2004 CAFR_restated 07-15-2005JAL s 4
The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2004
The Village of
North Palm Beach, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2004
Prepared by:
Finance Department
Shaukat Khan
Director of Finance
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letterof Transmittal .................................................................................... ............................... i
List of Principal Village Officials ................................................................ ............................... vi
Organization Chart
................................................................................... ............................... vii
GFOA Certificate of Achievement for Excellence in Financial Reporting .. ............................... viii
FINANCIAL SECTION
Independent Auditors' Report ....................................................................... ..............................1
Management's Discussion and Analysis ...................................................... ..............................3
BASIC FINANCIAL STATEMENTS:
Government -wide Financial Statements:
Statement of Net Assets ........................................................................ .............................11
Statementof Activities ........................................................................... .............................12
Fund Financial Statements:
Balance Sheet - Governmental Funds ................................................... .............................13
Reconciliation of Governmental Funds Balance Sheet
to the Statement of Net Assets ......................................................... .............................14
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds ............................................. .............................15
Reconciliation of the Statement of Revenues, Expenditures, and changes in
Fund Balances of the Governmental Funds to the Statement of Activities ....................16
Statement of Net Assets - Proprietary Fund .......................................... .............................17
Statement of Revenues, Expenses, and Changes in Net
Assets - Proprietary Fund ................................................................ .............................18
Statement of Cash Flows - Proprietary Fund ......................................... .............................19
Statement of Fiduciary Net Assets - Fiduciary Funds ............................ .............................20
Statement of Changes in Fiduciary Net Assets - Employee Retirement Funds ...................21
Notes to Basic Financial Statements ........................................................... .............................22
REQUIRED SUPPLEMENTARY INFORMATION:
Budgetary Comparison Schedule - General Fund ................................. .............................50
Schedule of Funding Progress - General Employees Retirement Fund . .............................55
Schedule of Employer and State Contributions ..................................... .............................56
Notes to Required Supplementary Information ...................................... .............................57
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
TABLE OF CONTENTS
(Continued)
OTHER SUPPLEMENTARY INFORMATION:
Combining Statements:
Combining Statement of Net Assets - Fiduciary Funds ........................... .............................59
Combining Statement of Changes in Net Assets - Employee Retirement Funds ..................60
Combining Statement of Changes in Fiduciary Assets and Liabilities - Agency Funds .........61
STATISTICAL SECTION
Government -wide Information:
Table I Government -wide Expenses by Function ............................. .............................62
Table II Government -wide Revenues ................................................ .............................63
Fund Information:
Table III
General Governmental Expenditures by Function ................ .............................64
Table IV
General Governmental Revenues by Source ....................... .............................65
Table V
Property Tax Levies and Collections .................................... .............................66
Table VI
Assessed Value of Taxable Property ................................... .............................67
Table VII
Property Tax Rates - Direct and Overlapping Governments . .............................68
Table VIII
Computation of Direct and Overlapping Bonded Debt - General
ObligationBonds .......................................................... .............................69
Table IX
Computation of Legal Debt Margin ....................................... .............................70
Table X
Debt Related Statistics - Schedule of Revenue Bond Coverage -
General and Enterprise Funds ...................................... .............................71
Table XI
Property Value, Construction, and Bank Deposits ................ .............................72
Table X1
Principal Taxpayers .............................................................. .............................73
Table XIII
Miscellaneous Statistics ........................................................ .............................74
REQUIRED REPORTS
Independent Auditors' Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards ...........................75
Management Letter in Accordance with the Rules of the Auditor General of the
Stateof Florida ...................................................................................... .............................77
INTRODUCTORY SECTION
March 4, 2005
The Honorable Mayor and Members of the Village Council
Village of North Palm Beach
North Palm Beach, Florida
The Finance Department and Village Manager's Office are pleased to submit the
Comprehensive Annual Financial Report for the Village of North Palm Beach, Florida for the
fiscal year ended September 30, 2004.
This report is published to provide the Village Council, Village staff, our citizens, our lenders,
and other interested parties with detailed information concerning the financial condition and
activities of the Village government. Responsibility for both the accuracy of the presented data
and the completeness and fairness of the presentation, including all disclosures, rests with the
Village.
To the best of our knowledge and belief, the enclosed data is accurate in all material respects,
and is organized in a manner designed to fairly present the financial position and results of
operations of the Village as measured by the financial activity of its various funds. We also
believe that all disclosures necessary to enable the reader to gain the maximum understanding
of the Village's financial affairs have been included.
THE REPORT
This report is presented in three sections: Introductory, Financial and Statistical. The
introductory section includes this transmittal letter, a listing of the Village Officials, and an
organizational chart of the Village. The financial section includes Management's Discussion and
Analysis (MD &A), basic financial statements, required supplementary information, and
combining and individual fund statements and schedules, as well as the independent auditor's
report on the basic financial statements. The MD &A is a narrative introduction, overview, and
analysis to accompany the basic financial statements. This letter of transmittal is designed to
complement the MD &A and should be read in conjunction with it. The Village of North Palm
Beach's MD &A can be found immediately following the report of the independent auditors. The
statistical section includes financial and demographic information, usually presented on a multi-
year basis; that is relevant to a financial statement reader.
The financial section described above is prepared in accordance with generally accepted
accounting principles for governments as prescribed by the Governmental Accounting
Standards Board (GASB) and other professional associations, as applicable.
VILLAGE PROFILE
The Village
The Village of North Palm Beach is primarily a residential community, having been incorporated
as a political subdivision of the State of Florida in 1956. The registered population of the Village
is approximately 12,000, which increases to approximately 18,000 during the winter months by
residents who list their northern homes as their official place of residence. Residents are
generally in the middle to upper income brackets.
Located in the northeastern quadrant of Palm Beach County, Florida, the Village has an unusual
amount of waterfront property created by a number of lakes, canals, and the Atlantic Ocean.
The governing body of the Village consists of a five member Village Council, each of whom is
elected for two -year overlapping terms. Day to day affairs of the Village are under the leadership
of a Village Manager who is appointed by the Council.
FINANCIAL DATA
Financial Reporting System and Budgetary Controls
The Village's financial records for its general governmental operations are maintained on the
modified accrual basis, which means that revenues are recorded when available and
measurable, and expenditures are reported when goods and services are received and the
related liabilities are incurred.
The financial records for its Enterprise Fund (i.e., the Country Club operation) are maintained on
the full accrual basis of accounting similar to that followed by commercial enterprises.
In developing and evaluating the Village's financial and accounting system, consideration is
given to the adequacy of internal accounting controls. Internal accounting controls are designed
to provide reasonable, but not absolute, assurance regarding: (a) the safeguarding of assets
against loss from unauthorized use or disposition; and (b) the reliability of financial records for
preparing financial statements and maintaining accountability for assets. The concept of
reasonable assurance recognizes that: (a) the cost of a control should not exceed the benefits
likely to be derived; and (b) the evaluation of costs and benefits requires estimates and
judgments by management.
All internal control evaluations occur with the above framework. We believe that the Village's
internal accounting controls adequately safeguard assets and provide reasonable assurance of
proper recording of financial transactions.
Budgetary control is maintained at the subfunction level by the encumbrance of estimated
purchase amounts prior to the release of purchase orders to vendors. Purchase orders, which
result in an overrun of subfunction balances, are not released until additional appropriations are
made available. Open encumbrances are reported as reservations of fund balance at
September 30, 2004.
ECONOMIC OUTLOOK
Property Values and Personnel Costs
The Village obtains a major portion of its annual general fund financial resources (58 %) from ad
valorem property taxes. Gross assessed property values have increased substantially over the
past three years (44% between 2001 and 2004) rising $160 million dollars, or 14% in 2004
alone, to a total of $1,297,803,114. The Village anticipates a substantial reduction in planned
new growth since most vacant property within municipal limits has been developed. There
remains only a single substantial plan for large development on remaining land along the
Intracoastal Waterway. The Village, therefore, anticipates much more moderate increases in
annual property values resulting from the sale, transfer and redevelopment of existing
properties. It is estimated that future annual property value increases will run in the 4 % -6%
range due largely to the waterways of the Village's eastern location along Lake Worth and the
Atlantic Ocean.
At the same time that property values plateau, the Village is facing significant increases in its
annual employee personnel costs. Over the past few years, several retirement plan changes
and pay plan studies were implemented causing significant and continuing annual increases in
annual Village pension contributions (rising from 9% in 1999 to 18% in 2004 ... with a further
increase to 23% in 2005). The municipality has also experienced significant increases in annual
health insurance costs that have been paid for entirely by the Village with no change in
employee contributions (costs increased from $752,000 in 2001 to $1,273,000 in 2004). The
Village will need to address the legacy of these significant economic forces during the coming
years.
Annexation
The Village intends to actively pursue annexation of surrounding unincorporated areas that
compliment the services and values of our existing community. The focus on annexations will
be toward providing exemplary municipal services that are revenue neutral to the annexed
areas as well as to the Village. The annexation of unincorporated areas north of the Village
could be coupled with a substantial reduction in Village tax rates without compromising high
levels of existing municipal service. The Village will be actively pursuing annexation during the
next few years.
Hurricane Cleanup Reimbursement - FEMA
The Village estimates it has incurred between $1.2 million and $1.5 million dollars in hurricane
recovery costs. After submitting claims for these costs to three different FEMA representatives
over a six -month period, virtually no reimbursements have been received from FEMA.
Continued federal delays or denials of these recovery costs could pose serious economic
hardships to the Village in coming months and years.
INITIATIVE AND FUTURE PROJECTS
Country Club
The last golf course irrigation and play area redevelopment was accomplished in 1989. The
Village is currently developing conceptual master plans for re- design and redevelopment of the
North Palm Beach golf course (irrigation, tees, greens and fairways). The Village administration
has recommended developing master plans design alternatives for the entire Country Club (golf,
tennis, pool, meeting rooms and restaurant). Business plans would be matched to these master
plans to measure the Country Club's debt capacity and related revenue improvements that
could allow repayment of needed capital improvement loans.
Northlake Boulevard Corridor Task Force
The Northlake Boulevard Task Force is in the process of bidding the construction of Phase I for
the Streetscape. Overlay zoning code is already accomplished. The commitment of the Village
in this project is noteworthy because our neighboring community, Lake Park, has withdrawn
from the Task Force.
Public Safety North Substation Annex
The Village is actively pursuing acquisition of a permanent site for construction of a public safety
sub - station at the northern end of town, north of the Intracoastal draw bridge. Funding for this
project has been diminished by the substantial cost of 2004 hurricane damages and cleanup.
The Village is seeking funding assistance from the federal government to allow the construction
of this new public safety sub - station to move forward within the next 1 -2 years.
Prosperity Farms Road Task Force
The Village created a Prosperity Farms Road Task Force comprised of citizens that reside in
the area. The Task Force assisted in developing plans to help resolve traffic problems affecting
residents that live along Prosperity Farms Road. An engineering firm was hired to develop a
concept plan. From that concept plan the Council selected an engineering firm to do the
construction and design phase and implement the conceptual plan. Palm Beach County is
providing the funding for the construction and design phase with an anticipated cost of
approximately $1,000,000. Once the construction design and project bids have been received
in March 2005, the Task Force will make recommendations to the Village Council whether to
proceed with the project (subject to available funding), implement parts of the project, seek
additional funding for the entire project or halt the project.
Canal Dredging
One of the noted development signatures of the Village is its intricate network of canals and
waterways. The canals and waterways enhance the property values of the Village and give it
character as a boating community. The canals were built in the 1950's as part of the original
development of North Palm Beach. However, the canals have not been maintained by the
Village in that length of time, and, as a result, have silted up and created navigational problems
for boaters. In order to alleviate this problem, the Village has been going through an extensive
dredging program to upgrade the quality of the canals and the North Palm Beach waterways.
iv
The dredging program has been described as a four -phase program with the first and second
phase being completed. Phases three and four are anticipated to be completed by June 2005.
OTHER INFORMATION
Independent Audit
Article 11, Section 2.18 of the Village Charter requires an annual audit of the books of account,
financial records, and transactions of all administrative departments of the Village by
independent certified public accountants selected by the Village Council. This requirement has
been complied with, and the independent auditor's report has been included in this report.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement of Excellence in Financial Reporting to the Village of
North Palm Beach for its Comprehensive Annual Financial Report for the fiscal year ended
September 30, 2003. The Certificate of Achievement is a prestigious national award,
recognizing conformance with the highest standards for preparation of state and local
government financial reports.
Mark Bates
Village Manager
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
PRINCIPAL VILLAGE OFFICIALS
SEPTEMBER 30, 2004
Title
Mayor
Vice Mayor
President Pro Tern
Council Member
Council Member
Village Manager
Director of Finance
Village Clerk
Name
Donald G. Noel
Edward E. Eissey
Charles R. O'Meilia
Rob Rennebaum
David B. Morris
Mark Bates
Shaukat Khan
Kathleen Kelly
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Village of North Palm Beach,
Florida
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2003
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
Executive Director
viii
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and Members of the Village Council
The Village of North Palm Beach, Florida
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
Village of North Palm Beach, Florida, (the Village) as of and for the year ended September 30,
2004, which collectively comprise the Village's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the Village of North Palm Beach's
management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the Village of North Palm Beach,
Florida, as of September 30, 2004, and the respective changes in financial position and cash
flows, where applicable, thereof for the year then ended in conformity with accounting principles
generally accepted in the United States.
As more fully described in Note 11 to the financial statements, subsequent to the original
issuance of the Village's financial statements for the year ended September 30, 2004 and our
report thereon dated March 4, 2005, we became aware that those financial statements did not
reflect certain accrued liabilities for employee and beneficiary medical and dental claims unpaid
as of September 30, 2004.
In accordance with Government Auditing Standards, we have also issued a report dated March
4, 2005, on our consideration of the Village of North Palm Beach's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts
grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing
and not to provide an opinion on the internal control 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 considered in assessing the results of our audit.
Management's Discussion and Analysis, pages 3 through 10, and the budgetary comparison
schedules and schedules of funding progress and employer contributions, pages 50 through 56,
are not required parts of the basic financial statements but are supplementary information
required by the Governmental Accounting Standards Board. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not
audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Village of North Palm Beach's basic financial statements. The
introductory section, other supplementary information, and the statistical section are presented
for purposes of additional analysis and are not required parts of the basic financial statements.
The information included in the introductory and statistical sections has not been subjected to
auditing procedures applied in the audit of the basic financial statements and, accordingly, we
express no opinion on them. The other supplementary information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, is
presented fairly, in all material respects, in relation to the basic financial statements taken as a
whole.
West Palm Beach, Florida
March 4, 2005, except as to the fourth
paragraph above and Note 11, which
are as of May 12, 2005
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Village of North Palm Beach, Florida (Village) Administration offers readers of the Village's
financial statements this narrative overview and analysis of the financial activities of the Village
for the fiscal year ended September 30, 2004. Please read it in conjunction with the
accompanying transmittal letter beginning on page i, and the accompanying basic financial
statements.
FINANCIAL HIGHLIGHTS
Total net assets
Unrestricted net assets available for future use
Governmental net assets
Total revenues from all sources
Governmental revenues
Total cost of all Village programs
Governmental revenues over (under) expenses
General fund revenues over (under) expenses
General fund unreserved fund balance
As a percent of general fund expenditures
Country Club revenues over (under) expenses
Decrease in total long -term debt for the Village
2004
2003
(Decrease)
Page #
$9.9 million
$8.6 million
$1.3 million
11
$3.1 million
$2.0 million
$1.1 million
11
$7.8 million
$6.5 million
$1.3 million
11
$17.1 million
$14.7 million
$2.6 million
12
$14.6 million
$12.2 million
$2.4 million
12
$15.9 million
$15.8 million
$0.1 million
12
$1.0 million
($2.8 million)
$3.8 million
15
$1.1 million
($1.4 million)
$2.5 million
15
$2.9 million
$1.7 million
$1.2 million
13
21.00%
11.80%
9.20%
27,000
(52,000)
79,000
18
$0.7 million
$1.3 million
($0.6 million)
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the
financial statements are: (1) Government -wide financial statements that include the Statement
of Net Assets and the Statement of Activities. These statements provide information about the
activities of the Village as a whole. (2) Fund financial statements tell how these services were
financed in the short term, as well as what remains for future spending. Fund financial
statements also report the Village's operations in more detail than the government wide
statements by providing information about the Village's most significant funds. (3) Notes to the
basic financial statements.
REPORTING THE VILLAGE AS A WHOLE
Statement of Net Assets and the Statement of Activities (Government -wide)
A frequently asked question regarding the Village's financial health is whether the year's
activities contributed positively to the overall financial well being. The Statement of Net Assets
and the Statement of Activities report information about the Village as a whole and about its
activities in 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.
3
These two statements report the Village's net assets and changes therein. Net assets, the
difference between assets and liabilities, are one way to measure the Village's financial health,
or financial position. Over time, increases or decreases in net assets are an indicator of whether
the financial health is improving or deteriorating.
The Statement of Net Assets and the Statement of Activities present information about the
following:
Governmental activities - All of the Village's basic services are considered to be
governmental activities, including general government, community development, public
safety, public services, library, and recreation. Property taxes, sales taxes, utility taxes,
and franchise fees finance most of these activities.
Proprietary activities /Business type activities - The Village charges a fee to customers to
cover all or most of the cost of the services provided. The Village's Country Club is
reported in this category.
REPORTING THE VILLAGE'S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds - not
the Village as a whole. Some funds are required to be established by State law. However,
management establishes other funds, which aid in the management of money for particular
purposes or meet legal responsibilities associated with the usage of certain taxes, grants, and
other money. The Village's three kinds of funds, governmental, proprietary, and fiduciary, use
different accounting approaches as explained below.
Governmental funds - Most of the Village's basic services are reported in governmental
funds. Governmental funds focus on how resources flow in and out, with the balances
remaining at year -end that are available for spending. These funds are reported using an
accounting method called the modified accrual accounting method, which measures
cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the Village's general
government operations and the basic services it provides. Governmental fund
information shows whether there are more or fewer financial resources that can be spent
in the near future to finance the Village's programs. The basic governmental fund
financial statements can be found on pages 13 -16 of this report.
• Proprietary funds - The Village's only proprietary fund is the Country Club fund, which
charges customers for the services it provides. These services are generally reported in
proprietary funds. Proprietary funds are reported in the same way that all activities are
reported in the Statement of Net Assets and the Statement of Activities. The basic
proprietary fund financial statements can be found on pages 17 - 19 of this report.
Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit
of parties outside the government. Fiduciary funds are not reflected in the government -
wide financial statement because the resources of those funds are not available to
support the Village's own programs. The accounting used for fiduciary funds is much like
that used for proprietary funds. The basic fiduciary fund financial statements can be
found on pages 20 - 21 of this report.
0
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's
financial position. In the case of the Village, assets exceeded liabilities by $8.4 million at the
close of the most recent fiscal year.
By far, the largest portion of the Village's net assets (70 %) reflects its investment in capital
assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire
those assets that is still outstanding. The Village uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Village's
investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
Assets:
Current and other assets
Capital assets
Total assets
Liabilities:
Current liabilities
Long -term debt outstanding
Total liabilities
Net assets:
Invested in capital assets,
net of debt
Restricted
Unrestricted
Total net assets
Village of North Palm Beach
Net Assets
(In Thousands)
Governmental Business
Activities Activities
Total
2004
2003
2004
2003
2004
2003
$ 4,912
11,341
$ 4,076
11,800
$ 127
2,543
$ 202
2,679
$ 5,039
13,884
$ 4,278
14,479
16,253
15,876
2,670
2,881
18,923
18,757
914
7,578
2,444
6,905
132
412
324
457
1,046
7,990
2,768
7,362
8,492
9,349
544
781
9,036
10,130
3,763
895
3,102
3,563
614
2,350
2,131
-
(5)
2,166
-
(66)
5,894
895
3,097
5,729
614
2,284
$ 7,760
$ 6,527
$ 2,126
$ 2,100
$ 9,886
$ 8,627
An additional portion of the Village's net assets (6.2 %) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets
(3.4 million) may be used to meet the government's ongoing obligations to citizens and
creditors.
At the end of the fiscal year, the Village is able to report positive balances in all categories of net
assets for the governmental activities and business -type activities net assets invested in capital
assets, net of related debt. Unrestricted net assets for business -type activities were a negative
$5,000 at fiscal year end.
There was an increase of $1.8 million in the government's net assets during the current fiscal
year. Governmental activities accounted for 98% of the total increase.
5
Governmental Activities
Governmental activities increased the Village's net assets by $1.5 million, thereby accounting
for 98% of the total increase in the net assets of the Village. Key elements of this decrease are
as follows:
Village of North Palm Beach
Changes in Net Assets
(In Thousands)
Governmental Business
Activities
Activities
Total
n
2004
2003
2004
2003
2004
2003
Revenues:
Program revenues:
Charges for services
$ 1,672
$ 1,503
$ 2,548
$ 2,510
$ 4,220
$ 4,013
Operating grants and
contributions
89
82
-
89
82
Capital grants and
contributions
-
103
10
-
113
General revenues:
Property taxes
8,452
6,365
-
8,452
6,365
Utility service taxes
1,830
1,755
-
1,830
1,755
Sales and use taxes
1,231
1,148
-
1,231
1,148
Franchise fees
861
890
-
861
890
contributions not
restricted to specific
programs
292
277
-
292
277
Investment earnings
53
75
3
5
56
80
Miscellaneous
92
55
43
100
135
155
Gain (loss) on asset
disposals
-
-
-
-
-
Total revenues
$ 14,572
$ 12,253
$ 2,594
$ 2,625
$ 17,166
$ 14,878
n
Expenses:
Program expenses:
General government
Public safety
Public services
Leisure services
Interest on long -term debt
Country Club
Total expenses
Increase (decrease) in
net assets
Net assets - beginning of year
Net assets - end of year
$ 3,174
$ 2,781
$ -
$ -
$ 3,174
$ 2,781
5,294
5,195
-
-
5,294
5,195
3,549
3,483
-
-
3,549
3,483
1,280
1,540
-
-
1,280
1,540
41
129
-
-
41
129
-
-
2,568
2,677
2,568
2,677
13,338
13,128
2,568
2,677
15,906
15,805
$ 13,338
1,235
(875)
26
(52)
1,261
(927)
6,527
7,402
2,100
2,152
8,627
9.554
$ 7,762
$ 6,527
$ 2,126
$ 2,100
$ 9,888
$ 8,627
The Village's programs include General Government, Public Safety, Public Services, and
Leisure Services. Each program's net cost (total cost, less revenues generated by the activities)
is presented below. The net cost shows the extent to which the Village's general taxes support
each of the Village's programs.
Village of North Palm Beach
Governmental Activities
(In Thousands)
The cost of all governmental activities this year was $12.9million. As shown on the Statement
of Activities, those who directly benefited from the programs paid for $1.7 million of this cost and
$11.2 million was financed through general revenues. The Village added $1.5million to fund
balance during 2004.
Business Type Activities
Net assets of the Proprietary Fund (Country Club) at September 30, 2004, were $2.1 million.
The cost of providing all Proprietary (Business Type) activities this year was $2.6 million. As
shown in the Statement of Activities, amounts paid by members and non - members of the
Country Club were $2.5 million, leaving a surplus of $26,600. Investment and miscellaneous
income of $46,000 helped generate the surplus. The income from operations was $40,100. Net
assets increased by $26,600.
7
2004
2003
Total Cost
Net Cost
Total Cost
Net Cost
of Services
of Services
of Services
of Services
General government
$ 3,174
$ (2,477)
$ 2,781
$ (1,166)
Public safety
5,294
(5,021)
5,195
(4,787)
Public services
3,549
(2,654)
3,483
(3,498)
Leisure services
1,280
(1,132)
1,540
(1,289)
Interest on long -term debt
41
-
129
(173)
$ 13,338
$ (11,284)
$ 13,128
$ (10,913)
The cost of all governmental activities this year was $12.9million. As shown on the Statement
of Activities, those who directly benefited from the programs paid for $1.7 million of this cost and
$11.2 million was financed through general revenues. The Village added $1.5million to fund
balance during 2004.
Business Type Activities
Net assets of the Proprietary Fund (Country Club) at September 30, 2004, were $2.1 million.
The cost of providing all Proprietary (Business Type) activities this year was $2.6 million. As
shown in the Statement of Activities, amounts paid by members and non - members of the
Country Club were $2.5 million, leaving a surplus of $26,600. Investment and miscellaneous
income of $46,000 helped generate the surplus. The income from operations was $40,100. Net
assets increased by $26,600.
7
FINANCIAL ANALYSIS OF THE VILLAGE'S FUNDS
As noted earlier, the Village uses fund accounting to ensure and demonstrate compliance with
finance - related legal requirements.
Governmental Funds - The focus of the Village's governmental funds is to provide information
on near -term inflows, outflows, and balances of spendable resources. Such information is
useful in assessing the Village's financing requirements. In particular, unreserved fund balance
may serve as a useful measure of a government's net resources available for spending at the
end of the fiscal year.
As of the end of the current fiscal year, the Village's general fund reported an ending fund
balance of $3.4 million, a $1.4 million increase over the 2003 fund balance of $2.0 million. This
was a planned event, since the Village planned to increase general fund balance in the current
year to support planned future expenditures.
Approximately 94% of the combined ending fund balance ($3.2 million) constitutes unreserved
fund balance, which is available for spending at the government's discretion. The remainder of
fund balance (.7 million) is reserved to indicate that it is not available for new spending because
it has already been committed for a variety of other restricted purposes.
The general fund is the chief operating fund of the Village. At the end of the current fiscal year,
unreserved fund balance of the general fund was $3.2 million, while total fund balance was $3.4
million. As a measure of the general fund's liquidity, it may be useful to compare both
unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund
balance is 24% of total general fund expenditures, while total fund balance represents 26% of
that same amount.
The capital projects fund has a total fund balance of $.47 million, all of which is reserved for
capital outlay projects. The net decrease in fund balance during the current year in the capital
projects fund was $.14 million, and is the result of expenditures for capital outlay ($.15 million)
that were greater than revenues and transfers in from the general fund ($8,500).
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget were $573,422 and can
be briefly summarized as follows:
• Funding for hurricane expenditures.
• Funding for street paving.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The capital assets of the Village are those assets that are used in the performance of Village
functions. Capital assets include equipment, buildings, land, and park facilities etc. The Village
has elected to retroactively apply the capitalization requirements of GASB Statement No 34 to
major general infrastructure assets acquired in fiscal years ending after June 30, 1980, or that
were significantly reconstructed or improved during that multiyear period.
The Village's investment in capital assets for its governmental and business -type activities as of
September 30, 2004 and 2003, amounts to $13.8 million and $14.58 million (net of accumulated
depreciation). The total increase in the Village's investment in capital assets for the current fiscal
year was $.5 million.
Village of North Palm Beach
Capital Assets
(In Thousands)
Land
Buildings and improvements
Improvements other than buildings
Improvements - golf course
Furniture, fixtures and equipment
Total assets
Less accumulated depreciation
Net assets
Governmental Business
Activities Activities Total
2004 2003 2004 2003 2004 2003
$ 2,056 $ 2,056 $ 1,051 $ 1,051 $ 3,107 $ 3,107
10,570
10,472
1,477
1,475
12,047
11,947
-
-
574
574
574
574
-
-
1,604
1,604
1,604
1,604
6,108
5,893
714
703
6,822
6,596
18,734
18,421
5,420
5,407
24,154
23,828
(7,393)
(6,621)
(2,877)
(2,729)
(10,270)
(9,350)
$ 11,341
$ 11,800
$ 2,543
$ 2,678
$ 13,884
$ 14,478
Additional information on the Village's capital assets can be found in Note 4 on page 36 -37 of
this report.
Debt
Currently, the Village uses debt financing on an as needed basis each year. At the end of the
current fiscal year, the Village had total debt of $6.8 million. None of this amount comprises debt
backed by the full faith and credit of the government. Of the $6.8 million of loans payable,
$5,000 is unsecured. The remaining loans payable are secured by franchise fees and public
services taxes. The capital leases are secured by equipment.
Loans payable
Capital leases
Total
Village of North Palm Beach
Outstanding Debt
(In Thousands)
Governmental Business
Activities Activities Total
2004 2003 2004 2003 2004 2003
$ 6,376 $ 6,950 $ 412 $ 513 $ 6,788 $ 7,463
434 588 - - 434 588
$ 6,810 $ 7,538 $ 412 $ 513 $ 7,222 $ 8,051
Additional information on the Village's debt can be found in Note 5 on page 37 -42 of this report.
9
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
During the current 2004 fiscal year, unreserved general fund balance increased to $3.2 million.
The Village did not appropriate any of this unreserved fund balance for spending in the
2004/2005 fiscal _year budget. This allowed the Village to re- establish a more appropriate level
of financial resources to address the economic challenges anticipated in the next few years.
In considering the Village's fiscal year 2003 -2004 budgets, the Village Council and management
were cautious as to revenue and expenditure growth. Investment income decreased by 25%
due to continued low interest rates. Court fine revenues increased by 167% from last fiscal
year. Building permit fees increased by 6% in 2003/2004 but are expected to decline in coming
years due to the lack of new developments.
The Village administration has identified and communicated that there have been substantial
cost increases for pension, health and wage adjustments over the past three years. These
large and continuing cost increases have not been directly addressed by management,
however, their impacts were initially offset by revenues obtained from completion of several
large developments during this same time period. Most Village vacant property is now gone,
causing an absence of substantial new development and a resulting decline in past revenue
growth. Continuing increases in employee wages, pension and health benefits will be major
economic challenges that the Village will need to address. These will remain an on -going
consideration for several years to come.
Federal FEMA reimbursement for 2004's hurricane damages will also play a lingering role and
perhaps even a growing factor in the Village's future economic considerations.
CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the Village's finances and to show the Village's
accountability for the money it receives. If you have questions about this report or need
additional financial information, contact the Village's Finance Department, at the Village of North
Palm Beach, 501 U.S. Highway 1, North Palm Beach, Florida 33408.
10
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF NET ASSETS
September 30, 2004
Assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Other assets
Restricted assets:
Cash and cash equivalents
Net pension assets
Capital assets:
Nondepreciable
Depreciable:
Buildings and improvements
Improvements other than buildings
Improvements - golf course
Furniture, fixtures and equipment
Less: accumulated depreciation
Total assets
Liabilities and Net Assets
Liabilities:
Accounts payable and other current liabilities
Other liabilities
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
Net Assets:
Invested in capital assets, net of related debt
Net pension assets
Restricted for:
Capital Projects
Unrestricted
Total net assets
Governmental Business -type
Activities Activities Total
$ 3,835,696 $ 65,413 $ 3,901,109
432,687 30,927 463,614
20,210 30,476 50,686
2,673 - 2,673
196,001 - 196,001
425,128 - 425,128
2,055,893 1,051,311 3,107,204
10,570,191
1,476,711
12,046,902
-
574,318
574,318
-
1,603,940
1,603,940
6,108,299
713,743
6,822,042
(7,393,252)
(2,877,085)
(10,270,337)
16,253,526
2,669,754
18,923,280
753,945 50,025 803,970
160,430 7,000 167,430
1,353,795
92,654
1,446,449
6,224,375
393,903
6,618,278
8,492,545
543,582
9,036,127
3,762,961 2,131,367 5,894,328
425,128 - 425,128
470,155 - 470,155
3,102,737 (5,195) 3,097,542
$ 7,760, 981 $ 2,126,172 $ 9,887,153
See accompanying notes to basic financial statements.
11
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
BALANCE SHEET
Governmental funds
September 30, 2004
Total
Capital Governmental
General Projects Funds
Assets
Cash and cash equivalents
$ 3,546,255 $
485,442 $
4,031,697
Accounts receivable, net
432,687
-
432,687
Inventories
20,210
-
20,210
Other assets
2,673
-
2,673
Total assets
$ 4,001,825 $
485,442 $
4,487,267
Liabilities and Fund Balances
Liabilities:
Accounts payable and other current liabilities
$ 738,658 $
15,287 $
753,945
Deferred revenues
160,430
-
160,430
Total liabilities
899,088
15,287
914,375
Fund balances
Reserved for:
Reserved for inventories
Reserved for prepaid items and deposits
Reserved for restricted assets
Reserved for capital outlay
Unreserved, undesignated
Total fund balances
Total liabilities and fund balances
20,210 -
20,210
2,672 -
2,672
196,000 -
196,000
- 470,155
470,155
2,883,855 -
2,883,855
3,102,737 470,155
3,572,892
$ 4,001,825 $ 485,442 $ 4,487,267
See accompanying notes to basic financial statements. 13
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets
September 30, 2004
Amounts reported for governmental activities in the statement of net assets are different because:
Ending fund balance - governmental funds $ 3,572,892
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the governmental funds:
Cost of assets $ 18,734,383
Accumulated Depreciation (7,393,252)
11,341,131
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
governmental funds. 425,128
Long -term liabilities, including notes and bonds payable, are not due and payable in the
current period and therefore are not reported in the funds. Long -term liabilities at year
end consist of:
Notes payable (6,376,387)
Capital leases payable (433,854)
Accrued compensated absences (767,929)
(7,578,170)
Net assets of governmental activities $ 7,760,981
See accompanying notes to basic financial statements. 14
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
Year Ended September 30, 2004
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Investment income
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Public safety
Public services
Leisure services
Reserves and other
Capital outlay
Debt service
Total expenditures
Excess of revenues over/
(under) expenditures
Other financing sources/ (uses):
Proceeds from debt issuance
Net change in fund balances
Fund balances, beginning of year
Fund balances, end of year
General
Capital
Projects
Total
Governmental
Funds
$ 11,439,823
$ -
$ 11,439,823
712,184
-
712,184
1,350,104
-
1,350,104
719,589
-
719,589
122,407
-
122,407
45,080
8,520
53,600
175,431
-
175,431
14,564,618
8,520
14,573,138
1,532,561
- 1,532,561
5,019,361
- 5,019,361
3,280,274
- 3,280,274
1,256,066
- 1,256,066
1,186,730
- 1,186,730
430,113
151,825 581,938
995,764
- 995,764
13,700,869
151,825 13,852,694
863,749 (143,305) 720,444
230,000 - 230,000
1,093,749 (143,305)
2,008,988 613,460
950,444
2,622,448
$ 3,102,737 $ 470,155 $ 3,572,892
See accompanying notes to basic financial statements. 15
THE VILLAGE OF NORTH PALM REACH, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
Year Ended September 30, 2004
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds $ 950,444
Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Expenditures for capital assets $ 590,740
Less: current year depreciation (1,041,875)
(451,135)
Proceeds from debt issuance reported as part of Other Financing Sources on the
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds are not revenues on the Statement of Activities but are
recognized as changes in liabilities on the Statement of Net Assets (230,000)
Repayment of long -term debt is reported as an expenditure on the Governmental
Funds, but a reduction of long -term liabilities in the Statement of Net Assets.
Principal payments on debt 801,246
Principal payments on capital leases 153,938
Total 955,184
Expenses that do not use current financial resources are not reported on the
Governmental Funds but are included in the Statement of Activities.
Change in long -term compensated absences 69,117
Change in net pension asset of defined benefit pension plans (59,572)
Total 9,545
Change in net assets of governmental activities $ 1,234,038
See accompanying notes to basic financial statements. 16
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF NET ASSETS
Proprietary Fund
September 30, 2004
Liabilities
Current liabilities:
Accounts payable and other current liabilities
Compensated absences payable
Deposits
Loans payable - current portion
Total current liabilities
Noncurrent liabilities:
Compensated absences payable
Loans payable
Total liabilities
Net assets
Investment in capital assets, net of related debt
Unrestricted
Total net assets
50,025
34,500
7,000
58,154
149,679
40,486
353,417
543,582
2,131,367
(5,195)
$ 2,126,172
See accompanying notes to basic financial statements. 17
Country
Club
Assets
Current assets
Cash and cash equivalents
$ 65,413
Accounts receivable, net
30,927
Inventories
30,476
Total current assets
126,816
Capital assets:
Land, buildings and equipment, net
2,542,938
Total assets
2,669,754
Liabilities
Current liabilities:
Accounts payable and other current liabilities
Compensated absences payable
Deposits
Loans payable - current portion
Total current liabilities
Noncurrent liabilities:
Compensated absences payable
Loans payable
Total liabilities
Net assets
Investment in capital assets, net of related debt
Unrestricted
Total net assets
50,025
34,500
7,000
58,154
149,679
40,486
353,417
543,582
2,131,367
(5,195)
$ 2,126,172
See accompanying notes to basic financial statements. 17
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
Proprietary Fund
Year Ended September 30, 2004
Operating revenues:
Greens fees /cart rentals /membership fees
Tennis revenues
Pool revenues
Golf shop revenues
Driving range revenues
Miscellaneous
Restaurant revenues
Total operating revenues
Operating expenses:
Golf course maintenance expenses
Clubhouse grounds expenses
Tennis expenses
Poolexpenses
Golf shop expenses
Food & beverage expenses
Administrative and general expenses
Insurance
Depreciation
Total operating expenses
Income from operations
Nonoperating revenues (expenses):
Interest income
Interest expense
Total nonoperating revenues (expenses)
Change in net assets
Net assets, beginning of year
Net assets, end of year
Country
Club
$ 1,937,429
89,611
121,296
112,349
225,253
42,560
62,321
2,590,819
958,829
164,517
117,877
203,331
536,328
38,842
269,579
39,132
222,253
2,550,688
40,131
3,450
(17,002)
(13,552)
26,579
2,099,593
$ 2,126,172
See accompanying notes to basic financial statements. 18
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF CASH FLOWS
Proprietary Fund
Year Ended September 30, 2004
Cash flows from operating activities
Cash received from customers
Cash payments to suppliers for goods and services
Cash payments to employees for services
Cash payments for payroll taxes
Cash payments for employee benefits
Net cash provided by operating activities
Cash flows from capital and related financing activities
Principal payments
Interest paid on debt
Acquisition of capital assets
Net cash used in capital and related financing activities
Cash flows from investing activities
Interest on investments
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Reconciliation of income from operations to net cash
provided by operating activities:
Operating income
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense
Decrease in accounts receivable
Decrease in inventory
Decrease in accounts payable and other current liabilities
Decrease in compensated absences payable
Total adjustments
Net cash provided by operating activities
Noncash capital and financing activities:
Book value of assets disposed
Country
Club
$ 2,600,365
(1,184,055)
(975,092)
(77,699)
(225,392)
138,127
(101,900)
(17,002)
(86,186)
(205,088)
3,450
(63,511)
128,924
$ 65,413
$ 40,131
222,252
9,554
2,129
(129, 994)
(5,945)
97,996
$ 138,127
See accompanying notes to basic financial statements. 19
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
Fiduciary Funds
September 30, 2004
ASSETS
Cash and cash equivalents
Investments:
Common stock
U.S. Government securities
Corporate bonds
Interest receivable
Accounts receivable
Total assets
LIABILITIES
Accounts payable and other liabilities
Due to others
Total liabilities
NET ASSETS
Held in trust for pension benefits
Total net assets
Employee
Retirement Agency
Funds Funds
$ 367,346 $ 272,084
8,119,416 -
2,365,305 -
2,970,261 -
18,747 -
43,409 -
13,884,484 272,084
10,154 -
- 272,084
10,154 272,084
13,874,330
$ 13,874,330
See accompanying notes to basic financial statements. 20
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS -
Employee Retirement Funds
Year Ended September 30, 2004
Investment income:
Interest 184,508
Net appreciation in fair value of investments 1,006,166
Investment expense (85,042)
Total investment income 1,105,632
Total additions 2,317,018
Deductions:
Administration 72,987
Benefits 1,859,760
Total deductions 1,932,747
Net increase 384,271
Net assets held in trust for pension benefits,
beginning of year 13,490,059
Net assets held in trust for pension benefits,
end of year $ 13,874,330
See accompanying notes to basic financial statements. 21
Employee
Retirement
Funds
Additions:
Contributions:
Employer
$ 774,000
State of Florida
203,317
Plan members
234,069
Total contributions
1,211,386
Investment income:
Interest 184,508
Net appreciation in fair value of investments 1,006,166
Investment expense (85,042)
Total investment income 1,105,632
Total additions 2,317,018
Deductions:
Administration 72,987
Benefits 1,859,760
Total deductions 1,932,747
Net increase 384,271
Net assets held in trust for pension benefits,
beginning of year 13,490,059
Net assets held in trust for pension benefits,
end of year $ 13,874,330
See accompanying notes to basic financial statements. 21
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Reporting Entity
The Village of North Palm Beach, Florida ( "the Village ") was incorporated in 1956 pursuant
to Chapter 31481, Laws of Florida, Extraordinary Session 1956. The Village is located in
the northeast portion of Palm Beach County, Florida. Its municipal area comprises
approximately 1,900 acres of land and 1,200 acres of lakes, canals and lagoons. The
Village's nonseasonal population consists of approximately 12,000 residents, which
increases during the winter months to approximately 18,000 people. The Village operates
under the Council- Manager form of government and provides the following services to its
residents: public safety, planning and zoning, sanitation, library, parks, marinas, and a
country club. The Village Council (the "Council ") is responsible for legislative and fiscal
control of the Village.
As required by generally accepted accounting principles, the basic financial statements
present the government and its component units. Component units are legally separate
entities for which the primary government is considered to be financially accountable and
for which the nature and significance of their relationship with the primary government are
such that .exclusion would cause the Village's combined financial statements to be
misleading or incomplete. The primary government is considered financially accountable if
it appoints a voting majority of an organization's governing body and imposes its will on that
organization. The primary government may also be financially accountable if an
organization is fiscally dependent on the primary government, regardless of the authority of
the organization's governing board. Blended component units, although legally separate
entities, are, in substance, part of the primary government's operations and are included as
part of the primary government.
Based on the application of the criteria set forth by the Governmental Accounting
Standards Board ( "GASB "), management has determined that no component units exist
which would require inclusion in this report. Further, the Village is not aware of any entity
that would consider the Village to be a component unit.
Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the
statement of activities) report information on all of the non - fiduciary activities of the Village.
For the most part, the effect of interfund activities has been removed from these
statements. Governmental activities, which are normally supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which
rely to a significant extent on fees and charges for support.
22
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Government -Wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Program revenues include 1)
charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government -wide financial
statements. Major individual governmental funds and the major individual enterprise fund
are reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements and proprietary fund financial statements are
reported using the accrual basis of accounting and the economic resources measurement
focus. Fiduciary funds use the accrual basis of accounting and, except for agency funds,
the economic resources measurement focus. Agency funds do not have a measurement
focus. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as
revenues in the year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are
recognized as soon as they are both measurable and available. Revenues are considered
to be available when they are collectible within the current period or soon enough thereafter
to pay liabilities of the current period. For this purpose, the Village considers revenues to be
available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is
due.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when the Village receives cash.
23
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
The Village reports the following major governmental funds:
General Fund
The general fund is the primary operating fund and is used to account for all
financial resources applicable to the general operations of the Village except those
required to be accounted for in another fund.
Capital Proiects Fund
The capital projects fund is used to account for the cost of acquiring, constructing,
and placing into service those capital improvements which are associated with
activities in the General Fund and are financed by long -term debt issues which are
repaid by the recurring operating revenues in the General Fund.
The Village reports the following major (and only) proprietary fund:
Country Club Enterprise Fund
This fund accounts for the activities related to the Country Club.
Additionally, the Village reports the following fiduciary funds:
Pension Trust Funds
The pension trust funds account for the activities of the General Employees
Retirement Fund and the Fire and Police Officers Retirement Fund, which
accumulate resources for pension benefits to qualified employees.
Agency Funds
The agency funds account for assets that are held for other parties and cannot be
used to finance the Village's own programs.
Private sector standards of accounting and financial reporting issued prior to December 1,
1989, are followed in both the government -wide and proprietary fund financial statements
to the extent that those standards do not conflict with or contradict guidance of GASB.
Governments also have the option of following subsequent private sector guidance for their
business -type activities and enterprise funds, subject to this same limitation. The Village
has elected not to follow subsequent private sector guidance.
24
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
As a general rule, the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are charges between the
government's country club and various other functions of the Village. Elimination of these
charges would distort the direct costs and program revenues reported for the various
functions concerned.
Proprietary funds distinguish operating revenues and expenses from non - operating items.
Operating revenues and expenses generally result from providing services and producing
and delivering goods in connection with a proprietary fund's principal ongoing operations.
The principal operating revenues of the Village's country club enterprise fund are charges
to customers for sales and services. Operating expenses for the enterprise fund include the
cost of sales and services, administrative expenses and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non - operating revenues
and expenses.
Assets, Liabilities, and Net Assets or Equity
Cash and Cash Equivalents
All short -term investments that are highly liquid are considered to be cash equivalents.
Cash equivalents are readily convertible to a known amount of cash, and at the day of
purchase, have a maturity date no longer than three months.
Investments
Investments are reported at fair value, which is determined by using various third party
pricing sources. The Local Government Surplus Funds Trust is a "2a -7 like" pool and, thus,
these investments are valued using the pooled share price.
Restricted Assets
Cash and cash equivalents are restricted for the following purposes:
Law enforcement education
Public safety
Library
Recreations facilities
Total restricted assets
2004 2003
$ 17,127 $
17,127
16,054
15,239
140,720
143,628
22,100
9,000
$ 196,001 $
184,994
25
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Assets, Liabilities, and Net Assets or Equity (Continued)
When both restricted and unrestricted resources are available for use, it is the Village's
policy to use restricted resources first, then unrestricted resources as they are needed.
Interfund Transactions
Activity between funds that is representative of lending /borrowing arrangements
outstanding at the end of the fiscal year are referred to as either "due to /from other funds"
(i.e., the current portion of interfund loans) or "advances to /from other funds" (i.e., the
noncurrent portion of interfund loans). All other outstanding balances between funds are
reported as "due to /from other funds." Any residual balances outstanding between the
governmental activities and business -type activities are reported in the government -wide
financial statements as internal balances.
Transfers and interfund balances totally within governmental activities and those that are
totally within business -type activities are eliminated and not presented in the government
wide financial statements. Transfers and balances between governmental and business -
type activities are presented in the government -wide financial statements.
Inventories
Inventories are valued at cost determined on a first -in, first -out basis. Inventories in the
general fund consist of expendable supplies held for consumption. The initial cost is
recorded as an asset at the time the individual inventory items are purchased and are
charged against operations in the period when used.
Capital Assets and Depreciation
Capital assets, which include property, plant, and equipment, are reported in the applicable
governmental or business -type activities column in the government -wide financial
statements. The Village defines capital assets as assets with an initial individual cost of
$1,000 or more and an estimated life in excess of one year. The Village has elected to
retroactively apply the capitalization requirements of GASB Statement No. 34 to major
general infrastructure assets acquired in fiscal years ending after June 30, 1980, or that
were significantly reconstructed or improved during that multi -year period.
26
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Assets, Liabilities, and Net Assets or Equity (Continued)
The accounting and reporting treatment applied to the capital assets associated with a fund
are determined by its measurement focus. General capital assets are assets of the Village
as a whole. When purchased, such assets are recorded as expenditures in the
governmental funds and capitalized as assets in the government -wide statement of net
assets. General capital assets are carried at historical cost. Where cost cannot be
determined from the available records, estimated historical cost has been used to record
the estimated value of the assets. Assets acquired by gifts or bequests are recorded at
their fair value at the date of acquisition.
Capital assets of the enterprise fund are capitalized in the fund. The valuation basis for
enterprise fund capital assets is the same as those used for general capital assets.
Additionally, net interest cost is capitalized on enterprise fund projects during the
construction period.
Additions, improvements, and other capital outlay that significantly extend the useful life of
an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as
incurred.
Depreciation has been provided over the estimated useful lives using the straight -line
method of depreciation. The estimated lives for each major class of depreciable fixed
assets are as follows:
Buildings and improvements
30 years
Improvements other than buildings
10 years
Golf course improvements
15 years
Furniture, fixtures and equipment
3 -10 years
Compensated Absences
The Village's employees are granted compensated absence pay for vacation and sick
leave in varying amounts based on length of service. Unused compensated absences are
payable upon separation from service. Vacation is accrued as a liability when the employee
earns benefits. This means that the employee has rendered services that give rise to a
vacation liability and it is probable that the Village will compensate the employee in some
manner, e.g., in cash or paid time -off, now or upon termination or retirement. The Village
uses the vesting method in accruing sick leave liability. Under the vesting method, the
liability for sick leave is accrued for employees who are eligible to receive termination
payments upon separation.
?X
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Compensated absences are accrued when incurred in the government -wide and
proprietary financial statements. A liability for these amounts is reported in the
governmental funds only if they have matured, for example, as a result of employee
resignations or retirements. For the governmental funds, compensated absences are
liquidated by the general fund.
Long -Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long -term debt and other long -term obligations are reported as
liabilities in the applicable governmental activities, business -type activities, or proprietary
fund type statement of net assets. Bond premiums and discounts, as well as issuance
costs, are deferred and amortized over the life of the bonds using the effective interest
method. Bonds payable are reported net of the applicable bond premium or discount. Bond
issuance costs are reported as deferred charges and amortized over the term of the related
debt.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of
debt issued is reported as other financing sources. Premiums received on debt issuances
are reported as other financing sources, while discounts on debt issuances are reported as
other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt service expenditures.
Net Assets
Equity in the government -wide statement of net assets and the proprietary fund is displayed
in three categories: 1) invested in capital assets net of related debt, 2) net pension asset, 3)
restricted, and 4) unrestricted. Net assets invested in capital assets net of related debt
consist of capital assets reduced by accumulated depreciation and by any outstanding debt
incurred to acquire, construct, or improve those assets. Net pension asset represent
pension contributions above the actuarially required amount. Net assets are reported as
restricted when there are legal limitations imposed on their use by Village legislation or
external restrictions by other governments, creditors, or grantors. Unrestricted net assets
consist of all net assets that do not meet the definition of either of the other three
components.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fund Equity
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties
for use for a specific purpose. Unreserved fund balance amounts that are reported as
designations of fund balances represent tentative plans for financial resource utilization in a
future period. The following is a description of the reserves and designations used by the
Village.
❖ Reserved for inventories prepaid items and deposits - Indicates that a portion of
fund balance is segregated since these items do not represent "available spendable
resources."
❖ Reserved for restricted assets - Restricted for expenditures related solely to law
enforcement, library, recreation facilities, and a memorial fund.
Budgetary Accounting
State of Florida Statutes require that all municipal governments establish budgetary
systems and approve balanced annual operating budgets. The Council annually adopts an
operating budget and appropriates funds for the general fund. The procedures for
establishing budgetary data are as follows:
❖ In July of each year, the Village Manager submits a proposed operating budget to
the Council for the next fiscal year commencing the following October 1st. The proposed
budget includes expenditures and the means of financing them.
❖ During the third week of July, the Council holds public meetings to obtain taxpayer
comments.
❖ Upon completion of the public hearings and prior to October 1, a final operating
budget is legally enacted through the passage of an ordinance. Estimated beginning fund
balances are considered in the budgetary process.
29
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Budgetary Accounting (Continued)
The ordinance approved by the Council, which adopted the budget for the fiscal year ended
September 30, 2004, allows budget transfers based on the following regulations:
Appropriations shall not be transferred in amounts over $5,000 without the approval
of the Village Council.
❖ Appropriations of $5,000 or less shall not be transferred without the approval of the
Village Manager; however, the Village Manager is not permitted to violate the intent
of the approved budget.
Property Taxes
Under Florida law, the assessment of all properties and the collection of all county,
municipal and school board property taxes are consolidated in the offices of the County
Property Appraiser and County Tax. Collector, respectively. All property is reassessed
according to its fair market value on January 1 of each year and each assessment roll is
submitted to the State Department of Revenue for review to determine if the assessment
rolls meet all of the appropriate requirements of State law. The assessed value of property
within the corporate limits of the Village at January 1, 2003, upon which the 2003 -04 levy
was based, was approximately $1.298 billion. State Statutes permit municipalities to levy
property taxes at a rate of up to 10 mills.
The tax levy of the Village is established by the Council prior to October 1 of each year
during the budget process. The Palm Beach County Property Appraiser incorporates the
Village's millage into the total tax levy, which includes the County, County School Board,
and special district tax requirements. The millage rate assessed by the Village for the year
ended September 30, 2004, was 6.8000 ($6.80 for each $1,000 of assessed valuation).
Taxes may be paid less a 4% discount in November or at declining discounts each month
through the month of February. All unpaid taxes become delinquent on April 1 following the
year in which they are assessed. Delinquent taxes on real property bear interest at 18% per
year. On or prior to June 1 following the tax year, certificates are offered for sale for all
delinquent taxes on real property.
After sale, tax certificates bear interest at 18% per year or at any lower rate bid by the
buyer. The certificate holder may make application for a tax deed on any unredeemed tax
certificate after a period of two years. The County holds unsold certificates. Delinquent
taxes on personal property bear interest at 18% per year until the tax is satisfied either by
seizure and sale of the property or by the five -year statute of limitations. At September 30,
2004, unpaid delinquent taxes are not material and have not been recorded by the Village.
30
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of Credit Risk
The Village performs ongoing credit evaluations of its customers and does not require
collateral. The Village maintains an allowance for uncollectible accounts at a level which
management believes is sufficient to cover potential credit losses.
Use of Estimates
The financial statements and related disclosures are prepared in conformity with
accounting principles generally accepted in the United States. Management is required to
make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the financial statements, and
revenue and expenses during the period reported. These estimates include the collectibility
of accounts receivable, the use and recoverability of inventory, the useful lives and
impairment of tangible assets, and the realization of net pension assets, among others.
Estimates and assumptions are reviewed periodically and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary.
Actual results could differ from those estimates.
NOTE 2. DEPOSITS AND INVESTMENTS
Deposits
In addition to insurance provided by the Federal Depository Insurance Corporation,
deposits are held in banking institutions approved by the Chief Financial Officer ( "CFO ") of
the State of Florida to hold public funds. Under Florida Statutes Chapter 280, Florida
Security for Public Deposits Act, the CFO requires all Florida qualified public depositories to
deposit eligible collateral with the CFO or another banking institution. In the event of a
failure of a qualified public depository, the remaining public depositories would be
responsible for covering any resulting losses. The Village's deposits at year -end are
insured or collateralized with securities held by the entity or by its agent in the entity's
name.
Investments
The Village is authorized to invest its funds as follows:
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;
31
THE VILLAGE OF NORTH PALM REACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (continued)
Investments (continued)
3. The Local Government Surplus Funds Trust Fund or any intergovernmental
investment pool authorized pursuant to the Florida Interlocal Cooperation Act, as
provided in Chapter 163, Florida Statutes;
4. Securities and Exchange Commission registered money market funds with the
highest credit quality rating from a nationally recognized rating agency;
5. Direct obligations of the United States Treasury;
6. Federal agencies and instrumentalities;
7. Securities of, or interest in, any open -end or closed -end management -type
investment company or investment trust registered under the Investment Company
Act of 1940, 15 U.S.C. sections 80a -1 et seq., as amended from time to time,
provided that the portfolio of such investment company or investment trust is limited
to obligations of the United States Government or any agency or instrumentality
thereof and to repurchase agreements fully collateralized by such United States
Government obligations, and provided that such investment company or investment
trust takes delivery of such collateral either directly or through an authorized
custodian;
8. Other investments authorized by law or by ordinance by the Village
Investments of the General Employees' Retirement Fund can consist of every kind of
investment except: options, futures, municipal bonds, non - investment grade bonds, foreign
securities, precious metals, private placements, short sales, purchases on margin, real
estate, and partnerships.
Investments of the Fire and Police Retirement Fund can consist of the following:
1) Time, savings, and money market deposit accounts of a national bank, a state bank
insured by the Federal Deposit Insurance Corporation or its successor, or a Savings
and Loan institution insured by the Federal Savings and Loan Insurance Corporation
or its successor, provided the amount deposited does not exceed the insured
amount.
2) Obligations of the United States Government or obligations guaranteed as to
principal and interest by the United States Government or any agency thereof.
32
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
3) Stocks, bonds or other evidence of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States or any state of the United
States or the District of Columbia and domiciled therein, provided:
a. Equities will be traded on one or more of the recognized national
exchanges.
b. The security meets any one of the following rating criteria:
i.) Fixed income: Standard & Poor's AAA, AA, or Moody's Aaa, Aa, A.
ii.) Equities: Value Line Investment Survey Rank for Safety, 1, 2, 3, or
Standard & Poor's A +, A, A -.
iii.) Money Market Instruments: Standard & Poor's Al or Moody's P1.
C. Not more than ten (10) percent of the Fund's assets shall be invested in the
common stock or capital stock of any one issuing company.
d. Not more than five (5) percent of the Fund's assets shall be invested in
preferred stock.
4) Commingled stock, bond, money market or mutual funds are permitted, provided
their investments are restricted to securities meeting the above criteria.
The State Board of Administration is part of the Local Government Surplus Funds Trust
Fund and is governed by Chapter 19 -7 of the Florida Administrative Code. These rules
provide guidance and establish the general operating procedures for the administration of
the Local Government Surplus Funds Trust Fund. Additionally, the Office of the Auditor
General performs the operational audit of the activities and investments of the State Board
of Administration. The Local Government Surplus Funds Trust Fund is not a registrant with
the Securities and Exchange Commission (SEC); however, the board has adopted
operating procedures consistent with the requirements for a 2a -7 fund.
L991
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Investments are categorized to give an indication of the level of credit risk assumed by an
entity at year -end. Category 1 includes investments that are insured or registered or for
which the Village or its agent in the Village's name holds the securities. Category 2 includes
uninsured and unregistered investments for which the securities are held by the counter -
party's trust department or agent in the Village's name. Category 3 includes uninsured and
unregistered investments for which the securities are held by the counter - party, or by its
trust department or agent, but not in the entity's name.
A reconciliation of deposits and investments as shown on the statement of net assets and
statement of fiduciary net assets for the Village is as follows:
By category:
Cash and cash equivalents $ 4,736,540
Investments 13,454,982
Total deposits and investments $ 18,191,522
Presented in the statement of net assets
Governmental activities
Cash and cash eqivalents $ 4,031,697
Business -type activities
Cash and cash eqivalents 65,413
Total statement of net assets 4,097,110
Presented in the statement of fiduciary net assets
Pension trust funds
Cash and cash eqivalents 367,346
Investments 13,454,982
Agencyfunds
Cash and cash eqivalents 272,084
Total fiduciary funds 14,094,412
Total deposits and investments $ 18,191,522
34
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 2. DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Cash and cash equivalents
Deposits
Repurchase agreements
Pension money market funds
State Board of Administration
Investment Pool
Total cash and cash
equivalents
Investments
U. S. government securities
Corporate bonds
Common stock
Total investments
Reported
Unrestricted Restricted Amount Fair Value Category
$ 11,471 $ - $ 11,471 $ 11,471 -
570,600 - 570,600 570,600 1
- 303,745 303,745 303,745 -
3,319,039 531,685 3,850,724 3,850,724 -
$ 3,901,110 $ 835,430 $ 4,736,540 $ 4,736,540
$ - $ 2,365,305 $ 2,365,305 $ 2,365,305 1
2,970,261 2, 970, 261 2,970,261 1
- 8,119,416 8,119,416 8,119,416 1
$ - $ 13,454,982 $ 13,454,982 $ 13,454,982
The following matrix presents the components of the Village's deposits and investments at
September 30, 2004. Credit risk categories are indicated in the last column.
NOTE 3. RECEIVABLES
Receivables at September 30, 2004, were as follows:
Less allowance for uncollectibles -
Net total receivables $432,687
Country
Club Total
$ - $ 96,411
- 76,367
- 93,363
30,927 134,555
- 62,918
30,927 463,614
27 4 14
35
General
Receivables:
State - shared revenues
$ 96,411
Franchise fees
76,367
Utility taxes
93,363
Accounts
103,628
Special assessments
62,918
Gross receivables
432,687
Less allowance for uncollectibles -
Net total receivables $432,687
Country
Club Total
$ - $ 96,411
- 76,367
- 93,363
30,927 134,555
- 62,918
30,927 463,614
27 4 14
35
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 4. CAPITAL ASSETS
Capital assets activity for the year ended September 30, 2004, was as follows:
October 1, Reclass- September 30,
2003 ifications Additions Deletions 2004
Governmental activities
Capital assets not being depreciated:
Land
$ 2,055,893
$ - $ -
$ -
$ 2,055,893
Capital assets being depreciated:
Buildings and improvements
10,472,157
(23,791) 151,825
(30,000)
10,570,191
Furniture, fixtures, and equipment
5,892,566
23,791 430,113
(238,171)
6,108,299
Capital assets being depreciated
16,364,723
- 581,938
(268,171)
16,678,490
Less accumulated depreciation for:
Buildings and improvements
(3,041,824)
- (432,261)
30,000
(3,444,085)
Furniture, fixtures, and equipment
(3,579,106)
- (609,614)
239,553
(3,949,167)
Total accumulated depreciation
(6,620,930)
- (1,041,875)
269,553
(7,393,252)
Governmental activities capital
assets, net $11,799,686 $ - $(459,937) $ 1,382 $ 11,341,131
Business -type activities
Capital assets not being depreciated:
Land $ 1,051,311 $ - $ - $ - $ 1,051,311
Capital assets being depreciated:
Buildings and improvements 1,475,421 - 1,290 - 1,476,711
Improvements other than buildings 574,318 - - - 574,318
Improvements - golf course 1,603,940 - - - 1,603,940
Furniture, fixtures, and equipment 702,658 - 84,896 (73,811) 713,743
Capital assets being depreciated $ 4,356,337 $ - $ 86,186 $ (73,811) $ 4,368,712
36
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 4. CAPITAL ASSETS (continued)
Capital assets activity for the year ended September 30, 2004, was as follows (continued):
Business -type activities (continued)
Less accumulated depreciation for:
Buildings and improvements
Improvements other than buildings
Improvements - golf course
Furniture, fixtures, and equipment
Total accumulated depreciation
Business -type activities capital
assets, net
NOTE 5. LONG -TERM DEBT
Changes in Long -Term Liabilities
October 1, Reclass- September 30,
2003 ifications Additions Deletions 2004
$ (1,831,715) $ - $(121,606) $ - $ (1,953,321)
(378,799) - (34,059) - (412,858)
(16,536) - (719) - (17,255)
(501,594) - (65,867) 73,811 (493,650)
(2,728,644) - (222,251) 73,811 (2,877,085)
$ 2,679,004 $ - $ (136,065) $ - $ 2,542,938
Long -term liability activity for the year ended September 30, 2004, was as follows:
Balance Balance Amount Due
October 1, September 30, Within
2003 Additions Reductions 2004 One Year
Governmental activities:
Loans payable
$ 6,947,633
$ 230,000
$ 801,246
$
6,376,387
$
749,003
Capital leases
587,792
-
153,937
433,855
4,792
Compensated abs. payable
698,812
610,713
541,597
767,928
600,000
Total
$ 8,234,237
$ 840,713
$ 1,496,780
$
7,578,170
$
1,353,795
Business -type activities:
Loans payable
$ 513,472
$ -
$ 101,900
$
411,572
$
58,154
Compensated abs. payable
76,163
34,501
35,677
74,987
34,500
Total
$ 589,634
$ 34,501
$ 66,223
$
486,558
$
92,654
Loans Payable
$860,000 Promissory Note
The Village Council adopted Resolution No. 71 -2000 authorizing the execution of a loan
agreement in the amount of $860,000 for the purpose of refinancing an existing loan incurred for
the renovation of the Village's Country Club restaurant and for capital expenditures in the general
fund. Franchise fees and public service taxes of the Village secure the loan. Principal and interest
payments are due quarterly, with a final maturity date of November 15, 2010. The interest rate on
the loan is 5.22 %.
37
THE VILLAGE OF NORTH PALM REACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (continued)
Loans payable (continued)
Amounts currently outstanding on the note are as follows:
Purpose Amount
Governmental activities $ 71,420
Business -type activities 410,493
481,913
Annual debt service requirements to maturity are as follows:
Governmental activities:
Year
Ending
Principal
Interest
Total
2005
$ 56,788
$ 3,730
$ 60,518
2006
14,632
191
14,823
2006
$ 71,420
$ 3,921
$ 75,341
Business -type activities:
Year
Ending
Principal
Interest
Total
2005 $
57,076
$ 21,428
$ 78,504
2006
60,114
18,448
78,562
2007
63,314
15,310
78,624
2008
69,684
12,005
81,689
2009
70,234
7,165
77,399
2010 -2011
90,073
6,675
96,748
$
410,495
$ 81,031
$ 491,526
$2,800,000 Promissory Note
The Village Council adopted Resolution No. 46 -2001 authorizing the execution of a note in the
principal amount of $2,800,000 to finance the construction of various capital projects. Franchise
fees and public service taxes secure the promissory note. Principal and interest payments are due
semi - annually, with a final maturity date of May 31, 2011. The interest rate on the note is 3.29 %.
Annual debt service requirements to maturity, which are payable by the general fund, are as
follows:
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (Continued)
Loans payable (continued)
Governmental activities:
Year
Ending
Principal
Interest
Total
2005
$ 265,133
$ 66,467
$ 331,600
2006
274,117
57,537
331,654
2007
283,404
48,306
331,710
2008
293,007
38,860
331,867
2009
302,934
28,892
331,826
2010
637,039
26,829
663,868
$ 2,055,634
$ 266,891
$ 2,322,525
$6,560,000 Promissory Note
The Village Council adopted Resolution No. 8 -97 authorizing the issuance of a note in the principal
amount of $6,560,000 to finance the acquisition, construction, equipping, and improving of a public
safety building, a community center, and a recreation building. A portion of the proceeds was also
used to refinance an existing loan incurred to make improvements to the Country Club.
Franchise fees and public service taxes of the Village secure the promissory note. Principal
payments of $190,000 are due semi - annually on January 1 and August 1, with a final maturity date
of February 1, 2017. The interest rate is at the London InterBank Offered Rate ( "LIBOR ") that is
defined as 75% of the rate of interest published as one -month LIBOR on the first day of each
month. The interest rate will be adjusted by either of the following events: a change in the
maximum corporate tax rate, or the event of taxability of the interest on this note. The effective
rate at September 30, 2004, was 1.12% and this approximates the rate that was used to calculate
the debt service requirements to maturity.
Amounts currently outstanding on the note are as follows:
Purpose Amount
Government activities 3.750.000
39
THE VILLAGE OF NORTH PALM REACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (Continued)
Loans payable (continued)
Annual debt service requirements to maturity are as follows:
Year
Ending
Principal
Interest
Total
2005
$ 300,000
$ 41,211
$ 341,211
2006
300,000
37,847
337,847
2007
300,000
34,483
334,483
2008
300,000
31,119
331,119
2009
300,000
21,026
321,026
2010 -2013
2,250,000
160,344
2,410,344
$ 3,750,000
$ 326,030
$ 4,076,030
$142,000 Promissory Note
The Village Council adopted Resolution No. 3 -00 authorizing the execution of a loan agreement
for the purpose of financing the lease- purchase of eight automobiles. A portion of the proceeds
was also used to finance the purchase of equipment for the Country Club restaurant. The loan is
unsecured. Principal and interest payments are due monthly, with a final maturity date of February
1, 2005. The interest rate on the loan is 4.33 %.
Amounts currently outstanding on the note are as follows:
Purpose Amount
Governmental activities $ 4,056
Business -type activities 1,078
Annual debt service requirements to maturity are as follows:
Governmental activities:
Year
Ending Principal Interest Total
2005 $ 4,056 $ 119 $ 4,175
.o
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (Continued)
Loans Payable (Continued)
Business -type activities:
Year
Ending Principal Interest Total
2005 $ 1,078 $ 32 $ 1,110
$271,000 and $132,000 Promissory Notes
In January 2003, the Village Council adopted Resolution No. 8 -2003 authorizing the issuance of
promissory notes to finance various capital expenditures. The notes are payable from the Village's
non -ad valorem tax revenues.
The $132,000 note bears interest at 2.93% and is payable in six semiannual payments of $23,158,
beginning July 2003 and with final maturity in January 2006. Annual debt service requirements to
maturity for this note, which are payable by the general fund, are as follows:
Governmental Activities:
Year
Ending
Principal
Interest
Total
2005
$ 44,638
$ 1,678
$ 46,316
2006
22,804
354
23,158
$ 67,442
$ 2,032
$ 69,474
The $271,000 note bears interest at 3.82% and is payable in fourteen semiannual payments of
$22,286, beginning July 2003 and with final maturity in January 2010. Annual debt service
requirements to maturity for this note, which are payable by the general fund, are as follows:
41
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (Continued)
Loans Payable (Continued)
Governmental Activities:
Year
Ending
Principal
Interest
Total
2005
$ 41,948
$ 3,626
$ 45,574
2006
42,718
2,856
45,574
2007
43,502
2,072
45,574
2008
44,300
1,274
45,574
2009
36,506
333
36,839
$ 208,974
$ 10,161
$ 219,135
$230,000 Promissory Note
In January 2004, the Village Council adopted Resolution No. 7 -2004 authorizing the issuance of a
promissory note to finance various capital expenditures. The note is payable from the Village's
non -ad valorem tax revenues and franchise fees. The note bears interest at 1.83% and is payable
in five semiannual payments of $21,025, beginning August 2004 and with final maturity in January
2009. Annual debt service requirements to maturity for this note, which are payable by the general
fund, are as follows:
Year
Ending
Principal
Interest
Total
2005
$ 36,441
$ 8,131
$ 44,572
2006
37,866
6,707
44,573
2007
39,347
5,226
44,573
2008
40,876
3,697
44,573
2009
21,846
440
22,287
$ 176,376
$ 24,201
$ 200,578
Capital Leases
The Village entered into various lease agreements as lessee for financing the acquisition of
equipment. The lease agreements qualify as capital leases for accounting purposes and therefore
have been recorded at the present value of the future minimum lease payments as of the date of
inception. Lease payments will be made from the general fund.
W,
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 5. LONG -TERM DEBT (Continued)
Capital Leases (Continued)
The assets acquired through capital leases are as follows:
Governmental
Activities
Assets
Vehicles $ 1,086,567
Less: Accumulated depreciation (564,936)
Total $ 521,631
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30, 2004, were as follows:
Year
Ending
Principal
Interest
Total
2005
$ 155,326
$ 11,171
$ 166,497
2006
159,182
5,123
164,305
2007
69,086
1,885
70,971
2008
34,286
904
35,190
2009
15,975
183
16,158
Total
$ 433,855
$ 19,266
$ 453,121
NOTE 6. RISK MANAGEMENT
The Village currently reports all of its risk management activities in the general fund. Claims
expenditures and liabilities are reported when it is probable that a loss has occurred and the
amount of the loss can be reasonably estimated. These losses include an estimate of claims that
have been incurred but not reported.
Employee Benefits Group
The Village is self insured to provide group medical coverage. A third party administers the group
medical coverage for the Village. The Village funds its losses based on actual claims. A stop loss
insurance contract executed with an insurance carrier covers individual claims in excess of
$35,000 per plan year. There were no significant changes in insurance coverage from the prior
year and the amount of settlements did not exceed insurance coverage for the last three years.
The liability for unpaid claims, if any, is estimated using an industry average that is based on
actual claims paid. As of September 30, 2004, the Village had no claims liability for its employee
benefit plan because Village contributions exceeded claims for the year. Changes in the claims
liability since September 30, 2004, are as follows:
LIB'
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 6. RISK MANAGEMENT (Continued)
Claims and
Year Ended
Claims Liability
Changes in
Claim
Claims Liability
September 30,
Beginning of Year
Estimates
Payments
End of Year
2001
$ 128,296
$ 484,762
$ (579,958)
$ 33,100
2002
33,100
1,210,299
(1,097,504)
145,895
2003
145,895
1,632,265
(1,585,596)
192,564
2004
192,564
1,055,715
(1,248,279)
-
Property and Casualty Group
The Village also participates in Southeast Risk Management Association ( SERMA), a
quasigovern mental agency created by an interlocal agreement, as authorized by Chapter 163,
Florida Statutes. SERMA administers the property and casualty coverage for the Village. The
Village and other participating members pool their resources so as to provide a comprehensive
risk management program, including insurance coverage, whose cost is less than the cost of each
municipality obtaining insurance separately. The members are subject to supplemental
assessments in the event of deficiencies, except that to the extent that deficiencies result from a
specific claim against a member in excess of the reinsurance available, such deficiency is solely
the responsibility of that member. SERMA reinsures for workers compensation and property
claims in excess of $250,000. The Village is also covered by Florida Statutes under the Doctrine of
Sovereign Immunity which effectively limits the amount of liability of municipalities to individual
claims of $100,000/$200,000 for all claims relating to the same incident. There were no changes in
insurance coverage from the prior year and the amount of settlements did not exceed insurance
coverage for the last three years.
At September 30, 2004, there were no liabilities recorded for property and casualty, based on a
recent actuarial valuation, which indicated that the reserve for incurred but not yet reported losses
was adequately funded, and no additional contributions are required.
NOTE 7. PENSION PLANS
The Village maintains the following two separate single employer defined benefit plans: Village of
North Palm Beach Fire and Police Retirement Fund, covering fire fighters and police officers, and
Village of North Palm Beach General Employees Retirement Fund, covering substantially all other
full -time Village employees. Both plans are reported as pension trust funds and included as part of
the Village's reporting entity. Neither plan issues a stand -alone financial report. Additional
information on these plans can be found beginning on page 58.
Each plan's financial statements are prepared using the accrual basis of accounting. Plan member
contributions are recognized in the period in which the contributions are due. Employer
contributions to each plan are recognized when due and the employer has made a formal
commitment to provide the contributions. Benefits and refunds are recognized when due and
payable in accordance with the terms of each plan.
Each plan has its own board that acts as plan administrator and trustee: Board of Trustees (for the
Fire and Police Retirement Fund) and General Employees Retirement Board. Each plan's assets
may only be used for the payment of benefits to the members and beneficiaries of the plan in
01
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
accordance with the terms of each plan document. The costs of administering each plan are
financed in the appropriate pension trust fund.
The Florida Constitution requires local governments to make the actuarially determined
contribution. The Florida Division of Retirement reviews and approves each local government's
actuarial report prior to its being appropriated for use for funding purposes. Additionally, the State
collects two locally authorized insurance premium surcharges (one for the Police Pension Plan on
casualty insurance policies and one for the Fire Pension Plan on certain real and personal
property insurance policies within the corporate limits) which can only be distributed after the State
has ascertained that the local government has met its actuarial funding requirement for the then
most recently completed fiscal year.
Investments are reported at fair value and are managed by third party money managers. The
Village's independent custodians and individual money managers price each instrument using
various third party pricing sources. The following investments represent concentrations of 5% or
more of net plan assets in investments that are not issued or guaranteed by the U.S. government.
General Employees Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
Fire and Police Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
The following schedule is derived from the respective actuarial reports and Village information for
the two pension plans as of October 1, 2003:
Plan Description:
Authority
Asset Valuation:
Reporting
Actuarial Valuation
Legal Reserves
Long -Term Receivable
Internal /Participant Loans
Membership and Plan Provisions:
Members:
Active Participants
Retirees and Beneficiaries
Terminated Vested
General Employees
Village Ordinance
Fair Value
5 -year smoothed market
None
None
None
92
13
35
Fire and Police
Village Ordinance /State
Fair Value
5 -year smoothed market
None
None
None
37
4
14
45
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Normal Retirement Benefits:
Retirement Age
Years of Service (minimum)
Accrual - (years 1 -20)
(over 20)
Maximum
Years to Vest
Under 5 years
5 or 6 years
7 or 8 years
9 or more years
Contributions:
Actuarial Rate:
Village
State
Participants
Annual Pension Cost
Contributions Made
Option 1 Option 2
65
60
55
5
5
9
2.00%
2.25%
2.50%
1%
1%
-
None
None
60%
10
0%
0%
50%
50%
75%
75%
100%
100%
16.35%
3.50%
n/a
5.09%
4.00 %*
2.00%
$ 530,099
$387,647
$ 524,000
$453,317
* Except for certain members who have elected not to contribute and for other members who have
elected to contribute only 2.00 %.
Actuarial Valuation:
Frequency
Latest Valuation
Basis for Contribution
Cost Method
Amortization:
Method
Period
Open /Closed
General Employees Fire and Police
Annual Annual
10/11/03 10/1/03
10/1/03 10/11/03
Frozen Entry Age Aggregate
Level percent n/a
27 years n/a
Closed n/a
Note: The aggregate actuarial cost method does not identify or separately amortize unfunded
actuarial liabilities.
Assumptions:
Investment Earning
(including inflation)
Salary Increases (including inflation)
Inflation
Mortality Rates
8.5% / year up to
retirement, 5.25%
thereafter
5.5% / year
4.0% / year
1983 Group Annuity
Mortality Table
8.0% / year
6.0% / year
4.0% / year
1983 Group Annuity
Mortality Table
46
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Retirement Age:
Eligible for early retirement
5%
Normal retirement date attained
60%
Four years after normal
Police
retirement date
40%
Fifth year after normal
Interest on net pension asset
retirement date
100%
Turnover:
Age 25
Age 30
Age 35
Age 40
Age 45
Age 50
Age 55
Post Retirement Benefits
18.8%
11.2%
6.3%
4.8%
3.4%
2.4%
0.5%
3% for those who retired
before 2/1/82 or who
contribute an extra 2%
5%
60%
40%
100%
8.6%
7.5%
5.7%
3.9%
2.4%
1.2%
3% / year
There have been no changes in actuarial assumptions and methods for either plan since the last
actuarial valuation (October 1, 2002).
Annual Pension Cost and Net Pension Obligation (Asset):
The Village's annual pension cost and net pension obligation (asset) for both plans for the current
year were as follows:
47
General
Fire and
Employees
Police
Annual required contribution
$ 523,127
$ 383,891
Interest on net pension asset
(15,938)
(8,533)
Adjustment to annual required contribution
(22,910)
12,289
Annual pension cost
530,099
387,647
Contributions made
(524,000)
(453,317)
Decrease (increase) in net pension asset
6,099
(65,670)
Net pension asset, beginning of year
(187,510)
(178,047)
Net pension asset, end of year
$ (181,411)
$ (243,717)
47
THE VILLAGE OF [NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 7. PENSION PLANS (Continued)
Three -Year Trend Information
NOTE 8. CONTRACTS AND COMMITMENTS
Operating Leases
The Village is committed under a lease agreement for golf carts in the enterprise fund. The lease
is considered for accounting purposes to be an operating lease. Lease payments for the year
ended September 30, 2004 were $47,760. Future minimum lease payments are $47,760 for the
year ending September 30, 2005.
The Village is also committed under a lease agreement for two police motorcycles in the general
fund. The lease is considered for accounting purposes to be an operating lease. Lease payments
for the year ended September 30, 3004 were $6,000. Future minimum lease payments are
$6,000 for the year ended September 30, 2005.
The Village is committed under a lease agreement as lessor of the food and beverage operations
at the North Palm Beach Country Club. The lease is considered for accounting purposes to be an
operating lease. As part of the lease agreement, the Village receives a percentage of sales of the
lessee and reimbursements for utilities and financed assets. The Village received $86,451 for the
year ended September 30, 2004 under the terms of this lease agreement. Future minimum lease
payments for the year ending September 30, 3005 are contingent upon sales and expenses of the
operations of the lessee.
NOTE 9. JOINTLY GOVERNED ORGANIZATION
The Village, through an interlocal agreement with certain other municipalities and Palm Beach
County, created the Seacoast Utility Authority ( "Seacoast ") which provides water and sewer
service to the citizens of each of the participating municipalities and a portion of Palm Beach
County. Seacoast's governing board is comprised of one member from each participating entity.
Seacoast is an independent Authority organized under the laws of the State of Florida, and the
.
Annual
Percentage
Net Pension
Year
Pension
of APC
Obligation
Ended
Cost (APC)
Contributed
(Asset)
General
Employees 9/30/02
$ 435,473
107.40%
$ (193,873)
9/30/03
509,583
98.75%
(187,510)
9/30/04
530,099
98.85%
(181,411)
Fire and Police 9/30/02
133,722
144.20%
(109,993)
9/30/03
327,228
120.80%
(178,047)
9/30/04
387,647
116.90%
(243,717)
NOTE 8. CONTRACTS AND COMMITMENTS
Operating Leases
The Village is committed under a lease agreement for golf carts in the enterprise fund. The lease
is considered for accounting purposes to be an operating lease. Lease payments for the year
ended September 30, 2004 were $47,760. Future minimum lease payments are $47,760 for the
year ending September 30, 2005.
The Village is also committed under a lease agreement for two police motorcycles in the general
fund. The lease is considered for accounting purposes to be an operating lease. Lease payments
for the year ended September 30, 3004 were $6,000. Future minimum lease payments are
$6,000 for the year ended September 30, 2005.
The Village is committed under a lease agreement as lessor of the food and beverage operations
at the North Palm Beach Country Club. The lease is considered for accounting purposes to be an
operating lease. As part of the lease agreement, the Village receives a percentage of sales of the
lessee and reimbursements for utilities and financed assets. The Village received $86,451 for the
year ended September 30, 2004 under the terms of this lease agreement. Future minimum lease
payments for the year ending September 30, 3005 are contingent upon sales and expenses of the
operations of the lessee.
NOTE 9. JOINTLY GOVERNED ORGANIZATION
The Village, through an interlocal agreement with certain other municipalities and Palm Beach
County, created the Seacoast Utility Authority ( "Seacoast ") which provides water and sewer
service to the citizens of each of the participating municipalities and a portion of Palm Beach
County. Seacoast's governing board is comprised of one member from each participating entity.
Seacoast is an independent Authority organized under the laws of the State of Florida, and the
.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes To Basic Financial Statements
Year Ended September 30, 2004
NOTE 9. JOINTLY GOVERNED ORGANIZATION (Continued)
Village has no participating equity ownership in Seacoast. The Village paid $74,738 to Seacoast
during the fiscal year for water and sewer service.
NOTE 10. POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
In addition to the pension benefits described in Note 7, the Village provides postretirement health
care and life insurance benefits, in accordance with State Statutes, to all employees who retire
from the Village. The normal retirement age for police and firefighters is age 55; the normal
retirement age for all other Village employees is either age 60 or age 65, depending on the option
selected by the employee. The employee's required contribution is the full amount of the annual
premium. Expenditures for post- retirement health care and life insurance benefits are recognized
as expenditures as claims are paid.
NOTE 11. ACCRUED MEDICAL CLAIMS LIABILITY
After issuing the financial statements for the year ended September 30, 2004, Village
management discovered that certain unpaid claims for employee and beneficiary medical and
dental care totaling an estimated $342,000 had not been accrued as of September 30, 2004.
These omissions resulted from complete information not being available at the time the statements
were issued. The inclusion of these liabilities in the revised financial statements increased
liabilities by $342,000 at September 30, 2004. The excess of general fund revenues over
expenditures in the statement of revenues, expenditures and changes in fund balance, and the
change in net assets in the statement of activities decreased by $342,000.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Budgetary fund balance, October 1. 2003
Resources (inflows)
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Interest Earnings
Miscellaneous
Amounts available for appropriation
Charges to appropriations (outflows)
Village council expenses
Budgeted Amounts
Actual on
Variance with
2,517,082
Budgetary
Final Budget
Original Final
Basis
Positive
Budget Budget
(See Note 1)
(Negative)
$ - $ 2,306,067
$ 667,442
$ (1,638,625)
11,228,808
8,922,741
11,439,823
2,517,082
463,515
588,515
712,184
123,669
1,142,400
1,506,135
1,350,104
(156,031)
646,510
641,510
719,589
78,079
122,700
122,700
122,407
(293)
50,000
50,000
45,080
(4,920)
138,000
227,687
175,431
(2,256)
13,741,933 14,315,355 15,232,060 916,705
Personnel expenses
35,927
37,227
35,927
1,300
Professional services
4,200
11,700
9,722
1,978
Accounting & auditing
29,000
29,000
18,977
10,023
Internal auditing
20,000
20,000
17,815
2,185
Other operating expenses
21,715
21,715
18,196
3,519
Total village council expenses
110,842
119,642
100,637
19,005
Village manager expenses
Personnel expenses
326,137
372,659
327,094
45,565
Telephone
8,100
8,100
8,021
79
Moving expenses
-
7,000
7,000
-
Computer supplies
3,000
4,155
4,154
1
Other operating expenses
13,180
12,065
10,197
1,868
Total Village Manager Expenses
350,417
403,979
356,466
47,513
Village clerk expenses
Personnel expenses
188,188
224,438
208,783
15,655
Telephone
2,100
2,100
1,892
208
Rental - facility
1,000
1,000
1,000
-
Office supplies
2,300
2,300
2,083
217
Other operating expenses
6,752
6,752
5,102
2,100
Total Village Clerk Expenses
200,340
236,590
218,860
18,180
Finance expenses
Personnel expenses
352,055
423,323
407,777
15,546
Professional services
2,500
3,000
3,325
(325)
Telephone
4,500
4,400
3,927
473
Office supplies
2,500
2,500
1,825
675
Computer supplies
3,500
3,600
3,610
(10)
Other operating expenses
23,210
24,660
21,935
2,725
Total Finance Expenses
388,265
461,483
442,399
19,084
Continued 50
See notes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
35,000
35,000
Budgetary Comparison Schedule
1,676
Utilities
General Fund
23,250
23,189
For the year ended September 30, 2004
Rental equipment
10,000
Budgeted Amounts
Actual on
Variance with
Insurance - package
Budgetary
Final Budget
Original Final
Basis
Positive
Budget Budget
(See Note 1)
(Negative)
76
Supplies
29,950
Village attorney expenses
28,335
32
Village attorney legal fee 85,000 77,300
67,704
9,596
Special legal services 20,000 18,400
18,345
55
Labor services 12,000 23,400
23,348
52
Total Village Attorney Expenses 117,000 119,100
109,397
9,703
Planning & comm. Devel. Exp
10,593
1,557
Engineering /planning general 10,000 8,200
19,203
(11,003)
Archivist/historian 200 200
1,084
(884)
Comp. Plan. Amendments 10,000 6,400
1,515
4,885
Northlake blvd redevelopement 10,000 10,000
10,000
-
Total Planning & Comm. Devel. Exp 30,200 24,800
31,802
(7,002)
General Service Expense - Village Hall
Postage
35,000
35,000
33,324
1,676
Utilities
15,400
23,250
23,189
61
Rental equipment
10,000
10,500
9,941
559
Insurance - package
170,000
162,700
158,080
4,620
Repairs and maintenance
3,500
3,100
3,024
76
Supplies
29,950
28,725
28,335
32
Other operating expenses
15,500
17,600
17,557
43
Total General Service Expense - Village Hall
279,350
280,875
273,450
7,425
General Service Expense- Public Safety Bldg
12,150
12,150
10,593
1,557
Postage
1,500
1,810
1,683
127
Utilities
105,785
102,845
93,608
9,237
Rental- copier equip.
8,000
8,000
10,637
(2,637)
Repairs and maintenance
16,000
12,300
11,165
1,135
Supplies
3,000
2,850
2,753
97
Other operating expenses
1,500
11,190
12,799
(1,609)
Total General Service Expense- Public Safety Bldg
143,385
138,995
132,645
6,350
Facilities maintenance. expenses
Personnel expenses
373,395
411,976
400,543
11,433
Supplies
9,300
9,600
9,001
599
Other operating expenses
3,600
3,600
3,182
418
Total Facilities Maint. Expenses
384,995
423,876
411,605
12,2.71
Vehicle maint. Expenses
Personnel expenses
130,443
141,444
133,150
8,294
Utilities
7,600
9,310
9,161
149
Repairs and maintenance
5,800
5,500
4,608
892
Supplies
12,150
12,150
10,593
1,557
Other operating expenses
1,000
1,000
802
198
Machinery & equipment
4,000
3,500
3,385
115
Total Vehicle Maint. Expenses
160,993
172,904
161,699
11,205
Continued
See notes to required supplementary information.
51
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
570
Budgetary Comparison Schedule
Licenses & fees
672
General Fund
Auto parts supplies
60
For the year ended September 30, 2004
Total Police forfeiture trust expense
-
-
Budgeted Amounts
Actual on
Variance with
Budgetary
Final Budget
674,598
Original
Final
Basis
Positive
13,610
Budget
Budget
(See Note 1)
(Negative)
Reserves expenses
35,263
28,095
7,168
Training and education
Council contingency
75,337
59,537
2,000
57,537
Reserve -group health
500,000
500,000
842,000
(342,000)
Reserve - miscellaneous
20,000
8,000
6,168
1,832
Reserve - Raises & Benefits
172,500
-
-
-
Reserve- accrued benefits
70,000
60,847
60,773
74
Performance Raise
225,000
-
-
-
2003 Salary Adjustment
622,000
-
-
-
Reserve- hurricane expenses
-
295,000
275,789
19,211
Total Reserves Expenses
1,684,837
923,384
1,186,730
(263,346)
Police expenses
6,655
3,744
2,911
Other operating expenses
Personnel expenses
2,694,780
3,006,016
2,886,561
119,455
Telephone
9,308
11,708
11,734
(26 )
Rental - equipment
8,658
8,258
7,252
1,006
Repairs and maintenance
53,501
57,401
48,462
8,939
Supplies
142,550
137,500
104,947
32,553
Training and education
30,799
24,199
20,143
4,056
Other operating expenses
55,833
40,933
22,218
18,715
Capital expenses
60,400
91,200
89,303
2,026
Total Police Expenses
3,055,829
3,377,215
3,190,620
186,724
Police forfeiture trust expense
R & m automotive
570
(570)
Licenses & fees
672
(672)
Auto parts supplies
60
(60)
Total Police forfeiture trust expense
-
-
1,302
(1,302)
Fire prevention expenses
Personnel expenses
674,598
746,055
670,810
75,245
Repairs and maintenance
13,610
13,610
5,256
8,354
Supplies
34,263
35,263
28,095
7,168
Training and education
5,841
4,541
4,167
374
Other operating expenses
11,694
12,994
13,735
(741)
Capital expenses
69,414
68,614
68,062
20,202
Total Fire Prevention Expenses
809,420
881,077
790,125
110,602
Public Service Administrative Expenses
Personnel expenses
464,237
516,584
463,190
53,394
Utilities
16,700
17,300
16,621
679
Repairs and maintenance
11,075
11,475
8,033
3,442
Supplies
14,000
13,800
13,836
(36)
Training and education
6,655
6,655
3,744
2,911
Other operating expenses
13,400
11,200
4,573
6,627
Computer hdwr & softwr
1,400
1,400
1,287
113
Total Public Service Administrative Expenses
527,467
.578,414
511,284
67,130
Continued 52
See notes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Budgeted Amounts
Actual on
Variance with
Budgetary
Final Budget
Original
Final
Basis
Positive
Budget
Budget
(See Note 1)
(Negative)
Emergency Medical Service Expenses
Personnel expenses
899,809
1,023,115
958,838
64,277
Utilities
6,100
9,691
9,045
646
Rental - equipment
9,000
9,000
8,391
609
Repairs and maintenance
11,900
10,950
5,701
5,249
Supplies
54,221
51,521
41,049
10,472
Training and education
4,846
3,955
3,862
93
Other operating expenses
35,510
34,610
30,726
3,884
Capital expenses
15,630
33,415
204,420
(168,006)
Total Emergency Medical Services Expenses 1,037,016
1,176,257
1,262,032
(82,776)
Sanitation expenses
Personnel expenses
866,038
979,057
933,971
45,086
Solid waste disposal
140,000
124,600
116,273
8,327
Repairs and maintenance
8,000
8,000
8,066
(66)
Advertising
1,200
1,200
1,101
99
Supplies
86,250
96,650
90,829
5,821
Recycling program
1,200
1,200
1,196
4
Total Sanitation Expenses
1,102,688
1,210,707
1,151,436
59,271
Street maint. Expenses
Personnel expenses
492,451
559,990
519,682
40,308
Utilities
72,000
77,700
82,436
(4,736)
Rental - equipment
1,000
1,000
118
882
Repairs and maintenance
9,000
205,000
2,668
202,332
Supplies
13,500
14,500
12,680
1,820
Other operating expenses
52,150
55,450
50,102
5,348
Total Street Maint. Expenses
640,101
913,640
667,686
245,185
Library expenses
Personnel expenses
473,381
565,760
535,695
30,065
Utilities
26,800
31,500
30,774
726
Rental equipment
3,250
3,250
2,179
1,071
Repairs and maintenance
7,836
7,836
4,468
3,368
Supplies
13,625
13,625
9,323
4,302
Other operating expenses
4,710
4,710
3,265
1,280
Books and capital expenses
84,435
84,435
93,627
(630)
Total Library Expenses
614,037
711,116
679,331
12,848
Park maint. Expenses
Personnel expenses
298,698
344,051
305,712
38,339
Utilities
8,500
10,930
10,936
(6)
Rental - equipment
1,000
1,200
1,200
-
Repairs and maintenance
7,700
7,700
6,769
931
Supplies
58,800
58,550
53,365
5,185
Other operating expenses
5,075
5,075
3,254
_ 1,821
Total Park Maint. Expenses
379,773
427,506
381,236
46.270
Continued
53
See notes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Budgetary Comparison Schedule
General Fund
For the year ended September 30, 2004
Budgeted Amounts
Actual on
Variance with
Budgetary
Final Budget
Original Final
Basis
Positive
Budget Budget
(See Note 1)
(Negative)
Recreation expenses
Personnel expenses
378,718 462,544
443,147
19,397
Utilities
109,000 102,000
106,996
(4,996)
Repairs and maintenance
8,000 11,500
11,363
137
Supplies
29,400 30,400
25,528
4,872
Training and education
1,900 1,900
27
1,873
Other operating expenses
4,360 5,960
4,864
1,096
Capital expenses
- 11,500
1,500
11,500
Total Recreation Expenses
531,378 625,804
593,425
33,879
Special events expense
Music & talent
10,000 6,750
6,718
32
Rental - Equipment
4,000 2,100
2,080
20
Public Events
45,000 39,541
38,624
917
Furniture /fixture
1,600 1,600
1,723
(123)
Refreshments & supplies
1,500 1,500
1,793
(293)
Total Special Events Expense
62,100 51,491
50,938
553
Debt service expenses
Total Debt Service Expenses 1,131,500 1,056,500 995,764 60.736
Total expenditures /charges to appropriations 13,741,933 14,315,355 13,700,869 619,508
Budgetary fund balance, September 30, 2004 $ - $ - $ 1,531,191 $ 1,536,213
54
See notes to required supplementary information.
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Funding Progress - General Emplovees Retirement Fund
See notes to required supplementary information. 55
Actuarial
UAAL as
Actuarial
Accrued
% of
Actuarial
Value of
Liability (AAL)
Unfunded AAL
Funded
Covered
Covered
Valuation
Assets
- Entry Age
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b -a)
(a/b)
(c)
(b -a) /c
10/01/1997
$ 4,301,968
$ 4,585,587
$ 283,619
93.8%
$ 2,380,024
11.9%
10/01/1998
4,574,342
4,733,864
159,522
96.6%
2,435,518
6.5%
10/01/1999
5,179,781
5,943,849
764,068
87.1%
2,543,984
30.0%
10/01/2000
5,732,329
7,508,961
1,776,632
76.3%
2,761,773
64.3%
10/01/2001
6,312,447
8,150,125
1,837,678
77.5%
3,127,313
58.8%
10/01/2002
6,193,676
8,594,442
2,400,766
72.1%
3,076,493
78.0%
10/01/2003
6,759,012
10,404,349
3,645,337
65.0%
3;443,843
105.9%
See notes to required supplementary information. 55
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Employer and State Contributions
Annual
Year Ended
Required
Employer
State
Percentage
September 30,
Contribution
Contribution
Contribution
Contributed
General Employees Retirement Fund
182,286
110,966
79,215
104.3%
1998
$ 224,810
$ 250,721
n/a
111.5%
1999
214,323
227,112
n/a
106.0%
2000
292,866
372,744
n/a
127.3%
2001
415,152
447,128
n/a
107.7%
2002
430,411
467,750
n/a
108.7%
2003
502,855
503,220
n/a
100.1%
2004
523,127
524,000
n/a
100.2%
Fire and Police Retirement Fund*
1998
$ 118,643 $
56,672 $
92,463
125.7%
1999
182,286
110,966
79,215
104.3%
2000
97,135
53,067
73,123
129.9%
2001
85,866
25,607
77,227
119.8%
2002
130,305
57,825
88,452
112.3%
2003
323,352
235,339
159,943
122.2%
2004
249,702
250,000
203,317
181.5%
* Annual required contributions for the Fire and Police Retirement Fund include contributions
from the State of Florida.
56
See notes to required supplementary information.
The Village of North Palm Beach, Florida
Notes to Required Supplementary Information
Year Ended September 30, 2004
NOTE 1. BUDGETARY DATA
As required by GASB Statement No. 34, a budgetary comparison schedule is
presented for the general fund. Budgetary comparison schedules are not required,
and have not been presented for capital projects funds or enterprise funds.
The budget for the general fund is adopted on an accounting basis that differs from
generally accepted accounting principles (GAAP) because it includes open
encumbrances as expenditures. Differences between budgetary inflows and outflows
and GAAP revenues and expenditures are as follows:
General Fund
Sources /Inflows of resources:
Actual amounts (budgetary basis) "available for appropriations" from the
Budgetary comparison schedule $15,232,060
Differences - budget to GAAP:
The fund balance at the beginning of the year is a budgetary resource but
is not a current -year revenue for financial reporting purposes (667,442)
Total revenues as reported on the statements of revenue, expenditures
and changes in fund balances - governmental funds $14,564,618
Uses /Outflows of resources:
Actual amounts (budgetary basis) "total charges to appropriations" from the
budgetary comparison schedule $13,700,869
Total expenditures, as reported on the statement of revenues, expenditures,
and changes in fund balances - governmental funds $13,700,869
Budgetary fund balance:
Actual fund balance (budgetary basis) from the budgetary
comparison schedule $1,531,191
Differences - budget to GAAP:
The fund balance at the beginning of the year is a budgetary resource
but is not a current -year revenue for financial reporting purposes (667,442)
Total fund balances, as reported on the statement of revenues,
expenditures and changes in fund balances - governmental funds $ 863,749
*/
The Village of North Palm Beach, Florida
Notes to Required Supplementary Information
Year Ended September 30, 2004
NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Unencumbered appropriations lapse at fiscal year end. Encumbrances at year -end
are carried forward to the next year. During the year, several supplementary
appropriations were necessary. For the year ended September 30, 2004, several
expenditures exceeded appropriations in the general fund. They are as follows:
❖ Expenditures for Capital Outlay - Computer Hardware and Software in Village
Manager and in Finance; and Automotive in Fire Prevention and in Park
Maintenance were not budgeted because they were funded through issuance of
bank loans.
❖ Expenditures for Outside Services Pay and Donations in Law Enforcement
exceeded appropriations because these are not budgeted items.
❖ Expenditures for Library Contribution Usage exceeded appropriations because
this is not a budgeted item.
❖ Expenditures for Health Insurance in all departments exceeded appropriations
due to increases in health care costs.
NOTE 3. PENSION PLANS
The aggregate actuarial cost method does not identity or separately amortize
unfunded actuarial liabilities. The information presented in the required
supplementary schedules was determined as part of the actuarial valuations at the
dates indicated. Additional information as of the latest actuarial valuation follows:
General Fire
Employees and Police
Valuation date 10/1/03 10/1/03
Actuarial cost method Frozen Entry Age Aggregate
Asset valuation method 5 -year smooth market 5 -year smoothed market
Actuarial assumptions:
Investment rate of return (including 8.59/o/year up to retirement, 81/o/year
inflation) 5.25% thereafter
Salary increase (including inflation) 5.50/o/year 61/o/year
Inflation 40/o/year 41/o/year
Post retirement benefit increases 3% /year for those who retired 30/o/year
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THE VILLAGE OF NORTH PALPJI BEACH, FLORIDA
COMBINING STATEMENT OF CHANGES IN NET ASSETS
Employee Retirement Funds
Year Ended September 30, 2004
Additions:
Contributions:
Employer
State of Florida
Plan members
Total contributions
Investment income:
Interest and dividends
Realized gains and losses
Net appreciation in fair value of investments
Investment expense
Total investment income
Total additions
Deductions:
Administration
Benefits
Total deductions
Net increase (decrease)
Net assets held in trust for pension benefits, beginning
of year
Net assets held in trust for pension benefits, end of
year
Employee Retirement Funds
Fire and
General Police Total
Employees Officers Employee
$ 524,000
$ 250,000
$ 774,000
-
203,317
203,317
179,569
54,500
234,069
703,569
507,817
1,211,386
7,183
177,325
184,508
-
241,996
241,996
619,674
144,496
764,170
(50,348)
(34,694)
(85,042)
576,509
529,123
1,105, 632
1,280,078
1,036,940
2,317,018
25,233
47,754
72,987
1,408,601
451,159
1,859,760
1,433,834
498,913
1,932,747
(153,756)
538,027
384,271
6,759,011
6,731,048
13,490,059
$ 6,605,255 $ 7,269,075 $ 13,874,330
•1
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
SEPTEMBER 30, 2004
Total All Agency Funds
October 1, 2003
Additions
Deductions
September 30, 2004
Manatee Protection Aoencv
Assets
$
246,153
$
26,512
$
581
$
272,084
Cash and Cash Equivalents
$
228,894
$
3,116
$
581
$
232,010
Total assets
$
228,894
$
3,116
$
$
232,010
Liabilities
$
246,153
$
26,512
$
581
$
272,084
Due to Others
$
228,894
$
3,116
$
581
$
232,010
Total liabilities
$
228,894
$
3,116
$
$
232,010
Northlake Boulevard Task Force
Assets
Cash and Cash Equivalents
$
17,259
$
23,396
$
581
$
40,074
Noncurrent Asset (Fiduciary)
-
-
-
-
Total assets
$
17,259
$
23,396
$
581
$
40,074
Liabilities
Due to Others
$
17,259
$
23,396
$
581
$
40,074
Total liabilities
$
17,259
$
23,396
$
581
$
40,074
Total All Agency Funds
Assets
Cash and Cash Equivalents
$
246,153
$
26,512
$
581
$
272,084
Total assets
$
246,153
$
26,512
$
581
$
272,084
Liabilities
Due to Others
$
246,153
$
26,512
$
581
$
272,084
Total liabilities
$
246,153
$
26,512
$
581
$
272,084
61
STATISTICAL SECTION
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Table V
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Year
Total
Tax Levy
Current Tax
Collections
Percent
of Levy
Collected
Delinquent
Tax
Collections
Total
Tax
Collections
Percent
Collected
To Tax Levy
1995
$ 3,780,663
$ 3,646,758
96.54%
$ 78
$ 3,646,836
96.57%
1996
3,704,613
3,577,517
96.46%
6,187
3,583,704
96.46%
1997
3,701,075
3,574,562
96.57%
4,379
3,578,941
96.74%
1998
4,105,193
3,961,574
96.50%
5,861
3,967,435
96.64%
1999
4,327,943
4,166,035
96.26%
6,721
4,172,756
96.41%
2000
4,512,027
4,335,668
96.09%
23,074
4,358,742
96.60%
2001
5,196,021
5,013,269
96.48%
4,687
5,017,956
96.57%
2002
5,562,239
5,357,206
96.31%
12,175
5,369,381
96.53%
2003
6,597,909
6,359,478
96.39%
5,522
6,365,000
96.47%
2004
8,825,061
8,441,383
95.65%
10,401
8,451,784
95.77%
Source: Palm Beach County Property Appraiser.
..
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Assessed Value of Taxable Property
Last Ten Fiscal Years
Fiscal
Year
Assessed Value
Real Personal
Property Property
Total
1995
$ 690,876,303
$ 29,249,922
$ 720,126,225
1996
694, 725, 948
31, 668, 828
726,394, 776
1997
700,039,002
31,398,755
731,437,757
1998
724,341,193
35,879,717
760,220,910
1999
736,890,024
35,742,548
772,632,572
2000
767,696,404
36,071,964
803,768,368
2001
861,214,093
40,169,760
901,383,853
2002
950,465,573
42,791,419
993,256,992
2003
1,093,294,027
44,276,499
1,137,570,526
2004
1,252,888,990
44,914,124
1,297,803,114
Note: The basis of assessed value is approximately one hundred percent
(100 %) of actual value. For each fiscal year ending September 30,
property is valued as of January 1st of the preceding calendar year.
Source: Palm Beach County Property Appraiser.
Table VI
67
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Tax Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
(Per $1, 000 of the Assessed Value)
Village
Palm Beach
of North
County
Fiscal Palm Special
School Palm Beach
Year Beach Districts
District County Total
1995
5.25
2.448
10.185
4.519
22.402
1996
5.10
2.485
9.797
4.519
21.901
1997
5.06
2.286
9.788
4.519
21.653
1998
5.40
2.360
9.557
4.867
22.184
1999
5.60
2.234
9.682
4.858
22.374
2000
5.60
2.262
8.918
4.936
21.716
2001
5.75
2.263
8.918
4.936
21.867
2002
5.60
2.456
8.948
4.935
21.939
2003
5.80
2.488
8.779
4.808
21.875
2004
6.80
2.556
8.571
4.791
22.718
Source: Palm Beach County Property Appraiser.
Table VII
.•
Table VIII
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Computation of Direct and Overlapping Bonded Debt
General Obligations Bonds
September 30, 2004
Percentage Amount
Net General Applicable to Applicable to
Name of Bonded Debt The Village of The Village of
Governmental Unit Outstanding North Palm Beach (1) North Palm Beach
Direct
Village of North Palm Beach $ - 100.00% $ -
Overlapping:
Palm Beach County N/A N/A N/A
Palm Beach County
School District N/A N/A N/A
Total $ _ $ _
(1) Estimated based on 2002 Ratio of Assessed Taxable Values.
Source: Palm Beach County Property Appraiser
School Board of Palm Beach County, Finance Department
Village of North Palm Beach.
N/A = Not Available
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Computation of Legal Debt Margin
September 30, 2004
The Village Charter and the Constitution of the State of Florida, Florida State Statute 200.181,
do not provide for a legal debt limit.
Table IX
70
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Table XI
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Property Value, Construction, and Bank Deposits
Last Ten Fiscal Years
Fiscal
Year
Property Value (1)
Commercial Residential
Commercial
Construction
Value
Residential
Construction
Value
Bank
Deposits (2)
(in thousands)
1995
$ 93, 576, 663
$ 541, 319, 023
$ 307,650
$ 18, 901, 801
$ 9,055,476
1996
91,959,700
595,990,486
4,434,050
4,032,198
9,545,424
1997
92,371,112
603,600,525
3,759,496
2,194,016
9,911,930
1998
97,758,105
620,048,032
3,769,950
10,893,857
10,715,610
1999
109,456,299
625,385,715
11,698,194
5,337,681
13,283,898
2000
113,851,156
653,605,011
4,394,857
28,219,296
12,711,003
2001
122,793,250
745,237,484
8,942,094
36,600,946
12,927,182
2002
124,216,202
823,286,154
2,218,598
11,234,443
13,841,347
2003
128,216,552
963,091,506
225,000
9,355,204
14,484,675
2004
147,927,933
1,092,433,722
565,215
11,417,004
15,855,918
(1) Estimated
(2) Data as of September 30 of the preceding year.
Sources: Village of North Palm Beach.
Palm Beach County Property Appraiser Office.
Florida Bankers Association (all of Palm Beach County)
72
Table XII
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Principal Taxpayers
January 1. 2004
Source: Palm Beach County Property Appraiser.
73
Percentage
2004
of Total
Assessed
Assessed
Taxpayer
Valuation
Valuation
Olen Residential Realty
$ 17,830,332
1.53%
Sanctuary Bay Trust Corporation
13,491,211
1.15%
Crystal Tree NPB
9,939,914
0.87%
Wolfchase Associates, L.L.C.
8,600,000
0.76%
Greater Florida Investment Co.
5,840,000
0.51%
Transcontinental Atrium, Inc.
4,590,000
0.40%
701 US One, Inc.
3,600,000
0.36%
Pavilion Office Center
3,240,000
0.35%
Old Port Cove Dev.
3,162,597
0.28%
Developers of Northlake, Inc.
3,143,442
0.27%
Morse, Edward J., Inc.
2,857,901
0.25%
$ 76,295,397
6.73%
Source: Palm Beach County Property Appraiser.
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Miscellaneous Statistics
September 30, 2004
Date of Incorporation: August 13, 1956
Form of Government Council - Manager
Area (land and waterways) 5.18 square miles
Miles of streets 36.00
Number of street lights 425
Population 12,198
Fire Protection
Number of stations 1
Number of firemen and officers 8
Police /EMS Protection
Number of stations 2
Number of policemen and officers 35
Number of EMS officers 13
Building Permits
Building permits - new 36
Building permits-- additions 165
Recreation /Culture
Number of parks
4
Public tennis courts
4
Number of marinas
1
Number of libraries
1
Number of volumes
47,531
Country Club
Golf course 1
Driving range 1
Swimming pool 1
Tennis courts 10
Employees 264
Source: Village of North Palm Beach
Table Xlli
74
REQUIRED REPORTS
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
The Honorable Mayor and Members of the Village Council
The Village of North Palm Beach, Florida
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the Village of North
Palm Beach, Florida ( "Village "), as of and for the year ended September 30, 2004, which
collectively comprise the Village's basic financial statements and have issued our report thereon
dated March 4, 2005. We conducted our audit in accordance with auditing standards generally
accepted in the United States and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Village of North Palm Beach, Florida's
internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinions on the financial statements and not to provide an opinion on
the internal control over financial reporting. Our consideration of the internal control over
financial reporting would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a reportable condition in
which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements in amounts caused by error or fraud
that would be material in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing their assigned
functions. We noted no matters involving the internal control over financial reporting and its
operation that we considered to be material weaknesses. However, we noted other matters
involving the internal control over financial reporting that we have reported to management of
the Village of North Palm Beach, Florida in a separate letter dated March 4, 2005.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Village of North Palm Beach,
Florida's financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and 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 test disclosed no instances of noncompliance that are required to be
reported under Government Auditing Standards.
75
This report is intended for the information and use of the audit committee, management,
members of the Village Council, the State of Florida Office of the Auditor General, and
applicable federal and state agencies, and is not intended to be and should not be used by
anyone other than these specified parties.
West Palm Beach, Florida
March 4, 2005
76
Management Letter in Accordance with the Rules
of the Auditor General of the State of Florida
The Honorable Mayor and Members of the Village Council
The Village of North palm Beach, Florida
We have audited the basic financial statements of the Village of North Palm Beach, Florida, (the
Village) as of and for the year ended September 30, 2004, and have issued our report thereon
dated March 4, 2005. We conducted our audit in accordance with auditing standards generally
accepted in the United States and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. We
have issued our Report of Independent Certified Public Accountants on Compliance and
Internal Control Over Financial Reporting and on Compliance and Other Matters, Based on an
Audit of Financial Statements Performed in Accordance With Government Auditing Standards
date March 4, 2005 and it should be considered in conjunction with this management letter.
In connection with our audit of the basic financial statements of the Village for the year ended
September 30, 2004, we report the following in accordance with Chapter 10.550, Rules of the
Auditor General, Local Governmental Entity Audits which requires that this report specifically
address, but not be limited to, the matters outlined in Rule 10.554 (1)(h):
1. No inaccuracies, shortages, defalcations, fraud, and violations of laws, rules;
regulations and contractual provisions were reported in the preceding annual
financial audit
2. The Village, during fiscal year 2004, was not in a state of financial emergency as
defined by Florida Statute, Section 218,503(1). The Village had no deficit fund
balances.
3. The Village has complied with Section 218.415, Florida Statutes regarding the
investment of public funds.
4. Recommendations to improve the Village's present financial management and
accounting procedures are presented below.
5. Recommendations made in the preceding financial audit have been implemented,
except as noted below.
6. During the course of our audit, nothing came to our attention that caused us to
believe that the Village:
a. Was in violation of any laws, rules, regulations or contractual provisions.
b. Made any illegal or improper expenditures that may or may not materially affect
the financial statements.
c. Had improper or inadequate accounting procedures, other than those
recommendations noted below to improve the Village's administrative and
accounting controls.
d. Failed to properly record financial transactions, which could have a material
effect on the Village's basic financial statements.
e. Had other inaccuracies, shortages, defalcations or instances of fraud and fraud
related matters.
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7. The annual financial report for the year ended September 30, 2004, has been filed
with the State of Florida Department of Financial Services pursuant to Section
218.32(1)(a), Florida Statutes, and was in agreement with the audited financial
statements of the same period.
8. The Village of North Palm Beach, Florida was incorporated by Chapter 165, Florida
Statutes.
9. During the course of our audit, we applied financial condition assessment procedures
pursuant to Rule 10.556(8). It is management's responsibility to monitor the Village's
financial condition, and our financial condition assessment, which was performed as
of the Village's fiscal year end, was based on representations made by management
and the review of financial information provided by the Village. There were no
findings regarding deteriorating financial conditions.
CURRENT YEAR COMMENTS AND RECOMMENDATIONS
AUDIT ADJUSTING ENTRIES
FINDING 04 -1
Criteria
An effective system of internal controls includes procedures that require that a responsible
official approve adjusting journal entries and that the entries be timely posted to the appropriate
general ledger accounts.
Condition
While reconciling certain fund balance general ledger accounts during the course of our audit of
the Village's financial statements for the year ended September 30, 2004, we noted that some
auditors' journal entries for the year ended September 30, 2003 were not posted to the general
ledger accounts as of the date of our examination. We also noted that some fiscal year 2004
activity had been posted to certain fund balance accounts rather that having been posted to
revenue and expense accounts.
Perspective /Effect
A FY2003 adjusting journal entry was not posted to the general ledger and certain fund balance
accounts contained current period activity. Because the 2003 journal entry was not posted, one
fund balance general ledger account was not in agreement with the September 30, 2003
audited financial statements.
Recommendation
We recommend that the Village strengthen controls over journal entries by requiring that all
adjustments be timely posted to the appropriate general ledger accounts, that current period
activity be posted to the appropriate revenue and expense accounts as it occurs, and that fund
balance accounts be reconciled with audited financial statements.
Management's response
By June 30, 2005 all adjusting journal entries will have been posted to the general ledger and
reconciled by the Finance Director. All future annual audit journal entries will be posted to the
appropriate general ledger accounts within 30 days of completion and delivery of the audit
report to the Village Council. Current monthly activity will be posted to the appropriate revenue
and expenditure accounts as it occurs.
BUDGET CATEGORIES SUBTOTALS
FINDING 04 -2
Criteria
An effective system of internal controls includes procedures that require that revenue and
expense categories be in compliance with properly adopted budgets and approved budget
amendments. The budget adoption ordinance reflects an allowance for budget transfers up to
and including $5,000 without council approval.
Condition
While preparing the CAFR for the fiscal year ended September 30, 2004, we noted that certain
revenue and expense categories and various transfers between line items occurred during the
year.
Perspective /Effect
The total budget in the general ledger reports agreed to the total approved budget as amended.
However, it was not clear how the line item transfers, particularly those that are required to be
approved by the council, relate to the budget level that was originally approved.
Recommendation
We recommend that the Village review the budget adoption and amendment levels (i.e., line
item level, department level, function level) to provide the most practical implementation of
budgetary controls by Village management.
Management's response
The Village Administration will recommend that the Village adopt an annual budget that sets the
legal level of financial control at the Department level for total operating expenditures and
further provide for categorical budget control of total capital expenditures within each
department. The Administration's recommendation will be reflected in the July 2005 proposed
budget to be considered by Council as part of the annual budget adoption in September 2005.
INFORMATION TECHNOLOGY PROCEDURES DOCUMENTATION
FINDING 04 -3
Criteria
An effective system of internal controls includes procedures for documentation of information
technology policies, procedures, and guidelines.
Condition
Our review of the current information systems department disclosed no significant problems.
However, we noted the lack of formal documentation of policies, procedures and controls.
Perspective /Effect
Documentation is primarily a function of safeguarding assets, ensuring continuity in case of
turnover and absences, and setting guidelines that help monitor the timing of software and
hardware upgrades, control obsolescence, and provide for the highest and best use of
information technology.
79
Recommendation
Formal documentation is a time consuming process. However, we recommend that the Village
implement the goal of completing the documentation of the technology policies and procedures.
Management's response
Information technology policies and procedures will be developed and implemented by
September 2005.
STATUS OF PRIOR YEARS' COMMENTS
FINDING 01 -01
Country Club Operation
Criteria
Proprietary funds are used to account for governmental activities that are similar to activities
that may be performed by a commercial enterprise. The basic objective of a proprietary fund is
to provide a service or product to the public at a reasonable cost.
Condition - current year
During the course of our audit, we utilize a variety of methods to identify the financial condition
of the organization. Financial condition, for the purpose of this comment, refers to the Village's
ability to provide services at the level and quality that is citizens desire. As part of our 2004,
audit, we updated financial indicators that had been calculated in the prior year.
At September 30, 2004, the financial indicators continue to demonstrate a deteriorating financial
condition for the country club operation. Our observations on this condition are as follows:
1. There has been a continuous decline in net assets for the past five years. Net
assets are the cumulative amount by which revenues and operating transfers from
other funds have exceeded expenses. For the year 2004, the Country Club
experienced a slight increase of 1.27 %.
2. There has been a continuous decline in the current ratio (as measured by cash and
investment to current liabilities) for the past three years. This may result in a
difficulty in meeting current needs. For the year 2004, there was an increase in the
current of .12:1.00 to .52:1.00.
3. There were operating losses for three of the past five years. This may result in a
reduction of the Village's ability to withstand financial emergencies and /or the ability
to fund major expenses or capital purchases without having to borrow.
4. There has been a negative working capital position for the last four years. At
September 30, 2004, the County Club's liquid assets were $126,818. The average
monthly cash requirement for operations is $213,000.
2004 2003 2002 2001
Financial Indicator #1
Net Assets $2,126,172 $2,099,593 $1,974,296 $2,044,028
Percentage Increase (Decrease) 1.27% (3.14)% (3.41)% (5.54)%
:N
Financial Indicator #2
Cash and Investments
$65,413
$128,924
$156,020
$114,861
Current Liabilities
149,679
324,499
390, 171
247,324
.52:1.00
.40:1.00
.40:1.00
.46:1.00
2004
2003
2002
2001
Financial Indicator #3
Operating Income (Loss)
$40,131
$(22,146)
$1,973
$(65,883)
Operating Revenues
2,590,819
2,631,509
2,570,649
2,492,894
1.5%
(0.84)%
0.08%
(2.60)%
Financial Indicator #4
Net assets
$2,126,172
$2,099,593
$1,974,286
$2,044,028
Total Operating Revenues
2,590,819
2,631,509
2,570,649
2,492,894
82%
79%
77%
82%
Financial Indicator #5
Net Working Capital (Deficiency)
$(22,860)
$(122,487)
$(140,018)
$(205,884)
Percentage Increase /(Decrease)
81 %
12%
32%
39%
Perspective
The financial condition of the enterprise fund may require the general fund to subsidize
operations and may prevent the ability to finance needed improvements.
Recommendation
We recommend that management:
1. Continue to review the revenue structures to determine stability, equity, efficiently
and capacity to finance operations.
2. Use long -term financial plans that include revenue and expenditure trend studies,
capital, and debt management plans.
Management Response
The Village Council has agreed with the Administration's recommendation to engage a financial
advisor for developing a set of business plans for the Country Club under various development
and operating scenarios. The advisor will assist in a review and forecasting of Country Club
financial operations and assist in identifying capital debt capacity for Country Club
improvements. The Administration will collaborate with the Village's Country Club Advisory
Board in reviewing and possibly adjusting annual Club fees, vendor contracts relating to outside
vending machines, golf course beverage services, driving range fees and various other Club
revenue enhancement opportunities.
This management letter is intended solely for the information and use of the Village of North
Palm Beach, Florida's management, and the State of Florida Office of the Auditor General, and
is not intended to be and should be used by anyone other than these specified parties.
West Palm Beach, Florida
March 4, 2005