HomeMy Public PortalAbout2013 AFRTOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2013
TABLE OF CONTENTS
Pages
Independent Auditor's Report 1-3
Management's Discussion and Analysis (required supplementary information) 4-11
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position
12
Statement of Activities
13-14
Fund Financial Statements
Balance Sheet—Governmental Funds
15
Reconciliation of the Balance Sheet—Governmental Funds to
the Statement of Net Position
16
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds
17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Funds to the Statement of Activities
18
Statement of Net Position — Proprietary Fund
19
Statement of Revenues, Expenses, and Changes in Fund Net Position —
Proprietary Fund
20
Statement of Cash Flows — Proprietary Fund
21
Notes to the Financial Statements
22-45
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
Budget and Actual — General Fund 46
Notes to the Budgetary Required Supplemental Information 47
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 48-49
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 50-53
NH NOWLEN, HOLT&MRNER,EA.
I,7sH,DI Hall,
& M
TFI I PH( IF H,H fin NPH
INDEPENDENT AUDITORS REPORT "
The Honorable Mayor and Members of He Town Commission our I III ativa_clliurll
Town of Gulf Stream, Fl on da ro
HH piJ wemn
ReportontlMe Financial Statenentx
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, and each major fund of the Town of Gulf Stream, Florida, as of and for the year ended
September 30, 2013, and the related notes to the financial statements, which collectively comprise the
Town s basic financial statements as listed in the table of contents.
Mwagement's Responsibihyfar•the Fin ciolSmtements
Management is responsible for the preparation and fair presentatron of these financial statements in
accordance with accounting principles generally accepted in the United States of America, His includes
He 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
In or
Aaduar's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with anditing standards generally accepted in the United States of Amens and
He standards applicable to financial audits contained in Government AuRnng 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 whetirerthe financial statements are Ree from material misstatement.
An audit involves pePorming procedures to obtain audit evidence about the amounts and disclosures in
He 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, butnotforthe purpose of expressing an opinion on the effectiveness of
He entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
He 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.
"FR1a%x eHrmrrt Cr AFrIoM PU9Y0tl»YmIm9.MeldMmNE CCCFRnPNInERIAHU NL
Basis for Qualified Opinions
The Town has not recognized the other postemployment benefits (OPEB) expense and obligation in the
financial statements of the governmental activities, business -type activities, and the Enterprise Fund as
required in accordance with accounting principles generally accepted in the United States of America as
provided in Governmental Accounting Standards Board Statement No. 45. The effects of that departure
on the financial statements are not reasonably determinable. The Town also has not disclosed the
descriptive information about other postemployment benefits required by standards.
Qualified Opinions
In our opinion, except for the effects of the matter described in the "Basis for Qualified Opinion"
paragraph, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, business -type activities, and Enterprise Fund
of the Town of Gulf Stream, Florida, as of September 30, 2013, and the respective changes in financial
position, and where applicable, cash flows thereof for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Unmodified Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the General Fund and the Special Assessment Fund of the Town of Gulf
Stream, Florida, as of September 30, 2013, and the respective changes in financial position thereof for
the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 4 through 11 and 46 through 47
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.
Management has omitted the Schedule of Funding Progress for Other Postemployment Benefits that
accounting principles generally accepted in the United States of America require to be presented to
supplement the basic financial statements. Such missing information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. Our opinion on the basic financial statements is not affected
by this missing information.
2
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 8,
2014, 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 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 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
January 8, 2014
Ic6urre.►t; �s2 4 rQ.
3
Management's Discussion and Analysis
The Town of Gulf Stream's (the "Town") discussion and analysis is designed to
A. Assist the reader in focusing on significant financial issues
B. Provide an overview of the Town's financial activity
C. Identify changes in the Town's financial position
D. Identify any material deviations from the financial plan (approved budget)
E. Identify individual fund issues or concerns
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current
years activities, resulting changes and currently known facts, please read it in conjunction with
the Town's financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
➢ The assets plus deferred outflows of resources of the Town of Gulf Stream exceeded its
liabilities plus deferred inflows of resources at the close of the most recent fiscal year by
$10,007,392 (net position). Of this amount, $1,005,838 (unrestricted net position) may be
used to meet the government's ongoing obligations to citizens and creditors.
➢ The governmental activities revenues were $3,119,593 at the close of fiscal year 2013.
➢ The business -type activities revenues were $944,686 at the close of fiscal year 2013.
➢ The total cost of all Town programs was $4,641,331 during the fiscal year 2013.
➢ At the end of the 2013 fiscal year, unassigned fund balance for the general fund was
$752,858 or 23% of total general fund expenditures.
USING THIS REPORT
In light of the fact that this is a very different presentation from the pre -GASB 34 Statements, the
following graphic is provided for your review.
MD&A
BASIC
FINANCIAL
STATEMENTS
REQUIRED
SUPPLEMENTAL
INFORMATION
Management's Discussion & Analysis
(Required supplemental information)
Government -wide financial Fund Financial Statements
statements (new)(pages 12-14) (Refocused)(Pages 15-21)
Notes to the financial statements (Expanded/
Restructured)(Pages 22-45)
Required supplementary information
(Otherthan MD&A) (Expanded) (Pages46-47)
4
Management's Discussion and Analysis
The financial statement's focus is on both the Town as a whole (government -wide) and on the
major individual funds. Both perspectives (government -wide and major fund) allow the user to
address relevant questions, broaden a basis for comparison (year to year or government to
government), and enhance the Town's accountability.
Government -Wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad
overview of the Town of Gulf Stream's finances, in a manner similar to a private -sector
business. The Statement of Net Position includes all of the government's assets, deferred
outflows of resources, liabilities, and deferred inflows of resources. All of the current year's
revenues and expenses are accounted for in the statement of activities regardless of when cash is
received or paid.
The two government -wide statements report the Town's net position and how it has changed.
Net position is the difference between the Town's (a) assets and deferred outflows of resources
and (b) liabilities and deferred inflows of resources. It is one way to measure the Town's
financial health or financial position. Over time, increases or decreases in the Town's net
position are indicators of whether its financial health is improving or deteriorating. You will
need to consider other non-financial factors, however, such as changes in the Town's property
tax base and the condition of the Town's roads, to assess the overall health of the Town.
In the Statement of Net Position and the Statement of Activities, we divide the Town into two
kinds of activities:
➢ Governmental activities — Most of the Town's basic services are reported here, including
the police, public services and general administration. Property taxes, franchise fees and
state shared revenue finance most of these activities.
➢ Business -type activities — The Town charges a fee to customers to help it cover all or
most of the cost of certain services it provides.
Fund Financial Statements
Our analysis of the Town's major funds begins on page 9. The fund financial statements provide
detailed information about the most significant funds — not the Town as a whole. Funds are
accounting devices that the Town uses to keep track of specific sources of funding and spending
for a particular purpose.
➢ Governmental Funds — Most of the Town's basic services are included in governmental
funds, which focus on (1) how cash and other financial assets can be readily converted to
cash flow and (2) the balances left at year-end that are available for spending.
Consequently, the governmental fund statements provide a short-term view that helps
you determine whether there are more or fewer financial resources that can be spent in
the near future to finance the Town's programs.
5
Management's Discussion and Analysis
➢ Proprietary Funds — Services for which the Town charges customers a fee are generally
reported in proprietary funds. Proprietary funds, like the government -wide statements,
provide both long and short-term financial information.
• The Town's enterprise fund (one type of proprietary fund) is the same as its
business type activities, but provides more detail and additional information,
such as cash flows.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Net Position
The Town's combined net position for the fiscal year ending 2013 is reported at $10,007,392.
Net position of the Town's governmental activities for the fiscal year ending 2013 is $7,603,961.
The net position of our business -type activities is reported at $2,403,431 for the fiscal year
ending 2013. Overall the financial position of the total primary government is about the same as
the prior year, with a slight decrease in net position for the governmental activities and a slight
increase for the business type activities.
Current and Other Assets
Capital Assets
TOTAL ASSETS
Current and Other Liabilities
Long -tern Liabilities
TOTAL LIABILITIES
Net Position:
Net Investment in Capital Assets
Restricted — Dredging Projects
Restricted — Underground Utilities
Restricted—Repairs, replacements,
and improvements
Unrestricted
TOTAL NET POSITION
Town of Gulf Stream
Statement of Net Position
As of September 30, 2013
Governmental
Businesstype
Activities
Activities
TOTAL
2012
2013
2012
2013
2012
2013
$8,854,512
$7,897,076
$ 314,502
$ 558,072
$9,169,014
$ 8,455,148
2 149 857
111L107 107
2 009 243
1 943 527
4 159 100
4 054 634
11 004 369
10 008 183
2 323 745
2 50L599
13 328 114
12 5W782
99,113
124,454
131,204
98,168
230,317
222,622
2 513 353
2 279 768
2 513 353
2 279 768
2 612 466
2 4O4 222
131 204
98J68
2 743 670
2 502 390
2,149,857
2,111,107
2,009,243
1,943,527
4,159,100
4,054,634
17,820
17,820
17,820
17,820
5,298,496
4,806,250
5,298,496
4,806,250
56,070
122,850
56,070
122,850
925 730
66&784
127 228
337 054
L051958
L005 838
$839L903
$7.603961
$2192.541
$2103.431
$M584A44
$10107392
6
Management's Discussion and Analysis
Changes in Net Position
The statement of activities presents information showing how the government's net position
changed during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in the future fiscal periods (i.e., uncollected taxes and earned but unused vacation
leave).
➢ The decrease in net position for governmental activities totaled $787,942. The decrease
in net position was primarily due increased legal fees as well fees associated with the
Special Revenue Fund.
➢ The increase in business -type net position was $210,890. The increase in net position
was due in part to the shift from utilizing contract services to in-house labor.
Revenues
Program Revenues:
Charges for Services
Operating & Capital Grants
General Revenues:
Property Taxes
Communications Taxes
Gas Taxes
Utility Service Taxes
Franchise Fees
Unrestricted Investment Earnings
Intergovernmental Revenues
Other
Total Revenues
Expenses
Governmental Activities:
General and Administrative
Police Department
Fire Protection
Streets
Sanitation
Physical Environment
Interest on long-term debt
Business -type Activities:
Water
Total Expenses
Change in Net Position
Net Position - Beginning
Net Position - Ending
Town of Gulf Stream's
Changes in Net Position
Governmental
Business -type
Activities
Activities
TOTAL
2012
2013
2012
2013
2012
2013
$ 272,564
$ 324,536
$ 874,573
$ 944,686
$ 1,147,137
$ 1,269,222
92,528
40,000
92,528
40,000
1,850,192
2,186,723
1,850,192
2,186,723
60,207
69,177
60,207
69,177
30,845
31,089
30,845
31,089
154,653
177,916
154,653
177,916
124,499
125,893
124,499
125,893
3,606
36,237
3,606
36,237
96,298
86,022
96,298
86,022
33M0
42M0
33M0
42M0
17M292 292
3 119 593
874 573
944 686
3 593 865
4 064 279
813,714
1,116,362
813,714
1,116,362
1,436,588
1,426,179
1,436,588
1,426,179
315,580
428,210
315,580
428,210
226,519
227,396
226,519
227,396
129,801
132,261
129,801
132,261
144,166
527,444
144,166
527,444
1,892
49,683
1,892
49,683
892168
733 796
892168
733 796
3 06&260
3M7 535
892168
733 796
3 960 428
4 641 331
(348,968)
(787,942)
(17,595)
210,890
(366,563)
(577,052)
&740 871
839L903 903
2 210 136
2 192 541
10 951 007
10 584 444
$8391.903
VM3X1
$2192.541
$2.403.431
$10584.444
$10A07392
7
Management's Discussion and Analysis
More than half the Town's revenue comes from Property Taxes. (Please see chart below.)
Revenues — Governmental Revenues by Source
Investment Ei
1%
Franchise Fe
4%
Charges for Services
10%
Intergovernmental
3%
Other
ty Taxes
0%
Management's Discussion and Analysis
The Town's expenses cover a range of services, with 36% related to public safety. (Please see
chart below.)
Expenses — Governmental Expenses by Function
General Govern
30%
Fire
Interest on Long-term
Debt, 1%
36%
Financial Analysis of the Governmental Fund on the Fund Basis
As the Town of Gulf Stream completed the year, the general fund reported a fund balance of
$778,193 a decrease of $202,983 from the previous fiscal year. The decrease was due primarily
to legal fees.
The general fund ended the 2013 fiscal year with $7,515 in nonspendable fund balance, $17,820
in restricted fund balance, and $752,858 in unassigned fund balance.
9
Management's Discussion and Analysis
Financial Analysis of the Proprietary Fund
Total net position of the water fund at the end of the fiscal year 2013 was $2,403,431. The net
position of the water fund has increased slightly from last year. Water rates were not changed
and there were not any major improvements.
General Fund Budgetary Highlights
Over the course of the year, The Town Commission revised the budget for expenditures twice.
These adjustments increased total expenditures by $485,910, with $380,000 of the increase for
legal costs. With these adjustments, actual expenditures were $167,975 less than the final budget
amounts. Revenues were $114,952 more than the final budget amounts.
CAPITAL ASSET AND DEBT ADMINSTRATION
Capital Assets
At the end of fiscal year 2013, the Town had invested $4,054,634 in a broad range of capital
assets including police equipment, buildings, infrastructure and water improvements. Additional
information can be found in Note 4 to the financial statements.
Town of Gulf Stream's Capital Assets
(Net of depreciation)
as of September 30, 2013
10
Governmental
Business type
Activities
Activities
TOTAL
2012
2013
2012 2013
2012
2013
Land
$ 376,523
$ 376,523
$ $
$ 376,523
$ 376,523
Construction in Process
Buildings & Improvements
216,427
186,415
2,002,855 1,939,545
2,219,282
2,125,960
Equipment
81,861
100,799
6,388 3,982
88,249
104,781
Infrastructure
1,475,046
1,447,370
1,475,046
1,447,370
TOTALS
2 149 857
2 111 107
2 009 243 1 943 527
4 159 100
4 054 634
10
Management's Discussion and Analysis
Long -Term Liabilities
As of September 30, 2013 the Town had $2,279,768 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's
Long -Term Liabilities
As of September 30, 2013
Governmental Business -type
Activities Activities TOTAL
2012 2013 2012 2013 2012 2013
Promissory Note $2,427,895 $2,187,516 $ $ $2,427,895 $2,187,516
Compensated Absences 85,458 92,252 85,458 92,252
TOTALS 2 513 353 2 279 768 $ $ 2 513 353 2 279 768
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
For the 2014 fiscal year, general fund revenue projections are increased by the millage rate
change.
➢ The millage rate was increased to 3.7000 mills from 3.1000 mills, which is greater than
the rolled -back rate by 24.42%.
CONTACTING THE TOWN'S FINANCIAL MANAGEMENT
This financial report is designed to provide our residents and creditors with a general overview
of the Town's finances and demonstrates the Town's accountability for the money it receives and
disburses. If you have any questions about this report or need additional information, please
contact the Town of Gulf Stream, 100 Sea Road, Gulf Stream, FL 33483.
11
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
September 30, 2013
Primary Government
Governmental Business -type
Activities Activities Total
Assets
Cash and cash equivalents
$ 2,467,917
$
$ 2,467,917
Investments
2,406,193
2,406,193
Equity in pooled investments
712,095
203,447
915,542
Accounts receivable
68,927
147,456
216,383
Assessments receivable
2,189,484
122,850
2,189,484
Inventories
7,515
7,656
15,171
Prepaid expenses
$ 7,603,961
1,163
1,163
Debt issue cost
21,492
21,492
Deposits
23,453
23,453
Restricted assets
Equity in pooled investments
185,950
185,950
Accounts receivable
12,400
12,400
Capital assets
Non -depreciable
376,523
376,523
Depreciable (net of depreciation)
1,734,584
1,943,527
3,678,111
Total assets
10,008,183
2,501,599
12,509,782
Liabilities
Liabilities
Accounts payable
46,889
16,897
63,786
Accrued liabilities
38,699
38,699
Accrued interest payable
22,797
22,797
Payable from restricted assets
Damage deposit bonds
75,500
75,500
Deferred revenue
16,069
5,771
21,840
Long -tens debt
Payable within one year
292,530
292,530
Payable after one year
1,987,238
1,987,238
Total liabilities
2,404,222
98,168
2,502,390
Net position
Net investment in capital assets
2,111,107
1,943,527
4,054,634
Restricted for dredging projects
17,820
17,820
Restricted for underground utilities
4,806,250
4,806,250
Restricted for repairs, replacements
and improvements
122,850
122,850
Unrestricted
668,784
337,054
1,005,838
Total net position
$ 7,603,961
$ 2,403,431
$ 10,007,392
See notes to the financial statements.
12
TOWN OF GULF STREAM, FLORIDA
Statement of Activities
For the Year Ended September 30, 2013
Functions/Programs
Primary Government
Governmental activities
General government
Police department
Fire protection
Streets
Sanitation
Physical environment
Interest on long-term debt
Total governmental activities
Business -type activities
Water
Total primary government
13
Charges for
Expenses Services
$ 1,116,362
1,426,179
428,210
227,396
132,261
527,444
49,683
3,907,535
$ 185,864
1,143
132,147
5,382
JG ', 30
733,796 944,686
$ 4,641,331 $ 1,269,222
See notes to the financial statements.
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
$ 40,000 $
$ (890,498)
$ $
(890,498)
(1,425,036)
(1,425,036)
(428,210)
(428,210)
(227,396)
(227,396)
(114)
(114)
(522,062)
(522,062)
(49,683)
(49,683)
40,000
(3,542,999)
(3,542,999)
210,890
210,890
$ 40,000 $
(3,542,999)
210,890
(3,332,109)
General revenues
Property taxes
2,186,723
2,186,723
Communications services taxes
69,177
69,177
Gas taxes
31,089
31,089
Utility service tax
177,916
177,916
Franchise taxes
125,893
125,893
Intergovernmental shared revenues
86,022
86,022
Unrestricted investment earnings
36,237
36,237
Miscellaneous revenues
42,000
42,000
Total general revenues
2,755,057
2,755,057
Change in net position
(787,942)
210,890
(577,052)
Netposition- beginning
8,391,903
2,192,541
10,584,444
Netposition- ending
$ 7,603,961
$ 2,403,431 $
10,007,392
See notes to the financial statements.
14
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2013
See notes to the financial statements.
15
Special
Total
General
Assessment
Governmental
Fund
Fund
Funds
Assets
Cash and cash equivalents
$
91,313
$
2,376,604
$
2,467,917
Investments
2,406,193
2,406,193
Equity in pooled investments
712,095
712,095
Accounts receivable
68,927
68,927
Assessments receivable
2,189,484
2,189,484
Due from other funds
23,453
23,453
Inventories
7,515
7,515
Security deposits
23,453
23,453
Total assets
$
903,303
$
6,995,734
$
7,899,037
Liabilities and fund equity
Liabilities
Accounts payable
$
46,889
$
$
46,889
Accrued liabilities
38,699
38,699
Due to other funds
23,453
23,453
Deferred revenue
16,069
2,189,484
2,205,553
Total liabilities
125,110
2,189,484
2,314,594
Fund equity
Nonspendable
Inventories
7,515
7,515
Restricted for
Dredging projects
17,820
17,820
Underground utilities
4,806,250
4,806,250
Unassigned
752,858
752,858
Total fund equity
778,193
4,806,250
5,584,443
Total liabilities and fund equity
$
903,303
$
6,995,734
$
7,899,037
See notes to the financial statements.
15
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2013
Fund balance of governmental funds
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets used in governmental activities are not financial
resources and therefore, are not reported in the governmental fund.
Governmental capital assets
Less accumulated depreciation
Revenue is recognized when earned in the government wide statements
regardless of when it is collected. Governmental funds recognize
revenue when it is both measurable and available.
5,584,443
$ 4,267,099
(2,155,992) 2,111,107
Deferred revenue 2,189,484
Debt issue cost are reported as expenditures in governmental funds
when debt is issued. These items are deferred and amortized over the
life of the related debt in the government -wide statements.
Unamortized debt issue cost 21,492
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 (2,187,516)
Accrued interest payable (22,797)
Compensated absences (92,252)
Net position of governmental activities $ 7,603,961
See notes to the financial statements.
16
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2013
Expenditures
Current
Special
Total
General and administrative
General
Assessment
Governmental
Police department
Fund
Fund
Funds
Revenues
428,210
428,210
Taxes
$ 2,480,109
$
$ 2,480,109
Intergovernmental revenue
128,022
128,022
Licenses and permits
282,017
499,213
282,017
Charges for services
135,395
135,395
Fines and forfeits
1,143
1,143
Investment earnings
3,907
32,330
36,237
Special assessments
238,412
238,412
Miscellaneous
51,288
5,382
56,670
Total revenues
3,081,881
276,124
3,358,005
Expenditures
Current
General and administrative
1,068,075
1,068,075
Police department
1,380,296
1,380,296
Fire protection
428,210
428,210
Streets
148,917
148,917
Sanitation
132,261
132,261
Physical environment
499,213
499,213
Capital outlay
127,105
127,105
Debt service
Principal
240,379
240,379
Interest
28,778
28,778
Total expenditures
3,284,864
768,370
4,053,234
Excess (deficiency) of revenues
over (under) expenditures
(202,983)
(492,246)
(695,229)
Net change in fund balance
(202,983)
(492,246)
(695,229)
Fund balance - beginning of the year
981,176
5,298,496
6,279,672
Fund balance - end of the year
$ 778,193
$ 4,806,250
$ 5,584,443
See notes to the financial statements.
17
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2013
Net change in fund balance of govemmental funds $ (695,229)
Amounts reported for govemmental activities in the statement of
activities are differert because:
Governmental finds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets
is depreciated over their estimated useful life.
Expenditures for capital assets
Less current year depreciation
Gains and losses on the disposal of fixed assets are not reported
in the govemmental funds but are reported in the statement of
activities
Net book value of fixed asset disposals
Governmental funds include revenues collected within 60 days
of year end as deferred revenue. Government -wide reporting
recognizes revenues when they are earned, regardless of when
they are collected
Special assessments
The repayment of the principal of long term debt consumes
financial resources of govemmental funds, but it does not
have any effect on net position
Principal payments on debt
Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore, are
not reported as expenditures of governmental funds.
Amortization of bond issue costs
Change in accrued interest payable
Change in long-term compensated absences
Change in net position of govemmental activities
See notes to the financial statements.
18
$ 118,032
148,165 (30,133)
(8,617)
(264,114)
240,379
(2,529)
(20,905)
(6,794)
$ (787,942)
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2013
Assets
Current assets
Equity in pooled investments
Accounts receivable, net
Prepaid expenses
Inventories
Restricted assets
Equity in pooled investments
Accounts receivable
Total current assets
Noncurrent assets
Depreciable capital assets
Less acumulated depreciation
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Accounts payable
Deferred revenue
Payable from restricted assets
Deposits payable
Total current liabilities
Total liabilities
Net position
Net investment in capital assets
Restricted for repairs, replacements and improvements
Unrestricted
Total net position
See notes to the financial statements.
19
Enterprise
Fund
$ 203,447
147,456
1,163
7,656
185,950
12,400
558,072
2,720,800
777,273
1,943,527
2,501,599
16,897
5,771
75,500
98,168
98,168
1,943,527
122,850
337,054
$ 2,403,431
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2013
Operating revenues
Charges for services
Total operating revenues
Operating expenses
Personnel
Water purchases
Repairs and maintenance
Management fees
Depreciation expense
Payment in lieu of taxes
Other expenses
Total operating expenses
Operating income
Capital contributions
Reserve fees
Total capital contributions
Change in net position
Net position - beginning of the year
Net position - end of the year
Enterprise
$ 877,906
877,906
44,110
496,138
1,741
65,000
65,716
30,132
30,959
733,796
144,110
66,780
66,780
210,890
2,192,541
$ 2,403,431
See notes to the financial statements.
20
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2013
Cash flows from operating activities:
Receipts from customers
Payments to employees
Payments to suppliers
Internal activity - receipts from other funds
Net cash provided by operating activities
Cash flows from capital financing activities:
Reserve fees received
Net cash provided by capital financing activities
Cash flows from investing activities:
Purchase of investments
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of the year
Cash and cash equivalents - end of the year
Cash flows from operating activities:
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable
Due from other funds
Prepaid expenses
Inventory
Increase (decrease)in:
Accounts payable
Deposits
Deferred revenue
Total adjustments
Net cash provided by operating activities
See notes to the financial statements.
21
Enterprise
$ 886,082
(44,110)
(585,536)
66,536
322,972
66,425
66,425
(389,397)
(389,397)
$ 144,110
65,716
(12,595)
161,668
4,765
(7,656)
(53,807)
15,000
5,771
178,862
$ 322,972
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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.
ReportinQ 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 it
appoints a voting majority of the organization's governing board and (1) it 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. 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, the Town of Gulf Stream has determined that there are
no legally separate entities to consider as potential component units.
Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non -fiduciary activities of the primary government. For
the most part, the effect of inter -fund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business -type activities, which rely on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
22
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government -wide and Fund Financial Statements (Continued)
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund
financial statements.
Measurement Focus, Basis ofAccountinz and Financial Statement Presentation
The govemment-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues
are recorded when earned and expenses recorded when a liability is incurred, regardless of the
timing of related cash flows. The Town does not accrue property tax revenues since the collection
of these taxes coincides with the fiscal year in which levied, and since the Town consistently has no
material uncollected property taxes at year end. Grants and similar items are recognized as revenue
as soon as all eligibility requirements imposed by the provider have been met.
When both restricted and unrestricted resources are available for use, it is the Town's policy to use
restricted resources first, then unrestricted resources as they are needed.
As a general rule the effect of inter -fund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are payments -in -lieu of taxes and other
charges between the Town's water and sewer function and various other functions of the Town.
Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
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
23
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental Funds (Continued)
expenditures relating to compensated absences and claims and judgments are recorded only when
payment is due.
Fines and permit revenues are not susceptible to accrual because generally, they are not measurable
until received in cash. Property taxes, franchise taxes, licenses, interest revenue, intergovernmental
revenues, and charges for services associated with the current fiscal period are all considered to be
susceptible to accrual and have been recognized as revenues of the current fiscal period. All other
revenue items are considered to be measurable and available only when cash is received by the
Town.
The Town reports the General Fund and The Special Assessment Fund as major governmental
funds. The General Fund is the general operating fund of the Town, and it is used to account for all
financial resources except those required to be accounted for in another fund. The Special
Assessment Fund is a special revenue fund used to account for financial resources relating to the
underground utility project.
Proprietary Funds
Proprietary Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises where the intent of the governing body is that the
costs (expenses, including depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges or (b) where the
governing body has decided that periodic determination of revenues earned, expenses incurred,
and net income is appropriate for capital maintenance, public policy, management control,
accountability, or other purposes. Proprietary funds distinguish operating revenues and expenses
from non-operating items. Operating revenues and expenses generally result from providing
services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. Operating expenses report on the costs to maintain the proprietary systems,
the cost of sales and services, administrative expenses and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.
The Town reports the Municipal Water Fund as a major proprietary fund. The Municipal Water
Fund was established to account for the provision of water services to Town residents.
24
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 in the Local Government Surplus Funds Trust Fund, a 2a -7 -like pool, are carried at fair
value. A 2a -7 -like pool is not registered with the SEC as an investment company, but nevertheless,
has a policy that it will, and does, operate in a manner consistent with the SEC's rule 2a-7 of the
Investment Company Act of 1940, which comprises the rules governing money market funds. Thus,
this pool operates essentially as a money market fund. Investments in certificates of deposits are
carried at amortized cost that approximates market, because these investments are considered to be
nonparticipating interest earning investment contracts that are not affected by changes in interest
rates.
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.
Canital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, and sidewalks) are reported in the applicable governmental or business -type activities
columns in the governmental -wide financial statements and in the Water Enterprise Fund.
Effective October 1, 2011, the Town increased the capitalization threshold from $1,000 for all
classes of capital assets to the following amounts:
Buildings
$5,000
Equipment
5,000
Infrastructure
10,000
Water Infrastructure
10,000
25
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets (Continued)
The change was made prospectively, and all capital assets placed into service prior to October 1,
2011 will remain capitalized. Such assets are recorded at cost or the fair market value of the
assets at the time of purchase or contribution. The Town is a Phase 3 government under
GASB 34 and has elected not to report major general infrastructure assets retroactively.
Depreciation has been provided over the useful lives using the straight line method. The
estimated useful lives are as follows:
Buildings
10-30 years
Equipment
3-15 years
Infrastructure
25-50 years
Water Infrastructure
40-50 years
Inventory
Inventories consist of expendable supplies held for consumption which are carried at cost (first -in,
first -out). The Town accounts for inventories using the consumption method, under which
expenditures are recognized only when inventory items are used. Reported inventory is equally
offset by nonspendable fund balance which indicates that it does not constitute "available spendable
resources" even though it is a component of net current assets.
Compensated Absences
Compensated absences are absences for which employees will be paid, such as vacation, sick
leave, and sabbatical leave. A liability for compensated absences that is attributable to services
already rendered and that is not contingent on a specific event that is outside the control of the
government and its employees is accrued as employees earn the rights to the benefits.
Compensated absences that relate to future services or that are contingent on a specific event that
is outside the control of the government and its employees are accounted for in the period in
which such services are rendered or such events take place. All vacation, sick leave, and
sabbatical leave is accrued when incurred in the government -wide and proprietary fund financial
statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements. Town employees
may accumulate up to 5 days of vacation leave and 120 days of sick leave. Accumulated vacation is
payable to employees upon termination or retirement at the rate of pay on that date. Sick leave can
only be used for paid time off and is not paid to any employee upon termination.
26
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Interest Cost
Interest costs in governmental funds are charged to expenditures as incurred. Construction period
interest incurred in governmental funds is not capitalized. Construction period interest incurred in
proprietary funds is capitalized and included in the cost of the assets in accordance with generally
accepted accounting principles.
Interfund Transactions
Transactions between funds consist of loans, services provided, reimbursements, or transfers. The
current portion of interfund loans are reported in the fund financial statements as "due from other
funds" and "due to other funds" while the non-current portion of interfund loans are reported as
"advances to other funds" and "advances from other funds". Any residual balances outstanding
between the governmental activities and business -type activities are reported in the government -
wide financial statements as "internal balances". Services deemed to be reasonably equivalent in
value, are treated as revenue and expenditures/expenses. Reimbursements occur when one fund
incurs a cost, charges the appropriate benefiting fund and reduces its related cost. All other
interfund transactions are presented as transfers.
Deferred Revenues
The government reports deferred revenue on its government wide statement of net position,
proprietary statement of net position, and governmental funds balance sheet. Deferred revenues
arise when a potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to incurring
qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or
when the government has a legal claim to the resources, the liability for deferred revenue is
removed and revenue is recognized.
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:
27
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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.
28
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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. A deferred outflow of resources is a consumption of net position
that is applicable to a future reporting period. A deferred inflow of resources is an acquisition of
net position that is applicable to a future reporting period. 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: 1) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or 2) law
through constitutional provisions of enabling legislation.
3. Unrestricted net position — All other net position that does not meet the
definition of "restricted" or "invested in capital assets, net of related debt."
29
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Budgetary Data
Formal budgetary integration is employed as a management control device during the year for the
General Fund and the Municipal Water Fund. Appropriations are legally controlled at the
department level. All budgets are legally enacted and are adopted on a basis consistent with
generally accepted accounting principles. Budgeted amounts are as originally adopted, or as
emended by appropriate action. The Special Assessment Special Revenue Fund is not budgeted
because it is not legally required to be budgeted.
Property Taxes
Under Florida law, the assessment of all properties and the collection of all county, municipal,
and school board property taxes are consolidated in the offices of the County Property Appraiser
and County Tax Collector. The laws of the State regulating tax assessment are also designed to
assure a consistent property valuation method statewide.
The tax levy of the Town is established by the Town Commission prior to October 1 of each
year, and the Palm Beach County Property Appraiser incorporates the Town's millages into the
total tax levy, which includes Palm Beach County and Palm Beach County School Board tax
requirements.
All property is reassessed according to its fair market value January 1 of each year, which is also
the lien date. Each assessment roll is submitted to the Executive Director of the State
Department of Revenue for review to determine if the rolls meet all the appropriate requirements
of state statutes.
All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment
roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April
1 following the year in which they are assessed. Discounts are allowed for early payment at the
rate of 4% in the month of November, 3% in the month of December, 2% in the month of
January and 1% in the month of February. The taxes paid in March are without discount.
Delinquent taxes on real property bear interest of 18% per year. On or prior, to June 1 following
the tax year, certificates are sold for all delinquent taxes on real property. After the sale, tax
certificates bear interest of 18% per year or any lower rate bid by the buyer. Application for a tax
deed on any unredeemed tax certificates may be made by the certificate holder after a period of
two years.
30
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property Taxes (Continued)
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.
Use ofEstimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and revenue and expenses during the
period reported. These estimates include assessing the collectibility of accounts receivable, the use
and recoverability of inventory, and useful lives and impairment of tangible and intangible assets,
among others. Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary. Actual
results could differ from the estimates.
Implementation of Governmental Accounting Standards Board Statements
The Town implemented the following Governmental Accounting Standards Board Statements
during the fiscal year ended September 30, 2013:
GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB
Statements No. 14 and No. 34. This statement provides additional criteria for classifying entities
as component units to better assess the accountability of elected officials by ensuring that the
financial reporting entity includes organizations for which the elected officials are financially
accountable or that are determined by the government to be misleading to exclude.
GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance
Contained in Pre -November 30, 1989 FASB and AICPA Pronouncements. This statement
directly incorporates the applicable guidance from FASB and AICPA pronouncements into the
state and local government accounting and financial reporting standards, with provisions
modified, as appropriate, to recognize the effects of the governmental environment and the needs
of governmental financial statement users without affecting the substance of the applicable
guidance.
31
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Implementation of Governmental Accounting Standards Board Statements (Continued)
GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources, and Net Position. This statement will improve financial reporting by
standardizing the presentation of deferred outflows of resources and deferred inflows of
resources and their effects on a government's net position. It alleviates uncertainty about
reporting those financial statement elements by providing guidance where none previously
existed.
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.
In March 2012, the GASB issued Statement No. 65, Items Previously Reported as Assets and
Liabilities. GASB 65 establishes accounting and financial reporting standards that reclassify, as
deferred outflows of resources or deferred inflows of resources, certain items that were
previously reported as assets and liabilities. This statement is effective for the fiscal year ending
September 30, 2014. Management is currently evaluating the impact of the adoption of this
statement on the Town's financial statements.
In March 2012, the GASB issued Statement No. 66, Technical Corrections — 2012 — an
amendment of GASB Statements No. 10 and No. 62. GASB 66 improves accounting and financial
reporting for a governmental reporting entity by resolving conflicting guidance that resulted from
the issuance of two pronouncements, Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions and Statement No. 62, Codification of Accounting and
Financial Reporting Guidance Contained in Pre -November 30, 1989 FASB and AICPA
Pronouncements. This statement is effective for the fiscal year ending September 30, 2014.
Management is currently evaluating the impact of the adoption of this statement on the Town's
financial statements.
In June 2012, the GASB issued Statement No. 67, Financial Reporting for Pension Plans — an
amendment of GASB Statement 25. GASB 67 improves financial reporting by state and local
governmental pension plans primarily through enhanced note disclosures and schedules of
required supplementary information. This Statement is effective for the fiscal year ending
September 30, 2014. Management is currently evaluating the impact of the adoption of this
statement on the Town's financial statements.
32
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recentiv Issued Accounting Pronouncements (Continued)
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for
Pensions — an amendment of GASB Statement 27. GASB 68 improves financial reporting by state
and local governments for pensions. It also improves information provided by state and local
governmental employers about financial support for pensions that is provided by other entities.
This Statement results from a comprehensive review of the effectiveness of existing standards of
accounting and financial reporting for pensions with regard to providing decision -useful
information, supporting assessments of accountability and inter -period equity, and creating
additional transparency. This Statement is effective for the fiscal year ending September 30,
2015. Management is currently evaluating the impact of the adoption of this statement on the
Town's financial statements.
In November 2013, the GASB issued Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date — an amendment of GASB Statement No. 68. This
Statement amends paragraph 137 of GASB 68 to require that, at transition, a government
recognize a beginning deferred outflow of resources for its pension contributions, if any, made
subsequent to the measurement date of the beginning net pension liability. The provisions of this
Statement are required to be applied simultaneously with the provisions of GASB 68.
NOTE 2 — DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2013, the carrying amount of the Town's deposits was $5,972,769 and the
bank balances totaled $6,029,113. The Town also had cash on hand of $200. Town's deposits
include checking accounts, money market accounts, and certificates of deposit. The Town had three
money market accounts with a total bank balance and carrying amount of $2,985,430. The
certificates of deposit and money market accounts are reported as investments in the balance sheet.
As of September 30, 2013, the Town held the following certificates of deposit:
Days to Maturity Fair Value
235 $255,782
297 263,840
519 622
33
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Deposits (Continued)
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasure requires all Florida qualified public depositories to deposit with the Treasure or other
banking institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The Town's
deposits are considered insured for custodial credit risk purposes.
Investments
Florida statutes authorize the Town to invest in the Local Government Surplus Funds Trust Fund
administered by the State Treasurer, negotiable direct obligations of or obligations unconditionally
guaranteed by the U.S. Government, interest-bearing time deposits in financial institutions located
in Florida and organized under Federal or Florida laws, obligations of the Federal Farm Credit
Banks, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank or its district
banks, or obligations guaranteed by the Government National Mortgage Association, and
obligations of the Federal National Mortgage Association.
The State Board of Administration is part of the Local Governments Surplus Funds Trust Fund
and is governed by Chapter 19-7 of the Florida Administrative Code. These rules provide
guidance and establish the general operating procedures for the administration of the Local
Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor General
performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the board has adopted operating
procedures consistent with the requirements for a 2a-7 fund.
On December 4, 2007, based on recommendations from an outside financial advisor, the State
Board of Administration restructured the Pool into two separate pools. Pool A, (Local
Government Surplus Funds Trust Fund Investment Pool) consisted of all money market
appropriate assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted
on a payment, paid more slowly than expected, and/or had any significant credit and liquidity
risk. At the time of the restructuring, all current pool participants had their existing balances
proportionately allocated into Pool A and Pool B. On August 3, 2009, the SBA announced
"Florida PRIME" as the highly enhanced version of the SBA's prior Local Government
Investment Pool. Pool A is now referred to as Florida PRIME and Pool B is referred to as
Fund B.
34
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
At September 30, 2013, Florida PRIME was assigned a "AAA(m)" principal stability fund rating
by the Standard and Poor's Ratings. Florida PRIME is considered a SEC 2a7 -like fund, thus, the
account balance should also be considered its fair value. Fund B is not considered a SEC 2a7 -like
fund and is not rated by any nationally recognized rating agency.
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2013, was 44
days. A portfolio's WAM reflects the average maturity in days based on final maturity or reset
date, in the case of floating rate instruments. WAM measures the sensitivity of Florida PRIME to
interest rate changes.
The weighted average life (WAL) of Fund B at September 30, 2013, was 4.04 years. A
portfolio's WAL is the dollar weighted average length of time until securities held reach
maturity. WAL is based on legal final maturity dates for Fund B as of September 30, 2013.
However, because Fund B consists of restructured or defaulted securities there is considerable
uncertainty regarding the weighted average life. Additional information regarding the Local
Government Surplus Funds Trust Fund may be obtained from the State Board of Administration.
As of September 30, 2013, the Town held the following investments:
Weighted
Average Fair
Maturi Value
State Board of Administration Investment Pool
Florida PRIME 44 days $ 2,053
Fund B 4.04 years 580
2 633
The investments in the State Board of Administration Pool are reported as investments in the
balance sheet.
35
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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. At September 30, 2013, Florida PRIME was rated "AAA(m) by Standard and
Poor's Ratings Services. Fund B is not rated by any nationally recognized rating agency.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Town does not have a formal investment policy that limits investment maturities
as a means of managing exposure to fair value losses arising from increasing interest rates.
NOTE 3 RECEIVABLES
As of September 30, 2013, the Town's receivables for the individual major funds, including
applicable allowances for uncollectible accounts, are as follows:
36
Special
General
Assessment
Water
Fund
Fund
Fund
Total
Taxes
$ 28,052
$
$
$ 28,052
Accounts - unbilled
21,816
154,012
175,828
Accounts - billed
3,820
12,434
16,254
Due from other governments
15,239
15,239
Special assessments
2,189,484
2,189,484
Subtotal
68,927
2,189,484
166,446
2,424,857
Allowance for uncollectibles
(6,590)
(6,590)
Net receivables
$ 68,927
$ 2,189,484
$ 159,856
$ 2,418,267-
36
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 4 — CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2013, was as follows:
Governmental activities capital
assets, net
Beginning
2 111 107
719,377
Ending
Ending
Balance
Additions
Deletions
Balance
Governmental Activities:
Capital assets being depreciated:
711,557
65,716
Capital assets not
$2,658,922 $ $
$2,658,922
Equipment
61,878
being depreciated:
Total at historical cost
2,720,800
2,720,800
Land
$ 376,523
$
$
$ 376,523
Construction in process
Capital assets being depreciated:
Buildings
856,995
856,995
Infrastructure
2,500,823
51,686
2,552,509
Equipment
455,404
66,3464(
0,678)
481,072
Total at historical cost
4,189,745
118,0324(
0,678)
4,267,099
Less accumulated depreciation for:
Buildings
640,568
30,012
670,580
Infrastructure
1,025,777
79,362
1,105,139
Equipment
373,543
38,7913(
2,061)
380,273
Total accumulated
depreciation
2,039,888
148,1653(
2,061)
2,155,992
Governmental activities capital
assets, net
2 149 857 $ (30,1331 8 617
2 111 107
719,377
Beginning
Ending
2,406
Balance Additions Deletions
Balance
Business -Type Activities:
Capital assets being depreciated:
711,557
65,716
Water system improvements
$2,658,922 $ $
$2,658,922
Equipment
61,878
61,878
Total at historical cost
2,720,800
2,720,800
Less accumulated depreciation for
Water system improvements
656,067
63,310
719,377
Equipment
55,490
2,406
57,896
Total accumulated
depreciation
711,557
65,716
777,273
Business -type activities capital
assets, net
2 009 243
65 716
1 943 527
37
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 4 — CAPITAL ASSETS (Continued)
Depreciation expense was charged to functions and programs of the primary government as
follows:
Governmental activities:
General government $ 43,107
Police department 36,484
Streets 68,574
Total governmental activities $ 148,165
Business -type activities:
Municipal water $ 65,716
NOTE 5 — INTERFUND RECEIVABLES AND PAYABLES
Individual interfund receivables and payables at September 30, 2013, are as follows:
Receivable Fund
Special Assessment
Pavable Fund
General Fund
Amount
$ 23,453
$ 23,453
The outstanding balance between funds results from the time lag between the dates that interfund
goods and services are provided or reimbursable expenditures occur and payments between funds
are made.
38
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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 funds and available non ad valorem revenues, amounts
sufficient to pay principal and interest on the Note as they become due. The covenant to budget and
appropriate does not create a lien upon or pledge of the available non ad valorem revenues. Pledged
funds consist of amounts on deposit in the note proceeds fund and the payment fund and special
assessments.
Principal and interest payments on the Note are due in annual installments commencing on April 1,
2013 and on each April 1 thereafter until final maturity on April 1, 2022. The Note bears interest at
the rate of 2.09%. At September 30, 2013, principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $2,422,412. Principal and interest paid for the current fiscal year
was $269,157 and pledged special assessments were $238,412.
Annual debt service requirements to maturity are as follows:
Year Ended
September 30
Principal
Interest
Payment
2014
$ 223,438
$ 45,719
$ 269,157
2015
228,108
41,049
269,157
2016
232,875
36,282
269,157
2017
237,742
31,415
269,157
2018
242,711
26,446
269,157
2019-2022
1,022,642
53,985
1,076,627
$ 2,187,516
$ 234,896
$ 2,422,412
39
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 6 — LONG-TERM LIABILITIES (Continued)
Changes in Long -Term Liabilities
Beginning
Compensated absences are liquidated by the General Fund
Interest Expense
Ending
Balance
$2,187,516
92,252
$2,279,768
Due Within
One Year
The total interest cost incurred on all Town debt for the year ended September 30, 2013, was
$49,683, and total interest paid during the year was $28,778. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 7 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
$223,438
69,092
$292,530
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. The Town's total payroll for the fiscal year ended September 30, 2013,
was $1,236,254, with covered payroll of $1,111,291. The Town's required and actual contribution
for the year was $232,482 equaling 20.92% of covered payroll. The employees' contribution for the
year was $88,903 equaling 8.0% of covered payroll. The investments are held in various mutual
funds and employees can direct employer and employee contributions made on their behalf.
40
Balance
Additions Deletions
Governmental activities:
Promissory Note,
Underground project
$2,427,895
$ $ 240,379
Compensated absences
85,458
103,829 97,035
Total Governmental Activities
$2,513,353
$103,829 $337,414
Compensated absences are liquidated by the General Fund
Interest Expense
Ending
Balance
$2,187,516
92,252
$2,279,768
Due Within
One Year
The total interest cost incurred on all Town debt for the year ended September 30, 2013, was
$49,683, and total interest paid during the year was $28,778. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 7 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
$223,438
69,092
$292,530
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. The Town's total payroll for the fiscal year ended September 30, 2013,
was $1,236,254, with covered payroll of $1,111,291. The Town's required and actual contribution
for the year was $232,482 equaling 20.92% of covered payroll. The employees' contribution for the
year was $88,903 equaling 8.0% of covered payroll. The investments are held in various mutual
funds and employees can direct employer and employee contributions made on their behalf.
40
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 7 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN (Continued)
Because the Town does not hold or administer funds for the Plan, it does not meet the criteria for
inclusion in the Town's financial statements as a fiduciary fund. The Plan does not issue a stand
alone financial report.
NOTE 8 — DEFERRED COMPENSATION PLAN
The Town offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all Town employees, permits them to defer a
portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death, or unforeseeable emergency.
Assets of the plan are invested in either mutual funds or insurance contracts. In 1998, the Plan was
amended to conform to changes in the Internal Revenue Code brought about by the Small Business
Job Protection Act of 1996 (the "Act"). The Act requires that eligible deferred compensation plans
established and maintained by governmental employers be amended to provide that all assets of the
plan be held in trust, or under one or more appropriate annuity contracts or custodial accounts, for
the exclusive benefit of plan participants and their beneficiaries. As a result of this change, plan
assets are no longer subject to the claims of the Town's general creditors.
Because the Town has little administrative involvement and does not perform the investing function
for funds in the Plan, the Town's activities do not meet the criteria for inclusion in the fiduciary
funds of a government.
NOTE 9 — INTERLOCAL AGREEMENTS
Interlocal Fire and EMS ServiceAQreement with the City ofDelrayBeach
On July 14, 2009, the Town entered into an agreement with the City of Delray Beach whereby the
City will provide the Town with fire and emergency medical services. The term of the agreement is
for 10 years beginning on October 1, 2009, and extending through September 30, 2019. On October
4, 2011, the agreement was amended to increase the service fee for additional areas annexed into
the Town. Pursuant to the amendment, the Town made a onetime payment of $57,210 in December
2012 which covers the increase in service fee as a result of the annexed area The Town also paid an
annual service fee of $370,987 for the fiscal year ended September 30, 2013. The annual service
fees for future years will be the current year fee of $370,987, adjusted annually based on the "All
Urban Customers — United States April Consumer Price Index" or an increase of five percent
(5.0%), whichever is greater. The annual service for the fiscal year ending September 30, 2014 will
be $389,536.
41
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 9 — INTERLOCAL AGREEMENTS (Continued)
Interlocal Dispatch Service Agreement with the City ofDelray Beach
On October 1, 2012, the Town entered into a new agreement with the City of Delray Beach for
dispatch services. The agreement shall automatically renew for five one year renewals unless either
party notifies the other in writing of their intent not to renew at least 90 days prior to the start of the
renewal term. The agreement shall terminate on September 30, 2017. The annual service fee under
the agreement is $54,036.
NOTE 10— OTHER POSTEMPLOYMENT BENEFITS (OPEB)
The Town was required to implement Governmental Accounting Standards Board Statement 45
(GASB 45), Accounting and Financial Reporting by Employers for Postemployment Benefits Other
than Pensions for fiscal year ending September 30, 2010. Retirees of the Town pay an amount
equal to the actual premium for health insurance charged by the carrier, but there is an implied
subsidy in the healthcare insurance premium charged for active employees, who are younger than
retirees on average. This implied subsidy constitutes other postemployment benefits under GASB
Statement 45.
The Town elected not to apply GASB 45. The effects of that departure on the financial statements
are not reasonably determinable. The Town also has not disclosed the descriptive information about
other postemployment benefits required by standards.
NOTE 11— COMMITMENTS
Solid Waste and Recycling Collection Franchise Agreement
On September 13, 2013, the Town amended the solid waste and recycling collection franchise
agreement with Waste Management Inc. of Florida (WMI). The amendment extended the term of
the agreement until September 30, 2018, and eliminated the fuel surcharge provision. Under the
terms of the agreement, the Town informs WMI of the total number of residential and multi -family
units that have a Certificate of Occupancy each year on September 1. WMI bills all multi -family
units that are serviced by a container. The monthly charges for the remainder of the units that are
serviced by means other than by containers are paid by the Town.
WMI bills the Town monthly for these services at the then current rate as adjusted from time to
time by the terms and conditions of the agreement. For the year ended September 30, 2013, the
Town made payments of $132,261 pursuant to the agreement.
42
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 11— COMMITMENTS (Continued)
Construction Commitments
Amount Balance to
Authorized Completed Complete
Project Amount at 09/30/13 at 09/30/13
Street Signs $ 80,000 $ $ 80,000
Undergrounding — Phase I 1,576,160 1,576,160
$1,656,160 $ $1,656,160
ProiectManaQement and EnQineerinQ Support Services
On April 8, 2011, the Town entered into an agreement for project management and engineering
support services for the utilities undergrounding project. Under the terms of the agreement, the
Town will be billed monthly for services based upon hourly rates plus out-of-pocket costs. Monthly
billings shall not exceed $15,000 per month without written approval in advance. Total billings
under the contract shall not exceed 7.5% of the total undergrounding project costs without written
approval in advance. As of September 30, 2013, the Town had expended $143,731 under 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. There were no settled claims which exceeded insurance coverage
during the fiscal years ended September 30, 2011 and 2012. During the fiscal year ended
September 30, 2013, settlements exceeded insurance coverage by $180,000.
The Town is involved in various litigation and claims arising in the course of operations. The
likelihood of unfavorable outcomes and the amounts of potential losses cannot be reasonably
determined at this time. Accordingly, no provision for any liability that may result has been made
in the accompanying financial statements.
43
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
NOTE 12 — RISK MANAGEMENT (Continued)
Florida Statues limit the Town's maximum loss for most liability claims to $200,000 per person
and $300,000 per occurrence under the Doctrine of Sovereign Immunity. However, under certain
circumstances, a plaintiff can seek to recover damages in excess of statutory limits by introducing a
claims bill to the Florida Legislature. The limits addressed in Florida Statutes do not apply to claims
filed in Federal courts.
NOTE 13 — OPERATING LEASE
On May 31, 2013, the Town entered into an operating lease for a copier for use in Town Hall. The
lease is for a term of 60 months and requires minimum monthly payments of $501 that commenced
in July 2013. For the year ended September 30, 2013, the Town made payments of $1,366 pursuant
to the lease.
The following is a schedule of the Town's required future minimum lease payments under the
agreement:
2014
Minimum
Year Ended
Lease
September 30
Payments
2014
$ 6,012
2015
6,012
2016
6,012
2017
6,012
2018
4,509
$28,557
44
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2013
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.
45
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, 2013
46
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Taxes
Ad valorem taxes
$ 2,180,829
$ 2,180,829
$ 2,186,723
$ 5,894
Local option fuel taxes
32,100
32,100
31,089
(1,011)
Utility service taxes
157,500
157,500
177,916
20,416
Communications services taxes
62,000
62,000
69,177
7,177
Local business tax
17,000
17,000
15,204
(1,796)
Total taxes
2,449,429
2,449,429
2,480,109
30,680
Licenses and permits
Building permits
65,000
65,000
156,124
91,124
Franchise fees
134,000
134,000
125,893
(8,107)
Total licenses and permits
199,000
199,000
282,017
83,017
Intergovemmental revenue
State revenue sharing proceeds
82,500
82,500
76,881
(5,619)
Shared revenue from other local units
7,000
7,000
9,141
2,141
Payment in heu of taxes
42,000
42,000
42,000
Total intergovernmental revenue
131,500
131,500
128,022
(3,478)
Charges for services
Solid waste collection fees
140,000
140,000
132,147
(7,853)
Other
3,248
3,248
Total charges for services
140,000
140,000
135,395
(4,605)
Judgments, fines and forfeits
Judgments and fines
3,000
3,000
1,143
(1,857)
Total judgments, fines, and forfeits
3,000
3,000
1,143
(1,857)
Investment eamings
6,000
6,000
3,907
(2,093)
Miscellaneous revenues
Contributions
38,000
38,000
40,000
2,000
Other
11,288
11,288
Total miscellaneous revneues
38,000
38,000
51,288
13,288
Total revenues
2,966,929
2,966,929
3,081,881
114,952
Expenditures
General and administrative
722,490
1,122,490
1,090,743
31,747
Police
1,429,058
1,460,468
1,424,974
35,494
Fire
430,947
430,947
428,210
2,737
Streets
192,640
247,140
208,676
38,464
Sanitation
141,000
141,000
132,261
8,739
Contingency
50,794
50,794
50,794
Total expenditures
2,966,929
3,452,839
3,284,864
167,975
Excess (deficiency) of revenues
over (under) expenditures
$
$ (485,910)
(202,983)
$ 282,927
Fund balance, beginning of year
981,176
Fund balance, end of year
$ 778,193
46
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2013
NOTE 1 - BUDGETS AND BUDGETARY ACCOUNTING
Budgetary comparison information is required to be presented for the General Fund and each major
special revenue fund. The Special Assessment Special Revenue Fund is not legally required to be
budgeted and is not budgeted.
A budgetary comparison schedule is presented for the General Fund. The procedures for establishing
budgetary data reflected in the budgetary comparison schedule are as follows:
1. Prior to August 1st, the Town Manager submits to the Town Commission a proposed operating
budget for the fiscal year commencing the next October 1st. The operating budget includes
proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. Prior to October 1st, the budget is legally enacted through the passage of an ordinance.
4. The Town Manager is authorized to transfer budgeted amounts within any department.
However, any revisions that alter the total expenditures of any department must be approved by
the Town Commission by a legally enacted ordinance.
5. Budgets are adopted on a basis consistent with generally accepted accounting principles.
6. Appropriations along with encumbrances lapse at September 30th.
NOTE 2 - BUDGET AND ACTUAL COMPARISONS
Formal budgetary integration is employed within the accounting system as a management control
device. Appropriations are legally controlled at the department level and expenditures may not legally
exceed appropriations at that level. For the year ended September 30, 2013, no departments had an
excess of expenditures over appropriations.
47
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INDEPENDENT AUDTTOR S REPORT ON INTERNAL CONTROL u.ovr
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND .I....
OTHER MATTERS BASED ON ANAUDTT OF FINANCIAL viLEGNICEFFIFINCE
STATEMENTS PERFORMED GO ACCORDANCE WPPH
Off I/ERNMENTA=171SRI STANDARDS SELLERnE,.
FAIIIIIIIHNOW
The Honorable Mayor and Members ofHeTown Commission
Town of Gulf Stream, Flonda
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 ofthe governmental activities, the business type activities, and each m jorfund ofthe
Town of Gulf Stream, Florida, as of and for the year ended September 30, 2013, and the related
notes to the financial statements, which collectively comprise the Town of Gulf Stem s basic
financial statements and have issued our report thereon dated Ianuary 8, 2014. The opinions on
He governmental activities, business type activities, and Enterprise Fund were qualified because
He Town has not recognized the other postemployment benefits (DOES) expense and obligation
which is required in accordance with U.S. generally accepted accounting principles as provided
in Governmental Accounting Standards Board Statement No. 45.
Internal Control Over Financial Reporthig
In planning and performing our audit of the financial statements, we considered the Town of
Gulf Stream, Florida's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing on
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Town of Gulf Stream, Ronda's internal control. Accordingly, we do not
express an opinion on the effectiveness ofthe Town of Gulf Stream, Florida's internal control.
A d hnanry 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 momrial waoknecc is
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that material misstatement of the entity's financial statements will not be prevented
or detected and corrected on a timely basis. A ignificant deficiency is a deficiency, or
combination of deficiencies, in internal control that is less severe than a material wealmess, yet
important enough to merit attention by those charged with governance
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 over financial
reporting that might be material weaknesses or significant deficiencies. Given these limitations,
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 determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
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
January 8, 2014
49
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MANAGEMENT LETTER IN ACCORDANCE WITH IIw.11.11, sas.Film liFid IF,
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA MILLEOLAMOI
r
The Honorable Mayor and Members of He Town Commission laaPaseein
Town of Gulf Stream, Florida
We have audited He financlal statements of the Town of Gulf Stream, Florida as of and for He
year ended September 30, 2013, and have issued our report thereon dated January 8, 2014.
The Town has not recognized He other postem ployment benefits (DOES) expense and obligation
in He governmental activities financial statements as required in accordance with accounting
principles generally accepted in He United States of America as provided in Government
Accounting Standards Board Statement No. 45. The effects of that departure on He financial
statements are not reasonably determinable The Town also has not disclosed the descriptive
information about other postemployment benefits required by accounting principles generally
accepted in He United States of America
We conducted our audit in accordance yarn auditing standards generally accepted in He United
States of America and He standards applicable to financial areas contained in Government
Auditing Stmvdards issued by He Comptroller General of He United States. We have issued our
Independent Anchor s Report on Internal Control over Financial Reporting and or Compliance
and Other Matters Based on an Audit of Financial Statements Performed in Accordance yarn
Guvsrnmant Auditing Standards. Disclosures in thatreport, which is dated January 8, 2014, should
be consideredin conjunction with His Management Letter.
Additionally, our audit was conducted in accordance with Chapter 10550, Rules of He Auditor
General, wlvch governs He conduct of local government Party audits performed in He State of
Florida This letterincludes the following information, which is notincluded in the aforementioned
ardi or s reports.
PRIOR YEAR COMMENTS
Rules of the Auditor General require that we determine whether or not corrective actions
have been taken to address findings and recommendations made in the preceding annual
financial audit report. There were no findings or recommendation in the preceding annual
financial audit report that required corrective actions.
CURRENT YEAR COMMENTS
Investment ofPublic Funds
Rules of the Auditor General require our audit to include a review of the Town's
compliance with Section 218.415, Florida Statutes, regarding the investment of public
funds. In connection with our audit, the results of our procedures did not disclose any
instances of noncompliance with Section 218.415, Florida Statutes.
Current Year Recommendations
Rules of the Auditor General require that we address in the Management Letter any
recommendations to improve financial management. In connection with our audit, we did
not have any such recommendations.
Violations ofProvisions of Contracts or Grant Agreements, or Abuse
Rules of the Auditor General require that we address 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 which warrants
the attention of those charged with governance. In connection with our audit, we did not
have any such findings.
Oversight Unit and Component Units
Rules of the Auditor General require that the name or official title and legal authority for
the primary government and each component unit of the reporting entity be disclosed in
this management letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements, but has been repeated here.
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to
Chapter 31276, Laws of Florida, 1955. Based upon the application of criteria defined in
publications cited in Chapter 10.553, Rules of the Auditor General, the Town has
determined that there are no component units related to the Town.
51
Consideration ofFinancial Emergency Criteria
Rules of the Auditor General require a statement be included as to whether or not the local
government entity has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific condition(s) met. In connection with our
audit, we determined that the Town of Gulf Stream, Florida did not meet any of the
conditions described in Section 218.503(1), Florida Statutes.
Annual Financial Report
Rules of the Auditor General require that we determine whether the annual financial report
for the Town of Gulf Stream, Florida for the fiscal year ended September 30, 2013, filed
with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida
Statutes, is in agreement with the annual financial audit report for the fiscal year ended
September 30, 2013. In connection with our audit, we noted that the two reports were in
substantial agreement.
Financial Condition Assessment Procedures
Pursuant to Rules of the Auditor General, we applied financial condition assessment
procedures as of the fiscal year end. It is management's responsibility to monitor the
Town of Gulf Stream, Florida's financial condition, and our financial condition
assessment was based in part on representations made by management and the review of
financial information provide by management. The results of our procedures did not
disclose any matters that are required to be reported. Our assessment was made as of the
fiscal year end.
Single Audits
The Town expended less than $500,000 of federal awards and less than $500,000 of state
financial assistance for the year ended September 30, 2013. Consequently, the Town was
not required to have afederal single audit or a state single audit.
Response to Management Letter
There were no items that required a response of management.
52
Our management letter 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, Federal and other granting agencies, pass-through entities, applicable
management, and the Town Commission, and is not intended to be and should not be used by
anyone other than these specified parties.
West Palm Beach, Florida
January 8, 2014
53
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