2011 CAFRThe Village of
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North Palm Beach, FL
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2011
The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2011
Prepared by:
Finance Department
Samia Janina
Director of Finance
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal ...................................................................................................... ............................... i
List of Principal Village Officials ............................................................................. ............................... vii
OrganizationChart .................................................................................................... ............................... viii
GFOA Certificate of Achievement for Excellence in Financial Reporting ................. ............................... ix
FINANCIAL SECTION
IndependentAuditors' Report ......................................................................................... ..............................1
Management's Discussion and Analysis ......................................................................... ..............................3
BASIC FINANCIAL STATEMENTS:
Government -wide Financial Statements
Statementof Net Assets .......................................................................................... .............................13
Statementof Activities ............................................................................................ .............................14
Fund Financial Statements:
Balance Sheet - Governmental Funds ..................................................................... .............................16
Reconciliation of the Balance Sheet — Governmental Funds
to the Statement of Net Assets .......................................................................... .............................17
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds .............................................................. .............................18
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of the Governmental Funds to the Statement of Activities ....... .............................19
Statement of Net Assets - Proprietary Fund ............................................................ .............................20
Statement of Revenues, Expenses, and Changes in Net
Assets- Proprietary Fund .................................................................................. .............................21
Statement of Cash Flows - Proprietary Fund .......................................................... .............................22
Statement of Fiduciary Net Assets - Fiduciary Funds ............................................. .............................23
Statement of Changes in Fiduciary Net Assets — Fiduciary Funds ......................... .............................24
Notes to the Basic Financial Statements ........................................................................ .............................25
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress- Other Post Employment Benefits ........................... .............................63
Schedule of Funding Progress — Retirement Funds ................................................. .............................64
Schedule of Employer and State Contributions ...................................................... .............................65
Notesto the Trend Data .......................................................................................... .............................66
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund .................................................................... .............................67
Notes to the Budgetary Required Supplementary Information ............................... .............................68
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
TABLE OF CONTENTS
(Continued)
OTHER SUPPLEMENTARY INFORMATION:
Schedule of Departmental Expenditures— Budget and Actual — General Fund ....... .............................69
Combining Balance Sheet — Nonmajor Governmental Funds ................................. .............................72
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
NonmajorGovernmental Funds ......................................................................... ............................... 73
Combining Statement of Net Assets - Fiduciary Funds .......................................... .............................74
Combining Statement of Changes in Fiduciary Net Assets - Employee Retirement Funds ................75
Combining Statement of Agency Net Assets .......................................................... .............................76
Combining Schedule of Changes in Agency Net Assets and Liabilities .................. .............................77
Schedule of Departmental Expenses — Budget and Actual — Country Club Fund — Budgetary Basis ..78
STATISTICAL SECTION
NetAssets by Component ..................................................................................... ...............................
79
Changesin Net Assets ........................................................................................... ...............................
80
Fund Balances, Governmental Funds ...................................................................... .............................82
Changes in Fund Balances, Governmental Funds ................................................... .............................83
Net Assessed Value and Estimated Actual Value of Taxable Property .................. .............................85
Property Tax Rates - Direct and Overlapping Governments .................................... .............................86
Principal Property Taxpayers .................................................................................. .............................87
Property Tax Levies and Collections ...................................................................... .............................88
Ratios of Outstanding Debt by Type ........................................................................ .............................89
Direct and Overlapping Governmental Activities Debt ........................................... .............................90
Pledged- Revenue Coverage ..................................................................................... .............................91
Demographic and Economic Statistics ..................................................................... .............................92
PrincipalEmployers ................................................................................................ .............................93
Full -Time Equivalent Village Government Employees by Function ....................... .............................94
Operating Indicators by Function /Program ............................................................. .............................95
Capital Asset Statistics by Function /Program .......................................................... .............................96
REQUIRED REPORTS
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 ..... .............................97
Management Letter in Accordance with the Rules of the Auditor General of the
Stateof Florida .................................................................................................... .............................99
INTRODUCTORY SECTION
THE VILLAGE OF
NORTH PALM BEACH
-- - THE BEST PLACE TO LIVE UNDER THE SUN
March 22, 2012
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, 2011.
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 are accurate in all material respects, and
are 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
Nowlen, Holt & Miner, P.A., Certified Public Accountants, have issued an unqualified ( "clean ") opinion
on the Village of North Palm Beach's financial statements for the year ended September 30, 2011. The
independent auditor's report is located at the front of the financial section of this report.
Management's Discussion and Analysis (MD &A) immediately follows the independent auditor's report
and provides a narrative, overview, and analysis of the basic financial statements. MD &A complements
this letter of transmittal and should be read in conjunction with it.
The CAFR's role is to assist in making economic, social and political decisions and to assist in
assessing accountability to the citizenry by:
• comparing actual financial results with the legally adopted budget, where appropriate;
• assessing financial condition and results of operations;
• assisting in determining compliance with finance related laws, rules and regulations;
• assisting in evaluating the efficiency and effectiveness of Village operations.
501 U.S. Highway 1, North Palm Beach, FL 33408 -4902 * (561) 841 -3380 * Fax (561) 848 -3344
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 13,000 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 abundant
amount of waterfront property created by a number of lakes, canals, and the Atlantic Ocean.
The governing body of the Village consists of a five member Village Council, each of whom is elected to
two -year overlapping terms. The Mayor is selected by majority vote of the Council and serves for a term
of one year. Day to day affairs of the Village are under the leadership of the 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.
Financial reporting for its Enterprise Fund (i.e., the Country Club operation) is presented using the full
accrual basis of accounting required by GAAP for its annual financial report. The Country Club annual
budget is adopted using a modified accrual basis of accounting (identical to the general government
operations mentioned above) which is consistent with how general ledger financial records are
maintained throughout the year by the Village administration.
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 within 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.
The Village of North Palm Beach maintains budgetary controls through the annual budget public
hearing and approval process for GAAP -based budgets. The formal budget approval for each fiscal
year is accomplished in a manner compliant with Florida State Statute 200.065, commonly referred to
as Truth -in- Millage (TRIM).
Budget amendments require Village Council approval at public meetings. Budgetary control is
maintained at the department level within the fund by the encumbrance of estimated purchase amounts
prior to the release of purchase orders to vendors. Purchase orders, which result in an overrun of
approved departmental appropriations within the fund, are not released until additional appropriations
are made available. Encumbered amounts lapse at year -end; however, they are re- appropriated as part
of the following year's budget.
ECONOMIC OUTLOOK
Property Values
The Village obtains a major portion of its annual General Fund financial resources (56 %) from ad
valorem property taxes. Gross assessed property values increased substantially between the years of
2002 through 2006 but slowed significantly in 2007. In years 2008 through 2011 area property values
declined in value, in many instances significantly, as a result of the economic downturn. This
unprecedented decline in property values is only exacerbated by the number of properties in various
stages of foreclosure. Both of these real- estate issues have had and continue to have an adverse
impact upon the financial resources of the Village. The Village does not anticipate a change in the pace
of planned new growth since most vacant property within the municipal limits has already been
developed. There continues to be an obvious softening of the real- estate market significantly impacting
both home values and sales.
The Village's property tax valuation continues to be negatively impacted since the passing of
Amendment One (Property Tax Reform) in January 2008! Three primary factors play a role in that
impact: doubling the Homestead exemptions to fifty thousand dollars; the capping of assessed property
values for homes not currently homesteaded; and portability. Political discussions continue regarding
alternative taxations which make future forecasts of Village property tax valuation uncertain.
The Village will continue to pursue annexation of surrounding unincorporated areas that complement
and enhance the services and values of our existing community. The focus of Village annexation
efforts will be providing exemplary municipal services that are revenue "neutral" to both the annexed
areas and to the Village.
Investment Revenues:
The economic downturn and softening of the Money Market continues to have significant
consequences on the Village's investment revenues. In the short -term, the Village made a conscious
decision to modify its investment strategies towards the Treasury Market to better protect and ensure
the availability of the Village's investment balances. This move proved successful in safeguarding
Village investments during this Market freefall but impacted the interest /dividend revenues to the
Village. Four years ago, the Village adopted, with the assistance of the Village's Audit Committee, a
"revised" Investment Policy designed to provide safety and liquidity while maximizing investment
return(s). The newly adopted policy provides numerous investment strategies, parameters, and
safeguards. The policy additionally provides for 1/12 of its annual operating budget to be deposited in a
liquid interest bearing account so as not to impede operations should other funds be temporarily
unavailable.
Personnel Costs
The Village will continue to face challenges primarily in areas of increased personnel costs for both
salaries and benefits as well as increased insurance and energy costs. In past years, several
retirement plan amendments were implemented by the Village and then followed by significant salary
adjustments that magnified the impact and cost of the retirement changes. The combination of these
changes resulted in significant increases to - and continuing requirements for - annual Village pension
costs. The Village has also encountered significant increases in annual health insurance costs during
the past few years. In 2005, the Village transitioned away from its self- insured health program to a
contractual, fixed -fee Health /Dental program. This new health program more accurately reflects and
contains annual Village costs while re- establishing a cost - sharing partnership with employees by
adjusting the amount of their annual contribution for health coverage.
Agreements for all three of the Village's collective bargaining units (police, fire, and public service
workers) were successfully bargained and ratified during fiscal year 2010. All Collective Bargaining
Agreements will run through September 30, 2013. All wage provisions "sunset" each year and must be
renegotiated pursuant to the annual re- opener provisions outlined in the respective Collective
Bargaining Agreements thereby giving the Village a more accurate means by which to calculate future
year salaries and benefit costs.
The impacts of personnel salaries and benefits in the coming years will have a large and continuing
effect on future Village financing and service priorities in the areas of staffing, public services and public
projects.
INITIATIVES AND FUTURE PROJECTS
The FY2011/2012 budget reflects a renewed commitment and predictable funding for community
infrastructure in areas such as roadways, neighborhood sidewalks and lighting, public buildings, and
park facilities.
The Community Development Department continues to meet the unending demands of our Village's
business and neighborhood redevelopment. Community Development will continue to concentrate staff
resources in areas of construction, permitting, licensing, and community planning while reinforcing
improvements in customer service. The continuing analysis and pursuit of annexation opportunities,
zoning and redevelopment enhancements and improvement of our business and development
regulations is also a function of the Community Development Department. This Department will better
align our Village with statutory development guidelines and help to meet steadily growing expectations
of homeowners and developers.
The Parks and Recreation Department continues to enhance programs for all age groups and at each
of the six facilities. The newly redeveloped Anchorage Park will host a variety of events in this
upcoming year to include: movies in the park; organized volleyball leagues; the Village's annual fishing
tournament; and Heritage day. The parks continue to be maintained by an outside service which has
been funded under the "contractual services" line.
The Village will be looking to make grant application in FY2012 at both the state and federal levels to
offset costs associated with the continuation of a walking path to the north side of Anchorage Park. The
Village will also seek to expand the (recreational vehicle) "dry storage" area at Anchorage Park to
accommodate those residents currently awaiting availability. Additionally, the Village will make
reapplication to FRDAP seeking a $50,000 non - matching grant to erect a "Veterans Memorial" to the
rear of Village Hall and adjacent to the Public Library.
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The Public Works Department is planning to continue oversight and maintenance of Village sanitation,
infrastructure, streets, facilities, equipment, and roadways. This Department will focus on and play a
major role in maintaining and expanding our focus on community appearance during the coming year.
Public Works improvements include funding for the replacement of A/C chiller units at Village Hall and
Public Safety. These A/C units are showing severe signs of wear and tear and could pose significant
disruption to the Village should there be an unanticipated failure. The replacement cost for these two
units is $111,600. Public Works also plans to take steps to improve neighborhood lighting in areas
identified as having acute need throughout the Village. Roadway appearance will be emphasized with
improved median and swale plantings.
Northlake Boulevard Corridor Task Force: An initial $500,000 grant from the State DOT allowed the
Village to award a local company the bid for construction of Phase 1 of the Northlake Boulevard
streetscape improvement. This first phase provided sidewalk widening and median /swale area
landscaping improvements from US1 westward to Southwind Drive. Replacement of deficient
vegetation was completed in February 2007. Implementation of Phase II which extends from Southwind
Drive westward to Alternate A1A got underway in FY2011 and will be completed sometime early 2012.
The Police Department has continued improvements in neighborhood outreach, crime suppression, and
crime clearances. In 2008, and again in 2011, the Village's Police Department was awarded the
coveted CALEA National Accreditation for law enforcement agencies. The Police budget includes
funding for the purchase /replacement of needed marked patrol vehicles.
The Human Resources Department, over this past year, assisted with workforce reduction strategies,
employee healthcare procurement, and risk management. Union related matters were also
successfully addressed with emphasis placed on legal reporting and the providing for a consistent
managerial oversight of all Village personnel matters. With the acquisition of the Restaurant at the
Country Club, new staff hiring and processing continues to task this relatively small department.
The Administration continues with its implementation of an optical records storage system which will be
ongoing. This system will be used by all Village operating departments (Community Development,
Finance, Human Resources, and Country Club). Optical record storage systems are now widely used
by governments and meet all State record storage requirements. This allows the Village to transition —
over time — from "paper" records to optically stored records. Optical storage permits digital "look up" of
any optical record "at will" through the convenience of a simple computer search. Optical storage
systems have become commonly used by many local governments, and the cost is relatively modest
when considering the time savings and customer service improvements they offer.
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.
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, 2010. The
Certificate of Achievement is a prestigious national award, recognizing conformance with the highest
standards for preparation of state and local government financial reports.
Respectfully submitted,
amia Janjua
Director of Finance
N
Innyy night
Iage Manager
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Title
Mayor
Vice Mayor
President Pro Tem
Council Member
Council Member
Village Manager
Director of Finance
Village Clerk
PRINCIPAL VILLAGE OFFICIALS
SEPTEMBER 30, 2011
V11
Name
Darryl C. Aubrey
David B. Norris
William L. Manuel
Robert A. Gebbia
T.R. Hernacki
James Titcomb
Sarnia Janjua
Melissa Teal
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INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and Members of the Village Council
The Village of North Palm Beach, Florida
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FAX {591 j 996 -9248
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 as of and for the year ended September 30, 2011, 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, Florida's
management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with U. S. generally accepted auditing standards 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, 2011, and the respective changes in financial position, and cash
flows, where applicable, thereof for the year then ended in conformity with U.S. generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated
March 13, 2012, on our consideration of the Village of North Palm Beach, Florida's internal
control over financial reporting and on 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
AMERICAN INST FUTE CIF CERTIFIED PUDUC#000UNTANT5 • FLORIDA INS7I7UTE OF OMFIM PUBMAC013UN7AN7S • CPAMERYCA INTERNATICINAL
the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 3 through 12, Pension and Other Post
Employment Benefit trend information on pages 63 through 66, and budgetary comparison
information on pages 67 through 68 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express
an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Village of North Palm Beach, Florida's financial statements as a whole.
The introductory section, other supplemental information and statistical section, are presented for
purposes of additional analysis and are not a required part of the financial statements. The other
supplemental information are the responsibility of management and were derived from and relate
directly to the underlying accounting and other records used to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the information is fairly stated in all material respects in relation to the financial
statements as a whole. The introductory and statistical sections have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we do
not express an opinion or provide any assurance on them.
March 13, 2012
West Palm Beach, Florida
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Village of North Palm Beach, Florida's (Village) Administration offers readers of the Village's
financial statements this narrative overview and analysis of the financial activities of the Village for the
fiscal year ended September 30, 2011. Please read it in conjunction with the accompanying transmittal
letter beginning on page i, and the accompanying basic financial statements.
TABLE 1
FINANCIAL HIGHLIGHTS
(in millions)
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 unassigned fund balance
As a percent of general fund expenditures
Country Club revenues over (under) expenses
Change in total long -term debt for the Village
September 30,
Increase/
Statement
2011
2010
(Decrease)
Page #
$32.14
$31.84
$0.30
13
$12.16
$10.97
$1.19
13
$29.56
$29.14
$0.42
13
$21.92
$22.66
($0.74)
14
$18.35
$19.37
($1.02)
14
$21.62
$21.62
$0.00
14
$0.42
$1.15
($0.73)
15
$1.98
$0.60
$1.38
18
$10.68
$10.44
$0.24
16
64.35%
55.45%
(0.11)
($0.11)
($0.10)
($0.01)
21
($0.31)
($2.40)
$2.09
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 expand upon information reported in the government -
wide and governmental fund 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 a way that helps
answer this question. These statements include all assets and liabilities using the accrual basis of
accounting, which is similar to the accounting used by most private- sector companies. All of the current
year's revenues and expenses are taken into account, regardless of when cash is received or paid.
J
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 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 Village maintains six individual governmental funds: the General Fund, one Capital Projects
Fund, and four Special Revenue Funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures and changes
in fund balance for the General Fund and the Capital Projects Fund, both of which are considered
major funds (generally accepted accounting principles define a fund as major based on that fund's
size relative to the other funds of the government, or a fund may be reported as major if the
government's officials believe that fund is particularly important to financial statement users).
The remaining funds are considered non -major funds, and data from these governmental funds
are combined into a single column for an aggregated presentation. The basic governmental fund
financial statements can be found on pages 16 -19 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
20 -22 of this report.
• Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. The funds in this category are the Village's Pension Trust Funds and Agency Funds.
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 23 -24 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
In the case of the Village, assets exceeded liabilities by $32.14 million at the close of the most recent
fiscal year.
A significant portion of the Village's net assets (60.46 %) 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.
Liabilities
Current liabilities
1,500
Table 2
461
509
1,961
Village of North Palm Beach
Long -term liabilities
1,974
1,843
4,061
Net Assets
6,035
6,200
Total liabilities
3,474
(In Thousands)
4,522
4,866
7,996
Governmental
Business
Activities
Activities
Total
Invested in capital assets,
2011 2010
2011 2010
2011
2010
Assets:
net of debt
17,237
18,184
2,201
Current and other assets
$ 15,799 $ 14,032
$ 890 $ 943
$ 16,689 $
14,975
Capital assets
17,237 18,184
6,219 6,621
23,456
24,805
Total assets
33,036 32,216
7,109 7,564
40,145
39,780
Liabilities
Current liabilities
1,500
1,230
461
509
1,961
1,739
Long -term liabilities
1,974
1,843
4,061
4,357
6,035
6,200
Total liabilities
3,474
3,073
4,522
4,866
7,996
7,939
Net assets:
Invested in capital assets,
net of debt
17,237
18,184
2,201
2,295
19,438
20,479
Restricted
548
391
548
391
Unrestricted
11,776
10,568
386
403
12,162
10,971
Total net assets
$ 29,561
$ 29,143
$ 2,587
$ 2,698
$ 32,148
$ 31,841
5
Governmental Activities
The cost of all governmental activities this year was $17.93 million. As shown on Table 3, Changes in
Net Assets, those who directly benefited from the programs paid for $2.86 million of this cost and $14.94
million was financed through general revenues. Governmental activities increased the Village's net assets
by $0.42 million, thereby accounting for 136% of the total increase in the net assets of the Village. Key
elements of this increase are as follows:
• Program revenues are higher due to expanded recreational activities.
• Due to discounts for prompt payments, State law requires that only 95% of the gross ad- valorem
taxes be budgeted as revenue ($10.22 million). For the current year, the Village received $10.44
million.
The increase in the above- mentioned revenues, while holding the line on operating costs, resulted in a
positive impact on the Village's Governmental Activities. Additional detail is shown in Table 3, which
follows on the subsequent page.
Table 3
Village of North Palm Beach
Changes in Net Assets
(In Thousands)
Governmental Business
Activities Activities Total
2011 2010 2011 2010 2011 2010
Revenues:
Program revenues:
Charges for services
$ 2,857
$ 2,802
$ 3,571
$ 3,228
$ 6,428
$ 6,030
Operating grants and contributions
127
97
127
97
Capital grants and contributions
5
76
5
76
General revenues:
Property taxes
10,442
11,053
10,442
11,053
Local option gas taxes
260
266
260
266
Utility service taxes
2,198
2,261
2,198
2,261
Sales and use taxes
1,141
1,115
1,141
1,115
Franchise taxes
1,191
1,204
1,191
1,204
Investment earnings
97
280
9
14
106
294
Miscellaneous
31
186
31
186
Gain on asset disposals
28
55
83
Total revenues
18,349
19,368
3,580
3,297
21,929
22,665
Expenses:
Program expenses:
General Government
2,404
2,679
2,404
2,679
Public Safety
7,233
7,304
7,233
7,304
Public Works
4,734
4,595
4,734
4,595
Community Development & Planning
811
807
811
807
Leisure Services
2,749
2,830
2,749
2,830
Interest on long -term debt
4
4
Country Club
3,691
3,398
3,691
3,398
Total expenses
17,931
18,219
3,691
3,398
21,622
21,617
Increase (decrease) in net assets
418
1,149
(111)
(101)
307
1,048
Net assets - beginning of year
29,143
27,994
2,698
2,799
31,842
30,793
Net assets - end of year
$ 29,561
$ 29,143
$ 2,587
$ 2,698
$ 32,149
$ 31,841
7
The Village's programs include General Government, Public Safety, Public Works, Community
Development & Planning, 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.
Table 4
Village of North Palm Beach
Cost of services
(In Thousands)
$ 17,931 $ (14,941) $ 18,219 $ (15,244)
At the end of the current year, as compared to the prior year, many of the departments realized a decrease
in their overall costs (for example, General Government decreased by $0.28 million, Public Safety
decreased by $0.07 million, and Leisure Services decreased by $0.08 million). The decrease is a result of
Department Directors reducing spending to counter the decrease in revenues. Public Works realized an
increase of $0.14 million primarily due to the Village -wide street sign project.
Business Type Activities
Charges for Services (revenues) in the Business Type Activities experienced an overall increase ($0.34
million) from that of the previous year. Also, during this same time period, expenses increased by $0.29
million. Net assets of the Proprietary Fund (Country Club) at September 30 2011 were $2.58 million.
Net assets decreased by $111,836.
The changes in Business Type Activities can be directly tied to the Village's acquisition of the Food &
Beverage Operations (resulting in an increase in both revenues & expenses).
8
2011
2010
Total Cost
Net Cost
Total Cost
Net Cost
of Services
of Services
of Services
of Services
General government
$ 2,404
$ (2,266)
$ 2,679
$ (2,547)
Public safety
7,233
(6,773)
7,304
(6,771)
Public works
4,734
(4,263)
4,595
(4,132)
Community development
and planning
811
50
807
(72)
Leisure services
2,749
(1,689)
2,830
(1,718)
Interest on long -term debt
4
(4)
$ 17,931 $ (14,941) $ 18,219 $ (15,244)
At the end of the current year, as compared to the prior year, many of the departments realized a decrease
in their overall costs (for example, General Government decreased by $0.28 million, Public Safety
decreased by $0.07 million, and Leisure Services decreased by $0.08 million). The decrease is a result of
Department Directors reducing spending to counter the decrease in revenues. Public Works realized an
increase of $0.14 million primarily due to the Village -wide street sign project.
Business Type Activities
Charges for Services (revenues) in the Business Type Activities experienced an overall increase ($0.34
million) from that of the previous year. Also, during this same time period, expenses increased by $0.29
million. Net assets of the Proprietary Fund (Country Club) at September 30 2011 were $2.58 million.
Net assets decreased by $111,836.
The changes in Business Type Activities can be directly tied to the Village's acquisition of the Food &
Beverage Operations (resulting in an increase in both revenues & expenses).
8
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, unrestricted (unassigned /assigned) fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the fiscal
year.
At the end of the current fiscal year, the combined fund balance for all Governmental Funds was $13.54
million, a $1.59 increase over the 2010 fund balance of $11.95 million. Approximately 94% of the
combined ending fund balance ($12.71 million) constitutes unrestricted (unassigned/assigned) fund
balance, which is available for spending at the government's discretion. The remainder of fund balance
($0.83 million) is restricted (non - spendable /restricted) 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,
unassigned fund balance of the General Fund was $10.68 million while the General Fund total fund
balance was $11.70 million. As a measure of the General Fund's liquidity, it may be useful to compare
both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance
is 64% of total general fund expenditures, while total fund balance represents 70% of that same amount.
The general fund unassigned fund balance ($10.68 million) represents an increase of $0.24 million over
the 2010 unassigned general fund balance of $10.44 million. Key elements of this increase are listed
below:
• Program revenues are higher due to expanded recreational activities.
• Due to discounts for prompt payments, State law requires that only 95% of the gross ad- valorem
taxes be budgeted as revenue ($10.22 million). For the current year, the Village received $10.44
million.
The increase in the above- mentioned revenues, while holding the line on operating costs, resulted in a
positive impact in the Village's General Fund.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget were $ 951,278 and can be briefly
summarized as follows:
• Street Signs Project ($270,819)
• Community Development Software ($89,222)
• Small Business Grant Cam, over ($100,000)
• Prior Year Open Purchase Order Carryover ($4,245)
• Southwest Neighborhood Project ($431,992)
• Pool Equipment Room ($55,000)
General Fund Budget Analysis
As shown on pages 69 -71 of this report, in the Schedule of Departmental Expenditures — Budget and
Actual, there was a favorable budget to actual cost variance of $511,411 in General Fund Departmental
Expenditures. The areas of significant budget to actual variances for the General Fund expenditures are
summarized below:
• The Village realized an overall budgetary savings of $161,960 in its anticipated employee related
costs: during the budgeting process, various assumptions, along with previous year costs, are
used in the development of the current year budget. The actual costs came in well under the
projected budgeted amount.
To counter the decrease in revenue brought about by property tax reform and the economic
downturn, the Village Manager directed Department Directors to reduce spending in a manner
that would minimize the impact on our residents. This required seeking new ways to serve our
customers. The Directors did an admirable job identifying areas to cut costs resulting in
favorable budget variances. The Village saw overall budgetary savings in operating costs of
$256,360. The areas of significant budget to actual variances for the General Fund operating
costs are summarized below:
o The Village saw overall budgetary savings in its utility costs ($86,465): the budgeted amount
included a ten percent increase for utilities, but the actual costs were well under the budgeted
amount.
o During the previous year, the Village implemented a "Small Business Grant Program" and
appropriated $100,000 from Council Contingency to fund this program. The program is
administered through the Community Development Department and is structured to provide
matching grants of up to $5,000 for improvements to small business properties. Businesses
would be required to match each dollar of grant funds with one dollar from their own funds.
Businesses must complete an application and will have to meet certain criteria to qualify. In
2011, there was only one (1) application that was approved for the Grant which resulted in a
budgetary savings ($95,000) in the Community Development Department.
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.
The Village's investment in capital assets for its governmental and business -type activities as of
September 30, 2011 and 2010 amounts to $23.42 million and $24.76 million, respectively (net of
accumulated depreciation).
10
Table 5
Village of North Palm Beach
Capital Assets
(In Thousands)
Governmental Business
Activities Activities
2011
2010
2011
2010
Total
2011 2010
Land
$ 2,151
$ 2,151
$ 1,051
$ 1,051
$ 3,202
$ 3,202
Construction in progress
212
142
Total $
$ $ 4,018
212
142
Buildings and improvements
22,090
21,647
1,405
1,405
23,495
23,052
Improvements other than buildings
272
357
272
357
Improvements - golf course
5,824
5,824
5,824
5,824
Furniture, fixtures and equipment
6,959
6,999
678
780
7,637
7,779
Total assets
31,412
30,939
9,230
9,417
40,642
40,356
Less accumulated depreciation
(14,175)
(12,755)
(3,050)
(2,840)
(17,225)
(15,595)
Net assets
$ 17,237
$ 18,184
$ 6,180
$ 6,577
$ 23,417
$ 24,761
Additional information on the Village's capital assets can be found in Note 7 on page 43 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 long -term debt of $4.02 million, all of which is in business -type activities.
The last outstanding debt instrument in the General Fund was satisfied in 2010; therefore, there is no
long -term debt outstanding in the Village's governmental activities. None of the Village's long -term debt
comprises debt backed by the full faith and credit of the government.
Table 6
Village of North Palm Beach
Outstanding Debt
(In Thousands)
Governmental
Activities
2011 2010
Business
Activities
2011 2010
Total
2011 2010
Loans payable
$ 3,845
$ 4,090
$ 3,845
$ 4,090
Capital leases
173
235
173
235
Total $
$ $ 4,018
$ 4,325
$ 4,018
$ 4,325
Additional information on the Village's debt can be found in Note 8 on page 45 of this report.
11
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
The Village's Unassigned Fund Balance is viewed by the Administration as a measurement of Village
financial stability. Unassigned general fund balance increased to $10.68 million during the current 2011
fiscal year. The Village is now ready to address the economic challenges anticipated in the next few
years.
The economic outlook for the primary revenue source for Florida municipalities will be challenging, as
cities are facing state mandated reductions of property taxes. In an effort to provide tax relief and spur the
slumping housing market, the State legislature focused on property tax reform in the 2007 session. House
Bill 1B was enacted to limit the authority of local governments to levi,- ad valorem taxes for the FY 2008
budget year and beyond.
The economic downturn and decline in property values have significantly impacted Village revenues. To
address the impact of the legislation, continuing increases in the cost of employee compensation and
benefits, and the reduction of revenues, the Village will need to continue to prioritize essential services
and desired levels of service to allocate sufficient funding in future budget years.
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.
12
BASIC FINANCIAL STATEMENTS
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Net Assets
September 30, 2011
Assets
Cash and cash equivalents
Investments
Accounts receivable
Developer fee receivable
Inventories
Prepaids
Due from other governments
Restricted assets:
Cash and cash equivalents
Net pension assets
Intangible assets, net of amortization
Capital assets:
Nondepreciable
Depreciable (net of depreciation)
Total assets
Liabilities
Accounts payable
Accrued liabilities
Deposits
Unearned revenue
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted for:
Recreation
Public safety
Streets and roads
Library
Other purposes
Unrestricted
Total net assets
Governmental Business -type
Activities Activities Total
$ 5,179,720 $
749,286 $
5,929,006
8,451,395
5,128,587
8,451,395
356,486
31,562
388,048
175,000
11,775,621
175,000
41,660
67,221
108,881
235,264
41,461
276,725
225,644
225,644
548,489 548,489
584,560 584,560
39,042 39,042
2,362,714
1,051,311
3,414,025
14,874,641
5,128,587
20,003228
33,035,573
7,108,470
40,144,043
444,016 119,990 564,006
571,428 571,428
5,250 5,250
483,866 334,746 818,612
836,443
314,930
1,151,373
1,138,355
3,747,004
4,885,359
3,474,108
4,521,920
7,996,028
17,237,355 2,200,928 19,438,283
413,500
413,500
50,009
50,009
49,329
49,329
23,406
23,406
12,245
12,245
11,775,621
385,622 12,161,243
$ 29,561,465 $
2,586,550 $ 32,148,015
See notes to the financial statements.
13
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Activities
For the Year Ended September 30, 2011
Functions/Programs Expenses
Government:
Governmental activities
General government
Public safety
Public works
Community development and planning
Leisure services
Total governmental activities
Business -type activities - country club
Total business -type activities
Total government
14
Charges for
Activities
2,403,681 $ 130,886
7,232,748 420,653
4,733,913 400,662
811,177 861,394
2,749,065 1,043,459
17,930,584 2,857,054
3,691,528 3,571,199
3,691,528 3,571,199
$ 21,622,112 $ 6,428,253
Program Revenues
Net Expense (Revenue) and
Operating Capital
Changes in Net Assets
Grants and Grants and
Governmental Business -type
Contributions Contributions
Activities Activities Total
$ 6,466 $ $ (2,266,329) $ $ (2,266,329)
33,570 5,169 (6,773,356) (6,773,356)
69,938 (4,263,313) (4,263,313)
50,217 50,217
16,594 (1,689,012) (1,689,012)
126,568 5,169 (14,941,793) (14,941,793)
$ 126,568 $ 5,169
General Revenues:
Taxes:
Property taxes
Local option gas taxes
Utility service taxes
Franchise taxes
Sales and use taxes
Investment income
Miscellaneous
Total general revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
(120,329)
(120,329)
(120,329)
(120,329)
2,198,148
2,198,148
(14,941,793) (120,329)
(15,062,122)
10,441,869
10,441,869
259,794
259,794
2,198,148
2,198,148
1,191,155
1,191,155
1,140,744
1,140,744
97,743
8,493 106,236
30,622
30,622
15,360,075
8,493 15,368,568
418,282 (111,836) 306,446
29,143,183 2,698,386 31,841,569
$ 29,561,465 $ 2,586.550 $ 32.148.015
See notes to the financial statements.
15
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Balance Sheet
Governmental Funds
September 30, 2011
Assets
Cash and cash equivalents
Investments
Accounts receivable
Developer fee receivable
Inventories
Prepaids
Due from other funds
Due from other governments
Restricted cash and cash equivalents
Total assets
Liabilities and fund balances
Liabilities
Accounts payable
Accrued liabilities
Due to other funds
Deferred revenue
Total liabilities
$ 304.998 $ 86.178 S 52.840 $ 444.016
571.428 571.428
44,028 44.028
658.866 658.866
1535292 86.178 96.868 1.718.338
Fund balances
Capital
Nonmajor
Total
Projects
Governmental
Governmental
General
Fund
Funds
Funds
Recreation
413.500
413.500
Streets and roads
$ 3254.861
$ 1.833.724
$ 91.135
$ 5.179.720
8.451395
Library
23A06
8.451395
356.486
12245
12245
356.486
175.000
Small business grants
175.000
41.660
Subsquent year's expenditures
9L594
41.660
235264
47.107 47.107
235264
1.791.574
44.028
Unassigned
44.028
171804
Total fund balances
51840
225.644
548.489
S 13235.959 S 1.877.752 S
143.975 S 15.252686
548.489
$ 13235959
S 1.877.752
$ 143.975
$ 15252686
$ 304.998 $ 86.178 S 52.840 $ 444.016
571.428 571.428
44,028 44.028
658.866 658.866
1535292 86.178 96.868 1.718.338
Fund balances
Nonspendable:
Inventories and prepaids
276.924
276.924
Restricted for:
Recreation
413.500
413.500
Streets and roads
50.009
50.009
Public safety
49329
49329
Library
23A06
23A06
Other purposes
12245
12245
Assigned for:
Small business grants
95.000
95.000
Subsquent year's expenditures
9L594
9L594
Special revenue funds
47.107 47.107
Capital project funds
1.791.574
1.791.574
Unassigned
10.688.660
10.688.660
Total fund balances
11.700.667 1.791574
47.107 13.539348
Total liabilities and fund balances
S 13235.959 S 1.877.752 S
143.975 S 15.252686
See notes to the financial statements.
16
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Balance Sheet — Governmental Funds
to the Statement of Net Assets
Governmental Funds
September 30, 2011
Fund balances- total govermnentalfunds $ 13,539,348
Amounts reported for governmental activities in the statement of net
assets are different because:
Capital assets used in govermnental activities are not financial
resources and therefore are not reported in the governmental funds:
Governmental capital assets $ 31,412,880
Less: accumulated depreciation (14,175,525)
17237,355
Revenue is recognized when earned in the government -wide
statements, regardless of activity. Governmental funds report
based on modified accrual, i.e., both measurable and available:
Developer fee 175,000
Net pension assets related to defined benefit pension plans are not
available to pay for current -period expenditures and, therefore, are not
reported as assets in the govermnental funds: 584,560
Long -tern liabilities, including notes and bonds payable, are not due and
payable in the current period and therefore are not reported in the
govermnental funds. Long tern liabilities at year -end consist of:
Claims and settlements (18,463)
Other postemployement benefits (761,417)
Accrued compensated absences (1,194,918)
(1,974,798)
Net assets of govermnental activities $ 29,561,465
See notes to the financial statements.
17
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2011
Revenues
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Investment
Miscellaneous
Total revenues
Expenditures
Current
General government
Public safetv
Public works
Community development and planning
Leisure services - recreation
Capital outla -y
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances
Beginning of year
End of year
See notes to the financial statements.
18
Capital
Nonmajor
Total
Projects
Governmental
Governmental
General
Fund
Funds
Funds
$ 14,090,966
$
$
$ 14,090,966
959,098
959,098
1,287,638
269,739
1,557,377
1,934,424
1,934,424
164,366
164,366
97,743
97,743
59,462
59,462
18,593,697
269,739
18,863,436
2,402,241
2,402,241
6,788,712
264,570
7,053,282
4,044,642
4,044,642
790,937
790,937
2,295,959
2,295,959
288,514
388,102
5,441
682,057
16,611,005
388,102
270,011
17,269,118
1,982,692
(388,102)
(272)
1,594,318
1,334,934
1,334,934
(1,334,934)
(1,334,934)
(1,334,934)
1,334,934
647,758
946,832
(272)
1,594,318
11,052,909
844,742
47,379
11,945,030
$ 11,700,667
$ 1,791,574
$ 47,107
$ 13,539,348
See notes to the financial statements.
18
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2011
Net chance in fund balances - total sovernmental funds $ 1,594,318
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of capital
assets is allocated over their estimated useful lives and reported
as depreciation expense:
Expenditures for capital assets $ 676,616
Less: current year depreciation (1,623,233)
(946,617)
Gains and losses on disposal of capital assets are reported in the statement
of activities, whereas in the sovernmental funds the proceeds from the sale
increases financial resources. The difference is the net book value of the
assets retired:
Net book value for retired assets (536)
Governmental funds report revenues when earned and
available. However, in the Statement of Activities, revenues are
recognized when earned, resardless of availability:
Developer fee (250,000)
Expenses that do not use current financial resources are not
reported on the sovernmental funds but are included in the
statement of activities:
Chance in lons -term compensated absences (12,694)
Chance in net pension asset of defined benefit pension plans 152,561
Chance in other postemployement benefits (243,125)
Chance in insurance liability 124,375
21,117
Change in net assets $ 418,282
See notes to the financial statements.
19
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Net Assets
Proprietary Fund
September 30, 2011
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Inventories
Prepaids
Total current assets
Non - current assets
Intangible asset, net
Land, buildings, and equipment, net
Total non - current assets
Total assets
Liabilities
Current liabilities
Accounts payable
Deposits
Deferred revenue
Compensated absences - current portion
Capital leases - current portion
Loans payable - current portion
Total current liabilities
Non - current liabilities
Other postemployement benefits
Compensated absences
Capital leases
Loans payable
Total non - current liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Enterprise
$ 749,286
31,562
67,221
41,461
889,530
39,042
6,179,898
6,218,940
7,108,470
119,990
5,250
334,746
11,539
66,150
237,241
774,916
28,434
3,949
106,934
3,607,687
3,747,004
4,521,920
2,200,928
385,622
$ 2,586,550
See notes to the financial statements.
20
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Fund
For the Year Ended September 30, 2011
Operating expenses
Golf course maintenance expenses
Enterprise
Operating revenue
84,485
Greens fee /cart rentals /membership fees
$ 2,372,337
Golf shop revenues
283,927
Driving range revenues
208,865
Restaurant revenues
700,378
Miscellaneous
5,692
Total operating revenues
3,571,199
Operating expenses
Golf course maintenance expenses
1,232,462
Clubhouse grounds expenses
84,485
Golf shop expenses
748,336
Food and beverage expenses
838,519
Administrative and general
104,659
Insurance
40,840
Depreciation and amortization
457,747
Total operating expenses
3,507,048
Operating income
64,151
Nonoperating revenues (expenses)
Interest revenue
8,493
Interest expense
(180,125)
Gain on disposal of capital assets
(4,355)
Total nonoperating revenues (expenses)
(175,987)
Change in net assets (111,836)
Net assets - beginning 2,698,386
Net assets - ending $ 2,586,550
See notes to the financial statements.
21
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Cash Flows
Proprietary Fund
For the Year Ended September 30, 2011
Cash flows from operating activities:
Receipts from customers
Payments to suppliers for goods or services
Payments to employees for services
Net cash provided by operating activities
Cash flows from capital and related financing activities:
Principal paid on long term debt
Interest paid on debt
Acquisition of capital assets
Net cash provided (used) by capital and related financing activities
Cash flows from investing activities:
Interest and dividends on investments
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Reconciliation of operating income
to net cash provided by operating activities:
Operating income
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation
Other revenues
Change in assets and liabilities
Decrease in accounts receivable
(Increase) in inventory
Decrease in prepaids
Increase in accounts payable
Increase in deposits
Increase in compensated absences payable
(Decrease) in deferred revenue
Increase in other postemployment benefits
Total adjustments
Net cash provided by operating activities
See notes to the financial statements.
22
Enterprise
$ 3,492,556
(2,326,886)
(711,171)
454,499
(307,448)
(180,723)
(60,457)
(548,628)
8,493
(85,636)
834,922
$ 749,286
$ 64,151
457,747
5,359
(6,947)
(29,700)
36,176
1,717
9,079
(85,719)
2,636
390,348
$ 454,499
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2011
Assets
Cash and cash equivalents
Investments:
Common equity securities
U.S. Government agencies
Municipal bonds
Corporate bonds
U.S. Treasury bonds
Equity mutual funds
Fixed income mutual funds
Accrued interest and dividends
Accounts receivable
Prepaids
Total assets
Liabilities
Accounts payable
Due to others
Total liabilities
Net Assets
Held in trust for pension benefits
and other purposes
Employee
Retirement
Funds
$ 1,314,241
4,980,195
1,067,419
146,431
2,459,279
326,235
4,076,260
2,589,419
49,550
Agency
Funds
$ 346,499
103,936
216,394
17,329,359 346,499
41,412
346,499
41,412 346,499
$ 17,287,947 $
See notes to the financial statements.
23
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the Year Ended September 30, 2011
Investment earnings
Dividends and interest 325,300
Net increase in fair value
of investments (542,086)
Total investment losses (216,786)
Less: investment expenses 116,377
Total net investment losses (333,163)
Total additions 1,493,743
Deductions
Administrative expense 104,677
Benefits 1,078,699
Refund of contributions 36,256
Total deductions 1,219,632
Change in net assets 274,111
Net assets - beginning 17,013,836
Net assets - ending $ 17,287,947
See notes to the financial statements.
24
Employee
Retirement
Funds
Additions
Contributions
Employer
$ 1,293,732
Plan members
268,604
State on- behalf payments
264,570
Total contributions
1,826,906
Investment earnings
Dividends and interest 325,300
Net increase in fair value
of investments (542,086)
Total investment losses (216,786)
Less: investment expenses 116,377
Total net investment losses (333,163)
Total additions 1,493,743
Deductions
Administrative expense 104,677
Benefits 1,078,699
Refund of contributions 36,256
Total deductions 1,219,632
Change in net assets 274,111
Net assets - beginning 17,013,836
Net assets - ending $ 17,287,947
See notes to the financial statements.
24
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. 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 13,000 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.
In accordance with Statement 14 of the Government Accounting Standards Board, the
underlying concept of the governmental financial reporting entity is that governmental
organizations are responsible to elected governing officials; therefore, financial reporting should
report the elected officials' accountability for those organizations. Furthermore, the financial
statements of the reporting entity should allow users to distinguish between the primary
government and its component units, if any, by communicating information about the component
units and their relationships with the primary government. A component unit is a legally
separate organization for which the elected officials of the primary government are financially
accountable. Determining factors of financial accountability includes appointment of a voting
majority, imposition of will, financial benefit or burden on a primary government, or fiscal
dependency. In addition, component units can be other organizations for which the nature and
significance of their relationship with a primary government are such that exclusion would cause
the reporting entity's financial statements to be misleading or incomplete.
Based on the application of these criteria, 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.
B. Governmentwide 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.
25
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Government-u) ide 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.
C. 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 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, sales taxes, franchise taxes, licenses, intergovernmental revenue, investment
income, and charges for services are all considered to be susceptible to accrual and so have been
recognized as revenue of the current fiscal period. All other revenues are considered to be
measurable and available only when received in cash by the Village.
26
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. 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.
The Village reports the following major (and only) proprietary fund:
Country Club Enterprise Fund
The fund accounts for the activities related to the Country Club.
Additionally, the Village reports the following fund and types:
Special Revenue Funds
The Village has four special revenue funds to account for the proceeds of specific revenue
sources that are legally restricted to expenditures for specific sources. The funds are the Public
Safety Fund, Northlake Boulevard Fund, Recreation, and On- Behalf Pension Contributions.
Employee Retirement Funds
The pension trust funds account for the activities of the General Employees Retirement Fund, the
Fire and Police Officers Retirement Fund and the Volunteer Firemen's Length of Service Award
Pension Fund, which accumulate resources for pension benefits to qualified employees.
27
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
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. The two agency funds are the Northlake Boulevard Task Force,
which is for the streetscape improvement of Northlake Boulevard, and the Manatee Protection
Fund, in which the assets are held in trust for the protection of manatees through the enforcement
of boat speed zones on the intracoastal and inland waterways.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally 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.
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 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.
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.
D. 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 purchase, have a
maturity date no longer than three months.
M.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Accounts Receivable
Accounts receivable of the General Fund consists of billed and unbilled receivables.
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.
Investments
Investments are reported at fair value, which is determined by using various third -party pricing
sources. The Local Government Surplus Funds Trust Fund, administered by the Florida State
Board of Administration, is a "2a -7 like" pool and these investments are valued using the pooled
share price.
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 td' or "due from other funds ". Any
residual balance 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 and prepaid items
Inventories are valued at cost determined on a last -in, first -out basis (LIFO). Inventories in the
General Fund consist of expendable supplies held for consumption. Inventories in the Enterprise
Fund consist of goods for sale to the public. 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.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government -wide and fund financial statements.
29
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Capital Assets and Depreciation
Capital assets, which include property, plant, infrastructure, and equipment, are reported in the
applicable governmental or business -type activities column in the government -wide financial
statements. The Village capitalizes all land purchases. The capitalization policy for other assets
are items with an estimated life in excess of one year and an initial individual cost of $250,000
for infrastructure, $25,000 for land improvements, $50,000 for buildings and building
improvements, and $5,000 for equipment and vehicles. 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. Infrastructure is reported in buildings and
improvements.
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 capital assets are as
follows:
Buildings, improvements and infrastructure 5 -30 years
Golf course improvements 5 -30 years
Machinery and Equipment 3 -15 years
Vehicles 3 -20 years
30
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Deferred Revenue
The government reports deferred revenue on its government wide statement of net assets,
proprietary statement of net assets, and governmental funds balance sheet. Deferred revenues
arise when potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to
incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria
are met, or when the government has a legal claim to the resources, the liability for deferred
revenue is removed and revenue is recognized.
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.
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.
31
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Long -Term Obligations (Continued)
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) restricted, and 3) unrestricted.
Net assets invested in capital assets net of related debt consists of capital assets reduced by
accumulated depreciation and by any outstanding debt incurred to acquire, construct, or improve
those assets. Net assets are reported as restricted when there are legal limitations imposed on
their use by Village legislation or external restrictions by other governments, creditors, or
grantors. Unrestricted net assets consist of all net assets that do not meet the definition of either
of the other three components.
Fund Equity
Fund balance is the difference between assets and liabilities reported in governmental funds. There
are five possible components of fund balance:
• Nonspendable fund balance represents amounts that are not in spendable form or are
legally or contractually required to be maintained intact.
• Restricted fund balance represents amounts that can be spent only for specific purposes
stipulated by external providers (e.g. creditors, grantors, contributor, or laws or regulations
of other governments) or imposed by law through constitutional provisions or enabling
legislation.
• Committed fund balance represents amounts that can be used only for the specific purposes
determined by formal action of the Village Commission. The Village has no committed
funds.
• Assigned fund balance includes spendable fund balance amounts that are intended to be
used for specific purposes, as expressed by the Village Commission or Village Manager,
that are neither considered restricted or committed. The Small Business Grants is a
program the Village Council approved in the prior fiscal year to provide matching grants
of up to $5,000 for improvements to small business properties.
• Unassigned fund balance is the residual fund balance classification for the general fund.
32
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Eynity (Continued)
Fund Equity (Continued)
The Village will first use committed fund balance then assigned fund balance and then
unassigned fund balance when expenditures are incurred for purposes for which any of the
unrestricted fund balance classifications could be used.
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.
Statement of Cash Flows
For purposes of the statement of cash flows, the Village considers all short-term investments that
are highly liquid to be cash equivalents. Cash equivalents are readily convertible to a known
amount of cash, and at the day of purchase, have a maturity date no longer than three months.
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Data
Formal budgetary integration is employed as a management control device during the year for
the General Fund and the Enterprise Fund. The only governmental fund with a legally adopted
annual budget is the General Fund. This budget is adopted on a basis consistent with generally
accepted accounting principles. Except for budgeting capital expenditures and not budgeting for
depreciation, the annual appropriated budgets for the Enterprise Funds are adopted on a basis
consistent with generally accepted accounting principles. For budgeting purposes, current year
encumbrances are not treated as expenditures.
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.
33
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
A. Budgetary Data (Continued)
• Upon completion of the public hearings and prior to October 1, a final operating budget
is legally enacted through the passage of an ordinance. Estimated beginning fund
balances are considered in the budgetary process.
• The Village Manager is authorized to transfer budgeted amounts up to $10,000 within a
department. Any change to the total departmental expenses must be approved by the
Village Council.
• Appropriations along with encumbrances lapse on September 30th.
Budgeted amounts are as originally adopted, or as amended by appropriate action. During the
year, several supplementary appropriations were necessary.
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase
orders, contracts) outstanding at year end are reported as reservations of fund balances and do
not constitute expenditures or liabilities because the commitments will be reappropriated and
honored during the subsequent year.
B. 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 the County Tax Collector. 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 laws of the State regulating tax assessment are also designed to assure a consistent
property valuation method statewide. 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, 2011, was 6.9723 ($6.9723 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.
34
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
B. Property Tees (Continued)
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, 2011, unpaid delinquent
taxes are not material and have not been recorded by the Village.
NOTE 3 — DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2011, the carrying amount of the Village's deposits (including fiduciary
funds) was $5,370,647, and the bank balances totaled $5,714,923. In addition to insurance
provided by the Federal Depository Insurance Corporation, deposits are held in banking
institutions approved by the State Treasurer of the State of Florida to hold public funds. Under
Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State Treasurer
requires all Florida qualified public depositories to deposit with the Treasurer or other banking
institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The
Village's deposits at year end are considered insured for custodial credit risk purposes.
The Village pools idle cash from all funds for the purpose of increasing income through
investment activities. Investment income from the pool is allocated back to the respective funds
based on each fund's equity in the pool with the exception of the Capital Projects Fund and the
special revenue funds.
Tn VPQtm -nte
The State Board of Administration is part of the Local Governments Surplus Funds Trust Fund
and is governed by Chapter 19 -7 of the Florida Administrative Code. These rules provide
guidance and establish the general operating procedures for the administration of the Local
Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor General
performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the board has adopted operating
procedures consistent with the requirements for a 2a -7 fund.
35
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
On December 4, 2007, based on recommendations from an outside financial advisor, the State
Board of Administration restructured the Pool into two separate pools. Pool A, (Local
Government Surplus Funds Trust Fund Investment Pool) consisted of all money market
appropriate assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted
on a payment, paid more slowly than expected, and /or had any significant credit and liquidity
risk. At the time of the restructuring, all current pool participants had their existing balances
proportionately allocated into Pool A and Pool B. On August 3, 2009, the SBA announced
"Florida PRIME" as the highly enhanced version of the SBA's prior Local Government
Investment Pool.
At September 30, 2011, Florida PRIME was assigned a "AAA(m)" principal stability fund rating
by the Standard and Poor's Ratings. Florida PREVIE is considered a SEC 2a7 -like fund, thus, the
account balance should also be considered its fair value. Fund B is not considered a SEC 2a7-
like fund and is not rated by any nationally recognized rating agency.
Fund B is accounted for as a fluctuating NAV pool. The fair value factor for September 30,
2011, was 0.756839. The factor should be multiplied by the account balance in order to calculate
the fair value of the investment in Fund B.
The weighted average days to maturity (WAM) of Florida PRIME at September 30, 2011, was
38 days. A portfolio's WAM reflects the average maturity in days based on final maturity or
reset date, in the case of floating rate instruments. WAM measures the sensitivity of Florida
PRINIE to interest rate changes.
The weighted average life (WAL) of Fund B at September 30, 2011, was 4.82 years. A
portfolio's WAL is the dollar weighted average length of time until securities held reach
maturity. WAL is based on legal final maturity dates for Fund B as of September 30, 2011.
However, because fund B consists of restricted or defaulted securities there is considerable
uncertainty regarding the weighted average life.
As of September 30, 2011, the Village had $532,353 invested in Florida PRIME. The cost basis
of Fund B as of September 30, 2011, was $254,145 and the fair value was $192,347. Additional
information regarding the Local Government Surplus Funds Trust Fund may be obtained from
the State Board of Administration.
36
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
As of September 30, 2011, the Village held the following investments:
Governmental Funds:
Wells Fargo municipal money
market fund
State Board of Administration
Investment Fund B
Florida Prime
Money Market Funds
U.S. Government Supported
Corporate Debt
U.S. Government and Agency
Obligations
U.S. Treasury Notes
Fiduciary Funds:
Money Market Funds
GNMA, FNMA, FHLMC
Pools
U.S. Government Agencies
Corporate Bonds
U.S. Treasury Obligations
Municipal Bonds
Common Equity Securities
Equity Mutual Funds
Fixed Income Mutual Funds
S &P's
Credit
Rating
N/R
N/R
AAA(m)
N/R
AA+
AA+
AA+
N/R
N/R
AA+
AA+ to A-
AA+
AAA to AA
N/R
N/R
N/R
Fair
Value
$ 1,150,824
192,347
532,353
38,968
899,754
2,560,911
4,759,415
1,078,661
964,030
103,389
2,459,279
326,235
146,431
4,980,195
4,076,260
2,589,419
Total investments $26,858,471
Investments are held in the governmental and fiduciary funds.
Weighted
Average
Maturity
N/A
4.82 yrs. (WAL)
38 days
N/A
0.58 yrs.
1.93 yrs.
1.84 yrs.
N/A
20.16 yrs.
10.71 yrs.
7.62 yrs.
29.38 yrs.
22.72 yrs.
N/A
N/A
N/A
Interest rate risk — Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks.
37
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Interest rate risk (Continued)
The Village limits its exposure to fair value losses resulting from rising interest rates by
structuring the investment portfolio so that the securities mature to meet cash requirements for
ongoing operations, thereby avoiding the need to sell securities on the open market prior to
maturity; and investing operating funds primarily in short-term securities, money market mutual
funds, or similar investment pools unless it is anticipated that long -term securities can be held to
maturity without jeopardizing the liquidity requirements. The Retirement Funds do not have a
formal investment policy that limits investment maturities as a means of managing exposure to
fair value losses arising from increasing interest rates.
The Village's investment in asset backed securities consist of mortgage pass - through securities
based on pools of residential home mortgage loans which are subject to prepayments and
therefore highly sensitive to changes in interest rates.
Custodial credit risk — For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the Village will not be able to recover the value of its investments
that are in the possession of an outside party. At September 30, 2011, all investments were
insured or collateralized, except the Village's three pension funds, in which the underlying
securities are held by counterparty, or by its trust department or agent but not in the Village's
name and is uninsured and unregistered. However, all securities are registered in the funds'
names.
Concentrations of credit risk — Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. The Village places no limit on the amount
they may invest in any one issuer, except those in the Fire and Police Retirement Fund. Not
more than five (5) percent of the Fund's assets shall be invested in the common stock or capital
stock of any one issuing company.
Authorized Investments —The Village has adopted an investment policy that applies to all the
investment activity except the Employees' Pension Funds, which are organized and administered
separately, as listed below, or for funds related to the issuance of debt where there are other
existing policies or indentures in effect for such funds. The Village is authorized to invest its
funds as follows:
1. Interest- bearing checking, savings and time deposits in banks from the most current top
ten listed "qualified public depositories ", as defined in Chapter 280, Florida Statutes;
with a CAEL (Capital Adequacy, Asset Quality, Earnings, Liquidity) score of 3 or better;
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Authorized Investments (Continued)
2. Securities and Exchange Commission registered money /market mutual funds with the
highest credit quality rating from S &P and Moody's rating agencies;
3. Insurance companies with a A.M. Best minimum rating of aaa;
4. Corporate interest notes with the highest credit quality rating from S &P and Moody's
rating agencies;
5. 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; provided all components in each pool must satisfy the
appropriate pre - qualification parameters noted for that institution;
6. Direct obligations of the United States Treasury;
7. Federal agencies and instrumentalities;
The Village General Employees' Retirement Fund 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;
2. Interest- bearing time deposits in qualified public depositories, as defined in Chapter 280,
Florida Statutes;
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;
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;
39
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Authorized Investments (Continued)
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, 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 Fire and Police Retirement Fund can consist of the following:
1. Time or savings accounts of a national bank, a state bank insured by the Federal Deposit
Insurance Corporation, or a savings, building and loan association insured by the Federal
Deposit Insurance Corporation;
2. Obligations of the United States or obligations guaranteed as to principal and interest by
Government of the United States;
3. Bonds, stocks, or any other evidence of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States, any state or organized territory
of the United States, or the District of Columbia, provided:
a. The corporation is listed on any one (1) or more of the recognized national stock
exchanges and holds a rating in one of the three (3) highest classifications by a
major rating service; and
b. The Board shall not invest more than five (5) percent of its assets in the common
stock, capital stock, bonds or indebtedness of any one (1) issuing company, nor
shall the aggregate investment of in any one (1) issuing company exceed five (5)
percent of the outstanding capital stock of that company, nor shall the aggregate
of its investments in equities at cost exceed sixty (60) percent of the pension
funds' assets;
4. Not withstanding any provision of this section to the contrary, the board is specifically
authorized to invest in foreign securities to the extent authorized by sections 175.071(1)
and 185.06(1)(b), Florida Statutes.
.e
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 3 — DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
A reconciliation of deposit and investments as shown on the statement of net assets and
statement of fiduciary net assets for the Village is as follows:
By Category:
Deposits
Petty cash
Investments
Total deposits and investments
Presented in the statement of net assets
Governmental activities
Cash and cash equivalents
Restricted cash and cash equivalents
Investments
Business -type activities
Cash and cash equivalents
Total statements of net assets
Presented in the statement of fiduciary net assets
Pension trust funds
Cash and cash equivalents
Investments
Agency funds
Cash and cash equivalents
Total fiduciary funds
Total deposits and investments
41
$ 5,370,647
5,750
26, 85 8,471
$32,234,868
$5,179,720
548,489
8,451,395
749,286
14,928,890
1,314,241
15,645,238
346,499
17,305,978
$32,234,868
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 4 — RECEIVABLES
Receivables at September 30, 2011, were as follows:
Utility franchise fees & taxes
Conroy Drive assessment
Other accounts receivable
Total accounts receivable
NOTE 5 — DEVELOPER FEE RECEIVABLE
General
Country
Fund
Club
Total
$ 347,467
$
$ 347,467
6,907
6,907
2,112
31,562
33,674
$ 356,486
$ 31,562
$ 388,048
The Village entered into an agreement with a developer on February 14, 2008, in which it agreed
to accept payment of $1,175,000 in lieu of the dedication of land for public use. The developer
paid $250,000 upon execution of the agreement. The balance due is to be paid in annual
installments of $250,000 on the anniversary date of the agreement until paid, with a final
payment of $175,000 in 2012. At September 30, 2011, the remaining amount receivable was
$175,000. In accordance with Village ordinance Sec. 36 -23, amounts received shall be utilized
for parks and recreational purposes or the construction or expansion of any public facilities or
other improvements designed to mitigate the impacts of the subdivision.
NOTE 6 — INTANGIBLE ASSETS
The intangible asset consists of the right to the availability and use of reclaimed water resulting
from an agreement with Seacoast Utility Authority. The asset had an original value of $50,377
and is being amortized on a straight line basis over the period of the expected benefit of ten
years.
42
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 7 — CAPITAL ASSETS
Capital Assets activity for the year ended September 30, 2011, was as follows:
Primary Government
Governmental Activities:
Capital assets not being
depreciated:
Land
Construction in progress
Capital assets being depreciated:
Buildings
Improvements
Machinery and equipment
Vehicles
Total at historical cost:
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Vehicles
Total accumulated depreciation
Governmental activities capital
assets, net
Beginning
Balance
$ 2,151,089
141.851
Ending
Additions Deletions Transfers Balance
81.014 (11,240)
$ 1151.089
211.625
9305.950
(1,531)
9304.419
12,341,173
463,588
(18,933)
12,785,828
3,362249
51099
(110.817)
3303.531
3,637,653
91,155
(71420)
3,656388
30,939,965
687,856
(214,941)
31,412,880
(4,215,667)
(293,394)
L531
(4,507.530)
(3,577,830)
(828,688)
18,933
(4,387,585)
(2,437,132)
(235,690)
110281
(2,561541)
(2,524,828)
(265,461)
71420
(1717,869)
(12,755,457)
(1,623233)
203,165
(14,175,525)
$ 18,184,508
$ (935377)
$ (11,776) $
$ 17237355
Depreciation expense was charged to functions /programs of the primary government as follows:
Governmental activities:
General government
$ 112,767
Public safety
382,506
Public works
670,980
Community development
14,463
Leisure services
442,517
Total depreciation expense, governmental activities
$L623233
4 3
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 7 — CAPITAL ASSETS (Continued)
Business -type activities:
Capital assets not being depreciated:
Land
Construction in progress
Capital assets being depreciated:
Buildings
Improvements
Machinery and equipment
Vehicles
Total at historical cost:
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Vehicles
Total accumulated depreciation
Business -type activities capital
assets, net
Construction Collinfitnientb`
Beginning
Balance Additions Deletions
$ 1.051311 $ $
Ending
Transfers Balance
$ $ 1.051311
1.405.035
1.405.035
6,180.517
57,399
(141,986)
6,095,930
471.978
3.058
(88,623)
386.413
307,705
(16,650)
291,055
9,416,546
60A57
(247,259)
9,229,744
(929,017)
(28,325)
(957,342)
(1,443,533)
(329,475)
137,631
(1,635,377)
(388,163)
(20.597)
88,623
(320,137)
(79,328)
(74,312)
16,650
(136,990)
(2,840.041)
(452,709)
241904
(3,049,846)
$ 6.576.505
$ (392.252)
$ (4.355) $
$ 6.179.898
Contracts awarded but not yet completed were as follows:
Estimated
Project Description Cost
Governmental activities
Village -wide Sidewalk Improvements $ 62,463
SW Neighborhoods Sidewalks and Streetlights,
Engineering and Design 23,322
Building Department Software Upgrade 80,899
..
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 8 — LONG TERM LIABILITIES
Change in Long -Term Liabilities
Long -term liability activity for the year ended September 30, 2011, was as follows:
Business -type activities
Loans payable
$ 4,090,284 $
$ (245,356)
$ 3,844,928
$ 237,241
Amount
235,176
Balance
173,084
66,150
Balance
Due
October 1,
Compensated absences
September 30,
Within
2010
Additions
Reductions
2011
One Year
Governmental activities
Total
$ 4,357,667 $ 15,765
$ (311,498)
$ 4,061,934
$ 314,930
Claims and settlements
$ 142,838
$
$ (124,375)
$ 18,463
$
OPEB (see note 15)
518,292
243,125
761,417
Compensated absences
payable
1,182,224
867,486
(854,792)
1,194,918
836,443
Total
$ 1,843,354
$ 1,110,611
$ (979,167)
$ 1,974,798
$ 836,443
Business -type activities
Loans payable
$ 4,090,284 $
$ (245,356)
$ 3,844,928
$ 237,241
Capital leases
235,176
(62,092)
173,084
66,150
OPEB (see note 15)
19,355 9,079
28,434
Compensated absences
payable
12,852 6,686
(4,050)
15,488
11,539
Total
$ 4,357,667 $ 15,765
$ (311,498)
$ 4,061,934
$ 314,930
Governmental activities other post employment benefit obligations and compensated absences
are expected to be paid out of the general fund.
Loans Payable
$4,893,673 Promissory Notes
The Village Council adopted Resolution No. 23 -2006 authorizing the issuance of a note in the
amount of $4,893,673 to finance certain capital expenditures relating to the municipal golf
course and country club. The revenues of the Country Club are pledged to secure the loan.
Principal and interest payments are due semi - annually in the amount of $197,450, with a final
maturity date of April 1, 2024. The interest rate on the loan is 4.11 %and is subject to adjustment
in the event of taxability of the interest on this note. As of September 30, 2011, the principal
amount outstanding was $3,844,928 and was for the purpose of business -type activities.
l
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 8 — LONG TERM LIABILITIES (Continued)
$4,893,673 Promissory Notes (Continued)
Annual debt service requirements to maturity are as follows:
Business -type activities:
Year Ending
2012
2013
2014
2015
2016
2017-2021
2022-2024
$284,000 Capital Lease
Principal
$ 237,241
247,646
258,036
268,862
279,810
1,586,923
966,410
$ 3,844,928
Interest Total
$ 157,659
147,254
136,864
126,038
115,090
3 87, 577
63,590
$ 1,134,072
$ 394,900
394,900
394,900
394,900
3 94, 900
1,974,500
1,030,000
$ 4,979,000
The Village entered into a three year capital lease agreement for the purpose of financing the
lease - purchase of $284,000 of equipment for the Country Club in October 2009. Principal and
interest payments are due monthly, with a final maturity date in December 2013. The final
payment includes a balloon payment of $96,000. As of September 30, 2011, the principal
amount outstanding was $173,084 and the net book value of the equipment was $147,920. The
rate used to impute interest was 6.3 %.
Annual debt service requirements to maturity are as follows:
Year Ending
2012
2013
Principal
$ 66,150
106,934
$ 173,084
Interest Total
$ 75,235
108,539
$ 183,774
1,605
$ 10,690
46
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 8 — LONG TERM LIABILITIES (Continued)
Claims and Settlements
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association ( SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006. At September 30, 2011, there is a long -term governmental liability of
$28,434 for pending claims activity for SERMA (see related Note 9.) The liability is an
estimated based on the 2010 valuation; the 2011 valuation is not yet available. The liability is
included in governmental noncurrent liabilities in the Statement of Net Assets.
SERMA, a quasi - governmental agency, was created by an interlocal agreement, as authorized by
Chapter 163, Florida Statutes. 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 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. Activity in the pool is allocated to participating members
based upon the cumulative contributions to the pool. The amount of settlements in SERMA
exceeded insurance coverage in the current fiscal year.
NOTE 9 — RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts: theft of, damage to, and
destruction of assets; errors and omissions; and natural disasters.
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.
Property and Casualty Group
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association ( SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006.The governmental liability of $28,434 is for pending claims activity for
SERMA (See related Note 8).
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.
47
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS
The Village maintains the following two separate single employer defined benefit plans: Village
of North Palm Beach Fire and Police Retirement Fund, covering firefighters 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. The Police and Fire Fund will issue separate
financial statements for the year ended September 30, 2011, the report may be obtained from the
Village Clerk. The General Employees Plan will not issue separate financial statements.
Additional information on these plans can be found beginning on page 64.
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 accordance with the terms of each plan document. The costs of administering each plan are
financed in the appropriate pension trust fund.
SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES
All Retirement Plans
Basis of Accounting. The retirement plans are reported on the accrual basis of accounting. Plan
member and state contributions are recognized as revenues in the period that 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.
Method Used to Value Investments. 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.
Investments Concentrations. 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.
M.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
PLAN DESCRIPTION AND CONTRIB UTION INFORMATION
The following schedule is provided for general information purposes only and is derived from
the respective actual reports and Village information for the two retirement plans as of
October 1, 2010, the date of the latest actuarial valuation. Plan participants should refer to the
appropriate source documents for more complete information on the plans.
Plan Description:
Authority
Asset Valuation:
Reporting
Legal Reserves
Long -Term Receivable
Internal/Participant Loans
General Employees' Fire and Police
Village Ordinance Village Ordinance /State
Fair Value Fair Value
None None
None None
None None
Membership of each plan consisted of the following at October 1, 2010, the date of the latest
actuarial valuation:
GERF F &P
Active Participants:
Vested 49 14
Non - vested 15 38
Retirees and Beneficiaries receiving benefits 7 9
Terminated vested members 48 10
Total 119 71
General Employees' Retirement System
Plan Description. The plan is established under Code of Ordinances for the Village of North
Palm Beach, Florida, Part II, Chapter 2, and was most recently amended under Ordinance No.
2010 -07 passed and adopted on May 27, 2010. The Plan is also governed by certain provisions
of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. The Plan provides
retirement benefits as well as death benefits. All full time general employees who are not sworn
police officers or firefighters shall become members of the system on October 1st following
completion of 12 months of employment as a condition of employment. For those employees
retired before February 1, 1982, those employees hired after September 30, 2000, or those
employees hired before October 1, 2000, who elect to contribute an extra 2 %, a 3% Cost of
Living increase is paid annually from the Plan. Authority to establish and amend the benefit
provisions of the plan rests with the Village Council.
. •
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
General Employees' Retirement System (Continued)
All benefits vest based on the following years of credited service.
Years of
Credited Service
Vested %
Under 5
0%
5 or 6
50%
7 or 8
75%
9 or more
100%
Employees become eligible for normal retirement benefits after attaining the age of 60 and
completing nine years of credited service, or attaining the age of 65 (depending on employee
contribution rate). The normal retirement benefit consists of a life annuity, options available,
(subject to cost of living increases not to exceed 3% a year), of either 2 %, 2.25 %, or 2.5%
(depending on employee contribution rate) of Average Monthly earnings (AME) times credited
service up to 20 years plus 1% of AME times credited service over 20 years. Early retirement
benefits can be received at age 55. The benefit is determined as for normal retirement and
payable at normal retirement date or payable immediately after reduction by 5% for each year by
which the benefit commencement date precedes the normal retirement date. If an active member
dies, his beneficiary receives a refund of member contributions without interest. For a member
who is age 55 and has at least five years of service but who dies before commencement of
retirement benefits, a monthly benefit is payable to the designated beneficiary; the benefit is
calculated as though the member had retired on his date of death and payable according to option
elected by the employee. For an active member who has at least five years of credited service
and dies prior to reaching normal retirement date, a benefit equal to his vested accrued benefit
will be paid to his beneficiary for ten years. If an employee terminates his employment, he is
entitled to the following:
- With less than five years of credited service, a refund of member contributions
without interest and no other benefit.
- With five or more years of credited service, a refund of member contributions, the
vested accrued benefit payable at normal retirement date or at any time after age 55
is attained, with the benefit being subject to the same reduction as for early
retirement benefits. The vesting schedule is listed above.
"Average monthly earnings" is the average during the 5 years within the last 10 years of
employment which produces the highest average.
50
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
General Employees' Retirement System (Continued)
"Credited service" consists of the total number of years and fractional parts of years of actual
service with the Village and shall apply to an employee whose employment is terminated with
the Village and who recommences fulltime employment within two years from the date of
termination.
Contributions. General employees may contribute 6 %, 4 %, 2% or 0% of earnings as elected by
the employee, with the retirement benefit received being based on the amount contributed. The
Village is required to contribute the amount necessary to fund the Plan properly according to the
Plan's actuary. Contribution requirements of plan members and the Village are established and
may be amended by the Village Council.
Fire and Police Retirement
Plan Description. The plan is established under Code of Ordinances for the Village of North
Palm Beach, Florida, Part II, Chapter 2, and was most recently amended under Ordinance No.
2010 -01 passed and adopted on January 14, 2010. The Plan is also governed by certain
provisions of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. The plan
provides retirement benefits as well as death and disability benefits. All benefits vest after ten
years of credited service. All fulltime police officers or firefighters are eligible for membership
immediately upon hire. Previously, members were not eligible until October 1st following
completion of 12 months of employment. Cost of living adjustments (COLA) are provided
annually each October 1, to reflect changes in CPI (subject to maximum increases or decreases
of 3% per year). Authority to establish and amend the benefit provisions of the plan rests with
the Village Council. Employees become eligible for normal retirement benefits after attaining
the age of 55, or the date on which the member attains age 52 and 25 credited years of service.
Previously, employees became eligible for normal retirement benefits after attaining the age of
55, only. The normal retirement benefit consists of ten years certain and life thereafter, with
other options available, (subject to cost of living adjustments not to exceed 3% a year), of 2.5%
of AME times the years of credited services, with a maximum benefit of 60% of AME.
Members are eligible for non - service connected disability, after ten years of credited service and
a total and permanent disability. For service connected disability, a total and permanent
disability with no service requirement, the disability benefit consists of a ten year certain and life
annuity that can be provided by the single -sum value of the member's accrued pension benefit,
51
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
Fire and Police Retirement System (Continued)
Plan Description (Continued)
but is at least 42% of AME for service connected disability and at least 25% of AME for non -
service connected disability. See the description of the General Employees' Retirement System
for the remainder of the benefits, except that early retirement and termination benefits for vested
members can be received at age 50.
Contributions. Members are required to contribute 2% of their basic compensation to the plan.
The Village is required to contribute the remaining amount to fund the plan using the Entry Age
Actuarial Cost Method. Contribution requirements of plan members and the Village are
established and may be amended by the Village Council.
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 locally authorized insurance premium surcharges 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. Contributions to the Plan from the State of
Florida totaled $264,570 during the fiscal year ended September 30, 2011.
All Retirement Plans
Annual Pension Cost and Net Pension Obligation. The Village's 2011 annual pension cost and
actual contributions for each plan are shown on the next page. The required contributions were
determined as part of the October 1, 2010, actuarial valuation for each plan. State law allows the
Village to use a portion of the State contribution to offset the Village's pension cost.
Components ofAnnual Pension Cost and Net Pension Obligation
General Employees' Retirement Fund
Fire and Police Retirement Fund
Annual
Required
Eligible
Pension
Village
State
Cost
Contribution
Contribution
$509,921
$503,477
N/A
$869,409
$638,713
$230,696
52
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
The following schedule was determined as part of the October 1, 2010, actuarial valuation for the
General Employees' and Fire and Police Retirement Plans.
(a) Information was not provided in the October 1, 2010, actuarial valuation.
Three -Year Trend Information
General
Annual
Employees'
Fire and Police
Annual required contribution (ARC)
$ 503,477
$ 869,409
Interest on net pension obligation (NPO)
(13,900)
(a)
Adjustment to ARC
20,344
(a)
Annual pension cost
509,921
869,409
Actual contributions
651,159
872,067
Increase in NPO
(141,238)
(2,658)
NPO at beginning of year
(185,330)
255 33 4)
NPO at end of year
$(326.568)
257 992
(a) Information was not provided in the October 1, 2010, actuarial valuation.
Three -Year Trend Information
53
Annual
Percentage
Net Pension
Year
Pension
Annual
of APC
Obligation
Ended
Cost (APC)
Contribution
Contributed
(Asset)
General
Employees'
9/30/09
767,429
765,381
99.7%
(165,505)
9/30/10
739,704
759,529
102.7%
(185,330)
9/30/11
509,921
651,159
127.7%
(326,568)
Fire and
Police
9/30/09
651,838
734,826
112.7%
(264,986)
9/30/10
893,728
884,076
98.9%
(255,334)
9/30/11
869,409
872,067
100.3%
(257,992)
53
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
The following are the actuarial methods and significant actuarial assumptions:
Valuation date
Actuarial Cost Method
Amortized Method
Remaining Amortization
Period
Asset Valuation Method
Actuarial assumptions:
Investment rate of return*
Projected salary increase*
*Includes inflation at
Cost of living adjustments
General Employees' Fire and Police
10/1/2010
Frozen Entry Age
Level percent closed
30 years
Difference between actual
and expected return
recognized over five years
8% up to retirement,
5.25% thereafter.
5.5%
4%
3% for those retired before
2/1/82 or who contribute
an extra 2 %.
10/1/2010
Aggregate
N/A (1)
N/A (1)
Five year smooth market.
8%
6%
4%
3%
(1) The aggregate actuarial cost method does not identify or separately amortize unfunded
actuarial liabilities.
Schedule of Funding Progress
As noted above, the Fire and Police Retirement System utilizes the aggregate actuarial cost
method to determine contributions to the Plan. This method does not identify or separately
amortize unfunded actuarial liabilities. The required schedule of funding progress immediately
following the notes to the financial statements presents multiyear trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits. The schedule of funding progress was prepared using the
entry age actuarial cost method to provide information that serves as a surrogate for the funding
progress of the Plan.
54
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 10 — EMPLOYEE RETIREMENT PLANS (Continued)
Fire and Police:
Actuarial Actuarial
Valuation Value of
10 /01 /10 11,240,540
General Employees':
Actuarial
Accrued
Liability
(AAL)
14,121,958
Unfunded
Funded
Actuarial
Actuarial
Actuarial
Accrued
Valuation
Value of
Liability
Date
Assets
(AAL)
10 /01 /10
6,863,057
10,516,549
Unfunded
Funded
AAL
Ratio
2,881,418
79.6%
Unfunded Funded
3,653,492 65.3%
NOTE 11— PENSION PLAN FINANCIAL INFORMATION
Unfunded
AAL
as % of
Covered Covered
Payroll Payroll
3,922,596 73.46%
Unfunded
AAL
as % of
Covered Covered
Payroll Payroll
3,424,324 106.7%
Generally accepted accounting principles (GAAP) requires that financial statements for
individual pension plans be presented in the notes to the financial statements of the primary
government if separate GAAP financial reports have not been issued. The Volunteer Fire and
General Employees' pension funds do not have separate GAAP reports issued, and the financial
information for these is presented below.
STATEMENT OF FIDUCIARY NET ASSETS
EMPLOYEE RETIREMENT FUNDS
SEPTEMBER 30, 2011
Assets
Cash and cash equivalents
Investments:
Equity mutual funds
Fixed income mutual funds
Accounts receivable
Total assets
Liabilities
Accounts payable
Net Assets
Held in trust for pension benefits and
other purposes
General
Volunteer Employee's
$ $ 233,423
4,056,958
2,589,419
23,941
6,903,741
$ $ 6.89L782
55
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 11— PENSION PLAN FINANCIAL INFORMATION (Continued)
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
EMPLOYEE RETIREMENT FUNDS
For the Fiscal Year Ended September 30, 2011
NOTE 12 — ON- BEHALF PAYMENTS
The state makes a contribution to the Fire and Police Officers' Retirement System from the
firefighters' and police officers' Insurance Premium Tax. For the fiscal year ended September
30, 2011, $264,570 was recorded as revenues and expenditures in the On- Behalf Pension
Contribution Special Revenue Fund relating to on- behalf payments received from the state.
56
General
Volunteer Fire
Employees'
Pension
Pension
Additions
Contributions
Employer
$ 1,202
$ 651,159
Plan members
169,948
Total contributions
1,202
821,107
Investment earnings
Dividends and interest
2,279
34,409
Net decrease in the fair value
of investments
(76,944)
Less investment expense
(62,774)
Total investment earnings
2,279
(105,309)
Total additions
3,481
715,798
Deductions
Administration
17,985
Benefits
109,707
29,679
Refund of contributions
32,479
Total deductions
109,707
80,143
Change in net assets
(106,226)
635,655
Net assets - beginning
106,226
6,256,127
Net assets - ending
$
$ 6.891782
NOTE 12 — ON- BEHALF PAYMENTS
The state makes a contribution to the Fire and Police Officers' Retirement System from the
firefighters' and police officers' Insurance Premium Tax. For the fiscal year ended September
30, 2011, $264,570 was recorded as revenues and expenditures in the On- Behalf Pension
Contribution Special Revenue Fund relating to on- behalf payments received from the state.
56
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 13 — DEFINED CONTRIBUTION PLAN
Effective October 1, 2006, all employees of the Village may participate in one of three Money
Purchase Plans that are qualified Defined Contribution Plans adopted under the provisions of
Internal Revenue Code Section 401(a). The three pension plans include Directors, General
Employees, and Municipal Employees. The defined contribution plans are administered by
International City /County Management Association and Retirement Corporation (ICMA -RC).
The ICMA -RC is a nonprofit corporation organized and existing under the laws of the State of
Delaware. Contribution requirements of employees' and the Village are established and may be
amended by the Village Council.
The vesting period for each defined contribution plan is five years, with a vesting of zero percent
in the first year, and a vesting of twenty -five percent for each year thereafter. While the plans
will not provide for retroactive funding, the vesting period shall run from each employee's
original date of hire. No loans are permitted by the plan. The normal retirement age for the plan
shall be age sixty. There is no waiting period for participation in the plan. The minimum age for
participation is eighteen.
The Village contributes 15% of participant earnings for the plan year. Earnings include regular
and bonus compensation, but do not include overtime or commissions. Employee contributions
are voluntary, after -tax contributions that are not matched by the Village. Employees may
contribute 3 %, 5 %, 10 %, or 15% of earnings to the plan. Contributions are remitted to the trusts
every payroll period.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the plans, the Village's activities do not meet the criteria for inclusion in the
fiduciary funds of a government. Consequently, the plans are not included in the Village's financial
statements.
Plan detail for participating employees at September 30, 2011, is listed below:
Director's
Village contributions $70,439
Employee contributions $30,854
General Municipal
Employees Employees
57
Total
$61,357 $58,341 $190,137
$13,807 $16,275 $60,936
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 14 — DEFERRED COMPENSATION PLAN ASSETS
Employees of the Village may participate in a deferred compensation plan adopted under the
provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans with Respect to
Service for State and Local Governments).
The deferred compensation plan is available to all employees of the Village. Under the plan,
employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred
portion until the withdrawal date. The deferred compensation amount is not available for
withdrawal by employees until termination, retirement, death, or unforeseeable emergency. A third
party administers the deferred compensation plan.
In 1998, the Village Adopted GASB -32, Accounting and Financial Reporting for Internal
Revenue Code Section 457 Deferred Compensation Plans. The Village modified its Deferred
Compensation Plan to conform with the changes in the Internal Revenue Code brought about by the
Small Business Job Protection Act of 1996 (the "Act "). The Act requires that eligible deferred
compensation plans established and maintained by governmental employers be amended to provide
that all assets of the plan be held in trust, or under one or more appropriate annuity contracts or
custodial accounts, for the exclusive benefit of plan participants and their beneficiaries. As a result
of this change, these plan assets are not property of the Village and are not subject to the claims of
the Village's general creditors.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the Plan, the Village's activities do not meet the criteria for inclusion in the
fiduciary funds of a government.
NOTE 15 — OTHER POST EMPLOYMENT BENEFITS
The Village implemented Governmental Accounting Standards Board Statement 45 (GASB 45),
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions, effective October 1, 2008. The Village elected to implement prospectively, and the
change in accounting principle had no effect on changes in net assets /fund equity for prior
periods. Retirees of the Village pay an amount equal to the actual premium for health insurance
charged by the carrier, but there is an implied subsidy in the healthcare insurance premium for
retirees because the premium charged for these retirees is the same as the premium charged for
active employees, who are younger than retirees on average. This implied subsidy constitutes
other postemployment benefits (OPEB) under GASB 45.
Plan Description
The Village provides a single employer defined benefit health care plan to all of its employees.
The plan allows its employees and their beneficiaries, to continue to obtain health and dental
benefits upon retirement. The normal retirement age for police and firefighters is 55; the normal
retirement age for all other Village employees is either age 60 or 65, depending on the option
selected by the employee.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 15 — OTHER POST EMPLOYMENT BENEFITS (Continued)
Plan Description (Continued)
The benefits of the plan are in accordance with Florida Statutes, which are the legal authority for
the plan. The plan has no assets and does not issue a separate financial report.
Funding PolicX
The Village does not directly make a contribution to the plan on behalf of retirees. Retirees and
their beneficiaries pay the same group rates as are charged to the Village for active employees by
its healthcare provider. However, the Village's actuaries, in their actuarial valuation, calculate
an offset to the cost of these benefits as an Employer Contribution, based upon an implicit rate
subsidy. This offset equals the total age- adjusted costs paid by the Village or its active
employees for coverage of the retirees and their dependents for the year net of the retiree's own
payments for the year.
Annual OPEB Cost and Net OPEB Obligation
The annual other post employment benefit (OPEB) cost is calculated based on the annual
required contribution of the employer, an amount actuarially determined in accordance with
GASB Statement No. 45. The annual required contribution represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and to amortize any
unfunded actuarial liabilities over a period not to exceed 30 years.
The annual OPEB cost and the net OPEB obligation for the Village for the current year and the
related information is as follows:
Required contribution rates:
Employer
Pay -as- you -go
Plan members
N/A
Normal cost
$ 245,351
Interest on normal cost
9,814
Amortization
152,437
Interest on amortization
6,097
Interest on net unfunded OPEB obligation
21,506
Annual OPEB cost
435,205
Contributions made
(183,000)
Increase in net OPEB obligation
252,205
Net OPEB obligation October 1, 2010
537,647
Net OPEB obligation September 30, 2011
789 852
59
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 15 — OTHER POST EMPLOYMENT BENEFITS (Continued)
Trend Information
Three -Year Trend Information
Percentage of
Fiscal Annual Annual Net
Year OPEB OPEB Cost OPEB
End Cost Contributed Obligation
09/30/09
$413,699
28.7%
$295,142
09/30/10
$425,505
43.0%
$537,647
09/30/11
$435,205
42.0%
$789,852
Funded Status
The funded status of the plan as of most recent actuarial valuation date was as follows:
Actuarial valuation date 10/01/2008
Actuarial accrued liability $2,741,387
Actuarial value of plan assets $
Unfunded actuarial accrued liability (UAAL) $2,741,387
Funded ratio 0.0%
Covered payroll $6,231,104
UAAL as a percentage of covered payroll 44.0%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are comparable with past expectations
and new estimates are made about the future. The schedule of funding progress presented as
required supplementary information following the notes to the financial statements, will present
multi -year trend information that shows whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits. The Village has not
contributed assets to the plan at this time.
Actuarial Methods and Assumptions
Projections of benefits are based on the substantive plan (the plan as understood by the employer
and plan members) and includes the types of benefits in force at the valuation date and the
pattern of sharing benefit costs between the Village and the plan members to that point.
Actuarial calculations reflect a long -term perspective and employ methods and assumptions that
are
:1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 15 — OTHER POST EMPLOYMENT BENEFITS (Continued)
designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of
assets. Significant methods and assumptions were as follows:
Actuarial valuation date
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actual assumptions:
Investment rate of return
Healthcare cost trend
10/01/2008
Projected Unit Credit
Level dollar, 30 Years, closed
28 years
Unfunded
4%
6.6% for 2011 decreasing to 4% in 2083
NOTE 16 — 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 consists of one member from each participating entity.
Seacoast is an Independent Authority organized under the laws of the State of Florida, and the
Village has no participating equity ownership in Seacoast. The Village paid $153,968 to
Seacoast during the fiscal year for water and sewer service.
NOTE 17 — INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances at September 30, 2011, is as follows:
Receivable Fund Payable Fund Amount
Capital Projects Fund Recreation Special Revenue Fund $44,028
The outstanding balance between funds results mainly from the time lag between the dates that
payments between funds are made. Interfund transfers during the year ended September 30,
2011, are as follows:
Transfer Out:
General Fund
Transfer in:
Capital Projects Fund
$1,334,934
The transfers from the General Fund to the other governmental funds were to move restricted
and unrestricted General Fund revenues to finance various programs that the government must
account for in other funds in accordance with budgetary authorizations, including amounts
provided as subsidies or matching funds for various grant programs.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2011
NOTE 18 — CONTRACTS, COMMITMENTS AND CONTINGENCIES
Contingencies
The Village is involved in various litigations and claims arising in the course of operations. It is
the opinion of legal counsel that the likelihood of unfavorable outcome and the amounts of
potential losses cannot be reasonably determined for all claims at this time.
NOTE 19 — ACCOUNTING CHANGE
GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, enhances
the usefulness of fund balance information by providing clearer fund balance classifications that
can be more consistently applied and by clarifying the existing governmental fund type definitions.
The Village implemented this standard in fiscal year 2011. Changes to the government fund type
fund balance reporting are reflected in the financial statements and schedules. Related disclosures
are included in Note 1.
NOTE 20 — SUBSEQUENT EVENT
On January 5, 2012, the Village Council terminated the City Manager without cause. Under the
terms of his employment contract he is due six months base salary as severance pay. This
amounts to $67,500 and was subsequently paid.
M
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD &A
FIDUCIARY FUNDS
Pension Trust Funds
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2011
Other Post Employment Benefits (OPEB)
10/01/08* $ $ 2,741,387 $ 2,741,387 0.0% $ 6,231,104
* This was the only actuarial valuation performed to date.
(1) Projected unit credit
The schedule of funding progress presented above will present multi -year trend information that
shows whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability for benefits. Because the fiscal year ended September 30,
2009, was the year of implementation of GASB 45, and the Villiage elected to apply the statement
prospectively, only one year is presented in the schedule at this time. In future years, required
trend data will be presented. The Villiage has not contributed assets to the plan at this time.
63
UAAL as a
Percentage
of Covered
Payroll
((b -a) /c)
44.0%
Schedule of Funding Progress „
Actuarial
Actuarial
Accrued Unfunded
Actuarial Value of
Liability AAL
Funded Covered
Valuation Assets
(AAL) (1) (UAAL)
Ratio Payroll
Date (a)
(b) (b -a)
(a/b) (c)
Other Post Employment Benefits (OPEB)
10/01/08* $ $ 2,741,387 $ 2,741,387 0.0% $ 6,231,104
* This was the only actuarial valuation performed to date.
(1) Projected unit credit
The schedule of funding progress presented above will present multi -year trend information that
shows whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liability for benefits. Because the fiscal year ended September 30,
2009, was the year of implementation of GASB 45, and the Villiage elected to apply the statement
prospectively, only one year is presented in the schedule at this time. In future years, required
trend data will be presented. The Villiage has not contributed assets to the plan at this time.
63
UAAL as a
Percentage
of Covered
Payroll
((b -a) /c)
44.0%
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2011
Schedule of Funding Progress
General Employees Retirement Fund (1)
10/1/2005
Actuarial
$ 9,116,599
$ 5,298,994
41.88%
Accrued
164.55%
UAAL as a
Actuarial
Liability
Unfunded
Percentage
Actuarial Value of
(AAL)-
AAL Funded
Covered of Covered
Valuation Assets
Entry Age(1)
(UAAL) Ratio
Payroll Payroll
Date (a)
(b)
(b -a) (a/b)
(c) ((b -a) /c)
General Employees Retirement Fund (1)
10/1/2005
$ 3,817,605
$ 9,116,599
$ 5,298,994
41.88%
$ 3,220,258
164.55%
10/1/2006
5,283,023
10,490,332
5,207,309
50.36%
3,680,960
141.47%
10/1/2007
6,481,382
10,997,783
4,516,401
58.93%
3,238,894
139.44%
10/1/2008
5,824,447
10,138,981
4,314,534
57.45%
2,977,995
144.88%
10/1/2009
6,048,808
8,328,331
2,279523
72.63%
3,046,421
74.83%
10/1/2010
6,863,057
10,516,549
3,653,492
65.26%
3,424,324
106.69%
Fire and Police Retirement Fund (2)
10/1/2005
$ 7,600,134
$ 8,692,747
$ 1,092,613
87.43%
$ 2,405,634
45.42%
10/1/2006
8,312,363
10,294,848
1,982,485
80.74%
2,798,919
70.83%
10/1/2007
9,228537
10,836,562
1,608,025
85.16%
3,110,081
51.70%
10/1/2008
10,376,733
11,719,336
1,342,603
88.54%
3,253,109
41.27%
10/1/2009
10,650,648
12,656,293
2,005,645
84.15%
3,488,338
57.50%
10/1/2010
11,240,540
14,121,958
2,881,418
79.60%
3,922,596
73.46%
General Employees Retirement Fund (1)
The General Employees Retirement Fund uses the frozen entry age actuarial cost method.
Fire and Police Retirement Fund (2)
The Fire and Police Retirement Fund uses the aggregate actuarial cost method to
determine contributions to the Plan. This method does not identify or separately amortize unfunded
actuarial liabilities. The schedule of funding progress presented above was prepared using the entry age
actuarial cost method to provide information that serves as a surrogate for the funding progress of the Plan.
."
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2011
Schedule of Emplover and State Contributions
Fiscal Year Annual
Ended Required Actual State Percentage
September 30 Contribution Contribution Contribution Contributed
General Employees Retirement Fund
2006
$ 1,007,695
$ 1,007,695
N/A
100.0%
2007
866,069
873,872
N/A
100.9%
2008
875,126
876,712
N/A
100.2%
2009
761,943
765,381
N/A
100.5%
2010
739,767
741,392
N/A
100.2%
2011
509,921
651,159
N/A
127.7%
Fire and Police Retirement Fund
2006
$ 690,186
$ 551,986
$ 138,200
100.0%
2007
539,651
401,451
138,200
100.0%
2008
715,784
580,463
138,200
100.4%
2009
728,729
596,626
138,200
100.8%
2010
884,415
653,719
230,696
100.0%
2011
869,409
641,371
230,696
100.3%
65
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Trend Data
September 30, 2011
Actuarial Assumption
Investment rate of return *
General Employees
Police and Fire
5.25% thereafter.
Retirement Fund
Retirement Fund
Contribution rates as of 9/30/11:
4% 4%
Cost of living adjustments
Village
15.78%
24.21%
Plan Members
6.00%(1)
2.00%
Actuarially Determined Contribution
$509,921
$869,409
Contributions Made
$651,159
$872,627
Valuation date
10/1/2009
10/1/2009
Actuarial Cost Method
Frozen Entry Age
Aggregate
Amortized Method
Level percent
N/A (2)
closed
Remaining Amortization Period
30 years
N/A (2)
Asset Valuation Method
Difference between
Five year
actual and expected
smooth
return recognized
market
over five years.
Administrative Costs
Expenses paid out of the
Expenses paid out of the
fund other than investment
fund other than investment
related expenses are
related expenses are
assumed to be equal to the
assumed to be equal to the
average of actual expenses
average of actual expenses
over the previous two years.
over the previous two years.
Actuarial Assumption
Investment rate of return *
8% up to retirement 8%
5.25% thereafter.
Projected salary increase *
5.5% 6%
*Includes inflation at
4% 4%
Cost of living adjustments
3% for those retired 3%
before 2/1/82 or
who contribute an
extra 2 %.
(1) Except for certain members who have elected not to contribute and for other members who have elected
to contribute only 2% or 4 %.
(2) The aggregate actuarial cost method does not identify or separately amortize unfunded actuarial liabilities.
66
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual
General Fund
For the Year Ended September 30, 2011
67
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues
Taxes
$ 13,550,692
$ 13,550,692
$ 14,090,966
$ 540,274
Licenses and penuits
658,800
658,800
959,098
300,298
Intergovernmental
1,228,726
1,228,726
1,287,638
58,912
Charges for sen-ices
1,845,027
1,845,027
1,934,424
89,397
Fines and forfeitures
130,000
130,000
164,366
34,366
Investment
84,027
84,027
97,743
13,716
Miscellaneous
8,800
8,800
59,462
50,662
Total revenues
17,506,072
17,506,072
18,593,697
1,087,625
Expenditures
Current
General government
2,455,316
2,444,898
2,388,151
56,747
Public safety
7,155,987
6,870,987
6,788,712
82,275
Public works
4,126,912
4,142,131
4,044,642
97,489
Cointnunity development and planning
819,557
894,602
790,937
103,665
Leisure sen-ices - recreation
2,411,375
2,374,099
2,295,959
78,140
Other govermnent
218,827
22,250
14,090
8,160
Capital outlay
318,098
373,449
288,514
84,935
Total expenditures
17,506,072
17,122,416
16,611,005
511,411
Excess of revenues over
expenditures
383,656
1,982,692
1,599,036
Other financing uses
Transfer out
(1,334,934)
(1,334,934)
Total other financing uses
(1,334,934)
(1,334,934)
Net change in fund balances
$
$ (951,278)
647,758
$ 1,599,036
Fund Balances
Beginning of year
11,052,909
End of year
$ 11,700,667
67
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Budgetary
Required Supplementary Information (RSI)
General Fund
September 30, 2011
Note 1 - Basis of Accounting
Generally accepted accounting principles (GAAP) serve as the budgetary basis of accounting.
G'I:
OTHER SUPPLEMENTARY INFORMATION
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2011
Variance with
Final Budget
Original Final Positive Percent
Budget Budget Actual (Negative) Variance
Village Council
Personal services
$ 50,513 $
50,513 $
50,455 $
58
0.11
Operating expenses
77,983
81,183
81,183
0.00
Total Village Council
128,496
131,696
131,638
58
0.04
Village Manager
Personal services
296,405
324,782
324,782
0.00
Operating expenses
11,866
11,866
8,068
3,798
32.01
Total Village Manager
308,271
336,648
332,850
3,798
1.13
Village Finance
Personal services
472,169
459,669
455,364
4,305
0.94
Operating expenses
54,728
44,728
44,093
635
1.42
Total Village Finance
526,897
504,397
499,457
4,940
0.98
Village Attorney
Operating expenses
170,000
170,000
159,693
10,307
6.06
Village Clerk
Personal services
251,242
251,242
248,595
2,647
1.05
Operating expenses
29,095
19,600
9,950
9,650
49.23
Total Village Clerk
280,337
270,842
258,545
12,297
4.54
Information Technology
Personal services
267,807
265,496
256,456
9,040
3.40
Operating expenses
20,825
23,136
23,136
0.00
Total Information Technology
288,632
288,632
279,592
9,040
3.13
Human Resources
Personal services
209,226
209,226
205,821
3,405
1.63
Operating expenses
27,401
27,401
21,049
6,352
23.18
Total Human Resources
236,627
236,627
226,870
9,757
4.12
Police
Personal services
4,099,061
3,951,061
3,913,060
38,001
0.96
Operating expenses
244,086
225,086
215,132
9,954
4.42
Total Police
4,343,147
4,176,147
4,128,192
47,955
1.15
Fire Rescue
Personal services
2,482,374
2,405,374
2,399,085
6,289
0.26
Operating expenses
179,832
167,832
146,369
21,463
12.79
Total Fire Rescue
2,662,206
2,573,206
2,545,454
27,752
1.08
Public Works Streets and Grounds
Personal services
323,825
323,825
318,170
5,655
1.75
Operating expenses
39,501
39,501
35,080
4,421
11.19
Total Public works
363,326
363,326
353,250
10,076
2.77
(Continued)
•e
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2011
Vehicle Maintenance
Variance with
Personal services
186,433
186,433
183,067
Final Budget
1.81
Operating expenses
Original
Final
173,666
Positive
Percent
Total Vehicle Maintenance
Budget
Budget
Actual
(Negative)
Variance
(Continued)
Sanitation
205,175
205,175
199,166
6,009
2.93
Personal services
$ 1,316,296
$ 1,266,296
$ 1,244,632
$ 21,664
1.71
Operating expenses
176,200
131,200
128,030
3,170
2.42
Total Sanitation
1,492,496
1,397,496
1,372,662
24,834
1.78
Facility Services
466,774
456,974
451,873
5,101
1.12
Personal services
289,852
289,852
285,560
4,292
1.48
Operating expenses
344,700
279,700
263,007
16,693
5.97
Total Facility Services
634,552
569,552
548,567
20,985
3.68
Street Maintenance
111,731
89,428
85,759
3,669
4.10
Personal services
539,707
528,707
519,861
8,846
1.67
Operating expenses
727,638
913,857
893,569
20,288
2.22
Total Street Maintenance
1,267,345
1,442,564
1,413,430
29,134
2.02
Vehicle Maintenance
Personal services
186,433
186,433
183,067
3,366
1.81
Operating expenses
182,760
182,760
173,666
9,094
4.98
Total Vehicle Maintenance
369,193
369,193
356,733
12,460
3.37
Planning and Engineering
Personal services
205,175
205,175
199,166
6,009
2.93
Operating expenses
17,064
118,909
34,139
84,770
71.29
Total Planning and Engineering
222,239
324,084
233,305
90,779
28.01
Building
Personal services
466,774
456,974
451,873
5,101
1.12
Operating expenses
14,411
14,411
10,299
4,112
28.53
Total Building
481,185
471,385
462,172
9,213
1.95
Code Enforcement
Personal services
111,731
89,428
85,759
3,669
4.10
Operating expenses
4,402
9,705
9,701
4
0.04
Total Code Enforcement
116,133
99,133
95,460
3,673
3.71
Leisure Services - Recreation
Personal services
577,195
577,195
577,195
0.00
Operating expenses
374,085
352,824
334,355
18,469
5.23
Total Leisure Services - Recreation
951,280
930,019
911,550
18,469
1.99
Library
Personal services
538,942
508,942
481,359
27,583
5.42
Operating expenses
173,647
163,647
154,503
9,144
5.59
Total Library
712,589
672,589
635,862
36,727
5.46
(Continued)
70
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures - Budget and Actual
General Fund
For the Year Ended September 30, 2011
71
Variance with
Final Budget
Original
Final
Positive
Percent
Budget
Budget
Actual
(Negative)
Variance
(Continued)
Tennis
Personal services
$ 102,129
$ 102,129
$ 90,511
$ 11,618
11.38
Operating expenses
274,776
288,537
288,541
(4)
0.00
Total Tennis
376,905
390,666
379,052
11,614
2.97
Pool
Personal services
89,977
89,977
89,581
396
0.44
Operating expenses
193,624
203,848
203,847
1
0.00
Total Pool
283,601
293,825
293,428
397
0.14
Special Events
Operating expenses
87,000
87,000
76,067
10,933
12.57
Total Special Events
87,000
87,000
76,067
10,933
12.57
Other
Operating expenses
218,827
22,250
14,090
8,160
36.67
218,827
22,250
14,090
8,160
36.67
Non - Departmental
Operating expenses
666,690
627,690
614,572
13,118
2.09
666,690
627,690
614,572
13,118
2.09
Capital Outlay
Information Technology
9,707
9,707
9,706
1
0.01
Village Clerk
9,495
9,495
Police
73,449
73,449
72,187
1,262
1.72
Facility Services
85,000
Planning and Engineering
89,222
8,323
80,899
90.67
Leisure Services - Recreation
26,500
26,500
24,031
2,469
9.32
Pool
101,000
147,135
146,831
304
0.21
Tennis
11,800
17,941
17,941
Library
10,642
Total Capital Outlay
318,098
373,449
288,514
84,935
22.74
Total expenditures
$ 17,506,072
$ 17,122,416
$ 16,611,005
$ 511,411
2.99%
71
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Public Safety Fund
Northlake Boulevard Fund
Recreation Fund
On -Beha f Pension Contributions
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2011
72
Special Revenue Funds
Public
Northlake
On- Behalf
Total Nonmajor
Safetv
Boulevard
Pension
Governmental
Fund
Fund
Recreation
Contributions
Funds
Assets
Cash and cash equivalents
$
975
$ L986
$ 88.174
$
$ 91.135
Due from other governments
51840
51840
Total assets
$
975
$ 1986
$ 88.174
$ 51840
$ 143.975
Liabilities
Accounts payable
$
$
S
$ 51840
$ 51840
Due to other funds
44.028
44.028
Total liabilities
44.028
51840
96.868
Fund balances
Assigned
975
L986
44.146
47.107
Total fund balances
975
1986
44.146
47.107
Total liabilities and fund balances
$
975
$ 1986
$ 88.174
$ 51840
$ 143.975
72
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2011
73
Special Revenue Funds
Public
Northlake
On- Behalf
Total Nonmajor
Safety
Boulevard
Pension
Governmental
Fund
Fund Recreation
Contributions
Funds
Revenues
Intergovernmental
$ 5,169
$ $
$ 264,570
$ 269,739
Total revenues
5,169
264,570
269,739
Expenditures
Current
Public safety
264,570
264,570
Capital outlay
5,441
5,441
Total expenditures
5,441
264,570
270,011
Net changes in fund balances
(272)
(272)
Fund balances - Beginning of year
1.247
1,986 44,146
47,379
Fund balances - End of year
$ 975
$ 1,986 $ 44,146
$
$ 47.107
73
FIDUCIARY FUNDS
Pension Trust Funds
Volunteer Fire Pension Trust Fund
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Net Assets - Fiduciary Funds
September 30, 2011
ASSETS
Cash and cash equivalents
Investments:
Common equity securities
U.S. Government agencies
Municipal bonds
Corporate bonds
U.S. Treasun' bonds
Equity mutual funds
Fixed income mutual funds
Accrued interest and dividends
Accounts Receivable
Prepaids
Total assets
LIABH,ITIES
Accounts payable
Total liabilities
Volunteer General
Fire Employees
Pension Pension
Fire and
Total
Police
Employee
Officers
Retirement
Pension
Funds
$ $ 233,423 $ 1,080,818 $
1,314,241
4,980,195
4,980,195
1,067,419
1,067,419
146,431
146,431
2,459,279
2,459,279
326,235
326,235
4,056,958 19,302
4,076,260
2,589,419
2,589,419
49,550
49,550
23,941 79,995
103,936
216,394
216,394
6,903,741 10,425,618
17,329,359
11,959 29,453 41,412
11,959 29,453 41,412
Net Assets
Held in trust for pension benefits
and other purposes $ $ 6,891,782 $ 10,396,165 $ 17,287,947
(1) A schedule of funding progress for the General Employees and Fire and Police Officers plans
is presented on page 64.
74
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Changes in Fiduciary Net Assets
Employee Retirement Funds
For the Year Ended September 30, 2011
Additions
Contributions
Employer
Plan members
State on- behalf payments
Total contributions
Investment earnings
Dividends and interest
Net (decrease) in fair value of investments
Investment expense
Total investment earnings (losses)
Total additions
Deductions
Administration
Benefits
Refund of contributions
Total deductions
Change in net assets
Net assets - beginning
Net assets - ending
Fire and
Total
Volunteer General Police
Employee
Fire Employees Officers
Retirement
98,656
268,604
$ 1,202
$ 651,159
$ 641,371
$ 1,293,732
169,948
98,656
268,604
264,570
264,570
1,202
821,107
1,004,597
1,826,906
2,279
34,409
288,612
325,300
(76,944)
(465,142)
(542,086)
(62,774)
(53,603)
(116,377)
2,279
(105,309)
(230,133)
(333,163)
3,481
715,798
774,464
1,493,743
17,985
86,692
104,677
109,707
29,679
939,313
1,078,699
32,479
3,777
36,256
109,707
80,143
1,029,782
1,219,632
(106,226)
635,655
(255,318)
274,111
106,226
6,256,127
10,651,483
17,013,836
$
$ 6,891,782
$ 10,396,165
$ 17,287,947
75
AGENCYFUNDS
Manatee Protection Agency
Northlake Boulevard Task Force
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Agency Net Assets
September 30, 2011
Assets
Cash and cash equivalents
Liabilities
Due to others
Manatee
Protection
Agency
Agency Funds
Northlake
Total
Boulevard
Agency
Task Force
Funds
$ 285,748 $ 60,751 $ 346,499
$ 285,748 $ 60,751 $ 346,499
76
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Schedule of Changes in Agency Net Assets and Liabilities
For the Year Ended September 30, 2011
Manatee Protection Agency
Assets
Cash and cash equivalents
Liabilities
Due to others
Northlake Boulevard Task Force
Assets
Cash and cash equivalents
Liabilities
Due to others
Total All Agencv Funds
Assets
Cash and cash equivalents
Liabilities
Due to others
October 1, 2010 additions Deductions September 30, 2011
$ 282,750 $ 2,998 $ $ 285,748
$ 282,750 $ 2,998 $ $ 285,748
$ 61,604 $ 647 $ 1,500 $ 60,751
$ 61,604 $ 647 $ 1,500 $ 60,751
$ 344,354 $ 3,645 $ 1,500 $ 346,499
$ 344,354 $ 3,645 $ 1,500 $ 346,499
77
PROPRIETARY FUND
(ENTERPRISE FUND)
Country Club Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Revenues and Departmental Expenses - Budget and Actual
Country Club Fund - Budgetary Basis
For the Year Ended September 30, 2011
Adjustments to reconcile to the GAAP Basis
Total expenses on the budgetary basis 3,597,329
Less capital outlay costs capitalized (60,455)
Less debt service (487,573)
Add depreciation expense 457,747
Total operating expenses $ 3,507,048
78
variance with
Final Budget
Original
Final
Positive
Percent
Budget
Budget
Actual
(Negative)
variance
Revenue
Greens fee /cart rentals membership fees
$ 2,637,170
$ 2,637,170
$ 2,372,337
$ (264,833)
-10.04
Golf shop revenues
218,750
218,750
283,927
65,177
29.80
Driving range revenues
200,227
200,227
208,865
8,638
4.31
Restaurant revenues
1,000,000
1,000,000
700,378
(299,622)
-29.96
Interest revenues
3,500
3,500
8,493
4,993
142.66
Miscellaneous
2,325
2,325
5,692
3,367
144.82
Total revenues
4,061,972
4,061,972
3,579,692
(482,280)
-11.87
Golf Maintenance
Operating expenses
1,264,727
1,264,727
1,232,462
32,265
2.55
Capital outlay
8,000
8,000
8,000
100.00
Total Golf Maintenance
1,272,727
1,272,727
1,232,462
40,265
3.16
Golf Pro Shop and Range
Personal services
424,501
460,142
470,552
(10,410)
-2.26
Operating expenses
332,493
296,852
277,784
19,068
6.42
Total Golf Pro Shop and Range
756,994
756,994
748,336
8,658
1.14
Food and Beverage
Personal services
388,219
388,219
354,651
33,568
8.65
Operating expenses
536,829
536,829
483,868
52,961
9.87
Capital outlay
7,500
7,500
3,056
4,444
59.25
Total Food and Beverage
932,548
932,548
841,575
90,973
9.76
Administration
Personal services
112,479
112,479
66,860
45,619
40.56
Operating expenses
51,835
51,835
34,404
17,431
33.63
Total Administration
164,314
164,314
101,264
63,050
38.37
Clubhouse and Grounds
Operating expenses
105,180
105,180
84,485
20,695
19.68
Capital outlay
60,309
60,309
57,399
2,910
4.83
Total Clubhouse and Grounds
165,489
165,489
141,884
23,605
14.26
Insurance and General Liability
Operating expenses
79,000
79,000
40,840
38,160
48.30
Reserves
Operating
10,000
10,000
3,395
6,605
66.05
Contingency
180,699
180,699
180,699
100.00
Total Reserves
190,699
190,699
3,395
187,304
98.22
Debt service
Debt service
500,201
500,201
487,573
12,628
2.52
Total expenses on the budgetary basis
4,061,972
4,061,972
3,597,329
464,643
11.44
Revenues under expenses
$
$
$ (17,637)
$ (17,637)
Adjustments to reconcile to the GAAP Basis
Total expenses on the budgetary basis 3,597,329
Less capital outlay costs capitalized (60,455)
Less debt service (487,573)
Add depreciation expense 457,747
Total operating expenses $ 3,507,048
78
STATISTICAL SECTION
STATISTICAL SECTION
This part of the Village of North Palm Beach's comprehensive annual financial report presents detailed unaudited information as
a context for understanding what the information in the financial statement, note disclosures, and required supplementary
information says about the Village's overall financial health.
Contents Paqe
Financial Trends
These schedules contain trend information to help the reader understand how the Village's financial
performance and well -being have changed over time. These schedules include:
Net Assets by Component 79
Changes in Net Assets 80
Fund Balances, Governmental Funds 82
Changes in Fund Balances, Governmental Fund 83
Revenue Capacity
These schedules contain information to help the reader assess the Village's most significant local
revenue source, the property tax.
Net Assessed Value and Estimated Actual Value of Taxable Property 85
Property Tax Rates - Direct and Overlapping Governments 86
Principal Property Taxpayers 87
Property Tax Levies and Collections 88
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's
current levels of outstanding debt and the Village's ability to issue additional debt in the future.
Ratios of Outstanding Debt by Type 89
Direct and Overlapping Governmental Activities Debt 90
Pledged- Revenue Coverage 91
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the Village's financial activities take place.
Demographic and Economic Statistics 92
Principal Employers 93
Operating Information
These schedules contain service and infrastructure data to help understand how the information
in the Village's financial report relates to the services the Village provides and the activities it performs.
Full -Time Equivalent Village Government Employees by Function 94
Operating Indicators by Function /Program 95
Capital Asset Statistics by Function /Program 96
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
VILLAGE OF NORTH PALM BEACH
NET ASSETS BY COMPONENT
LAST TEN FISCAL PEARS
(ACCRUAL BASISOFACCOUNTING) Unaudited
Fiscal Year
Business -Type Activities:
Invested in capital assets, net of related debt 2,165,529 2,131,367 1,919,194 1,999,123 2,195,630
Unrestricted (65,937) (5,195) 270,374 415,865 151,005
Total business -type activities net assets 2,099,592 2,126,172 2,189,568 2,414,988 2,346,635
Primary government
Invested in capital assets, net of related debt
2003
2004
2005
2006
2007
Governmental Activities:
613,459
470,155
19,828
154,073
113,269
Invested in capital assets, net of related debt
$ 3,563,142
$ 3,762,961
$ 3,535,596
$ 8,118,773
$ 10,543,788
Restricted
613,459
470,155
19,828
154,073
113,269
Unrestricted
2,350,342
3,527,865
6,654,989
7,143,452
9,281,170
Total governmental activities net assets
6,526,943
7,760,981
10,210,413
15,416,298
19,938,227
Business -Type Activities:
Invested in capital assets, net of related debt 2,165,529 2,131,367 1,919,194 1,999,123 2,195,630
Unrestricted (65,937) (5,195) 270,374 415,865 151,005
Total business -type activities net assets 2,099,592 2,126,172 2,189,568 2,414,988 2,346,635
Primary government
Invested in capital assets, net of related debt
5,728,671
5,894,328
5,454,790
10,117,896
12,739,418
Restricted
613,459
470,155
19,828
154,073
113,269
Unrestricted
1284.405
3.521670
6.925363
7.559317
9,431175
Total primary government net assets
$ 8,626,535
$ 9,887,153
$ 12,399,981
$ 17,831,286
$ 22,284,862
Primary government
Invested in capital assets, net of related debt
2008
2009
2010
2011
Governmental Activities:
979,182
251,088
390,081
548,489
Invested in capital assets, net of related debt
$ 12,845,093
$ 16,643,241
$ 18,184,508
$ 17,237,355
Restricted
979,182
251,088
390,081
548,489
Unrestricted
9,836,912
11,016,626
10,568,594
11,775,621
Total governmental activities net assets
23,661,187
27,910,955
29,143,183
29,561,465
Business -Type Activities:
Invested in capital assets, net of related debt
2,492,524
2,364,814
2,295,125
2,200,927
Unrestricted
202,802
434,212
403,261
385,623
Total business -type activities net assets
2,695,326
2,799,026
2,698,386
2,586,550
Primary government
Invested in capital assets, net of related debt
15,337,617
19,008,055
20,479,633
19,438,282
Restricted
979,182
251,088
390,081
548,489
Unrestricted
10,039,714
11,450,838
10,971,855
12,161,244
Total primary government net assets
$ 26,356,513
$ 30,709,981
$ 31,841,569
$ 32,148,015
Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
79
Expenses
Governmental activities:
General government
Public safety
Public works
Community development and planning
Leisure services
Other government
Interest on long -term debt
Total governmental activities expenses
Business -type activities:
Country club
Total business -type activities
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services:
General government
Public safety
Public works
Community development and planning
Leisure services
Other government
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
VILLAGE OF NORTH PALM BEACH
CHANGES IN NET ASSETS
LAST TEN FISCAL YEARS
(ACCRUALBASISOFACCOUNTING) Unaudited
Fiscal Year
2003 2004 2005 2006 2007
$ 2,781,333
$ 3,174,460
$ 2,127,009
$ 1,784,528
$ 2,698,187
5,195,338
5,294,399
6,038,846
7,036,117
6,671,490
3,482,975
3,549,178
5,091,305
4,131,500
3,733.815
-
-
-
657,112
737,165
1,539,771
1,280,483
1,635,784
2,562,627
2,781,658
-
-
842,561
2,049
-
128,507
40,580
151,233
241,995
204,666
13,127,924
13,339,100
15,886.738
16,415,928
16, 826,981
2,676,883
2,567,690
2,607,712
2,124,927
3,570.683
2,676,883
2,567,690
2,607,712
2,124,927
3,570.683
$ 15.804.807
$ 15.906.790
$ 18.494.450
$ 18.540.855
$ 20.397,664
$ 342,936
$ 355,118
$ 285,386
$ 158,160
$ 122,455
258,723
273,391
329,081
388,671
345,731
727,016
895,291
1,326,820
140,923
217,975
-
-
-
1,175,252
938,188
174,589
147,773
78,475
528,983
496,679
82,134
89,362
1,392,729
998,573
170,389
102,560
462,394
1,454,526
1,687,958
1,760,935
3,412,491
3,852,956
3,745,943
Business -type activities:
Charges for services:
Country club
2,510,258
2,548,259
2,658,468
2,167,089
3,463,524
Operating grants and contributions
-
-
-
68,883
-
Capital grants and contributions
10,000
Total business -type activities program revenues
2,520,258
2,548,259
2,658,468
2,235,972
3,463,524
Total primary government program revenues
$ 4,208,216
$ 4.309.194
$ 6.070.959
$ 6.088.928
$ 7,209,467
Net
Governmental activities
$ (11.439.966)
$ (11,578,165)
$ (12,474,247)
$ (12,562,972)
$ (13,081,041)
Business -type activities
(156.625)
(19.431)
50.756
111.045
(107,159)
Total primary government net expense
$ (11.596.591)
$ (11.597.596)
$ (12.423.491)
$ (12.451.927)
$ (13,188,200)
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Propertv taxes
Local option gas taxes
Utility service taxes
Franchise taxes
Sales and use taxes
Unrestricted grants and contributions
Investment earnings
Miscellaneous
Contributions for Support Our Troops
Transfers
Total governmental activities
Business -type activities:
Investment income
Miscellaneous
Transfers
Total business -type activities
Total primary government
Change in net assets
Governmental activities
Business -type activities
Total primary government
$ 6,365,000 $ 8,451,783 $ 10,070,977 $ 10,881,501 $ 12,076.184
- - - 307,043 292,332
1,755,153 1,830,339 1,955,403 2,001,164 2,001,443
890,285 861,708 890,297 1,150,974 1,207,552
1,148,210 1,230, 803 1,277,124 1,415,917 1,339, 893
276,302 291,710 421,254 - -
75,023 53,600 196,699 477,420 650,022
54,875 92,260 111,927 53,264 8,836
- - - - 15,502
36,445 5,111
10,564,848 12,812,203 14,923,681 16,323,728 17,596,875
4,586 3,450 12,640 112,841 43,917
99,553 42,560 - - -
(36,445) (5,111)
104,139 46,010 12,640 76,396 38,806
$ 10.668.987 $ 12.858213 $ 14.936321 $ 16.400.124 $ 17.635.681
$ (875.118) $ 1,234,038 $ 2,449,434 $ 3,760,756 $ 4,515,834
(52,486) 26,579 63,396 187,441 (68,353)
$ 927,604) $ 1,260,617 $ 2,512,830 $ 3,948,197 $ 4,447,481
Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements and Management's Discussion andAnah'sis for-State and Local Governments.
80
2008 2009 2010 2011
$ 1,839,228 $ 2,239.511 $ 2,679,192 $ 2,403,681
7,154,578 7.095.043 7,304,233 7,232,748
3,996,711 4,083,441 4,594,738 4,733,913
860,448 826.149 806,536 811,177
3,244,045 3,174,623 2,830,292 2,749,065
120,549 26,702 4,384
17,215,559 17,445,469 18,219,375 17,930,584
3,268,562 3,308,535 3,398,206 3,691,528
3,268,562 7308,535 3,398,206 3.691,528
$ 20,484,121 $ 20,754,004 $ 21,617,581 $ 21.622112
$ 123,334 $ 122,569 $ 126,968 $ 130,886
383,325 378,591 465,263 420,653
288,994 394,082 411,722 400,662
888,015 699,130 734,718 861,394
595,558 912,862 1,063,748 1,043,459
W224 105,080 96,670 126,568
1,602,465 2,017,158 75,845 5,169
3,969,915 4,629,472 2,974,934 2,988,791
3,616,509 3,404,859 3,227,580 3,571,199
13,609 - - -
3,630,118 3,404,859 3,227,580 3,571,199
$ 7,600,033 $ 8,034,331 $ 6?02 514 $ 6.559.990
$ (13,245,644) $ (12,815,997) $ (15,244,441) $ (14,941,793)
361556 96324 (170,626) (120,329)
$ (12,884.088) $ (12.719.673) $ (15.41.067) $ (1.062.122)
$ 11,915,355 $ 11,917,359 $ 11,053,128 $ 10,441,869
278,649 267,557 266,077 259,794
2,018,071 2,239.002 2,261,375 2,198,148
1,212,562 1,256, 831 1,204,328 1,191,155
1,227,341 1,116,107 1,114,945 1,140, 744
194,652 (1,346) 280,217 97,743
55,719 263,459 213,425 30,622
16,959 6,796
49,296,
16,968,604 17765,765 16,393,495 15,360,075
36,431 7,376 14,686 8,493
- - 55,300
(49 296)
(11865) 7,376 69,986 8,493
$ 16,955,739 $ 17.073.141 $ 16.463.481 $ 1.368568
$ 3,722,960 $ 4,249,768 $ 1,149,054 $ 418,282
348,691 103,700 (100,640) (111,836)
$ 4,071,651 $ 4,353,468 $ 1,048,414 $ 306,446
81
VILLAGE OF NORTH PALM BEACH
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED-4 CCRUAL BASIS OF -4 CCO UNTING) Unaudited
General Fund
Reserved
Unreserved
Total general fund
All other Governmental Funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Total all other governmental funds
General Fund
Reserved
Unreserved
Total general fund
All other Governmental Funds
Reserved
Unreserved, reported in:
Special revenue funds
Capital projects funds
Total all other governmental funds
General Fund
Nonspendable
Restricted
Assigned
Unassigned
Total general fund
All other Governmental Funds
Restricted
Assigned
Special revenue funds
Capital projects funds
Total all other governmental funds
2003 2004 2005 2006 2007
$ 354,396 $ 218,882 $ 197,163 $ 308,836 $ 945,891
1,654,593 2,883,855 5,771,684 7,022,606 8,179,659
$ 2,008,989 $ 3,102,737 $ 5,968,847 $ 7,331,442 $ 9,125,550
$ 613,459 $ 470,155 $ 19,828 $ - $ -
- - - 400,000 224,937
- - - 397,233 673,232
$ 613,459 $ 470,155 $ 19,828 $ 797,233 $ 898,169
2008 2009
$ 775,339 $ 563,115
8,265,513 10,058,216
$ 9,040,852 $ 10,621,331
$ 239,979 $
594,399 (152,861)
713,373 825,778
$ 1,547,751 $ 672,917
2010 2011
$ 167,108
$ 276,924
338,457
548,489
104,245
186,594
10, 443, 099
10, 688, 660
$11,052,909 $ 11,700,667
47379 47,107
844.742 1,491,574
$ 891121 $ 1,538,681
Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements and Management's Discussion andAnalvsis for State and Local Governments.
The Village implemented GAS 54, Fzind Balance Reporting and Government Fzlnd Definitions, in 2011 and restated the 2010 amounts.
82
VILLAGE OF NORTH PALM BEACH
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
( MODIFIED -4CCRUALB-4SISOF-4CCOUNTING) Unaudited
Revenues:
Taxes
Licenses and Permits
Intergovernmental
Charges for services
Fines and forfeitures
Investment earnings
Miscellaneous
Total revenues
Expenditures:
General government
Public safety
Public works
Community development and planning
Leisure services - recreation
Other government
Capital outlay
Debt service
Principal payments
Interest paid on debt
Total expenditures
Excess of revenues over (under) expenditures
Other financing sources (uses)
Transfers in
Transfers out
Capital lease
Proceeds from debt issuance
Miscellaneous
Total other financing sources (uses)
Net change in fund balances
Debt service as a percentage of noncapital
expenditures
Fiscal Year
2003 2004 2005 2006 2007
$ 9,292,822
$ 11,439,823
$ 13,236,952
$ 14,340,682
$ 15,577,511
686,548
712,184
1,131,903
1,128,658
880,266
1,280,228
1,350,104
2,804,985
2,914,057
2,750,021
665,496
719,589
647,915
1,003,660
1,082,569
113,391
122,407
234,513
165,496
132,158
75,023
53,600
196,699
477,421
650,022
139,354
175,431
83,205
130,515
194,716
12,252,862
14,573,138
18,336,172
20,160,489
21,267,263
1,360,072
1,532,561
2,061,545
1,648,131
2,304,654
4,758,982
5,019,361
5,713,904
6,494,578
6,609,801
3,285,603
3,280,274
5,019,739
4,708,196
3,558,264
651,331
735,155
1,216,156
1,256,066
1,376,950
1,682,030
2,430,403
1,298,492
1,186,730
817,293
2,049
2,542,819
581,938
-
1,917,377
2,737,805
939,396
955,184
903,225
879,527
789,048
136,676
40,580
151,233
199,373
207,088
15, 538,196
13, 852,694
16,043,889
18,182,592
19,372,218
(3,285,334)
720,444
2,292,283
1,977,897
1,895,045
1,471,529 593,884
(1,471,529) (593,884)
403,000 230,000 123,500
(56)
402,944 230,000 123,500 - -
$ (2,882,390) $ 950,444 $ 2,415,783 $ 1,977,897 $ 1,895,045
9.0300 8.1100 7.0300 7.2900 6.4100
83
2008
2009
2010
2011
$ 15,424,638
$ 15,680,749
$ 14,784,906
$ 14,090,966
1,047,144
880,016
910,997
959,098
2,459,211
3,315,908
1,768,388
1,557,377
1,268,774
1,684,718
1,944,245
1,934,424
235,965
145,340
142,048
164,366
194,652
(1,345)
280,218
97,743
137,447
300,455
278,062
59,462
20,767,831
22,005,841
20,108,864
18,863,436
2,246,461
1,970,257
2,496,342
2,402,241
7,056,833
6,835,730
7,021,231
7,053,282
3,725,450
3,432,556
3,887,034
4,044,642
840,366
784,486
774,121
790,937
2,876,840
2,898,252
2,361,388
2,295,959
2,597,065
3,939,455
663,582
682,057
716,206
1,395,735
2,250,000
143,726
43,725
4,384
20,202,947
21,300,196
19,458,082
17,269,118
564,884
705,645
650,782
1,594,318
1,254,952
454,111
163,490
1,334,934
(1,254,952)
(454,111)
(163,490)
(1,334,934)
$ 705,645
$ 564,884
$ 650,782
$ 1,594,318
4.91'o
8.0700
11.9900
84
VILLAGE OF NORTH PALM BEACH
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Unaudited
Real Property
Fiscal Year
Ended Tax Role Residential Commercial Personal Total Net Market - Total Direct
Sept 30, Year Property Property Property Assessed Value Tax Rate
2002
2001
$ 823,286,154
$ 124,216,202
$ 42,791,419
$ 990,293,775
5.60
2003
2002
963,091,506
128,216,552
44,276,499
1,135,584,557
5.80
2004
2003
1,092,433,722
147,927,933
44,914,124
1,285,275,779
6.80
2005
2004
1,180,028,585
208,240,338
49,767,286
1,438,036,209
7.27
2006
2005
1,441,249,707
179,827,665
44,422,817
1,665,500,189
6.80
2007
2006
1,700,678,282
235,776,768
45,084,335
1,981,539,385
6.30
2008
2007
1,744,202,888
229,300,592
43,735,861
2,017,239,341
6.10
2009
2008
1,575,367,916
230,599,951
41,471,282
1,847,439,149
6.70
2010
2009
1,394,954,867
221,443,121
40,552,276
1,656,950,264
6.90
2011
2010
1,295,097,223
210,844,220
38,261,607
1,544,203,050
6.9723
Note: Assessed values are established by the Palm Beach Property Appraiser's office as of January 1, each year.
Assessments were increased to 100% of market value as of 1980.
Property in the Village is reassessed each year. Property is assessed at actual value, therefore the assessed
values are equal to actual value. Tax rates are per $1,000 of assessed value.
Source: Palm Beach County Property Appraiser
85
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Unaudited
Fiscal
Tax Roll
Village of
Year
Year
N. Palm Beach
2002
2001
5.600
2003
2002
5.800
2004
2003
6.800
2005
2004
7.270
2006
2005
6.800
2007
2006
6.300
2008
2007
6.100
2009
2008
6.698
2010
2009
6.900
2011
2010
6.9723
Overlapping Rates (1)
Palm Beach
County
Palm
Special
School
Beach
Districts
District
County
8.95
4.935
2.456
8.78
4.808
2.488
8.57
4.791
2.556
8.43
4.768
2.526
8.11
4.719
2.504
7.87
4.480
2.325
7.36
3.981
2.131
7.25
3.966
2.257
7.98
4.561
2.493
8.154
4.996
2.5549
Note: All millage rates are based on $1 for every $1,000 of assessed value.
Total
Direct and
Overlapping
Rates
Source: North Palm Beach: Notice of Ad Valorem Taxes and Non -Ad Valorem Assessments
21.941
21.876
22.717
22.994
22.133
20.975
19.572
20.171
21.934
22.6772
(1) Overlapping rates are those of local and county governments that apply to property owners within the Village
of North Palm Beach. Not all overlapping rates apply to all Village of North Palm Beach property owners
(i.e. The rates for special districts apply only to the proportion of the government's property owners whose
property is located within the geographic boundaries of the special district.)
86
Taxpayers
Florida Power & Liaht
Olen Residential Realty
Greater Fla Inv Co &
Sanctuary Bay Trust Corporation
Crystal Tree Property Owners, LLC
New Country Motor Cars
Old Port Cove Holding, Inc
CF02 Palm Beach III LP
Domani Development, LLC
Village Shoppers at US 1 LLC
Interevest Crystal Tree
North Palm Properties, LTD
Transcontinental Atrium, Inc.
Roschman, M. Elaine TR
WCI Communities, Inc
Pavilion Office Center
Old Port Cove Dev.
Total
VILLAGE OF NORTH PALM BEACH
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND 2002
Unaudited
Taxable
Assessed
Value
$ 14,537,154
14.500.000
13,376.802
11.600.000
11.000.000
10.984.628
8.475.000
7.000.000
6.884,529
6,210,237
$ 104,568350
2011
6.77 °'0
2002
Percentage
of Total
Village Net
Taxable Taxable
Assessed Assessed
Value Rank Value
17399,486 1
5.840.000 5
13.120.685 2
9.873.474 3
8.600.000 4
4.590.000 6
4.100.000 7
4.009.300 8
3.240.000 9
3,118,107 10
$ 73,891,052
Source: Palm Beach Country Appraiser
Note: Assessed values are established by the Palm Beach Property Appraiser's offices as of January I. each year.
87
1.76 °'0
0.59 °'0
1.32 °'0
1.00 °'0
0.87 °'0
0.460,0'
0.410o
0.400o
0.33 °'0
0.31 °'0
7.450,a'.
Percentage
of Total
Village Net
Taxable
Assessed
Rank
Value
1
0.94 °b
2
0.94 °b
3
0.870,0'
4
0.750,0'
5
0.71 °'0
6
0.71 °'0
7
0.55 °'0
8
0.450,0'
9
0.45° %0
10
0.40° %0
6.77 °'0
2002
Percentage
of Total
Village Net
Taxable Taxable
Assessed Assessed
Value Rank Value
17399,486 1
5.840.000 5
13.120.685 2
9.873.474 3
8.600.000 4
4.590.000 6
4.100.000 7
4.009.300 8
3.240.000 9
3,118,107 10
$ 73,891,052
Source: Palm Beach Country Appraiser
Note: Assessed values are established by the Palm Beach Property Appraiser's offices as of January I. each year.
87
1.76 °'0
0.59 °'0
1.32 °'0
1.00 °'0
0.87 °'0
0.460,0'
0.410o
0.400o
0.33 °'0
0.31 °'0
7.450,a'.
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN CALENDAR YEARS
Unaudited
Collected within
Source: Palm Beach Country Property Appraiser
* Information presented is preliminary due to county software upgrade problems.
88
the Fiscal Year
Total Collections
Fiscal Year
Total Taxes
of the Lew
Collections in
to Date
Ending
Tax Roll
Levied for
Percent
Subsequent
Percent
Sept 30,
Year
Fiscal Year
Amount
of Levy
Years
Amount
of Lew
2002
2001
5,562,239
5,357,206
96.31%
12,175
5,369,381
96.53%
2003
2002
6,597,909
6,359,478
96.39%
5,522
6,365,000
96.47%
2004
2003
8,825,061
8,441,383
95.65%
10,401
8,451,784
95.77%
2005
2004
10,463,873
10,059,478
96.14%
9,476
10,068,954
96.23%
2006
2005
11,329,648
10,690,869
94.36%
172,744
10,863,613
95.89%
2007
2006
12,624,307
11,802,457
93.49%
228,352
12,030,809
95.30%
2008
2007
12,360,135
11,546,732
93.42%
333,756
11,880.488
96.12%
2009
2008
12,401,519
11,530,384
92.98%
349,642
11,880,026
95.79%
2010
2009
11,564,281
10,683,829
92.39%
284,004
10,967,833
94.84%
2011
2010
10,793,319
10,097,289
93.55%
298,514
10,395,803
96.32%
Source: Palm Beach Country Property Appraiser
* Information presented is preliminary due to county software upgrade problems.
88
VILLAGE OF NORTH PALM BEACH
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Unaudited
* 2010 Median Household Income was used for calculation - 2011 Income was not available due to agency software upgrades
* * 2010 Population was used for calculation - 2011's Population was not available due to agency software upgrades
(1) See the Schedule of Demographic and Economic Statistics on page 92 for personal income and population data.
N/A Data not available.
89
Business -type
Governmental Activities
Activities
Fiscal Year
Percent of
Ended
Loans
Capital
Loans
Capital
Median Personal
Per
Sept 30,
Pavable
Leases
Pavable
Leases
Total
Income (1)
Capita 1
2002
7,334,853
736,967
651,058
8,722,878
N/A
715.11
2003
6,947,633
587,792
513,472
8,048,897
N/A
659.85
2004
6,376,387
433,855
411,573
7,221,815
N/A
592.05
2005
5,754,677
275,840
454,131
6,484,648
N/A
513.31
2006
4,941,765
209,224
5,185,978
10,336,967
17.20 °o
786.20
2007
4,280,842
81,100
5,026,895
9,388,837
14.67 °o
715.61
2008
3,605,639
40,097
4,662,833
192,892
8,501,461
12.92° o
692.64
2009
2,250,000
-
4,383,033
97,049
6,730,082
10.14° o
583.15
2010
-
4,090,284
235,176
4,325,460
6.74 °o
371.64
2011
3,844,928
173,084
4,018,012
*6.26°o
* *345.22
Note:
Details regarding the Village's outstanding debt may
be found in the notes to the
financial statements.
* 2010 Median Household Income was used for calculation - 2011 Income was not available due to agency software upgrades
* * 2010 Population was used for calculation - 2011's Population was not available due to agency software upgrades
(1) See the Schedule of Demographic and Economic Statistics on page 92 for personal income and population data.
N/A Data not available.
89
VILLAGE OF NORTH PALM BEACH
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2011
Unaudited
Debt repaid with property taxes:
Palm Beach County
Palm Beach County School Board
Other debt:
Palm Beach County
Palm Beach County School Board
Subtotal, overlapping debt
Village of North Palm Beach Direct Debt
Total direct and overlapping debt
Sources: Palm Beach County Tax Appraiser's Office
Palm Beach County School Board
Palm Beach County Clerk & Comptroller
13,979,245
100% -
$ 13,979,245
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries
of the Village. This schedule estimates the portion of the outstanding debt of those overlapping
governments that is borne by the residents and businesses of the Village of North Palm Beach. This
process recognizes that, when considering the Village's ability to issue and repay long -term debt, the
entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt,
of each overlapping government.
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using
taxable assessed property values. Value that is within the Village's boundaries and dividing it by the
County's and School Board's total taxable assessed value. This approach was also used for the other
debt.
90
Percentage
Amount
Net
Applicable to
Applicable to
Debt
the Village of
the Village of
Outstanding
North Palm Beach (1)
North Palm Beach
$ 226,545,000
1.22%
$ 2,763,849
1.15%
884,215,000
1.22%
10,787,423
37,215,000
1.15%
427,973
13,979,245
100% -
$ 13,979,245
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries
of the Village. This schedule estimates the portion of the outstanding debt of those overlapping
governments that is borne by the residents and businesses of the Village of North Palm Beach. This
process recognizes that, when considering the Village's ability to issue and repay long -term debt, the
entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt,
of each overlapping government.
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using
taxable assessed property values. Value that is within the Village's boundaries and dividing it by the
County's and School Board's total taxable assessed value. This approach was also used for the other
debt.
90
Fiscal
Year
(4)
2006
2007
2008
2009
2010
2011
VILLAGE OF NORTH PALM BEACH
Pledged - Revenue Coverage
Country Club Bonds
Last Ten Fiscal Years
Unaudited
Gross Operating
Revenues (1) Expenses (2) Net Revenue
Required
Debt
Service
Coverage (3)
$ 2,348,813
$ 1,910,640
$ 438,173
$ 106,936
4.10
3,507,441
2,991,621
515,820
392,505
1.31
3,652,940
2,558,591
1,094,349
394,900
2.77
3,412,235
2,587,171
825,064
394,900
2.09
3,242,266
2,728,470
513,796
394,900
1.30
3,579,692
3,049,301
530,391
394,900
1.34
(1) Gross revenue includes interest revenue.
(2) Operating expenses excludes depreciation.
(3) Coverage should be not less than 1.00.
(4) 2006 was the first year the debt was outstanding, and was not a complete year.
91
(4)
Calendar
Year
2002
2003
2004
2005
2006 (estimate)
2007 (estimate)
2008 (estimate)
2009 (estimate)
2010 (estimate)
2011 (estimate)
Sources:
Note
VILLAGE OF NORTH PALM BEACH
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Unaudited
Business Development Board
US Census Bureau
* 2011 Demographic data is not available due to Agency Software upgrade
that is not complete
(1) All information available at the current time is presented.
(2) North Palm Beach is not large enough to track unemployment rates.
Palm Beach Count-,,, rates are presented.
92
Per
Palm Beach
Median
Capita
Count-,,,
Personal
Personal
Unemployment
Population (1)
Income (1)
Income (1)
Rate (2)
12,198
-
-
6.1
12,198
-
-
5.6
12,198
-
-
5.0
12,633
-
-
4.0
13,148
60,101
46,726
3.3
13,120
63,984
42,224
4.1
12,274
65,815
45,563
6.3
11,541
66,401
49,350
10.8
11,639
64,156
49,130
12.0
*
*
*
10.7
Business Development Board
US Census Bureau
* 2011 Demographic data is not available due to Agency Software upgrade
that is not complete
(1) All information available at the current time is presented.
(2) North Palm Beach is not large enough to track unemployment rates.
Palm Beach Count-,,, rates are presented.
92
Emplover
Palm Beach Country School Board
Palm Beach County Government
State Government
Federal Government
Tenet Health Care Corp (2)
Florida Power & Light Company
G4S Headquarters
HCA - Hospital Corp. of America (1)
Florida Alantic University
Bethesda Memorial Hospital
Total
VILLAGE OF NORTH PALM BEACH
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Unaudited
2011
68,819 11.13%
Palm Beach Country School Board
Palm Beach County Government
State Government
Federal Government
HCA - Hospital Corp. of America (1)
Intracoastal Health Systems, Inc (2)
U.S. Sugar Corporation
Florida Power & Light Company
Boca Raton Resort & Club (Hotel)
Florida Crystals
Total
Source: Business Development Board of Palm Beach County
Employer: Palm Beach County
Information is not available for the Village of North Palm Beach.
** Percentage of total employment is calculated using Palm Beach County's
available labor force in each of the respective years presented.
Notes:
(1) Formerly Columbia Palm Beach Health Care Systems, Inc
(2) Intracoastal Health Systems, Inc - now part of Tenet Healthcare Corp
93
2002
Percentage
of Total
Employees
Employment
21,495
3.47%
11,381
1.84%
9,200
1.49° u
6,200
1.00° u
6,100
0.99%
3,632
0.59%
3,000
0.48%
2,714
0.44%
2,706
0.44%
2,391
0.39%
68,819 11.13%
Palm Beach Country School Board
Palm Beach County Government
State Government
Federal Government
HCA - Hospital Corp. of America (1)
Intracoastal Health Systems, Inc (2)
U.S. Sugar Corporation
Florida Power & Light Company
Boca Raton Resort & Club (Hotel)
Florida Crystals
Total
Source: Business Development Board of Palm Beach County
Employer: Palm Beach County
Information is not available for the Village of North Palm Beach.
** Percentage of total employment is calculated using Palm Beach County's
available labor force in each of the respective years presented.
Notes:
(1) Formerly Columbia Palm Beach Health Care Systems, Inc
(2) Intracoastal Health Systems, Inc - now part of Tenet Healthcare Corp
93
2002
Percentage
of Total
Employees
Employment
18,677
3.21%
9,000
1.55%
8,705
1.50%
5,660
097%
4,000
0.69%
3,040
0.52%
3,000
0.52%
2,800
0.48%
2,380
0.41%
2,000
0.34%
59,262
10.19%
VILLAGE OF NORTH PALM BEACH
Full -Time Equivalent
Village Government
Employees by Function
LAST TEN FISCAL YEARS ( *)
Unaudited
2002 2003 2004
2005
2006
2007
2008
2009
2010
2011
Number of Employees:
General Government
Village Manager - Full -Time
1 1 1
1
1
1
1
1
1
1
Assistant Village Manager - Full -Time
1 1 1
1
0
0
0
0
0
0
Systems Specialist
Full -Time
1 1 1
1
2
2
2
2
2
2
Part -Time
0 0 0
0
0
0
0
1
1
1
Executive Secretarv_ - Full -Time
1 1 1
1
1
1
1
1
1
1
Human Resources
2
2
2
2
2
2
Village Clerk- Full -Time
2 3 3
_
_
_
3
3
3
3
Finance
Full -time
5 5 5
5
5
5
5
5
5
5
Part -Time
0 0 0
0
0
0
1
1
1
1
Public Works
Full -time
61 61 61
62
54
47
48
38
37
37
Part -Time
4 8 8
6
3
0
0
0
0
0
Public Safety
Full -time
63 66 66
61
66
68
68
67
67
67
Part -Time
12 14 14
15
14
13
12
11
12
12
Community Development and Planning
Full -time
0 0 0
0
0
9
10
9
9
9
Part -Time
0 0 0
0
0
1
1
2
2
2
Leisure Services
Library
Full -time
9 9 9
8
7
7
7
6
6
6
Part -Time
8 7 7
7
8
8
8
10
10
10
Recreation
Full -time
5 6 6
5
15
15
17
9
7
6
Part -Time
14 14 14
15
31
39
42
42
42
43
Other Government - Countrv_ Club
Full -time
24 25 25
24
18
19
18
5
5
7
Part -Time
36 27 27
27
24
25
22
21
21
64
Total Number of Employees Budgeted FY Ending
247 249 249
242
254
265
268
236
234
279
* Variance exists due to the employment of seasonal and
part -time employees.
Source: Village of North Palm Beach Budget Report
94
VILLAGE OF NORTH PALM BEACH
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Unaudited
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
FUNCTION/PROGRAM
GENERAL GOVERNMENT
Number of Parcels - - - - - 7,411 7,422 7,472 7,466 7,466
PUBLIC WORKS
Street Maintenance (No. of lane miles maintained)
31.155
31.155
31.155
31.155
31.155
31
31
31
31
31
Sanitation (Tons of Refuse Collected)
11996
13.136
18,842
14,037
13,203
12,085
11,974
10,667
10,165
9,962
No. of collection units for solid waste (residential)
7.328
7.434
7,470
7,519
7,558
7,152
7,163
7,214
7,070
7,071
Number of vehicles maintained
95
95
95
95
95
104
104
110
110
98
Number of repair overlays completed (iniles)
2.840
1 787
5.587
2.462
2.935
2
3
2.5
2.71
-
PUBLIC SAFETY
Number of arrests by police officers
246
320
315
331
410
545
549
448
402
260
Number of traffic citations issued
3,936
2,564
3,110
5,743
4,272
4,269
5,520
6,305
4,951
2,564
EMS average response times (minutes)
3.33
2.94
4.42
3.98
4.69
4.73
5.17
5.01
5.12
5.19
Number of EMS calls
853
922
1,066
965
1,056
1,034
1,114
1,214
1,146
1,179
COMMUNITY DEVELOPMENT & PLANNING
Building Department- Number ofPennits
205
224
201
201
(1)
1,875
1,619
1,548
1,744
1,616
Number of code enforcement violations
-
1,767
1,617
729
613
391
575
Number of code violations brought to board/magistrate
(Calendar Yr End)
101
120
145
165
144
126
115
73
38
72
RECREATION
Number of community events presented
13
14
15
22
21
24
23
28
28
38
Number of registrants in athletic programs
2,185
1,750
1,575
1,400
1,520
1,600
1,400
1,125
1,005
1,260
LIBRARY
Library - Number of Volumes
47,339
47,960
47,531
54,074
47,371
42,372
33,122
35,681
39,277
40,658
OTHER GOVERNMENT
Country Club
Number of Golf Members
Number of Tennis Members
(1) An accurate number of building permits issued for 2006 is not available - computer systems crash.
Source: Village of North Palm Beach
U.S. Census Bureau
95
365 579 389 297 354 298
136 171 171 180 184 173
VILLAGE OF NORTH PALM BEACH
CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAAI
LAST TEN FISCAL YEARS
Unaudited
Function Program:
General Government
No. of General Government Buildings
11
11
11
11
11
11
11
23
23
23
Public Works
Square illiles
5.18
5.18
5.18
5.18
5.18
5.18
5.18
5.18
5.18
5.18
1\files of Streets
36.00
36.00
36.00
36.00
36.00
36.00
36.00
36.00
36.00
36.00
Number of Street Lights
425
425
425
425
425
425
513
513
513
513
Public Safety
Fire:
Number of Stations
1
1
1
1
1
1
1
1
1
1
Number of Fireman & Officers
8
8
8
8
0
0
0
0
0
0
Number of Firemen Paramedics EXITS
0
0
0
0
23
23
23
23
23
23
Police EMS Protection:
Number of Stations
2
1
1
1
1
1
1
1
1
1
Number of Policemen & Officers
33
35
35
35
33
32
32
31
31
31
EXIS Protection
13
13
13
13
0
0
0
0
0
0
Leisure Sereices
Recreation
Number of Parks
4
4
4
4
4
4
4
4
4
4
Public Tennis Courts
4
4
4
4
2
2
2
2
2
2
Swimming Pool
1
1
1
1
1
1
1
1
1
1
Number of Marinas
1
1
1
1
1
1
1
1
1
1
Library
Number of Libraries
1
1
1
1
1
1
1
1
1
1
Number of Volumes
47,339
47,960
47,531
54,074
47,371
42,372
33,122
35,681
39,277
40,658
Other Government
Country Club
Golf Course
1
1
1
1
1
1
1
1
1
1
Driving Range
1
1
1
1
1
1
1
1
1
1
Tennis Courts
10
10
10
10
10
10
10
10
10
10
Restaurant iSanckBar
-
-
-
1
1
Source: Village of North Palm Beach
96
OTHER REPORTS
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NOWLEN, HOU& MINER, P.A.
WESTPALM BEACH OR WE
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REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GO VERNMENT A UDITING STANDARDS
The Honorable Mayor and Members of the Village Council
North Palm Beach, Florida
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TELEPHONE (591 ) 9911-51312
FAX {591 j 996 -9248
We have audited the 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, as of and for the year ended September 30, 2011, which collectively
comprise the Village of North Palm Beach, Florida's basic financial statements and have issued
our report thereon dated March 13, 2012. We conducted our audit in accordance with U.S.
generally accepted auditing standards 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 as a basis for designing our auditing procedures for the
purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the Village of North Palm Beach, Florida's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the Village of North Palm Beach, Florida's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis.
AMERICAN INST FUTE CIF CERTIFIED PUBUC#000UNTANT5 • FLORIDA INS 17UTE OF COMFIM PUBMAC013UN7AN7S • CPAMERYCA INTERNATICINAL
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies, or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether 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 grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
We noted certain matters that we reported to the management of the Village of North Palm Beach,
Florida in the attached Management Letter dated March 13, 2012.
This report is intended solely for the information and use of management, the audit committee,
Village Council, and federal and state awarding agencies and pass - through entities and is not
intended to be and should not be used by anyone other than these specified parties.
March 13, 2012
West Palm Beach, Florida
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MANAGEMENT LETTER pPiWMD7.b*X- -cJR,rpo
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The Honorable Mayor and Members of the Village Council = 8,9, vne STRFFI
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Village of North Palm Beach, Florida AFI L F GLADF, FLC)gPDA 33,L3Dg33[
TELEPHONE (M i) f�9L�S61 s
FAX (56 1) 9BM24L
We have audited the financial statements of the Village of North Palm Beach, Florida, as of and for
the year ended September 30, 2011, and have issued our report thereon dated March 13, 2012.
We conducted our audit in accordance with U.S. generally accepted auditing standards, 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 Independent Auditor's Report on
Internal Control over Financial Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with Government Auditing Standards.
Disclosures in that report, which is dated March 13, 2012, should be considered in conjunction
with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General, which governs the conduct of local governmental entity audits performed in the State of
Florida. This letter includes the following information, which is not included in the aforementioned
auditor's report.
PRIOR YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter whether
or not recommendations made in the preceding annual financial audit report have been
followed. All prior year recommendations have been implemented.
CURRENT YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter any
recommendations to improve financial management. In connection with our audit for the
fiscal year ended September 30, 2011, we did not have any such recommendations.
Amr R IC.Aw IN C'T[TL 1TF m: r= RTIF im PL 1RI Jr. AC:[':[- 11NTANT14 - FI €SR I n A INCTITL 1TF nF n PL 1RI Jr. Ar..d:f411%7ANTF - CPAUPR WA IN7FRPUAT1nPdA1
Investment ofPublic Funds
Rules of the Auditor General require our audit to include a review of the Village's
compliance with Section 218.415, Florida Statutes, regarding the investment of public
funds. In connection with our audit for the fiscal year ended September 30, 2011, the
results of our procedures did not disclose any instances of noncompliance with Section
218.415, Florida Statutes.
Violations of Contracts and Grant Provisions or Abuse
Rules of the Auditor General require that we address violations of provisions of contracts
or grant agreements or abuse that have occurred, or are likely to have occurred, that have an
effect on the financial statements that is less than material but more than inconsequential.
In connection with our audit for the fiscal year ended September 30, 2011, we did not have
any such findings.
Matters Inconsequential to the Financial Statements
Rules of the Auditor General provide that the auditor may, based on professional judgment,
report the following matters that have an inconsequential effect on the financial statements,
considering both quantitative and qualitative factors: (1) violations provisions of contracts
or grant agreements, fraud, illegal acts, or abuse; and (2) deficiencies in internal control that
are not significant deficiencies. In connection with our audit for the fiscal year ended
September 30, 2011, we did not have any such findings.
Oversight Unit and Component Units
The Village of North Palm Beach, Florida, is a municipal corporation incorporated in 1956
pursuant to Chapter 3 148 1, Laws of Florida, Extraordinary Session 1956. Based upon the
application of criteria defined in publications cited in Chapter 10.553, Rules of the Auditor
General, the Village has determined that there are no component units related to the Village.
Consideration of Financial Emef ency Criteria
Rules of the Auditor General require a statement be included as to whether or not the local
government entity has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific condition(s) met. In connection with our
audit, the results of our procedures did not disclose that the Village of North Palm Beach,
Florida has met any of the conditions described in Section 218.503(1) during the fiscal year
ended September 30, 2011.
Annual Financial Report
Rules of the Auditor General require that we determine whether the annual financial report
for the Village of North Palm Beach, Florida for the fiscal year ended September 30, 2011,
filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a),
Florida Statutes, is in agreement with the annual financial audit report for the fiscal year
100
ended September 30, 2011. In connection with our audit, we noted that the two reports
were in substantial agreement.
Financial Condition Assessment Procedures
Pursuant to Rules of the Auditor General, we applied financial condition assessment
procedures as of September 30, 2011. It is management's responsibility to monitor the
Village's financial condition, and our financial condition assessment was based in part on
representations made by management and the review of financial information provide by
management. The results of our procedures did not disclose any matters that are required
to be reported.
Excess oxpenditures Over Appropriations
There were no departments that had expenditures in excess of appropriations.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information and use of management,
the audit committee, Village Council, federal and state awarding agencies and pass - through
entities, and the Florida Auditor General, and is not intended to be and should not be used by
anyone other than these specified parties.
March 13, 2012
West Palm Beach, Florida
% 4 OWMX, Pa,
101