HomeMy Public PortalAbout2015 AFRTOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2015
TABLE OF CONTENTS
Paees
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 -
Govemmental 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 48-50
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 51-54
Independent Accountant's Report on Compliance with Section 218.415,
Florida Statutes 55
4H H NOWLEN, HOLT & MINER, P.A.
ry CERTIFIED PUBLIC ACCOUNTANTS EVERET1` B. NOWLEN 119 P19U), CPA
M EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED, CPA
ROBERT W. HENDRIX. JR., CPA
WEST PALM BEACH OFFICE JANET R. BARICEVICH, CPA
NORTHBRIDGE CENTRE TERRY L. MORTON. JR., CPA
515 N. FLAGLER DRIVE, SUITE 1700 N. RONALD BENNETT, CVA, ABV, CFF. CPA
POST OFFICE BOX 347ALEXIA O. VARGA. CFE, CPA
EDWARD T HOLT, JR., PFS, CPA
WEST PALM BEACH, FLORIDA 3340241347 BRIAN J. BRESOIA, CFP, CPA
TELEPHONE (561) 659-3060
FAX (561) 835-0628
W W WNHMCFA.COM
MARXJ. SYMASTER, CFE, CPA
RYAN M. SHORE, CFP, CPA
INDEPENDENT AUDITOR'S REPORT I PAN. CPA
WILLIAM C KECPA
The Honorable Mayor and Members of the Town Commission BELLE GLADE OFFICE
S.E. 2nd STREET
Town of Gulf Stream, Florida POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430.0338
TELEPHONE (561) 996.6612
FAX(561)996-6248
Report on the Financial Statements
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, 2015, and the related notes to the financial statements, which collectively comprise the
Town's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
Basis for Qualified Opinions
The Town has not recognized the other postemployment benefits (OPEB) expense and obligation in the
financial statements of the governmental activities, business -type activities, and the Enterprise Fund as
required in accordance with accounting principles generally accepted in the United States of America as
provided in Governmental Accounting Standards Board Statement No. 45. The effects of that departure
on the financial statements are not reasonably determinable. The Town also has not disclosed the
descriptive information about other postemployment benefits required by standards.
Qualified Opinions
In our opinion, except for the effects of the matter described in the "Basis for Qualified Opinions"
paragraph, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, business -type activities, and Enterprise Fund
of the Town of Gulf Stream, Florida, as of September 30, 2015, 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, 2015, and the respective changes in financial position thereof for
the year then ended in accordance with accounting principles generally accepted in the United States of
America.
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the Town adopted the provisions of Governmental
Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for
Pensions — an Amendment of GASB Statement 27, during the fiscal year ended September 30, 2015. Our
opinions are not modified with respect to this matter.
OtherMatters
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 I 1 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.
2
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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2016,
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
June 30, 2016
Management's Discussion and Analysis
The Town of Gulf Stream's (the "Town") discussion and analysis is designed to:
A. Assist the reader in focusing on significant financial issues
B. Provide an overview of the Town's financial activity
C. Identify changes in the Town's financial position
D. Identify any material deviations from the financial plan (approved budget)
E. Identify individual fund issues or concerns
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's
activities, resulting changes and currently known facts, please read it in conjunction with the Town's
financial statements, which follow this section.
lyh/_\Oro) 11KIIq I l[ 'lft9c!]"I
➢ 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
$8,713,324 (net position).
➢ The governmental activities revenues were $4,295,529 at the close of fiscal year 2015.
➢ The business -type activities revenues were $1,089,717 at the close of fiscal year 2015.
Z The total cost of all Town programs was $5,459,541 during the fiscal year 2015.
At the end of the 2015 fiscal year, unassigned fund balance for the general fund was $1,338,829
or 36% 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
(Other than MD&A) (Expanded) (Pages 46-47)
Management's Discussion and Analysis
The financial statement's focus is on both the Town as a whole (government -wide) and on the major
individual funds. Both perspectives (government -wide and major fund) allow the user to address
relevant questions, broaden a basis for comparison (year to year or government to government), and
enhance the Town's accountability.
Government -Wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of the
Town of Gulf Stream's finances, in a manner similar to a private -sector business. The Statement of Net
Position includes all of the government's assets, deferred outflows of resources, liabilities, and deferred
inflows of resources. All of the current year's revenues and expenses are accounted for in the Statement
of Activities regardless of when cash is received or paid.
The two government -wide statements report the Town's net position and how it has changed. Net
position is the difference between the Town's (a) assets plus deferred outflows of resources and (b)
liabilities plus deferred inflows of resources. It is one way to measure the Town's financial health or
financial position. Over time, increases or decreases in the Town's net position are indicators of whether
its financial health is improving or deteriorating. You will need to consider other non-financial factors,
however, such as changes in the Town's property tax base and the condition of the Town's roads, to
assess the overall health of the Town.
In the Statement of Net Position and the Statement of Activities, we divide the Town into two kinds of
activities:
➢ Governmental activities — Most of the Town's basic services are reported here, including the
police, public services and general administration. Property taxes, franchise fees and state
shared revenue finance most of these activities.
Business -type activities — The Town charges a fee to customers to help it cover all or most of
the cost of certain services it provides.
Fund Financial Statements
Our analysis of the Town's major funds begins on page 10. The fund financial statements provide
detailed information about the most significant funds — not the Town as a whole. Funds are accounting
devices that the Town uses to keep track of specific sources of funding and spending for a particular
purpose.
➢ Governmental Funds — Most of the Town's basic services are included in governmental funds,
which focus on (1) how cash and other financial assets can be readily converted to cash flow
and (2) the balances left at year-end that are available for spending. Consequently, the
governmental fund statements provide a short-term view that helps you determine whether there
are more or fewer financial resources that can be spent in the near future to finance the Town's
programs.
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 2015 is
reported at $8,713,324. Net
position of the Town's governmental activities for the fiscal year ending
2015 is $5,843,148. The net
position of our business -type activities is reported at $2,870,176 for the fiscal year ending 2015. Overall
the financial position of the total primary government decreased $74,295 during the current fiscal year.
Net position for the governmental activities decreased $291,651 and net position for the business -type
activities increased $217,356.
Town of Gulf Stream
Net Position
September 30, 2014 and 2015
Governmental Business -type
TOTAL
Activities Activities
' 2014 2015 2014 2015
2014 2015
Current and Other Assets $6,603,432 $5,928,977 $ 839,270 S 1,210,932
$7,442,702 $7,139,909
Capital Assets 2,242,320 2,108,528 1,886,995 1.820,556
4,129,315 3,929,084
TOTAL ASSETS 8.845.752 8.037,505 2,726,265 3.031,488
11,572,017 11.068,993
J Currentand Other Liabilities 627,905 348,860 73,445 160,227
701,350 509,087
Long-term Liabilities 2,076,483 1,841,529 1,085
2,076,483 1,842,614
TOTAL LIABILITIES 2,704,388 2,190,389 73,445 161,312
2,777,833 2,351,701
Deferred Inflows of Resources 6,565 3,968
6,565 3,968
Net Position:
Net Investment in Capital Assets 2,242,320 2,108,528 1,886,995 1,820,556
4,129,315 3,929,084
Restricted- Dredging Projects 17,820 17,820
17,820 17,820
Restricted- Underground Utilities 3,176,041 2,446,436
3,176,041 2,446,436
Restricted for transportation 10,582 16,454
10,582 16,454
Restricted- Repairs, replacements, 189,960 256,830
189,960 256,830
and improvements
Unrestricted 688,036 1,253,910 575,865 792,790
1163,901 2,046,700
TOTAL NET POSITION $6,134,799 $5,843,148 52,652,820 $2,870,176
$8,787,619 58,713,324
0
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 $291,651. The decrease in net
position was primarily due increased legal fees and emergency repairs to collapsed stormwater
outfalls.
➢ The increase in business -type net position was $217,356, The increase in net position was due
to the shift from utilizing contract services to in-house labor that eliminated excessive fees for
meter reading, maintenance and repairs.
Town of Gulf Stream
Changes in Net Position
For the Fiscal Years Ended September 30, 2014 and 2015
7
Governmental Activities
Business -type
Activities
Total
2014
2015
2014
2015
2014
2015
Revenues
Program Revenues
Charges for Services
$ 302,050
$ 275,237
$1,025,373
$1,089,717
$1,327,423
$1,364,954
Operating & Capital Grants &
Contributions
13,180
24,254
13,180
24,284
General Revenues
Property Taxes
2,745,494
3,287,456
2,745,494
3,287,456
Communications Taxes
62,600
60,656
62,600
60,656
Gas Taxes
32,697
34,723
32,697
34,723
Utility Service Taxes
204,000
223,761
204,000
223,761
Franchise Fees
139,567
154,349
139,567
154,349
Unrestricted Investment
Earnings
51,422
107,115
51,422
107,115
Intergovernmental Revenues
95,251
47,781
95,251
47,781
Other
34,559
80,167
34,559
80,167
Total Revenues
3,680,820
4,295,529
1,025}73
1,089,717
4,706,193
5,385,246
Expenses
Governmental Activities
General Government
1,297,045
1,620,270
1,297,045
1,620,270
Police Department
1,406,977
1,394,742
1,406,977
1,394,742
Fire Protection
389,536
409,013
389,536
409,013
Streets
216,047
248,481
216,047
248,481
Sanitation
134,722
138,341
134,722
138,341
Physical Environment
1,640,828
737,662
1,640,828
737,662
Interest on Long -Term Debt
43,335
38,671
43,335
38,671
Business -Type Activities
Water
775,984
872,361
775,984
872,361
Total Expenses
5,128,490
4587,180
775,984
872,361
5,904,474
5,459,541
Change in Net Position
(1,447,670)
(291,651)
249,389
217,356
(1,198,281)
(74,295)
Net Position - Beginning
7582,469
6,134,799
2,403,541
2,652,820
9,986,010
8,787,619
Net Position - Ending
$6,134,799
$5,843,148
$2,652,930
$2,870,176
$8,787,729
$8,713,324
7
J
Management's Discussion and Analysis
More than half the Town's revenue comes from Property Taxes. (Please see chart below.)
Udii
GasTaxe
1%
CUInnIYllhahUll]
1%
Revenues — Governmental Revenues by Source
Intergovernmental geuenuea Ciwges for Services
1%
Other 6%
Investment Earnings
..._...._._.- 2% �% Operating Capital GmnL^^&
■ Charges tar Services ■Operating&Cap tal Grants& Contributions Y Property Taxes
■CammUnitatanSTaxes ■Gas Taxes ■ Utflty Service Taxes
■Farnhise Fees ■hrv> jtwut Eetnirgte ■I'LLergwenunenlel geveuuea
■ Other
8
3
Management's Discussion and Analysis
The Town's expenses cover a range of services, with 30% related to public safety. (Please see chart
below.)
Sa
Sue
61
Fire
Expenses — Governmental Expenses by Function
Intereston Long -Term
Debt
1%
Police Department
30%
YGeneral Government Y Police Department W Fire Protection 9Streets
■Sanitation u Physical Environment ■ Interest on Long-Temt Debt
E
overnment
M
Management's Discussion and Analysis
Financial Analysis of the Governmental Funds
As the Town of Gulf Stream completed the year, the general fund reported a fund balance of
$1,411,890, an increase of $562,524 from the previous fiscal year. The increase was due primarily to
decreased costs to bring the Town's facilities into ADA compliance and increased tax revenue. The
general fund ended the 2015 fiscal year with $38,787 in non -spendable fund balance, $34,274 in
restricted fund balance, and $1,338,829 in unassigned fund balance.
Financial Analysis of the Proprietary Fund
Total net position of the water fund at the end of the fiscal year 2015 was $2,870,176. The net position
of the water fund has increased slightly from last year. Water rates were raised slightly by Town
Resolution 13-11 that was implemented for the entire Fiscal Year 2014-2015.
General Fund Budgetary Highlights
Over the course of the year, The Town Commission revised the budget for expenditures one time by
resolution. This adjustment did not change total expenditures but was a reclassification of expenditures.
With this adjustment, actual expenditures were $445,791 less than the final budget amounts. Revenues
were $116,733 more than the final budget amounts.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2015, the Town had invested $3,929,084 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
Capital Assets
(Net of Depreciation)
September 30, 2014 and 2015
10
Governmental
Business -type
Activities
Activities
TOTAL
2014
2015
2014 2015
2014
2015
Land
$ 376,523
$ 376,523
$ $
$ 376,523
$ 376,523
Construction in Process
3,190
5,235
3,190
5,235
Buildings & Improvements
193,824
164,532
1,876,236 1,812,926
2,070,060
1,977,458
Equipment
212,062
196,150
10,759 7,630
222,821
203,780
Infrastructure
1.456.721
1,366.088
1.456.721
1.366.088
TOTALS
Ri 242.;20
10,108
$LRRfi.995 $1.R20.55fi
$4.129315
I .9_i__?9M
10
Management's Discussion and Analysis
Long -Term Liabilities
As of September 30, 2015 the Town had $1,842,614 in long-term liabilities as shown in the following
table. Additional information can be found in Note 5 to the financial statements.
Town of Gulf Stream
Long -Term Liabilities
September 30, 2014 and 2015
Governmental Business -type
Activities Activities TOTAL
2014 2015 2014 2015 2014 2015
Promissory Note $1,964,023 $1,735,914 $ $ $1,964,023 $1,735,914
Compensated Absences 112.460 105.615 1,085 112.460 106,700
TOTALS .1;2.076.483
jECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
1 For the 2016 fiscal year, general fund revenue projections are increased by the millage rate change.
1 ➢ The millage rate was increased to 5.0000 mills from 3.9000 mills, which is greater than the rolled -
I back rate by 37.61%.
' 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, 2015
J
Assets
J
Cash and cash equivalents
Investments
J Equity in pooled investments
Accounts receivable
Assessments receivable
Inventories
Prepaid expenses
Restricted assets
i Cash and cash equivalents
Equity in pooled investments
Accounts receivable
Capital assets
Non -depreciable
Depreciable (net of depreciation)
Total assets
i
Liabilities
Accounts payable
Accrued liabilities
i Accrued interest payable
j Payable from restricted assets
Damage deposit bonds
Unearned revenue
Long-term liabilities
Payable within one year
Payable after one year
Total liabilities
Deferred inflows of resources
Unearned revenue
Net position
Net investment in capital assets
Restricted for dredging projects
Restricted for underground utilities
Restricted for transportation
Restricted for repairs, replacements
and improvements
Unrestricted
Total net position
Primary Government
Governmental Business -type
Activities Activities Total
$ 89,867
$
$ 89,867
2,421,494
2,421,494
1,524,486
773,532
2,298,018
71,787
176,411
248,198
1,735,056
1,735,056
8,287
4,159
12,446
30,500
30,500
47,500
47,500
242,362
242,362
14,468
14,468
381,758
381,758
1,726,770
1,820,556
3,547,326
8,037,505
3,031,488
11,068,993
226,353
153,760
380,113
50,722
50,722
18,091
18,091
47,500
47,500
6,194
6,467
12,661
311,054
1,085
312,139
1,530,475
1,530,475
2,190,389
161,312
2,351,701
3,968
3,968
2,108,528
1,820,556
3,929,084
17,820
17,820
2,446,436
2,446,436
16,454
16,454
256,830
256,830
1,253,910
792,790
2,046,700
$ 5,843,148
$ 2,870,176
$ 8,713,324
See notes to the financial statements.
12
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared reveni
Unrestricted investment earning
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning
Net position - ending
3,287,456
Net (Expense) Revenue and
60,656
Program Revenues
Changes in Net Position
34,723
Operating Capital
Primary Government
154,349
Grants and Grants and
Governmental Business -type
107,115
Contributions Contributions
activities activities
Total
$ 24,284 $
$ (1,467,162) $ $
(1,467,162)
(291,651) 217,356
(1,392,277)
(1,392,277)
8,787,619
(409,013)
(409,013)
J
(248,481)
(248,481)
(58)
(58)
(731,997)
(731,997)
J
(38,671) (38,671)
24,284
(4,287,659)
(4,287,659)
217,356
217,356
$ 24,284 $_
(4,287,659) 217,356
(4,070,303)
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared reveni
Unrestricted investment earning
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning
Net position - ending
3,287,456
3,287,456
60,656
60,656
34,723
34,723
223,761
223,761
154,349
154,349
107,115
107,115
47,781
47,781
80,167
80,167
3,996,008
3,996,008
(291,651) 217,356
(74,295)
6,134,799 2,652,820
8,787,619
$ 5,843,148 $ 2,870,176
$ 8,713,324
See notes to the financial statements.
14
I
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2015
See notes to the financial statements.
15
Special
Total
General
Assessment
Governmental
Fund
Fund
Funds
Assets
Cash and cash equivalents
$ 59,346
$ 30,521
S 89,867
Investments
2,421,494
2,421,494
Equity in pooled investments
1,524,486
1,524,486
Accounts receivable
71,787
71,787
Assessments receivable
1,735,056
1,735,056
Inventories
8,287
8,287
Prepaid expenditures
30,500
30,500
Restricted assets
Cash and cash equilvalents
47,500
47,500
Total assets
$ 1,741,906
S 4,187,071
$ 5,928,977
Liabilities, deferred inflows of resources,
and fund equity
Liabilities
Accounts payable
S 221,632
,$ 4,721
5 226,353
Accrued liabilities
50,722
50,722
Unearned revenue
6,194
6,194
Payable from restricted assets
Deposit payable
47,500
47,500
Total liabilities
326,048
4,721
330,769
Deferred inflows of resources
Unearned revenue
3,968
3,968
Unavailable revenue
1.735.056
1,735,056
Total deferred inflows of resources
3,968
1,735.056
1,739,024
Fund equity
Nonspendable
Inventories
8,287
8,287
Prepaids
30,500
30,500
Restricted for
Dredging projects
17,820
17,820
Transportation
16,454
16,454
Underground utilities
2,447,294
2,447,294
Unassigned
1,338,829
1,338,829
Total fund equity
1,411,890
2,447,294
3,859,184
Total liabilities, deferred inflows of resources,
and fund equity
S 1,741,906
S 4,187,071
$ 5,928,977
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, 2015
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.
3,859,184
$ 4,515,259
(2,406,731) 2,108,528
Unavailable revenue 1,735,056
Long-term liabilities, including accrued interest payable, are not due
and payable in the current period and therefore, are not reported in
governmental funds.
Note payable (1,735,914)
Accrued interest payable (18,091)
Compensated absences (105,615)
Net position of governmental activities $ 5,843,148
See notes to the financial statements.
16
I
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2015
Revenues
Taxes
Intergovernmental revenue
Licenses and permits
Charges for services
Fines and forfeits
Investment earnings
Special assessments
Miscellaneous
Total revenues
Expenditures
Current
General and administrative
Police department
Fire protection
Streets
Sanitation
Physical environment
Capital outlay
Debt service
Principal
Interest
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balance
Fund balance - beginning of the year
Fund balance - end of the year
General
Fund
$ 3,623,947
146,815
252,544
139,587
2,465
4,341
76,725
4,246,424
1,560,006
1,341,206
409,013
168,042
138,341
67,292
Special
Assessment
Fund
43,440
230,595
5,665
279,700
737,662
228,109
41,048
3,683,900 1,006,819
562,524
562,524
849,366
$ 1,411,890
See notes to the financial statements.
17
(727,119)
(727,119)
3,174,413
$ 2,447,294
Total
Governmental
Funds
$ 3,623,947
146,815
252,544
139,587
2,465
47,781
230,595
82,390
4,526,124
1,560,006
1,341,206
409,013
168,042
138,341
737,662
67,292
228,109
41,048
4,690,719
(164,595)
(164,595)
4,023,779
$ 3,859,184
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, 2015
Net change in fund balance of governmental funds
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental fonds 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
j in the governmental funds but are reported in the statement of
activities
1 Net book value of fixed asset disposals
Governmental funds include revenues collected within 60 days
i 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.
Change in accrued interest payable
Change in long-term compensated absences
Change in net position of governmental activities
See notes to the financial statements.
18
$ 67,292
(181,537)
$ (164,595)
(114,245)
(19,547)
(230,595)
228,109
2,377
6,845
$ (291,651)
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2015
Assets
Current assets
Equity in pooled investments
Accounts receivable, net
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
Compensated absences payable
Unearned revenue
Total current liabilities
Total liabilities
Net position
Net investment in capital assets
Restricted for repairs, replacements and improvements
Unrestricted
Total net position
See notes to the financial statements.
19
Enterprise
Fund
$ 773,532
176,411
4,159
242,362
14,468
1,210,932
2,730,300
(909,744)
1,820,556
3,031,488
153,760
1,085
6,467
161,312
161,312
1,820,556
256,830
792,790
$ 2,870,176
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2015
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
$ 1,022,847
1,022,847
73,926
568,288
17,389
75,000
66,439
39,700
31,619
872,361
150,486
66,870
66,870
217,356
2,652,820
$ 2,870,176
See notes to the financial statements.
20
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2015
J
Cash flows from operating activities:
J Receipts from customers
Payments to employees
Payments to suppliers
Internal activity - payments to other funds
J
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 used by investing activities
Net increase (decrease)in cash and cash equivalents
Cash and cash equivalents - beginning of the year
Cash and cash equivalents - end of the year
Cash flows from operating activities:
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
l
Depreciation
Changes in assets and liabilities:
' Decrease (increase) in:
Accounts receivable
' Increase (decrease)in:
Accounts payable
Accrued liabilities
Unearned revenue
i
Total adjustments
I
Net cash provided by operating activities
See notes to the financial statements.
21
Enterprise
Fund
$ 1,011,572
(72,841)
(531,210)
(114,700)
292,821
66,201
66,201
(359,022)
(359,022)
$ 150,486
66,439
(11,971)
86,086
1,085
142,335
$ 292,821
,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Gulf Stream, Florida (the "Town") have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental
units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting
body for establishing governmental accounting and financial reporting principles. The Town's
significant accounting policies are described below.
Reporting Entity
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to Chapter 31276,
1955 Laws of Florida. The Town operates under the Commission/Mayor form of government. The
Town's major operations include general government, public safety, streets, sanitation, physical
1 environment, and water services.
J
As required by generally accepted accounting principles, these financial statements include the
Town (the primary government) and its component units. Component units are legally separate
entities for which the Town is financially accountable. The Town is financially accountable if
a) The Town appoints a voting majority of the organization's governing board and (I) the
Town is able to impose its will on the organization or (2) there is a potential for the
organization to provide specific financial benefits to or impose specific financial burdens on
the Town, or
b) the organization is fiscally dependent on the Town and (1) there is a potential for the
organization to provide specific financial benefits to the Town or (2) impose specific
financial burdens on the Town.
Organizations for which the Town is not financially accountable are also included when doing so is
necessary in order to prevent the Town's financial statements from being misleading.
Based upon application of the above criteria, management of the Town of Gulf Stream has
determined that no component units exist which would require inclusion in this report. Further, the
Town is not aware of any entity that would consider the Town to be a component unit.
22
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non -fiduciary activities of the primary government.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business -type activities, which rely on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund
financial statements.
Measurement Focus. Basis ofAccountine. and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues
are recorded when earned and expenses recorded when a liability is incurred, regardless of the
timing of related cash flows. The Town does not accrue property tax revenues since the collection
of these taxes coincides with the fiscal year in which levied, and since the Town consistently has no
material uncollected property taxes at year end. Grants and similar items are recognized as revenue
as soon as all eligibility requirements imposed by the provider have been met.
When both restricted and unrestricted resources are available for use, it is the Town's policy to use
restricted resources first, then unrestricted resources as they are needed.
As a general rule the effect of inter -fund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are payments -in -lieu of taxes and other
charges between the Town's water and sewer function and various other functions of the Town.
Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
23
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental Funds
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough afterwards to pay liabilities of the
current period. The Town considers revenues collected within 60 days of the year end to be
available to pay liabilities of the current period. Expenditures are generally recorded when a
l liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures relating to compensated absences and claims and judgments are recorded only when
payment is due.
1 Fines and permit revenues are not susceptible to accrual because generally, they are not measurable
until received in cash. Property taxes, franchise taxes, licenses, interest revenue, intergovernmental
revenues, and charges for services associated with the current fiscal period are all considered to be
susceptible to accrual and have been recognized as revenues of the current fiscal period. All other
revenue items are considered to be measurable and available only when cash is received.
The Town reports the General Fund and The Special Assessment Fund as major governmental
funds. The General Fund is the general operating fund of the Town, and it is used to account for all
financial resources except those required to be accounted for in another fund. The Special
Assessment Fund is a special revenue fund used to account for financial resources relating to the
underground utility project.
Proprietary Funds
Proprietary Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises where the intent of the governing body is that the
costs (expenses, including depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges or (b) where the
governing body has decided that periodic determination of revenues eamed, expenses incurred,
and net income is appropriate for capital maintenance, public policy, management control,
accountability, or other purposes. Proprietary funds distinguish operating revenues and expenses
from non-operating items. Operating revenues and expenses generally result from providing
services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. Operating expenses report on the costs to maintain the proprietary systems,
the cost of sales and services, administrative expenses and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.
24
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J Proprietary Funds (Continued)
The Town reports the Municipal Water Fund as a major proprietary fund. The Municipal Water
Fund was established to account for the provision of water services to Town residents.
Cash and Cash Equivalents
J
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
J 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,
J 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,
,i this pool operates essentially as a money market fund.
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.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
bridges, and sidewalks) are reported in the applicable governmental or business -type activities
columns in the governmental -wide financial statements and in the Water Enterprise Fund.
Effective October 1, 2011, the Town increased the capitalization threshold from $1,000 for all
classes of capital assets to the following amounts:
Buildings
$5,000
Equipment
5,000
Infrastructure
10,000
Water Infrastructure
10,000
25
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
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 I,
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.
GASB 34 and has elected not to report major
Depreciation has been provided over the useful
estimated useful lives are as follows:
Buildings
Equipment
Infrastructure
Water Infrastructure
brventory
The Town is a Phase 3 government under
general infrastructure assets retroactively.
lives using the straight line method. The
10-30 years
3-15 years
25-50 years
40-50 years
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, 2015
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.
Unearned Revenues
The government reports unearned revenue on its government wide statement of net position,
proprietary statement of net position, and governmental funds balance sheet. Unearned revenue
arises when the government receives resources prior to revenue recognition. In subsequent periods,
when revenue recognition criteria are met the liability for uneamed revenue is removed and revenue
is recognized.
Unavailable Revenue
The Town reports unavailable revenue on its governmental funds balance sheet for resource inflows
that do not qualify for recognition as revenue in a governmental fund because they are not yet
considered available. In subsequent periods when the resources are considered available the liability
for unavailable revenue is removed and revenue is recognized.
Deferred Outflows of Resources
A deferred outflow of resources is a consumption of net position that is applicable to a future
reporting period.
27
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred Inflows ofResources
A deferred inflow of resources is an acquisition of net position that is applicable to a future
reporting period.
Lona -Term Liabilities
In the government -wide financial statements and proprietary fund financial statements, long-term
debt and other long-term obligations are reported as liabilities in the applicable governmental
activities, business -type activities, or proprietary fund statement of net position.
Fund Balance
In the fund financial statements, governmental funds report fund balance classifications that
comprise a hierarchy based primarily on the extent to which the Town is bound to honor constraints
on the specific purposes for which amounts in those funds can be spent. Fund balance is reported
under the following categories:
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 he 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.
28
_,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
J
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j Fund Balance (Continued)
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.
j 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.
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.
29
J
TOWN OF GULF STREAM, FLORIDA
J Notes to the Financial Statements
September 30, 2015
J NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Net Position
Net position is the residual of all other elements presented in a statement of financial position. It
is the difference between (a) assets plus deferred outflows of resources and (b) liabilities and
deferred inflows of resources. Net position is displayed in following three components:
1. Net investment in capital assets — Consists of capital assets including
restricted capital assets, net of accumulated depreciation and reduced by
the outstanding balances of any bonds, notes or other borrowings that are
attributable to the acquisition, construction or improvement of those
assets.
1
J
2. Restricted net position — Consists of net position with constraints placed
on the use either by: (a) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or (b) law
I through constitutional provisions of enabling legislation.
3. Unrestricted net position — All other net position that does not meet the
definition of "restricted" or "net investment in capital assets".
BudFetary 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.
30
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property Taxes (Continued)
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 I 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
15` 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 I following
the tax year, certificates are sold for all delinquent taxes on real property. After the sale, tax
certificates bear interest of 18% per year or any lower rate bid by the buyer. Application for a tax
deed on any unredeemed tax certificates may be made by the certificate holder after a period of
two years.
Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied
either by seizure and sale of the property or by the five year statute of limitations.
Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and revenue and expenses during the
period reported. These estimates include assessing the collectibility of accounts receivable, the use
and recoverability of inventory, and useful lives and impairment of tangible and intangible assets,
among others. Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary. Actual
results could differ from the estimates.
31
M
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Implementation of Governmental Accounting Standards Board Statements
The Town implemented the following Governmental Accounting Standards Board Statements
during the fiscal year ended September 30, 2015:
GASB Statement No. 68, Accounting and Financial Reportingfor 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.
Recently Issued Accounting Pronouncements
A brief description of new accounting pronouncements that might have a significant impact on
the Town's financial statements is presented below. Management is currently evaluating the
impact of adoption of these statements in the Town's financial statements.
In February 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application.
This Statement provides guidance for determining a fair value measurement for financial
reporting purposes and also provides guidance for applying fair value of certain investments and
disclosures related to all fair value measurements. This Statement is effective for the fiscal year
ending September 30, 2016.
In June 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for
Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and
Amendments to Certain Provisions of GASB Statements 67 and 68. This Statement improves the
usefulness of information about pensions included in the general purpose external financial
reports of state and local governments for making decisions and assessing accountability. Certain
sections of this Statement are effective for the fiscal year ending September 30, 2016 and the
remaining sections are effective for the fiscal year ending September 30, 2017.
In June 2015, the GASB issued Statement No. 74, Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans. This Statement improves the usefulness of information
about postemployment benefits other than pensions included in the general purpose external
financial reports of state and local government OPEB plans for making decisions and assessing
accountability. This Statement is effective for the fiscal year ending September 30, 2017.
32
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
In June 2015 the GASB issued Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions. This Statement improves accounting and
financial reporting by state and local governments for postemployment benefits other than
pensions. It also improves information provided by state and local governmental employers about
financial support for OPEB that is provided by other entities. This Statement is effective for the
fiscal year ending September 30, 2018.
In June 2015 the GASB issued Statement No. 76, The Hierarchy of Generally Accepted
Accounting Principles for State and Local Governments. This Statement identifies — in the
current governmental financial reporting environment — the hierarchy of generally accepted
accounting principles. This Statement is effective for the fiscal year ending September 30, 2016.
In August 2015 the GASB issued Statement No. 77, Tax Abatement Disclosures. This Statement
improves financial reporting by giving users of financial statements essential information that is
not consistently of comprehensively reported to the public at present. This Statement is effective
for the fiscal year ending September 30, 2017.
In December 2015 the GASB issued Statement No. 78, Pensions Provided Through Certain
Multiple -Employer Defined Benefit Pension Plans. This Statement addresses a practice issue
regarding the scope and applicability of Statement No. 68, Accounting and Financial Reporting
for Pensions. This Statement is effective for the fiscal year ending September 30, 2017.
In December 2015 the GASB issued Statement No. 79, Certain External Investment Pools and
Pool Participants. This Statement establishes criteria for an external investment pool to qualify
for making an election to measure all of its investments at amortized cost for financial reporting
purposes. This Statement is effective for the fiscal year ending September 30, 2017.
In March 2016, the GASB issued Statement No. 82, Pension Issues — an amendment of GASB
Statements No. 67, No. 68, and No. 73. This Statement addresses issues regarding the presentation
of payroll -related measures in required supplementary information, the selection of assumptions
and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial
reporting purposes, and the classification of payments made by employers to satisfy employee (plan
member) contribution requirements. This statement is effective for the fiscal year ending September
30, 2017. Earlier application is encouraged.
33
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 2 — DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2015, the carrying amount of the Town's deposits was $5,095,304 and the
bank balances totaled $5,110,495. 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 $4,437,577. The
certificates of deposit and money market accounts are reported as investments in the balance sheet.
As of September 30, 2015, the Town held the following certificates of deposit:
Days to Maturity Fair Value
175 $255,901
667 264.659
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.
34
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 2 — DEPOSPI'S AND INVESTMENTS (Continued)
Investments (Continued)
On August 3, 2009, the SBA announced "Florida PRIME" as the highly enhanced version of the
SBA's prior Local Government Investment Pool, which was previously known as the Local
Government Surplus Trust Fund. The SBA administers Florida PRIME which is governed by
Chapter 19-7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes.
These rules provide guidance and establish the policies and general operating procedures for the
administration of the Florida PRIME. The Florida PRIME 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, which permits money market funds to use amortized cost to
maintain a constant net asset value (NAV) of $1 per share. The fair share of the position in the
Florida PRIME is equal to the value of the pool shares.
At September 30, 2015, Florida PRIME was assigned a "AAA(m)" principal stability fund rating
by the Standard and Poor's Ratings. Florida PRIME is considered a SEC 20 -like fund, thus, the
account balance should also be considered its fair value.
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2015, was 29
days. A portfolio's WAM reflects the average maturity in days based on final maturity or reset
date, in the case of floating rate instruments. WAM measures the sensitivity of Florida PRIME to
interest rate changes.
Additional information regarding the Local Government Surplus Funds Trust Fund may be
obtained from the State Board of Administration.
As of September 30, 2015, the Town held the following investments:
Weighted
Average Fair
Maturity Value
State Board of Administration Investment Pool
Florida PRIME 29 days -$=3
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, 2015
NOTE 2 —DEPOSITS AND INVESTMENTS (Continued)
Credit Risk
J
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill their
J obligations. The Town's investment policies limit its investments to high quality investments to
control credit risk. At September 30, 2015, Florida PRIME was rated "AAA(m) by Standard and
Poor's Ratings Services.
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
1 as a means of managing exposure to fair value losses arising from increasing interest rates.
J
NOTE 3 — RECEIVABLES
J As of September 30, 2015, 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
$ 29,190
$
$
$ 29,190
Accounts - unbilled
23,078
182,038
205,116
Accounts - billed
5,574
15,431
21,005
Due from other governments
13,945
13,945
Special assessments
1,735,056
1,735,056
Subtotal
71,787
1,735,056
197,469
2,004,312
Allowance for uncollectibles
(6,590)
(6,590)
Net receivables
$ 71,787
$ 1,735,056
$ 190,879
$ 1,997,722
36 .
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 4 — CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2015, was as follows:
Beginning
Business-Tvoe Activities
Assets being depreciated
Water system improvements
Equipment
Total at historical cost
Accumulated depreciation
Water system improvements
Equipment
Total accumulated depreciation
Business -type activities, net
Additions Deletions
$2,658,922 $ $
71,378 _
2,730,300
782,686
63,310
60,619
3,129
843,305
66,439
$1,886,995
$(66,439)
37
Ending
Balance
$2,658,922
71,378
2,730,300
845,996
63,748
909,744
$1,820,556
7
J
n
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 4 — CAPITAL ASSETS (Continued)
Governmental Activities
Assets not being depreciated
Land
Construction in progress
Total not being depreciated
Assets being depreciated
Buildings
Equipment
Infrastructure
Total being depreciated
Total at historical cost
Accumulated depreciation
Buildings
Equipment
Infrastructure
Total accumulated depreciation
Governmental activities, net
Beginning Ending
Balance Additions Deletions Balance
$ 376,523 $
3,190 2,045
379,713 2,045
$ $ 376,523
5,235
381,758
892,705
892,705
585,746
65,247
(61,051)
589,942
2,650,854
2,650,854
4,129,305
65,247
(61,051)
4,133,501
4,509,018
67,292
(61,051)
4,515,259
698,881
29,292
728,173
373,684
61,612
(41,504)
393,792
1,194,133
90,633
1,284,766
2,266,698
181,537
(41,504)
2,406,731
$2,242,320 $ (114,245) $ (19,547) $2,108,528
Depreciation expense was charged to functions and programs of the primary government as
follows:
Governmental activities:
General government $ 62,325
Police department 39,607
Streets 79,605
Total governmental activities $ 181,537
Business -type activities:
Municipal water $ 66,439
W
,
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 5 — LONG-TERM LIABILITIES
Governmental Activities
On September 6, 2012, the Town issued its Promissory Note, Undergrounding Project in the
principal amount of $2,427,895 to provide funds for the project of undergrounding the electric,
cable television, and telephone utility facilities serving the municipality. Such debt shall not be a
general obligation of the Town. The Town covenants that, so long as the Note shall remain unpaid
or any other amounts are owed by the Town under the Note, it will appropriate in its annual budget,
by amendment, if required, from pledged funds and available non ad valorem revenues, amounts
sufficient to pay principal and interest on the Note as they become due. The covenant to budget and
appropriate does not create a lien upon or pledge of the available non ad valorem revenues. Pledged
funds consist of amounts on deposit in the note proceeds fund and the payment fund and special
assessments.
Principal and interest payments on the Note are due in annual installments commencing on April 1,
2013 and on each April I thereafter until final maturity on April 1, 2022. The Note bears interest at
the rate of 2.09%. At September 30, 2015, principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $1,884,034. Principal and interest paid for the current fiscal year
was $269,157 and pledged special assessments were $230,595.
Annual debt service requirements to maturity are as follows:
Year Ended
September 30 Principal Interest Payment
2016
$ 232,876
$ 36,281
$ 269,157
2017
237,743
31,414
269,157
2018
242,712
26,445
269,157
2019
247,785
21,372
269,157
2020
252,964
16,193
269,157
2021-2022
521,834
16,415
538,249
$ 1,735,914
$ 148,120
$ 1,884,034
39
,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2015, was
$38,671 and total interest paid during the year was $41,048. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
On November 28, 1990, the Town passed Resolution No. 90-8, authorizing the establishment of a
401(a) plan (the 'Plan"). All full-time employees are eligible to participate in the Plan upon
completion of six months of service and attaining age 18. This defined contribution pension plan is
administered by the International City Management Association Retirement Corporation. In a
defined contribution plan, benefits depend solely on amounts contributed to the Plan plus
investment earnings. The plan requires that the Town and the employees contribute an amount
equal to 20.92% and 8.0%, respectively, of the employee's base salary each month. The Town's
contribution for each employee and investment earnings allocated to the employee's account vest at
a rate of 20% per year of service completed. Employees are eligible for normal retirement upon
attainment of the age of 59-1/2. Town contributions and interest forfeited by employees who leave
employment before satisfying the vesting requirement are used to reduce the Town's current -period
contribution requirement. For the fiscal year ended September 30, 2015, the Town recognized
O
NOTE 5 — LONG-TERM LLABILITIES (Continued)
,
Changes in the Town's long-term liabilities for the year ended September 30,
2015 are summarized
as follows:
J
Beginning
Ending
Due Within
Governmental Activities Balance Additions Deletions
Balance
One Year
J Promissory Note $1,964,023 $ $228,109
$1,735,914
$232,876
Compensated absences 112,460 46,967 53,812
105,615
78,178
Total Governmental Activities $2,076,483 $ 46,967 $ 281,921
$1,841,529
$311,054
Beginning
Ending
Due Within
j Business -type Activities Balance Additions Deletions
Balance
One Year
Total Governmental Activities $ $ 1,085 $
$ 1,085
$ 1,085
Compensated absences of the governmental activities are liquidated by the General Fund.
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2015, was
$38,671 and total interest paid during the year was $41,048. No interest was capitalized in the
Enterprise Fund during the year.
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN
On November 28, 1990, the Town passed Resolution No. 90-8, authorizing the establishment of a
401(a) plan (the 'Plan"). All full-time employees are eligible to participate in the Plan upon
completion of six months of service and attaining age 18. This defined contribution pension plan is
administered by the International City Management Association Retirement Corporation. In a
defined contribution plan, benefits depend solely on amounts contributed to the Plan plus
investment earnings. The plan requires that the Town and the employees contribute an amount
equal to 20.92% and 8.0%, respectively, of the employee's base salary each month. The Town's
contribution for each employee and investment earnings allocated to the employee's account vest at
a rate of 20% per year of service completed. Employees are eligible for normal retirement upon
attainment of the age of 59-1/2. Town contributions and interest forfeited by employees who leave
employment before satisfying the vesting requirement are used to reduce the Town's current -period
contribution requirement. For the fiscal year ended September 30, 2015, the Town recognized
O
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 6 — DEFINED CONTRIBUTION EMPLOYEE RETIREMENT PLAN (Continued)
pension expense of $248,737 for the Plan, and as of the fiscal year end, the Town reported a
payable in the amount of $8,247 for outstanding contributions to the Plan. There were no
forfeitures for the fiscal year.
Because the Town does not hold or administer funds for the Plan, it does not meet the criteria for
inclusion in the Town's financial statements as a fiduciary fund. The Plan does not issue a stand
alone financial report.
NOTE 7 — DEFERRED COMPENSATION PLAN
The Town offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all Town employees, permits them to defer a
portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death, or unforeseeable emergency.
Assets of the plan are invested in either mutual funds or insurance contracts. In 1998, the Plan was
amended to conform to changes in the Internal Revenue Code brought about by the Small Business
Job Protection Act of 1996 (the "Act"). The Act requires that eligible deferred compensation plans
established and maintained by governmental employers be amended to provide that all assets of the
plan be held in trust, or under one or more appropriate annuity contracts or custodial accounts, for
the exclusive benefit of plan participants and their beneficiaries. As a result of this change, plan
assets are no longer subject to the claims of the Town's general creditors.
Because the Town has little administrative involvement and does not perform the investing function
for funds in the Plan, the Town's activities do not meet the criteria for inclusion in the fiduciary
funds of a government.
NOTE 8 — OTHER POSTEMPLOYMENT BENEFITS (OPEB)
The Town was required to implement Governmental Accounting Standards Board Statement 45
(GASB 45), Accounting and Financial Reporting by Employers for Postemployment Benefits Other
than Pensions for fiscal year ending September 30, 2010. Retirees of the Town pay an amount
equal to the actual premium for health insurance charged by the carrier, but there is an implied
subsidy in the healthcare insurance premium charged for active employees, who are younger than
retirees on average. This implied subsidy constitutes other postemployment benefits under GASB
Statement 45. The Town elected not to apply GASB 45. The effects of that departure on the
financial statements are not reasonably determinable. The Town also has not disclosed the
descriptive information about other postemployment benefits required by standards.
41
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 9 — INTERLOCAL AGREEMENTS
Interlocal Fire and EMS Service Agreement with the City ofDelrav Beach
On July 14, 2009, the Town entered into an agreement with the City of Delray Beach whereby the
City will provide the Town with fire and emergency medical services. The term of the agreement is
for 10 years beginning on October 1, 2009, and extending through September 30, 2019. On October
4, 2011, the agreement was amended to increase the service fee for additional areas annexed into
the Town. The Town paid an annual service fee of $389,536 for the fiscal year ended September
30, 2015. The annual service fees for future years will be the current year fee of $409,013 adjusted
annually based on the "All Urban Customers — United States April Consumer Price Index" or an
increase of five percent (5.01/6), whichever is greater. The annual service for the fiscal year ending
September 30, 2016 will be $429,464
Interlocal Dispatch Service Agreement with the City ofDelrav Beach
On October 1, 2012, the Town entered into a new agreement with the City of Delray Beach for
dispatch services. The agreement shall automatically renew for five one year renewals unless either
party notifies the other in writing of their intent not to renew at least 90 days prior to the start of the
renewal term. The agreement shall terminate on September 30, 2017. The basic service fee under
the agreement was $54,036 for the initial contract year. Each year thereafter the basic service fee
shall be adjusted from the previous year in an amount based upon the All Urban Consumers -United
States Consumer Price Index for April. For the year ended September 30, 2015, the Town paid
$54,036 pursuant to the agreement.
Interlocal Water Purchase Agreement with the Citv ofDelrav Beach
In June 1998, the Town entered into an agreement with the City of Delray Beach for the purchase of
treated, potable water. The term of the agreement is for a period of twenty-five years. Under the
terms of the agreement, the Town is to pay the City the prevailing water rate charged by the City to
non-residential users plus a surcharge of 25%. For the year ended September 20, 2015, the Town
paid $568,288 pursuant to the agreement.
42
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 10 — COMMITMENTS
Solid Waste and Reo line Collection Franchise Aereement
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.
J
WMI bills the Town monthly for these services at the then current rate as adjusted from time to
1 time by the terms and conditions of the agreement. For the year ended September 30, 2015, the
J Town made payments of $138,341 pursuant to the agreement.
Construction Commitments
J
I Amount Balance to
J Authorized Completed Complete
Project Amount at 09/30/15 at 09/30/15
1
J Undergrounding— Phase 1 $1,389,355 $1,385,031 $ 4,324
Project Management and
Engineering Support 408,206 278,888 129,318
$1,797,561 $1,663,919 $ 133,642
NOTE 11— 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, 2014 and 2015. During the fiscal year ended
September 30, 2013, settlements exceeded insurance coverage by $180,000.
43
_,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
NOTE 11— 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.
The Town is involved in various litigation and claims arising in the course of operations. The
Town is a defendant in several lawsuits alleging violation by the Town of the State of Florida's
Public Records Law. In the event of success in these cases, plaintiffs would be entitled to
attorney's fees. The likelihood of unfavorable outcomes and the amounts of potential losses
cannot be reasonably determined at this time. Accordingly, no provision for any liability that may
result has been made in the accompanying financial statements.
NOTE 12 — OPERATING LEASE
On May 31, 2013, the Town entered into an operating lease for a copier for use in Town Hall. The
lease is for a term of 60 months and requires minimum monthly payments of $501 that commenced
in July 2013. For the year ended September 30, 2015, the Town made payments of $6,012 pursuant
to the lease.
The following is a schedule of the Town's required future minimum lease payments under the
agreement:
$16,533
En
Minimum
Year Ended
Lease
September 30
Payments
2016
$ 6,012
2017
6,012
2018
4,509
$16,533
En
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2015
J
NOTE 13 — SPECIAL ASSESSMENT
On June 30, 2011, the Town adopted Resolution 011-11 levying non -ad valorem special
assessments on properties specially benefitted by a capital improvement project to place
underground the overhead electric, cable television, and telephone utility facilities that serve a
portion of the Town and its inhabitants. The special assessments were calculated using a
methodology that fairly and reasonably apportions the cost of the project among the benefitted
parcels in proportion to the benefits to such parcels. The calculation methodology used an
equivalent benefit unit assigned for three categories: (1) improved safety (2) improved reliability
and (3) improved aesthetics.
Property owners were given the option to pay the entire amount of the assessment in advance of the
Town obtaining financing for the project. The special assessments are subject to prepayment only
1 on or before November 1, 2011. Assessments that are not prepaid shall be payable in not less than
J10 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
j was $5,518,144, and the Town received prepayments in the amount of $2,885,049. See Note 5 for a
discussion of the related financing for the project.
NOTE 14 — SUBSEQUENT EVENTS
On May 13, 2016, the Town awarded contracts for the Phase 11 undergrounding project to Wilco
Electrical LLC in the amount of $2,890,597 and Comcast in the amount of $160,312.
45
9
J
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, 2015
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Taxes
J Ad valorem taxes
S 3,306,230
$ 3,306,230
S 3,287,456
S (18,774)
Local option fuel taxes
33,017
33,017
34,723
1,706
Utility service taxes
174,500
174,500
223,761
49,261
Communications services taxes
69,000
69,000
60,656
(8,344)
Local business tax
22,140
22,140
17,351
(4,789)
Total taxes
3,604,887
3,604,887
3,623,947
19,060
Licenses and permits
Building permits
90,000
90,000
98,195
8,195
Franchise fees
133,000
133,000
154,349
21,349
Total licenses and permits
223,000
223,000
252,544
29,544
Intergovernmental revenue
State revenue sharing proceeds
97,144
97,144
97,646
502
Shared revenue from other local units
'
4,860
4,860
9,469
4,609
Payment in lieu of taxes
39,700
39,700
39,700
Total intergovernmental revenue
141,704
141,704
146,815
5,111
Charges for services
' Solid waste collection fees
140,000
140,000
138,283
(1,717)
Other
15,000
15,000
1,304
(13,696)
Total charges for services
155,000
155,000
139,587
(15,413)
Judgments, fines and forfeits
Judgments and fines
'
1,100
1,100
2,465
1,365
Total judgments, fines, and forfeits
1,100
1,100
2,465
1,365
' Investment earnings
4,000
4,000
4,341
341
Miscellaneous revenues
Contributions
24,284
24,284
? Other
52,441
52,441
Total miscellaneous revneues
76,725
76,725
Total revenues
4,129,691
4,129,691
4,246,424
116,733
Expenditures
General and administrative
1,247,248
1,547,248
1,560,006
(12,758)
Police
1,504,708
1,504,708
1,406,453
98,255
Fire
410,013
410,013
409,013
1,000
Streets
657,172
357,172
170,087
187,085
Sanitation
141,000
141,000
138,341
2,659
Contingency
169,550
169,550
169,550
Total expenditures
4,129,691
4,129,691
3,683,900
445,791
Excess (deficiency) of revenues
over (under) expenditures
SS
562,524
S 562,524
Fund balance, beginning of year
849,366
Fund balance, end of year
$ 141 1890
46
K
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2015
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:
I. Prior to August 1 st, the Town Manager submits to the Town Commission a proposed operating
budget for the fiscal year commencing the next October 1 st. The operating budget includes
1 proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. Prior to October 1 st, 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, 2015, the following department
had an excess of expenditures over appropriations.
General and administrative $ 12,758
47
NH NOWLEN, HOLT & MINER, P.A.
/�/ CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NOWLEN (1990-19U). CPA
& EDWARD T HOLT, CPA
WIWAM B. MINER, RETIRED, CPA
ROBERT W. HENDRIX, JR., CPA
WEST PALM BEACH OFFICE JANET R. BARICEVICH, CPA
NORTHBRIDGE CENTRE TERRY L. MORTON, JR., CPA
515 N. FLAGLER DRIVE. SUTFE 1700 N. RONALD BENNIM.. CVA, ABV, CFR CPA
POST OFFICE BOX 347ALEXIA O. VARGA, CFE, CPA
EDWARD HOLT JR., PFS, CPA
WEST PALM BEACH. FLORIDA 33402-0347 BRIAN J. BRESCIA. CFP. CPA
TELEPHONE (561) 659-3050
FAX (561) 835-0638
WW W.NHMCPA.COM
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business -type activities, and each major fund of the
Town of Gulf Stream, Florida, as of and for the year ended September 30, 2015, and the related
notes to the financial statements, which collectively comprise the Town of Gulf Stream's basic
financial statements and have issued our report thereon dated June 30, 2016. The opinions on the
governmental activities, business -type activities, and Enterprise Fund were qualified because the
Town has not recognized the other postemployment benefits (OPEB) expense and obligation
which is required in accordance with U.S. generally accepted accounting principles as provided
in Governmental Accounting Standards Board Statement No. 45.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of
Gulf Stream, Florida's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Town of Gulf Stream, Florida's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Town of Gulf Stream, Florida's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
cf',3
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAM ERICA INTERNATIONAL
MARKJ.BYMASTER,CFE.CPA
RYAN M. SHORE, CFP, CPA
WEI PAN, CPA
WIWAM C. KISKER. CPA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
BELLE GLADE OFFICE
333 S.E. 2nd STREET
STATEMENTS PERFORMED IN ACCORDANCE WITH
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
GOVERNMENTAUDITINGSTANDARDS
TELEPHONE(561)996.5612
FAX (561) 996.6248
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business -type activities, and each major fund of the
Town of Gulf Stream, Florida, as of and for the year ended September 30, 2015, and the related
notes to the financial statements, which collectively comprise the Town of Gulf Stream's basic
financial statements and have issued our report thereon dated June 30, 2016. The opinions on the
governmental activities, business -type activities, and Enterprise Fund were qualified because the
Town has not recognized the other postemployment benefits (OPEB) expense and obligation
which is required in accordance with U.S. generally accepted accounting principles as provided
in Governmental Accounting Standards Board Statement No. 45.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of
Gulf Stream, Florida's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the Town of Gulf Stream, Florida's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Town of Gulf Stream, Florida's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
cf',3
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAM ERICA INTERNATIONAL
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 and therefore, material
weaknesses or significant deficiencies may exist that were not identified. However, as described
below, we identified a deficiency in internal control that we consider to be a material weakness.
J Finding 2015-1 Closing Procedures
J Condition: Material adjustments were required to correct the accounting records.
Criteria: Accurate accounting records are required as a basis for decision making.
Effect: Prior to audit adjustments, the accounting records were misstated.
Recommendation: We recommend that the Town review the monthly and year-end
financial closing and reporting procedures and update them to facilitate the preparation of
more accurate financial reports.
Management Response: A review of the year-end accounts payable and accrued
liabilities processing procedures will be examined to assure that the accounting software
1 capabilities are maximized to the fullest extent possible and that the underlying
accounting records are reconciled to the general ledger.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Gulf Stream, Florida's
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the 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.
Town of Gulf Stream, Florida's Response to Findings
The Town of Gulf Stream, Florida's response to the finding identified in our audit is described
above. The Town of Gulf Stream, Florida's response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no
opinion on it.
ME
1 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.
DA
West Palm Beach, Florida
June 30, 2016
J
50
NH NOWLEN, HOLT & MINER, P.A.
ty CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NGWLEN H83D1BBQ, CPA
/y�
M ■ EDWARD T HOLT. CPA
WI WAM B. MINER, RETRIED, CPA
ROBERT W. HENDRIX. JR., CPA
WEST PALM BEACH OFFICE JANET R. BARICEVICH. CPA
NORTHBRIDGE CENTRE TERRY L MORTON, JR.. CPA
515 N. FLAGLER DRIVE, SUITE 1700 N. RONALD SENNM. CVA, ABV, CFF, CPA
ALEXIA G. VAROA. CFE. CPA
POSE OFFICE BOX 34] EDWARD T HOLT JR., PFS. CPA
WEST PALM BEACH, FLORIDA 33402-0347 BRIAN J. BRESCIA, CFP, CPA
TELEPHONE (561) 659-31160
FAX (561) 535-0628
WW WNHMCPA.COM
MARK J. SYMASTER, CFE, CPA
RYAN M. SHORE, CFP, CPA
WE[ PAN, CPA
WILLIAM C. KISKER. CPA
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL BELLE GLADE OFFICE
333 B.E. 2nd STREET
OF THE STATE OF FLORIDA POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 988.5612
FAX (561) 896.6248
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
Report on the Financial Statements
We have audited the financial statements of the Town of Gulf Stream, Florida, as of and for the
fiscal year ended September 30, 2015, and have issued our report thereon dated June 30, 2016.The
Town has not recognized the other postemployment benefits (OPEB) expense and obligation in the
financial statements of the governmental activities, business -type activities, and Enterprise Fund as
required in accordance with accounting principles generally accepted in the United States of
America, as provided in Governmental Accounting Standards Board Statement No. 45. The effects
of that departure on the financial statements are not reasonably determinable. The Town also has
not disclosed the descriptive information about other postemployment benefits required by
accounting principles generally accepted in the United States of America.
Auditor's Responsibility
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and Chapter 10.550 Rules of the
Auditor General.
Other Reports
We have issued our Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards and Independent Accountant's Report on an
examination conducted in accordance with AICPA Professional Standards, Section 601, regarding
51
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General.
Disclosures in those reports, which are dated June 30, 2016, should be considered in conjunction
with this Management Letter.
Prior Audit Findings
Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
annual financial audit report. There were no findings or recommendations in the prior year that
required corrective actions.
Official Title and Legal Authority
Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and
legal authority for the primary government and each component unit of the reporting entity be
disclosed in this Management Letter, unless disclosed in the notes to the financial statements. This
information is disclosed in Note 1 to the financial statements.
Financial Condition
Section 10.554(1)(i)5.a. and 10.556(7), Rules of the Auditor General, require that we report the
results of our determination as to whether or not the Town of Gulf Stream, Florida has met one or
more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the
specific condition(s) met. In connection with our audit, we determined that the Town of Gulf
Stream, Florida did not meet any of the conditions described in Section 218.503(1), Florida
Statutes.
Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), Rules of the Auditor General, we applied
financial condition assessment procedures. It is management's responsibility to monitor the
Town of Gulf Stream, Florida's financial condition, and our financial condition assessment was
based in part on representations made by management and the review of financial information
provided by same. Our assessment was done as of the fiscal year end. The results of our
procedures did not disclose any matters that are required to be reported.
Annual Financial Report
Section 10.554(1)(i)5.b. and 10.556(7), Rules of the Auditor General, require that we report the
results of our determination as to whether the annual financial report for the Town of Gulf Stream,
Florida for the fiscal year ended September 30, 2015, 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, 2015. In connection with our
audit, we determined that the two reports were in agreement.
52
Special District Component Units
Section 10.554(1)(i)5.d, Rules of the Auditor General, requires that we determine whether or not a
special district that is a component unit of a county, municipality, or special district, provided the
financial information necessary for proper reporting of the component unit, within the audited
financial statements of the county, municipality, or special district in accordance with Section
218.39(3)(b), Florida Statutes.
Based on the application of criteria in publications cited in Section 10.553, Rules of the Auditor
General, there are no special district component units of the Town of Gulf Stream, Florida.
Other Matters
Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the Management
Letter any recommendations to improve financial management. In connection with our audit, we
noted the following item.
Findine 2015-2
Condition: As indicated in Note 2 to the Budgetary Required Supplementary Information,
certain departments had expenditures in excess of appropriations.
Criteria: Florida Statutes prohibit expenditures in excess of appropriations.
Effect: Noncompliance with budgetary requirements.
Recommendation: We recommend that the Town adopt budget adjustments as necessary
to eliminate expenditures in excess of appropriations.
Management Response: In the future, the Town Manager will monitor budget
appropriations, and where appropriate, a recommendation for a budget amendment will
be made to the Town Commission.
Section 10.554(1)(i)3., Rules of the Auditor General, requires 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.
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, 2015, and was not required to have a federal single
audit or a state single audit.
53
Response to Management Letter
The Town of Gulf Stream, Florida's response to the findings identified in our audit is presented
above. The Town's response was not subjected to the auditing procedures applied in the audit of
the financial statements and, accordingly, we express no opinion on it.
Purpose of this Letter
Our Management Letter is intended solely for the information and use of the Legislative Auditing
Committee, members of the Florida Senate and the Florida House of Representative, the Florida
Auditor General, Federal and state awarding agencies, pass-through entities, management of the
Town of Gulf Stream, and members of the Town Commission, and is not intended to be and
should not be used by anyone other than these specified parties.
West Palm Beach, Florida
June 30, 2016
54
NH NOWLEN, HOLT & MINER, P.A.
MCERTIFIED PUBLIC ACCOUNTANTS EVERETTE. NOWLEN(1B 1W), CPA
EDWARD T HOLT, CPA
WILLIAM B. MINER, RETIRED, CPA
ROBERT W. HENDRIX, JR.CPA
WEST PALM BEACH OFFICE JANET R. SARICEVICH,, CPA
NORTHBRIDGE CENTRE TERRY L. MORTON, JR., CPA
515 N. FLAGLER DRIVE, SUITE 17W N. RONALD SENNM. CVA ABV, CFR CPA
ALE%IA O. VARDA. CFE, CPA
POST OFFICE BOX 3i7 EDWARD T. HOLT, JR., PFS, CPA
WEST PALM BEACH, FLORIDA 33402-0347 BRIAN J. BRESCIA. CFP, CPA
TELEPHONE (561) 659-3060
FAX(561)B35-D628
W W W.NHMCPA.COM
MARK J. SYMASTER, CFE, CPA
RYAN M. SHORE. CFP, CPA
WEI PAN, CPA
WILLIAM C. XISXER, CPA
INDEPENDENT ACCOUNTANT'S REPORT
ON COMPLIANCE WITH SECTION 218.415,
8ELLE GLADE OFFICE
3335E E. STREET
FLORIDA STATUTESPOST
OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996.5612
FAX (561) 996-6248
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have examined the Town of Gulf Stream, Florida's compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2015. Management is responsible for the Town of Gulf
Stream, Florida's compliance with those requirements. Our responsibility is to express an opinion on the
Town of Gulf Stream, Florida's compliance based on our examination.
Our examination was conducted in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence
about the Town of Gulf Stream, Florida's compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a legal determination on
the Town of Gulf Stream, Florida's compliance with specified requirements.
In our opinion, the Town of Gulf Stream, Florida complied, in all material respects, with the
aforementioned requirements for the year ended September 30, 2015.
This report is intended solely for the information and use of the Legislative Auditing Committee,
members of the Florida Senate and Florida House of Representative, the Florida Auditor General,
applicable management, and the Town Commission, and is not intended to be and should not be used by
anyone other than these specified parties.
West Palm Beach, Florida
June 30, 2016
55
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL