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CAFR_FY Ending_09/30/2009 I te Olt VILL O F TE Comprehensive Annual Financial Report Fiscal Year Ending S eptember 1 2009 TEQUESTA as j 4 .. �I �IlHlliill: 3 _ i r iii �. - ._... :. ................... _ 1� �\��• o . 1 = j � � �lJJttt 1. lj ..... ..J<[S.._.: i � :: :'.::�:.�.. •: 1 1 1 1 % �� I �G�l /�J %l %lJ lfllllllll 1�f1!/� S fle'a� - -• .t -. � � _`l �'�� .Gt' i✓°i�117f d EE��Is:::i1:1'' •��i 1 . l `� l /1Jl�J' / /�_f� /��'JJt��i "ii ��.. ij.��i� iiii�•. � - I � ^i 1 jy' ldl2Tlllt_ ` '.iii: ` BRID O PENING I I VILLAGE OF TEQUESTA COUNCIL MEMBERS 2009 From left to right: Council Member Vince Arena, Vice -Mayor Thomas Paterno, Mayor Patricia Watkins, Council Member James Humpage and Council Member Calvin Turnquest VILLAGE OF TEQUESTA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30, 2009 Prepared By Finance Department The Village of Tequesta, Florida i VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS I. INTRODUCTORY SECTION Letterof Transmittal ............................................................................... ............................... i -v Certificate of Achievement for Excellence in Financial Reporting ........ ............................... A OrganizationChart ................................................................................. ............................... vii Listof Principal Officials ...................................................................... ............................... viii II. FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT ............................................... ............................1 -2 MANAGEMENT'S DISCUSSION AND ANALYSIS ...................... ............................... 3 -15 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements Statementof Net Assets ...................................................................... .............................16 Statementof Activities ........................................................................ .............................17 Fund Financial Statements Balance Sheet — Governmental Funds ................................................. .............................18 Statement of Revenues, Expenditures and Changes in Fund Balances — GovernmentalFunds ........................................................................ .............................19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..... .............................20 Statement of Net Assets — Proprietary Funds ...................................... .............................21 Statement of Revenues, Expenses and Changes in Net Assets — Proprietary Funds .......22 Statement of Cash Flows — Proprietary Funds .................................... .............................23 Statement of Fiduciary Net Assets — Fiduciary Funds ........................ .............................24 Statement of Changes in Fiduciary Net Assets — Fiduciary Funds ..... .............................25 Notes to Financial Statements ........................................................ ............................... 26 -60 REQUIRED SUPPLEMENTARY INFORMATION (Other than MD &A) Budgetary Comparison Schedule — General Fund ................................. .............................61 Note to Budgetary Comparison Schedule .............................................. .............................62 Schedule of Employer Contributions ..................................................... .............................63 Schedule of Funding Progress ................................................................ .............................64 VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS (Continued) COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet — Nonmajor Governmental Funds ............... .............................65 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds .......................................................... .............................66 Budgetary Comparison Schedule — Special Revenue Fund ................... .............................67 Budgetary Comparison Schedule — Special Law Enforcement Trust Fund ........................68 Budgetary Comparison Schedule — Capital Improvement Fund ............ .............................69 Budgetary Comparison Schedule — Capital Projects Fund .................... .............................70 Combining Statement of Net Assets — Nonmajor Enterprise Funds ...... .............................71 Combining Statement of Revenues, Expenses and Changes in Net Assets — NonmajorEnterprise Funds ................................................................. .............................72 Combining Statement of Cash Flows — Nonmajor Enterprise Funds .... .............................73 Combining Statement of Fiduciary Net Assets ...................................... .............................74 Combining Statement of Changes in Fiduciary Assets .......................... .............................75 III. STATISTICAL SECTION NetAssets by Component ......................................................................... .............................76 Changesin Net Assets ....................................................................... ............................... 77 -78 Fund Balances, Governmental Funds ........................................................ .............................79 Changes in Fund Balances, Governmental Funds ..................................... .............................80 Assessed and Estimated Actual Value of Taxable Property ..................... .............................81 Property Tax Rates — All Direct and Overlapping Governments .............. .............................82 Principal Property Taxpayers .................................................................... .............................83 Property Tax Levies and Collections ........................................................ .............................84 Ratios of Outstanding Debt by Type ......................................................... .............................85 Ratio of Net Outstanding Debt to Assessed Value and Net Bonded Debt PerCapita ............................................................................................... .............................86 Computation of Legal Debt Margin .......................................................... .............................87 Direct and Overlapping Governmental Activities Debt ..................... ..... .............................88 Pledged- Revenue Coverage — Revenue Bonds - 1994 .............................. .............................89 Demographic and Economic Statistics ...................................................... .............................90 Full- time - Equivalent Village Government Employees by Function / Program ....................... 91 Operating Indicators by Function / Program ............................................... .............................92 Capital Asset Statistics by Function / Program ........................................... .............................93 i VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS (Continued) IV. COMPLIANCE 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 .............. 94 -95 Management Letter in Accordance with the Rules of the Auditor General of the Stateof Florida ............................................................................... ............................... 96 -97 Schedule of Findings and Responses ........................................................ .............................98 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD &A) Page Intentionally Left Blank 1 INTRODUCTORY SECTION 345 Tequesta Drive Tequesta, Florida 33469 -0273 (561) 575 -6200 www.Tequesta.org May 10, 2010 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 (CAFR) of the Village of Tequesta for the fiscal year ended September 30, 2009. Publication of the CAFR meet the requirement of Chapter 11.45 of the Florida Statues, Chapter 10.550 of the rules of the Auditor General of the State of Florida which requires the Village to publish, within six months of the close of each fiscal year, a complete set of audited financial statements. The Village of Tequesta's Comprehensive Annual Financial Report (CAFR), for the fiscal year ended September 30, 2009.is published not only to meet State law requirements but to demonstrate the Village philosophy of transparency by presenting all disclosures necessary for the reader to gain an understanding of the Village's financial activities and condition. To this end, • The financial statements included in this report conform to generally accepted accounting principles (GAAP) in the United States of America as promulgated by the Governmental Accounting Standards Board (GASB). • Management provides a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis. The MDA complements this letter of transmittal and should be read in conjunction with it. • This report consists of management's representations concerning the finances of the Village of Tequesta. • Management assumes full responsibility for the completeness and reliability of the information presented. • We believe the data, as presented, is accurate in all material respects. • We assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. i To provide a reasonable basis for making these representations, management established a comprehensive internal control framework that is designed for this purpose. Because the cost of internal controls should not outweigh their benefits, the Village's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. The Village's financial statements have been audited by MarcumRachlin, the Florida operating division of Marcum LLP, a national firm of licensed public accountants. The independent auditor concluded, based upon the audit, that there was reasonable basis for rendering an unqualified opinion that the Village's financial statements for the fiscal year ended September 30, 2009 are fairly presented in accordance with GAAP. The independent auditors' report is located at the front of the financial section of this report. PROFILE OF THE VILLAGE OF TEQUESTA The Village of Tequesta, Florida is a municipal corporation organized June 4, 1957 pursuant to Special Act 57 -1915, Laws of Florida. The Village has a Council- Manager form of government. All powers of the Village are vested in an elected governing body of the Village consisting of a five member Village Council responsible for enacting ordinances, resolutions and regulations governing the Village, adopting budgets, determining policies, as well as appointing the members of various advisory boards and the Village Manager. The Village Manager executes the laws and administers the government as well as attends to the day -to -day affairs of the Village. The Village of Tequesta provides a full range of services, including police and fire protection; the construction and maintenance of streets and other infrastructure; recreational and cultural activities; water and stormwater utilities and contracts for sanitation services. The Village's basic operating unit is a department. Departments concentrate their activities on various functions: general government, public safety, transportation and leisure services. The 2009 gross taxable value of real, personal and centrally assessed property was $834,425,204. The majority of the Village is made up of residential properties. Commercial properties represent approximately 9.5% of property values. The Village has no discernable level of industries. The Budget for Planning and Control The annual budget serves as the foundation for the Village of Tequesta's financial planning and control. The budget is a policy document which incorporates and reflects the values, goals and priorities identified by the Village Council and residents. It is also the Village's proposed business plan for the fiscal year, outlining the priorities and financial resources to carry out the Council's mission of maintaining and enhancing the highest possible level of public service delivery and quality of life for the Village of Tequesta residents. ii Operating budgets, as well as a 5 year capital improvement plan, are adopted on an annual basis by our governing body. The legal level of budgetary control is at the fund level; however, the Village manages at the department level. Prior to October l the Village Council adopts the approved budget along with a resolution establishing the property tax rate (millage) required to fund the budget. Department heads recommend transfers of budgeted amounts within their department which are submitted to the Finance Department for review and the Village Manager for approval. Supplemental appropriations require the approval of the Village Council. All annual appropriations lapse at the end of the fiscal year. The Village departments meet with and submit their plans, objectives and needs for the coming year to the Finance Department, The Village Manager reviews and then submits the Manager's recommended budget to the Village Council. The Village Council reviews the budget, holds workshops and two public hearings to obtain citizen input and make changes prior to adoption of the budget. Prior to October I", the Village Council adopts the approved budget along with a resolution establishing the property tax rate (millage) required to fund the budget. Budget -to -actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Village of Tequesta operates. LOCAL ECONOMY AND ECONOMIC CONDITION AND OUTLOOK The Village is located at the extreme northeastern quadrant of Palm Beach County. Tequesta is a relatively affluent residential community with adequate commercial facilities necessary to provide goods and services to its residents. Tequesta'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. The Village is approximately 2 square miles and almost completely built - out/developed. Property value assessments for tax year 2009 decreased approximately 10% from the prior tax year. This is the second year in a row that property values decreased. According to the National Bureau of Economic Research, the economic recession officially began December 2007. The Village first experienced the effect of the recession through lowered property values which resulted in lower revenues from ad valorem taxes. Services provided for in the governmental funds benefit the community as a whole and theoretically are supported through general taxation in the form of property taxes. iii Unfortunately, the State Legislature, attempting to reduce the tax burden to Florida residents, took actions that reduced property tax revenue at a time when the market downturn further reduced property values. It became obvious that any revenue with a direct link to housing would be negatively impacted and permit fees sharply decreased along with other related fees and charges. In additional to a significant slowdown of new construction permits in 2009, the Village experienced flat to low growth occurring in the local business environment, declining local employment levels and has experienced some exposure to the housing foreclosures that are being experienced nation -wide. Like other municipalities across the nation, the Village will be challenged with balancing the high expectations and demand for top quality municipal services with the ability to raise revenue to pay for them. However, in prior years, when tax revenues were growing, the Village used additional income to pay down debt, to purchase, construct and repair capital assets with existing cash and to build reserves. This has positioned the Village to allow time to plan and adjust to the changing economic environment, rather than react to it. Long -Term Financial Planning Due to the state of the economy, the main focus of long -term financial planning for the Village of Tequesta is on maintaining a high level of services supported by a shrinking economy. The Village of Tequesta's primary focus is in identifying additional revenue sources and cost savings. Some of the new revenue sources the Village has identified are new lease contracts as well as contracting services to other governments. Some of the major costs the Village will be focusing on is health care and post retirement benefits. The Village has been able to keep health care costs level for the next fiscal year. This was achieved with the aid of a committee that included both employees and representatives from all bargaining units. In addition, the Village is reviewing solutions to rising post retirement benefit costs. The Village has a five -year capital improvement plan and continues to maintain and enhance existing roadways, parks and recreational facilities. Tequesta Drive Bridge had been found to be structurally unsound and in need of immediate repair. Through diligence and hard work by the Village Council, the Village Manager, staff and residents, the Village secured $3,000,000 in Federal Economic Stimulus Funds to build a replacement bridge that connects two sections of the Village. After much discussion with the Florida Department of Transportation (FDOT) they have taken over the construction project. The Village signed a memorandum of understanding (MOU) with the FDOT, in which the Village agreed that when the project is completed the FDOT will turn the bridge over to the Village and that the Village will be responsible for all bridge maintenance after that date. Construction is expected to begin January 2010. iv MAJOR INITIATIVES • Review the Village's investment policies and strategies to more effectively protect the Village's assets in the current economical environment. • Continue to explore alternative revenue sources, at both the state and federal level, with the assistance of a professional lobbyist. • Continue to explore annexation of contiguous properties in unincorporated Palm Beach County. • Transition all records to electronic format and create a comprehensive index for ease in accessing records. • Continue to evaluate and implement contemporary policies and procedures to ensure the efficient and economical operation of the Village of Tequesta. • Construct a new reverse osmosis train reducing demand on surficial wells and increasing natural water supply. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Tequesta for its comprehensive annual financial report for the fiscal year ended September 30, 2008. This was the twenty -fifth consecutive year that Tequesta has received this prestigious award. In order to be awarded a Certificate of Achievement, Tequesta had to 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 finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. 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 of Tequesta's finances. Respectfully submitted, Michael R. Couzzo, Jr. JoAnn Forsythe, CPA Village Manager Finance Director v VILLAGE OF TEQUESTA, FLORIDA CERTIFICATE OF ACHIEVEMENT SEPTEMBER 30, 2009 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, 2008 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. a0 /410001-- W A m CA u SFAL "cw President Executive Director vi VILLAGE OF TEQUESTA ORGANIZATIONAL CHART AT SEPTEMBER 30, 2009 Residents of Tequesta illage Atton Village Manager Assistan Zonin Building ` - � R e s ources S erv i ces ,- •• ` J •.- .. J J 1 l � i � VILLAGE OF TEQUESTA, FLORIDA LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2009 VILLAGE COUNCIL Patricia Watkins Mayor Thomas Paterno Vice -Mayor Vince Arena Councilmember James Humpage Councilmember Calvin Turnquest Councilmember VILLAGE OFFICIALS Michael R. Couzzo, Jr. Village Manager Trela White (Corbett & White, PA) Village Attorney Lori McWilliams Village Clerk JoAnn Forsythe, CPA Finance Director James M. Weinand Fire Chief William McCollom Police Chief Catherine Harding Director of Community Development Russell White Public Services Manager Michael R. Couzzo, Jr. Director of Utilities Gregg Corbitt Director of Parks and Recreation VILLAGE AUDITORS MarcumRachlin, a division of Marcum LLP viii e- tie (I 2 FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT MARCUM RACHLIN ACCOUNTANTS A ADVISORS INDEPENDENT AUDITORS' REPORT Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida (the Village) as of and for the year ended September 30, 2009, which collectively comprise the Village's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Village's management. Our responsibility is to express opinions on these basic 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida as of September 30, 2009 and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 1 MARCUVIGROUP MEMBER MarcumRachlin a division of Marcum u.r ■ marcumrachlin.com 450 East Las Oias Boulevard ■ Ninth Floor ■ Fart Lauderdale, Florida 33301 ■ Rhone 954.525.1040 ■ Fax 954.525.2004 FLORIDA a NEW YORK ■ NEW JERSEY ■ CONNECTICUT ■ GRAND CAYMAN In accordance with Government Auditing Standards, we have also issued our report dated May 10, 2010 on our consideration of the Village's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Management's Discussion and Analysis and the Required Supplementary Information on pages 3 to 15 and pages 61 to 64 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village's basic financial statements. The introductory section, combining and individual fund statements and schedules and statistical tables 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 have been subjected to the auditing procedures applied in the audit of the basic financial statements and in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The information identified in the table of contents as the introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. L a division of Marcum LLP West Palm Beach, Florida May 10, 2010 2 WCUM RACH LI N ACCOUNTANTS • ADVISORS A division of Marcum u.v MANAGEMENT'S DISCUSSION AND ANALYSIS (MD &A) Management's Discussion and An alysis 2009 Village of Tequesta, Florida Mannement's Discussion and Anaiysis As management of the Village of Tequesta, we offer readers of the Village's financial statement this narrative overview and analysis of the financial activities of the Village for the fiscal year ended September 30, 2009. 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 v of this report. Financial Mahlighhts • The assets of the Village of Tequesta exceeded its liabilities at the close of fiscal year 2009 by $31 million (net assets). Of this amount, $10 million (unrestricted net assets) may be used to meet the ongoing obligations to the citizens and creditors. • The Village's total net assets increased by $177 thousand (0.579'0) during the current fiscal year. • Although total net assets increased from the prior year, general revenues decreased $532 thousand (7%). The majority of the decrease is due to a decrease in property taxes. • Total government -wide expenses increased $477 thousand or 3.7% over the prior year. • As of the close of the 2009 fiscal year, the Village's governmental funds reported combined ending fund balances of $6.23 million, a decrease of $583 thousand (3.60) from fiscal year 2008. • At the end of the current fiscal year, unreserved, undesignated fund balance for the General fund was $3.3 million, a decrease of $884 thousand (21%) from the prior year. Total General Fund fund balance decreased $583 thousand from the prior year. The majority of this decrease was due to a transfer out to the Capital Improvement Fund for the construction of Tequesta Bridge. • The Village's long -term -debt (notes and capital lease) decreased by $540 thousand (4.90) during the current fiscal year. 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. In addition to these basic financial statements, this report contains other supplementary information. Government -wide financial statements: The government -wide financial statements are designed to provide readers with a broad overview of the Village's finances, in a manner similar to a private - sector business. j Z I 3 Management's Discussion and Analysis _ 2009 The statement of net assets presents information on all of the Village's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Village is improving or deteriorating. The statement of activities presents information showing how the Village's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. 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 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 included general government, public safety, transportation and leisure services. The business -type activities of the Village included water, stormwater and refuse and recycling. The government -wide financial statements can be found on pages 16 -17 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, 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 can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental fund. 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 outflows 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 evaluating the Village'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 Village'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 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, Special Revenue, Special Law Enforcement, Capital Projects and Capital Improvement funds. The Village Council approved resolution 55 -08 to close the Special Revenue Fund and transfer equity to the General Fund. The transfer of equity was the only activity in this fund during the fiscal year. The General Fund is considered to be the only major I governmental fund in the fiscal year ending September 30, 2009. 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 elsewhere in this report. 4 Management's Discussion and Analysis f 2009 The Village adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 1$ -20 of this report. Proprietary fund. The Village maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The Village uses enterprise funds to account for its water, stormwater and refuse and recycling. 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 Utility, which is considered a major fund. Data from the nonmajor Stormwater Utility and Refuse and Recycling funds are combined into a single, aggregated presentation. The basic proprietary fund financial statements can be found on pages 21 -23 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 reflected in the government -wide financial statement because the resources of those funds are not available to support the Village's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 24 -25 of this report. Notes to the financial statements: The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 26-60 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 to its employees. Required supplementary information can be found on pages 61 -64 of this report. The combining statements referred to earlier in connection with non -major governmental funds, as well as, non -major enterprise funds and fiduciary funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 65 -75 of this report. Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of the Village's financial position. In the case of the Village of Tequesta, total assets exceeded liabilities by $31 million at the close of the most recent fiscal year. The largest portion of the Village's net assets (67.7%) represents investments in capital assets (e.g., land, buildings, machinery and equipment), less any related outstanding debt 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. 5 Management's Discussion and Analysis 2009 Village offequesta's Net Assets Governmental Business-Type Activities Activities 'rotal 2009 2008 2009 2008 2 2008 Assets Current and other assets $7.554.503 $7,652.931 $4,509,551 $3,935,409 $12,064.054 $11.588,340 Capital assets, net 11,195,372 11,102.637 19.967,285 20.575.460 31.162,657 31.678.097 Total Assets 18.749.875 18.755,568 24.476.836 24.510.869 43.226.711 43,266.437 Liabilities Long -term liabilities 4.342.028 4.573,320 6.367.892 6.640,634 10,709.920 11.213.954 Other liabilities 858,488 759.394 398.148 205.734 1.256.636 969.128 Total Liabilities 5,200.516 5.332.714 6.766.040 6.846.368 11.966.556 12.183.082 Net Assets Invested in capital assets, net of related debt 7.330,897 6.959.332 13.713.525 14.082.989 21.044.422 21.042.321 Unrestricted 6. 218.462 6.459.522 3.997.271 3.581.512 10.215.733 10,041.034 Total Net Assets $13, 549.359 $13.418.854 $17.710.796 $17164.501 $31.260.155 $31.083.355 The remaining unrestricted net assets of $10 million (32.7 %) may be used to meet the Village's ongoing obligations to 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 assets, 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. The government's total net assets increased $177 thousand (0.57 %) during the year. This increase demonstrates the degree in which increases in ongoing revenues outpaced increases in ongoing expenses. This gap continues to narrow as revenues increase at a slower rate than expenses. Specifically, the decision of the Village Council to hold the millage rate the same as the prior year. combined with decreasing property values, resulted in revenues from ad valorem taxes declining $487 thousand. 6 Management's Discussion and Analysis 2009 Governmental activities: Governmental activities increased the Village of Tequesta's net assets by $131 thousand, accounting for 73.8% of the total increase in net assets of the Village. Key elements of this increase are as follows: Village of Tequesta Business-Type Changes in Net Assets Governmental Activities Activities Total 2009 200S 2(109 2008 2009 2008 Revenues: Program Revenues: Charges for services $1,158,443 $1,388,866 $4.592,320 54.165.732 55.750.763 S5,554.598 Operating grants & contributions 67,842 18,711 67,842 18.711 Capital grants & contributions - 57,736 - 57,736 General Revenues: Ad valorem taxes 5,173.808 5,661,200 5,173,808 5.661.200 Other taxes 1,285,063 1,123,272 1,285,063 1,123,272 Franchise fees based on gross receipts 466,541 462,296 466,541 462,296 Unrestricted intergovernmental 702,616 783,034 702,616 783,034 Unrestricted investment earnings (loss) 8,725 152,602 (9,208) 86.811 (483) 239,413 Miscellaneous 171.614 37.621 42.080 39.955 213.694 77.576 Total Revenues 9.034.652 9,685.338 4- 625.192 4.292.498 13,659,844 13.977.836 Expenses: General government 1,501,344 1,344,038 - - 1,501 1,344,038 Public safety 5,807,477 5,784,245 5.807,477 5,784,245 Transportation 774,966 736,844 774,966 736,844 Leisure services 639,590 539,450 639,590 539,450 Interest on long -term debt 180,770 206,126 180,770 206,126 Water utility services - 3,907,950 3,760.426 3,907,950 3,760,426 Stormwater services 226,498 215,163 226,498 215.163 Refuse & recycling services 444.449 420.081 444.449 420.081 Total Expenses 8.904.147 8.610.703 4.578.897 4.395.670 13.483.044 13.006.373 Increase (decrease) in net assets before transfers 130,505 1,074,635 46,295 (103,172) 176.800 971,-163 Transfers 120,600 (120,600) - - Increase (decrease) In net assets 130.505 1.195.235 46,295 (223,772 176.800 971.463 Net assets -beginning 10101 13.418.854 12223,619 17.664.501 17,888 273 31.083.355 30.1 1 1.892 Net assets - ending 9/30 S 13.549.359 S 13.418.854 _S 13_71 S 17.664501 S 31?(1(1.155 S 31.083.355 7 Management's Discussion and Analysis 2009 Governmental activities continued: • Property taxes decreased $487 thousand (- 8.61 %) due to decreasing property values/assessments and the Village Council's decision to keep the current millage rate level with the prior year. • Revenues from other taxes increased $161 thousand (14.4 %). The largest increase was in Communications Services Tax revenues which increased $85 thousand with the majority of the increase due to an adjustment from the Florida Department of Revenue • Intergovernmental revenues decreased $80 thousand (- 10.3%). This revenue includes various sales taxes that are collected and distributed by the Florida Department of Revenue. This downturn is a reflection of the drop in consumer spending for this period. • Investment earnings decreased $143 thousand as the Village experienced investment losses in the fiscal year ending September 30. 2009. This is the result of interest rates dropping on cash and cash equivalents as well as unrealized and realized investment losses related to investments in Fund B with the State Board of Administration. • Charges for services decreased $230 thousand (- 16.6 %) with the majority of this decrease (51 %) related to decreased revenues from building and zoning fees. • Revenue from operating grants and contributions increased $49 thousand (101%). This increase is attributable primarily to public safety grants. • Other miscellaneous revenues increased to $171 thousand, as compared to $38 thousand in the prior year. Reimbursements from insurance and bridge repairs represented the largest component of this increase. • General government expenses increased $157 thousand (11.68 %) primarily as a result of additional personnel in the IT and human resources departments. • Leisure services increased $100 thousand (18.56 %.) as a result of increased costs for engineering services and general maintenance resulting from the addition of a new park. Expenses and Program Revenues - Governmental Activities in Thousands $6,000 ; $5,000 $4,000 $3,000 $2,000 $1,000 ti ■ Expenses ■ Revenues 8 Management's Discussion and Analysis 2009 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. The cost of all governmental activities this year was $8.9 million. As shown on the Statement of Activities, the functions directly benefiting from the programs generated revenue of $12 million towards this cost and the remaining $7.7 million (86 %) was financed through general revenues. This represents a 3.2% increase in the percentage financed through general revenues from the prior year. Revenues by Source - Governmental Activities Thousands $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $_ y o � L r Jet a��y Jc 0� Fieare 2 Business -type activities: The net assets of business -type activities increased $46 thousand (0.26%) from the prior year. Key elements of this increase are as follows. • Charges for services for business -type activities increased by $426 thousand or 10.24 %. The Water Utility Fund accounts for a significant portion of this increase which was primarily due to a 7% rate increase resulting from a rate study prepared by the Utility's consultants. Although charges for services increased by 2.6% in the Refuse and Recycling Fund, it was less than the increase in fees charged by the service provider. • Water utility service expenses increased $147 thousand (3.92 %) as a result of increases in the costs of utility services and chemicals. 9 Management's Discussion and Analysis 1 2009 Total Revenues & Expenses - Business Type Activities in Thousands $4,000 va L . $3,500 m $3,000 $2,500 $2,000 1` $1,500 $1,000 €� $500 -- — -- Water Utility Refuse & Recycling Stormwater Utility ■ Revenue ■ Expenditure Revenues by Source - Business Type Activities in Thousands $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 — - $500 Charges for Services Non - operating 10 Management's Discussion and Analysis 2009 Financial Analysis of the Villaee'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, unreserved fund balance may serve as a useful measure of the Village's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, The Village of Tequesta's governmental funds reported combined ending fund balances $6,234,668, a decrease of $235,930 ( -3.6 %) from the prior year. Approximately 72% ($4;491,394) of the total amount of fund balances constitutes unreserved, undesignated fund balance, which is available for spending at the government's discretion. Additionally, the Village has designated $1,000,000 of the fund balances for Disaster Relief in the General Fund and $330,000 in the Capital Improvement Fund for Tequesta Bridge. Designations reflect the Village's self- imposed limitations on the use of otherwise available current financial resources. Additionally, the Village has reserved $413,274 (6.6 %) of fund balance for inventories, encumbrances and prepaid items. The General Fund is the chief operating fund of the Village. At September 30, 2009, unreserved fund balance of the General Fund was $4,296,418 (this includes designations). As a measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved, undesignated fund balance represents 38% of fiscal year 2009 General Fund expenditures and total General Fund fund balance represents 54% of the total expenditures. The ratio of total fund balance to expenditures has decreased from the prior year when unreserved fund balance represented 50% of total General Fund expenditures and total fund balance represented 62% of total expenditures. Compared to the prior fiscal year, total General Fund revenues decreased by $107,674 (- 1.2%). One of the most significant reasons for the decrease in revenues is the economic crisis that has affected the U.S. economy as a whole. Some specific key factors and how they have affected the Village's revenues are as follows; • A stalled real estate market - the Village suffered the effect of the sub -prime mortgage crises which resulted in a reduction in proceeds from ad- valorem taxes as property values decreased. • The deceleration of the United States economy and a widespread drop in spending was reflected in a drop in intergovernmental revenues (sales taxes, revenue sharing, etc.) • A growing inventory of houses in the market, resulting in minimal new construction, followed by a decrease in related revenues from licenses and permits ($88 thousand decrease). • Investment earnings decreased ($133 thousand) as interest rates declined to zero and the asset value of any investments tied to subprime mortgages declined. • These decreases were offset by the following increases in revenue • Revenue from utility and communication services taxes as well as franchise fees increased as rates increased. • Additional revenue from a positive net adjustment in communication services taxes. • Additional grant revenue of $50 thousand for public safety projects. • Charges for services increased $22 thousand (4%). • Rents and royalties increased due to rent increases that were written into existing leases (cell tower). 11 Management's Discussion and Analysis 1 2009 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 I)v Source Change 2009 $ 2008 Revenues Ad valorem taxes $ 5,173.808 57.5% $(487.392) -8.6% $ 5,661.200 Other taxes 1.285.063 14YX 161.791 14.4% 1.123,272 Intergovernmental 724.375 8.0(/ (58,659) -7q 783.034 Franchise fees 466.541 5.2(7( 422.271 954ck 44.270 Charges for services 597,269 6.6% 22.332 4% 574,937 Intra overnmental 292.990 3.3% 11890 5% 280,100 Grants 37.583 0.4% 18.871 101 18,712 Licenses and permits 211,371 2.3%, (87.688) -29% 299.0.59 Investment eamin gs 8.725 0.1% (132,879) -94% 141,604 Fines and forfeitures 34.877 0.4�/ (5,202) -13`k 40.079 Miscellaneous 48.988 0.59 10.746 28% 1 38.242 Rents and royalties 120.596 1.3% 16.969 16(/ 103.627 Impact fees 851 0.0 (1.724) -67`k 2.575 Total Revenues $ 9,003.037 1 100.0% $(107.674) 1.2 $ 9.1 10,71 1 General fund Revenues by Source - in Thousands 6,000 5,000 4,000 3,000 2,000 1,000 dOP I► ' - -" � � +e h 6' VC e e; �y ��a� � a\`` � pia °5 h ` � J � e S `c` ° �5 ei �� 5e rah P o� pa e a ° 40 ey ti ° � ��a� ° � eA a ac �a� e c ak o e o n e Cr � J o ey o �. �C 12 Management's Discussion and Analysis 2009 Expenditures in the General Fund are shown in the following schedule: General Fund - Expenditures by Function Cliange 2009 2008 Expenditures General government $1.373.158 15.8 $152.920 12.5 $1.220.238 Public safety 5,41 1.745 62.3'7 (27,457) 45% 5.439,202 Transportation 710.384 8.2q 17.832 2.670 692.552 Leisure services 562.714 6.5% 94.974 20.3% 467,740 Capital outlay 164,226 1.9 (8,353) -4.8% 172,579 Debt service 459,601 5.3'1: (43.431) - 8.6(7. 503.032 Total Ex ndituu'es $8.681.828 100.0 °7 $186.485 2.2 $8,495,343 In fiscal year 2009, total General fund expenditures increased by $186,485 (2.2 %) compared to the prior year. • The general government function, which includes the Village Council and administrative departments increased 12.5% ($153 thousand) from the prior year due to the following; • General administrative government increased $113,943 mainly due to the addition of an IT position. • Human resources increased $30 thousand as 50% of the cost of an administrative assistant was charged to that department for the 2009 fiscal year. • Finance increased $34 thousand compared with 2008 as the prior year had a position that remained open for an extended period before being filled. • Leisure services increased $95 thousand (20.3 %). The majority of this increase was due to operating expenditures related to the general maintenance of the Village's parks. • Debt service was reduced as the Village paid down debt. Ending fund balances for the Capital Projects Fund is $363,773 and the Capital Improvement Fund is $1,168,674. These funds are designated for capital projects/improvements. These funds receive revenue from capital grants and transfers in frorn other funds. During 2009, $1,273,323 was transferred into the Capital Improvement Fund from the General Fund for the Tequesta bridge construction. Proprietary funds: The Village's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. At the end of the year, total net assets of the proprietary funds were $17,710,796 a small increase from the prior year ($46 thousand). While income from operations increased $249 thousand from the prior year, after non - operating expenses of $200 thousand, net assets had an increase of less than 1 % from the prior year. The Water Utility Fund reflected operating income of $189 thousand, an increase of $258 thousand from the prior year. This increase is attributable to increased rates in the Water Utility Fund (7 %) as well as an increase in water usage. Operating expenses in the Water Utility Fund increased by $83 thousand, primarily as a result of increases in the cost of utility services and chemicals. The non -major funds (the Stormwater Utility and Refuse and Recycling funds) recorded $58 thousand in operating income down from $67 thousand in the prior year, mainly attributable to increased expenses for drainage maintenance. While the operating income generated by the Stormwater Utility Fund remained somewhat constant with the prior year, the Refuse & Recycling Fund recorded a $30 thousand operating loss. This loss occurred as fees charged to customers were less than the increased fees charged to the Fund by the service provider Waste Management Inc. 13 Management's Discussion and Analysis 2009 General Fund Budl=etary Hi2hli2hts Differences between the original budgeted expenditures and the final amended budget can be briefly summarized as follows: • Revenues from "Other Taxes" were increased to recognize additional revenues from the insurance premium taxes that were not budgeted. • Budgeted expenditures for general government were reduced by $75 thousand, significant decreases were; • Election expenditures decreased $11 thousand • Compensated absences decreased $15 thousand • Budgeted expenditures for public safety increased $185 thousand. Significant changes were • Personal services in police administration increased $61 thousand • Personal services in police communications increased $42 thousand • Personal services in police operations decreased $51 thousand. • Personal services in fire control increased $121 thousand. • Budgeted expenditures for leisure services increased $92 thousand. The most significant change was an increase of $95 thousand for engineering services and general maintenance resulting from the addition of a new park. • Budgeted expenditures for capital outlay increased $154 thousand. Each year's capital outlay budget is increased by the unbudgeted roll - forward of encumbrances, the most significant increase in 2009 was due to the purchase of an ambulance. Capital Assets and Debt Administration Capital Assets: The Village's capital assets for its governmental and business -type activities are $31,162.657 (net accumulated depreciation) as of September 30, 2009. These assets include land, buildings, improvements - other- than - buildings and machinery and equipment. Although the Village added more capital assets during the year than were deducted, the Village's total net capital assets for the current fiscal year decreased $515 thousand as annual depreciation was greater than the amount of the additions. Following is a detail of capital assets at September 30, 2009. Additional information on the Village's capital assets can be found in Note 6, Capital Assets, starting on page 43 of this report. Governmental • 1 Capital Assets Activities Activities Total Land $402.935 $83.335 $486.270 Construction in progress 421.994 $97.875 $519.869 Buildings 8,043.522 $979.512 $9.023.034 Improvements 3.064.161 $29.607.092 $32.671,253 Machinery and E ui ment 4,087.189 $1,263.729 $5.350,918 Total capital assets $16.019,801 $32,031.543 $48.051.344 Lcss accumulated depreciation (4,824,429) (12.064.258) (16.888.687) Total capital assets, net $11.195.372 $19.967,285 $31.162.657 14 Management's Discussion and Analysis 1 2009 Long -term Debt: At the end of the current fiscal year, the Village had no general obligation bonded debt. All of the Village's outstanding debt is secured by general revenue sources. Governmental Activities Business-Type AL'tk'ili" T(I'd 2009 2008 2009 2008 2009 Notes payable S3.709,027 $ 3,917,907 S6,068.462 S6.929.640 S10.377.489 Capital leases 155,448 225,399 155,448 Total Non - current liabilities $ 3,864.475 S4.143.300 $ 6.668.462 S6,929,640 $10,532,937 During the current fiscal year, the Village's net outstanding debt, decreased by $540 thousand (4.9%). Additional information on the Village's long -term debt can be found in Note 7. Long Term Debt starting on page 44 of this report. Economic Factor and Next Year's Budgets and Rates • The Village Council decision to hold the millage rate at 5.7671 mills will result in a reduction in tax revenues as property values continue to decline. • Interest rates remain low which will continue to effect investment earnings. • Pension contributions in the Village's defined benefit plans continue to rise as ROI remains low, asset values are slow to recover and new mortality tables are implemented.. • Revenues from sales taxes are trending lower. • The unemployment rate for the Village of Tequesta at September 30, 2009 is 9.7% up from 7.3c7c a year ago. • The South Florida Water Management District permanently restricted water usage which will directly affect revenues in the water utility. • The Village of Tequesta's water rates increased 7% on October I, 2009. • All of these factors were considered in preparing the Village of Tequesta's budget for the 2009 -2010 fiscal year. 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 Office. 345 Tequesta Drive, Tequesta, Florida 33469. 15 Page Intentionally Left Blank BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET ASSETS SEPTEMBER 30, 2009 Business - Governmental type Activities Activities Total Assets Cash and cash equivalents $ 5,237,854 $ 3,725,637 $ 8,963,491 Investments 158,517 406,062 564,579 Receivables, net 381,801 300,589 682,390 Inventories 30,332 23,868 54,200 Prepaid items 86,329 -- 86,329 Net pension asset 461,347 -- 461,347 Other assets 1,198,323 53,395 1,251,718 Capital assets not being depreciated 824,929 181,210 1,006,139 Capital being depreciated, net 10,370,443 19,786,075 30,156,518 Total Assets 18,749,875 24 43,226,711 Liabilities Accounts payable 266,075 289,983 556,058 Accrued liabilities 386,720 27,319 414,039 Customer deposits -- 23,596 23,596 Due to other governments 698 -- 698 Unearned revenue 148,965 -- 148,965 Other current liabilities 56,030 57,250 113,280 Non - current liabilities Due within one year 333,934 267,434 601,368 Due in more than one year 4,008,094 6,100,458 10,108,552 Total Liabilities 5,200,516 6,766,040 11,966,556 Net Assets Invested in capital assets, net of related debt 7,330,897 13,713,525 21,044,422 Unrestricted 6,218,462 3,997,271 10,215,733 Total Net Assets $ 13,549,359 $ 17 $ 31,260,155 The accompanying notes are an integral part of these financial statements. 16 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2009 Net (Expense) Revenue and Program Revenues C_ hanges in Net Assets Charges Operating Capital Business- for Grants and Grants and Governmental type Functions /Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities General government $ 1,501,344 $ 302,182 $ -- $ $ (1,199,162) $ -- $ (1,199,162) Public safety 5,807,477 783,774 50,133 -- (4,973,570) -- (4,973,570) Transportation 774,966 -- 9,209 -- (765,757) -- (765,757) Leisure services 639,590 72,487 8,500 -- (558,603) -- (558,603) Interest on long -tern debt 180,770 -- -- -- (180,770) -- (180,770) Total Governmental Activities 8,904,147 1,158,443 67,842 -- (7,677,862) -- (7,677,862) Business -type Activities Water 3,907,950 3,863,439 -- -- -- (44,511) (44,511) Other enterprise activities 670,947 728,881 -- -- -- 57,934 57,934 Total Business -type Activities 4,578,897 4,592,320 -- -- -- 13,423 13,423 Total $ 13A83,044 $ 5,750,763 $ 67,842 $ (7,677,862) 13,423 (7,664,439) General Revenues Ad valorem taxes 5,173,808 -- 5,173,808 Other taxes 1,285,063 -- 1,285,063 Franchise fees based on gross receipts 466,541 -- 466,541 Unrestricted intergovernmental 702,616 -- 702,616 Unrestricted investment earnings (loss) 8,725 (9,208) (483) Miscellaneous revenues 171,614 42,080 213,694 Total general revenues 7,808,367 32,872 7,841,239 Change in Net Assets 130,505 46,295 176,800 Net Assets - Beginning 13,418,854 17,664,501 31,083,355 Net Assets - Ending $ 13,549,359 $ 17,710,796 $ 31,260,155 The accompanying notes are an integral part of these financial statements. 17 VILLAGE OF TEQUESTA, FLORIDA BALANCESHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 Other Total Governmental Governmental General Funds Funds Assets Cash and cash equivalents $ 4,754,257 $ 483,597 $ 5,237,854 Investments 158,517 -- 158,517 Receivables, net 350,187 31,614 381,801 Inventories 30,332 -- 30,332 Prepaid items 86,329 -- 86,329 Other assets -- 1,198,323 1,198,323 Total Assets 5,379,622 1,713,534 7,093,156 Liabilities and Fund Balances Liabilities Accounts payable 107,025 159,050 266,075 Accrued liabilities 386,720 -- 386,720 Due to other governments 698 -- 698 Unearned revenue 148,965 -- 148,965 Other current liabilities 56,030 -- 56,030 Total Liabilities 699,438 159,050 858,488 Fund Balances Reserved for: Inventories 30,332 -- 30,332 Prepaid items 86,329 -- 86,329 Encumbrances 267,105 29,508 296,613 Unreserved, designated for, reported in: General fund: Designated for disaster relief 1,000,000 -- 1,000,000 Capital improvement fund: Bridge repair -- 330,000 330,000 Unreserved, undesignated, reported in: General fund 3,296,418 -- 3,296,418 Special law enforcement fund -- 22,037 22,037 Capital improvement fund -- 809,166 809,166 Capital projects fund -- 363,773 363,773 Total Fund Balances 4,680,184 1,554,484 6,234,668 Total Liabilities and Fund Balances $ 5,379,622 $ 1,713,534 Amounts Reported for Governmental Activities in the Statement of Net Assets are Different Because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 11,195,372 Net pension assets are not considered to represent a financial asset in the governmental funds 461,347 Long -term liabilities, including notes payable, are not due and payable in the current period and therefore are not reported in the governmental funds: Note payable (3,709,027) Capital leases (155,448) Compensated absences (477,553) Net Assets of Governmental Activities $ 13,549,359 The accompanying notes are an integral part of these ftttanclal statements. 18 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Other Total Governmental Governmental General Funds Funds Revenues Ad valorem taxes $ 5,173,808 $ -- $ 5,173,808 Other taxes 1,285,063 -- 1,285,063 Intergovernmental 724,375 -- 724,375 Franchise fees 466,541 -- 466,541 Charges for services 597,269 -- 597,269 Intragovernmental 292,990 -- 292,990 Grants and contributions 37,583 -- 37,583 Licenses and permits 21 1,371 -- 211,371 Investment earnings 8,725 -- 8,725 Fines and forfeitures 34,877 -- 34,877 Miscellaneous 48,988 31,615 80,603 Rents and royalties 120,596 -- 120,596 Impact fees 851 -- 851 Total Revenues 9,003,037 31,615 9,034,652 Expenditures Current: General government 1,373,158 -- 1,373,158 Public safety 5,411,745 -- 5,411,745 Transportation. 710,384 -- 710,384 Leisure services 562,714 -- 562,714 Capital outlay 164,226 588,754 752,980 Debt service: Principal 278,831 -- 278,831 Interest 171,297 -- 171,297 Fiscal charges 9,473 -- 9,473 Total Expenditures 8,681,828 588,754 9,270,582 Excess (Deficiency) of Revenues over Expenditures 321,209 (557,139) (235,930) Other Financing Sources (Uses) Transfers in 369,490 1,273,323 1,642,813 Transfers out (1,273,323) (369,490) 1,642,813) Total Other Financing Sources (Uses) (903,833) 903,833 Net Change in Fund Balances (582,624) 346,694 (235,930) Fund Balances - Beginning 5,262,808 1,207,790 6,470,598 Fund Balances - Ending $ 4,6880,184 $ 1,554,484 $ 6,234,668 The accompanying notes are an integral part of these financial statements. 19 VILLAGE OF TEQUESTA, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FISCAL YEAR ENDED SEPTEMBER 30, 2009 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds (Page 19) $ (235,930) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. The details of the difference are as follows: Capital outlay $ 752,980 Depreciation expense 65( 3,121) Net adjustment 99,859 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade -ins, and donations) is to decrease net assets (7,124) 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. The detail of the differences are as follows: Principal payments: Notes payable 208,880 Capital leases 69,951 Net adjustment 278,831 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: The details of the difference are as follows: Compensated absences (47,539) Net pension expenses 42,408 Change in net assets of governmental activities $ 130,505 The accompanying notes are an integral part of these financial statements. 20 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30, 2009 Business -type Activities Water Nonmajor Fund Funds Totals Assets Current Assets Cash and cash equivalents $ 3,461,351 $ 264,286 $ 3,725,637 Investments 105,922 300,140 406,062 Accounts receivable, net 292,878 7,711 300,589 Inventories 22,707 1,161 23,868 Other assets 53,110 285 53,395 Total Current Assets 3,935,968 573,583 4,509,551 Non - Current Assets Capital assets not being depreciated 181,210 -- 181,210 Capital assets being depreciated, net 18,165,153 1,620,922 19,786,075 Total Non- Current Assets 18,346,363 1,620,922 19,967,285 Total Assets 22,282,331 2,194,505 24,476,836 Liabilities and Net Assets Current Liabilities Accounts payable 237,375 52,608 289,983 Accrued liabilities 27,319 -- 27,319 Customer deposits 23,596 -- 23,596 Current maturities of notes payable - 262,934 -- 262,934 Current portion of compensated absences 4,500 -- 4,500 Other current liabilities 57,250 -- 57,250 Total Current Liabilities 612,974 52,608 665,582 Long -Term Liabilities Compensated absences 107,496 2,136 1 09,632 Notes payable (net of deferred loss on refunding) 5,990,826 -- 5,990,826 Total Long -Term Liabilities 6,098,322 2,136 6,100,458 Total Liabilities 6,711,296 54,744 6,766,040 Net Assets Invested in capital assets, net of related debt 12,092,603 1,620,922 13,713,525 Unrestricted 3,478,432 518,839 3,997,271 Total Net Assets $ 15,571,035 $ 2,139,761 $ 17,710,796 The accompanying notes are an integral part of these financial statements 21 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF :REVENUES, EXPENSES AND CHANGES IN NET ASSETS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Business -type Activities Water Nonmajor Fund Funds Totals Operating Revenues Charges for services $ 3,804,549 $ 728,881 $ 4,533,430 Total Operating Revenues 3,804,549 728,881 4,533,430 Operating Expenses Cost of sales and services; Plant production 1,359,335 -- 1,359,335 Distribution 701,379 -- 701,379 Stonnwater -- 120,197 120,197 Purchased services -- 438,589 438,589 Management services 277,190 15,799 292,989 Administration 337,258 337,258 Depreciation 940,613 96,362 1,036,975 Total Operating Expenses 3,615,775 670,947 4,286,722 Operating Income 188,774 57,934 246,708 Non - Operating Revenues (Expenses) Connection fees 58,890 -- 58,890 Miscellaneous revenue 42,080 -- 42,080 Investment earnings (loss) (9,687) 479 (9,208) Interest expense (282,686) -- (282,686) Other fiscal charges (9,489) -- (9,489) Total Non - Operating Revenues (Expenses) (200,892) 479 (200,413) Change in Net Assets (12,118) 58,413 46,295 Net Assets - Beginning 15,583,153 2,081,348 17,664,501 Net Assets - Ending $ 15,571,035 $ 2,139,761 $ 17 The accompanying notes are an integral part of these financial statements. 22 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Business -type Activities Water Nonmajor Fund Funds Totals Cash Flows from Operating Activities Cash received from customers, governments and other funds $ 3,721,233 $ 729,045 $ 4,450,278 Cash paid to suppliers (1,310,325) (478,133) (1,788,458) Cash paid to employees (1,244,063) (49,137) (1,293,200) Other cash received 42,080 -- 42,080 Net Cash Provided by Operating Activities 1,208,925 201,775 1,410,700 Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets (427,566) -- (427,566) Proceeds from connection fees 58,890 -- 58,890 Principal payments on long -term debt (261,178) __ (261,178) Interest and fiscal charges paid (270,942) -- (270,942) Net Cash Used in Capital and Related Financing Activities (900,796) -- (900,796) Cash Flows from Investing Activities Purchases of investments (1,616) (1,616) Sales of investments 348,824 30,142 378,966 Interest received on investments 17,256 2,302 19,558 Net Cash Provided by Investing Activities 366,080 30,828 396,908 Net Increase in Cash and Cash Equivalents 674,209 232,603 906,812 Cash and Cash Equivalents - Beginning 2,787,142 31,683 2,818,825 Cash and Cash Equivalents - Ending $ 3,461,351 $ 264,286 $ 3,725,637 Adjustments to Reconcile Operating income to Net Cash Provided by Operating Activities Operating income $ 188,774 $ 57,934 $ 246,708 Depreciation and amortization 940,613 96,362 1,036,975 Miscellaneous non - operating revenue 42,080 -- 42,080 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (83,316) 164 (83,152) Inventories 9,021 (1,053) 7,968 Other assets 1,727 11 1,738 Increase (decrease) in: Accounts payable 142,586 48,075 190,661 Retainage payable (1,000) - (1,000) Accrued liabilities (1,234) -- (1,234) Customer deposits 6,621 -- 6,621 Compensated absences (34,313) 282 (34,031) Other current liabilities (2,634) -- (2,634) Net Cash Provided by Operating Activities $ 1,208,925 $ 201,775 $ 1,410,700 Noncash Investing Activities Change in fair value of investments $ (26,943 ) $ 1,823 $ 28,766 The accompanying notes are an integral part of these financial statements. 23 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Pension Trust Funds Assets Cash and cash equivalents $ 357,616 Investments, at fair value: Corporate stocks 3,576,539 Corporate bonds 938,285 Government backed assets 1,079,499 Contributions receivable 74,629 Accrued interest receivable 22,011 Total Assets 6,048,579 Liabilities and Net Assets Accounts payable 21,930 Due to broker 25,577 Total Liabilities 47,507 Net Assets Held in Trust for Pension Benefits $ 6,001,072 The accompanying notes are an integral part of these financial statements. 24 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Pension Trust Funds Additions Contributions: Employer $ 568,027 Employee 190,856 Total contributions 758,$83 Investment income Net depreciation in fair value of investments (118,732) Investment earnings 134,421 15,689 Less investment expenses (57,793) Net investment loss (42,104) Total Additions 716,779 Deductions Refunds of contributions 12,877 Operating expenses 80,155 Total Deductions 93,032 Net Increase 623,747 Net Assets Held in Trust for Pension Benefits Net assets - beginning 5,377,325 Net assets - ending $ 6,OOi The accompanying notes are an integral part of these financial statements. 25 NOTES TO BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1 - SUMI%IARY OF SIGNIFICANT ACCOUNTING POLICIES The Village of Tequesta, Florida 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. The Village's major operations include public safety (police, fire rescue/EMS), streets and roads, culture and recreation, public improvements, planning and zoning, water, stormwater, recycling services and general and administrative. The financial statements of the Village have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard - setting body for establishing governmental and financial reporting principles. The more significant of the Village's accounting policies are described below: A. THE FINANCIAL REPORTING ENTITY The financial statements were prepared in accordance with governmental accounting standards, which establishes standards for defining and reporting on the financial reporting entity. 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. The Village has no component units to report for the fiscal year ending September 30, 2009. B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS The government -wide financial statements distinguish between the governmental and business -type activities of the Village. Governmental activities are those supported by taxes and intergovernmental revenues. Business -type activities rely to a significant extent on fees and charges for support. Government -wide financial statements include a Statement of Net Assets and a Statement of Activities. These statements report on the government as a whole and provide a consolidated financial picture of the government. Fiduciary funds (the Village's pension trust funds) are excluded from this presentation as the assets are held for the benefit of a third party (members and beneficiaries) and cannot be used to address activities or obligations of the government. 26 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. All remaining nonmajor governmental funds or proprietary funds are aggregated and reported as other governmental or nonmajor funds. Since the governmental fund financial statements are presented on a different measurement focus and basis of accounting than the government -wide statements, a reconciliation is provided which briefly explains the adjustments necessary to reconcile the results of governmental fiend accounting to the government -wide presentations. C. MEASUREMENT FOCUS, BASIS OFACCOUNTING AND BASIS OF PRESENTA TION The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 45 days after the end of the current fiscal period. 27 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Principal revenue sources considered susceptible to accrual include property taxes, sales taxes, franchise taxes, grant revenues and investment earnings. Other revenues, such as fines and forfeitures, are considered measurable and available only when cash is received by the Village. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long -term debt and compensated absences which are recognized as expenditures when payment is due. The accounts of the Village are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for using a separate set of self balancing accounts. Accounting principles generally accepted in the United States of America set forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category of the governmental and business -type combined), for the determination of major funds, Major funds are presented individually while the non -major funds are shown in the aggregate within one column. 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 required to be accounted for in another fund. The Village also reports the following non -major governmental funds: The Special Revenue Fund was created to account for the Improvement Revenue Refunding Bond Series 1994. On June 20, 2008 the Village used available cash to pay the outstanding balance in full. On December 11, 2008, the Village Council approved resolution 55 -08 to close this fund. The Special Law Enforcement Fund accounts for forfeitures received by the Police Department. The forfeitures must be expended for certain law enforcement purposes as prescribed by Florida Statute Chapter 932.704. The Capital Improvement 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. 28 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Capital Projects Fund accounts for the acquisition or construction of major capital projects, other than those financed by proprietary fund types. The Village reports the following major proprietary funds: The Water Fund is used to account for the activities of the water utility, which includes the processing and distribution of potable water to Village residents and some surrounding communities. The Village also reports the following nonmajor proprietary funds: The Stormwater Utility Fund accounts for the construction and maintenance of the Village's stormwater system. The Refuse and Recycling Fund is used to account for revenues received from non -ad valorem assessments charged to residents for residential curbside pick -up of solid waste and recyclable material. Additionally, the Village reports the following fiduciary funds: The Firefighters' Pension Trust Fund accounts for the accumulation of resources and for contributions and benefits of the firefighter employees. The Police Officers' Pension Trust Fund accounts for the accumulation of resources and for contributions and benefits of the police employees. The General Employees' Trust Fund accounts for the accumulation of resources and for contributions and benefits of the general employees of the Village. Private- sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. The Village has the option of following subsequent private - sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The Village has elected not to follow subsequent private - sector guidance. As a general rule, the effect of interfund activity has been eliminated from the government - wide financial statements. Exceptions to this general rule are payments -in -lieu of taxes and other charges between the Village utility functions and various other functions of the Village. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 29 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non - operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Village's water utility, stormwater utility and solid waste services funds are charges to customers for services. Operating expenses for proprietary funds include the costs of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the Village's policy to use restricted resources first, then unrestricted resources as they are needed. D. ASSETS, LIABILITIES, AND 1VETASSETS OR EQUITY 1. Deposits and Investments The Village's cash and cash equivalents are considered to be cash on hand, demand and time deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the Village to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, commercial paper, corporate bonds, repurchase agreements, State Board Investment Pool and the Florida Municipal Investment Trust. The Village maintains a cash and investment pool that is available for use by all funds with the exception of the Water Utility which has separate accounts with the State Board of Administration (SBA). Pooled cash is classified as "Cash and Cash Equivalents" in the Statement of Net Assets and pooled investments are combined with other separate investments and classified as "Investments." Interest income earned as a result of pooling is distributed to the appropriate funds based on the month end equity balance in each fund. All investments, except the State Board Investment Pool, are reported at fair value, which is based on quoted market prices. The Investment Pool is segregated into the Florida PRIME which is recorded at its value of the pool shares (20 -like Fund) which is fair value and Fund B which is accounted for as a fluctuating NAV pool and is reported based on the fair value factor. 30 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Receivables and Payables Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to /from other funds ". Any residual balances outstanding between the governmental activities and business -type activities are reported in the govemment -wide financial statements as "internal balances." All trade and other receivables are shown net of an allowance for uncollectibles. Allowances for uncollectible receivables are based upon historical trends and the periodic aging of receivables. Water charges to customers are based on actual water consumption. Consumption is based upon a monthly cycle. The Village recognizes revenue and a related receivable for unbilled consumption as of September 30 of each year. 3. Inventories Inventories of the general fund are valued at cost on a first -in, first -out (FIFO) method. Inventories consist of expendable supplies held for consumption. The cost is recorded as an expenditure when the individual inventory items are purchased. Inventories of the Water Fund are valued at lower of cost (determined using the weighted average) or market and consist of pipes, valves, fittings and meters. The cost is recorded as an expense when the individual inventory items are put into service. 4. Capital Assets Capital assets, which include property, plant and equipment, and certain infrastructure assets (e.g., utility plant, roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the Village chose to include all such items regardless of their acquisition date. Capital assets are defined by the Village as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. Purchased or constructed assets are recorded at actual cost of estimated historical cost if actual asset is unavailable. Donated capital assets are recorded at estimated fair market value at the date of donation. 31 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Capital Assets (continued) The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset's life are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the asset constructed. There was no capitalized interest expense in 2009. Capital assets of the Village are depreciated using the straight line method over the following estimated useful lives: Buildings 20 — 40 years Improvements other than buildings 20 — 50 years Machinery and equipment 2 — 15 years 5. Compensated Absences It is the Village's policy to permit employees to accumulate within certain limits, earned but unused vacation time, sick leave and compensatory time which will be paid to employees upon separation from Village service. All vacation, sick leave pay and compensatory time is accrued when incurred in the government -wide and proprietary fund financial statements. In the governmental funds, a liability is recorded only for unused vacation and sick leave payouts for employees who have separated, for example, as a result of employee resignations and retirements. 6. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs and refunding gains /losses, are deferred and amortized over the life of the bonds using the straight -line amortization method. Bonds payable are reported net of the applicable bond premium or discount and refunding gains /losses. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing source while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 32 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUE])) 7. Use of Estimates The financial statements and related disclosures are prepared in conformity with accounting principles generally accepted in the United States of America. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amount of revenue and expenditures /expenses during the period reported. These estimates include assessing collectability of accounts receivable, pension obligations, and useful lives and impairment of tangible assets, among others. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Actual results may differ from those estimates. 8. Net Assets Net assets of the government -wide and proprietary funds are categorized as invested in capital assets, net of related debt; restricted or unrestricted. Investment in capital assets, net of related debt, is that portion of net assets that relates to the Village's capital assets reduced by accumulated depreciation and by any outstanding debt incurred to acquire, construct or improve those assets, excluding unexpended proceeds. Restricted net assets is that portion of net assets that has been restricted for general use by external parties (creditors, grantors, contributors, or laws or regulations of other governments) or imposed by law through constitutional provisions or enabling legislation. Unrestricted net assets consist of all net assets that do not meet the definition of either of the other two components. 9. Fund Balance In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance, where noted, represent tentative management plans that are subject to change. 33 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 2 - PROPERTY TAXES Ad valorem taxes are assessed as of January I s' and billed the following October. They are due and payable on November I' of each year or as soon thereafter as the assessment roll is certified and delivered to the Tax Collector. Taxes are collected by the County and remitted to the Village. Revenue is recognized at the time monies are received from the County. All unpaid taxes become delinquent on April 1" following the year in which they are assessed. Discounts are allowed for early payment at the rate of 4% in the month of November, 3% in the month of December, 2% in the month of January and 1 % in the month of February. The taxes paid in March are without discount. At September 30` unpaid delinquent taxes, if any, are reflected as a receivable on the balance sheet. There were no material delinquent property taxes at September 30, 2009. Assessed values are established by the Palm Beach County Property Appraiser at approximately fair market value. The assessed value for operating purposes of property at January 1, 2008, upon which the 2008 -2009 levy was based, was $930,575,461. Under Florida law, the assessment of all properties and the collection of all county, municipal, school district and special district property taxes are consolidated in the offices of the County Property Appraiser and County Tax Collector. The Village is permitted by Article 7, Section 8 of the Florida Constitution to levy taxes up to $10 (10 mills) per $1,000 of assessed valuation for general governmental services (other than the payment of principal and interest on general obligation long -term debt). In addition, unlimited amounts may be levied for the payment of principal and interest on general obligation long -term debt, subject to a limitation on the amount of debt outstanding. The millage rate to finance general governmental services for the year ended September 30, 2009 was 5.7671 mills per $1,000 of assessed valuation. NOTE 3 - DEPOSITS AND INVESTMENTS DEPOsITs 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 Chief Financial Officer shall determine the collateral requirements and collateral pledging level for each qualified public depository following procedures established by rule. These procedures shall include numerical parameters for 25- percent, 50- percent, 125- percent, and 200- percent pledge 34 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 — DEPOSITS AND INVESTMENTS (CONTINUED) levels based on nationally recognized financial rating services information and established financial performance guidelines. 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, 2009, none of the Village's primary bank balances were exposed to custodial credit risk. INVESTMENTS The Village has adopted an investment policy in accordance with Florida Statutes to establish guidelines for the efficient management of its cash reserves. The Village 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 the 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 (formerly known as the Local Government Surplus Funds Trust Fund LGIP) and the Fund B Surplus Funds Trust Fund (Fund B), both of which are governed by Chapter 19 -7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes. These rules provide guidance and establish the policies and general operating procedures for the administration of the Florida PRIME and Fund B. The Florida PRIME is not a registrant with the Securities and Exchange Commission (SEC); however, the Board has adopted operating procedures consistent with the requirements for a 2a -7 fund, which permits money market funds to use amortized cost to maintain a constant net asset value (NAV) of $1 per share. The fair value of the position in the Florida PRIME is equal to the value of the pool shares. The Fund B is accounted for as a fluctuating NAV pool. As of September 30, 2009, the fair value factor for Fund B was $.54915069 per share. Fund B is not subject to participant withdrawal requests. Distributions from Fund B, as determined by the SBA, are effected by transferring eligible cash or securities to the Florida PRIME, consistent with the pro rata allocation of pool shareholders of record at the creation of Fund B. One hundred percent of such distributions from Fund B are available as a liquid balance within the Florida PRIME. The investments in the Florida PRIME and Fund B are not insured by FDIC or any other governmental agency. 35 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) A. VILLAGE OF TEQUESTA At September 30, 2009, the Village of Tequesta had the following deposits and investments: Weighted Deposits and Average Credit Percent Investments Fair Value Maturitv Rating Distribution Demand deposits $ 8,963,491 94% SBA - Florida PRIME 370,449 33 days AAAm S &P 4% SBA - Fund B 194,130 6.69 years Not rated 2 % Total investments 564,579 Total deposits and investments $ 9,528,070 100% INTEREST RATE RISK Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect an investment's fair value. Generally, the longer the time to maturity, the greater the exposure to interest rate risk. The Village's investment policy disallows the purchase of securities that have a maturity of greater than five years. In addition, on any given date, at least 80% of the portfolio shall mature within one year. At September 30, 2009, the Village's investments are in compliance with this policy. CREDIT RISK Credit risk is the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that investments be limited to investments in specific securities and that short-term obligations of U.S. corporations are rated at the time of purchase at one of the three highest classifications established by at least two standard rating services and mature not later than 180 days from the date of purchase. At September 30, 2009, the Village's investments are in compliance with this policy. CONCENTRATION OF CREDIT RISK The Village's investment policy states that assets shall be diversified to control the risk of loss resulting from concentration of assets to a specific maturity, instrument, issue, dealer, or bank through which these securities are bought and sold. As of September 30, 2009, the value of each position held in the Village's portfolio is less than 5 % in any one issuer. 36 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) B. GENERAL EMPLOYEES' PENSION TRUST FUND At September 30, 2009, the General Employees' Pension. Trust Fund had the following deposits and investments: Weighted Average Credit Percent Fair Value Maturft Rating Distribution Cash $ 11,490 0,91% Money market 60,229 4.78% Corporate bonds: 2.62 years Bonds 68,245 Al 5.42% Bonds 27,047 A2 2.15% Bonds 31,643 A3 2.51% Bonds 15,356 BAA1 1.22% U.S. agencies 126,613 .51 year AAA 10.05% U.S. treasuries 97,737 .77 year AAA 7.75% Corporate stocks 821,803 65.21 $ 1,260,163 100.00 INTERF,ST RATE RISK Interest rate risk is 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 to interest rate risk. The established performance objectives require investment maturities to match anticipated cash flow requirements in order to pay obligations when due. At September 30, 2009, the weighted average maturity in years for each investment type is included in the preceding table. CREDIT RISK Credit risk is the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that investments made or held in the fund shall be limited 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; 37 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) • 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: • Fixed Income: Holds a rating in one of the four highest classifications by a major rating service • Equities: Traded on a National Exchange • Money Market: The money market fund or STIF provided by the Plan's custodian. At September 30, 2009, the investments of the General Employees' Pension Trust Fund were in compliance with the policies. CONCENTRATION OF CREDIT RISK Concentration of credit risk is defined as the risk of loss attributed to the magnitude of an investment in a single issuer. The Plan utilizes limitations on securities of a single issuer to manage this risk. The Plan's investment policy limits 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. The investment policy requires that the value of bonds issued by any single corporation shall not exceed 10% of the total fund. Investments in corporate common stock and convertible bonds shall not exceed 70% of the fund assets at market value. Foreign securities shall not exceed 25% of the market value of the fund. If the Plan owns investments at the end of a calendar quarter which no longer satisfy the applicable investment standard, then such investment is disposed of at the earliest economically feasible opportunity. CUSTODIAL CREDIT RISK The Plan's investment policy requires all investments be placed in custody. Plan assets are held by a third party custodian, and all securities purchased by, and all collateral obtained by, the Plan shall be properly designated as plan assets. Securities transactions between a broker - dealer and the custodian involving purchase or sale of securities by the transfer of money or securities must be made on a "delivery vs. payment" basis to insure that the custodian will have the security or money in hand at the conclusion of the transaction. FOREIGN CURRF_NCY RISK Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The investment policy permits a maximum of 25% of the market value of the fund securities to be invested in foreign securities. At September 30, 2009, approximately 9.57% of the market value of the fund was invested in foreign securities, which met the limitations of the policy. 38 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) C. POLICE AND FIREFIGHTERS' PENSION TRUST FUND At September 30, 2009, the Police and Firefighters' Pension Trust Fund had the following deposits and investments: Weighted Average Credit Percent Fair Value Maturi Ratine Distribution Cash $ 2,647 0.06% Money market 283,250 AAA 6.04% Corporate bonds: 6.71 years Bonds 166,296 AAA 3.54% Bonds 57,501 A] 1.23% Bonds 72,758 A2 1.55% Bonds 112,095 A3 2.39% Bonds 34,663 AA2 0.74% Bonds 137,611 AA3 2.93% Bonds 98,423 BAA 1 2.10% Bonds 42,163 BAA2 0.90 % Bonds 36,787 BAA3 0.78% Bonds 37,697 BBA1 0.80% U.S. agencies 221,981 2.70 years AAA 4.73% U.S. treasuries 633,168 3.00 years AAA 13.50% Corporate stocks 2,754,736 58.71 $ 4,691,776 100.00 INTEREST RATE RISK Interest rate risk is 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 to interest rate risk. The established performance objectives require investment maturities to match anticipated cash flow requirements in order to pay obligations when due. At September 30, 2009, the weighted average maturity in years for each investment type is included in the preceding table. 39 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 - DEPOSITS AND INVESTMENTS (CONTINUED) CREDIT RISK Credit risk is the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that investments made or held in the fund shall be limited 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. • Stocks and commingled funds administered by national or state banks, mutual funds and bonds 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 District of Columbia provided that the securities meet the following ranking criteria: • Fixed Income: Standard & Poor's Investment Grade or Moody's investment grade • Equities: At least 90% of the equities shall be rated by a major rating service in the top three quality grades • Money Market: Standard & Poor's A 1 or Moody's P 1 At September 30, 2009, the investments of the Police and Firefighters' Pension Trust Fund were in compliance with the policies. CONCENTRATION OF CREDIT RISK Concentration of credit risk is defined as the risk of loss attributed to the magnitude of an investment in a single issuer. The Plan utilizes limitations on securities of a single issuer to manage this risk. The Plan's investment policy limits 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. The investment policy requires that the value of corporate bonds issued by any single corporation cannot represent more than 5% of the total fund. Investments in corporate common stock and convertible bonds shall not exceed 60% of the fund assets at cost or 70% of the fund assets at market value. Foreign securities shall not exceed 10% of the value at cost of the fund. If the Plan owns investments that complied with the limitations at the time of purchase, which subsequently exceed these limits or do not satisfy the applicable standards, the non - compliant investment may be held until it is economically feasible to dispose of the investment. CUSTODIAL CREDIT RISK The Plan's investment policy requires all investments be placed in custody. Plan assets are held by a third party custodian, and all securities purchased by, and all collateral obtained by, the Plan shall be properly designated as plan assets. Securities transactions between a broker - dealer and the custodian involving purchase or sale of securities by the transfer of money or securities must be made on a "delivery vs. payment' basis to insure that the custodian will have the security or money in hand at the conclusion of the transaction. 40 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 3 — DEPOSITS AND INVESTMENTS (CONTINUED) FOREIGN CURRENCY RISK Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment. The investment policy permits a maximum of 10% of the market value of the fund to be invested in foreign securities. At September 30, 2009, approximately 4.05% of the market value of the fund was invested in foreign securities, which met the limitations of the policy. RISKS AND UNCERTAINTIES — PENSION PLANS The Plans invest in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and, that such changes could materially affect the amounts reported in the statement of plan net assets for each Plan. The Plans, through their investment advisors, monitor Plan investments and the risks associated therewith on a regular basis which each Plan believes minimizes these risks. Contributions to the Plans are made and the actuarial present value of accumulated plan benefits are reported based on certain assumptions pertaining to interest rates, inflation rates and employee demographics, all of which are subject to change. Due to uncertainties inherent in the estimations and assumptions process, it is at least reasonably possible that changes in these estimates and assumptions in the near term would be material to the financial statements. NOTE 4 - RECEIVABLES Receivables at September 30, 2009 for the government's individual major funds, non -major and fiduciary funds in the aggregate, including the applicable allowance for uncollectible accounts, are as follows: Nonmajor Pension and Other Trust General Water Funds Funds Total Customers billed $ 163,113 $ 178,864 $ 536 $ -- $ 342,513 Other taxes 43,768 -- -- -- 43,768 Miscellaneous 2,773 -- 4,452 96,640 103,865 Employees 952 -- -- -- 952 Interest 388 -- -- -- 388 Intergovernmental 125,506 118,514 34,337 -- 278,357 Franchise fees 45,167 -- -- -- 45,167 Gross receivables 381,667 297,378 39,325 96,640 815,010 Less allowance for uncollectibles 31,480 4,500 -- -- 3( 5,980) Net total receivables $ 350,187 $ 292,878 $ 39,325 $ 96,640 $ 779,030 41 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 4 — RECEIVABLES (CONTINUED) Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, various components of unearned revenue reported in the governmental funds were as follows: GENERAL FUND Prepaid cell tower leases $ 94,150 Prepaid business taxes 53,239 Prepaid licenses and registrations not yet due 1,576 $ 148,965 NOTE 5 — INTERFUND TRANSFERS Inter -fund transfers during the year ended September 30, 2009 are as follows: Transfers In Nonmajor General Governmental Transfers Out Fund Fund Total General fund $ -- $ 1,273,323 $ 1,273,323 Nonmajor governmental 369,490 -- 369,490 Total $ 369,490 $ 1,273,323 $ 1,642,813 Transfers are used to (1) move excess revenues from the special revenue funds as required by bond covenants, (2) move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various grant programs. INTER FUND ADmmsTRA TrvE FEE During the year ended September 30, 2009, the Enterprise Funds remitted $292,989 to the General Fund for Administrative Management fees. This amount is reflected as Intra- governmental Services revenue in the General Fund and as management fees, an operating expense, in the Enterprise Funds. 42 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 6 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2009 was as follows: Beginning Ending Balance Additions Deductions Balance Governmental activities Capital assets not being depreciated: Land $ 402,935 $ -- $ -- $ 402,935 Construction in progress 69,689 421,992 (69,687 421,994 Total capital assets not being depreciated 472,624 421,992 (09,687 824,929 Capital assets being depreciated: Buildings 8,043,522 -- -- 8,043,522 Improvements other than buildings 2,885,012 181,648 (2,499) 3,064,161 Machinery and equipment 3,921,509 219,027 (53,347 4,087,189 Total capital assets being depreciated 14,850,043 400,675 (55,846) 15,194,872 Less accumulated depreciation for: Buildings (919,981) (197,581) -- (1,117,562) Improvements other than buildings (533,285) (117,422) 2,500 (648,207) Machinery and equipment (2,766,764) (338,118 46,222 (3,058,660 Total accumulated depreciation (4,220,030) 653,121) 48,722 (4,824,429 Total capital assets being depreciated 10,630,013 252,446 (7,124) 10,370,443 Governmental activities capital assets, net $ 11,102,637 $ 169,546 $ (76,811 $ 11,195,372 Business -type activities Capital assets not being depreciated: Land $ 83,335 $ -- $ - $ 83,335 Construction in progress 28,564 79,374 10,063 97,875 Total capital assets not being depreciated 111,899 79,374 1( 0,063} 181,210 Capital assets being depreciated: Buildings 979,512 -- -- 979,512 Improvements other than buildings 29,336,257 270,835 -- 29,607,092 Machinery and equipment 1,175,075 88,654 -- 1,263,729 Total capital assets being depreciated 31,490,844 359,489 -- 31,850,333 Less accumulated depreciation for: Buildings (504,092) (24,488) -- (528,580) Improvements other than buildings (9,767,094) (889,105) -- (10,656,199) Machinery and equipment (756,097) 123,382) -- (879,479) Total accumulated depreciation (11,027,283} (1,036,975 -- (12,064,258) Total capital assets being depreciated, net 20,463,561 (677,486 -- 19,786,075 Business -type activities capital assets, net $ 20,575,460 $ (598,112 $ (10,063 $ 19,967,285 43 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 6 — CAPITAL ASSETS (CONTINUED) Depreciation expense was charged to functions/programs of the Village as follows: Governmental activities: General government $ 140,038 Public safety 370,814 Transportation 68,275 Leisure services 73,994 Total depreciation expense - governmental activities $ 653,121 Business - type activities: Water $ 940,613 Nonmajor funds 96,362 Total depreciation expense - business -type activities $ 1,036,975 NOTE 7 — LONG -TERM DEBT GOVERNMENTAL A CTIVITIES Note Payable On September 13, 2002, the Village signed a $5,000,000 promissory note with the Bank of America, with an interest rate of 4.28 %, payable monthly in arrears and maturing September 13, 2022. Proceeds from the note were used to finance the final construction of the public safety facility, to repay existing debt obligations and to reimburse the Village for prior capital expenditures incurred in connection with the construction of the public safety facility. Debt service requirements to maturity are as follows: Principal Interest Total Year ending September 30: 2010 $ 217,999 $ 154,502 $ 372,501 2011 227,514 144,987 372,501 2012 237,445 135,056 372,501 2013 247,809 124,692 372,501 2014 258,626 113,875 372,501 2015 -2019 1,472,648 389,858 1,862,506 2020 -2022 1,046,986 70,518 1,117,504 Total $$ 3,7� $ 1,133,488 $ 4,842,515 44 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 7 - LONG -TERM DEBT (CONTINUED) Capital Leases The Village entered into a capital lease with Bank of America in the amount of $397,922 dated February 13, 2003 for the financing of a fire pumper. The applicable interest rate is 3.610% with principal and interest payments totaling $46,720 due annually on April 15` through 2012. The following is a schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2009: Fiscal year ending September 30: 2010 $ 46,720 2011 46,720 2012 46,720 Total minimum lease payments 140,160 Less amount representing interest 9,542 Present value of future minimum lease payments $ 130,618 The Village entered into a capital lease with Bank of America in the amount of $152,999 dated May 26, 2005 for the financing of a 2005 American Lafrance Medic Master ambulance. The applicable interest rate is 3.84% with monthly principal and interest payments totaling $2,802 through June 2010. The following is a schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2009, Fiscal year ending September 30: 2010 $ 25,223 Total minimum lease payments 25,223 Less amount representing interest (393) Present value of future minimum lease payments $ 24,830 The assets acquired through capital leases are as follows: Machinery and equipment $ 550,921 Accumulated depreciation (396,348 $ 154,573 45 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 7 - LONG -TERM DEBT (CONTINUED) BUSINESS - T YPE A CTI VI TI ES Note Payable - 2004 On June 30, 2004, the Village signed a $645,170 promissory note with the Bank of America, with an interest rate of 4.96% per annum, maturing May 1, 2024. Proceeds from the note were used to finance the expansion of the Village water system. Interest on the outstanding principal balance is paid in arrears, on the first day of each and every May and November. The final payment of the entire unpaid principal balance and all accrued and unpaid interest is due on May 1, 2024. The principal may be prepaid at the option of the Village without any prepayment premium. As of September 30, 2009, $146,275 has been prepaid on the note. Debt service requirements to maturity are as follows: Principal Interest Total Year ending September 30: 2010 $ 25,000 $ 19,388 $ 44,388 2011 26,000 18,148 44,148 2012 27,000 16,859 43,859 2013 29,000 15,520 44,520 2014 30,000 14,081 44,081 2015 -2019 176,000 46,400 222,400 2020 -2024 77,895 5,694 83,589 Total $ 390,895 $ 136,090 $ 526,985 Note Payable -1008 On July 14, 2008, the Village signed a $6,554,935 promissory note with the Bank of America, with an interest rate of 3.6852% per annum, maturing on March 1, 2028. The proceeds of the note were used to advance refund the 1998 Water Revenue Bonds. Principal and interest are paid monthly and payments commenced on August 1, 2008 with interest paid in arrears, At September 30, 2009, the outstanding balance on the note was $6,277,567. Principal Interest Total Year ending September 30: 2010 $ 237,934 $ 230,512 $ 468,446 2011 246,910 221,463 468,373 2012 255,830 212,671 468,501 2013 267,218 202,353 469,571 2014 277,867 192,160 470,027 2015 -2019 1,562,123 794,276 2,356,399 2020 -2024 1,883,677 474,040 2,357,717 2025 -2028 1,546,008 105,713 1,651,721 $ 6,277,567 $ 2,433,188 $ 8,710,755 46 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 7 — LONG -TERM DEBT (CONTINUED) CHANGES JN LONG -TERM DEBT The following is a summary of changes in long -term liabilities of the Village for the year ended September 30, 2009: Beginning Ending Due Within Balance Additions Deletions Balance One Year Governmental activities: Note payable - 2002 $ 3,917,907 $ -- $ (208,880) $ 3,709,027 $ 217,999 Capital leases 225,399 -- (69,951) 155,448 66,835 Compensated absences 430,014 83,645 (36,106) 477,553 49,100 $ 4,5� 73� $83,645 $ 314,937 $ 4,342,028 $ 333,934 Business -type activities: Note payable - 2004 $ 414,895 $ -- $ (24,000) $ 390,895 $ 25,000 Note payable - 2008 6,514,745 -- (237,178) 6,277,567 237,934 Unamortized deferred loss on refunding of debt (437,169) -- 22,467 (414,702) -- Compensated absences 148,163 22,667 56,698 114,132 4,500 $$ 6,640,634 $ 22,667 L225,409 $ 6,367,892 $ 267,434 All governmental activities compensated absences are liquidated by the general fund. NOTE 8 — FLORIDA RETIREMENT SYSTEM PLAN DESCRIATION All full time employees hired before January 1, 1996 are eligible to participate in the Florida Retirement System (FRS), a cost sharing, multiple - employer, public retirement system controlled by the State Legislature and administered by the State of Florida Department of Administration, Division of Retirement. 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. 47 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 8 - FLORIDA RETIREMENT SYSTEM (CONTINUED) 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 was for the fiscal year ended June 30, 2009. That 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 http: / /dms.myflorida.com. I''UNDINC POLICY The FRS funding policy provides for monthly employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll are adequate to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates, established by State law, is determined using the entry -age actuarial cost method. If an unfunded actuarial liability reemerges as a result of future plan benefit changes, assumption changes, or methodology changes, it is assumed any unfunded actuarial liability would be amortized over 30 years, using level dollar amounts. Except for gains reserved for rate stabilization, it is anticipated that future actuarial gains and losses are amortized on a rolling 10% basis, as a level dollar amount. The contribution rates by job class for the Village's employees at September 30, 2009 were as follows: regular employees — 9.85 %, special risk employees — 20.92% and senior management — 13.12 %. These rates include 1.11% for the employer Health Insurance Subsidy contribution, and 0.05% for an administrative fee. The Village's contributions to the FRS for the fiscal years ended September 30, 2007, 2008, and 2009 were $187,647, $160,046 and $165,716 respectively, which were equal to the required contributions for each fiscal year. NOTE 9— PENSION PLANS The Village maintains two single employer defined benefit pension plans, the Public Safety Officers' Pension Trust Fund and the General Employees' Pension Trust Fund (GPTF). Since the Public Safety Officers' Plan receives contributions that may not be used to pay benefits of all employee classes, two separate pension trust funds, the Firefighters' Pension Trust Fund (FPTF) and the Police Officers' Pension Trust Fund (PPTF) are reflected in the financial statements. The General Employee's Plan is also reflected as a pension trust fund in the financial statements. 48 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9- PENSION PLANS (CONTINUED) SUMMARY OFSIGN/FICANT ACCOUNTING POLICIES Basis of Accounting 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. Method Used to Value Investments Investments are carried at fair value, which is determined as follows: securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the fiscal year; securities traded in the over - the - counter market and listed securities for which no sales was reported on that date are valued at the last reported bid price. Purchases and sales of securities are reflected on a trade -date basis. Gains or losses on sales of securities are based on average cost. Dividends and interest income are recorded as earned. CURRENT MEMBERSHIP Membership in each Plan consisted of the following at September 30, 2009: FPTF PPTF GPTF Covered group: Active members 19 12 35 Vested terminated members 1 1 3 Total 20 13 38 As of the last actuarial date, there were no retirees or beneficiaries receiving benefits. 49 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) A. PUBLIC SAFETY OFFICERS' TRUST FUND Plan Description The Public Safety Officers' Trust Fund is a single - employer defined benefit plan administered by a five- member Board of Trustees which covers all Village police officers and firefighters hired after 1996 (prior to 1996, the Village participated in the Florida Retirement System). The Plan is also governed by Chapters 112, 175 and 185, Florida Statutes. Any firefighter or police officer who completes six or more years of credited service and attains age 55, or completes 25 years of credited service and attains age 52, is eligible for normal retirement benefits. The monthly retirement benefit shall be equal to 3 % for the first six (6) years of service, 3.5% for the next four (4) years of service, 4% for the next five (5) years of service, 3% for the next six (6) years of service, 2% for the next four (4) years of service and 3% for all years after twenty -five years of service. Early retirement may be taken after a firefighter or police office attained the age of 50 and has six (6) years of credited service. In the event of early retirement, benefits are actuarially reduced to take into account the firefighter or police officer younger age and earlier commencement of retirement benefits. Such reduction shall not exceed 3% per year. Disability benefits can be received for total and permanent disabilities as determined by the Board of Trustees. If the pension is granted, the benefit amount shall be as follows: If the injury or disease is service connected, the firefighter or police officer shall be entitled to the greater of (a) or (b): (a) A monthly pension equal to 42 % of his average monthly compensation as of his/her disability retirement date, or (b) The accrued normal retirement benefit. If the injury or disease is not service connected, the firefighter or police officer shall be entitled to the greater of (a) or (b): (a) A monthly pension equal to 25% of his average monthly compensation as of his/her disability retirement date, or (b) The accrued normal retirement benefit. If the firefighter or police officer dies prior to retirement from the Village, his beneficiary shall receive the following benefit: (a) Line -of -Duty- Death - Benefit — a pension to the spouse (or children) of 50% of Average Final Compensation for life. (b) Non - Line -of- Duty -Death — the spouse of a member with six years of credited service will receive the actuarial equivalent of the accrued early or normal retirement benefit. 50 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 -PENSION PLANS (CONTINUED) If the firefighter or police officer dies or terminates employment with less than six years of credited service, he is entitled to a refund of the money he contributed. Funding Policy Contribution requirements of Plan members and the Village are established, and may be amended only by the Village Council. Effective September 5, 2008, Firefighters and Police Officers are required to contribute 5% of their compensation to the Plan. Prior to September 5, 2008, Firefighters contributed 6.1% to the Plan. Pursuant to Chapters 175 and 185 of the Florida Statutes, premium taxes on certain property and casualty insurance contracts written on Village properties is collected by the State and is remitted to the Plan. The amount of insurance premium taxes collected by the Village totaled $202,002 for the year ended September 30, 2009, $136,854 for property insurance contracts for firefighters under Chapter 175 and $65,148 for casualty insurance contracts for police officers under Chapter 185. This amount was recognized as a revenue and expenditure in the General Fund, Employer contributions for the fiscal year ending September 30, 2009 determined using the actuarial valuation dated October 1, 2007 were 8.24% of covered payroll for Police officers and 10.57% of covered payroll for firefighters. The Village is required to contribute the remaining amounts necessary to finance the benefits based on actuarially determined amounts. ]"he Firefighters' Pension Trust Fund (part of the Public Safety Officers' Trust Fund) does not issue separate stand alone financial statements. Included below are the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets as of and for the year ended September 30, 2009. FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET ASSETS SEPTEMBER 30, 2009 ASSETS Cash and cash equivalents $ 207,905 Investments 3,182,107 Contributions receivable 57,012 Accrued interest receivable 12,142 Total assets 3,459,166 LIABILITIES AND NET ASSETS Accounts payable 8,427 Due to broker 18,100 Total liabilities 26,527 Net assets held in trust for pension benefits $ 3,432,639 51 VILLAGE OF TEQUESTA, FLORIDA ?VOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FISCAL YEAR ENDED SEPTEMBER 30, 2009 ADDITIONS Contributions $ 347,615 Investment income (loss), net 43,095) Total additions 304,520 DEDUCTIONS Operating expenses 28,874 Total deductions 28,874 Net increase 275,646 Net assets held in trust for pension benefits: Net assets, beginning 3,156,993 Net assets, ending $ 3,432,639 The Police Officers' Pension Trust Fund (part of the Public Safety Officers' Trust Fund) does not issue separate stand alone financial statements. Included below are the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets as of and for the year ended September 30, 2009. POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET ASSETS SEPTEMBER 30, 2009 ASSETS Cash and cash equivalents $ 77,992 Investments 1,223,772 Contribution receivable 5,791 Accrued interest receivable 4,601 Total assets 1,312,156 LIABILITIES AND NET ASSETS Accounts payable 3,193 Due to broker 6,859 Total liabilities 10,052 Net assets held in trust for pension benefits $ 1,302,104 52 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FISCAL YEAR ENDED SEPTEMBER 30, 2009 ADDITIONS Contributions $ 182,139 Investment income (loss), net 13,741) Total additions 168,398 DEDUCTIONS Refunds of contributions 12,268 Operating expenses 12,162 Total deductions 24,429 Net increase 143,969 Net assets held in trust for pension benefits: Net assets, beginning 1,158,135 Net assets, ending $ 1,302,104 R. GENERAL EMPLOYEES' PENSION TRUST FUND Plan Description The General Employees' Pension Trust Fund is a single employer defined benefit plan administered by a five member Board of Trustees which covers all Village general employees hired after 1996 (prior to 1996, the Village participated in the Florida Retirement System). Any general employee who attains age 62, or completes 30 years of credited service regardless of age, is eligible for normal retirement benefits. The monthly amount of normal retirement income for a general employee is equal to the number of years of credited service multiplied by 2% of his average highest compensation. Early retirement may be taken after a general employee has attained the age of 50 and has six (6) years of credited service. In the event of early retirement, benefits are actuarially reduced to take into account the general employee younger age and earlier commencement of retirement benefits. Such reduction shall not exceed 5% per year. Disability benefits can be received for total and permanent disabilities as determined by the Board of Trustees. If the pension is granted, the benefit amount shall be as follows: 53 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) If the injury or disease is service connected, the general employee shall be entitled to the greater of (a) or (b): (a) A monthly pension equal to 42% of his average monthly compensation as of his disability retirement date, or (b) An amount equal to the number of years of his credited service multiplied by 2% of his average monthly salary based upon his final five years of service. If the injury or disease is not service connected, the general employee shall be entitled to the greater of (a) or (b): (a) A monthly pension equal to 25% of his average monthly compensation based on his final five (5) years of service, or (b) An amount equal to the number of years of his credited service multiplied by 2% of his average monthly salary based upon his final five years of service. If the general employee dies prior to retirement from the Village, his beneficiary shall receive an amount equal to the vested pension benefit. A survivor benefit is payable to the beneficiary starting when the member would have reached retirement age. If the general employee dies or terminates employment with less than six years of credited service, he is entitled to a refund of the money he contributed, Funding Policy Contribution requirements of Plan members and the Village are established, and may be amended only by the Village Council. General employees are required to contribute 5% of their compensation to the Plan. Employer contributions for the fiscal year ending September 30, 2009 determined using the actuarial valuation dated October 1, 2007 were 5.92% of covered payroll. The Village is required to contribute the remaining amount necessary to finance the benefits based on an actuarially determined amount. 54 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) The General Employees' Pension Trust Fund does not issue separate stand alone financial statements. Included below are the Statement of Fiduciary Net Assets and the Statement of Changes in Fiduciary Net Assets as of and for the year ended September 30, 2009. GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET ASSETS SEPTEMBER 30, 2009 ASSETS Cash and cash equivalents $ 71,719 Investments 1,188,444 Contributions receivable 11,826 Accrued interest receivable 5,268 Total assets 1,277,257 LIABILITIES AND NET ASSETS Accounts payable 10,310 Due to broker 618 Total liabilities 10,928 Net assets held in trust for pension benefits $ 1,266,329 GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FISCAL YEAR ENDED SEPTEMBER 30, 2009 ADDITIONS Contributions $ 229,129 Investment income, net 14,732 Total additions 243,861 DEDUCTIONS Refunds of contributions 609 Operating expenses 39,120 Total deductions 39,729 Net increase 204,132 Net assets held in trust for pension benefits: Net assets, beginning 1,062,197 Net assets, ending $ 1,266,329 55 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 - PENSION PLANS (CONTINUED) Annual Pension Cost and Net Pension Asset The Village's current contributions were determined through actuarial valuations performed as of October 1, 2007. Significant actuarial assumptions as of the latest actuarial valuation are as follows: General Public Safety Officers' Pension Fund Employees' Firefighters' Police Pension Pension Officers' Fund Valuation date 10/1/2009 10/1/2009 10/1/2009 Actuarial cost method Entry Age Normal* Entry Age Normal* Aggregate Amortization method N/A N/A N/A Remaining amortization period N/A N/A N/A Asset valuation method Five year smoothing Five year smoothing Five year smoothing Actuarial assumptions: Investment rate of return 8% 8% 7.5% Projected salary increase 6% 6% 6% Includes inflation at 4% 4% 4% Cost of living adjustments N/A N/A N/A * Effective for the October 1, 2009 actuarial valuation, the actuarial cost method for the Firefighters' and Police Officers' Plans was changed to the entry age normal cost method. The aggregate actuarial cost method was used to determine the annual required contribution of the employer for the Plans for the 2009 fiscal year. Because this method does not identify or separately amortize unfunded actuarial liabilities, information about the Plans funded status and funding progress has been prepared using the entry age actuarial cost method for that purpose, and the information presented is intended to serve as a surrogate for the funded status and funding progress of the Plans. The Village's 2009 annual pension cost and net pension asset for each Plan are shown below. Police General Firefighters' Officers' Employees' Annual required contribution (ARC) $ 211,458 $ 88,769 $ 92,364 Interest on net pension obligation (NPO) (12,664) (10,023) (8,479) Adjustment to ARC 16,751) 14,431) (12,294 Annual pension cost 215,545 93,177 96,179 Actual contributions 213,534 114,669 141,407 Increase (decrease) in net pension obligation (asset) 2,011 (21,492) (45,228) Net pension obligation (asset), beginning 158,298 125,284 113,056 Net pension obligation (asset), ending $ (156,287) $ (146,776 56 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 — PENSION PLANS (CONTINUED) Annual Pension Cost and Net Pension Asset (continued) Three -Year Trend Information Annual Percentage Net Pension Pension of APC Obligation Fiscal Year Endine Cost (APC) Contributed (Asse Firefighters' Retirement System: September 30, 2007 $ 176,060 105.1% $(167,810) September 30, 2008 205,406 95.4% (158,298) September 30, 2009 215,545 99.1% (156,287) Police Officers' Retirement System: September 30, 2007 $ 113,012 103.9% $ (93,577) September 30, 2008 88,663 135.8% (125,284) September 30, 2009 93,177 123.1% (146,776) General Employees' Retirement System: September 30, 2007 $ 92,789 132.0% $ (74,056) September 30, 2008 91,665 142.5% (113,056) September 30, 2009 96,179 147.0% (158,284) Funded Status and Funding Progress The funded status of the Plans as of October 1, 2009, the most recent actuarial valuation date, is as follows: Actuarial Accrued UAAL as Actuarial Liability Unfunded a % of Value (AAL) - AAL Funded Covered Covered Assets Entry AR e UAAL Ratio Payroll Payroll - / Public Safety Pension Fund: ((b a) c) Fire $ 3,965,053 $ 4,471,106 $ 506,053 88.7% $ 1,434,855 35.3% Police 1,333,906 987,399 (346,507) 135.1% 749,835 -46.2% General Employees' Pension Fund* 1,465,279 1,341,518 (123,761) 109.2% 1,890,529 -6.5% *For purposes of this schedule, the AAL for the General Employees' Plan was determined using the entry age actuarial cost method. Note that the ARC for the Plan was calculated using the aggregate actuarial cost method. 57 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 9 —PENSION PLANS (CONTINUED) Funded Status and Funding Progress (continued) The schedule of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, presents multiyear trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the AALs for benefits. NOTE 10 — COMMITMENTS AND CONTINGENCIES LEASEfAGREEMENTS On December 20, 1994, the Village entered into an Interlocal 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. CONTRACTED SERVICES — REFUSE AND RECYCLING COLLECTION Effective October 1, 2007, the Village entered into a solid waste and recyclable collection agreement with Waste Management Inc. of Florida for a period of five years beginning October 1, 2007 and expiring September 30, 2012. 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, Beginning on October 1, 2008 and on each October I thereafter, the rates shall be adjusted to reflect the increase or decrease in CPI (June to June). The CPI adjustment will be applied to 90% of the collection component of the rate. In addition, Waste Management shall annually adjust the applicable rate charged to reflect any change in the cost of diesel fiiel determined by reference to EIA/DOE website that reports average prices and the fuel adjustment will be applied to 10% of the collection component of the rate. CONTRACTED SERVICES — FIRE/EMERGENCYMEDICAL SERVICE Effective October 1, 1993, the Village entered into an Interlocal agreement with Jupiter Inlet Colony for the Village to provide fire protection/emergency medical services for a fee. For the year ended September 30, 2009, fire protection fees received from Jupiter Inlet Colony were $205,330. 58 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED) CONSTRUCTION COMMITMENTS Significant construction commitments as of September 30, 2009 are as follows: Estimated Estimated Expended Cost to Completion Description to Date Complete Date Tequesta Bridge $ 570,000 ** Summer 10 Tequesta Park 20,000 $ 80,000 Apr -10 Water Plant Expansion 87,875 4,625 Feb -10 * *The Florida Department of Transportation (FDOT) has agreed to complete this project using $3,000,000 in Federal Economic Stimulus Funds allocated for the bridge. According to a memorandum of understanding with the FDOT, the Village will be responsible for costs in excess of the $3,000,000 of the stimulus funds. At this time, the Village does not expect the costs to exceed that amount. NOTE 11- 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, the Village 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 and railroad coverage. Deductibles and limits vary by coverage and are secured based upon the Village's tolerance of risk retention in each area. 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 and business income values at the time of loss or damage at the locations where the damage occurred, subject to the policy deductible, 59 i VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 11- RISK MANAGEMENT (CONTINUED) whichever is greater. The Village continues to self insure all properties valued under $100,000. FMIT issued members in good standing a return of premium credit; the Village of Tequesta received a total credit of $7,007 in fiscal year 2008/2009 related to policy years 2006/2007 and 2007/2008. 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. The final audit by the FMIT for fiscal year 2008/2009 has not been completed as of the date of this writing. There were no significant changes in insurance coverage from coverage in prior years. Settled claims have not exceeded the commercial coverage in any of the past three fiscal years. NOTE 12 -JOINT VENTURE 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. NOTE 13 - GASB 45 ACCOUNTING AND FINANCIAL REPORTING BY EMPLOYEES FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS The Village of Tequesta will implement GASB 45 in fiscal year ending September 30, 2010. 60 Page Intentionally Left Blank REQUIRED SUPPLEMENTAL INFORMATION VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Ad valorem taxes $ 5,156,000 $ 5,156,000 $ 5,173,808 $ 17,808 Other taxes 960,450 1,162,452 1,285,063 122,611 Intergovernmental 752,140 752,140 724,375 (27,765) Franchise fees 470,000 470,000 466,541 (3,459) Charges for services 561,655 561,655 597,269 35,614 Inteagovernmental 292,990 292,990 292,990 -- Grants and contributions -- 5,280 37,583 32,303 Licenses and permits 229,525 229,525 211,371 (18,154) Investment earnings 121,500 121,500 8,725 (112,775) Fines and forfeitures 27,500 27,500 34,877 7,377 Miscellaneous 14,375 17,875 48,988 31,113 Rents and royalties 119,410 119,410 120,596 1,186 Impact fees 1,000 1,000 851 (149) Total Revenues 8,706,545 8,917,327 9,003 85,710 Expenditures Current: General government 1,487,685 1,412,672 1,373,158 39,514 Public safety 5,404,605 5,589,422 5,411,745 177,677 Transportation 766,480 762,986 710,384 52,602 Leisure services 503,500 595,604 562,714 32,890 Capital outlay 213,410 367,739 164,226 203,513 Debt service: Principal 298,175 281,565 278,831 2,734 Interest 181,435 171,305 171,297 8 Fiscal charges 6,255 6,255 9,473 3( 218) Total Expenditures 8,861,545 9,187,548 8,681,828 505,720 Excess (Deficiency) of Revenues over Expenditures (155,000) (270,221) 321,209 591,430 Other Financing Sources (Uses) Transfers in 230,000 369,490 369,490 -- Transfers out (75,000) (1,273,323) (1,273,323) -- Appropriated fund balance -- 1,174,054 -- 1,174,054 Total Other Financing Sources (Uses) 155,000 270,221 (903,833) (1,174,054) Net Change in Fund Balance $ -- $ -- $ 582,624 $ 582,624 See note to the budgetary comparison schedule. 61 VILLAGE OF TEQUESTA, FLORIDA NOTE TO THE BUDGETARY COMPARISON SCHEDULE FISCAL YEAR ENDED SEPTEMBER 30, 2009 NOTE 1— BUDGETS AND BUDGETARY ACCOUNTING Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Fund and Capital Projects Funds. All budgets are legally enacted through passage of a resolution. 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. The Village follows these procedures in establishing the budgetary data reflected in the financial statements: 1) Prior to September I", the Village Manager submits to the Village Council a proposed operating budget for the fiscal year commencing the following October 1". The operating budget includes proposed expenditures and the means of financing them. 2) Public hearings are conducted to obtain taxpayer comments. 3) Prior to October I", the budget is legally enacted through adoption of a resolution. As the original budgeted appropriations were adopted by resolution, all changes to the total appropriations of a fund must be adopted by resolution. Budget amendments for items in excess of $5,000, capital items or amendments transferring funds between unrelated departments are presented to the Village Council for approval. Budget amendments not requiring Village Council approval are submitted by departments to the Finance Department for review and the Village Manager for approval. During the year, total supplemental appropriations of $1,524,326 were approved and adopted. Appropriations are legally controlled at the fund level and expenditures may not legally exceed budgeted appropriations at that level. Appropriations lapse at year end. 62 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Annual Village Contribution Fiscal Required Village Premium Tax Percentage Year Contribution Contribution Contribution Contributed Firefighters' Pension Fund 2004 $ 139,739 $ 82,036 $ 56,536 99.2% 2005 145,344 115,072 92,522 142.8% 2006 165,394 102,194 86,714 114.2% 2007 171,986 116,915 136,052 147.1% 2008 201,074 127,844 158,602 142.5% 2009 211,458 143,079 136,854 132.4% Police Officers' Pension Fund 2004 $ 56,225 $ 20,391 $ 67,950 157.1% 2005 58,489 49,002 65,700 196.1% 2006 106,969 70,169 65,700 127.0 2007 111,243 87,635 73,932 145.2% 2008 85,371 87,240 70,571 102.2% 2009 88,769 81,539 65,148 91.9 General Employees' Pension Fund 2004 $ 92,218 $ 74,110 N/A 80.4% 2005 95,949 98,658 N/A 102.8% 2006 88,512 108,015 N/A 122.0% 2007 92,042 122,449 N/A 133.0% 2008 88,790 130,665 N/A 147.2% 2009 92,364 141,407 N/A 153.1% 63 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Actuarial Accrued Actuarial Liability Unfunded UAAL as a % Actuarial Value of (AAL) - AAL Funded Covered of Covered Valuation Assets Entry Age* (UAAL) Ratio Payroll Payroll Date (a) (b) fib) - (a) (a) / (b) (c) ((b - a) / c) Public Safety 10/01/00 $ 1,683,867 $ 834,839 $ (849,028) 201.7% $ 1,203,923 (70.5 %) 10 /01/02 1,875,657 1,428,869 (446,788) 131.3% 2,132,437 (21.0 %) 10/01/03 1,966,148 1,610,963 (355,185) 122.0% 1,339,667 (26.5 %) 10101105 2,782,953 2,598,331 (184,622) 107.1% 1,650,403 (11.2 %) 10/01/07 4,080,609 3,730,247 (350,362) 109.4% 1,931,871 (18.1 %) 10/01/09 Fire 3,965,053 4,471,106 506,053 88.7% 1,434,855 35.3% Police 1,333,906 987,399 (346,507) 135.1% 749,835 (46.2 %) Note: Separate information for fire and police was not available prior to the 10/1109 valuation. (1) Through 10/1/07, the annual required contribution (ARC) was calculated using the aggregate actuarial cost method. Information in this schedule for those years was calculated using the entry age actuarial cost method as a surrogate for the funding progress of the Plan, General Employees' (2) 10/01/02 $ 248,725 $ 222,882 $ (25,843) 111.6% $ 866,467 (3.0 %) 10/01/03 333,944 264,486 (69,458) 126.3% 1,056,797 (6.5 %) 10/01/05 602,280 429,242 (173,038) 140.3% 1,098,039 (15.8 %) 10/01/07 1,026,897 764,571 (262,326) 134.3% 1,500,201 (17.5 %) 10/01/08 1,235,850 1,034,855 (200,995) 119.4% 1,790,280 (11.2 %) 10/01/09 1,465,279 1,341,518 (123,761) 109.2% 1,890,529 (6.5 %) (2) The annual required contribution (ARC) was calculated using the aggregate actuarial cost method. Information in this schedule is calculated using the entry age actuarial cost method as a surrogate for the funding progress of the Plan. 64 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Page Intentionally Left Blank NONMA.JOR GOVERNMENTAL FUNDS NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Special Revenue Fund — This fund was created to account for the Improvement Revenue Refunding Bond Series 1994. On June 20, 2008, the Village used available cash to pay the outstanding balance in full. On December 11, 2008, the Village Council approved resolution 55 -08 to close this fund. Special Law Enforcement Trust Fund — This fund accounts for forfeitures received by the Police Department. The forfeitures must be expended for certain law enforcement purposes as prescribed by Florida Statute Chapter 932.704. Capital Projects Funds 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. VILLAGE OF TEQUESTA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 Special Revenue Capital Projects Total Special Special Law Capital Capital Nonmajor Revenue Enforcement Improvement Projects Governmental Fund Fund Fund Fund Funds Assets Cash and cash equivalents $ -- $ 22,037 $ 93,251 $ 368,309 $ 483,597 Accounts receivable -- -- 31,614 -- 31,614 Other assets -- -- 1,198,323 -- 1,198,323 Total Assets $ -- $ 22,037 $ 1,323,188 $ 368,309 $ 1,713,534 Liabilities and Fund Balances Liabilities Accounts payable $ -- $ -- $ 154,514 $ 4,536 $ 159,050 Total Liabilities -- -- 154,514 4,536 159,050 Fund Balances Reserved for encumbrances -- -- 29,508 -- 29,508 Unreserved, designated: Bridge repair -- -- 330,000 -- 330,000 Unreserved, undesignated reported in: Special law enforcement fund -- 22,037 -- -- 22;037 Capital improvement fund -- -- 809,166 -- 809,166 Capital projects fund -- -- -- 363,773 363,773 Total Fund Balances -- 22,037 1,168,674 363,773 1 Total Liabilities and Fund Balances $ -- $ 22,037 $ 1,323,188 $ 368,309 $ 1,713,534 65 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Special Revenue Capital Projects Total Special Special Law Capital Capital Nonmajor Revenue Enforcement Improvement Projects Governmental Fund Fund Fund Fund Funds Revenues Miscellaneous $ -- $ -- $ 31,615 $ -- $ -- Total Revenues -- -- 31,615 -- 31,615 Expenditures Capital outlay -- -- 561,270 27,484 588,754 Total Expenditures -- — 561,270 27,484 588,754 Deficiency of Revenues over Expenditures -- -- (529,655) 2( 7,484) (557,139) Other Financing Sources (Uses) Transfers in -- -- 1,273,323 -- 1,273,323 Transfers out (369,490 -- -- -- (369,490) Total Other Financing Sources (Uses) 369,490 -- 1,273,323 -- 903,833 Net Change in Fund Balances (369,490) -- 743,668 (27,484) 346,694 Fund Balances - Beginning 369,490 22,037 425,006 391,257 1,207,790 Fund Balances - Ending $ -- $ 22,037 $ 1,168,674 $ 363,773 $ 1,554,484 �w 66 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE SPECIAL REVENUE FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues $ __ $ __ $ __ $ Expenditures Excess of Revenues over Expenditures -- -- -- -- Other Financing Sources (Uses) Transfers out (230,000) (369,490) (369,490) -- Appropriated fund balance 230,000 369,490 -- 369,490 Total Other Financing Uses -- -- (369,490 ) 369,490 Net Change in Fund Balance $ -- $ -- $ 369,490 $ 369,490 67 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE SPECIAL LAW ENFORCEMENT TRUST FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 i rrrrrrr� i i �� err r Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues $ __ $ __ $ __ $ Expenditures Net Change in Fund Balance $ -- $ -- $ __ $ 68 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Miscellaneous $ -- $ -- $ 31,615 $ (31,615 Expenditures Capital outlay 328,571 587,237 561,270 25,967 Total Expenditures 328,571 587,237 561,270 25,967 Deficiency of Revenues over Expenditures 328,571 587,237) 529,655 57,582 Other Financing Sources (Uses) Transfers in 75,000 1,273,323 1,273,323 -- Appropriated fund balance 253,571 (686,086) - 686,086 Total Other Financing Sources 328,571 587,237 1,273,323 686,086 Net Change in Fund Balance $ -- $ -- $ 743,668 $ 743,668 69 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental $ -- $ 100,000 $ -- $ 100,000 Expenditures Capital outlay -- 112,752 27,484 85,268 Total Expenditures -- 112,752 27,484 85,268 Deficiency of Revenues over Expenditures -- 12,752 27,484 (14 Other Financing Sources Appropriated fund balance -- 12,752 -- 12,752 Total Other Financing Sources -- 12,752 -- 12,752 Net Change in Fund Balance $ __ $ 27,484 $ 27 70 NONMAJOR ENTERPRISE FUNDS NONMAJOR ENTERPRISE FUNDS Stormwater Fund — This fund is used to account for the construction and maintenance of the Village's stormwater system. Refuse and Recycling Fund — This fund is used to account for revenues received from non -ad valorem assessments charged to residents for residential curbside pick -up of solid waste and recyclable material. Page Intentionally Left Blank VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF NET ASSETS NONMAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2009 Total Nonmajor Stormwater Refuse & Enterprise Utility Recycling Funds Assets Current Assets Cash and cash equivalents $ 219,822 $ 44,464 $ 264,286 Investments 187,688 112,452 300,140 Receivables, net 4,453 3,258 7,711 Inventories 1,161 -- 1,161 Other assets 285 -- 285 Total Current Assets 413,409 160,174 573,583 Noncurrent Assets Capital assets being depreciated, net 1,620,922 -- 1,620,922 Total Noncurrent Assets 1,620,922 -- 1,620,922 Total Assets 2,034,331 160,174 2,194,505 Liabilities Current Liabilities Accounts payable 16,113 36,495 52,608 Total Current Liabilities 16,113 36,495 52,608 Noncurrent liabilities: Compensated absences 2,136 -- 2,136 Total Noncurrent Liabilities 2,136 -- 2,136 Total Liabilities 18,249 36,495 54,744 Net Assets Invested in capital assets, net of related debt 1,620,922 -- 1,620,922 Unrestricted 395,160 123,679 518,839 Total Net Assets $ 2,016,082 $ 123,679 $ 2,139,761 71 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND AND CHANGES IN NET ASSETS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Total Nonmajor Stormwater Refuse & Enterprise Utility Recycling Funds Operating Revenues Charges for services $ 314,569 $ 414,312 $ 728,881 Total Operating Revenues 314,569 414,312 728,881 Operating Expenses Stormwater 120,197 -- 120,197 Purchased services -- 438,589 438,589 Management services 9,939 5,860 15,799 Depreciation 96,362 -- 96,362 Total Operating Expenses 226,498 444,449 670,947 Operating Income (Loss) 88,071 30,137 57,934 Non - Operating Revenues Investment earnings (loss) 636 (157) 479 Total Non- Operating Revenues 636 157 479 Change in Net Assets 88,707 (30,294) 58,413 Net Assets - Beginning 1,927,375 153,973 2,081,348 Net Assets - Ending $ 2,016,082 $ 123,679 $ 2,139,761 72 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF CASH FLOWS NONMAJOR ENTERPRISE FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Total Nonmajor Stormwater Refuse & Enterprise Utility Recycling Funds Cash Flows from Operating Activities Cash received from customers, governments and other funds $ 314,540 $ 414,505 $ 729,045 Cash paid to suppliers (70,179) (407,954) (478,133) Cash paid to employees 49,137 -- 49,137 Net Cash Provided by Operating Activities 195,224 6,551 201,775 Cash Flows from Investing Activities Purchases of investments (1,616) -- (1,616) Sales of investments -- 30,142 30,142 Interest received on investments 2,131 171 2,302 Net Cash Provided by Investing Activities 515 30,313 30,828 Net Increase in Cash and Cash Equivalents 195,739 36,864 232,603 Cash and Cash Equivalents - Beginning 24,083 7,600 31,683 Cash and Cash Equivalents - Ending $ 219,822 $ 44,464 $ 264,286 Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) $ 88,071 $ (30,137) $ 57,934 Depreciation 96,362 -- 96,362 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (29) 193 164 Inventories (1,053) -- (1,053) Other assets 11 -- 11 Increase (decrease) in: Accounts payable 11,580 36,495 48,075 Compensated absences 282 -- 282 Net Cash Provided by Operating Activities $$ 1� $ 6,551 $ 201,775 Noncash Investing Activities Change in fair value of investments 73 Page Intentionally Left Blank FIDUCIARY FUNDS FIDUCIARY FUNDS Firefighters' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the firefighter employees. Police Officers' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the police employees. General Employees' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits for the general employees of the Village. VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2009 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Assets Cash and cash equivalents $ 207,905 $ 77,992 $ 71,719 $ 357,616 Investments, at fair value: Corporate stocks 1,990,021 764,715 821,803 3,576,539 Corporate bonds 575,026 220,968 142,291 938,285 Government backed assets 617,060 238,089 224,350 1,079,499 Contributions receivable 57,012 5,791 11,826 74,629 Accrued interest receivable 12,142 4,601 5,268 22,011 Total Assets 3,459,166 1,312,156 1,277,257 6,048,579 Liabilities and Net Assets Accounts payable $ 8,427 $ 3,193 $ 10,310 $ 21,930 Due to broker 18,100 6,859 618 25,577 Total Liabilities 26,527 10,052 10,928 47,507 Net Assets Held in Trust for Pension Benefits $$ 3,432 $ 1,302,104 $ 1,266,329 $ 6,001,072 74 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS FISCAL YEAR ENDED SEPTEMBER 30, 2009 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Additions Contributions: Employer $ 279,933 $ 146,687 $ 141,407 $ 568,027 Employee 67,682 35,452 87,722 190,856 Total contributions 347,615 182,139 229,129 758,883 Investment income Net appreciation (depreciation) in fair value of investments (91,125) (31,571) 3,964 (118,732) Investment earnings 75,104 27,942 31,375 134,421 (16,021) (3,629) 35,339 15,689 Less investment expenses 27,074 (10,112) 20,607) (57,793) Net investment income (loss) 43,095 13,741 14,732 (42,104 Total Additions 304,520 168,398 243,861 716,779 Deductions Refunds of contributions -- 12,268 609 12,877 Operating expenses 28,874 12,161 39,120 80,155 Total Deductions 28,874 24,429 39,729 93,032 Net Increase 275,646 143,969 204,132 623,747 Net Assets Held in Trust for Pension Benefits Net assets - beginning 3,156,993 1,158,135 1,062,197 5,377,325 Net assets - ending $ 3,432,639 $ 1,302,104 $ 1,266,329 $ 6,001,072 75 3 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. 76 -80 Revenue Capacity These schedules contain information to help the reader understand and assess the factors affecting the Village's most significant local revenue source, property taxes. 81 -84 Debt Capacity These schedules present information to help the reader assess the affordability of the Village's current levels of outstanding debt and the Village's ability to issue additional debt in the future. 85 -89 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. 90 -91 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. 92 -93 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 ASSETS BY COMPONENT LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2003 2004 2005 2006 2007 2008 2009 Governmental activities: Invested in capital assets, net of related debt $ 2,209,191 $ 921,889 $ 1,788,749 $ 4,515,096 $ 6,679,855 $ 6,959,332 $ 7,330,897 Restricted -- -- -- 143,370 140,990 — _ Unrestricted 4,423,513 4,947,838 6,926,208 5,570,447 5,402,774 6,459,522 6,218,462 Total governmental activities net assets $ 6,632,704 $ 5,869,727 $ 8,714,957 $10,228,913 $12,223,619 $13,418,854 $ 13,549,359 Business -type activities: Invested in capital assets, net of related debt $10,561,209 $ 9,602,911 $10,815,151 $11,722,188 $14,513,500 $1.4,082,989 $ 13,713,525 Restricted 317,193 322,818 317,102 396,369 328,544 — -- Unrestricted 4,843,781 5,901,624 4,604,463 4,867,905 3,046,229 3,581,512 3,997,271 Total business -type activities net assets $15,722,183 $15,827,353 $15,736,716 $16,986,462 $17,888,273 $17,664,501 $ 17,710,796 Primary government: Invested in capital assets, net of related debt $12,770,400 $10,524,800 $12,603,900 $16,237,284 $21,193,355 $21,042,321 $ 21,044,422 Restricted 317,193 322,818 317,102 539,739 469,534 -- Unrestricted 9,267,294 10,849,462 11,530,671 10,438,352 8,449,003 10,041,034 10,215,733 Total governmental activities net assets $22� 354,887 $21,697,080 $24,451,673 $27,215,375 $30,111,892 $31,083,355 $ 31,260,155 Note: The Village began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003. 76, VILLAGE OF TEQUESTA, FLORIDA CHANGES IN NET ASSETS LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) Expenses: 2003 2004 2005 2006 2007 2008 2009 Governmental activities: General government S 1,299,812 S 1,105,741 S 1,361,013 S 1,402,535 $ 1,391,654 $ 1,344,038 S 1,501,344 Public safety 3,649,803 4,138,374 4,691,063 5,577,243 5,634,834 5,784,245 5,807,477 Transportation 474,134 804,523 656,158 837,441 766,226 736,844 774,966 Leisure services 385,192 458,659 605,745 756,224 559,583 539,450 639,590 Interest on long -term debt 277,855 262,479 248,728 243,871 _ 229,074 206,126 180,770 Total governmental activities expenses 6 6,769,776 7,562,707 8,817,314 8,581,371 8,610,703 8,904,147 Business -type activities: water 3,881,752 3,975,766 4,026,027 4,187,257 4,139,784 3,760,426 3,907,950 Stonnwater 278,442 155,537 142,788 198,993 188,709 215,163 226,498 Refuse and recycling 229,460 252,933 260,715 270,887 306,347 420,081 444,449 Community development 593,105 513,101 _ _ Total business -type activities expenses 4,982,759 4,897,337 4,429,530 4,657,137 4,634,840 4,395,670 4,578,897 Total primary government program expenses $11,069,555 S 11,667,113 S 11,992,237 $13,474,451 $13,216,211 S 13,006,373 S 13,483,044 Program revenues: Governmental activities: Charges for services: General government $ 352,901 $ 439,646 $ 260,647 $ 270,137 $ 278,215 S 475,244 $ 302,182 Public safety 477,041 538,056 1,040,427 1,121,642 1,006,947 863,391 783,774 Transportation - - - - - 12 - Leisure services 63,439 42,430 4,410 57,261 54,364 50,219 72,487 Operating grants and contributions 56,517 43,945 515,438 365,183 20,350 18,711 67,842 Capital grants and contributions - 535,000 _ 54,764 57,736 Total governmental activities program revenues 949 ,897 1,064,077 1,820,922 2,349,223 1,414,640 1,465,313 1,226285 Business -type activities: Charges for services: Water 4,082,459 3,931,562 4,037,674 4,090,269 3,850,508 3,463,564 3,863,439 Stont water 297,843 303,450 298,188 301,993 303,273 299,729 314,568 Refuse and recycling 242,901 248,252 277,589 283,821 285,917 402,439 414,313 Community development 628,068 348,511 - - - - _ Operating grants and contributions - - - 42,471 7,827 Capital grants and contributions - 119,944 484,000 430,000 Total business -type activities program revenues 5,251,271 4,831,775 4,733,395 5,202,553 _ 4,877 525 4,165,732 4,592,320 Total primary government program revenues $ 6 S 5,895,852 S 6 54,317 $ 7,551,776 $ 6,292,165 S $,631,045 $ 5,818,605 Net (expense) revenue: Governmental activities S (5,136,899) S (5,705,699) S (5,741,785) S (6,468,091) $ (7,166,731) S (7,145,390) $ (7,677,862) Business -type activities 268,512 (65,562) 303,865 545,416 242,685 (229,938) 13,423 Total primary government net expetrse S (4,868,387) S (5,771 ,261) $ (5437,920) $ (5,922 $ (6,924,046 ) S 7,3( 75,328) $ 7,664,439 Note: The Village began to report accrual information when it implemented GASB Statement No, 34 in fiscal year 2003. 77 VILLAGE OF TEQUESTA, FLORIDA CHANGES IN NET ASSETS (Continued) LAST SEVEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2003 2004 2005 2006 2007 2008 2009 General revenues and other changes in net assets: Governmental activities: Taxes: Ad valorem taxes $ 3,392,623 $ 3,781,095 $ 4,494,713 $ 5,166,754 $ 6,139,007 $ 5,661,200 $ 5,173,808 Other taxes 1,093,877 1,089,781 1,084,827 1,087,759 1,157,128 1,123,272 1,285,063 Franchise fees based on gross receipts 350,423 372,212 367,778 419,929 477,711 462,296 466,541 Intergovernmental 520,921 558,069 622,457 679,001 815,828 783,034 702,616 Unrestricted investment earnings 89,532 79,483 214,588 392,961 404,816 152,602 8,725 Miscellaneous revenues 123,740 83,126 641,901 173,362 106,647 37,621 171,614 Gain (loss) on sale of capital assets 6,400 (1,012,584) - 1,981 - __ - Transfers (7,847) (8,460) 710,151 60,300 60,300 120,600 Total governmental activities 5,569,669 4,942,722 8,136,415 7,982,047 9,161,437 8,340,625 7,808,367 Business -type activities: Unrestricted investment earnings (loss) 70,706 75,846 164,163 280,665 321,718 86,811 (9,208) Miscellaneous revenues 10,917 82,576 151,487 479,145 397,708 39,955 42,080 Gain on sale of capital assets 681,912 3,850 (710,151) 4,820 - - - Transfers 7,847 8,460 - (60,300) (60.300) 1( 20,600) Total business- typeactivities 771,382 170,732 (394 704,330 659,126 6,166 32,872 Total primary government 6,341,051 5,113,454 7,741,914 8,686,377 9,820,563 8,346,791 7,841,239 Change in net assets: Governmental activities 432,770 (762,977) 2,394,630 1,513,956 1,994,706 1,195,235 130,505 Busmess4ype activities 1,039,894 105,170 (90 1,249,746 901,811 223 772 46,195 Total primary government $1,472,664 $ 657,807 $2,303,994 $2,763,702 $2,896,517 $ 971,463 $ 176,800 Note: The Village began to report accrual information when it implemented GASB Statement No. 34 in fiscal year 2003. - 78 VILLAGE OF TEQUESTA, FLORIDA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 General fund: Reserved $ 196,217 $ 202,585 $ 146,557 $ 43,745 $ 50,509 $ 56,759 $ 176,410 $ 47,493 $ 82,197 $ 383,766 Unreserved 2,878,834 2,656,696 2,943,229 3,170,436 3,718,380 3,424,408 3,221,390 4,456,247 5,180,611 4,296,418 Total general fund 3,075,051 2,859,281 3,089,786 3,214,181 3,768,889 3,481,167 3,397,800 4,503,740 5,262,808 4,680,184 All other governmental funds: Reserved 267,549 122,627 1,030,617 155,645 341,722 823,675 143,370 196,426 12,752 29,508 Unreserved, reported in: Special revenue fund 118,738 141,912 175,980 237,858 15,692 17,901 255,179 341,736 369,490 -- Special law enforcement fund -- - - -- - -- -- 20,846 22,037 22,037 Capital improvement fund - - - -- - -- -- 103,149 425,006 809,166 Capital projects funds 80,781 1,091,185 1,557,927 1,069,670 889,395 2,519,033 1,599,416 354,736 378,505 693,773 $ 467,068 $1,355,724 $2,764,524 $1,463,173 $1,246,809 $3,360,609 $1,997,965 $1,016,893 $ 1,207,790 $1,554,484 Note: In fiscal year 2007, the Village began to present a breakdown of unreserved fund balance of other governmental funds. 79 VILLAGE OF TEQUESTA, FLORIDA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Revenues: Taxes $3,%2,782 $4,102,022 $4,502,446 $ 4,836,923 $5,243,088 S 5,579,540 $ 6,254,513 $ 7,296,135 $ 6,871,639 $ 6,458,871 Intergovernmental 644,679 573,933 638,106 575,986 596,947 622,457 679,001 815,828 783,034 724,375 Franchise fees - -- -- -- -- 367,778 419,929 477,711 462,2% 466,541 Charges for services 264,018 302,072 382,650 361663 477,513 490,995 507,702 526,922 574,937 597,269 Intrrgovernmental 232,833 252,756 327,270 337,490 341,700 254,898 262,700 273,150 280,100 292,990 Grants - __ 142,207 56,517 43,945 515,438 900,183 90,398 76,448 37,583 - Licenses and permits 96,975 83, 108,429 103,564 93,601 549,884 631,521 401,704 299,059 211,371 Interest 236,148 193,208 84,693 83,166 79,483 214,588 392,961 404,816 152,602 8,725 Fines and forfeitures 45,675 47,351 68,758 58,467 57,413 352,254 34,825 111,080 40,779 34,877 Miscellaneous 18,129 46,116 46,423 80,494 83,126 289,647 175,343 52,899 38,242 80,603 Rents and royalties - - -- - -- 108,628 103,627 120.596 Impact fees 29,225 4,084 44,320 32,143 11,028 9,707 12,292 3,858 2,575 851 Total revenues 5,530,464 5,605,244 6,345,302 6,527,413 7,027,844 9,247,186 10,270,970 10,563,129 9,685,338 9,034,652 Expenditures: Current: General government 895,633 1,216,011 1,139,653 1,289,050 1,225,550 1,314,270 1,391,612 1,371,148 1,220,238 1,373,158 Public safety 2,649,089 2,996,439 3,229,968 3,443,961 3,918,798 4,351,936 5,233,807 5,291,398 5,439,202 5,411,745 Transportation 381,372 430,813 403,363 440,263 776,273 625,014 807,651 736,436 692,552 710,384 Leisure services 245,165 238,843 325,326 347,975 384,980 523,439 692,408 495,767 467,740 562,714 Capital outlay 432,305 1,381,776 4,048,126 1,439,607 368,303 870,453 3,162,034 1,892,075 257,373 752,980 Debt service: Principal 330,768 486,147 1,997,263 470,221 319,280 336,101 382,687 482,665 572,742 278,831 Interest 162,420 164,307 133,998 277,855 262,479 255,672 243,871 222,938 200,236 171,297 Fiscal charges -- - - - -- -- - 6,136 5,890 9,473 Total expenditures 5,096,752 6,914,336 11,277,697 7,708,932 7,255,663 8,276,885 11,914,070 10,498,563 8,855,973 9,270,582 Excess (deficiency) of revenues over expenditures 433,712 1,3� 09,092) (4,932,395) 1,18151.9 2( 27,819) 970,301 (1,643,100) 64,566 829,365 235930) Other financing sources (uses): Transfers in 742,355 2,624,652 5,358,147 464,954 326,010 3,771,617 2,023,368 685,644 924,300 1,642,813 Transfers out (542,811) (644,090) (4,038,447) (472,801) (334,470) (3,068,840) (1,963,068) (625,344) (803,700) (1,642,813) Other 550,000 -- 5 -- 574,624 152,999 136,789 - - Total other financing sources (uses) 749,544 1,980,562 6,571,700 (7,847) 566,164 855,776 197,089 60,300 120,600 Net change in fund balances $1,183,256 $ 671,470 S 1,639,305 S(1,189,366 ) $ 3_ 38,345 S 1,826,077 S (1,446,011 ) $ 124,866 $ 949,965 $ (235 Debt service as a percentage of noncapital expenditures 10.57% 1 1.76% 29.48% 11.93% 8.45% 7.99 7.16% 8.20% 8.99% 5.40% 80 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 Ending Assessed Taxable Assessed Taxable Assessed Taxable Assessed Tax Taxable Actual September 30 Value Property Value Property Value Property Value Rate Property Value 2000 $ 422,707,903 $ 522,797,351 $18,949,389 $ 21,865,379 $ 278,827 $ 278,827 $ 441,936,119 6.7305 $ 544,941,557 81% 2001 468,569,608 601,222,227 18,641,610 21,621,054 279,734 279,734 487,490,952 6.7305 623,123,015 78% 2002 503,562,346 672,688,887 19,211,494 22,202,297 287,762 287,762 523,061,602 6.7305 695,178,946 75% 2003 583,470,308 789,428,369 19,488,528 22,409,087 326,474 326,474 603,285,310 6.4980 812,163,930 74% 2004 695,900,596 950,969,798 19,752,631 22,669,061 340,485 340,485 715,993,712 6.4980 973,979,344 74% 2005 804,692,586 1,159,686,579 20,372,762 23,286,106 340,839 340,839 825,406,187 6.4980 1,183,313,524 70% 2006 959,650,125 1,369,028,275 21,925,090 21,925,090 385,284 385,284 981,960,499 6.4980 1,391,338,649 71% 2007 992,309,662 1,410,466,330 24,589,752 27,733,698 489,214 489,214 1,017,388,628 5.7671 1,438,689,242 71% 2008 909,587,738 1,267,801,514 20,262,864 26,731,490 724,859 730,883 930,575,461 5.7671 1,295,263,887 72% 2009 813,253,151 1,087,961,335 20,692,261 26,957,624 479,792 485,221 834,425,204 5.7671 1,115,404,180 75% Source: Palm Beach County Property Appraiser's Office: Form DR403AM "The 2009 Revised Recapitulation of the Ad Valorem Assessment Rolls of Tequesta, Palm Beach County, Florida" 81 VILLAGE OF TEQUESTA, FLORIDA PROPERTY TAX RATES - ALL DIRECT AND OVERLAPPING GOVERNMENTS (Per $1,000 of Assessed Value) LAST TEN FISCAL YEARS Direct Rate Overlapping Rates (1) Fl. Inland S. Florida Jupiter Navigation Children's County Fiscal Year Ending Village County Everglades School County Water Mgmt. Inlet District Services Health Care September 30 Rate County Debt Construction District Library District District (FIND) Council District 2000 6.7305 4.9362 0.3362 0.1000 8.9180 0.5403 0.6970 0.1091 0.0410 0.5000 1.0250 2001 6.7305 4.9351 0.3851 0.1000 8.9480 0.5403 0.6970 0.1012 0.0385 0.5703 1.1500 2002 6.7305 4.5000 0.3084 0.1000 8.7790 0.5403 0.5970 0.0916 0.0385 0.6228 1.1300 2003 6.7305 4.5000 0.2910 0.1000 8.5710 0.5833 0.5970 0.0916 0.0385 0.6902 1.1300 2004 6.4980 4.5000 0.2677 0.1000 8.4320 0.5807 0.5970 0.0916 0.0385 0.6902 1.1000 2005 6.4980 4.4500 0.2692 0.1000 8.1060 0.6250 0.5970 0.0916 0.1000 0.6887 1.0800 2006 6.4980 4.2800 0.1975 0.1000 7.8720 0.5989 0.5970 0.0916 0.0385 0.6199 0.9700 2007 5.7671 3.7811 0.2002 0.0894 7.3560 0.5441 0.5346 0.0909 0.0345 0.5823 0.8900 2008 5.7671 3.7811 0.1845 0.0894 7.2510 0.5427 0.5346 0.1000 0.0345 0.6009 0.9975 2009 5.7671 4.3440 0.2174 0.0894 7.9830 0.5518 0.5346 0.1253 0.0345 0.6898 1.1451 (1) Overlapping rates are those of local and county governments that apply to property owners within the Village ofTequesta. Source: Palm Beach County Property Appraiser's Office 82 VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2009 2000 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) $ 18,471,466 1 2.21% $ 12,881,896 1 2.91% Inland S.E. Tequesta, LLC (Teq. Shoppes) 9,000,000 2 1.08% 7,720,000 2 1.75% Tequesta Investors LP 7,400,000 3 0.89% Terrace Communities Tequesta LLC 7,070,621 4 0.85% SLO ML LLC 4,853,449 5 0.58% JMZ Tequesta Properties, Inc. 4,770,176 6 0.57% Tequesta Country Club 4,158,957 7 0.50% 3,527,576 5 0.80% ALS North America, Inc. 4,150,000 8 0.50% Royal Tequesta LLC 3,946,354 9 0.47% Tracy Thomas J. 3,796,045 10 0.45% Lighthouse Cove apartments, Ltd. 7,300,954 3 1.65% H & J Tequesta Assoc. 5,450,000 4 1.23% AHC Purchaser Inc 2,978,496 6 0.67% Jacksonville Tower Assoc. 2,250,385 7 0.51% First Union National Bank of FL 1,978,062 8 0.45% Oz of Tequesta, Inc. 1,672,374 10 0.38% Tequesta Fashion Mall 1,800,000 9 0.41% Total $ 67,617,068 8.10% $ 47,559,743 10.76% Source: Palm Beach County Property Appraiser's Office 83 VILLAGE OF TEQUESTA, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected within the Fiscal Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date (2) Ended for the Percentage in Subsequent Percentage September 30, Fiscal Year (1) Amount of Levy Years Amount of Levy 2000 $ 2,858,426 $ 2,846,894 99.6% $ 11,531 $2,858,425 100.0% 2001 2,985,994 2,970,942 99.5% 15,052 2,985,994 100.0% 2002 3,271,160 3,147,730 96.2% 5,816 3,153,546 96.4% 2003 3,520,466 3,388,176 96.2% 13,983 3,402,160 96.6% 2004 3,912,003 3,776,782 96.5% 3,750 3,780,532 96.6% 2005 4,650,578 4,486,224 96.5% 5,338 4,491,562 96.6% 2006 5,363,489 5,164,292 96.3% 4,590 5,168,882 96.4% 2007 6,355,149 6,134,038 96.5% 8,176 6,142,214 96.6% 2008 5,863,796 5,663,439 96.6% 2,792 5,666,230 96.6% 2009 5,341,529 5,162,044 96.6% -- 5,162,044 96.6% (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 84 VILLAGE OF TEQUESTA, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Business -type Activities Percentage Fiscal Year Ending Revenue Notes Capital Revenue Notes of Personal Per September 30 Bonds Payable Leases Bonds Payable Total Income Capita 2000 $ 960,000 $ 4,029 $ 314,127 $ 7,780,000 $ 84,360 $ 9,142,516 4.96% $ 1,734 2001 880,000 -- 246,696 7,640,000 58,669 8,825,365 4.75% 1,663 2002 790,000 5,000,000 162,856 7,495,000 36,723 13,484,579 7.24% 2,531 2003 695,000 4,838,352 353,636 7,345,000 13,827 13,245,815 7.10% 2,484 2004 595,000 4,669,648 363,065 7,185,000 645,170 13,457,883 6.81% 2,383 2005 490,000 4,493,579 461,032 7,020,000 524,852 12,989,463 6.53% 2,284 2006 380,000 4,309,827 508,886 6,850,000 504,852 12,553,565 6.29% 2,202 2007 259,846 4,118,053 338,150 6,670,000 437,952 11,824,001 4.61% 1,990 2008 -- 3,917,908 225,398 - 6,929,640 11,072,946 3.39% 1,877 2009 -- 3,709,027 155,448 -- 6,668,462 10,532,937 3.03% 1,794 85 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 Outstanding Debt Outstanding Fiscal Year Ending (1) Taxable Outstanding Funds Outstanding to Value of Debt September 30, Population Property Debt Available Debt Taxable Property Per Capita 2000 5,273 $ 441,936,119 $9,142,516 $ 118,738 $9,023,778 2.04% $ 1,711 2001 5,307 487,490,952 8,825,365 141,912 8,683,453 1.78% 1,636 2002 5,327 523,061,602 13,484,579 141,913 13,342,666 2.55% 2,505 2003 5,333 603,285,310 13,245,815 225,676 13,020,139 2.16% 2,441 2004 5,648 715,993,712 13,457,883 272,801 13,185,082 1.84% 2,334 2005 5,686 825,406,187 12,989,463 294,444 12,695,019 1.54% 2,233 2006 5,702 981,960,499 1 2,553,565 378,680 12,174,885 1.24% 2,135 2007 5,942 1,017,388,628 11,824,001 482,726 11,341,275 1.11% 1,909 2008 5,898 930,575,461 11,072,946 369,490 10,703,456 1.15% 1,815 2009 5,872 834,425,204 10,532,937 - 10,532,937 1.26% 1,794 (1) Florida Estimates of Population - Bureau of Economic and Business Research, University of Florida (2) Palm Beach County Property Appraiser's Office 86 VILLAGE OF TEQUESTA, FLORIDA COMPUTATION OF LEGAL DEBT MARGIN LAST SEVEN FISCAL YEARS SEPTEMBER 30, 2009 Total assessed value (1) $ 834,425,204 Legal debt margin: Debt limitation - 10% of total assessed value (2) 83,442,520 Total bonded debt outstanding Less amount available in debt service fund _ Total debt applicable to limitation -- Legal debt margin $ 83,442,520 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Debt limit $ 59,606,928 $ 71,463,973 $ 82,565,448 $ 98,162,738 $ 101 ,695,653 $93,130,772 $ 83,442,520 Total net debt applicable to limit 470,324 322,199 195,556 1,023 -- -_ Legal debt margin $59 =604 $71,141,774 $82,369,892 $98,161,715 $ 101,695,653 $93,130,772 $ 83,442,520 Total net debt applicable to limit as a percentage of debt limit 0.79% 0.45% 0.24% 0.00% 0.00 % 0.00% 0.00% (1) Palm Beach County Property Appraiser's Office (2) Village of Tequesta Charter Section 5.02 Limitations Note: The Village began to report this information in fiscal year 2003. 87 VILLAGE OF TEQUESTA, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT SEPTEMBER 30, 2009 Estimate Estimate Share of Net Percentage Direct and Debt Applicable to Overlapping Governmental Unit Outstanding Tequesta (1) Debt Overlapping debt: Debt repaid with property taxes Palm Beach County $ 270,150,000 0.59% $ 1,593,885 Palm Beach County School Board 32,835,000 0.59% 193,727 Subtotal, overlapping debt 1,787,612 Direct debt: Village of Tequesta direct debt 31864,475 Total direct and overlapping debt $ 5,652,087 (1) Sources: Palm Beach County and Palm Beach County 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 Palm Beach County 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 tong -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. 88 VILLAGE OF TEQUESTA, FLORIDA PLEDGED- REVENUE COVERAGE - REVENUE BONDS - 1994 LAST TEN FISCAL YEARS Net Fiscal Pledged Less: Available Debt Service (2) Year Revenues (1) Expenditures Revenue Principal Interest Coverage 2000 $ 490,179 $ 143,960 $ 346,219 $ 80,000 $ 63,960 2.40 2001 498,959 139,095 359,864 80,000 59,095 2.59 2002 441,409 144,461 296,948 90,000 54,461 2.06 2003 448,946 143,585 305,361 95,000 48,585 2.13 2004 464,973 142,678 322,295 100,000 42,678 2.26 2005 459,873 141,490 318,383 105,000 36,490 2.25 2006 524,468 140,135 384,333 110,000 30,135 2.74 2007 593,649 143,370 450,279 120,154 23,216 3.14 2008 515,700 275,836 239,864 259,846 15,990 0.87 2009 -- _ Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements. (1) Pledged revenues include franchise fees, licenses and permits from Fund 101. Fund 101 closed in fiscal year 2009. (2) Debt paid in full in fiscal year 2008. 89 VILLAGE OF TEQUESTA, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Capita Fiscal Population Personal Personal Median Unemployment Year (1) Income (2) Income (2) Age (3) Rate (4) 2000 5273 $ 184,417,902 $ 34,974 47.5 5.2% 2001 5307 185,607,018 34,974 47.5 5.5% 2002 5327 186,306,498 34,974 47.5 5.1% 2003 5333 186,516,342 34,974 47.5 6.2% 2004 5648 197,533,152 34,974 47.5 5.7% 2005 5686 198,862,164 34,974 47.5 3.1% 2006 5702 199,421,748 34,974 47.5 3.7% 2007 5942 256,397,300 43,150 49.6 3.3% 2008 5898 326,224,278 55,311 47.5 7.3% 2009 5872 347,311,184 59,147 47.5 9.7% Sources: (1) Florida Estimates of Population - Bureau of Economic and Business Research, University of Florida (2) U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System, May 2009 (3) 2000 U.S. Census Data, adjusted for inflation by MuniNetGuide.com (4) Florida Agency for Workforce Innovation, Labor Market Statistics Center, Local Area Unemployment Statistics Program 90 VILLAGE OF TEQUESTA, FLORIDA FULL -TIME EQUIVALENT VILLAGE GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST EIGHT FISCAL YEARS Full -time Equivalent Employees as of September 30, Function /Program 2002 2003 2004 2005 2006 2007 2008 2009 Governmental activities: General government 8.0 8.5 12.0 11.5 10.5 9.5 15.0 15.0 Public safety 45.5 51.0 45.0 45.0 46.0 51.0 50.0 49.0 Transportation 2.0 2.5 - - 3.0 4.0 4.0 4.0 Leisure services 1.5 2.5 2.0 2.0 3.0 3.0 3.0 3.0 Total governmental activities 57.0 64.5 59.0 58.5 62.5 67.5 72.0 71.0 Business -type activities: Water 14.0 12.5 14.5 14.0 15.0 15.5 15.0 16.0 Stormwater 0.5 - -- -- 1.0 1.0 1.0 1.0 Community development (1) 3.5 3.0 2.5 - - -_ Total business -type activities 18.0 15.5 17.0 14.0 16.0 16.5 16.0 17.0 Total primary government 75.0 80.0 76.0 72.5 78.5 84.0 88.0 88.0 Note: The Village was able to access this data from 2002. Source: Village of Tequesta Human Resource Department Note: A full -time employee is scheduled to work 2,088 hours per year (including vacation and sick leave). Full -time- equivalent employment is calculated by dividing total labor hours by 2,088. (1) Community Development activities (planning, building and code enforcement) were accounted for in an enterprise (business -type activity) fund until fiscal year 2005 when the fund was closed. Planning and building activities are currently accounted for in the General Fund, and code enforcement as part of the function of Public Safety. 91 VILLAGE OF TEQUESTA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST FOUR FISCAL YEARS Function /program: 2006 2007 2008 2009 Governmental activities: General government Registered voters 4,007 4,007 4,439 4,612 Public safety: Police department: No. of full -time certified police officers 16 19 17 18 No. of calls received 3,300 3,500 3,535 3,533 No. of arrests 199 238 224 251 No. of parking violations 162 148 171 131 No. of incident numbers issued 817 853 965 887 Fire department: No. of full -time certified firefighters 16 19 20 21 No. of emergency responses 1,254 1,122 1,143 1,189 No. of transports 622 521 621 651 No. of fires extinguished 632 601 522 538 No. of inspections 326 412 435 476 Building, zoning: No. of building permits issued 1,049 998 906 784 No. of building inspections conducted 2,214 2,581 2,039 1,771 Leisure services: No. of Spring classes __ __ g g No. of Summer classes __ _ 4 5 No. of movies -- -- 4 4 Business -type activities: Water: No. of customers 4,612 4,722 4,968 4,983 Average daily consumption 2.782 mg 2.349 mg 2.351 mg 2.175 mg Note: The Village began to report this information in fiscal year 2006, as prior information is not available. 92 VILLAGE OF TEQUESTA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST FOUR FISCAL YEARS 2006 2007 2008 2009 Function /aroaram: Governmental activities: General government: Municipal center 0 0 1 1 Public safety Police: No. of stations 1 1 I 1 No. of patrol units 12 12 7 9 Fire: No. of stations 1 1 1 1 No. of ambulances 2 2 2 2 No. of pumpers 3 3 2 2 Transportation: Miles of street lane miles 48 43 43 *24 No. of bridges 1 1 1 1 Leisure services No. of parks 3 3 3 4 No. of park acreage 48 53 53 50 No. of playgrounds 3 3 2 2 No. of baseball /softball diamonds 3 3 3 3 No. of skate -parks 1 1 1 1 Business -type activities: Water: Miles of water mains 50 75 72 72 No, of fire hydrants 550 430 430 430 Storage capacity (thousands of gallons) 3,250 3,250 3,250 3,250 Note: The Village began to report this information in fiscal year 2006, as prior information is not available. * This report is presenting the revised method in calculating the miles of street lane 93 Page Intentionally Left Blank COMPLIANCE SECTION 4 MARCUM RACHL.IN 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 GovernmentAuditing Standards Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited the financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the Village of Tequesta, Florida (the Village), as of and for the year ended September 30, 2009, which collectively comprise the Village's basic financial statements and have issued our report thereon dated May 10, 2010. 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. Internal Control over Financial Reporting In planning and performing our audit, we considered the Village's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Village's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Village's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Village's financial statements that is more than inconsequential will not be prevented or detected by the Village's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Village's internal control. 94 MARDWGROL P MEMBER MamumRachlin a division of Marcum up ■ mammrachlin.com 450 East Las Olas Boulevard ■ Ninth Floor ■ Fort Lauderdale, Florida 33301 ■ Phone 954.525.1040 a Fax 954.525.2004 FLORIDA ■ NEW YORK w NEW JERSEY ■ CONNECTICUT v GRAND CAYMAN Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Mayor, Village Council, management, and regulatory agencies and is not intended to be and should not be used by anyone other than these specified parties. a division of Marcum LLP West Palm Beach, Florida May 10, 2010 95 WCUM RACH LI N ACCOUNTANTS + ADVISORS A dMafon of Marcum ur MARCUM RACHLIN ACCOUNTANTS ♦ ADVISORS Management Letter in Accordance with the Rules of the Auditor General of the State of Florida Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited the financial statements of the Village of Tequesta, Florida (the Village) as of and for the year ended September 30, 2009, and have issued our report thereon dated May 10, 2010. 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. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters and the Schedule of Findings and Responses. Disclosures in those reports, which are dated May 10, 2010, should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General, which governs the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's reports or schedule; ➢ Section 10.554(1)(i)1., 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. Corrective actions have been taken to address findings or recommendations made in the preceding annual financial report. ➢ Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415; Florida Statutes, regarding the investment of public funds. In connection with our audit, we determined that the Village complied with Section 218.415, Florida Statutes. ➢ Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address violations of provisions of contracts or grant agreements, or abuse, that have an effect on the financial statements that is Iess than material but more than inconsequential. In connection with our audit, we did not have any such findings. 96 MARCUIVIGROLIP MEMBER MarcumRachlin a division of Marcum up ■ marcumrachikeem 450 East Las Olas Boulevard ■ Ninth Floor ■ Fort Lauderdale, Florida 83301 ■ Phone 954.525.1040 ■ Fax 954.525.2004 FLORIDA • NEW YORK ■ NEW JERSEY ■ CONNECTICUT ■ GRAND CAYMAN ➢ Section 1O.554(1)(i)5., Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on the financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)6., 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. ➢ Section 10.554(1)(i)7.a., Rules of the Auditor General, requires a statement be included as to whether or not the local governmental entity has met one or more of the conditions described in Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In connection with our audit, we determined that the Village did not meet any of the conditions described in Section 218.503(1), Florida Statutes. ➢ Section 10.554(1)(i)7.b., Rules of the Auditor General, requires that we determine whether the annual financial report for the Village for the fiscal year ended. September 30, 2009, filed with the Florida Department of Financial Services pursuant to Section 218.32(1)(a), Florida Statutes, is in agreement with the annual financial audit report for the fiscal year ended September 30, 2009. In connection with our audit, we determined that these two reports were in agreement. ➢ Section 10.554(1)(i)7.c. and 10.556(7), Rules of the Auditor General, we applied financial condition assessment procedures. It is management's responsibility to monitor the Village's financial condition, and our financial condition assessment was based in part on representations made by management and the review of financial information provided by same. The assessment was done as of the fiscal year end. There were no findings that identified deteriorating financial conditions. Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information of the Mayor, Village Council, management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. L- kKA 1h(X &Earl, a division of Marcum LLP West Palm Beach, Florida May 10, 2010 97 MARCUM RACHLIN ACCOUNTANTS • ADVISORS A d *W of Marcum up VILLAGE OF TEQUESTA, FLORIDA SCHEDULE OF FINDINGS AND RESPONSES FISCAL YEAR ENDED SEPTEMBER 30, 2009 FINANCIAL STATEMENT FINDINGS SECTION I — PRIOR FINDINGS NOT IMPLEMENTED None. SECTION II — CURRENT YEAR FINDINGS AND RECOMMENDATIONS None. 98 "The Village of Tequesta continues Its mission to provide excellent community services with strict adherence to maintaining strong flnandal health. It has done so again this year despite significant. economic challenges Including a 9% decrease k property tax assessments. This CAFR reveals that Village expenses were kept In check accordingly and net revenue of over three hundred and twenty thousand dollars was realised at fiscal year -end. Although the Village Is small In size It benefits from Its own water plant and public works department Community development and code compliance departments maintain conformity In how properties In the Village are built and maintained. Parks and Recreation watch over public spaces and host year - round events that appeal to all ages The Village also provides for the safety and wellbeing of Its residents with its own police force and fira /rescue squad. Each department works within the strict confines of Its own budget The fiscal strength of the Village is due In large part to a unique synergy among Village residents, elected officials, the Village manager and staff members. The five- member Village Council maintains Its commitment to act In the best Interest of the community as a whole. Decisions concerning Village spending are carefully considered and closely monitored. The Village Manager sees that every opportunity to maxlmlre revenues and contain expenses is explored and used. Staff members wear many hats and are dedicated to providing an outstanding level of service. Residents are encouraged to be involved and serve on boards and committees and volunteer for numerous community service projects and events This portnership facilitates outstanding community services with complete financial Integrity and accountability." Contributed by, Abby Brennan Resident Village ofTequesta