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2002 CAFR ' ; ` .cp t~' -- ~ , ~ ~N The Village of North Palm Beach Florida ,?;rE Y --- - ,y~,~_ - - ---~ y, a at i 4 A t~~ i i. cif ~ ~ 1. :1~~~i.4i; :1.399+ -- ` COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2002 The Village of North Palm Beach Florida y. t~.s, 1. _ :.t., . ~..- _ Y. ~ s. } j/ S COMPREHENSIVE ANNUAL FINANCIAL REPORT September 30, 2002 Prepared by: Finance Department Shaukat Khan Director of Finance TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal vli List of Principal Village Officials xm Organization Chart xiv GFOA Certificate of Achievement for Excellence in Financial Reporting xv FINANCIAL SECTION Report of Independent Certified Public Accountants 3 Management's Discussion and Analysis 5 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Assets .................................................................................................:.................:.............15 Statement of Activities ..................................................................................................................................16 Fund Financial Statements: Balance Sheet -Governmental Funds ...........................................................................................................18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ..................................................................................................................19 Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities ..............................................................................................................................21 ' Statement of Fund Net Assets -Proprietary Fund 22 Statement of Revenues, Expenses, and Changes in Fund Net Assets -Proprietary Fund 23 Statement of Cash Flows -Proprietary Fund 24 Statement of Fiduciary Net Assets -Fiduciary Funds 25 Statement of Changes in Fiduciary Net Assets -Fiduciary Funds 26 Notes to Basic Financial Statements 27 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule -General Fund 49 Schedule of Funding Progress -General Employees Retirement Fund 70 Schedule of Employer and State Contributions 71 Notes to Required Supplementary Information 72 COMBINING INDIVIDUAL FUND AND ACCOUNT GROUP STATEMENTS Combining Statements: Combining Statement of Net Assets 78 Combining Statement of Changes in Net Assets 81 Combining Statement of Changes in Assets and Liabilities -Agency Funds 82 Capital Assets Used in the Operation of Governmental Funds: Comparative Schedules by Source 85 Schedule by Function and Activity 86 Schedule of Changes by Function and Activity .............................................................................................88 Contents iii 1 I T14~LE ®F C®R1TEN1~~ (C®?ttJr~ued) ~ STATISTICAL SECTION Government-wide Information: Table I Government-wide Expenses by Function 94 Table II Government-wide Revenues 96 Fund Information: Table III General Governmental Expenditures by Function ~ 00 Table IV General Governmental Revenues by Source Table V Property Tax Levies and Collections ...........................................................................................102 Table VI Assessed Value of Taxable Property ...........................................................................................103 Table VII Property Tax Rates -Direct and Overlapping Governments ......................................................104 Table VIII Computation of Direct and Overlapping Bonded Debt -General Obligation Bonds ......................................................................................................................105 Table IX Computation of Legal Debt Margin ............................................................................................107 Table X Debt Related Statistics -Schedule of Revenue Bond Coverage - General and Enterprise Funds ....................................................................................................108 Table XI Property Value, Construction, and Bank Deposits .....................................................................110 Table XII Principal Taxpayers .....................................................................................................................111 Table XIII Miscellaneous Statistics ...............................................................................................................112 1 REQUIRED REPORTS 1 Report of Independent Certified Public Accountants on Compliance and on 1 Internal Control Over Financial Reporting Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Standards ..................................115 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida .117 Iv Contents N~Y.7L~~S ~i2Y6~.d,~fYCbC?a1f.b~ib I. l) IJ (J l l~ t~ l i I _f THE VII.,LAGE OF ~~c~° North Palm Beach ~~~'a'u~•~w4 Department of Finance Village Hall • 501 U.S. Highway 1 • North Palm Beach, FL 33408 • (561) 841-3360 • Fax (561) 881-7469 February 6, 2003 The Honorable Mayor and Members of the Village Council Village of North Palm Beach North Palm Beach, Florida The Finance Department and Village Manager's. Office are pleased to submit the Comprehensive Annual Finan- cial Report for the Village of North Palm Beach, Florida for the fiscal-year ended September 30, 2002. This report is published to provide the Village Council, Village staff, our citizens, our bondholders, and other interested parties with detailed information concerning the financial condition and activities of the Village gov- ernment. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Village. To the best of our knowledge and belief the enclosed data is accurate in all material respects, and is organized in a manner designed to fairly present the financial position and results of operations of the Village as measured by the financial activity of its various funds. We also believe that all disclosures necessary to enable the reader to gain the maximum understanding of the Village's financial affairs have been included. THE REPORT This report is presented in three sections: Introductory, Financial and Statistical. The introductory section in- cludes this transmittal letter, a listing of the Village Officials, and an organizational chart of the Village. The financial section includes Management's Discussion. and Analysis (MD&A), basic financial statements, required supplementary information, and combining and individual fund statements and schedules, as well as the inde- pendent auditors' report on the basic financial statements. The MD&A is a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The Village of North Palm Beach's MD&A can be found immediately following the report of the independent auditors. The statistical section includes financial and demographic information, usually presented on a multi-year basis, that is relevant to a financial statement reader. The financial section described above is prepared in accordance with generally accepted accounting principles for governments as prescribed by the Governmental Accounting Standards Board (GASB) and other profes- sional associations, as applicable. VILLAGE PROFILE The Village The Village of North Palm Beach is primarily a residential community, having been incorporated as a political subdivision of the State of Florida in 1956. The registered population the Village is approximately 12,000, Introductory Section vii a which increases to approximately 18,000 during the winter months by residents who list their northern homes as their official place of residence. Residents are generally in the middle to upper income brackets. Located in the northeastern quadrant of Palm Beach County, Florida, the Village has an unusual amount of wa- terfront property created by a number of lakes, canals, and the Atlantic Ocean. The governing body of the Village consists of a five member Village Council, each of whom is elected for two- ( . year overlapping terms. Day to day affairs of the Village are under the leadership of a Village Manager who is appointed by the Council. FINANCIAL DATA Financial Reporting System and Budgetary Controls ~i The Village's financial records for its general governmental operations are maintained on the modified accrual basis, which means that revenues are recorded when available and measurable, and expenditures are reported when goods and services are received and the related liabilities are incurred. ~ li The financial records for its Enterprise Fund (i.e., the Country Club operation) are maintained on the full accrual l i basis of accounting similar to that followed by commercial enterprises. In developing and evaluating the Village's financial and accounting system, consideration is given to the ade- quacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (a) the safeguarding of assets against loss from unauthorized use or disposition, ~ and (b) the reliability of financial records for preparing financial statements and maintaining accountability for I assets. The concept of reasonable assurance recognizes that: (a) the cost of a control should not exceed the 1 benefits likely to be derived; and (b) the evaluation of costs and benefits requires estimates and judgments by J management. All internal control evaluations occur within the above framework. We believe that the Village's internal ac- counting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Budgetary control is maintained at the subfunction level by the encumbrance of estimated purchase amounts prior to the release of purchase orders to vendors. Purchase orders, which result in an overrun of subfunction balances, are not released until additional appropriations are made available. Open encumbrances are reported as reservations of fund balance at September 30, 2002. ECONOMIC OUTLOOK i Property Values Last year we reported, based on an analysis by this staff, that property values over the last ten years have in- creased generally from twenty to thirty million dollars per year up until two years ago. In the previous two Iii years, property values have increased almost one hundred million dollars in each year. It appears that this year ~ i~ will be no exception. We expect property values in the Village to increase approximately one hundred million dollars. This is a result of Prosperity Harbor, the large WCI project located on Prosperity Farms Road, coming 1 to completion (build out), as is Harbor Isles, located further north on Prosperity Farms Road. These two pro- ) jects, in addition to rebuilds throughout the Village and the upgrade of the Shoppes of Northlake (the old Twin ~ City Mall site) being done by Sabatello Construction, should contribute to the one hundred million dollar in- crease in property values. Improvements to Prosperity Farms Road should help the values of the homes located viii Introductory section directly on Prosperity Farms Road and, to a certain extent, improve the values of those homes within a block off of Prosperity Farms Road. Annexation The Village annexation committee completed its study titled "Annexation Area Study, Lost Tree, Hidden Key, and Portage Landing", prepared by Land Research Management, Inc., dated June 2002. That study has vali- dated the statutory requirement of meeting the 70/30% ratio required in residential annexations. The study and the financial report,. which is in the process of being completed, provide preliminary indications that it is eco- nomically feasible to annex those properties into the Village of North Palm Beach. The Village would realize a sizable reduction in the millage rate as the higher values are added to the Village's property value base. Once the financial analysis and the consultant's report are completed, the committee will be prepared to submit its recommendation to the Village Council, with the expectations that the Village will go forward with an annexa- tion referendum within the next twelve to eighteen months. INITIATIVES AND FUTURE PROJECTS Country Club The Country Club's Clubhouse redevelopment/renovation project is for all practical purposes completed. Over the past. year the Village has been doing some cosmetic work on the exterior of the Clubhouse building. At the _ time of this writing, new awnings have been. installed, an ice machine has been purchased and installed, and new marble/granite tee signs have been purchased and installed at various holes. The Country Club has turned the corner financially and has found itself in the black this year, with small positive retained earnings. Some major improvements to the golf course have been placed on hold until the Village gets through a better part of the sea- son to generate a more positive cash flow from the operation. A strategic plan is currently in the process of be- ing developed that will provide the Country Club Advisory Board and the Village Council with some guidance and direction on how to develop and redevelop the golf course and the Country Club properties over the next few years. Promenade Shoppes of Northlake The Promenade Shoppes of Northlake continue to progress in a very positive fashion. The latest addition is a Wendy's Hamburger restaurant located on one of the Northlake Boulevard out parcels. Carl Sabatello of Sa- batello Construction Company is redeveloping the old Builders Square and Hyde Park grocery store. The Sa- batello redevelopment project will be a major improvement to the Old Twin City Mall property. As of this writ- ing, there has been no revealing as to what tenants will be using the new property for. Northlake Boulevard Corridor Task Force The Northlake Boulevard Task Force is currently in the process of entering the construction phase to make im- provements on the rights-of--way of the Northlake Boulevard Corridor. Based on the conceptual design provided by the consultant, there will be extensive upgrades in the landscaping, irrigation, brick paved cross walks, light- ing, etc. in the portion from U.S. Highway 1 to the C-17 Canal. Village Hall Renovation The Village Hall renovation is approximately 90% complete. The move in date for employees to go back into the Village Hall is February 24, 2003. New furniture for the facility will arrive on February 10, 2003, and there will be a ribbon cutting to the new building on February 18, 2003. The overall project is coming in at approxi- mately $1.45 million. All of the administrative offices, including the Village Manager, Finance Department, Village Clerks Office, and Information Technology Department, along with a new Council Chamber, will be Introductory Section ix housed in the new Village Hall building. 1l~Iaster Recreation Plan -Anchorage Park The Village Council has developed a conceptual capital improvement plan wherein they have dedicated $3 mil- lion toward the improvement of Anchorage Park. These improvements will be predicated on the Anchorage Park Master Recreation Plan. The Village will still have to deal with the disposition of the old Anchorage Park sewage plant previously owned by Seacoast Utility Authority. U.S. Highway 1 Corridor Study The Florida Department of Transportation is currently in the process of starting a major redevelopment of the U.S. Highway 1 corridor running through North Palm Beach. The study has been completed and presentations from DOT representatives have been made to the Village Council regarding construction dates and other con- struction criteria required for this project. The program should include but not be limited to improvements in the way of landscaping, brick pavers, signalization, signage, etc. The construction is to take place from the southern Village limit of U.S. 1 (the service station next to the Stewart Toyota dealership) and run north on U.S. 1 to the Parker Bridge, but will not include Parker Bridge. Prosperity Farms Road Task h'orce i The Prosperity Farms Road Task Force was comprised of citizens that reside on or near Prosperity Farms Road. Ji The citizens were appointed by the Village Council for the purpose of developing a plan in an attempt to resolve some of the traffic problems affecting the residents that live along Prosperity Farms Road. An engineering firm was hired to develop a concept plan. From that concept plan the Council has started the process of selecting an engineering firm to do the construction and design phase to implement the concept plan. Palm Beach County is providing the funding for the construction and design phase. The anticipated cost is approximately $500,000 with the actual contract anticipated to come in below that number. Once the construction and design phase is completed the Village Council will then make a decision as to whether to continue with the project or not. Should the Council opt to continue with the project they will have numerous options in which to decide what level of implementation they want to carry out. The construction and design product should carry with it vari- ous options along with the cost appropriate to each option in which the Council can make a decision. Canal Dredging One of the noted development signatures of the Village is its intricate network of canals and waterways. The canals and waterways enhance the property values of the Village and give it character as a boating community. The canals were built in the 1950's as part of the original development of North Palm Beach. However, the ca- nals have not been maintained by the Village in that length of time, and as a result, have silted up and created navigational problems for boaters. In order to alleviate this problem, the Village has been going through an ex- J tensive dredging program to upgrade the quality of the canals and the North Palm Beach waterways. The dredg- 1 ing program has been described as a three-phase program with the first phase being completed; the contractor will be initiating phase II during Fiscal Year 2002 - 2003. Phase I was primarily the portions of the North Palm Beach waterways and canals feeding off of the waterways. Phase II is targeted toward the canals that feed off of the north end of Lake Worth, east of U.S. Highway 1. Phase III is anticipated as being a mitigation project for an area that has been identified as environmentally sensitive and will require an offsetting mitigation program ` that involves underwater seagrasses. Public Safety North Substation The Village has been in ongoing negotiations with the Passionate Monastery (Our Lady of Florida Spiritual Center) located on U.S. Highway 1, for the purchase of approximately 1.18 acres of land to be used for the 1 North Substation of the Public Safety Department. The negotiations have been very complex and intricate, and x Introductory Section will probably wrap up with an agreement during Fiscal Year 2002 - 2003. Efforts have been made to offset numerous concerns expressed by the Monastery to assure that their properties will be protected in the future. Issues such as barrier walls, landscaping, and noise intrusion, etc. have been discussed and negotiated during the past two years. The price for the property will be approximately $600,000. OTHER INFORMATION Independent Audit Article 11, Section 2.18 of the Village Charter requires an annual audit of the books of account, financial re- cords, and transactions of all administrative departments of the Village by independent certified public account- ants selected by the Village Council. This requirement has been complied with, and the independent auditor's report has been included in this report. Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement of Excellence in Financial Reporting to the Village of North Palm Beach for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2001. The Certificate of Achievement is a prestigious national award, recognizing conformance with the highest standards for preparation of state and lo- cal government financial reports. g Dennis W. Kelly Village Manager ~5~ _ - Shaukat Khan Finance Director Introductory Section xi I This page intentionally left blank 1 l ,1 I I x66 Intr®d~ct®ry ~~~ti®ra c~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA PRINCIPAL VILLAGE OFFICIALS SEPTEMBER 30, 2002 TITLE NAME Mayor Edward M. Eissey, Ph.D. Vice Mayor Donald G. Noel President Pro Tem Joseph A. Tringali Council. Member Charles R. O'Meilia Council Member David B. Norris Village Manager Dennis W. Kelly Director of Finance Shaukat Khan, CPA Village Clerk Kathleen F. Kelly Introductory Section xiii TH PALM BEAGH~ FLORIDA THE V ILLAGE OF NOR Organization Chart September 30, 2002 ~ ~------ ~ VILLAGE BOARDS _ The Resider>tts ® - .._- •COUNTRY CLUB ADV~ORY ~ ~ ~ ~ _ •CODE ENFORCEME •I.IBRARY ADVISORY •RECREATIONADVISORY ,I Village •pLANNING COMMISSION Council • BOARD OF AW USTMEN'~ •CONTRACTORS •FENSION I ~-~------- i Village Village ' Village Cleric Manager ~ a Attorney ~-,_ 'g Cour>~try C9ub library public Recreatwn .- Public ~ Safety ~ ..F, : . , E _ _ ;a s..~ Finance - c,,iervices _~--~ " ~ . w ~ -~ _ _~_-_ ~~~t ~~11 Pre~~n~kec~ tQ Fir ids ~arr~prehens~v~ ~,nn~a~ F'ni~r~cial ~e~c~r f r~r #h~ Fsc~~ dear En~[ed ~~ptember 1 Certificate of Ac}ievernertt far ~ac~e~lenee in Financial ~;eportin~ is presented the Covernrr~ent Finance Of#icers Associati€~ri of the [.lnite~3 States and ~~nada to goverr~nent unfits anal public employee retirement systems whQSe comprehensive annual fi~iancial reports (CAFFIs} achieve the l~~~hest standards in government accounting and financial reporting. President -_ Fxecc~tive Uirecfc~r Introductory Section xv This a e in e ~ I p g t nhonally left blank .1 1 .1 .l 1 xvi Introductory Section L._~ ]FIllTAIVCIA]L SECTION ---- 1 i~ s i l~ l~ ~ ' , rr~~; Rachlin Cohen 8~ Holtz LLP Certified Public Accountants & Consultants REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Honorable Mayor and Members of the Village Council The Village of North Palm Beach, Florida We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of The Village of North Palm Beach, Florida, (the Village) as of and for the year ended September 30, 2002, which collectively comprise the Village's financial statements as listed in the table of contents. These financial statements are the re- sponsibility of the Village's management. Our responsibility is to express an opinion 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, each major fund, and the aggregate re- maining fund information of the Village as of September 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States. As described in Note 1 to the financial statements, the Village adopted the provisions of Governmental Ac- counting Standards Board (GASB) Statement No. 34, Basic Financial Statements -and Management's Dis- cussion and Analysis -for State and Local Governments, GASB Statement No. 37, Basic Financial State- ments -and Management's Discussion and Analysis -for State and Local Governments -Omnibus, GASB Statement No. 38, Certain Financial Statement Note Disclosures, and GASB Interpretation No. 6, Recogni- tion and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements, as of October 1, 2001. In accordance with Government Auditing Standards, we have also issued a report dated January 13, 2003, on our consideration of The Village's internal control over financial reporting and our tests of its compliance with certain. provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Phillips Point East Tower 777 South Flagler Drive, Suite 150, West Palm Beach, Florida 33401 • Te1561-833-0002 • Fax 561-833-3235 Offices nl: Mianu Ft. Lauderdale West Palm Beach Stuart ww~v.rclupa.com 3 Member of Sununu International Associates, Inc. with offices in principal cifies throughout the r~~orld Member of the American hufitute of Certified Public Accountants and member of the Florida Institute of Certified Public Accountants 1Vlanage_m__ent's Discussion and Analysis; pages 5 through 12, and the budgetary comparison schedules and schedules of funding progress and employer contributions, pages 49 through 73, are not required parts of the ~ basic financial statements but are supplementary information required by accounting principles generally .accepted in the United States. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplemen- tart' information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Village of North Palm Beach's basic financial statements. The introductory section, other sup- plementary information, and the statistical tables are presented for- purposes of additional analysis and are not required parts of the basic financial statements. The other supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is presented fairly, in all material respects, in relation to the basic financial statements taken as a whole. The information included in the introductory and statistical sections has not been subjected to auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion on them. West Palm Beach, Florida January 13, 2003 ~ I 1 1 11 1 1 I ,l ~--~ ~ 4 Financial Section ~I MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the Village of North Palm Beach, Florida (Village), we offer readers of the Village's financial statements this narrative overview and analysis of the financial activities of the Village for the fiscal year ended September 30, 2002. Please read it in conjunction with the accompanying transmittal let- ter beginning on page vii, and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • The Village's total net assets at September 30; 2002 were $9.3 million. Of this amount, $2.8 million (unrestricted net assets) may be used to meet the Village's ongoing obligations to citizens and creditors. • Governmental net assets were $7.1 million. • The total revenues from all sources were $11 million. • The total cost of all Village programs was $12.5 million. • During the year, the Village's governmental activity expenses exceeded general revenues by $1.5 mil- - lion. • Total expenditures in the General Fund exceeded total revenue by $1.2 million, including other financ- ing sources and uses. • At the end of the current fiscal year, unreserved fund balance for the general fund was $.85 million, or 6.8% of total general fund expenditures. • The Country Club's net assets decreased by $53,000. • The Village's total debt increased by $588,000 during the current fiscal year. The key factor in this increase was the execution of lease agreements for financing the acquisition of various equipment. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The three components of the financial state- ments are: (1) Government-wide financial statements which include the Statement of Net Assets and the Statement of Activities. These statements provide information about the activities of the Village as a whole. (2) Fund financial statements tell how these services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the Village's operations in more detail than the government-wide statements by providing information about the Village's most significant funds. (3) Notes to the financial statements. In this first year of implementation of GASB 34, no compara- tive financial information is required, as that would have meant converting the previous fiscal year to the GASB 34 model; consequently for fiscal 2001- 2002, only current year information is provided. Financial Section 5 REPORTII'dG TH€ V ILLAGE AS A °~i{HOLE Statement of Net Assets and the Statement of Activities (Government-wide) A frequently asked question regarding the Village's financial health is whether the year's activities contrib- uted positively to the overall financial well being. The Statement of Net Assets and the Statement of Ac- tivities report information about the Village as a whole and about its activities in a way that helps answer - this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's reve- nues and expenses are taken into account, regardless of when cash is received or paid. , These two statements report the Village's net assets and changes therein. Net assets, the difference be- tween assets and liabilities, are one way to measure the Village's financial health, or financial position. Over time, increases or decreases in net assets are an indicator of whether the financial health is improving or deteriorating. The Statement of Net Assets and the Statement of Activities present information about the following: ` ~ ; • Governmental activities -All of the Village's basic services are considered to be governmental ac- tivities, including general government, community development, public safety, public services, li- brary, and recreation. Property taxes, sales taxes, utility taxes, and franchise fees finance most of i these activities. • Proprietary activities/Business type activities -The Village charges a fee to customers to cover all or most of the cost of the services provided. The Village's Country Club is reported in this cate- gorY REPORTING THE VILLAGE'S MOST SIGNIFICANT FUNDS Fund Financial Statements 1 The fund financial statements provide detailed information about the most significant funds -not the Vil- lage as a whole. Some funds are required to be established by State law. However, management estab- i lishes other funds, which aid in the management of money for particular purposes or meet legal responsi- bilities associated with the usage of certain taxes, grants, and other money. The Village's three kinds of funds, governmental, proprietary, and fiduciary use different accounting approaches as explained below. 1 • Governmental funds -Most of the Village's basic services are reported in governmental funds. J Governmental funds focus on how resources flow in and out, with the balances remaining at year- i end that are available for spending. These funds are reported using an accounting method called the lI modified accrual accounting method, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Village's general government operations and the basic services it provides. Governmental fund information shows whether there are more or fewer financial resources that can be spent in the near future to finance the Village's programs. The basic governmental fund financial statements can be found on pages 18-21 of this report. ® Proprietary funds -The Village's only proprietary fund is the Country Club fund, which charges customers for the services it provides. These services are generally reported in proprietary funds. ` Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. The basic proprietary fund financial statements can be found on pages 22-24 of this report. 6 financial Section ~ I. i • Fiduciary funds -Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial state- ment because the resources of those funds are not available to support the Village's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fi- duciary fund financial statements can be found on pages 25-26 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Village, assets exceeded liabilities by $9.3 million at the close of the most recent fiscal year. By far, the largest portion of the Village's net assets (48%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The Village uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Village's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Village of North Palm Beach Net. Assets (In Thousands) Governmental Business Total Activities Activities Activities 2002 2002 2002 Assets: Current and other assets $ 6,250 $ 250 $ 6,500 Capital assets 10,352 2,802 13,154 Total assets $ 16,602 $ 3,052 $ 19,654 Liabilities: Long-term debt outstanding $ 7,826 $ 510 $ 8,336 Other liabilities 1,678 390 2,068 Total liabilities $ 9,504 $ 900 $ 10,404 Net Assets: Invested in capital assets, net of debt $ 2,247 $ 2,151 $ 4,398 Restricted 2,058 - 2,058 Unrestricted 2,793 1 2,794 Total net assets $ 7,098 $ 2,152 $ 9,250 An additional portion of the Village's net assets (22%) represents resources that are subject to external re- strictions on how they may be used. The remaining balance of unrestricted net assets ($2.8 million) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the fiscal year, the Village is able to report positive balances in all three categories of net as- sets, both for the government as a whole, as well as for its separate governmental and business-type activi- ties. Financial Section 7 r r There was a decrease of $1.58 million in the government's net assets during the current fiscal year. Gov- ernmental activities accounted for 97% of the total decrease. Governmental Activities Governmental activities decreased the Village's net assets by $1.5 million, thereby accounting for 97% of the total decrease in the net assets of the Village. Key elements of this decrease are as follows: Village of North Palm Reach Changes in Net Assets (In Thousands) Governmental Eusiness Total Activities Activities Activities 2002 2002 2002 Revenues: Program revenues: r Charges for services $ 1,128 $ 2,447 $ 3,575 Operating grants and contributions 94 - 94 Capital grants and contributions 93 - 93 General revenues: Property taxes 5,369 - 5,369 Utility service taxes 1,716 - 1,716 Sales and use taxes 1,123 - 1,123 Franchise fees 846 - 846 Occupational licenses 245 - 245 ` Investment earnings 396 124 520 Miscellaneous 140 5 145 Loss on disposal of assets (151) (27) (178) Total revenues 10,999 2,549 13,548 Expenses: ~ Program expenses: General government 1,475 - 1,475 Public safety 5,179 - 5,179 Public services 4,241 - 4,241 Leisure services 1,464 - 1,464 .Interest on long-term debt 173 - 173 Country Club - 2,602 2,602 Total expenses 12,532 2,602 15,134 Decrease in net assets (1,533) (53) (1,586) Net assets -October 1, 2001 8,631 2,205 10,83b J Net assets -September 30, 2002 $ 7,098 $ 2,152 $ 9,250 The Village's programs include General Government, Public Safety, Public Services, and Leisure Services. Each program's net cost (total cost, less revenues generated by the activities) is presented below. The net cost shows the extent to which the Village's general taxes support each of the Village's programs. l LI 8 Financial Section Village of North Palm Beach Governmental Activities (In Thousands) Total Cost Net Cost Of Services of Services General government $ 1,475 $ (1,470) Public safety 5,179 (4,787) Public services 4,241 (3,498) Leisure services 1,464 (1,289) Interest on long-term debt 173 (173) $ 12,532 $ (11,217) The cost of all governmental activities this year was $12.5 million. As shown on the Statement of Activi- ties, $1.3 million of this cost was paid for by those who directly benefited from the programs, and $9.7 mil- lion was financed through general revenues. The Village used $1.5 million of the budgeted $2.2 million appropriated fund balance to finance the remainder of the expenses. Business Type Activities Net assets of the Proprietary Fund (Country Club) at September 30, 2002, were $2.15 million. The cost of providing all Proprietary (Business Type) activities this year was $2.6 million. As shown in the Statement of Activities, amounts paid by members and non-members of the Country Club were $2.45 million, leaving a deficit of $155,000. Investment and miscellaneous income of $128,819 was used to fund the deficit. Net assets decreased by $53,000. FINANCIAL ANALYSIS OF THE VILLAGE'S FUNDS As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds -The focus of the Village's governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Village's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Village's governmental funds reported combined ending fund balances of $5.5 million, a decrease of $1.9 million in comparison with the prior year. This was a planned event, since the Village had budgeted to utilize $2.2 million of general fund balance in the current year to support budgeted expenditures. Approximately 52% of the combined ending fund balances ($2.9 million) constitutes unreserved fund bal- ance, which is available for spending at the government's discretion. The remainder of fund balance is re- served to indicate that it is not available for new spending because it has already been committed 1) to liq- uidate contracts and purchase orders of the prior period ($398,000), 2) to pay for various construction pro- jects ($2.1 million), and 3) for a variety of other restricted purposes ($169,000). The general fund is the chief operating fund of the Village. At the end of the current fiscal year, unreserved fund balance of the general fund was $2.9 million, while total fund balance was $3.4 million. As a measure of the general fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 23% of total general fund expendi- tures, while total fund balance represents 27% of that same amount. Financial Section 9 The capital projects fund has a total fund balance of $2.1 million, all of which is reserved for construction projects. The net decrease in fund balance during the current year in the capital projects fund was $758,000, and is the result of expenditures for capital outlay ($1.2 million) that were greater than revenues and transfers in from the general fund ($409,000). General Fund Budgetary Highlights Differences between the original budget and the final amended budget were relatively minor ($80,058) and can be briefly summarized as follows: • Increases in salaries and related expenditures of various departments. ' j • Increases in various departments for professional service and capital outlay expenditures. J Of this increase, $60,000 was budgeted from available fund balance and the remaining $20,058 was funded ~ l out of miscellaneous intergovernmental revenues. 1 CAPITAL ASSET AND DEBT ADMINISTRATION _ Capital Assets The capital assets of the Village are those assets that are used in the performance of Village functions. Capital assets include equipment, buildings, land, and park facilities etc. The Village has elected to retroactively apply the capitalization requirements of GASB Statement No 34 to major general infrastructure assets acquired in fiscal years ending after June 30, 1980, or that were significantly ` reconstructed or improved during that multi-year period. The Village's investment in capital assets for its governmental and business-type activities as of September 30, 2002, amounts to $13.2 million (net of accumulated depreciation). The total increase in the Village's investment in capital assets for the current fiscal year was $1.4 million. Major capital asset events during the current fiscal year included the following: • Construction began on the renovation of Village Hall; construction in progress as of the close of the fiscal year was $555,000. • The Village financed the purchase of vehicles with a capital lease in the amount of $588,000. Village of North Palm Beach ; Capital Assets (In Thousands) Governmental Business Activities Activities Total Land $ 2,056 $ 1,051 $ 3,107 Construction in progress 591 - 591 Buildings and improvements 8,595 1;462 10,037 Improvements other than buildings - 574 574 Improvements e golf course - 1,604 1,604 Furniture, fixtures and equipment 4,799 670 5,469 Total assets 16,041 5,361 21,402 Less accumulated depreciation (5,689) (2,559) (8,248) Total $ 10,352 $ 2,802 $ 13,154 ~ 6~ ~ v 1 i 10 Financial Section i Additional information on the Village's capital assets can be found in Note 4 on page 36 of this report. Debt Currently the Village uses debt financing on an as needed basis each year. At the end of the current fiscal year, the Village had total debt of $8.7 million. None of this amount comprises debt backed by the full faith and credit of the government. Of the $7.9 million of loans payable, $55,000 is unsecured. The re- maining loans payable are secured by franchise fees and public services taxes. The capital leases are se- cured by equipment. Village of North Palm Beach Outstanding Debt (In Thousands) Governmental Business Activities Activities Total Loans payable $ 7,335 $ 651 $ 7,986 Capital leases 737 - 737 Total $ 8,072 $ 651 $ 8,723 Additional information on the Village's debt can be found in Note 5 on page 37 of this report. NEXT YEAR'S BUDGET AND ECONOMIC FACTORS During the current fiscal year, unreserved fund balance in the general fund decreased to $2.9 million. The Village has appropriated $2 million of this amount for spending in the 2003 fiscal year budget. It is in- tended that this use of available fund balance will avoid the need to raise taxes or charges during the 2003 fiscal year. In considering the Village's budget for fiscal year 2002-2003, the Village Council and management were cautious as to the growth of revenues and expenditures. Investment income decreased by 65% and sales tax revenues decreased by 6% from last fiscal year. Building permit fees have also taken a down turn due to the near completion of new development. CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the Village's finances and to show the Village's accountability for the money it re- ceives. ff you have questions about this report or need additional financial information, contact the Vil- lage's Finance Department, at the Village of North Palm Beach, 501 U.S. Highway 1, North Palm Beach, Florida 33408. Financial Section 11 1 I This page intentionally left blank. _J 1 ,J ~ ~1 L~ i 1 I 12 financial ~~cti®n S.1LN~[L~i~.L~,L~ `I~d~AiVNII.~ ~dSF~ffi [1 J i J _I J d t 1 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Net Assets September 30, 2002 Governmental Business-type Activities Activities Total Assets: Cash and cash equivalents $ 5,569,981 $ 156,020 $ 5,726,001 Receivables (net) 511,954 62,343 574,297 Inventories 31,230 31,790 63,020 Deposits 2,000 - 2,000 Restricted assets: Cash and cash equivalents 135,312 - 135,312 Capital assets: Nondepreciable: Land 2,055,889 1,051,311 3,107,200 Construction in progress 590,636 - 590,636 Depreciable: Buildings and improvements 8,594,971 1,461,852 10,056,823 Improvements other than buildings - 574,318 574,318 Improvements -golf course - 1,603,940 1,603,940 Furniture, fixtures and equipment 4,798,843 669,554 5,468,397 Less: accumulated depreciation (5,688,940) (2,558,407) (8,247,347) Total assets $ 16,601,876 $ 3,052,721 $ 19,654,597 Liabilities: Accounts payable and other current liabilities $ 654,590 $ 150,790 $ 805,380 Accrued interest payable 32,373 - 32,373 Deferred revenue 84,965 24,686 109,651 Miscellaneous deposits 6,081 7,000 13,081 Noncurrent liabilities: Due within one year 899,971 207,695 1,107,666 Due in more than one year 7,825,701 510,472 8,336,173 Total liabilities $ 9,503,681 $ 900,643 $ 10,404,324 Net Assets: Invested in capital assets (net of related debt) $ 2,247,206 $ 2,151,510 $ 4,398,716 Restricted for: Capital projects 2,058,096 - 2,058,096 Unrestricted 2,792,893 568 2,793,461 Total net assets $ 7,098,195 $ 2,152,078 $ 9,250,273 See accompanying notes to basic financial statements. Financial Section 15 THR VILLAGE ®F N®RTH PALM REACH, FL®RI®A r Statement of ~4ctivitiea Year Ended September 30, 2002 ~ ®perating Capital ' Charges for Grants and Grants and Function/Program Activities Expenses Services Contributions Contributions Governmental activities General government $ 1,474,645 $ 4,689 $ - $ - Public safety 5,179,278 307,690 84,194 - i Public services 4,240,543 640,498 10,058 92,461 J Leisure services 1,464,072 175,382 - - Interest on long term debt 173,488 - - - " 1 Total governmental activities 12,532,026 1,128,259 94,252 92,461 l Business-type activities Country Club 2,602,160 2,447,220 - - Total business-type activities $ 2,602,160 $ 2,447,220 $ - $ - General revenues: 1 Taxes: 1 Property taxes Utility service taxes 1 Sales and use taxes I Franchise fees Occupational licenses 1 Investment earnings J Miscellaneous Gain/(loss) on disposal of assets Total general revenues Change in net assets f Net assets, beginning of year ~ J Net assets, end of year See accompanying notes to basic financial statements. J ,J ~6 Financial Sec#ion Govermental Business-type Activities Activities Total $ (1,469,956) $ - $ (1,469,956) (4,787,394) - (4,787,394) (3,497,526) - (3,497,526) (1,288,690) - (1,288,690) (173,488) - (173,488) (11,217,054) - (11,217,054) - (154,940) (154,940) - (154,940) (154,940) 5,369,381 - 5,369,381 1,715,637 - 1,715,637 1,123,319 - 1,123,319 846,178 - 846,178 245,307 - 245,307 396,025 123,429 519,454 139,923 5,390 145,313 (151,279) (26,549) (177,828) 9,684,491 102,270 9,786,761 (1,532,563) (52,670) (1,585,233) 8,630,758 2,204,748 10,835,506 $ 7,098,195 $ 2,152,078 $ 9,250,273 Financial Section 17 `fHE !/ILLAGE ®F N®FiTH PALM BEACIi, FL®RI®A Balance Sheet Governmental Funds ~ September 30, 2002 Total Capital Governmental General Projects Funds Assets: Cash and cash equivalents $ 3,304,958 $ 2,265,023 $ 5,569,981 Restricted cash 135,312 - 135,312 Receivables: State shared revenues 177,098 - 177,098 r Utility taxes 230,690 - 230,690 Accounts 99,610 - 99,610 Special assessments 4,556 - 4,556 Inventories 31,230 - 31,230 Deposits 2,000 - 2,000 Total assets $ 3,985,454 $ 2,265,023 $ 6,250,477 Liabilities and Fund Balances J Liabilities: Accounts payable and other liabilities $ 447,663 $ 206,927 $ 654,590 Deferred revenue 84,965 - 84,965 Miscellaneous deposits 6,081 - 6,081 1 Total liabilities 538,709 206,927 745,636 Fund balances: l Reserved: l Reserved for inventories 31,230 - 31,230 Reserved for prepaid items and deposits 2,000 - 2,000 Reserved for restricted assets 135,312 - 135,312 Reserved for encumbrances 398,366 - 398,366 Reserved for construction - 2,058,096 2,058,096 Unreserved: Designated for subsequent year 2,031,067 - 2,031,067 Undesignated 848,770 - 848,770 Total fund balances 3,446,745 2,058,096 5,504,841 Total liabilities and fund balances $ 3,985,454 $ 2,265,023 $ 6,250,477 See accompanying notes to basic financial statements. I l I~ `q I 18 Financial Section -.~ I THE VILLAGE OF NORTH PALM BEACH, FLORIDA Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets September 30, 2002 Total governmental fund balances $ 5,504,841 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 funds: Cost of assets $16,040,339 Accumulated depreciation (5,688,940) 10,351,399 Long-term liabilities, including notes and bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Long term liabilities at year-end consist of: _ Capital leases (736,967) Notes payable (7,334,853) Accrued interest on long-term debt (32,373) Compensated absences (653,852) (8,758,045) Total net assets $ 7,098,195 See accompanying notes to basic~nancial statements. Financial Section 19 THE VILLAGE ®F N®RTH PALM BEACH, FL®Fil®A ' j Statement of Revenues, Expenditures and Changes in Fund Balances J Governmental Funds Year Ended September 30, 2002 r Total Capital Governmental - General Projects Funds Revenues: Taxes $ 8,197,886 $ - $ 8,197,886 r 1 Licenses and permits 648,873 - 648,873 1 Intergovernmental 1,267,331 82,500 1,349,831 Charges for services 521,660 - 521,660 ' j Fines and forfeitures 168,995 - 168,995 J Interest 85,239 54,684 139,923 Miscellaneous 123,574 - 123,574 Total revenues 11,013,558 137,184 11,150,742 €xpenditures: Current: ` General government 1,344,492 - 1,344,492 Public safety 4,263,883 - 4,263,883 Public services 3,265,242 - 3,265,242 ` 1 Leisure services 1,081,833 - 1,081,833 Other 434,199 - 434,199 Capital outlay 1,085,684 1,166,404 2,252,088 j Debt service: J Principal 828,975 - 828,975 Interest and fiscal charges 196,072 - 196,072 Total expenditures 12,500,380 1,166,404 13,666,784 Excess (deficiency) of revenues ` over (under) expenditures (1,486,822) (1,029,220) (2,516,042) Other financing sources (uses): Capital lease 588,000 - 588,000 ` l Sale of surplus equipment 11,229 - 11,229 J Transfers in - 271,340 271,340 Transfers out (271,340) - (271,340) l Total other financing sources (uses) 327,889 271,340 599,229 Net change in fund balances (1,158,933) (757,880) (1,916,813) Fund balances, beginning of year 4,605,678 2,815,976 7,421,654 Fund balances, end of year $ 3,446,745 $ 2,058,096 $ 5,504,841 1 See accompanying notes to basic~nancial statements. ~J 1 ~I ~0 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of the Governmental Funds to the Statement of Activities September 30, 2002 Net change in fund balances -total governmental funds (page 20) $ (1,916,813) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of capital assets is allocated over their estimated useful lives and reported as depreciation expense: Expenditures for capital assets $1,355,194 Less: current year depreciation (1,008,750) 346,444 In the statement of activities, the loss on the disposal of fixed assets is reported, whereas in the governmental funds, the proceeds from the disposal increase financial resources: Capital assets disposed, net of accumulated depreciation (162,508) (162,508) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets: Decrease in accrued interest payable 22,584 Principal payments on debt 828,975 851,559 Proceeds from debt issuance are reported as other financing sources and uses in governmental funds. However, these transactions are not reported in the statement of activities. Instead, they are recognized in the statement of net assets as changes to liabilities: Proceeds from debt (588,000) (588,000) Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in long-term compensated absences (63,245) (63,245) Change in net assets $ (1,532,563) See accompanying notes to basic financial statements. Financial Section 21 r THE VILLAGE OF NORTH PALM EEACH, FLORIDA Statement of Fund lVet Assets Proprietary Fund } September 30, 2002 Country Dlub Assets and Other Debits r Current assets: Cash and cash equivalents $ 156,020 Accounts receivable 62,343 r Inventories 31,790 Total current assets 250,153 Noncurrent assets: Land, buildings and equipment 2,802,568 Total assets $ 3,052,721 Liabilities Current liabilities: Accounts payable and other liabilities $ 150,790 Compensated absences payable 67,109 Deferred revenue 24,686 Miscellaneous deposits 7,000 1 Loans payable -current portion 140,586 J Total current liabilities 390,171 Noncurrent liabilities: Loans payable 510,472 Total liabilities $ 900,643 Net Assets Invested in capital assets, net of related debt $ 2,151,510 Unrestricted 568 ` l Total net assets $ 2,152,078 l See accompanying notes to basic financial statements. .1 `1 `l 22 Financial Section -~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Fund Year Ended September 30, 2002 Country Club Operating revenues: Charges for services $ 2,447,220 Miscellaneous 123,429 Total operating revenues 2,570,649 Operating expenses: Sports activities 1,672,213 Clubhouse 218,034 Administrative and general 426,364 Depreciation 252,065 Total operating expenses 2,568,676 Income from operations 1,973 Nonoperating revenues (expenses): Interest income 5,390 Interest expense (33,484) Loss on disposal of fixed assets (26,549) Total nonoperating revenues (expenses) (54,643) Change in net assets (52,670) Net assets, beginning of year 2,204,748 Net assets, end of year $ 2,152,078 See accompanying notes to basic financial statements. Financial Section 23 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Wash Fl©~~ Proprietary Fund Year Ended September 30, 2002 Count Club Cash flows from operating activities: Cash received from customers $ 2,371,493 Cash payments to suppliers for goods and services (957,-320) Cash payments to employees for services (1,276,537) Other operating cash receipts 123,429 Net cash provided by operating activities 261,065 Cash flows from capital and related financing activities: f Principal repayments (134,723) Interest paid on debt (33,484) Acquisition of capital assets (57,089) Net cash used in capital and related financing activities (225,296) Cash flows from investing activities: ~ 1 Interest on investments 5,390 Net decrease in cash and cash equivalents 41,159 Cash and cash equivalents, beginning of year 114,861 Cash and cash equivalents, end of year $ 156,020 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 1,973 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 252,065 1 Increase in accounts receivable (1,040) J Decrease in inventories 5,806 Increase in accounts payable 88,646 Decrease in deferred revenue (74,687) Decrease in compensated absences (11,698) Total adjustments 259,092 ` Net cash provided by operating activities $ 261,065 Noncash capital and financing activities: Book value of assets disposed $ 127,293 See accompanying notes to basic fcnancial statements. ~1 ~ 24 Financial Section `-~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Statement of Fiduciary Net Assets Fiduciary Funds September 30, 2002 Employee Retirement Agency Funds Funds Assets Cash and cash equivalents $ 568,760 $ 233,341 Investments 10,646,014 - Interest receivable 32,608 - Total assets $ 11,247,382 $ 233,341 Liabilities Due to others $ - $ 233,341 Total liabilities $ - $ 233,341 Net Assets Reserved for employees' pension benefits $ 11,247,382 $ - Total net assets $ 11,247,382- $ - See accompanying notes to basic~nancial statements. Financial Section 25 ,- THE VILLAGE OF NORTH PALM REACH, FLORIDA Statement of Changes in Fiduciary 1Vet Assets Fiduciary Funds Year Ended September 30, 2002 Employee , F3etirement Funds ~?dditions: r Contributions: Employer $ 525,575 State of Florida 135,068 Plan member ~ ~ 132,391 Total contributions 793,034 Investment income: , J Interest 156,264 J Dividends 202,051 Net depreciation in-fair value of investments (1,096,890). ~ Investment expense (67,743) Total investment loss (806,318) Total additions (13,284) ` Deductions: Administration 44,314 l Benefits 831,740 J Total deductions 876,054 Net decrease (889,338) Net assets held in trust for pension benefits, beginning of year 12,136,720 Net assets held in trust for pension benefits, end of year ~ $ 11,247,382 See accompanying notes to basic financial statements. ~J l I 26 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Reporting Entity The Village of North Palm Beach, Florida ("the Village") was incorporated in 1956 pursuant to Chapter 31481, Laws of Florida, Extraordinary Session 1956. The Village is located in the northeast portion of Palm Beach County, Florida. Its municipal area comprises approximately 1,900 acres of land and 1,200 acres of lakes, ca- nals and lagoons. The Village's nonseasonal population consists of approximately 12,000 residents which in- creases during the winter months to approximately 18,000 people. The Village operates under the Council- Manager form of government and provides the following services to its residents: public safety, planning and zoning, sanitation, library, parks, marinas, and a country club. The Village Council (the "Council") is responsi- ble for legislative and fiscal control of the Village. As required by generally accepted accounting principles, the basic financial statements present the government and its component units. Component units are legally separate entities for which the primary government is considered to be financially accountable and for which the nature and significance of their relationship with the primary government are such that exclusion would cause the Village's combined financial statements to be mis- leading or incomplete. The primary government is considered financially accountable if it appoints a voting majority of an organization's governing body and imposes its will on that organization. The primary govern- ment may also be financially accountable if an organization is fiscally dependent on the primary government, regardless of the authority of the organization's governing board. Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are included as part of the primary government. Based on the application of the criteria set forth by the Governmental Accounting Standards Board ("GASB"), management has determined that no component units exist which would require inclusion in this report. Fur- ther, the Village is not aware of any entity that would consider the Village to be a component unit. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the non-fiduciary activities of the Village. For the most part, the effect of the interfund activities has been removed from these statements. Governmental activities, which are normally sup- ported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and the major individual enterprise fund are reported as separate columns in the fund financial statements. Financial Section 27 THE !lI~~A~E 9F N®RTH PALM REACH, F~®RI®A Notes to Basic Financial Statements September 30, 2002 Measurement Focus, Basis of e4ccounting 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 are recorded when a liability is incurred, regardless of the timing of related cash flows. Property. taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements and the agency funds 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 1 current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered ` to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other reve- nue items are considered to be measurable and available only when cash is received by the Village. The Village reports the following major governmental funds: General Fund The general fund is the primary operating fund and is used to account for all financial resources applicable to the general operations of the Village except those required to be accounted for in another fund. Capital Projects Fund The capital projects fund is used to account for the cost of acquiring, constructing, and placing into service those capital improvements which are associated with activities in the General Fund and are financed by long-term debt issues which are repaid by the recurring operating revenues in the General Fund. The Village reports the following major (and only) proprietary fund:. Country Club Enterprise Fund This fund accounts for the activities related to the Country Club. Additionally, the Village reports the following fund types: Pension Trust Fund The pension trust fund accounts for the activities of the General Employees' Fund and the Police Officers' and Firefighters' Fund, which accumulate resources for pension benefits to qualified employees. Private sector standards of accounting and financial reporting issued prior to December 1, 1989, are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of GASB. Governments also have the option of following subsequent pri- vate sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The L ~ Village has elected not to follow subsequent private sector guidance. As a general rule, the effect of inte:~und activity has been eliminated from the government-wide financial- state- ~ 28 Financial Section ~ j THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 ments. Exceptions to this general rule are charges between the government's country club and various other functions of the Village. Elimination of these charges would distort the direct costs and program revenues re- ported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 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. The principal operating revenues of the Village's country club enterprise fund are charges to customers for sales and services. Operating expenses for the enterprise funds in- dude 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. When both restricted and unrestricted resources are available for use, it is the Village's policy to use restricted resources first, then unrestricted resources as they are needed. Cash and Cash Equivalents All short-term investments that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to a known amount of cash, and at the day of purchase, have a maturity date no longer than three months. Investments Investments are reported at fair value, which is determined by using various third party pricing sources. The Local Government Surplus Funds Trust, administered by the Florida State Board of Administration, is a " 2A-7 like" pool and, thus, these investments are valued using the pooled share price. Restricted Assets Cash and cash equivalents are restricted for the following purposes: 2002 2001 Law enforcement education $ 14,077 $ 10,290 Public safety 16,054 15,304 Library 101,181 61,321 Recreation facilities 4,000 4,000 Atwater Memorial - 5,990 Total restricted assets $ 135,312 $ 96,905 Interfund Transactions Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "ad- vances to/from other funds" (i.e., the noncurrent portion of interfund loans). All other outstanding balances be- tween funds are reported as "due to/from other funds." Any residual balances outstanding between the govern- mental activities and business-type activities are reported in the government-wide financial statements as inter- nal balances. Financial Section 29 THE ~lILLe4(aE ®F N®RTH Pe4LM i3EACH, FL®RI®A Notes to Basic Financial Statements September 30, 2002 Transfers and interfund balances totally within .governmental activities and those that are totally within business- type activities are eliminated and not presented in the government-wide financial statements. Transfers and bal- ances between governmental and business-type activities are presented in the government-wide financial state- ments. Inventories ,- Inventories are valued at cost determined on a first-in, first-out basis. Inventories in the general fund consist of expendable supplies held for consumption. The initial cost is recorded as an asset at the time the individual in- ventory items are purchased and are charged against operations in the period when used. Capital Assets and Depreciation ' Capital assets, which include property, plant, and equipment, are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets are defined by the Village as assets with an initial individual cost of $1,000 or more and an estimated life in excess of one year. The Village has elected to retroactively apply the capitalization requirements of GASB Statement No. 34 to ma- jor general infrastructure assets acquired in fiscal years ending after June 30, 1980, or that were significantly reconstructed or improved during that multi-year period. The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. General capital assets are assets of the Village as a whole. When purchased, such assets I are recorded as expenditures in the governmental funds and capitalized as assets in the government-wide state- ment of net assets. General capital assets are carried at historical cost. Where cost can not be determined from the available records, estimated historical cost has been used to record the estimated value of the assets. Assets acquired by gift or bequest are recorded at their fair value at the date of acquisition. Capital assets of the enterprise funds are capitalized in the fund in which they are utilized. The valuation basis for enterprise fund capital assets are the same as those used for general capital assets. Additionally, net interest cost is capitalized on enterprise fund projects during the construction period in accordance with Statements of Financial Accounting Standards No. 34 and 62. ` Additions, improvements, and other capital outlay that significantly extend the useful life of an asset are capital- ized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation has been provided over the estimated useful lives using the straight-line method of depreciation. The estimated lives for each major class of depreciable fixed assets are as follows: Buildings and improvements 30 years Improvements other than buildings 10 years Golf course improvements 15 years Equipment 3-10 years Compensated Absences ` The Village's employees are granted compensated absence pay for vacation and sick leave in varying amounts based on length of service. Unused compensated absences are payable upon separation from service. Vacation is accrued as a liability when the employee earns benefits. This means that the employee has rendered services that give rise to a vacation liability and it is probable that the Village will compensate the employee in some , manner, e.g., in cash or paid time-off, now or upon termination or retirement. The Village uses the vesting method in accruing sick leave liability. Under the vesting method, the liability for sick leave is accrued for em- ' ployees who are eligible to receive terminatio,~, payments upon separation. v ~ 30 Financial Section ~ ~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 Compensated absences are accrued when incurred in the government-wide and proprietary financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations or retirements. Special Assessments Receivable/Deferred Revenue Special assessments receivable recorded in the general fund represent the aggregate balance of assessments lev- ied by the Village to repay the costs of improvements. These assessments are collected in annual installments together with interest and collection costs. The Village reports deferred revenue in an amount equal to the special assessments receivable, since this reve- nue will be collected in future years. Long-Term Obligations In the government-wide financial statements, and proprietary fund types: in the 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 type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt pro- ceeds received, are reported as debt service expenditures. Net Assets Equity in the government-wide statement of net assets is displayed in three categories: 1) invested in capital as- sets net of related debt, 2) restricted, 3) unrestricted. Net assets invested in capital assets net of related debt con- sist of capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, con- struct, or improve those assets. Net assets are reported as restricted when there are legal limitations imposed on their use by Village legislation or external restrictions by other governments, creditors, or grantors. Unrestricted net assets consist of all net assets that do not meet the definition of either of the other two components. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Unreserved fund balance amounts that are reported as designations of fund balances represent tentative plans for financial resource utilization in a future period. The following is a description of the reserves and designations used by the Village. Reserved for inventories and deposits -Indicates that a portion of fund balance is segregated since these items do not represent "available spendable resources." Reserved for restricted assets -Restricted for expenditures related solely to law enforcement, library, recreation facilities, and a memorial fund. Reserved for encumbrances -Represents outstanding purchase orders and open contracts at year end which will be re-appropriated in the new year. Financial Section 31 THE !lILLA(aE ®F N®RTH Pe4LM BEACH, FL®RI®A (Votes to Basic Financial Statements September 30, 2002 Reserved for emplo ey es, pension benefits -Restricted for payment of retirement benefits. Budgetary Accounting State of Florida statutes require that all municipal governments establish budgetary systems and approve bal- anced annual operating budgets. The Council annually adopts an operating budget and appropriates funds for the general fund. The procedures for establishing budgetary data are as follows: In July of each year, the Village Manager submits a proposed operating budget to the Council for the next fiscal year commencing the following October 1st. The proposed budget includes expenditures and the means of financing them. . During the third week of July, the Council holds public meetings to obtain taxpayer comments. Upon completion of the public hearings and prior to October 1, a final operating budget is legally enacted / through the passage of an ordinance. Estimated beginning fund balances are considered in the budgetary process. The ordinance approved by the Council which adopted the budget for the fiscal year ended September 30, 2002, allows budget transfers based on the following regulations: Appropriations within a department shall not be transferred in amounts greater than $5,000 without the ap- ` J proval of the Council. Appropriations for amounts more than $1,000 and up to $5,000 shall not be transferred without the approval of the Village Manager. Unencumbered appropriations lapse at fiscal year end. Encumbrances at year end are carried forward to the next year. During the year, several supplementary appropriations were necessary. For the year ended September 30, 2002, ` i expenditures that exceeded appropriations in the general fund are as follows: J Expenditures for capital outlay -Automotive in Fire Prevention, Law Enforcement, EMS, Code Enforce- ment, Facilities Maintenance, Solid Waste, Street Maintenance, Mechanical Maintenance, and Recreation exceeded appropriations due to the accounting treatment for capital purchases financed through debt in the initial year. The budget for the general fund is adopted on an accounting basis that differs from generally accepted account- ~- ing principles (GAAP) because it includes open encumbrances as expenditures. The Village also adopts an op- erating budget for the enterprise fund substantially on a basis consistent with generally accepted accounting principles, except that depreciation is not budgeted. As required by GASB Statement No. 34, budgetary comparison schedules are presented for the general fund. ~ Budgetary comparison schedules are not required, and have not been presented for capital projects funds or en- ` ~ terprise funds. Property Taxea ` 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, re- ~ i spectively. All property is reassessed according to its fair market value on January 1 of each year and each as- 4 ~ d ~ 32 Financial- Section 4-~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 sessment roll is submitted to the State Department of Revenue for review to determine if the assessment rolls meet all of the appropriate requirements of State law. The assessed value of property within the corporate limits of the Village at January 1, 2001, upon which the 2001-02 levy was based, was approximately $993 million. State Statutes permit municipalities to levy property taxes at a rate of up to 10 mills. The tax levy of the Village is established by the Council prior to October 1 of each year during the budget pro- cess. The Palm Beach County Property Appraiser incorporates the Village's millage into the total tax levy, which includes the County, County School Board, and special district tax requirements. The millage rate as- sessed by the Village for the year ended September 30, 2002,, was_ 5.6000 ($5.60 for each $1,000 of assessed valuation). Taxes may be paid less a 4% discount in November or at declining discounts each month through the month of February. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Delin- quent taxes on real property bear interest at 18% per year. On or prior to June 1 following the tax year, certifi- cates are offered for sale for all delinquent taxes on real property. After sale, tax certificates bear interest at 18% per year or at any lower rate bid by the buyer. Application for a tax deed on any unredeemed tax certificate may be made by the certificate holder after a period of two years. Unsold certificates are held by the County. Delinquent taxes on personal property bear interest at 18% per year until the tax is satisfied either by seizure and sale of the property or by the five-year statute of limitations. At September 30, 2002, unpaid delinquent taxes are not material and have not been recorded by the Village. Concentration of Credit Risk The Village performs ongoing credit evaluations of its customers and does not require collateral. The Village maintains an allowance for uncollectible accounts at a level which management believes is sufficient to cover potential credit losses. (2) DEPOSITS AND INVESTMENTS Deposits All of the Village's deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chap- ter 280, "Florida Security for Public Deposits Act." Under the Act, every qualified public depository shall de- posit with the Treasurer eligible collateral of the depository to be held subject to his or her order. The Treasurer, by rule, shall establish minimum required pledging levels. The pledging level may range from 25% to 125% of the average monthly balance of public deposits, depending upon the depository's financial condition and estab- lishment period. All collateral must be deposited with an approved financial institution. Any losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral, and, if necessary, assessments against other qualified public depositories of the same type as -the depository in default. At year end, the Village's deposits were covered by federal depository insurance. Investments The Village is authorized to invest its funds as follows: 1. Interest-bearing checking or savings accounts in qualified public depositories, as defined in Florida State Statute 280.02; 2. Interest-bearing time deposits in qualified public depositories, as defined in Florida State Statute 280.02; 3. The Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Florida State Statute 163.01; Financial Section 33 THE !TILLAGE ®F N®RTH PALM BEACH, FL®RI®A Notes to Sasic financial Statements ~ September 30, 2002 4. Securities and Exchange Commission registered money market funds with the highest credit quality rat- ing from a nationally recognized rating agency; 5. Direct obligations of the United States Treasury; 6. Federal agencies and instrumentalities; 7. Securities of, or interest in, any open-end or closed-end management-type investment company or in- vestment trust registered under the Investment Company Act of 1940, 15 U.S.C. sections $Oa-1 et seq., as amended from time to time, provided that the portfolio of such investment company or investment trust is limited to obligations of the United States Government or any agency or instrumentality thereof and to repurchase agreements fully collateralized by such United States Government obligations, and provided that such investment company or investment trust takes delivery of such collateral either di- rectly or through an authorized custodian; 8. Other investments authorized by law or by ordinance by the Village. Investments of the General Employees' Retirement Fund can consist of every kind of investment except for: options, futures, municipal bonds, non-investment grade bonds, foreign securities, precious metals, .private . f placements, short sales, purchases on margin, real estate, and partnerships. Investments of the Fire and Police Retirement Fund can consist of the following: 1) Time, savings, and money market deposit accounts of a national bank, a state bank insured by the Federal Deposit Insurance Corporation or its successor, or a Savings and Loan institution insured by the Federal Savings and Loan Insurance Corporation or its successor, provided the amount deposited does not exceed the insured amount. 2) Obligations of the United States Government or obligations guaranteed as to principal and interest by the United States Government or any agency thereof. 3) Stocks, bonds or other evidence of indebtedness issued or guaranteed by a corporation organized under the \ laws of the United States or any state of the United States or the District of Columbia and domiciled therein, provided: a. Equities will be traded on one or more of the recognized national exchanges. b. The security meets any one of the following rating criteria: ` i.) Fixed income: Standard & Poor's AAA, AA, or Moody's Aaa, Aa, A. ii.) Equities: Value Line Investment Survey Rank for Safety, 1, 2, 3, or Standard & Poor's A+, A, A-. iii.) Money Market Instruments: Standard & Poor's Al or Moody's P1. c. Not more than ten (10) percent of the Fund's assets shall be invested in the common stock or capital stock of any one issuing company. 1 ~J d. Not more than five (5) percent of the Fund's assets shall be invested in preferred stock. 4) Commingled stock, bond, money market or mutual funds are permitted, provided their investments are re- ` stricted to securities meeting the above criteria. The Village's investments are categorized to give an indication of the level of risk assumed by the entity at year end. Category 1 includes investments that are insured or registered or for which the securities are held by the ~4 Financial Section y THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 Village or its agent in the Village's name. Category 2 includes uninsured and unregistered investments for which the securities are held by the counter-party's trust department or agent in the Village's name. Category 3 includes uninsured and unregistered investments for which the securities are held by the counter-party, or by its trust department or agent, but not in the entity's name. Investments in the State Treasurer's Investment Pool and mutual funds are not required to be categorized, since the investments are not evidenced by securities that exist in physical or book entry form. The following matrix presents the components of the Village's cash and cash equivalents and investments at September 30, 2002. The investment risk categories are indicated in the last column. Deposit risks are not in- cluded in the table. Reported Fair Bnrestricted Restricted Amount Value Category Cash and cash equivalents: Deposits $ 73,211 $ - $ 73,211 $ 73,211 - Repurchase agreement 1,162,160 - 1,162,160 1,162,160 3 Money market mutual funds - 233,460 233,460 233,460 - Investment in State Treasurer's Investment Pool 4,490,630 703,953 5,194,583 5,194,583 - Total cash and cash equivalents 5,726,001 937,413 6,663,414 6,663,414 Investments: U.S. government securities - 1,931,323 1,931,323 1,931,323 2 Corporate bonds - 685,478 685,478 685,478 2 Common stock - 2,394,923 2,394,923 2,394,923 2 Retirement plan mutual funds - 5,634,290 5,634,290 5,634,290 - Total investments - 10,646,014 10,646,014 10,646,014 Total cash and cash equiva- lents and investments $ 5,726,001 $ 11,583,427 $ 17,309,428 $ 17,309,428 The pension trust funds own all of the investments in Category 2. (3) RECEIVABLES Receivables for the year ended September 30, 2002, are as follows: General Country Club Total Receivables: State-shared revenues $ 177,098 $ - $ 177,098 Franchise fees 118,827 - 118,827 Utility taxes 111,863 - 111,863 Accounts 99,610 62,343 161,953 Special assessments 4,556 4,556 Gross receivables 511,954 62,343 574,297 Less allowance for uncollectibles - - - Net total receivables $ 511,954 $ 62,343 $ 574,297 Financial Section 35 THE VILLAGE ®P' M®RTH PALM BEACH, FL®RI®A Notes to Basie Financial Staterr~er?ts 1 September 30, 2002 (4) CAPITAL ASSETS Capital assets activity for the year ended September 30, 2002, was as follows: - Balance Balance ®ctober 1, September 30, 2001 Additions Deletions 2002 f Governmental Activities: -Non-Depreciable Assets: - Land $ 2,055,889 $ - $ - $ 2,055;8$9 1 Construction in progress - 590,636 - 590,636 1 Total non-depreciable assets 2,055,889 590,636 - 2,646,525 Depreciable Assets: Buildings and improvements 8,602,533 28,545 36,107 8,594,971 Furniture, fixtures, and equipment 4,673,681 736,013 610,851 4,798,843 ! 1 Total depreciable assets 13,276,214 764,558 646,958 13,393,814 1 Less accumulated depreciation (5,164,640) (1,008,750) (484,450) (5,688,940) Governmental activities capital assets, net $ 10,167,463 $ 346,444 $ 162,508 $ 10,351,399 _j Business-Type Activities: Non-Depreciable Assets: Land $ 1,051,311 $ - $ - $ 1,051,311 Total non-depreciable assets 1,051,311 - - 1,051,311 Depreciable Assets: ` Buildings and improvements 1,462,356 1,996 2,500 1,461,852 Improvements other than buildings 574,949 - 631 574,318 Improvements -golf course 1,603,940 - - 1,603,940 Furniture, fixtures and equipment 738,623 55,335 124,404 669,554 Total depreciable assets 4,379,868 57,331 127,535 4,309,664 Less accumulated depreciation (2,407,086) (252,065) (100,744) (2,558,407) ~ j Business-type activities capital assets, net $ 3,024,093 $ (194,734) $ 26,791 $ 2,802,568 ,pip 1 36 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 Depreciation expense was charged to functions as follows: Governmental Activities: General Government $ 38,779 Public Safety 455,824 Public Services 159,992 Leisure Services 354,155 Total depreciation expense - governmental activities $ 1,008,750 Business-type activities: Country Club $ 252,065 (5) LONG-TERM DEBT Changes in Long-Term. Liabilities _ Long-term liability activity for the year ended September 30, 2002, was as follows: Balance Balance October 1, September 30, 2001 Additions Reductions 2002 Governmental activities: Loan payable $ 8,067,736 $ - $ 732,883 $ 7,334,853 Capital leases 245,059 588,000 96,092 736,967 Compensated absences payable 590,606 470,628 407,382 653,852 Total $ 8,903,401 $1,058,628 $1,236,357 $ 8,725,672 Business-type activities: Loan payable $ 785,781 $ - $ 134,723 $ 651,058 Compensated absences payable ~ 78,807 32,845 44,543 67,109 Total $ 864,588 $ ~ 32,845 $ 179,266 $ 718,167 Loans Payable Promissory Note The Village Council adopted Resolution No. 71-2000 authorizing the execution of a loan agreement for the pur- pose of refinancing an existing loan incurred for the renovation of the Village's Country Club restaurant in the amount of $860,000. A portion of the proceeds was also used to finance various capital expenditures of the Vil- lage. The loan is secured by franchise fees and public service taxes of the Village. Principal and interest payments are due quarterly, commencing on February 15, 2001, with a final maturity date of November 15, 2010. 'The inter- est rate on the loan is 5.22%. A portion of the loan ($260,000) is reported in the general long-term debt account group in an amount equal to the proceeds used for various capital expenditures in the general fund. The remainder of the loan ($600,000) is recorded in the proprietary fund. Annual debt service requirements to maturity are as follows: Financial Section 37 THE !TILLAGE ®F N®RTH PALM BEe4CH, FL®RI®A Notes to t3asic ~inanciai Statements September 30, 2002 Year Ending BusinessaType Governmental r September 30, Activities Activities 2003 $ 77,398 $ 60,388 2004 77,398 60,388 2005 77,398 60,388 2006 77,398 15,097 2007 77,398 - 2008-2011 251,544 - Total debt service requirements 638,534 196,261 Less: Amount representing interest (122,397) (19,701) $ 516,137 $ 176;560 Promissory Note The Village Council adopted Resolution No. 46-2001 authorizing the execution of a note in the principal amount of $2,800,000 to finance the construction of various capital projects. The promissory note is secured by franchise fees and public service taxes. Principal and interest payments are due semi-annually, commencing on November 30, 2001, with a final maturity date of May 31, 2011. The interest rate on the note is 3.29%. Annual debt service requirements to maturity, which are payable by the general fund, are as follows: Year Ending September 30, Amount 2003 $ 331,449 2004 331,498 2005 331,748 2006 331,600 2007 331,654 2008-2012 1,659,243 ` 1 Total debt service requirements 3,317,192 1 Less: Amount representing interest (757,103) ` 1 $ 2,560,089 J Promissory Note The Village Council adopted Resolution No. 18-99 authorizing the execution of a loan agreement for the pur- pose of financing various capital expenditures in the amount of $600,000. The loan is secured by franchise fees and public service taxes of the Village. Principal and interest payments are due monthly, commencing on April 16, 2000, with a final maturity date of March 16, 2004. The interest rate on the loan is 3.99%. Annual debt ser= ` 1 vice requirements to maturity, which are payable by the general-fund, are as follows: Year Ending September 30, Amount 2003 $ 132,774 2004 66,386 Total debt service requirements 199,160 Less: Amount representing interest (6,232) $ 192,928 33 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 Promissory Note The Village Council adopted Resolution No. 8-97 authorizing the issuance of a note in the principal amount of $6,560,000 to finance the acquisition, construction, equipping, and improving of a public safety building, a community center, and a recreation building. A portion of the proceeds was also used to refinance an existing loan incurred to make improvements to the Country Club. The promissory note is secured by franchise fees and public service taxes of the Village. Principal payments of $190,000 are due semi-annually on January 1 and August 1, commencing on August 1, 1997. The interest rate is at the London InterBank Offered Rate ("LIBOR") which is defined as 75% of the rate of interest published as one-month LIBOR on the first day of each month. The interest rate will be adjusted by either of the following events: a change in the maximum corporate tax rate, or the event of taxability of the interest on this note. The effective rate at September 30, 2001, was 2.64% and this approximates the rate that was used to calculate the debt service requirements to maturity. A portion of the promissory note ($560,000) is reported in the proprietary fund in an amount equal to the pro- ceeds used to refinance an existing country club obligation. The remainder of the promissory note ($6,000,000) is recorded in the general long-term debt account group. Annual debt service requirements to maturity are as follows: Year Ending Business-Type Governmental September 30, Activities Activities 2003 $ 81,819 $ 377,762 2004 40,364 372,305 2005 - 366,848 2006 - 361,391 2007 - 355,934 2008-2012 - 1,697,816 2013-2017 - 1,411,392 Total debt service requirements 122,183 4,943,448 Less: Amount representing interest (2,183) (593,448 ) $ 120,000 $ 4,350,000 Promissory Note The Village Council adopted Resolution No. 3-00 authorizing the execution of a loan agreement for the purpose of financing the lease-purchase of eight automobiles. A portion of the proceeds was also used to finance the purchase of equipment for the Country Club restaurant. The loan is unsecured. Principal and interest payments are due monthly, commencing on March 1, 2000, with a final maturity date of February 1, 2005. The interest rate on the loan is 4.33%. A portion of the promissory note ($30,000) is reported in the proprietary fund in an amount equal to the pro- ceeds used to finance the purchase of equipment. The remainder of the promissory note ($112,000) is recorded in the general long-term debt account group. Annual debt service requirements to maturity are as follows: Financial Section 39 THE ilILLAGE OF NORTH PALM BEACH, FLORIDA - Notes to Basic Financial Statements September 30, 2002 Year Ending Business-Type Governmental r September 30, Activities Activities 2003 $ 6,659 $ 25,050 2004 6,659 25,050 2005 2,219 8,349 Total debt service requirements 15,537 58,449 , Less: Amount representing interest (616) (3,173) $ 14,921 $ 55,276 Capital Leases The Village entered into lease agreements as lessee for financing the acquisition of various equipment. The lease agreements qualify as capital leases for accounting purposes and therefore have been recorded at the pre- sent value of the future minimum lease payments as of the date of inception. Lease payments will be made from the general fund. The assets acquired through capital leases are as follows: Governmental Activities Asset: Vehicles $ 1,061,391 Less: Accumulated depreciation (327,056) Total $ 734,335 The future minimum lease obligations and the net present value of these minimum lease payments as of Sep- tember 30, 2002, were as follows: ` i Year Ending l September 30, Amount ` 2003 $ 170,417 2004 168,319 2005 166,222 2006 164,124 2007 70,995 2008-2012 52,467 - 1 Total debt service requirements 792,544 ~ 1 Less: Amount representing interest (55,577) Present value of future minimum lease payments $ 736,967 (6) RISK MANAGEMENT The Village currently reports all of its risk management activities in the general fund. Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably ~ 40 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 estimated. These losses include an estimate of claims that have been incurred but not reported. Employee Benefits Group The Village is self insured to provide group medical coverage. A third party administers the group medical cov- erage for the Village. The Village funds its own losses based on actual claims. A stop loss insurance contract executed with an insurance carrier covers individual claims in excess of $35,000 per plan year. There were no significant changes in insurance coverage from the prior year and the amount of settlements did not exceed in- surance coverage for the last three years. The liability for unpaid claims is estimated using an industry average that is based on actual claims paid. As of September 30, 2002, the Village recorded a liability for its employee benefit plan in the amount of $145,895, because Village claims exceeded contributions for the year. Changes in the claims liability since September 30, 2000, are as follows: Claims and Year Ended Claims Liability Change in Claim Claims Liability September 30, Beginning of Year Estimates Payments End of Year 2000 $ 162,737 $ 817,517 $ (851,958) $ 128,296 2001 128,296 484,762 (579,958) 33,100 2002 33,100 1,210,299 (1,097,504) 145,895 Property and Casualty Group The Village also participates in Southeast Risk Management Association (SERMA), aquasi-governmental agency created by an interlocal agreement, as authorized by Florida Statute 163. SERMA administers the prop- erty and casualty coverage for the Village. The Village and other participating members pool their resources so as to provide a comprehensive risk management program, including insurance coverage, whose cost is less than the cost of each municipality obtaining insurance separately. The members are subject to supplemental assess- ments in the event of deficiencies; except that to the extent that deficiencies result from a specific claim against a member in excess of the reinsurance available, such deficiency is solely the responsibility of that member. SERMA reinsures for workers compensation and property claims in excess of $250,000. The Village is also covered by Florida Statutes under the Doctrine of Sovereign Immunity which effectively limits the amount of liability of municipalities to individual claims of $100,000/$200,000 for all claims relating to the same incident. There were no changes in insurance coverage from the prior year and the amount of settlements did not exceed insurance coverage for the last three years. At September 30, 2002, there were no liabilities recorded for property and casualty based on a recent actuarial valuation, which indicated that the reserve for incurred but not yet reported losses was adequately funded, and no additional contributions are required. (7) PENSION PLANS The Village maintains the following two separate single employer defined benefit plans: Village of North Palm Beach Fire and Police Retirement Fund, covering fire fighters and police officers, and Village of North Palm Beach General Employees Retirement Fund, covering substantially all other full-time Village employees. Both plans are reported as pension trust funds and included as part of the Village's reporting entity. Neither plan is- sues astand-alone financial report. Additional information on these plans can be found beginning on page 70. Each plan's financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to each plan are recog- Financial Section 41 r j THE VILLAGE OF NORTH PALM BEACH, FLORI®A - Notes to Basic Financial Statements September 30, 2002 nized when due and the employer has made a formal commitment to provide the contributions. Benefits and r refunds are recognized when due and payable in accordance with the terms of each plan. Each plan has its own board which acts as plan administrator and trustee: Board of Trustees (for the Fire and Police Retirement Fund) and General Employees Retirement Board. Each plan's assets may only be used for the payment of benefits to the members and beneficiaries of the plan in accordance with the terms of each plan - document. The costs of administering each plan are financed in the appropriate pension trust fund. ~ The Florida Constitution requires local governments to make the actuarially determined contribution. The Flor- ida Division of Retirement reviews and approves each local government's actuarial report prior to its being ap- ~ l propriated for use for funding purposes. Additionally, the State collects two locally authorized insurance pre- _ mium surcharges (one for the Police Pension Plan on casualty insurance policies and one for the Fire Pension Plan on certain real and personal property insurance policies within the corporate limits) which can only be dis- " tributed after the State has ascertained that the local government has met its- actuarial funding -requirement for- the then most recently completed fiscal year. Investments are reported at fair value and are managed by third party money managers. The Village's inde- pendent custodians and individual money managers price each instrument using various third party pricing sources. The following investments represent concentrations of 5% or more of net plan assets in investments that are not issued or guaranteed by the U.S. government. General Employees Retirement Fund Mutual Funds: ~ I STI High Grade Bond Fund $ 1,874,913 f STI Classic Investment Grade Bond Fund 408,933 - SunTrust High Grade Equity Fund 1,684,337 - i SunTrust U.S. Limited Capitalization Equity Fund 578,984 SunTrust High-Grade Equity Fund 1,121,507 Fire and Police Retirement Fund ` 1 No nongovernmental investments exceed 5% of net plan assets. J The following schedule is derived from the respective actuarial reports and Village information for the two pen- ` sion plans as of October 1, 2001: General Employees Fire and Police Plan Description: Authority Village Ordinance Village Ordinance/State Asset Valuation: Reporting Fair Value Fair Value Actuarial Valuation 5-year smoothed market 5-year smoothed market Legal Reserves None -None ~ i Long-Term Receivable None None Internal/Participant Loans None None . ~ Membership and Plan Provisions: - ti Members: Active Participants 93 27 Retirees and Beneficiaries 13 4 j 42 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 General Employees Fire- and Police Terminated Vested 32 12 Normal Retirement Benefits: Option 1 Option 2 Retirement Age 65 60 55 Years of Service (minimum) 5 5 9 Accrual - (years 1-20) 2.00% 2.25% 2.50% (over 20) 1% 1% - Maximum None None 60% Years to Vest 10 Under 5 years 0% 0% 5 or 6 years 50% 50% 7 or 8 years 75% 75% 9 or more years 100% 100% Contributions: Actuarial Rate: Village 13.76% 3:50% State n/a 5.09% Participants 4.00%* 2.00% Annual Pension Cost $ 435;473 - $ 133,722 Contributions Made $ 467,750 $ 192,893 * Except for certain members who have elected not to contribute and for other members who have elected to contribute only 2.00%. Actuarial Valuation: Frequency Annual Annual Latest Valuation 10/1/O1 10/1/O1 Basis for Contribution 10/1/O1 10/1/O1 Cost Method Frozen Entry Age Aggregate Amortization: Method Level percent n/a Period 30 years n/a Open/Closed Closed n/a Note: The aggregate actuarial cost method does not identify or separately amortize unfunded ac- tuarial liabilities. Assumptions: Investment Earnings (including inflation) 8.5% /year up to retirement, 5.25% thereafter 8.0% /year Salary Increases (including inflation) 5.5% /year 6.0% /year Inflation 4.0% /year 4.0% /year Mortality Rates 1983 Group Annuity 1983 Group Annuity Mortality Table Mortality Table Retirement Age: Eligible for early retirement 5% 5% Normal retirement date attained 60% 60% Financial Section 43 THE VILLAGE O~ NORTH PALM BEACH, FLORI®A Notes to Sasic financial Statements September 30, 2002 General Employees Fire and Police Four years after normal retirement date 40% 40% Fifth year after normal retirement date 100% . 100% Turnover: Age 25 18.8% 8.6% Age 30 11.2% 7.5% Age 35 6.3% 5.7% Age 40 4.8% 3.9% Age 45 3.4% 2.4% Age 50 2.4% 1.2% j Age 55 0.5% - I Post Retirement Benefits 3% for those who retired 3% /year before 2/1/82 or who - ~ , contribute an extra 2% There have been no changes in actuarial assumptions and methods for either plan since the last actuarial valua- tion (October 1, 2000). _ Annual Pension Cost and Net Pension Obligation (Benefit): The Village's annual pension cost and net pension obligation (benefit) for both plans for the current year were as follows: General Employees Fire and Police Annual required contribution $ 430,411 $ 130,305 Interest on net pension benefit (13,736) (7,795) Adjustment to annual required contribution 18,798 11,212 Annual pension cost 435,473 133,722 Contributions made (467,750) (192,893) Increase in net pension benefit (32,277) (59,171) Net pension benefit, beginning of year (161,596) (97,438) Net pension .benefit, end of year $ (193,873) $ (156,609) -- Three-Year Trend Information Annual Percentage Net Pension Year Pension of APC Obligation Ended Cost (APC) Contributed (Benefit) General 9/30/00 $ 294,902 126.4% $ (134,023) Employees 9/30/01 419,555 106.6% (161,596) 9/30/02 435,473 107.4% (193,873) Fire and Police 9/30/00 $ 98,606 128.0% $ (82,532) 9/30/01 89,928 117.0% (97,438) 9/30/02 133,722 144.2% (156,609) 44 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Basic Financial Statements September 30, 2002 (8) CONTRACTS AND COMMITMENTS Contracts The Village entered .into a contract with B.E.A. International Corporation in the amount of $187,900 for the purpose of providing architectural services for interior renovations of the Village Hall. The amount paid under this contract for 2002 was $113,195. The Village entered into a contract with Catalfumo Construction and Development, Inc. in the amount of $1,481,240 for renovations of the Village Hall. The amount paid under this contract for 2002 was $429,650. Operating Leases The Village is committed under a lease agreement for golf carts in the enterprise fund. The lease is considered for accounting purposes to be an operating lease. Lease payments for the year ended September 30, 2002, were $47,760. Future minimum lease payments are $47,760 for the year ending September 30, 2003. The Village is also committed under a lease agreement for two police motorcycles in the general fund. The lease is considered for accounting purposes to be an operating lease. Lease payments for the year ended Sep- tember 30, 2002, were $6,000. Future minimum lease payments are $6,000 for the year ending September 30, 2003. The Village is committed under a lease agreement as lessor of the food and beverage operations at the North Palm Beach Country Club. The lease is considered for accounting purposes to be an operating lease. As part of the lease agreement, the Village receives a percentage of sales of the lessee and reimbursements for utilities and financed assets. The Village received $110,409 for the year ended September 30, 2002, under the terms of this lease agreement. Future minimum lease payments for the year ending September 30, 2003, are contingent upon sales and expenses of the operations by the lessee. (9) JOINTLY GOVERNED ORGANIZATION The Village, through an interlocal agreement with certain other municipalities and Palm Beach County, created the Seacoast Utility Authority ("Seacoast") which provides water and sewer service to the citizens of each of the participating municipalities and a portion of Palm Beach County. Seacoast's governing board is comprised of one member from each participating entity. Seacoast is an independent Authority organized under the laws of the State of Florida, and the Village has no participating equity ownership in Seacoast. The Village paid $69,870 to Seacoast during the fiscal year for water and sewer service. (10) POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS In addition to the pension benefits described in Note 7, the Village provides postretirement health care and life insurance benefits, in accordance with State Statutes, to all employees who retire from the Village. The normal retirement age for police and firefighters is age 55; the normal retirement age for all other Village employees is either age 60 or age 65, depending on the option selected by the employee. The employee's contribution is the full amount of the annual premium. Expenditures for post-retirement health care and life insurance benefits are recognized as expenditures as claims are paid. Currently, ten retirees who met the eligibility requirements elected to participate in the health care plan. During the year, expenditures of $77,943 were recognized for post- retirement healthcare. This was an increase of $50,167 from the previous year. Financial Section 45 r~ This page intentionally left blank. 1' ,J ,1 46 ~inencial Section aa~~it~~bea~aans ~axinZ~aa~ 1 l 1~ t . t, F, t_ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Budgetary fund balance, October 1 $ 2,139,610 $ 2,199,610 $ 2,199,610 $ - Resources (inflows): Taxes: Ad valorem taxes 5,277,538 5,277,538 5,369,381 91,843 Sales and use taxes: Local option gas tax trust 170,000 170,000 177,431 7,431 Motor fuel gas tax 80,000 80,000 89,259 9,259 Total sales and use taxes 250,000 250,000 266,690 16,690 Franchise taxes: Electricity 660,000 660,000 659,730 (270) Telephone 32,000 32,000 28,689 (3,311) Gas 3,000 3,000 6,738 3,738 Cable TV 120,000 120,000 - (120,000) Water 185,000 185,000 151,021 (33,979) Total franchise taxes 1,000,000 1,000,000 846,178 (153,822) Utility service taxes: Electricity 860,000 860,000 877,308 17,308 Telecommunication 480,000 480,000 787,765 307,765 Gas 38,000 38,000 50,564 12,564 Total utility service taxes 1,378,000 1,378,000 1,715,637 337,637 Total taxes 7,905,538 7,905,538 8,197,886 292,348 Licenses and permits: Village occupational licenses 203,000 203,000 203,972 972 Building permits 400,000 400,000 444,879 44,879 Other licenses and permits: Bicycle registrations 10 10 22 12 Total licenses and permits 603,010 603,010 648,873 45,863 Intergovernmental revenue: State shared revenue: General government: State shared revenue 260,000 260,000 261,530 1,530 Alcoholic beverages licenses 9,000 9,000 9,233 233 Local government 1/2 cent sales tax 950,000 950,000 856,629 (93,371) Total state shared revenue 1,219,000 1,219,000 1,127,392 (91,608) Transportation: Motor fuel tax rebate 7,500 7,500 1,666 (5,834) Continued on the following page... Financial Section 49 THE VILLA~F ®F N®RTH PALM BEACH, FL®RI®A Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) County shared revenues: County occupational licenses $ 31,000 $ 31,000 $ 34,060 $ 3,060 911-system enhancement program 75,000 75,000 62,327 (12,673) FEMA reimbursement - 10,058 10,058 - County grant - - 9,961 9,961 ~ j DCA grant - 10,000 21,867 11,867 } Total county shared revenues 106,000 126,058 138,273 12,215 Total intergovernmental revenue 1,332,500 1,352,558 1,267,331 (85,227) ) Charges for services: J ' General government: Sale of maps and publications 500 500 1,576 1,076 Certify, copy & research 1,000 1,000 1,593 593 Election filing fees 60 60 30 (30) Total general government 1,560 1,560 3,199 1,639 1 Public safety: 1 Accident reports and identifications 2,000 2,000 1,968 (32) ` Ambulance fees 180,000 180,000 164,838 (15,162) Total public safety 182,000 182,000 166,806 (15,194) Physical environment: 1 Refuse collection fees 88,000 88,000 84,588 (3,412) 1 Rental of cellular tower 72,000 72,000 97,638 25,638 Protective inspections fees 5,000 5,000 825 (4,175) Total physical environment 165,000 165,000 183,051 18,051 Culture and recreation: Library: Memberships 4,500 4,500 4,570 70 ` Copying 1,000 1,000 835 (165) t Postage 600 600 644 44 Recreation. Program activity fees 3,000 3,000 3,880 880 Arts and crafts 3,200 3,200 1,685 (1,515} L Summer programs 7,000 7,000 11,500 4,500 Other: Lost books -library 700 700 849 149 Recreation facility usage fees 35,000 35,000 57,062 22,062 Special recreation facilities: Marina 76,000 76,000 75,939 (61) ` i Marina decals 6,000 6,000 10,150 4,150 J Total culture and recreation 137,000 137,000 167,114 30,114 l Continued on the following page... v1 50 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Zoning and annexation fees $ - $ - $ 1,490 $ 1,490 Total charges for services 485,560 485,560 521,660 36,100 Fines and forfeitures: Court cases: Court fines 145,000 145,000 108,603 (36,397) Police education $2.00 4,000 4,000 1,863 (2,137) Total court cases 149,000 149,000 110,466 (38,534) Library fines 7,000 7,000 8,268 1,268 Other: Parking fines 2,000 2,000 3,270 1,270 False alarm fines 12,000 12,000 8,695 (3,305) Alarm users permit fee 20,000 20,000 17,820. (2,180) Occupational license penalty 5,000 5,000 7,275 2,275 Outside services 5,000 5,000 7,478 2,478 Code enforcement 7,000 7,000 5,090 (1,910) Seized tag payment 200 200 633 433 Total other 51,200 51,200 50,261 (939) Total fines and forfeitures 207,200 207,200 168,995 (38,205) Revenue from use of money: Interest: Interest earned 50,000 50,000 5,485 (44,515) Interest earned -SBA 180,000 180,000 79,754 (100,246) Total revenue from use of money 230,000 230,000 85,239 (144,761) Miscellaneous Revenue: Other miscellaneous revenue: Reimbursements from the Country Club: Administration 70,000 70,000 70,000 - Maintenance 1,000 1,000 903 (97) Total reimbursements from the Country Club 71,000 71,000 70,903 (97) Other: Insurance refunds: Worker's compensation - - 1,392 1,392 Wabash assessment 2,500 2,500 - (2,500) Other: Discounts -earned 10,000 10,000 2,560 (7,440) Commissions -telephone - - 2 2 Continued on the following page... Financial Section 51 THE VILLAGE OF NORTH PALM BEACH, FLORIDA budgetary Comparison Sohedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (Bee Note 1) (Negative) Commissions -vending machine $ - $ - $ 156 $ 156 Miscellaneous revenues - - 48,561 48,561 Total miscellaneous revenue 83,500 83,500 123,574 40,074 Other financing sources: Capital lease - - 588,000 588,000 Sale of surplus equipment - - 11,229 11,229 Amounts available for appropriation 12,986,918 13,066,976 13,812,397 745,421 Charges to appropriations (outflows): General government: Village Council: J Personal services: Executive salaries 31,200 31,200 31,200 - ` j FICA 2,387 2,387 2,387 - J Worker's compensation 2,340 2,340 2,340 - Operating expenses: Donations 18,000 18,000 - 18,000 ` Professional services 3,000 3,349 3,349 - Accounting and auditing 20,000 20,000 19,291 709 Travel 5,836 6,547 2,722 3,825 R&M furniture & equipment 585 585 584 1 Employee relations 5,000 5,000 1,827 3,173 Advertising 6,000 6,000 5,987 13 Advisory Board dinner 5,670 5,670 5,426 244 Office supplies 200 200 43 157 Publications & subscriptions 60 100 100 - Membership & dues 8,468 8,468 6,525 1,943 l Conference & seminars 1,450 1,450 925 525 J Training and education 500 500 - 500 Total Village Council 110,696 111,796 82,706 29,090 ` Village Manager: Personal services: Executive salaries 188,952 195,493 195,530 (37) - Regular pay 33,056 33,556 33,599 (43) Certification pay 1,000 1,000 - 1,000 Holiday gifts 200 200 200 - ` FICA 16,984 17,461 16,252 1,2x9 Pension-general employees 26,641 27,390 26,700 690 Health insurance 9,820 11,520 15,113 (3,593) i Life insurance 1,554 1,598 1,598 LTD insurance 1,254 2,679 2,668 11 Worker's compensation 16,651 16,719 16,651 68 Continued on the following page... 52 Financial Section ~ THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Operating expenses: Employee assistance program $ 800 $ 515 $ 515 $ - Administration fee 500 500 500 - Professional services 30,000 35,200 35,200 - Contractual services 4,000 161 68 93 Travel 8,290 10,700 10,682 18 Auto allowance 6,000 6,000 6,000 - Telephone 7,100 8,700 8,667 33 Insurance-surety bond 750 750 700 50 Computer supplies 4,200 4,994 5,031 (37) R&M furniture & equipment 200 721 678 43 Printing and binding 700 300 214 86 Employee relations 4,000 7,540 6,999 541 Advertising 500 650 591 59 Office supplies 900 1,389 1,361 28 Furniture supplies 250 250 231 19 Publications & subscriptions 2,700 2,700 2,602 98 Membership & dues 4,725 5,735 5,731 4 Conference and seminars 1,820 2,620 2,345 275 Training and education 1,700 1,110 754 356 Total Village Manager 375,247 398,151 397,180 971 Finance: Personal services: Executive salaries 84,633 88,209 88,247 (38) Regular pay 146,856 150,083 149,596 487 Overtime pay 8,000 8,000 8,033 (33) Holiday gifts 250 250 250 - FICA 18,321 18,841 17,972 869 Pension-general employees 28,739 28,905 28,739 166 Health insurance 12,912 12,912 16,939 (4,027) Life insurance 1,625 1,673 1,673 - LTD insurance 1,308 2,693 2,692 1 Worker's compensation 17,362 17,372 17,362 10 Operating expenses: Professional services 3,500 2,300 150 2,150 Contractual services 11,000 11,000 10,538 462 Travel 5,490 4,990 4,654 336 Telephone 4,500 4,500 4,473 27 Insurance-surety bond 1,500 1,200 1,200 - R&M furniture & equipment 2,000 1,500 823 677 Printing and binding 3,000 5,500 5,410 90 Employee relations 900 1,400 1,323 77 Continued on the following page... Financial Section 53 r- THE !lILLe4(aE ®F N®RTH PALM BEa4CH9 FL®RI®A Budgetary Comparison Bchedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance .Basis Positive - Original Final (See Note 1) (Negative) Office supplies $ 2,500 $ 3,000 $ 2,838 $ 162 Computer supplies ~ 3,200 3;200 2,236 964 Publications & subscriptions 300 300 185 115 Membership and dues 650 650 740 (90) Conference and seminars 1,300 1,450 1,502 (52) Training and education 600 600 680 (80) J Capital outlay: Computer hardware & software 1,000 1,000 1,082 (82) Total Finance 361,446 371,528 369,337 2,191 Village Clerk: f Personal services: Executive salaries 54,002 56,608 56,624 (16) Regular pay 36,031 37,806 37,851 (45) r Part-time pay 5,880 380 - 380 Holiday gifts 100 100 100 - FICA 7,337 7,650 6,835 815 Pension-general employees 10,804 11,294 11,036 258 Health insurance 4,761 4,761 6,246 (1,485) Life insurance 632 661 661 - ` LTD insurance 509 1,063 975 88 Worker's compensation 7,193 7,200 7,193 7 Operating expenses: Contractual services 3,000 3,400 3,365 35 ` 1 Travel 593 593 419 174 1 Telephone 2,000 2,000 2,000 - Rental-facility 500 500 250 250 Insurance-surety bond 110 110 100 10 R&M building & grounds 80 80 - 80 R&M furniture & equipment 1,590 1,290 580 710 ` l Printing and binding 1,670 1,670 894 776 J Employee relations 500 500 358 142 Recording fees/court cost 150 150 47 103 Trophies, awards & prizes 700- 700 242 458 Office supplies 2,095 2,095 2,022 73 Recording tapes 140 140 133 7 i Records retention supplies 100 - - - Flower expense 800 800 863 (63) Publications & subscriptions 335 335 222 113 Membership & dues 300 330 300 30 Conference and seminars 410 380 180 200 Training and education 1,200 1,200 179 1,021 Continued on the following page... ~ i 54 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Capital outlay: Furniture & fixtures $ 500 $ 500 $ 500 $ - Total Village Clerk 144,022 144,296 140,175 4,121 Village Attorney: Operating expenses: Monthly retainer 70,000 87,000 86,981 19 Special legal services 50,000 26,375 20,639 5,736 Labor services 15,000 21,625 21,603 22 Total Village Attorney 135,000 135,000 129,223 5,777 Planning and Community Development: Contractual services: Engineering/planning 10,000 37,500 37,449 51 Archivist/historian 200 200 - 200 Erosion control study - 15,000 4,684 10,316 Total Planning and Community Development 10,200 52,700 42,133 10,567 General Services: Operating expenses: Contract Labor 10,000 8,500 7,486 1,014 Telephone 2,600 2,950 2,868 82 Postage 34,000 34,000 31,072 2,928 Electricity 14,000 14,000 6,365 7,635 Water and sewer 2,300 2,300 1,977 323 Gas 100 100 - 100 Solid waste disposal 400 400 329 71 Rental-postage equipment 1,600 1,600 1,202 398 Rental-copier equipment 7,800 7,800 6,274 1,526 Insurance -package 150,000 120,000 82,926 37,074 R&M building & grounds 900 900 64 836 R&M furniture & equipment 2,500 2,500 2,531 (31) Printing and binding 7,500 8,600 8,482 118 Newsletter supplies 13,000 11,550 11,288 262 Office supplies 1,500 1,500 1,442 58 Building maintenance supplies 2,000 2,000 1,422 578 Furniture/fixtures supplies 150 150 - 150 Irrigation supplies 300 300 248 52 Machinery & equipment supplies 1,000 1,000 419 581 Fertilizers 500 500 - 500 Continued on the following page... Financial Section 55 THE \/ILLACE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive , Original Final (Barr Note 1) (Negative) Custodial supplies $ 2,000 $ 2,000 $ 1,630 $ 370 Refreshments and supplies 2,000 2,000 605 1,395 Capital outlay: Computer hardware & software 3,000 3,000 2,100 900 Machinery & equipment - 1,500 1,500 - Total General Services 259.,150 229,150 172,230 56,920 Special Projects: r Contractual services: Comprehensive plan amendments 10,000 10,000 5,000 5,000 Northlake Boulevard redevelopment 5,000 5,000 - 5,000 Total Special Projects 15,000 15,000 5,000 10,000 r 1 Total general J ~ government 1,410,761 1,457,621 1,337,984 119,637 Public Safety: Law enforcement: Personal services: Executive salaries 276,414 299,980 300,004 (24) Regular pay 1,339,353 1,304,525 1,281,494 23,031 Part-time pay 63,533 63,533 57,141 6,392 Overtime pay 85,000 198,163 198,241 (78) Holiday overtime 45,000 45,000 38,850 6,150 Training overtime 30,000 16,500 5,421 11,079 Outside services pay - - 4,624 (4,624) ` J Special pay 23,360 23,360 20,758 2,602 Holiday gifts 2,600 2,600 2,600 - FICA 142,496 150,313 141,836 8,477 y Pension-general employees 39,246 43,950 39,246 4,704 Pension-police and fire 73,608 73,608 36,804 36,804 Health insurance 99,623 99,623 130,690 (31,067) ` j Life insurance 11,311 12,038 12,038 - ) LTD insurance 17,856 19,011 19,012 (1) Worker's compensation 125,947 126,004 125,947 57 Operating expenses: Physical exams 7,565 7,175 7,123 52 Donations 4,755 4,755 - 4,755 Laundry & dry cleaning 23,520 25,197 25,196 1 ` Travel 15,000 21,000 20,187 813 Continued on the following page... 56 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Telephone $ 1,440 $ 1,440 $ 1,409 $ 31 Rental-equipment 10,158 9,158 8,030 1,128 Insurance-law enforcement liability 600 600 (80) 680 R&M automotive 8,000 8,000 7,484 516 R&M machinery & equipment 17,000 17,000 15,085 1,915 R&M PA & communication 14,615 14,615 10,717 3,898 R&M computer 7,000 6,050 2,271 3,779 Printing and binding 12,000 9,200 8,647 553 Photographic 4,000 3,750 3,106 644 Employee relations 1,500 1,500 1,188 312 Advertising 3,000 4,624 5,271 (647) Licenses & fees 3,155 7,487 6,841 646 Prisoner and jail expenses 500 500 60 440 Special investigation 2,000 1,399 1,229 170 Victim examination fee 250 250 - 250 Appreciation Banquet 3,500 4,500 4,500. - Office supplies 5,000 8,300 8,386 (86) Computer supplies 1,275 3,775 3,479 296 K-9 supplies 2,000 2,400 2,281 119 Machinery & equipment supplies 525 625 698 (73) Auto parts supplies 12,000 16,150 15,568 582 Tires and tubes 2,900 4,800 4,629 171 Safety supplies 9,300 9,300 8,607 693 Chemicals 500 500 444 56 Gas, oil & lubricants 35,205 34,705 30,642 4,063 Refreshments & supplies 1,.100 3,350 2,892 458 Uniforms & shoes 25,000 25,300 25,304 (4) Ammunition and gun parts 5,289 7,857 7,717 140 Fingerprinting supplies 5,000 4,500 3,551 949 Publications & subscriptions 1,420 1,420 1,419 1 Membership & dues 1,695 1,695 660 1,035 Conference & seminars 2,700 1,700 1,474 226 Training & education 28,000 21,690 15,178 6,512 2nd dollar education 4,000 4,000 2,850 1,150 Capital outlay: Capital 18,690 18,690 18,708 (18) Automotive 100,337 99,837 114,223 (14,386) Computer hardware & software 18,400 18,400 17,820 580 Continued on the following page... Financial Section 57 l'I-IE VILLA(a€ ®F N®RTH PALM BEA~I-1, FL®RI®A ~- Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (Bee Note 1) (Negative) Office equipment $ 3,050 $ 3,050 $ 3,050 $ - Audio, visual & f communication 20,404 18,404 16,232 2,172 Total Law Enforcement 2,818,695 2,936,856 2,848,782 88,074 Fire Prevention: r Personal services: Executive salaries 63,418 63,680 63,724 (44) Regular pay 275,356 240,156 239,376 780 Overtime pay 40,280 40,280 37,737 2,543 Holiday overtime 12,105 12,105 8,734 3,371 ` Training overtime 30,000 18,642 11,803 6,839 Special pay 18,120 16,895 7,718 9,177 Holiday gifts 1,150 1,150 1,150 - FICA 33,604 33,604 27,137 6,467 ` 1 Pension-police & fire 21,963 21,963 10,982 10,981 Volunteer length of service award 11,000 11,000 8,673 2,327 Health insurance 22,039 22,039 28,912 (6,873) ` l Life insurance 2,366 2,366 2,366 - 1 LTD insurance 3,827 3,827 3,826 1 Worker's compensation 25,409 25,409 25,409 - Operating expenses: Physical exams 1,000 1,000 930 70 Laundry and dry cleaning 4,320 4,920 4,920 - Travel 3,056 2,231 1,229 1,002 ` R&M automotive 14,250 15,890 15,583 307 R&M machinery & equipment 2,500 2,795 2,859 (64) R&M PA & communication 2,000 3,275 2,884 391 R&M computer 760 - - - Licenses & fees 135 235 199 36 Volunteer appreciation 3,100 3,450 3,396 54 Office supplies 1,050 1,150 1,074 76 Audio, visual & communication 5,127 652 643 9 Machinery & equipment supplies 4,000 4,000 3,592 408 Auto parts supplies 3,000 4,145 3,314 831 Chemicals 900 620 556 64 Gas, oil and lubricants 4,500 4,725 4,748 (23) Refreshments and supplies 400 50 47 3 Uniforms and shoes 8,384 12,084 12,076 8 i Flashlights & batteries 500 1,000 1,017 (17) Uniforms-volunteers 7,000 7,000 10,025 (3,025) L Publications & subscriptions 1,830 1,860 1,860 - Membership & dues 475 445 375 70 Continued on the following p~gp,.. 58 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Conference & seminars $ 450 $ 450 $ - $ 450 Training & education 15,500 9,790 6,461 3,329 Capital outlay: Automotive 104,500 127,039 314,806 (187,767) Computer hardware & software 1,750 1,210 1,210 - Audio, visual & communication 8,785 8,399 8,398 1 Machinery & equipment 8,800 6,240 6,229 11 Total Fire Prevention 768,709 737,771 885,978 (148,207) Emergency Medical Service: Personal services: Executive salaries 58,369 74,476 73,832 644 Regular pay 467,968 522,097 522,149 (52) Overtime pay 63,588 94,488 93,621 867 Holiday overtime 17,500 22,400 22,007 393 Training overtime 10,726 9,726 9,727 (1) Special pay 3,480 4,880 4,528 352 Holiday gifts 650 650 650 - FICA 47,555 53,397 53,420 (23) Pension-general employees 26,409 27,751 26,409 1,342 Pension-police and fire 20,078 10,578 10,039 539 Health insurance 37,648 37,648 49,389 (11,741) Life insurance 3,682 4,052 4,052 - LTD insurance 5,948 6,545 6,545 - Worker's compensation 39,475 39,538 39,475 63 Operating expenses: Preventative medical service 1,000 1,540 1,531 9 Physical exams 2,250 - - - Other professional services 13,200 13,200 13,200 - Laundry & dry cleaning 7,020 9,470 8,940 530 Contractual services 3,545 3,545 3,245 300 Travel 2,910 2,910 2,556 354 Telephone 6,435 5,935 5,399 536 Electricity 2,600 1,900 1,918 (18) Water & sewer 200 200 156 44 Rental-equipment 5,160 10,110 9,222 888 Insurance-EMT 2,800 135 - 135 R&M automotive 4,000 2,240 1,365 875 R&M machinery & equipment 6,128 2,128 1,825 303 R&M PA & communication 2,000 2,350 2,260 90 Licenses & fees 5,950 4,210 4,157 53 Office supplies 1,450 1,920 1,911 9 Computer supplies 3,675 3,915 3,908 7 Continued on the following page... Financial Section 59 THE \/ILLAGE OF NORTH PALM REACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) r Building maintenance supplies $ 400 $ 700 $ 695 $ 5 Furniture/fixtures supplies 280 280 - 280 Machinery & equipment supplies 500 600 535 65 Auto parts supplies 4,800 2,500 2,449 51 Medical & safety supplies 24,000 22,300 22,311 (11) Disaster supplies 1,000 14,411 14,091 320 1 Chemicals 1,000 1,050 1,046 4 J Custodial supplies 400 400 204 196 Gas, oil & lubricants 6,420 3,570 3,112 458 Refreshments & supplies 250 50 72 (22) Uniforms & shoes 7,957 6,657 6,672 (15) Flashlights & batteries 500 500 477 23 Publications & subscriptions ~ 489 504 500 4 Membership & dues 100 100 - 100 Conference & seminars 1,610 .1,210 1,170 40 Training & education 7,000 5,560 5,597 (37) l Capital outlay: ) Capital 4,496 3,896 3,805 91 Automotive 24,000 7,500 80,000 (72,500) - Computer hardware & software 6,270 4,070 3,795 275 Furniture & fixtures 3,438 2,558 2,549 9 Audio, visual & communication 2,830 1,930 1,343 587 Machinery & equipment 12,622 6,902 6,890 12 Total Emergency Medical Service 983,761 1,061,182 1,134,749 (73,567) i Total public safety 4,571,165 4,735,809 4,869,509 (133,700) i Public Services: Code Enforcement: Personal services: Executive salaries 138,478 138,839 136,303 2,536 Regular pay 193,543 120,377 117,995 2,382 Part-time pay 15,278 41,944 37,752 4,192 Overtime pay 650 2,650 1,642 1,008 Holiday gifts 425 425 450 (25) ` FICA 26,617 26,617 21,521 5,096 Pension-general employees 39,920 39,920 39,920 - Health insurance 21,063 21,063 27,632 (6,569) Life insurance 2,332 2,332 2,332 - LTD insurance 1,145 2,565 2,564 1 Worker's compensation 26,047 26,047 26,047 - ` Operating expenses: I Physical exams 200 200 88 112 Continued on the following page... 1 60 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Uniform rental $ 1,500 $ 1,500 $ 1,524 $ (24) Contractual service 2,150 2,950 2,999 (49) Travel 3,290 2,890 2,177 713 Telephone 11,700 13,900 13,958 (58) Electricity 4,500 3,500 3,086 414 Water & sewer 500 500 471 29 R&M building & grounds 1,500 1,500 876 624 R&M furniture & equipment 6,600 6,000 4,618 1,382 R&M PA & communication 3,000 3,150 3,130 20 Printing & binding 1,200 1,200 1,002 198 Reproduction 400 200 148 52 Employee relations 1,000 1,100 1,067 33 Advertising 5,000 9,400 9,480 (80) County PW activities 300 50 - 50 Office supplies 5,500 5,900 5,754 146 Building maintenance supplies 800 800 469 331 Machinery & equipment supplies 3,500 - 3,500 Auto parts supplies 3,500 300 1,898 (1,598) Tires and tubes 300 600 291 309 Custodial supplies 600 - 428 (428) Gas, oil & lubricants 3,500 3,500 2,416 1,084 Refreshments & supplies 500 600 532 68 Publications & subscriptions 790 790 845 (55) Membership & dues 1,290 1,290 1,217 73 Conference & seminars 1,225 1,225 1,084 141 Training & education 3,500 1,750 1,712 38 Capital outlay: Automotive 3,000 1,500 12,500 (11,000) Computer hardware & software 1,600 1,600 1,320 280 Total Code Enforcement 534,443 494,174 489,248 4,926 Facilities Maintenance: Personal services: Regular pay 224,423 230,473 226,480 3,993 Overtime pay 5,000 5,000 4,158 842 Holiday gifts 400 400 400 - FICA 17,553 18,244 16,771 1,473 Pension-general employees 27,531 28,616 27,531 1,085 Health insurance 20,765 20,765 27,241 (6,476) Life insurance 1,579 1,642 1,642 - LTD insurance 858 2,638 2,638 - Worker's compensation 16,832 16,910 16,832 78 Operating expenses: Physical exams 200 200 - 200 Uniform rental 2,000 2,000 2,013 (13) Continued on the following page... Financial Section 61 THE i/ILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) 1 R&M machinery & equipment $ 350 $ 350 $ 157 $ 193 R&M PA & communication 2,000 2,000 1,782 .218 Shop tools & supplies 1,000 1,000 881 119 Machinery & equipment supplies 1,550 1,550 1,488 62 Auto parts supplies 2,000 1,800 1,734 66 Tires & tubes 300 500 500 - Gas, oil & lubricants 4,500 4,500 4,408 92 Uniforms & shoes 730 730 688 42 Capital outlay: Automotive 14,500 8,000 58,000 (50,000) Machinery and equipment 7,600 6,200 5,657 543 Total Facilities Maintenance 351,671 353,518 401,001 (47,483) Genera] Services: Operating expenses: l Telephone 33,950 33,550 32,734 816 Postage 2,289 1,139 365 774 Electricity 38,712 43,712 43,522 190 Water and sewer 2,232 2,972 2,982 (10) Gas 4,000 2,750 1,950 800 Solid waste disposal 1,600 1,500 1,463 37 Rental -copier equipment 9,000 7,700 5,508 2,192 R&M building & grounds 14,381 16,001 8,079 7,922 R&M furniture & equipment 1,000 1,000 623 377 Building maintenance supplies 5,900 3,250 2,718 532 _ l Furniture & fixtures 1,500 1,380 951 429 J Irrigation supplies 500 250 136 114 Machinery & equipment supplies 1,000 1,350 1,337 13 Fertilizers 400 150 19 131 Custodial supplies 3,800 3,950 3,949 1 Refreshment and supplies 4,000 4,000 3,980 20 Capital outlay: Computer hardware & software 1,449 1,059 1,055 4 Total General Services 125,713 125,713 111,371 14,342 Solid Waste Collection: Personal services: Regular pay 569,224 577,264 569,171 8,093 Overtime pay 1,500 1,500 1,171 329 Holiday overtime 5,500 6,220 6,207 13 Holiday gifts 1,100 1,100 1,100 4 FICA 44,082 45,311 42,616 2,695 Continued on the following page... 62 Financial Section 1 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Pension-general employees $ 69,147 $ 71,070 $ 69,147 $ 1,923 Health insurance 51,462 52,212 68,482 (16,270) Life insurance 4,007 4,119 4,119 - LTD insurance 2,354 6,612 6,613 (1) Worker's compensation 42,692 42,695 42,692 3 Operating expenses: Preventative medical supplies 450 450 74 376 Physical exams 600 600 558 42 Uniform rental 5,500 5,700 5,713 (13) Solid waste disposal 80,000 129,800 124,986 4,814 R&M PA & communication 2,400 2,400 2,409 (9) Advertising 1,200 1,200 1,200 - Shop tools & supplies 1,000 2,000 1,738 262 Auto parts supplies 28,000 33,000 30,293 2,707 Tires & tubes 8,000 10,000 9,737 263 Chemicals 600 600 637 (37) Gas, oil, & lubricants 40,000 38,000 35,581 2,419 Oil-grease 2,000 2,000 1,869 131 Uniforms & shoes 3,200 3,200 3,190 10 Recycling program 850 850 807 43 Capital outlay: Automotive 43,750 143,250 207,130 (63,880) Machinery & equipment 6,000 4,000 2,544 1,456 Total Solid Waste Collection 1,014,618 1,185,153 1,239,784 (54,631) Street Maintenance: Personal services: Executive salaries 53,458 55,780 55,813 (33) Regular pay 249,788 248,150 247,836 314 Overtime pay 1,000 2,500 2,563 (63) Holiday gifts 550 550 550 - FICA 23,275 23,649 22,379 1,270 Pension-general employees 36,510 37,097 36,510 587 Health insurance 30,190 30,190 39,605 (9,415) Life insurance 2,134 2,288 2,273 15 LTD insurance 1,482 3,642 3,635 7 Worker's compensation 22,743 22,810 22,743 67 Operating expenses: Physical exams 400 400 136 264 Other professional services 41,000 32,550 21,092 11,458 Uniform rental 2,500 2,700 2,715 (15) Tree trimming 7,000 7,000 3,225 3,775 Electricity 50,000 49,500 48,192 1,308 Continued on the following page... Financial Section 63 THE VILLAGE OF NORTb PALM REACH FLORIDA - Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 , Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (Bee Note 1) (Negative) Water & sewer $ 22,000 $ 23,500 $ 23,517 $ (17) Rental-.equipment 1.,000 1.,000 666 334 ~ ~ ; R&M communication system 2,500 2,350 2,070 280 R&M street paving 200,000 190,490 187,150 3,340 R&M storm drainage system 20,000 20,250 15,054 5,196 Street striping 1,500 1,500 1,470 30 Shop tools & supplies 1,500 1,500 1,575 (75) Irrigation supplies 6,000 6,000 5,562 438 Machinery & equipment supplies 3,000 4,500 4,507 (7) Auto parts supplies 3,000 3,000 2,822 178 Street light supplies ~ 1,000 1,000 999 1 Tires & tubes 1,000 1,000 815 185 Trees & sod 9,000 9,000 7,161 1,839 Fertilizers 5,000 5,000 2,448 2,552 Traffic control signs 4,000 4,000 3,829 171 Fences-alleys 2,600 2,600 2,273 327 Catch basin grates 4,000 4,000 3,877 123 Gas, oil and lubricants 7,600 9,000 9,096 (96) Uniforms and shoes 1,000 1,000 913 87 1 Asphalt, shell and concrete 10,000 10,000 8,714 1,286 J Capital outlay: Construction & major renovation 180,000 180,000 179,435 565 Automotive 5,500 3,000 22,325 (19,325) Machinery and equipment 4,500 3,000 2,976 24 Total Street Maintenance 1,017,730 1,005,496 998,521 6,975 Mechanical Maintenance: Personal services: Regular pay 94,776 94,868 91,973- 2,895 j Overtime pay 800 800 732 68 J Holiday gifts 200 200 200 - FICA 7,312 8,305 6,910 1,395 Pension-general employees 11,469 13,028 11,469 1,559 Health insurance 9,820 9,820 12,882 (3,062) Life insurance 664 755 755 - LTD insurance 157 1,219 1,219 - Worker's compensation 7,108 7,183 7,108 75 Operating expenses: Uniform rental 1,000 1,000 978 22 ` Other contractual services 800 800 360 440 Electricity 2,600 5,000 5,073 (73) Water & sewer 1,600 1,600 1,577 23 ` Solid waste disposal 1,600 1,600 1,508 92 R&M building & grounds 5,700 14,200 14,177 23 I Continued on the following page... ~ j L 1 64 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note y) (Negative) R&M machinery & equipment $ 2,000 $ 2,000 $ 2,036 $ (36) R&M communication system 500 500 425 75 Licenses & fees 150 150 50 100 Shop tools & supplies 5;000 6,400 6,366 34 Building maintenance supplies 1,000 1,000 949 51 Machinery & equipment supplies 600 600 637 (37) Auto parts supplies 1,500 1,500 1,327 173 Tires & tubes 200 600 190 410 Chemicals 1,000 1,000 874 12b Custodial supplies 1,200 1,450 1,450 - Gas, oil & lubricants 1,260 1,710 1,790 (80) Uniforms and shoes 250 250 201 49 Capital outlay: Construction & major renovation 5,000 5,000 4,999 1 Automotive 5,500 3,000 20,700 (17,700) Machinery and equipment - - 1,625 (1,625) Total Mechanical Maintenance 170,766 185,538 200,540 (15,002) Park Maintenance: Personal services: Regular pay 196,829 201,891 196,733 5,158 Part-time pay 11,900 3,900 3,880 20 Overtime pay 6,000 6,000 4,470 1,530 Holiday gifts 475 475 475 - FICA 16,426 16,815 15,110 1,705 Pension-general employees 24,339 24,946 24,339 607 Health insurance 19,640 20,740 27,196 (6,456) Life insurance 1,380 1,415 1,407 8 LTD insurance 730 2,462 2,457 5 Worker's compensation 15,655 15,734 15,655 79 Operating expenses: Physical exams 200 200 176 24 Other professional services 2,000 1,500 - 1,500 Uniform rental 1,800 2,300 2,132 168 Tree trimming 3,000 3,000 2,700 300 Electricity 5,000 4,500 3,789 711 Solid waste disposal 5,000 5,000 4,634 366 Rental-equipment 500 500 112 388 R&M marina 8,000 8,000 7,964 36 R&M PA & communication 900 900 854 46 R&M streets, roads & paths 500 500 144 356 Printing & binding 375 375 - 375 Shop tools & supplies 1,500 1,500 1,446 54 Building maintenance supplies 23,000 24,500 19,248 5,252 Irrigation supplies 6,500 6,500 6,562 (62) Continued on the following page... Financial Section 65 `THE VILLAGE ®F N®RTH PALM BEACH, FL®Fil®e4 ' ] Budgetary Comparison Schedule J General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive - Original Final (See Note 1) (Negative) Machinery & equipment supplies $ 4,000 $ 4,000 $ 3,965 $ 35 Auto parts supplies 2,000 2,000 1,590 410 Tires & tubes 700 700 699 1 Trees & sod 10,000 10,000 9,859 141 Fertilizers 15,000 15,000 14,788 212 Sand/clay/shelUtopsoil 5,000 5,000 3,972 1,028 Lime for ballfields 500 500 474 26 Chemicals 1,200 1,200 824 376 Gas, oil and lubricants 4,000 4,000 3,491 509 Uniforms and shoes 630 630 584 46 Capital outlay: ~ 1 Construction & major renovation 50,000 50,000 1,500 48,500 J Automotive 5,500 20,000 19,785 215 Machinery & equipment 20,800 20,800 20,628 172 Total Park Maintenance 470,979 487,483 423,642 63,841 Total public services 3,685,920 3,837,075 3,864,107 (27,032) Leisure services: ` Library: Personal services: Executive salaries 54,068 55,944 55,958 (14) Regular pay 244,769 251,919 223,446 28,473 Part-time pay 74,059 74,059 55,618 18,441 Holiday gifts 650 650 650 - FICA 28,526 29,300 24,787 4,513 Pension-general employees 35,862 37,075 35,862 1,213 Health insurance 19,208 19,208 25,198 (5,990) Life insurance 2,102 2,173 2,173 - LTD insurance 470 3,061 3,154 (93) Worker's compensation 27,967 28,057 27,967 90 Operating expenses: Physical exams 165 165 - .165 Other contractual services 900 900 775 125 Travel 1,180 1,180 398 782 Telephone 8,000 8,000 7,989 11 Electricity 15,000 15,900 15,961 (61) Water 8~ sewer 2,000 2,000 1,719 281 Solid waste disposal 600 600 - 600 Rental-equipment 2,620 2,620 2,364 256 Rental-film/exhibit 300 300 - 300 ` R&M building & grounds 6,200 6,200 3,547 2,653 R&M windows 400 400 - 400 Continued on the following page... ~ ~l 66 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note '1) (Negative) R&M carpet $ 1,400 $ 1,400 $ 1,200 $ 200 R&M lights 110,000 110,000 91,932 18,068 R&M furniture & office equipment 1,200 1,200 364 836 R&M elevator 1,626 1,626 1,480 146 R&M PA & communication 200 200 - 200 R&M computer 2,895 2,595 760 1,835 Printing & binding 4,000 4,000 2,247 1,753 Employee relations 800 800 654 146 Licenses & fees 260 260 - 260 Office supplies 5,000 5,000 4,879 121 Computer supplies 1,300. 1,300 1,274 26 Building maintenance supplies 1,000 1,000 942 58 Furniture maintenance supplies 500 500 223 277 Irrigation supplies 500 500 28 472 Machinery & equipment supplies 1,500 1,500 845 655 Fertilizers 165 165 - 165 Chemicals 100 100 26 74 Custodial supplies 1,500 1,500 1,421 79 Photocopies & reproducing 1,000 1,000 924 76 Refreshments & supplies 600 600 530 70 Membership & dues 595 595 465 130 Conference & seminars 280 280 - 280 Training & education 300 300 150 150 Capital outlay: Computer hardware & software 3,700 4,000 2,387 1,613 Books & publications 55,000 55,000 54,959 41 Audio book collection 3,000 3,000 2,998 2 Video cassette 4,000 4,000 4,014 (14) Total Library 727,467 742,132 662,268 79,864 Recreation: Personal services: Executive salaries 57,540 59,299 59,326 (27) Regular pay 122,113 126,308 126,373 (65) Part-time pay 77,834 99,134 98,692 442 Holiday gifts 500 500 400 100 FICA 19,698 21,246 21,336 (90) Pension-general employees 21,558 22,105 21,558 547 Health insurance 11,787 11,787 15,463 (3,676) Continued on the following page... Financial Section 67 ,J THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive ®riginal Final (See fVote (iVegative) Life insurance $ 1,263 $ 1,294 $ 1,352 $ -(58) LTD insurance 1.,01.5 2,082 .2,082. - Worker's compensation 19,312 19,353 19,312 41 Operating expenses: Physical exams 165 165 - 165 - Travel 1,600 2,910 2,563 347 Telephone 11,600 13,100 12,580 520 Electricity 80,000 76,000 75,224 776 Water and sewer 12,000 12,000 11,867 133 Solid waste disposal 2,500 2,500 1,763 737 R&M building & grounds 14,700 14,700 14,662 38 R&M furniture & equipment 500 200 116 84 R&M PA & communication 1,000 1,000 648 352 Printing & binding 450 450 413 37 Employee relations 900 900 565 335 Advertising 350 350 349 1 Trophies, awards & prizes 300 300 - 300 Office supplies 2,500 2,800 2,721 79 Photo supplies 300 300 236 64 Building maintenance supplies 14,500 13,100 13,099 1 Furniture maintenance supplies 270 270 245 25 Machinery & equipment supplies 2,400 2,400 2,178 222 ` Auto parts supplies 1,000 1,000 545 455 Nets & tapes 1,000 1,000 870 130 Playground supplies 3,500 4,500 4,449 51 Arts & crafts supplies 3,000 3,000 2,958 42 Medical & safety supplies 500 500 461 39 Custodial supplies 7,500 7,500 7,298 202 Gas, oil & lubricants 1,200 1,700 1,651 49 Refreshments & supplies 350 350 142 208 Uniforms & shoes 1,000 1,500 1,201 299 ` 1 Membership & dues 760 760 590 170 JI Conference & seminars 1,100 1,600 1,242 358 Training & education 700 200 170 30 Capital outlay: Construction & major renovation 10,000 10,000 - 10,000 Automotive 5,000 2,500 20,000 (17,500) Playground & outside equipment 40,100 36,100 29,232 6,868 l Machinery & equipment 45,400 29,100 29,012 88 Total Recreation 600,765 607,863 604,944 2,919 Special Events: 4 Operating expenses: Music & talent 8,350 8,350 7,683 667 Continued on the following page... ~ ~ 68 Financial Section i ~l THE VILLAGE OF NORTH PALM BEACH, FLORIDA Budgetary Comparison Schedule General Fund (Continued) Year Ended September 30, 2002 Budgeted Amounts Actual on Budgetary Variance Basis Positive Original Final (See Note 1) (Negative) Rental-equipment $ 4,000 $ 3,500 $ 2,574 $ 926 Public events 38,000 35,000 34,696 304 Employees' summer outing 6,000 4,780 3,523 1,257 Furniture & fixture supplies 1,390 1,390 1,272 118 Refreshments & supplies 1,250 750 230 520 Capital outlay: Furniture & fixtures 3,650 3,950 3,270 680 Machinery and equipment 5,000 5,000 4,825 175 Total Special Events 67,640 62,720 58,073 4,647 Total leisure services 1,395,872 1,412,715 1,325,285 87,430 Other: Council contingency: Village Manager contingency 10,000 190 - 190 Council contingency 125,000 104,047 - 104,047 Insurance: Reserve-group health 200,000 333,200 333,200 - Benefits and awards: Reserve-miscellaneous 20,000 20,700 20,741 (41) Reserve-raises and benefits 246,000 8,919 - 8,919 Reserve-accrued. benefits 60,000 100,000 80,258 19,742 Safety and attendance awards 10,000 - - - Performace raises 138,000 - - - Total other 809,000 567,056 434,199 132,857 Debt service: Debt service principal 829,000 829,000 828,9'75 25 Debt service interest 285,200 227,700 196,072 31,628 Total debt. service 1,114,200 1,056,700 1,025,047 31,653 Other financing uses: Transfer to capital projects fund - - 271,340 (271,340) Total charges to appropriations 12,986,918 13,066,976 13,127,471 (60,495) Budgetary fund balance, September 30 $ - $ - $ 684,926 $ 684,926 See notes to required supplementary information. Financial Section 69 THE !/ILLAGE ®F N®RTH PALM BEACH, FL®RI®A r schedule of Funding Progress -General Employees Retirement Fund Actuarial UAAL as Actuarial Accrued % of Actuarial Value of Liability (AAL) Unfunded AAL Funded Covered Covered Valuation Assets -Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b - a) (a/b) (c) (b-a)/c ~ 1 10!1/96 $ 3,805,073 $ 4,295,018 $ 489,945 88.6% $ 2,251,610 21.8% J 10/1/97 4,301,968 4,585,587 283,619 93.8% 2,380,024 11.9% 10/1/98 4,574,342 4,733,864 159,522 96.6% 2,435,518 6.5% 10/1/99 5,179,781 5,943,849 764,068 87.1% 2,543,984 30.0% r 10/1/00 5,732,329 7,508,961 1,776,632 76.3% 2,761,773 64.3% ~ j 10/1/O1 6,312,447 8,150,125 1,837,678 77.5% 3,127,313 58.8% J See notes to required supplementary information. _1 1 [1 `l i~ 70 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Schedule of Employer and State Contributions Annual Year Ended Required Employer State Percentage September 30, Contribution Contribution Contribution Contributed General Employees Retirement Fund 1997 $ 240,637 $ 245,169 n/a 101.9% 1998 224,810 250,721 n/a 111.5% 1999 214,323 227,112 n/a 106.0% 2000 292,866 372,744 n/a 127.3% 2001 415,152 447,128 n/a 107.7% 2002 430,411 467,750 n/a 108.7% Fire and Police Retirement Fund 1997 $ 167,763 $ 93,000 $ 76,514 101.0% 1998 118,643 56,672 92,463 125.7% 1999 182,286 110,966 79,215 104.3% 2000 97,135 53,067 73,123 129.9% 2001 85,866 25,607 77,227 119.8% 2002 130,305 57,825 135,068 148.0% * Annual required contributions for the Fire and Police Retirement Fund include contributions from the State of Florida. See notes to required supplementary information. Financial Section 71 r~ THE !/ILLAG~ ®F N®RTH BALM BEAdH, FL®RI®A Notes to Required Supplementary Information September 30, 2002 (1) BUDGETARY DATA r~ An explanation of the differences between budgetary inflows and outflows and GAAP revenues and expendi- tures follows: General Fund Sources/Inflows of resources: Actual amounts (budgetary basis) "available for appropriations" from the budg- etary comparison schedule $ 13,812,397 Differences -budget to GAAP: i The fund balance at the beginning of the year is a budgetary resource but is 1 not acurrent-year revenue for financial reporting purposes (2,199,610) The proceeds from capital leases are budgetary resources but are not reve- nues for financial reporting purposes (588,000) The proceeds from the sale of the surplus equipment are budgetary re- ` sources but are regarded as a special item, rather than revenue, for financial reporting purposes (11,229) Total revenues as reported on the statement of revenues, expenditures and changes in fund balances -governmental funds $ 11,013,558 Uses/Outflows of resources: Actual amounts (budgetary basis) "total charges to appropriations" from the budgetary comparison schedule $ 13,127,471 ` 1 Differences -budget to GAAP: J Encumbrances for supplies and equipment ordered but not received are re- 1 ported in the year the order is placed for budgetary purposes, but in the year II the supplies and equipment are received for financial reporting purposes. (355,751) ` Transfers to other funds are outflows of budgetary resources but are not ex- ` penditures for financial reporting purposes (271,340) Total expenditures, as reported on the statement of revenues, expendi- tures, and changes in fund balances -governmental funds $12,500,380 (2) STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY ` Unencumbered appropriations lapse at fiscal year end. Encumbrances at year end are carried forward to the next year. During the year, several supplementary appropriations were necessary. For the year ended September 30, j 2002, several expenditures exceeded appropriations in the general fund. They are as follows: 'J 72 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Notes to Required Supplementary Information September 30, 2002 Expenditures for capital outlay -Automotive in Fire Prevention, Law Enforcement, EMS, Code Enforce- ment, Facilities Maintenance, Solid Waste, Street Maintenance, Mechanical Maintenance, and Recreation exceeded appropriations due to the accounting treatment for capital purchases financed through debt in the initial year. Expenditures for Outside Services Pay in Law Enforcement is not a budgeted item. These costs are incurred as a result of contracts with businesses in the Village for additional police protection. This amount is offset by fees charged for those services. Expenditures for Uniforms-Volunteers in Fire Prevention exceeded appropriations due to open encum- brances for expenditures. (3) PENSION PLANS The aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilities. The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows: General Fire Employees and Police Valuation date 10/1/O1 10/1/O1 Actuarial cost method Frozen Entry Age Aggregate Asset valuation method 5-year 5-year smoothed smoothed market market Actuarial assumptions: Investment rate of return (including inflation) 8.5% /year up to retirement, 5.25% thereafter 8% /year Salary increases (including inflation) 5.5% /year 6% /year Inflation 4% /year 4% /year Post retirement benefit increases 3% /year for 3% /year those who retired before 2/1/82 Financial Section 73 r r~ r r r This page intentionally left blank. i 74 Financial Section i df]l~}2][~ .LNfIlQ1~~~a' CIN~ CIi0if7~.~ '7[~fbCIIdCeIIQNd JAidI~II~IhiO~ r r i r i r r i i 'i i li i. i i. i. i i. i Fiduciary Funds Financial Section 77 r T'HE i/ILLAGE ®F N®RTH PALM BEACH, FL®RI®A Combining Statement of Net,4ssets September 30, 2002 Employee Retirement Funds Fire and Total General Police Employee Employees Officers Retirement Pension Pension Funds Assets Cash and cash equivalents $ 135,021 $ 433,739 $ 568,760 Investments 5,634,290 5,011,724 10,646,014 Interest receivable - 32,608 32,608 Total assets $ 5,769,311 $ 5,478,071 $ 11,247,382 r 1 Liabilities I Due to others $ - $ - $ - Totalliabilities $ - $ - $ - Net Assets Reserved for employees' pension benefits $ 5,769,311 $ 5,478,071 $ 11,247,382 Total net assets $ 5,769,311 $ 5,478,071 $ 11,247,382 ` 1 `1 ~1 ~1 ~j `l 78 Financial Section ~J Agency Funds Manatee Northlake Total Protection Boulevard Agency Agency Task Force Funds $ 225,516 $ 7,825 $ 233,341 225,516 $ 7,825 $ 233,341 $ 225,516 $ 7,825 $ 233,341 $ 225,516 $ 7,825 $ 233,341 $ - $ - $ $ - ~ - ~ Financial Section 79 r r 1 ~ ~ ~ This page intentionally left blank, 1 wi 80 Financial Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Combining Statement of Changes in Net Assets Year Ended September 30, 2002 Employee Retirement Funds Fire and Total General Police Employee Employees Officers Retirement Pension Pension Funds Additions: Contributions: Employer $ 467,750 $ 57,825 $ 525,575 State of Florida - 135,068 135,068 Plan member 97,864 34,527 132,391 Total contributions 565,614 227,420 793,034 Investment income: Interest (498) 156,762 156,264 Dividends 159,841 42,210 202,051 Net depreciation in fair value of investments (577,135) (519,755) (1,096,890) Investment expense (38,231) (29,512) (67,743) Total investment loss (456,023) (350,295) (806,318) Total additions 109,591 (122,875) (13,284) Deductions: Administration 21,851 22,463 44,314 Benefits 814,198 17,542 831,740 Total deductions 836,049 40,005 876,054 Net decrease (726,458) (162,880) (889,338) Net assets held in trust for pension benefits, beginning of year 6,495,769 5,640,951 12,136,720 Net assets held in trust for pension benefits, end of year $ 5,769,311 $ 5,478,071 $ 11,247,382 Financial Section 81 .i TH€ VILLAGE OF N®F3TH PALM BEACH, FL®IRI®A Combining Statement of Changes in Assets and Liabilities Agency Funds Year Ended September 30, 2002 Balance Balance ®ctober 1, September 30, 2001 Additions Deletions 2002 Manatee Protection Agency r Assets: - Cash and cash equivalents $ 220,909 $ 4,607 $ - $ 225,516 - Liabilities: Due to others $ 220,909 $ 4,607 $ - $ 225,516 Northlake Boulevard Task Force , Assets: Cash and cash equivalents $ 20,382 $ 3,343 $15,900 $ 7,825 i Liabilities: 1 Due to others $ 20,382 $ 3,343 $15,900 $ 7,825 Totals -All Agency Funds J Assets: Cash and cash equivalents $ 241,291 $ 7,950 $15,900 $ 233,341 Liabilities - Due to others $ 241,291 $ 7,950 $15,900 $ 233,341 ~I `J ~1 ~l ~J 1I ~.1 d . a 82 Financial Section Capital Assets Used in the Operation of Governmental Funds Financial Section 83 t r r This page intentionally left blank. .J .- ~J ~J 84 Financial Section i j I THE VILLAGE OF NORTH PALM BEACH, FLORIDA Comparative Schedules by Source September 30, 2002 and 2001 2002 2001 Governmental funds capital assets: Buildings and improvements $ 8,594,971 $ 8,602,533 Furniture, fixtures and equipment 4,798,843 4,673,681 Land 2,055,889 2,055,889 Construction in progress 590,636 - Total governmental funds capital assets $ 16,040,339 $ 15,332,103 Investment in governmental funds capital assets by source: General fund 7,175,944 $ 7,058,344 Capital projects fund 8,864,395 8,273,759 Total governmental funds capital assets $ 16,040,339 $ 15,332,103 Financial Section 85 r THE ilILLAGE ®F N®RTH PALM EEACH, FL®RI®A Schedule by Function and Activity September 30, 2002 Land and Buildings and Improvements Improvements General government: Village Manager $ - $ - r j Finance - - J Village Clerk - - General services 89,775 320,757 - Total general government 89,775 320,757 Public safety: Police department 1,228,766 4,255,790 Fire department - - Emergency medical department - - Total public safety 1,228,766 4,255,790 Public works: Code enforcement 12,500 173,915 r Facilities maintenance - - Sanitation -solid waste - - Street maintenance - 23,227 Vehicle maintenance - 564 Park maintenance - - Total public works 12,500 197,706 Culture/recreation: Library - 368,896 Recreation 724,848 3,451,822 Total culture/recreation 724,848 3,820,718 $ 2,055,889 $ 8,594,971 ,.1 86 Financial Secti®n ] Construction in progress Equipment Total $ - $ 9,821 $ 9,821 - 42,945 42,945 - 14,366 14,366 555,251 149,966 1,115,749 555,251 217,098 1,182,881 - 933,559 6,418,115 - 772,617 772,617 - 499,982 499,982 - 2,206,158 7,690,714 - 81,990 268,405 - 138,085 138,085 - 654,095 654,095 35,385 164,565 223,177 - 46,874 47,438 - 155,444 155,444 35,385 1,241,053 1,486,644 - 892,513 1,261,409 - 242,021 4,418,691 - 1,134,534 5,680,100 $ 590,636 $ 4,798,843 $ 16,040,339 Financial Section 87 THE i/ILLAGE ®F N®RTH PALM BEACH, FL®RIDA - j ~chedu/e of Changes by Function and Activity ! Year ended September 30, ~Op~ ~ Balance ®ctober 1, 2001 Additions General government: Village Manager $ 11,5.87 $ 2,879- Finance 47,618 4,582 Village Clerk 17,692 - General services 182,383 4,500 General government land 89,775 - General government buildings and improvements 353,759 555,251 Total general government 702,814 567,212 Public safety: ~ ~ Police department 882,661 157,871 Fire department 934,458 16,152 Emergency medical department 398,154 126,711 Public safety land 1,228,766 - Public safety buildings and improvements 4,255,790 - Total public safety 7,699,829 300,734 Public works: Code enforcement 75,242 13,269 Facilities maintenance 93,158 61,555 Sanitation -solid waste 603,291 127,674 Street maintenance 203,296 24,581 Vehicle maintenance 31,419 19,081 Park maintenance 122,229 40,413 Public service land 12,500 - Public service buildings and improvements 174,818 35,385 Total public works 1,315,953 321,958 Culturelrecreation: Library books and equipment 868,124 89,253 Library building and improvements 370,468 - Recreation 226,160 47,492 Recreation land 724,848 - Recreation buildings and improvements 3,423,907 28,545 Total culturelrecreation 5,613,507 165,290 Total general fixed assets $ 15,332,103 $ 1,355,194 J I I ,I 88 Financial Section ` ~ ll Balance September 30, Deletions Transfers 2002 $ 3,865 $ (780) $ 9,821 9,255 - 42,945 3,326 - 14,366 21,267 (15,650) 149,966 _ - 89,775 33,002 - 876,008 70,715 (16,430) 1,182,881 107,143 170 933,559 177,823 (170) 772,617 24,883 - 499,982 _ - 1,228,766 _ - 4,255,790 309,849 - 7,690,714 7,301 780 81,990 16,347 (281) 138,085 76,870 - 654,095 40,085 - 187,792 18,993 15,931 47,438 7,198 - 155,444 _ - .12,500 903 - 209,300 167,697 16,430 1,486,644 64,864 - 892,513 1,572 - 368,896 31,631 - 242,021 - - 724,848 630 - 3,451,822 98,697 - 5,680,100 $ 646,958 $ - $ 16,040,339 Financial Section 89 r 7 r l ~ ~1 This page intentionally left blank. 1 l ~- l ~1 90 Financial Section i l STA'd'IS1TdCA]L SECTION J ~J J J J I J F } f This page intentionally left blank. Statistical Section 93 r THE i(ILLAGE ®l= iV®RTH PALM BEACH, FL®RI®A Government-wide expenses by Function Last Ten Fiscal Years Fiscal Year Ended Total General Public Public Leisure September 30, Expenses Government Safety Services Services 1993 $ - $ - $ - $ - $ - r~ 1994 - - - _ _ 1995. - - - -- _ - 1996 - - - - - 1997 - - - - - 1998 - - - - - 1999 - - - - - 2000 - - - - - 2001 - - - - - 2002 12,683,305 1,474,645 5,179,278 4,240,543 1,464,072 ' The Village implemented GASB Statement No. 34, Basic Financial Statements -and Management's 1 Discussion and Analysis -for State and Local Governments ;GASB Statement No. 37, Basic Financial J Statements -and Management's Discussion and Analysis -for State and Local Governments -Omnibus; GASB Statement No. 38, Certain Financial Statement Note Disclosures ; and GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements , as of October 1, 2001. ~1 ~1 ~l 1I ~f ~J 94 Statistical Section Table I Interest on Long-term Other Debt $ - ~ - 151,279 173,488 Statistical Section 95 r TiiE i/ILLAGE OF fVORTH PALM BEACH, FLORIDA Government-wide Revenues Last Ten Fiscal Years Program Revenues Fiscal Year Charges Operating Capital Ended Total for Grants and Grants and September 30, Revenue Services Contributions Contributions ~ l 1993 $ - $ - $ - $ - J - - - - 1994 - - - - 1995 - - - - 1996 - - - - 1997 - - - - 1998 - - - - r 1999 - - - - 2000 - - - - 2001 - - - - 2002 11,150,742 1,128,259 94,252 92,461 i The Village implemented GASB Statement No. 34, Basic Financial Statements -and Management's Discussion and Analysis -for State and Local Governments ; GASB Statement No. 37, Basic Financial Statements -and Management's Discussion and Analysis -for State and Local Governments -Omnibus ; j GASB Statement No. 38, Certain Financial Statement Note Disclosures ; and GASB Interpretation No. 6, JI Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements, as of October 1, 200E ` L1 96 Statistical Section Table II General Revenues Unrestricted Unrestricted Grants and Investment Taxes Contributions Earnings Miscellaneous $ - ~ - ~ - ~ 9,299,822 - 139,923 396,025 Statistical Section 97 ~l rl i This page intentionally left blank. I 98 Statistical Section ~l i THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table III General Governmental Expenditures by Function Last Ten Fiscal Years Fiscal General Public Public Leisure Capital Debt Year Government Safety Services Services Outlay Service Other Total 1993 $ 789,759 $2,262,389 $1,968,009 $ 622,590 $ 277,451 $ 37,806 $141,092 $6,099,096 1994 868,031 2,191,033 2,127,065 670,643 270,946 29,943 144,178 6,301,839 1995 866,103 2,378,817 2,223,340 669,058 422,679 35,688 188,614 6,784,299 1996 948,997 2,705,393 2,412,502 690,046 527,699 41,696 138,020 7,464,353 1997 928,801 2,759,664 2,439,231 712,690 856,302 109,778 253,000 8,059,466 1998 947,839 2,865,117 2,425,110 791,373 332,324 79,930 194,306 7,635,999 1999 1,172,478 2,944,489 2,491,317 856,945 739,316 146,317 569,038 8,919,900 2000 1,211,403 3,191,976 2,806,141 991,603 727,258 765,297 442,494 10,136,172 2001 1,220,944 3,701,807 2,918,996 1,038,304 433,970 782,190 303,178 10,399,389 2002 1,344,492 4,263,883 3,265,242 1,081,833 1,085,684 1,025,047. 434,199 12,500,380 Note: The above expenditures are for the general fund. Statistical Section 99 THE VILLAGE OF NORTH PALM BEACH, FLORIDA - General Governmental Revenues ,by Source Last Ten Fiscal Years Licenses Charges Fiscal and Inter for Year Taxes Permits governmental Services 1993 $ 4,617,122 $ 257,046 $ 964,903 $ 218,826 1994 4,976,695 317,642 1,030,089 195,332 1995 5,417,516 748,676 1,071,940 246,016 1 1996 5,429,150 453,912 1,352,609 219,447 j 1997 5,627,038 366,031 1,172,716 275,100 1998 6,116,651 509,055 1,379,295 342,863 1999 6,528,207 543,650 1,144,583 357,336 2000 6,794,249 756,419 1,273,110 437,811 2001 7,686,039 917,166 1,336,664 492,830 2002 8,197,886 648,873 1,267,331 521,660 Note: The above revenues are for the general fund. j i .- 1 ~1 i 100 Statistical Section Table IV Fines and Forfeitures Interest Miscellaneous Total $ 111,004 $ 72,395 $ 76,788 $ 6,318,084 73,423 90,706 116,126 6,800,013 97,993 191,427 96,630 7,870,198 97,886 248,700 93,635 7,895,339 156,281 201,759 129,890 7,928,815 128,140 213,637 96,113 8,785,754 119,185 239,372 95,893 9,028,226 149,690 290,413 139,419 9,841,111 244,921 247,931 108,551 11,034,102 168,995 85,239 123,574 11,013,558 Statistical Section 101 f TFIE \/ILLAG€ O~ NORTW PALM EEACW, FLORIDA Table V Property Tax Levies and Collections Last Ten Fiscal Years ,1 Percent Delinquent Total Percent Fiscal Total Current Tax of Levy Tax Tax Collected Year Tax Levy Collections Collected Collections Collections. To Tax Levy 1993 _ _ $ 3,281,385_ _ $ 3,141,952 _ 95.75% _ 7,090 _ 3,149,042_ _ 95.97% 1994 3,454,871 3,335,241 96.54% 984 3,336,225 96.57% 1995 3,780,663 3,646,758 96.46% 78 3,646,836 96.46% 1996 3,704,613 3,577,517 96.57% 6,187 3,583,704 96.74% 1997 3,701,075 3,574,562 96.58% 4,379 3,578,941 96.70% 1998 4,105,193 3,961,574 96.50% 5,861 3,967,435 96.64% 1999 4,327,943 4,166,035 96.26% 6,721 4,172,756 96.41% 2000 4,512,027 4,335,668 96.09% 23,074 4,358,742 96.60% 2001 5,196,021 5,013,269 96.48% 4,687 5,017,956 96.57% ` l 2002 5,562,239 5,357,206 96.31% 12,175 5,369,381 96.53% ) Source: Palm Beach County Property Appraiser fl _l 102 Statistical Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table VI Assessed Value of Taxable Property Last Ten Fiscal Years Assessed Values Fiscal Real Personal Year Property. Property Total 1993 $ 677,090,383 $ 29,584,585 $ 706,674,968 1994 675,501,648 29,573,967 705,075,615 1995 690,876,303 29,249,922 720,126,225 1996 694,725,948 31,668,828 726,394,776 1997 700,039,002 31,398,755 731,437,757 1998 724,341,193 35,879,717 760,220,910 1999 736,890,024 35,742,548 772,632,572 2000 767,696,404 36,071,964 803,768,368 2001 861,214,093 40,169,760 901,383,853 2002 950,465,573 42,791,419 993,256,992 Note: The basis of assessed value is approximately one hundred percent (100%) of actual value. For each . fiscal year ending September 30, property is valued as of January 1st of the preceding calendar year. Source: Palm Beach County Property Appraiser Statistical Section 103 THE VILLA(aE ®F N®FiTH PALiVi BEACH, FL®RI®A Table VII Property Tax Rates -Direct and Overlapping Governments Last Ten Fiscal Years (Per $1,000 of the Assessed Value) ~ i Village Palm Beach of North County Fiscal Palm Special School Palm Beach - - Y-ear- - - - - -Beach - - Castricts - - - - - District.- - - - - County - - - - - -Total -- - - - - 1993 4.65 2.378 9.603 4.622 21.253 1994 4.90 2.453 10.063 4.550 21.966 1995 5.25 2.448 10.185 4.519 22.402 1996 5.10 2.485 9.797 4.519 21.901 1997 5.06 2.286 9.788 4.519 21.653 - ~ 1998 5.40 2.360 9.557 4.867 22.184 1999 5.60 2.234 9.682 4.858 22.374 2000 5.60 2.262 8.918 4.936. 2.1.716 2001 5.75 2.263 8.918 4.936 21.867 2002 5.60 2.456 8.948 4.935 21.939 ` Source: Palm Beach County Property Appraiser. ~1 J 104 Statistical Section i THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table VIII Computation of Direct and Overlapping Bonded Debt General Obligation Bonds September 30, 2002 Percentage Amount Net General Applicable to Applicable to Name of Bonded Debt The Village of The Village of Governmental Unit Outstanding North Palm Beach North Palm Beach Direct: Village of North Palm Beach $ - 100.00% $ - Overlapping: Palm Beach County 253,845,000 1.25% 3,173,063 Palm Beach County School District 194,475,000 1.25% 2,430,938 . Total $ 448,320,000 $ 5,604,001 ~l~ Estimated based on 2001 Ratio of Assessed Taxable Values Source: Palm Beach County Property Appraiser School Board of Palm Beach County, Finance Department Village of North Palm Beach Statistical Section 105 r f r 1 r r This page intentionally left blank. l _1 _I `1 L~ 106 Statistical Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table IX Computation of LegaC Debt Margin September 30, 2002 The Village Charter and the Constitution of the State of Florida, Florida State Statute 200.181, does not provide for a legal debt limit. Statistical Section 107 r THE VILLAGE OF NORTH PALM BEACH, FLORIDA Debt Related Statistics Schedule of Revenue Rond Coverage General and Enterprise Funds Last Ten Fiscal Years r iVet Revenue Available Fiscal Gross Expenditures/ For Debt Year Revenue Expenses ~1~ Service 1993 $ 8,352,291 $ 7,713,144 $ 639,147 1994 9,189,523 8,415,414 774,109 r 1995 10,167,560 8,829,772 1,337,788 1996 * * * 1997 * * * f 1998 1999 * * * ~ , 2000 * 2001 * * * . J 2002 * .l Source: Village of North Palm Beach `- ~l~ Represents total General Fund and Country Club expenditures/expenses, exclusive of depre- ciation, debt service, and loss on disposal of fixed assets. ` * Revenue bonds were paid in full in 1995. ~1 J ~l 100 Statistical Section Table X Debt Service Requirements Principal Interest Total Coverage $ 150,000 $ 25,500 $ 175,500 3.64 150,000 15,562 165,562 4.68 150,000 5,250 155,250 8.62 * * * ~ * ~ ~ * * ~ ~ * * ~ ~ ~ * ~ ~ ~ ~ :x ~ * * ~ ~ Statistical Section 109 ,- THE VIL~/~GE ®F N®RTH PALiVi BEACH, FL®RI®A Table XI Property Value, Construction, and Bank Deposits Last Ten Fiscal Years Commercial Residential ~ i Property Value til Construction Construction Bank Fiscal Deposits Year Commercial Residential Value Value (000) _ _ _ _ 199 _ 42,562,514 $ 568 481487 _ ~ 1 076515 _ _ _ 1 034,129_ _ _ _7,727,879 _ 1994 98,698,619 570,810,390 747,820 1,101,790 8,196,595 1995 93,576,663 541,319,023 307,650 18,901,801 9,055,476 1996 91,959,700 595,990,486 4,434,050 4,032,198 9,545,424 1997 92,371,112 603,600,525 3,759,496 2,194,016 9,911,930 i 1998 97,758,105 620,048,032 3,769,950 10,893,857 10,715,610 J 1999 109,456,299 625,385,715 11,698,194 5,337,681 13,283,898 ` 2000 113,851,156 653,605,011 4,394,857 28,219,296 12,711,003 2001 122,793,250 745,237,484 8,942,094 36,600,946 12,927,182 2002 124,216,202 823,286,154 2,218,598 11,234,443 13,841,347 l cl~ Estimated Sources: Village of North Palm Beach Palm Beach County Property Appraiser Office i Florida Bankers Association. Data as of September 30 of the preceding year. * Information not available. 119 Statistical Section THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table XII Principal Taxpayers January 1, 2002 Percentage 2002 of Total Assessed Assessed Taxpayer Valuation Valuation Olen Residential Realty $ 16,321,086 2,11% WCI Communities, Inc. 11,981,541 1.55% Sanctuary Bay Trust Corporation 11,247,093 1.46% Intervest Crystal Tree 10,199,784 1.32% North Palm Properties Limited 9,002,699 1.17% Greater Florida Investment Co. 5,840,000 0.76% Transcontinental Atrium, Inc. 4,590,000 0.59% Roschman, M. Elaine TR 4,100,000 0.53% Pavilion Office Center 3,240,000 0.42% Old Port Cove Dev. 3,100,000 0.40% Morse, Edward J., Inc. 3,025,889 0.39% $ 82,648,092 10.70% Source: Palm Beach County Property Appraiser. Statistical Section 111 THE VILLAGE OF NORTH PALM BEACH, FLORIDA Table XIII r Miscellaneous Statistics- September 30, 2002 Date of incorporation: August 13, 1956 Form of Government Council -Manager Area (land and waterways) 5.18 square miles ~ 1 Miles of streets 36.00 - --Number of-street-lights- - - - - - -- - -- - -- - - 425 Population 12198 ` ~ i Fire Protection Number of stations 1 ~ 1 ~ Number of firemen and officers 8 1i Police/EMS Protection Number of stations 2 Number of policemen and officers 33 Number of EMS officers 13 Building Permits Building permits -new 22 Building permits -additions 183 L Recreation/Culture Number of parks 4 Public tennis courts 4 Number of marinas 1 Number of libraries 1 .- Number of volumes 47,339 l Country Club 1 1 Golf course 1 Driving range 1 Swimming pool 1 Tennis courts 10 Employees 255 Source: Village of North Palm Beach ~1 ~y '112 Statistical Section -~ ~~~~c~~~~ 1 1 ,J 1~ '9 l~ ;d l --- -- - - - t~ ~_J Rachlin Cohen & Holtz LLP Certified Public Accotmtants & Consultants REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF GENERAL PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and Members of the Village Council The Village of North Palm Beach, Florida We have audited the financial statements of the Village of North Palm Beach, Florida, as of and for the year ended September 30, 2002, and have issued our report thereon dated January 13, 2003. We conducted our audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Gen- eral of the United States. Compliance As part of obtaining reasonable assurance about whether the Village of North Palm Beach, Florida's finan- cial statements are free of material misstatement, we performed tests of its compliance with certain provi- sions of laws, regulations, contracts and grants, 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 opin- ion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Village of North Palm Beach, Florida's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. However, we noted other matters involving the internal control over financial reporting that we have re- ported to management of the Village of North Palm Beach, Florida in a separate letter dated January 13, 2003. Phillips Point East Tower 777 South Flagler Drive, State 150, West Palm Beach, Florida 33401 • Te1561-833-0002 • Fax 561-833-3235 Offices nt: Miami Ft. Lauderdale West Palm Beach Stuart ti~tvw.rchcpa.com ~ 15 Member of Sununu International Associates, brc. with offices in principal cifies throughout the teorld bfember of the American Ltstih~te of Certified Public Accountants and member of the Florida Institute of Certified Public Accountants 1 This report is intended for the information of management and members of the Village Council, and is not intended to be and should not be used by anyone other than these specified parties. ~i West Palm Beach, Florida January 13, 2003 l ~i i I ~I l l 116 Required Rep®rt~ ~ Rachlin Cohen 8~ Holtz zLP - Certified Public Accountants & Consultants MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA The Honorable Mayor and Members of the Village Council The Village of North Palm Beach, Florida We have audited the financial statements of the Village of North Palm Beach, Florida (the Village) for the year ended September 30, 2002, and have issued our report thereon dated January 13, 2003. We have issued our Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of General Purpose Financial Statements Performed in Accordance with Government Auditing Stan- dards, dated January 13, 2003. Disclosures in that report, if any, should be considered in conjunction with this management letter. We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards issued by the Comptroller General of the United States. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida and require that certain items be ad- dressed in this letter. The Rules of the Auditor General (Section 10.554 (1) (g) 1. a) require that we comment as to whether or not inaccuracies, shortages, defalcations, fraud, and violations of laws, rules, regulations, and contractual provisions reported in the preceding annual financial audit report have been corrected. There were no such instances disclosed in the preceding annual financial audit report. The Rules of the Auditor General (Section 10.554 (1) (g) 1. b) require that we comment as to whether or not recommendations made in the preceding annual financial audit report have been followed. The recommen- dations made in the preceding annual financial audit report have not yet been corrected. As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6. a), the scope of our audit in- cluded areview of the provisions of Section 218.503 (1), Florida Statutes, "Determination of Financial Emergency." In connection with our audit, we determined that the Village is not in a state of financial emergency as a consequence of the conditions described by Section 218.503 (1), Florida Statutes. The scope of our audit included the use of financial condition assessment procedures to assist in the detection of deteriorating financial conditions pursuant to section 218.39 (5), Florida Statutes. As required by the Rules of the Auditor General (Section 10.554 (1) (g) 6. b), we deternned that the an- nual financial report for the Village for the year ended September 30, 2002, was filed with the Department of Banking Finance pursuant to Section 218.32, Florida Statutes, and is in agreement with the annual finan- cial audit report for the year ended September 30, 2002. Phillips Point East Tower 777 South Flagler Drive, Stute 150, West Palm Beach, Florida 33401 • Te1561-833-0002 • Fax 561-833-3235 Offices in: Miuiu Ft. Lauderdale West Palm Beach Shiart ti'<vw.rchcpa.com ~ ~ 7 Member of Srmmut International Associates, Inc. with offices in principal cities throughout the world Member of the American Institute of CefifiedPublic Accamltuits and member of the Florida Institute of Certified Public Accormtants The Rules of the Auditor General (Section 10.554 (1) (g) 2.) require that we comment as to whether or not the Village complied with Section 218.415, Florida Statutes, regarding the investment of public funds. The Village has adopted a written investment policy and was in compliance with the provisions of that policy for the year ended September 30, 2002. i The Rules of Auditor General (Sections 10.554 (1) (g) 3., 4.) require disclosure in the management Letter of the following matters if not already addressed in the auditor's report on compliance and internal control over finan- ~ cial reporting: recommendations to improve financial management, accounting procedures, and internal controls; recommendations addressing deteriorating financial conditions; violations of laws, rules, regulations and contrac- tual provisions; illegal orimproper expen itures w is may or may not matena ly a eft tle financial ~a~ements; - -- - _ -- improper or inadequate accounting procedures; failures to properly record financial transactions; and other inac- curacies, shortages, defalcations and instances of fraud discovered by the auditor. Our audit disclosed the follow- ing matter required to be disclosed by Rules of Auditor General (Sections 10.554 (1) (g) 3., 4.). FINDING 01-02 Country Club Operations (Repeat Comment) i Criteria ~ ~ Proprietary funds are used to account for governmental activities that are similar to activities that may be per- formed by a commercial enterprise. The basic objective of a proprietary fund is to provide a service or product ~ to the public at a reasonable cost. Condition During the course of our audit, we utilize a variety of methods to identify the financial condition of the organiza- tion. Financial condition, for the purpose of this comment, refers to the Village's ability to provide services at 1 the level and quality that its citizens desire. J We computed the following financial indicators based on data collected for the five most recent years. Where indicated, amounts were adjusted for inflation. The price index used was the municipal cost index published by . American City and County Magazine. 2002 2001 2000 1999 1998 Financial Indicator #1 Net Assets (in constant dollars) $ 1,974,286 $ 2,044,028 $ 2,163,904 $ 2,590,313 $ 2,766,385 Percentage Increase/Decrease -3.41% -5:54% -16.46% -6.36% -2.37% Financial Indicator #2 Cash and Investments $ 156,020 $ 114,861 $ 266,731 $ 1,480,113 $ 1,061,132 Current Liabilities 390,171 247,324 355,220 430,355 191,666 j .40:1.00 .46:1.00 .75:1.00 3.44:1.00 5.54:1.00 I Financial Indicator #3 Operating Income $ 1,973 $ (65,883) $ (338,420) $ (164,050) $ 38,392 Operating Revenues 2,570,649 2,492,894 2,290,350 2,290,261 2,113;566 0.08% -2.60% -14.80% -7.20% 1.80% - 118 Required Reports I. i 2002 2001 2000 1999 1998 Financial Indicator #4 Net assets (in constant dollars) $ 1,974,286 $ 2,044,028 $ 2,163,904 $ 2,590,313 $ 2,766,385 Total Operating Revenues 2,570,649 2,492,894 2,290,350 2,290,261 2,113,566 77% 82% 94% 113% 131% Financial Indicator #5 Net Working Capital $ (140,018) $ (205,884) $ (338,666) $ 755,976 $ 801,228 Percentage Increase/Decrease 32% 39% -145% -6% -11% The financial indicators demonstrate a deteriorating financial condition for the country club operation. Our ob- servations on this condition are as follows: 1. There has been a continuous decline in net. assets for the past five years. Net assets is the cumulative amount by which revenues and operating transfers from other funds have exceeded expenses. 2. There has been a continuous decline in the current ratio (as measured by cash and investments to current liabilities). This may result in a difficulty in meeting current needs. 3. There were operating losses for the three years prior to fiscal year 2002. This occurred despite an in- crease in revenues each year since fiscal year 1999. Current operating revenues support current operat- ing expenditures by only $1,963. This may result in a reduction of the Village's ability to withstand fi- nancial emergencies and the ability to fund capital purchases without having to borrow. 4. There has been a negative working capital position for the last three years. At September 30, 2002, the Country Club's liquid assets were $218,363. The average monthly cash requirement for operations is $229,000. In response to our management letter dated January 21, 2002, the Village Council and staff took several actions. The Village Council approved increases in various fees in response to our recommendation to review the reve- nue structure. In response to our recommendation to develop a long term financial plan, the Village has estab- lished areserve for capital improvements to be used for future capital and debt management plans. The Village has implemented additional monitoring procedures of the country club budget in response to the recommenda- tion of considering a flexible budget. Perspective Deficits in this fund may require the general fund to subsidize operations. Recommendation 1. Continue to review the revenue structures to determine stability, equity, efficiency and capacity to fi- nance operations. 2. Utilize long-term financial plans that include revenue and expenditure trend studies, capital, and debt management plans. Management Response This comment will be forwarded to the Village Council for resolution. Required Reports 119 I i This management letter is intended solely for the information and use of the Village of North Palm Beach, Flor- ida's management, and the State of Florida Office of the Auditor General, and is not intended to be and should not be used by anyone other than these specified parties.. ~ a e - ~ ~ e~~J West Palm Beach, Florida January 13, 2003 -- l I l'~ 120 Requires! Rep®rl~ `