2008 CAFRVillage of North Palm Beach
Comprehensive Annual Financial Report
Fiscal Year Ended September 30, 2008
The Village of
North Palm Beach, Florida
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COMPREHENSIVE ANNUAL FINANCIAL REPORT
Fiscal Year Ended September 30, 2008
Prepared by:
Finance Department
Samia Janjua
Director of Finance
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal i
List of Principal Village Officials vii
Organization Chart viii
GFOA Certificate of Achievement for Excellence in Financial Reporting ix
FINANCIAL SECTION
Independent Auditors' Report 1
Management's Discussion and Analysis 3
BASIC FINANCIAL STATEMENTS:
Government-wide Financial Statements:
Statement of Net Assets 11
Statement of Activities 12
Fund Financial Statements:
Balance Sheet -Governmental Funds 14
Reconciliation of the Balance Sheet -Governmental Funds
to the Statement of Net Assets 15
Statement of Revenues, Expenditures and Changes in
Fund Balances -Governmental Funds 16
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of the Governmental Funds to the Statement of Activities 17
Statement of Net Assets -Proprietary Fund 18
Statement of Revenues, Expenses, and Changes in Net
Assets -Proprietary Fund 19
Statement of Cash Flows -Proprietary Fund 20
Statement of Fiduciary Net Assets -Fiduciary Funds 21
Statement of Changes in Fiduciary Net Assets -Fiduciary Funds 22
Notes to Basic Financial Statements 23
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Funding Progress 62
Schedule of Employer and State Contributions 63
Notes to the Trend Data 64
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual -General Fund 65
Notes to the Budgetary Required Supplementary Information 66
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
TABLE OF CONTENTS
(Continued)
OTHER SUPPLEMENTARY INFORMATION:
Schedule of Departmental Expenditures- Budget and Actual -General Fund 67
Combining Balance Sheet - Nonmaj or Governmental Funds 70
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds 71
Combining Statement of Net Assets -Fiduciary Funds 72
Combining Statement of Changes in Fiduciary Net Assets -Employee Retirement Funds 73
Combining Statement of Agency Net Assets 74
Combining Schedule of Changes in Agency Net Assets and Liabilities 75
Schedule of Departmental Expenses -Budget and Actual -Country Club Fund -Budgetary Basis . 76
STATISTICAL SECTION
Net Assets by Component 77
Changes in Net Assets 78
Fund Balances, Governmental Funds 79
Changes in Fund Balances, Governmental Funds 80
Net Assessed Value and Estimated Actual Value of Taxable Property 81
Property Tax Rates -Direct and Overlapping Governments 82
Principal Property Taxpayers 83
Property Tax Levies and Collections 84
Ratios of Outstanding Debt by Type 85
Direct and Overlapping Governmental Activities Debt 86
Pledged-Revenue Coverage 87
Demographic and Economic Statistics 88
Principal Employers 89
Full-Time Equivalent Village Government Employees by Function 90
Operating Indicators by Function/Program 91
Capital Asset Statistics by Function/Program 92
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 93
Management Letter in Accordance with the Rules of the Auditor General of the
State of Florida 95
INTRODUCTORY SECTION
THE VILLAGE OF
NORTH PALM BEACH
"THE BEST PLACE TO L/ VE UNDER THE SUN"
March 26, 2009
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, 2008.
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
Nowlen, Holt & Miner, P.A., Certified Public Accountants, have issued an unqualified ("clean") opinion
on the Village of North Palm Beach's financial statements for the year ended September 30, 2008. The
independent auditor's report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the independent auditor's report
and provides a narrative, overview, and analysis of the basic financial statements. MD&A complements
this letter of transmittal and should be read in conjunction with it.
The CAFR's role is to assist in making economic, social and political decisions and to assist in
assessing accountability to the citizenry by:
• comparing actual financial results with the legally adopted budget, where appropriate;
• assessing financial condition and results of operations;
• assisting in determining compliance with finance related laws, rules and regulations;
• assisting in evaluating the efficiency and effectiveness of Village operations.
501 U.S. Highway 1, North Palm Beach, FL 33408-4902 (561) 841-3380 * Fax (561) 848-3344
VILLAGE PROFILE
The Village
The Village of North Palm Beach is primarily a residential community, having been incorporated as a
political subdivision of the State of Florida in 1956. The registered population of the Village is
approximately 13,000 which increase to approximately 18,000 during the winter months by residents
who list their northern homes as their official place of residence. Residents are generally in the middle
to upper income brackets.
Located in the northeastern quadrant of Palm Beach County, Florida, the Village has an abundant
amount of waterfront property created by a number of lakes, canals, and the Atlantic Ocean.
The governing body of the Village consists of a five member Village Council, each of whom is elected to
two-year overlapping terms. The Mayor is selected by majority vote of the Council and serves for a term
of one year. Day to day affairs of the Village are under the leadership of 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.
Financial reporting for its Enterprise Fund (i.e., the Country Club operation) is presented using the full
accrual basis of accounting required by GAAP for its annual financial report. The Country Club annual
budget is adopted using a modified accrual basis of accounting (identical to the general government
operations mentioned above) which is consistent with how general ledger financial records are
maintained throughout the year by the Village administration.
In developing and evaluating the Village's financial and accounting system, consideration is given to the
adequacy of internal accounting controls. Internal accounting controls are designed to provide
reasonable, but not absolute, assurance regarding: (a) the safeguarding of assets against loss from
unauthorized use or disposition; and (b) the reliability of financial records for preparing financial
statements and maintaining accountability for assets. The concept of reasonable assurance recognizes
that: (a) the cost of a control should not exceed the benefits likely to be derived; and (b) the evaluation
of costs and benefits requires estimates and judgments by management.
All internal control evaluations occur 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.
The Village of North Palm Beach maintains budgetary controls through the annual budget public
hearing and approval process of GAAP based budgets. The formal budget approval for each fiscal
year is accomplished in a manner to comply with Florida State Statute 200.065, commonly referred to
as Truth-in-Millage (TRIM).
ii
Budget amendments require Village Council approval at public meetings. Budgetary control is
maintained at the department level within Fund by the encumbrance of estimated purchase amounts
prior to the release of purchase orders to vendors. Purchase orders, which result in an overrun of
approved departmental appropriations within fund, are not released until additional appropriations are
made available. Encumbered amounts lapse at year-end; however they are re-appropriated as part of
the following year's budget.
ECONOMIC OUTLOOK
Property Values
The Village obtains a major portion of its annual general fund financial resources (60%) from ad
valorem property taxes. Gross assessed property values had increased substantially (67%) between
the years of 2002 through 2006 but slowed significantly in 2007. In year 2008 area property values
began to decline in value and in many instances significantly, as a result of the economic downturn.
This unprecedented decline in property values is only exacerbated by the number of properties in
various stages of foreclosure. Both of these real-estate issues have had and will continue to have an
adverse impact upon the financial resources of the Village. The Village does not anticipate a change in
the pace of planned new growth since most vacant property within the municipal limits has already
been developed. There is an obvious softening of the real-estate market significantly impacting both
home values and sales.
As was reported in last year's report with the passing of Amendment One (Property Tax Reform) in
January of 2008 the Village's property tax valuation was negatively impacted! Three primary factors
play a role on that impact, doubling the Homestead exemptions to fifty thousand dollars, capping of
assessed property values for those homes not currently homesteaded and Portability. The latter two
factors can not be easily measured but the doubling of the Villages Homesteaded properties alone had
a negative consequence of roughly $673,745 on our 2008 annual tax revenues. Political discussions
continue regarding other alternative taxations which make future forecasts of Village property tax
valuation uncertain. The Village will continue to pursue annexation of surrounding unincorporated areas
that compliment and enhance the services and values of our existing community. The focus of Village
annexation efforts will be toward providing exemplary municipal services that are revenue "neutral" to
both the annexed areas and to the Village.
Investment Revenues
The economic downturn and softening of the Money Market has had significant consequences to the
Village's investment revenues. The Village in the short-term had made a conscious decision to modify
its investment strategies towards the Treasury Market to better protect and ensure the availability of
Village's investment balances. This move proved successful in the safeguarding of Village investments
during this Market freefall but has impacted the interest/dividend revenues to the Village. The Village
has with the assistance of the Village's Audit Committee adopted a "revised" Investment policy
designed to provide safety, liquidity while maximizing the investment return(s). The new policy provides
numerous investment strategies; parameters and safeguards. The policy additionally provides for 1/12
of its annual operating budget in be deposited in an interest bearing account so as not to impede
operations should liquidity be temporary unavailable.
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Personnel Costs
The Village will continue to face challenges primarily in areas of increased employee personnel costs
for both salaries and benefits as well as increased insurance and energy costs. In past years, several
retirement plan amendments were implemented by the Village and then followed by significant salary
adjustments that magnified the impact and cost of the retirement changes. The combination of these
changes resulted in significant increases to -and continuing requirements for -annual Village pension
costs. Significant increases in annual health insurance costs have also been encountered during the
past few years. In 2005, the Village transitioned away from its self-insured health program to a
contractual fixed fee Health/Dental program. This new health program more accurately reflects and
contains annual Village health costs while re-establishing a cost sharing partnership with employees by
adjusting the amount of their annual contribution for health coverage.
Agreements for all three of the Village's collective bargaining units (police, fire, and public service
workers) will run through September 30th 2009. All three collective bargaining agreements were
transitioned from single to three year contracts thus giving the Village a more accurate means by which
to calculate future year salaries and benefit costs. The impacts of personnel salaries and benefits in the
coming years will have a large and continuing effect on future Village financing and service priorities in
areas of staffing, public services and public projects. Wth the current economic condition any
[employee] enhancement to the collective bargaining agreements are not likely.
INITIATIVES AND FUTURE PROJECTS
Country Club Tennis Facility
As was reported in last year's report the Village Country Club Tennis Facility has passed its expected
useful life. Council has provided fora "temporary" building (trailer) while engaging an architect and
contractor to construct a new permanent facility. Village Council has appropriated $250,000 for the
construction of a new facility to be located on the same site. Groundbreaking for the permanent facility
is anticipated in April of 2009. In 2007, the Tennis component was relocated from the Country Club
enterprise fund to the general fund under Parks and Recreation. Under this option the Village became
eligible for outside grant funding for structural and non-structural improvements, an option that was not
available to the Village under the enterprise fund.
Northlake Boulevard Corridor Task Force
An initial $500,000 grant from the State DOT allowed the Village to award a local company the bid for
construction of Phase 1 of the Northlake Blvd. streetscape improvement. This first phase provided
sidewalk widening and median / swale area landscaping improvements from U.S. 1 westward to
Southwind Drive in the Village. Replacement of deficient vegetation was completed in February 2007.
The Task Force has begun to work on the implementation of Phase II which extends from Southwind
Drive westward to Alternate A1A, but funding remains to be a challenge for all Task Force entities.
Earman River Water Supply Line
The existing irrigation system for the Country Club/Golf Course, U.S. 1 Median and Village Parks are
supplied by the Earman River. This supply line runs from the Earman River to the Lake on the 13tH
Fairway and is beginning to show signs of deterioration. Your Village Staff has obtained estimates for
replacing a portion of the line that has shown signs of leaking. The initial repairs were provided for and
completed in 2008/2009 with the remaining line replaced over the next few years. This remains to be an
active and ongoing project.
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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. The dredging program was developed and implemented as a four-phase
program with the first and second phases being completed in 2004 and phase three reaching completion
in 2005. The completion of the remaining two canals has been stalled due to the identification of
Johnson's sea-grass which is a natural food source for the manatee population and as such is highly
regulated by various Federal and State agencies. The Village has been successful in obtaining the
necessary permits required for the dredging of these two remaining canals. The dredging permits require
the Village to establish a "no-motoring" boating zone as mitigation for the removal of the sea-grass. This
project should be completed sometime in late 2009.
Lighthouse Bridge Refurbishment
Public Works Staff has worked diligently with Village Engineers to address construction deficiencies
identified in the state inspection report. The technical specifications for the required work have been
completed and the work is scheduled for early July 2009 to coincide with the summer break for the area
schools. Florida DOT grant funding is being sought to offset costs.
Parks and Recreation/Village Facility Improvement Grants
The Village has been awarded grants for projects at Anchorage Park, Village Pool and Lakeside Park.
The demolition of the old Seacoast water treatment plant and the construction of Phase 1
improvements have begun with a completion date of mid-April 2009. Future phases will likely be placed
on hold until the economy and Market rebounds.
The Community Center facility has undergone a significant "facelift" with the installation of impact
resistant windows. Repairs to the interior walls damaged by water intrusion and painting to the exterior
of the facility are in their final stages with a completion date sometime in mid-year 2009.
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Library Renovations
The Village has begun renovating the Library building located on the Village Hall campus. Repairs
include the replacement of all existent windows on the second floor and replacing them with impact
resistant windows. The building will undergo structural modifications in order to accept the new
windows. This work will necessitate significant Interior cosmetic work which will require the closure of
the upstairs portion of the Library for a period of about 3 weeks. Additionally, the single elevator
servicing the patrons of the library will have to be taken off line for needed repairs as outlined in the
most recent state inspection report. Both repair items are scheduled to be performed in early 2009 with
a 3 - 6 week completion period.
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 ending September 30, 2007. The
Certificate of Achievement is a prestigious national award, recognizing conformance with the highest
standards for preparation of state and local government financial reports.
Respectfully submitted,
Samia Janjua Ji my night
Director of Finance V Ilage Manager
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
PRINCIPAL VILLAGE OFFICIALS
SEPTEMBER 30, 2008
Title Name
Mayor William L. Manuel
Vice Mayor David B. Norris
President Pro Tem Darryl C. Aubrey
Council Member Edward M. Eissey
Council Member T.R. Hernacki
Village Manager Jimmy Knight
Director of Finance Samia Janjua
Village Clerk Melissa Teal
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THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Organization Chart
September 30, 2008
VILLAGE BOARDS
•Audit Committee
The Residents •Code Enforcement
•Construction Board of Adjustment
•Golf Advisory
•Library Advisory
•Pension Boards
Village Council •Planning Commission
•Recreation Advisory
•Waterways Board
•Zoning Board of Adjustment
Village Attorney Village Manager Village Clerk
Parks
Community Finance Human Library & Public Public Country
Development Resources Safety Works Club
Recreation
viii
Certificate of
Achievement
for Excellence
in Financial
Deporting
Presented to
Village of North Palm Beach
Florida
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2007
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance OfficeEs
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 accountumg
and financial reporting.
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FINANCIAL SECTION
N H NOwLEN, HOLT & MINER, P.A .
M CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NOWLEN ~i9ao-i9ea~, CPA
EDWARD T. HOLT CPA
WILLIAM B. MINER, CPA
WEST PALM BEACH OFFICE ROBERT W. HENDRIX, JR., CPA
215 FIFTH STREET, SUITE 200 JANET R. BARICEVICH, CPA
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628 KATHLEEN A. MINER, CPA
ROBERT W. HELMREICH, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT CPA
J. MICHAEL STEVENS, CPA
DANIEL A. KIRCHMAN, CPA
ALEXIA G. VARGA, CPA
BRIAN J. BRESCIA, CFP~, CPA
DANIEL S.YOUNG, CPA
7~7~7717~~L~ L~~~7717~~L~~T T ~~11~~ 7~ 7~ L~ 7~ KARA D. PETERSON, CPA
11VLEPEIVLENT AUIJITORS' REPORT BELLE GLADE OFFICE
333 S. E. 2nd STREET
POST OFFICE BOX 338
BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
FAX (561) 996-6248
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 as of and for the year ended September 30, 2008, which
collectively comprise the Village's basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the Village of North Palm Beach, Florida's
management. Our responsibility is to express opinions on these financial statements based on
our audit.
We conducted our audit in accordance with U. S. generally accepted auditing standards and the
standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the 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, 2008, and the respective changes in financial position, and cash flows,
where applicable, thereof for the year then ended in conformity with U. S. generally accepted
accounting principles.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•CPAMERICA INTERNATIONAL
1
In accordance with Government Auditing Standards, we have also issued our report dated
March 16, 2009, on our consideration of the Village of North Palm Beach, Florida'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 read in conjunction with this report in
considering the results of our audit.
Management's Discussion and Analysis on pages 3 through 10 and the required supplementary
information on pages 62 through 66 are not a required part of the basic financial statements but
are supplementary information required by U. S. generally accepted accounting principles. 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, Florida's basic financial statements. The
introductory section, other supplemental information, and statistical data listed in the table of
contents are presented for purposes of additional analysis and are not a required part of the basic
financial statements of the Village of North Palm Beach, Florida. The other supplemental
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the
basic financial statements taken as a whole. The introductory and statistical sections have not
been subjected to the auditing procedures applied in the audit of the basic financial statements
and, accordingly, we express no opinion on them.
`~e~; 4 ~a.
March 16, 2009
West Palm Beach, Florida
2
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, 2008. Please read it in conjunction with the accompanying transmittal
letter beginning on page i, and the accompanying basic financial statements.
FINANCIAL HIGHLIGHTS
(in millions)
September 30, Increase/ Statement
2008 2007 (Decrease) Page #
Total net assets $26.3 5 $22.28 $4.07 11
Unrestricted net assets available for future use $10.03 $9.43 $0.60 11
Governmental net assets $23.66 $19.93 $3.73 11
Total revenues from all sources $24.54 $24.85 ($0.31) 12
Governmental revenues $20.89 $21.34 ($0.45) 12
Total cost of all Village programs $20.48 $20.40 $0.08 12
Governmental revenues over (under) expenses $3.72 $4.52 ($0.80) 13
General fund revenues over (under) expenses $1.17 $2.39 ($1.22) 16
General fund unreserved fund balance $8.26 $8.18 $0.08 14
As a percent of general fund expenditures 44.48% 46.50% ($0.02)
Country Club revenues over (under) expenses $0.3 5 ($0.07) $0.42 19
Change intotallong-term debt for the Village ($0.94) ($0.97) $0.03
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the financial
statements are: (1) Government-wide financial statements that include the Statement of Net Assets and
the Statement of Activities. These statements provide information about the activities of the Village as a
whole. (2) Fund financial statements tell how these services were financed in the short term, as well as
what remains for future spending. Fund financial statements also report the Village's operations in more
detail than the government wide statements by providing information about the Village's most significant
funds. (3) Notes to the basic financial statements expand upon information reported in the government-
wide and governmental fund statements.
REPORTING THE VILLAGE AS A WHOLE
Statement of Net Assets and the Statement of Activities (Government-wide)
A frequently asked question regarding the Village's financial health is whether the year's activities
contributed positively to the overall financial well being. The Statement of Net Assets and the Statement
of Activities report information about the Village as a whole and about its activities in a way that helps
answer this question. These statements include all assets and liabilities using the accrual basis of
accounting, which is similar to the accounting used by most private-sector companies. All of the current
year's revenues and expenses are taken into account, regardless of when cash is received or paid.
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 14-17 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 18-20 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 21-22 of this report.
• Special Revenue funds -Special Revenue funds are used to account for the proceeds of specific
revenue sources that are restricted to expenditure for specified purposes. The Village has four
4
funds in this category: Public Safety Fund, Northlake Boulevard Fund, On-Behalf Pension
Contribution Fund and the Recreation Fund. The basic fund financial statements can be found on
pages 14-17 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position.
In the case of the Village, assets exceeded liabilities by $26.35 million at the close of the most recent
fiscal year.
A significant portion of the Village's net assets (58.19%) reflects its investment in capital assets (e.g.,
land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still
outstanding. The Village uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the Village's investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
Village of North Palm Beach
Net Assets
(In Thousands)
Governmental Business
Activities Activities Total
2008 2007 2008 2007 2008 2007
Assets:
Current and other assets $ 13,617 $ 12,160 $ 932 $ 1,078 $ 14,549 $ 13,238
Capital assets 16,491 14,906 7,348 7,275 23,839 22,181
Total assets 30,108 27,066 8,280 8,353 38,388 35,419
Liabilities:
Current liabilities 1,713 1,306 715 914 2,428 2,220
Long-term debt outstanding 4,734 5,822 4,870 5,093 9,604 10,915
Total liabilities 6,447 7,128 5,585 6,007 12,032 13,135
Net assets:
Invested in capital assets,
net of debt 12,845 10,544 2,493 2,195 15,338 12,739
Restricted 979 113 979 113
Unrestricted 9,837 9,281 202 151 10,039 9,432
Total net assets $ 23,661 $ 19,938 $ 2,695 $ 2,346 $ 26,356 $ 22,284
Governmental Activities
Governmental activities increased the Village's net assets by $3.72 million, thereby accounting for 91% of
the total increase in the net assets of the Village. An increase in Governmental Capital Assets ($1.59m) is
due to an increase in capital improvement projects. Key elements of this increase are as follows:
5
Village of North Palm Beach
Changes in Net Assets
(In Thousands)
Governmental Business
Activities Activities Total
2008 2007 2008 2007 2008 2007
Revenues:
Program revenues:
Charges for services $ 2,279 $ 2,121 $ 3,617 $ 3,464 $ 5,896 $ 5,585
Operating grants and
contributions 88 170 14 102 170
Capital grants and
contributions 1,602 1,455 1,602 1,455
General revenues:
Property taxes 11,915 12,076 11,915 12,076
Local option gas taxes 279 292 279 292
Utility service taxes 2,018 2,001 2,018 2,001
Sales and use taxes 1,227 1,340 1,227 1,340
Franchise taxes 1,213 1,208 1,213 1,208
Investment earnings 195 650 36 44 231 694
Miscellaneous 22 9 22 9
Contribution-Support
Our Troops 17 15 17 15
Gain (loss) on asset
disposals 34 34
Total revenues $ 20,889 $ 21,337 $ 3,667 $ 3,508 $ 24,556 $ 24,845
The Village's programs include General Government, Public Safety, Public Works, Community
Development and Planning, and Leisure Services. Each program's net cost (total cost, less revenues
generated by the activities) is presented below. The net cost shows the extent to which the Village's
general taxes support each of the Village's programs.
6
Village of North Palm Beach
Change in Net Assets
(In Thousands)
Governmental Business
Activities Activities Total
2008 2007 2008 2007 2008 2007
Expenses:
Program expenses:
General government $ 1,839 $ 2,698 $ $ $ 1,839 $ 2,698
Public safety 7,154 6,671 7,154 6,671
Public works 3,997 3,733 3,997 3,733
Community development
and planning 860 737 860 737
Leisure services 3,244 2,782 3,244 2,782
Reserves and other
Interest on long-term debt 121 205 121 205
Country club 3,269 3,571 3,269 3,571
Total expenses 17,215 16,826 3,269 3,571 20,484 20,397
Transfers 49 5 (49) (5)
Increase (decrease) in
net assets 3,723 4,516 349 (68) 4,072 4,448
Net assets -beginning of year 19,938 15,422 2,346 2,414 22,284 17,836
Net assets -end of year $ 23,661 $ 19,938 $ 2,695 $ 2,346 $ 26,356 $ 22,284
2008 2007
Total Cost Net Cost Total Cost Net Cost
of Services of Services of Services of Services
General government $ 1,839 $ (1,707) $ 2,698 $ (2,475)
Public safety 7,154 (6,626) 6,671 (6,240)
Public works 3,997 (3,702) 3,733 (3,510)
Community development
and planning 860 28 737 234
Leisure services 3,244 (1,118) 2,782 (885)
Interest on long term debt 121 (121) 205 (205)
$ 17,215 $ (13,246) $ 16,826 $ (13,081)
The cost of all governmental activities this year was $17.2 million. Due to an approved and implemented
workforce reduction strategy (employee buyouts), costs for the Public Safety Department increased by
$0.48 million, costs for the Public Works Department increased by $0.26 million and costs for the Leisure
Services department increased by $0.46 million. As shown on the Statement of Activities, those who
directly benefited from the programs paid for $2.28 million of this cost and $13.25 million was financed
through general revenues. The Village added $3.72 million to fund balance during 2008.
7
Business Type Activities
Business Type Activities were positively affected due to increases of both member and non-member
activity resulting in greater number of overall golf rounds played, the implementation of a "new" summer
membership program and the outsourcing of the Golf Course Maintenance division. Charges for Services
increased from the prior year by $0.15 million and the expenses decreased by $0.30 million. Net assets of
the Proprietary Fund (Country Club) at September 30, 2008, were $2.69 million. Net assets increased by
$348,691.
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.
At the end of the current fiscal year, the combined fund balance for all Governmental Funds was $10.59
million, a $0.57 increase over the 2007 fund balance of $10.02 million. Approximately 90% of the
combined ending fund balance ($9.57 million) constitutes unreserved fund balance, which is available for
spending at the government's discretion. The remainder of fund balance ($1.02 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 $8.26 million, while total fund balance was $9.04
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 44% of total
general fund expenditures, while total fund balance represents 49% of that same amount.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget were $1,606,575 and can be briefly
summarized as follows:
• Grants ($470,677)
• Community Center Appropriation ($250,000)
• Legal Settlement ($250,000)
• Tennis Facility-Recreation Impact Fees ($250,000)
• Public Safety Radio System ($191,622)
• Fiscal Year 2006-2007 Open Purchase Order Carryover ($194,276)
8
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, 2008 and 2007 amounts to $23.84 million and $22.18 million (net of accumulated
depreciation). The total increase in the Village's investment in capital assets for the current fiscal year was
$1.65 million.
Village of North Palm Beach
Capital Assets
(In Thousands)
Governmental Business
Activities Activities Total
2008 2007 2008 2007 2008 2007
Land $ 2,151 $ 2,151 $ 1,051 $ 1,051 $ 3,202 $ 3,202
Construction in progress 777 2,143 777 2,143
Buildings and improvements 17,278 13,422 1,436 1,701 18,714 15,123
Improvements other than buildings 6,975 6,960 407 407 7,382 7,367
Improvements -golf course 7,060 6,725 7,060 6,725
Furniture, fixtures and equipment 785 580 785 580
Total assets 27,181 24,676 10,739 10,464 37,920 35,140
Less accumulated depreciation 10,690 9,770 3,391 3,189 14,081 12,959
Net assets $ 16,491 $ 14,906 $ 7,348 $ 7,275 $ 23,839 $ 22,181
Additional information on the Village's capital assets can be found in Note 6 on page 40 of this report.
9
Debt
Currently, the Village uses debt financing on an as needed basis each year. At the end of the current fiscal
year, the Village had total debt of $8.5 million. None of this amount comprises debt backed by the full
faith and credit of the government.
Village of North Palm Beach
Outstanding Debt
(In Thousands)
Governmental Business
Activities Activities Total
2008 2007 2008 2007 2008 2007
Loans payable $ 3,606 $ 4,281 $ 4,663 $ 5,027 $ 8,269 $ 9,308
Capital leases 40 81 193 52 233 133
Total $ 3,646 $ 4,362 $ 4,856 $ 5,079 $ 8,502 $ 9,441
Additional information on the Village's debt can be found in Note 7 on page 42 of this report.
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
The Village's Unappropriated Fund Balance is viewed by the Administration as a measurement of Village
financial stability. Unreserved general fund balance increased to $8.26 million during the current 2008
fiscal year. The Village is now ready to address the economic challenges anticipated in the next few
years.
The economic outlook for the primary revenue source for Florida municipalities will be challenging, as
cities are facing state mandated reductions of property taxes. In an effort to provide tax relief and spur the
slumping housing market, the State legislature focused on property tax reform in the 2007 session. House
Bill 1B was enacted to limit the authority of local governments to levy ad valorem taxes for the FY 2008
budget year and beyond.
The economic downturn, decline in property values and general decline in the value of investments have
significantly impacted Village revenues. To address the impact of the legislation, continuing increases in
the cost of employee compensation and benefits, and the reduction of revenues, the Village will need to
continue to prioritize essential services and desired levels of service to allocate sufficient funding in
future budget years.
CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors
with a general overview of the Village's finances and to show the Village's accountability for the money it
receives. If you have questions about this report or need additional financial information, contact the
Village's Finance Department, at the Village of North Palm Beach, 501 U.S. Highway 1, North Palm
Beach, Florida 33408.
10
BASIC FINANCIAL STATEMENTS
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Net Assets
September 30, 2008
Governmental Business-type
Activities Activities Total
Assets
Cash and cash equivalents $ 10,425,677 $ 830,069 $ 11,255,746
Investments 399,579 399,579
Accounts receivable, net 400,621 56,849 457,470
Developer fee receivable 925,000 925,000
Inventories 23,462 23,658 47,120
Prepaids 321,248 21,574 342,822
Due from other governments 627,041 627,041
Restricted assets:
Cash and cash equivalents 144,804 144,804
Net pension assets 349,551 349,551
Capital assets:
Nondepreciable 2,928,570 1,051,311 3,979,881
Depreciable (net of depreciation) 13,562,259 6,296,938 19,859,197
Total assets 30,107,812 8,280,399 38,388,211
Liabilities
Accounts payable 960,198 109,499 1,069,697
Accrued liabilities 482,673 482,673
Accrued interest payable 17,023 2,124 19,147
Deposits 17,500 17,500
Deferred revenue 252,468 585,680 838,148
Noncurrent liabilities:
Due within one year 1,394,345 380,713 1,775,058
Due in more than one year 3,339,918 4,489,557 7,829,475
Total liabilities 6,446,625 5,585,073 12,031,698
Net Assets
Invested in capital assets, net of related debt 12,845,093 2,492,524 15,337,617
Restricted for:
Library 31,417 31,417
Recreation 833,439 833,439
Public safety 81,530 81,530
Other purposes 32,796 32,796
Unrestricted 9,836,912 202,802 10,039,714
Total net assets $ 23,661,187 $ 2,695,326 $ 26,356,513
See notes to the financial statements.
11
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Activities
For the Year Ended September 30, 2008
Charges for
Functions/Programs Expenses Activities
Government:
Governmental activities
General government $ 1,839,228 $ 123,334
Public safety 7,154,578 383,325
Public works 3,996,711 288,994
Community development and planning 860,448 888,015
Leisure services 3,244,045 595,558
Interest on long-term debt 120,549
Total governmental activities 17,215,559 2,279,226
Business-type activities -country club 3,268,562 3,616,509
Total business-type activities 3,268,562 3,616,509
Total government $ 20,484,121 $ 5,895,735
12
Program Revenues Net Expense (Revenue) and
Operating Capital Changes in Net Assets
Grants and Grants and Governmental Business-type
Contributions Contributions Activities Activities Total
~ g,~lg ~ ~ ~l,~0~,1~6~ ~ ~ ~l,~0~,1~6~
4g,93o 96,s4~ ~6,62s,~~6~ ~6,62s,~~6~
s,~19 ~3,~o1,99g~ ~3,~o1,99g~
a~,s6~ a~,s6~
24,gs~ l,sos,9lg ~1,11~,~12~ ~1,11~,~12~
~12o,s49~ ~12o,s49~
88,224 1,602,465 (13,245,644) (13,245,644)
13,609 361,556 361,556
13,609 361,556 361,556
$ 101,833 $ 1,602,465 (13,245,644) 361,556 (12,884,088)
General Revenues:
Taxes:
Property taxes 11,915,355 11,915,355
Local option gas taxes 278,649 278,649
Utility service taxes 2,018,071 2,018,071
Franchise taxes 1,212,562 1,212,562
Sales and use taxes 1,227,341 1,227,341
Investment income 194,652 36,431 231,083
Gain on disposal of fixed assets 33,644 33,644
Miscellaneous 22,075 22,075
Contributions for support our troops 16,959 16,959
Transfers 49,296 (49,296)
Total general revenues and transfers 16,968,604 (12,865) 16,955,739
Change in net assets 3,722,960 348,691 4,071,651
Net assets, beginning of year 19,938,227 2,346,635 22,284,862
Net assets, end of year $ 23,661,187 $ 2,695,326 $ 26,356,513
See notes to the financial statements.
13
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Balance Sheet
Governmental Funds
September 30, 2008
Nonmajor Total
Governmental Governmental
General Funds Funds
Assets
Cash and cash equivalents $ 8,875,755 $ 1,549,922 $ 10,425,677
Investments 399,579 399,579
Accounts receivable 400,621 400,621
Developer fee receivable 925,000 925,000
Inventories 23,462 23,462
Prepaids 321,248 321,248
Due from other funds 32,364 32,364
Due from other governments 207,465 419,576 627,041
Restricted cash and cash equivalents 144,804 144,804
Total assets $ 11,330,298 $ 1,969,498 $ 13,299,796
Liabilities and fund balances
Liabilities
Accounts payable $ 629,305 $ 330,893 $ 960,198
Accrued liabilities 482,673 482,673
Due to other funds 32,364 32,364
Deferred revenue 1,177,468 58,490 1,235,958
Total liabilities 2,289,446 421,747 2,711,193
Fund balances
Reserved for:
Inventories and prepaids 344,710 344,710
Encumbrances 285,825 285,825
Library 31,417 31,417
Recreation 28,500 239,979 268,479
Public safety 54,077 54,077
Other purposes 30,810 30,810
Unreserved:
Special revenue funds 594,399 594,399
Undesignated 8,265,513 713,373 8,978,886
Total fund balances 9,040,852 1,547,751 10,588,603
Total liabilities and fund balances $ 11,330,298 $ 1,969,498 $ 13,299,796
See notes to the financial statements.
14
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Balance Sheet -Governmental Funds
to the Statement of Net Assets
Governmental Funds
September 30, 2008
Fund balances -total governmental funds $ 10,588,603
Amounts reported for governmental activities in the statement of net
assets are differentbecause:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the governmental funds:
Governmental capital assets 27,181,190
Less accumulated depreciation (10,690,361)
16,490,829
Revenue is recognized when earned in the government-wide
statements, regardless of activity. Governmental funds report
based on modified accrual, i.e., both measurable and available
Grant revenues 58,490
Developer fee 925,000
983,490
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. 349,551
Long-term liabilities, including notes and bonds payable, are not due and
payable in the current period and therefore are not reported in the
governmental funds. Long term liabilities at year-end consist of:
Accrued interest payable (17,023)
Notes payable (3,605,639)
Capital leases payable (40,097)
Accrued compensated absences (1,088,527)
(4,751,286)
Net assets of governmental activities $ 23,661,187
See notes to the financial statements.
15
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2008
Nonmajor Total
Governmental Governmental
General Funds Funds
Revenues
Taxes $ 15,424,638 $ $ 15,424,638
Licenses and permits 1,047,144 1,047,144
Intergovernmental 1,516,624 942,587 2,459,211
Charges for services 1,268,774 1,268,774
Fines and forfeitures 157,022 78,943 235,965
Interest 194,652 194,652
Miscellaneous 137,447 137,447
Total revenues 19,746,301 1,021,530 20,767,831
Expenditures
Current
General government 2,246,461 2,246,461
Public safety 6,644,629 412,204 7,056,833
Public works 3,725,450 3,725,450
Community development & planning 840,366 840,366
Leisure services -recreation 2,875,570 1,270 2,876,840
Capital outlay 1,383,639 1,213,426 2,597,065
Debt service
Principal payments 716,206 716,206
Interest paid on debt 143,726 143,726
Total expenditures 18,576,047 1,626,900 20,202,947
Excess (deficiency) of revenues
over (under) expenditures 1,170,254 (605,370) 564,884
Other financing sources (uses)
Transfers in 1,254,952 1,254,952
Transfers out (1,254,952) (1,254,952)
Total other financing sources (uses) (1,254,952) 1,254,952
Net change in fund balances (84,698) 649,582 564,884
Fund balances
Beginning of year 9,125,550 898,169 10,023,719
End of year $ 9,040,852 $ 1,547,751 $ 10,588,603
See notes to the financial statements.
16
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of the Governmental Funds to the Statement of Activities
For the Year Ended September 30, 2008
Net change in fund balances -total governmental funds $ 564,884
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of capital
assets is allocated over their estimated useful lives and reported
as depreciation expense:
Expenditures for capital assets $ 2,682,835
Transfer of assets from country club 49,296
Less: current year depreciation (1,128,375) 1,603,756
Gains and losses on disposal of capital assets are reported in the statement
of activities, whereas in the governmental funds the proceeds from the sale
increases financial resources. The difference is the net book value of the (18,656)
assets retired.
Governmental Funds report revenues when earned and
available. However, in the Statement of Activities, revenues are
recognized when earned, regardless of availability.
Palm Beach County Pool Improvement grant (50,000)
Palm Beach County Northlake Boulevard grant (122,139)
Florida Recreation Development Assistance Program grant (260,000)
FEMA grant (31,671)
Developer fee 925,000
461,190
Repayment oflong-term debt is reported as an expenditure
on the governmental funds, but a reduction oflong-term
liabilities in the statement of net assets. 716,206
Some expenses reported in the statement of activities do not
require the use of current financial resources and, therefore are not
reported as expenditures in governmental funds.
Change in accrued interest expense 23,177
Change in long-term compensated absences (53,080)
(29,903)
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 net pension asset of defined benefit pension plans (8,545)
Retainage payable 9,207
Claims settlement 250,000
Insurance liability 174,821 425,483
Change in net assets $ 3,722,960
See notes to the financial statements.
17
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Net Assets
Proprietary Fund
September 30, 2008
Enterprise
Assets
Current assets
Cash and cash equivalents $ 830,069
Accounts receivable, net 56,849
Inventories 23,658
Prepaids 21,574
Total current assets 932,150
Non-current assets
Land, buildings, and equipment, net 7,348,249
Total assets 8,280,399
Liabilities
Current liabilities
Accounts payable 109,499
Accrued interest payable 2,124
Deposits 17,500
Deferred revenue 585,680
Compensated absences -current portion 13,294
Capital leases -current portion 84,829
Loans payable -current portion 282,590
Total current liabilities 1,095,516
Non-current liabilities
Compensated absences 1,251
Capital leases 108,063
Loans payable 4,380,243
Total non-current liabilities 4,489,557
Total liabilities 5,585,073
Net Assets
Invested in capital assets, net of related debt 2,492,524
Unrestricted 202,802
Total net assets $ 2,695,326
See notes to the financial statements.
18
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Fund
For the Year Ended September 30, 2008
Enterprise
Operating revenue
Greens fee/cart rentals/membership fees $ 2,979,324
Golf shop revenues 224,908
Driving range revenues 213,103
Restaurant revenues 125,677
Miscellaneous 73,497
Total operating revenues 3,616,509
Operating expenses
Golf course maintenance expenses 1,376,669
Clubhouse grounds expenses 100,823
Golf shop expenses 600,034
Food & beverage expenses 46,608
Administrative and general 284,291
Insurance 150,166
Depreciation 486,651
Total operating expenses 3,045,242
Operating income (loss) 571,267
Nonoperating revenues (expenses)
Interest revenue 36,431
Interest expense (222,237)
Other revenues 13,609
Loss on disposal of fixed assets (1,083)
Total nonoperating revenues (expenses) (173,280)
Transfers out (49,296)
Change in net assets 348,691
Net assets -beginning 2,346,635
Net assets -ending $ 2,695,326
See notes to the financial statements.
19
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Cash Flows
Proprietary Fund
For the Year Ended September 30, 2008
Enterprise
Cash flows from operating activities:
Receipts from customers $ 3,501,366
Payments to suppliers for goods or services (2,045,552)
Payments to employees for services (520,239)
Net cash provided (used) by operating activities 935,575
Cash flows from capital and related financing activities:
Principal paid on long term debt (444,493)
Interest paid on debt (322,233)
Acquisition of capital assets (389,432)
Net cash provided (used) by capital and related financing activities (1,156,158)
Cash flows from investing activities:
Interest and dividends on investments 36,431
Net increase (decrease) in cash and cash equivalents (184,152)
Cash and cash equivalents at beginning of year 1,014,221
Cash and cash equivalents at end of year $ 830,069
Reconciliation of operating income (loss)
to net cash provided by operating activities:
Operating income $ 571,267
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation 486,651
Other revenues 13,609
Change in assets and liabilities
(Increase) in accounts receivable (4,756)
(Increase) in inventory (11,543)
(Increase) in prepaids (21,574)
Increase in accounts payable 24,907
Increase in compensated absences payable 1,010
(Decrease) in deferred revenue (123,996)
Total adjustments 364,308
Net cash provided by operating activities $ 935,575
Non cash capital and financing activities:
Contributions of capital assets to governmental funds $ 49,296
Assets acquired through capital leases $ 221,126
See notes to the financial statements.
20
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Fiduciary Net Assets
Fiduciary Funds
September 30, 2008
Employee
Retirement Agency
Funds Funds
Assets
Cash and cash equivalents $ 1,403,297 $ 340,050
Investments:
Common equity securities 5,443,831
Preferred equity securities 65,323
U.S. Government agencies 1,692,586
Corporate bonds 1,245,758
U.S. Treasury bonds 165,174
Equity mutual funds 303,374
Common trust funds 4,248,730
Fixed annuity funds 71,479
Equity annuity funds 8,013
Pending trades 19,364
Accrued interest and dividends 57,526
Accounts receivable 533,269
Total assets 15,257,724 340,050
Liabilities
Deferred village contributions 111,329
Due to others 340,050
Total liabilities 111,329 340,050
Net Assets
Held in trust for pension benefits
and other purposes $ 15,146,395 $
See notes to the financial statements.
21
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the Year Ended September 30, 2008
Employee
Retirement
Funds
Additions
Contributions
Employer $ 1,461,392
Plan members 223,097
State on-behalf payments 321,142
Total contributions 2,005,631
Investment earnings:
Dividends and interest 395,695
Net (decrease) in fair value
of investments (2,160,925)
Total investment income (1,765,230)
Less investment expenses 99,291
Total net investment earnings (1,864,521)
Total additions 141,110
Deductions
Administrative expense 101,344
Benefits 2,686,450
Total deductions 2,787,794
Change in net assets (2,646,684)
Net assets -beginning 17,793,079
Net assets -ending $ 15,146,395
See notes to the financial statements.
22
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Village of North Palm Beach, Florida ("the Village") was incorporated in 1956 pursuant to
Chapter 31481, Laws of Florida, Extraordinary Session 1956. The Village is located in the
northeast portion of Palm Beach County, Florida. Its municipal area comprises approximately
1,900 acres of land and 1,200 acres of lakes, canals and lagoons. The Village's nonseasonal
population consists of approximately 13,000 residents, which increases during the winter months
to approximately 18,000 people. The Village operates under the Council-Manager form of
government and provides the following services to its residents: public safety, planning and
zoning, sanitation, library, parks, marinas, and a country club. The Village Council (the
"Council") is responsible for legislative and fiscal control of the Village.
In accordance with Statement 14 of the Government Accounting Standards Board, the
underlying concept of the governmental financial reporting entity is that governmental
organizations are responsible to elected governing officials; therefore, financial reporting should
report the elected officials' accountability for those organizations. Furthermore, the financial
statements of the reporting entity should allow users to distinguish between the primary
government and its component units, if any, by communicating information about the component
units and their relationships with the primary government. A component unit is a legally
separate organization for which the elected officials of the primary government are financially
accountable. Determining factors of financial accountability includes appointment of a voting
majority, imposition of will, financial benefit or burden on a primary government, or fiscal
dependency. In addition, component units can be other organizations for which the nature and
significance of their relationship with a primary government are such that exclusion would cause
the reporting entity's financial statements to be misleading or incomplete.
Based on the application of these criteria, management has determined that no component units
exist which would require inclusion in this report. Further, the Village is not aware of any entity
that would consider the Village to be a component unit.
B. 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.
23
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. 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.
C. Measurement Focus, Basis of
Accounting and Financial Statement Presentation
The government-wide financial statements and proprietary fund financial statements are reported
using the accrual basis of accounting and the economic resources measurement focus. Fiduciary
funds use the accrual basis of accounting and, except for agency funds, the economic resources
measurement focus. Agency funds do not have a measurement focus. Revenues are recorded
when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the
current period. For this purpose, the Village considers revenues to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current
period. For this purpose, the Village considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only
when payment is due.
Property taxes, sales taxes, franchise taxes, licenses, interest associated with the current fiscal
period and all other revenue items are all considered to be susceptible to accrual and so have
been recognized as revenue of the current fiscal period.
24
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of
Accounting and Financial Statement Presentation (Continued)
The Village reports the following major governmental funds:
General Fund
The general fund is the primary operating fund and is used to account for all financial resources
applicable to the general operations of the Village except those required to be accounted for in
another fund.
The Village reports the following major and onlx proprietary fund:
Country Club Enterprise Fund
The fund accounts for the activities related to the Country Club.
Additionally, the Villa.~e reports the followin f.~
and tykes:
Capital Projects Fund
The capital projects fund is used to account for the cost 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.
Special Revenue Funds
The special revenue funds are used to account for the proceeds of specific revenue sources (for
major capital projects) that are legally restricted to expenditures for specified purposes. The
Village has four special revenue funds, Public Safety Fund, Northlake Boulevard Fund,
Recreation Fund, and On-Behalf Pension Contributions.
Employee Retirement Funds
The pension trust fund account for the activities of the General Employees Retirement Fund, the
Fire and Police Officers Retirement Fund and the Volunteer Firemen's Length of Service Award
Pension Fund, which accumulate resources for pension benefits to qualified employees.
25
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of
Accounting and Financial Statement Presentation (Continued)
Agency Funds
The agency funds account for assets that are held for other parties and cannot be used to finance
the Village's own programs. The two agency funds are the Northlake Boulevard Task Force,
which is for the streetscape improvement of Northlake Boulevard, and the Manatee Protection
Fund, in which the assets are held in trust for the protection of manatees through the enforcement
of boat speed zones on the Intracoastal and inland waterways.
Private sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of GASB.
Governments also have the option of following subsequent private sector guidance for their
business-type activities and enterprise funds, subject to this same limitation. The Village has
elected not to follow subsequent private sector guidance.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are charges between the government's
country club and various other functions of the Village. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Proprietary fund 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 that cost of
sales and services, administrative expenses and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Village's policy to
use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
Cash and Cash Equivalents
All short-term investments that are highly liquid are considered to be cash equivalents. Cash
equivalents are readily convertible to a known amount of cash, and at the day of purchase, have a
maturity date no longer than three months.
26
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Accounts Receivable
Accounts receivable of the General Fund consists of billed and unbilled receivables.
Concentration of Credit Risk
The Village performs ongoing credit evaluations of its customers and does not require collateral.
The Village maintains an allowance for uncollectible accounts at a level which management
believes is sufficient to cover potential credit losses.
Investments
Investments are reported at fair value, which is determined by using various third-party pricing
sources. The Local Government Surplus Funds Trust Fund, administered by the Florida State
Board of Administration, is a " 2a-71ike" pool and these investments are valued using the pooled
share price.
Interfund Transactions
Activity between funds that is representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current
portion of Interfund loans). All other outstanding balances between funds are reported as "due
to/from other funds." Any residual balance outstanding between the governmental activities and
business-type activities are reported in the government-wide financial statements as internal
balances.
Transfers and Interfund balances totally within governmental activities and those that are totally
within business-type activities are eliminated and not presented in the government wide financial
statements. Transfers and balances between governmental and business-type activities are
presented in the government-wide financial statements.
Inventories
Inventories are valued at cost determined on a last-in, first-out basis (LIFO). Inventories in the
general fund consist of expendable supplies held for consumption. Inventories in the enterprise
fund consist of goods for sale to the public. The initial cost is recorded as an asset at the time the
individual inventory items are purchased and are charged against operations in the period when
used.
27
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Capital Assets and Depreciation
Capital assets, which include property, plant, infrastructure, and equipment, are reported in the
applicable governmental or business-type activities column in the government-wide financial
statements. The Village defines capital assets as assets with an initial individual cost of $2,500
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. Infrastructure is reported in buildings and
improvements.
The accounting and reporting treatment applied to the capital assets associated with a fund are
determined by its measurement focus. General capital assets are assets of the Village as a whole.
When purchased, such assets are recorded as expenditures in the governmental funds and
capitalized as assets in the government-wide statement of net assets. General capital assets are
carried at historical cost. Where cost cannot be determined from the available records, estimated
historical cost has been used to record the estimated value of the assets. Assets acquired by gifts
or bequests are recorded at their fair value at the date of acquisition.
Capital assets of the enterprise fund are capitalized in the fund. The valuation basis for
enterprise fund capital assets is the same as those used for general capital assets. Additionally,
net interest cost is capitalized on enterprise fund projects during the construction period.
Additions, improvements, and other capital outlay that significantly extend the useful life of an
asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred.
Depreciation has been provided over the estimated useful lives using the straight-line method of
depreciation. The estimated lives for each major class of depreciable capital assets are as
follows:
Buildings, improvements & infrastructure 5-30 years
Golf course improvements 5-30 years
Machinery & Equipment 3-15 years
Vehicles 3-20 years
28
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Deferred Revenue
The government reports deferred revenue on its government wide statement of net assets,
proprietary statement of net assets, and governmental funds balance sheet. Deferred revenues
arise when potential revenue does not meet both the "measurable" and "available" criteria for
recognition in the current period. Deferred revenues also arise when the government receives
resources before it has a legal claim to them, as when grant monies are received prior to
incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria
are met, or when the government has a legal claim to the resources, the liability for deferred
revenue is removed and revenue is recognized.
Compensated Absences
The Village's employees are granted compensated absence pay for vacation and sick leave in
varying amounts based on length of service. Unused compensated absences are payable upon
separation from service. Vacation is accrued as a liability when the employee earns benefits.
This means that the employee has rendered services that give rise to a vacation liability and it is
probable that the Village will compensate the employee in some manner, e.g., in cash or paid
time-off, now or upon termination or retirement. The Village uses the vesting method in
accruing sick leave liability. Under the vesting method, the liability for sick leave is accrued for
employees who are eligible to receive termination payments upon separation.
Compensated absences are accrued when incurred in the government-wide and proprietary
financial statements. A liability for these amounts is reported in the governmental funds only if
they have matured, for example, as a result of employee resignations or retirements. For the
governmental funds, compensated absences are liquidated by the general fund.
Long-Term Obli
atg
ions
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.
29
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Long-Term Obli
atg
ions (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are reported
as other financing sources, while discounts on debt issuances are reported as other financing
uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Net Assets
Equity in the government-wide statement of net assets and the proprietary fund is displayed in
three categories: 1) invested in capital assets net of related debt, 2) net pension asset, 3)
restricted, and 4) unrestricted. Net assets invested in capital assets net of related debt consists of
capital assets reduced by accumulated depreciation and by any outstanding debt incurred to
acquire, construct, or improve those assets. Net 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.
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 capital outlay -Restricted for expenditures related to capital projects.
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.
30
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities, and Net Assets or Equity (Continued)
Use of Estimates
The financial statements and related disclosures are prepared in conformity with accounting
principles generally accepted in the United States. Management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and revenue and expenses
during the period reported. These estimates include the collectibility of accounts receivable, the
use and recoverability of inventory, the useful lives and impairment of tangible assets, and the
realization of net pension assets, among others. Estimates and assumptions are reviewed
periodically and the effects of revisions are reflected in the financial statements in the period
they are determined to be necessary. Actual results could differ from those estimates.
Statement of Cash Flows
For purposes of the statement of cash flows, the Village considers all short-term investments that
are highly liquid to be cash equivalents. Cash equivalents are readily convertible to a known
amount of cash, and at the day of purchase, have a maturity date no longer than three months.
NOTE 2 -STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Budgetary Data
Formal budgetary integration is employed as a management control device during the year for
the General Fund and the Enterprise Fund. The only governmental fund with a legally adopted
annual budget is the General Fund. This budget is adopted on a basis consistent with generally
accepted accounting principles. Except for budgeting capital expenditures and not budgeting for
depreciation, the annual appropriated budgets for the enterprise funds are adopted on a basis
consistent with generally accepted accounting principles. For budgeting purposes, current year
encumbrances are not treated as expenditures.
The procedures for establishing budgetary data are as follows:
• In July of each year, the Village Manager submits a proposed operating budget to the
Council for the next fiscal year commencing the following October 1st. The proposed
budget includes expenditures and the means of financing them.
• During the third week of July, the Council holds public meetings to obtain taxpayer
comments.
31
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 2 -STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
A. Budgetary Data (Continued)
• Upon completion of the public hearings and prior to October 1, a final operating budget
is legally enacted through the passage of an ordinance. Estimated beginning fund
balances are considered in the budgetary process.
• The Village Manager is authorized to transfer budgeted amounts up to $5,000 within a
department. Any change to capital outlay or to the total departmental expenses,
excluding capital outlay, must be approved by the Village Council.
• Appropriations along with encumbrances lapse on September 30th.
Budgeted amounts are as originally adopted, or as amended by appropriate action. During the
year several supplementary appropriations were necessary.
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase
orders, contracts) outstanding at year end are reported as reservations of fund balances and do
not constitute expenditures or liabilities because the commitments will be reappropriated and
honored during the subsequent year.
B. Property Taxes
Under Florida law, the assessment of all properties and the collection of all county, municipal
and school board property taxes are consolidated in the offices of the County Property Appraiser
and the County Tax Collector. All property is reassessed according to its fair market value on
January 1 of each year and each assessment roll is submitted to the State Department of Revenue
for review to determine if the assessment rolls meet all of the appropriate requirements of State
law. The laws of the State regulating tax assessment are also designed to assure a consistent
property valuation method statewide. State Statutes permit municipalities to levy property taxes
at a rate of up to 10 mills.
The tax levy of the Village is established by the Council prior to October 1 of each year during
the budget process. The Palm Beach County Property Appraiser incorporates the Village's
millage into the total tax levy, which includes the County, County School Board, and special
district tax requirements. The millage rate assessed by the Village for the year ended
September 30, 2008, was 6.1000 ($6.10 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.
32
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 2 -STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)
B. Property Taxes (Continued)
After sale, tax certificates bear interest at 18% per year or at any lower rate bid by the buyer.
The certificate holder may make application for a tax deed on any unredeemed tax certificate
after a period of two years. The County holds unsold certificates. Delinquent taxes on personal
property bear interest at 18% per year until the tax is satisfied either by seizure and sale of the
property or by the five-year statute of limitations. At September 30, 2008, unpaid delinquent
taxes are not material and have not been recorded by the Village.
NOTE 3 -DEPOSITS AND INVESTMENTS
Deposits
As of September 30, 2008, the carrying amount of deposits (including fiduciary funds) was
$2,510,586 and the bank balances were $2,975,645. The Village also had $2,766 of petty cash.
In addition to insurance provided by the Federal Depository Insurance Corporation, deposits are
held in banking institutions approved by the State Treasurer of the State of Florida to hold public
funds. Under Florida Statutes Chapter 280, Florida Security for Public Deposits Act, the State
Treasurer requires all Florida qualified public depositories to deposit with the Treasurer or other
banking institution eligible collateral. In the event of failure of a qualified public depository, the
remaining public depositories would be responsible for covering any resulting losses. The
Village's deposits at year end are considered insured for custodial credit risk purposes.
The Village pools idle cash from all funds for the purpose of increasing income through
investment activities. Investment income from the pool is allocated back to the respective funds
based on each fund's equity in the pool with the exception of the capital projects fund and the
special revenue funds.
Investments
At September 30, 2008, the Village had investments in the State Board of Administration
Investment Pool B. The State Board of Administration is part of the Local Governments Surplus
Funds Trust Fund and is governed by Chapter 19-7 of the Florida Administrative Code. These
rules provide guidance and establish the general operating procedures for the administration of
the Local Governments Surplus Funds Trust Fund. Additionally, the Office of the Auditor
General performs the operational audit of the activities and investments of the State Board of
Administration. The Local Government Surplus Funds Trust Fund is not a registrant with the
Securities and Exchange Commission (SEC); however, the board has adopted operating
procedures consistent with the requirements fora 2a-7 fund.
33
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 3 -DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
On November 29, 2007, the State Board of Administration implemented a temporary freeze on
the assets held in the Pool due to an unprecedented amount of withdrawals from the Pool coupled
with the absence of market liquidity for certain securities within the Pool. The significant
amount of withdrawals followed reports that the Pool held asset-backed commercial paper that
was subject to sub prime mortgage risk. On December 4, 2007, based on recommendations from
an outside financial advisor, the State Board of Administration restructured the Pool into two
separate pools. Pool A, (Local Government Surplus Funds Trust Fund Investment Pool)
consisted of all money market appropriate assets, which was approximately $12 billion or 86%
of Pool assets. Pool B, (Surplus Funds Trust Fund) consisted of assets that either defaulted on a
payment, paid more slowly than expected, and/or had any significant credit and liquidity risk,
which was approximately $2 billion or 14% of Pool assets. At the time of the restructuring, all
current pool participants had their existing balances proportionately allocated into Pool A and
Pool B.
At September 30, 2008, Pool A participants could withdraw 65% of their balance or $12 million,
whichever is greater, without penalty. On December 23, 2008, this restriction was withdrawn and
Pool A participants could withdraw 100% of their balances without penalty. At September 30,
2008, the Village had no investments in Pool A.
Pool B is not rated by any nationally recognized rating agency. Pool B is accounted for as a
fluctuating NAV pool. The fair value factor for September 30, 2008 was .798385. The factor
should be multiplied by the account balance in order to calculate the fair value of the investment
in Pool B.
The weighted average life (WAL) of Pool B at September 30, 2008 was 9.36 years. A portfolio's
WAL is the dollar weighted average length of time until securities held reach maturity. WAL is
based on legal final maturity dates for Pool B as of September 30, 2008.
As of September 30, 2008, the cost basis of the Village's investment in Pool B was $500,485 and
the fair value and adjusted book value was $399,579. Additional information regarding the
Local Government Surplus Funds Trust Fund may be obtained from the State Board of
Administration.
34
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 3 -DEPOSITS AND INVESTMENTS (Continued)
Investments
As of September 30, 2008, the Village held the following investments:
Weighted
Credit Fair Average
Rating Value Maturity
Evergreen municipal money
market fund N/R $ 9,456,410 8 days
State Board of Administration
Investment Pool B N/R 399,579 9.36 yrs.
Money market funds Aaa 922,463 N/A
Money market funds N/R 251,672 N/A
GNMA, FNMA, FHLMC
Pools N/R 960,449 22.92 yrs.
U.S. Gov. Agency bonds Aaa 732,137 8.77 yrs.
Corporate bonds Aaa to A 1,245,758 10.57 yrs.
U.S. Treasury bonds Aaa 165,174 6.68 yrs.
Common equity securities N/R 5,443,831 N/A
Preferred equity securities 65,323
Equity mutual funds N/R 303,374 N/A
Common trust funds N/R 4,248,730 N/A
Fixed annuity funds N/R 71,479 N/A
Equity funds N/R 8,013 N/A
Net pending trades N/R 19,364 N/A
Total investments $24,293,756
All the investments other than the State Board of Administration and the Evergreen investments
are held in the fiduciary funds. The credit ratings are Moody's.
Interest rate risk -Interest rate risk is the risk that changes in interest rates will adversely affect
the fair value of an investment. Generally, the longer the time to maturity, the greater the
exposure to interest rate risks. The Village limits its exposure to fair value losses resulting from
rising interest rates by structuring the investment portfolio so that the securities mature to meet
cash requirements for ongoing operations, thereby avoiding the need to sell securities on the
open market prior to maturity; and investing operating funds primarily in short-term securities,
money market mutual funds, or similar investment pools unless it is anticipated that long-term
securities can be held to maturity without jeopardizing the liquidity requirements. The
Retirement Funds do not have a formal investment policy that limits investment maturities as a
means of managing exposure to fair value losses arising from increasing interest rates.
35
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 3 -DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
Interest rate risk (Continued)
The Village's investment in asset backed securities consist of mortgage pass-through securities
based on pools of residential home mortgage loans which are subject to prepayments and
therefore highly sensitive to changes in interest rates.
Custodial credit risk -For an investment, custodial credit is the risk that, in the event of the
failure of the counterparty, the Village will not be able to recover the value of its investments
that are in the possession of an outside party. At September 30, 2008 all investments were
insured or collateralized, except the Village's three pension funds, in which the underlying
securities are held by counterparty, or by its trust department or agent but not in the Village's
name and is uninsured and unregistered. However, all securities are registered in the funds'
names.
Concentrations of credit risk- Concentration of credit risk is defined as the risk of loss attributed
to the magnitude of an investment in a single user. The Village places no limit on the amount
they may invest in any one issuer, except those in the Fire and Police Retirement Fund. Not
more than then (10) percent of the Fund's assets shall be invested in the common stock or capital
stock of any one issuing company, nor shall more than five (5) percent of the Fund's assets shall
The U. S. government and agency securities, money market mutual funds, bonds, stocks, asset
backed securities and mutual and common trust funds are owned by the Pension Trust Funds.
The Village General Employees' Retirement Fund is authorized to invest its funds as follows:
1. Interest-bearing checking or savings accounts in qualified public depositories, as defined
in Chapter 280, Florida Statutes;
2. Interest-bearing time deposits in qualified public depositories, as defined in Chapter 280,
Florida Statutes;
3. The Local Government Surplus Funds Trust Fund or any intergovernmental investment
pool authorized pursuant to the Florida Interlocal Cooperation Act, as provided in
Chapter 163, Florida Statutes;
4. Securities and Exchange Commission registered money market funds with the highest
credit quality rating from a nationally recognized rating agency;
5. Direct obligations of the United States Treasury;
6. Federal agencies and instrumentalities;
36
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 3 -DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
7. Securities of, or interest in, any open-end or closed-end management-type investment
company or investment trust registered under the Investment Company Act of 1940, 15
U.S.C. sections 80a-1 et seq., as amended from time to time, provided that the portfolio
of such investment company or investment trust is limited to obligations of the United
States Government or any agency or instrumentality thereof and to repurchase
agreements fully collateralized by such United States Government obligations, and
provided that such investment company or investment trust takes delivery of such
collateral either directly or through an authorized custodian;
8. Other investments authorized by law or by ordinance by the Village.
Investments of the Fire and Police Retirement Fund can consist of the following:
1. Time or savings accounts of a national bank, a state bank insured by the Federal Deposit
Insurance Corporation, or a savings, building and loan association insured by the Federal
Deposit Insurance Corporation.
2. Obligations of the United States or obligations guaranteed as to principal and interest by
Government of the United States.
3. Bonds, stocks, or any other evidence of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States, any state or organized territory
of the United States, or the District of Columbia, provided:
a. The corporation is listed on any one (1) or more of the recognized national stock
exchanges and holds a rating in one of the three (3) highest classifications by a
major rating service; and
b. The board shall not invest more than five (5) percent of its assets in the common
stock, capital stock, bonds or indebtedness of any one (1) issuing company, nor
shall the aggregate investment of in any one (1) issuing company exceed five (5)
percent of the outstanding capital stock of that company, nor shall the aggregate
of its investments in equities at cost exceed sixty (60) percent of the pension
funds' assets.
4. Not withstanding any provision of this section to the contrary, the board is specifically
authorized to invest in foreign securities to the extent authorized by sections 175.071(1)
and 185.06(1)(b), Florida Statutes.
37
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 3 -DEPOSITS AND INVESTMENTS (Continued)
Investments (Continued)
A reconciliation of deposit and investments as shown on the statement of net assets and
statement of fiduciary net assets for the Village is as follows:
By Category:
Deposits $ 2,510,586
Petty cash 2,766
Investments 24,293,756
Total deposits and investments $26,807,108
Presented in the statement of net assets
Governmental activities
Cash and cash equivalents $10,425,677
Restricted cash and cash equivalents 144,804
Investments 3 99, 579
Business-type activities
Cash and cash equivalents 830,069
Total statements of net assets 11,800,129
Presented in the statement of fiduciary net assets
Pension trust funds
Cash and cash equivalents 1,403,297
Investments 13,263,632
Agency funds
Cash and cash equivalents 340,050
Total fiduciary funds 15,006,979
Total deposits and investments $26,807,108
38
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 4 -RECEIVABLES
Receivables at September 30, 2008, were as follows:
General Country
Fund Club Total
Utility franchise fees & taxes $ 336,596 $ $ 336,596
Conroy Drive assessment 28,894 28,894
Other accounts receivable 35,131 72,849 107,980
Subtotal accounts receivable 400,621 72,849 473,470
Less: Allowance for doubtful accounts 16,000 (16,000)
Total accounts receivable $ 400,621 $ 56,849 $457,470
NOTE 5 -DEVELOPER FEE RECEIVABLE
The Village entered into an agreement with a developer on February 14, 2008, in which it agreed
to accept payment of $1,175,000 in lieu of the dedication of land for public use. The developer
paid $250,000 upon execution of the agreement. The balance due is to be paid in annual
installments of $250,000 on the anniversary date of the agreement until paid, with a final
payment of $175,000 in 2012. At September 30, 2008, the remaining amount receivable was
$925,000. In accordance with Village ordinance Sec. 36-23, amounts received shall be utilized
for parks and recreational purposes or the construction or expansion of any public facilities or
other improvements designed to mitigate the impacts of the subdivision.
39
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 6 -CAPITAL ASSETS
Capital Assets activity for the year ended September 30, 2008, was as follows:
Primary Government
Beginning Ending
Governmental Activities: Balance Additions Deletions Balance
Capital assets not being depreciated:
Land $ 2,151,089 $ $ $ 2,151,089
Construction in progress 2,143,272 1,336,513 (2,702,304) 777,481
Capital assets being depreciated:
Buildings 9,018,038 206,371 (22,718) 9,201,691
Improvements and infrastructure 4,403,307 3,672,940 8,076,247
Machinery and equipment 3,197,508 169,503 (240,290) 3,126,721
Vehicles 3,762,518 331,621 (246,353) 3,847,786
Total at historical cost: 24,675,732 5,716,948 (3,211,665) 27,181,015
Less accumulated depreciation for:
Buildings (3,458,222) (303,426) 21,812 (3,739,836)
Improvements (1,624,630) (581,325) 175 (2,205,780)
Machinery and equipment (2,282,131) (235,787) 237,823 (2,280,095)
Vehicles (2,405,020) (290,525) 231,070 (2,464,475)
Total accumulated depreciation (9,770,003) (1,411,063) 490,880 (10,690,186)
Governmental activities capital
assets, net $ 14,905,729 $ 4,305,885 2,720,785) $ 16,490,829
40
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 6 -CAPITAL ASSETS (Continued)
Beginning Ending
Business-type activities: Balance Additions Deletions Balance
Capital assets notbeing depreciated:
Land $ 1,051,311 $ $ $ 1,051,311
Construction in progress
Capital assets being depreciated:
Buildings and improvements 2,107,560 52,701 (317,314) 1,842,947
Improvements -golf course 6,725,232 335,057 7,060,289
Machinery and equipment 494,762 5,250 (1,545) 498,467
Vehicles 84,835 217,550 (15,625) 286,760
Total at historical cost: 10,463,700 610,558 (334,484) 10,739,774
Less accumulated depreciation for:
Buildings and improvements (1,267,896) (89,726) 278,394 (1,079,228)
Improvements -golf course (1,513,655) (281,664) (1,795,319)
Machinery and equipment (345,938) (40,384) 884 (385,438)
Vehicles (61,490) (74,877) 4,827 (131,540)
Total accumulated depreciation (3,188,979) (486,651) 284,105 (3,391,525)
Business-type activities capital
assets, net $ 7,274,721 $ 123,907 50,379) $ 7,348,249
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 102,985
Public safety 390,085
Public works 258,571
Community development 16,386
Leisure services 360,348
Total depreciation expense, governmental activities 1,128,375
Accumulated depreciation of assets transferred from the
Country Club fund 282,688
Total additions to accumulated depreciation $1,411,063
41
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 6 -CAPITAL ASSETS (Continued)
Construction Commitments
Contracts awarded but not yet completed were as follows:
Estimated
Proj ect Description Cost
Governmental activities:
Anchorage Park $ 421,450
Earman River 168,355
Wash Rack 27,190
Radio Communications System 27,042
Community Center 24,807
Total Construction Commitments $ 668,844
NOTE 7 -LONG TERM LIABILITIES
Change in Long-Term Liabilities
Long-term liability activity for the year ended September 30, 2008, was as follows:
Balance Balance Amount Due
October 1, September 30, Within
2007 Additions Reductions 2008 One Year
Governmental activities
Loans payable $4,280,842 $ 675,203) $3,605,639 $ 691,542
Capital leases 81,100 (41,003) 40,097 26,009
Claims and setklements 424,821 (424,821)
Compensated absences
payable 1,035,447 653,152 (600,072) 1,088,527 676,794
Total $5,822,210 $ 653,152 ($1,741,099) $4,734,263 $1,394,345
Business-type activities:
Loans payable $5,026,895 $ 364,062) $4,662,833 $ 282,590
Capital leases 52,197 221,126 (80,431) 192,892 84,829
Compensated absences
payable 13,535 13,580 (12,570) 14,545 13,294
Total $5,092,627 $ 234,706 457,063) $4,870,270 $ 380,713
42
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
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. The general fund portion has been repaid. 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%. 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. As of September 30, 2008, the principal
amount outstanding was $162,306 and was for the purpose of business-type activities.
Annual debt service requirements to maturity are as follows:
Business-type activities:
Year Ending Principal Interest Total
2009 $ 70,234 $ 7,215 $ 77,449
2010 73,972 3,425 77,397
2011 18,100 241 18,341
$162,306 $ 10,881 $ 173,187
$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 note bears interest at a variable
rate, adjusted semi-annually, equal to the London InterBank Offered Rate ("LIBOR") plus
.585%. 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, 2008 was 2.53% and this approximates the rate that was used to calculate
the debt service requirements to maturity. As of September 30, 2008, the principal amount
outstanding was $939,943 and was for the purpose of government activities.
43
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
$2,800,000 Promissory Note (Continued)
Annual debt service requirements to maturity, which are payable by the general fund, are as
follows:
Year Ending Principal Interest Total
2009 $ 306,553 $ 31,643 $ 338,196
2010 310,064 28,132 338,196
2011 323,326 12,269 335,595
$ 939,943 $ 72,044 $ 1,011,987
$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"),
and adjusted as of 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, 2008 was 1.86% and this approximates
the rate that was used to calculate the debt service requirements to maturity. As of September
30, 2008, the principal amount outstanding was $2,550,000 and was for the purpose of
government activities.
Annual debt service requirements to maturity are as follows:
Year Ending Principal Interest Total
2009 $ 300,000 $ 47,549 $ 347,549
2010 300,000 41,955 341,955
2011 300,000 36,361 336,361
2012 300,000 30,767 330,767
2013 300,000 25,173 325,173
2014-2017 1,050,000 44,752 1,094,752
$ 2,550,000 $ 226,557 $ 2,776,557
44
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
$271,000 and $132,000 Promissory Notes
In January 2003, the Village Council adopted Resolution No. 8-2003 authorizing the issuance of
promissory notes of $271,000 and $132,000 to finance various capital expenditures. The notes
are payable from the Village's non-ad valorem tax revenues.
The $132,000 note had a final maturity in January 2007 and was paid off by the Country Club.
The $271,000 note bears interest at 3.82% and is payable in 14 semi-annual payments of
$22,286, beginning July 2003 and with final maturity in January 2010. As of September 30,
2008, the principal amount outstanding was $64,352. Annual debt service requirements to
maturity for this note, which are payable from the general fund, are as follows:
Year Ending Principal Interest Total
2009 $ 42,521 $ 2,051 $ 44,572
2010 21, 831 413 22,244
$ 64,352 $ 2,464 $ 66,816
$230,000 Promissory Note
In January 2005, 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 a fluctuating rate at
all times equal to 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, plus 73 basis
points and is payable in five semi-annual payments of $22,787, beginning August 2004 and with
final maturity in January 2009. The effective rate at September 30, 2008 was 6.05% and this
approximates the rate that was used to calculate the debt service requirements to maturity. As of
September 30, 2008, the principal amount outstanding was $51,344 and was for the purpose of
government activities. Annual debt service requirements to maturity for this note, which are
payable by the general fund, are as follows:
Year Ending Principal Interest Total
2009 $ 42,468 $ 3,106 $ 45,574
2010 8,876 537 9,413
$ 51,344 $ 3,643 $ 54,987
45
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
$4,893,673 Promissory Notes
The Village Council adopted Resolution No. 23-2006 authorizing the issuance of a note in the
amount of $4,893,673 to finance certain capital expenditures relating to the municipal golf
course and country club. Pledged revenues secure the loan. Principal and interest payments are
due semi-annually in the amount of $197,450, with a final maturity date of April 1, 2024. The
interest rate on the loan is 4.11% and is subject to adjustment in the event of taxability of the
interest on this note. As of September 30, 2008, the principal amount outstanding was
$4,500,527 and was for the purpose of business-type activities.
Annual debt service requirements to maturity are as follows:
Business-type activities:
Year Ending Principal Interest Total
2009 $ 212,356 $ 182,544 $ 394,900
2010 221,173 173,727 394,900
2011 230,357 164,543 394,900
2012 239,922 154,978 394,900
2013 249,884 145,016 394,900
2014-2018 1,413,946 560,554 1,974,500
2019-2024 1,932,889 245,568 2,178,457
$ 4,500,527 $ 1,626,930 $ 6,127,457
$588,000 Capital Leases
The Village entered into a seven year $588,000 capital lease agreement as lessee for financing
the acquisition of machinery and equipment for governmental activities with a purchase price of
$640,332 in 2002. There are fourteen semi-annual payments required of principal and interest
beginning September 22, 2002. Interest will be a fluctuating rate at all times equal to 111% of
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 lease contains a purchase
option. At September 30, 2008, the net book value of machinery and equipment was $262,984.
The $588,000 note had a final maturity in September 2008 and was paid off by the General
Fund.
46
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
$223,500 Capital Leases
The Village Council adopted Resolution No. 03-2005 authorizing the execution of a five year
capital lease agreement for the purpose of financing the lease-purchase of $123,500 of equipment
for the General Fund and $100,000 of equipment for the Country Club. Principal and interest
payments are due semi-annually, with a final maturity date of February 15, 2010. At
September 30, 2008, the net book value of the equipment was $94,181. The rate used to impute
interest was 3.55%.
Amounts currently outstanding on the note are as follows:
Purpose Amount
Governmental activities $ 40,097
Business-type activities 32,072
72 169
Annual debt service requirements to maturity are as follows:
Governmental activities:
Year Ending Principal Interest Total
2009 $ 26,009 $ 1,170 $ 27,179
2010 14,088 237 14,325
$ 40,097 $ 1,407 $ 41,504
Business-type activities:
Year Ending Principal Interest Total
2009 $ 21,058 $ 947 $ 22,005
2010 11,014 192 11,206
$ 32,072 $ 1,139 $ 33,211
47
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 7 -LONG TERM LIABILITIES (Continued)
$223,500 Capital Leases
The Village entered into a three year capital lease agreement for the purpose of financing the
lease-purchase of $274,800 of equipment for the Country Club in December 2006. Principal and
interest payments are due monthly, with a final maturity date of December 1, 2009. The final
payment includes a balloon payment of $92,000. As of September 30, 2008, the principal
amount outstanding was $160,820 and the net book value of the equipment was $148,850. The
rate used to impute interest was 5.6%.
Annual debt service requirements to maturity are as follows:
Business-type activities:
Year Ending Principal Interest Total
2009 $ 63,771 $ 7,386 $ 71,157
2010 97,049 881 97,930
$ 160,820 $ 8,267 $ 169,087
Claims and Settlements
The Village settled a dispute with Florida Blacktop, Inc., and paid $250,000 on February 15,
2008.
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association (SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006. The governmental liability of $174,821 for pending claims activity for
SERMA was paid in December 2008. (See related note 8.)
NOTE 8 -RISK MANAGEMENT
The Village is exposed to various risks of loss related to torts: theft of, damage to, and
destruction of assets; errors and omissions; and natural disasters.
The Village currently reports all of its risk management activities in the general fund. Claims
expenditures and liabilities are reported when it is probable that a loss has occurred and the
amount of the loss can be reasonably estimated. These losses include an estimate of claims that
have been incurred but not reported.
48
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 8 -RISK MANAGEMENT (Continued)
Employee Benefits Group
The Village was self-insured to provide group medical coverage through June 30, 2005. A third
party administered the group medical coverage for the Village. The Village funds its losses
based on actual claims.
The liability for unpaid claims, if any, is estimated using an industry average that is based on
actual claims paid. At September 30, 2008, the Village was no longer liable for claims stemming
from this policy. The following is a reconciliation of changes in the aggregate liability for the
current and prior fiscal years.
Claims and Claims
Year Ended Claims Liability Changes in Claim Liability
September 30 Be i.~ nnin~ of Year Estimates Payments End of Year
2007 $45,552 ($45,552) $ $
2008 $ $ $ $
Property and Casualt~p
Effective October 1, 2006, the Village discontinued its participation in the Southeast Risk
Management Association (SERMA) and joined the Florida Municipal Insurance Trust (FMIT).
However, as a former participant in SERMA, the Village is liable for claims incurred through
September 30, 2006. The governmental liability of $174,821 for pending claims activity for
SERMA was paid in December 2008. (See related Note 7.)
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.
NOTE 9 -EMPLOYEE RETIREMENT PLANS
The Village maintains the following two separate single employer defined benefit plans: Village
of North Palm Beach Fire and Police Retirement Fund, covering firefighters and police officers,
and Village of North Palm Beach General Employees Retirement Fund, covering substantially
all other full-time Village employees. Both plans are reported as pension trust funds and
included as part of the Village's reporting entity. The Police and Fire Fund will issue separate
financial statements for the year ended September 30, 2008, the report may be obtained from the
Village Clerk The General Employees Plan will not issue separate financial statements.
Additional information on these plans can be found beginning on page 62.
49
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT PLANS (Continued)
Each plan has its own board that acts as plan administrator and trustee: Board of Trustees (for
the Fire and Police Retirement Fund) and General Employees Retirement Board. Each plan's
assets may only be used for the payment of benefits to the members and beneficiaries of the plan
in accordance with the terms of each plan document. The costs of administering each plan are
financed in the appropriate pension trust fund.
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
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.
SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES
All Retirement Plans
Basis of Accounting. The retirement plans are reported on the accrual basis of accounting. Plan
member and state contributions are recognized as revenues in the period that the contributions
are due. Employer contributions to each plan are recognized when due and the employer has
made a formal commitment to provide the contributions. Benefits and refunds are recognized
when due and payable in accordance with the terms of each plan.
Method Used to Value Investments. Investments are reported at fair value and are managed by
third party money managers. The Village's independent custodians and individual money
managers price each instrument using various third party pricing sources.
Investments Concentrations The following investments represent concentrations of 5% or more
of net plan assets in investments that are not issued or guaranteed by the U. S. government.
General Employees Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
Fire and Police Retirement Fund
No nongovernmental investments exceed 5% of net plan assets.
50
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT PLANS (Continued)
PLANDESCRIPTIONAND CONTRIBUTIONINFORMATION
The following schedule is provided for general information purposes only and is derived from
the respective actual reports and Village information for the two retirement plans as of
October 1, 2007, the date of the latest actuarial valuation. Plan participants should refer to the
appropriate source documents for more complete information on the plans.
General Employees Fire and Police
Plan Description:
Authority Village Ordinance Village Ordinance/State
Asset Valuation:
Reporting Fair Value Fair Value
Legal Reserves None None
Long-Term Receivable None None
Internal/Participant Loans None None
Membership of each plan consisted of the following at October 1, 2007, the date of the latest
actuarial valuation:
GERF F&P
Active Participants:
Vested 56 14
Non-vested 16 32
Retirees and Beneficiaries receiving benefits 10 4
Terminated vested members receiving benefits 49 11
Total 131 61
General Employees' Retirement S
sy tem
Plan Description. The plan provides retirement benefits as well as death benefits. All full time
general employees who are not sworn police officers or firefighters shall become members of the
system on October 1st following completion of 12 months of employment as a condition of
employment. Three percent cost of living adjustments (COLA) are provided for employees who
retired before February 1, 1982. Employees hired before October 1, 2000, may choose to
contribute an extra 2% in order to receive a 3% COLA. Employees hired after September 30,
2000, are required to contribute the extra 2% for the 3% COLA. Authority to establish and
amend the benefit provisions of the plan rests with the Village Council. All benefits vest based
on the following years of credited service.
Years of
Credited Service Vested
Under 5 0%
5 or 6 50%
7 or 8 75%
9 or more 100%
51
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT PLANS (Continued)
Employees become eligible for normal retirement benefits after attaining the age of 60 and
completing nine years of credited service, or attaining the age of 65 (depending on employee
contribution rate. The normal retirement benefit consists of a life annuity, options available,
(subject to cost of living adjustments not to exceed 3% a year), of either 2%, 2.25%, or 2.5%
(depending on employee contribution rate) of AME times credited service up to 20 years plus
1% of AME times credited service over 20 years. Early retirement benefits can be received at
age 55. The benefit is determined as for normal retirement and payable at normal retirement date
or payable immediately after reduction by 5% for each year by which the benefit commencement
date precedes the normal retirement date. If an active member dies, his beneficiary receives a
refund of member contributions without interest. For a member who is age 55 and has at least
five years of service but who dies before commencement of retirement benefits, a monthly
benefit is payable to the designated beneficiary; the benefit is calculated as though the member
had retired on his date of death and payable according to option elected by the employee. For an
active member who has at least five years of service credited service and dies prior to reaching
normal retirement date, a benefit equal to his vested accrued benefit will be paid to his
beneficiary for ten years. If an employee terminates his employment, he is entitled to the
following:
- With less than five years of credited service, a refund of member contributions
without interest and no other benefit.
- With five or more years of credited service, a refund of member contributions, the
vested accrued benefit payable at normal retirement date or at any time after age 55
is attained, with the benefit being subject to the same reduction as for early
retirement benefits. The vesting schedule is listed above.
"Average monthly earnings" is the average during the five years within the last ten years of
employment which produces the highest average.
"Credited service" consists of the total number of years and fractional parts of years of actual
service with the Village and shall apply to an employee whose employment is terminated with
the Village and who recommences fulltime employment within two years from the date of
termination.
Contributions. General employees may contribute 6%, 4%, 2% or 0% of earnings as elected by
the employee, with the retirement benefit received being based on the amount contributed. The
Village is required to contribute the amount necessary to fund the Plan properly according to the
Plan's actuary. Contribution requirements of plan members and the Village are established and
may be amended by the Village Council.
52
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT SYSTEMS (Continued)
Fire and Police Retirement S
sy tem
Plan Description. The plan provides retirement benefits as well as death and disability benefits.
All benefits vest after ten years of credited service. All fulltime police officers or firefighters
shall become members of the system on October 1st following completion of 12 months of
employment as a condition of employment. Cost of living adjustments (COLA) are provided
annually each October 1, to reflect changes in CPI (subject to maximum increases or decreases
of 3% per year). Authority to establish and amend the benefit provisions of the plan rests with
the Village Council. Employees become eligible for normal retirement benefits after attaining
the age of 55. The normal retirement benefit consists of ten years certain and life thereafter, with
other options available, (subject to cost of living adjustments not to exceed 3% a year), of 2.5%
of AME times the years of credited services, with a maximum benefit of 60% of AME.
Members are eligible for non-service connected disability, after ten years of credited service and
a total and permanent disability. For service connected disability, a total and permanent
disability with no service requirement, the disability benefit consists of a ten year certain and life
annuity that can be provided by the single-sum value of the member's accrued pension benefit,
but is at least 42% of AME for service connected disability and at least 25% of AME for non-
service connected disability. See the description of the general employees' retirement system for
the remainder of the benefits, except that early retirement and termination benefits for vested
member can be received at age 50.
Contributions. Members are required to contribute 5% of their basic compensation to the plan.
The Village is required to contribute the remaining amount to fund the plan using the Entry Age
Actuarial Cost Method. Contribution requirements of plan members and the Village are
established and may be amended by the Village Council.
The Florida Constitution requires local governments to make the actuarially determined
contribution. The Florida Division of Retirement reviews and approves each local government's
actuarial report prior to its being appropriated for use for funding purposes. Additionally, the
State collects locally authorized insurance premium surcharges which can only be distributed
after the State has ascertained that the local government has met its actuarial funding requirement
for the then most recently completed fiscal year. Contributions to the Plan from the State of
Florida totaled $321,142 during the fiscal year ended September 30, 2008.
All Retirement Plans
Annual Pension Cost and Net Pension Obli ag
tion. The Village's 2008 annual pension cost and
actual contributions for each plan are shown on the next page. The required contributions were
determined as part of the October 1, 2007 actuarial valuation for each plan. State law allows the
Village to use a portion of the State contribution to offset the Village's pension cost.
53
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT PLANS (Continued)
Components of
Annual Pension Cost and Net Pension Obligation
Annual Required Eligible
Pension Village State
Cost Contribution Contribution
General Employees Retirement Fund $880,321 $876,712 N/A
Fire and Police Retirement Fund 723,599 718,663 138,200
The following schedule was determined as part of the October 1, 2007, actuarial valuation for the
General and Fire and Police Retirement Plans.
General
Employ Fire and Police
Annual required contribution (ARC) $ 875,126 $ 715,784
Interest on net pension obligation (NPO) (13,674) (14,435)
Adjustment to ARC 18,869 22,250
Annual pension cost 880,321 723,599
Actual contributions(1) 876,712 718,663
Increase in NPO 3,609 4,936
NPO at beginning of year, revised(1) 171 162) 186 934)
NPO at end of year 167 553) 181 998
(1) Part of the current year contributions reported as income was reclassified as a prior year contribution for
actuarial purposes.
Three-Year Trend Information
Annual Percentage Net Pension
Year Pension Annual of APC Obligation
Ended Cost APC~ Contribution Contributed ~Asset~
General
Employees 9/30/05 669,011 662,237 99.0% (175,080)
9/30/06 1,014,362 1,007,695 99.3% (168,413)
9/30/07 $ 871,123 $ 873,854 100.3% $ (171,144)
Fire and
Police 9/30/05 513,792 610,064 118.7% (203,493)
9/30/06 699,092 690,186 98.7% (194,587)
9/30/07 $ 547,785 $ 539,651 98.5% $ (186,453)
54
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 9 -EMPLOYEE RETIREMENT PLANS (Continued)
The following are the actuarial methods and significant actuarial assumptions:
General Employees Fire and Police
Valuation date 10/1/2007 10/1/2007
Actuarial Cost Method Frozen Entry Age Aggregate
Amortized Method Level percent closed N/A (1)
Remaining Amortization 30 years N/A (1)
Period
Asset Valuation Method Difference between actual
and expected return
recognized over five years. Five year smooth market.
Actuarial assumptions:
Investment rate of return* 8% up to retirement,
5.25% thereafter. 8%
Projected salary increase* 5.5% 6%
*Includes inflation at 4% 4%
Cost of living adjustments 3% for those retired before
2/1/82 or who contribute 3%
an extra 2%.
(1) The aggregate actuarial cost method does not identify or separately amortize unfunded
actuarial liabilities.
Schedule of Funding Progress
As noted above, the Fire and Police Retirement System utilizes the aggregate actuarial cost
method to determine contributions to the Plan. This method does not identify or separately
amortize unfunded actuarial liabilities. The required schedule of funding progress immediately
following the notes to the financial statements presents multiyear trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits. The schedule of funding progress was prepared using the
entry age actuarial cost method to provide information that serves as a surrogate for the funding
progress of the Plan.
Funded Status
Unfunded
Actuarial AAL
Actuarial Actuarial Accrued as % of
Valuation Value of Liability Unfunded Funded Covered Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
10/01/07 9,228,537 10,836,562 1,608,025 85.2% 3,110,081 51.7%
55
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 10 -PENSION PLAN FINANCIAL INFORMATION
Generally accepted accounting principles (GAAP) requires that financial statements for
individual pension plans be presented in the notes to the financial statements of the primary
government if separate GAAP financial reports have not been issued. The Volunteer Fire and
General Employees pension funds do not have separate GAAP reports issued and the financial
information for these is presented below.
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
EMPLOYEE RETIREMENT FUNDS
SEPTEMBER 30, 2008
Total
General Employee
Volunteer Employees Retirement
Fire Pension Pension Funds
ASSETS
Cash and cash equivalents $ $ 251,672 $ 251,672
Investments:
Equity mutual funds 303,374 303,374
Common trust funds 4,248,730 4,248,730
Fixed annuity funds 71,479 71,479
Equity annuity funds 8,013 8,013
Accrued interest and dividends 406 406
Accounts receivable 210,774 210,774
Total assets 79,492 5,014,956 5,094,448
Net Assets
Held in trust for pension benefits and
other purposes $ 79,492 $ 5,014,956 $ 5,094,448
56
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 10 -PENSION PLAN FINANCIAL INFORMATION (Continued)
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
EMPLOYEE RETIREMENT FUNDS
For the Fiscal Year Ended September 30, 2008
Total
General Employee
Volunteer Employees Retirement
Fire Pension Pension Funds
Additions:
Contributions:
Employer $ 4,217 $ 876,712 $ 880,929
Plan members 161,290 161,290
Total contributions 4,217 1,038,002 1,042,219
Investment earnings:
Dividends and interest 3,236 31,451 34,687
Net decrease in the fair value
of investments (271) (692,615) (692,886)
Less investment expense 48,043 48,043
Total investment earnings 2,965 (709,207) (706,242)
Total additions 7,182 328,795 335,977
Deductions:
Administration 2,980 21,192 24,172
Benefits 2,083,710 2,083,710
Total deductions 2,980 2,104,902 2,107,882
Change in net assets 4,202 (1,776,107) (1,771,905)
Net assets -beginning 75,290 6,791,063 6,866,353
Net assets -ending $ 79,492 $ 5,014,956 $ 5,094,448
NOTE 11- ON-BEHALF PAYMENTS
The state makes a contribution to the Fire and Police Officers' Retirement System from the
firefighters' and police officers' Insurance Premium Tax. For the fiscal year ended
September 30, 2008, $321,142 was recorded as revenues and expenditures in the On-Behalf
Pension Contribution Special Revenue Fund relating to on-behalf payments received from the
state.
57
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 12 -DEFINED CONTRIBUTION PLAN
Effective October 1, 2006, all employees of the Village may participate in one of three Money
Purchase Plans that are qualified Defined Contribution Plans adopted under the provisions of
Internal Revenue Code Section 401(a). The three pension plans include Directors, General
Employees, and Municipal Employees. The defined contribution plans are administered by
International City/County Management Association and Retirement Corporation (ICMA-RC).
The ICMA-RC is a nonprofit corporation organized and existing under the laws of the State of
Delaware.
The vesting period for each defined contribution plan is five years, with a vesting of zero percent
in the first year, and a vesting of twenty-five percent for each year thereafter. While the plans
will not provide for retroactive funding, the vesting period shall run from each employee's
original date of hire. No loans are permitted by the plan. The normal retirement age for the plan
shall be age sixty. There is no waiting period for participation in the plan. The minimum age for
participation is eighteen.
The Village contributes 15% of participant earnings for the plan year. Earnings include regular
and bonus compensation, but do not include overtime or commissions. Employee contributions
are voluntary, after-tax contributions that are not matched by the Village. Employees may
contribute 3%, 5%, 10%, or 15% of earnings to the plan. Contributions are remitted to the trusts
every payroll period. The plan administration fee is .55% per annum of the amount of plan
assets invested in the trust, based on average daily net plan assets. The administration fee paid
for 2008 was $500 and was expensed in the general fund.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the plans, the Village's activities do not meet the criteria for inclusion in the
fiduciary funds of a government. Consequently, the plans are not included in the Village's financial
statements.
At September 30, 2008, payroll expense for all employees was $9,194,656. Plan detail for
participating employees at September 30, 2008 is listed below:
Director's General Municipal Total
Employees Employees
Covered Payroll $257,211 $518,495 $368,059 $1,143,765
Required employer 38,582 77,774 55,209 171,565
contributions
Actual Village 38,582 77,774 55,209 171,565
contributions
Village contributions as a 15% 15% 15% 15%
of covered payroll
Employee contributions 8,948 19,791 16,596 45,335
58
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 13 -DEFERRED COMPENSATION PLAN ASSETS
Employees of the Village may participate in a deferred compensation plan adopted under the
provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans with Respect to
Service for State and Local Governments).
The deferred compensation plan is available to all employees of the Village. Under the plan,
employees may elect to defer a portion of their salaries and avoid paying taxes on the deferred
portion until the withdrawal date. The deferred compensation amount is not available for
withdrawal by employees until termination, retirement, death, or unforeseeable emergency. A third
parry administers the deferred compensation plan.
In 1998, the Village Adopted GASB-32, Accounting and Financial Reporting for Internal
Revenue Code Section 457 Deferred Compensation Plans. The Village modified its Deferred
Compensation Plan to conform with the changes in the Internal Revenue Code brought about by the
Small Business Job Protection Act of 1996 (the "Act"). The Act requires that eligible deferred
compensation plans established and maintained by governmental employers be amended to provide
that all assets of the plan be held in trust, or under one or more appropriate annuity contracts or
custodial accounts, for the exclusive benefit of plan participants and their beneficiaries. As a result
of this change, these plan assets are not property of the Village and are not subject to the claims of
the Village's general creditors.
Because the Village has little administrative involvement and does not perform the investing
function for funds in the Plan, the Village's activities do not meet the criteria for inclusion in the
fiduciary funds of a government.
NOTE 14 -POST EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
In addition to the pension benefits described in Note 9, the Village provides post-retirement
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 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.
59
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 15 -VOLUNTEER FIREFIGHTERS PENSION
The Village maintains a Length of Service Award Pension Plan that covers substantially all
volunteer firefighters in the Village of North Palm Beach. The plan is reported as a pension trust
fund and is included as part of the Village's reporting entity. The plan does not issue a stand-
alone financial report. The plan's financial statements are prepared using the accrual basis of
accounting. The plan is noncontributory for members. Employer contributions to the plan are
recognized when due and yearly contributions are required based on the most recent actuarial
valuation. Benefits and refunds are recognized when due and payable in accordance with the
terms of the plan.
Members are eligible to participate in the plan after attaining the age of 18, and are entitled to
receive benefits at age 60 and completion of one year of plan participation. One hundred percent
vesting is achieved after five years of service. The monthly retirement benefit is $10 times each
year of completed service, with a maximum monthly benefit of $300 and a minimum of $50.
The plan contains a death benefit that is the greater of $30,000 or the accrued benefit due at date
of death. The plan uses the modified aggregate funding method. Plan assets are held by
Hartford Life.
NOTE 16 -JOINTLY GOVERNED ORGANIZATION
The Village, through an interlocal agreement with certain other municipalities and Palm Beach
County, created the Seacoast Utility Authority ("Seacoast') which provides water and sewer
service to the citizens of each of the participating municipalities and a portion of Palm Beach
County. Seacoast's governing board consists of one member from each participating entity.
Seacoast is an Independent Authority organized under the laws of the State of Florida, and the
Village has no participating equity ownership in Seacoast. The Village paid $95,184 to Seacoast
during the fiscal year for water and sewer service.
NOTE 17 - INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances at September 30, 2008, is as follows:
Receivable Fund Pay_ able Fund Amount
Northlake Boulevard Special
General Fund Revenue Fund $32,364
The outstanding balance between funds results mainly from the time lag between the dates that
payments between funds are made. Interfund transfers during the year ended September 30,
2008 are as follows:
Transfer In:
Governmental Non-major
Activities: Capital Governmental
Assets Funds
Transfer out:
General Fund $1,254,952
Country Club Fund $49,296
60
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Basic Financial Statements
September 30, 2008
NOTE 17 - INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (Continued)
The transfers from the General Fund to the non-major governmental funds were to move
unrestricted general fund revenues to finance various programs that the government must
account for in other funds in accordance with budgetary authorizations, including amounts
provided as subsidies or matching funds for various grant programs. The transfer into the
general fund was the net book value of assets transferred from the Country Club to governmental
capital assets.
NOTE 18 -CONTRACTS, COMMITMENTS AND CONTINGENCIES
Operating Leases
The Village is committed under a lease agreement as lessor of the food and beverage operators 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 $176,116 for
the year ended September 30, 2008 under the terms of this lease agreement. Future minimum
lease payments for the year ending September 30, 2008 are contingent upon sales and expenses
of the operations of the lessee. At September 30, 2008, the cost of the leased assets was $74,896,
net book value was $9,638 and depreciation expense was $3,790.
Contin
eg ncies
The Village is involved in various litigations and claims arising in the course of operations. It is
the opinion of legal counsel that the likelihood of unfavorable outcome and the amounts of
potential losses cannot be reasonably determined for all claims at this time.
NOTE 19 -NEW PRONOUNCEMENTS
The Village is required to implement Governmental Accounting Standards Board Statement 45
(GASB 45), Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pensions for the fiscal year ending September 30, 2009. Retirees of the Village pay
an amount equal to the actual premium for health insurance charged by the carrier, but there is an
implied subsidy in the healthcare insurance premium for retirees under age 65 because the
premium charged for these retirees is the same as the premium charged for active employees,
who are younger than retirees on average. This implied subsidy constitutes other
postemployment benefits (OPEB) under GASB 45. The impact of the implementation of GASB
45 will be determined by an actuarial valuation, which has not been completed.
61
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
FIDUCIARY FUNDS
Pension Trust Funds
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2008
Schedule of Funding Pro_rg
ess
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)- AAL Funded Covered of Covered
Valuation Assets Entry Age(1) (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
General Employees Retirement Fund
10/1/2002 6,193,676 8,594,442 2,400,766 72.07% 3,076,493 78.04%
10/1/2003 6,759,012 10,404,349 3,645,337 64.96% 3,443,843 105.85%
10/1/2004 6,578,832 12,084,785 5,505,953 54.44% 4,275,981 128.76%
10/1/2005 3,817,605 9,116,599 5,298,994 41.88% 3,220,258 164.55%
10/1/2006 5,283,023 10,490,332 5,207,309 50.36% 3,680,960 141.47%
10/1/2007 6,481,382 10,997,783 4,516,401 58.93% 3,238,894 139.44%
Fire and Police Retirement Fund (2)
10/1/2002 5,963,256 6,565,654 602,398 90.83% 1,921,532 31.35%
10/1/2003 6,635,342 7,616,168 980,826 87.12% 2,312,228 42.42%
10/1/2004 6,771,959 8,546,754 1,774,795 79.23% 2,627,239 67.55%
10/1/2005 7,600,134 8,692,747 1,092,613 87.43% 2,405,634 45.42%
10/1/2006 8,312,363 10,294,848 1,982,485 80.74% 2,798,919 70.83%
10/1/2007 9,228,537 10,836,562 1,608,025 85.16% 3,110,081 51.70%
(1) The General Employees Retirement Fund uses the Frozen Entry Age and the Fire and Police
Retirement Fund uses the Entry Age acturarial costs method.
Fire and Police Retirement Fund (2)
The Fire and Police Retirement Fund uses the aggregate actuarial cost method to
determine contributions to the Plan. This method does not identify or separately amortize unfunded
actuarial liabilities. The schedule of funding progress presented above was prepared using the entry age
62
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Required Supplemental Information
September 30, 2008
Schedule of Employer and State Contributions
Fiscal Year Annual
Ended Required Actual State Percentage
September 30 Contribution Contribution Contribution Contributed
General Employees Retirement Fund
2003 502,855 503,220 N/A 100.1%
2004 523,127 524,000 N/A 100.2%
2005 662,237 662,237 N/A 100.0%
2006 1,007,695 1,007,695 N/A 100.0%
2007 866,069 873,872 (1) N/A 100.9%
2008 875,126 876,712 N/A 100.2%
Fire and Police Retirement Fund
2003 369,089 235,339 134,303 100.1%
2004 383,891 250,000 138,200 101.1%
2005 509,800 471,864 138,200 119.7%
2006 690,186 551,986 138,200 100.0%
2007 539,651 401,451 (1) 138,200 100.0%
2008 715,784 580,463 138,200 100.4%
(1) Part of the current year contributions reported as income was reclassified as a prior year contribution for actuarial purposes.
63
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Trend Data
September 30, 2008
General
Employees Police and
Retirement Retirement
Fund Fund
Contribution rates as of 9/30/07:
Village 22.13% 22.53%
Plan Members 6% (1) 2.00%
Actuarially Determined Contribution 866,069 401,451
Contributions Made 873,872 401,451
Valuation date 10/1/2007 10/1/2007
Actuarial Cost Method Frozen Entry Age Aggregate
Amortized Method Level percent N/A (2)
closed
Remaining Amortization Period 30 years N/A (2)
Asset Valuation Method Difference between Five year
actual and expected smooth
return recognized market
over five years.
Administrative Costs Expenses paid out of the Expenses paid out of the
fund other than investment fund other than investment
related expenses are related expenses are
assumed to be equal to the assumed to be equal to the
average of actual expenses average of actual expenses
over the previous two years. over the previous two years.
Actuarial Assumption:
Investment rate of return * 8% up to retirement 8%
5.25% thereafter.
Projected salary increase * 5.5% 6%
*Includes inflation at 4% 4%
Cost of living adjustments 3% for those retired 3%
before 2/1/82 or
who contribute an
extra 2%.
(1) Except for certain members who have elected not to contribute and for other members who have elected
to contribute only 2% or 4%.
64
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Revenues, Expenditures, and Changes
in Fund Balance -Budget and Actual
General Fund
For the Year Ended September 30, 2008
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues
Taxes $ 15,144,244 $ 15,144,244 $ 15,424,638 $ 280,394
Licenses and permits 905,416 1,158,916 1,047,144 (111,772)
Intergovernmental 1,397,649 1,543,434 1,516,624 (26,810)
Charges for services 1,499,793 1,506,305 1,268,774 (237,531)
Fines and forfeitures 124,805 122,305 157,022 34,717
Interest 527,541 527,541 194,652 (332,889)
Miscellaneous 92,500 92,500 137,447 44,947
Total revenues 19,691,948 20,095,245 19,746,301 (348,944)
Expenditures
Current
General government 2,224,493 2,321,083 2,183,182 137,901
Public safety 6,914,893 6,745,259 6,644,629 100,630
Public works 4,001,640 4,076,213 3,725,450 350,763
Community development & planning 926,293 950,413 840,366 110,047
Leisure services -recreation 2,731,674 2,928,788 2,875,570 53,218
Other government 307,141 308,341 63,279 245,062
Capital outlay 1,579,640 1,839,869 1,383,639 456,230
Debt service
Principal payments 838,002 716,405 716,206 199
Interest paid on debt 168,172 143,769 143,726 43
Total expenditures 19,691,948 20,030,140 18,576,047 1,454,093
Excess (deficiency) of revenues
over (under) expenditures 65,105 1,170,254 1,105,149
Other financing sources (uses)
Transfer out (1,268,383) (1,254,952) 13,431
Total other financing sources (uses) (1,268,383) (1,254,952) 13,431
Net change in fund balances $ $ (1,203,278) (84,698) $ 1,118,580
Fund Balances
Beginning of year 9,125,550
End of year $ 9,040,852
65
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Notes to the Budgetary
Required Supplementary Information (RSIJ
General Fund
September 30, 2008
Note 1 -Basis of Accounting
Generally accepted accounting principles (GAAP) serve as the budgetary basis of accounting.
66
OTHER SUPPLEMENTARY INFORMATION
GENERAL FUND
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures -Budget and Actual
General Fund
For the Year Ended September 30, 2008
Variance with
Final Budget
Original Final Positive Percent
Budget Budget Actual (Negative) Variance
Village Council
Personal services $ 50,672 $ 50,672 $ 50,668 $ 4 0.01%
Operating expenses 88,241 102,041 93,428 8,613 8.44
Total Village Council 138,913 152,713 144,096 8,617 5.64
Village Manager
Personal services 269,618 269,618 266,240 3,378 1.25
Operating expenses 13,880 16,099 16,098 1 0.01
Total Village Manager 283,498 285,717 282,338 3,379 1.18
Village Finance
Personal services 406,541 406,541 385,206 21,335 5.25
Operating expenses 61,870 65,195 40,464 24,731 37.93
Total Village Finance 468,411 471,736 425,670 46,066 9.77
Village Attorney
Operating expenses 170,000 170,000 122,646 47,354 27.86
Village Clerk
Personal services 209,889 223,692 223,691 1 0.00
Operating expenses 30,665 30,665 23,886 6,779 22.11
Total Village Clerk 240,554 254,357 247,577 6,780 2.67
Information Technology
Personal services 202,243 212,359 212,359 - 0.00
Operating expenses 40,380 40,380 29,538 10,842 26.85
Total Information Technology 242,623 252,739 241,897 10,842 4.29
Human Resources
Personal services 183,565 192,194 192,194 - 0.00
Operating expenses 39,415 39,415 26,627 12,788 32.44
Contingencies 2,075 2,075 2,075 100.00
Total Human Resources 225,055 233,684 218,821 14,863 6.36
Police
Personal services 3,872,234 3,701,071 3,682,145 18,926 0.51
Operating expenses 290,794 294,861 290,301 4,560 1.55
Total Police 4,163,028 3,995,932 3,972,446 23,486 0.59
Fire Rescue
Personal services 2,412,423 2,412,423 2,386,921 25,502 1.06
Operating expenses 201,958 205,084 169,004 36,080 17.59
Total Fire Rescue 2,614,381 2,617,507 2,555,925 61,582 2.35
Public Works /Streets and Grounds
Personal services 265,973 265,973 232,622 33,351 12.54
Operating expenses 22,900 24,770 14,107 10,663 43.05
Total Public Works 288,873 290,743 246,729 44,014 15.14
(Continued)
67
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures -Budget and Actual
General Fund
For the Year Ended September 30, 2008
Variance with
Final Budget
Original Final Positive Percent
Budget Budget Actual (Negative) Variance
(Continued)
Sanitation
Personal services $ 1,387,294 $ 1,426,071 $ 1,426,071 $ 0.00%
Operating expenses 306,145 306,145 216,453 89,692 29.30
Total Sanitation 1,693,439 1,732,216 1,642,524 89,692 5.18
Facility Services
Personal services 411,120 411,120 387,954 23,166 5.63
Operating expenses 183,228 185,330 165,505 19,825 10.70
Total Facility Services 594,348 596,450 553,459 42,991 7.21
Street Maintenance
Personal services 741,627 741,627 584,100 157,527 21.24
Operating expenses 303,580 317,091 317,091 0.00
Total Street Maintenance 1,045,207 1,058,718 901,191 157,527 14.88
Park Maintenance
Personal services 570,441 627,503 627,503 0.00
Operating expenses 85,550 85,550 74,304 11,246 13.15
Total Park Maintenance 655,991 713,053 701,807 11,246 1.58
Vehicle Maintenance
Personal services 283,957 283,957 271,122 12,835 4.52
Operating expenses 95,816 95,816 92,113 3,703 3.86
Total Vehicle Maintenance 379,773 379,773 363,235 16,538 4.35
Planning and Engineering
Personal services 198,959 198,959 141,636 57,323 28.81
Operating expenses 40,495 50,470 17,678 32,792 64.97
Total Planning and Engineering 239,454 249,429 159,314 90,115 36.13
Building
Personal services 481,133 481,133 473,086 8,047 1.67
Operating expenses 55,258 55,258 52,180 3,078 5.57
Total Building 536,391 536,391 525,266 11,125 2.07
Code Enforcement
Personal services 129,748 143,893 143,892 1 0.00%
Operating expenses 20,700 20,700 11,894 8,806 42.54
Total Code Enforcement 150,448 164,593 155,786 8,807 5.35
Leisure Services-Recreation
Personal services 603,273 606,117 606,116 1 0.00
Operating expenses 281,050 311,098 311,098 0.00
Total Leisure Services-Recreation 884,323 917,215 917,214 1 0.00
Library
Personal services 567,476 600,775 600,775 0.00
Operating expenses 73,733 144,761 144,761 0.00
Total Library 641,209 745,536 745,536 0.00
(Continued)
6g
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenditures -Budget and Actual
General Fund
For the Year Ended September 30, 2008
Variance with
Final Budget
Original Final Positive Percent
Budget Budget Actual (Negative) Variance
(Continued)
Tennis
Personal services $ 101,702 $ 101,702 $ 86,886 $ 14,816 14.57%
Operating expenses 83,435 86,268 86,268 0.00
Total Tennis 185,137 187,970 173,154 14,816 7.88
Pool
Personal services 199,214 199,214 198,732 482 0.24
Operating expenses 70,800 70,800 50,226 20,574 29.06
Total Pool 270,014 270,014 248,958 21,056 7.80
Special events
Operating expenses 95,000 95,000 88,903 6,097 6.42
Total Special events 95,000 95,000 88,903 6,097 6.42
Debt Service 1,006,174 860,174 859,932 242 0.03
Other
Operating expenses 307,141 326,654 81,591 245,063 75.02
307,141 326,654 81,591 245,063 75.02
Non-Departmental
Operating expenses 592,923 631,957 616,393 15,564 2.46
592,923 631,957 616,393 15,564 2.46
Capital Outlay
Village Manager 1,500 1,500 1,500 100.00
Village Clerk 1,000 1,000 1,000 100.00
Information Technology 51,000 51,000 43,975 7,025 13.77
Human Resources 1,000 1,000 1,000 100.00
Police 121,003 121,003 116,452 4,551 3.76
Fire Rescue 6,850 6,850 6,850 100.00
Building 73,000 73,000 56,166 16,834 23.06
Code Enforcement 20,000 20,000 20,000 100.00
Public Works /Streets and Grounds 22,000 22,000 19,046 2,954 13.43
Sanitation 140,000 140,000 134,998 5,002 3.57
Street Maintenance 888,900 822,747 648,894 173,853 21.13
Park Maintenance 15,000 318,314 278,504 39,810 12.51
Vehicle Maintenance 50,000 50,000 9,683 40,317 80.63
Leisure Services 40,500 51,923 43,359 8,564 16.49
Tennis 14,500 24,521 8,553 15,968 65.12
Pool 11,000 11,000 11,000 100.00
Library 100,687 100,687 4,339 96,348 95.69
Special events 6,000 6,000 5,170 830 13.83
Non-Departmental 15,700 17,324 14,500 2,824 16.30
Total Capital outlay 1,579,640 1,839,869 1,383,639 456,230 24.80
Total expenditures $ 19,691,948 $ 20,030,140 $ 18,576,047 $ 1,454,093 7.26%
69
COMBINING FINANCIAL STATEMENTS
NONMAJOR GOVERNMENTAL FUNDS
Capital Projects Fund
Special Revenue Funds
Public Safety Fund
Northlake Boulevard Fund
Recreation Fund
On-Behalf Pension Contributions
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2008
Special Revenue Funds
Capital Public Northlake On-Behalf Total Nonrnajor
Projects Safety Boulevard Recreation Pension Governrnental
Fund Fund Fund Fund Contributions Funds
Assets
Cash and cash equivalents $ 959,201 $ 27,453 $ $ 563,268 $ $ 1,549,922
Due from other governrnents 58,490 34,350 5,594 321,142 419,576
Total assets $ 1,017,691 $ 27,453 $ 34,350 $ 568,862 $ 321,142 $ 1,969,498
Liabilities
Accounts payable $ 5,849 $ $ $ 3,902 $ 321,142 $ 330,893
Due to other funds 32,364 32,364
Deferred revenue 58,490 58,490
Total liabilities 64,339 32,364 3,902 321,142 421,747
Fund balances
Reserved 239,979 239,979
Unreserved
Undesignated 713,373 27,453 1,986 564,960 1,307,772
Total fund balances 953,352 27,453 1,986 564,960 1,547,751
Total liabilities and fund balances $ 1,017,691 $ 27,453 $ 34,350 $ 568,862 $ 321,142 $ 1,969,498
~0
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2008
Special Revenue Funds
Capital Public Northlake On-Behalf Total Nonmajor
Projects Safety Boulevard Recreation Pension Governmental
Fund Fund Fund Fund Contributions Funds
Revenues
Intergovernmental $ 430,062 $ 17,604 $ 34,350 $ 139,429 $ 321,142 $ 942,587
Fines and forfeitures 78,943 78,943
Total revenues 430,062 96,547 34,350 139,429 321,142 1,021,530
Expenditures
Current
Public safety 17,340 73,722 321,142 412,204
Leisure services -recreation 1,270 1,270
Capital outlay 763,538 243,376 206,512 1,213,426
Total expenditures 763,538 260,716 1,270 280,234 321,142 1,626,900
Excess (deficiency) of revenues over
(under) expenditures (333,476) (164,169) 33,080 (140,805) (605,370)
Other financing sources (uses)
Transfers in 613,596 191,622 449,734 1,254,952
Total other financing sources (uses) 613,596 191,622 449,734 1,254,952
Net changes in fund balances 280,120 27,453 33,080 308,929 649,582
Fund balances -Beginning of year 673,232 (31,094) 256,031 898,169
Fund balances -End of year $ 953,352 $ 27,453 $ 1,986 $ 564,960 $ $ 1,547,751
71
FIDUCIARY FUNDS
Pension Trust Funds
Volunteer Fire Pension Trust Fund
General Employees Pension Trust Fund
Fire and Police Officers Pension Trust Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Net Assets -Fiduciary Funds
September 30, 2008
Fire and Total
Volunteer General Police Employee
Fire Employees Officers Retirement
Pension Pension Pension Funds
ASSETS
Cash and cash equivalents $ $ 251,672 $ 1,151,625 $ 1,403,297
Investments:
Common equity securities 5,443,831 5,443,831
Preferred equity securities 65,323 65,323
U.S. Government agencies 1,692,586 1,692,586
Corporate bonds 1,245,758 1,245,758
U.S.Treasury bonds 165,174 165,174
Equity mutual funds 303,374 303,374
Common trust funds 4,248,730 4,248,730
Fixed annuity funds 71,479 71,479
Equity annuity funds 8,013 8,013
Pending trades 19,364 19,364
Accrued interest and dividends 406 57,120 57,526
Accounts Receivable 210,774 322,495 533,269
Total assets 79,492 5,014,956 10,163,276 15,257,724
LIABILITIES
Deferred village contributions 111,329 111,329
Total liabilities 111,329 111,329
Net Assets
Held in trust for pension benefits
and other purposes $ 79,492 $ 5,014,956 $ 10,051,947 $ 15,146,395
(1) A schedule of funding progress for the General Employees and Fire and Police Officers plans
is presented on page 62.
72
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Changes in Fiduciary Net Assets
Employee Retirement Funds
For the Year Ended September 30, 2008
Fire and Total
Volunteer General Police Employee
Fire Employees Officers Retirement
Pension Pension Pension Funds
Additions:
Contributions:
Employer $ 4,217 $ 876,712 $ 580,463 $ 1,461,392
Plan members 161,290 61,807 223,097
State on-behalf payments 321,142 321,142
Total contributions 4,217 1,038,002 963,412 2,005,631
Investment earnings:
Dividends and interest 3,236 31,451 361,008 395,695
Net decrease in fair value of investments (271) (692,615) (1,468,039) (2,160,925)
Investment expense (48,043) (51,248) (99,291)
Total investment earnings 2,965 (709,207) (1,158,279) (1,864,521)
Total additions 7,182 328,795 (194,867) 141,110
Deductions:
Administration 2,980 21,192 77,172 101,344
Benefits 2,083,710 602,740 2,686,450
Total deductions 2,980 2,104,902 679,912 2,787,794
Change in net assets 4,202 (1,776,107) (874,779) (2,646,684)
Net assets -beginning 75,290 6,791,063 10,926,726 17,793,079
Net assets -ending $ 79,492 $ 5,014,956 $ 10,051,947 $ 15,146,395
73
AGENCY FUNDS
Manatee Protection Agency
Northlake Boulevard Task Force
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Statement of Agency Net Assets
September 30, 2008
Agency Funds
Manatee Northlake Total
Protection Boulevard Agency
Agency Task Force Funds
ASSETS
Cash and cash equivalents $ 276,649 $ 63,401 $ 340,050
LIABILITIE S
Due to others $ 276,649 $ 63,401 $ 340,050
74
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Combining Schedule of Changes in Agency Net Assets and Liabilities
For the Year Ended September 30, 2008
October 1, 2007 Additions Deductions September 30, 2008
Manatee Protection Agency
Assets
Cash and cash equivalents $ 263,028 $ 13,621 $ $ 276,649
Liabilities
Due to others $ 263,028 $ 13,621 $ $ 276,649
Northlake Boulevard Task Force
Assets
Cash and cash equivalents $ 66,521 $ 3,370 $ 6,490 $ 63,401
Liabilities
Due to others $ 66,521 $ 3,370 $ 6,490 $ 63,401
Total All Agency Funds
Assets
Cash and cash equivalents $ 329,549 $ 16,991 $ 6,490 $ 340,050
Liabilities
Due to others $ 329,549 $ 16,991 $ 6,490 $ 340,050
75
PROPRIETARY FUND
(ENTERPRISE FUND)
Country Club Fund
THE VILLAGE OF NORTH PALM BEACH, FLORIDA
Schedule of Departmental Expenses -Budget and Actual
Country Club Fund -Budgetary Basis
For the Year Ended September 30, 2008
Variance with
Final Budget
Original Final Positive Percent
Budget Budget Actual (Negative) Variance
Golf Maintenance
Personal services $ 896,459 $ $ $
Operating expenses 607,135 1,377,348 1,343,992 33,356 2.42
Capital outlay 152,500 100.00
Total Golf Maintenance 1,656,094 1,377,348 1,343,992 33,356 2.42
Golf Pro Shop and Range
Personal services 321,519 321,519 313,829 7,690 2.39
Operating expenses 279,509 279,509 286,205 (6,696) -2.40
Capital outlay 7,000 7,000 5,250 1,750 25.00
Total Golf Pro Shop and Range 608,028 608,028 605,284 2,744 0.45
Food and Beverage
Operating expenses 48,952 48,952 46,608 2,344 4.79
Total Food and Beverage 48,952 48,952 46,608 2,344 4.79
Administration
Personal services 205,159 208,537 207,420 1,117 0.54
Operating expenses 143,970 96,064 76,871 19,193 19.98
Total Administration 349,129 304,601 284,291 20,310 6.67
Clubhouse and Grounds
Operating expenses 192,992 192,992 144,165 48,827 25.30
Capital outlay 406 406 100.00
Total Clubhouse and Grounds 192,992 193,398 144,165 49,233 25.46
Insurance and General Liability
Operating expenses 105,639 150,167 150,166 1 0.00
Reserves
Operating 5,000 5,000 3,623 1,377 27.54
Contingency 29,283 471,205 369,894 101,311 21.50
Total Reserves 34,283 476,205 373,517 102,688 21.56
Debt service
Debt service 641,901 641,901 565,916 75,985 11.84
Total expenses on the budgetary basis $ 3,637,018 $ 3,800,600 3,513,939 $ 286,661 7.54%
Adjustments to reconcile to the GAAP Basis
Less capital outlay costs capitalized (389,432)
Less debt service (565,916)
Add depreciation expense 486,651
Total operating expenses $ 3,045,242
76
STATISTICAL SECTION
STATISTICAL SECTION
This part of the Village of North Palm Beach's comprehensive annual financial report presents detailed unaudited information as
a context for understanding what the information in the financial statement, note disclosures, and required supplementary
information says about the Village's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the Village's financial
performance and well-being have changed over time. These schedules include:
Net Assets by Component 77
Changes in Net Assets 78
Fund Balances, Governmental Funds 79
Changes in Fund Balances, Governmental Fund 80
Revenue Capacity
These schedules contain information to help the reader assess the Village's most significant local
revenue source, the property tax.
Net Assessed Value and Estimated Actual Value of Taxable Property 81
Property Tax Rates -Direct and Overlapping Governments 82
Principal Property Taxpayers 83
Property Tax Levies and Collections 84
Debt Capacity
These schedules present information to help the reader assess the affordability of the Village's
current levels of outstanding debt and the Village's ability to issue additional debt in the future.
Ratios of Outstanding Debt by Type 85
Direct and Overlapping Governmental Activities Debt 86
Pledged-Revenue Coverage 87
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the Village's financial activities take place.
Demographic and Economic Statistics 88
Principal Employers 89
Operating Information
These schedules contain service and infrastructure data to help understand how the information
in the Village's financial report relates to the services the Village provides and the activities it performs.
Full-Time Equivalent Village Government Employees by Function 90
Operating Indicators by Function/Program 91
Capital Asset Statistics by Function/Program 92
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
VILLAGE OF NORTH PALM BEACH
NET ASSETS BY COMPONENT
LAST SIX FISCAL YEARS
(ACCRUAL BASISOFACCOUNTING) Unaudited
Fiscal Year
2003 2004 2005 2006 2007
Governmental Activities:
Invested in capital assets, net of related debt $ 3,563,142 $ 3,762,961 $ 3,535,596 $ 8,118,773 $ 10,543,788
Restricted 613,459 470,155 19,828 154,073 113,269
Unrestricted 2,350,342 3,527,865 6,654,989 7,143,452 9,281,170
Total governmental activities net assets 6,526,943 7,760,981 10,210,413 15,416,298 19,938,227
Business-Type Activities:
Invested in capital assets, net of related debt 2,165,529 2,131,367 1,919,194 1,999,123 2,195,630
Unrestricted (65,937) (5,195) 270,374 415,865 151,005
Total business-type activities net assets 2,099,592 2,126,172 2,189,568 2,414,988 2,346,635
Primary government:
Invested in capital assets, net of related debt 5,728,671 5,894,328 5,454,790 10,117,896 12,739,418
Restricted 613,459 470,155 19,828 154,073 113,269
Unrestricted 2,284,405 3,522,670 6,925,363 7,559,317 9,432,175
Total primary government net assets $ 8,626,535 $ 9,887,153 $ 12,399,981 $ 17,831,286 $ 22,284,862
2008
Governmental Activities:
Invested in capital assets, net of related debt $ 12,845,093
Restricted 979,182
Unrestricted 9,836,912
Total governmental activities net assets 23,661,187
Business-Type Activities:
Invested in capital assets, net of related debt 2,492,524
Unrestricted 202,802
Total business-type activities net assets 2,695,326
Primary government:
Invested in capital assets, net of related debt 15,337,617
Restricted 979,182
Unrestricted 10,039,714
Total primary government net assets $ 26,356,513
Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
77
VILLAGE OF NORTH PALM BEACH
CHANGES IN NET ASSETS
LAST SIX FISCAL YEARS
(ACCRUALBASISOFACCOUNTING) Unauc&ted
Fiscal Year
2003 2004 2005 2006 2007 2008
Expenses
Governmental activities:
Generalgovernment $ 2,781,333 $ 3,174,460 $ 2,127,009 $ 1,784,528 $ 2,698,187 $ 1,839,228
Public safety 5,195,338 5,294,399 6,038,846 7,036,117 6,671,490 7,154,578
Public works 3,482,975 3,549,178 5,091,305 4,131,500 3,733,815 3,996,711
Community development and planning - - - 657,112 737,165 860,448
Leisure services 1,539,771 1,280,483 1,635,784 2,562,627 2,781,658 3,244,045
Other govemment - - 842,561 2,049 - -
Interest on long-term debt 128,507 40,580 151,233 241,995 204,666 120,549
Total governmental activities expenses 13,127,924 13,339,100 15,886,738 16,415,928 16,826,981 17,215,559
Business-type activities:
Country club 2,676,883 2,567,690 2,607,712 2,124,927 3,570,683 3,268,562
Total business-type activities 2,676,883 2,567,690 2,607,712 2,124,927 3,570,683 3,268,562
Total primary govemment expenses $ 15,804,807 $ 15,906,790 $ 18,494,450 $ 18,540,855 $ 20,397,664 $ 20,484,121
Program Revenues
Governmental activities:
Charges for services:
General govemment $ 342,936 $ 355,118 $ 285,386 $ 158,160 $ 122,455 $ 123,334
Public safety 258,723 273,391 329,081 388,671 345,731 383,325
Public works 727,016 895,291 1,326,820 140,923 217,975 288,994
Community development and planning - - - 1,175,252 938,188 888,015
Leisure services 174,589 147,773 78,475 528,983 496,679 595,558
Other government - - - - - -
Operating grants and contributions 82,134 89,362 1,392,729 998,573 170,389 88,224
Capital grants and contributions 102,560 - - 462,394 1,454,526 1,602,465
Totalgovemmentalactivities program revenues 1,687,958 1,760,935 3,412,491 3,852,956 3,745,943 3,969,915
Business-type activities:
Charges for services:
Country club 2,510,258 2,548,259 2,658,468 2,167,089 3,463,524 3,616,509
Operating grants and contributions - - - 68,883 - 13,609
Capital grants and contributions 10,000 - - - - -
Total business-type activities program revenues 2,520,258 2,548,259 2,658,468 2,235,972 3,463,524 3,630,118
Total primarygovernmentprogramrevenues $ 4,208,216 $ 4,309,194 $ 6,070,959 $ 6,088,928 $ 7,209,467 $ 7,600,033
Net (Expense)/Revenue
Governmental activities $ (11,439,966) $ (11,578,165) $ (12,474,247) $ (12,562,972) $ (13,081,041) $ (13,245,644)
Business-type activities (156,625) (19,431) 50,756 111,045 (107,159) 361,556
Total primarygovernmentnetexpense $ (11,596,591) $ (11,597,596) $ (12,423,491) $ (12,451,927) $ (13,188,200) $ (12,884,088)
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes $ 6,365,000 $ 8,451,783 $ 10,070,977 $ 10,881,501 $ 12,076,184 $ 11,915,355
Local option gas taxes - - - 307,043 292,332 278,649
Utility service taxes 1,755,153 1,830,339 1,955,403 2,001,164 2,001,443 2,018,071
Franchise taxes 890,285 861,708 890,297 1,150,974 1,207,552 1,212,562
Sales and use taxes 1,148,210 1,230,803 1,277,124 1,415,917 1,339,893 1,227,341
Unrestricted grants and contributions 276,302 291,710 421,254 - - -
Investmenteamings 75,023 53,600 196,699 477,420 650,022 194,652
Miscellaneous 54,875 92,260 111,927 53,264 8,836 55,719
Contributions for Support Our Troops - - - - 15,502 16,959
Transfers - - - 36,445 5,111 49,296
Total governmental activities 10,564,848 12,812,203 14,923,681 16,323,728 17,596,875 16,968,604
Business-type activities:
Investment income 4,586 3,450 12,640 112,841 43,917 36,431
Miscellaneous 99,553 42,560 - - - -
Transfers - - - (36,445) (5,111) (49,296)
Total business-type activities 104,139 46,010 12,640 76,396 38,806 (12,865)
Total primary government $ 10,668,987 $ 12,858,213 $ 14,936,321 $ 16,400,124 $ 17,635,681 $ 16,955,739
Change in net assets
Governmental activities $ (875,118) $ 1,234,038 $ 2,449,434 $ 3,760,756 $ 4,515,834 $ 3,722,960
Business-type activities (52,486) 26,579 63,396 187,441 (68,353) 348,691
Total primary govemment $ (927,604) $ 1,260,617 $ 2,512,830 $ 3,948,197 $ 4,447,481 $ 4,071,651
Note: Data not available prior to fiscal 2002 implementation of Governmental Accounting Standards Board StatementNo. 34,
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
7g
VILLAGE OF NORTH PALM BEACH
FUND BALANCES, GOVERNMENTAL FUNDS
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASIS OFACCOUNTING) Unaudited
2003 2004 2005 2006 2007
General Fund
Reserved $ 354,396 $ 218,882 $ 197,163 $ 308,836 $ 945,891
Unreserved 1,654,593 2,883,855 5,771,684 7,022,606 8,179,659
Total general fund $ 2,008,989 $ 3,102,737 $ 5,968,847 $ 7,331,442 $ 9,125,550
All other Governmental Funds
Reserved $ 613,459 $ 470,155 $ 19,828 $ - $ -
Unreserved, reported in:
Special revenue funds - - - 400,000 224,937
Capital projects funds - - - 397,233 673,232
Total all other governmental funds $ 613,459 $ 470,155 $ 19,828 $ 797,233 $ 898,169
2008
General Fund
Reserved $ 775,339
Unreserved 8,265,513
Total general fund $ 9,040,852
All other Governmental Funds
Reserved $ 239,979
Unreserved, reported in:
Special revenue funds 594,399
Capital projects funds 713,373
Total all other governmental funds $ 1,547,751
Note: Data not available prior to fisca12002 implementation of Governmental Accounting Standards Board Statement No. 34,
Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.
79
VILLAGE OF NORTH PALM BEACH
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST SIX FISCAL YEARS
(MODIFIED ACCRUAL BASISOFACCOUNTING) Unaudited
Fiscal Year
2003 2004 2005 2006 2007 2008
Revenues:
Taxes $ 9,292,822 $ 11,439,823 $ 13,236,952 $ 14,340,682 $ 15,577,511 $ 15,424,638
Licenses and Permits 686,548 712,184 1,131,903 1,128,658 880,266 1,047,144
Intergovernmental 1,280,228 1,350,104 2,804,985 2,914,057 2,750,021 2,459,211
Charges for services 665,496 719,589 647,915 1,003,660 1,082,569 1,268,774
Fines and forfeitures 113,391 122,407 234,513 165,496 132,158 235,965
Investment earnings 75,023 53,600 196,699 477,421 650,022 194,652
Miscellaneous 139,354 175,431 83,205 130,515 194,716 137,447
Total revenues 12,252,862 14,573,138 18,336,172 20,160,489 21,267,263 20,767,831
Expenditures
General government 1,360,072 1,532,561 2,061,545 1,648,131 2,304,654 2,246,461
Public safety 4,758,982 5,019,361 5,713,904 6,494,578 6,609,801 7,056,833
Public works 3,285,603 3,280,274 5,019,739 4,708,196 3,558,264 3,725,450
Community development and planning 651,331 735,155 840,366
Leisure services -recreation 1,216,156 1,256,066 1,376,950 1,682,030 2,430,403 2,876,840
Other govemment 1,298,492 1,186,730 817,293 2,049
Capital outlay 2,542,819 581,938 - 1,917,377 2,737,805 2,597,065
Debt service
Principal payments 939,396 955,184 903,225 879,527 789,048 716,206
Interest paid on debt 136,676 40,580 151,233 199,373 207,088 143,726
Total expenditures 15,538,196 13,852,694 16,043,889 18,182,592 19,372,218 20,202,947
Excess of revenues over (under) expenditures (3,285,334) 720,444 2,292,283 1,977,897 1,895,045 564,884
Other financing sources (uses)
Transfers in 1,471,529 593,884 1,254,952
Transfers out (1,471,529) (593,884) (1,254,952)
Capital lease
Proceeds from debt issuance 403,000 230,000 123,500
Miscellaneous (56)
Total other financing sources (uses) 402,944 230,000 123,500 - - -
Net change in fund balances $ (2,882,390) $ 950,444 $ 2,415,783 $ 1,977,897 $ 1,895,045 $ 564,884
Debt service as a percentage of noncapital
expenditures 9.03% 8.11% 7.03% 7.29% 6.41% 4.91%
80
VILLAGE OF NORTH PALM BEACH
NET ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Unaudited
Real Property
Fiscal Year Total Net
Ended Sept Tax Role Residential Commercial Personal Market - Total Direct
30 Year Property Property Property Assessed Value Tax Rate
1999 1998 625,385,715 109,456,299 35,742,548 770,584,562 5.60
2000 1999 653,605,011 113,851,156 36,071,964 803,528,131 5.60
2001 2000 745,237,484 122,793,250 40,169,760 908,200,494 5.75
2002 2001 823,286,154 124,216,202 42,791,419 990,293,775 5.60
2003 2002 963,091,506 128,216,552 44,276,499 1,135,584,557 5.80
2004 2003 1,092,433,722 147,927,933 44,914,124 1,285,275,779 6.80
2005 2004 1,180,028,585 208,240,338 49,767,286 1,438,036,209 7.27
2006 2005 1,441,249,707 179,827,665 44,422,817 1,665,500,189 6.80
2007 2006 1,700,678,282 235,776,768 45,084,335 1,981,539,385 6.30
2008 2007 1,744,202,888 229,300,592 43,735,861 2,017,239,341 6.10
Note: Assessed values are established by the Palm Beach Property Appraiser's office as of January 1, each year.
Assessments were increased to 100% of market value as of 1980.
Property in the Village is reassessed each year. Property is assessed at actual value, therefore the assessed
values are equal to actual value. Tax rates are per $1,000 of assessed value.
Source: Palm Beach County Property Appraiser
81
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX RATES -DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Unaudited
Overlapping Rates (1)
Village of Palm Beach Total
N. Palm Beach County Palm Special Direct and
Fiscal Tax Roll General School Beach Districts Overlapping
Year Year Operations District County Rates
1999 1998 5.600 9.68 4.858 2.234 22.372
2000 1999 5.600 8.92 4.936 2.262 21.718
2001 2000 5.750 8.92 4.936 2.263 21.869
2002 2001 5.600 8.95 4.935 2.456 21.941
2003 2002 5.800 8.78 4.808 2.488 21.876
2004 2003 6.800 8.57 4.791 2.556 22.717
2005 2004 7.270 8.43 4.768 2.526 22.994
2006 2005 6.800 8.11 4.719 2.504 22.133
2007 2006 6.300 7.87 4.480 2.325 20.975
2008 2007 6.100 7.36 3.981 2.131 19.572
Note: All millage rates are based on $1 for every $1,000 of assessed value.
Source: North Palm Beach: Notice of Ad Valorem Taxes and Non-Ad Valorem Assessments
(1) Overlapping rates are those of local and county governments that apply to property owners within the Village
of North Palm Beach. Not all overlapping rates apply to all Village of North Palm Beach property owners
(i. e. The rates for special districts apply only to the proportion of the government's property owners whose
property is located within the geographic boundaries of the special district.)
82
VILLAGE OF NORTH PALM BEACH
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND 1999
Unaudited
2008 1999
Percentage Percentage
of Total of Total
Village Net Village Net
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayers Value Rank Value Value Rank Value
Crystal Tree NPB $ 18,037,727 1 0.89% $
Olen Residential Realty 16,800,000 2 0.83% 6,571,968 3 0.85%
Domani Development, LLC 13,720,275 3 0.68%
Sanctuary Bay Trust Corporation 13,200,300 4 0.65%
CF02 Palm Beach III LP 13,000,000 5 0.64%
Greater Fla Inv Co & 10,371,407 6 0.51% 5,840,000 4 0.76%
Interevest Crystal Tree 9,387,971 1 1.22%
Olen Company 9,327,828 2 1.21%
Village Shoppers at US 1 LLC 9,325,955 7 0.46%
Old Port Cove Holding, Inc 7,702,923 8 0.38%
Riverside National Bank of Florida 6,363,298 9 0.32%
Northlake Storage, LLC 5,610,908 10 0.28%
Pavilion Office Center 5,500,000 11 0.27%
Transcontinental Atrium, Inc. 4,800,000 5 0.62%
WCI Communities Limited Partnership 4,563,478 6 0.59%
Pulte Home Corporation 4,207,200 7 0.54%
Amoco Oil Company 3,706,713 8 0.48%
Roschman, M. Elaine TR 3,300,000 9 0.43%
Morse, Edward J., Inc 3,132,969 10 0.41%
Old Port Cove Dev. 3,100,000 11 0.40%
Total $ 119,632,793 5.91% $ 57,938,127 7.51%
Source: Palm Beach Country Appraiser
Note: Assessed values are established by the Palm Beach Property Appraiser's offices as of January 1, each year.
83
VILLAGE OF NORTH PALM BEACH
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN CALENDAR YEARS
Unaudited
Collected within
the Fiscal Year Total Collections
Fiscal Year Total Taxes of the Levy Collections in to Date
Ending Tax Roll Levied for Percent Subsequent Percent
Sept 30, Year Fiscal Year Amount of Levy Years Amount of Levy
1999 1998 4,327,943 4,166,035 96.26% 6,721 4,172,756 96.41%
2000 1999 4,512,027 4,335,668 96.09% 23,074 4,358,742 96.60%
2001 2000 5,196,021 5,013,269 96.48% 4,687 5,017,956 96.57%
2002 2001 5,562,239 5,357,206 96.31% 12,175 5,369,381 96.53%
2003 2002 6,597,909 6,359,478 96.39% 5,522 6,365,000 96.47%
2004 2003 8,825,061 8,441,383 95.65% 10,401 8,451,784 95.77%
2005 2004 10,463,873 10,059,478 96.14% 9,476 10,068,954 96.23%
2006 2005 11,329,648 10,690,869 94.36% 172,744 10,863,613 95.89%
2007 2006 12,624,307 11,802,457 93.49% 228,352 12,030,809 95.30%
2008 2007 12,360,135 11,546,732 93.42% 333,756 11,880,488 96.12%
Source: Palm Beach Country Property Appraiser
84
VILLAGE OF NORTH PALM BEACH
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Unaudited
Business-type
Governmental Activities Activities
Fiscal Year Percent of
Ended Loans Capital Loans Capital Median Personal Per
September 30, Payable Leases Payable Leases Total Income (1) Ca ita 1
1999 $ 5,795,386 $ 360,592 $ 398,179 $ $ 6,554,157 N/A 520.92
2000 5,481,150 298,552 280,000 6,059,702 11.33% 502.30
2001 8,067,736 245,059 785,781 9,098,576 N/A 745.91
2002 7,334,853 736,967 651,058 8,722,878 N/A 715.11
2003 6,947,633 587,792 513,472 8,048,897 N/A 659.85
2004 6,376,387 433,855 411,573 7,221,815 N/A 592.05
2005 5,754,677 275,840 454,131 6,484,648 N/A 513.31
2006 4,941,765 209,224 5,185,978 10,336,967 17.20% 786.20
2007 4,280,842 81,100 5,026,895 9,388,837 14.67% 715.61
2008 3,605,639 40,097 4,662,833 192,892 8,501,461 12.92% 692.64
Note: Details regarding the Village's outstanding debt may be found in the notes to the
financial statements.
(1) See the Schedule of Demographic and Economic Statistics on page 88 for personal income and population data..
N/A Data not available.
85
VILLAGE OF NORTH PALM BEACH
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
SEPTEMBER 30, 2008
Unaudited
Percentage Amount
Net Applicable to Applicable to
Debt the Village of the Village of
Government Unit Outstanding North Palm Beach (1) North Palm Beach
Debt repaid with property taxes:
Palm Beach County $ 290,410,000 1.19% $ 3,455,879
Palm Beach County School Board 1.19%
Other Debt:
Palm Beach County 957,498,000 1.19% 11,394,226
Palm Beach County School Board 35,805,000 1.19% 426,080
Subtotal, Overlapping Debt 15,276,185
Village of North Palm Beach Direct Debt 100% 3,645,736
Total Direct and Overlapping Debt $ 18,921,921
Sources: Palm Beach County Tax Appraiser's Office
Palm Beach County School Board
Palm Beach County Clerk & Comptroller
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries
of the Village. This schedule estimates the portion of the outstanding debt of those overlapping
governments that is borne by the residents and businesses of the Village of North Palm Beach. This
process recognizes that, when considering the Village's ability to issue and repay long-term debt, the
entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt,
of each overlapping government.
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable
assessed property values. Value that is within the Village's boundaries and dividing it by the County's and
School Board's total taxable assessed value. This approach was also used for the other debt.
86
VILLAGE OF NORTH PALM BEACH
Pledged -Revenue Coverage
Country Club Bonds
Last Ten Fiscal Years
Unaudited
Required
Fiscal Gross Operating Debt
Year Revenues (1) Expenses (2) Net Revenue Service Coverage (3)
(4)
2006 $ 2,348,813 $ 1,910,640 $ 438,173 $ 106,936 4.10 (4)
2007 3,507,441 2,991,621 515,820 392,505 1.31
2008 3,652,940 2,558,591 1,094,349 394,900 2.77
(1) Gross revenue includes interest revenue.
(2) Operating expenses excludes depreciation.
(3) Coverage should be not less than 1.00.
(4) 2006 was the first year the debt was outstanding, and was not a complete year.
87
VILLAGE OF NORTH PALM BEACH
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Unaudited
Per Palm Beach
Median Capita County
Calendar Personal Personal Unemployment
Year Population (1) Income (1) Income (1) Rate (2)
1999 12,582 5.3
2000 12,064 53,488 44,869 4.2
2001 12,198 - - 5.0
2002 12,198 - - 6.0
2003 12,198 - - 5.6
2004 12,198 - - 5.0
2005 12,633 - - 4.0
2006 (estimate) 13,148 60,101 46,726 3.3
2007 (estimate) 13,120 63,984 42,224 4.1
2008 (estimate) 12,274 65,815 45,563 6.3
Sources: Business Development Board
US Census Bureau
Note: (1) All information available at the current time is presented.
(2) North Palm Beach is not large enough to track unemployment rates.
Palm Beach County rates are presented.
88
VILLAGE OF NORTH PALM BEACH
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Unaudited
2008 1999
Percentage Percentage
of Total of Total
Employer Employees Employment Employees Employmenl
School Board 21,718 3.34% School Board 17,000 3.21%
Palm Beach County 11,319 1.74% Palm Beach County 9,000 1.70%
Tenet Healthcare Corp 4,500 0.69% State Government 8,800 1.66%
Florida Power & Light 3,632 0.56% Federal Government 5,900 1.11%
Hospital Corp of America 3,395 0.52% Columbia Palm Beach Health System 4,000 0.75%
Wachenhut Corporation 3,000 0.46% Pratt & Whitney Aircraft 4,000 0.75%
Florida Atlantic University 2,838 0.44% Intracoastal Health Systems, Inc. 3,200 0.60%
Veterans Health Administration 2,207 0.34% Florida Atlantic University 3,100 0.58%
Office Depot 2,100 0.32% Flo Sun, Inc. 2,500 0.47%
Boca Raton Community Hosp 2,100 0.32% Motorola, Inc. & Florida Power & Light 2,300 0.43%
Total 56,809 8.73% 59,800 11.26%
Source: Business Development Board of Palm Beach County
* Employer: Palm Beach County
Information is not available for the Village of North Palm Beach.
Percentage of total employment is calculated using Palm Beach County's
available labor force in each of the respective years presented.
89
VILLAGE OF NORTH PALM BEACH
Full-Time Equivalent Village Government Employees by Function
LAST TEN FISCAL YEARS
Unaudited
2000 2001 2002 2003 2004 2005 2006 2007 2008
Number of Employees:
General Government
Village Manager -Full-Time 1 1 1 1 1 1 1 1 1
Assistant Village Manager -Full-Time 1 1 1 1 1 1 0 0 0
Systems Specialist -Full -Time 1 1 1 1 1 1 2 2 2
Executive Secretary -Full-Time 1 1 1 1 1 1 1 1 1
Human Resources 2 2 2
Village Clerk -Full-Time 0 0 0 0 0 3 3 3 3
Finance
Full-time 4 4 5 5 5 5 5 5 5
Part-Time 1 1 0 0 0 0 0 0 1
Public Works
Full-time 61 61 61 61 61 62 54 47 48
Part-Time 4 4 4 8 8 6 3 0 0
Public Safety
Full-time 60 63 63 66 66 61 66 68 68
Part-Time 13 12 12 14 14 15 14 13 12
Community Development and Planning
Full-time 0 0 0 0 0 0 0 9 10
Part-Time 0 0 0 0 0 0 0 1 1
Leisure Services
Library
Full-time 8 9 9 9 9 8 7 7 7
Part-Time 9 8 8 7 7 7 8 8 8
Recreation
Full-time 5 5 5 6 6 5 15 15 17
Part-Time 6 14 14 14 14 15 31 39 42
Other Government -Country Club
Full-time 24 22 24 25 25 24 18 19 18
Part-Time 28 34 36 27 27 27 24 25 22
Total Number of Employees Budgeted FY Ending 227 241 245 246 246 242 254 265 268
* Variance exists due to the employment of seasonal and part-time employees.
Information is not available prior to fiscal year 2000.
Source: Village of North Palm Beach Budget Report
90
VILLAGE OF NORTH PALM BEACH
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS (1)
Unaudited
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
FUNCTION/PROGRAM
GENERAL GOVERNMENT
Number of Residential Units - 7,349 - - - - - - 7,564 7,422
PUBLIC WORKS
Street Maintenance (No. of lane miles maintained) 31.155 31.155 31.155 31.155 31.155 31.155 31.155 31.155 31 31
Sanitation (Tons of Refuse Collected) - - 11,633 12,996 13,136 18,842 14,037 13,203 12,085 11,974
No. of collection units for solid waste (residential) 7,027 7,019 7,241 7,328 7,434 7,470 7,519 7,558 7,564 7,569
Number of vehicles maintained 93 93 93 95 95 95 95 95 104 104
Number of repair overlays completed - 0.662 0.662 2.840 3.787 5.587 2.462 2.935 2 3
PUBLIC SAFETY
Number of arrests by police officers 161 272 381 246 320 315 331 410 545 549
Number of traffic citations issued 3,129 5,506 6,502 3,936 2,564 3,110 5,743 4,272 4,269 5,520
EMS average response times (minutes) 4.00 3.04 5.43 3.33 2.94 4.42 3.98 4.69 4.73 5.17
NumberofEMScalls 503 744 812 853 922 1,066 965 1,056 1,034 1,114
COMMUNITY DEVELOPMENT & PLANNING
Building Department -Number of Permits 121 251 278 205 224 201 201 (2) 1,875 1,619
Number of code enforcement violations - - - - - - - 1,767 1,617 729
Number of code violations brought to board
(Calendar Yr End) - - - 101 120 145 165 144 126 115
RECREATION
Number of community events presented 13 13 13 13 14 15 22 21 24 23
Number of registrants in athletic programs 2,085 2,100 2,185 2,185 1,750 1,575 1,400 1,520 1,600 1,400
LIBRARY
Library -Number of Volumes 42,637 44,686 45,700 47,339 47,960 47,531 54,074 47,371 42,372 33,122
OTHER GOVERNMENT
Country Club
Number of Golf Members - - - - - - - 365 579 389
Number of Tennis Members - - - - - - - 136 171 171
(1) Available information for fiscal years 1999 through 2008 is presented.
(2) An accurate number of building permits issued for 2006 is not available -computer systems crash.
Source: Village of North Palm Beach
U. S. Census Bureau
91
VILLAGE OF NORTH PALM BEACH
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Unaudited
Fiscal Year
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Function/Program:
General Governrnent
No. of General Governrnent Buildings 12 12 11 11 11 11 11 11 11 11 11
Public Works
Square Miles 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18 5.18
1Vfiles of Streets 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00 36.00
Number of Street Lights 425 425 425 425 425 425 425 425 425 425 513
Public Safety
Fire:
Number of Stations 1 1 1 1 1 1 1 1 1 1 1
Number of Substations - - - 0 0 0 1 1 1 1 1
Number of Fireman & Officers 5 5 5 5 8 8 8 8 - - -
Number of Fireman/Paramedics - - - - - - - - 23 23 23
Police/EMS Protection:
Number of Stations 2 2 2 2 2 1 1 1 1 1 1
Number of Substations - - - 0 0 1 1 1 1 1 1
Number of Policemen & Officers 41 41 56 56 33 35 35 35 33 32 32
EMS Protection 12 12 12 12 13 13 13 13 - - -
Leisure Services
Recreation
Number of Parks 4 4 4 4 4 4 4 4 4 4 4
Public Tennis Courts 5 5 5 4 4 4 4 4 2 2 2
Swimming Pool 1 1 1 1 1 1 1 1 1 1 1
Number of Marinas 1 1 1 1 1 1 1 1 1 1 1
Library
Number of Libraries 1 1 1 1 1 1 1 1 1 1 1
Number of Volumes 41,908 42,637 44,686 45,700 47,339 47,960 47,531 54,074 47,371 42,372 33,122
Other Governrnent
Country Club
Golf Course 1 1 1 1 1 1 1 1 1 1 1
Driving Range 1 1 1 1 1 1 1 1 1 1 1
Tennis Courts 10 10 10 10 10 10 10 10 10 10 10
Source: Village of North Palm Beach
92
OTHER REPORTS
N H NOwLEN, HOLT & MINER, P.A .
M CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NOWLEN ~i9ao-i9ea~, CPA
EDWARD T. HOLT CPA
WILLIAM B. MINER, CPA
WEST PALM BEACH OFFICE ROBERT W. HENDRIX, JR., CPA
215 FIFTH STREET, SUITE 200 JANET R. BARICEVICH, CPA
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628 KATHLEEN A. MINER, CPA
ROBERT W. HELMREICH, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT CPA
J. MICHAEL STEVENS, CPA
DANIEL A. KIRCHMAN, CPA
ALEXIA G. VARGA, CPA
BRIAN J. BRESCIA, CFP~, CPA
DANIEL S.YOUNG, CPA
KARA D. PETERSON, CPA
REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE
~f LTC A ~f ~f C A C A BELLE GLADE OFFICE
AND O 1'11L.R Mti 1' 1'Ei R~7' Bti~7'Ei D ON tiN 333 S. E. 2nd STREET
AUDIT OF FINANCIAL STATEMENTS PosT OFFICE Box 333
7~L~ 7~1~~i 7~~ 7~T~ BELLE GLADE, FLORIDA 33430-0338
PEi~l' Oi~1V1ED 11V AI~I~OiVJANI~E WITH TELEPHONAX (561) 996-6248
GOVERNMENT A UDITING STANDARDS
The Honorable Mayor and Members of the Village Council
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 Village of North
Palm Beach, Florida, as of and for the year ended September 30, 2008, which collectively
comprise the Village of North Palm Beach, Florida's basic financial statements and have issued
our report thereon dated March 16, 2009. We conducted our audit in accordance with U.S.
generally accepted auditing standards and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Village of North Palm Beach, Florida's
internal control over financial reporting as a basis for designing our auditing procedures for the
purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the Village of North Palm Beach, Florida's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the Village of North Palm Beach, Florida's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination
of control deficiencies, that adversely affects the Village of North Palm Beach, Florida's ability
to initiate, authorize, record, process, or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the Village of North Palm Beach, Florida's financial statements that is more
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•CPAMERICA INTERNATIONAL
93
than inconsequential will not be prevented or detected by the Village of North Palm Beach,
Florida's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the Village of North Palm Beach, Florida's internal control.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Village of North Palm Beach, Florida's
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
We noted certain matters that we reported to the management of the Village of North Palm Beach,
Florida in the attached management letter dated March 16, 2009.
This report is intended solely for the information and use of management, the audit committee,
Village Council, and federal awarding agencies and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
9' ' ~ r Ulvull~ ~ ~Q-
March 16, 2009
West Palm Beach, Florida
94
N H NOwLEN, HOLT & MINER, P.A .
M CERTIFIED PUBLIC ACCOUNTANTS EVERETT B. NOWLEN ~i9ao-i9ea~, CPA
EDWARD T. HOLT CPA
WILLIAM B. MINER, CPA
WEST PALM BEACH OFFICE ROBERT W. HENDRIX, JR., CPA
215 FIFTH STREET, SUITE 200 JANET R. BARICEVICH, CPA
POST OFFICE BOX 347
WEST PALM BEACH, FLORIDA 33402-0347
TELEPHONE (561) 659-3060
FAX (561) 835-0628 KATHLEEN A. MINER, CPA
ROBERT W. HELMREICH, CPA
TERRY L. MORTON, JR., CPA
N. RONALD BENNETT CPA
J. MICHAEL STEVENS, CPA
DANIEL A. KIRCHMAN, CPA
ALEXIA G. VARGA, CPA
MANAGEMENT LETTER BRIAN J BRESCIA, CFP~, CPA
DANIEL S.YOUNG, CPA
KARA D. PETERSON, CPA
BELLE GLADE OFFICE
333 S. E. 2nd STREET
POST OFFICE BOX 338
The Honorable Mayor and Members of the Village Council BELLE GLADE, FLORIDA 33430-0338
TELEPHONE (561) 996-5612
Village of North Palm Beach, Florida FAX (561) 996-6248
We have audited the basic financial statements of the Village of North Palm Beach, Florida, as of
and for the year ended September 30, 2008, and have issued our report thereon dated March 16,
2009.
We conducted our audit in accordance with U. S. generally accepted auditing standards, and
Government Auditing Standards issued by the Comptroller General of the United States. We have
issued our Independent Auditor's Report on Internal Control over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards. Disclosures in that report, which is dated March
16, 2009, should be considered in assessing the results of our audit.
Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules
of the Auditor General, which require that we address certain compliance and other matters in the
management letter.
PRIOR YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter whether
or not recommendations made in the preceding annual financial audit report have been
followed. All prior year recommendations have been implemented.
CURRENT YEAR COMMENTS
The Rules of the Auditor General require that we address in the management letter any
recommendations to improve financial management, accounting procedures, and internal
controls. In connection with our audit for the fiscal year ended September 30, 2008, we did
not have any such recommendations.
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS•CPAMERICA INTERNATIONAL
95
Excess of
Expenditures Over A~ro~riations
There were no departments that had expenditures in excess of appropriations.
Oversight Unit and Component Units
The Village of North Palm Beach, Florida, is a municipal corporation incorporated in 1956
pursuant to Chapter 31481, Laws of Florida, Extraordinary Session 1956. Based upon the
application of criteria defined in publications cited in Chapter 10.553, Rules of the Auditor
General, the Village has determined that there are no component units related to the Village.
Consideration of
Financial Emergency Criteria
Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as
to whether or not the local government entity has met one or more of the conditions
described in Section 218.503(1), Florida Statutes, and identification of the specific
condition(s) met. In connection with our audit, the results of our procedures did not
disclose that the Village of North Palm Beach, Florida has met any of the conditions
described in Section 218.503(1) during the fiscal year ended September 30, 2008.
Financial Condition Assessment Procedures
Sections 10.554(1)(i)7.c.and 10.556(7), Rules of the Auditor General, require that we
apply financial condition assessment procedures. In connection with our audit, we
applied financial condition assessment procedures. It is managements responsibility to
monitor the Village's financial condition, and our financial condition assessment was
based in part on representations made by management and the review of financial
information provide by management. The results of our procedures did not disclose any
matters that are required to be reported.
Annual Financial Report
Section 10.554(1)(i)7.b., Rules of the Auditor General requires that we determine whether
the annual financial report for the Village of North Palm Beach, Florida for the fiscal year
ended September 30, 2008, filed with the Florida Department of Financial Services
pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial
audit report for the fiscal year ended September 30, 2008. In connection with our audit, we
noted that the two reports were in substantial agreement.
Investment of Public Funds
Section 10.554(1)(1)2., Rules of the Auditor General, requires our audit to include a review
of the Village's compliance with Section 218.415, Florida Statutes, regarding the
investment of public funds. The results of our procedures did not disclose any instances of
noncompliance with Section 218.415, Florida Statutes, by the Village of North Palm Beach,
Florida for the year ended September 30, 2008.
96
Violations of Contracts and Grant Provisions or Abuse
Section 10.554(1)(1)4., Rules of the Auditor General, requires that we address violations of
provisions of contracts and grant agreements or abuse that have an effect on the financial
statements that is less than material but more than inconsequential. In connection with our
audit for the fiscal year ended September 30, 2008, we did not have any such findings.
Matters Inconsequential to the Financial Statements
Section 10.554(1)(1)5., Rules of the Auditor General, requires based on professional
judgment, the reporting of the following matters that are inconsequential to the financial
statements, considering both quantitative and qualitative factors: (1) violations of laws,
rules, regulations, and contractual provisions or abuse that have occurred, or were likely to
have occurred, and would have an immaterial effect on the financial statements;
(2) improper expenditures or illegal acts that would have an immaterial effect on the
financial statements; and (3) control deficiencies that are not significant deficiencies,
including, but not limited to; (a) improper or inadequate accounting procedures; (b) failures
to properly record financial transactions; and (c) other inaccuracies, shortages, defalcations,
and instances of fraud discovered by, or that come to the attention of, the auditor. In
connection with our audit for the fiscal year ended September 30, 2008, we did not have
any such findings.
This report is intended for the information of management, members of the Village Council,
federal awarding agencies, and pass-through entities and is not intended to be and should not be
used by anyone other than the specified parties.
March 16, 2009
West Palm Beach, Florida
97