HomeMy Public PortalAbout2014 AFRTOWN OF GULF STREAM, FLORIDA
SEPTEMBER 30, 2014
TABLE OF CONTENTS
Pages
Independent Auditor's Report 1-3
Management's Discussion and Analysis (required supplementary information) 4-11
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position
12
Statement of Activities
13-14
Fund Financial Statements
Balance Sheet — Governmental Funds
15
Reconciliation of the Balance Sheet — Governmental Funds to
the Statement of Net Position
16
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Governmental Funds
17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance of the Governmental Funds to the Statement of Activities
18
Statement of Net Position — Proprietary Fund
19
Statement of Revenues, Expenses, and Changes in Fund Net Position —
Proprietary Fund
20
Statement of Cash Flows — Proprietary Fund
21
Notes to the Financial Statements
22-44
Required Supplemental Information Other Than MD&A
Schedule of Revenues, Expenditures, and Changes in Fund Balance —
Budget and Actual — General Fund 45
Notes to the Budgetary Required Supplemental Information 46
Other Reports
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards 47-48
Management Letter in Accordance with the Rules of the Auditor General
of the State of Florida 49-51
Independent Accountant's Report on Compliance with Section 218.415,
Florida Statutes 52
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE. SHITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33403-0347
TELEPHONE (561) 659-3060
FAX(561)105-0628
W W W.NHMCPA.COM
INDEPENDENT AUDITOR'S REPORT
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
Report on the Financial Statements
EVERETT S. NCWLEN pBB6IDe4j, CPA
EDWARD T. HOLT, CPA
WILLMM B. MINER, RETIRED, CPA
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, CPA
TERRY L MORTON, JR., CPA
N. RONALD BENNETT, CVA, ASV, CFF, CPA
ALEXIA O. VARGA, CFE, CPA,
EDWARD T. HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP. CPA
KATHLEEN A. MINER, CPA
KARA D. PETERSON, CFE, CPA
MARK J. SYMASTER. CFE, CPA
RYAN M. SHORE, LFP. CPA
TIMCTHY H. SCHMEDES, DFP, CPA
WEI PAN. CPA
PHILLIP C. MMI -LISTER: CPA
BEL ALE a�FFICE
333 S.E. 2nD STREET
POST OFFICE BOX 338
BELLE GLADE. FLORIDA 33430-0338
TELEPHONE (561) 9966612
FAX (561) 996-6248
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, 2014, and the related notes to the financial statements, which collectively comprise the
Town's basic financial statements as listed in the table of contents.
Management's Responsibilityfor the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
I
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, 2014, 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, 2014, 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 14 to the financial statements, the Town adopted the recognition and disclosure
requirements of Governmental Accounting Standards Board Statement No. 65, Items Previously
Reported as Assets and Liabilities, during the fiscal year ended September 30, 2014. Net position of the
governmental activities as of October 1, 2013 has been restated. Our opinions are not modified with
respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 4 through 11 and 45 through 46
be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
2
J
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.
J Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2015,
J 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
1 Gulf Stream, Florida's internal control over financial reporting and
compliance.
J West Palm Beach, Florida
June 29, 2015
3
Management's Discussion and Analysis
The Town of Gulf Stream's (the "Town") discussion and analysis is designed to:
A. Assist the reader in focusing on significant financial issues
B. Provide an overview of the Town's financial activity
C. Identify changes in the Town's financial position
D. Identify any material deviations from the financial plan (approved budget)
E. Identify individual fund issues or concerns
Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's
activities, resulting changes and currently known facts, please read it in conjunction with the Town's
financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
➢ The assets plus deferred outflows of resources of the Town of Gulf Stream exceeded its
liabilities plus deferred inflows of resources at the close of the most recent fiscal year by
$8,787,619 (net position).
➢ The governmental activities revenues were $3,680,820 at the close of fiscal year 2014.
➢ The business -type activities revenues were $1,025,373 at the close of fiscal year 2014.
➢ The total cost of all Town programs was $5,904,474 during the fiscal year 2014.
➢ At the end of the 2014 fiscal year, unassigned fund balance for the general fund was $815,709 or
23% of total general fund expenditures.
USING THIS REPORT
In light of the fact that this is a very different presentation from the pre -GASB 34 Statements, the
following graphic is provided for your review.
MD&A
BASIC
FINANCIAL
STATEMENTS
REQUIRED
SUPPLEMENTAL
INFORMATION
Management's Discussion & Analysis
(Required supplemental information)
Government -wide financial Fund Financial Statements
statements (new)(pages 12-14) (Refocused)(Pages 15-21)
Notes to the financial statements (Expanded/
Restructured)(Pages 22-44)
Required supplementary information
(Other than MD&A) (Expanded) (Pages 45-46)
ld
J
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.
D 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 Ion page 10. The fund financial statements provide
detailed information about the most significant fluids — 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.
R
J
1 Management's Discussion and Analysis
J
➢ Proprietary Funds — Services for which the Town charges customers a fee are generally reported
J 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
J type activities, but provides more detail and additional information, such as cash flows.
FINANCIAL ANALYSIS OF THE TOWN AS A WHOLE
Net Position
J
The Town's combined net position for the fiscal year ending 2014 is reported at $8,787,619. Net
position of the Town's governmental activities for the fiscal year ending 2014 is $6,134,799. The net
J position of our business -type activities is reported at $2,652,820 for the fiscal year ending 2014. Overall
J the financial position of the total primary government decreased $1,198,281 during the current fiscal
year. Net position for the governmental activities decreased $1,447,670 and net position for the
business -type activities increased $249,389.
Town of Gulf Stream
Net Position
September 30, 2013 and 2014
Governmental
Business -type
TOTAL
Activities
Activities
2013
2014
2013
2014
2013
2014
Current and Other Assets
$7,875,584
$6,603,432
$ 558,072
$ 839,270
$8,433,656
$7,442,702
Capital Assets
2,111,107
2.242,320
1.943.527
1,886.995
4,054,634
4,129.315
TOTAL ASSETS
9,986,691
8,845,752
2.501,599
2.726.265
12,488.290
11,572,017
Current and Other Liabilities
114,579
627,905
98,168
73,445
212,747
701,350
Long-term Liabilities
2279,768
2,076,483
2.279,768
2,076,483
TOTAL LIABILITIES
2,394,347
2,704,388
98,168
73,445
2,492,515
2,777,833
Deferred Inflows of Resources
9,875
6,565
9,875
6,565
Net Position:
Net Investment in Capital Assets
2,111,107
2,242,320
1,943,527
1,886,995
4,054,634
4,129,315
Restricted— Dredging Projects
17,820
17,820
17,820
17,820
Restricted— Underground Utilities
4,806,250
5,140,064
4,806,250
5,140,064
Restricted for transportation
10,582
10,582
Restricted—Repairs, replacements,
122,850
189,960
122,850
189,960
and improvements
Unrestricted
647.292
(1,275,987)
337,054
575,865
984.346
(700,122)
TOTAL NET POSITION
$7,582,469
$6,134,799
$2,403.431
$2,652,820
$9,985,900
$8,787,619
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 $1,447,670. The decrease in net
position was primarily due increased legal fees as well as fees associated with the bringing the
Town's facilities into ADA compliance.
➢ The increase in business -type net position was $249,389. The increase in net position was due
in part to the shift from utilizing contract services to in-house labor.
Town of Gulf Stream
Changes in Net Position
For the Fiscal Years Ended September 30, 2013 and 2014
Revenues
Program Revenues
Charges for Services
Operating & Capital Grants &
Contributions
General Revenues
Property Taxes
Communications Taxes
Gas Taxes
Utility Service Taxes
Franchise Fees
Unrestricted Investment
Earnings
Intergovernmental Revenues
Other
Total Revenues
Expenses
Governmental Activities
General Government
Police Department
Fire Protection
Streets
Sanitation
Physical Environment
Interest on Long -Tenn Debt
Business -Type Activities
Water
Total Expenses
Change in Net Position
Net Position - Beginning
Net Position - Ending
Governmental Activities
Business -type
Activities
Total
2013
2014
2013
2014
2013
2014
$ 324,536
$ 302,050
$ 944,686
$1,025,373
$1,269,222
$1,327,423
40,000
13,180
40,000
13,180
2,186,723
2,745,494
2,186,723
2,745,494
69,177
62,600
69,177
62,600
31,089
32,697
31,089
32,697
177,916
204,000
177,916
204,000
125,893
139,567
125,893
139,567
36,237
51,422
36,237
51,422
86,022
95,251
86,022
95,251
42,000
34,559
42,000
34,559
3,119,593
3,680,820
944,686
1,025,373
4,064.279
4,706,193
1,116,362
1,297,045
1,116,362
1,297,045
1,426,179
1,406,977
1,426,179
1,406,977
428,210
389,536
428,210
389,536
227,396
216,047
227,396
216,047
132,261
134,722
132,261
134,722
524,915
1,640,828
524,915
1,640,828
49,683
43,335
49,683
43,335
733,796
775,984
733,796
775,984
3,905,006
5,128,490
733,796
775,984
4,638,802
5,904,474
(785,413)
(1,447,670)
210,890
249,389
(574,523)
(1,198,281)
8367,882
7,582,469
2,192,541
2,403,541
10,560,423
9,986,010
$7,582,469
$6.134,799
$2,403,431
$2,652,930
$9,985,900
$8.787,729
W
Management's Discussion and Analysis
More than half the Town's revenue comes from Property Taxes. (Please see chart below.)
Utility Se
Gas Tax
1%
Communications Taxes
2%
H
Revenues — Governmental Revenues by Source
Intergovemmental
Revenues
3% Charges for Senrices
W Property Taxes V Communications Taxes
■ Gas Taxes m Utility service Taxes
■Franchise Fees ■ Investment Earnings
N Intergovernmental Revenues mother
E
tat
ions
tyTaxes
594
Management's Discussion and Analysis
The Town's expenses cover a range of services, with 27% related to public safety. (Please see chart
below.)
Expenses — Governmental Expenses by Function
Interest on Long -Term
Debt
1%
0
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 $849,366,
an increase of $71,173 from the previous fiscal year. The increase was due primarily to decreased
settlement costs. The general fund ended the 2014 fiscal year with $5,255 in non -spendable fund
balance, $28,402 in restricted fund balance, and $815,709 in unassigned fund balance.
Financial Analysis of the Proprietary Fund
Total net position of the water fund at the end of the fiscal year 2014 was $2,652,820. The net position
of the water fund has increased slightly from last year. Water rates were raised slightly by Town
Resolution 13-11.
General Fund Budgetary Highlights
Over the course of the year, The Town Commission revised the budget for expenditures four times by
resolution. These adjustments increased total expenditures by $285,524, with $241,840 of the increase
for legal costs. With these adjustments, actual expenditures were $268,368 less than the final budget
amounts. Revenues were $88,107 more than the final budget amounts.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end of fiscal year 2014, the Town had invested $4,129,315 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, 2013 and 2014
TOTALS
10
Governmental
Business -type
Activities
Activities
TOTAL
2013 2014
2013 2014
2013
2014
Land
$ 376,523 $ 376,523
$ $
$ 376,523
$ 376,523
Construction in Process
3,190
3,190
Buildings & Improvements
186,415 193,824
1,939,545 1,876,236
2,125,960
2,070,060
Equipment
100,799 212,062
3,982 10,759
104,781
222,821
Infrastructure
1,447,370 1,456,721
1,447,370
1,456,721
TOTALS
10
J
0R
Management's Discussion and Analysis
Long -Term Liabilities
As of September 30, 2014 the Town had $2,076,483 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, 2013 and 2014
J
Governmental Business -type
Activities Activities TOTAL
2013 2014 2013 2014 2013 2014
J
Promissory Note $2,187,516 $1,964,023 $ $ $2,187,516 $1,964,023
Compensated Absences 92.252 112.460 92,252 112.460
TOTALS 7G8 $Z f3 $ $ $2.ZZZ ZGf $2�Ib�83
1 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
For the 2015 fiscal year, general fund revenue projections are increased by the millage rate change.
J➢ The millage rate was increased to 3.9000 mills from 3.1000 mills, which is greater than the rolled -
back rate by 11.53%.
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, 2014
Assets
J
Cash and cash equivalents
Investments
J Equity in pooled investments
Accounts receivable
Assessments receivable
Inventories
Prepaid expenses
Restricted assets
Cash and cash equivalents
Equity in pooled investments
Accounts receivable
Capital assets
Non -depreciable
Depreciable (net of depreciation)
Total assets
Liabilities
_ Accounts payable
Accrued liabilities
Accrued interest payable
Payable from restricted assets
- Damage deposit bonds
Unearned revenue
Long-term debt
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
Govenunental Business -type
Activities Activities Total
S 1,155,254
S
$ 1,155,254
2,413,625
2,413,625
915,763
480,711
1,396,474
77,384
164,440
241,824
1,965,651
1,965,651
5,255
4,159
9,414
70,500
70,500
176,161
176,161
13,799
13,799
379,713
379,713
1,862,607
1,886,995
3,749,602
8,845,752
2,726,265
11,572,017
485,125
67,674
552,799
45,618
45,618
20,468
20,468
70,500
70,500
6,194
5,771
11,965
312,308
312,308
1,764,175
1,764,175
2,704,388
73,445
2,777,833
6,565
6,565
2,242,320
1,886,995
4,129,315
17,820
17,820
5,140,064
5,140,064
10,582
10,582
189,960
189,960
(1,275,987)
575,865
(700,122)
S 6,134,799
S 2,652,820
S 8,787,619
See notes to the financial statements.
12
249,389 249,389
$ 12,046 $ 1,134 (4,813,260) 249,389 (4,563,871)
General revenues
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared revenues
Unrestricted investment earnings
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning, as restated
Net position - ending
2,745,494
2,745,494
Net (Expense) Revenue and
Program Revenues
32,697
Changes in Net Position
Operating
Capital
Primary Government
' Grants and
Grants and
Governmental Business -type
Contributions
Contributions
activities activities Total
34,559
3,365,590
3,365,590
J $ 12,046
$
$ (1,132,712) $ $ (1,132,712)
9,985,900
1,134
(1,395,747) (1,395,747)
(389,536) (389,536)
(216,047) (216,047)
(891) (891)
(1,634,992) (1,634,992)
(43,335) (43,335)
12,046
1,134
(4,813,260) (4,813,260)
249,389 249,389
$ 12,046 $ 1,134 (4,813,260) 249,389 (4,563,871)
General revenues
Property taxes
Communications services taxes
Gas taxes
Utility service tax
Franchise taxes
Intergovernmental shared revenues
Unrestricted investment earnings
Miscellaneous revenues
Total general revenues
Change in net position
Net position - beginning, as restated
Net position - ending
2,745,494
2,745,494
62,600
62,600
32,697
32,697
204,000
204,000
139,567
139,567
95,251
95,251
51,422
51,422
34,559
34,559
3,365,590
3,365,590
(1,447,670) 249,389
(1,198,281)
7,582,469 2,403,431
9,985,900
$ 6,134,799 $ 2,652,820
$ 8,787,619
See notes to the financial statements.
14
TOWN OF GULF STREAM, FLORIDA
Balance Sheet - Governmental Funds
September 30, 2014
See notes to the financial statements.
15
Special
Total
General
Assessment
Governmental
Fund
Fund
Funds
Assets
Cash and cash equivalents
$
43,873
$
1,111,381
S 1,155,254
Investments
2,413,625
2,413,625
Equity in pooled investments
915,763
915,763
Accounts receivable
77,384
77,384
Assessments receivable
1,965,651
1,965,651
Inventories
5,255
5,255
Restricted assets
Cash and cash equilvalems
70,500
70,500
Total assets
S
1,112,775
$
5,490,657
S 6,603,432
Liabilities, deferred inflows of resources,
and fund equity
Liabilities
Accounts payable
S
134,532
$
350,593
S 485,125
Accrued liabilities
45,618
45,618
Unearned revenue
6,194
6,194
Payable from restricted assets
Deposit payable
70,500
70,500
Total liabilities
256,844
350,593
607,437
Deferred inflows of resources
Unearned revenue
6,565
6,565
Unavailable revenue
1,965,651
1,965,651
Total deferred inflows of resources
6,565
1,965,651
1,972,216
Fund equity
Nonspendable
Inventories
5,255
5,255
Restricted for
Dredging projects
17,820
17,820
Transportation
10,582
10,582
Underground utilities
3,174,413
3,174,413
Unassigned
815,709
815,709
Total fund equity
849,366
3,174,413
4,023,779
Total liabilities, defned inflows of resources,
and fund equity
$
1,112,775
$
5,490,657
S 6,607432
See notes to the financial statements.
15
1
J
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
September 30, 2014
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.
Unavailable revenue
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
Accrued interest payable
Compensated absences
Net position of governmental activities
See notes to the financial statements.
16
$ 4,023,779
$ 4,509,018
(2,266,698) 2,242,320
1,965,651
(1,964,023)
(20,468)
(112,460)
$ 6,134,799
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Funds
For the Year Ended September 30, 2014
Expenditures
Current
71,173
Special
Total
General and administrative
General
Assessment
Governmental
Police department
Fund
Fund
Funds
Revenues
389,536
$ 3,174,413
389,536
Taxes
$ 3,065,013
$
$ 3,065,013
Intergovernmental revenue
126,285
126,285
Licenses and permits
251,817
1,640,828
251,817
Charges for services
139,710
139,710
Fines and forfeits
10,096
10,096
Investment earnings
2,943
48,479
51,422
Special assessments
223,833
223,833
Miscellaneous
30,641
5,836
36,477
Total revenues
3,626,505
278,148
3,904,653
Expenditures
Current
71,173
(1,631,837)
(1,560,664)
General and administrative
1,229,014
(1,631,837)
1,229,014
Police department
1,353,004
4,806,250
1,353,004
Fire protection
389,536
$ 3,174,413
389,536
Streets
139,280
139,280
Sanitation
134,722
134,722
Physical environment
1,640,828
1,640,828
Capital outlay
309,776
309,776
Debt service
Principal
223,493
223,493
Interest
45,664
45,664
Total expenditures
3,555,332
1,909,985
5,465,317
Excess (deficiency) of revenues
over (under) expenditures
71,173
(1,631,837)
(1,560,664)
Net change in fund balance
71,173
(1,631,837)
(1,560,664)
Fund balance - beginning of the year
778,193
4,806,250
5,584,443
Fund balance - end of the year
$ 849,366
$ 3,174,413
$ 4,023,779
See notes to the financial statements.
17
TOWN OF GULF STREAM, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2014
Net change in fund balance of governmental funds
Amounts reported for governmental activities in the statement of
-, activities are different because:
J Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets
7 is depreciated over thein estimated useful life.
Expenditures for capital assets
i Less current year depreciation
Gains and losses on the disposal of fixed assets are not reported
in the governmental funds but are reported in the statement of
1 activities
Net book value of fixed asset disposals
Governmental funds include revenues collected within 60 days
of year end as deferred revenue. Government -wide reporting
J
recognizes revenues when they are earned, regardless of when
they are collected.
Special assessments
The repayment of the principal of long term debt consumes
financial resources of governmental funds, but it does not
have any effect on net position
Principal payments on debt
Some expenses reported in the statement of activities do not
require the use of current financial resources and therefore, are
not reported as expenditures of governmental funds.
Change in accrued interest payable
Change in long-term compensated absences
Change in net position of govenuncntal activities
See notes to the financial statements.
18
S 308,281
(171,864)
S (1,560,664)
136,417
(5,204)
(223,833)
223,493
2,329
(20,208)
S (1,447,670)
TOWN OF GULF STREAM, FLORIDA
Statement of Net Position
Proprietary Fund
September 30, 2014
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
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
$ 480,711
164,440
4,159
176,161
13,799
839,270
2,730,300
(843,305)
1,886,995
2,726,265
67,674
5,771
73,445
73,445
1,886,995
189,960
575,865
$ 2,652,820
TOWN OF GULF STREAM, FLORIDA
Statement of Revenues, Expenses, and Changes
in Fund Net Position
Proprietary Fund
For the Year Ended September 30, 2014
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
�.._a
$ 958,263
958,263
69,013
521,308
3,617
65,000
66,032
29,900
21,114
775,984
182,279
67,110
67,110
249,389
2,403,431
$ 2,652,820
See notes to the financial statements.
20
TOWN OF GULF STREAM, FLORIDA
Statement of Cash Flows - Proprietary Fund
For the Year Ended September 30, 2014
Cash flows from operating activities:
Receipts from customers
Payments to employees
Payments to suppliers
Internal activity - payments to other funds
Net cash provided by operating activities
Cash flows from capital financing activities:
Reserve fees received
Acquisition and construction of fixed assets
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:
Depreciation
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable
Prepaid expenses
Inventory
Increase (decrease)in:
Accounts payable
Deposits
Total adjustments
Net cash provided by operating activities
See notes to the financial statements.
21
Enterprise
Fund
$ 865,779
(69,013)
(490,602)
(94,900)
211,264
65,711
(9,500)
56,211
(267,475)
(267,475)
S
$ 182,279
66,032
(16,984)
1,163
3,497
50,777
(75,500)
28,985
$ 211,264
i TOWN OF GULF STREAM, FLORIDA
- Notes to the Financial Statements
September 30, 2014
J
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.
Renortinz Entity
The Town of Gulf Stream, Florida is a municipal corporation organized pursuant to Chapter 31276,
1955 Laws of Florida. The Town operates under the Commission/Mayor form of government. The
Town's major operations include general government, public safety, streets, sanitation, physical
environment, and water services.
As required by generally accepted accounting principles, these financial statements include the
Town (the primary government) and its component units. Component units are legally separate
entities for which the Town is financially accountable. The Town is financially accountable if
a) The Town appoints a voting majority of the organization's governing board and (1) the
Town is able to impose its will on the organization or (2) there is a potential for the
organization to provide specific financial benefits to or impose specific financial burdens on
the Town, or
b) the organization is fiscally dependent on the Town and (1) there is a potential for the
organization to provide specific financial benefits to the Town or (2) impose specific
financial burdens on the Town.
Organizations for which the Town is not financially accountable are also included when doing so is
necessary in order to prevent the Town's financial statements from being misleading.
Based upon application of the above criteria, management of the Town of Gulf Stream has
determined that no component units exist which would require inclusion in this report. Further, the
Town is not aware of any entity that would consider the Town to be a component unit.
`-N
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government -wide and Fund Financial Statements
The basic financial statements include both government -wide and fund financial statements. The
government -wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non -fiduciary activities of the primary government.
Governmental activities, which normally are supported by taxes and intergovernmental revenues,
are reported separately from business -type activities, which rely on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function are offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function
and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function. Taxes and other items not included among program
revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund
financial statements.
Measurement Focus. Basis ofAccountinz and Financial Statement Presentation
The 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, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Governmental Funds
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough afterwards to pay liabilities of the
current period. The Town considers revenues collected within 60 days of the year end to be
available to pay liabilities of the current period. Expenditures are generally recorded when a
liability is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures relating to compensated absences and claims and judgments are recorded only when
payment is due.
Fines and permit revenues are not susceptible to accrual because generally, they are not measurable
until received in cash. Property taxes, franchise taxes, licenses, interest revenue, intergovernmental
revenues, and charges for services associated with the current fiscal period are all considered to be
susceptible to accrual and have been recognized as revenues of the current fiscal period. All other
revenue items are considered to be measurable and available only when cash is received.
The Town reports the General Fund and The Special Assessment Fund as major governmental
funds. The General Fund is the general operating fund of the Town, and it is used to account for all
financial resources except those required to be accounted for in another fund. The Special
Assessment Fund is a special revenue fund used to account for financial resources relating to the
underground utility project.
Proprietary Funds
Proprietary Funds are used to account for operations (a) that are financed and operated in a
manner similar to private business enterprises where the intent of the governing body is that the
costs (expenses, including depreciation) of providing goods or services to the general public on a
continuing basis be financed or recovered primarily through user charges or (b) where the
governing body has decided that periodic determination of revenues earned, expenses incurred,
and net income is appropriate for capital maintenance, public policy, management control,
accountability, or other purposes. Proprietary funds distinguish operating revenues and expenses
from non-operating items. Operating revenues and expenses generally result from providing
services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. Operating expenses report on the costs to maintain the proprietary systems,
the cost of sales and services, administrative expenses and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues and
expenses.
hk!
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
J NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
R
Proprietary Funds (Continued)
The Town reports the Municipal Water Fund as a major proprietary fund. The Municipal Water
J Fund was established to account for the provision of water services to Town residents.
Cash and Cash Equivalents
Cash and cash equivalents include amounts on deposit in demand accounts. For the purposes of the
statement of cash flows, the Town considers amounts on deposit in demand accounts to be cash
equivalents.
1 Investments
J
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,
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, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capital Assets (Continued)
The change was made prospectively, and all capital assets placed into service prior to October 1,
2011 will remain capitalized. Such assets are recorded at cost or the fair market value of the
assets at the time of purchase or contribution. The Town is a Phase 3 government under
GASB 34 and has elected not to report major general infrastructure assets retroactively.
Depreciation has been provided over the useful lives using the straight line method. The
estimated useful lives are as follows:
Buildings
10-30 years
Equipment
3-15 years
Infrastructure
25-50 years
Water Infrastructure
40-50 years
Lnrventory
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
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J 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 unearned revenue is removed and revenue
is recognized.
Unavailable Revenue
The Town reports unavailable revenue on its governmental funds balance sheet for resource inflows
that do not qualify for recognition as revenue in a governmental fund because they are not yet
considered available. In subsequent periods when the resources are considered available the liability
for unavailable revenue is removed and revenue is recognized.
Deferred Outflows ofResources
A deferred outflow of resources is a consumption of net position that is applicable to a future
reporting period.
27
,
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
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.
Long -Term Liabilities
J
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 be maintained intact. The "not in spendable form"
criterion includes items that are not expected to be converted to cash, for
example, inventories and prepaid amounts. It also includes the long-term
amount of loans and notes receivable, as well as property acquired for resale.
However, if the use of the proceeds from the collection of those receivables
or from the sale of those properties is restricted, committed, or assigned,
then they should be included in the appropriate fund balance classification
(restricted, committed, or assigned), rather than the nonspendable fund
balance. The corpus (or principal) of a permanent fund is an example of an
amount that is legally or contractually required to be maintained intact.
2. Restricted fund balance — Includes amounts that are restricted to specific
purposes when constraints placed on the use of resources are either
(a) externally imposed by creditors (such as through debt covenants),
grantors, contributors, or laws or regulations of other governments, or
(b) imposed by law through constitutional provisions or enabling legislation.
PV
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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
i 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
,
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
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
1 assets.
I
2. Restricted net position — Consists of net position with constraints placed
on the use either by: (a) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or (b) law
through constitutional provisions of enabling legislation.
3. Unrestricted net position — All other net position that does not meet the
definition of "restricted" or "net investment in capital assets".
Budgetary Data
Formal budgetary integration is employed as a management control device during the year for the
General Fund and the Municipal Water Fund. Appropriations are legally controlled at the
department level. All budgets are legally enacted and are adopted on a basis consistent with
generally accepted accounting principles. Budgeted amounts are as originally adopted, or as
emended by appropriate action. The Special Assessment Special Revenue Fund is not budgeted
because it is not legally required to be budgeted.
Property Taxes
Under Florida law, the assessment of all properties and the collection of all county, municipal,
and school board property taxes are consolidated in the offices of the County Property Appraiser
and County Tax Collector. The laws of the State regulating tax assessment are also designed to
assure a consistent property valuation method statewide.
30
J
TOWN OF GULF STREAM, FLORIDA
J Notes to the Financial Statements
September 30, 2014
J 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 1 of each year, which is also
the lien date. Each assessment roll is submitted to the Executive Director of the State
Department of Revenue for review to determine if the rolls meet all the appropriate requirements
1 of state statutes.
I
' All taxes are due and payable on November 1 of each year or as soon thereafter as the assessment
roll is certified and delivered to the Tax Collector. All unpaid taxes become delinquent on April
1 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 I% in the month of February. The taxes paid in March are without discount.
Delinquent taxes on real property bear interest of 18% per year. On or prior, to June 1 following
the tax year, certificates are sold for all delinquent taxes on real property. After the sale, tax
certificates bear interest of 18% per year or any lower rate bid by the buyer. Application for a tax
deed on any unredeemed tax certificates may be made by the certificate holder after a period of
two years.
Delinquent taxes on personal property bear interest of 18% per year until the tax is satisfied
either by seizure and sale of the property or by the five year statute of limitations.
Use ofEstimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements, and revenue and expenses during the
period reported. These estimates include assessing the collectibility of accounts receivable, the use
and recoverability of inventory, and useful lives and impairment of tangible and intangible assets,
among others. Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary. Actual
results could differ from the estimates.
31
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
J NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
.1
Implementation of Governmental Accounting Standards Board Statements
The Town implemented the following Governmental Accounting Standards Board Statements
during the fiscal year ended September 30, 2014:
GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB 65
establishes accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported as assets
and liabilities. The cumulative effect of applying this statement is required to be reported as a
restatement of beginning net position. See Note 14.
J GASB Statement No. 66, Technical Corrections — 2012 — an amendment of GASB Statements
J No. 10 and No. 62. GASB 66 improves accounting and financial reporting for a governmental
i reporting entity by resolving conflicting guidance that resulted from the issuance of two
pronouncements, Statement No. 54, Fund Balance Reporting and Governmental Fund Type
' Definitions and Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre -November 30, 1989 FASB and AICPA Pronouncements.
Implementation of this standard had no significant impact on the Town's financial statements.
GASB issued Statement No. 67, Financial Reporting for Pension Plans — an amendment of
GASB Statement 25. GASB 67 improves financial reporting by state and local governmental
pension plans primarily through enhanced note disclosures and schedules of required
supplementary information. Implementation of this standard had no significant impact on the
Town's financial statements
Recently Issued Accounting Pronouncements
A brief description of new accounting pronouncements that might have a significant impact on
the Town's financial statements is presented below.
In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for
Pensions — an amendment of GASB Statement 27. GASB 68 improves financial reporting by state
and local governments for pensions. It also improves information provided by state and local
governmental employers about financial support for pensions that is provided by other entities.
This Statement results from a comprehensive review of the effectiveness of existing standards of
accounting and financial reporting for pensions with regard to providing decision -useful
information, supporting assessments of accountability and inter -period equity, and creating
additional transparency. This Statement is effective for the fiscal year ending September 30,
2015.
32
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements (Continued)
In November 2013, the GASB issued Statement No. 71, Pension Transition for Contributions
] Made Subsequent to the Measurement Date — an amendment of GASB Statement No. 68. This
Statement amends paragraph 137 of GASB 68 to require that, at transition, a government
recognize a beginning deferred outflow of resources for its pension contributions, if any, made
subsequent to the measurement date of the beginning net pension liability. The provisions of this
Statement are required to be applied simultaneously with the provisions of GASB 68.
Management is currently evaluating the impact of the adoption of these statements on the Town's
financial statements.
NOTE 2 — DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2014, the carrying amount of the Town's deposits was $5,209,178 and the
bank balances totaled $5,207,502. 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 $3,463,597. The
certificates of deposit and money market accounts are reported as investments in the balance sheet.
As of September 30, 2014, the Town held the following certificates of deposit:
Days to Maturity Fair Value
205 $255,875
298 264,152
2 2
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.
33
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 2 —DEPOSITS AND INVESTMENTS (Continued)
Investments
Florida statutes authorize the Town to invest in the Local Government Surplus Funds Trust Fund
administered by the State Treasurer, negotiable direct obligations of or obligations unconditionally
guaranteed by the U.S. Government, interest-bearing time deposits in financial institutions located
in Florida and organized under Federal or Florida laws, obligations of the Federal Farm Credit
Banks, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank or its district
banks, or obligations guaranteed by the Government National Mortgage Association, and
obligations of the Federal National Mortgage Association.
J
The State Board of Administration is part of the Local Governments Surplus Funds Trust Fund
1 and is governed by Chapter 19-7 of the Florida Administrative Code. These rules provide
J guidance and establish the general operating procedures for the administration of the Local
Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor General
i performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the board has adopted operating
procedures consistent with the requirements for a 2a-7 fund.
On December 4, 2007, based on recommendations from an outside financial advisor, the State
Board of Administration restructured the Pool into two separate pools. Pool A, (Local
Government Surplus Funds Trust Fund Investment Pool) consisted of all money market.
appropriate assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted
on a payment, paid more slowly than expected, and/or had any significant credit and liquidity
risk. At the time of the restructuring, all current pool participants had their existing balances
proportionately allocated into Pool A and Pool B.
On August 3, 2009, the SBA announced "Florida PRIME" as the highly enhanced version of the
SBA's prior Local Government Investment Pool. Pool A is now referred to as Florida PRIME
and Pool B is referred to as Fund B. During the fiscal year ended September 30, 2014, the
remaining principle balances in Fund B were distributed to each Fund B participant, and the
Fund was closed.
At September 30, 2014, 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. Fund B is not considered a SEC 20 -like
fund and is not rated by any nationally recognized rating agency.
34
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 2 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2013, was 39
J 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.
J
Additional information regarding the Local Government Surplus Funds Trust Fund may be
obtained from the State Board of Administration.
J
As of September 30, 2014, the Town held the following investments:
J
Weighted
Average Fair
Maturity Value
State Board of Administration Investment Pool
Florida PRIME 39 days 2 �3
i The investments in the State Board of Administration Pool are reported as investments in the
balance sheet.
i Credit Risk
Credit risk is the risk that an issuer or other counter party to an investment will not fulfill their
obligations. The Town's investment policies limit its investments to high quality investments to
control credit risk. At September 30, 2013, Florida PRIME was rated "AAA(m) by Standard and
Poor's Ratings Services. Fund B is not rated by any nationally recognized rating agency.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. The Town does not have a formal investment policy that limits investment maturities
as a means of managing exposure to fair value losses arising from increasing interest rates.
35
J
J
J
J
J
l
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 3 — RECEIVABLES
As of September 30, 2014, the Town's receivables for the individual major funds, including
applicable allowances for uncollectible accounts, are as follows:
Taxes
Accounts - unbilled
Accounts - billed
Due from other governments
Special assessments
Subtotal
Allowance for uncollectibles
Net receivables
NOTE 4 — CAPITAL ASSETS
General
Fund
Special
Assessment
Fund
$ 32,331
$
22,572
196,650
8,811
19,562
13,670
13,670
1,965,651
77,384
1,965,651
W / /,✓vT W a,iv✓,v
Water
Fund
Total
$
$ 32,331
174,078
196,650
10,751
19,562
Additions Deletions
13,670
1,965,651
184,829
2,227,864
(6,590)
(6,590)
'$178,239
$ 2,221,274
Capital asset activity for the year ended September 30, 2014, was as follows:
Beginning
Ending
Business -Type Activities
Balance
Additions Deletions
Balance
J Assets being depreciated
Water system improvements
$2,658,922
$ $
$2,658,922
Equipment
61,878
9,500
71,378
Total at historical cost
2,720,800
9,500
2,730,300
Accumulated depreciation
' Water system improvements
719,377
63,309
782,686
Equipment
57,896
2,723
60,619
Total accumulated depreciation
777,273
66,032
843,305
Business -type activities, net
$1,943,527
$(56,532) $
$1,886,995
01
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial
Statements
September 30,
2014
NOTE 4 - CAPITAL ASSETS (Continued)
Beginning
Ending
Governmental Activities
Balance
Additions
Deletions
Balance
J
Assets not being depreciated
Land
$ 376,523
$
$
$376,523
Construction in progress
3,190
3,190
Total not being depreciated
376,523
3,190
379,713
Assets being depreciated
Buildings
856,995
35,710
892,705
Equipment
481,072
171,036
(66,362)
585,746
Infrastructure
2,552,509
98,345
2,650,854
Total being depreciated
3,890,576
305,091
(66,362)
4,129,305
Total at historical cost
4,267,099
308,281
(66,362)
4,509,018
Accumulated depreciation
Buildings
670,580
28,301
698,881
Equipment
380,273
54,569
(61,158)
373,684
Infrastructure
1,105,139
88,994
1,194,133
Total accumulated depreciation
2,155,992
171,864
(61,158)
2,266,698
Governmental activities, net
$2,111,107
$136,417
$ 5,204
$2,242,320
Depreciation expense was charged to
functions and
programs of the primary government as
follows:
' Governmental activities:
General government
$ 56,469
Police department
37,429
Streets
77,966
I
Total governmental activities
$ 171,864
Business -type activities:
Municipal water
$ 66,032
37
J
-I, TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
J
NOTE 5 — LONG-TERM LIABILITIES
Governmental Activities
On September 6, 2012, the Town issued its Promissory Note, Undergrounding Project in the
principal amount of $2,427,895 to provide funds for the project of undergrounding the electric,
cable television, and telephone utility facilities serving the municipality. Such debt shall not be a
general obligation of the Town. The Town covenants that, so long as the Note shall remain unpaid
or any other amounts are owed by the Town under the Note, it will appropriate in its annual budget,
by amendment, if required, from pledged funds and available non ad valorem revenues, amounts
sufficient to pay principal and interest on the Note as they become due. The covenant to budget and
appropriate does not create a lien upon or pledge of the available non ad valorem revenues. Pledged
funds consist of amounts on deposit in the note proceeds fund and the payment fund and special
assessments.
Principal and interest payments on the Note are due in annual installments commencing on April 1,
2013 and on each April 1 thereafter until final maturity on April 1, 2022. The Note bears interest at
the rate of 2.09%. At September 30, 2014, principal and interest to maturity on April 1, 2022 to be
paid from pledged funds totaled $2,153,190. Principal and interest paid for the current fiscal year
was $269,157 and pledged special assessments were $223,833.
Annual debt service requirements to maturity are as follows:
Year Ended
September 30
Principal
Interest
Payment
2015
$ 228,109
$ 41,048
$ 269,157
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
2020-2022
774,798
32,607
807,405
$ 1,964,023
$ 189,167
$ 2,153,190
f R!
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
J NOTE 5 — LONG-TERM LUBILITIES (Continued)
Changes in Long -Term Liabilities
Beginning
Ending
Due Within
Governmental Activities Balance Additions Deletions
Balance
One Year
Promissory Note $2,187,516 $ $223,493
$1,964,023
$228,109
Compensated absences 92,252 74,837 54,629
112,460
84,199
J Total Governmental Activities $2,279,768 $ 74,837 $278,122
$2,076,483
$312,308
Compensated absences are liquidated by the General Fund.
J
Interest Expense
The total interest cost incurred on all Town debt for the year ended September 30, 2014, was
$43,334 and total interest paid during the year was $45,664. 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. The Town's total payroll for the fiscal year ended September 30, 2014,
was $1,294,054, with covered payroll of $1,205,120. The Town's required and actual contribution
for the year was $252,111 equaling 20.92% of covered payroll. The employees' contribution for the
year was $96,409 equaling 8.0% of covered payroll. The investments are held in various mutual
funds and employees can direct employer and employee contributions made on their behalf.
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.
39
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
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 Govemmental 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.
M
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 9 — INTERLOCAL AGREEMENTS
Interlocal Fire and EMS Service Agreement with the City of Delray Beach
On July 14, 2009, the Town entered into an agreement with the City of Delray Beach whereby the
City will provide the Town with fire and emergency medical services. The term of the agreement is
for 10 years beginning on October 1, 2009, and extending through September 30, 2019. On 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, 2014. The annual service fees for future years will be the current year fee of $389,536 adjusted
annually based on the "All Urban Customers — United States April Consumer Price Index" or an
increase of five percent (5.0%), whichever is greater. The annual service for the fiscal year ending
September 30, 2015 will be $409,013
Interlocal Dispatch Service Agreement with the City ofDelray Beach
On October 1, 2012, the Town entered into a new agreement with the City of Delray Beach for
dispatch services. The agreement shall automatically renew for five one year renewals unless either
party notifies the other in writing of their intent not to renew at least 90 days prior to the start of the
renewal term. The agreement shall terminate on September 30, 2017. The 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, 2014, the Town paid
$54,610 pursuant to the agreement.
Interlocal Water Purchase Agreement with the City of Delray Beach
In June 1998, the Town entered into an agreement with the City of Delray Beach for the purchase of
treated, potable water. The term of the agreement is for a period of twenty-five years. Under the
terms of the agreement, the Town is to pay the City the prevailing water rate charged by the City to
non-residential users plus a surcharge of 25%. For the year ended September 20, 2014, the Town
paid $521,308 pursuant to the agreement.
41
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
NOTE 10 — COMMITMENTS
Solid Waste and Recycling Collection Franchise Agreement
On September 13, 2013, the Town amended the solid waste and recycling collection franchise
agreement with Waste Management Inc. of Florida (WMI). The amendment extended the term of
the agreement until September 30, 2018, and eliminated the fuel surcharge provision. Under the
terms of the agreement, the Town informs WMI of the total number of residential and multi -family
units that have a Certificate of Occupancy each year on September 1. WMI bills all multi -family
units that are serviced by a container. The monthly charges for the remainder of the units that are
serviced by means other than by containers are paid by the Town.
WMI bills the Town monthly for these services at the then current rate as adjusted from time to
time by the terms and conditions of the agreement. For the year ended September 30, 2014, the
Town made payments of $134,722 pursuant to the agreement.
Construction Commitments
Amount Balance to
$1,797,561 $1,593,005 $ 204,556
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, 2012 and 2014. During the fiscal year ended
September 30, 2013, settlements exceeded insurance coverage by $180,000.
42
Authorized
Completed
Complete
Project
Amount
at 09/30/14
at 09/30/14
Undergrounding— Phase I
$1,389,355
$1,360,684
$ 28,671
Project Management and
Engineering Support
408,206
232,321
175,885
$1,797,561 $1,593,005 $ 204,556
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, 2012 and 2014. During the fiscal year ended
September 30, 2013, settlements exceeded insurance coverage by $180,000.
42
TOWN OF GULF STREAM, FLORIDA
Notes to the Financial Statements
September 30, 2014
J
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.
J
NOTE 12 — OPERATING LEASE
j 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, 2014, 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:
Minimum
Year Ended Lease
September 30 Payments
2015
$ 6,012
2016
6,012
2017
6,012
2018
4,509
$22,545
43
RE
J
_1 TOWN OF GULF STREAM, FLORIDA
J Notes to the Financial Statements
September 30, 2014
NOTE 13 — SPECIAL ASSESSMENT
On June 30, 2011, the Town adopted Resolution 011-11 levying non -ad valorem special
assessments on properties specially benefitted by a capital improvement project to place
underground the overhead electric, cable television, and telephone utility facilities that. serve a
portion of the Town and its inhabitants. The special assessments were calculated using a
methodology that fairly and reasonably apportions the cost of the project among the benefitted
parcels in proportion to the benefits to such parcels. The calculation methodology used an
equivalent benefit unit assigned for three categories: (1) improved safety (2) improved reliability
and (3) improved aesthetics.
Property owners were given the option to pay the entire amount of the assessment in advance of the
Town obtaining financing for the project. The special assessments are subject to prepayment only
on or before November 1, 2011. Assessments that are not prepaid shall be payable in not less than
J 10 and not more than 20 yearly installments. The special assessments shall bear interest not
exceeding 10% per annum over the term of the financing obtained by the Town and will include
annual costs related to administration and collection not to exceed 5%. The total assessable cost
was $5,518,144, and the Town received prepayments in the amount of $2,885,049. See Note 5 for a
i discussion of the related financing for the project.
NOTE 14 — CHANGE IN ACCOUNTING PRINCIPLE
As discussed in Note 1, the Town implemented GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities during the current fiscal year. The cumulative effect of
applying GASB 65 has been reported as a restatement of the beginning net position of the
governmental activities on the entity -wide financial statements. A reconciliation of the prior
period ending net position to the current period beginning net position is as follows.
Balance at September 30, 2013, as reported
Adjustment to write-off loan issue costs
Balance at September 30, 2013, as restated
:L!
$ 7,603,961
(21,492)
$ 7,582,469
`
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, 2014
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Taxes
Ad valorem taxes
$ 2,743,575 $
2,743,575
$ 2,745,494
$ 1,919
Local option fuel taxes
31,456
31,456
32,697
1,241
Utility service taxes
168,500
168,500
204,000
35,500
Communications services taxes
66,597
66,597
62,600
(3,997)
Local business tax
20,000
20,000
20,222
222
Total taxes
3,030,128
3,030,128
3,065,013
34,885
Licenses and permits
Building permits
90,000
90,000
112,250
22,250
Franchise fees
133,000
133,000
139,567
6,567
Total licenses and permits
223,000
223,000
251,817
28,817
Intergovernmental revenue
State revenue sharing proceeds
86,270
86,270
89,447
3,177
Shared revenue from other local units 7,000
7,000
5,804
(1,196)
Payment in lieu of taxes
29,900
29,900
29,900
Grants
1,134
1,134
Total intergovernmental revenue
123,170
123,170
126,285
3,115
Charges for services
Solid waste collection fees
140,000
140,000
133,831
(6,169)
Other
15,000
15,000
5,879
(9,121)
Total charges for services
155,000
155,000
139,710
(15,290)
Judgments, fines and forfeits
Judgments and fines
1,100
1,100
1,546
446
Violation of local ordinances
8,550
8,550
Total judgments, fines, and forfeits
1,100
1,100
10,096
8,996
Investment earnings
6,000
6,000
2,943
(3,057)
Miscellaneous revenues
Contributions
12,046
12,046
Other
18,595
18,595
Total miscellaneous revneues
30,641
30,641
Total revenues
3,538,398
3,538,398
3,626,505
88,107
Expenditures
General and administrative
904,833
1,396,483
1,378,113
18,370
Police
1,448,500
1,477,152
1,412,146
65,006
Fire
390,537
390,537
389,536
1,001
Streets
491,528
256,528
240,815
15,713
Sanitation
141,000
141,000
134,722
6,278
Contingency
162,000
162,000
162,000
Total expenditures
3,538,398
3,823,700
3,555,332
268,368
Excess (deficiency) of revenues
over(under)expenditures
$ $
(285.302)
71,173
$ 356,475
Fund balance, beginning of year
778,193
Fund balance, end of year
$ 849,366
45
J
TOWN OF GULF STREAM, FLORIDA
Notes to the Budgetary
Required Supplemental Information (RSI)
General Fund
September 30, 2014
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.
J A budgetary comparison schedule is presented for the General Fund. The procedures for establishing
budgetary data reflected in the budgetary comparison schedule are as follows:
1. Prior to August lst, the Town Manager submits to the Town Commission a proposed operating
1 budget for the fiscal year commencing the next October 1st. The operating budget includes
J 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.
J 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.
1
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, 2014, no departments had an
excess of expenditures over appropriations.
M
NH NOWLEN, HOLT & MINER, P.A.
&M CERTIFIED PUBLIC ACCOUNTANTS EVERETTS. NOWLEN 1189618&1). CPA
EDWARD T HOLT. CPA
WI WAM B. MINER, RETIRED, CPA
WEST PALM BEACH OFFICE ROBERT W. HENDRIX. JR., CPA
NORTHBRIDGE CENTRE JANET R. SARICEVICH. CPA
CPA
515 N. FLAGLER TERRY L. MORTON, JR., DRIVE. SUITE 1700 N. RONALD SENNETT. CVA, ABV, CFF, CPA
POST OFFICE BOX 347 ALEXIA O. VARGA, CFE. CPA
WEST PALM BEACH. FLORIDA 33402-0347 EDWARD HOLT, JR., PFS, CPA
TELEPHONE (561) 659-3050 BRIAN J. BRESCIA. CFP, CPA
FAX (361) 835-0629
W W W.NHMCPA.COM
KATHLEEN A. MINER. CPA
KARA D. PETERSON. CFE, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE. CFP, CPA
TIMOTHY H. SCHMEDES, CFP, CPA
WEI PAN, CPA
PHIWP C. MWLLISTER. CPA
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
ICE
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND 8333 S.E.2nd
PST OFFICE BOX 338
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL BELLE GLADE, FLORIDA 3430.0338
STATEMENTS PERFORMED IN ACCORDANCE WITH TELEPHONE (661) 996-5612
FAX (561) 996-6248
GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business -type activities, and each major fund of the
Town of Gulf Stream, Florida, as of and for the year ended September 30, 2014, 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 29, 2015. 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.
47
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. Given these limitations,
we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Gulf Stream, Florida's
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
West Palm Beach, Florida
June 29, 2015
48
%7M _4-x.-rQ.
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGE CENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402.0317
TELEPHONE (561) 659.3060
FAX (561) 835-0628
W W WNHMCPAZOM
MANAGEMENT LETTER IN ACCORDANCE WITH
THE RULES OF THE AUDITOR GENERAL
OF THE STATE OF FLORIDA
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
Report on the Financial Statements
EVERM S. NOWLEN HB30.1B41), CPA
EDWARD T HOLT, CPA
WILLIAM S. MINER, RETIRED, CPA
ROBERT W. HENDRIX, JR., CPA
JANET R. BARICEVICH, CPA
TERRY L MORI@L JR., CPA
N. RONALD BENNET,, CVA, ABV, CFR CPA
AIEXIA G. VARGA. CFE, CPA
EDWARD T HOLT, JR., PFS, CPA
BRIAN J. BRESCIA, CFP, CPA
KATHLEEN A. MINER, CPA
KARA O. PETERSON, CFE. CPA
MARK J. SYMASTER, CFE, CPA
RYAN M. SHORE, CFP, CPA
TIMOTHY H. 6CHMEDES, CFP, CPA
WEI PAN, CPA
PHI WP C. Mc4W STER, CPA
BELL aU ADVICE
333 S.E. 2nD STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430.0338
TELEPHONE (561) 986-5612
FAX (561) 996.6248
We have audited the financial statements of the Town of Gulf Stream, Florida, as of and for the
fiscal year ended September 30, 2014, and have issued our report thereon dated June 29, 2015.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
49
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
i
compliance requirements in accordance with Chapter 10.5550, Rules of the Auditor General.
Disclosures in those reports, which are dated June xx, 2015, should be considered in conjunction
with this Management Letter.
J
Prior Audit Findings
Section 10.554(1)(i)1., Rules of the Auditor General, requires that we deternvne 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., Rules of the Auditor General, requires 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., Rules of the Auditor General, requires 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, 2014, 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, 2014. In connection with our audit, we determined
that the two reports were in agreement.
50
JSpecial 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
21839(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
did not have any such recommendations.
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, 2014, and was not required to have a federal single
audit or a state single audit.
Response to Management Letter
There were no items that required a response by management.
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 29, 2015
51
NH
&M
NOWLEN, HOLT & MINER, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
WEST PALM BEACH OFFICE
NORTHBRIDGECENTRE
515 N. FLAGLER DRIVE, SUITE 1700
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX(561)835-0628
W W W.NHMCPA.COM
INDEPENDENT ACCOUNTANT'S REPORT
ON COMPLIANCE WITH SECTION 218.415,
FLORIDA STATUTES
The Honorable Mayor and Members of the Town Commission
Town of Gulf Stream, Florida
EVERETT B. NCWLEN(19B IBHI, CPA
EDWARD T. HOLT, CPA
WILLIAM B. MINER, RETIRED, CPA
MEEK W. HENDRIX, JR., CPA
JANET R. BARICEVICH, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT, CVA, ABV, CFF. CPA
ALEXIA O. VARGA, CFE, CPA
EDWARD T. HOLT, JR., PFS, CPA
SHIM J. BRESCIA, CFP, CPA
KATHLEEN A. MINER, CPA
KARA D. PETERSON. CFE, CPA
MARK J. BYMASTER, CFE, CPA
RYAN M. SHORE, CFP, CPA
TMMY H. SCHMEDES, CFP, CPA
WEI PAN, CPA
PHIWP C. MrA UMR CPA
BELErUEAI5ffZMICE
333 S.E. 2nD STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430.0338
TELEPHONE (561) 896-6612
FAX (561) 996-6248
We have examined the Town of Gulf Stream, Florida's compliance with Section 218.415, Florida
Statutes during the year ended September 30, 2014. 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, 2014.
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 29, 2015
_ S
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • CPAMERICA INTERNATIONAL
I
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