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Notes to Financial Statements

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City of Crescent City, Florida Notes to Financial Statements

September 30, 2013

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the City of Crescent City, Florida have been prepared in conformance with accounting principles generally accepted in the United States of America as applicable to government units. The Governmental Accounting Standards Board (GASB) is the accepted body for promulgating governmental accounting and financial reporting principles. The following is a summary of the City's significant accounting policies.

A. Reporting Entity

The City of Crescent City, Florida is a Florida municipality, established under Chapter 57-1244, House Bill 1672, of the State of Florida. The legislative branch of the City is composed of an elected jive (5) member City Commission. As required by generally accepted accounting principles, the accompanying financial statements present the City as a primary government. Component units, if any, would also be presented.

Component units are organizations for which the City as the primary government is financially accountable. · To be considered financially accountable, the organization must be fiscally dependent on the City or the City must appoint a majority of the board of the organization and either 1) be able to impose its will on the organization or 2) the relationship must have the potential for creating a financial benefit or imposing a financial burden of the City.

The City did not participate in any joint ventures during the 201212013 fiscal year.

The accompanying financial statements present the financial position, results of operations and cash flows of the applicable fonds controlled by or dependent on the City. In evaluating the City as a reporting entity, management ha addressed all potential component units for which the entity may or may not be financially accountable and, as such, be included within the City's financial statements.

Blended Component Unit - The Community Redevelopment Agency Fund is a special revenue fund used to account for the revenues of the redevelopment tax district. The Community Redevelopment Agency oversees operations of the taxing district. The Agency was organized under Ordinance No. 9504 of the City of Crescent City, Florida on November 9, 1995. The Agency's board is comprised of the City Commission. The Agency met the conditions described above.

B. Government-Wide and Fund Financial Statements

The government wide financial statements, comprised of the Statement of Net Position and the Statement of Activities, report aggregated information for the overall government for all the activities of the primary government. The primary government is reported in two columns to separately report governmental activities from business type activities. The effect of interfund activity has been eliminated from these statements as is further disclosed below under the heading Interfund Activity Eliminations and Declassifications.

Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other

33

City of Crescent City, Florida Notes to Financial Statements September 30, 2013

non-exchange revenues, are reported separately from business-type activities, which are financed wholly or partially by fees charged to external parties for goods or services and are reported in enterprise funds.

The Statement of Net Position presents the overall government's financial position at year-end. The Statement of Activities presents direct expenses of a given fonctional segment offset by program revenues for the fiscal reporting period.

The resulting net expense or revenue is then totaled and offi et by general revenue producing the aggregate change in net assets for the period. 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 of the government, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular fonction or segment. Taxes and other non-exchange revenues not properly included among program revenues are reported as general revenues.

Separate financial statements are provided for governmental funds, proprietary fonds and fiduciary funds. Fiduciary funds are excluded from the government-wide financial statements. Major individual government fonds and major individual business-type fonds are reported in separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurementfocus and the accrual basis of accounting. 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 revenue 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 fond financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectable within the current period or as soon enough thereafter to pay liabilities of the current period. For this purpose, the government 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.

Taxes, intergovernmental revenue, licenses and permits, charges for services, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. Revenues, expenses, gains, losses, assets and liabilities resulting from non-(!xchange transactions are recognized in accordance with the requirements of Governmental Accounting Standards Board Statement No. 33, Accounting and Financial Reporting for Non-exchange Transactions. Non-exchange transactions are grouped into four classes based on their principal characteristics. The accounting treatment for each type of transaction is as follows:

Derived Tax Revenue, defined as assessments imposed on exchange transactions. Examples include: sales taxes, franchise tax, utility taxes, etc. Assets from derived tax revenue are recognized in the period when the exchange transaction on which the tax is imposed or when resources are received, whichever occurs first. Revenues are recognized, net of estimated uncollectible amounts, in the same period that the

34


assets are recognized. Resources received in advance are recorded as deferred revenue until the period of the exchange.

Imposed Non-exchange Revenue, results from assessments on non-governmental entities, other than assessments on exchange transactions. Examples include: ad valorem (property) taxes, fines and penalties, and property forfeitures. Assets from imposed non-exchange revenues are recognized in the period when an enforceable legal claim to the assets arises or when the resources are received, whichever occurs first. Property taxes are recognized in the period for which the taxes are levied. All other imposed nonexchange revenues are recognized in the same period that the assets are recognized.

Government-mandated Non-exchange Transactions, frequently established eligibility requirements before a transaction can occur. Examples include federal awards and state financial assistance. Until the requirements are met, the recipient does not have a receivable and the recognition of revenue received in advance is deferred. The providers (usually federal, state, and county governments) often offer resources on a reimbursement ("expenditure-driven") basis at the time the recipient has incurred allowable costs under the applicable program.

Voluntary Non-exchange Transactions result from legislative or contractual agreements other than exchanges entered into willingly by two or more parties. Examples include certain grants, entitlements, and donations by non-governmental entities. Principal characteristics of these types of transactions are (J) they are not imposed on the provider or recipient, and (2) fulfillment of eligibility requirements is essential for a transaction to occur. Assets and revenues are recognized when all applicable eligibility requirements, including time requirements, are met. Resources received in advance are reported as deferred revenue.

Proprietary fund financial statements are reported using the accrual basis of accounting. Under this method, revenue is recorded when earned and expenses are recorded at the time liabilities are incurred. The City's accounts are organized on the basis of funds each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based on the purpose for which they are to be spent and the means by which spending activities are controlled. The focus of the governmental and proprietary fund financial statements i on major funds, as defined and determined based on criteria established under Governmental Accounting Standards Boards Statement No. 34.

The City reports the following major governmental fund :

General Fund - The general fund is the principal fund of the City, which accounts for all transactions not accounted for in other funds. The majority of current operating expenditures of the City are financed through revenues received by the General Fund.

Special Revenue Funds - These funds are used to account for the proceeds of specific revenue sources (other than special assessments, or capital projects), which are legally restricted to finance particular functions or activities of the City. These funds include the Community Redevelopment Agency Fund to finance the CRA and the Discretionary Tax Fund to finance improvements to the City's infrastructure. The City reports the following major proprietary funds:

Gas Fund - The Gas Fund was established to account for revenues and expenses associated with providing gas services to the area.

35


Water and Sewer Fund - The Water and Sewer Fund was established to account for the revenues and expenses associated with the provision of water, sewer services to the business and residents of the City.

Amounts reported in the funds as interfund receivables and payables have been eliminated in the governmental and business-type activities column, except for the net residual amounts due between governmental and business-type activities, which are presented as internal balances due to and due from these different types of activities within the primary government.

The City reports as program revenues: (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary fund's principal ongoing activities. For the City, operating revenues include gas, water and sewer fees and other operating fees which are the principal ongoing operations of the Gas Fund and Water and Sewer Fund. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

D. Assets, Liabilities, and Net Position or Equity

1. Deposits and Investments

The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and shortterm investments with origi,nal maturities of three months or less from the date of acquisition. General Fund Investments represent certificates of deposit held at a FDIC insured financial institution and are stated at their market value.

Credit Risk

The City's investment policy limits the exposure to credit risk by requiring funds to be invested in the State certified public depository. The pension plans do not address credit risk.

Interest Rate Risk

The City's investment policy does not limit the maturities of investments to reduce the interest rate risk. The interest rate risk is controlled through the investing in certificates of deposit with stated interest rates.

Concentration of Credit Risk

The City's investments included savings accounts and certificate of deposits which limits the concentration of credit risk. The Pension Funds are restricted as defined under State Statute; specifically Sections 185. 06 and 17 5. 71 respectively.

2. Inventory Inventories which consist of gas, oil, and other expendable supplies are recorded at cost or on the basis of the "first-in, first-out" method of accounting when used. The effect of this method is to flow cost through operation in the order in which they 're purchased and to assign a balance sheet cost more nearly at the current replacement values.

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City of Crescent City , Florida otes to Financial Statements September 30, 2013

3. Restricted Assets

Certain revenue bonds obligations, as well as certain resources set aside for their repayment, are classified as restricted assets in the government-wide .financial statements because their use is limited by applicable legal indentures imposed by applicable bond covenants and other legal indentures. The restricted assets are used to report resources set aside to 1) provide a reserve for debt service, 2) provide a reserve for maintenance and replacement costs, and 3) acquire capital assets. It is the City's policy to use restricted assets when both restricted assets and unrestricted assets are available and meets the purpose of the restricted asset.

4. Capital Assets

Capital Assets include property, plant, equipment and infrastructure assets. The term general capital assets and general infrastructure assets relate only to the as ets associated with governmental activities.

Whereas the terms capital assets and irifrastructure assets relate to all such assets belonging to the City, capital assets are de.fined by the City as assets having a usefal life of more than one year.

Such assets are recorded at historical cost or estimated historical cost, if purchased or constructed. Contributed assets are recorded at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the usefal life of an asset are capitalized.

Depreciation is reported for the primary government using the straight-line method calculated on a service-life basis to amortize the cost of the assets over the estimated economic useful lives, which are as follows:

Buildings ....... .. ... ... ..... ............. .... ............................. ... ..... .... ........................ 20-40 years Improvements other than buildings ..... ........... ....... ...... .... ... ...... ....... .... .. .... .. 10-30 years Equipment ...... ................. .................... .. ...... ....... ..... ....... ....................... .. ...... 3-30 years Infrastructure ............................................................................................... 20-40years

5. Compensated Absences

It is the City's policy to grant employees vacation leave based upon the number of years of employment with the City. Vacation leave may be used as time off during the year. Full-time employees can accrue up to 480 hours of vacation leave to the subsequent year. Upon termination, employees receive a cash payment equal to 0 of the approved days carried over, based upon the applicable employee's current wage rate.

Sick leave is accumulated at a rate of 1.5 hours per week (480 hours maximum) per fall-time employee and can be accumulated, but used only for illness.

The portion of employee's payroll costs paid subsequent to year-end attributable to services performed prior to year-end accumulated unpaid vacation, sick leave, and personal leave is recorded and recognized as current liabilities. The remainder of the liability for compensated absences payable beyond the current period is recorded as a long-term liability.

6. Long-term Obligations

In the government wide .financial statements, long-term debt obligations are reported as liabilities in the

37


statement of net assets. The face amount of debt is reported as other financing sources. Premiums received 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.

7. Fund Equity

The City adopted GASE Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions for the year ended September 30, 2011. The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental fonds can be spent. The classifications used in the governmental fund financial statements are as follows:

Non-spendable Fund Balance - Amounts that are inherently not spendable because of their form (such as inventory) and/or that cannot convert or are not readily convertible to cash (such as prepaid assets or the long-term portion of loans receivable).

Restricted Fund Balance - Amounts that have externally enforceable limitations on their use. These amounts are constrained to the specific purposes by their providers (such as grantors, bondholders, or higher levels of government pursuant to enabling legislation, e.g., gas tax revenues that must be used for road repairs).

Committed Fund Balance- Amounts that have self-imposed limitations established through actions of the City Commission (the City 's highest level of decision maldng authority) set in place prior to the end of a financial reporting period. These amounts cannot be used for any other purpose unless the City Commission takes action to remove or change the limitation.

Assigned Fund Balance - Amounts that the government intends on expending for a specific purpose. These amounts are neither restricted nor committed but is the City's intent on the use of funds.

Unrestricted Fund Balance for amounts that are available for any purpose.

8. Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, and the reported revenue and expenses. Actual results could vary from the estimate a sumed in preparing the financial statements.

9. Reclassifications

Certain amounts presented in prior year data may have been reclassified in order to be consistent with the current year's presentation. NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

A. Explanation of certain differences between the Governmental Fund Balance Sheet and the government-wide Statement of Net Position.

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Following the governmental fund balance sheet is a reconciliation betweenfund balance - total government funds and net position - governmental activities as reported in the government-wide statement of net position. A detailed explanation of these differences is provided in the reconciliation.

B. Explanation of certain differences between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance and the government-wide Statement of Activities.

Following the governmental fund statement of revenues, expenditures, and changes in fond balances, there is reconciliation between net changes in fond balances - total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. A detailed explanation of these differences is provided in this reconciliation.

NOTE 3 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgets and Budgetary Accounting

The City follows these procedures in establishing the budgetary data reflected in the financial statements:

(1) Prior to the first day of the new fiscal year, the City Manager submits to the City Commission a budget for the ensuing fiscal year.

(2) Budget workshop sessions are scheduled by the City Manager and City Commission as needed.

(3) The general summary of the budget and notices of public hearings are published in an area newspaper.

(4) Public hearings are conducted to obtain taxpayer comments.

(5) Prior to October I , the budget is legally enacted through passage of an ordinance.

(6) The City Commission, by ordinance, may make supplemental appropriations for the year up to the amount of revenues in excess of those estimated.

(7) The level of classification detail at which expenditures may not legally exceed appropriations is at the fond level.

(8) Every appropriation lapses at the close of the fiscal year to the extent that is has not been expended. Reserved and designated fund balances are re-budgeted in the year of planned expenditure.

(9) Budgets for the General Fund are adopted on a basis of accounting consistent with generally accepted accounting principles. The General Fund is required to have a legally adopted annual budget.

NOTE 4 - PROPERTY TAX

Under Florida Law, the assessment of all properties and the collection of all county, municipal and school board property taxes are consolidated in the office of the County Property Appraiser and County Tax Collector. The laws of the Stat~ 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

39


of up to 10 mills.

The tax levy of the City is established by the City Commission prior to October 1 of each year and the Putnam County Property Appraiser incorporates the millages into the total tax levy, which includes the County, the School Board and other applicable taxing districts.

All property is reassessed by the County Property Appraiser according to its fair market value as of January 1 of each year. Each assessment roll is submitted to the Executive Director of the State Department of Revenue for review to determine if the rolls meet all of the appropriate requirements of state statutes.

All real and tangible personal property taxes are due and payable on November 1 of each year or as soon thereafter as the assessment roll is certifi.ed and delivered to the Tax Collector. All unpaid taxes become delinquent on April 1 following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4 % in the month of November, 3 % in the month of December 2 % in the month of January, and 1 % in the month of February. The taxes paid in March are without discount. All unpaid taxes on real and tangible personal property become delinquent on April 1 of the year following the year in which the taxes were billed. Procedures for the collection of delinquent taxes are the responsibility of the county and are subject to Florida Law.

Property tax revenues are recognized when levied in accordance with the modifi.ed accrual basis of accounting. Delinquent taxes receivable that are measurable, but not available as of the end of the fiscal year are reflected as deferred revenues, if material.

NOTE 5 - CASH AND INVESTMENTS

The City maintains separate cash and investment accounts for all of the funds.

Deposits: The carrying amount of the City's cash was $2,500,294 (reconciled balance) at September 30, 2013. The bank balance of these deposits at September 30, 2013 is $2,534, 767. Florida Statutes require depositories of public funds to provide collateral for all public deposits in excess of FDIC insurance. The collateral is held by the State Treasurer or other custodian with full legal rights maintained by the Treasurer to transfer ownership. Any loss not covered by the pledged securities and deposit insurance would be assessed by the State Treasurer and paid by the other public depositories.

Inve tment : State Statutes and local resolution govern the City's investment policies. Allowable investment instruments include: bonds, notes, certifi.cates of indebtedness, treasury bills, or other securities which are guaranteed by the full faith and credit of the United States of America, interest bearing savings accounts, intere t bearing certificates of deposit and interest bearing time deposits.

Investments administered by the Trustees of the City's Municipal Police Officers Pension Plan and the Municipal Firemen 's Pension Plan are restricted to investments as defined under State Statute,· specifi.cally Section 185. 03 and 17 5. 041 respectively. See Retirement Plans for additional information.

40

City of Crescent City, Florida Notes to Financial Statements September30, 2013

NOTE6 - ACCOUNTSRECEIVABLE

Accounts receivable at September 30, 2013 consists of the following:

Water Governmental Gas & Sewer

Activities Fund Fund Accounts Receivable $2,967 $91,493 $170,090 Other Receivable Other Receivable-Police Pension Fund Less: Allowance for Doubtful Accounts --- 42.369 60.398 Total $ 2.967 ~~2.1,~ ~ rn2.~2'

NOTE 7 - INTERFUND BALANCES At September 30, 2013, interfund balances consisted of:

Due from Other Funds

Governmental Funds General Fund $ 209,170 Special Revenue Fund ~

Total Governmental Funds 425,762 Entexprise Funds

Gas Fund 288,313 Water and Sewer Fund ~

Total Enterprise Funds ill...W

Total $~

Total Business

Type Activities

$261 ,583

102.767 U~8.Bl~

Due to Other Funds

$ 241,316 ----

241.316

331,728 166.467 ~

$ 132 51 1

$

Total $264,550

102.767 $16L783

Totals

(32, 146) lli.i22 184.446

(43,415) (141,Q~ l) 084.446)

$

These balances are used for working capital purposes and are expected to be repaid in the next year.

NOTE 8 -DUE FROM OTHER GOVERNMENTS Due from other Governments of $242,768 is composed of various shared revenues and grants due from State of Florida including sales taxes, communication service taxes and gas taxes.

NOTE 9 - CAPITAL ASSETS A summary of capital assets activity for the year ended September 30, 2013, is as follows :

Government Activities: Capital assets not being depreciated Land Trees Construction in Progress

Total assets not being depreciated Capital assets being depreciated

Buildings Improvements other than buildings

Furniture, fixtures and Equipment

Total Capital Assets being depreciated Total Capital Assets

Balance October l ,

2012 Adjustments Additions Deletions

$ 217,675 44,442

275522 537,639

609,065

2,048,546

993,509

3,651,120 $ 4,188,759

$

(84,394) (84,394)

84,394

84,394 $ __ _

41

$

23 1,084

333,394

564,478 $564,478

$

$ __ -

Balance September 30,

2013

$ 217,675 44,442

191,128 453,245

609,065

2,364,024

1,326,903

4,299,992 $4,753,237

City of Crescent City, Florida Notes to Financial Statements September30,2013

NOTE 9- CAPITAL ASSETS Continued

Balance Balance October 1, September 30,

2012 Adiustments Additions Deletions 2013

Less accumulated depreciation for: Buildings 276,915 20,712 297,627 Improvements other

than buildings 1,319,326 58,869 1,378,195 Furniture, fixtures

and Equipment 596,730 77.594 - 674.324 --Total accumulated depreciation 2.192.971 157.175 --- 2.350.146 Governmental activities Capital assets, net ~1,225 288 $ $~Q'.Z,3Q~ $~ $2,1Q3,Q21

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Activities: Ex(!ense General Government $ 23,906 Public Safety 43,760 Transportation 22,947 Parks/Recreation 66.562

Total Depreciation $ 15'.Z 175


2012 Adjustment Additions Deletions 2013 Business Type Activities: Gas Fund: Capital assets not being depreciated Land $ 37.720 $ --- $ $ $ 37.720 Total assets not being depreciated 37.720 --- 37.720

Capital assets being depreciated Improvements other than buildings 2,076,836 2,076,836

Furniture, fixture and Equipment 282,517 3,198 285,715 Total assets being depreciated 2,359,353 3,198 2.362.551

Total assets 2.397,073 J...1.2..8. 2,400,271

Less accumulated depreciation 1.723.537 29,621 l.753,158

Net capital assets Gas $ 673,536 $ $ (26.423) $ $ 64'.Z,113

Water and Sewer Fund: Capital assets not being depreciated Land $ 201,148 $ $ $ $ 201,148 Construction in Progress 2,749 13.500 16,249

Total assets not being depreciated $ 203,897 $ $ 13.500 $ $ 217,397

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NOTE 9 - CAPITAL ASSETS Continued


2012 Adjustments Additions Deletions 2013 Business Type Activities:

Water and Sewer Fund: continued

Capital assets being depreciated Improvements other than buildings $9,015,922 $ $ $ $ 9,015,922 Furniture, fixtures and Equipment 629,288 30,736 660,024

Total assets being depreciated 9,645,210 30,736 2,675,946 Total assets 9,849,107 44,236 9,893,343 Less accumulated depreciation 5.480,299 169,717 5,650,016

Net capital assets Water and Sewer $4,368,808 $ $ 025 481) $~ $ 4 243 327

Total Business Types: Capital assets not being depreciated Land $ 238,868 $ $ $ $ 238,868 Construction in Progress 2 749 13,500 16,249

Total assets not being depreciated 241,6 17 13,500 255,117

Capital assets being depreciated Improvements other than buildings 11,092,758 11 ,092,758 Furniture, fixtures and Equipment 911.805 - 33,934 - 945.739 -- --

Total assets being depreciated 12,004,563 33,934 12,038,497 Total assets 12.246.180 - 47.434 - 12.293.614 -- --Less accumulated depreciation 7,203.836 - 199,338 - 7.403.174 -- --Net capital assets business type $5 042 344 $ ~ $(151 904) $ $ 4,890.440

NOTE JO - LONG TERM DEBT

The City has entered into long-term debt obligations where it pledges specific income streams in order to pay debt service. Other credit facilities include capital lease financing for acquisition of operating equipment, the recognition of compensated absences liability for employees' earned but unused personai leave balances and the recognition of other post retirement benefits.

A summary of changes in general long-term debt follows:


2012 Additions Deletions 2013 Long-Term Debt Accrued compensated

Absences $26,709 $ $ $ 26,709 Other post retirement benefits 45,742 23 ,613 69,355 Obligation under capital lease - 10,003 _ill 9.876 --Total Long-Term Debt $~ $~ $ 127 $105,940

See note 13 for other post retirement benefits

43

City of Crescent City, Florida Notes to Financial Statements

Enterprise Funds Long Term Debt

Revenue Bonds Gas System Revenue Bonds pay principal and interest annually on September 1 and carry interest from 4.875% to 5%. Bonds mature in 2036.

Water and ewer Revenue Bonds pay principal and intere t Annually on eptember l and carry interest at 4.5%. Bonds mature in 2040.

Obligation Under Capital Lease Water meters and other equipment purcha ed on March 15, 2006. The interest rate is 4.752% starting on June 30, 2006 at $2,507 for 120 months, due May 31, 2016.

Changes in Enterprise Long Term Debt A summary of changes in Enterprise long-term debt follows:

Balance October 1,

2012 Revenue Bonds

Gas Fund $ 792,500 Water and Sewer Fund 1,417,300

Obligation under capital lea e 108,811 Total Long-Term Debt $2,31 8.611

Maturities on long-term debt are as follows:

Bonds Payable Year Ended

September 30, 2013

2014 2015 2016 2017 20 18

Thereafter Totals

Principal

Obligation under capital lease-Governmental Activities

$

$

Additions

September 30, 2013

$ 774,600

1,391,100

83,1 74

Total

Deletions

Balance September30,

2013

$

$

Intere t

17,900 26,200 25,637 !22.:ZJ:Z

$145,861 145,995 146,025 145,852 145,866

3,017.787 $3,747.386

The City entered into a lease for telephone equipment because the current company would not permit a purchase of the current equipment. The payments are $216 per month for sixty-months with an interest rate of JO. 754% due September 28, 2018. The lease contains a bargain purchase option of $1 at the end of 5 years.

Year E nded September 30, 2013 Principal Interest Total

2014 $ 1,6 11 $ 984 $ 2,595 2015 1,793 802 2,595 2016 1,996 600 2,596 2017 2,221 374 2,595 2018 2.255 __in 2,378

Total $ U16 $2.W $12..lli

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Obligation under capital lease-Business-Type Activities

Water and Sewer Fund purchased water meters and other equipment under a capital lease with an interest rate of 4. 753% payable monthly $2,507 or 120 months, due May 31, 2016.

Year Ended September 30, 2013 Principal Interest Total

2014 $ 26,883 $ 3,201 $ 30,084 2015 28,187 1,897 30,084 2016 28.104 576 28.680

Total $ ~ $ ~ $ ~

NOTE 11 -RETIREMENT PLANS

The City sponsors and administers two retirement plans, which are accounted for in separate Pension Trust Funds:

Investments

The provision under both statutes limit investments to: Investment in annuity and life insurance contracts of life insurance companies; time or savings accounts of a national bank, a state bank insured by the Bank Insurance Fund, or savings, building and loan association insured by the Savings Associations Insurance Fund which is administered by the Federal Deposit Insurance corporation or a state or federai chartered credit union with shares accounts insured by the National Credit Union Share Insurance Fund; Obligations of the United States or obligations guaranteed as to principal and interest by the government of the United States; Bonds issued by the State of Israel; Bonds, stocks, or other evidences OJ indebtedness issued or guaranteed by a corporation organized under the laws of the United States, any tate or organi.zed territory of the United States, or the District of Columbia, provided that it meets the

requirements of Chapter 185.06 (a) and (b) and Chapter 175.071 (a) and (b) .

At September 30, 2013, the City had the following deposits and Investments:

Investment Type

Equity Fixed Income Cash and Short Term Totals

Fair Value Municipal Police Officers

Pension Fund

$683,673 44,595 60.716

$788.984

General Employees' Pension Plan

Fair Value Municipal Firemen 's

Pension Fund

$418,870 29,373 28.627

$476870

The City provided pension benefits for all full time City personnel who had completed one year OJ employment and were at least 21 years of age through this defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The City was obligated under resolution #87-05 to contribute an amount equal to 5% of the employee's salary.

45

City of Crescent City, Florida otes to Financial Statements September 30, 2013

On May 1, 2000, the City passed a resolution amending and restating the then-exi ting plan. The current defined contribution plan is a money purchase plan qualified under Section 401 (a) of the Internal Revenue Code. For each plan participant, the current plan established participant-directed investment accounts. Because of these changes, the City has minimal administrative responsibilities related to the plan and no longer has fiduciary accountability for assets in participant accounts. Therefore, those assets are not reported in the accompanyingfinancial statements.

The City administers the Municipal Police Officers' Pension Plan and the Municipal Firemen's Pension Plan; both single-employer contributory defined benefit pension plans.

Plan Descriptions

Each plan provides retirement, death and disability benefits to plan members. These benefits, authority for participant eligibility and all other requirements are established in Chapter 17 5, Florida Statutes, for the Firemen's Plan and Chapter 185, Florida Statutes for the Police Officers' Plan. Separate standalone financial reports are not available. The latest available actuarial report was completed on September26, 2011.

Funding Policy and Annual Pension Cost

The City's annual pension cost and related information for each plan follows:

Police Officers' Firemen's Plan Plan

Contribution Rates: City 1.1 % Members 5.0% 5.0%

Annual Pension Costs $7,298 $ Contributions Made $6,723 $ Actuarial Valuation Date 1011107 1011107 Actuarial Cost Method Aggregate* Aggregate* Amortization Method NIA* NIA* Asset Valuation Method Market Market

Police Officers' Firemen's Plan Plan

Actuarial Assumptions: Investment Return 8.0% 6.5% Projected Salary Increases 7.5% 5.0%

Includes fuflation at 3.0% 3.0% Cost-of-Living Adjustments 0.0% 0.0%

*The aggregate Actuarial Cost Method does not identify or separately amortize unfunded actuarial liabilities.

46


Five Year Trend Information

Annual Percentage Net Year Pension ofAPC Pension

Ending Cost (APC) Contributed Obligation

Police Officers' 9/30/10 $ 7,298 92% $ (25 ,039) 6/30/09 331 3,379% (25,614) 6/30/08 17,699 118% (14,759) 9/30/07 33,459 100% (11,496) 9/30/06 28,349 0% (11 ,760) 9/30/05 21 ,561 0% 54,949 9/30/04 26,878 0% 34,015 9/30/03 11 ,631 72% 7,109 9/30/02 100% 9/30/01 9,787 100%

Firemen's 9/30/10 $ $ 9130109 9/30/08 9130107 9/30/06 9130105 9/30/04 9/30/03 9/30/02 9/30/01

Development of Net Pension Obligation (NPO)

The Police Defined Benefit Plan has been subject to the minimum funding standards since the adoption of the "Florida Protection of Public Employee Retirement Benefits Act" (Part VII of Chapter 112, Florida Statutes) in 1980. Accordingly, the sponsor has funded the actuarially determined required contributions for all years from October 1, 1987, through the transition date, October 1, 1997. Thus, the NPO on October 1 1997 is 0. The development of the Net Pension Obligation to date is as follows :

2007 2008 2009 2010

Actuarially Determined Contribution $33,459 $17,441 $ $ 6,723 Interest on NPO (941) (920) (1 ,181) (2,049) Adjustment to ADC 1.205 ~ -1..lli. 2.624 Annual Pension Cost 33,723 17,699 331 7,298 Contributions Made 33.459 20.962 11.186 6.723 Increase in NPO 264 (3 ,263) (10,855) 575 NPO Beg of Year Cl 1.760) Cl 1.496) (14,759) (25,614) NPO End of Year $(1 1,126) $(H 752) $(25 614) $(25 032)

47

City of Cr~cent City, Florida ot~ to Financial Statements September 30, 2013

SCHFDULEOF FUNDING PROGRESS FOR PENSION PLAN

Actuarial

Accrued UAALas a

Actuarial Liability Unfunded % of

Actuarial Value of (AAL}- AAL Funded Covered Covered

Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (alb) (c) ((b-a)/c)

Police 1011/2010 $ 636,404 $ 812,282 $ 175,878 78.300/o $ 253,435 69.40%

10/1/2007 666,260 662,189 (4,071) 100.600/o 194,953 -2.10%

Fire 10/1/2010 $ 409,354 $ 234,298 $ (175,056) 174.700/o $ 34,738 -503.90%

10/1/2007 406,220 45,903 (360,317) 885.000/o 25,407 -1418.20%

Begi.nning with the October 1, 2007 actuarial valuation report, GASB 50 requires that plans utilizing the aggregate actuarial cost method disclose the funded ratio the plan would have if it were utilizing the entry age normal cost method.

NOTE 12 - INTERFUND TRANSFERS

Interfund transfers as of September 30, 2013 are a follows:

Transfers In:

General Discretionary CRA NonMajor

Transfers Out: Fund Fund Fund Fund Gas W&S Totals

Genc.ral Fund $ $ $ 13,335 $ $ $ $ 13,335

CRA Fund

Discretionary Tax Fund

NonMajor Fw1d

Proprietary Fund

Gas Fund 1,000 1,000

Water/ ewer Fund _zm --- --- -- z.m Total Proprietary Fund ____am --- -- -- 8.881 Total ~ s s 13 335 s s s - s 22 216

48


NOTE 13 - OTHER POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS

Plan Description The City of Crescent City administers a single-employer de.fined benefit healthcare p lan. The plan

provides lifetime healthcare insurance for eligible retirees through the City's group health insurance plan, which covers both active and retired members. Bene.fits provisions are established through the City obtaining the best provisions for the employees. The plan does not issue a stand alone report.

Funding Policy The City pays 100% of the active employees insurance and retirees can choose to remain on the City 's policy into retirement if they pay the entire premium. The insurance carrier charges actives and retirees the same premium rates.

Annual OPEB Cost and Net OPEB Obligation

The actuarial valuation involves estimates of the value of reported amounts and assumptions about the probability of events far into the future. Examples include assumptions about fature employment, mortality, and the healthcare cost trend. Amounts determined regarding the fonded status of the p lan and the annual required contributions of the employer are subject to constant revision as actual experience is compared with past expectations and new estimates are made about the future. The schedule offanding progress, presented as required upplementary information presents multi-year trend information that shows whether the actuarial value of plan assets i increasing or decreasing over time relative to the actuarial liabilities for benefits.

Calculations are based upon the types of benefits provided under the terms of the substantive plan at the time of the valuation and on the pattern of sharing of costs between the employer and plan members to that point. Calculations reflect a long-term prospective, o methods and a umptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets.

For the Actuarial Valuation, the Entry Age Normal (level % of pay) actuarial co t method was used. Select Actuarial Assumptions are listed in the table below:

Funding Interest Rate:

Health Care Inflation:

4.5%

Pre-Medicare: 7.0% in 2012, trending to 5.0% in 2014 Post-Medicare:7.0% in 2012, trending to 5.0% in 2014

Payroll Growth/Inflation Assumption: 0.0%

Amortization of UAAL: Level Percentage of Payroll (Closed Amortization over 30 Years)

Employee Contribution Information

Retirees participating in the group insurance plans offered by the City are required to contribute 100% oj the active premiums. Jn future years, contributions are assumed to increase at the same rate as premiums.

The premiums for the Dental, Vision, and Life Insurance are anticipated to cover the full cost of the benefit.

49

City of Crescent City, Florida

Valuation Date

Notes to Financial Statements

Applicable for the Fiscal Year Ending

Annual Required Contribution Interest on Net OPEB Obligation Adjustment to Annual Required contribution Annual OPEB Cost/(Expense) Estimated Net Contribution Made Increase/(Decrease) in Net OPEB Obligation Net OPEB Obligation - Beginning of Year Net OPEB Obligation - End of Year

Funded Status as of:

Actuarial Accrued Liability (AAL) Actuarial Value of Assets (AVA) Unfunded Actuarial Accrued Liability (UAAL) Funded Ratio

Three Year Trend Information

Year Annual Ending OPEB Cost

9130112 $15,097 9130111 $15,300 9130110 NIA

Development of Annual OPEB Expense

10/112010 9/30/2012

$ 15,231 386

( 520) $ 15,097

( 6.691) 8,406 8,578

10/112010

$108,282

108,282 0.0%

Percentage of OPEB

Contributed

44.3% 43.9%

NIA

• Amortization of Unfunded Actuarial Accrued Liability Actuarial Accrued Liability Actuarial Value of Assets Unfunded Actuarial Accrued Liability Amortization period Amortization method Discount rate Payroll Growth Rate Amortization Amount

Development of Annual OPEB Expense (continued)

• Development of Annual Required Contribution (ARC) Normal Cost at Valuation Date Interest on Normal cost Normal Cost Component

Amortization Amount at Valuation Date Amortization interest Amortization component

Annual Required Contribution

50

September 30, 2013

Net OPEB

Obligation

$16,984 $8,578

NIA

$108,282

$108,282 30

Closed 4.5% 0.0%

$ 6,859

$ 7,717 _l11

$ 8.064

$ 6,859 ~

$ 7.167

$15,231


NOTE 14-0PERATING LEASES

The City entered into an operating lease with Putnam County board of County Commissioners for offices located at 115 North Summit Street. The term of the lease shall be a period of sixty months (60) which began on December 1, 2007. The rental payments shall be $2,000 per month plus applicable sales tax, if any, and shall be paid in advance on the first day of each month.

Commencing on the start of the second lease year and each year thereafter, the annual rent shall be adjusted upward by 2%. The annual rent/or 2013 was $23,432.

The lease is currently being treated as a month to month lease.

NOTE 15 - DISCRETIONARY TAX

The City receives funds from the additional one cent discretionary sales tax from Putnam County that was passed by referendum. The surtax is to be in effect for 15 years and to be used for roads, sidewalks, parks, improve drainage, resurface roads, improve land for public use, modernize libraries, build water! sewer systems, promote economic development, build or expand government buildings and community centers, improve law enforcement and fire protection systems and facilities, public transportation systems and waterfront assets and accessibility. The City accounts for this revenue source as a Special Revenue Fund.

The Discretionary Tax Fund loaned the General Fund money to cover the timing differences for capital grant expenditures. The General Fund is expected to pay the funds back when the grant proceeds are received.

NOTE 16 - DEFICIT IN NET ASSETS-GAS FUND

The Gas Fund had a deficit in net assets as of September 30, 2013 of $127,487. The deficit was calculated by taking the net book value of the fixed assets for the Gas Fund less the outstanding debt. The City expects the deficit will be eliminated or reduced when new assets are acquired in the Fund. The Fund Net Assets was a positive $17 5, 682.

NOTE 17-0 THER INFORMATION

Risk of loss

The City is a member of the Florida Municipal Insurance Trust (the "Trust"). The Trust is a selfinsurance program established to provide certain liability, casualty, and property coverage and workers compensation to participating units of local governments in Florida, pursuant to variou provisions of the Florida statutes. The Trust 's underwriting and rate setting policies were established after consulting with an independent actuary. The Trust is non-assessable and therefore, the City has no liability for future deficits of the Trust, if any. The deductible for general liability, auto, and property damage and workers compensation ranges from $500 for auto, $1, 000 for property and none for general liability or workers compensation.

The City also has a policy to cover other equipment and the deductible ranges from $500 to $1, 000 with a limit of $1,000,000.

51


NOTE 18 - GOVERNMENTAL ACCOUNTING STANDARD BOARD STATEMENT NO. 63

In June 2011, the GASE issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASE No. 63 provides guidance for reporting deferred outflows of resources, deferred inflow of resources, and net position in a statement of financial position and related disclosures. The statement of net assets is renamed to the statement of net position and includes the following elements: assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position.

NOTE 19 - COMMITMENTS AND CONTINGENCIES

The City is engaged in routine litigation incidental to the conduct of its business and municipal affairs. In the opinion of its counsel, no legal proceedings are pending against them, not covered by insurance, which would inhibit the City 's ability to p erform its operations or materially affect its financial condition.

52

Required Supplementary Information

CITY OF CRESCENT CITY, FLORIDA SCHEDULE OF REVENUES, EXPENDITIJRES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL GENER AL FUND

FOR THE YEAR ENDED SEPTEMBER 30, 2013

Bu!!J:ctcd Amounts Variance \\I th Flnal Budget-

Original Flnal Actual Amounts Pos ld ve ~cgatlve) JU.VENUES TAXIS

Property $ 455,258 $ 455,258 $ 444,632 $ (10,626) Utility 216,500 216,500 213,485 (3,015) Franchise 115,500 115,500 113,870 (1,630) Loca l Option Gas Tax 74,800 74,800 64,529 (10,271) Other

Licenses and pennits 31,750 31,750 29,356 (2,394) lnlergovemmental 151,500 151 ,500 148,498 (3,002) Charges for services 349,750 349,750 341,374 (8,376) Fines and forfeitures 8,950 8,950 5,861 (3,089) Volu nteer Fire Acct Investment earnings 2,000 2,000 639 (1,361) Capital grants and contnbutions 366,031 366,03 1 414,243 48,212 Operating grants 188,866 188,866 184,977 (3,889) Miscellaneous revenue 9,000 9,000 21,976 12,976 Park & Recreation Impact 1,500 1,500 (1 ,500) Fire Impact Fees 1,500 1,500 (1,500) Po lice Impact Fees I 500 1 500 (1,500) TOTAL REVENUES 1,974,405 1974405 1,983,440 9035

EXPENDITURES Current:

General government 789,828 789,278 751,900 (37,378) Public safety 596,711 596,711 565,389 (31,322) Transportation 176,755 176,480 146,005 (30,475) Parks and recreation 48,325 49,575 47,935 {l,640)

Debt service: Principal 127 127 Interest 90 90

Ganis and aids Capital outlays 355,500 466,791 503,401 36,610 Total e)(j)enditures 1,967,119 2,078,835 2 014,847 (63,988)

F.xcess (deficiency) of revenues over (under) e)(j)enditures . 7286 (104,430) (31 ,40!) 73,023

OTHER FINANCING SO URCES AND (USES) Operating transfers in 5,000 5,000 8,881 3,881 Operating transfers out (1 2,286) (13,336) (13,335) I Sale of Capital Assets Debt proceeds 10003 10003

Total other financing sources (uses ) (7,28~ (8,336) 5,549 13,885

Nei change in fund ba lances (11~766) (25,858) 86,908

Fund balances-beginning 784,513 784,513 784,513 Fund balances-ending $ 784,513 $ 671 747 $ 758 655 $ 86,908

55

CITY OF CRESCENT CITY, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL DISCRETIONARY FUND


REVINUES TAXES

Property Utility Franchise Local Option Gas Tax Other

Licenses and pennits Intergovernmental Charges for services Fines and forfeitures Volunteer Fire Acct Investment earnings Capital grants and contnbutions MisceUaneous revenue Park & Recreation lmpact Fire Impact Fees Po lice ln'l>act Fees TOTAL REVINUES

EXPEND~

Current: General government Public safety Transportation Parks and recreation

Debt service: Principal Interest

G-ants and aids Capital outlays Total expenditures

Excess (deficiency) ofrevenues over (under) expenditures.

OTIIER FlNANCINGSOURC.ES AND (US.ES) Operating transfers in Operating transfers out Debt proceeds

Total other financing sources (uses)

Net change in fund balances

Fund balances-beginning Fund balances-ending

Bu!!geted Amounts

Original Flnal Actu.al Amounts

$ $ $

98,500 98,500 101 ,248

1,100 1,100 372

99,600 99,600 101620

89,600 89,600 2,545

10000 10,000 58 215 99,600 99600 60760

40 860

40 860

428,320 s ___ _ s ___ _ s ___ 46_.9 ... 1_80_,

56

Variance mth Flnal Budget-

Poslthe Q'.:!egadw)

$

$

2,748

(728)

2020

87,055

(48,215) 38 840

40,860

40 860

428,320 469,180

CITY OF CRESCENT CITY, FLORIDA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES JN FUND BALANCES

BUDGET AND ACTUAL COMMUNITY REDEVELOPMENT AGENCY FUND


Bu!!geted Amounts Variance with Flnal Budget-

Original Flnal Actual Amounts Positive ~cgathe) REVFNtJES TAXES

Property $ $ $ $ Utility Franchise Motor fuel Other

Licenses and permits Intergovernmental 12,894 12,894 13,994 1,100 Charges for services Fines and forfeitures Voluntare Fire Department Investment earnings 170 170 26 (144) Miscellaneous revenue 7,000 7,000 2,001 (4,999) Park & Recreation llllJact Fire Impact Fees Police Impact Fees TOTALREV"ENW 20,064 202064 162021 !4,043)

EXPENDITURES Current:

General government 27,350 27,350 i6,276 11,074 Public safety Transportation Parks and recreation

Debt service: Principal Interest

Grants and aids Capital outlays 5,000 5,000 52000 Total expenditures 32,350 32,350 16,276 16,074

Excess (deficiency) ofrevenues over (under) expenditures. !12,28§) (12228§) (255) 122031

OTHERFlNANCING OURC.ES AND(IB.ES) Operating transfers in 12,286 12,286 13,335 1,049 Operating transfers out Debt proceeds

Total other financing sources (uses) 12,286 12,286 13,335 1049

Net change in fund balances 13,080 13,080

Fund balances-beginning 362545 362545 362545 Fund balances-ending $ 36,545 $ 36,545 $ 49,625 $ 13,080

57

Cl1Y OF CRESCENT Cl1Y, FLORIDA SCHEDULE OF FUNDING PROGRESS FOR HEALIB CARE PLAN

Actuarial

Accrued UAALas a

Actuarial Lialjlity Unfunded % of

Actu.arial Value of (AAL)- AAL Funded Cow red Cow red

Valuation Assets Fntry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) ~a) {alb) (c) (~a)/c)

09/30/10 $ - $ 108,282 $ 108,282 0.0% $ 769,565 14.1%

58

Other Supplemental Information

CITY OF CRESONT CITY, FLORIDA SCBIDULES OF CONTRIBUTIONS FROM.EMPLOYER AND STAIE OF FLORIDA

MUNICIPAL POLICE OFFICERS' PENSION PLAN

.EMPWYER CONTRIBUTIONS STAIE CONTRIBUTIONS Annual Actual Annual Actual

Year Required :Elnployer Percentage Required State Percentage :Ended {;2ntributi!m ~ontribution ~Qntribut~~ {;2ntribun2n Contribution ~2ntribut~~ 9/30/2013 $ - $ 14,514 0% $ - $ 16,252 0% 9/30/2012 23,271 0% 16,143 0% 9/30/2011 5,000 0% 18,486 0% 9/30/2010 6,723 6,723 100% 17,912 17,912 100% 9/30/2009 11,186 100% 18,127 32,607 100% 9/30/2008 17,442 20,962 100% 16,675 16,675 100% 9/30/2007 33,459 33,459 100% 16,117 16,117 100% 9/30/2006 28,349 81,484 287% 13,270 13,270 100% 913012005 21,561 0% 15,636 15,636 100% 9/30/2004 26,878 12,561 47% 0% 9/30/2003 11,631 8,388 72% 15,215 15,215 100% 9/30/2002 7,767 13,011 168% 13,625 13,625 100% 9/30/2001 7,767 9,787 126% 12,406 12,406 100% 9/30/2000 11,103 3,965 36% 11,861 11,861 100% 9/30/1999 14,040 14,040 100% 9/30/1998 7,480 13,508 181% 9/30/1997 5,780 13,032 225%

MUNICJP AL FIRE\.1EN'S PENSION PLAN .EMPLOYER CONTRIBUTIONS STAIE CONTRIBUTIONS

Annual Actual Annual Actual Year Required Employer Percentage Required State Percentage

~ C2ntribun2n C2ntribun2n C2ntributed C2ntribunon Contribution C2ntributed

9/30/2013 $ - $ 0% $ - $ 7,835 0% 9/30/2012 0% 7,835 0% 9/30/2011 0% 7,985 0% 9/30/2010 0% 9,155 0% 9/30/2009 0% 10,148 0% 9/30/2008 0% 4,714 0% 9/30/2007 0% 12,259 100% 9/30/2006 0% 14,039 100% 9/30/2005 0% 8,622 100% 9/30/2004 6,176 2,453 40% 6,176 9,173 148.52% 9/30/2003 6,459 0% 6,459 9,995 154.75% 9/30/2002 4,156 0% 4,156 10,725 258.09% 9/30/2001 4,084 0% 7,332 0% 9/30/2000 4,972 0% 7,328 0% 9/30/1999 4,826 0% 6,648 0% 9/30/1998 0% 10,648 0% 9/30/1997 0% 6,332 0%

61

CITY OF CRESCENT CITY, FLORIDA SCHEDULE OF RESERVES FOR DEBT SERVICE AND BOND CONTINGENCY

SEPTEMBER 30, 2013

Reserved Reserved for Bond For Debt Contingenc~

GAS SYSTEM

Restricted Assets $ 99,639 $

Less, Payable from Restricted Assets Bonds Payable 18,800

TOTAL $ 80,839 $

62

CITY OF CRESCENT CITY, FLORIDA COMPARATIVE SCHEDULES OF NET POSITION

GAS FUND SEPTEMBER 30, 2013 and 2012

2013 ASSETS Cash $ 3,333 Receivables-net of allowance 49,124 Other receivables Inventories 36,258 Due from other fimds 288,313 Unarmrtiz.ed debt issuance costs 13,158 Restricted assets:

Cash

Renewal and replacement fund 157,941 sinking fimd 24,991 Debt Service Reserve Accotmt 99,639 Utility deposits 88,662

Capital assets:

Land 37,720 Buildings and improvements other than buildings 2,076,836 Equipment 285,715 Construction in Progress

Accumulated depreciation (1 ,753,158) Total assets 1,408,532

LIABILITIES Cash Deficit

Accotmts payable and other current liabilities 12,222 Due to other fimds 331,728 Payable from restricted assets:

Current maturities of bonds payable 18,800 Accrued interest payable 3,852 Customer deposits 88,662

N oncurrent liabilities:

Revenue bonds payable - net 755,800 Other Post Retiremtent Benefits 10,294 Compensated absences 11 ,492

Total liabilities 1,232,850

NET POSITION Invested in capital assets, net of related debt (127,487) Retained Earnings:

Unrestricted 303,169 Total net position $ 175,682

63

2012

$ 47,479

37,569 288,313

13,158

150,483 17,021 93,864 91,467

37,720 2,076,836

282,517

(1 ,723,537) 1,412,890

9,108 12,601

331 ,728

17,900 3,852

91 ,467

774,600 6,978 9,931

1,258,165

(118,964)

273,689 $ 154,725

CITY OF CRESCENT CI1Y, FLORIDA COMPARATIVE SCHEDULES OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

GAS FUND FOR THE YEARS ENDED SEPTEMBER 30, 2013 AND 2012

2013 2012 Operating Revenues:

Charge for ervices: Gas ale $ 557,041 $ 524,554 Other ervices 43 1,376

Total Operating Revenues 557,084 525,930

Operating expenses: Personal services 147,935 159,108 Operations 164,133 170,516 Repairs and maintenance 7,442 6,592 Gas purchase 145,549 142,784 Re ale items 1,322 2,495 Depreciation and amortization 29,621 30,585

Total Operating Expenses 496,002 512,080 Operating Income (Loss) 61 ,082 13,850

Nonoperating Revenues (Expenses): lnve tment revenue 225 725 Interest expense (39,350) (40,199) Other non-operating revenue (expense) 2,000

Total Nonoperating Revenues (Expenses) (39,125) (37,474)

Income (Loss) Before Capital Contributions and Transfers 21,957 (23,624)

Operating transfers in Operating transfers out (1 ,000)

(1 ,000)

Change in Net Position 20,957 (23,624)

Total Net Position-Beginning 154,725 178,349 Total Net Position-Ending $ 175,682 $ 154,725

64

CllY OF CRESCENT CllY, FLORIDA COMPARATIVE SCHEDULES OF NET POSmON

WATER AND SEWER FUND SEPTEMBER 30, 2013 AND 2012

2013 2012 ASSETS F.quity in pooled cash and invest:rrents $ 67,783 $ 55,290 Receivables-net of allowance 109,692 101,473 Other Receivables Due from other governments 1,225 Inventories 21,708 21,708 Due from other iimds 25,436 40,436 Prepaid Insurance Restricted assets:

F.quity in pooled cash and invest:rrents: Renewal and replacement iimd-Maintenance 864,826 800,448 sinking iimd 44,446 39,367 Debt Service Re erve Accomt 122,164 113,048 lrq>act fue 47,967 47,813

Utility deposits 70,393 66,712 Capital assets:

Land 201,148 201,148 Buildin~ and improverrents other than building5 9,015,922 9,015,922 F.quiprrent 660,024 629,288 Construction in Progress 16,249 2,749

Accurrrulated depreciation (5,650,016) (5,480,299) Total assets 5,617,742 5,656,328

LIABILITIES Accmmts payable and other current liabilities 14,989 14,981 Due to other iimds 166,467 181,466 Current maturities oflease obligations 27,419 25,647 Payable from restricted assets:

Current maturities of bonds payable 26,200 26,200 Accrued intere t payable 6,094 6,094 Custorrer deposits 70,393 66,712

Noncurrent liabilities: Revenue bonds payable - net 1,364,900 1,391,100 Other Post Retirerrent Benefits 7,443 4,178 Obligations under capital lease 55,755 83,164

Corq:Jensated absence 4,362 4,362 Total liabilities 1,744,022 1,803,904

NETPOSIDON Invested in capital assets, net of related debt 2,769,053 2,842,697 Retained Earnings: Unrestricted 1,104,667 1,009,727 Total net position $ 3,873,720 $ 3,852,424

65

CITY OF CRESCENT CITY, FLORIDA COMPARATIVE SCHEDULES OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

WATER AND SEWER FUND FOR THE YEARS ENDED SEP'IEMBER 30, 2013 AND SEPTEMBER 30, 2012

2013 2012 Operating Revenues:

Charges for services: Sales and ervice charges $ 893,843 $ 891 ,915 Impact fees 2,640 Other services 2,737

Total Operating Revenues 893,843 897,292

Operating expenses: Personal services 146,156 137,924 Operations 449,639 465,424 Repairs and maintenance 40,208 33,549 Depreciation and amortization 169,717 177,113

Total Operating Expenses 805,720 814,010 Operating Income (Loss) 88,123 83,282

Nonoperating Revenues (Expenses): Investment revenue 1,158 1,897 Interest expense (68,226) (70,543) Other non-operating revenue 622 2,628

Total Nonoperating Revenues (Expenses) (66,446) (66,018)

Income (Loss) Before Capital Contributions and Transfers 21 ,677 17,264

Capital contnbutions and grants 7,500 1,500 Operating transfers in Operating transfers out (7,881)

(381) 1,500

Change in Net Position 21 ,296 18,764

Total Net Position-Beginning 3,852,424 3,833,660 Total Net Position-Ending $ 3,873,720 $ 3,852,424

66

Other Reports

,.~ MOATS & ASSOCIATES

------------ CERTIFIED PUBLIC Ai COUNTANT Members of:

American Institute of CPAs Florida Institute of CPAs

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Mayor and City Commission City of Crescent City, Florida

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Crescent City, Florida as of and for the year ended September 30, 2013, and the notes to the financial statements, which collectively comprise the City of Crescent City, Florida's basic financial statements and have issued our report thereon dated January 15, 2014.

Internal Control over Financial Reporting

In planning and performing our audit, we considered the City of Crescent City, Florida's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances 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 City of Crescent City, Florida's internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Crescent City, Florida's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity 's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

69

Telephone (386) 760-3083 • Fax (386) 760-6134 • www.MoatsandAssociatesCPAs.com 2100 South Ridgewood "\venue, Suite 7 •South Daytona, Florida 32119

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City of Crescent City, Florida's financial statements are free of material misstatement, we performed tests of it compliance with certain provisions of laws, regulations, contract. , and grants 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 matter that we reported to management of the City of Cre cent City, Florida in a separate letter dated January 15, 2014.

The City of Crescent City, Florida's response to the findings identified in our audit is described in Management Response and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standard in considering the entity 's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

South Daytona, Florida January 15, 2014

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,.~ MOATS & ASSOCIATES

------------ CERTIFIED PUBLIC ACCOUNTANTS-------------

CITY OF CRESCENT CITY, FLORIDA MANAGEMENT LETTER

The Honorable Mayor, City Commission and City Manager City of Crescent City, Florida

Members of: American Institute of CPAs

Florida Institute of CPAs

We have audited the .financial statements of the City of Crescent City, Florida, as of and for the fiscal year ended September 30, 2013, and have issued our report thereon dated January 15, 2014.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to .financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; We have issued our Independent Auditor's Report on Internal control over Financial Reporting and Compliance and Other Matter Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report which is dated January 15, 2004 should be considered in conjunction with this management letter.

Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's reports or schedule:

• Section 10.554 (1)(i)1.,The Rules of the Auditor General require that we determine whether or not corrective actions have been taken to address .findings and recommendations made in the preceding annual .financial audit report. Corrective actions have been taken to address findings and recommendations made in the preceding annual.financial audit report.

• Section 10. 554(1)(i)2., Rules of the Auditor General, require our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the inve tment of public funds. In connection with our audit, we determined that the City of Crescent City complies with Section 218.415, Florida Statutes.

• Section 10.554(1)(i)3., Rules of the Auditor General, require that we address in the management letter any recommendations to improve .financial management. Jn connection with our audit we have the following recommendation.

(2013 -1) Accounting Policy and Procedure Manual

The City has completed several sections of its procedural manual. We recommend the City continue by completing the General Ledger, Accounts Payable and Bank Reconciliations policies and procedures.

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Telephone (386) 760-3083 • Fax (386) 760-6134 • www.MoatsandAssoclatesCPAs.com 2100 South Ridgewood Avenue, Suite 7 • South Daytona, Florida 32119

• Section J0.554(l)(i)4., Rules of the Auditor General, requires that we address noncompliance of provision of contracts or grant agreements or abu e, that have occurred, or are likely to have occurred, that have an effect on the financial statement that is le s than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any findings.

• ection J0.554(J)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be di clo ed in this management letter, unless disclosed in the notes to the financial statement . See Note 1 to the notes to the financial statements.

• Section 10.554(J)(i)6.a. , Rules of the Auditor General, requires a statement be included a to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statute, and identification of the specific condition met. In connection with our audit, we determined that the City of Crescent ity did not meet any of the conditions described in Section 218.503(1), Florida Statutes.

• Section J0.554(1)(i)7.b. , Rules of the Auditor General, requires that we determine whether the annual financial report for the City of Cre cent City for the fiscal year ended September 30, 2013, filed with the Florida Department of Financial Services pur uant to Section 21 .32 (l)(a), Florida Statutes, i in agreement with the annual financial audit report for the fiscal year ended September 30, 2013. In connection with our audit, we determined that the e two reports were in agreement.

• Pursuant to Sections 10.554(1)(i)6.c. and 10.556(7), Rule of the Auditor General, we appliedfinancial condition assessment procedures. It is management's re ponsibility to monitor the City of Crescent City's financial condition, and our financial condition a sessment was ba ed in part on representations made by management and the review of financial information provided by ame.

Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, other governmental agencies, and applicable management, and is not intended to be and should not be u ed by anyone other than these specified parties.

The City ofCre cent City written response to this management letter has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

South Daytona, Florida January 15, 2014

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ebruary 2 I, 2014

:J .~ouT11 snu1n surnt:·r 4'1&E\f't;:\·r ( .,., .. H .OHIU.\ :a:i 112.2 .wn

RE: Management Letter fr m Moat & Ass iate, PA -FY2012/2013 Audit

Dear ir or Madam:

Cit\' Hall (3811) b'l!l-2.~25 Pol k~ (:I&) o•l 1~11

Fui•, (18b) 698-1212 ,,~ n~pt (.litb) 1i<ll!-11&

W tt•r O.•pt ( 18~) o9tl ·2525 I A : ('.180) b'l!I l-lb7

This letter re pond to the City' Audit for Fi cal Year 2012/2013 and the Management Letter of R.R. Moate , .P.A., P.A. regarding ame. Re ponding to the pri r year and current year finding , we offer the following:

Accounting Procedure Manual

The City agree with the auditor on thes comment . We have now have a pro edure manual in place, but it requires some fine tuning if it is expected to direct omeone who is completely unfamiliar with our policies and procedures. We realize this has been a comment from the auditor for several year , but in faime to our taff, the City h n ver had a formalized policy and procedure manual and creating one from cratch while performing all of our other duties has not been simple. We will continue to work towards completion of the manual in the coming year.

hould you have any question or comments, please do not he itate to contact us.

Sincerely,

notes to financial statements - flauditor.gov rpts/2013 crescent city... · the governmental...

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