2004 CAFR1
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The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2004
The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2004
Prepared by:
Finance Department
Shaukat Khan
Director of Finance
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' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
' TABLE OF CONTENTS
' INTRODUCTORY SECTION
Letter of Transmittal ................................................................................................ ................... i
List of Principal Village Officials .............................................................................. ................. vi
' Organization Chart .............:.................................................................................... ................ vii
GFOA Certificate of Achievement for Excellence in Financial Reporting ................. ................ viii
' FINANCIAL SECTION
Independent Auditors' Report .................................................................................. ...................1
' Management's Discussion and Analysis ................................................................. ...................3
BASIC FINANCIAL STATEMENTS:
' Government-wide Financial Statements:
Statement of Net Assets .................................................................................... .................11
Statement of Activities ....................................................................................... .................12
Fund Financial Statements:
' Balance Sheet -Governmental Funds ............................................................... .................13
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Assets ..................................................................... .................14
' Statement of Revenues, Expenditures and Changes in
Fund Balances -Governmental Funds ......................................................... .................15
Reconciliation of the Statement of Revenues, Expenditures, and changes in
' Fund Balances of the Governmental Funds to the Statement of Activities 16
...
Statement of Net Assets -Proprietary Fund ................................................. .................
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Statement of Revenues, Expenses, and Changes in Net
' Assets -Proprietary Fund ............................................................................ .................18
Statement of Cash Flows -Proprietary Fund ..................................................... .................19
Statement of Fiduciary Net Assets -Fiduciary Funds ........................................ .................20
' Statement of Changes in Fiduciary Net Assets -Employee Retirement Funds .. .................21
Notes to Basic Financial Statements ....................................................................... .................22
' REQUIRED SUPPLEMENTARY INFORMATION:
Budgetary Comparison Schedule -General Fund ..............................................................50
Schedule of Funding Progress -General Employees Retirement Fund ..............................55
' Schedule of Employer and State Contributions ..................................................................56
Notes to Required Supplementary Information ...................................................................57
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
TABLE OF CONTENTS
(Continued)
OTHER SUPPLEMENTARY INFORMATION:
Combining Statements:
Combining Statement of Net Assets -Fiduciary Funds ........................................................59
Combining Statement of Changes in Net Assets -Employee Retirement Funds ..................60
Combining Statement of Changes in Fiduciary Assets and Liabilities -Agency Funds .........61
STATISTICAL SECTION
Government-wide Information:
Table I Government-wide Expenses by Function ..........................................................62
Table II Government-wide Revenues .............................................................................63
Fund Information:
Table III General Governmental Expenditures by Function ..............................
Table IV General Governmental Revenues by Source .....................................
Table V Property Tax Levies and Collections ..................................................
Table VI Assessed Value of Taxable Property .................................................
Table VII Property Tax Rates -Direct and Overlapping Governments ...............
Table VIII Computation of Direct and Overlapping Bonded Debt -General
Obligation Bonds ........................................................................
Table IX Computation of Legal Debt Margin .....................................................
Table X Debt Related Statistics -Schedule of Revenue Bond Coverage -
General and Enter rise Funds
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Table XI Property Value, Construction, and Bank Deposits ...........................................
' Table XII Principal Taxpayers .........................................................................................
Table XIII Miscellaneous Statistics ...................................................................................
REQUIRED REPORTS
Independent Auditors' Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards.....
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida .............................................................................................
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INTRODUCTORY SECTION
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' March 4, 2005
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 Financial Report for the Village of North Palm Beach, Florida for the
fiscal year ended September 30, 2004.
This report is published to provide the Village Council, Village staff, our citizens, our lenders,
and other interested parties with detailed information concerning the financial condition and
activities of the Village government. 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 includes 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 independent auditor's
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 professional 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 of the Village
' is approximately 12,000, 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 waterfront property created by a number of Takes, canals, and the Atlantic Ocean.
I 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
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.
The financial records for its Enterprise Fund (i.e., the Country Club operation) are maintained on
the full accrual 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 adequacy 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 assets. The concept of
reasonable assurance recognizes that: (a) the cost of a control should not exceed the benefits
likely to be derived; and (b) the evaluation of costs and benefits requires estimates and
judgments by management.
All internal control evaluations occur with the above framework. We believe that the Village's
internal accounting 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, 2004.
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ECONOMIC OUTLOOK
Property Values and Personnel Costs
' The Village obtains a major portion of its annual general fund financial resources (58%) from ad
valorem property taxes. Gross assessed property values have increased substantially over the
' past three years (44% between 2001 and 2004) rising $160 million dollars, or 14% in 2004
alone, to a total of $1,297,803,114. The Village anticipates a substantial reduction in planned
new growth since most vacant property within municipal limits has been developed. There
' remains only a single substantial plan for large development on remaining land along the
Intracoastal Waterway. The Village, therefore, anticipates much more moderate increases in
annual property values resulting from the sale, transfer and redevelopment of existing
' properties. It is estimated that future annual property value increases will run in the 4%-6%
range due largely to the waterways of the Village's eastern location along Lake Worth and the
Atlantic Ocean.
At the same time that property values plateau, the Village is facing significant increases in its
annual employee personnel costs. Over the past few years, several retirement plan changes
and pay plan studies were implemented causing significant and continuing annual increases in
annual Village pension contributions (rising from 9% in 1999 to 18% in 2004...with a further
increase to 23% in 2005). The municipality has also experienced significant increases in annual
health insurance costs that have been paid for entirely by the Village with no change in
employee contributions (costs increased from $752,000 in 2001 to $1,273,000 in 2004). The
Village will need to address the legacy of these significant economic forces during the coming
years.
Annexation
' The Village intends to actively pursue annexation of surrounding unincorporated areas that
compliment the services and values of our existing community. The focus on annexations will
be toward providing exemplary municipal services that are revenue neutral to the annexed
areas as well as to the Village. The annexation of unincorporated areas north of the Village
' could be coupled with a substantial reduction in Village tax rates without compromising high
levels of existing municipal service. The Village will be actively pursuing annexation during the
next few years.
Hurricane Cleanup Reimbursement -FEMA
' The Village estimates it has incurred between $1.2 million and $1.5 million dollars in hurricane
recovery costs. After submitting claims for these costs to three different FEMA representatives
over asix-month period, virtually no reimbursements have been received from FEMA.
' Continued federal delays or denials of these recovery costs could pose serious economic
hardships to the Village in coming months and years.
INITIATIVE AND FUTURE PROJECTS
Country Club
The last golf course irrigation and play area redevelopment was accomplished in 1989. The
Village is currently developing conceptual master plans for re-design and redevelopment of the
North Palm Beach golf course (irrigation, tees, greens and fairways). The Village administration
has recommended developing master plans design alternatives for the entire Country Club (golf,
tennis, pool, meeting rooms and restaurant). Business plans would be matched to these master
plans to measure the Country Club's debt capacity and related revenue improvements that
could allow repayment of needed capital improvement loans.
Northtake Boulevard Corridor Task Force
I The Northlake Boulevard Task Force is in the process of bidding the construction of Phase I for
the Streetscape. Overlay zoning code is already accomplished. The commitment of the Village
in this project is noteworthy because our neighboring community, Lake Park, has withdrawn
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Public Safety North Substation Annex
The Village is actively pursuing acquisition of a permanent site for construction of a public safety
sub-station at the northern end of town, north of the Intracoastal draw bridge. Funding for this
project has been diminished by the substantial cost of 2004 hurricane damages and cleanup.
The Village is seeking funding assistance from the federal government to allow the construction
of this new public safety sub-station to move forward within the next 1-2 years.
Prosperity Farms Road Task Force
The Village created a Prosperity Farms Road Task Force comprised of citizens that reside in
the area. The Task Force assisted in developing plans to help resolve traffic problems affecting
residents that live along Prosperity Farms Road. An engineering firm was hired to develop a
concept plan. From that concept plan the Council selected an engineering firm to do the
construction and design phase and implement the conceptual plan. Palm Beach County is
providing the funding for the construction and design phase with an anticipated cost of
approximately $1,000,000. Once the construction design and project bids have been received
in March 2005, the Task Force will make recommendations to the Village Council whether to
proceed with the project (subject to available funding), implement parts of the project, seek
additional funding for the entire project or halt the project.
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 canals 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 extensive
dredging program to upgrade the quality of the canals and the North Palm Beach waterways.
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The dredging program has been described as a four-phase program with the first and second
' phase being completed. Phases three and four are anticipated to be completed by June 2005.
OTHER INFORMATION
' Independent Audit
' Article 11, Section 2.18 of the Village Charter requires an annual audit of the books of account,
financial records, and transactions of all administrative departments of the Village by
independent certified public accountants selected by the Village Council. This requirement has
been complied with, and the independent auditor's report has been included in this report.
I 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, 2003. The Certificate of Achievement is a prestigious national award,
recognizing conformance with the highest standards for preparation of state and local
government financial reports.
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Mark Bates
Village Manager
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
PRINCIPAL VILLAGE OFFICIALS
SEPTEMBER 30, 2004
Title
Mayor
Vice Mayor
President Pro Tem
Council Member
Council Member
Village Manager
Director of Finance
Village Clerk
Name
Donald G. Noel
Edward E. Eissey
Charles R. O'Meilia
Rob Rennebaum
David B. Morris
Mark Bates
Shaukat Khan
Kathleen Kelly
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Organization Chart
September 30, 2004
The Residents
Village Attorney
Finance I (Public
Village council
Village Manager
Public Safety
VILLAGE BOARDS
-CODE ENFORCEMENT
-LIBRARY ADVISORY
-RECREATION ADVISORY
-PLANNING COMMISSION
-BOARD OF ADJUSTMENT
-CONTRACTORS
-PENSION
Village Clerk
Recreation
Library ~ ~ Country Club ~
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Village of North Palm Beach,
Florida
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2003
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
Executive Director
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FINANCIAL SECTION
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INDEPENDENT AUDITORS' REPORT
' 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,
' 2004, which collectively comprise the Village's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the Village of North Palm Beach's
management. Our responsibility is to express opinions on these financial statements based on
' our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
' States 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
' the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Village of North Palm Beach,
Florida, as of September 30, 2004, 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 more fully described in Note 11 to the financial statements, subsequent to the original
issuance of the Village's financial statements for the year ended September 30, 2004 and our
report thereon dated March 4, 2005, we became aware that those financial statements did not
' reflect certain accrued liabilities for employee and beneficiary medical and dental claims unpaid
as of September 30, 2004.
In accordance with Government Auditing Standards, we have also issued a report dated March
' 4, 2005, on our consideration of the Village of North Palm Beach's internal coritrol over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts
grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing
and not to provide an opinion on the internal control overfinancial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
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Management's Discussion and Analysis, pages 3 through 10, and the budgetary comparison
schedules and schedules of funding progress and employer contributions, pages 50 through 56,
' are not required parts of the basic financial statements but are supplementary information
required by the Governmental Accounting Standards Board. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of
' measurement and presentation of the required supplementary information. However, we did not
audit the. information and express no opinion on it.
' Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Village of North Palm Beach's basic financial statements. The
introductory section, other supplementary information, and the statistical section are presented
' for purposes of additional analysis and are not required parts of the basic financial statements.
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
express no opinion on them. 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.
c~~, ~~~~^~` ~ fed-~OL~ ~
West Palm Beach, Florida
March 4, 2005, except as to the fourth
paragraph above and Note 11, which
are as of May 12, 2005
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Village of North Palm Beach, Florida (Village) Administration offers readers of the Village's
financial statements 4his narrative overview and analysis of the financial activities of the Village
for the fiscal year ended September 30, 2004. Please read it in conjunction with the
accompanying transmittal letter beginning on page i, and the accompanying basic financial
statements.
FINANCIAL HIGHLIGHTS
Total net assets
Unrestricted net assets available for future use
Governmental net assets
Total revenues from all sources
Governmental revenues
Total cost of all Village programs
Governmental revenues over (under) expenses
General fund revenues over (under) expenses
General fund unreserved fund balance
As a percent of general fund expenditures
Country Club revenues over (under) expenses
Decrease in total long-term debt for the Village
2004 2003 (Decrease) Page #
$9.9 million $8.6 million $1.3 million 11
$3.1 million $2.0 million $1.1 million 11
$7.8 million $6.5 million $1.3 million 11
$17.1 million $14.7 million $2.6 million 12
$14.6 million $12.2 million $2.4 million 12
$15.9 million $15.8 million $0.1 million 12
$1.0 million ($2.8 million) $3.8 million 15
$1.1 million ($1.4 million) $2.5 million 15
$2.9 million $1.7 million $1.2 million 13
21.00% 11.80% 9.20%
27,000 (52,000) 79,000 18
$0.7 million $1.3 million ($0.6 million)
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the
financial statements are: (1) Government-wide financial statements that 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
basic financial statements.
REPORTING THE VILLAGE AS A WHOLE
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 contributed positively to the overall financial well being. The Statement of Net Assets
and the Statement of Activities report information about the Village as a whole and about its
activities in away 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 revenues and expenses are taken into
account, regardless of when cash is received or paid.
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These two statements report the Village's net assets and changes therein. Net assets, the
difference between 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 activities, including general government, community development, public
safety, public services, library, and recreation. Property taxes, sales taxes, utility taxes,
and franchise fees finance most of 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 category.
REPORTING THE VILLAGE'S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds -not
the Village as a whole. Some funds are required to be established by State law. However,
management establishes other funds, which aid in the management of money for particular
purposes or meet legal responsibilities 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.
Governmental funds -Most of the Village's basic services are reported in governmental
funds. Governmental funds focus on how resources flow in and out, with the balances
remaining at year-end that are available for spending. These funds are reported using an
accounting method called the 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 13 -16 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 17 - 19 of this report.
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 statement 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 fiduciary fund financial statements can be
found on pages 20 - 21 of this report.
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' 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 $8.4 million at the
close of the most recent fiscal year.
' By far, the largest portion of the Village's net assets (70%) 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
' Activities Activities Total
2004 2003 2004 2003 2004 2003
' Assets:
Current and other assets $ 4,912 $ 4,076 $ 127 $ 202 $ 5,039 $ 4,278
Capital assets 11,341 11,800 2,543 2,679 13,884 14,479
' Total assets 16,253 15,876 2,670 2,881 18,923 78,757
Liabilities:
' Current liabilities 914 2,444 132 324 1,046 2,768
Long-term debt outstanding 7,578 6,905 412 457 7,990 7,362
Total liabilities 8,492 9,349 544 781 9,036 10,130
Net assets:
' Invested in capital assets,
net of debt 3,763 3,563 2,131 2,166 5,894 5,729
Restricted 895 614 - - 895 614
I Unrestricted 3,102 2,350 (5) (66) 3,097 2,284
Total net assets $ 7,760 $ 6,527 $ 2,126 $ 2,100 $ 9,886 $ 8,627
' An additional portion of the Village's net assets (6.2%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets
' (3.4 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 categories of net
' assets for the governmental activities and business-type activities net assets invested in capital
assets, net of related debt. Unrestricted net assets for business-type activities were a negative
$5,000 at fiscal year end.
' There was an increase of $1.8 million in the government's net assets during the current fiscal
year. Governmental activities accounted for 98% of the total increase.
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Governmental Activities
Governmental activities increased the Village's net assets by $1.5 million, thereby accounting
for 98% of the total increase in the net assets of the Village. Key elements of this decrease are
as follows:
Revenues:
Program revenues:
Charges for services
Operating grants and
contributions
Capital grants and
contributions
General revenues:
Property taxes
Utility service taxes
Sales and use taxes
Franchise fees
contributions not
restricted to specific
programs
Investment earnings
Miscellaneous
Gain (loss) on asset
disposals
Total revenues
Village of North Palm Beach
Changes in Net Assets
(In Thousands)
Governmental Business
Activities Activities Total
2004 2003 2004 2003 2004 2003
$ 1,672 $ 1,503 $ 2,548 $ 2,510 $ 4,220 $ 4,013
89 82 - 89 82
- 103 10 - 113
8,452 6,365 - 8,452 6,365
1,830 1,755 - 1,830 1,755
1,231 1,148 - 1,231 1,148
861 890 - 861 890
292 277 - 292 277
53 75 3 5 56 80
92 55 43 100 135 155
$ 14,572 $ 12,253 $ 2,594 $ 2,625 $ 17,166 $ 14,878
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I Expenses:
Program expenses:
General government $ 3,174 $ 2,781 $ - $ - $ 3,174 $ 2,781
Public safety 5,294 5,195 _ - 5,294 5,195
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Public services 3,549 3,483 3,549 3,483
Leisure services 1,280 1,540 - - 1,280 1,540
Interest on long-term debt 41 129 - - 41 129
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Country Club 2,568 2,677 2,568 2,677
Total expenses 13,338 13,128 2,568 2,677 15,906 15,805
I Increase(decrease)in
net assets 1,235 (875) 26 (52) 1,261 (927)
Net assets -beginning of year 6,527 7,402 2,100 2,152 8,627 9,554
I Net assets -end of year $ 7,762 $ 6,527 $ 2,126 $ 2,100 $ 9,888 $ 8,627
I 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.
Village of North Palm Beach
Governmental Activities
(In Thousands)
2004 2003
I Total Cost Net Cost Total Cost Net Cost
of Services of Services of Services of Services
I General government $ 3,174 $ (2,477) $ 2,781 $ (1,166)
Public safety 5294 (5,021) 5,195 (4,787)
Public services 3,549 (2,654) 3,483 (3,498)
I
Leisure services 1,280 (1,132) 1,540 (1,289)
Interest on long-term debt a1 - 129 (173)
I $ 13,338 $ (11,284) $ 13,128 $ (10,913)
The cost of all governmental activities this year was $12.9million. As shown on the Statement
of Activities, those who directly benefited from the programs paid for $1.7 million of this cost and
$11.2 million was financed through general revenues. The Village added $1.5million to fund
balance during 2004.
Business Type Activities
Net assets of the Proprietary Fund (Country Club) at September 30, 2004, were $2.1 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 $2.5 million, leaving a surplus of $26,600. Investment and miscellaneous
income of $46,000 helped generate the surplus. The income from operations was $40,100. Net
assets increased by $26,600.
7
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 general fund reported an ending fund
balance of $3.4 million, a $1.4 million increase over the 2003 fund balance of $2.0 million. This
was a planned event, since the Village planned to increase general fund balance in the current
year to support planned future expenditures.
Approximately 94% of the combined ending fund balance ($3.2 million) constitutes unreserved
fund balance, which is available for spending at the government's discretion. The remainder of
fund balance (.7 million) is reserved to indicate that it is not available for new spending because
it has already been committed for a variety of other restricted purposes.
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 $3.2 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 is 24% of total general fund expenditures, while total fund balance represents 26% of
that same amount.
The capital projects fund has a total fund balance of $.47 million, all of which is reserved for
capital outlay projects. The net decrease in fund balance during the current year in the capital
projects fund was $.14 million, and is the result of expenditures for capital outlay ($.15 million)
that were greater than revenues and transfers in from the general fund ($8,500).
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget were $573,422 and can
be briefly summarized as follows:
• Funding for hurricane expenditures
Funding for street paving.
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 multiyear period.
I The Village's investment in capital assets for its governmental and business-type activities as of
September 30, 2004 and 2003, amounts to $13.8 million and $14.58 million (net of accumulated
I depreciation). The total increase in the Village's investment in capital assets for the current fiscal
year was $.5 million.
' Village of North Palm Beach
Capital Assets
(In Thousands)
I Land
Buildings and improvements
Improvements other than buildings
I Improvements -golf course
Furniture, fixtures and equipment
Total assets
I Less accumulated depreciation
Net assets
Governmental Business
Activities Activities Total
2004 2003 2004 2003 2004 2003
$ 2,056 $ 2,056 $ 1,051 $ 1,051 $ 3,107 $ 3,107
10,570 10,472 1,477 1,475 12,047 11,947
- - 574 574 574 574
- - 1,604 1,604 1,604 1,604
6,108 5,893 714 703 6,822 6,596
18,734 18,421 5,420 5,407 24,154 23,828
Additional information on the Village's capital assets can be found in Note 4 on page 36-37 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 $6.8 million. None of this amount comprises debt
backed by the full faith and credit of the government. Of the $6.8 million of loans payable,
$5,000 is unsecured. The remaining loans payable are secured by franchise fees and public
services taxes. The capital leases are secured by equipment.
Village of North Palm Beach
I Outstanding Debt
(In Thousands)
Governmental Business
Activities Activities Total
2004 2003 2004 2003 2004 2003
Loans payable $ 6,376 $ 6,950 $ 412 $ 513 $ 6,788 $ 7,463
Capital leases 434 588 - - 434 588
Total $ 6.810 $ 7.538 $ 412 $ 513 $ 7,222 $ 8.051
Additional information on the Village's debt can be found in Note 5 on page 37-42 of this report.
9
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
During the current 2004 fiscal year, unreserved general fund balance increased to $3.2 million.
The Village did not appropriate any of this unreserved fund balance for spending in the
2004/2005 fiscal year budget. This allowed the Village to re-establish a more appropriate level
of financial resources to address the economic challenges anticipated in the next few years.
In considering the Village's fiscal year 2003-2004 budgets, the Village Council and management
were cautious as to revenue and expenditure growth. Investment income decreased by 25%
due to continued low interest rates. Court fine revenues increased by 167% from last fiscal
year. Building permit fees increased by 6% in 2003/2004 but are expected to decline in coming
years due to the lack of new developments.
The Village administration has identified and communicated that there have been substantial
cost increases for pension, health and wage adjustments over the past three years. These
large and continuing cost increases have not been directly addressed by management,
however, their impacts were initially offset by revenues obtained from completion of several
large developments during this same time period. Most Village vacant property is now gone,
causing an absence of substantial new development and a resulting decline in past revenue
growth. Continuing increases in employee wages, pension and health benefits will be major
economic challenges that the Village will need to address. These will remain an on-going
consideration for several years to come.
Federal FEMA reimbursement for 2004's hurricane damages will also play a lingering role and
perhaps even a growing factor in the Village's future economic considerations.
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 receives. If you have questions about this report or need
additional financial information, contact the Village's Finance Department, at the Village of North
Palm Beach, 501 U.S. Highway 1, North Palm Beach, Florida 33408.
10
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' STATEMENT OF NET ASSETS
September 30, 2004
1
Assets
1
1
1
Cash and cash equivalents
Accounts receivable, net
Inventories
Other assets
Restricted assets:
Cash and cash equivalents
Net pension assets
Capital assets:
Nondepreciable
Depreciable:
Buildings and improvements
Improvements other than buildings
Improvements -golf course
Furniture, fixtures and equipment
Less: accumulated depreciation
Total assets
Liabilities and Net Assets
Liabilities:
Accounts payable and other current liabilities
Other liabilities
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
Net Assets:
Invested in capital assets, net of related debt
Net pension assets
Restricted for:
Capital Projects
Unrestricted
Total net assets
Governmental Business-type
Activities Activities Total
$ 3,835,696 $ 65,413 $ 3,901,109
432,687 30,927 463,614
20,210 30,476 50,686
2,673 - 2,673
196,001 - 196,001
425,128 - 425,128
2,055,893 1,051,311 3,107,204
10,570,191 1,476,711 12,046,902
- 574,318 574,318
- 1,603,940 1,603,940
6,108,299 713,743 6,822,042
(7,393,252) (2,877,085) (10,270 337)
16,253,526 2,669,754 18,923,280
753,945 50,025 803,970
160,430 7,000 167,430
1,353,795 92,654 1,446,449
6,224,375 393,903 6,618 278
8,492,545 543,582 9,036,127
3,762,961 2,131,367 5,894,328
425,128 - 425,128
470,155 - 470,155
3,102,737 (5,195) 3,097,542
$ 7,760,981 $ 2,126,172 $ 9,887,153
See accompanying notes to basic financial statements.
I 11
tlitititi ~ ri ~ lllllllll~ i~ ~ ~ ~ ~ ~ ~ ~
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF ACTIVITIES
Year Ended September 30, 2004
Functions/Programs Expenses
Government:
Govemmental activities
General government
Public safety
Public services
Leisure services
Interest on long-term debt
Total govemmental activities
Business-type activities -country club
Total business-type activities
Total government
General Revenues:
Taxes:
Property taxes
Utility service taxes
Sales and use taxes
Franchise fees
Total
Program Revenues
Operating
Charges for Grants and Governmental Business-type
Activities Contributions Activities Activities
$ 3,174,460 $ 355,118 $ - $ (2,819,342)
5,294,399 273,391 78,255 (4,942,753)
3,549,178 895,291 - (2,653,887)
1,280,483 147,773 11,107 (1,121,603)
40,580 - - (40,580)
13,339,100 1,671,573 89,362 (11,578,165)
2,567,690 2,548,259 -
2,567,690 2,548,259 -
$ (2,819,342)
(4,942,753)
(2,653,887)
(1,121,603)
(40,580)
(11, 578,165)
- (19,431) (19,431)
- (19,431) (19,431)
15,906,790 4,219,832 89,362 (11,578,165) (19,431) (11,597,596)
Grants and contributions not restricted to specific purposes
Investment income
Miscellaneous
Total general revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
8,451,783 - 8,451,783
1,830,339 - 1,830,339
1,230,803 - 1,230,603
861,706 - 861,708
291,710 - 291,710
53,600 3,450 57,050
92,260 42,560 134,820
12,812,203 46,010 12,858,213
~ ~ ~ ~ ~ ~
1,234,038 26,579 1,260,617
6,526,943 2,099,593 8,626,536
$ 7,760,981 $ 2,126,172 $ 9,887,153
See accompanying notes to the basic financial statements. 12
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' BALANCE SHEET
Govemmental funds
September 30, 2004
Assets
Capital
General Projects
Total
Governmental
Funds
t
Cash and cash equivalents $ 3,546,255 $ 485,442 $ 4,031,697
Accounts receivable, net 432,687 - 432,687
Inventories 20,210 - 20,210
Other assets 2,673 - 2,673
Total assets $ 4,001,825 $ 485,442 $ 4,487,267
Liabilities and Fund Balances
Liabilities:
Accounts payable and other current liabilities $ 738,658 $ 15,287 $ 753,945
Deferred revenues 160,430 - 160,430
Total liabilities 899,088 75,287 914,375
Fund balances
Reserved for:
Reserved for inventories
Reserved for prepaid items and deposits
Reserved for restricted assets
Reserved for capital outlay
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
See accompanying notes to basic financial statements.
20,210 - 20,210
2,672 - 2,672
196,000 - 196,000
- 470,155 470,155
2,883,855 - 2,883,855
3,102,737 470,155 3,572,892
$ 4,001,825 $ 485,442 $ 4,487,267
13
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
September 30, 2004
Amounts reported for governmental activities in the statement of net assets are different because:
' Ending fund balance -governmental funds $ 3
572
892
,
,
Capital assets used in govemmental activities are not financial resources and, therefore,
' are not reported in the governmental funds:
Cost of assets $ 18,734,383
Accumulated Depreciation (7,393,252)
'
Net pension assets related to defined benefit pension plans are not available to pay for 11,341,131
current-period expenditures and, therefore, are not reported as assets in the
governmental funds. 425,128
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:
Notes payable (6,376,387) ,
Capital leases payable (433,854)
' Accrued compensated absences (767,929)
(7,578,170)
Net assets of govemmental activities $ 7,760,981
1
1
1
I See accompanying notes to basic financial statements. 14
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended September 30, 2004
~o
I Revenues:
Taxes
I Licenses and permits
Intergovernmental
Charges for services
' Fines and forfeitures
Investment income
Miscellaneous
Total revenues
' Expenditures:
Current:
' General government
Public safety
Public services
' Leisure services
Reserves and other
Capital outlay
I Debt service
Total expenditures
Excess of revenues over/
I (under) expenditures
Other financing sources/ (uses):
' Proceeds from debt issuance
Net change in fund balances
' Fund balances, beginning of year
' Fund balances, end of year
' See accompanying notes to basic financial statements.
Total
Capital Governmental
General Projects Funds
$ 11,439,823 $ - $ 11,439,823
712,184 - 712,184
1,350,104 - 1,350,104
719,589 - 719,589
122,407 - 122,407
45,080 8,520 53,600
175,431 - 175,431
14,564,618 8,520 14,573,138
1,532,561 -
5,019,361 -
3,280,274 -
1,256,066 -
1,186,730 -
430,113 151,825
995,764 -
13,700,869 151,825
863,749 (143,305)
1,532,561
5,019,361
3,280,274
1,256,066
1,186,730
581,938
995,764
13,852,694
720,444
230,000 - 230,000
1,093,749 (143,305) 950,444
2,008,988 613,460 2,622,448
$ 3,102,737 $ 470,155 $ 3,572,892
15
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
Year Ended September 30, 2004
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances -total governmental funds
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Expenditures for capital assets $ 590,740
Less: current year depreciation (1,041,875)
$ 950,444
(451,135)
Proceeds from debt issuance reported as part of Other Financing Sources on the
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds are not revenues on the Statement of Activities but are
recognized as changes in liabilities on the Statement of Net Assets
Repayment of long-term debt is reported as an expenditure on the Govemmental
Funds, but a reduction of long-term liabilities in the Statement of Net Assets.
Principal payments on debt 801,246
Principal payments on capital leases 153,938
Total
Expenses that do not use current financial resources are not reported on the
Governmental Funds but are included in the Statement of Activities.
Change in long-term compensated absences 69,117
Change in net pension asset of defined benefit pension plans (59,572)
Total
Change in net assets of governmental activities
(230,000)
955,184
9,545
$ 1,234,038
See accompanying notes to basic financial statements. 16
r
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF NET ASSETS
Proprietary Fund
September 30, 2004
Assets
Current assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Total current assets
Capital assets:
Land, buildings and equipment, net
Total assets
Liabilities
Current liabilities:
Accounts payable and other current liabilities
Compensated absences payable
Deposits
Loans payable -current portion
Total current liabilities
Noncurrent liabilities:
Compensated absences payable
Loans payable
Total liabilities
Net assets
Investment in capital assets, net of related debt
Unrestricted
Total net assets
Country
Club
$ 65,413
30,927
30,476
126,816
2,542,938
2,669,754
50,025
34,500
7,000
58,154
149,679
40,486
353,417
543,582
2,131,367
(5,1.95}~~
$ 2,126,172
See accompanying notes to basic financial statements. 77
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
'
Proprietary Fund
Year Ended September 30, 2004
I
Country
'
Operating revenues: Club
Greens fees/cart rentals/membership fees $ 1,937,429
Tennis revenues 89,611
'
Pool revenues 121,296
Golf shop revenues 112,349
Driving range revenues 225,253
' Miscellaneous 42,560
Restaurant revenues 62,321
Total operating revenues 2,590,819
I Operating expenses:
Golf course maintenance expenses 958,829
Clubhouse grounds expenses 164,517
'
Tennis expenses 117,877
Pool expenses 203,331
Golf shop expenses 536,328
Food & beverage expenses 38,842
'
Administrative and general expenses 269,579
Insurance 39,132
Depreciation 222,253
I
Total operating expenses 2,550,688
Income from operations 40,131.
Nonoperatingrevenues(expenses):
Interest income 3,450
Interest expense (17,002)
I
Total nonoperating revenues (expenses) (13,552)
I Change in net assets 26,579
Net assets, beginning of year 2,099,593
I Net assets, end of year $ 2,126,172
I See accompanying notes to basic financial statements. 18
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF CASH FLOWS
Proprietary Fund
Year Ended September 30, 2004
Cash flows from operating activities
' Cash received from customers
Cash payments to suppliers for goods and services
Cash payments to employees for services
' Cash payments for payroll taxes
Cash payments for employee benefits
Net cash provided by operating activities
I Cash flows from capital and related financing activities
Principal payments
I Interest paid on debt
Acquisition of capital assets
Net cash used in capital and related financing activities
I Cash flows from investing activities
Interest on investments
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Reconciliation of income from operations to net cash
provided by operating activities:
Operating income
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense
Decrease in accounts receivable
Decrease in inventory
Decrease in accounts payable and other current liabilities
Decrease in compensated absences payable
Total adjustments
Net cash provided by operating activities
Noncash capital and financing activities:
Book value of assets disposed
Country
Club
$ 2,600,365
(1,184,055)
(975,092)
(77,699)
(225,392)
138,127
(101,900)
(17,002)
(86,186)
(205,088)
3,450
(63,511)
128,924
$ 65,413
$ 40,131
222,252
9,554
2,129
(129,994)
(5,945)
97,996
$ 138,127
$ -
See accompanying notes to basic financial statements. 19
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
Fiduciary Funds
September 30, 2004
ASSETS
Cash and cash equivalents
Investments:
Common stock
U.S. Government securities
Corporate bonds
Interest receivable
Accounts receivable
Total assets
LIABILITIES
Accounts payable and other liabilities
Due to others
Total liabilities
NET ASSETS
Held in trust for pension benefits
Total net assets
Employee
Retirement Agency
Funds Funds
$ 367,346 $ 272,084
8,119,416 -
2,365,305 -
2,970,261 -
18,747 -
43,409 -
13,884,484 272,084
10,154 -
- 272,084
10,154 272,084
13,874,330
$ 13,874,330 $ -
See accompanying notes to basic financial statements. 20
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS -
Employee Retirement Funds
Year Ended September 30, 2004
Employee
Retirement
Funds
Additions:
Contributions:
Employer $ 774,000
State of Florida 203,317
Plan members 234,069
Total contributions 1,211,386
Investment income
Interest 184,508
Net appreciation in fair value of investments 1,006,166
Investment expense (85,042)
Total investment income 1,105,632
Total additions 2,317,018
Deductions:
Administration 72,987
Benefits 1,859,760
Total deductions 1,932,747
Net increase 384,271
Net assets held intrust for pension benefits,
beginning of year 13,490,059
Net assets held intrust for pension benefits,
end of year $ 13,874,330
See accompanying notes to basic financial statements. 21
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial 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, canals and lagoons. The
Village's nonseasonal population consists of approximately 12,000 residents, which
increases 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 responsible 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
misleading 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 government 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. Further, 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 activities) report information on all of the non-fiduciary activities of the Village.
For the most part, the effect of interfund activities has been removed from these
statements. Governmental activities, which are normally supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support.
22
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government-Wide and Fund Financial Statements (Continued)
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.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements and proprietary fund financial statements are
reported using the accrual basis of accounting and the economic resources measurement
focus. Fiduciary funds use the accrual basis of accounting and, except for agency funds,
the economic resources measurement focus. Agency funds do not have a measurement
focus. 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 are reported using the current financial resources
measurement focus, and the modified accrual basis of accounting. Revenues are
recognized as soon as they are both measurable and available. Revenues are considered
to be available when they are collectible within the current period or soon enough 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 revenue items are considered to be
measurable and available only when the Village receives cash.
23
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
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 fiduciary funds:
Pension Trust Funds
The pension trust funds account for the activities of the General Employees
Retirement Fund and the Fire and Police Officers Retirement Fund, which
accumulate resources for pension benefits to qualified employees.
Agency Funds
The agency funds account for assets that are held for other parties and cannot be
used to finance the Village's own programs.
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 private sector guidance for their
business-type activities and enterprise funds, subject to this same limitation. The Village
has elected not to follow subsequent private sector guidance.
24
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
As a general rule, the effect of interfund activity has been eliminated from the government-
wide financial statements. 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 reported for the various
functions concerned.
' Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing
I 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 fund include 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.
' Assets, Liabilities, and Net Assets or Equity
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
I 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 is a "2a-7 like" pool and, thus,
these investments are valued using the pooled share price.
1 Restricted Assets
Cash and cash equivalents are restricted for the following purposes:
' 2004 2003
I Law enforcement education $ 17,127 $ 17,127
Public safety 16,054 15,239
Library 140,720 143,628
' Recreations facilities 22,100 9,000
Total restricted assets $ 196,001 $ 184,994
25
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
I Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Assets, Liabilities, and Net Assets or Equity (Continued)
' 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.
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 "advances to/from other funds" (i.e., the
noncurrent portion of interfund loans). All other outstanding balances between funds are
reported as "due to/from other funds." Any residual balances outstanding between the
governmental activities and business-type activities are reported in the government-wide
financial statements as internal balances.
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 balances between governmental and business-
type activities are presented in the government-wide financial statements.
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 inventory 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. The Village defines capital assets 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 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.
26
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Assets, Liabilities, and Net Assets or Equity (Continued)
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 are recorded as expenditures in the
governmental funds and capitalized as assets in the government-wide statement of net
assets. General capital assets are carried at historical cost. Where cost cannot be
determined from the available records, estimated historical cost has been used to record
the estimated value of the assets. Assets acquired by gifts or bequests are recorded at
their fair value at the date of acquisition.
Capital assets of the enterprise fund are capitalized in the fund. The valuation basis for
enterprise fund capital assets is the same as those used for general capital assets.
Additionally, net interest cost is capitalized on enterprise fund projects during the
construction period.
Additions, improvements, and other capital outlay that significantly extend the useful life of
an asset are capitalized. 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
Furniture, fixtures and 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 employees who are eligible to receive termination
payments upon separation.
27
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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. For the governmental funds, compensated absences are
liquidated by the general fund.
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
proceeds received, are reported as debt service expenditures.
Net Assets
Equity in the government-wide statement of net assets and the proprietary fund is displayed
in three categories: 1) invested in capital assets net of related debt, 2) net pension asset, 3)
restricted, and 4) unrestricted. Net assets invested in capital assets net of related debt
consist of capital assets reduced by accumulated depreciation and by any outstanding debt
incurred to acquire, construct, or improve those assets. Net pension asset represent
pension contributions above the actuarially required amount. 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 three
components.
28
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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, prepaid items 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.
Budgetary Accounting
State of Florida Statutes require that all municipal governments establish budgetary
systems and approve balanced 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.
29
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Budgetary Accounting (Continued)
The ordinance approved by the Council, which adopted the budget for the fiscal year ended
September 30, 2004, allows budget transfers based on the following regulations:
:• Appropriations shall not be transferred in amcunts over $5,000 without the approval
of the Village Council.
:• Appropriations of $5,000 or less shall not be transferred without the approval of the
Village Manager; however, the Village Manager is not permitted to violate the intent
of the approved budget.
Property Taxes
Under Florida law, the assessment of all properties and the collection of all county,
municipal and school board property taxes are consolidated in the offices of the County
Property Appraiser and County Tax. Collector, respectively. All property is reassessed
according to its fair market value on January 1 of each year and each assessment 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, 2003, upon which the 2003-04 levy
was based, was approximately $1.298 billion. 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 process. 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 assessed by the Village for the year
ended September 30, 2004, was 6.8000 ($6.80 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. Delinquent taxes on real property bear interest at 18% per
year. On or prior to June 1 following the tax year, certificates 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. The certificate holder may make application for a tax deed on any unredeemed tax
certificate after a period of two years. The County holds unsold certificates. 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,
2004, unpaid delinquent taxes are not material and have not been recorded by the Village.
30
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
1
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
Use of Estimates
' The financial statements and related disclosures are prepared in conformity with
accounting principles generally accepted in'the United States. Management is required to
make estimates and assumptions that affect the reported amounts of assets and liabilities,
' the disclosure of contingent assets and liabilities at the date of the financial statements, and
revenue and expenses during the period reported. These estimates include the collectibility
of accounts receivable, the use and recoverability of inventory, the useful lives and
impairment of tangible assets, and the realization of net pension assets, among others.
' Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary.
Actual results could differ from those estimates.
NOTE 2. DEPOSITS AND INVESTMENTS
Deposits
In addition to insurance provided by the Federal Depository Insurance Corporation,
deposits are held in banking institutions approved by the Chief Financial Officer ("CFO") of
the State of Florida to hold public funds. Under Florida Statutes Chapter 280, Florida
Security for Public Deposits Act, the CFO requires all Florida qualified public depositories to
deposit eligible collateral with the CFO or another banking institution. In the event of a
failure of a qualified public depository, the remaining public depositories would be
responsible for covering any resulting losses. The Village's deposits at year-end are
insured or collateralized with securities held by the entity or by its agent in the entity's
name.
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 Chapter 280, Florida Statutes;
I 2. Interest-bearing time deposits in qualified public depositories, as defined in Chapter
280, Florida Statutes;
31
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 2. DEPOSITS AND INVESTMENTS (continued)
' Investments (continued)
3. The Local Government Surplus Funds Trust Fund or any intergovernmental
' investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as
provided in Chapter 163, Florida Statutes;
t 4. Securities and Exchange Commission registered money market funds with the
highest credit quality rating 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 investment trust registered under the Investment Company
Act of 1940, 15 U.S.C. sections 80a-1 et seq., as amended from time to time,
t 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 directly 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: options, futures, municipal bonds, non-investment grade bonds, foreign
securities, precious metals, private 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.
32
1
1
J
1
1
1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
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 AI 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.
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 restricted to securities meeting the above criteria.
The State Board of Administration is part of the Local Government Surplus Funds Trust
Fund and is governed by Chapter 19-7 of the Florida Administrative Code. These rules
provide guidance and establish the general operating procedures for the administration of
the Local Government Surplus Funds Trust Fund. Additionally, the Office of the Auditor
General performs the operational audit of the activities and investments of the State Board
of Administration. The Local Government Surplus Funds Trust Fund is not a registrant with
the Securities and Exchange Commission (SEC); however, the board has adopted
operating procedures consistent with the requirements fora 2a-7 fund.
33
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Investments are categorized to give an indication of the level of credit risk assumed by an
entity at year-end. Category 1 includes investments that are insured or registered or for
which the Village or its agent in the Village's name holds the securities. 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.
A reconciliation of deposits and investments as shown on the statement of net assets and
statement of fiduciary net assets for the Village is as follows:
By category:
Cash and cash equivalents $ 4,736,540
Investments 13,454,982
Total deposits and investments $ 18,191,522
Presented in the statement of net assets
Governmental activities
Cash and cash egivalents $ 4,031,697
Business-type activities
Cash and cash egivalents 65,413
Total statement of net assets 4,097,110
Presented in the statement of fiduciary net assets
Pension trust funds
Cash and cash egivalents 367,346
Investments 13,454,982
Agency funds
Cash and cash egivalents 272,084
Total fiduciary funds 14,094,412
Total deposits and investments $ 18,191,522
34
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
' Investments (Continued)
Reported
Unrestricted Restricted Amount Fair Value
Cash and cash equivalents
Deposits $ 11,471 $ - $ 11,471 $ 11,471
Repurchase agreements 570,600 - 570,600 570,600 1
Pension money market funds - 303,745 303,745 303,745
State Board of Administration
Investment Pool 3,319,039 531,685 3,850,724 3,850,724
Total cash and cash
equivalents $3,901,110 $ 835,430 $ 4,736,540 $ 4,736,540
Investments
U. S. government securities $ - $ 2,365,305 $ 2,365,305 $ 2,365,305 1
Corporate bonds - 2,970,261 2,970,261 2,970,261 1
Common stock - 8,119,416 8,119,416 8,119,416 1
Total investments $ - $ 13,454,982 $ 13,454,982. $ 13,454,982
The following matrix presents the components of the Village's deposits and investments at
' September 30, 2004. Credit risk categories are indicated in the last column.
NOTE 3. RECEIVABLES
Receivables at September 30, 2004, were as follows:
General
Receivables:
State-shared revenues $ 96,411
Franchise fees 76,367
Utility taxes 93,363
Accounts 103,628
Special assessments 62.918
Gross receivables 432,687
Less allowance for uncollec tibles
Net total receivables $ 432.6$2
Country
Club Total
$ - $ 96,411
- 76,367
- 93,363
30,927 134,555
62.918
30,927 463,614
35
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 4. CAPITAL ASSETS
Capital assets activity for the year ended September 30, 2004, was as follows:
Governmental activities
Capital assets not being depreciated:
Land
Capital assets being depreciated:
Buildings and improvements
Furniture, fixtures, and equipment
Capital assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture, fixtures, and equipment
Total accumulated depreciation
October 1, Reclass- September 30,
2003 ifications Additions Deletions 2004
$ 2,055,893 $ - $ - $ - $ 2,055,893
10,472,157 (23,791) 151,825 (30,000) 10,570,191
5,892,566 23,791 430,113 (238,171) 6,108,299
16,364,723 - 581,938 (268,171) 16,678,490
(3,041,824) - (432,261) 30,000 (3,444,085)
(3,579,106) - (609,614) 239,553 (3,949,167)
Governmental activities capital
assets, net
Business-type activities
Capital assets not being depreciated:
Land
Capital assets being depreciated:
Buildings and improvements
Improvements other than buildings
Improvements -golf course
Furniture, fixtures, and equipment
Capital assets being depreciated
$11,799,686 $ - $(459,937) $ 1,382 $ 11,341,131
$ 1,051,311 $ - $ - $ - $ 1,051,311
1,475,421 - 1,290 - 1,476,711
574,318 - - - 574,318
1,603,940 - - - 1,603,940
702.658 - 84.896 (73.811) 713.743
36
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
I NOTE 4. CAPITAL ASSETS (continued)
I Capital assets activity for the year ended September 30, 2004, was as follows (continued):
I Business-type activities (continued)
Less accumulated depreciation for:
Buildings and improvements
I Improvements other than buildings
Improvements -golf course
Furniture, fixtures, and equipment
I Total accumulated depreciation
Business-type activities capital
assets, net
October 1, Reclass- September 30,
2003 ifications Additions Deletions 2004
$ (1,831,715) $ - $(121,606) $ - $ (1,953,321)
(378,799) - (34,059) - (412,858)
(16,536) - (719) - (17,255)
(501.5941 - (65.8671 73.811 (493.6501
$ 2,679,004 $ - $(136,065) $ - $ 2,542,938
I NOTE 5. LONG-TERM DEBT
Changes in Long-Term Liabilities
Long-term liability activity for the year ended September 30, 2004, was as follows:
' Balance Balance Amount Due
October 1, September 30, Within
' 2003 Additions Reductions 2004 One Year
Governmental activities:
I Loans payable $ 6,947,633 $ 230,000 $ 801,246 $ 6,376,387 $ 749,003
Capital leases 587,792 153,937 433,855 4,792
Compensated abs. payable 698,812 610,713 541,597 767,928 600,000
I Total $ 8,234,237 $ 840,713 $ 1,496,780 $ 7,578,170 $ 1,353,795
Business-type activities:
Loans payable $ 513,472 $ - $ 101,900 $ 411,572 $ 58,154
I Compensated abs. payable 76,163 34,501 35,677 74,987 34,500
Total $ 589,634 $ 34,501 $ 66,223 $ 486,558 $ 92,654
Loans Payable
$860,000 Promissory Note
The Village Council adopted Resolution No. 71-2000 authorizing the execution of a loan
agreement in the amount of $860,000 for the purpose of refinancing an existing loan incurred for
the renovation of the Village's Country Club restaurant and for capital expenditures in the general
fund. Franchise fees and public service taxes of the Village secure the loan. Principal and interest
payments are due quarterly, with a final maturity date of November 15, 2010. The interest rate on
the loan is 5.22%.
37
f
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
I NOTE 5. LONG-TERM DEBT (continued)
Loans payable (continued)
Amounts currently outstanding on the note are as follows:
Purpose Amount
Governmental activities $ 71,420
Business-type activities 410.493
4 1 0
I Annual debt service requirements to maturity are as follows:
Governmental activities:
Year
' Ending Principal Interest Total
2005 $ 56,788 $ 3,730 $ 60,518
2006 14,632 191 14,823
$ 71,420 $ 3,921 $ 75,341
Business-type activities:
Year
Ending Principal Interest Total
I 2005 $ 57,076 $ 21,428 $ 78,504
2006 60,114 18,448 78,562
2007 63,314 15,310 78,624
I 2008 69,684 12,005 81,689
2009 70,234 7,165 77,399
2010-2011 90,073 6,675 96,748
' $ 410,495 $ 81,031 $ 491,526
$2,800,000 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. Franchise
' fees and public service taxes secure the promissory note. Principal and interest payments are due
semi-annually, 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:
38
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG-TERM DEBT (Continued)
r
1
1
Loans payable (continued)
Governmental activities:
Year
Ending Principal Interest Total
2005 $ 265,133 $ 66,467 $ 331,600
2006 274,117 57,537 331,654
2007 283,404 48,306 331,710
2008 293,007 38,860 331,867
2009 302,934 28,892 331,826
2010 637,039 26,829 663,868
$ 2,055,634 $ 266,891 $ 2,322,525
$6,560,000 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.
Franchise fees and public service taxes of the Village secure the promissory note. Principal
payments of $190,000 are due semi-annually on January 1 and August 1, with a final maturity date
of February 1, 2017. The interest rate is at the London InterBank Offered Rate ("LIBOR") that 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, 2004, was 1.12% and this approximates the rate that was used to calculate
the debt service requirements to maturity.
Amounts currently outstanding on the note are as follows:
Government activities
39
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
I Notes To Basic Financial Statements
Year Ended September 30, 2004
I NOTE 5. LONG-TERM DEBT (Continued)
1 Loans payable (continued)
Annual debt service requirements to maturity are as follows:
' Year
Ending Principal Interest Total
2005 $ 300,000 $ 41,211 $ 341,211
I
2006 300,000 37,847 337,847
2007 300,000 34,483 334,483
2008 300,000 31,119 331,119
2009 300,000 21,026 321,026
2010-2013 2,250,000 160,344 2,410,344
$ 3,750,000 $ 326,030 $ 4,076,030
$142,000 Promissory Note
I 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, with a final maturity date of February
1, 2005. The interest rate on the loan is 4.33%.
~ Amounts currently outstanding on the note are as follows:
Purpose Amount
Governmental activities $ 4,056
Business-type activities 1,078
$x`.134
Annual debt service requirements to maturity are as follows:
Governmental activities:
Year
Ending Principal Interest Total
2005 $ 4,056 $ 119 $ 4,175
40
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 5. LONG-TERM DEBT (Continued)
' Loans Payable (Continued)
Business-type activities:
~ Year
Ending Principal Interest Total
' 2005 $ 1,078 $ 32 $ 1,110
' $271,000 and $132,000 Promissory Notes
In January 2003, the Village Council adopted Resolution No. 8-2003 authorizing the issuance of
' promissory notes to finance various capital expenditures. The notes are payable from the Village's
non-ad valorem tax revenues.
' The $132,000 note bears interest at 2.93% and is payable in six semiannual payments of $23,158,
beginning July 2003 and with final maturity in January 2006. Annual debt service requirements to
maturity for this note, which are payable by the general fund, are as follows:
Governmental Activities:
Year
Ending Principal Interest Total
2005 $ 44,638 $ 1,678 $ 46,316
' 2006 22,804 354 23,158
$ 67,442 $ 2,032 $ 69,474
' The $271,000 note bears interest at 3.82% and is payable in fourteen semiannual payments of
$22,286, beginning July 2003 and with final maturity in January 2010. Annual debt service
requirements to maturity for this note, which are payable by the general fund, are as follows:
41
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG-TERM DEBT (Continued)
t Loans Payable (Continued)
Governmental Activities:
Year
Ending Principal Interest Total
' 2005 $ 41,948 $ 3,626 $ 45,574
2006 42,718 2,856 45,574
2007 43,502 2,072 45,574
' 2008 44,300 1,274 45,574
2009 36,506 333 36,839
$ 208,974 $ 10,161 $ 219,135
t $230,000 Promissory Note
In January 2004, the Village Council adopted Resolution No. 7-2004 authorizing the issuance of a
promissory note to finance various capital expe nditures. The note is payable from the Village's
non-ad valorem tax revenues and franchise fees. The note bears interest at 1.83% and is payable
' in five semiannual payments of $21,025, beginning August 2004 and with final maturity in January
2009. Annual debt service requirements to maturity for this note, which are payable by the general
' fund, are as follows:
Year
Ending Principal Interest Total
' 2005 $ 36,441 $ 8,131 $ 44,572
2006 37,866 6,707 44,573
2007 39,347 5,226 44,573
' 2008 40,876 3,697 44,573
2009 21,846 440 22,287
$ 176,376 $ 24,201 $ 200,578
' Capital Leases
The Village entered into .various lease agreements as lessee for financing the acquisition of
equipment. The lease agreements qualify as capital leases for accounting purposes and therefore
' have been recorded at the present value of the future minimum lease payments as of the date of
inception. Lease payments will be made from the general fund.
42
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
I NOTE 5. LONG-TERM DEBT (Continued)
Capital Leases (Continued)
The assets acquired through capital leases are as follows:
Governmental
Activities
Assets
Vehicles $ 1,086,567
Less: Accumulated depreciation (564,936)
Total $ 521,631
I The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2004, were as follows:
Year
Ending Principal Interest Total
2005 $ 155,326 $ 11,171 $ 166,497
2006 159,182 5,123 164,305
2007 69,086 1,885 70,971
2008 34,286 904 35,190
2009 15,975 183 16,158
Total $ 433,855 $ 19,266 $ 453,121
NOTE 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 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 parry administers the group
medical coverage for the Village. The Village funds its 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 insurance coverage for the last three years.
The liability for unpaid claims, if any, is estimated using an industry average that is based on
actual claims paid. As of September 30, 2004, the Village had no claims liability for its employee
benefit plan because Village contributions exceeded claims for the year. Changes in the claims
liability since September 30, 2004, are as follows:
43
' THE VILLAGE OE NORTH PALM BEACH, FLORIDA
' Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 6. RISK MANAGEMENT (Continued)
Claims and
Year Ended Claims Liability Changes in Claim Claims Liability
She tember 30, Beqinning of Year Estimates Payments End of Year
2001 $ 128,296 $ 484,762 $ (579,958) $ 33,100
2002 33,100 1,210,299 (1,097,504) 145,895
2003 145,895 1,632,265 (1,585,596) 192,564
2004 192,564 1,055,715 (1,248,279) -
t Property and Casualty Group
The Village also participates in Southeast Risk Management Association (SERMA), a
quasigovernmental agency created by an interlocal agreement, as authorized by Chapter 163,
Florida Statutes. SERMA administers the property 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
assessments 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, 2004, 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.
NOTE 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 issues astand-alone financial report. Additional
information on these plans can be found beginning on page 58.
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 recognized when due and the employer has made a formal
commitment to provide the contributions. Benefits and refunds are recognized when due and
payable in accordance with the terms of each plan.
Each plan has its own board that 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
44
1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
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 Florida Division of Retirement reviews and approves each local government's
actuarial report prior to its being appropriated for use for funding purposes. Additionally, the State
collects two locally authorized insurance premium 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 distributed 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 independent 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
No nongovernmental investments exceed 5% of net plan assets.
Fire and Police Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
The following schedule is derived from the respective actuarial reports and Village information for
the two pension plans as of October 1, 2003:
' Plan Description:
Authority
Asset Valuation:
Reporting
Actuarial Valuation
' Legal Reserves
Long-Term Receivable
Internal/Participant Loans
r Membership and Plan Provisions:
Members:
' Active Participants
Retirees and Beneficiaries
Terminated Vested
General Emolovees
Village Ordinance
Fair Value
5-year smoothed market
None
None
None
92
13
35
Fire and Police
Village Ordinance/State
Fair Value
5-year smoothed market
None
None
None
37
4
14
45
1
1
J
1
1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Normal Retirement Benefits:
Retirement Age
Years of Service (minimum)
Accrual-(years 1-20)
(over 20)
Maximum
Years to Vest
Under 5 years
5 or 6 years
7 or 8 years
9 or more years
Contributions:
Actuarial Rate:
Village
State
Participants
Annual Pension Cost
Contributions Made
Option 1 Option 2
65 60 55
5 5 9
2.00% 2.25% 2.50%
1% 1% -
None None 60%
10
0% 0%
50% 50%
75% 75%
100% 100%
16.35% 3.50%
n/a 5.09%
4.00%' 2.00%
$ 530,099 $387,647
$ 524,000 $453,317
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
Latest Valuation
Basis for Contribution
Cost Method
Amortization:
Method
Period
Open/Closed
General Emolovees Fire and Police
Annual Annual
10/1 /03 10/1 /03
10/1/03 10/1/03
Frozen Entry Age Aggregate
Level percent n/a
27 years n/a
Closed n/a
Note: The aggregate actuarial cost method does not identify or separately amortize unfunded
actuarial liabilities.
Assumptions:
Investment Earning
(including inflation)
Salary Increases (including inflation)
Inflation
Mortality Rates
8.5% /year up to
retirement, 5.25%
thereafter
5.5% /year
4.0% /year
1983 Group Annuity
Mortality Table
8.0% /year
6.0% /year
4.0% /year
1983 Group Annuity
Mortality Table
46
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Retirement Age
Eligible for early retirement 5% 5%
Normal retirement date atta ined 60% 60%
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%
Age 55 0.5%
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 valuation (October 1, 2002).
Annual Pension Cost and Net Pension Obligation (Asset):
The Village's annual pension cost and net pension obligation (asset) for both plans for the current
year were as follows:
General Fire and
Annual required contribution
Interest on net pension asset
Adjustment to annual required contribution
Annual pension cost
Contributions made
Decrease (increase) in net pension asset
Net pension asset, beginning of year
Net pension asset, end of year
Employees Police
$ 523,127 $ 383,891
(15,938)
(22,910)
530,099
(524,000)
6,099
(187,510)
$ (181,411)
(8,533)
12,289
387,647
(453,317)
(65,670)
(178,047)
$ (243,717)
47
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Three-Year Trend Information
Annual Percentage Net Pension
Year Pension of APC Obligation
Ended Cost (APC) Contributed (Asset)
General
Employees 9/30/02 $ 435,473 107.40% $ (193,873)
9/30/03 509,583 98.75% (187,510)
9/30/04 530,099 98.85% (181,411)
Fire and Police 9/30/02 133,722 144.20% (109,993)
9/30/03 327,228 120.80% (178,047)
9/30/04 387,647 116.90% (243,717)
NOTE 8. CONTRACTS AND COMMITMENTS
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, 2004 were $47,760. Future minimum lease payments are $47,760 for the
year ending September 30, 2005.
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 September 30, 3004 were $6,000. Future minimum lease payments are
$6,000 for the year ended September 30, 2005.
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 $86,451 for the
year ended September 30, 2004 under the terms of this lease agreement. Future minimum lease
payments for the year ending September 30, 3005 are contingent upon sales and expenses of the
operations of the lessee.
NOTE 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
48
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
' NOTE 9. JOINTLY GOVERNED ORGANIZATION (Continued)
Village has no participating equity ownership in Seacoast. The Village paid $74,738 to Seacoast
' during the fiscal year for water and sewer service.
NOTE 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
I 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
I 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 required 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.
NOTE 11. ACCRUED MEDICAL CLAIMS LIABILITY
After issuing the financial statements for the year ended September 30, 2004, Village
management discovered that certain unpaid claims for employee and beneficiary medical and
dental care totaling an estimated $342,000 had not been accrued as of September 30, 2004.
These omissions resulted from complete information not being available at the time the statements
were issued. The inclusion of these liabilities in the revised financial statements increased
liabilities by $342,000 at September 30, 2004. The excess of general fund revenues over
expenditures in the statement of revenues, expenditures and changes in fund balance, and the
change in net assets in the statement of activities decreased by $342,000.
49
1
1
1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Budgeted Amounts Actual on Variance with
Budgetary Final Budge[
Original Final Basis Positive
Budget Budget ~ (See No[e 1) (Negative).
Budgetary fund balance, October 1.2003 $ $ z,39s,os7 $ ss7,aaz $ (1,638,625)
Resources (inflows)
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
fines and forteitums
Interest Earnings
Miscellaneous
Amounts availahle for appropriation
Charges to appropriations (outflows)
Village council expenses
' Personnel expenses
Professional services
Accounting 8 auditing
' Internal auditing
Other operating expenses
Total village councl expenses
' Village manager expenses
Personnel expenses
Telephone
Moving expenses
' Computer supplies
Other operating expenses
Total Village Manager Expenses
' Village clerk expenses
Personnel expenses
Telephone
Rental - facility
' Office supplies
Other operating expenses
Total Village Clerk Expenses
Finance expenses
Personnel expenses
Professional services
Telephone
Office supplies
Computer supplies
Other opeaiting expenses
Total Finance Expenses
Continued
11,228, 808 8,922, 741 11,439,823 2,517,082
463, 515 588, 515 712,184 123.669
1,142, 400 1,506, 135 1,350,104 (156,031)
646, 510 641, 510 719,589 78,079
122, 700 122, 700 122,407 (293)
50, 000 50, 000 45,080 (4,920)
138, 000 227, 687 175,431 (2,256)
13,741,933 14,315,355 15,232,060 918,705
35,927 37,227 35,927 1,300
4,200 11,700 9,722 '.,978
29,000 29,000 18,977 10,023
20,000 20,000 17,815 2.185
21,715 21,715 18,196 3,519
110,842 119,642 100,637 19, 005
328,137 372,659 327,094 45,565
8,100 8,100 8,021 79
- 7,000 7,000 -
3,000 4,155 4,154 1
13,180_ 12,085 10,197 1,888
350,417 403,979 356,466 47,513
188,188 224,438 208,783 15,655
2,100 2,100 1,892 208
1,000 1,000 1,000 -
2,300 2,300 2,083 217
6,752 6,752 5,102 2,100
200,340 236,590 218,860 10,180
352,055 423,323 407,777 15,546
2,500 3,000 3.325 (325)
4,500 4,400 3,927 473
2,500 2,500 1,825 675
3,500 3,600 3,810 (10)
23,210 24,660 21,935 2.725
388,265 461,483 442,399 19084
50
See notes to required supplementary information.
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
' Budgeted Amounts
Original Final
Budget Budget Actual on
Budgetary
Basis
(See Note 1) Variance with
Final Budget
Positive
(Negative)
'
Village attorney expenses
Village adomey legal fee 85,000 77,300 67.704 9.596
'
Special legal services 20,000 18,400 16.345 55
Labor services 12,000 23,400 23.348 52
Total Village Attorney Expenses 117,000 179,100 109.397 9.703
' Planning 8 comm. bevel. Exp
Engineering planning general 10,000 8,200 19,203 (71,003)
AmhivisUhistorian 200 200 t,08a (884)
Comp. Plan. Amendments 10,000 6,400 1,St5 4.885
'
Nonhlake blvd redevelopemenl 10,000 10,000 10,000
ToWi Planning 8 Comm. bevel. Exp 30,200 24,600 31.802 (7002)
General Service Expense-Village Hall
'
Postage 35,000 35,000 33,324 7,676
Utilities 15,400 23,250 23,189 6t
Rental equipment 10,000 10,500 9,947 559
Insurance-package 170,000 162,700 758,080 4,620
'
Repairs and maintenance 3,500 3,100 3,024 76
Supplies 29,950 28,725 28,335 32
Other operating expenses 75,500 17,600 17,557 43
'
Total General Service Expense-Village Hali 279,350 280,875 273,450 7,425
General Service Expense- Public Safety Bldg
Postage 1,500 1,810 1,683 127
'
Utilities 105,785 102,845 93,608 9,237
Rental-copier equip. 6,000 8,000 10,837 (2,637)
Repairs and maintenance 16,000 12.300 77,165 1.135
Supplies 3,000 2,850 2,753 97
I
Other operating expenses 1,500 11,190 12,799 (1,609)
Total General Service Expense- Public Safety Bldg 143,365 738.995 132,645 6,350
Faciltties maintenance. expenses
'
Personnel expenses 373,395 411,976 400,543 11,433
Supplies 9,300 9,600 9.001 599
Other opereting expenses 3,600 3,600 3,162 a18
I Total Facilities Maint. Expenses 384,995 423,876 411,605 12,271
Vehicle main[. Expenses
Personnel expenses 130,443 141,444 133,150 8.294
I
Utilities 7,600 9,310 9,181 149
Repairs and maintenance 5,800 5,500 4,608 892
Supplies 12,150 12,150 10,593 1,557
Other opeating expenses 1,000 1,000 802 198
'
Machinery 8 equipment 4,000 3,500 3,385 175
Total Vehicle Maint. Expenses 160,993 172,904 761,699 11,205
I Continued 51
See notes to required supplementary information.
I THE VILLAGE OF NORTH PALM BEACH, FLORIDA
' Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
I Budgeted Amounts Actual on Variance with
Budgetary Final Budget
Original Final Basis Positive
Budget Budget (See Note 1) (Negative)
Reserves expenses
Council wntingency 75,337 59,537 2,000 57,537
Reserveyroup health 500,000 500,000 842,000 (342,000)
I
Reserve-miscellaneous 20,000 8,000 6,168 1,832
Reserve -Raises & Benefits 172,500
Reserve-accrued benefits 70,000 60,847 60,773 74
Pertormance Raise 225,000 - - -
I
2003 Salary Adjustment 622.000
Reserve-hurricane expenses 295,000 275,789 19,211
Total Reserves Expenses 1,684,837 923,384 1,186,730 (283,348)
I Police expenses
Personnel expenses 2,694,780 3,006.016 2,886.561 119.455
Telephone 9,308 11,708 11,734 (26)
-Rental-equipment 8.658 8,258 7,252 1,006
I
Repairs and maintenance 53.501 57,401 48,462 8,939
Supplies 142,550 137,500 104,947 32,553
Training and education 30,799 24,199 20,143 4,058
Other operating expenses 55,833 40,933 22,218 18,715
I
Capital expenses 60,400 91,200 89,303 2,026
Total Police Expenses 3,055,829 3,377,215 3,190,620 186,724
I Police forteiture trust expense
R & m. automotive 570 (570)
Licenses & fees - - 872 (872)
Auto parts supplies = = 60 (60)
I
Total Police forfeiture trust expense 1,302 (1,302)
Fire prevention expenses
Personnel expenses 674,598 746,055 670,810 75,245
I
Repairs and maintenance 13,610 13,610 5,256 8,354
Supplies 34,263 35,263 28,095 7,168
Training and education 5,841 4,541 4,167 374
ONer operating expenses 11,694 12,994 13,735 (741)
I
Capital expenses 89,414 88,814 68,062 20,202
Total Fire Prevention Expenses 809,420 881,077 790.125 t 10,602
I Public Service Administrative Expenses
Personnel expenses 464,237 516,584 463.190 53.394
Utilities 16,700 17,300 18.821 879
Repairs and maintenance 11,075 11,475 8,033 3.442
I
SuDPlies 14,000 13,800 13.836 (36)
Training and education 6,655 6,655 3,744 2,911
Other operating expenses 13,400 11,200 4,573 6,627
Computer hdwr&safrtvr 1,400 1,400 1,287 113
I
Total Public Service Administrative Expenses 527,467 578,414 511,284 67,130
Continued
52
See dotes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Emergency Medical Service Expenses
Personnel expenses
Utilities
Rental -equipment
Repairs and maintenance
Supplies
Training and education
Other operating expenses
Capital expenses
Total Emergency Medical Services Expenses
Sanitation expenses
Personnel expenses
Solid waste disposal
Repairs antl maintenance
Advertising
Supplies
Recycling program
Total Sanitation Expenses
Street malnt Expenses
I Personnel expenses
Utilities
Rental -equipment
Repairs and maintenance
I Supplies
Other operating expenses
Total Street Malnt. Expenses
Library expenses
Personnel expenses
Utilities
Rental equipment
Repairs and maintenance
Supplies
Other operating expenses
Books and wpifal expenses
Total Library Expenses
Park malnL Expenses
I Personnel expenses
Utilities
Rental -equipment
Repairs and maintenance
I Supplies
Other operating expenses
Total Park Maint. Expenses
Continued
Budgeted Amounts Actual on Variance with
Budgetary Final Budget
Original Final Basis Positive
Budge[ Budget (See No[e 1) (Negative)
899,809 1023,715 958,838 64.277
6,100 9,691 9,045 646
9,000 9,000 8,391 609
11,900 10,950 5,701 5.249
54,221 51,521 41,049 10,472
4,846 3,955 3,062 93
35,510 34,610 30,726 3,884
15,830 33,415 204,420 (168,008)
1,037,016 1,176,257 1,262,032 (82,776)
866,038 979,057 933,971 45.086
140,000 724,600 116,273 8,327
8,000 8,000 8,066 (66)
1,200 1,200 1,101 99
86,250 96,650 90,829 5,821
1,200 1,200 1,198 4
1,102,888 1,210,707 1,151,438 59,271
492,451 559.990 519,682 40,308
72,000 77,700 82,438 (4.736)
1,000 1,000 118 882
9,000 205,000 2.668 202.332
13,500 14,500 12,680 1.820
52,150 55,450 50,102 5,348
640,101 913,640 667,686 245,105
473,381 565.760 535,895 30,085
26,800 31,500 30,774 728
3,250 3,250 2,179 1,071
7,836 7,836 4,468 3.368
13,625 13,625 9,323 4,302
4,710 4,710- 3,285 1,280
84,435 84,435 93,827 (630)
614,037 711,116 879,331 12,848
298,698 344,051 305,772 38,339
8,500 10,930 10,936 (6)
1,000 1,200 1,200
7,700 7,700 6,769 931
58,800 58.550 53.365 5.185
5,075 5,075 3,254 1,821
379,773 427,506 381.236 46.270
53
See notes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Recreation expenses
Personnel expenses
Utilities
Repairs and maintenance
Supplies
Training and education
Other operating expenses
Capital expenses
Total Recreation Expenses
Special events expense
Music 8 talent
Rental -Equipment
Public Events
Fumiture/(xlure
Refreshments 8 supplies
Total Special Events Expense
' Debt service expenses
Total Debt Service Expenses
' Total expenditures/charges to approprladons
Budgetary funtl balance, September 30, 2004
Budgeted Amounts Actual on Variance with
Budgetary Final Budget
Original Final Basis Positive
Budget Budget (See Note 1) (Negative)
378,718 4fi2,544 443,147 19,397
109,000 102,000 106.996 (4.996)
8,000 11,500 11,363 737
29,400 30,400 25,528 4.872
1,900 1.900 27 1.873
4,360 5,980 4.864 1,096
11,500 1.500 11,500
531,378 625,804 593,425 33,879
10,000 6,750 6,718 32
4,000 2,100 2,080 20
45,000 39,541 38,824 917
1,600 1,800 1,723 (123)
1,500 1,500 1,793 (293)
82,100 51,491 50,938 553
1,131,500 1,056,500 995,764 60,736
13,741,933 14,315,355 13,700,869 fi19,508
$ $ $ 1,531,191 $ 1,536,213
54
See notes to required supplementary information.
I THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Funding Progress - General Employees Retirement Fund
Actuarial UAAL as
I 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
10/01/1997 $ 4,301,968 $ 4,585,587 $ 283,619 93.8% $ 2,380,024 11.9%
10/01/1998 4,574,342 4,733,864 159,522 96.6% 2,435,518 6.5%
I
10/01/1999
10/01/2000 5,179,781
5,732,329 5,943,849
7,508,961 764,068
1,776,632 87.1%
76.3% 2,543,984
2,761,773 30.0%
64.3%
10/01/2001 6,312,447 8,150,125 1,837,678 77.5% 3,127,313 58.8%
I
10/01/2002 6,193,676 8,594,442 2,400,766 72.1% 3,076,493 78.0%
10/01/2003 6,759,012 10,404,349 3,645,337 65.0% 3,443,843 105.9%
I
I See notes to required supplementary information. 55
I 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
I General Employees Retirement Fund
1998 $ 224,810 $ 250,721 n/a 111.5%
1999 214,323 227,112 n/a 106.0%
I
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%
'
2003 502,855 503,220 n/a 100.1%
2004 523,127 524,000 n/a 100.2%
I Fire and Police Retirement Fund*
1998 $ 118,643 $ 56,672 $ 92,463 125.7%
1999 182,286 110,966 79,215 104.3%
I
2000 97,135 53,067 73,123 129.9%
2001 85,866 25,607 77,227 119.8%
2002 130,305 57,825 88,452 112.3%
'
2003 323,352 235,339 159,943 122.2%
2004 249,702 250,000 203,317 181.5%
I `Annual required contributions for the Fire and Police Retirement Fund include contrib utions
from the State of Florida.
I 56
See notes to required supplementary information.
' The Village of North Palm Beach, Florida
Notes to Required Supplementary Information
' Year Ended September 30, 2004
' NOTE 1. BUDGETARY DATA
' As required by GASB Statement No. 34, a budgetary comparison schedule is
presented for the general fund. Budgetary comparison schedules are not required,
and have not been presented for capital projects funds or enterprise funds.
' The budget for the general fund is adopted on an accounting basis that differs from
generally accepted accounting principles (GAAP) because it includes open
' encumbrances as expenditures. Differences between budgetary inflows and outflows
and GAAP revenues and expenditures are as follows:
General Fund
' Sources/Inflows of resources:
' Actual amounts (budgetary basis) "available for appropriations" from the
Budgetary comparison schedule $15,232,060
' Differences -budget to GAAP:
The fund balance at the beginning of the year is a budgetary resource but
is not acurrent-year revenue for financial reporting purposes (667,442)
' Total revenues as reported on the statements of revenue, expenditures
and changes in fund balances -governmental funds $14,564,618
' Uses/Outflows of resources:
' Actual amounts (budgetary basis) "total charges to appropriations" from the
budgetary comparison schedule $13,700,869
' Total expenditures, as reported on the statement of revenues, expenditures,
and changes in fund balances -governmental funds $13,700,869
' Budgetary fund balance:
' Actual fund balance (budgetary basis) from the budgetary
comparison schedule $1,531,191
Differences -budget to GAAP:
' The fund balance at the beginning of the year is a budgetary resource
but is not acurrent-year revenue for financial reporting purposes (667,442)
' Total fund balances, as reported on the statement of revenues,
expenditures and changes in fund balances -governmental funds $ 863,749
' 57
' The Viilage of North Palm Beach, Florida
Notes to Required Supplementary Information
' Year Ended September 30, 2004
NOTE 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, 2004, several
' expenditures exceeded appropriations in the general fund. They are as follows:
:• Expenditures for Capital Outlay -Computer Hardware and Software in Village
' Manager and in Finance; and Automotive in Fire Prevention and in Park
Maintenance were not budgeted because they were funded through issuance of
bank loans.
' :• Expenditures for Outside Services Pay and Donations in Law Enforcement
exceeded appropriations because these are not budgeted items.
' :• Expenditures for Library Contribution Usage exceeded appropriations because
this is not a budgeted item.
' :• Expenditures for Health Insurance in all departments exceeded appropriations
due to increases in health care costs.
' NOTE 3. PENSION PLANS
The- aggregate actuarial cost method does not identity 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
Employees Fire
and Potice
Valuation date 10/1/03 10/1/03
' Actuarial cost method Frozen Entry Age Aggregate
Asset valuation method 5-year smooth market 5-year smoothed market
I Actuarial assumptions:
Investment rate of return (including 8.5%/year up to retirement, 8%/year
inflation) 5.25% thereafter
Salary increase (including inflation) 5.5%/year 6%/year
'
Inflation 4%/year 4%/year
Post retirement benefit increases 3%/year for those who retired 3%/year
58
~ ~ ~ ri ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
COMBINING STATEMENT OF NET ASSETS -FIDUCIARY FUNDS
SEPTEMBER 30, 2004
Employee Retirement Funds Agency Funds
Fire and
General Police Total Manatee Northlake Tutal
Employees Officers Employee Protection Boulevard Agency
Pension Pension Retirement Agency Task Force Funds
ASSETS
Cash and cash equivalents $ 62,684 $ 304,662 $ 367,346 $ 232,010 $ 40,074 $ 272,084
Investments:
Common stock 4,189,974 3,929,442 8,119,416 - - -
U.S. Government securities - 2,365,305 2,365,305 - - -
Corporate bonds 2,358,704 611,557 2,970,261 - - -
Interest receivable - 18,747 18,747 - - -
Accounts Receivable 43,409 43,409 - - -
Totalassets 6,611,362 7,273,122 13,884,484 232,010 40,074 272,084
LIABILITIES
Accounts Payable 6,107 4,047 10,154 - - -
Due to Others - - - 232,010 40,074 272,084
Total liabilities 6,107 4,047 10,154 232,010 40,074 272,084
Net Assets
Held in trust for pension benefits $ 6,605,255 $ 7,269,075 $ 13,874,330 $ - $ - $ -
59
' THE VILLAGE OF NORTH PALM BEACH, FLORIDA
COMBINING STATEMENT OF CF-IANGES IN NET ASSETS
' Employee Retirement Funds
Year Ended September 30, 2004
Employee Retirement Funds
Fire and
General Police Total
Employees Officers Employee
Pension Pension Retirement
' Additions:
Contributions:
Employer $ 524,000 $ 250,000 $ 774,000
State of Florida - 203,317 203,317
' Plan members 179,569 54,500 234,069
Total contributions 703,569 507,817 1,211,386
' Investment income:
Interest and dividends 7,183 177,325 184,508
Realized gains and losses - 241,996 241,996
' Net appreciation in fair value of investments 619,674 144,496 764,170
Investment expense (50,348) (34,694) (85,042)
Total investment income 576,509 529,123 1,105,632
Total additions 1,280,078 1,036,940 2,317,018
Deductions:
' Administration 25,233 47,754 72,987
Benefits 1,408,601 451,159 1,859,760
Total deductions 1,433,834 498,913 1,932,747
' Net increase (decrease) 153
756 538
027
(
,
) , 384,271
Net assets held in trust for pension benefits, beginning
' of year 6,759,011 6,731,048 13,490,059
' Net assets held intrust for pension benefits, end of
year
$ 6,605,255 $ 7,269,075 $ 13,874,330
60
1
1
1
1
I
I
I
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
SEPTEMBER 30, 2004
October 1, 2003 Additions Deductions September 30, 2004
Manatee Protection Aoencv
Assets
Cash and Cash Equivalents $ 228,894 $ 3,116 $ - $ 232,010
Total assets $ 228,894 $ 3,116 $ - $ 232,010
Liabilities
Due to Others $ 228,894 $ 3,116 $ $ 232,010
Total liabilities $ 228,894 $ 3,116 $ $ 232,010
Northlake Boulevard Task Force
Assets
Cash and Cash Equivalents $ 17,259 $ 23,396 $ 581 $ 40,074
Noncurrent Asset (Fiduciary) -
Total assets $ 17,259 $ 23,396 $ 581 $ 40,074
Liabilities
Due to Others $ 17,259 $ 23,396 $ 581 $ 40.074
Total liabilities $ 17,259 $ 23,396 $ 581 $ 40,074
Total All Aaenev Funds
Assets
Cash and Cash Equivalents $ 246,153 $ 26,512 $ 581 $ 272,084
Total assets $ 246,153 $ 26,512 $ 581 $ 272,084
Liabilities
Due to Others $ 246,153 $ 26,512 $ 581 $ 272,084
Total liabilities $ 246,153 $ 26,512 $ 581 $ 272084
61
STATISTICAL SECTION
~ ~ ~ ~ ~ ~ ~ Illllllll^ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Table I
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Government-wide Expenses by Function
Last Ten Fiscal Years (1)
Fiscal Year Interest on
Ended Total General Public Public Leisure Long-term Country
September 30, Expenses Government Safety Services Services Debt Club
1995 $ - $ - $ - $ - $ - $ - $ -
1996 - - - - _ _ _
1997 - - - - _ _ _
1998 - - - - _ _ _
1999 - - - - _ _ _
2000 - - - - - - _
2001 - - - - _ _ _
2002 15,134,186 1,474,645 5,179,278 4,240,543 1,464,072 173,488 2,602,160
2003 15,804,807 2,781,333 5,195,338 3,482,975 1,539,771 128,507 2,676,883
2004 15,564,790 2,832,460 5,294,399 3,549,178 1,280,483 40,580 2,567,690
(1) Information riot available prior to 2002.
62
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ [i ~
Table fl
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Government-wide Revenues
Last Ten Fiscal Years (i)
Program Revenues General Revenues
Fiscal Year Charges Operating Capital Unrestricted Unrestricted
Ended Total for Grants and Grants and Grants and Investment
September 30, Revenue Services Contributions Contributions Taxes Contributions Earnings Miscellaneous
1995 $ - $ - $ - $ - $ - $ - $ - $ -
1996 - - - - - - -
1997 - - - _ _ _ - _
1998 - - - - - - - _
1999 - - - - - - -
2000 - - - - - - - -
2001 - - - _ _ _ - -
2002 13,548,953 3,820,786 94,252 92,461 9,054,515 - 145,313 341,626
2003 14,877,203 4,013,522 82,134 112,560 10,158,648 276,302 79,609 154,428
2004 17,167,407 4,219,832 89,362 - 12,374,633 291,710 57,050 134,820
(1) Information not available prior to 2002.
63
Table III
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
General Governmental Expenditures by Function
Last Ten Fiscal Years
Fiscal General Public Public Leisure Capital Debt
Year Government Safety Services Services Outlay Services Other Total
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 78?_,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
2003 1,360,072 4,758,982 3,285,603 1,216,156 1,054,207 1,076,072 1,298,492 14,049,584
2004 1,532,561 5,019,361 3,280,274 1,256,066 430,113 995,764 844,730 13,358,869
Note: The above expenditures are for the general fund.
64
Table IV
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
General Governmental Revenues by Source
Last Ten Fiscal Years
Licenses Charges Fines
Fiscal and Inter- for and
Year Taxes Permits governmental Services Forfeitures Interest Miscellaneous Total
1995 $ 5,417,516 $ 748,676 $ 1,071,940 $ 246,016 $ 97,993 $ 191,427 $ 96,630 $ 7,870,198
1996 5,429,150 453,912 1,352,609 219,447 97,886 248,700 93,635 7,895,339
1997 5,627,038 366,031 1,172,716 275,100 156,281 201,759 129,890 7,928,815
1998 6,116,651 509,055 1,379,295 342,863 128,140 213,637 96,113 8,785,754
1999 6,528,207 543,650 1,144,583 357,336 119,185 239,372 95,893 9,028,226
2000 6,794,249 756,419 1,273,110 437,811 149,690 290,413 139,419 9,841,111
2001 7,686,039 917,166 1,336,664 492,830 244,921 247,931 108,551 11,034,102
2002 8,197,886 648,873 1,267,331 521,660 168,995 85,239 123,574 11,013,558
2003 9,292,822 686,548 1,280,228 665,496 113,391 54,554 138,945 12,231,984
2004 11,439,823 712,184 1,350,104 719,589 122,407 45,080 175,431 14,564,618
Note: The above revenues are for the general fund
65
Table V
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Tax Levies and Collections
Last Ten Fiscal Vears
Percent Delinquent Total Percent
Fiscal Total Current Tax of Levy Tax Tax Collected
Year Tax Levy Collections Collected Collections Collections To Tax Levy
1995 $ 3,780,663 $ 3,646,758 96.54% $ 78 $ 3,646,836 96.57%
1996 3,704,613 3,577,517 96.46% 6,187 3,583,704 96.46%
1997 3,701,075 3,574,562 96.57% 4,379 3,578,941 96.74%
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%
2002 5,562,239 5,357,206 96.31% 12,175 5,369,381 96.53%
2003 6,597,909 6,359,478 96.39% 5,522 6,365,000 96.47%
2004 8,825,061 8,441,383 95.65% 10,401 8,451,784 95.77%
Source: Palm Beach County Property Appraiser.
66
Table VI
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Assessed Ualue of Taxable Property
Last Fen Fiscal Years
Fiscal
Year Assessed Value
Real Personal
Property Property
Total
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
2003 1,093,294,027 44,276,499 1,137,570,526
2004 1,252,888,990 44,914,124 1,297,803,114
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.
I Source: Palm Beach County Property Appraiser.
67
1
1
I
1
1
1
1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Tax Rates -Direct and Overlapping Governments
Last Ten Fiscal Years
(Per $1,000 of the Assessed Value)
Fiscal
Year Village
of North
Palm
Beach
Special
Districts Palm Beach
County
School
District
Palm Beach
County
otal
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 21.716
2001 5.75 2.263 8.918 4.936 21.867
2002 5.60 2.456 8.948 4.935 21.939
2003 5.80 2.488 8.779 4.808 21.875
2004 6.80 2.556 8.571 4.791 22.718
Source: Palm Beach County Property Appraiser
Table VII
68
Table VIII
I THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Computation of Direct and Overlapping Bonded Debt
General Obligations Bonds
' September 30, 2004
Percentage Amount
I Net General Applicable to Applicable to
Name of Bonded Debt The Village of The Village of
Governmental Unit Outstanding North Palm Beach (1) North Palm Beach
'
Direct
' Village of North Palm Beach $ - 100.00% $ -
Overlapping:
' Palm Beach County N/A N/A N/A
Palm Beach County
I School District N!A N/A N/A
Total $ - $ -
I (1) Estimated based on 2002 Ratio of Assessed Taxable Values.
Source: Palm Beach County Property Appraiser
I
School Board of Palm Beach County, Finance Department
Village of North Palm Beach.
I N/A =Not Available
69
Table IX
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Computation of Legal Debi Margin
September 30, 2004
The Village Charter and the Constitution of the State of Florida, Florida State Statute 200.181,
do not provide for a legal debt limit.
70
Table X
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Debt Related Statistics
Schedule of Revenue Bond Coverage
General and Enterpirse Funds
Debt Service Requirements
Net
Revenue
Available
Fiscal Gross Expenditures/ For Debt
Year Revenue Expenses (1) Service Principal Interest Total Coverage
1995 $ 10,167,560 $ 8,829,772 $ 1,337,788 $ 150,000 $ 5,250 $ 155,250 $ 9
1996 " '
1997 ' '
1998 " '
1999 ' '
2000 ` ' "
zool " ' " " "
2002 " " '
2003 ' ` " '
2004 '
Source: Village of North Palm Beach.
(1) Represents total General Fund and Country Club expenditures/expenses, exclusive of
depreciation,debtseryice, and loss on disposal of fixed assets.
' Revenue bonds were paid in full in 1995.
71
Table XI
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Value, Construction, and Bank Deposits
Last Ten Fiscal Years
Commercial Residential
Property Value (1) Construction Construction Bank
Fiscal Deposits (2)
Year Commercial Residential Value Value lin thousand:
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
1998 97,758,105 620,048,032 3,769,950 10,893,857 10,715,610
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
2003 128,216,552 963,091,506 225,000 9,355,204 14,484,675
2004 147,927,933 1,092,433,722 565,215 11,417,004 15,855,918
(1) Estimated
(2) Data as of September 30 of the preceding year.
Sources: Village of North Palm Beach.
Palm Beach County Property Appraiser Office.
Florida Bankers Association (all of Palm Beach County)
72
Table XII
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Principal Taxpayers
January 1. 2004
Percentage
2004 of Total
Assessed Assessed
Taxpayer Valuation Valuation
Olen Residential Realty $ 17,830,332 1.53%
Sanctuary Bay Trust Corporation 13,491,211 7.15%
Crystal Tree NPB 9,939,914 0.87%
Wolfchase Associates, L.L.C. 8,600,000 0.76%
Greater Florida Investment Co. 5,840,000 0.51%
Transcontinental Atrium, Inc. 4,590,000 0.40%
701 US One, Inc. 3,600,000 0.36%
Pavilion Office Center 3,240,000 0.35%
Old Port Cove Dev. 3,162,597 0.28%
Developers of Northlake, Inc. 3,143,442 0.27%
Morse, Edward J., Inc. 2,857,901 0.25%
$ 76,295,397 6.73%
Source: Palm Beach County Property Appraiser
73
Table Xlli
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Miscellaneous Statistics
September 30. 2004
Date of Incorporation: August 13, 1956
Form of Government Council -Manager
Area (land and waterways) 5.18 square miles
Miles of streets 36.00
Number of street lights 425
Population 12,198
Fire Protection
Number of stations 1
Number of firemen and officers 8
Police/EMS Protection
Number of stations 2
Number of policemen and officers 35
Number of EMS officers 13
Building Permits
Building permits -new 36
Building permits -additions 165
Recreation/Culture
Number of parks 4
Public tennis courts 4
Number of marinas 1
Number of libraries 1
Number of volumes 47,531
Country Club
Golf course 1
Driving range 1
Swimming pool 1
Tennis courts 10
Employees 264
Source: Village of North Palm Beach
74
REQUIRED REPORTS
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
The Honorable Mayor and Members of the Village Council
The Village of North Palm Beach, Florida
We have audited the financial statements of 4he governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Village of North
Palm Beach, Florida ("Village"), as of and for the year ended September 30, 2004, which
collectively comprise the Village's basic financial statements and have issued our report thereon
dated March 4, 2005. 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 General of the United States.
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 opinions on the financial statements and not to provide an opinion 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 reportable 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 caused by error or fraud
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 considered to be material weaknesses. However, we noted other matters
involving the internal control over financial reporting that we have reported to management of
the Village of North Palm Beach, Florida in a separate letter dated March 4, 2005.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village of North Palm Beach,
Florida's financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and gran4 agreements,
noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an
opinion. The results of our test disclosed no instances of noncompliance that are required to be
reported under Government Auditing Standards.
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This report is intended for the information and use of the audit committee, management,
members of the Village Council, the State of Florida Office of the Auditor General, and
applicable federal and state agencies, and is not intended to be and should not be used by
anyone other than these specified parties.
' West Palm Beach, Florida
March 4, 2005
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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 basic financial statements of the Village of North Palm Beach, Florida, (the
Village) as of and for the year ended September 30, 2004, and have issued our report thereon
dated March 4, 2005. 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 General of the United States. We
have issued our Report of Independent Certified Public Accountants on Compliance and
Internal Control Over Financial Reporting and on Compliance and Other Matters, Based on an
Audit of Financial Statements Performed in Accordance With Government Auditing Standards
date March 4, 2005 and it should be considered in conjunction with this management letter.
In connection with our audit of the basic financial statements of the Village for the year ended
September 30, 2004, we report the following in accordance with Chapter 10.550, Rules of the
Auditor General, Local Governmental Entity Audits which requires that this report specifically
address, but not be limited to, the matters outlined in Rule 10.554 (1)(h):
1. No inaccuracies, shortages, defalcations, fraud, and violations of laws, rules,
regulations and contractual provisions were reported in the preceding annual.
financial audit
2. The Village, during fiscal year 2004, was not in a state of financial emergency as
defined by Florida Statute, Section 218,503(1). The Village had. no deficit fund
balances.
3. The Village has complied with Section 218.415, Florida Statutes regarding the
investment of public funds.
4. Recommendations to improve the Village's present financial management and
accounting procedures are presented below.
5. Recommendations made in the preceding financial audit have been implemented,
except as noted below.
6. During the course of our audit, nothing came to our attention that caused us to
believe that the Village:
a. Was in violation of any laws, rules, regulations or contractual provisions.
b. Made any illegal or improper expenditures that may or may not materially affect
the financial statements.
c. Had improper or inadequate accounting procedures, other than those
recommendations noted below to improve the Village's administrative and
accounting controls.
d. Failed to properly record financial transactions, which could have a material
effect on the Village's basic financial statements.
e. Had other inaccuracies, shortages, defalcations or instances of fraud and fraud
related matters.
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7. The annual financial report for the year ended September 30, 2004, has been filed
with the State of Florida Department of Financial Services pursuant to Section
218.32(1}(a), Florida Statutes, and was in agreement with the audited financial
statements of the same period.
8. The Village of North Palm Beach, Florida was incorporated by Chapter 165, Florida
Statutes.
9. During the course of our audit, we applied financial condition assessment procedures
pursuant to Rule 10.556(8). It is management's responsibility to monitor the Village's
financial condition, and our financial condition assessment, which was performed as
of the Village's fiscal year end, was based on representations made by management
and the review of financial information provided by the Village. There were no
findings regarding deteriorating financial conditions.
CURRENT YEAR COMMENTS AND RECOMMENDATIONS
AUDIT ADJUSTING ENTRIES
FINDING 04-1
Criteria
An effective system of internal controls includes procedures that require that a responsible
official approve adjusting journal entries and that the entries be timely posted to the appropriate
general ledger accounts.
Condition
While reconciling certain fund balance general ledger accounts during the course of our audit of
the Village's financial statements for the year ended September 30, 2004, we noted that some
auditors' journal entries for the year ended September 30, 2003 were not posted to the general
ledger accounts as of the date 'of our examination. We also noted that some fiscal year 2004
activity had been posted to certain fund balance accounts rather that having been posted to
revenue and expense accounts.
Perspective/Effect
A fY2003 adjusting journal entry was not posted to the general ledger and certain fund balance
accounts contained current period activity. Because the 2003 journal entry was not posted, one
fund balance general ledger account was not in agreement with the September 30, 2003
audited financial statements.
Recommendation
We recommend that the Village strengthen controls over journal entries by requiring that all
adjustments be timely posted to the appropriate general ledger accounts, that current period
activity be posted to the appropriate revenue and expense accounts as it occurs, and that fund
balance accounts be reconciled with audited financial statements.
Management's response
By June 30, 2005 all adjusting journal entries will have been posted to the general ledger and
reconciled by the Finance Director. All future annual audit journal entries will be posted to the
appropriate general ledger accounts within 30 days of completion and delivery of the audit
report to the Village Council. Current monthly activity will be posted to the appropriate revenue
and expenditure accounts as it occurs.
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BUDGET CATEGORIES SUBTOTALS
FINDING 04-2
Criteria
An effective system of internal controls includes procedures that require that revenue and
expense categories be in compliance with properly adopted budgets and approved budget
amendments. The budget adoption ordinance reflects an allowance for budget transfers up to
and including $5,000 without council approval.
Condition
While preparing the CAFR for the fiscal year ended September 30, 2004, we noted that certain
revenue and expense categories and various transfers between line items occurred during the
year.
Perspective/Effect
The total budget in the general ledger reports agreed to the total approved budget as amended.
However, it was not clear how the line item transfers, particularly those that are required to be
approved by the council, relate to the budget level that was originally approved.
Recommendation
We recommend that the Village review the budget adoption and amendment levels (i.e., line
item level, department level, function level) to provide the most practical implementation of
budgetary controls by Village management.
Management's response
The Village Administration will recommend that the Village adopt an annual budget that sets the
legal level of financial control at the Department level for total operating expenditures and
further provide for categorical budget control of total capital expenditures within each
department. The Administration's recommendation will be reflected in the July 2005 proposed
budget to be considered by Council as part of the annual budget adoption in September 2005.
INFORMATION TECHNOLOGY PROCEDURES DOCUMENTATION
FINDING 04-3
Criteria
An effective system of internal controls includes procedures for documentation of information
technology policies, procedures, and guidelines.
Condition
Our review of the current information systems departmen4 disclosed no significant problems.
However, we noted the lack of formal documentation of policies, procedures and controls.
Perspective/Effect
Documentation is primarily a function of safeguarding assets, ensuring continuity in case of
turnover and absences, and setting guidelines that help monitor the timing of software and
hardware upgrades, control obsolescence, and provide for the highest and best use of
information technology.
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Recommendation
Formal documentation is a time consuming process. However, we recommend that the Village
implement the goal of completing the documentation of the technology policies and procedures.
Management's response
Information technology policies and procedures will be developed and implemented by
September 2005.
STATUS OF PRIOR YEARS' COMMENTS
FINDING 01-01
Country Club Operation
Criteria
Proprietary funds are used to account for governmental activities that are similar to activities
that may be performed 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 -current year
During the course of our audit, we utilize a variety of methods to identify the financial condition
of the organization. Financial condition, for the purpose of this comment, refers to the Village's
ability to provide services at the level and quality that is citizens desire. As part of our 2004,
audit, we updated financial indicators that had been calculated in the prior year.
At September 30, 2004, the financial indicators continue to demonstrate a deteriorating financial
condition for the country club operation. Our observations on this condition are as follows:
1. There has been a continuous decline in net assets for the past five years. Net
assets are the cumulative amount by which revenues and operating transfers from
other funds have exceeded expenses. For the year 2004, the Country Club
experienced a sl g increase of 1.27%.
2. There has been a continuous decline in the current ratio (as measured by cash and
investment to current liabilities) for the past three years. This may result in a
difficulty in meeting current needs. For the year 2004, there was an increase in the
current of .12:1.00 to .52:1.00.
3. There were operating losses for three of the past five years. This may result in a
reduction of the Village's ability to withstand financial emergencies and/or the ability
to fund major expenses or capital purchases without having to borrow.
4. There has been a negative working capital position for the last four years. At
September 30, 2004, the County Club's liquid assets were $126,818. The average
monthly cash requirement for operations is $213,000.
2004 2003 2002 2001
Financial Indicator #1
Net Assets $2,126,172 $2,099,593 $1,974,296 $2,044,028
Percentage Increase (Decrease) 1.27% (3.14)% (3.41)% (5.54)%
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Financial Indicator #2
Cash and Investments
Current Liabilities
$65,413 $128,924 $156,020 $114,861
149,679 324,499 390, 171 247,324
.52:1.00 .40:1.00 .40:1.00 .46:1.00
2004 2003 2002 2001
Financial Indicator #3
Operating Income (Loss)
Operating Revenues
$40,131 $(22,146) $1,973 $(65,883)
2,590,819 2,631,509 2,570,649 2,492,894
1.5% (0.84)% 0.08% (2.60)%
Financial Indicator #4
Net assets
Total Operating Revenues
$2,126,172 $2,099,593
2,590,819 2,631,509
$1,974,286 $2,044,028
2,570,649 2,492,894
82% 79%
77% 82%
Financial Indicator #5
Net Working Capital (Deficiency)
Percentage Increase/(Decrease)
$(22,8so) $(122,a87)
81 % 12%
$(140,018) $(205,884)
32% 39%
Perspective
The financial condition of the enterprise fund may require the general fund to subsidize
operations and may prevent the ability to finance needed improvements.
Recommendation
I We recommend that management:
1. Continue to review the revenue structures to determine stability, equity, efficiently
and capacity to finance operations.
2. Use long-term financial plans that include revenue and expenditure trend studies,
capital, and debt management plans.
Management Response
The Village Council has agreed with the Administration's recommendation to engage a financial
advisor for developing a set of business plans for the Country Club under various development
I and operating scenarios. The advisor will assist in a review and forecasting of Country Club
financial operations and assist in identifying capital debt capacity for Country Club
improvements. The Administration will collaborate with the Village's Country Club Advisory
' Board in reviewing and possibly adjusting annual Club fees, vendor contracts relating to outside
vending machines, golf course beverage services, driving range fees and various other Club
revenue enhancement opportunities.
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This management letter is intended solely for the information and use of the Villaoe of North
Palm Beach, Florida's management, and the State of Florida Office of the Auditor General, and
is not intended to be and should be used by anyone other than these specified parties.
West Palm Beach, Florida
March 4, 2005
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