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CAFR_FY Ending_9/30/2020 r x y + i At 0 ` AM , lag e oTequesta 19rida com rehensive Annual Financial Report {' Fiscal Year Ended September 30, 2020 oil I ew Recrea i ente om i ng Soon! i s r 1 � 020 v � ii � � counc � � L to R: Council Member Bruce Prince,.Counci'1 Member Frank D'Ambra, Vice-Mayor Kyle Stone, Mayor Abby Brennan and Counci'I Member Laurie Brandon VILLAGE OF TEQUESTA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Prepared By Finance Department The Village of Tequesta,Florida VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal i-iv Certificate of Achievement for Excellence in Financial Reporting v Organization Chart vi List of Principal Officials vii II. FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information) 4-18 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 19 Statement of Activities 20 Fund Financial Statements Balance Sheet—Governmental Funds 21 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 22 Statement of Revenues,Expenditures and Changes in Fund Balances— Governmental Funds 23 Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 24 Statement of Net Position—Proprietary Funds 25 Statement of Revenues,Expenses and Changes in Net Position—Proprietary Funds 26 Statement of Cash Flows Proprietary Funds 27 Statement of Fiduciary Net Position—Fiduciary Funds 28 Statement of Changes in Fiduciary Net Position—Fiduciary Funds 29 Notes to Basic Financial Statements 30-95 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule General Fund 96 Note to the Budgetary Comparison Schedule 97 Firefighters' Pension Trust Fund Schedule of Changes in the Village's Net Pension Liability and Related Ratios 98 Schedule of Village Contributions 99 Schedule of Investment Returns 100 Police Officers'Pension Trust Fund Schedule of Changes in the Village's Net Pension Asset and Related Ratios 101 Schedule of Village Contributions 102 Schedule of Investment Returns 103 General Employees' Pension Trust Fund Schedule of Changes in the Village's Net Pension Liability(Asset)and Related Ratios 104 Schedule of Village Contributions 105 Schedule of Investment Returns 106 Schedule of Changes in Total OPEB Liability and Related Ratios 107 Schedule of Village's Proportionate Share of the Net Pension Liability— Florida Retirement System Pension 108 Schedule of the Village's Proportionate Share of the Net Pension Liability— Retiree Health Insurance Subsidiary Program 109 Schedule of the Village's Contributions Florida Retirement System Pension Plan 110 Schedule of the Village's Contributions Retiree Health Insurance Subsidy Program III VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS 11. FINANCIAL SECTION(CONTINUED) SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules Combining Balance SheetNonmajor Governmental Funds 112-113 Combining Statement of Revenues,Expenditures and Changes in Fund Balances— Nonmajor Governmental Funds 114 Budgetary Comparison Schedule—Building Fund 115 Budgetary Comparison Schedule—Special Law Enforcement Trust Fund 116 Budgetary Comparison Schedule—Capital Improvement Fund 117 Budgetary Comparison Schedule—Capital Projects Fund 118 Combining Statement of Fiduciary Net Position 119-120 Combining Statement of Changes in Fiduciary Net Position 121 III. STATISTICAL SECTION Net Position by Component 122 Changes in Net Position 123-124 Fund Balances, Governmental Funds 125 Changes in Fund Balances, Governmental Funds 126 Assessed and Estimated Actual Value of Taxable Property 127 Property Tax Rates—All Direct and Overlapping Governments 128 Principal Property Taxpayers 129 Property Tax Levies and Collections 130 Ratios of Outstanding Debt by Type 131 Ratio of Net Outstanding Debt to Assessed Value and Net Bonded Debt Per Capita 132 Computation of Legal Debt Margin 133 Direct and Overlapping Governmental Activities Debt 134 Demographic and Economic Statistics 135 Principal Employers—Palm Beach County 136 Full-time-Equivalent Village Government Employees by Function/Program 137 Operating Indicators by Function/Program 138 Capital Asset Statistics by Function/Program 139 IV. REPORTING SECTION Independent Auditors' Report on Compliance and 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 140-141 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida 142-145 Independent Accountants' Report On Compliance Pursuant To Section 218.415 Florida Statutes 146 r. i INTRODUCTORY SECTION Village of Tequesta 345 Tequesta Drive 561-768-0700 Tequesta, FL 33469 - www.tequesta.org s i March 31, 2021 To the Honorable Mayor, Members of the Village Council And Citizens of the Village of Tequesta, Florida We are pleased to submit the Comprehensive Annual Financial Report of the Village of Tequesta, Florida (the Village), for the fiscal year ended September 30, 2020. This report provides the Village's Council, staff, our citizens, and other interested parties with detailed information concerning the financial condition and activities of the Village government. State law requires that all general-purpose local governments annually publish a complete set of financial statements within nine months of the close of each fiscal year. The financial statements are presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards and government auditing standards by an independent auditing firm. We believe that this report complies with these requirements and continues to present the Village's strong tradition of hill financial disclosure. This philosophy is reflected by the informative financial analysis,the exhibits and statistical tables included herein. The role of the Comprehensive Annual Financial Report 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; and • Assisting in evaluating the efficiency and effectiveness of Village operations. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the management of the Village. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to present fairly the financial position and results of operations of the Village; and that all disclosures necessary to enable the reader to gain an understanding of the Village's financial activity have been included. Marcum LLP, Certified Public Accountants, have issued an unmodified ("clean") opinion on the Village of Tequesta's financial statements for the fiscal year ended September 30, 2020. The independent auditors' report is located at the front of the financial section of this report. Management's discussion and analysis(MD&A) immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. i THE VILLAGE OF TEQUESTA Profile The Village of Tequesta, Florida is a municipal corporation organized on June 4, 1957 pursuant to Special Act 57-1915, Laws of Florida. It is approximately 2 square miles and is located in northern Palm Beach County, Florida. It is almost completely built-out/developed. The Village's growth potential is restricted by the natural boundaries of the Atlantic Ocean to the east,the Loxahatchee River to the west,the Town of Jupiter to the south and Martin County to the north. It is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time. The Village has a Council-Manager form of government. Policy-making and legislative authority are vested in an elected governing body of the Village consisting of a five-member Village Council. Council members are elected at large and select a Mayor at their first organizational meeting each year. Council members serve two-year terms,with three members elected every other year. The Village Council appoints the Village manager,who is responsible for hiring all Village employees. The Village provides a full range of services, including police and fire protection; building inspections; licenses and permits;the construction and maintenance of streets and other infrastructure, recreational and cultural activities, water utility services, storm water operations and contracts for residential refuse and recycling services. The Council is required to adopt an initial budget prior to the beginning of the fiscal year October 1. This annual budget serves as the foundation for the Village of Tequesta's financial planning and control. The budget is prepared by fund, function (e.g., public safety), and department(e.g., police) and is adopted by fund total. Departments may transfer resources within a department with the approval of the budget officer and the Village Manager. Transfers between departments require budget amendments be approved by the Village Council. The legal level of budgetary control is therefore at the department level. Local Economy and COVID-19 impact The Village, located in Palm Beach County, is the third most populous county in the State of Florida (approximately 1.47 million residents). The latest population estimate prepared by the Bureau of Economic and Business Research,University of Florida indicates that the current population of the Village of Tequesta is 5,874. Tequesta is home to middle to upper-income suburban families; has a small commercial area and no major industries located within its boundaries. It is home to a number of assisted living facilities,private schools and a high-end treatment center. ii The negative adjustments to the state's economy forecast resulted from the Coronavirus outbreak. Since July 2020, economic activity has slightly recovered as consumers redirected spending from the hard-hit service sector to purchases of goods, with some spending down the atypically large savings that built up during the pandemic. While all Florida industries have been impacted in the near term, Florida's leisure and hospitality industry has a longer-term impact. The total number of tourists declined by 60.3 percent from the prior year in the second quarter of 2020 and managed to recover to 35.4 percent of the prior year's level. The State's unemployment rate spiked to 13.8 percent in April 2020,dropped back to 6.4 percent by October 2020,notably better than the 6.9 percent for the nation as a whole.The unemployment rate for Palm Beach County at the fiscal year end was 6.2 percent. The prediction is that the rate continues to decrease until it reaches 3.7 percent from FY 2025-26 though FY 2027-28. Another important element of a state's economic health is personal income growth. Florida's personal income growth increased by 26.7 percent at an annual rate in the second quarter of 2020,due largely to the various federal stimulus and relief programs. Growth remains positive(+2.3 percent)for the 2020-21 fiscal year.Going forward,personal income is projected to decline by-1.1 percent in FY 2021-22 and then recover by+4.5 percent in FY 2022-23. The housing market has shown resiliency in the face of the pandemic. It continues to trudge forward, although slowing from the stronger growth in the first half of FY 2019-20. Tequesta continues to see a positive increase in property values. Per the Palm Beach County Property Appraiser's Office, gross taxable value for calculating ad valorem proceeds increased from$1.123 billion during fiscal year 2019 to $1.173 billion used to calculate fiscal year 2020 revenues. Long-Term Financial Planning and Major Initiatives The continued goal of the Village is to maintain a consistently high quality of services to the residents, while protecting the assets,the level of service and the quality of life that the residents have come to expect. It is the result of hard work by the Village staff, and fiscally sound,responsible decisions by the Village Council that allows the Village to meet service demands while minimizing the financial burden on its residents.The Village is very fortunate to have a citizenry that is active on many boards and committees,a working staff that has shown its willingness to take on additional responsibilities, an expanded workload and perhaps most importantly, a Village Council that is very responsive to the needs of the residents and staff and who donate so much of their time to this community. The Village's primary focus is providing exceptional municipal services to its residents in the most efficient and cost effective manner possible. Continued economic challenges require innovative approaches on both sides of the balance sheet. Efforts to expand contractual services to generate additional revenue should continue to be considered. The Village continues to explore grant funding options and partnerships in an effort to control cost while improving services and equipment. MAJOR INITIATIVES • Prepare a 5-year capital improvement/capital replacement plan and sustainable financing plan. • Make upgrades to the Water Treatment Plant, which includes energy conservation projects, to provide safe, reliable, cost-effective and environmentally responsible potable water. • Maintain a reliable drinking water supply by rehabilitating upper Floridian aquifer wells and construct a new surficial well. • To advance a long-range plan for the replacement of the aging water distribution system. • Develop a sustainable business plan for the new Community Center. • Long-term road and sidewalk improvement plan. iii • Continue to explore alternative revenue sources, at both the state and federal level, with the assistance of grant writers and other professional consultant services. • Develop and execute annexation strategy. • Continue to explore ways to reduce the cost of health care while sustaining sought after benefits. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Village for its comprehensive annual financial report for the fiscal year ended September 30, 2019. This was the thirty-eight consecutive year that the Village has received this prestigious award. The Village must publish an easily readable and efficiently organized comprehensive annual financial report.This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year. We believe that our current comprehensive annual financial report will continue to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Village's finance department as well as the support of the other Village departments. Special appreciation is also extended to Ms. Tatiana Racanati,Assistant Finance Director,whose dedicated service made the completion of this report all the more possible. In closing, we must also acknowledge the Mayor and Council for their unfailing support for maintaining the highest standards of professionalism in the management of the Village's finances. Respectfully submitted, •• e emy Allen, CPM Hugh B. Dunk ey, CPA, CGFO llage Manager Finance Director iv Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Village of Tequesta Florida For its Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2019 P. ;tom Executive Director/CEO v VILLAGE OF TEQUESTA, FLORIDA ORGANIZATION CHART SEPTEMBER 30, 2020 Residents of Tecluesta Vi Ilagc council Village Manager Village Attorney Executiveflsslstant Departments Human Resources Allagederk haanrcie Genera I Government Community Building DEvelopment Refuse&Recyding IT Code Enforcement Police Department Fire Rescue/EMS F—P-blir.Works leisure Services 14zt-rr Water UtllltySysrtem Utlllty Vl VILLAGE OF TEQUESTA, FLORIDA LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30,2020 VILLAGE COUNCIL Abby Brennan Mayor Kyle Stone Vice-Mayor Laurie Brandon Councilmember Frank D'Ambra Councilmember Bruce Prince Councilmember VILLAGE OFFICIALS Jeremy Allen, CPM Village Manager Corbett,White, Davis &Ashton, PA Village Attorney Lori McWilliams, MMC Village Clerk Hugh Dunkley, CPA, CGFO Finance Director Jim Trube Fire Chief Gus Medina Police Chief Merlene Reid, Ed.D., SPHR Human Resources Director NZ Consultants, Inc. Planning and Zoning Director Jose Rodriguez Building Director Greg Corbitt Parks and Recreation Director Matthew Hammond, PE Utilities Director VILLAGE INDEPENDENT AUDITORS Marcum LLP vii =i FINANCIAL SECTION i INDEPENDENT AUDITORS' REPORT MARCUM ACCOUNTANTS ADVISORS INDEPENDENT AUDITORS' REPORT To the Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements 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 Tequesta, Florida (the Village), as of and for the fiscal year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Village's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. © 1 MARCUMGROUP MEMBER Marcum uP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach,Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Village, as of September 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 18, the budgetary comparison schedule, the schedules of changes in the net pension liability (asset) and related ratios, the schedules of village contributions, the schedules of investment returns, the schedule of changes in total OPEB liability and related ratios and schedules of proportionate share of the net pension liability on pages 96 through 111 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village's basic financial statements. The combining and individual fund statements and schedules, the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with 2 auditing standards generally accepted in the United States of America by us and other auditors. In our opinion, based on our audit and the procedures performed as described above, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2021 on our consideration of the Village's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the Village's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village's internal control over financial reporting and compliance. PYk «f West Palm Beach, Florida March 31, 2021 3 i MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) Management's Discussion and Analysis 2020 Village of Tequesta, Florida Management's Discussion and Analysis As management of the Village of Tequesta, we offer 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, 2020.We encourage readers to consider the information presented here in conjunction with the additional information that we have furnished in the letter of transmittal found on pages i to iv of this report. Financial Hi2hli2hts • The assets and deferred outflows of resources of the Village of Tequesta exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $35,114,546. Of total net position, 24.7% ($8,678,044) is unrestricted and may be used to meet the ongoing obligations to the citizens and creditors. • The Village of Tequesta's total net position increased during the current period. Net position for governmental activities changed by $28,583. The business-type activities net position increased by $481,531 due mainly to increase in water rates. • At the close of the current fiscal year, the Village of Tequesta's governmental funds reported a change in combined fund balances of$159,958. • At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) reported in the general fund was $2,682,965. • Total deferred outflows of resources increased by $513,453 primarily as a result of changes in assumptions as well as net differences between projected and actual earnings for the Fire Pension Plan. • Other liabilities decreased by $622,711 from the previous year due primarily to employer pension contributions payable to the Police Pension Plan at the previous year-end. • The Village did not expend $750,000 or more in federal awards or state financial assistance in the fiscal year ended September 30, 2020 and therefore did not meet the threshold for a single audit according to the Florida Single Audit Act(section 215.97 F.S.) or OMB Uniform Guidance. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Village of Tequesta's basic financial statements. The Village's basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves. Government-wide Financial Statements: The government-wide financial statements are designed to provide readers with a broad overview of the Village of Tequesta's finances, in a manner similar to a private-sector business. 4 Management's Discussion and Analysis 2020 The statement of net position presents financial information on all of the Village of Tequesta's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Village of Tequesta is improving or deteriorating. The statement of activities presents information showing how the Village of Tequesta's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the Village of Tequesta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village includes general government, public safety, transportation and leisure services. The business-type activities of the Village includes water, stormwater and refuse and recycling. The government-wide financial statements can be found on pages 19-20 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village of Tequesta, like other state and local governments,uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the Village of Tequesta can be divided into three categories: governmental funds,proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and ou flows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village of Tequesta maintains five individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund which is considered a major fund. Data from the other four governmental funds is combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report. The Village of Tequesta adopts an annual appropriated budget for its governmental funds. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. The Village of Tequesta's governmental fund financial statements can be found on pages 21-24 of this report. 5 Management's Discussion and Analysis 2020 Proprietary Funds. The Village of Tequesta maintains one type of proprietary fund — enterprise funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Village of Tequesta uses enterprise funds to account for its water, stormwater,and refuse and recycling funds. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water Fund and the Stormwater Fund,major funds, as well as the Refuse and Recycling Fund,a nonmajor fund. The basic proprietary fund financial statements can be found on pages 25-27 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the Village. Fiduciary funds are not reported 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 Village of Tequesta maintains one type of fiduciary fund — a Pension trust fund which is used to report resources held in trust for retirees and beneficiaries covered by the Public Safety Pension Plan (which includes the Firefighters' Pension Trust Fund and the Police Officers' Pension Trust Fund) and the General Employees'Pension Plan. The fiduciary fund financial statements can be found on pages 28-29 of this report. Notes to basic financial statements: The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 30-95 of this report. Other information: In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Village of Tequesta's progress in funding its obligation to provide pension benefits and OPEB benefits to its employees, as well as the Village's net pension liability (asset) and related ratios, contributions and pension investment returns. Required supplementary information can be found on pages 96-111 of this report. The combining and individual fund statements and schedules referred to earlier in connection with non-major governmental funds and fiduciary funds are presented immediately following the required supplementary information on pensions and OPEB. Combining and individual fund statements and schedules can be found on pages 112-121 of this report. Government-wide Overall Financial Analysis Net position over time, may serve as a useful indicator of a government's financial position. In the case of the Village of Tequesta, assets and deferred outflows of resources exceeded liabilities and deferred inflows at the close of the most recent fiscal year. This change is discussed below. Village of Tequesta's Total Net Position The Village of Tequesta's total assets and deferred outflows exceeded total liabilities and deferred inflows by $35,114,546 at the close of the 2020 fiscal year. Net Position in governmental activities recorded an increase of 0.21%. The Village's business-type activities recorded a 2.30% increase in total net position. The majority of this change was due to a change of current and other assets by $(1,214,745). Other liabilities also decreased by $622,711, as well as an increase of $513,453 in deferred outflows of resources and a decrease of$387,497 of deferred inflows of resources related to pensions. As noted previously,the decrease in Other 6 Management's Discussion and Analysis 2020 liabilities was due mainly to a decrease in employer pension contributions payable to the Police Pension Plan at the end of the prior year. L_ Village of Position Governmental Business-type Activities Activites Total 2020 2019 2020 2019 2020 2019 Current and other assets $ 6,697,013 $ 7,310,056 $ 7,978,407 $ 8,580,109 $ 14,675,420 $ 15,890,165 Capital assets,net 11,564,350 11,746,340 17,423,098 16,968,979 28,987,448 28,715,319 Total assets 18,261,363 19,056,396 25,401,505 25,549,088 43,662,868 44,605,484 Total deferred outflows of resources 2,301,042 1,838,104 562,687 512,172 2,863,729 2,350,276 Noncurrent liabilities 4,350,233 3,957,976 3,626,914 3,948,240 7,977,147 7,906,216 Other liabilities 1,209,304 1,602,326 708,784 938,473 1,918,088 2,540,799 Total liabilities 5,559,537 5,560,302 4,335,698 4,886,713 9,895,235 10,447,015 Total deferred inflows ofresources 1,349,489 1,709,402 167,327 194,911 1,516,816 1,904,313 Net position Net investment in capital assets 10,473,238 10,470,562 14,166,351 13,012,584 24,639,589 23,483,146 Restricted Infrastructure 240,480 422,754 240,480 422,754 Debt Service 420,583 411,570 397,997 818,580 411,570 Building 652,877 1,151,130 652,877 1,151,130 Law Enforcement 84,976 81,991 84,976 81,991 Unrestricted 1,781,225 1,086,789 6,896,819 7,967,052 8,678,044 9,053,841 Total net position $ 13,653,379 $ 13,624,796 $ 21,461,167 $ 20,979,636 $ 35,114,546 $ 34,604,432 The largest portion of the Village's total net position (70.2%) represents investments in capital assets (e.g., land, buildings, machinery and equipment), less depreciation and any related outstanding debt and deferred inflows/outflows used to acquire those assets. The Village uses these capital assets to provide services to citizens; consequently, they 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. An additional portion of the Village of Tequesta's net position (5.1%)represents resources that are subject to external restrictions on how they may be used. The remaining balance of$8,678,044 is unrestricted and may be used to meet the government's ongoing obligations to its citizens and creditors. At the end of the current fiscal year, the Village of Tequesta is able to report positive balances in all categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. 7 Management's Discussion and Analysis 2020 Village of Tegnesta Components of NetPGsifiGn Re sfricted ■2019 Unrestricted ■2020 et In�-es C<ri�nt in - capital assets S- 510-000,000 S2 0.000.000 S.31i3.000.000 8 Management's Discussion and Analysis 2020 Village of Tequesta's Changes in Net Position Village of Tequesta Changes in Net Position Governmental Business-type Total Activities Activities 2020 2019 2020 2019 2020 2019 Revenues: Program Revenues: Charges for Services $ 2,729,630 $ 2,927,244 $ 7,290,781 $ 7,090,985 $ 10,020,411 $ 10,018,229 Operating Grants&Contributions 113,992 33,737 - - 113,992 33,737 General Revenues: Ad valorem Taxes 7,497,093 6,800,483 7,497,093 6,800,483 Other Taxes 1,711,817 2,222,910 1,711,817 2,222,910 Franchise fees on gross receipts 447,682 467,670 447,682 467,670 Unrestricted intergovernmental 807,939 861,647 807,939 861,647 Unrestricted investment earnings 54,602 133,769 59,333 147,356 113,935 281,125 Gain on sale of capital assets 21,976 24,597 - 2,222 21,976 26,819 Other Miscellaneous 19,996 27,131 46,014 37,290 66,010 64,421 Total Revenues 13,404,727 13,499,188 7,396,128 7,277,853 20,800,855 20,777,041 Expenses: General government 2,353,750 2,411,174 - - 2,353,750 2,411,174 Public safety 8,806,935 8,455,155 8,806,935 8,455,155 Transportation 1,496,229 1,436,674 1,496,229 1,436,674 Leisure Services 675,172 771,783 675,172 771,783 Interest expense/other fiscal charges 44,058 71,803 146,800 179,008 190,858 250,811 Water utility services - - 5,817,402 4,900,236 5,817,402 4,900,236 Stormwater services 453,776 485,566 453,776 485,566 Refuse&recycling services - - 496,619 480,268 496,619 480,268 Total Expenses 13,376,144 13,146,589 6,914,597 6,045,078 20,290,741 19,191,667 Increase in net position 28,583 352,599 481,531 1,232,775 510,114 1,585,374 Net position-beginning 13,624,796 13,272,197 20,979,636 19,746,861 34,604,432 33,019,058 Netposition-ending $ 13,653,379 $ 13,624,796 $ 21,461,167 $ 20,979,636 $ 35,114,546 $ 34,604,432 For fiscal year ended September 30, 2020, the Village of Tequesta's overall net position increased from the prior fiscal year. While revenues decreased slightly in the governmental activities and increased in the business-type activities, combined entitywide revenues exceeded expenses for fiscal year ended September 30, 2020 by $510,114. Revenues increased in business-type activities due mainly to an increase in water rates. Governmental Activities-Expenses and Program/General Revenues Governmental activities. Overall revenue from governmental activities decreased slightly from the prior year due to the net effects of an increase in property tax revenue, which was largely offset by decreases in permit fees and insurance premium tax funds received from the State of Florida for the Police Pension Plan. The increase in property tax revenue was primarily due to increases in property values, while the decrease in permit fees was mainly attributable to the effects of the COVID-19 pandemic. These increases allowed for an overall increase in net position of$28,583. 9 Management's Discussion and Analysis 2020 Expenses and Program.'General Revenues- Governmental Activities in Thousands 54,000 5 S.000 56 000 S 5,000 54,000 S3,000 52,000 st_Doa s0 Public Safety General GoVt Tran-sportation Leisure Interest onL-T Services debt ■kewnue:s ■E.xpenses The Village's programs/functions include General Government, Public Safety, Transportation and Leisure Services. The net cost shows the extent to which the Village's general revenues support each of the Village's programs/functions. The net cost of all governmental activities this year was $10,532,522, a 3.41% increase from the prior period. The largest increase in net cost was from the function of public safety due to an increase in expenditures for salary increases in accordance with collective bargaining agreements; an increase in fire pension contributions as well as increases in expenses related to the COVID-19 pandemic. As shown on the Statement of Activities, the functions directly benefiting from the programs generated revenue of $2,843,622 with $10,561,105 financed through general revenues. 10 Management's Discussion and Analysis 2020 The following is a comparison of revenues by source for governmental activities for fiscal year 2020 and 2019. Revenues b-,- Source - Governmental Activities in Thousands 53,000 2019 S7,000 2020 5�,000 S5.000 S4-,000 S3,000 S2,000 S 1-000 d I M � S0 4O Ns� - y , C� Business-type Activities. The Village of Tequesta's business-type activities reported operating revenues exceeding expenses by$376,184. Non-operating revenues were $105,347. This resulted in an increase in net position of$481,531 from the prior year. 11 Management's Discussion and Analysis 2020 Loud Revenues-Expenses-BusinessT�jie Acthities in Thousands S- M1nn ��, M1M1M1 S5.ao0 54,000 {2 nnn S 1.0 Cn 'Water Utility Refuse&Recycling Storm}rater r-tility ■R.ewnue ■Expenses As shown in the chart below, revenues from charges for services reported in business-type activities increased $199,796 from the prior year. Increased water rates in the Water Utility resulted in increased revenues of 4.7%or$196,815 from the prior year. The Stormwater Utility reported increases in revenues of 0.4% and Refuse and Recycling revenues remained fairly constant. Non-operating income includes investment earnings which decreased by 43.4%, as well as miscellaneous revenue from payments for the construction portion of the Tropic Vista water extension. Reveouesby Source - Business Type Acti%hies in Ihousands 5 8�000 S 7-000 56,O00 5 5,000 54_000 S3,000 S2:000 2020 2019 51.000 50 Char gesfor SerNiees Non-operating 12 Management's Discussion and Analysis 2020 Financial Analysis of the Village's Funds As noted earlier, the Village of Tequesta 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, unassigned fund balance may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to be used for a particular purpose by either an external party, the Village of Tequesta itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the Village of Tequesta's Council. At September 30, 2020 the Village of Tequesta's governmental funds reported total combined fund balances of$4,510,299. $1,884,304 (42%) of the combined governmental fund balances is unassigned and is available for spending at the Village's discretion. Approximately 20.7% or $933,102 is assigned or committed, with the largest portion committed to hurricane/disaster emergency. Approximately $1.4 million is restricted for a particular purpose (i.e. debt service, Law Enforcement Trust funds, etc.). $293,977 is in nonspendable form (i.e. inventories, prepaid items, etc.). Total combined fund balances have increased 3.68% from the prior year. Governmental Funds Components of Fund Balance September 30, 2020 and 2019 2019 ■Commirned ITT onsp endable ■R estri cte d ■Assigned ■Unassigned 2UO so 5.500.000 51-000-000 S 1.5 u u.0 C 0 S2.V u u u u u S2. u C.0 0 0 13 Management's Discussion and Analysis 2020 The General Fund is the chief operating fund of the Village of Tequesta. At the end of the current fiscal year total fund balance was $3,394,469, a decrease of$275,960 from the prior year. Unassigned fund balance of $1,884,304, increased by 27% from the prior year. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents approximately 15% of fiscal year 2020 General Fund expenditures and total fund balance represents approximately 28% of total expenditures. The Village of Tequesta adopted a policy to keep unassigned fund balance at a minimum of two months (17%) of expenditures. Ge ne ra L Fund Components of Fund Balance September 30,2 ?ll and 2019 2019 ■Committed ■N msp endable. ■R,estricted ■A.ssi9ned ■Unassi ned 2{G20 z z z S0 $500,000 $1,000,000 $1,500,000 $2,000,000 14 Management's Discussion and Analysis 2020 The amount of General Fund revenue by type, their percent of the total and the amount of change compared to last fiscal year are shown in the following schedule: General Fund Revenues—by Source SourcesGENERALFUND REVENUES Change Revenue I I of i ' . Ad valorem taxes $ 7,497,093 57.7% $ 696,610 10.2% $ 6,800,483 Other taxes 1,711,817 13.2% (511,093) (23.0)% 2,222,910 Charges for services 1,387,467 10.7% 111,300 8.7% 1,276,167 Intergovernmental 815,868 6.3% (53,724) (6.2)% 869,592 Intragovernmental 725,436 5.6% 28,836 4.1% 696,600 Franchise fees 447,682 3.4% (19,988) (4.3)% 467,670 Licenses and permits 680 % (652,817) (99.9)% 653,497 Rents and Royalties 218,931 1.7% 5,441 2.5% 213,490 Fines and forfeitures 11,708 0.1% (75,782) (86.6)% 87,490 Misc. grants and contributions 121,739 0.9% 69,982 135.2% 51,757 Investment earnings 48,065 0.4% (85,130) (63.9)% 133,195 Total Revenue $ 12,986,486 100% $ (486,365) (3.6)% $ 13,472,851 As noted in the table above,total General Fund revenues decreased by$486,365 ((3.6)%). The largest changes were due to: 1) increased ad valorem tax revenue resulting from increased property values; 2) decreased "other taxes" as a result of decreased insurance premium tax funds received from the state due to re-opening of the Police Pension Plan during the prior fiscal year; and(3) decreased licenses and permits due to the creation of a new Building Fund, a non-major Special Revenue fund. Expenditures in the General Fund are shown in the following schedule: FunctionL General Fund Expenditures by Fun ction/Classification Change 2020 ' of i ' 2019 Public Safety $ 7,385,605 60.2% $ (1,044,218) (12.4)% $ 8,429,823 General government 2,207,621 18.0% (68,279) (3.0)% 2,275,900 Transportation 1,309,050 10.7% 76,825 6.2% 1,232,225 Leisure services 603,268 4.9% (47,381) (7.3)% 650,649 Debt service 456,118 3.7% (11,541) (2.5)% 467,659 Capital outlay 298,728 2.4% 42,128 16.4% 256,600 Total expenditures $ 12,260,390 100% $ (1,052,466) (7.9)% $ 13,312,856 Total General fund expenditures decreased from the prior year by 7.9%. The decrease of$1,044,218 or 12.4%in Public Safety was primarily due to the transfer of the Building Department functions to a new non-major special revenue fund as well as decreased contributions to the Police Pension Fund, since less insurance premium tax funds were received during the fiscal year from the State of Florida. 15 Management's Discussion and Analysis 2020 Below is a graphical presentation of how the Village expends funds and how they compare to the prior period. General Fund-Expenditures by Source in Thousands 59,000 mow 202D OR, 3,000 �6,UD0 �S,UDO S�,DDO 5?.UDO 51.DDO 50 2019 N At September 30, 2020, ending fund balances for the Non-major Special Revenue funds are as follows: Building Fund - $655,933; Special Law Enforcement Fund - $84,976. The ending fund balances in the Non-major Capital Projects Fund are as follows: Capital Improvement Fund - $318,655; Capital Projects Fund - $56,266. Fund balances in these funds are restricted or assigned for capital projects/improvements; public safety/enforcement of the building code. The Building Fund derives its revenue primarily from building permit fees, while the Special Law Enforcement Fund receive its revenue from the U.S. Department of Justice from asset forfeitures/seizures. The Capital Projects Fund and the Capital Improvement Fund receive revenue from capital grants and transfers-in from other funds. General Fund Budgetary Highlights The General Fund original budgeted expenditures were decreased by $400,535. The Public Safety budget decreased by$501,477 as a result of a transfer of the Building Department to its own Special Revenue fund. Proprietary funds: The Village's proprietary funds provide the same type of information found in the government-wide financial statements,but in more detail. The table below summarizes the operating income (loss) and the change in net position for each of the Village's proprietary funds. At the end of the year, total net position of the proprietary funds was $21,461,167 an increase of $481,531 from the prior period as shown below. Other factors concerning the finances of this major fund have already been addressed in the discussion of the Village's business-type activities. 16 Management's Discussion and Analysis 2020 PROPRIETARY FUNDS Change in Operating IncomePosition Operating Income(Loss) Chan a in Net Position 2020 2019 2020 2019 Water $ 622,281 $ 1,288,042 $ 502,833 $ 1,256,234 Stormwater (21,421) (54,752) (13,241) (31,998) Refuse and Recycling (8,745) 6,625 (8,061) 8,539 $ 592,115 $ 1,239,915 $ 481,531 $ 1,232,775 Capital Assets and Debt Administration Capital assets: The Village's capital assets for its governmental and business-type activities total $28,987,448 (net accumulated depreciation) as of September 30, 2020. The Village acquired $3,206,158 in assets during the year and disposed of$384,553 during the year. Additional information on the Village's capital assets can be found in Note 3D, Capital Assets, starting on page 51 of this report. VILLAGE OF TEQUESTA Capital Assests Governmental Activities Business type Activities Total 2020 2019 2020 2019 2020 2019 Land $ 634,017 $ 634,017 $ 83,335 $ 83,335 $ 717,352 $ 717,352 Construction in progress 98,047 2,517 - 1,212,080 98,047 1,214,597 Buildings 8,043,526 8,043,526 979,512 979,512 9,023,038 9,023,038 Improvements 2,424,606 2,424,606 58,720 58,720 2,483,326 2,483,326 Infrastructure 5,138,363 4,965,348 36,414,112 34,192,913 41,552,475 39,158,261 Machinery&Equipment 4,797,293 4,730,380 2,200,049 1,935,101 6,997,342 6,665,481 Intangibles 274,455 274,455 129,096 129,096 403,551 403,551 Other-K-9 20,549 20,549 - - 20,549 20,549 Total capital assets 21,430,856 21,095,398 39,864,824 38,590,757 61,295,680 59,686,155 Less accumulated depreciation (9,866,506) (9,349,058) (22,441,726) (21,621,778) (32,308,232) (30,970,836) Total capital assets,net $ 11,564,350 $ 11,746,340 $ 17,423,098 $ 16,968,979 $ 28,987,448 $ 28,715,319 17 Management's Discussion and Analysis 2020 Noncurrent liabilities: At the end of the current fiscal year, the Village had a total of $7,977,147 of noncurrent liabilities. The largest portion are debt instruments in the form of promissory notes with Bank of America that are secured by general revenue sources. The table below summarizes the Village's debt position. In accordance with GASB Statements No's. 68 and 75,the Village recognized a net pension liability(NPL)of $2,546,737 and a total OPEB liability of $390,250, respectively. The Village is presenting the NPL and OPEB liability as separate components of the noncurrent liabilities on the face of the financial statements to present more clearly the Village's long-term pension and other post-employment benefit obligations. A more detailed explanation can be found in Note 3.K—Noncurrent Liabilities. Village of iLiabilities Governmental Activities Business-type Activities Total 2020 2019 2020 2019 2020 2019 Notes payable $ 712,790 $ 1,046,986 $ 3,119,112 $ 3,507,580 $ 3,831,902 $ 4,554,566 Capital leases 256,234 228,793 - - 256,234 228,793 Compensated absences 782,847 656,329 169,177 133,514 952,024 789,843 Total OPEB Liability 295,386 496,276 94,864 148,412 390,250 644,688 Noncurrent Liabilities 2,047,257 2,428,384 3,383,153 3,789,506 5,430,410 6,217,890 Net Pension Liability 2,302,976 1,529,592 243,761 158,734 2,546,737 1,688,326 Total Noncurrent Liabilities $ 4,350,233 $ 3,957,976 $ 3,626,914 $ 3,948,240 $ 7,977,147 $ 7,906,216 Economic Factors and Next Year's Budgets and Rates The following economic factors currently affect the Village of Tequesta and were considered in developing the 2020-2021 fiscal year budget: • The Village Council's decision to keep the millage rate constant at 6.6290. • Increase in gross taxable value of properties of 4.2%. • Projected Cost of Living Adjustment(COLA)increase of 3.85%for Fire Union members; 4.00%for Police employees; 3.08%for Communications Workers of America Union; 3.00%for all other non-union employees. • Interest rates have remained low as the Federal Reserve continues to monitor the progress of the economy amidst the COVID-19 pandemic. • The CPI remains lower than 3% • The U.S. Real Gross Domestic Product decreased by 3.5%during calendar year 2020. • The Village of Tequesta's proposed water rate increase of 3.5% to fund capital needs. Requests for Information This financial report is designed to provide a general overview of the Village of Tequesta's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Village of Tequesta, Finance Department, 345 Tequesta Drive, Tequesta, Florida 33469. 18 BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30,2020 Business- Governmental type Activities Activities Total Assets Cash $ 4,646,188 $ 6,570,007 $ 11,216,195 Investments 24,559 40,596 65,155 Receivables,net 754,879 1,042,957 1,797,836 Inventories 64,580 253,272 317,852 Prepaid items 229,397 71,575 300,972 Net pension asset 977,410 - 977,410 Capital assets not being depreciated 732,064 83,335 815,399 Capital assets being depreciated,net 10,832,286 17,339,763 28,172,049 Total Assets 18,261,363 25,401,505 43,662,868 Deferred Outflows of Resources Deferred outflows-pensions 2,286,629 390,494 2,677,123 Deferred outflows-OPEB 14,413 4,627 19,040 Deferred charge on refunding - 167,566 167,566 Total Deferred Outflows of Resources 2,301,042 562,687 2,863,729 Liabilities Accounts payable 440,596 581,770 1,022,366 Accrued liabilities 591,730 86,712 678,442 Customer deposits - 39,956 39,956 Unearned revenue 172,420 - 172,420 Due to other governments 4,558 346 4,904 Noncurrent liabilities: Due within one year 522,782 412,997 935,779 Due in more than one year 1,229,089 2,875,292 4,104,381 Total OPEB liability 295,386 94,864 390,250 Net pension liability 2,302,976 243,761 2,546,737 Total Liabilities 5,559,537 4,335,698 9,895,235 Deferred Inflows of Resources Deferred inflows-pensions 1,349,489 167,327 1,516,816 Total Deferred Inflows of Resources 1,349,489 167,327 1,516,816 Net Position Net investment in capital assets 10,473,238 14,166,351 24,639,589 Restricted: Infrastructure 240,480 - 240,480 Debt Service 420,583 397,997 818,580 Building 652,877 - 652,877 Law Enforcement 84,976 - 84,976 Unrestricted 1,781,225 6,896,819 8,678,044 Total Net Position $ 13,653,379 $ 21,461,167 $ 35,114,546 The accompanying notes are an integral part of these financial statements. 19 VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Net(Expense)Revenue and Program Revenues Changes in Net Position Primary Government Operating Capital Grants Charges for Grants and and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government Governmental Activities General government $ 2,353,750 $ 1,150,219 $ $ $ (1,203,531) $ $ (1,203,531) Public safety 8,806,935 1,552,009 105,492 8,500 (7,140,934) (7,140,934) Transportation 1,496,229 - - - (1,496,229) (1,496,229) Leisure services 675,172 27,402 (647,770) (647,770) Interest on long-term debt 44,058 - - - (44,058) (44,058) Total governmental activities 13,376,144 2,729,630 105,492 8,500 (10,532,522) (10,532,522) Business-type Activities Water 5,964,202 6,370,552 - - 406,350 406,350 Stormwater utility 453,776 432,355 (21,421) (21,421) Refuse and Recycling 496,619 487,874 (8,745) (8,745) Total business-type activities 6,914,597 7,290,781 - 376,184 376,184 Total primary government $ 20,290,741 $ 10,020,411 $ 105,492 $ 8,500 (10,532,522) 376,184 (10,156,338) General Revenues Ad valorem taxes 7,497,093 - 7,497,093 Utility taxes 645,267 645,267 Communication service tax 302,967 302,967 Insurance premium taxes 263,315 263,315 Infrustructure surtax 404,870 404,870 Business taxes 95,398 95,398 Franchise fees based on gross receipts 447,682 447,682 Unrestricted intergovernmental revenues 807,939 - 807,939 Unrestricted investment earnings 54,602 59,333 113,935 Gain on sale of capital assets 21,976 - 21,976 Miscellaneous revenues 19,996 46,014 66,010 Total general revenues 10,561,105 105,347 10,666,452 Change in net position 28,583 481,531 510,114 Net Position-Beginning 13,624,796 20,979,636 34,604,432 Net Position-Ending $ 13,653,379 $ 21,461,167 $ 35,114,546 The accompanying notes are an integral part of these financial statements. 20 VILLAGE OF TEQUESTA,FLORIDA BALANCESHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2020 Other Total General Governmental Governmental Fund Funds Funds Assets Cash $ 3,487,221 $ 1,158,967 $ 4,646,188 Investments 24,559 - 24,559 Receivables,net 754,874 5 754,879 Inventories 64,379 201 64,580 Prepaid items 226,542 2,855 229,397 Total Assets $ 4,557,575 $ 1,162,028 $ 5,719,603 Liabilities Accounts payable $ 413,069 $ 27,527 $ 440,596 Accrued liabilities 576,429 15,301 591,730 Unearned revenue 172,420 - 172,420 Due to other governments 1,188 3,370 4,558 Total Liabilities 1,163,106 46,198 1,209,304 Fund Balances Nonspendable: Inventories 64,379 201 64,580 Prepaid items 226,542 2,855 229,397 Restricted: Infrastructure - 240,480 240,480 Debt Service 420,583 - 420,583 Building - 652,877 652,877 Law Enforcement - 84,976 84,976 Committed to: Disaster Reserve 500,000 - 500,000 Capital Projects - 46,485 46,485 Assigned to: Capital Projects - 41,393 41,393 Subsequent years budget 298,661 46,563 345,224 Unassigned: General Fund 1,884,304 - 1,884,304 Total Fund Balances 3,394,469 1,115,830 4,510,299 Total Liabilities and Fund Balances $ 4,557,575 $ 1,162,028 $ 5,719,603 The accompanying notes are an integral part of these financial statements. 21 VILLAGE OF TEQUESTA,FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30,2020 Amounts reported for governmental activities in the statement of net position are different because: Total Fund Balances-Governmental Funds $ 4,510,299 Net pension asset is not considered to represent a financial asset in the governmental funds. 977,410 Net capital assets used in the governmental activities are not financial resources and,therefore are not reported in the governmental funds. 11,564,350 Deferred outflows of resources related to pensions and OPEB transactions not reported in the governmental funds. 2,301,042 Deferred inflows of resources related to pension transactions not recognized in the governmental funds. (1,349,489) Long-term liabilities,including notes payable,are not due and payable in the current period and,therefore, are not reported in the governmental funds. (1,751,871) Total OPEB liability is not due and payable in the current period and,therefore, not reported in the governmental funds. (295,386) Net pension liability is not due and payable in the current period and, therefore,not reported in the funds. (2,302,976) Net Position of Governmental Activities $ 13,653,379 The accompanying notes are an integral part of these financial statements. 22 VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Other Total General Governmental Governmental Fund Funds Funds Revenues Ad valorem taxes $ 7,497,093 $ - $ 7,497,093 Other taxes 1,711,817 - 1,711,817 Charges for services 1,387,467 215 1,387,682 Intergovernmental 815,868 - 815,868 Intragovernmental 725,436 - 725,436 Licenses and permits 680 385,193 385,873 Franchise fees 447,682 - 447,682 Rents and royalties 218,931 - 218,931 Miscellaneous 19,941 55 19,996 Fines and forfeitures 11,708 - 11,708 Grants,contributions and donations 101,798 4,265 106,063 Investment earnings 48,065 6,537 54,602 Total Revenues 12,986,486 396,265 13,382,751 Expenditures Current: General government 2,207,621 - 2,207,621 Public safety 7,385,605 668,401 8,054,006 Transportation 1,309,050 - 1,309,050 Leisure services 603,268 - 603,268 Capital outlay 298,728 421,283 720,011 Debt service: Principal 412,060 - 412,060 Interest 44,058 - 44,058 Total Expenditures 12,260,390 1,089,684 13,350,074 Excess(Deficiency)of Revenues Over Expenditures 726,096 (693,419) 32,677 Other Financing Sources(Uses) Transfers in 195,378 1,324,715 1,520,093 Transfers out (1,324,715) (195,378) (1,520,093) Proceeds on sale of capital assets 21,976 - 21,976 Issuance of debt 105,305 - 105,305 Total other financing sources(uses) (1,002,056) 1,129,337 127,281 Total other financing sources(uses) (1,002,056) 1,129,337 127,281 Net change in fund balances (275,960) 435,918 159,958 Fund Balances-Beginning 3,670,429 679,912 4,350,341 Fund Balances-Ending $ 3,394,469 $ 1,115,830 $ 4,510,299 The accompanying notes are an integral part of these financial statements. 23 VILLAGE OF TEQUESTA,FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances-total governmental funds $ 159,958 Governmental funds report capital outlay as expenditures. However,in the statement of activities,the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation/amortization in the current period. The details of the difference are as follows: Capital outlay 720,011 Depreciation/amortization expense (899,484) (179,473) The effect of transactions involvin capital assets as follows: Disposition of capital asset (2,516) (2,516) The issuance of long-term debt provides current financial resources to governmental funds,while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.Neither transaction,however,has any effect on net position. Proceeds for capital lease (105,305) Payment on notes payable 334,196 Payment on capital lease 77,864 306,755 Some revenues and expenses reported in the statement of activities do not require the use of current financial resources and,therefore,are not reported in governmental funds: The details of the difference are as follows: Compensated absences (126,518) Total OPEB liability 188,640 Net pension liability (318,263) (256,141) Change in net position of governmental activities $ 28,583 The accompanying notes are an integral part of these financial statements. 24 VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2020 Business-type Activities Nonmajor Water Refuse& Fund Stormwater Recycling Total Assets Current Assets: Cash $ 5,412,380 $ 1,001,433 $ 156,194 $ 6,570,007 Investments 40,596 - - 40,596 Receivables,net 1,036,918 2,990 3,049 1,042,957 Inventories 252,814 458 - 253,272 Prepaid items 70,874 701 - 71,575 Total Current Assets 6,813,582 1,005,582 159,243 7,978,407 Non-current Assets: Capital assets not being depreciated 83,335 - - 83,335 Capital assets being depreciated,net 15,992,545 1,347,218 - 17,339,763 Total Non-Current Assets 16,075,880 1,347,218 - 17,423,098 Total Assets 22,889,462 2,352,800 159,243 25,401,505 Deferred Outflows of Resources Deferred outflows-pensions 366,951 23,543 - 390,494 Deferred outflows-OPEB 4,283 344 - 4,627 Deferred charge on refunding 167,566 - - 167,566 Total Deferred Outflows of Resources 538,800 23,887 - 562,687 Liabilities Current Liabilities: Accounts payable $ 222,684 $ 318,420 $ 40,666 $ 581,770 Accrued liabilities 82,300 4,412 - 86,712 Customer deposits 39,956 - - 39,956 Compensated absences 15,000 - - 15,000 Due to other governments 346 - - 346 Notes payable 397,997 - - 397,997 Net pension liability 315 - - 315 Total Current Liabilities 758,598 322,832 40,666 1,122,096 Noncurrent Liabilities: Compensated absences 153,164 1,013 - 154,177 Notes payable 2,721,115 - - 2,721,115 Net pension liability 242,571 875 - 243,446 Total OPEB liability 87,806 7,058 - 94,864 Total Noncurrent Liabilities 3,204,656 8,946 - 3,213,602 Total Liabilities 3,963,254 331,778 40,666 4,335,698 Deferred Inflows of Resources Deferred inflows-pensions 156,780 10,547 - 167,327 Total Deferred Inflows of Resources 156,780 10,547 - 167,327 Net Position Net investment in capital assets 13,112,193 1,054,158 - 14,166,351 Restricted: Debt Service 397,997 - - 397,997 Unrestricted 5,798,038 980,204 118,577 6,896,819 Total Net Position $ 19,308,228 $ 2,034,362 $ 118,577 $ 21,461,167 The accompanying notes are an integral part of these financial statements.25 VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Business-type Activities Nonmaj or Water Refuse& Fund Stormwater Recycling Total Operating Revenues Charges for services: Metered water sale $ 6,288,962 $ - $ - $ 6,288,962 Tap fees 81,131 - - 81,131 Stormwater fees - 432,355 - 432,355 Refuse and recycling fees - - 487,874 487,874 Total Operating Revenues 6,370,093 432,355 487,874 7,290,322 Operating Expenses Cost of sales and services: Plant production 1,876,089 - - 1,876,089 Distribution 1,719,865 - - 1,719,865 Stormwater - 319,181 - 319,181 Purchased services - - 488,171 488,171 Management services 598,596 14,292 8,448 621,336 Administration 853,617 - - 853,617 Depreciation/amortization 699,645 120,303 - 819,948 Total Operating Expenses 5,747,812 453,776 496,619 6,698,207 Operating Income(Loss) 622,281 (21,421) (8,745) 592,115 Non-Operating Revenues(Expenses) Miscellaneous revenue 46,473 - - 46,473 Investment earnings 50,469 8,180 684 59,333 Interest expense (146,800) - - (146,800) Legal settlement (69,590) - - (69,590) Total Non-Operating Revenues(Expenses) (119,448) 8,180 684 (110,584) Change in Net Position 502,833 (13,241) (8,061) 481,531 Net Position-Beginning 18,805,395 2,047,603 126,638 20,979,636 Net Position-Ending $ 19,308,228 $ 2,034,362 $ 118,577 $ 21,461,167 The accompanying notes are an integral part of these financial statements. 26 VILLAGE OF TEQUESTA,FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Business-type Activities Water Storm Water Refuse Fund Fund Non Major Fund Totals Cash Flows from Operating Activities Cash received from customers,governments and other funds $ 6,190,293 $ 433,017 $ 488,066 $ 7,111,376 Cash paid to suppliers (3,632,305) (174,241) (455,953) (4,262,499) Cash paid to employees (2,064,309) (126,570) - (2,190,879) Net Cash Provided by Operating Activities 493,679 132,206 32,113 657,998 Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets (834,479) (182,393) - (1,016,872) Principal payments on long-term debt (388,468) - - (388,468) Interest paid (146,800) - - (146,800) Net Cash Used in Capital and Related Financing Activities (1,369,747) (182,393) - (1,552,140) Cash Flows from Investing Activities Interest and micsellaneous income 27,352 8,180 684 36,216 Sale of investments 5,255,594 911,109 70,094 6,236,797 Net Cash Provided by Investing Activities 5,282,946 919,289 70,778 6,273,013 Net Increase in Cash and Cash Equivalents 4,406,878 869,102 102,891 5,378,871 Cash and Cash Equivalents-Beginning 1,005,502 132,331 53,303 1,191,136 Cash and Cash Equivalents-Ending $ 5,412,380 $ 1,001,433 $ 156,194 $ 6,570,007 Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities Operating income(loss) $ 622,281 $ (21,421) $ (8,745) $ 592,115 Adjustments to reconcile operating Income to net cash provided by operating activities: Depreciation/Amortization 699,645 120,303 - 819,948 Changes in operating assets,liabilities and deferred inflows/ outflows of resources: (Increase)decrease in: Accounts receivable (183,708) 662 192 (182,854) Inventories (71,319) 74 - (71,245) Deferred outflow of resources (46,577) (3,938) - (50,515) Prepaid items (2,764) 639 - (2,125) Increase(decrease)in: Accounts payable (577,589) 39,810 40,666 (497,113) Accrued liabilities 6,260 50 - 6,310 Customer deposits 3,908 - - 3,908 Compensated absences 36,824 (1,161) - 35,663 Deferred inflows of resources (28,484) 900 - (27,584) Net pension liability 84,381 646 - 85,027 Due to other governments 11 - - 11 Total OPEB liability (49,190) (4,358) - (53,548) Net Cash Provided by Operating Activities $ 493,679 $ 132,206 $ 32,113 $ 657,998 The accompanying notes are an integral part of these financial statements. 27 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30,2020 Pension Trust Funds Assets Cash and cash equivalents $ 338,597 Investments Equities 17,592,785 Fixed Income 6,147,924 Real Estate Fund 1,917,373 Total investments 25,658,082 Accounts receivable 288,566 Contributions receivable 71,134 Accrued interest receivable 22,316 Prepaid items 35,331 Total Assets 26,414,026 Liabilities Accounts payable 33,122 Due to broker 21,622 Total Liabilities 54,744 Net Position Restricted for Pension Benefits $ 26,359,282 The accompanying notes are an integral part of these statement. 28 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Pension Trust Funds Additions Contributions: State of Florida $ 263,314 Employer 834,359 Employee 352,485 Total Contributions 1,450,158 Investment Earnings Net appreciation in fair value of investments 1,622,813 Gain on sale of investments 139,121 Interest and dividends 442,227 2,204,161 Less investment expenses (93,107) Net Investment Earnings 2,111,054 Miscellaneous 2,354 Total Additions 3,563,566 Deductions Benefits paid 427,313 Refund of contributions 104,053 Administrative expenses 106,401 Total Deductions 637,767 Change in Net Position 2,925,799 Net Position Restricted for Pension Benefits Beginning of year 23,433,483 End of year $ 26,359,282 The accompanying notes are an integral part of these statement. 29 r.� -s NOTES TO BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Note 1—Summary of Significant Accounting Policies A. Description of'Government-Wide Financial Statements The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all non-fiduciary activities of the primary government and any component units. All fiduciary funds are presented separately. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other non-exchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. B. Reporting Entity The Village of Tequesta, Florida (the Village) is a municipal corporation organized in 1957 pursuant to Special Act 57-1915, Laws of Florida. The Village has a Council-Manager form of government governed by a five (5) member Council elected at large. Each year, the Council appoints one of its members Mayor, to serve at the pleasure of Council for one year. The Village's major operations include public safety (police, fire rescue/EMS, building and code enforcement), transportation (streets and roads), leisure services (culture and recreation), water, stormwater, refuse &recycling services and general and administrative. The definition of the financial reporting entity is based upon the concept that elected officials are accountable to their constituents for their actions. One of the objectives of financial reporting is to provide users of financial statements with a basis for assessing the accountability of the elected officials. The financial reporting entity consists of the Village, organizations for which the Village is financially accountable and other organizations for which the nature and significance of their relationship with the Village are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. The Village is financially accountable for a component unit if it appoints a voting majority of the organization's governing board and it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the Village, or has operational responsibility. The Village has no component units to report. The financial statements of the Village have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. C. Basis of Presentation—Government-Wide Financial Statements While separate government-wide and fund financial statements are presented,they are interrelated. Both sets of statements distinguish between the governmental and business-type activities of the Village. The governmental activities column incorporates data from governmental funds while business-type activities incorporate data from the Village's enterprise funds. 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. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the Village's water and various other functions of the government. Elimination of these VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 charges would distort the direct costs and program revenues reported for the various functions concerned. The Statement of Net Position reports all financial and capital resources of the Village's governmental and business-type activities. Governmental activities are those supported by taxes and intergovernmental revenues. Business-type activities rely to a significant extent on fees and charges for support. 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 for goods or services that are recovered directly from customers for services rendered 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. D. Basis of'Presentation—Fund Financial Statements The fund financial statements provide information about the Village's funds, including its fiduciary funds. Separate statements for each fund category— governmental, proprietary and fiduciary— are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Fiduciary funds are presented apart from major and nonmajor funds. The Village reports the following major governmental fund: The General Fund is the Village's primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. The Village reports the following major enterprise funds: The Water Fund, which accounts for the activities of the water utility, which includes the processing and distribution of potable water to Village residents and some surrounding communities, and the Stormwater Utility Fund, which accounts for the construction and maintenance of the Village's stormwater system. Additionally,the Village reports the following fund type: The pension trust funds account for the activities of the Public Safety Employees' (Police and Fire) and the General Employees' Pension Trust Funds, which accumulate resources for pension benefit payments to qualified employees. During the course of operations, the Village has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds (short-term) and advances to/from other funds (long-term). While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in the business-type activities (i.e., the enterprise 31 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. E. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus 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 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. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose,the Village considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. Capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the Village. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The proprietary funds are reported using the economic resources measurement focus and the accrual basis of accounting for reporting its assets and liabilities and deferred inflows and outflows of resources (as described previously). The pension trust funds 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 the plan. All plan investments are reported at fair value, except for a money market fund which is reported at amortized cost; securities traded in the over-the-counter market and listed securities for which no sales were reported on that date are valued at the last reported bid price. Securities without an established fair value are reported at estimated fair value. Purchases and sales of securities are recorded on a trade-date basis. F. Budgetary Information 1. Budgetary Basis of Accounting Annual budgets are adopted on a basis consistent with generally accepted accounting principles. The appropriated budget is prepared by fund, function and department. Per established procedures approved by the Village Council, the designated budget officer may approve a department head's request to transfer appropriations between accounts, within a department. Although the Village Council requires all inter-department budget amendments to go before the Village Council, the budget was adopted on a fund basis and the legal level of budgetary control is at that level. What this means is that any amendments that change the total fund's budget requires the Village Council to approve it in the same manner that the original budget was approved—by resolution. Appropriations in all budgeted funds lapse at the end of the fiscal year even if they have related encumbrances. Encumbrances are commitments related to unperformed (executory) contracts for goods or services (i.e., purchase orders, contracts, and commitments). Encumbrance accounting is utilized to the extent necessary to assure effective budgetary control and accountability and to facilitate effective cash planning and control. While all appropriations and encumbrances lapse at year end, valid outstanding encumbrances (those for which performance under the executor contract is expected in the next year) are re-appropriated and become part of the subsequent year's budget pursuant to state regulations. 33 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 G.Assets,Liabilities,Deferred OutflowsJnflows of'Resources, and Net Position/Fund Balance 1. Cash The Village's cash is considered to be cash on hand and demand deposits. 2. Investments Investments for the Village are reported at fair value, except for the position in the State Board of Administration Investment Pool (SBA). Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The SBA administers Florida PRIME and is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 215 and 218 of the Florida Statutes. These rules provide guidance and establish the policies and general operating procedures for the administration of the Florida PRIME. Florida PRIME invests in a pool of investments whereby the Village owns a share of the respective pool, not the underlying securities. Florida PRIME is reported at amortized cost and is exempt from the GASB No. 72 fair value hierarchy disclosures. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories consist of expendable supplies and water distribution repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 4. Capital Assets Capital assets, which include property, plant, equipment, infrastructure and intangible assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets, except for infrastructure and intangible assets, are defined by the Village as assets with an initial, individual cost of $1,000 or more and an estimated useful life in excess of one year. For infrastructure and intangible assets the same estimated minimum useful life is used (in excess of one year), but only those projects that cost more than $25,000 are reported as capital assets. hi the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the Village chose not to capitalize infrastructure acquired in fiscal years ending prior to September 30, 2004. As the Village constructs or acquires additional capital assets each period they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or increase its estimated useful life. Donated capital assets are recorded at their acquisition value at the date of donation. 34 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the primary government are depreciated using the straight line method over the following estimated useful lives: Buildings 20—40 years Improvements 20— 50 years Infrastructure 20— 50 years Machinery and equipment 5 — 15 years Intangibles 5 —20 years 5. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position reports a separate section for deferred ou flows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The Village has three items that qualify for reporting in this category. They are; 1) Deferred outflows related to pensions; 2) Deferred outflows related to OPEB; and 3) Deferred charge on refunding resulting from the difference in the carrying value of refunded debt and its reacquisition price, and is amortized over the shorter of the life of the refunded or refunding debt. These items are reported in the government-wide statement of net position and the statement of net position of the proprietary funds. In addition to liabilities,the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The Village has one type of item that qualifies for reporting in this category - Deferred inflows related to pensions. This item is reported in the government-wide statement of net position and the statement of net position of the proprietary funds. 6. Net Position Flow Assumption Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources (e.g. restricted bond or grant proceeds). In order to calculate the amounts to report as restricted net position and unrestricted net position, in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Village's policy to consider restricted net position to have been depleted before unrestricted net position is applied. 7. Fund Balance Flow Assumptions Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the Village's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 35 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 8. Fund Balance Policies The Village classifies fund balance in accordance with GASB Statement No.54 Fund Balance Reporting and Governmental Fund Type Definitions. This statement enhances the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. In the fund financial statements, governmental funds report classifications that comprise a hierarchy based primarily on the extent to which the Village is bound to honor constraint of the specific purposes for which amounts in those funds can be spent. The Village reports the following fund classifications: Nonspendable fund balance. Nonspendable fund balances are amounts that cannot be spent because they are either not in spendable form such as inventory or legally or contractually required to be maintained intact such as a perpetual trust. Restricted fund balance. Restricted fund balances are amounts that are constrained by the imposition externally by creditors, grantors, or laws or regulations of other governmental agencies or imposed by law through constitutional provisions or enabling legislation. Committed fund balance. Those amounts can only be used for specific purposes determined by a formal action of the government's highest level of decision-making authority. The Village Council is the highest level of decision-making authority for the Village that can, by adoption of an ordinance or resolution equally binding and of equal decision-making authority, prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance or resolution remains in place until a similar action is taken (the adoption of another ordinance or resolution)to remove or revise the limitation. Assigned fund balance. Amounts in the assigned fund balance classification are intended to be used by the Village for specific purposes but do not meet the criteria to be classified as committed. The Village Council (Council) has, by adopting a fund balance policy, authorized the Village Manager and/or the Finance Director to assign fund balance. The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. Unassigned fund balance. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. The General Fund is the only fund that reports a positive unassigned fund balance amount. The other governmental funds may report negative unassigned fund balance if that fund's expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes. 36 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 H.Revenues and Expenditures/Expenses 1. Program Revenues Amounts reported as 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 (including special assessments) that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues. 2. Property Taxes Property tax collections are governed by Chapter 197, Florida Statutes. Property taxes are based on assessed property value at January 1st as determined by the Palm Beach County Property Appraiser. The Village sets the property tax millage rate in September. The Palm Beach County Tax Collector bills and collects all property taxes levied within the County. Florida Statutes limit the county-wide millage rate to a maximum of 10 mills, excluding voter-approved debt service millage rates. The millage rate for the Village in fiscal year 2020 was 6.6290 mills. Tax bills are mailed out November 1st and discounts are available for payments made in the following months; November 4%, December 3%, January 2% and February 1%. Taxes become delinquent on April 1st. The owner of a tax certificate may at any time after taxes have been delinquent (April 1), for two years, file an application for a tax deed sale. Tax deeds are issued to the highest bidder for the property which is sold at public auction. The Tax Collector remits current taxes collected through four distributions to the Village in the first two months of the tax year and one distribution each month thereafter. The Village recognizes property tax revenue in the period in which they are levied. The Tax Collector pays the Village interest on monies held from day of collection to day of distribution. 3. Compensated Absences Vacation The Village's policy permits employees to accumulate earned but unused vacation benefits, which are eligible for payment upon separation from the Village's service up to the maximum allowable limit. The liability for such leave is reported as incurred in the government-wide and proprietary fund financial statements. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. The liability for compensated absences includes salary-related benefits,where applicable. Sick Leave The Village's policy permits employees to accumulate unused sick leave up to a maximum amount approved by Council. Upon termination, this leave is eligible for payment at percentages determined by years of service. The liability for such leave is reported as incurred in the government-wide and proprietary fund financial statements when the liability has matured. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. 37 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 4. Proprietary Funds Operating and Non-Operating Revenues and Expenses Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water fund, refuse and recycling fund and stormwater fund are charges to customers for sales and services. The water fund also recognizes as operating revenue, the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for the enterprise funds 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. L Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. J. Implementation of new GASB Statement The Village of Tequesta implemented GASB Statement No. 83, Certain Asset Retirement Obligations, during fiscal year 2020. This Statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for certain asset retirement obligations (ARO's). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. The implementation of this pronouncement did not result in a financial impact to the Village. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 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 The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that "capital assets used in governmental activities are not financial resources and, therefore are not reported in the funds." The amount of this reconciling element is $11,564,350 as explained in the following detail (additional details shown in Note 3.D.): Capital assets not being depreciated: Land $ 634,017 Construction in progress 98,047 Capital assets being depreciated: Buildings,net 4,713,986 Improvements other than buildings,net 876,199 Infrastructure,net 3,946,468 Machinery and equipment,net 1,250,551 Intangibles,net 31,872 Other K-9,net 13,210 Net Adjustment to Increase Fund Balance- Total Governmental Funds to Arrive at Net Position - Governmental Activities $ 11,564,350 Another element of that reconciliation explains that "long-term liabilities, including bonds/notes payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this $1,751,871 difference are as follows: Note payable $ 712,790 Capital leases 256,234 Compensated absences 782,847 Net Adjustment to Reduce Fund Balance- Total Governmental Funds to Arrive at Net Position—Governmental Activities $ 1,751,871 39 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Note 3—Detailed Notes on All Activities and Funds A. Cash Deposits with Financial Institution Custodial credit risk-deposits. In the case of deposits, this is the risk that in the event of a bank failure,the government's deposits may not be returned to it. All of the Village's deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280,Florida Security for Public Deposits Act. Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral of the depository to be held subject to his or her order. The pledging level may range from 25% to 200% of the average monthly balance of public deposits depending upon the depository's financial condition and establishment period. All collateral must be deposited with an approved financial institution. Any potential losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. At September 30, 2020, none of the Village's primary bank balances were exposed to custodial credit risk. B. Investments The Village has adopted an investment policy in accordance with Florida Statutes and is authorized to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, certificates of deposit, the State Board of Administration Investment Pool, any intergovernmental investment pools authorized pursuant to Chapter 163 of the Florida Statutes, SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency, and securities of any interest in any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio is limited to obligations of U.S. government, its agencies and instrumentalities and to repurchase agreements fully collateralized by such U.S. government obligations and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. The State Board of Administration (SBA) administers the Florida PRIME investment pool which is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes. The Florida PRIME is not a registrant with the Securities and Exchange Commission (SEC). As a participant,the Village invests in a pool of investments owning a share of the pool, not the underlying securities. The value of the Village's participation is the same as the value of the pool shares. The investments in the Florida PRIME are reported at amortized cost and not insured by FDIC or any other governmental agency. GASB Statement No. 79, Certain External Investment Pool and Pool participants establishes criteria for an external investment pool to qualify to report at amortized cost. Florida PRIME is exempt from the GASB No. 72 fair value hierarchy disclosures and reports at amortized cost. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 As of September 30, 2020,the Village had the following demand deposits and investments: Weighted Credit Average Rating Percent Deposits and Investments Reported Value Maturity (S&P) Distribution SBA-Florida PRIME $ 65,155 48 days AAAm 0.58% Demand deposits 11,216,195 99.42% Total Deposits and Investments $ 11,281,350 100% Interest Rate Risk — The Village does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates nor do they have any investments that are subject to interest rate risk. Credit Risk- The Village does not have a written investment policy and,therefore, follows Florida Statue 218.415(17). The Village invests surplus funds in the State Board of Administration Investment Pool. The Florida PRIME is rated by Standard and Poor's. Concentration of Credit Risk—Disclosure is required when the percentage of investments is 5%or more in any one issuer or 5%or more of total investments. At September 30, 2020,the Village only invests in an external investment pool and therefore is not subject to concentration of credit risk. Custodial Credit Risk - The risk that, in the event of the failure of the counter party, the Village will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At this time, the Village is only invested in the State Board of Administration of Florida(SBA) investment pool. Investment Pools and Pool Participants With regard to SBA - Florida PRIME redemption dates, Chapter 218.409(8) (a), Florida Statutes, states, "The principal, and any part thereof, of each account constituting the trust fund is subject to payment at any time from the moneys in the trust fund. However, the Executive Director may, in good faith, on the occurrence of an event that has a material impact on liquidity or operations of the trust fund, for 48 hours limit contributions to or withdrawals from the trust fund to ensure that the Board can invest moneys entrusted to it in exercising its fiduciary responsibility. Such action must be immediately disclosed to all participants, the Trustees, the Joint Legislative Auditing Committee, the Investment Advisory Council, and the Participant Local Government Advisory Council. The Trustees shall convene an emergency meeting as soon as practicable from the time the Executive Director has instituted such measures and review the necessity of those measures. If the Trustees are unable to convene an emergency meeting before the expiration of the 48-hour moratorium on contributions and withdrawals, the Executive Director may extend the moratorium until the Trustees are able to meet to review the necessity for the moratorium. If the Trustees agree with such measures, the Trustees shall vote to continue the measures for up to an additional 15 days. The Trustees must convene and vote to continue any such measures before the expiration of the time limit set,but in no case may the time limit set by the Trustees exceed 15 days." VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 With regard to liquidity fees, Florida Statute 218.409(4) provides authority for the SBA to impose penalties for early withdrawal, subject to disclosure in the enrollment materials of the amount and purpose of such fees. At present,no such disclosure has been made. As of September 30, 2020, there were no redemption fees, maximum transaction amounts, or any other requirements that serve to limit a participant's daily access to 100 percent of their account value. Investments—Public Safety Pension Trust Fund Investment Policy Statement The Public Safety Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board's intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the Investment Manager feels that the specific objectives defined in the statement cannot be met, or the guidelines constrict performance, the Investment Manager will present a formal modified investment policy statement to the Board of Trustees at a meeting for the Board's review. Once the Board has adopted, the new investment policy goes into effect 31 days after it has been filed with the State of Florida. There were no changes to the Investment Policy Statement for the fiscal year ended September 30, 2020. The investments of the Public Safety Pension Trust Fund were in compliance with the investment policy. Fair Value Hierarchy The Plan categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on valuation input used to measure the fair value of an asset: Level 1 -investments reflect unadjusted quoted prices in active markets for identical assets; Level 2 - investments reflect prices that are based on inputs that are either directly or indirectly observable for an asset(including quoted prices for similar assets), which may include inputs in markets that are not considered to be active; Level 3 -investments reflect prices based upon unobservable inputs for an asset. The investment pricing transparency determines the category within the hierarchy and should not be observed at the investment risk. The custodian bank's (primary external pricing vendors) quoted prices were used to determine level classification based on the fair value hierarchy. Debt and equity securities classified as Level 1 of the fair value hierarchy are valued using quoted prices at September 30, 2020 (or the most recent market close date if the markets are closed on September 30) in active markets. This includes common stock, equity mutual funds and bond mutual funds. Debt securities are valued using pricing inputs that reflect the assumptions market participants would use to price an asset or liability and are developed based on market data obtained from sources independent of the reporting equity (Level 2). It is valued using a matrix pricing technique. Matrix pricing values securities based on the securities relationship to benchmark quoted prices. This includes U.S. Treasury bonds and notes, U.S. agencies, mortgage backed securities, municipal bonds and corporate obligations, including asset backed securities. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The Real Estate Fund - this fund enters into real estate partnerships with various joint venture partners. The portfolio is valued quarterly at net asset value (NAV). Investments valued at NAV are excluded from the fair value hierarchy because the valuation is not based on actual market inputs but rather is quantified using the fund's reported NAV. The fund had no outstanding commitments. As of September 30, 2020 the Public Safety Pension Trust Fund has the following recurring fair value investments: Quoted Prices in Significant Active Markets for Significant Unobservable Identical Assets Observable Inputs Inputs 9/30/2020 (Level1) (Level2) (Level3) Equities Mutual funds equities $ 12,749,980 $ 12,749,980 Total equity 12,749,980 12,749,980 Fixed income Corporate bonds 2,106,836 2,106,836 U.S. Agencies 1,257,485 1,257,485 U.S. Government bonds 381,991 381,991 Bond mutual fund 719,941 719,941 Total fixed income 4,466,253 719,941 3,746,312 Total investments at fair value 17,216,233 $ 13,469,921 $ 3,746,312 $ - Investment at net asset value Redemption Redemption Notice (NAV) Frequency Period Real Estate Fund 1,387,119 Quarterly 30 days Total investments $ 18,603,352 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 As of September 30, 2020, the Village of Tequesta's Public Safety Pension Trust Fund had the following demand deposits and investments: Weighted Credit Reported Average Rating Percent Percent of Value Maturity (Moody) Distribution Net Position Cash $ 23,419 0.12% % Short-Term Money Market Fund 273,500 1.45% 1.42% Total Cash and Cash Equivalents 296,919 Equities Mutual Funds 12,749,980 67.46% 66.30% Total Equities 12,749,980 Fixed Income Corporate Bonds: 8.08 years Bonds 807,058 A2 4.27% 4.20% Bonds 1,299,778 A3 6.88% 6.76% U.S. Government Bonds 381,991 2.02% 1.99% U.S. Agencies 1,257,485 2.88 years Aaa 6.65% 6.54% Bond Mutual Fund 719,941 3.81% 3.74% Total Fixed Income 4,466,253 Real Estate Fund 1,387,119 7.34% 7.21% Total investments 18,603,352 Total cash and investments $ 18,900,271 100.00% 98.28% Interest Rate Risk - the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer the time to maturity the greater the exposure. The Plan does not have a formal policy relating to interest rate risk,however; • The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. • At September 30, 2020, there were investments in mutual funds that included debt instruments in their portfolio. Credit Risk- the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that: • Fixed income investments must hold a rating in one of the four highest classifications by a major rating service. • Equities must be traded on a national exchange. • Money market investments must hold a minimum rating of Standard & Poor's Al or Moody's P1. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Concentration of Credit Risk - the risk of loss attributed to the magnitude of an investment in a single issuer. The investment policy limits exposure to this risk by: • Limiting investments in common stock,capital stock or convertible stock of any one issuing company or aggregate of any one issuing company to 5%of the outstanding capital stock of the company. • Limiting the value of corporate bonds issued by any single corporation to not more than 5% of the total fund. • Limiting investments in corporate common stock and convertible bonds (not to exceed 70% of the fund assets at fair value). Mortgage-backed securities issued by non-government entities are limited to 15%of the fixed income portfolio. • Limiting investments in foreign securities (not to exceed 25% of the value at cost of the fund). Custodial Credit Risk-the risk that,in the event of the failure of the counterparty,the plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan's investment policy limits exposure to this risk by: • Requiring all securities to be held with a third party custodian. • Requiring security transactions between a broker/dealer and the custodian involving the purchase or sale of securities by transfer of money or securities are made on a "delivery vs. payment" basis to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. Foreign Currency Risk - is the risk of an investment's value changing due to changes in currency exchange rates. Exposure to foreign currency risk is low as: • Foreign investments are through ADR's (shares listed in the U.S.), mutual funds (registered in the U.S.), or Yankee bonds (denominated in U.S. dollars should not to exceed 5% of total fund). • The investment policy permits a maximum of 25% of the fair value of the fund securities to be invested in foreign securities. • At September 30, 2020, 18.77% of the fair value of the fund was invested in international funds. • All the international securities are denominated in U.S. dollars. There is no foreign currency risk. Money Weighted Rate of'Return and Target Allocation For the fiscal years ended September 30, 2020 and 2019,the overall annual money-weighted rate of return (long-term expected real rate of return) on the Public Safety Pension Plan investments (both Police Officers' and Firefighters') was 8.30% and 2.93%. The money-weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. The long-term expected rate of return on pension plan investments, shown below by asset class, is developed using best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation). These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 45 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as well as the long-term expected real rate of return as of September 30, 2020 and 2019 are as follows: Long-Term Expected Real Target Rate of Return Asset Class Allocation Range 2020 2019 Domestic Equity 50% 45%-55% 7.5% 7.5% International Equity 15% 10%-20% 8.5% 8.5% Total Equities 65% 60%-70% Domestic Core Fixed Income 20% 15%-25% 2.5% 2.5% Diversified Fixed Income 5% 0%-10% 3.5% 3.5% Total Fixed Income 25% 20%-30% Core Real Estate 10% 5%-15% 4.5% 4.5% Investments— General Employees' Pension Trust Fund Investment Policy Statement The General Employees' Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board's intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the Investment Manager feels that the specific objectives defined in the statement cannot be met, or the guidelines constrict performance, the Investment Manager will present a formal modified investment policy statement to the Board of Trustees at a meeting for the Board's review. Once the Board has adopted, the new investment policy goes into effect 31 days after it has been filed with the State of Florida. There were no changes to the Investment Policy Statement for the fiscal year ended September 30, 2020 and investments of the General Employees' Pension Trust Fund were in compliance with the investment policy. Fair Value Hierarchy The Plan categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on valuation input used to measure the fair value of an asset: Level 1 -investments reflect unadjusted quoted prices in active markets for identical assets; Level 2 - investments reflect prices that are based on inputs that are either directly or indirectly observable for an asset(including quoted prices for similar assets), which may include inputs in markets that are not considered to be active; Level 3 -investments reflect prices based upon unobservable inputs for an asset. The investment pricing transparency determines the category within the hierarchy and should not be observed as the investment risk. The custodian bank's (primary external pricing vendors) quoted prices were used to determine level classification based on the fair value hierarchy. Debt and equity securities classified as Level 1 of the fair value hierarchy are valued using quoted prices at September 30, 2020 (or the most recent market close date if the markets are closed on September 30) in active markets. This includes common stock, mutual funds and fixed income funds. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Debt securities are valued using pricing inputs that reflect the assumptions market participants would use to price an asset or liability and are developed based on market data obtained from sources independent of the reporting equity (Level 2). It is valued using a matrix pricing technique. Matrix pricing values securities based on the securities relationship to benchmark quoted prices. This includes U.S. Treasury bonds and notes, U.S. agencies, mortgage backed securities, municipal bonds and corporate obligations, including asset backed securities. The Real Estate Fund - this fund enters into real estate partnerships with various joint venture partners. The portfolio is valued quarterly at net asset value. Investments valued at NAV are excluded from the fair value hierarchy because the valuation is not based on actual market inputs but rather is quantified using the fund's reported NAV. The fund had no outstanding commitments. As of September 30, 2020 the General Employees' Pension Trust Fund has the following recurring fair value investments: Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs 9/30/20 (Level1) (Level2) (Level3) Equities Common stocks $ 1,916,672 $ 1,916,672 $ - Mutual funds equities 2,926,133 2,926,133 Total equities 4,842,805 4,842,805 Fixed income Corporate bonds 479,666 479,666 U.S. Government bonds 276,005 276,005 U.S. Agences 241,079 241,079 Bond mutual fund 264,297 264,297 Exchange traded funds 420,624 420,624 Total fixed income 1,681,671 684,921 996,750 Total investments at fair value 6,524,476 $ 5,527,726 $ 996,750 $ - Investment at net asset value Redemption Redemption (NAV) Frequency Notice Period Real Estate Fund 530,254 Quarterly 30 days Total investments $ 7,054,730 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 At September 30, 2020,the Village of Tequesta's General Employees'Pension Trust Fund had the following demand deposits and investments: Weighted Credit Percent Reported Average Rating Percent of Net Value Maturity (Moody) Distribution Position Cash $ 15,178 0.21% 0.21% Short Term Money Market Fund 26,500 0.37% 0.37% Total Cash and Cash equivalents 41,678 Equities Common stocks 1,916,672 27.01% 26.88% Mutual funds 2,926,133 41.23% 41.04% Total Equities 4,842,805 Fixed Income Corporate Bonds: 4.15 years Bonds 25,041 Al 0.35% 0.35% Bonds 55,964 A2 0.79% 0.79% Bonds 221,303 A3 3.12% 3.10% Bonds 137,451 Baal 1.94% 1.93% Bonds 26,517 Baa3 0.37% 0.37% Bonds 13,390 N/A 0.19% 0.19% ETF-Exchange Traded Fund 420,624 5.93% 5.90% U.S. Government Bonds 276,005 3.89% 3.87% U.S. Agencies 241,079 5.56 years Aaa 3.40% 3.38% Mutual Fund 264,297 3.72% 3.71% Total Fixed Income 1,681,671 Real Estate Fund 530,254 7.47% 7.44% Total Investments 7,054,730 Total Cash and Investments $ 7,096,408 100.00% 99.54% Interest Rate Risk - the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer the time to maturity, the greater the exposure. The Plan does not have a formal policy relating to interest rate risk,however: • The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. • At September 30, 2020, the weighted average maturity in years for each investment type is included in the preceding table and ranges from 4.15 to 5.56 years. Credit Risk-the risk that a debt issuer will not fulfill its obligations. The Plan limits exposure that a debt issuer will not fulfill its obligations by limiting investments made or held in the fund to: • Obligations issued by the U.S. Government or obligations guaranteed as to principal and interest by the U.S. government or by an agency of the U.S. Government; • Bonds, stocks, or commingled funds administered by national or state banks, or other evidences or 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 District of Columbia provided that the securities meet the following ranking criteria: o Fixed income investments holding a rating in one of the four highest classifications by a major rating service. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 o Equities that are traded on a National Exchange. Concentration of'CreditRisk-the risk of loss attributed to the magnitude of an investment in a single issuer. The Plan's investment policy limits exposure by: • Limiting investments in common stock or capital stock of any one issuing company or aggregate of any one issuing company to 5%of the outstanding capital stock of the company. • Limiting the value of bonds issued by any single corporation not to exceed 10% of the total fund. • Limiting investments in corporate common stock and convertible bonds not to exceed 70% of the fund assets at fair value. • Limiting investments in foreign securities not to exceed 25%of the fair value of the fund. Custodial Credit Risk — the risk that, in the event of the failure of the counterparty, the plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan's investment policy limits exposure to this risk by: • Requiring all securities to be held by a third party custodian in the name of the Plan. As of September 30, 2020,the Plan's investment portfolio was held with a third-party custodian. • Requiring securities transactions between a broker-dealer and the custodian involving purchase or sale of securities by the transfer of money or securities to be made on a"delivery vs. payment"basis to ensure that the custodian will have the security or money in hand at the conclusion of the transaction. Foreign Currency Risk - is the risk of an investment's value changing due to changes in currency exchange rates. Exposure to foreign currency risk is low as: • Foreign investments are through ADR's (shares listed in the U.S.), mutual funds (registered in the U.S.), or Yankee bonds (traded in U.S. dollars). • The investment policy permits a maximum of 25% of the fair value of the fund securities (including equities and fixed income securities)to be invested in foreign securities. • At September 30, 20, 18.06% of the fair value of the fund was invested in international funds. • All the international securities are denominated in U.S. dollars. There is no foreign currency risk. Money Weighted Rate of Return and Target Allocation For the fiscal years ended September 30, 2020 and 2019,the overall annual money-weighted rate of return (long-term expected real rate of return) on the General Employees' Pension Plan investments was 8.83% and 3.36% respectively. The money-weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. The long-term expected rate of return on pension plan investments, shown below by asset class, is developed using best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation). These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 49 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as well as the long-term expected real rate of return as of September 30, 2020 and 2019 are as follows: Long-Term Expected Real Target Rate of Return Asset Class Allocation Range 2020 2019 Domestic Equity 50% 45%-55% 7.5% 7.5% International Equity 15% 10%-20% 8.5% 8.5% Total Equities 65% 60%-70% Domestic Core Fixed Income 20% 15%-25% 2.5% 2.5% Diversified Fixed Income 5% 0%-10% 3.5% 3.5% Total Fixed Income 25% 20%-30% Core Real Estate 10% 5%-15% 4.5% 4.5% C. Receivables Below is the detail of receivables for the general, water, and nonmajor governmental and enterprise funds including the applicable allowances for uncollectible accounts: Storm- Nonmaj or General Water water Funds Total Accounts $ 264,879 $ 1,039,314 $ - $ - $ 1,304,193 Intergovernmental 412,327 483 2,990 3,054 418,854 Other taxes 94,948 - - - 94,948 Gross receivables 772,154 1,039,797 2,990 3,054 1,817,995 Less: allowance for uncollectibles (17,280) (2,879) - - (20,159) Net Total Receivables $ 754,874 $ 1,036,918 $ 2,990 $ 3,054 $ 1,797,836 50 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 D. Capital Assets Capital assets activity for the fiscal year ended September 30, 2020, was as follows: Beginning Ending Balance Additions Deductions Balance Governmental Activities Capital assets not being depreciated/amortized: Land $ 634,017 $ $ $ 634,017 Construction-in-progress 2,517 98,047 (2,517) 98,047 Total Capital Assets Not Being Depreciated/Amortized 636,534 98,047 (2,517) 732,064 Capital assets being depreciated/amortized: Buildings 8,043,526 - 8,043,526 Improvements other than buildings 2,424,606 - 2,424,606 Infrastructure 4,965,348 173,015 5,138,363 Machinery and equipment 4,730,380 448,949 (382,036) 4,797,293 Intangibles 274,455 - 274,455 Other K-9 20,549 20,549 Total Capital Assets Being Depreciated/Amortized 20,458,864 621,964 (382,036) 20,698,792 Less accumulated depreciation/amortization for: Buildings (3,128,452) (201,088) (3,329,540) Improvements other than buildings (1,462,002) (86,405) (1,548,407) Infrastructure (1,065,809) (126,086) (1,191,895) Machinery and equipment (3,467,051) (461,727) 382,036 (3,546,742) Intangibles (221,340) (21,243) - (242,583) Other K-9 (4,404) (2,935) - (7,339) Total Accumulated Depreciation/Amortization (9,349,058) (899,484) 382,036 (9,866,506) Total Capital Assets Being Depreciated/Amortized,Net 11,109,806 (277,520) - 10,832,286 Governmental Activities Capital Assets,Net $ 11,746,340 $ (179,473) $ (2,517) $ 11,564,350 Depreciation/amortization expense was charged to the functions/programs of the governmental activities of the Village as follows: Governmental Activities General government $ 115,402 Public safety 522,952 Transportation 198,211 Leisure services 62,919 Total Depreciation/Amortization Expense-Governmental Activities $ 899,484 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Beginning Ending Balance Additions Deductions Balance Business-type Activities: Capital assets not being depreciated/amortized: Land $ 83,335 $ - $ - $ 83,335 Construction in progress 1,212,080 - (1,212,080) - Total Capital Assets Not Being Depreciated/Amortized 1,295,415 - (1,212,080) 83,335 Capital assets being depreciated/amortized: Buildings 979,512 - - 979,512 Improvements other than buildings 58,720 - - 58,720 Infrastructure 34,192,913 2,221,199 - 36,414,112 Machinery&Equipment 1,935,101 264,948 - 2,200,049 Intangibles 129,096 - - 129,096 Total capital assets being depreciated/amortized 37,295,342 2,486,147 - 39,781,489 Less accumulated depreciation/amortization for: Buildings (722,771) (15,375) - (738,146) Improvements other than buildings (29,361) (2,348) - (31,709) Infrastructure (19,055,199) (654,291) - (19,709,490) Machinery&Equipment (1,740,165) (122,114) - (1,862,279) Intangibles (74,282) (25,820) - (100,102) Total Accumulated Depreciation/Amortization (21,621,778) (819,948) - (22,441,726) Total Capital Assets Being Depreciated/Amortized,Net 15,673,564 1,666,199 - 17,339,763 Business-type Activity Capital Assets,Net $ 16,968,979 $ 1,666,199 $(1,212,080) $ 17,423,098 Depreciation/amortization expense charged to the water and stormwater funds of the business-type activities was $819,948. The depreciation/amortization expense breakdown by activity is as follows: Water utility $ 699,645 Stormwater 120,303 Total depreciation/amortization expence $ 819,948 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 E. Accrued Liabilities Accrued liabilities reported by governmental funds at September 30, 2020,were as follows: Other Total General Governmental Governmental Fund Funds Funds Salary and employee benefits $ 310,371 $ 15,301 $ 325,672 Employer pension State distribution 263,315 - 263,315 Other 2,743 - 21743 Total Accrued Liabilities $ 576,429 $ 15,301 $ 591,730 E Pension Obligations Florida Retirement System (FRS) -a Statewide Local Government Employees'Retirement System(SLGERS) General Information. The FRS was established and administered in accordance with Chapter 121, Florida Statutes, effective December 1, 1970. Full time employees hired before January 1, 1996 are eligible to participate in the Florida Retirement System (FRS), as provided by Chapters 121 and 112, Florida Statutes, a cost-sharing, multiple-employer defined benefit plan administered by the State Board of Administration ("SBA"). The FRS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members and beneficiaries. A post-employment health insurance subsidy is also provided to eligible employees. Benefits are established by Chapter 121, Florida Statutes and Chapter 22B, Florida Administrative Code. Amendments to the law can only be made by an act of the Florida Legislature. The State of Florida issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or visiting the website at ww.dms.myflorida.com/workforce operations/retirement/publications. Plan Description: The FRS is a cost-sharing multiple-employer qualified defined benefit pension plan,with a Deferred Retirement Option Program ("DROP")for eligible employees. Benefits Provided—Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011: Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with a least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3.0%of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July, 2011,the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers' class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also,the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Contributions — Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. 54 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Contribution rates during the 2019-2020 fiscal year were as follows: Class Employee Employer(1) Regular 3% 6.54% Special Risk 3% 23.76% Special Risk Administrative Support 3% 36.87% Elected Officers' Judges 3% 40.28% Governor, Lt.Governor, Cabinet, Legistrators, State Attorneys, Public Defenders 3% 54.31% Elected County, City Officers' 3% 47.10% Senior Management Service 3% 23.69% DROP participants - 12.94% Reemployed Retiree (2) (2) Notes: (1) These rates include the normal cost and unfunded actuarial liability contributions but do not include the 1.66 percent contribution for the Retiree Health Insurance Subsidy and the fee of 0.06 percent for administration of the FRS Investment Plan and provision of educational tools for both plans. (2) Contribution rates are dependent upon retirement class in which reemployed. The Village's total contributions to the Pension Plan totaled $58,313 for the fiscal year ended September 30, 2020. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources The total pension liability for the FRS was determined by the plan's actuary and reported in the plan's GASB 67 valuation as of June 30, 2020 calculated based on the discount rate and actuarial assumptions below. The total pension liability is calculated using the Individual Entry Age Normal cost allocation method. The net pension liability was measured as of June 30, 2020. At September 30, 2020, the Village reported a liability of$717,034 for its proportionate share of the Pension Plan's net pension liability. The Village's proportionate share of the net pension liability was based on the Village's 2019-2020 fiscal year contributions relative to the 2018-2019 fiscal year contributions of all participating members. At the June 30, 2020 Measurement Date,the Village's proportionate share was 0.001654384, which was an increase of 0.000077% from its proportionate share measured as of June 30,2019. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 For the fiscal year ended September 30, 2020, the Village recognized pension expense of$150,583 as follows: Service Cost $ 43,799 Interest Cost 222,661 Effect of economic/demographic gains or losses (difference between expected and actuarial experience) 13,420 Effect of assumptions changes or inputs 45,285 Member contributions (12,382) Projected investment earnings (182,602) Net difference between projected and actual investment earnings 20,045 Administrative expenses 357 Total $ 150,583 In addition,the Village reported deferred outflow of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Deferred Inflows/Outflows of Resources Inflows Outflows Effect of economic/demographic gains or losses (differences between expected and actual experience) $ - $ 27,442 Effect of assumptions changes or inputs - 129,806 Changes in proportion and differences between contributions and proportionate share of contributions (60,686) 17,502 Net differences between projected and actual investment earnings - 42,693 Village Pension Plan contributions subsequent to the measurement date - 14,530 Total $ (60,686) $ 231,973 The deferred outflows of resources related to the Pension Plan contributions subsequent to the measurement date, totaling $14,530 will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2021. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows: Fiscal Year Ending Amount 2021 22,135 2022 49,645 2023 45,063 2024 30,604 2025 9,310 Thereafter - $ 156,757 Discount Rate The discount rate used to measure the total pension liability was 6.80%. The Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees if future experience follows assumptions and the Actuarially Determined Contribution is contributed in full each year.. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return. Discount rate 6.80% Long-term expected rate of return,net of investment expense 6.80% Municipal bond rate N/A Actuarial Assumptions The actuarial assumptions that determined the total pension liability as of June 30, 2020, were based on the results of an actuarial experience study for the period July 1, 2013 —June 30, 2018. Valuation Date July 1, 2020 Measurement date June 30, 2020 Inflation 2.40% Salary increases including inflation 3.25% Mortality PUB-2010 base table varies by member category and sex, projected generationally with Scale MP-2018 details in valuation report Actuarial cost method Individual Entry Age Sensitivity Analysis The following presents the Village's portion of the net pension liability of the FRS, calculated using the discount rate of 6.80%, as well as what the FRS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (5.80%) or one percentage point higher(7.80%)than the current rate. 1% Current 1% Decrease Discount Rate Increase 5.80% 6.80% 7.80% Village's proportionate share of net pension liability $ 1,144,983 $ 717,034 $ 359,610 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Long-Term Expected Rate of'Return The long-term expected rate of return assumption of 6.80% on Pension Plan investments is based on a forward-look capital market economic model. The allocation policy's description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimated of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Compound Annual Annual Target Arithmetic (Geometric) Standard Asset Class Allocation Return Return Deviation Cash 1.0% 2.2% 2.2% 1.2% Fixed income 19.0% 3.0% 2.9% 3.5% Global equity 54.2% 8.0% 6.7% 17.1% Real estate 10.3% 6.4% 5.8% 11.7% Private equity 11.1% 10.8% 8.1% 25.7% Strategic investments 4.4% 5.5% 5.3% 6.9% Assumed Inflation -Mean 2.4% 1.7% Pension Plan Fiduciary Net Position— Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. Pavables to the Pension Plan — At September 30, 2020 the Village reported a payable in the amount of$592 employee and $6,962 employer for outstanding contributions to the Pension Plan, both FRS and Retiree Health Insurance Subsidy(HIS). The Retiree Health Insurance Subsidy(HIS)Program Plan Description — HIS Program is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes. The Florida Legislature establishes and amends the contribution requirements and benefit terms of the HIS Program. The benefit is a monthly payment to assist retirees of state-administered retirement systems in paying their health insurance costs and is administered by the Department of Management Services, Division of Retirement. Benefits Provided — For the fiscal year ended June 30, 2020, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service credited at retirement multiplied by $5. The minimum payment is $30 and maximum payment is $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a state-administered retirement system must provide proof of eligible health insurance coverage, which can include Medicare. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Contributions— For the fiscal year ended June 30, 2020,the contribution rate was 1.66% of payroll pursuant to section 112.363, Florida Statutes. HIS contributions are deposited in a separate trust fund from which HIS payments are authorized. The Village's total contributions to the HIS Plan totaled $4,348 for the fiscal year ended September 30, 2020. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Actuarial valuations for the HIS Program are conducted biennially. The July 1, 2020, HIS valuation is the most recent valuation and was used to develop the liabilities for June 30, 2020. Liabilities originally calculated as of the actuarial valuation date have been recalculated as of a later GASB Measurement Date using standard actuarial roll forward procedures. The discount rates used at the two liability measurement dates differ due to changes in the applicable municipal bond index between dates. At September 30, 2020, the Village reported a liability of$109,870 for its proportionate share of the Pension Plan's net pension liability, of which $1,145 represents Village's net pension liability due within one year due to the pension's plan fiduciary net position being less than the amount of benefit payments expected to be paid within one year. The Village's proportionate share of the net pension liability was based on the Village's 2019-2020 fiscal year contributions relative to the 2018-2019 fiscal year contributions of all participating members. At June 30, 2020, the Village's proportionate share was 0.0008998%, which was a decrease of 0.000037% from its proportionate share measured as of June 30, 2019. The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB 67. For the fiscal year ended September 30, 2020,the Village recognized pension expense of$9,042 as follows: Service Cost $ 2,389 Interest Cost 3,623 Effect of economic/demographic gains or losses (difference between expected and actuarial experience) 762 Effect of assumptions changes or inputs 2,339 Member contributions (3) Projected investment earnings (106) Net difference between projected and actual investment earnings 36 Administrative expenses 2 Total $ 9,042 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 In addition,the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Deferred Inflows/Outflows of Resources Inflows Outflows Effect of economic/demographic gains or losses (differences between expected and actual experience) $ (85) $ 4,494 Effect of assumptions changes or inputs (6,388) 11,814 Changes in proportion and differences between contributions and proportionate share of contributions (49,613) - Net differences between projected and actual investment earnings - 88 Village Pension Plan contributions subsequent to the measurement date - 1,271 Total $ (56,086) $ 17,667 The deferred outflows of resources related to the HIS Plan, totaling $1,271 resulting from Village contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows: Fiscal Year Ending Amount 2021 $ (14,630) 2022 (9,916) 2023 (9,400) 2024 (4,230) 2025 (1,821) Thereafter 307 $ (39,690) Discount Rate The discount rate used to measure the total pension liability was 2.21%. In general, the discount rate for calculating the total pension liability under GASB 67 is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the FRS Actuarial Assumption Conference. The discount rates used at the two dates differ due to changes in the applicable municipal bond index. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Discount rate 2.21% Long-term expected rate of return,net of investment expense N/A Bond Buyer General Obligation 20-Bond Municipal Bond Index 2.21% Actuarial Assumptions The actuarial assumptions that determined the total pension liability as of June 30, 2020, were based on certain results of an actuarial experience study of the FRS for the period July 1, 2013 - June 30, 2018. Valuation Date July 1, 2020 Measurement date June 30, 2020 Inflation 2.40% Salary increases including inflation 3.25% Mortality Generational PUB-2010 with Projection Scale MP-2018; details in valuation report Actuarial cost method Individual Entry Age Sensitivity Analysis The following presents the net pension liability of the HIS, calculated using the discount rate of 2.21%, as well as what the HIS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (1.21%) or one percentage point higher (3.21%) than the current rate. 1% Current 1% Decrease Discount Rate Increase 1.21% 2.21% 3.21% Village's proportionate share of net pension liability $ 127,005 $ 109,870 $ 95,845 Pension Plan Fiduciary Net Position - Detailed information regarding the HIS Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. The Vllage of Tequesta Single-Employer Defined Benefit Pension Plans Overview: The Village maintains two single-employer defined benefit pension plans, the Public Safety Officers' Pension Trust Fund and the General Employees' Pension Trust Fund. The sole administration of and responsibility for the proper operation of the retirement system is vested in The Board of Trustees. The defined benefit pension plans do not issue stand alone financial statements. All full-time general employees who are not classified as police officers or firefighters are eligible for membership in the General Employees' Pension Plan on the date of employment. The General Employees' Pension Board consists of five Trustees. Two are legal residents of the municipality, appointed by the Village Council, and two are full time General Employee members. The fifth Trustee is selected by a majority vote of the other Trustees. The Public Safety Board consists of five Trustees. Two are legal residents of the municipality, appointed by the Village Council, one is a full time police officer member, and one is full time firefighter member. The fifth Trustee is selected by a majority vote of the other Trustees. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 All full-time police officers and all full-time firefighters are eligible for membership in the Public Safety Officers' Pension Plan on the date of employment. The Public Safety Officers' Pension Trust Fund receives contributions that may not be used to pay benefits of all employee classes, therefore, two separate trust funds, the Firefighters' Pension Trust Fund (FPTF) and the Police Officers' Pension Trust Fund (PPTF) are reflected separately in the financial statements, as well as the General Employee's Trust Fund (GPTF). Membership in the Village of Tequesta's defined benefit pension plans as of the actuarial valuation date of October 1, 2019: FPTF PPTF GPTF Number of: Inactive members or beneficiaries currently receiving benefits 6 3 8 Inactive members entitled to but not yet receiving benefits 1 3 7 Active members 20 17 56 Total 27 23 71 Funding Policies are presented below under each of the plans. Actuarial Assumptions and Net Pension Liability (NPL) The actuarial valuation of the liabilities for the FPTF, PPTF and GPTF as of the September 30, 2019 measurement date were determined as of the beginning of the year, October 1, 2018 (based on actuarial valuation results as reported in the October 1, 2018 actuarial valuation). Using a measurement date of September 30, 2019 allows for timelier reporting at the end of the year. These liabilities are used for GASB Statement No. 68 reporting for the reporting fiscal year ending September 30, 2020. The total pension liability for the Village's defined benefit pension plans was determined using the following actuarial methods and assumptions, applied to all prior periods included in the measurement period. Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. If significant changes occur during the year, such as benefit changes or changes in assumptions or methods, these would be noted in the footnotes. FPTF PPTF GPTF Actuarial Valuation Date Oct. 1, 2018 Oct. 1, 2018 Oct. 1, 2018 Measurement Date of the net pension liability Sep. 30, 2019 Sep. 30, 2019 Sep. 30, 2019 Village's Fiscal Year Ended Date for Reporting Purposes Sep. 30, 2020 Sep. 30, 2020 Sep. 30, 2020 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Pension Expense Fiscal Year Ended September 30, 2020 Based on Measurement Period Ended September 30,2019 FPTF PPTF GPTF Service Cost $ 333,395 $ 100,925 $ 461,164 Interest on the Total Pension Liability 878,984 215,318 425,911 Current-Period Benefit Changes 22,243 821,833 - Employee Contributions (made negative for additions here) (94,343) (65,446) (161,553) Projected Earnings on Plan Investments (made negative for additions here) (800,818) (329,992) (408,974) Administrative Expense 30,043 30,034 48,241 Other Changes in Plan Fiduciary Net Position (Contributions Transferred from 401(a)Plan) - (297,733) - Other Changes in Total Pension Liability (Increase in State Contribution Reserve) - 649,262 - Recognition of Outflow (Inflow) of Recourses due to Liabilities 39,217 (156,966) (4,237) Recognition of Outflow (Inflow) of Recourses due to Assets 88,108 29,046 49,554 Total Pension Expense $ 496,829 $ 996,281 $ 410,106 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The deferred outflow of resources, resulting from the Village's contributions to the Plans subsequent to the measurement date of September 30, 2019 will be recognized as a reduction of the Village's net pension liability in the fiscal year ended September 30, 2021. The Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Fire: Deferred Outflows Deferred Inflows of of Resources Resources Difference between expected and actual experience $ 87,767 $ 232,801 Changes in assumptions 459,420 78,128 Net difference between projected and actual earnings on pension plan investments 356,815 261,515 Contribution subsequent to measurement date 443,018 - Total $ 1,347,020 $ 572,444 Police: Deferred Outflows Deferred Inflows of of Resources Resources Difference between expected and actual experience $ 19,341 $ 320,601 Changes in assumptions 115,347 8,220 Net difference between projected and actual earnings on pension plan investments 149,241 99,590 Total $ 283,929 $ 428,411 General: Deferred Outflows Deferred Inflows of of Resources Resources Difference between expected and actual experience $ 46,655 $ 264,301 Changes in assumptions 202,731 - Net difference between projected and actual earnings on pension plan investments 155,807 134,888 Contribution subsequent to measurement date 391,341 - Total $ 796,534 $ 399,189 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Net Deferred Inflows and Deferred Outflows of Resources by Year to be Recognized in Future Pension Expenses Net Deferred Inflows and Outflows of Resources Fiscal Year Ending September 30, FPTF PPTF GPTF 2021 $ 21,654 $ (170,106) $ (14,017) 2022 18,864 (50,880) (31,062) 2023 76,663 36,694 29,097 2024 121,507 39,810 49,167 2025 61,208 - (17,430) Thereafter 31,662 - (9,751) Total $ 331,558 $ (144,482) $ 6,004 Net Pension Liability (Asset) Below is a summary of components of the net pension liability (asset), by Plan, which was measured as of September 30, 2019 (measurement date in accordance with GASB Statement No. 68). Fire Police General Measurement Date September 30, 2019 2019 2019 Total Pension Liability $ 13,253,864 $ 4,672,055 $ 6,249,987 Plan Net Position 11,572,288 5,649,465 6,211,730 Net Pension Liability(Asset) $ 1,681,576 $ (977,410) $ 38,257 Plan Net Position as a %of Total Pension Liability 87.31% 120.92% 99.39% 65 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 In accordance with GASB Statement No. 67, information as of September 30, 2020 has been disclosed: Fire Police General Measurement Date September 30, 2020 2020 2020 Total Pension Liability $ 14,767,838 $ 4,906,802 $ 7,280,856 Plan Net Position 13,058,965 6,171,161 7,129,156 Net Pension Liability(Asset) $ 1,708,873 $ (1,264,359) $ 151,700 Plan Net Position as a %of Total Pension Liability 88.43% 125.77% 97.92% Below is a detail of the net changes in pension liability(asset): FIREFIGHTERS' PENSION TRUST CHANGES IN NET PENSION LIABILITY Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Balances at September 30,2018 $ 11,898,913 $ 10,877,527 $ 1,021,386 Changes for the year: Service cost 333,395 - 333,395 Interest 878,984 - 878,984 Changes of benefit terms 22,243 - 22,243 Differences between expected and actual experience (41,742) - (41,742) Changes in assumptions 378,870 - 378,870 Contributions -employer - 332,559 (332,559) Contributions -state - 156,424 (156,424) Contributions -employee - 94,343 (94,343) Net investment Income - 358,277 (358,277) 'Benefit payments, including refunds of employee contributions (216,799) (216,799) - Administrative expense - (30,043) 30,043 Net Changes 1,354,951 $ 694,761 660,190 Balances at September 30,2019 $ 13,253,864 11,572,288 $ 1,681,576 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 POLICE OFFICERS' PENSION TRUST CHANGES IN NET PENSION ASSET Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Asset Balances at September 30,2018 $ 2,889,074 $ 4,246,463 $ (1,357,389) Changes for the year: Service cost 100,925 - 100,925 Interest 215,318 - 215,318 Changes of benefit terms 821,833 - 821,833 Differences between expected and actual experience (85,146) - (85,146) Changes of assumptions 120,973 - 120,973 Contributions -employer - 317,338 (317,338) Contributions -employer(from state) - 649,262 (649,262) Contributions -members - 65,446 (65,446) Net investment income - 143,441 (143,441) Benefit payments, including refunds of employee contributions (40,184) (40,184) - Administrative expense - (30,034) 30,034 Other 649,262 297,733 351,529 Net changes 1,782,981 1,403,002 379,979 Balances at September 30,2019 $ 4,672,055 $ 5,649,465 $ (977,410) VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 GENERAL EMPLOYEES' PENSION TRUST CHANGES IN NET PENSION LIABILITY Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Balances at September 30,2018 $ 5,727,627 $ 5,708,753 $ 18,874 Changes for the year: Service cost 461,164 - 461,164 Interest 425,911 - 425,911 Differences between expected and actual experience (156,013) - (156,013) Contributions -employer - 362,848 (362,848) Contributions -member - 161,553 (161,553) Net investment income - 235,519 (235,519) Benefit payments, including refunds of employee contributions (160,588) (160,588) - Refunds (48,114) (48,114) - Administrative expense - (48,241) 48,241 Net changes 522,360 502,977 19,383 Balances at September 30,2019 $ 6,249,987 $ 6,211,730 $ 38,257 Sensitivity of the Net Pension Liability (Asset)to Changes in the Discount Rate A single discount rate of 7.00% as of September 30, 2020, same as of September 30, 2019, was used to measure the total pension liability for the Police Officers' and Firefighters' Pension trusts. This single discount rate was based on the expected rate of return on pension plan investments of 7.00%. A discount rate of 6.50% was used to measure total pension liability for the General Employees' Pension Trust as of September 30, 2020 and 7.00% for 2019. This single discount rate was based on the expected rate of return on pension plan investments of 6.5% and 7.00% accordingly. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Regarding the sensitivity of the net pension liability to changes in the single discount rate, the tables below present the plan's net pension liability, calculated using a single discount rate of 7.00% (for the Police Officers' and Firefighters' Pension trusts) and 6.50% (for the General Employees' Pension Trust) as well as what the plan's net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher (amounts in parenthesis represent a net pension asset). Current Single 1% Discount Rate 1% Decrease Assumption Increase Fiscal Year Ended September 30,2019 6.00% 7.00% 8.00% Firefighters' $ 3,380,383 $ 1,681,576 $ 260,724 Police Officers' (427,381) (997,410) (1,427,328) General Employees' $ 874,673 $ 38,257 $ (660,199) In accordance with GASB Statement No. 67, information as of September 30, 2020 has been disclosed: Current Single 1% Discount Rate 1% Decrease Assumption Increase Fiscal Year Ended September 30, 2020 6.00% 7.00% 8.00% Firefighters' $ 3,554,789 $ 1,708,873 $ 164,620 Police Officers' (637,394) (1,264,359) (1,773,219) Current Single Discount Rate 1% Decrease Assumption Increase Fiscal Year Ended September 30,2020 5.50% 6.50% 7.50% General Employees' $ 1,181,143 $ 151,700 $ (701,396) rillage of Tequesta Public Safety Employees'Pension Plan (PSEPP) Summary of Plan Provisions A. Ordinances The Plan was established under the Code of Ordinances for the Village of Tequesta, Florida, Chapter 2, Article III, Division 1, Section 2-61 (b), and was most recently amended under Ordinance No. 02-19 , passed and adopted on March 14, 2019. The Plan is also governed by certain provisions of Chapters 175 and 185, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. 69 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 B. Effective Date Adopted March 14, 2019 C. Plan Year October 1 through September 30 D. Type of Plan Qualified,governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time police officers and all full-time firefighters are eligible for membership on the date of employment. F. Credited Service Service is measured as the total number of years and completed months of a year as a police officer or firefighter with the Village. No service is credited for any periods of employment for which the member received a refund of their contributions. G. Compensation Total cash remuneration for services rendered as a police officer or firefighter. For firefighters and police officers hired before October 1, 2010, overtime hours are limited to 300 hours per year, effective October 1, 2013 for firefighters and October 1, 2014 for police officers. For firefighters and police officers hired before October 1, 2010, payments for unused leave earned after October 1, 2013 for firefighters and October 1, 2014 for police officers are excluded from pensionable salary. For firefighters hired on or after October 1, 2010, fixed monthly remuneration including regular earnings, vacation pay and sick pay but excluding lump sum payments, overtime, bonuses, incentives and longevity. H. Average Final Compensation (AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service. 1. Normal Retirement Eligibility - A member may retire on the first day of the month coincident with or next following the earlier of (1) age 55 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015), or (2) age 52 and 25 years of Credited Service. 70 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Benefit-For police officers hired before February 1, 2013 and firefighters hired before August 14, 2015 firefighters: Credited Service only prior to September 1, 201.5 : 3.0%of AFC multiplied by the first 6 years of Credited Service,plus 3.5%of AFC multiplied by the next 4 years of Credited Service,plus 4.0%of AFC multiplied by the next 5 years of Credited Service,plus 3.0%of AFC multiplied by the next 6 years of Credited Service,plus 2.0%of AFC multiplied by the next 4 years of Credited Service,plus 3.0%of AFC multiplied by all years of Credited Service over 25 years For firefighters hired before August 14, 2015, Credited Service on or after September 1, 2015: 3.0%of AFC multiplied by years of Credited Service For police officers hired on or after February 1, 2013 and firefighters hired on or after August 14, 2015: 2.75%of AFC multiplied by all years of Credited Service Normal Form ofBenefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. J. Early Retirement Eligibility - A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The Normal Retirement Benefit is reduced by 3.0% for each year by which the Early Retirement date precedes the Normal Retirement date. Normal Form ofBenefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. 71 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 K. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. L. Service Connected Disability Eligibility - Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village as a result from an act occurring in the performance of service for the Village is immediately eligible for a disability benefit. Benefit - The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 42%of AFC. Normal Form of Benefit- 10 Years Certain and Life thereafter. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. M. Non-Service Connected Disability Eligibility - Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village is immediately eligible for a disability benefit. Benefit - The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 25%of AFC. Normal Form ofBenefat- 10 Years Certain and Life thereafter. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. N. Death in the Line of Duty Eligibility-Members are eligible for survivor benefits regardless of Credited Service. Benefit-The member's spouse or dependent child will receive the 50%of the member's AFC as of the date of death. Normal Form of Benefit-Payable for the life of the beneficiary. 72 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. O. Other Pre-Retirement Death Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The beneficiary will receive the actuarial equivalent of the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. Normal Form of Benefit-Payable for the life of the beneficiary. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. The beneficiary of a plan member with less than 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015) at the time of death will receive a refund of the member's accumulated contributions. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. Q. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are the Life Annuity option or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options. R. Vested Termination Eligibility -A member has earned a non-forfeitable right to Plan benefits after the completion of 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The benefit is the member's accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the member's Normal Retirement date. Alternatively, members can elect a reduced Early Retirement benefit any time after age 50. 73 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Normal Form of Benefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None Supplemental Benefit - Once in pay status, all retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of$600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. Members terminating employment with less than 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015) will receive a refund of their own accumulated contributions. S. Refunds Eligibility - All members terminating employment with less than 6 years of Credited Service (10 years of Credited Service for firefighters on or after August 14, 2015) are eligible. Optionally, vested members (those with 6 or more years of Credited Service — 10 years of Credited Service for firefighters hired on or after August 14, 2015) may elect a refund in lieu of the vested benefits otherwise due. Benefit-Refund of the member's contributions. T. Member Contributions 5%of Compensation for police officers hired before February 1, 2013 and 6% of compensation for police officers hired on or after February 1, 2013. Five (5)percent of compensation for firefighters through the fiscal year ending September 30, 2016; 5.5% of Compensation for firefighters beginning in the fiscal year ending September 30, 2017; thereafter, 6% of Compensation for firefighters. Employee contributions for firefighters would revert back to 5% of Compensation if the Village opts out of participation in Chapter 175. U. State Contributions Chapter 185 Premium Tax Revenue: The Village is permitted to use all annual Chapter 185 revenue as a credit toward the Required Employer Contribution and to apply the Chapter 185 reserve of$613,832 as an offset to the Required Employer Contribution. Chapter 175 Premium Tax Revenue: The Village is permitted to use all annual Chapter 175 revenue as a credit toward the Required Employer Contribution. V. Employer Contributions Any additional amount determined by the actuary needed to fund the plan properly according to State laws. 74 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 W. Cost of Living Increases Not Applicable X. 13th Check Not Applicable Y. Deferred Retirement Option Plan Eligibility-Plan members who have met one of the following criteria are eligible for the DROP: (1) age 55 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015), or (2) age 52 and 25 years of Credited Service. Members must make a written election to participate in the DROP before the 27th year of employment. Benefit - The member's Credited Service and AFC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and AFC. Firefighters have the optional sell back of vacation and sick leave when entering the DROP. Maximum DROP Period - The earlier of 5 years of participation in the DROP or 30 years of employment. There are two DROP plan participants with the assets balance rollforward of $464,403 at fiscal year ending September 30, 2020. Interest Credited - The member's DROP account is credited on September 30 of each year with investment earnings or losses at the same rate earned by the pension fund less any administrative expenses. The interest rate will not be less than 0%nor greater than 7.5%. Normal Form of Benefit-Lump Sum; other options are also available. COLA: None Z. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a Village of Tequesta Public Safety Officers' Pension Trust Fund liability if continued beyond the availability of funding by the current funding source. 75 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 AA. Changes from Previous Valuation None The Firefighters' Pension Trust Fund (part of the PSEPP) does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2020. FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30,2020 Assets Cash and cash equivalents $ 199,893 Investments Equities 8,665,406 Fixed income 3,035,393 Real Estate Funds 942,770 Total investments 12,643,569 Accounts receivable 171,940 Contributions receivable 40,315 Accrued interest receivable 10,061 Prepaid items 18,067 Total Assets 13,083,845 Liabilities Accounts payable 10,184 Due to broker 14,696 Total Liabilities 24,880 Net Position Restricted for Pension Benefits $ 13,058,965 76 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Additions Contributions: State of Florida $ 171,939 Employer 443,018 Employee 101,983 Total Contributions 716,940 Investment earnings Net appreciation in fair value of investment 763,139 Gain on sale of investments 78,198 Interest and dividends 212,077 Total investment earnings 1,053,414 Less investment expenses (32,392) Net investment earnings 1,021,022 Miscellaneous 36 Total Additions 1,737,998 Deductions Benefits paid 216,799 Refund of contributions 8,648 Administrative expenses 25,874 Total Deductions 251,321 Change in Net Position 1,486,677 Net Position Restricted for Pension Benefits Beginning of year 11,572,288 End of year $ 13,058,965 77 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The Police Officers'Pension Trust Fund(part of the PSEPP) does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2020. POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30,2020 Assets Cash and cash equivalents $ 97,026 Investments Equities 4,084,574 Fixed income 1,430,860 Real Estate Funds 444,349 Total investments 5,959,783 Accounts receivable 116,626 Contributions receivable 3,454 Accrued interest receivable 4,742 Prepaid items 4,091 Total Assets 6,185,722 Liabilities Accounts payable 7,635 Due to broker 6,926 Total Liabilities 14,561 Net Position Restricted for Pension Benefits $ 6,171,161 78 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Additions Contributions: State of Forida $ 91,375 Employee 70,327 Total Contributions 161,702 Investment earnings Net appreciation in fair value of investments 359,510 Gain on sale of investments 37,676 Interest and dividends 102,393 Total investment earnings 499,579 Less investment expenses (22,573) Net investment earnings 477,006 Miscellaneous 32 Total Additions 638,740 Deductions Benefits paid 49,095 Refund of contributions 42,075 Administrative expenses 25,874 Total Deductions 117,044 Change in Net Position 521,696 Net Position Restricted for Pension Benefits Beginning of year 5,649,465 End of year $ 6,171,161 79 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 General Employees'Pension Plan A. Ordinances The Plan was established under the Code of Ordinances for the Village of Tequesta, Florida, Chapter 2,Article III, Division 1, Section 2-61 (a), and was most recently amended under Ordinance No. 11-I I passed and adopted on June 9, 2011. The Plan is also governed by certain provisions of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. B. Effective Date December 11, 2003 C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time general employees who are not classified as police officers or firefighters are eligible for membership on the date of employment. F. Credited Service Service is measured as the total number of years and completed months of a year as a general employee with the Village. No service is credited for any periods of employment for which the member received a refund of their contributions. G.Compensation Base compensation including regular earnings, vacation pay, sick pay, plus all tax-deferred items of income,but excluding any lump sum payments, overtime,bonuses and longevity bonus. H.Average Final Compensation (AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service; does not include lump sum payments of unused leave. 80 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 I. Normal Retirement Eligibility-A member may retire on the first day of the month coincident with or next following the earlier of (1)age 62, or (2) 30 years of Credited Service regardless of age. Benefit - 2.0% of AFC multiplied by Credited Service with a maximum benefit equal to 100% of AFC. Normal Form of Benefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None J. Early Retirement Eligibility - A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 6 years of Credited Service. Benefit - The Normal Retirement Benefit is reduced by 5.0% for each year by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None K.Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. L. Service Connected Disability Eligibility-Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village as a result from an act occurring in the performance of service for the Village is immediately eligible for a disability benefit. Benefit -The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 42%of AFC. Normal Form of Benefit- 10 Years Certain and Life thereafter. COLA: None 81 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 M. Non-Service Connected Disability Eligibility -Any member who has 6 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service to the Village is immediately eligible for a disability benefit. Benefit -The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 25%of AFC. Normal Form of Benefit- 10 Years Certain and Life thereafter. COLA: None N. Death in the Line of Duty Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service. Benefit- The beneficiary will receive the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. The benefit is payable at the member's Normal Retirement date. Normal Form of Benefit- 10 Years Certain COLA: None The beneficiary of a plan member with less than 6 years of Credited Service at the time of death will receive a refund of the member's accumulated contributions with interest. 0.Other Pre-Retirement Death Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service. Benefit - The beneficiary will receive the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. The benefit is payable at the member's Normal Retirement date. Normal Form of Benefit- 10 Years Certain COLA: None The beneficiary of a plan member with less than 6 years of Credited Service at the time of death will receive a refund of the member's accumulated contributions with interest. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. 82 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Q. Optional Forms In lieu of electing the Normal Form of benefit,the optional forms of benefits available to all retirees are the Life Annuity option or the 50%, 66 2/3%, 75%and 100%Joint and Survivor options. R. Vested Termination Eligibility - A member has earned a non-forfeitable right to Plan benefits after the completion of 6 years of Credited Service. Benefit - The benefit is the member's accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the member's Normal Retirement date. Alternatively, members can elect a reduced Early Retirement benefit any time after age 50. Normal Form of Benefit- 10 Years Certain and Life thereafter; other options are also available. COLA: None Members terminating employment with less than 6 years of Credited Service will receive a refund of their own accumulated contributions with interest. S. Refunds Eligibility - All members terminating employment with less than 6 years of Credited Service are eligible. Optionally, vested members (those with 6 or more years of Credited Service) may elect a refund in lieu of the vested benefits otherwise due. Benefit- Refund of the member's contributions with interest. Interest is currently credited at a rate of 3%. T. Member Contributions 5%of Compensation U. Employer Contributions Any additional amount determined by the actuary needed to fund the plan properly according to State laws. V. Cost of Living Increases Not Applicable W. 13th Check Not Applicable 83 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 X.Deferred Retirement Option Plan Not Applicable Y. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a Village of Tequesta General Employees' Pension Trust Fund liability if continued beyond the availability of funding by the current funding source. Z. Changes from Previous Valuation There have been no changes since the last valuation. The General Employees' Pension Trust Fund does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2020. GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30,2020 Assets Cash and cash equivalents $ 41,678 Investments Equities 4,842,805 Fixed income 1,681,671 Real Estate Funds 530,254 Total investments 7,054,730 Contributions receivable 27,365 Accrued interest receivable 7,513 Prepaid items 13,173 Total Assets 7,144,459 Liabilities Accounts payable 15,303 Total Liabilities 15,303 Net Position Restricted for Pension Benefits $ 7,129,156 84 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Additions Contributions: Employer $ 391,341 Employee 180,175 Total Contributions 571,516 Investment earnings Net appreciaton in fair value of investments 500,164 Gain on sale of investments 23,247 Interest and dividends 127,757 Total investment earnings 651,168 Less investment expenses (38,142) Net investment earnings 613,026 Miscellaneous 2,286 Total Additions 1,186,828 Deductions Benefits paid 161,419 Refunds of contributions 53,330 Administrative expenses 54,653 Total Deductions 269,402 Change in Net Position 917,426 Net Position Restricted for Pension Benefits Beginning of year 6,211,730 End of year $ 7,129,156 85 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The following summarizes the pension related amounts for the pension plans as of the indicated measurement date: Net Pension Deferred Deferred Pension Measurement Net Pension Liability Outflow of Inflow of Expense Date Asset Resources Resources General Employees' Pension Trust Fund 9/30/19 $ 38,257 $ 796,534 $ 399,189 $ 410,106 Firefighters Pension Trust Fund 9/30/19 1,681,576 1,347,020 572,444 496,829 Police Pension Trust Fund 9/30/19 977,410 283,929 428,411 996,281 FRS 6/30/20 717,034 231,973 60,686 150,583 HIS 6/30/20 109,870 17,667 56,086 9,042 Total $ 977,410 $ 2,546,737 $ 2,677,123 $ 1,516,816 $ 2,062,841 Vllage of'Tequesta Defined Contribution Plan The Village Single-Employer Defined Contribution Plan (the Plan) was established on February 1, 2013 with an effective date of March 1, 2013. The Plan is a 401(a) money purchase plan in the form of the Empower Retirement Governmental Money Purchase Plan and Trust (The Plan) with assets of the Plan held in trust for the exclusive benefit of the Plan participants and their beneficiaries. The assets shall be invested in the Plan and shall not be diverted to any other purpose. The employer's beneficial ownership of Plan assets held in the Empower Retirement Trust shall be held for the further exclusive benefit of the Plan participants. The Village Manager is the coordinator for the Plan and is authorized to execute all necessary agreements with the Empower Retirement Trust incidental to the administration of the Plan. The Village serves as Trustee under the Plan. In a defined contribution plan, benefits depend solely on amounts contributed to the Plan plus investment earnings. The Plan covered the Police Chief and Assistant Police Chief. Employees must designate a mandatory participation contribution between the range of 1% to 12% for the Plan year as a condition of participation in the Plan. The participant shall not have the right to discontinue or vary the rate after becoming a Plan participant. Newly eligible employees have an election window of 30 days from the date of eligibility to make the election to participate in the mandatory contribution portion of the Plan which will begin the first of the month following the end of the election window. This election is irrevocable and remains in force until the employee terminates employment or ceases to be eligible to participate in the Plan. The Village contributes 10% of compensation. Employees are immediately vested in the Plan. Plan provisions are established and may be amended by the Village. The Village does not hold or administer resources of the Plan and consequently, the Plan does not meet the requirements for inclusion in the Village's financial statements. The Plan does not issue a stand-alone financial report. The fair value of the Plan assets at September 30, 2020 was $142,825. Employee contributions to the Plan for fiscal year ended September 30, 2020 were $12,398; the Village's contributions were $26,561. 86 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 G. Other Postemployment Benefits (OPEB) rillage of Tequesta's Other Postemployment Benefits Plan Plan description. The Village of Tequesta provides health insurance benefits to its retired employees through a single-employer plan administered by the Village. Pursuant to the provisions of Section 112.0801, Florida Statutes, former employees who retire from the Village and eligible dependents may continue to participate in the Village's fully-insured benefit plan for medical insurance coverage. The Village subsidizes the premium rates paid by retirees by allowing them to participate in the plan at reduced or blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The benefits provided under this defined benefit plan are provided until the retiree's attainment of age 65 (or until such time at which retiree discontinues coverage under the Village sponsored plans,if earlier). Funding Policy. The Village's Other Post-Employment Benefits are unfunded (pay-as-you-go basis). That is, the Village does not have a separate Trust Fund to make contributions to advance-fund the obligation. Current and future retirees are required to pay 100% of the blended premium to continue coverage under the Village's group health insurance program. Summary of Membership Information. The following table provides a summary of the number of participants in the plan at the measurement date of September 30, 2019: Inactive members or beneficiaries currently receiving benefits 4 Inactive members entitled to but not yet receiving benefits 0 Active members 100 Total 104 OPEB Liability,Expense,Deferred Outflows of Resources, and Deferred Inflows of Resources The Village recognizes the OPEB liability and the OPEB expense in the financial statements, along with the related deferred outflows and inflows of resources. The OPEB liability is the difference between the total OPEB liability and the plan's fiduciary net position. Since the plan is currently unfunded,the net OPEB liability is equal to and reported as total OPEB liability. At September 30, 2020, the Village reported an OPEB liability of $390,250 that is based on an Alternative Measurement Method calculation performed as of a valuation date of September 30, 2019 and measurement date of September 30, 2019. 87 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 For the fiscal year ended September 30, 2020,the Village recognized OPEB expense of$254,438. Total OPEB Liability- Beginning (September 30,2018) $ 644,688 Service cost 50,439 Interest on the Total OPEB Liability 25,960 Difference between expected and actuarial experience of the Total OPEB Liability (309,165) Changes in assumptions and other inputs 12,964 Benefit payments (34,636) Net change in Total OPEB Liability (254,438) Total OPEB Liability- Ending (September 30,2019) $ 390,250 hi addition, the Village reported an outflow of resources due to the benefits paid after the measurement date in the amount of$19,040. There were no deferred inflows related to OPEB. Actuarial methods, assumptions and other inputs. The total OPEB liability was determined using Alternative Measurement Method (AMM) as authorized by GASB Statement No. 75. Valuation Date September 30, 2019 Measurement Date September 30, 2019 Actuarial Cost Method Entry age normal Inflation 2.25 % Discount Rate 2.75% Salaty Increase 6.00% Retirement Age Varies based on several factors including plan-specified retirement eligibility provisions and experiences Mortality PR-2000 Combined Healthy Participant mortality tables,projected the year 2000 using Projection Scale AA Healthcare Cost Trend Rates 6.50%for FY beginning 2020, 6.25%for FY beginning 2021 and then gradually decreasing to an ultimate trend rate of 4.00%in 2029 Other infornation Notes Changes in assumptions and other inputs reflected in the schedule of changes in the Total OPEB Liability include: -discount rate changed to 2.75%(from 3.83%) -premiums were updated based on information provided -updated inflation and healthcare cost trend rates as described above There were no benefit changes during the year. 88 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each AMM calculation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. As authorized by GASB Statement No. 75, the Alternative Measurement Method allows to use simplifications of certain assumptions in measuring the costs and liabilities. Discount Rate For plans that do not have formal assets, the discount rate is equal to the tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating as of the measurement date. For the purpose of this AMM calculation, the municipal bond rate is 2.75% (based on the daily rate of Fidelity's "20-Year Municipal GO AA Index" closest to but not later than the measurement date). The discount rate was 3.83%as of the beginning of the measurement year. Sensitivity of'Total OPEB Liability Regarding the sensitivity of the total OPEB liability to changes in the discount rate, the following presents the plan's total OPEB liability, calculated using a discount rate of 2.75%, as well as what the plan's total OPEB liability would be if it were calculated using a discount rate that is one percent lower or one percent higher. Sensitivity of Total OPEB Liability to the Discount Rate Assumption Current Discount Rate 1%Decrease Assumption 1%Increase 1.75% 2.75% 3.75% Village's OPEB liability $400,637 $ 390,250 $ 373,795 Regarding the sensitivity of the total OPEB liability to changes in the healthcare cost trend rates, the following presents the plan's total OPEB liability, calculated using the assumed trend rates as well as what the plan's total OPEB liability would be if it were calculated using a trend rate (6.5%) that is one percent lower or one percent higher. Sensitivity of Total OPEB Liability to the Healthcare Cost Trend Rate Assumption Current Healthcare Cost 1%Decrease Trend Rate Assumption 1%Increase 5.5% 6.5% 7.5% Village's OPEB liability $ 352,607 $ 390,250 $ 433,710 89 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 IL Construction and Other Commitments The Village has active construction projects as of September 30, 2020. The projects include various water, stormwater, architect services for the new recreation facility and purchase of a new fire rescue vehicle. At year end, The Village had the following significant related to uncompleted contacts for construction and equipment: Description Remaining Commitment Governmental Funds: 2020 Fire rescue vehicle $ 298,661 Architect services for new recreation facility 46,563 345,224 Business-type Activities: Water utility projects 650,962 Stormwater projects 233,630 $ 884,592 All commitments are financed from existing Village resources. Inter-Local Agreement On December 20, 1994,the Village entered into an Inter-local agreement with Palm Beach County. Per the agreement, Palm Beach County provided for partial funding, land acquisition and design and construction of a branch library within Tequesta. Upon completion of the project, the library was leased to Palm Beach County for 50 years for an annual rent of one dollar. In the event the Village terminates the lease before the end of 50 years, the Village must reimburse Palm Beach County a depreciated value using a useful life of 25 years based on an initial value of $405,000 calculated on a straight-line basis. L Contracted Services—Refuse and Recycling Collection The Village entered into a new agreement with Waste Management, Inc. of Florida with the initial term for a period of eight years beginning October 1, 2017 and ending September 30, 2025 with optional renewal for one additional five year period. With this agreement the Village granted Waste Management the exclusive franchise for solid waste collection of residential, commercial, industrial and roll-off refuse, recycling and vegetative waste. The annual change in the collection component is determined using the Water, Sewer, and Trash Collection CPI published monthly by The Bureau of Labor Statistics during the most recent previous twelve consecutive months period beginning on April 1 and ending March 31. J. 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, injuries to employees and natural disasters. While the Village cannot anticipate the areas in which potential claims may arise, it purchases commercial insurance to protect against areas of possible exposure germane to municipal entities such as property, liability, automobile, workers' compensation, crime, storage tank, inland marine, statutory accidental death and dismemberment, firefighter cancer program coverage, and railroad coverage. Deductibles and limits vary by coverage and are secured based upon the Village's tolerance of risk retention in each area. 90 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 At the Village Council's direction, the property deductible of$100,000 is applicable for all perils excluding hurricane/windstorm damage. The Florida Municipal Insurance Trust (FMIT) applies a named storm deductible of 5% of the 100% value of real and personal property, personal property of others in our care, custody and control values at the time of loss or damage at the locations where the damage occurred, subject to the policy deductible, whichever is greater. The Village continues to self-insure all property claims up to $100,000 via a policy deductible. FMIT issued members in good standing a return of premium credit. The Village received a total credit of$7,369 related to policy year 2018/2019. The Village remains fully insured with the FMIT for workers' compensation coverage with statutory limits. Premiums are based upon risk class and remuneration of covered employees adjusted by an experience modification factor which includes three prior years of claims history. At the end of each fiscal year, the plan is audited and the Village can either receive a return of premium or be required to pay additional premium base upon actual versus estimated payroll. FMIT's final audit for fiscal year 2019/2020 resulted in the Village being refunded a total of$8,456 in fiscal year 2021. K. Lease Obligations Capital Lease-Police Fleet The Village entered into a capital lease with Enterprise Fleet Management Trust in the amount of $105,305 with funding on September 18, 2020 for the financing of three Dodge Durango vehicles. The applicable interest rate is 3.15% and interest and principal payments are due monthly. This is a five (5) year lease with sixty(60)payments. The following is the schedule of the of the future minimum lease payments under this capital lease arrangement at September 30, 2020: Fiscal Year Ending September 30: Amount 2021 $ 24,019 2022 24,019 2023 24,019 2024 24,019 2025 26,596 Total minimum lease payments 122,672 Less amount presenting interest (17,857) Present Value of Future Minimum Lease Payments $ 104,815 Capital Lease—Police Tasers The Village entered into a 60-month capital lease with Axon Enterprise, Inc. in the amount of $31,100 with funding on September 18, 2018 for the financing of twenty (20) tasers. The payments are due annually. The following is the schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2020: Fiscal Year Ending September 30: Amount 2021 $ 6,620 2022 6,620 Total minimum lease payments 13,240 Present Value of Future Minimum Lease Payments $ 13,240 91 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Capital Lease-Fire Equipment The Village entered into a Master Equipment Lease Purchase agreement with Community First National Bank in the amount of$132,774 with funding on January 5, 2016 for the financing of fire equipment. The applicable interest rate is 2.889% and interest and principal payments are due annually on January 5th. The lease matured on 01/05/2020 and paid off at fiscal year ending 9/30/2020. Capital Lease-Fire Pumper The Village entered into a capital lease with SunTrust in the amount of$432,844 with funding on October 29, 2013 for the financing of a fire pumper. The applicable interest rate is 2.423% and interest and principal payments are due annually on November 1 lth. This is a nine (9) year lease with ten (10)payments. Pursuant to Section 4.4(b) of the Agreement, the interest rate automatically increased from 2.42% to 2.94%, effective as of January 1, 2018, due to a decrease in the maximum federal corporate income tax rate. The following is a new schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2020: Fiscal Year Ending September 30: Amount 2021 $ 48,794 2022 48,794 2023 48,794 Total minimum lease payments 146,382 Less amount representing interest (8,203) Present Value of Future Minimum Lease Payments $ 138,179 L. Long-Term Liabilities Promissory Notes The Village issues long-term debt to provide funds for the acquisition and construction of major capital facilities. Promissory notes have been signed for both governmental and business-type activities. These notes mature in 4 to 10 years and have interest rates from 3.685% to 4.96% per year. The outstanding notes from direct borrowings and direct placements related to governmental activities of $712,790 contain events of default and remedies whereby failure of the Village to pay the principal and interest on any debt when due or failure to observe and perform any covenant or condition applicable to the various Village obligations, constitutes an "event of default." Upon the occurrence of any event of default,the noteholder may declare all outstanding amounts become immediately due. The Village's outstanding notes from direct borrowings related to its business-type activities of $3,119,112 are secured by pledged revenues of the water utility system or by a pledge of a covenant to budget and appropriate non-ad valorem revenues. These notes contain (1) a provision that, in an event of default, the timing of repayment of outstanding amounts may become immediately due if pledged revenues during the fiscal year are less than 120% of debt service requirements for that year and (2) a provision that if the Village is unable to make payment, outstanding amounts may become due immediately. 92 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The Notes outstanding at September 30, 2020 are as follows: Signed Original Interest Final Outstanding Promissory Notes Payable Date Borrowing Rate Maturity 9/30/2020 Government Activities Public Improvements/P.S. Building 9/13/2002 $ 5,000,000 4.28% 9/13/2022 $ 712,790 Business-type Activities Water Plant Expansion 6/30/2004 $ 645,170 4.96% 4/1/2021 $ 36,895 Public Improvement(Refunding) 7/14/2008 6,554,935 3.69% 3/1/2028 3,082,217 Total Business-type Activities $ 3,119,112 Legal Debt Margin The Village is subject to a bonded debt limitation of 10% of total assessed value of taxable real property. The final gross taxable value at September 30, 2020 was $1,151,534,124. As of September 30, 2020 the Village did not exceed the debt limit of$115,153,412. Changes in Long-Term Liabilities Changes in the Village's long-term liabilities for the fiscal year ended September 30, 2020 are as follows: Governmental Activities Beginning Ending Due Within Balance Additions Deletions Balance One Year Governmental Activities Note Payable-2002 $ 1,046,986 $ - $ 334,196 $ 712,790 $ 348,783 Capital leases 228,793 105,305 77,864 256,234 71,799 Compensated absences 656,329 224,160 97,642 782,847 102,200 Total Governmental Activities $ 1,932,108 $ 329,465 $ 509,702 $ 1,751,871 $ 522,782 * For governmental activities,the liability for compensated absences,pension and OPEB liabilities are liquidated by the general fund. Business-type Activities Beginning Ending Due Within Balance Additions Deletions Balance One Year Business-type Activities Note Payable(2004) $ 77,895 $ - $ 41,000 $ 36,895 $ 36,895 Note Payable(2008) 3,429,686 - 347,469 3,082,217 361,102 Compensated absences 133,513 36,127 463 169,177 15,000 Total Business-type Activities $ 3,641,094 $ 36,127 $ 388,932 $ 3,288,289 $ 412,997 93 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 The debt service requirements for the Village's notes are as follows: Governmental Activities Fiscal Year Ending Promissory Notes September 30: Principal Interest Total 2021 $ 348,783 $ 23,718 $ 372,501 2022 364,007 8,494 372,501 Total $ 712,790 $ 32,212 $ 745,002 Business-type Activities Promissory Notes Fiscal Year Ending Business-type Activities September 30: Principal Interest Total 2021 $ 397,999 $ 109,757 $ 507,756 2022 376,729 94,117 470,846 2023 391,823 79,732 471,555 2024 406,556 64,977 471,533 2025 420,915 49,309 $ 470,224 2026-2028 1,125,090 51,655 1,176,745 Total $ 3,119,112 $ 449,547 $ 3,568,659 Total Primary Government Debt Fiscal Year Ending Total Primary Government Debt September 30: Principal Interest Total 2021 $ 746,782 $ 133,475 $ 880,257 2022 740,736 102,611 843,347 2023 391,823 79,732 471,555 2024 406,556 64,977 471,533 2025 420,915 49,309 2026-2028 1,125,090 51,656 1,176,746 Total $ 3,831,902 $ 481,760 $ 4,313,662 M. Fund Balance Minimum Fund Balance Policy The Village Council has adopted a financial policy to maintain a minimum level of unassigned fund balance in the general fund. The target level is set at two months of general fund operating expenditures over annual revenues (approximately 17%). This amount is intended to provide fiscal stability when economic downturns and other unexpected events occur. If fund balance falls below the minimum target level because it has been used, essentially as a"revenue" source, as dictated by current circumstances, the policy provides for actions to replenish the amount to the minimum target level. Generally, replenishment is to occur within a three-year period. 94 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 At September 30, 2020 the unassigned fund balance was below the minimum target level - 14.16%, which is a 3.23% increase compared to the prior fiscal year. Management continues to propose and implement measures to cover the shortfall in unassigned fund balance. N. Interfund Transfers The composition of interfund transfers for the fiscal year ended September 30, 2020 is as follows: Interfund Transfers Transfers In Capital Improvement Fund General Fund Building Fund Total Transfers Out (1) (2) (3) General Fund $ 173,585 $ - $ 1,151,130 $ 1,324,715 Building Fund - 195,378 - 195,378 Total Interlund Transfers $ 173,585 $ 195,378 $ 1,151,130 $ 1,520,093 (1) Transfer is to restrict infrastructure tax to fund capital projects and improvements. (2)Indirect costs reimbursement. (3)Transfer of restricted building fund balance to its own fund. O. Joint Ventures The Village, in conjunction with six other municipalities, organized a consortium to provide mutual fire and emergency aid. The consortium is known as the Northern Area Mutual Aid Consortium (NAMAC). During 1999, the consortium purchased equipment and supplies as well as collected contributions. The consortium does not issue separate financial statements. The Village has not been obligated to contribute any funds to the consortium since its inception in 1999. P. Subsequent events On January 21, 2021,the Village entered into a loan agreement with Sterling National Bank for the issuance of Capital Improvement Revenue Note, Series 2021 in an amount of$6,890,000 over 20 years. The proceeds of this loan will provide for (i) cost of issuance; (ii) construction of a new community center; (iii) street and sidewalk improvements; (iv) other miscellaneous public safety and public works improvements; and (v) other parks and recreational improvements. The issue provides for semi-annual principal and interest payments at an interest rate of 2.18% with a final maturity date of October 1, 2040. On February 18, 2021, the Village entered into a 3-year equipment lease financing arrangement with Truist Bank for the acquisition of computer hardware in connection with its SAN (Storage Area Network) Project. The total amount financed was $168,389.09 at an interest rate of 1.67%. Principal and interest payments are made annually with a final maturity date of February 18, 2024. 95 3 REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF TEQUESTA,FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Ad valorem taxes $ 7,482,400 $ 7,482,400 $ 7,497,093 $ 14,693 Other taxes 1,547,900 1,639,276 1,711,817 72,541 Charges for services 1,410,950 1,420,950 1,387,467 (33,483) Intergovernmental 888,300 888,300 815,868 (72,432) Intragovernmental 725,450 725,450 725,436 (14) Licenses and permits 737,100 - 680 680 Franchise fees 460,000 460,000 447,682 (12,318) Rents and royalties 221,600 221,600 218,931 (2,669) Miscellaneous 50,750 50,750 19,941 (30,809) Fines and forfeitures 16,000 16,000 11,708 (4,292) Grants,contributions and donations 5,000 55,000 101,798 46,798 Investment earnings 115,000 115,000 48,065 (66,935) Total Revenues 13,660,450 13,074,726 12,986,486 (88,240) Expenditures Current: General government 2,369,350 2,373,389 2,207,621 165,768 Public safety 7,964,180 7,462,703 7,385,605 77,098 Transportation 1,405,400 1,400,035 1,309,050 90,985 Leisure services 686,950 685,250 603,268 81,982 Capital outlay 510,000 595,059 298,728 296,331 Debt service: Principal 411,620 427,061 412,060 15,001 Interest 44,500 47,968 44,058 3,910 Total Expenditures 13,392,000 12,991,465 12,260,390 731,075 Excess(Deficiency)of Revenues Over Expenditures 268,450 83,261 726,096 642,835 Other Financing Sources(Uses) Transfers in - 195,378 195,378 - Transfers out (127,100) (127,100) (1,324,715) (1,197,615) Proceeds on sale of capital assets 15,000 30,689 21,976 (8,713) Issuance of debt - 96,505 105,305 8,800 Total Other Financing Sources(Uses) (112,100) 195,472 (1,002,056) (1,197,528) Net Change in Fund Balance 156,350 278,733 (275,960) (554,693) Fund Balance-Beginning 3,670,429 3,670,429 3,670,429 - Fund Balance-Ending $ 3,826,779 $ 3,949,162 $ 3,394,469 $ (554,693) See note to budgetary comparison schedule. 96 VILLAGE OF TEQUESTA, FLORIDA NOTE TO THE BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Note 1 —Budgets and Budgetary Accounting The Village is required to present a budget to actual comparison for the general fund and any major special revenue fund with a legally adopted annual budget. The Village may not include nonmajor special revenue funds, or funds of other fund types. This fiscal year, the Village presents this schedule for the general fund only. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. For budgeting purposes, current year encumbrances are not treated as expenditures. All budgets are legally enacted through passage of a resolution. Although the Village Council requires all inter-department budget amendments to go before the Village Council for approval, the budget was adopted on a fund basis. However, the legal level of budgetary control is at the department level What this means is that any amendment that changes the department's total budget requires the Village Council to approve it in the same manner that the original budget was approved—by resolution. The original budget is the budget in place at the start of the fiscal year, which includes all of the following: The budget passed by the Village Council +Subsequent amendments made prior to the start of the fiscal year +Carryovers from the previous year (encumbrances) =Original budget The final budget includes all adjustments to the budget applicable to the fiscal year, even if they take place after the close of the fiscal year. During the fiscal year, there were no supplemental appropriations. Appropriations are legally controlled at the department level and expenditures may not legally exceed budgeted appropriations at that level. 97 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS FIREFIGHTERS' PENSION TRUST FUND Measurement Date,September 30, 2020 2019 2018 2017 2016 2015 2014 Total Pension Lability Service cost $ 447,688 $ 333,395 $ 392,933 $ 366,393 $ 348,504 $ 334,559 $ 312,030 Interest 951,218 878,984 827,256 788,885 778,642 679,400 582,897 Changes of benefit terms (6,147) 22,243 - - - 318,787 - Difference between expected and actual experience 346,662 (41,742) 71,910 (22,327) (401,835) 108,010 450 Changes of assumptions - 378,870 - (136,724) 300,255 - Benefit payments (216,799) (216,799) (518,495) (163,805) (438,149) (61,913) (53,637) Refunds (8,648) - (1,852) - - - Other (151,438) (151,438) (242,266) 118,555 30,162 Net Change in Total Pension Liability 1,513,974 1,354,951 622,166 679,132 345,151 1,497,398 871,902 Total Pension Liability-Beginning 13,253,864 11,898,913 11,276,747 10,597,615 10,252,464 8,755,066 7,883,164 Total Pension Liability-Ending(a) $14,767,838 $13,253,864 $11,898,913 $ 11,276,747 $10,597,615 $10,252,464 $8,755,066 Plan Fiduciary Net Position Contributions-employer $ 443,018 $ 332,559 $ 182,198 $ 209,615 $ 60,162 $ 335,771 $ 351,652 Contributions-employer(from State)* 171,939 156,424 307,956 300,401 394,709 189,010 100,617 Contributions-member 101,983 94,343 90,424 79,564 68,982 64,721 65,803 Net Investment income 1,021,058 358,277 943,640 974,383 609,318 77,213 567,786 Benefit payments (216,799) (216,799) (518,495) (163,805) (438,149) (61,913) (53,637) Refunds (8,648) - - (1,852) - - - Administrative expense (25,874) (30,043) (31,858) (18,789) (27,450) (27,290) (18,921) Other(Use of State Contribution Reserve) - - (151,438) (151,438) (242,266) - - Net Change in Plan Fiduciary Net Position 1,486,677 694,761 822,427 1,228,079 425,306 577,512 1,013,300 Plan Fiduciary Net Position-Beginning 11,572,288 10,877,527 10,055,100 8,827,021 8,401,715 7,824,203 6,810,903 Plan Fiduciary Net Position-Ending(b) $13,058,965 $ 11,572,288 $10,877,527 $10,055,100 $8,827,021 $8,401,715 $7,824,203 Net Pension Liability-Ending(a)-(b) $ 1,708,873 $ 1,681,576 $ 1,021,386 $ 1,221,647 $ 1,770,594 $ 1,850,749 $ 930,863 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 88.43% 87.31% 91.42% 89.17% 83.29% 81.95% 89.37% Covered Payroll $ 1,699,718 $ 1,572,385 $ 1,507,072 $ 1,446,616 $ 1,379,650 $ 1,294,416 $ 1,316,060 Net Pension Liability as a Percentage of Covered Payroll 100.54% 106.94% 67.77% 84.45% 128.34% 142.98% 70.73% *State Contribution Reserve was used to offset the Village's contribution requirements for the fiscal year ending 2016,2017 and 2018. This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 98 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS FIREFIGHTERS' PENSION TRUST FUND Fiscal Year Actuarially Contribution Actual Ended Determined Actual Deficiency Covered Contribution as a% September 30, Contribution Contribution (Excess) Payroll of Covered Payroll 2014 $ 416,665 $ 422,107 $ (5,442) $ 1,316,060 32.07% 2015 403,211 406,226 (3,015) 1,294,416 31.38% 2016 454,871 454,871 - 1,379,650 32.97% 2017 498,504 510,016 (11,512) 1,446,616 35.26% 2018 485,729 490,154 (4,425) 1,507,072 32.52% 2019 474,074 488,983 (14,909) 1,572,385 31.10% 2020 614,958 614,958 - 1,699,718 36.18% Notes to Schedule Valuation Date 10/1/2018 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Entry age normal Amortization method Level dollar, closed Remaining amortization period 20 years Asset valuation method 5-year smoothed market Inflation 2.50% Salary increases 6.0%, including inflation Investment rate of return 7.00% Retirement age 100%upon reaching normal retirement age. Probability of early retirement is 5%or each year eligible. Mortality RP-2000 Combined Healthy Participant Mortality Table (for pre-retirement mortality) and the PR-2000 Mortality Table for Annuitants (for post-retirement mortality),with mortality improvements projected to all future years after 2000 using Scale BB. For males,the base mortality rates include a 90%blue collar adjustment and a 10%white collar adjustment. For females,the base mortality rates include a 100%white collar adjustment. Same rates used for a Special Risk Class members of the FRS in the July 1, 2017 Actuarial Valuation Report, as mandated by Chapter 112.63, Florida Statutes. Other information See discussion of valuation results in the October 1, 2018 Actuarial Valuation report, dated March 20, 2019. This schedule is presented as required,however,until a full 10-year trend is compiled, information is presented for those years available. 99 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS FIREFIGHTERS' PENSION TRUST FUND Fiscal Year Ended September 30, 2020 2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expenses 8.30% 2.93% 8.92% 10.58% 7.69% 0.38% 7.46% This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 100 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE VILLAGE'S NET PENSION ASSET AND RELATED RATIOS POLICE OFFICERS' PENSION TRUST FUND Measurement Date,September 30, 2020 2019 2018 2017 2016 2015 2014 Total Pension Lability Service cost $ 304,219 $ 100,925 $ 98,621 $ 80,711 $ 110,495 $ 126,703 $ 161,156 Interest 345,149 215,318 193,922 200,356 201,452 213,603 169,526 Benefit changes - 821,833 - - - (39,467) - Difference between expected and actual experience (121,364) (85,146) 34,217 (329,387) (226,384) (391,613) - Changes of assumptions - 120,973 - (30,633) 75,463 -Benefit payments (49,095) (40,184) (27,708) (27,708) (27,708) (30,312) (10,073) Refunds (42,075) - (52,038) (43,331) Other(increase in State contribution reserve) (202,087) 649,262 - - - - - Net Change in Total Pension Liability 234,747 1,782,981 299,052 (106,661) 81,280 (121,086) 277,278 Total Pension Liability-Beginning 4,672,055 2,889,074 2,590,022 2,696,683 2,615,403 2,736,489 2,459,211 Total Pension Liability-Ending(a) $ 4,906,802 $ 4,672,055 $ 2,889,074 $ 2,590,022 $ 2,696,683 $ 2,615,403 $ 2,736,489 Plan Fiduciary Net Position Contributions-employer $ - $ 317,338 $ 175,116 $ 40,829 $ 38,638 $ 80,782 $ 111,164 Contributions-employer(from State) 293,462 649,262 - - - - - Contributions-member 70,327 65,446 31,338 16,998 17,067 20,545 25,888 Net Investment income 477,038 143,441 344,620 357,477 306,504 20,718 219,219 Benefit payments (49,095) (40,184) (27,708) (27,708) (27,708) (30,312) (10,073) Refunds (42,075) - - - (52,038) - (43,331) Administrative expense (25,874) (30,034) (31,858) (18,788) (27,026) (27,967) (18,677) Other-use of State contribution reserve (202,087) * 297,733 ** - - - - - Net Change in Plan Fiduciary Net Position 521,696 1,403,002 491,508 368,808 255,437 63,766 284,190 Plan Fiduciary Net Position-Beginning 5,649,465 4,246,463 3,754,955 3,386,147 3,130,710 3,066,944 2,782,754 Plan Fiduciary Net Position-Ending(b) $ 6,171,161 $ 5,649,465 $ 4,246,463 $ 3,754,955 $ 3,386,147 $ 3,130,710 $ 3,066,944 Net Pension Asset-Ending(a)-(b) $(1,264,359) $ (977,410) $(1,357,389) $(1,164,933) $ (689,464) $ (515,307) $ (330,455) Plan Fiduciary Net Position as a Percentage of Total Pension Liability 125.77% 120.92% 146.98% 144.98% 125.57% 119.70% 112.08% Covered Payroll $ 1,229,934 $ 1,153,957 $ 582,166 $ 339,957 $ 341,342 $ 410,897 $ 517,760 Net Pension Asset as a Percentage of Covered Payroll (102.80)% (84.70)% (233.16)% (342.67)% (201.99)% (125.41)% (63.82)% * State contribution reserve was used to offset the Village's contribution requirements for fiscal year ending 2020. **Transers from 401(a)plan. This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 101 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS POLICE OFFICERS' PENSION TRUST FUND Fiscal Year Actuarially Contribution Actual Ended Determined Actual Deficiency Covered Contribution as a% September 30, Contribution Contribution (Excess) Payroll of Covered Payroll 2014 $ 111,164 $ 111,164 $ - $ 517,760 21.47% 2015 80,782 80,782 - 410,897 19.66% 2016 37,377 38,638 (1,261) 341,342 11.32% 2017 40,659 40,829 (170) 339,957 12.01% 2018 175,116 175,116 - 582,166 30.08% 2019 317,338 317,338 - 1,153,957 27.50% 2020 293,462 * 293,462 - 1,229,934 23.86% Notes to Schedule *The actual employer contribution consists of the annual state contribution of$91,375 and the Chapter 185 reserve balance of$202,087. Valuation Date 10/01/2018 Actuarially determined contribution rates are calculated as of October 1,which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Entry age normal Amortization method Level dollar, closed Remaining amortization period 20 years Asset valuation method 5-year smoothed market Inflation 2.50% Salary increases 6.0%,including inflation Investment rate of return 7.00% Retirement age 100%upon reaching normal retirement age. Probability of early retirement is 5%or each year eligible. Mortality RP-2000 Combined Healthy Participant Mortality Table (for pre-retirement mortality)and the PR-2000 Mortality Table for Annuitants (for post-retirement mortality), with mortality improvements projected to all future years after 2000 using Scale BB. For males,the base mortality rates include a 90%blue collar adjustment and a 10%white collar adjustment. For females,the base mortality rates include a 100%white collar adjustment. Same rates used for a Special Risk Class members of the FRS in the July 1, 2017 Actuarial Valuation Report, as mandated by Chapter 112.63, Florida Statutes. Other Information: See discussion of valuation results in the October 1,2018 Actuarial Valuation report, dated March 20,2019 This schedule is presented as required,however,until a full 10-year trend is compiled,information is presented for those years available. 102 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS POLICE OFFICERS' PENSION TRUST FUND Fiscal Year Ended September 30, 2020 2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expenses 8.30% 2.93% 8.92% 10.58% 7.69% 0.38% 7.46% This schedule is presented as required, however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 103 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE VILLAGE'S NET PENSION LIABILITY (ASSET)AND RELATED RATIOS GENERAL EMPLOYEES' PENSION TRUST FUND Measurement Date,September 30, 2020 2019 2018 2017 2016 2015 2014 Total Pension Lability Service cost $ 547,702 $ 461,164 $ 447,305 $ 380,051 $ 359,231 $ 300,325 $ 278,029 Interest 468,322 425,911 373,859 329,590 285,954 253,701 216,124 Benefit changes - - - - - - Difference between actual and expected experience 101,865 (156,013) 66,509 (112,103) (40,094) (157,539) Assumption changes 127,729 - - 362,784 - -Benefit payments (161,419) (160,588) (79,332) (41,859) (16,657) (11,918) (8,534) Refunds (53,330) (48,114) (27,837) (13,511) (16,161) (5,959) (4,454) Net Change in Total Pension Liability 1,030,869 522,360 780,504 904,952 572,273 378,610 481,165 Total Pension Liability-Beginning 6,249,987 5,727,627 4,947,123 4,042,171 3,469,898 3,091,288 2,610,123 Total Pension Liability-Ending(a) $ 7,280,856 $ 6,249,987 $ 5,727,627 $ 4,947,123 $ 4,042,171 $ 3,469,898 $ 3,091,288 Plan Fiduciary Net Position Contributions-employer and State $ 391,341 $ 362,848 $ 350,412 $ 305,931 $ 201,704 $ 194,376 $ 184,627 Contributions-member 180,175 161,553 156,434 143,361 134,829 115,288 100,560 Net investment income 615,311 235,519 417,228 562,828 191,848 (36,136) 308,314 Benefit payments (161,419) (160,588) (79,332) (41,859) (16,657) (11,918) (8,534) Refunds (53,330) (48,114) (27,837) (13,511) (16,161) (5,959) (4,454) Administrative expense (54,652) (48,241) (43,300) (37,296) (44,359) (38,098) (25,678) Net Change in Plan Fiduciary Net Position 917,426 502,977 773,605 919,454 451,204 217,553 554,835 Plan Fiduciary Net Position-Beginning 6,211,730 5,708,753 4,935,148 4,015,694 3,564,490 3,346,937 2,792,102 Plan Fiduciary Net Position-Ending(b) $ 7,129,156 $ 6,211,730 $ 5,708,753 $ 4,935,148 $ 4,015,694 $ 3,564,490 $ 3,346,937 Net Pension Liability(Asset)-Ending(a)-(b) $ 151,700 $ 38,257 $ 18,874 $ 11,975 $ 26,477 $ (94,592) $ (255,649) Plan Fiduciary Net Position as a Percentage of Total Pension Liability 97.92% 99.39% 99.67% 99.76% 99.34% 102.73% 108.27% Covered Payroll $ 3,603,500 $ 3,231,060 $ 3,128,680 $ 2,867,220 $ 2,696,572 $ 2,305,760 $ 2,011,191 Net Pension Liability(Asset)as a Percentage of Covered Payroll 4.21% 1.18% 0.60% 0.42% 0.98% (4.10)% (12.71)% This schedule is presented as required, however, until a full 10-year trend is compiled, the Village is only presenting information for those years for which information is available. 104 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS GENERAL EMPLOYEES' PENSION TRUST FUND Fiscal Year Actuarially Contribution Actual Ended Determined Actual Deficiency Covered Contribution as a% September 30, Contribution Contribution (Excess) Payroll of Covered Payroll 2014 $ 184,627 $ 184,627 $ - $ 2,011,191 9.18% 2015 194,376 194,376 - 2,305,760 8.43% 2016 201,704 201,704 - 2,696,572 7.48% 2017 235,972 305,931 (69,959) 2,867,220 10.67% 2018 350,412 350,412 - 3,128,680 11.20% 2019 362,848 362,848 - 3,231,060 11.23% 2020 391,341 391,341 - 3,603,500 10.86% Notes to Schedule Valuation Date 10/01/2018 Actuarially determined contribution rates are calculated as of October 1,which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Aggregate method Amortization method N/A Remaining amortization period N/A Asset valuation method 5-year smoothed market Inflation 2.50% Salary increases 6.0%,including inflation Investment rate of return 7.00% Rate of retirement 100%when first eligible for normal retirement; 5%for each year eligible for early retirement. Mortality RP-2000 Combined Healthy Participant Mortality Table (for pre-retirement mortality) and the PR-2000 Mortality Table for Annuitants (for post-retirement mortality),with mortality improvements projected to all future years after 2000 using Scale BB. For males,the base mortality rates include a 50%blue collar adjustment and a 50%white collar adjustment. For females,the base mortality rates include a 100%white collar adjustment. Same rates used for a Regular Class members of the FRS in the July 1,2017 Actuarial Valuation Report, as mandated by Chapter 112.63,Florida Statutes. Other information See discussion of valuation results from the October 1, 2018 Actuarial Valuation report. This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 105 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS GENERAL EMPLOYEES' PENSION TRUST FUND Fiscal Year Ended September 30, 2020 2019 2018 2017 2016 2015 2014 Annual money-weighted rate of return, net of investment expenses 8.83% 3.36% 7.28% 12.52% 3.97% (2.11)% 9.73% This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only representing information for those years for wich information is available. 106 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOUS OTHER POST-EMPLOYMENT BENEFITS Measurement Date,September 30, 2019 2018 2017 Total OPEB Lability Service cost $ 50,439 $ 51,371 $ 53,040 Interest 25,960 22,929 19,739 Difference between expected and actual experience (309,165) - - Changes of assumptions and other inputs 12,964 (13,500) (14,020) Benefit payments (34,636) (39,712) (37,725) Net Change in Total OPEB Liability (254,438) 21,088 21,034 Total OPEB Liability-Beginning 644,688 623,600 602,566 Total OPEB Liability-Ending $ 390,250 $ 644,688 $ 623,600 Covered-Employee Payroll $ 7,284,363 $ 6,694,984 $ 5,708,842 Total OPEB Liability as a percentage of Covered Payroll 5.36% 9.63% 10.92% Notes to Schedule Changes of benefit terms. There were no benefit changes during the year. Changes of assmptions. Changes of assumptions and other inputs reflect the effect of changes in the discount rate each period. Discount rate changed to 2.75%from 3.83%. The following is a select health cost trends: FY Beginning 2020 6.50% 2021 6.25% 2022 6.00% 2023 5.75% 2024 5.50% 2025 5.50% 2026 5.25% 2027 5.25% 2028 5.00% Ultimate health cost trend 4.00% Salary Scale 6.00% The Village of Tequesta implemented GASB Statement No.75 in fiscal year ending 9/30/218 with a measurement date of 9/30/2017.This schedule is presented as required,however,until a full 10-year trend is compiled,the Village is only presenting information for those years for which information is available. 107 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION FLORIDA RETIREMENT SYSTEM (FRS) SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Fiscal Year Ended June 30, 2020 2019 2018 2017 2016 2015 2014 2013 Proportion of the net pension liability 0.00165% 0.00158% 0.00166% 0.00189% 0.00227% 0.00223% 0.00291% 0.00397% Proportionate share of the net pension liability $717,034 $543,212 $501,303 $561,097 $572,594 $ 287,876 $ 177,517 $ 683,841 Covered payroll $222,110 $285,622 $369,696 $391,643 $492,907 $ 508,785 $ 635,666 $ 716,621 Proportionate share of the net pension liability as a percentage of its covered payroll 322.83% 190.19% 135.60% 143.27% 116.17% 56.58% 27.93% 95.43% Plan fiduciary net position as a percentage of the total pension liability 78.85% 82.61% 84.26% 83.89% 84.88% 92.00% 96.09% 88.54% The amounts presented for each fiscal year were determined as of 6/30. This schedule is presented as required,however,until a full 10-year trend is compiled,information is presented for only those years for which information is available. 108 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION HEALTH INSURANCE SUBSIDY PROGRAM (HIS) SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Fiscal Year Ended June 30, 2020 2019 2018 2017 2016 2015 2014 2013 Proportion of the net pension liability 0.00090% 0.00094% 0.00113% 0.00121% 0.00160% 0.00168% 0.00214% 0.00247% Proportionate share of the net pension liability $ 109,870 $104,854 $ 119,802 $129,440 $ 186,087 $ 171,031 $ 200,044 $ 214,766 Covered payroll $222,110 $285,622 $369,696 $391,643 $492,907 $ 508,785 $ 635,666 $ 716,621 Proportionate share of the net pension liability as apercentage of its covered payroll 49.47% 36.71% 32.41% 33.05% 37.75% 33.62% 31.47% 29.97% Plan fiduciary net position as a percentage of the total pension liability 3.00% 2.63% 2.15% 1.64% 0.97% 0.50% 0.99% 178.00% The amounts presented for each fiscal year were determined as of 6/30. This schedule is presented as required,however,until a full 10-year trend is compiled,information is presented for only those years for which information is available. 109 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION FLORIDA RETIREMENT SYSTEM (FRS) SCHEDULE OF VILLAGE CONTRIBUTIONS Fiscal Year Ended September 30, 2020 2019 2018 2017 2016 2015 2014 2013 Contractually required contribution $ 58,313 $ 52,059 $ 48,540 $ 47,988 $ 62,966 $ 43,642 $ 58,404 $ 72,698 Contributions in relation to the contractually required contribution (58,313) (52,059) (48,540) (47,988) (62,966) (43,642) (58,404) (72,698) Contribution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll $233,482 $261,899 $362,908 $382,869 $451,085 $484,772 $ 569,299 $651,093 Contributions as a percentage of covered payroll 24.98% 19.88% 13.38% 12.53% 13.96% 9.00% 10.26% 11.17% The information in this schedule determined as of the Village's most recent fiscal year. This schedule is presented as required,however,until a full 10-year trend is compiled,information is presented for only those years for which information is available. 110 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION HEALTH INSURANCE SUBSIDY PROGRAM (HIS) SCHEDULE OF VILLAGE CONTRIBUTIONS Fiscal Year Ended September 30, 2020 2019 2018 2017 2016 2015 2014 2013 Contractually required contribution $ 3,876 $ 4,348 $ 6,024 $ 6,356 $ 7,488 $ 5,381 $ 6,832 $ 8,204 Contributions in relation to the conractually required contribution (3,876) (4,348) (6,024) (6,356) (7,488) (5,381) (6,832) (8,204) Contribution deficiency(excess) $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll $233,482 $261,899 $362,908 $382,869 $451,085 $484,772 $ 569,299 $651,093 Contributions as a percentage of covered payroll 1.66% 1.66% 1.66% 1.66% 1.66% 1.11% 1.20% 1.26% The information in this schedule determined as of the Village's most recent fiscal year. This schedule is presented as required,however,until a full 10-year trend is compiled,information is presented for only those years for which information is available. 111 t COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 7_ NONMAJOR GOVERNMENTAL FUNDS NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for specific revenue sources that are restricted to expenditures for particular purposes. Building Fund - This fund accounts for permit fees required on all public or private buildings, structures, and facilities. The revenue obtained shall be used solely for carrying out responsibilities in enforcing Florida Building Code. Special Law Enforcement Trust Fund — This fund accounts for forfeitures received by the Police Department. Forfeitures obtained locally are expended as prescribed by Florida Statute Chapter 932.704. Forfeitures obtained through federal programs are expended according to the Department of Justice Asset Forfeiture Program. Capital Projects Funds Capital Projects Funds are used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays including the acquisition or construction of capital facilities and other capital assets. The use of the capital projects fund type is permitted rather than mandated for financial reporting purposes. Capital projects funds can be a valuable management tool for multi-year projects. Capital Improvement Fund — This fund is used to account for the maintenance and upkeep of the Village's general infrastructure (such as roads, bridges, sidewalks and storm water drainage systems) and streetscape beautification projects. Capital Projects Fund — This fund accounts for the acquisition or construction of major capital projects, other than those financed by proprietary fund types. 112 VILLAGE OF TEQUESTA,FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30,2020 Special Revenue Capital Projects Total Special Law Capital Capital Nonmajor Building Enforcement Improvement Projects Governmental Fund Fund Fund Fund Funds Assets Cash $ 685,023 $ 84,976 $ 320,003 $ 68,965 $ 1,158,967 Receivables,net 5 - - - 5 Inventories 201 - - - 201 Prepaid items 2,855 - - - 2,855 Total Assets $ 688,084 $ 84,976 $ 320,003 $ 68,965 $ 1,162,028 Liabilities and Fund Balances Liabilities Accounts payable 13,480 - 1,348 12,699 27,527 Accrued liabilities 15,301 - - - 15,301 Due to other governments 3,370 - - - 3,370 Total Liabilities 32,151 - 1,348 12,699 46,198 Fund Balances Nonspendable Inventories 201 - - - 201 Nonspendable Prepaid Items 2,855 - - - 2,855 Restricted for: Infrastructure - - 240,480 - 240,480 Building 652,877 - - - 652,877 Law Enforcement - 84,976 - - 84,976 Capital Projects - - 46,485 - 46,485 Commited to: Assigned to: Capital Projects - - 31,690 9,703 41,393 Subsequent years budget - - - 46,563 46,563 Total Fund Balances 655,933 84,976 318,655 56,266 1,115,830 Total Liabilities and Fund Balances $ 688,084 $ 84,976 $ 320,003 $ 68,965 $ 1,162,028 113 VILLAGE OF TEQUESTA,FLORIDA COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Special Revenue Capital Projects Total Special Law Capital Capital Nonmaj or Building Enforcement Improvement Proj ects Governmental Fund Fund Fund Fund Funds Charges for services $ 215 $ - $ - $ - $ 215 Licenses and permits 385,193 - - - 385,193 Miscellaneous 55 - - - 55 Grants,contributions and donations - 4,265 - - 4,265 Investment earnings 2,821 232 3,484 - 6,537 Revenues 388,284 4,497 3,484 - 396,265 Expenditures Current: Public safety 666,889 1,512 - - 668,401 Capital outlay 21,214 - 302,022 98,047 421,283 Total Expenditures 688,103 1,512 302,022 98,047 1,089,684 Excess(Deficiency)of Revenues Over Expenditures (299,819) 2,985 (298,538) (98,047) (693,419) Other Financing Sources(Uses) Transfers in 1,151,130 - 173,585 - 1,324,715 Transfers out (195,378) - - - (195,378) Total Other Financing Sources(Uses) 955,752 - 173,585 - 1,129,337 Net Change in Fund Balances 655,933 2,985 (124,953) (98,047) 435,918 Fund Balances-Beginning of Year - 81,991 443,608 154,313 679,912 Fund Balances-End of Year $ 655,933 $ 84,976 $ 318,655 $ 56,266 $ 1,115,830 114 VILLAGE OF TEQUESTA,FLORIDA BUDGETARY COMPARISON SCHEDULE BUILDING FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Charges for services $ - $ - $ 215 $ 215 Licenses and permits - 508,000 385,193 (122,807) Miscellaneous - - 55 55 Investment earnings - - 2,821 2,821 Total Revenues - 508,000 388,284 (119,716) Expenditures Public safety - 690,291 666,889 23,402 Capital outlay - 26,500 21,214 5,286 Total Expenditures - 716,791 688,103 28,688 (Deficiency)of Revenues Over Expenditures - (208,791) (299,819) (91,028) Other Financing Sources(Uses) Transfers in - - 1,151,130 1,151,130 Transfers out - (195,378) (195,378) - Total Other Financing Sources(Uses) - (195,378) 955,752 1,151,130 Net Change in Fund Balance - (404,169) 655,933 1,060,102 Fund Balance-Beginning - - - - Fund Balance-Ending $ - $ (404,169) $ 655,933 $ 1,060,102 115 VILLAGE OF TEQUESTA,FLORIDA BUDGETARY COMPARISON SCHEDULE SPECIAL LAW ENFORCEMENT TRUST FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Grants,contributions and donations $ - $ - $ 4,265 $ 4,265 Investment earnings - 232 232 Total Revenues - - 4,497 4,497 Expenditures Public safety - 2,296 1,512 784 Capital outlay - - - - Total Expenditures - 2,296 1,512 784 Net Change in Fund Balance - (2,296) 2,985 5,281 Fund Balance-Beginning 87,034 87,034 81,991 (5,043) Fund Balance-Ending $ 87,034 $ 84,738 $ 84,976 $ 238 116 VILLAGE OF TEQUESTA,FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Investment earnings $ - $ - $ 3,484 $ 3,484 Total Revenues - - 3,484 3,484 Expenditures Capital outlay - 349,775 302,022 47,753 Total Expenditures - 349,775 302,022 47,753 (Deficiency)of Revenues Over Expenditures - (349,775) (298,538) 51,237 Other Financing Sources(Uses) Transfers in 127,100 127,100 173,585 46,485 Total Other Financing Sources(Uses) 127,100 127,100 173,585 46,485 Net Change in Fund Balance 127,100 (222,675) (124,953) 97,722 Fund Balance-Beginning 475,919 475,919 443,608 (32,311) Fund Balance-Ending $ 603,019 $ 253,244 $ 318,655 $ 65,411 117 VILLAGE OF TEQUESTA,FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues $ - $ - $ - $ - Expenditures Leisure services $ 154,000 $ - $ - $ - Capital outlay - 154,000 98,047 55,953 Total Expenditures 154,000 154,000 98,047 55,953 Net Change in Fund Balance (154,000) (154,000) (98,047) 55,953 Fund Balance-Beginning (45,686) (45,686) 154,313 199,999 Fund Balance-Ending $ (199,686) $ (199,686) $ 56,266 $ 255,952 118 FIDUCIARY FUNDS FIDUCIARY FUNDS Fiduciary funds are used to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government's own programs. Pension trust funds are fiduciary funds that are used to report resources required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post-employment benefit plans, or other employee benefit plans. The Village accounts for two defined benefit plans (Public Safety reports separate trust funds for Police Officers and Firefighters) and a separate fund is reported for each individual trust fund. The three trust funds are as follows: Firefighters' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the firefighter employees. Police Officers' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the police employees. General Employees' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits for the general employees of the Village. 119 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30,2020 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Assets Cash and cash equivalents $ 199,893 $ 97,026 $ 41,678 $ 338,597 Investments Equities 8,665,406 4,084,574 4,842,805 17,592,785 Fixed Income 3,035,393 1,430,860 1,681,671 6,147,924 Real Estate Fund 942,770 444,349 530,254 1,917,373 Total investments 12,643,569 5,959,783 7,054,730 25,658,082 Accounts receivable 171,940 116,626 - 288,566 Contributions receivable 40,315 3,454 27,365 71,134 Accrued interest receivable 10,061 4,742 7,513 22,316 Prepaid items 18,067 4,091 13,173 35,331 Total Assets 13,083,845 6,185,722 7,144,459 26,414,026 Liabilities Accounts payable 10,184 7,635 15,303 33,122 Due to broker 14,696 6,926 - 21,622 Total Liabilities 24,880 14,561 15,303 54,744 Net Position Restricted for Pension Benefits $ 13,058,965 $ 6,171,161 $ 7,129,156 $ 26,359,282 120 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2020 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Additions Contributions: State of Florida $ 171,939 $ 91,375 $ - $ 263,314 Employer 443,018 - 391,341 834,359 Employee 101,983 70,327 180,175 352,485 Total Contributions 716,940 161,702 571,516 1,450,158 Investment Earnings Net appreciation in fair value of investments 763,139 359,510 500,164 1,622,813 Gain on sale of investments 78,198 37,676 23,247 139,121 Interest and dividends 212,077 102,393 127,757 442,227 Total investment earnings 1,053,414 499,579 651,168 2,204,161 Less investment expenses (32,392) (22,573) (38,142) (93,107) Net Investment earnings 1,021,022 477,006 613,026 2,111,054 Miscellaneous 36 32 2,286 2,354 Total Additions 1,737,998 638,740 1,186,828 3,563,566 Deductions Benefits paid 216,799 49,095 161,419 427,313 Refund of contributions 8,648 42,075 53,330 104,053 Administrative expenses 25,874 25,874 54,653 106,401 Total Deductions 251,321 117,044 269,402 637,767 Change in Net Position 1,486,677 521,696 917,426 2,925,799 Net Position Restricted for Pension Benefits Beginning of year 11,572,288 5,649,465 6,211,730 23,433,483 End ofyear $ 13,058,965 $ 6,171,161 $ 7,129,156 $ 26,359,282 121 STATISTICAL SECTION STATISTICAL SECTION This part of the Village of Tequesta's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, 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. 122-126 Revenue Capacity These schedules contain information to help the reader assess the Village's most significant local revenue source, the property tax. 127-130 Debt Capacity These schedules present information to help the reader assess the affordability of the Village's current levels of outstanding debt and the Town's ability to issue additional debt in the future. 131-134 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. 135-136 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Village's financial report relates to the services the Village provides and the activities it performs. 137-139 Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. VILLAGE OF TEQUESTA,FLORIDA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2011. 2012 2013 2014 2015 2016 2017 2018 2019 2020 Governmental Activities Net investment in capital assets $10,730,256 $10,591,778 $10,261,476 $10,284,849 $10,058,956 $ 9,948,379 $10,023,291 $10,678,761 $10,470,562 $10,473,238 Restricted - 579,809 579,320 940,739 1,572,614 1,343,543 1,776,769 1,615,279 2,067,445 1,398,916 Unrestricted 4,442,410 3,510,237 3,011,737 2,739,726 1,638,243 1,612,070 1,157,654 978,157 1,086,789 1,781,225 Total Governmental Activities Net Position $15,172,666 $14,681,824 $13,852,533 $13,965,314 $13,269,813 $12,903,992 $12,957,714 $13,272,197 $13,624,796 $13,653,379 Business-type Activities: Net investment in capital assets $14,673,046 $14,718,841 $14,167,067 $13,402,412 $12,681,504 $12,321,453 $13,078,584 $12,774,847 $13,012,584 $14,166,351 Restricted - - - - - - - - - 397,997 Unrestricted 4,315,056 4,884,793 5,408,598 5,632,617 5,781,969 6,117,202 5,883,331 6,972,014 7,967,052 6,896,819 Total Business-type Activities Net Position $18,988,102 $19,603,634 $19,575,665 $19,035,029 $18,463,473 $18,438,655 $18,961,915 $19,746,861 $20,979,636 $21,461,167 Primary government: Net investment in capital assets $25,403,302 $25,310,619 $24,428,543 $23,687,261 $22,740,460 $22,269,832 $23,101,875 $23,453,608 $23,483,146 $24,639,589 Restricted - 579,809 579,320 940,739 1,572,614 1,343,543 1,776,769 1,615,279 2,067,445 1,796,913 Unrestricted 8,757,466 8,395,030 8,420,335 8,372,343 7,420,212. 7,729,272 7,040,985 7,950,171 9,053,841 8,678,044 Total Governmental Activities Net Position $34,160,768 $34,285,458 $33,428,198 $33,000,343 $31,733,286 $31,342,647 $31,919,629 $33,019,058 $34,604,432 $35,114,546 Note:The Village implemented GASB Statement No.63 during the fiscal year ended September 30,2013 and utilized the new temmology for all years presented. 122 VILLAGE OF TEQUESTA,FLORIDA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expenditures Governmental activities: General government $ 1,591,575 $ 1,629,115 $ 1,642,948 $ 1,770,326 $ 1,714,571 $ 1,918,843 $ 2,201,162 $ 2,308,838 $ 2,411,174 $ 2,353,750 Public safety 5,989,357 6,210,365 6,207,866 6,222,408 5,812,114 7,270,731 7,004,196 7,023,664 8,455,155 8,806,935 Transportation 857,456 898,458 1,049,062 1,009,693 1,161,613 1,381,760 1,650,162 1,945,513 1,436,674 1,496,229 Leisure services 635,671 635,110 640,513 583,445 566,585 663,524 699,068 704,448 771,783 675,172 Interest on long-term debt 158,685 146,868 135,204 114,398 124,331 117,709 111,504 96,109 71,803 44,058 Total Governmental Activities Expenditures 9,232,744 9,519,916 9,675,593 9,700,270 9,379,214 11,352,567 11,666,092 12,078,572 13,146,589 13,376,144 Business-type activities: Water 3,829,330 4,017,097 4,204,955 4,782,022 4,911,816 4,726,849 5,038,740 4,871,601 5,079,244 5,964,202 Stormwater 194,331 207,526 221,283 279,051 262,413 490,405 338,758 687,878 485,566 453,776 Refuse and recycling 444,302 468,637 484,165 489,977 499,670 489,874 479,278 479,478 480,268 496,619 Total Business-type Activities Expenses 4,467,963 4,693,260 4,910,403 5,551,050 5,673,899 5,707,128 5,856,776 6,038,957 6,045,078 6,914,597 Total Primary Government Program Expenses $ 13,700,707 $ 14,213,176 $ 14,585,996 $ 15,251,320 $15,053,113 $ 17,059,695 $ 17,522,868 $ 18,117,529 $ 19,191,667 $ 20,290,741 Program Revenues Governmental activities: Charges for services: General government $ 568,452 $ 742,438 $ 695,801 $ 694,220 $ 786,792 $ 814,596 $ 865,589 $ 899,257 $ 997,556 $ 1,150,219 Public safety 1,283,728 1,270,308 1,142,593 1,755,652 1,563,375 1,734,116 1,775,824 1,867,606 1,845,894 1,552,009 Transportation - - 4,480 - - - - - - - Leisure services 77,955 71,939 86,349 76,918 67,777 69,570 83,749 83,209 83,794 27,402 Operating grants and contributions 58,746 60,260 95,145 63,148 48,300 9,505 10,235 253,986 16,045 105,492 Capital grants and contributions 2,689,626 119,200 73,828 23,657 82,000 17,692 8,500 Total Governmental Activities Program Revenues 4,678,507 2,264,145 2,024,368 2,589,938 2,466,244 2,701,615 2,759,054 3,186,058 2,960,981 2,843,622 Business-type Activities Charges for services: Water 4,585,287 4,436,958 4,018,755 4,155,865 4,422,030 4,826,495 5,487,305 5,894,396 6,173,278 6,370,552 Stormwater 314,264 323,193 323,513 323,363 319,993 325,005 340,118 375,534 430,814 432,355 Refuse and recycling 436,142 487,392 482,422 480,795 478,616 490,801 493,753 488,121 486,893 487,874 Operating grants and contributions Total Business-type Activities Program Revenues 5,335,693 5,247,543 4,824,690 4,960,023 5,220,639 5,642,301 6,321,176 6,758,051 7,090,985 7,290,781 Total Primary Government Program Revenues $ 10,014,200 $ 7,511,688 $ 6,849,058 $ 7,549,961 $ 7,686,883 $ 8,343,916 $ 9,080,230 $ 9,944,109 $ 10,051,966 $ 10,134,403 Net(Expense)Revenue Governmental activities $ (4,554,237) $ (7,255,771) $ (7,651,225) $ (7,110,332) $(6,912,970) $ (8,650,952) $ (8,898,038) $ (8,892,514) $(10,185,608) $(10,532,522) Business-type activities 867,730 554,283 (85,713) (591,027) (453,260) (64,827) 464,400 719,094 1,045,907 376,184 Total Primary Government Net Expense $ (3,686,507) $ (6,701,488) $ (7736,938) $ (7701,359) $(7366,230) $ (8,715,779) $ (8,433,638) $ (8,173,420) $ (9,139,701) $(10,156,338) Note:The Village implemented GASB StatementNo.63 during the fiscal year ended September 30,2013 and utilized the new tenninology for all years presented. 123 VILLAGE OF TEQUESTA,FLORIDA CHANGES IN NET POSITION(CONTINUED) LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) General Revenues 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Governmental activities: Taxes: Property taxes $ 4,341,668 $ 4,268,732 $ 4,339,215 $ 4,767,948 $ 5,275,411 $ 5,683,707 $ 6,098,723 $ 6,420,058 $ 6,800,483 $ 7,497,093 Other taxes 1,266,681 1,235,941 1,266,929 1,216,100 1,304,312 1,271,278 1,512,354 1,556,934 2,222,910 1,711,817 Franchise fees based on gross receipts 412,441 393,734 380,160 401,859 462,312 449,126 452,496 459,076 467,670 447,682 Unrestricted intergovernmental 724,400 718,277 735,924 770,616 811,044 822,390 830,570 848,666 861,647 807,939 Unrestricted investment earnings 32,775 49,173 22,316 13,184 7,139 8,465 15,605 92,520 133,769 54,602 Miscellaneous revenues 116,707 99,072 77,390 53,406 17,739 27,041 32,676 19,414 27,131 19,996 Gain on sale of capital assets 13,073 23,123 9,336 13,375 24,597 21,976 Total Governmental Revenues and transfers 6,894,672 6,764,929 6,821,934 7,223,113 7,891,030 8,285,130 8,951,760 9,410,043 10,538,207 10,561,105 Business-type Activities Unrestricted Investment earnings 28,074 30,448 20,727 14,976 9,986 14,601 28,064 86,097 147,356 59,333 Miscellaneous revenues 79,968 30,801 37,017 35,415 20,432 25,408 30,796 29,106 37,290 46,014 Gain on sale of capital assets 4,278 2,222 Total Business-type Activities 108,042 61,249 57,744 50,391 30,418 40,009 58,860 119,481 186,868 105,347 Total Primary Government 7,002,714 6,826,178 6,879,678 7,273,504 7,921,448 8,325,139 9,010,620 9,529,524 10,725,075 10,666,452 Change in net position: Governmental activities 2,340,435 (490,842) (829,291) 1.12,781. 978,059 (365,822) 53,722 517,529 352,599 28,583 Business-type activities 975,772 615,532 (27,969) (540,636) (422,842) (24,818) 523,260 838,575 1,232,775 481,531 Total Primary Government $ 3,316,207 $ 124,690 $ (857,260) $ (427,855) $ 555,217 $ (390,640) $ 576,982 $ 1,356,104 $ 1,585,374 $ 510,114 Note:The Village implemented GASB Statement No.63 during the fiscal year ended September 30,2013 and utilized the new terminology for all years presented. 124 VILLAGE OF TEQUESTA,FLORIDA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 General Fund Nonspendable $ 228,049 $ 178,478 $ 144,581 $ 207,869 $ 161,036 $ 174,985 $ 212,042 $ 224,994 $ 237,510 $ 3,056 Restricted 419,591 549,034 575,287 668,050 790,582 995,512 1,440,911 1,506,888 1,562,700 420,583 Committed - - - - - - - - 391,214 500,000 Assigned 1,372,125 1,481,792 1,000,000 1,013,600 1,010,978 1,060,578 1,214,418 1,000,000 - 298,661 Unassigned 2,009,180 1,487,198 1,921,295 1,714,008 2,024,550 2,079,187 1,478,525 1,150,229 1,479,005 1,884,304 Total General Fund $ 4,028,945 $ 3,696,502 $ 3,641,163 $ 3,603,527 $ 3,987,146 $ 4,310,262 $ 4,345,896 $ 3,882,111 $ 3,670,429 $ 3,106,604 All Other Governmental Funds Nonspendable $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,056 Restricted 45,771 30,775 4,033 291,654 286,965 348,031 335,858 108,391 504,745 978,333 Committed - - - - - - - - - 46,485 Assigned 646,977 608,377 159,726 9,726 16,441 110,232 60,149 234,838 175,167 87,956 Total Other Governmental Funds $ 692,748 $ 639,152 $ 163,759 $ 301,380 $ 303,406 $ 458,263 $ 396,007 $ 343,229 $ 679,912 $ 1,115,830 125 VILLAGE OF TEQUESTA,FLORIDA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues Taxes $5,608,349 $5,504,673 $5,606,144 $5,984,048 $6,579,723 $6,954,985 $7,611,077 $7,976,992 $9,023,393 $9,208,910 Intergovernmental 776,500 755,792 752,728 816,323 841,950 825,990 836,780 893,555 869,592 815,868 Franchise fees 412,441 393,734 380,160 401,859 462,312 449,126 452,496 459,076 467,670 447,682 Charges for services 888,639 948,395 901,659 1,102,496 1,192,142 1,246,301 1,272,994 1,300,331 1,276,167 1,387,682 Intmgovemmental 323,110 503,163 503,709 519,188 534,416 550,350 561,350 577,300 696,600 725,436 Grants,contributions and donations - 126,944 61,185 21,166 17,394 79,733 27,682 291,097 25,792 106,063 Licenses and permits 332,913 417,702 330,569 433,428 346,529 554,591 646,126 753,211 653,497 385,873 Interest 32,775 49,173 22,316 13,184 7,139 8,465 15,605 92,520 133,769 54,602 Fines and forfeitures 204,273 57,539 42,187 319,598 150,323 67,010 32,743 8,241 87,490 11,708 Miscellaneous 141,902 86,064 98,341 64,855 20,017 28,389 40,660 20,547 27,131 19,996 Rents and royalties 162,651 167,636 147,303 136,906 192,256 198,682 203,965 209,856 213,490 218,931 Impact fees 18,257 Total Revenues 8,883,553 9,029,072 8,846,301 9,813,051 10,344,201 10,963,622 11,701,478 12,582,726 13,474,591 13,382,751 Expenditures Current: General government 1,410,417 1,469,615 1,528,314 1,614,291 1,615,339 1,811,777 2,104,039 2,210,205 2,275,900 2,207,621 Public safety 5,565,091 5,902,568 5,902,479 5,900,978 6,201,180 6,154,309 6,632,707 6,968,142 8,452,601 8,054,006 Transportation 714,934 725,833 879,169 858,787 1,010,126 1,203,513 1,462,522 1,761,729 1,243,062 1,309,050 Leisure services 548,729 552,002 561,938 507,069 527,223 609,009 629,764 647,830 700,649 603,268 Capital outlay 973,810 335,689 120,399 831,240 399,457 309,399 356,224 999,035 260,796 720,011 Debt service: Principal 271,035 282,537 247,809 306,411 334,630 428,048 440,676 429,614 395,856 412,060 Interest 148,186 137,027 125,054 114,398 113,986 106,848 92,164 74,486 59,573 44,058 Fiscal charges 10,499 9,841 11,870 12,736 10,345 18,643 19,340 21,623 12,230 Total Expenditures 9,642,701 9,415,112 9,377,032 1Q,145,910 10,212,286 1Q,641,546 11,737,436 13,112,664 13,400,667 13,350,074 Excess(Deficiency)of Revenues Over Expenditures (759,148) (386,040) (530,731) (332,859) 131,915 322,076 (35,958) (529,938) 73,924 32,677 Other Financing Sources(Uses) Transfers in 250,000 251,300 420,440 150,000 85,000 366,800 106,000 740,100 422,754 1,520,093 Transfers-out (250,000) (251,300) (420,440) (150,000) (85,000) (366,800) (106,000) (740,100) (422,754) (1,520,093) Issuance of debt - - - 432,844 253,730 132,774 - - 26,480 105,305 Other proceeds 23,123 9,336 13,375 24,597 21,976 Total Other Financing Sources(Uses) 432,844 253,730 155,897 9,336 13,375 51,077 127,281 Net Change in Fund Balances $ (759,148) $ (386,040) $ (530,731) $ 99,985 $ 385,645 $ 477,973 $ (26,622) $ (516,563) $ 125,001 $ 159,958 Debt Service as a Percentage of Noncapital Expenditures 4.84% 4.62% 4.03% 4.52% 4.57% 5.18% 4.68% 4.16% 3.47% 3.61% 126 VILLAGE OF TEQUESTA,FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Centrally Real Property Personal Property Assessed Property Total Estimated Estimated Estimated Estimated Assessed Actual"Just" Actual"Just" Actual"Just" Actual"Just" Value as a Taxable Value of Taxable Value of Taxable Value of Taxable Direct Value of Percentage of Fiscal Year:Ended Assessed Taxable Assessed Taxable Assessed Taxable Assessed Tax Taxable Actual. September 30 Value Property Value Property Value Property Value Rate Property Value 2011 $ 759,663,152 $ 990,741,690 $ 20,087,425 $ 26,205,842 $ 471,680 $ 476,546 $ 780,222,257 5.7671 $ 1,017,424,078 77% 2012 746,532,525 972,735,340 17,997,653 23,646,754 487,407 491,873 765,017,585 5.7671 996,873,967 77% 2013 760,886,279 985,098,719 17,464,955 23,010,389 1,559,808 1,564,811 779,911,042 5.7671 1,009,673,919 77% 2014 797,213,933 1,036,624,755 17,442,002 22,943,347 1,675,609 1,680,227 816,331,544 6.0500 1,061,248,329 77% 2015 844,999,610 1,154,086,000 17,344,269 22,968,598 1,593,192 1,832,732 863,937,071 6.2920 1,178,887,330 73% 2016 909,292,932 1,269,361,269 19,880,161 25,574,708 1,810,329 1,837,722 930,983,422 6.2920 1,296,773,699 72% 2017 978,487,013 1,404,754,183 21,837,763 27,617,131 1,900,210 1,907,953 1,002,224,986 6.2920 1,434,279,267 70% 2018 1,039,469,424 1,469,747,205 19,372,909 24,908,873 1,930,206 1,934,055 1,060,772,539 6.2920 1,496,590,133 71% 2019 1,100,472,687 1,551,282,505 21,121,271 26,506,260 1,940,096 1,944,199 1,123,534,054 6.2920 1,579,732,964 71% 2020 1,149,591,099 1,613,291,960 21,858,849 27,142,879 1,943,025 1,946,645 1,173,392,973 6.6290 1,642,381,484 71% Source: Palm Beach County Property Appraiser's office: Form DR-403 V Revised Recapitulation of the Ad.Valorem Rolls of Tequesta,Palm Beach County Florida 127 VILLAGE OF TEQUESTA,FLORIDA PROPERTY TAX RATES-ALL DIRECT AND OVERLAPPING GOVERNMENTS (Per$1,000 of Assessed Value) LAST TEN FISCAL YEARS Direct Rates Overlapping Rates(1) S.Florida Jupiter Fl.Island Children's County Fiscal Year Ended Village County Everglades School County Water Mgmt. Inlet Nay.District Services Health Care September 30 Rate County Debt Construction District Library District District (FIND) Council District 2011 5.7671 4.7500 0.2460 0.0894 8.1540 0.6069 0.5346 0.1364 0.0345 0.7513 1.1451 2012 5.7671 4.7815 0.2110 0.0624 8.1800 0.6081 0.1785 0.1364 0.0345 0.7475 1.1250 2013 5.7671 4.7815 0.2087 0.0613 7.7780 0.6066 0.1757 0.1364 0.0345 0.7300 1.1220 2014 6.0500 4.7815 0.2037 0.0587 7.5860 0.6065 0.1685 0.1364 0.0345 0.7025 1.0800 2015 6.2920 4.7815 0.1914 0.0548 7.5940 0.6024 0.1577 0.1285 0.0345 0.6745 1.0800 2016 6.2920 4.7815 0.1462 0.0506 7.5120 0.5985 0.1459 0.1216 0.0320 0.6677 1.0426 2017 6.2920 4.7815 0.1327 0.0471 7.0700 0.5933 0.1359 0.1145 0.0320 0.6833 0.8993 2018 6.2920 4.7815 0.1208 0.0441 6.7690 0.5891 0.2659 0.1089 0.0320 0.6590 0.7808 2019 62920 4.7815 0.1165 0.0417 6.5720 0.5901 0.2519 0.1042 0.0320 0.6403 0.7261 2020 6.6290 4.7815 0.0765 0.0397 7.1640 0.5870 0.2398 0.0998 0.0320 0.6497 0.7261 (1)Overlapping rates are those of local and county governments that apply to property owners within the Village of Tequesta. Sources: Palm Beach County Property Appraiser's office 128 VILLAGE OF TEQUESTA,FLORIDA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2020 2011 Percentage of Percentage of Taxable Total Village Taxable Total Village Assessed Taxable Assessed Taxable Taxpayer Value Rank Value Value Rank Value Tamwest Realty,Inc(County Line Plaza) $ 22,018,486 1 1.88% S 13,848,742 1 1.77% GHM Tequesta Holdings,LLC 17,747,410 2 1.51% Noble Centers,LLC(Tequesta Shoppes) 13,264,861 3 1.13% 8,047,394 2 1.03% RCMR JV,LLC 11,807,832 4 1.01% Turnbery Beach Road,LLC 10,080,152 5 0.86% Terrace Communities Tequesta,LLC 9,627,251 6 0.82% 6,121,737 5 0.78% Florida Power&Light Co. 9,179,557 7 0.78% 6,962,557 3 0.89% ALS North America,Inc. 6,827,871 8 0.58% 3,400,000 7 0.44% Tequesta Mall,LLC(SLO ML LLC) 5,803,140 9 0.49% 3,797,129 6 0.49% Tequesta Country Club 5,015,881 10 0.43% Tequesta Investors LP 6,296,211 4 0.81% Tracy Thomas J 3,195,299 8 0.41% Elliott Edward W.Jr. 2,915,675 9 0.37% Hersey Marta 2,906,568 10 0.37% Total S 111,372,441 9.49% S 57,491,312 7.36% Source: Palm Beach County Tax Collector's System,tax year 2020 129 VILLAGE OF TEQUESTA,FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Taxes Collected within the Collections Fiscal Year Levied for Fiscal Year of the Levy in Total Collections to Date(2) Ended for the Fiscal Percentage Subsequent Percentage September 30, Year(1) Amount of Levy Years Amount of Levy 2011 $ 4,513,447 $ 4,338,395 96.1% $ 22,377 $ 4,360,772 96.6% 2012 4,425,793 4,254,037 96.1% 18,346 4,272,383 96.5% 2013 4,502,727 4,337,570 96.3% 21,847 4,359,417 96.8% 2014 4,946,692 4,755,463 96.1% 13,841 4,769,304 96.4% 2015 5,437,423 5,237,859 96.3% 3,796 5,241,655 96.4% 2016 5,866,490 5,651,698 96.3% (186) 5,651,512 96.3% 2017 6,314,407 6,083,598 96.3% (311) 6,083,287 96.3% 2018 6,674,381 6,422,680 96.2% 2,401 6,425,081 96.3% 2019 7,069,276 6,799,389 96.2% 562 6,799,951 96.2% 2020 7,778,422 7,494,948 96.4% -- 7,494,948 96.4% (1)The tax levied in a fiscal year is based on the taxable value of the prior year (2) Includes discounts taken by property taxpayers. Source: Palm Beach County Tax Collector's office. 130 VILLAGE OF TEQUESTA,FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business-type Governmental Activities Activities Total Percentage Fiscal Year Ended Notes Capital Notes Primary of Personal Per September 30 Payable Leases Payable Government Income Capita 2011 $ 3,263,515 $ 45,092 $ 6,132,618 $ 9,441,225 2.92% $ 1,677 2012 3,026,070 - 5,849,788 8,875,858 2.94% 1,572 2013 2,778,261 - 5,553,570 8,331,831 2.65% 1,474 2014 2,519,635 385,059 5,245,703 8,150,397 2.50% 1,448 2015 2,249,720 561,001 4,925,818 7,736,539 2.37% 1,366 2016 1,968,023 547,423 4,592,420 7,107,866 1.81% 1,247 2017 1,674,030 400,739 4,244,561 6,319,330 1.53% 1,103 2018 1,367,204 277,951 3,882,784 5,527,939 1.26% 944 2019 1,046,986 228,793 3,507,581 4,783,360 1.03% 818 2020 712,790 256,234 3,119,113 4,088,137 0.84% 696 Note:Details regarding the Village's outstanding debt can be found in the notes to the financial statements. 131 VILLAGE OF TEQUESTA,FLORIDA RATIO OF NET OUTSTANDING DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (2) Assessed (A) (B) (A-B) Ratio of Net Net Value of Gross Debt Service Net O/S Debt to Outstanding Fiscal Year Ended (1) Taxable Outstanding Funds Outstanding Value of Debt September 30, Population Property Debt Available (O/S)Debt Taxable Property Per Capita 2011 5,629 $ 780,222,257 $ 9,441,225 $ 9,441,225 1.21% $ 1,677 2012 5,646 765,017,585 8,875,858 8,875,858 1.16% 1,572 2013 5,652 779,911,042 8,331,831 8,331,831 1.07% 1,474 2014 5,629 816,331,544 8,150,397 8,150,397 1.00% 1,448 2015 5,665 863,937,071 7,736,539 7,736,539 0.90% 1,366 2016 5,699 930,983,422 7,107,866 7,107,866 0.76% 1,247 2017 5,731 1,002,224,986 6,319,330 6,319,330 0.63% 1,103 2018 5,857 1,060,772,539 5,527,938 5,527,938 0.52% 944 2019 5,850 1,121,712,544 4,783,360 4,783,360 0.43% 818 2020 5,874 1,172,469,036 4,088,137 4,088,137 0.35% 696 (1)Florida Estimates of Population-Bureau of Economic and Business research,University of Florida. (2)Form DR-422"Certificate of Final Taxable Value" 132 VILLAGE OF TEQUESTA,FLORIDA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Total Assessed Value (1) $ 1,151,534,124 Legal Debt Margin Debt hmitation-10%of total assessed value (2) 115,153,412 Total bonded debt outstanding - Less amount in debt service fund - Total Debt Applicable to Limitation Legal Debt Margin $ 115,153,412 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Debt Limit $ 78,022,226 $ 76,501,759 $ 77,991,104 $ 81,633,154 $ 86,393,707 $ 93,098,342 100,222,499 $ 106,077,254 $ 110,241,278 $ 115,153,412 Total Net Debt Applicable to Limit Legal debt margin $ 78,022,226 $ 76,501,759 $ 77,991,104 $ 81,633,154 $ 86,393,707 $ 93,098,342 100,222,499 $ 106,077,254 $ 110,241,278 $ 115,153,412 Total Net Debt Applicable to Limit as a Percentage of Debt Limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (1)Form DR-422"Certificate of Final Taxable Value" (2)Village of Tequesta Charter Section 5.02 Limitations 133 VILLAGE OF TEQUESTA,FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30,2020 Estimate Estimate Share of Net Percentage Direct and Debt Applicable to Overlapping Governmental Unit Outstanding Tequesta Debt (a) (b) OVERLAPPING Palm Beach County $ 44,740,000 0.59% $ 263,966 P.B.C.School Board 26,832,000 0.59% 158,309 Subtotal,overlapping debt 422,275 DIRECT DEBT Village of Tequesta 969,024 100.00% 969,024 Total direct and overlapping debt $ 1,391,299 (a)Sources:Palm Beach County and PBC School Board Note:For debt repaid with property taxes,the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Village taxable assessed value and dividing it by the PBC taxable assessed value.(Data provided by the PBC Property Appraiser's Office) Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the Village of Tequesta.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 Tequesta. 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. 134 VILLAGE OF TEQUESTA,FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Palm Beach Capita County Fiscal Population Personal Personal Median Unemployment Year (1) Income(2) Income(2) Age(3) Rate(4) 2011 5,629 $ 323,447,969 $ 57,461 49.9 11.0% 2012 5,646 302,061,000 53,500 49.9 9.2% 2013 5,652 314,409,456 55,628 49.9 7.1% 2014 5,629 326,397,565 57,985 49.9 6.0% 2015 5,665 379,067,810 66,914 49.9 5.3% 2016 5,699 391,766,357 68,743 49.9 5.2% 2017 5,731 412,322,526 71,946 49.9 3.7% 2018 5,857 437,834,178 74,754 49.9 3.1% 2019 5,850 466,596,000 79,760 49.9 3.2% 2020 5,874 489,116,232 83,268 49.9 6.6% Sources: (1)Florida Estimates of Population-Bureau of Economic and Business research,University of Florida. (2) US Department of Commerce,Bureau of Economic Analysis,Regional Economic Information System. (3) U.S.Census Bureau,2010 Census (4) U.S.Department of Labor,Bureau of Labor Statistics,Labor Market Statistics Center, Local Area Unemployment Statistics Program 135 VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL EMPLOYERS-PALM BEACH COUNTY CURRENT YEAR AND NINE YEARS AGO 2020 2011** Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment Palm Beach County School Board 22,049 1 N/A 21,718 1 N/A Tenet Coastal Division Palm Beach County 6,505 2 N/A 5,127 3 N/A Palm Beach County Government 5,438 3 N/A 11,381 2 N/A NextEra Energy/Florida Power&Light 4,807 4 N/A 3,658 5 N/A Florida Atlantic University 2,898 5 N/A 2,776 7 N/A Hospital Corporation of America(HCA) 2,806 * 6 N/A 4,150 4 N/A Boca Raton Regional Hospital 2,800 * 7 N/A Veterans Health Administration 2,700 * 8 N/A 2,205 9 N/A The Breakers 2,300 9 Bethesda Health,Inc 2,282 * 10 N/A 2,300 8 Wackenhut Corporation 3,000 6 N/A Boca Raton Resort and Club 2,200 10 N/A 54,585 N/A 58,515 N/A Source: Business Development Board otPalm Beach County Employment information for the Town is not available N/A=not available *Updated figures unavailable at date of publication. **Updated figures for 2011 not published,information used updated 3/2010. 136 VILLAGE OF TEQUESTA,FLORIDA FULL-TIME EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Governmental Activities General government 10.5 10.5 11.5 10.5 10.3 10.3 10.8 11.8 13.3 12.9 Public safety 49.0 50.0 53.0 51.0 51.0 52.0 53.0 52.0 53.6 50.0 Transportation 4.0 4.0 5.0 5.0 5.9 6.9 8.1 7.1 8.3 5.3 Leisure services 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Total Governmental Activities 66.5 67.5 72.5 69.5 70.2 72.2 74.9 73.9 78.2 71.2 Business-type Activities Water 14.5 14.5 16.5 16.5 18.6 18.6 20.4 20.9 22.1 21.2 Stormwater 1.0 1.0 1.0 1.0 1.2 2.2 1.7 1.7 1.7 1.7 Total Business-type Activities 15.5 15.5 17.5 17.5 19.8 20.8 22.1 22.6 23.8 22.9 Total Primary Government 82.0 83.0 90.0 87.0 90.0 93.0 97.0 97.0 102.0 94.0 Source: Village of Tequesta Finance Department Notes: A full-time employee is scheduled to work 2,080 hours per year(including vacation and sick leave). Full-time-equivalent employment is calculated by dividing total labor hours by 2,080. 137 VILLAGE OF TEQUESTA,FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Governmental Activities General government Registered voters 4,543 4,676 4,854 4,702 4,634 4,813 4,017 4,951 5,056 5,204 Public safety: No.of full-time certified police officers 19 l l* 18 20 19 18 19 19 19 19 No.of calls received 3,266 3,272 3,571 3,548 3,853 3,109 3,442 3,443 3,614 3,571 No.of arrests 204 129 136 168 174 94 108 69 61 46 No.ofparking violations 82 149 328 120 207 61 39 20 48 48 No.of incident numbers issued 595 622 691 725 552 345 312 254 259 181 Fire department: No.of full-time certified firefighters 22 21 21 18 22 22 22 22 21 21 No.of emergency responses 1,096 1,155 1,372 1,197 1,291 1,409 1,286 1,227 1,168 1,226 No.of transports 622 695 675 693 1,006 817 722 724 721 1,017 No.of fires extinguished/alarms 474 460 697 504 285 254 309 267 206 15 No.of inspections 462 495 539 713 499 654 742 608 767 405 Building,zoning: No.of building permits issued 800 883 914 929 1,034 1,583 1,755 1,356 1,226 1,198 No.of building inspections conducted 1,728 1,931 2,176 2,201 1,705 2,472 3,017 2,634 2,649 2,611 Leisure services: No.of Spring Classes 10 10 10 8 8 12 10 10 10 7 No.of Summer Classes 4 4 4 4 4 4 4 4 4 - No.of Movies 3 3 3 4 3 3 3 3 2 - Business-type Activities Water: No.of customers 5,019 4,996 5,037 5,039 5,038 5,055 5,042 5,087 5,084 5,070 Average daily consumption 2.698 mg 2.550 mg 2.454 mg 2.422 mg 2.500 mg 2.600 mg 2.700 mg 2.781 mg 2.642 mg 2.656 mg Sources: Various Village departments * The number is much lower than the year before due to increased number of reserve officers to cover for the full-time officers that left the department during the FY 2012. 138 VILLAGE OF TEQUESTA,FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Governmental Activities General government: Municipal center 1 1 1 1 1 1 1 1 1 1 Public safety Police: No.of stations 1 1 1 1 1 1 1 1 1 1 No.of patrol units 15 11 10 11 10 12 10 12 11 11 Fire: No.of stations 1 1 1 1 1 1 1 1 1 2 No.of ambulances 3 3 3 3 2 2 2 2 2 2 No.of pumpers 3 3 3 3 3 3 2 2 2 2 Transportation: Miles of street lane miles 24 24 24 24 24 24 24 24 24 24 No.of bridges 1 1 1 1 1 1 1 1 1 1 Leisure services No.of parks 5 5 5 6 * 6 6 7 7 7 7 No.of park acreage 54 54 54 62 * 62 62 62 62 62 62 No.of playgrounds 2 2 2 2 2 2 2 2 2 2 No.of baseball/softball diamonds 3 3 3 3 3 3 3 3 3 3 No.of skate-parks 1 1 1 1 1 1 1 1 1 1 Business-type activities: Water: Miles of water mains 72 72 73 73 73 77 77 77 77 72 No.of fire hydrants 430 430 433 409 430 456 435 435 435 579 3,250 3,250 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 Storage capacity(thousands of gallons) Sources: Various Village departments *The green area has been identified as a park(Linear/Green Mile park) 139 5 y ■ REPORTING SECTION MARCUM ACCOUNTANTS ,& ADVISORS 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 GOVERNMENTA UDITING STANDARDS To the Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited, in accordance with the 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 Village of Tequesta, Florida (the Village), as of and for the fiscal year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the Village's basic financial statements, and have issued our report thereon dated March 31, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village's internal control over financial reporting (internal control) as a basis for designing 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 Village's internal control. Accordingly, we do not express an opinion on the effectiveness of the Village'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 Village'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. 140 MARCUMGROUP MEMBER Marcum uP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach,Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village's financial statements are free from 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 financial statements. 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. 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 result of that testing, and not to provide an opinion on the effectiveness of the Village's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Village's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. "Y c`P West Palm Beach, Florida March 31, 2021 141 MARCUM ACCOUNTANTS ,& ADVISORS MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA To the Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements We have audited the financial statements of the Village of Tequesta, Florida (the Village), as of and for the fiscal year ended September 30, 2020, and have issued our report thereon dated March 31, 2021. Auditors'Responsibility 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; and Chapter 10.550, Rules of the Auditor General. Other Reporting Requirements We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated March 31, 2021, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(l)(i)l., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. The status of recommendations made in the preceding annual financial audit report have been addressed in the accompanying Appendix A to this report. Official Title and Legal Authority Section 10.554(l)(i)4., 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 disclosed in this management letter, unless disclosed in the notes to the financial statements. The Village was incorporated in 1957 by laws of Florida 57-1915. There are no component units related to the Village. © 142 MARCUMGROUP MEMBER Marcum uP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach,Florida 33401 ■ Phone 561.653.7300 Fax 561.653.7301 marcumllp.com Financial Condition and Management Section 10.554(l)(i)5.a. and 10.556(7), Rules of the Auditor General, require us to apply appropriate procedures and communicate the results of our determination as to whether or not the Village has met one or more of the conditions described in Section 218.503(l), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the Village did not meet any of the conditions described in Section 218.503(l), Florida Statutes. Pursuant to Sections 10.554(l)(i)5.b. and 10.556(8), Rules of the Auditor General, we applied financial condition assessment procedures for the Village. It is management's responsibility to monitor the Village's financial condition, and our financial condition assessment was based in part on representations made by management and review of financial information provided by same. Our assessment was performed as of the fiscal year end. Section 10.554(l)(i)2., Rules of the Auditor General, requires that we communicate any recommendations to improve financial management. In connection with our audit, we did identify an item reported in the accompanying Appendix A. Additional Matters Section 10.554(l)(i)3., Rules of the Auditor General, requires us to communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, please see the accompanying Appendix A. Purpose of*this Letter 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, Federal and other granting agencies, the Mayor and the Village Council, and applicable management, and is not intended to be and should not be used by anyone other than these specified parties. PCB,kLz? West Palm Beach, FL March 31, 2021 143 VILLAGE OF TEQUESTA, FLORIDA APPENDIX A—CURRENT YEAR AND PRIOR YEARS RECOMMENDATIONS TO IMPROVE FINANCIAL MANAGEMENT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 MLC 2019-001—UTILITY BILLING RATES Prior Year's Observation During our utility billings and collections testing, Marcum noted discrepancies between the authorized/approved utility rates being charged/billed to customers. The exception related to the "W2C-3/4" and "Cond-Condos" (represents approximately codings still being charged the rates that were effective October 1, 2017 versus that rates that were approved to be effective October 1, 2018. These two account codes represent approximately 4.6% of total accounts as of September 30, 2019. All utility bills should be processed with the authorized rates listed in the appropriate Ordinance approved by Village Council. Improper billing rates could create "over- billing(s)" and "under-billing(s)"; in this case, an under billing. Prior Year's Recommendation Marcum recommends that an internal control be developed to ensure that accurate data is input into the utility billing system. Authorized rates used by the Utility Billing Division, should be reviewed and compared against the corresponding Ordinance(s). This should reduce the incidence of discrepancies between the authorized rates and the rates charged/billed on the Village customer's utility bills. Additionally, if feasible and allowed by law, the Village should consider trying to recover any under billing. Management's Response in the Prior Year The Village has since reviewed the authorized rate for all customers and has put procedures in place to periodically review changes that are made by the Customer Service Division. The Utilities Director will be responsible for reviewing changes that are made by subordinate staff. Current Year's Status The Village has since addressed this observation. 144 VILLAGE OF TEQUESTA, FLORIDA APPENDIX A—CURRENT YEAR AND PRIOR YEARS RECOMMENDATIONS TO IMPROVE FINANCIAL MANAGEMENT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 MLC 2019-002—MINimum FUND BALANCE POLICY Prior Year's Observation The Village Council adopted a fund balance policy in order to maintain a minimum level of unassigned fund balance in the general fund. The target level is set a two months of general fund operating expenditures. If the minimum fund balance falls below that required of the policy, the Village has three (3) fiscal years in order to replenish the unassigned fund balance. Since September 3, 2017, the unassigned fund balance has been below the minimum target level. Prior Year's Recommendation Essentially, by September 30, 2020, the unassigned fund balance should be replenished to comply with the minimum fund balance policy. However, given the current pandemic, the Village may fall short of its policy and should revisit its policy and/or the upcoming budget so to not fall too far below its policy. Management's Response in the Prior Year During the budgeting process for the upcoming fiscal year, Management proposed several measures to address the shortfall in the unassigned fund balance. Current Year's Status Recommendation remains the same as prior year noted above. Management's Response in the Current Year During the budgeting process for the upcoming fiscal year, Management will continue to impose the measures that have been previously included, and propose any necessary additional measures, to address the shortfall in the unassigned fund balance. 145 MARCUM ACCOUNTANTS ADVISORS INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE PURSUANT TO SECTION 218.415 FLORIDA STATUTES To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have examined the Village of Tequesta's (the Village) compliance with Section 218.415 Florida Statutes for the fiscal year ended September 30, 2020. Management is responsible for the Village's compliance with the specified requirements. Our responsibility is to express an opinion on the Village's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Village complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Village complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village's compliance with specified requirements. In our opinion, the Village complied, in all material respects, with Section 218.415 Florida Statutes for the fiscal year ended September 30, 2020. This report is intended to describe our testing of compliance with Section 218.415 Florida Statutes and it is not suitable for any other purpose. `Mavith C. L.Lf West Palm Beach, FL March 31, 2021 © 146 MARCUMGROUP MEMBER Marcum uP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach,Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com