
over (under) expenditures (600,000)$ (540,709)$ 638,562 1,179,271$
Other financing sources (uses)
Transfers out (59,291) 59,291
Total other financing sources (uses) (59,291) 59,291
Net change in fund balance (600,000)$ (600,000)$ 638,562 1,238,562$
Fund balance, beginning of year - as restated 7,225,122
Fund balance, end of year 7,863,684$
See notes to the budgetary comparison schedule
55
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2021
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.FortheyearendedSeptember30,2021,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.
56
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, 2021
Actuarial Valuation Date 10/01/2016 10/01/2018 10/01/2019 10/01/2020
Measurement Date of Total OPEB Liability 09/30/2018 09/30/2019 09/30/2020 09/30/2021
Employer's Reporting Date 09/30/2018 09/30/2019 09/30/2020 09/30/2021
2018 2019 2020 2021
Total OPEB liability - beginning 66,172$ 69,996$ 61,271$ 59,892$
Changes for the year:
Service cost 5,843 4,139 4,294 3,793
Expected interest growth 2,558 2,562 1,329 1,525
Demographic experience 16,699 255 (13,647)
Benefit payments & refunds (3,487) (5,206) (7,002) (1,828)
Assumption changes (1,090) (26,919) (255) (4,429)
Net change in total OPEB liability 3,824 (8,725) (1,379) (14,586)
Total OPEB liability - ending 69,996$ 61,271$ 59,892$ 45,306$
Covered-employee payroll 1,533,673$ 1,616,938$ 1,721,402$ 1,737,443$
Total OPEB liability as a percentage of
covered-employee payroll 4.56%3.79%3.48%2.61%
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%
September 30, 2021 measurement date 2.43%
Sincethepriormeasurementdate,thediscountratewasincreasedfrom2.14%perannumto2.43%perannum;thehealthcare
costtrendrateswereincreasedfrom6.00%forthe2020/21fiscalyeargradeddownto5.00%to8.50%forthe2020/21fiscal
yeargradeddownto5.00%;theimpliedmonthlysubsidyatage60forthe2020/21fiscalyearwasdecreasedfrom$266.25to
$225.00.
Thisscheduleisintendedtoshowinformationfor10years.However,untilafull10-yeartrendiscompiled,informationwill
bepresentedforthoseyearsforwhichinformationisavailable.Noassetsareaccumulatedinatrustthatmeetsthecriteriain
GASB Statement No. 75, paragraph 4, to pay related benefits.
57
58
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, 2021, 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 27, 2022.
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.
59
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. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
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.
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 27, 2022
60
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, 2021, and have issued our report thereon dated June 27, 2022.
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 27, 2022, should be considered in
conjunction with this Management Letter.
61
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.
62
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, 2021 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 27, 2022
63
INDEPENDENT ACCOUNTANT’S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
To 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, 2021. 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 AICPA.
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 nature,
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.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the examination engagement.
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, 2021.
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 of Commission, and is not intended to be and should not be used
by anyone other than these specified parties.
West Palm Beach, Florida
June 27, 2022