Loading...
CAFR_FY Ending_09-30-2014VILLAGEOFTEQUESTACOUNCILMEMBERS2014 Fromlefttoright:CouncilMemberThomasPaterno,ViceMayorVinceArena, MayorAbbyBrennan,CouncilMemberFrank$Ȍ!¬¡± ǾCouncilMemberSteveOkun VILLAGE OF TEQUESTA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Prepared By Finance Department The Village of Tequesta, Florida VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS I. INTRODUCTORY SECTION Letter of Transmittal .......................................................................................................................... i-iv Certificate of Achievement for Excellence in Financial Reporting ...................................................... v Organization Chart ............................................................................................................................... vi List of Principal Officials ................................................................................................................... vii II. FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT ......................................................................................... 1-3 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplementary Information) ... 4-17 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position ............................................................................................................. 18 Statement of Activities ................................................................................................................. 19 Fund Financial Statements Balance Sheet – Governmental Funds .......................................................................................... 20 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ................................................................................................................. 21 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................. 22 Statement of Net Position – Proprietary Funds ............................................................................ 23 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds ................. 24 Statement of Cash Flows – Proprietary Funds ............................................................................. 25 Statement of Fiduciary Net Position – Fiduciary Funds .............................................................. 26 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ............................................ 27 Notes to Basic Financial Statements .......................................................................................... 28-79 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund ........................................................................... 80 Note to the Budgetary Comparison Schedule .................................................................................. 81 Firefighters’ Pension Trust Fund Schedule of Changes in the Village’s Net Pension Liability and Related Ratios ......................... 82 Schedule of Village Contributions ............................................................................................... 83 Schedule of Investment Returns ................................................................................................... 84 Schedule of Funding Progress ...................................................................................................... 85 Police Officers’ Pension Trust Fund Schedule of Changes in the Village’s Net Pension Liability and Related Ratios ......................... 86 Schedule of Village Contributions ............................................................................................... 87 Schedule of Investment Returns ................................................................................................... 88 Schedule of Funding Progress ...................................................................................................... 89 General Employees’ Pension Trust Fund Schedule of Changes in the Village’s Net Pension Liability and Related Ratios ......................... 90 Schedule of Village Contributions ............................................................................................... 91 Schedule of Investment Returns ................................................................................................... 92 Schedule of Funding Progress ...................................................................................................... 93 Schedule of Funding Progress - Other Post Employment Benefits ................................................. 94 VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS II. FINANCIAL SECTION (CONTINUED) SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules Combining Balance Sheet – Nonmajor Governmental Funds ..................................................... 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ................................................................................................ 96 Budgetary Comparison Schedule – Special Law Enforcement Trust Fund ................................. 97 Budgetary Comparison Schedule – Capital Improvement Fund .................................................. 98 Budgetary Comparison Schedule – Capital Projects Fund ........................................................... 99 Combining Statement of Fiduciary Net Position ....................................................................... 100 Combining Statement of Changes in Fiduciary Net Position ..................................................... 101 III. STATISTICAL SECTION Net Position by Component .............................................................................................................. 102 Changes in Net Position ............................................................................................................. 103-104 Fund Balances, Governmental Funds ............................................................................................... 105 Changes in Fund Balances, Governmental Funds ............................................................................ 106 Assessed and Estimated Actual Value of Taxable Property ............................................................. 107 Property Tax Rates – All Direct and Overlapping Governments ..................................................... 108 Principal Property Taxpayers ............................................................................................................ 109 Property Tax Levies and Collections ................................................................................................ 110 Ratios of Outstanding Debt by Type ................................................................................................ 111 Ratio of Net Outstanding Debt to Assessed Value and Net Bonded Debt Per Capita ....................................................................................................................................... 112 Computation of Legal Debt Margin .................................................................................................. 113 Direct and Overlapping Governmental Activities Debt .................................................................... 114 Pledged-Revenue Coverage – Revenue Bonds - 1994 ..................................................................... 115 Demographic and Economic Statistics ............................................................................................. 116 Principal Employers – Palm Beach County ...................................................................................... 117 Full-time-Equivalent Village Government Employees by Function/Program.................................. 118 Operating Indicators by Function/Program ...................................................................................... 119 Capital Asset Statistics by Function/Program ................................................................................... 120 IV. REPORTING SECTION Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................ 121-122 Management Letter in Accordance with the Rules of the Auditor General of the State of Florida ....................................................................................................................... 123-124 Independent Accountants’ Report On Compliance Pursuant To Section 218.415 Florida Statutes .............................................................................................................................. 125 INTRODUCTORY SECTION Village of Tequesta 345 Tequesta Drive Tequesta, Florida 33469-0273 (561) 768-0424 www.Tequesta.org May 1, 2015 To the Honorable Mayor, Members of the Village Council And Citizens of the Village of Tequesta, Florida Florida law requires that every general purpose local government publish, within nine months of the close of each fiscal year, a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ended September 30, 2014. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Marcum LLP, Certified Public Accountants, have issued an unmodified (“clean”) opinion on the Village of Tequesta’s financial statements for the fiscal year ended September 30, 2014. The independent auditors’ report is located at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. 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. It is approximately 2 square miles and is located in northern Palm Beach County, Florida. It is almost completely built-out/developed. 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. It is empowered by state stature to extend its corporate limits by annexation, which it has done from time to time. The Village has a Council-Manager form of government. Policy-making and legislative authority are vested in an elected governing body of the Village consisting of a five member Village Council. Council members are elected at large and select a Mayor at their first organizational meeting each year. Council members serve two-year terms, with three members elected every other year. The Village Council appoints the Village of Tequesta’s manager, who is responsible for hiring all Village employees. i The Village of Tequesta provides a full range of services, including police and fire protection; building inspections; licenses and permits; the construction and maintenance of streets and other infrastructure, recreational and cultural activities, water services, stormwater operations and contracts for residential refuse and recycling services. The Council is required to adopt an initial budget prior to beginning of the fiscal year on October 1. This annual budget serves as the foundation for the Village of Tequesta’s financial planning and control. The budget is prepared by fund, function (e.g., public safety), and department (e.g., police) and is adopted by fund total. Departments may transfer resources within a department with the approval of the budget officer and the Village Manager. Transfers between departments require the budget amendments be approved by the Village Council, while changes to the total fund budget requires approval of the Village Council by resolution. Local Economy The Village of Tequesta, located in Palm Beach County, Florida, is home to middle to upper-income suburban families. Tequesta has a small commercial area and no major industries located within its boundaries. The Village of Tequesta is home to a number of assisted living facilities, private schools and a high-end treatment center. Over the past year, 37 states, including Florida had statistically significant changes in employment, all of which were positive. The largest significant over-the-year job increase occurred in Texas (413,700) followed by California (297,000) and Florida (205,600). The national unemployment rate for September was 5.9%, the first time unemployment has dropped below six percent since July 2008. The unemployment rate in Florida for September 2014 was 6.1% which was 0.8% lower than the prior year. The unemployment rate for Palm Beach County at the fiscal year end was 6.0%, down from 6.7% the previous year. It has been suggested that a stronger job market may also force the Federal Reserve to back away from six years of bond-buying that pumped more than a trillion dollars into the economy. However, because inflation is below the Fed’s 2% target they might well keep interest rates near zero in the immediate future. According to the US Census Bureau’s Quickfacts as of July 8, 2014, median household income for Tequesta was $64,191 which continues to be significantly higher than the nation as a whole ($47,309).Tequesta is beginning to see a positive change in the housing market as property values continue to increase. Per the Palm Beach County Property Appraiser’s Office, gross taxable value for calculating ad valorem proceeds increased from $780 million during fiscal year 2013 to $817 million used to calculate 2014 revenues – approximately 4.7% higher than the prior year. The Village of Tequesta continues to develop its operating budget based on this expected slow, but steady, increase in property values over the next few years. During the past ten years, the Village’s expenditures related to public safety have increased in amount and as a percentage of total expenditures in governmental funds (currently $6.2 million or 50% of total general funds expenditures, an increase of $2.06 million from 2004). Much of this increase reflects a trend that has seen the salaries and benefits of police and firefighters growing at a much faster rate than those of other categories of public sector employees. During this same ten-year period, charges for services related to public safety have also increased in amount and as a percentage of total revenues reflecting a ten-year increase of $604 thousand from 2004. In the most recent three-year period (2011 through 2013) this revenue source has followed a downward trend with revenues decreasing $141,135 during that three-year period. However, the Village of Tequesta renegotiated a contract for fire rescue service that begins in fiscal year 2014 and we expect to see this revenue source increase by $177 thousand. ii Long-Term Financial Planning and Major Initiatives Unrestricted fund balance in the general fund at year end was 21.8% of total general fund revenues. This amount was above policy guidelines set by the Council for budgetary and planning purposes (i.e., two months of general fund revenues, approximately 16.7%). The Village of Tequesta has always spent conservatively while providing the highest quality services to its residents. We continue to cautiously watch the “gap” between revenues and expenditures. To protect the investments our residents have made in their community, the Village increased the millage rate to 6.0500 from 5.7671 which was an 8.69% percent change of the rolled-back rate (the rate required to bring in the same amount of revenue as the prior period). It has not been easyto maintain a consistently high quality of services to the residents, while protecting the assets, the level of service and the quality of life that the residents of the Village of Tequesta have come to expect. It is the result of hard work, long hours, pay and benefit concessions and the making of fiscally sound, responsible decisions by the administration, working staff and Village Council that allowed the Village to meet service demands while minimizing the financial burden on its residents. The Village is very fortunate to have a citizenry that is active on many boards and committees, a working staff that has shown its willingness to take on additional responsibilities, an expanded workload and very importantly, a Village Council that is very responsive to the needs of the residents and staff and who donate so much of their time to this community. If the future of a community is dependent on its people, then the future of Tequesta is bright and we expect to successfully meet challenges that come before us. The Village of Tequesta’s primary focus is providing exceptional municipal services to its residents in the most efficient and cost effected manner possible. Continued economic challenges require innovative approaches on both sides of the balance sheet. Efforts to expand contractual services to generate additional revenue should continue to be considered. The Village should continue to modify its traditional public safety plans, if an effort to reduce costs and future liabilities. The Village continues researching ways to control the growing cost of health care and post-retirement benefits and has implemented changes and negotiated concessions with the current bargaining units. Tequesta continues to discuss options with the three collective bargaining units to control the cost of post- retirement benefits. MAJOR INITIATIVES Continue to explore alternative revenue sources, at both the state and federal level, with the assistance of a professional lobbyist. Continue to find ways to reduce the cost of health care and post-retirement benefits. Finalize negotiations of a new contract with the IAFF (International Association of Firefighters). Develop a 6-year capital improvement /capital replacement plan. Provide a utility revenue sufficiency and rate adequacy study to evaluate the overall sufficiency of the rate revenues to meet the Village’s objectives for a sustained high quality utility service by providing a stable funding plan. Relevant Financial Policies The Village of Tequesta has adopted a comprehensive set of financial policies. During the next fiscal year, the Village will be reviewing and updating its Water Utility policies. iii 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, 2013. This was the thirtieth 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 Tequesta’s 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. iv v VILLAGE OF TEQUESTA, FLORIDA ORGANIZATION CHART SEPTEMBER 30, 2014 vi VILLAGE OF TEQUESTA, FLORIDA LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2014 VILLAGE COUNCIL Abby Brennan Mayor Vince Arena Vice-Mayor Frank D’Ambra Councilmember Steve Okun Councilmember Thomas Paterno Councilmember VILLAGE OFFICIALS Michael R. Couzzo, Jr. Village Manager Corbett, White and Davis, PA Village Attorney Lori McWilliams, MMC Village Clerk JoAnn Forsythe, CPA Finance Director James M. Weinand Fire Chief Christopher L. Elg Police Chief NZ Consultants, Inc. Planning and Zoning Director Timothy English Director/Building Official Michael R. Couzzo, Jr. Utilities Director Greg Corbitt Parks and Recreation Director Merlene Reid, MS, SPHR Human Resources Director VILLAGE INDEPENDENT AUDITORS Marcum LLP vii FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT INDEPENDENT AUDITORS' REPORT To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida (the Village) as of and for the fiscal year ended September 30, 2014 and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 1 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida as of September 30, 2014 and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of a Matter As discussed in Note 1 to the financial statements, the Village implemented Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No.25. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information, schedules of net pension liability and ratios, contributions, investment returns and funding progress on pages 4-17 and 80-94 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village’s basic financial statements. The combining and individual fund statements and schedules, the introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. 2 The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required byGovernment Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 1, 2015 on our consideration of the Village’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Village’s internal control over financial reporting and compliance. West Palm Beach, Florida May 1, 2015 3 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) Village of Tequesta, Florida Management’s Discussion and Analysis 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, 2014. We encourage readers to consider the information presented here in conjunction with the additional information that we have furnished in the letter of transmittal found on pages i to iv of this report. Financial Highlights The assets and deferred outflows of resources of the Village of Tequesta exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $33,000,343 (net position). Of this amount, $8,353,378 is unrestricted and may be used to meet the ongoing obligations to the citizens and creditors. The Village of Tequesta’s total net position decreased $428 thousand during the current period Governmental activities increased net position by $113 thousand and business activities decreased net position by $540 thousand. At the close of the current fiscal year, the Village of Tequesta’s governmental funds reported combined fund balances of $3,904,907, an increase of $99,985 from the prior year. Of the $3.9 million in fund balance, approximately 44% of this amount ($1.7 million) is available for spending at the government’s discretion (unassigned fund balance). At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned,andunassigned components of fund balance) for the general fund in 2014 was $2,727,608 or approximately 27% of total general fund expenditures, down from 33% in 2013. The Village of Tequesta’s total outstanding long-term debt increased by $124 thousand or approximately 3.6%, due mainly to the net effect of paying down existing note payable and entering into a capital lease for the purchase of a fire pumper. Please see details in the Notes to Basic Financial Statements, Note 3. K. starting on page 75. The Village did not expend $500,000 or more in Federal and/or State financial assistance in the fiscal year ended September 30, 2014 and therefore did not meet the threshold for a single audit according to the Florida Single Audit Act (section 215.97 F.S.) and OMB Circular A-133. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Village of Tequesta’s basic financial statements. The Village’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves. 4 Government-wide Financial Statements: The government-wide financial statements are designed to provide readers with a broad overview of the Village of Tequesta’s finances, in a manner similar to a private-sector business. Thestatement of net position presents financial information on all of the Village of Tequesta’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Village of Tequesta is improving or deteriorating. Thestatement of activities presents information showing how the Village of Tequesta’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related 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 of Tequesta that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the Village 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 18-19 of this report. Fund Financial Statements. Afundis a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village of Tequesta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Village of Tequesta can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and 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 assessing a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmentalactivities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds andgovernmental activities. The Village of Tequesta maintains four 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 balance for the General Fund which is considered a major fund. Data from the other three governmental funds is combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report. 5 The Village of Tequesta adopts an annual appropriated budget for its governmental funds. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. The Village of Tequesta’s governmental fund financial statements can be found on pages 20-21 of this report. Proprietary Funds. The Village of Tequesta maintains one type of proprietary fund – enterprise funds. Enterprise funds are used to report the same functions presented as business-typeactivities in the government-wide financial statements. The Village of Tequesta uses enterprise funds to account for its water, stormwater, and refuse and recycling funds. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water fund and the Stormwater Fund, major funds, as well as the Refuse and Recycling fund, a nonmajor fund. The basic proprietary fund financial statements can be found on pages 23-25 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the Village. Fiduciary funds arenot reported in the government-wide financial statement because the resources of those funds arenot available to support the Village’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. GASB Statement No. 67 was implemented in fiscal year 2014. The Village of Tequesta maintains one type of fiduciary fund – a Pension trust fund which is used to report resources held in trust for retirees and beneficiaries covered by the Public Safety Pension Plan (which includes the Firefighters’ Pension Trust Fund and the Police Officers’ Pension Trust Fund) and the General Employees’ Pension Plan. The fiduciary fund financial statements can be found on pages 26-27 of this report. Notes to basic financial statements: The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 28-79 of this report. Other information: In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Village of Tequesta’s progress in funding its obligation to provide pension benefits and OPEB benefits to its employees, as well as the Village’s net pension liability, contributions and pension investment returns. Required supplementary information can be found on pages 80-94 of this report. The combining statements referred to earlier in connection with non-major governmental funds and fiduciary funds are presented immediately following the required supplementary information on pensions and OPEB. Combining and individual fund statements and schedules can be found on pages 95-101 of this report. 6 Government-wide Overall Financial Analysis As noted earlier, net position over time, may serve as a useful indicator of a government’s financial position. In the case of the Village of Tequesta, assets and deferred outflows of resources exceeded liabilities and deferred inflows by $13,965,314 at the close of the most recent fiscal year. Village of Tequesta’s Net Position As seen below, the Village of Tequesta’s total assets and deferred outflows exceeded total liabilities and deferred inflows by approximately $33 million at the close of the 2014 fiscal year. Governmental activities recorded a change of 0.81% in total net position while the Village’s business-type activities recorded a (2.76 %) change in total net position. Village of Tequesta's Net Position GovernmentalBusiness-type ActivitiesActivitiesTotal 2014 2013 2014 2013 2014 2013 Current and other assets $ 4,910,701 $ 4,878,984 $ 6,086,581 $ 5,728,854 $10,997,282 $10,607,839 Capital assets, net 13,189,543 13,039,737 18,345,747 19,395,803 31,535,290 32,435,540 Total assets 18,100,244 17,918,721 24,432,328 25,124,657 42,532,572 43,043,378 Total deferred outflows of resources - - 302,367 324,834 302,367 324,834 Long-term liabilities outstanding 3,578,906 3,455,442 5,429,500 5,711,390 9,008,406 9,166,832 Other liabilities 421,431 447,629278,752162,436700,183610,065 Total liabilities 4,000,337 3,903,071 5,708,252 5,873,826 9,708,589 10,439,146 Total deferred inflows of resources 134,593 163,117 - - 134,593 163,117 Net position Net investment in capital assets 10,284,849 10,261,476 13,402,412 14,167,067 23,687,261 24,428,543 Restricted 959,704 579,320 - - 959,704 579,320 Unrestricted 2,720,761 3,011,737 5,632,617 5,408,598 8,353,378 8,420,335 Total net position $13,965,314 $13,852,533 $19,035,029 $19,575,665 $33,000,343 $33,428,198 The largest portion of the Village’s total net position (72%) represents investments in capital assets (e.g., land, buildings, machinery and equipment), less any related outstanding debt and deferred inflows/outflows used to acquire those assets. The Village uses these capital assets to provide services to citizens; consequently, they are not available for future spending. Although the Village’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the Village of Tequesta’s net position (2.9%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $8,353,378 is unrestricted and may be used to meet the government’s ongoing obligations to its citizens and creditors. 7 At the end of the current fiscal year, the Village of Tequesta is able to report positive balances in all categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. VillageofTequesta,NetPosition Restricted Unrestricted NetInvestmentsincapitalassets NetInvestmentsincapital 9/30 UnrestrictedRestricted assets 2013 24,428,5438,420,335579,320 2014 23,687,2618,353,378959,704 The Village of Tequesta’s overall net position decreased $427,855 from the prior fiscal year. The reasons for this overall decrease are discussed in the following sections for governmental activities and business- type activities. Village of Tequesta’s Changes in Net Position Village of Tequesta Changes in Net Position Governmental Business-type Activities Total ActivitiesActivities 201420132014201320142013 Revenues: Program Revenues: Charges for Services $ 2,526,790 $ 1,929,223 $ 4,960,023 $4,824,690 $7,486,813 $6,753,913 Operating Grants & Contributions 63,148 95,145 - - 63,148 95,145 General Revenues: Ad valorem Taxes 4,767,948 4,339,215 - - 4,767,948 4,339,215 Other Taxes 1,216,100 1,266,929 - - 1,216,100 1,266,929 Franchise fees on gross receipts 401,859 380,160 - - 401,859 380,160 Unrestricted intergovernmental 770,616 735,924 - - 770,616 735,924 Unrestricted investment earnings 13,184 22,316 14,976 20,727 28,160 43,043 Other Miscellaneous 53,406 77,390 35,415 37,017 88,821 114,407 Total Revenue 9,813,051 8,846,302 5,010,414 4,882,434 14,823,465 13,728,736 8 Village of Tequesta Changes in Net Position (Continued) GovernmentalBusiness-type Activities Total ActivitiesActivities 201420132014201320142013 Expenses: General government 1,770,326 1,642,948 - - 1,770,326 1,642,948 Public safety 6,222,408 6,207,866 - - 6,222,408 6,207,866 Transportation 1,009,693 1,049,062 - - 1,009,693 1,049,062 Leisure Services 583,445 640,513 - - 583,445 640,513 Interest on long-term debt 114,398 135,204 - - 114,398 135,204 Water utility services - - 4,782,022 4,204,955 4,782,022 4,204,955 Stormwater services - - 279,051 221,283 279,051 221,283 Refuse & recycling services - - 489,977 484,165 489,977 484,165 Total Expenses 9,700,270 9,675,593 5,551,050 4,910,403 15,251,320 14,585,996 Increase (decrease) in net position 112,781 (829,291) (540,636) (27,969) (427,855) (857,260) Net position - beginning 10/01 13,852,533 14,681,824 19,575,665 19,603,634 33,428,198 34,285,458 Net position - ending 9/30 $13,965,314 $13,852,533 $19,035,029 $19,575,665 $33,000,343 $33,428,198 Governmental Activities – Expenses and Program Revenues Governmental activities. During the current fiscal year, net position for governmental activities increased $113 thousand (less than 1%) from the prior period and ended with a balance of $13,965,314. This change resulted from an increase in the millage rate from 5.7671 to 6.050 which generated additional revenue of $429 thousand, which was offset by a decrease in revenue from other taxes of $51 thousand. Additionally, revenues received for charges for services increased $598 thousand with the largest increases recorded in Emergency Services (a new contract for emergency services with Jupiter Inlet Colony increased revenue $200 thousand) and building permit fees which increased $100 thousand. There was a small increase in total expenses from the prior year ($25 thousand) and overall the Village’s net position from governmental activities remained stable. ExpensesandProgramRevenuesGovernmentalActivities inThousands $8,000 $6,000 $4,000 $2,000 $ RevenuesExpenses 9 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 net cost of all governmental activities this year was $7.1 million – a decrease of 6.6% from the prior period. This was the result of an increase in charges for services while expenses remained stable. As shown on the Statement of Activities, the functions directly benefiting from the programs generated revenue of approximately $2 million towards this cost and the remainder was financed through general revenues ($7.2 million) and the use of excess funds. The following is a comparison of revenues by source for governmental activities for fiscal year 2014 and 2013. RevenuesbySourceGovernmentalActivities inThousands 2014 5000 2013 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Business-type Activities. The Village of Tequesta’s business-type activities resulted in a decrease of $541 thousand in net position. Revenues were up $135 thousand from the prior year attributable to higher demand for water. This was offset by an increase in expenses in the water utility of $577 thousand. Expenses related to renewal and replacement projects ($448 thousand) significantly contributed to the water utility expenses increasing 13.7% from the prior year. Renewal and replacement projects are a planned investment in the system to ensure the facilities function at their designed level. The project was budgeted at $788 thousand and is ongoing at year end. 10 TotalRevenues/ExpensesBusinessTypeActivities inThousands $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $ WaterUtilityRefuse&RecyclingStormwaterUtility RevenueExpenses As the chart below demonstrates, revenues received from charges for services were fairly stable and increasing slightly from the prior year. Non-operating income reflects revenues from cash and investment earnings, which remains low, as excess cash is invested in low-risk, highly liquid instruments. RevenuesRevenuesbybySourceSourceBusinessBusinessTypeTypeActivitiesActivities $5,000,000 $4,500,000 $4,000,000 $3,500,000 2013 $3,000,000 2014 $2,500,000 $2,000,000 $1,500,000 $1,000,000 2014 $500,000 20132013 $ ChargesforServices Nonoperating 11 Financial Analysis of the Village’s Funds As noted earlier, the Village of Tequesta uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds: The focus of the Village’s governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Village’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the Village of Tequesta itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the Village of Tequesta’s Council. At September 30, 2014 the Village of Tequesta’s governmental funds reported total combined fund balances of $3,904,907. Approximately 44% ($1.7 million) of combined governmental fund balances of $3.9 million is unassigned fund balance and is available for spending at the Village’s discretion. Approximately 26% is assigned fund balance which includes $1 million for hurricane/disaster emergency. The remaining $1.2 million is either restricted for a particular purpose (i.e. debt service, etc.) or not in spendable form (i.e. inventories, prepaid items, etc.). During the year, restricted and nonspendable fund balances increased $444 thousand with the largest increases from $269 thousand from receipt of forfeiture funds and $133 thousand from surpluses generated from building permit fees. However, unassigned and assigned fund balances decreased $344 thousand. The net effect was an increase in total combined fund balances of $100 thousand. Governmental Funds Components of Fund Balance September 30, 2014 and 2013 2013 Nonspendable. Restricted Assigned Unassigned 2014 $0$500,000$1,000,000$1,500,000$2,000,000 12 The General Fund is the chief operating fund of the Village of Tequesta. At the end of the current fiscal year, unassigned fund balance of the General Fund was $1,714,008 while total fund balance was $3,603,527. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents approximately 17% of fiscal year 2014 General Fund expenditures (a decrease of 4%) and total fund balance represents 36%. The ratio of total fund balance to expenditures has decreased from the prior year when total fund balance represented 47% of total expenditures. This is the sixth year that these ratios have decreased representing a growing gap between revenues and expenditures as the Village uses excess funds to bridge this gap. The fund balance of the Village of Tequesta’s general fund decreased by $37,636 during the current fiscal year which was significantly less than in prior years, as the Village continues to reduce it use of existing funds to support activities. General Fund Components of Fund Balance September 30, 2014 and 2013 2013 Nonspendable. Restricted Assigned Unassigned 2014 $0$500,000$1,000,000$1,500,000$2,000,000 13 The amount of General Fund revenue by type, their percent of the total and the amount of change compared to last fiscal year are shown in the following schedule: General Fund Revenues –by Source GENERAL FUND REVENUES Change Revenue Sources 2014 % of Total $%2013 Taxes $4,767,948 50.1% $428,733 9.88% $4,339,215 Other taxes 1,216,100 12.8% (50,829) -4.01% 1,266,929 Intergovernmental 816,323 8.6% 63,595 8.45% 752,728 Franchise fees 401,859 4.2% 21,699 5.71% 380,160 Charges for services 1,102,496 11.6% 200,837 22.27% 901,659 Intragovernmental 519,188 5.5% 15,479 3.07% 503,709 Licenses and permits 433,428 4.6% 102,859 31.12% 330,569 Investment earnings 13,184 0.1% (9,132) -40.92% 22,316 Fines and forfeitures 31,977 0.3% 14,048 78.35% 17,929 Miscellaneous 86,021 0.9% (73,505) -46.08% 159,526 Rents and Royalties 136,906 1.4% (10,397) -7.06% 147,303 Total Revenue $9,525,430 100%$703,387 7.97% $8,822,043 Total General Fund revenue has increased $703.387 (8%) due to an increase in the tax rate as well as improved property values. Additionally, the Village negotiated better rates for emergency services to other cities and fees from permits were higher than expected for the year. The increase in revenue from licenses and permits is indicative of the cyclical nature of this revenue in a community that is almost completely built out. Expenditures in the General Fund are shown in the following schedule: GENERAL FUND EXPENDITURES BY FUNCTION Change Function 2014 % of Total $%2013 Public Safety $ 5,900,978 58.2% $ (501) 0.0% $5,901,479 General government 1,614,291 15.9% 85,977 5.6% 1,528,314 Transportation 858,787 8.5% 57,828 7.2% 800,959 Leisure services 507,069 5.0% (54,869) -9.8% 561,938 Debt service 433,545 4.3% 48,812 12.7% 384,733 Capital outlay 831,240 8.2% 710,841 590.4% 120,399 Total expenditures $10,145,910 100%$848,088 9.1% $9,297,822 14 General fund expenditures show an increase (9.1%) due mainly to the purchase of capital items which are recorded as expenditures in the funds as they report on a modified accrual basis of accounting. Additionally, the Village entered into a capital lease for the purchase of a fire pumper which resulted in the cost of debt increasing 3.6%. The remaining increase in expenditures 1.48% ($137 thousand) represents the effect of cost of living increases (wages and changes in the cost of operational expenditures). Below is a graphic presentation of how (what functions) the Village expends funds. General Fund -Expenditures by Source in Thousands $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 2014 2013 Ending fund balances for the Capital Projects Fund is $4,313 and the Capital Improvement fund is $5,412. Fund balances in both funds are assigned for capital projects/improvements. The Capital Projects Fund and the Capital Improvement Fund receive revenue from capital grants and transfers-in from other funds. There were no capital projects budgeted for either fund at the end of fiscal year ending 9/30/2014. Proprietary funds: The Village’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The table below summarizes the operating income (loss) and the change in net position for each of the Village’s proprietary funds. At the end of the year, total net positions of the proprietary funds were $19,035,029, decreasing $540,636 (2.8% from the prior period). As noted earlier, the major decrease in net position in the Water utility resulted from an increase in spending on renewal and replacement projects in the water utility. Other factors concerning the finances of this major fund have already been addressed in the discussion of the Village’s business-type activities. 15 PROPRIETARY FUNDS Change in Operating Income and Net Position Operating Income (Loss) Change in Net Position 2013 2014 2013 2014 ($381,840) $91,051 ($577,408) ($130,639) Water 44,312 102,230 45,573 103,748 Storm-water (9,182) (1,742) (8,801) (1,078) Refuse and Recycling ($346,710) $191,539($540,636) ($27,969) General Fund Budgetary Highlights The difference between the original and final amended General fund budget in total for 2014 was an increase of $447,518 thousand. The most significant portion of this increase ($318,830) was due to the purchase of a new 800MHZ radio system that was not funded in the original budget. Other large additions to the budget were roll-forwards of prior year projects ($89,565) and funding for summer camp counselors ($24,122). Capital Assets and Debt Administration Capital assets: The Village’s capital assets for its governmental and business-type activities total $31,536,290 (net accumulated depreciation) as of September 30, 2014. These assets include land, construction in progress, buildings, improvements-other-than-buildings, infrastructure and machinery and equipment. Additional information on the Village’s capital assets can be found in Note 3 D., Capital Assets, starting on page 50 of this report. VILLAGE OF TEQUESTA Capital Assets Governmental Business 2014 Capital Assets Activities Activities Total Land $ 634,017 $83,335 $ 717,352 Construction in progress 67,604 - 67,604 Buildings 8,043,526 979,512 9,023,038 Improvements 2,385,930 58,720 2,444,650 Infrastructure 4,544,085 32,596,833 37,140,918 Machinery & Equipment 3,862,270 1,709,903 5,572,173 Intangibles 201,377 - 201,377 Other - K-9 25,763 - 25,763 Total capital assets 19,764,572 35,428,303 55,192,875 Less accumulated depreciation (6,575,029) (17,082,556) (23,657,585) Total capital assets, net $13,189,543 $18,345,747 $31,535,290 16 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. The table below summarizes the Village’s debt position. A more detailed explanation can be found in Note 3.K – Long-Term Liabilities starting on page 75. Village of Tequesta - Long Term Debt Governmental Activities Business-type Activities Total 2014 2013 2014 2013 2014 2013 Notes payable $2,519,635 $2,778,261 $5,245,703 $5,553,570 $7,765,338 $8,331,831 Capital leases 385,059 - - - 385,059 - Compensated absences 484,212 519,181 156,798 139,820 641,010 659,001 Net OPEB Obligation 190,000 158,000 27,000 18,000 217,000 176,000 Total Long Term Debt $3,578,906 $3,455,442 $5,429,501 $5,711,390 $9,008,407 $9,166,832 Economic Factor and Next Year’s Budgets and Rates The following economic factors currently affect the Village of Tequesta and were considered in developing the 2014-2015 fiscal year budgets. The Village Council’s decision to raise the millage rate from 6.050 mills to 6.292 and an increase in property values will result in an increase in tax revenues. The Village is expecting property values to continue to rise. Interest rates remain low and there is no indication that the Federal Reserve will take any action to raise rates. There was some thought that when the unemployment rate hit 6.5%, the Fed might take action, however, February unemployment rates dropped to 5.5% without indication from the Fed that interest rates would increase. Revenues from sales taxes continue to be flat and current trends are not predicting any immediate change unless consumer confidence increases. There is an uptick in the housing market and new home construction is beginning to improve. The Village continues to look into annexation of surrounding properties, however, most of this type of annexation is expected be smaller parcels. The CPI is expected to be around 2%. The U.S. Gross domestic Product has been growing at a rate slightly over 2%. Government data shows consecutive months that the market created more than 200,000 jobs. The Village of Tequesta’s water rates increased 2.98% on October 1, 2013. Requests for Information This financial report is designed to provide a general overview of the Village of Tequesta’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Village of Tequesta, Finance Department, 345 Tequesta Drive, Tequesta, Florida 33469. 17 BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2014 Business- Governmentaltype ActivitiesActivitiesTotal Assets Cash and cash equivalents3,642,251$ 5,464,041$ 9,106,292$ Investments176,582 122,181 298,763 Receivables, net404,737 382,305 787,042 Inventories52,368 56,234 108,602 Prepaid items174,466 61,820 236,286 Other current assets10,527 -- 10,527 Net pension asset449,770 -- 449,770 Capital assets not being depreciated701,621 83,335 784,956 Capital assets being depreciated, net12,487,922 18,262,412 30,750,334 Total Assets 24,432,32818,100,244 42,532,572 Deferred Outflows of Resources 302,367 302,367 Deferred charge on refunding-- Total deferred outflows of resources-- 302,367 302,367 Liabilities Accounts payable119,819 226,151 345,970 Accrued liabilities 20,570279,892 300,462 Customer deposits19,074 32,031 51,105 Due to other governments2,646 -- 2,646 Noncurrent liabilities: Due within one year365,817 343,385 709,202 Due in more than one year3,213,089 5,086,115 8,299,204 Total Liabilities 5,708,2524,000,337 9,708,589 Deferred Inflows of Resources -- 134,593 Deferred revenue134,593 Total deferred inflows of resources134,593 -- 134,593 Net Position Net investment in capital assets10,284,849 13,402,412 23,687,261 Restricted: Debt Service269,915 -- 269,915 Building348,135 -- 348,135 Law Enforcement322,689 -- 322,689 Unrestricted2,739,726 5,632,617 8,372,343 Total Net Position $ 19,035,02913,965,314$ 33,000,343$ The accompanying notes are an integral part of these financial statements. 18 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Net (Expense) Revenue and Program RevenuesChanges in Net Position ChargesOperating Primary Government forGrants andGovernmentalBusiness-typeTotal Functions/ProgramsExpensesServicesContributionsActivitiesActivities Primar Governmen yt Governmental activities: General government1,770,326$ 694,220$ --$ (1,076,106)$ --$ (1,076,106)$ Public safety6,222,408 1,755,652 56,023 (4,410,733) -- (4,410,733) Transportation1,009,693 -- -- (1,009,693) -- (1,009,693) Leisure services583,445 76,918 7,125 (499,402) -- (499,402) -- -- (114,398) -- (114,398) Interest on long-term debt114,398 Total governmental activities9,700,270 2,526,790 63,148 (7,110,332) -- (7,110,332) Business-type activities-- -- -- -- -- -- Water4,782,022 4,155,865 -- -- (626,157) (626,157) Stormwater utility279,051 323,363 -- -- 44,312 44,312 Refuse and recycling489,977 480,795 -- -- (9,182) (9,182) Total business-type activities5,551,050 4,960,023 -- -- (591,027) (591,027) Total primary government15,251,320$ 7,486,813$ 63,148$ (7,110,332) (591,027) (7,701,359) General Revenues Ad valorem taxes4,767,948 -- 4,767,948 Utility taxes703,623 -- 703,623 Communication service tax324,530 -- 324,530 Insurance premium taxes100,617 -- 100,617 Business taxes87,330 -- 87,330 Franchise fees based on gross receipts401,859 -- 401,859 Unrestricted intergovernmental revenues770,616 -- 770,616 Unrestricted investment earnings13,184 14,976 28,160 Miscellaneous revenues53,406 35,415 88,821 Total general revenues7,223,113 50,391 7,273,504 Change in Net Position (540,636)112,781 (427,855) Net Position - Beginning 19,575,665 33,428,198 13,852,533 Net Position - Ending 19,035,029$ 33,000,343$ $13,965,314 The accompanying notes are an integral part of these financial statements. 19 VILLAGE OF TEQUESTA, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Other Total GeneralGovernmentalGovernmental FundFundsFunds Assets Cash and cash equivalents3,359,836$ 282,415$ 3,642,251$ Investments176,582 -- 176,582 Receivables, net404,737 -- 404,737 Inventories33,403 18,965 52,368 Prepaid items174,466 -- 174,466 Other current assets10,527 -- 10,527 Total Assets 301,3804,159,551 4,460,931 Liabilities Accounts payable119,819 -- 119,819 Accrued liabilities279,892 -- 279,892 Due to other governments19,074 -- 19,074 Other current liabilities2,646 -- 2,646 Total Liabilities -- 421,431 421,431 Deferred Inflows of Resources --134,593 134,593 Unavailable revenue --134,593 134,593 Total deferred inflows of resources Fund Balances Nonspendable: Inventories33,403 18,965 52,368 Prepaid items174,466 -- 174,466 Restricted: Debt service269,915 -- 269,915 Building348,135 -- 348,135 Law enforcement50,000 272,689 322,689 Assigned to: Subsequent year's budget13,600 -- 13,600 Hurricane/disaster emergency1,000,000 -- 1,000,000 Capital projects-- 9,726 9,726 Unassigned: --1,714,008 1,714,008 General Fund 301,380 3,904,907 3,603,527 Total Fund Balances Total Liabilities, Deferred Inflows of $ 301,3804,159,551$ 4,460,931 Resources and Fund Balances Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because: Capital assets used in the governmental activities are not financial resources and, therefore, are not reported in the funds.13,189,543 Net pension assets are not considered to represent a financial asset in the governmental funds449,770 Long-term liabilities, including notes payable, are no due and payable in the current period and, therefore, are not reported in the governmental funds:(3,578,906) Net Position of Governmental Activities $ 13,965,314 The accompanying notes are an integral part of these financial statements. 20 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHARGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 TotalTotal GeneralNonmajorGovernmental FundFundsFunds Revenues Ad valorem taxes4,767,948$ --$ 4,767,948$ Other taxes1,216,100 -- 1,216,100 Charges for services1,102,496 -- 1,102,496 Intergovernmental816,323 -- 816,323 Intragovernmental519,188 -- 519,188 Licenses and permits433,428 -- 433,428 Franchise fees401,859 -- 401,859 Fines and forfeitures31,977 287,621 319,598 Rents and royalties136,906 -- 136,906 Miscellaneous64,855 -- 64,855 Grants, contributions and donations21,166 -- 21,166 Investment earnings13,184 -- 13,184 Total Revenues 287,6219,525,430 9,813,051 enditures Ex p Current: General government1,614,291 -- 1,614,291 Public safety5,900,978 -- 5,900,978 Transportation858,787 -- 858,787 Leisure services507,069 -- 507,069 Capital outlay831,240 -- 831,240 Debt service: Principal306,411 -- 306,411 Interest114,398 -- 114,398 -- 12,736 Fiscal charges12,736 enditures Total Ex p --10,145,910 10,145,910 Excess (Deficiency) of Revenues Over (Under) Exenditures p 287,621(620,480) (332,859) Other Financing Sources (Uses) Transfers in150,000 -- 150,000 Transfers out-- (150,000) (150,000) -- 432,844 Capital lease432,844 Total other financing sources (uses)582,844 (150,000) 432,844 Net change in fund balances(37,636) 137,621 99,985 Fund Balance s- Beginning 163,7593,641,163 3,804,922 $ 301,3803,603,527$ 3,904,907$ Fund Balance s - Ending The accompanying notes are an integral part of these financial statements. 21 VILLAGE OF TEQUESTA, FLORIDA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Amounts reported for governmental activities in the statement of activities (Page 19) are different because: Net change in fund balances - total governmental funds (Page 21)99,985$ Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. The details of the difference are as follows: Capital outlay843,960$ Depreciation expense(694,154) Net Adjustment149,806 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Capital lease (432,844) Repayment of notes payable principal258,626 Repayment of capital lease principal47,785 (126,433) 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 absences34,969 Net OPEB obligation(32,000) Net pension expense(13,546) (10,577) Change in net position of governmental activities (Page 19)112,781$ The accompanying notes are an integral part of these financial statements. 22 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2014 Business-type Activities WaterNonmajor FundStormwaterRefuse & RecyclingTotal Assets Current assets: $ 949,0454,414,532$ 100,464$ 5,464,041$ Cash and cash equivalents Investments110,140 5,942 6,099 122,181 Receivables, net375,193 1,868 5,244 382,305 Inventories55,732 502 -- 56,234 Prepaid items60,338 1,482 -- 61,820 8887,039 659 8,586 Other current assets Total Current Assets 959,7275,022,974 112,466 6,095,167 Non-current assets: Capital assets not being depreciated83,335 -- -- 83,335 16,707,8121,554,600 18,262,412-- Capital assets being depreciated, net Total Non-Current Assets 1,554,60016,791,147 -- 18,345,747 Total Assets 2,514,32721,814,121 112,466 24,440,914 Deferred Outflows of Resources Deferred charge on refunding302,367 -- -- 302,367 Total Deferred Outflows of Resources --302,367 -- 302,367 Liabilities Current liabilities: Accounts payable214,285 11,866 -- 226,151 Accrued liabilities20,570 -- -- 20,570 Customer deposits32,031 -- -- 32,031 Compensated absences23,500 -- -- 23,500 --319,885 -- 319,885 Notes payable Total Current Liabilities 11,866610,271 -- 622,137 Noncurrent liabilities Compensated absences131,231 2,067 -- 133,298 Notes payable4,925,817 -- -- 4,925,817 26,200800 27,000-- Net OPEB obligation Total Noncurrent Liabilities 2,8675,083,248 -- 5,086,115 Total Liabilities 14,7335,693,519 -- 5,708,252 Net Position Net investment in capital assets11,847,812 1,554,600 -- 13,402,412 944,9944,575,157 112,466 5,632,617 Unrestricted Total Net Position$ 2,499,59416,422,969$ 112,466$ 19,035,029$ The accompanying notes are an integral part of these financial statements. 23 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHARGES IN NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Business-type Activities WaterNonmajor FundStormwaterRefuse & RecyclingTotal Operating Revenues Charges for services: Metered water sale4,095,960$ --$ --$ 4,095,960$ Tap fees59,905 -- -- 59,905 Stormwater fees-- 323,363 -- 323,363 -- 480,795 480,795 Refuse & recycling fees-- Total Operating Revenues 323,363 480,795 4,960,023 4,155,865 Operating Expenses Cost of sales and services: Plant production1,368,893 -- -- 1,368,893 Distribution1,157,515 -- -- 1,157,515 Stormwater-- 159,887 -- 159,887 Purchased services-- -- 482,922 482,922 Management services499,785 11,978 7,055 518,818 Administration452,012 -- -- 452,012 Depreciation1,059,500 107,186 -- 1,166,686 Total Operating Expenses 279,051 489,977 5,306,733 4,537,705 Operating Income (Loss) 44,312 (9,182) (346,710) (381,840) Non-Operating Revenues (Expenses) Miscellaneous revenue35,415 -- -- 35,415 Investment earnings13,334 1,261 381 14,976 Interest expense(227,222) -- -- (227,222) Other fiscal charges(17,095) -- -- (17,095) Total Non-Operating Revenues (Expenses) 1,261(195,568) 381 (193,926) Change in Net Position 45,573(577,408) (8,801) (540,636) Net Position - Beginning 2,454,02117,000,377 121,267 19,575,665 Net Position - Ending $ 2,499,59416,422,969$ 112,466$ 19,035,029$ The accompanying notes are an integral part of these financial statements. 24 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Business-type Activities Nonmajor Refuse & WaterStormwater Recycling FundFundFundsTotals Cash Flows from Operating Activities Cash received from customers, governments and other funds4,186,569$ 323,891$ 480,555$ 4,991,015$ Cash paid to suppliers(2,095,649) (275,394) (530,387) (2,901,430) Cash paid to employees(1,255,614) 111,039 -- (1,144,575) Net Cash Provided by (Used in) Operating Activities 159,536835,306 (49,832) 945,010 Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets(94,833) (21,797) -- (116,630) Principal payments on long-term debt(307,868) -- -- (307,868) Interest and fiscal charges paid(204,755) -- -- (204,755) Net Cash Used in Capital and Related Financing Activities (21,797)(607,456) -- (629,253) Cash Flows from Investing Activities Interest received on investments35,502 1,913 832 38,247 Net Cash Provided by Investing Activities 1,913 832 38,247 35,502 Net Increase in Cash and Cash Equivalents 139,652263,352 (49,000) 354,004 809,3934,151,180 149,464 5,110,037 Cash and Cash Equivalents - Beginning 949,0454,414,532 100,464 5,464,041 Cash and Cash Equivalents - Ending Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities Operating income (loss)(381,840) 44,312 (9,182) (346,710) Depreciation 1,059,500 107,186 -- 1,166,686 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable30,704 528 (240) 30,992 Inventories(21,328) 45 -- (21,283) Prepaid items and other assets(24,731) (1,577) (659) (26,967) Increase (decrease) in: -- Accounts payable148,198 7,870 (39,751) 116,317 Accrued liabilities (1,531) -- -- (1,531) Customer deposits1,528 -- -- 1,528 Net OPEB obligation8,200 800 -- 9,000 Compensated absences16,606 371 -- 16,977 Net Cash Provided by (Used in) Operating Activities $ 159,536835,306$ (49,832)$ 945,010$ Noncash Investing Activities Change in fair value of investments(3,847)$ (651)$ (451)$ (4,949)$ Noncash Related Financing Activities Amortization of deferred charge on refunding22,467$ --$ --$ 22,467$ an integral part of these financial statements. The accompanying notes are 25 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2014 Pension Trust Funds Assets Cash and cash equivalents531,777$ Investments, at fair value: Corporate stocks4,629,088 Corporate bonds394,159 Government backed securities407,241 Mutual funds8,169,762 Total investments, at fair value13,600,250 Prepaid items4,388 Contributions receivable120,763 Accrued interest receivable16,752 Total Assets 14,273,930 Liabilities Accounts payable28,974 Due to broker6,872 Total Liabilities 35,846 Net Position Restricted for Pension Benefits $14,238,084 The accompanying notes are an integral part of these financial statements. 26 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Pension Trust Funds Additions Contributions: Employer (including State)748,060$ Employee192,251 Total Contributions 940,311 Investment Earnings Net appreciation in fair value of investments731,794 Interest earnings258,819 Gain on sale of investments176,770 1,167,383 Less investment expenses(72,064) Net Investment Earnings 1,095,319 Total Additions 2,035,630 Deductions Benefits paid72,244 Refunds of contributions47,785 Administrative expenses63,276 Total Deductions 183,305 Net Increase 1,852,325 Net Position Restricted for Pension Benefits 12,385,759 Beginning $14,238,084 Ending The accompanying notes are an integral part of these financial statements. 27 NOTES TO BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES A. DG-WFS ESCRIPTION OF OVERNMENTIDE INANCIAL TATEMENTS The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all non-fiduciary activities of the primary government and any component units (the Village has no component units). All fiduciary funds are presented separately. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other non-exchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. B. RE EPORTING NTITY 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 governed by a five (5) member Council elected at large. Each year, the Council appoints one of its members Mayor, to serve at the pleasure of Council for one year. The Village’s major operations include public safety (police, fire rescue/EMS, building and code enforcement), transportation (streets and roads), leisure services (culture and recreation), water, stormwater, recycling services and general and administrative. The definition of the financial reporting entity is based upon the concept that elected officials are accountable to their constituents for their actions. One of the objectives of financial reporting is to provide users of financial statements with a basis for assessing the accountability of the elected officials. The financial reporting entity consists of the Village, organizations for which the Village is financially accountable and other organizations for which the nature and significance of their relationship with the Village are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The Village is financially accountable for a component unit if it appoints a voting majority of the organization’s governing board and it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the Village. The Village has no component units to report for the fiscal year ending September 30, 2014. C. BP–G-WFS ASIS OF RESENTATION OVERNMENTIDE INANCIAL TATEMENTS While separate government-wide and fund financial statements are presented, they are interrelated. Both sets of statements distinguish between the governmental and business- type activities of the Village. The governmental activities column incorporates data from governmental funds while business-types activities incorporate data from the Village’s enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. 28 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED C. BP–G-WFS() ASIS OF RESENTATIONOVERNMENTIDE INANCIAL TATEMENTS CONTINUED As a general rule, the effect of interfund activity has been eliminated from the government- wide financial statements, Exceptions to this general rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the Village of Tequesta’s water, and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. The Statement of Net Position reports all financial and capital resources of the Village’s governmental and business-type activities. Governmental activities are those supported by taxes and intergovernmental revenues. Business-type activities rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges for goods or services that are recovered directly from customers for services rendered and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. D. BP–FFS ASIS OF RESENTATION UNDINANCIAL TATEMENTS The fund financial statements provide information about the Village’s funds, including its fiduciary funds. Separate statements for each fund category – governmental, proprietary and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Fiduciary funds are presented apart from major and nonmajor funds. The Village reports the following major governmental fund: The General Fund is the Village’s primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. 29 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED D. BP-() ASIS OF RESENTATION FUND FINANCIAL STATEMENTS CONTINUED The Village reports the following major enterprise funds: TheWater Fund, which accounts for the activities of the water utility, which includes the processing and distribution of potable water to Village residents and some surrounding communities, and the Stormwater Utility Fund, which accounts for the construction and maintenance of the Village’s stormwater system. Additionally, the Village reports the following fund type: Thepension trust funds account for the activities of the Public Safety Employees’ and the General Employees’ Pension Trust Funds, which accumulate resources for pension benefit payments to qualified employees. During the course of operations the Village has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in the business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfer in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. E. MFBA EASUREMENT OCUS AND ASIS OF CCOUNTING The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. 30 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED E. MFBA() EASUREMENT OCUS AND ASIS OF CCOUNTING CONTINUED government-widefinancial statements The are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. governmental fundfinancial statements The 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 of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source (within 45 days of year-end). Expenditure-driving grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 45 days of year-end). All other revenue items are considered to be measurable and available only when cash is received by the Village. The proprietary and pension trust funds are reported using the economic resources measurement focus and the accrual basis of accounting for reporting its assets and liabilities. 31 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED F. BI UDGETARY NFORMATION 1. Budgetary Basis of Accounting Annual budgets are adopted on a basis consistent with generally accepted accounting principles. The appropriated budget is prepared by fund, function and department. Per established procedures approved by the Village Council, the designated budget officer may approve a department head‘s request to transfer appropriations between accounts, within a department. Although the Village Council requires all inter-department budget amendments to go before the Village Council, the budget was adopted on a fund basis and the legal level of budgetary control is at that level. What this means is that any amendments that change the total fund’s budget requires the Village Council to approve it in the same manner that the original budget was approved – by resolution. Appropriations in all budgeted funds lapse at the end of the fiscal year even if they have related encumbrances. Encumbrances are commitments related to unperformed (executory) contracts for goods or services (i.e., purchase orders, contracts, and commitments). Encumbrance accounting is utilized to the extent necessary to assure effective budgetary control and accountability and to facilitate effective cash planning and control. While all appropriations and encumbrances lapse at year end, valid outstanding encumbrances (those for which performance under the executor contract is expected in the next year) are re-appropriated and become part of the subsequent year’s budget pursuant to state regulations. G. A,L,DO/IR,N SSETSIABILITIESEFERRED UTFLOWSNFLOWS OF ESOURCES AND ET P/FB OSITIONUNDALANCE 1. Cash and Cash Equivalents The Village’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. 2. Investments Investments for the Village of Tequesta are reported at fair value, except for the position in the State Board of Administration Investment Pool (SBA). The SBA administers Florida PRIME and 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. 32 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED G. A,L,DO/IR,N SSETSIABILITIESEFERRED UTFLOWSNFLOWS OF ESOURCES AND ET P/FB() OSITIONUNDALANCE CONTINUED 2. Investments (continued) During the fiscal year, the Village had investments in the SBA Fund B. On September 5, 2014, the SBA transferred the final portion of the original principal in Fund B to all fund participants as a transfer into Florida PRIME. See Note 3.B for more details. 3. Inventories and Prepaid Items Inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories consist of expendable supplies and water distribution repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 4. Capital Assets Capital assets, which include property, plant, equipment, infrastructure and intangible assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets, except for infrastructure and intangible assets, are defined by the Village as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of two years. For infrastructure and intangible assets the same estimated minimum useful life is used (in excess of two years), but only those projects that cost more than $25,000 are reported as capital assets. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the Village of Tequesta chose not to capitalize infrastructure acquired in fiscal years ending prior to September 30, 2004. As the Village constructs or acquires additional capital assets each period they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or increase its estimated useful life. Donated capital assets are recorded at their estimated fair value at the date of donation. 33 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED G. A,L,DO/IR,N SSETSIABILITIESEFERRED UTFLOWSNFLOWS OR ESOURCES AND ET P/FB() OSITIONUNDALANCE CONTINUED 4. Capital Assets (continued) Interest incurred during the construction phase of capital assets of enterprise funds is included as part of the capitalized value of the assets constructed. The amount of interest capitalized depends on the specific circumstances. There was no interest capitalized in 2014. Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the primary government are depreciated using the straight line method over the following estimated useful lives: Buildins 20 –40 ears gy Improvements 20 –50 years Infrastructure 20 –50 years Machinery and equipment 5 –15 years Intangibles 5 –20 years 5. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement elementrepresents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Village only has one item that qualifies for reporting in this category. It is the deferred charge on refunding reported in the government-wide statement of net position and the statement of net position of the proprietary funds. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. 34 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED G. A,L,DO/IR,N SSETSIABILITIESEFERRED UTFLOWSNFLOWS OR ESOURCES AND ET P/FB() OSITIONUNDALANCE CONTINUED 5. Deferred Outflows/Inflows of Resources (continued) In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Village has only one type of item that qualifies for reporting in this category. The item, revenue collected in advance (deferred revenue at the government-wide level and unavailable at the fund level), includes revenue from two sources: local business taxes ($57,000) and lease revenues ($80,238). These amounts are deferred and recognized as an inflow of resources in the period that the amounts become earned. 6. Net Position Flow Assumption Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources (e.g. restricted bond or grant proceeds). In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Village’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. 7. Fund Balance Flow Assumptions Sometimes the Village will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the Village’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance, Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. 35 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED G. A,L,DO/IR,N SSETSIABILITIESEFERRED UTFLOWSNFLOWS OR ESOURCES AND ET P/FB() OSITIONUNDALANCE CONTINUED 8. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The Village itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. The Village Council is the highest level of decision-making authority for the Village of Tequesta that can, by adoption of an ordinance or resolution (equally binding), which are of equal decision-making authority, prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance or resolution remains in place until a similar action is taken (the adoption of another ordinance or resolution) to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the Village for specific purposes but do not meet the criteria to be classified as committed. The Village Council (Council) has, by adopting a fund balance policy, authorized the Village Manager and/or the Finance Director to assign fund balance. The Council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. H. RE/E EVENUES AND XPENDITURESXPENSES 1. Program Revenues Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions (including special assessments) that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues. 36 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED H. RE/E() EVENUES AND XPENDITURESXPENSESCONTINUED 2. Property Taxes Property tax collections are governed by Chapter 197, Florida Statutes. Property taxes st are based on assessed property value at January 1 as determined by the Palm Beach County Property Appraiser. The Village of Tequesta sets the property tax millage rate in September. The Palm Beach County Tax Collector bills and collects all property taxes levied within the County. Florida Statutes limit the county-wide millage rate to a maximum of 10 mills, excluding voter-approved debt service millage rates. The millage rate for the Village in fiscal year 2014 was 6.050 mills. Tax bills are mailed out November 1st and discounts are available for payment made in the following months; November 4%, December 3%, January 2% and February 1%. Taxes become delinquent st on April 1. The owner of a tax certificate may at any time after taxes have been delinquent (April 1), for two years, file an application for a tax deed sale. Tax deeds are issued to the highest bidder for the property which is sold at public auction. The Tax Collector remits current taxes collected through four distributions to the Village in the first two months of the tax year and one distribution each month thereafter. The Village recognizes property tax revenue in the period in which they are levied. The Tax Collector pays the Village interest on monies held from day of collection to day of distribution. 3. Compensated Absences Vacation The Village’s policy permits employees to accumulate earned but unused vacation benefits, which are eligible for payment upon separation from the Village’s service up to the maximum allowable limit. The liability for such leave is reported as incurred in the government-wide and proprietary fund financial statements. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable. Sick Leave The Village’s policy permits employees to accumulate unused sick leave up to a maximum amount approved by Council. Upon termination, this leave is eligible for payment at percentages determined by years of service. The liability for such leave is reported as incurred in the government-wide and proprietary fund financial statements when the liability has matured. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. 37 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–SSAP() OTEUMMARY OF IGNIFICANT CCOUNTING OLICIES CONTINUED H. RE/E() EVENUES AND XPENDITURESXPENSESCONTINUED 4. Proprietary Funds Operating and Non-operating Revenues and Expenses Proprietary funds distinguish operatingrevenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the water fund, refuse and recycling fund and stormwater fund are charges to customers for sales and services. The water fund also recognizes as operating revenue, the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for the enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. I. UE SE OF STIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. N2–RG-WFFS OTEECONCILIATION OF OVERNMENTIDE AND UNDINANCIAL TATEMENTS A.ECDBGF XPLANATION OF ERTAIN IFFERENCES ETWEEN THE OVERNMENTAL UND BSG-SNP ALANCE HEET AND THE OVERNMENTWIDE TATEMENT OF ET OSITION The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “capital assets used in governmental activities are not financial resources and, therefore are not reported in the funds.” The amount of this reconciling element is $13,189,543 and details are as follows: 38 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N2–RG-WFFS OTEECONCILIATION OF OVERNMENTIDE AND UND INANCIAL TATEMENTS () CONTINUED A.ECDBGF XPLANATION OF ERTAIN IFFERENCES ETWEEN THE OVERNMENTAL UND BSG-SNP ALANCE HEET AND THE OVERNMENTWIDE TATEMENT OF ET OSITION () CONTINUED Land634,017$ Construction in progress67,604 Buildings8,043,526 Less: accumulated depreciation-buildings(2,123,006) Improvement other than buildings 2,385,930 Less: accumulation depreciation (1,017,725) Machinery, equipment and vehicles3,862,270 Less: accumulated depreciation - machinery, equipment, and vehicles(2,807,782) Infrastructure4,544,085 Less: accumulated depreciation - infrastructure(507,415) Intangibles201,377 Less: accumulated depreciation - intangibles(117,261) Other K-925,763 Less: accumulated depreciation - K-9(1,840) Net Adjustment to Increase Fund Balance- Total Governmental Funds to Arrive at Net Position - Governmental Activities$13,189,543 The final element of that reconciliation explains that “long-term liabilities, including bonds/notes payable, are not due and payable in the current period and therefore are not reported in the funds.” The details of this $3,578,906 difference are as follows: Note payable2,519,635$ Capital leases385,059 Compensated absences484,212 Other post-employment benefits190,000 Net Adjustment to Reduce Fund Balance - Total Governmental Funds to Arrive at Net Position – Governmental Activities$3,578,906 39 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF OTEETAILED OTES ON LL CTIVITIES AND UNDS CDFI ASHEPOSITS WITH INANCIAL NSTITUTION Custodial credit risk-deposits. In the case of deposits, this is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. All of the Village’s deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280, Florida Security for Public Deposits Act. Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral of the depository to be held subject to his or her order. The pledging level may range from 25% to 200% of the average monthly balance of public deposits depending upon the depository’s financial condition and establishment period. All collateral must be deposited with an approved financial institution. Any potential losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. At September 30, 2014, none of the Village’s primary bank balances were exposed to custodial credit risk. I NVESTMENTS The Village has adopted an investment policy in accordance with Florida Statutes and is authorized to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, certificates of deposit, the State Board of Administration Investment Pool, any intergovernmental investment pools authorized pursuant to Chapter 163 of the Florida Statutes, SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency, and securities of any interest in any open-end or closed- end management type investment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio is limited to obligations of U.S. government, its agencies and instrumentalities and to repurchase agreements fully collateralized by such U.S. government obligations and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. The State Board of Administration (SBA) administers the Florida PRIME investment pool which is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes. The Florida PRIME is not a registrant with the Securities and Exchange Commission (SEC); however, the Board has adopted operating procedures consistent with the requirements for a 2a-7-like fund, which permits money market funds to use amortized cost to maintain a constant net asset value (NAV) of $1 per share. As a participant, the Village invests in a pool of investments owning a share of the pool, not the underlying securities. The fair value of the position in the Florida PRIME is equal to the value of the pool shares. The investments in the Florida PRIME are not insured by FDIC or any other governmental agency. 40 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Prior to September 5, 2014, the SBA administered, and the Village participated in, the Fund B “reserve” account (a participant in the Fund B Surplus Funds Trust Fund acting as subordinated equity). Due to the lack of an actively traded market for Fund B securities, the “fair value” was an estimate of the liquidation value that was determined through a collaborative process among various pricing experts and sources in the marketplace. On September 5, 2014, the SBA transferred the final portion of the original principal in Fund B to all fund participants as a transfer into Florida PRIME. On September 26, 2014 the SBA completed the sale of all remaining Fund B collateral assets, which will continue to be invested in an SEC-registered 2a-7 money market fund until the transfer back to Florida PRIME. The Fund B Trust Fund will continue to hold the remaining reserve until directed by the SBA Trustees to distribute to Florida PRIME, which is expected to occur sometime in the first quarter of 2015. The final amount to be transferred is uncertain, but will not be retained as a new reserve fund. Rather, the final distribution will be based on the average account balance at the time of the final distribution. Until that time, the Village will report an estimate of the amount of distribution (based upon the difference between the NAV value of Fund B prior to September 5, 2014, and the original principal) distributed as other assets. As of September 30, 2014, the Village of Tequesta had the following demand deposits and investments: Weighted Credit Average Rating Percent Deposits and Investments Fair Value Maturity(S&P)Distribution Demand Deposits9,104,542$96.8% SBA-Florida PRIME298,76339 days3.2% AAAm Total Investments298,763 Total Deposits and Investments $ 100%9,403,305 Interest Rate Risk The Village manages its exposure to declines in fair values by limiting the weighted average maturity of its investments portfolio to less than five years. The Village doesn’t have a formal policy related to a specific investment related risk. 41 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Credit Risk This is the risk that a debt issuer will not fulfill its obligations. The Village limits credit risk by requiring investments be limited to specific securities and short-term obligations of U.S. corporations that are rated at one of the three highest classifications as established by a nationally recognized statistical rating organization. Concentration of Credit Risk At this time the Village is invested in the SBA investment pool which represents 3% of total deposits and investments. Custodial Credit Risk-Investments Is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. At this time, the Village is only invested in the State Board of Administration of Florida (SBA) investment pool. Investments – Public Safety Pension Trust Fund Investment Policy Statement The Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board’s intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the Investment Manager feels that the specific objectives defined in the statement cannot be met, or the guidelines constrict performance, the Investment Manager will present a formal modified investment policy statement to the Board of Trustees at a meeting for the Board’s review. Once the Board has adopted, the new investment policy goes into effect 31 days after it has been filed with the State of Florida and the Village of Tequesta. There were no changes to the Investment Policy Statement for the fiscal year ending September 30, 2014 and the investments of the Public Safety Pension Trust Fund were in compliance with the investment policy. 42 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Investments – Public Safety Pension Trust Fund (continued) As of September 30, 2014, the Village of Tequesta’s Public Safety Pension Trust Fund had the following demand deposits and investments: Percent Percent of Fair Value DistributionNet Position Cash10,029$ 0.09% 0.00% Short Term Investments418,695 3.88% 3.84% Mutual Funds - Fixed Income3,614,982 33.49% 33.19% Corporate stocks2,765,951 25.63% 25.39% Exchange Traded Fund - Equities21,270 0.20% 0.20% Mutual Funds - Equities3,962,905 36.71% 36.38% Total $ 10,793,832 100.00% 99.00% Public Safety Pension Trust Fund Target Allocation Target Asset Class Range Allocation Domestic Equity 50%40%-60% International Equity 15%10%-25% Total Equities 65%60%-70% Domestic Core Fixed Income 30%25%-40% 0%-10% Diversified Fixed Income 5% Total Fixed Income 35%30%-50% 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. The Plan does not have a formal policy relating to interest rate risk, however: The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. At September 30, 2014, there were no direct investments in debt instruments. However, there were investments in mutual funds that included debt instruments in their portfolio. 43 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Public Safety Pension Trust Fund Target Allocation (continued) Credit Risk Is the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that: Fixed income investments must hold a rating in one of the four highest classifications by a major rating service. Equities must be traded on a national exchange. Money market investments must hold a minimum rating of Standard & Poor’s A1 or Moody’s P1. Concentration of Credit Risk Is the risk of loss attributed to the magnitude of an investment in a single issuer. The investment policy limits exposure to this risk by: Limiting investments in common stock, capital stock or convertible stock of any one issuing company or aggregate of any one issuing company to 5% of the outstanding capital stock of the company. Limiting the value of corporate bonds issued by any single corporation to not more than 5% of the total fund. Limiting investments in corporate common stock and convertible bonds (not exceed 70% of the fund assets at fair value). Mortgage-backed securities issued by non- government entities are limited to 15% of the fixed income portfolio. Limiting investments in foreign securities (not exceed 15% of the value at cost of the fund). Rate of Return For the fiscal year ended September 30, 2014, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 7.46%. The money- weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. Inputs to the internal rate of return calculation are determined on a monthly basis. Custodial Credit Risk-Investments Is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan’s investment policy limits exposure to this risk by: Requiring all securities to be held with a third party custodian. 44 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Public Safety Pension Trust Fund Target Allocation (continued) Custodial Credit Risk-Investments Requiring security transactions between a broker/dealer and the custodian involving the purchase or sale of securities by transfer of money or securities are made on a “delivery vs. payment” basis to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. Investments – General Employees’ Pension Trust Fund Investment Policy Statement The Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board’s intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the Investment Manager feels that the specific objectives defined in the statement cannot be met, or the guidelines constrict performance, the Investment Manager will present a formal modified investment policy statement to the Board of Trustees at a meeting for the Board’s review. Once the Board has adopted, the new investment policy goes into effect 31 days after it has been filed with the State of Florida and the Village of Tequesta. There were no changes to the Investment Policy Statement for the fiscal year ending September 30, 2014 and the investments of the General Employees’ Pension Trust Fund were in compliance with the investment policy. 45 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Public Safety Pension Trust Fund Target Allocation (continued) Investment Policy Statement (continued) At September 30, 2014, the Village of Tequesta’s General Employees’ Pension Trust Fund had the following demand deposits and investments: Weighted Credit Percent Percent Average Rating of Net Distribution Maturity(Moody)Position Fair Value Cash1,277$ 0.04%0.04% Short Term Investments101,776 3.05%3.04% Corporate Bonds1.82 years Bonds24,897 A10.75%0.74% Bonds37,883 Ba11.13%1.13% Bonds107,778 Baa13.23%3.22% Bonds141,781 Baa24.25%4.24% Bonds81,820 Baa32.45%2.44% ETF - Exchange Traded Fund 259,464 7.77%7.75% U.S. Agencies/Treasuries407,241 2.39 yearsAaa12.20%12.17% Mutual Funds 591,875 17.73%17.68% Corporate stocks1,582,403 47.40%47.28% Total$ 100.00%3,338,19599.73% Target Allocations In order to provide for a diversified portfolio, the Board has engaged investment professionals to manage and administer funds. The Board has established the following asset allocation targets for the total pension trust fund: 46 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED General Employees' Pension Trust Fund Target Allocation Target Range Asset Class Allocation Domestic Equity 40%-60% 50% 15% International Equity10%-25% Total Equities 65%50%-70% Domestic Core Fixed Income 25%-40% 30% 5% Diversified Fixed Income 0%-10% Total Fixed Income 35%30%-50% 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. The Plan does not have a formal policy relating to interest rate risk, however; The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. At September 30, 2014, the weighted average maturity in years for each investment type is included in the preceding table and ranges from 1.82 to 2.39. Credit Risk The Plan limits exposure that a debt issuer will not fulfill its obligations by limiting investments made or held in the fund to: Obligations issued by the U.S. Government or obligations guaranteed as to principal and interest by the U.S. government or by an agency of the U.S. Government; Bonds, stocks, or commingled funds administered by national or state banks, or other evidences or indebtedness, issued or guaranteed by a corporation organized under the laws of the United States, any state or organized territory of the United States, or District of Columbia provided that the securities meet the following ranking criteria: Fixed income investments holding a rating in one of the four highest classifications o by a major rating service. Equities that are traded on a National Exchange. o 47 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Investments – General Employees’ Pension Trust Fund (continued) Concentration of Credit Risk The Plan’s investment policy limits exposure to this risk by: Limiting investments in common stock or capital stock of any one issuing company or aggregate of any one issuing company to 5% of the outstanding capital stock of the company. Limiting the value of bonds issued by any single corporation not exceed 10% of the total fund. Limiting investments in corporate common stock and convertible bonds not exceed 70% of the fund assets at fair value. Limiting investments in foreign securities not exceed 25% of the fair value of the fund. Rate of Return For the year ended September 30, 2014, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 9.73%. The money- weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. Inputs to the internal rate of return calculation are determined on a monthly basis. Custodial Credit Risk The Plan’s investment policy limits exposure to this risk by: Requiring all securities to be held by a third party custodian in the name of the Plan. As of September 30, 2014, the Plan’s investment portfolio was held with a third-party custodian. Requiring securities transactions between a broker-dealer and the custodian involving purchase or sale of securities by the transfer of money or securities to be made on a “delivery vs. payment” basis to ensure that the custodian will have the security or money in hand at the conclusion of the transaction. 48 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED B. I() NVESTMENTS CONTINUED Investments – General Employees’ Pension Trust Fund (continued) Foreign Currency Risk Exposure to foreign currency risk is low as; Foreign investments are through ADR’s (shares listed in the U.S.), Mutual funds (registered in the U.S.), or Yankee bonds (traded in U.S. dollars). The investment policy permits a maximum of 25% of the fair value of the fund securities to be invested in foreign securities. At September 30, 2014, 6.6% of the fair value of the fund was invested in foreign securities. At September 30, 2014, the investments of the General Employees’ Pension Trust Fund were in compliance with the investment policy. * See Note F. Pension obligations, for additional information on the Village’s pension plans. C. R ECEIVABLES Below is the detail of receivables for the general, water, and nonmajor fund including the applicable allowances for uncollectible accounts: Storm-Nonmajor GeneralWaterFundTotalwater Accounts179,469$ 377,615$ --$ 2,649$ 559,733$ Intergovernmental184,594 457 1,868 2,595 189,514 Other taxes57,954 -- -- -- 57,954 Gross receivables422,017 378,072 1,868 5,244 807,201 Less: allowance for uncollectibles(17,280) (2,879) -- -- (20,159) Net Total Receivables 375,193$ 1,868$ 5,244$ 787,042$ $404,737 49 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED D. CA APITAL SSETS Capital assets activity for the fiscal year ended September 30, 2014, was as follows: BeginningEnding BalanceAdditionsDeductionsBalance Governmental Activities: Capital assets not being depreciated: Land634,017$ --$ --$ 634,017$ Construction in progress10,710 67,604 (10,710) 67,604 Total Capital Assets Not Being Depreciated 67,604644,727 (10,710) 701,621 Capital assets being depreciated: Buildings8,043,526 -- -- 8,043,526 Improvements other than buildings2,385,930 -- -- 2,385,930 Infrastructure4,544,085 -- -- 4,544,085 Machinery & Equipment3,100,967 761,303 -- 3,862,270 Intangible201,377 -- -- 201,377 Other K-9-- 25,763 -- 25,763 Total Capital Assets Being Depreciated 787,06618,275,885 -- 19,062,951 Less accumulated depreciation for: Buildings(1,921,918) (201,088) -- (2,123,006) Improvements other than buildings(906,035) (111,690) -- (1,017,725) Infrastructure(399,819) (107,596) -- (507,415) Machinery & Equipment(2,569,489) (238,293) -- (2,807,782) Intangibles(83,614) (33,647) -- (117,261) Other K-9-- (1,840) -- (1,840) Total Accumulated Depreciation (694,154)(5,880,875) -- (6,575,029) Total Capital Assets Being Depreciated, Net 92,91212,395,010 -- 12,487,922 Governmental Activity Capital Assets, Net $ 160,51613,039,737$ (10,710)$ 13,189,543$ 50 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED D. CA() APITAL SSETSCONTINUED Depreciation expense was charged to the functions/programs of the governmental activities of the primary Village as follows: Governmental Activities General government125,401$ Public safety326,964 Transportation166,563 Leisure services75,226 Total Depreciation Expense - Governmental Activities $694,154 BeginningEnding BalanceAdditionsDeductionsBalance Business-Type Activities Capital assets not being depreciated: Land83,335$ $ --$ -- 83,335$ Total Capital Assets Not Being Depreciated 83,335 -- -- 83,335 Capital assets being depreciated: Buildings979,512 -- -- 979,512 Improvements other than buildings58,720 -- -- 58,720 Infrastructure32,596,833 -- -- 32,596,833 Machinery and equipment1,593,273 116,630 -- 1,709,903 Total capital assets being depreciated35,228,338 116,630 -- 35,344,968 Less accumulated depreciation for: Buildings(610,295) (20,429) -- (630,724) Improvements other than buildings(15,267) (2,349) -- (17,616) Infrastructure(14,386,065) (984,356) -- (15,370,421) (159,552) -- (1,063,795) Machinery and equipment(904,243) Total Accumulated Depreciation (1,166,686)(15,915,870) -- (17,082,556) Total Capital Assets Being Depreciated, Net 19,312,468 (1,050,056) -- 18,262,412 Business-Type Activities Capital Assets, Net$ 19,395,803 (1,050,056)$ --$ 18,345,747$ 51 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED E. AL CCRUED IABILITIES Accrued liabilities reported by governmental funds at September 30, 2014, were as follows: Total GeneralGovernmental FundFunds Salary and employee benefits231,249$ 231,249$ Other48,643 48,643 Total Accrued Liabilities$279,892 279,892$ F. PO ENSION BLIGATIONS Florida Retirement System - a Statewide Local Government Employees’ Retirement System (SLGERS) Plan Description. 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. 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, 2014. 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://myfrs.com. Funding Policy. Contribution requirements of employers and employees and the amendment of those requirements are governed by Florida statutes. Plan members, with the exception of DROP participants, contribute 3% of their annual covered salary. Employer contribution rates are actuarially determined based upon membership tier and plan provisions. Contribution rates are established by State law and are expressed as a percentage of covered payroll. The employer contribution rates by job class for the 52 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Florida Retirement System - a Statewide Local Government Employees’ Retirement System (SLGERS) (continued) Village’s employees at September 30, 2014 were as follows: regular employees – 6.07%, special risk employees – 18.52% and employees participating in the Deferred Retirement Option Program (DROP) – 12.28%. The regular and special risk employees’ rates include 1.26% for the employer Health Insurance Subsidy contribution and 0.04% for an administrative fee. The DROP rate includes the 1.26% Health Insurance Subsidy contribution but the 0.04% administrative fee does not apply to DROP participants. The Village’s contributions to the FRS for the fiscal years ended September 30, 2014, 2013 and 2012 were $70,577, $69,032 and $67,295, respectively, which were equal to 100 percent of the required contributions for each fiscal year. The Village of Tequesta Single Employer Defined Benefit Pension Plans Plan Description.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). The Public Safety Officers’ Pension Trust Fund receives contributions that may not be used to pay benefits of all employee classes, therefore, two separate trust funds, the Firefighters’ Pension Trust Fund (FPTF) and the Police Officers’ Pension Trust Fund (PPTF) are reflected in the financial statements. The General Employee’s Plan is also reflected as a separate pension trust fund in the financial statements. Effective February 1, 2013, the PPTF is not available to new employees. Police officers, who begin work with the Village after February 1, 2013 will be able to participate in a defined contribution plan. Summary of Significant Accounting Policies – Basis of Accounting and Valuation of Investments. The pension trust funds are reported on the accrual basis of accounting. Plan member and state contributions are recognized as revenues in the period that the contributions are due. Employer contributions to each Plan are recognized when due and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. All plan investments are reported at fair value 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. Securities without an established fair value are reported at estimated fair value. Purchases and sales of securities are recorded on a trade-date basis. 53 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED The Village of Tequesta Single Employer Defined Benefit Pension Plans (continued) Funding Policies are presented below under each of the plans. Current Membership in each of the three Plans consisted of the following at September 30, 2014: FPTFPPTFGPTF Covered Group Active plan members16 7 40 Inactive plan members entitled to, but not yet receiving benefits1 2 2 Inactive plan members or beneficiaries currently receiving benefits3 2 1 Total 20 11 43 Actuarial Assumptions: Annual Pension Cost (APC), Net Pension Asset (NPA) and Net Pension Liability (NPL) The Village’s current contributions were determined through actuarial valuations performed as of October 1, 2012. The total pension liability was determined using an actuarial valuation date of October 1, 2013 with the following actuarial assumptions, applied to all prior periods included in the measurement; Public Safety Officers' Pension Fund PoliceGeneral Employees' Firefighters'Officers'Pension Fund Valuation Date: 10/1/201310/1/201310/1/2013 Note: Actuarially determined contribution rates are calculated as of October 1, which is one year prior to the end of the fiscal year in which contributions are reported. 54 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Actuarial Assumptions: Annual Pension Cost (APC), Net Pension Asset (NPA) and Net Pension Liability (NPL) (continued) Public Safety Officers' Pension Fund PoliceGeneral Employees' Firefighters'Officers'Pension Fund Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost MethodEntry Age NormalEntry Age NormalAggregate Method Amortization MethodLevel Dollar, ClosedLevel Dollar, ClosedN/A Remaining Amortization Period2020N/A Asset Valuation Method5-Year smoothed market5-Year smoothed market5-Year smoothed market Inflation3.0%3.0%4.0% Salary Increases6.0%, including inflation6.0%, including inflation6.0%, including inflation Investment Rate of Return7.5%7.5%7.5% Retirement Age100% when first eligible for Normal Retirement of DROP entry Mortality RP-200 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years using Scale AAA Other Information Notes: See Discussion of Valuation Results in the October 1, 2013 Actuarial Valuation Report * The aggregate actuarial cost method was used to determine the annual required contribution of the employer for the General Employees’ Pension Fund for the 2014 fiscal year. This allocation is performed for the group as a whole, not as a sum of individual allocations. The portion of this Actuarial Present Value allocated to a specific year is called the employer Normal Cost. Under this method, actuarial gains and losses, plan amendments, and changes in actuarial assumptions and methods reduce or increase future Normal Costs. 55 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Actuarial Assumptions: Annual Pension Cost (APC), Net Pension Asset (NPA) and Net Pension Liability (NPL) (continued) The Village’s 2014 annual pension cost and net pension asset for each Plan are shown below. PoliceGeneral Firefighters’Officers’Employees' Annual required contribution (ARC)416,665$ 111,164$ 184,627$ Interest on net pension asset (NPA)(12,735) (11,395) (10,619) Adjustment to ARC(19,159) (17,256) (17,322) Annual pension cost 423,089 117,025 191,330 Contributions made422,107 111,164 184,627 (Increase) decrease in NPA982 5,861 6,703 Net Pension Asset - Beginning(169,804) (151,927) (141,585) $ (146,066)(168,822)$ (134,882)$ - Ending Net Pension Asset Net Pension Liability The components of the net pension liability at September 30, 2014 were as follows: Police General Firefighters'Officers'Employees' Total Pension Liability8,755,066$ 2,736,489$ 3,091,288$ Plan Net Positio n 3,066,9447,824,203 3,346,937 eenson aysse $930,863$(330,455)$(255,649) NtPiLibilit(At) Plan Net Position as a % of Total Pension Liability 89.37%112.08%108.27% 56 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Actuarial Assumptions: Annual Pension Cost (APC), Net Pension Asset (NPA) and Net Pension Liability (NPL) (continued) Actuarial Assumptions The total pension liability (asset) was determined by an actuarial valuation as of October 1, 2012, rolled forward to September 30, 2014, using the following actuarial assumptions, applied to all periods included in the measurement: 5.86% per annum (2.00% per annum is attributable to long-term Discount rate: inflation); this rate was used to discount all future benefit payments. Salary increases:Not applicable Cost-of-living increases:None assumed Mortality basis: Sex-distinct rates set forth in the RP-2000 Mortality Table for annuitants, projected to 2013 by Scale AA, as published by the Internal Revenue Service (IRS) for purposes of Internal Revenue Code (IRC) section 430; future generational improvements in mortality have not been reflected. Retirement:Not applicable Other decrements:None assumed Form of payment:Future retirees are assumed to select the 10-year certain and life annuity form of payment. Non-investment expenses:Projected liability has been loaded by 20.00% to account for anticipated administrative expenses. Future contributions:Contributions from the employer are assumed to be made as legally required. Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of September 30, 2014 are summarized in the following table: 57 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Actuarial Assumptions (continued) Long-Term Expected Asset ClassReal Rate of Return Domestic equity7.5% International equity8.5 Fixed income2.5 Single Discount Rate A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments (7.50%) was applied to all periods of projected benefit payments to determine the total pension liability. Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher: Current Single Discount Rate 1% Decrease1% IncreaseAssumption 6.50%8.50%7.50% Firefighters'2,045,475$ 930,863$ (1,423)$ Police Officers'62,212 (330,455) (653,552) General Employees'181,729 (255,649) (616,133) 58 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Annual Pension Cost (APC) and Net Pension Asset (NPA) Three Year Trending. The Village of Tequesta’s APC, percentage of APC contributed and NPA for the pension plans, for the current year and each of the two preceding years were as follows: Three-Year Trend Information AnnualPercentageNet Pension Pensionof APCObligation Fiscal Year EndingCost (APC)Contributed(Asset) Firefighters' Retirement System September 30, 2012409,961$ 99.0%(142,665)$ September 30, 2013383,005 107.1%(169,804) September 30, 2014423,089 99.8%(168,822) Police Officers' Retirement System September 30, 2012208,681 97.6%(132,471) September 30, 2013150,143 113.0%(151,927) September 30, 2014117,025 95.0%(146,066) General Employees' Retirement System September 30, 2012175,447 97.6%(147,878) September 30, 2013188,587 96.7%(141,585) September 30, 2014191,330 96.5%(134,882) 59 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Funded Status and Funding Progress The funded status of the Plans as of October 1, 2013, the most recent actuarial valuation date, is as follows: Actuarial AccruedUAAL as ActuarialLiabilityUnfundeda % of Value(AAL) -AALFundedCoveredCovered AssetsEntry Age(UAAL) RatioPayrollPayroll (a)(b)(b) - (a)(a) / (b)( c)((b - a) / c) Public Safety Pension Fund: Fire6,861,939$ 8,082,747$ 1,220,808$ 84.9%1,450,827$ 84.1% Police2,688,884 2,038,883 (650,001) 131.9%509,217 -127.6% General Employees' Pension Fund* 2,944,7403,180,312 (235,572) 108.0%2,345,459 -10.0% * 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. 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 the plan assets are increasing or decreasing over time relative to the AALs for benefits. Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) PSEPP Plan Description: The PSEPP is administered by a five-member Board of Trustees and 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. As of February 1, 2013 the PPTF portion of the Public Safety Officers’ Trust Fund was closed to new hires. As a result, no state contributions from Florida Statutes Chapter 185 will be received as a contribution to the PPTF portion of the Public Safety Officers’ Trust Fund after calendar year 2013. 60 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) 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’s 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/her 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/her 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. 61 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) If the firefighter or police officer dies or terminates employment with less than six years of credited service, he/she is entitled to a refund of the money he contributed. All retirees and beneficiaries receiving pension benefits will be paid a monthly supplemental benefit equal to $20 per month for each year of the member’s Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. Deferred Retirement Option Program Plan members who are age 55 with 6 years of credited service; or age 52 with 25 years of credited service may make a written election to participate in the Deferred Retirement th Option Plan (DROP) before the 27 year of employment. The member’s credited service and AFC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen credited service and AFC. The maximum DROP period is the earlier of 5 years of participation in the DROP or 30 th years of employment. The member’s DROP account is credited on September 30 of each year with investment earnings or losses at the same rate earned by the pension fund less any administrative expenses. The amount in the DROP account at September 30, 2014 is $346,206. There is no COLA associated with this account and the normal form of benefit is a lump sum although other options are available. Funding Policy. The contribution requirements of plan members and the Village are established and may be amended by the Village Council. Plan members, with the exception of DROP participants, are required to contribute 5% of their annual covered salary. The Village is required to contribute at an actuarially determined rate. The current employer contribution rate for fiscal year ending September 30, 2014is 21.47% for police officers and 26.72% for firefighters. Additionally, 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 remitted to the Plan. The amount of insurance premium taxes collected and remitted to the plan totaled $100,617 for fiscal year ending September 30, 2014. 62 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) Firefighters’ Pension Trust Fund The (part of the PSEPP) does not issue separate stand- alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2014. FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2014 Assets Cash and cash equivalents305,878$ Investments7,415,946 Prepaid items1,678 Contributions receivable110,087 Interest receivable4,707 Total Assets 7,838,296 Liabilities Accounts payable9,526 Due to broker4,567 Total Liabilities 14,093 Net Position Restricted for Pension Benefits $7,824,203 63 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Additions Contributions518,072$ Investment earnings567,786 Total Additions 1,085,858 Deductions Benefits paid53,637 Administrative expenses18,921 Total Deductions72,558 Net Increase 1,013,300 Net Position Restricted for Pension Benefits 6,810,903 Beginning Ending7,824,203$ 64 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED F. PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) Police Officers’ Pension Trust Fund The (part of the PSEPP) does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2014. POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2014 Assets Cash and cash equivalents122,846$ Investments2,949,162 Prepaid items1,678 Contributions receivable2,522 Interest receivable1,563 Total Assets 3,077,771 Liabilities Accounts payable9,011 Due to broker1,816 Total Liabilities 10,827 Net Position Restricted for Pension Benefits $3,066,944 65 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Public Safety Employees’ Pension Plan (PSEPP) (continued) POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Additions Contributions137,052$ Investment earnings219,219 Total Additions 356,271 Deductions Benefits paid10,073 Refunds of contributions43,331 Administrative expenses18,677 Total Deductions 72,081 Net Increase 284,190 Net Position Restricted for Pension Benefits 2,782,754 Beginning $3,066,944 Ending Village of Tequesta General Employees’ Pension Plan (GEPP) Plan Description The General Employees’ Pension Trust Fund is a single employer defined benefit plan administered by a five member Board of Trustees that 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 66 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED PO() ENSION BLIGATIONS CONTINUED Village of Tequesta General Employees’ Pension Plan (GEPP) (continued) Plan Description (continued) 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: 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/her average monthly compensation as of his disability retirement date, or (b)An amount equal to the number of years of his/her 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/her average monthly compensation based on his final five (5) years of service, or (b)An amount equal to the number of years of his/her 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, the 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, the employee is entitled to a refund of the money 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, 2014 determined using the actuarial valuation dated October 1, 2013 were 9.09% of covered payroll. The Village is required to contribute the remaining amount necessary to finance the benefits based on an actuarially determined amount. 67 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED PO() ENSION BLIGATIONS CONTINUED Village of Tequesta General Employees’ Pension Plan (GEPP) (continued) General Employees’ Pension Trust Fund The does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the year ended September 30, 2014. GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2014 Assets Cash and cash equivalents103,053$ Investments3,235,142 Contributions receivable8,154 Interest receivable10,482 Prepaid items1,032 Total Assets3,357,863 Liabilities Accounts payable10,437 Due to broker489 Total Liabilities 10,926 Net Position Restricted for Pension Benefits$3,346,937 68 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED PO() ENSION BLIGATIONS CONTINUED Village of Tequesta General Employees’ Pension Plan (GEPP) (continued) GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Additions Contributions285,187$ Investment earnings308,314 Total Additions 593,501 Deductions Benefits paid8,534 Refunds of contributions4,454 Administrative expenses25,678 Total Deductions 38,666 Net Increase 554,835 Net Position Restricted for Pension Benefits 2,792,102 Beginning $3,346,937 Ending Village of Tequesta Defined Contribution Pension Plan The Village of Tequesta’ Single Employer Defined Contribution Pension Plan (the Plan) was established on February 1, 2013 with and effective date of March 1, 2013. The Plan is a 401(a) money purchase plan in the form of The ICMA Retirement Corporation Governmental Money Purchase Plan and Trust with assets of the Plan held in trust for the exclusive benefit of the Plan participants and their beneficiaries. The assets shall be invested in the VantageTrust, and shall not be diverted to any other purpose. The employer’s beneficial ownership of Plan assets held in the VantageTrust shall be held for the further exclusive benefit of the Plan participants. The Village Manager is the coordinator for the Plan and is authorized to execute all necessary agreements with the ICMA Retirement Corporation incidental to the administration of the Plan. The Village serves as Trustee under the Plan. 69 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED PO() ENSION BLIGATIONS CONTINUED Village of Tequesta Defined Contribution Pension Plan (continued) In a defined contribution plan, benefits depend solely on amounts contributed to the Plan plus investment earnings. The Plan covers Police officers hired after February 1, 2013. Employees must designate a mandatory participation contribution between the range of 0 to 5% for the Plan year as a condition of participation in the Plan. The participant shall not have the right to discontinue or vary the rate after becoming a Plan participant. Newly eligible employees have an election window of 30 days from the date of eligibility to make the election to participate in the mandatory contribution portion of the Plan which will begin the first of the month following the end of the election window. This election is irrevocable and remains in force until the employee terminates employment or ceases to be eligible to participate in the Plan. The Village is required to match employee contributions up to a maximum contribution of 5%. Employees are immediately vested in the Plan. Plan provisions are established and may be amended by the Village of Tequesta. The Village does not hold or administer resources of the Plan and consequently, the Plan does not meet the requirements for inclusion in the Village’s financial statements. The Plan does not issue a stand-alone financial report. The fair value of the plan assets at September 30, 2014 was $68,663. Employee contributions to the Plan for fiscal year ended September 30, 2014 were $27,801; the City’s contribution was $21,449. OPB(OPEB)O THER OSTEMPLOYMENT ENEFIT BLIGATIONS Village of Tequesta’s Other Postemployment Benefits Plan Plan Description. The Village provides an optional single employer defined benefit post- employment healthcare plan to eligible individuals. The plan allows its employees and their beneficiaries, at their own cost, to continue to obtain health, dental and other insurance benefits upon retirement. The benefits of the plan conform to Florida Statutes, which are the legal authority for the plan. The plan has no assets and does not issue a separate financial report. 70 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED OPB(OPEB)O() THER OSTEMPLOYMENT ENEFIT BLIGATIONS CONTINUED Village of Tequesta’s Other Postemployment Benefits Plan (continued) Funding Policy. The Village does not directly make a contribution to a health plan on behalf of retirees. However, retirees and their beneficiaries can purchase from the Village’s healthcare provider the same health plan, at the same group rates as are charged to the Village for active employees. Under GASB Statement No. 45, the Village is required to calculate an offset to the cost of these benefits as an employer contribution, based upon an implicit rate subsidy prepared by the Village’s actuary. This offset equals the total age-adjusted costs paid by the Village for its active employees for coverage of the retirees and their dependents for the year net of the retiree’s own payments for the year. The annual other post employment benefit cost is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the current cost of the benefit. Any unfunded actuarial liabilities are amortized over a period not to exceed thirty years. The annual OPEB cost for the Village for the current year and the related information for the fiscal year ended September 30, 2014 is as follows: Required Contribution Rates EmployerPay-as-you-go Plan membersN/A Annual OPEB Cost FY 2014 Annual Required Contribution (ARC)63,000$ Interest on Net OPEB Obligation7,000 Adjustment to ARC(15,000) Total Annual OPEB Cost55,000$ Net OPEB Obligation Annual OPEB Cost55,000$ Employer Contributions(14,000) * Increase in the Net OPEB Obligation41,000 Net OPEB Obligation (beginning of year)176,000 $217,000 Net OPEB Obligation (end of year) * reflects a contribution credit for the implied subsidy 71 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED OPB(OPEB)O() THER OSTEMPLOYMENT ENEFIT BLIGATIONS CONTINUED Village of Tequesta’s Other Postemployment Benefits Plan (continued) The funded status of the Plan as of October 1, 2014, the most recent actuarial valuation date is as follows: ctuaraUnfunded UAAL As % Ail une Actuarial Accrued AAL of Covered Fdd Value of liability (UAAL) (2) - Ratio Covered Payroll Assets(AAL)(1)(1) / (2)Payroll(3) / (4) $ 380,000--$ 380,000$ 0.0%5,218,000$ 7.3% Three-Year Trend Information FiscalAnnualPercentage of AnnualNet OPEB Year EndOPEB CostOPEB Cost ContributedObligation 2012N/A0%176,000$ * 2013N/A0%176,000 * 2014$63,00022%217,000 * In fiscal years ending September 30, 2012 and 2013, the Village changed to a high deductible health plan which resulted in retirees declining to purchase the Village's health insurance and consequently the Village recognized no annual OPEB cost in those years. Subsequently, the Village elected to offer a traditional health insurance package resulting in new retirees electing to purchase health insurance through the Village's plan and the Village incurring and reporting an annual OPEB cost in the fiscal year ending September 30, 2014. COSC ONSTRUCTION AND THER IGNIFICANT OMMITMENTS Construction Commitments The Village had no significant construction commitments as of September 30, 2014. 72 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED COSC() ONSTRUCTION AND THER IGNIFICANT OMMITMENTS CONTINUED Inter-Local Agreement On December 20, 1994, the Village entered into an Inter-local agreement with Palm Beach County. Per the agreement, Palm Beach County provided for partial funding, land acquisition and design and construction of a branch library within Tequesta. Upon completion of the project, the library was leased to Palm Beach County for 50 years for an annual rent of one dollar. In the event the Village terminates the lease before the end of 50 years, the Village must reimburse Palm Beach County a depreciated value using a useful life of 25 years based on an initial value of $405,000 calculated on a straight-line basis. Contracted Services – Refuse and Recycling Collection The Village entered into a solid waste and recyclable collection agreement with Waste Management Inc. of Florida on September 13, 2007 for a period of five years beginning October 01, 2007 and expiring September 30, 2013. With this agreement the Village granted Waste Management the exclusive franchise for solid waste collection of residential, commercial, industrial and roll-off refuse, recycling and vegetative waste. The Village, on August 5, 2010, entered into the first amendment to the agreement separating the diesel fuel and collection components of the rate allowing for separate calculation of an annual increase. The annual change in the collection component is determined using the CPI (June to June) while the annual change in the fuel component is determined using the change in the cost of diesel fuel determined by reference to EIA/DOE website that reports average prices. Effective September 30, 2010 the Village entered into a second amendment to the agreement extending the term of the current agreement and additional five (5) years from October 1, 2013 and expiring September 30, 2017. RM ISK ANAGEMENT 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. 73 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED RM() ISK ANAGEMENT CONTINUED 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, 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 $15,090 in fiscal year 2014 related to policy year 2011/2012 and $21,456 related to policy year 2012/2013. The Village remains fully insured with the FMIT for workers’ compensation coverage with statutory limits. Premiums are based upon risk class and remuneration of covered employees adjusted by an experience modification factor which includes three prior years of claims history. At the end of each fiscal year, the plan is audited and the Village can either receive a return of premium or be required to pay additional premium base upon actual versus estimated payroll. FMIT’s final audit for fiscal year 2012/2013 resulted in the Village being refunded a total of $23,537, of which $13,280 was workers’ compensation related. This was due to the temporary reduction in staffing in the police department, which also impacted our general liability which experienced a refund of $9,622. Property and auto accounted for the additional $635. 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. LO EASE BLIGATIONS Capital Lease The Village entered into a capital lease with SunTrust in the amount of $432,844 with funding on October 29, 2013 for the financing of a fire pumper. The applicable interest rate is 2.423% and interest and principal payments are due annually on November 11th. This is a nine (9) year lease with ten (10) payments. 74 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED LO() EASE BLIGATIONS CONTINUED Capital Lease (continued) The following is a schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2014: For the Fiscal Year Ending September 30, Amount 2015 $ 48,135 2016 48,135 2017 48,135 2018 48,135 2019 48,135 2020-2023 192,538 Total Minimum Lease Payments 433,211 Less: Amount Representing Interest (48,153) Present Value of Future Minimum Lease Payments $385,059 L-TL ONGERM IABILITIES Promissory Notes The Village of Tequesta issues long-term debt to provide funds for the acquisition and construction of major capital facilities. Promissory notes have been signed for both governmental and business-type activities. These notes mature in 7 to 14 years and have interest rates from 3.685% to 4.96% per year. Notes outstanding at September 30, 2014 are as follows: Outstanding SignedOriginalInterestFinalSeptember 30, Promissory Notes PayableDateBorrowingRateMaturity2014 Government Activities Public Improvement/P.S. Bldg.9/13/20025,000,000$ 4.28%9/13/20222,519,635$ Business-Type Activities Water Plant Expansion6/30/2004645,170$ 4.96%4/1/2021253,895 Public Improvement (Refunding)7/14/20086,554,935 3.69%3/1/20284,991,808 Total Business-Type Activities$5,245,703 75 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED L-TL() ONGERM IABILITIES CONTINUED Legal Debt Margin The Village of Tequesta is subject to a bonded debt limitation of 10% of total assessed value. The final gross taxable value per DR-422 at September 30, 2014 was $81,633,154. As of September 30, 2014 the Village had total outstanding debt in governmental activities of $3,578,906 of which no portion of the outstanding debt was applicable to the limit. Changes in Long-Term Liabilities Changes in the Village of Tequesta’s long-term liabilities for the fiscal year ended September 30, 2014 are as follows: Governmental Activities BeginningEndingDue Within BalanceAdditionsDeletionsBalanceOne Year Governmental Activities Note payable - 20022,778,261$ --$ 258,626$ 2,519,635$ 269,915$ Capital lease-- 432,844 47,785 385,059 38,802 Compensated absences519,181 43,987 78,956 484,212 57,100 Net OPEB obligation158,000 32,000 -- 190,000 -- Governmental Activities 508,831$ 385,367$ 3,578,906$ 365,817$ Long-Term Liabilities$3,455,442 * For governmental activities, the liability for compensated absences and any other postemployment benefit obligations is liquidated by the general fund. Business-Type Activities BeginningEndingDue Within BalanceAdditionsDeletionsBalanceOne Year Business-Type Activities Note payable - 2004283,895$ --$ 30,000$ 253,895$ 32,000$ Note payable - 20085,269,675 -- 277,867 4,991,808 287,885 Compensated absences139,820 29,316 12,338 156,798 23,500 Net OPEB obligation18,000 9,000 -- 27,000 -- Business-Type Activities Long-Term Liabilities$ 38,3165,711,390$ 320,205$ 5,429,501$ 343,385$ 76 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED L-TL() ONGERM IABILITIES CONTINUED Changes in Long-Term Liabilities (continued) The debt service requirements for the Village’s notes are as follows: Governmental Activities Promissory Notes - For The Fiscal Year Ending Governmental Activities September 30, PrincipalInterest 2015 $ 269,915 $102,586 2016 281,697 90,805 2017 293,993 78,509 2018 306,825 65,676 2019 320,218 52,283 2020-2022 1,046,987 70,518 Total $2,519,635$460,377 Business-type Activities Promissory Notes - For The Fiscal Year Ending Business-type Activities September 30, PrincipalInterest 2015 $ 319,885 $ 203,900 2016 333,398 191,748 2017 347,859 179,574 2018 361,778 153,956 2019 375,203 152,121 2020-2024 1,961,572 473,949 2025-2028 1,546,008 100,965 Total $5,245,703$1,456,213 77 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED L-TL() ONGERM IABILITIES CONTINUED Total Primary Government Debt For The Fiscal Year Ending Total Primary Government Debt September 30, PrincipalInterest 2015 $ 589,800 $ 306,487 2016 615,095 282,553 2017 641,852 258,082 2018 668,603 219,632 2019 695,421 204,404 2020-2024 3,008,559 544,467 2025-2028 1,546,008 100,965 Total$7,765,338$1,916,590 FB UNDALANCE Minimum Fund Balance Policy The Village Council has adopted a financial policy to maintain a minimum level of unassigned fund balance in the general fund. The target level is set at two months of general fund annual revenues (approximately 16.7%). This amount is intended to provide fiscal stability when economic downturns and other unexpected events occur. If fund balance falls below the minimum target level because it has been used, essentially as a “revenue” source, as dictated by current circumstances, the policy provides for actions to replenish the amount to the minimum target level. Generally, replenishment is to occur within a three-year period. 78 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N3–DNAAF() OTEETAILED OTES ON LL CTIVITIES AND UNDS CONTINUED IT NTERFUND RANSFERS The composition of interfund transfers for the fiscal year ended September 30, 2014 is as follows: Interfund Transfers Transfers In General Transfers OutFundTotal Capital Improvement fund100,000$ 100,000$ Capital Projects fund50,000 50,000 Total 150,000$ $150,000 JV OINTENTURES The Village, in conjunction with six other municipalities, organized a consortium to provide mutual fire and emergency aid. The consortium is known as the Northern Area Mutual Aid Consortium (NAMAC). During 1999, the consortium purchased equipment and supplies as well as collected contributions. The consortium does not issue separate financial statements. The Village has not been obligated to contribute any funds to the consortium since its inception in 1999. 79 REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Variance with Final Budget Budgeted AmountsActual Positive OriginalFinalAmounts(Negative) Revenues Ad valorem taxes4,764,000$ 4,764,000$ 4,767,948$ 3,948$ Other taxes1,178,060 1,141,360 1,216,100 74,740 Intergovernmental786,300 786,300 816,323 30,023 Franchise fees392,000 392,000 401,859 9,859 Charges for services1,052,060 1,052,060 1,102,496 50,436 Intragovernmental518,818 518,818 519,188 370 Grants, contributions and donations500 13,000 21,166 8,166 Licenses and permits338,950 338,950 433,428 94,478 Investment earnings29,800 29,800 13,184 (16,616) Fines and forfeitures24,800 24,800 31,977 7,177 Miscellaneous36,650 54,650 64,855 10,205 118,990 136,906 17,916 Rents and royalties118,990 Total Revenues 9,234,728 9,525,430 290,702 9,240,928 Expenditures Current: General government1,546,545 1,583,016 1,614,291 (31,275) Public safety6,224,075 6,072,467 5,900,978 171,489 Transportation787,400 800,289 858,787 (58,498) Leisure services590,410 586,712 507,069 79,643 Capital outlay492,850 833,347 831,240 2,107 Debt service: Principal305,995 305,995 306,411 (416) Interest125,065 125,065 114,398 10,667 16,000 12,736 3,264 Fiscal charges16,000 Total Expenditures 10,322,89110,088,340 10,145,910 (176,981) Excess (Deficiency) of Revenues (1,088,163)(847,412) (620,480) 467,683 Other Financing Sources Transfers in200,000 200,000 150,000 (50,000) 432,850 432,844 (6) Capital lease432,850 Total Other Financing Sources 632,850632,850 582,844 (50,006) Net Change in Fund Balances (455,313)(214,562) (37,636) 417,677 3,641,1633,641,163 3,641,163 -- Fund Balances- Beginning $ 3,185,8503,426,601$ 3,603,527$ 417,677$ Fund Balances - Ending See note to budgetary comparison schedule. 80 VILLAGE OF TEQUESTA, FLORIDA NOTE TO THE BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 N1–BBA OTEUDGETS AND UDGETARY CCOUNTING The Village is required to present a budget to actual comparison for the general fund and any major special revenue fund with a legally adopted annual budget. The Village may not include nonmajor special revenue funds, or funds of other fund types. This fiscal year, the Village presents this schedule for the general fund only. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. For budgeting purposes, current year encumbrances are not treated as expenditures. All budgets are legally enacted through passage of a resolution. Although the Village Council requires all inter-department budget amendments to go before the Village Council for approval, the budget was adopted on a fund basis and the legal level of budgetary control is at that level. What this means is that any amendment that changes the fund’s total budget requires the Village Council to approve it in the same manner that the original budget was approved – by resolution. Theoriginal budget is the budget in place at the start of the fiscal year, which includes all of the following The budget passed by the Village Council +Subsequent amendments made prior to the start of the fiscal year +Carryovers from the previous year (encumbrances) =Original budget Thefinal budget includes all adjustments to the budget applicable to the fiscal year, even if they take place after the close of the fiscal year. During the year, total supplemental appropriations of $453,718 were approved and adopted for the General Fund. Appropriations are legally controlled at the fund level and expenditures may not legally exceed budgeted appropriations at that level. Appropriations lapse at year end. 81 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE VILLAGE'S NET PENSION LIABILITY AND RELATED RATIOS FIREFIGHTERS' PENSION TRUST FUND September 30, 2014 Total Pension Liability Service cost312,030$ Interest582,897 Changes in benefit terms-- Differences between expected and actual experience450 Changes of assumptions-- Benefit payments(53,637) Refunds-- Other (increase in state reserve)30,162 Net Change in Total Pension Liability 871,902 7,883,164 Total Pension Liability - Beginning $8,755,066 Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - employer and state351,652$ Contributions - non-employer contributing entity100,617 Contributions - member65,803 Net Investment income567,786 Benefit payments(53,637) Refunds-- Administrative expense(18,921) Net Change in Plan Fiduciary Net Position 1,013,300 6,810,903 Plan Fiduciary Net Position - Beginning $7,824,203 Plan Fiduciary Net Position - Ending (b) $930,863 Net Pension Liability - Ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 89.37% Covered Employee Payroll* $1,316,062 Net Pension Liability as a Percentage of Covered-Employee Payroll 70.73% * Actual covered payroll for the fiscal year ending September 30, 2014 ThisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedintheUnited StatesofAmerica,however,untilafull10-yeartrendiscompiled,informationispresentedfor those years available. 82 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS FIREFIGHTERS' PENSION TRUST FUND September 30, 2014 Actuarially determined contribution416,665$ Contributions in relation to the actuarially determined contribution422,107 Contribution deficiency (excess)(5,442)$ Covered-employee payroll1,316,062$ Contributions as a percentage or covered-employee payroll32.07% Notes to Schedule Valuation date:October 1, 2012 ActuariallydeterminedcontributionratesarecalculatedasofOctober1,twoyearsprior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial cost methodEntry age normal Amortization methodLevel dollar, closed Remaining amortization period20 years Asset valuation method5-year smoothed market Inflation3.00% Salary increases6.0% including inflation Investment rate of return7.5% Retirement age100% when first eligible for normal retirement or DROP entry. Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 83 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION FIREFIGHTERS' PENSION TRUST FUND SCHEDULE OF INVESTMENT RETURNS September 30, 2014 Annual money-weighted rate of return, net of investment expense7.46% Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 84 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION FIREFIGHTERS' PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS ActuarialUAAL as a ActuarialAccruedUnfundedPercentage ActuarialValue ofLiabilityAALFundedCoveredof Covered ValuationAssets(AAL)(UAAL)RatioPayrollPayroll Date(a)(b)(b-a)(ab)(c)((b-a)c) October 1, 20091,333,909$ 987,399$ (346,507)$ 135.1%749,835$ -46.2% October 1, 20111,772,107 1,685,977 (86,130) 105.1%858,342 -10.0% October 1, 20122,079,888 1,887,237 (192,651) 110.2%744,314 -25.9% 85 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE VILLAGE'S NET PENSION LIABILITY AND RELATED RATIOS POLICE OFFICERS' PENSION TRUST FUND September 30, 2014 Total Pension Liability Service cost161,156$ Interest169,526 Changes in benefit terms-- Differences between expected and actual experience-- Changes of assumptions-- Benefit payments(10,073) Refunds(43,331) Other (increase in state reserve)-- Net Change in Total Pension Liability 277,278 2,459,211 Total Pension Liability - Beginning $2,736,489 Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - employer and state111,164$ Contributions - member25,888 Net Investment income219,219 Benefit payments(10,073) Refunds(43,331) Administrative expense(18,677) Net Change in Plan Fiduciary Net Position 284,190 2,782,754 Plan Fiduciary Net Position - Beginning $3,066,944 Plan Fiduciary Net Position - Ending (b) $(330,455) Net Pension Asset - Ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 112.08% Covered Employee Payroll* $517,765 Net Pension Liability (Asset) as a Percentage of Covered-Employee Payroll -63.82% * Actual covered payroll for the fiscal year ending September 30, 2014 ThisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedintheUnited StatesofAmerica,however,untilafull10-yeartrendiscompiled,informationispresentedfor those years available. 86 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS POLICE OFFICERS' PENSION TRUST FUND September 30, 2014 Actuarially determined contribution111,164$ Contributions in relation to the actuarially determined contribution111,164 Contribution deficiency (excess)--$ Covered-employee payroll517,765$ Contributions as a percentage or covered-employee payroll21.47% Notes to Schedule Valuation date:October 1, 2012 ActuariallydeterminedcontributionratesarecalculatedasofOctober1,twoyearsprior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial cost methodEntry age normal Amortization methodLevel dollar, closed Remaining amortization period20 years Asset valuation method5-year smoothed market Inflation3.00% Salary increases6% including inflation Investment rate of return7.5% Retirement age100% when first eligible for normal retirement or DROP entry. Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 87 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION POLICE OFFICERS' PENSION TRUST FUND SCHEDULE OF INVESTMENT RETURNS September 30, 2014 Annual money-weighted rate of return, net of investment expense7.46% Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 88 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION POLICE OFFICERS' PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS ActuarialUAAL as a ActuarialAccruedUnfundedPercentage ActuarialValue ofLiabilityAALFundedCoveredof Covered ValuationAssets(AAL)(UAAL)RatioPayrollPayroll Date(a)(b)(b-a)(ab)(c)((b-a)c) October 1, 20093,965,053$ 4,471,106$ 506,053$ 88.7%1,434,855$ 35.3% October 1, 20114,754,263 6,034,582 1,280,319 78.8%1,313,021 97.5% October 1, 20125,291,259 6,708,023 1,416,764 78.9%1,427,247 99.3% 89 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE VILLAGE'S NET PENSION LIABILITY AND RELATED RATIOS GENERAL EMPLOYEES' PENSION TRUST FUND September 30, 2014 Total Pension Liability Service cost278,029$ Interest216,124 Changes in benefit terms-- Differences between expected and actual experience-- Changes of assumptions-- Benefit payments(8,534) Refunds(4,454) Other (increase in state reserve)-- Net Change in Total Pension Liability 481,165 2,610,123 Total Pension Liability - Beginning $3,091,288 Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - employer and state184,627$ Contributions - member100,560 Net Investment income308,314 Benefit payments(8,534) Refunds(4,454) Administrative expense(25,678) Net Change in Plan Fiduciary Net Position 554,835 2,792,102 Plan Fiduciary Net Position - Beginning $3,346,937 Plan Fiduciary Net Position - Ending (b) $(255,649) Net Pension Asset- Ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 108.27% Covered Employee Payroll* $2,011,200 Net Pension Liability (Asset) as a Percentage of Covered-Employee Payroll -12.71% * Actual covered payroll for the fiscal year ending September 30, 2014 ThisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedintheUnited StatesofAmerica,however,untilafull10-yeartrendiscompiled,informationispresentedfor those years available. 90 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS GENERAL EMPLOYEES' PENSION TRUST FUND September 30, 2014 Actuarially determined contribution184,627$ Contributions in relation to the actuarially determined contribution184,627 Contribution deficiency (excess)--$ Covered-employee payroll2,011,200$ Contributions as a percentage or covered-employee payroll9.18% Notes to Schedule Valuation date:October 1, 2012 ActuariallydeterminedcontributionratesarecalculatedasofOctober1,twoyearsprior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial cost methodAggregate Amortization methodN/A Remaining amortization periodN/A Asset valuation method5-year smoothed market Inflation4.00% Salary increases6.0%, including inflation Investment rate of return7.5% Retirement age100% when first eligible for normal retirement or DROP entry Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 91 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION GENERAL EMPLOYEES' PENSION TRUST FUND SCHEDULE OF INVESTMENT RETURNS September 30, 2014 Annual money-weighted rate of return, net of investment expense9.73% Thisscheduleispresentedasrequiredbyaccountingprinciplesgenerallyacceptedinthe UnitedStatesofAmerica,however,untilafull10-yeartrendiscompiled,informationis presented for those years available. 92 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION GENERAL EMPLOYEES' PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS ActuarialUAAL as a ActuarialAccruedUnfundedPercentage ActuarialValue ofLiabilityAALFundedCoveredof Covered ValuationAssets(AAL)(UAAL)RatioPayrollPayroll Date(a)(b)(b-a)(ab)(c)((b-a)c) October 1, 20091,465,279$ 1,341,518$ (123,761)$ 109.2%1,890,529$ -6.5% October 1, 20101,716,448 1,625,288 (91,220) 105.6%1,858,451 -4.9% October 1, 20111,965,445 1,921,731 (43,714) 102.3%1,902,093 -2.3% October 1, 20122,287,726 2,306,175 18,449 99.2%1,994,337 0.9% October 1, 20132,683,092 2,610,123 (72,969) 102.8%2,181,428 -3.3% October 1, 20143,180,312 2,944,740 (235,572) 108.0%2,345,459 -10.0% 93 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS Unfunded (a)Actuarial ActuarialActuarialUnfundedAccrued ActuarialValue ofAccruedActuarialFundedCoveredLiability as of Valuation DateAssetsLiability (AAL)LiabilityRatioPayroll% of Covered October 1, 2009--$ 484,000$ 484,000$ 0.0%4,111,000$ 11.8% October 1, 2014-- 380,000 380,000 0.0%5,218,000 7.3% Note: See Note 3.G Other post Employment Benefit (OPEB) Obligations 94 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES NONMAJOR GOVERNMENTAL FUNDS NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special revenue funds are used to account for specific revenue sources that are restricted, committed, or assigned to expenditures for particular purposes. Special Law Enforcement Trust Fund – This fund accounts for forfeitures received by the Police Department. Forfeitures obtained locally are expended as prescribed by Florida Statute Chapter 932.704. Forfeitures obtained through federal programs are expended according to the Department of Justice Asset Forfeiture Program. Capital Projects Funds Capital Projects Fundare used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays including the acquisition or construction of capital facilities and other capital assets. The use of the capital projects fund type is permitted rather than mandated for financial reporting purposes. Capital projects funds can be a valuable management tool for multi-year projects. Capital Improvement Fund – This fund is used to account for the maintenance and upkeep of the Village’s general infrastructure (such as roads, bridges, sidewalks and storm water drainage systems) and streetscape beautification projects. Capital Projects Fund – This fund accounts for the acquisition or construction of major capital projects, other than those financed by proprietary fund types. VILLAGE OF TEQUESTA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 Special RevenueTotal Capital Projects Special LawCapital Capital Nonmajor EnforcementImprovementProjectsGovernmental FundFundFundFunds Assets Cash and cash equivalents272,689$ 5,412$ 4,314$ 282,415$ Inventories18,965 -- -- 18,965 Total Assets $ 5,412291,654$ 4,314$ 301,380$ Liabilities and Fund Balances Liabilities $ ----$ --$ --$ Fund Balances Nonspendable: Inventories18,965 -- -- 18,965 Restricted for: Law enforcement272,689 -- -- 272,689 Assigned to: 5,412-- 4,314 9,726 Capital projects Total Fund Balances 5,412 4,314 301,380 291,654 $ 5,412291,654$ 4,314$ 301,380$ Total Liabilities and Fund Balances 95 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHARGES IN FUND NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Special RevenueTotalCapital Projects Special LawCapital Capital Nonmajor EnforcementImprovementProjectsGovernmental FundFundFundFunds Revenues Forfeitures/confiscations287,621$ --$ --$ 287,621$ Miscellaneous-- -- -- -- Investment earnings-- -- -- -- Total Revenues --287,621 -- 287,621 Expenditures Current: Public Safety-- -- -- -- Transportation-- -- -- -- Total Expenditures ---- -- -- Excess of Revenues Over Expenditures --287,621 -- 287,621 Other Financing Uses (100,000) (50,000) (150,000) Transfers out-- Total Other Financing Uses (100,000)-- (50,000) (150,000) Net Change in Fund Balances (100,000)287,621 (50,000) 137,621 105,4124,033 54,314 163,759 Fund Balances - Beginning of Year $ 5,412291,654$ 4,314$ 301,380$ Fund Balances - End of Year 96 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE SPECIAL LAW ENFORCEMENT TRUST FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Variance with Final Budget Budgeted AmountsActual Positive OriginalFinalAmounts(Negative) Revenues Forfeitures/Confiscations50,000$ 50,000$ 287,621$ 237,621$ Expenditures Current: Public Safety1,000 1,000 -- (1,000) Excess of Revenues Over Expenditures 49,000 49,000 287,621 238,621 Other Financing Uses Transfers out(50,000) (50,000) -- 50,000 Net Change in Fund Balance (1,000)(1,000) 287,621 288,621 29,775 29,775 4,033 -- Fund Balance - Beginning $28,775 28,775$ 291,654$ 262,879$ Fund Balance - Ending 97 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Variance with Final Budget Budgeted Amounts Actual Positive OriginalFinalAmounts(Negative) Revenues $-- --$ --$ --$ Exenditures p-- -- -- -- Excess (deficiency) of revenues over (under) expenditures ---- -- -- Other Financing Sources (Uses) Transfers out(100,000) (100,000) (100,000) -- Net Change in Fund Balance (100,000)(100,000) (100,000) -- 105,412105,412 105,412 -- Fund Balance - Beginning $ 5,4125,412$ 5,412$ --$ Fund Balance - Ending 98 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Variance with Final Budget Budgeted AmountsActual Positive OriginalFinalAmounts(Negative) Revenues $ ----$ --$ --$ Expenditures ---- ---- Transportation ---- ---- Total Expenditures Excess (deficiency) of revenues over (under) expenditures ---- -- -- Other Financing Uses Transfers out(50,000)(50,000) --(50,000) Net Change in Fund Balance (50,000)(50,000) (50,000) -- 54,31454,314 --54,314 Fund Balance - Beginning $4,314$4,314$ --4,314$ Fund Balance - Ending 99 FIDUCIARY FUNDS FIDUCIARY FUNDS Fiduciary funds are used to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government’s own programs. Pension trust funds are fiduciary funds that are used to report resources required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other postemployment benefit plans, or other employee benefit plans. The Village accounts for two defined benefit plans (Public Safety reports separate trust funds for Police Officers and Firefighters) and a separate fund is reported for each individual trust fund. The three trust funds are as follows: Firefighters’ Pension Trust Fund – This fund accounts for the accumulation of resources and for contributions and benefits of the firefighter employees. Police Officers’ Pension Trust Fund – This fund accounts for the accumulation of resources and for contributions and benefits of the police employees hired prior to February 1, 2013. 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 POSITION SEPTEMBER 30, 2014 Police General Firefighters'Officers'Employees' PensionPensionPension Trust FundTrust FundTrust FundTotal Assets Cash and cash equivalents305,878$ 122,846$ 103,053$ 531,777$ Investments, at fair value: Corporate stocks1,994,179 793,042 1,841,867 4,629,088 Corporate bonds-- -- 394,159 394,159 Government backed securities-- -- 407,241 407,241 2,156,120 591,875 8,169,762 Mutual Funds5,421,767 Total investment, at fair value7,415,946 2,949,162 3,235,142 13,600,250 Prepaid items1,678 1,678 1,032 4,388 Contributions receivable110,087 2,522 8,154 120,763 Accrued interest receivable4,707 1,563 10,482 16,752 Total Assets 3,077,7717,838,296 3,357,863 14,273,930 Liabilities Accounts payable9,526 9,011 10,437 28,974 Due to broker4,567 1,816 489 6,872 10,827 10,926 35,846 14,093 Total Liabilities Net Position Restricted for Pension Benefits $ 3,066,9447,824,203$ 3,346,937$ 14,238,084$ 100 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2014 Police General Firefighters'Officers'Employees' PensionPensionPension Trust FundTrust FundTrust FundTotal Additions Contributions: Employer (including State)452,269$ 111,164$ 184,627$ 748,060$ Employee65,803 25,888 100,560 192,251 Total Contributions 137,052518,072 285,187 940,311 Investment earnings Net increase in fair value of investments395,708 161,015 175,071 731,794 Gain on sale of investments65,448 26,027 85,295 176,770 52,006 78,268 258,819 Interest earnings128,545 Total investment earnings589,701 239,048 338,634 1,167,383 Less investment expenses(21,915) (19,829) (30,320) (72,064) Net investment earnings567,786 219,219 308,314 1,095,319 Total Additions1,085,858 356,271 593,501 2,035,630 Deductions Benefits paid53,637 10,073 8,534 72,244 Refunds of contributions-- 43,331 4,454 47,785 18,677 25,678 63,276 Administrative expenses18,921 72,08172,558 38,666 183,305 Total Deductions Net Increase 284,1901,013,300 554,835 1,852,325 Net Position Restricted for Pension Benefits 2,782,7546,810,903 2,792,102 12,385,759 Beginning $ 3,066,9447,824,203$ 3,346,937$ 14,238,084$ Ending 101 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. ContentsPage Financial Trends Theseschedulescontaintrendinformationtohelpthereaderunderstandhowthe 102-106 Village's financial performance and well-being have changed over time. Revenue Capacity TheseschedulescontaininformationtohelpthereaderassesstheVillage'smost 107-110 significant local revenue source, the property tax. Debt Capacity Theseschedulespresentinformationtohelpthereaderassesstheaffordabilityofthe Village'scurrentlevelsofoutstandingdebtandtheTown'sabilitytoissueadditional 111-115 debt in the future. Demographic and Economic Information Theseschedulesofferdemographicandeconomicindicatorstohelpthereader 116-117 understand the environment within which the Village's financial activities take place. Operating Information Theseschedulescontainserviceandinfrastructuredatatohelpthereaderunderstand howtheinformationintheVillage'sfinancialreportrelatestotheservicestheVillage 118-120 provides and the activities it performs. Sources: Unlessotherwisenoted,theinformationintheseschedulesisderivedfrom the Comprehensive Annual Financial Reports for the relevant year. 109 CURRENT YEAR AND NINE YEARS AGO PRINCIPAL PROPERTY TAXPAYERS 110 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS 116 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL EMPLOYERS - PALM BEACH COUNTY CURRENT YEAR AND NINE YEARS AGO 20132005 Percentage of Percentage of Total County Total County EmployerEmployeesRankEmploymentEmployeesRankEmployment School Board of Palm Beach County21,449 13.55%21,618 13.72% Palm Beach County11,010 21.82%10,432 21.80% Tenet Healthcare Corporation 6,100 31.01%5,000 30.86% Florida Power & Light (Headquarters)3,804 40.50%2,924 50.50% G4S (Headquarters)3,000 50.63% Florida Atlantic University2,980 60.49% Hospital Corporation of America (HCA) 2,714 70.45% Veterans Health Administration2,700 80.45% Bethesda Memorial Hospital2,643 90.44% Boca Raton Regional Hospital2,250 100.37% Columbia PB Healthcare System3,750 40.65% Office Depot (Headquarters)2,680 60.46% Boca Raton Resort & Club2,200 70.38% U.S. Sugar Corporation 2,100 80.36% Florida Crystals 90.34%2,000 City of Boca Raton1,991 100.34% 9.71%54,69558,650 9.41% Source:Business Development Board of Palm Beach County Employment information for the Town is not available Notes:2014 numbers were not available at time of publication 117 VILLAGE OF TEQUESTA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST NINE FISCAL YEARS 200620072008200920102011201220132014 Governmental Activitie s General governmen t Registered voter 4,0074,007 4,439 4,612 4,505 4,543 4,676 4,854 4,702 s Public safety: 1916 17 18 17 19 11 *18 20 No. of full-time certified police officers No. of calls receive 3,5003,300 3,535 3,533 3,178 3,266 3,5483,571 d 3,272 No. of arrests199 238 224 251 296 204 129 136 168 No. of parking violation 148162 171 131 124 82 149 328 120 s 853817 965 887 881 595 622 691 725 No. of incident numbers issued Fire department : No. of full-time certified firefighter 1916 20 21 21 22 21 21 18 s No. of emergency response 1,1221,254 1,143 1,189 1,043 1,096 1,155 1,372 1,197 s No. of transports622 521 621 651 562 622 695 675 693 No. of fires extinguished/alarm 601632 522 538 481 474 460 697 504 s No. of inspections326 412 435 476 480 462 495 539 713 Building, zoning: 9981,049 906 784 812 800 883 914 929 No. of building permits issued No. of building inspections conducte 2,5812,214 2,039 1,771 1,579 1,728 1,931 2,176 2,201 d Leisure services: No. of Spring Classes-- -- 8 8 10 10 10 10 8 No. of Summer Classes-- -- 4 5 4 4 4 4 4 No. of Movies-- -- 4 4 3 3 3 3 4 Business-Tpe Activities y Water: No. of customers4,612 4,722 4,968 4,983 4,982 5,019 4,996 5,037 5,039 2.782 mg2.349 mg2.351 mg2.175 mg2.175 mg2.698 mg2.550 mg2.454 mg2.422 mg Average daily consumption Sources: Various Village department s Note: The Village began to report this information in fiscal year 2006, as prior information is not available * The number is much lower than the year before due to increased number of reserve officers to cover for the full-time officers that left the department during the FY 2012. 119 VILLAGE OF TEQUESTA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST NINE FISCAL YEARS Function/Program200620072008200920102011201220132014 Governmental Activities General government: Municipal center0011 1 1 1 11 Public safety Police: No. of stations1111 1 11 11 No. of patrol units121279 15 1511 1011 Fire: No. of stations1111 1 11 11 No. of ambulances2222 3 33 33 No. of pumpers3322 3 33 33 Transportation: Miles of street lane miles484343*2424 2424 2424 No. of bridges11 1 1111 11 Leisure services No. of parks3334 4 55 5 6 ** No. of park acreage48484850 53 5454 54 62 ** No. of playgrounds3322 2 2222 No. of baseball/softball diamonds 3333 3 3333 No. of skate-parks1111 1 1111 Business-type activities: Water: Miles of water mains50757272 73 72727373 No. of fire hydrants550430430430 430 430430433409 Storage capacity (thousands of gallons)3,250 3,250 3,250 3,250 3,250 3,250 3,250 2,7502,750 Sources: Various Village departments 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 ** The green area has been identified as a park (Linear/Green Mile park) 120 REPORTING SECTION INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statementsof the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta (the Village), as of and for the fiscal year ended September 30, 2014 and the related notes to the financial statements, which collectively comprise the Village’s basic financial statements, and have issued our report thereon dated May 1, 2015. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Village’s internal control. Adeficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 121 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Village’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. West Palm Beach, FL May 1, 2015 122 MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements We have audited the financial statements of the Village of Tequesta, Florida (the Village), as of and for the fiscal year ended September 30, 2014, and have issued our report thereon dated May 1, 2015. Auditors’ Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors’ Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountants’ Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 1, 2015, should be considered in conjunction with this management letter. Prior Audit Findings 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. There were no recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The Village was incorporated in 1957 by laws of Florida 57-1915. There are no component units related to the Village. 123 Financial Condition Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the Council 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. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), 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. This assessment was done as of the fiscal year ended September 30, 2014. Annual Financial Report Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the Councilfor the year ended September 30, 2014, 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, 2014. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(i)2., 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)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not . have any such findings Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, Village Council, and management, and is not intended to be and should not be used by anyone other than these specified parties. West Palm Beach, FL May 1, 2015 124 INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE PURSUANT TO SECTION 218.415 FLORIDA STATUTES To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have examined the Village of Tequesta’s (the Village) compliance with Section 218.415 Florida Statutes for the fiscal year ended September 30, 2014. Management is responsible for the Village’s compliance with those requirements. Our responsibility is to express an opinion on the Village’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Village’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village’s compliance with specified requirements. In our opinion, the Village complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2014. This report is intended solely for the information and use of management, Village Council, others within the Village and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. West Palm Beach, FL May 1, 2015 125 VILLAGE OF TEQUESTA, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements. 111 Governmental Activities Business -type Activities Total Percentage Fiscal Year Ending Revenue Notes Capital Revenue Notes Primary of Personal Per September 30 Bonds Payable Leases Bonds Payable Government Income Capita 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 2010 -- 3,491,028 88,613 -- 6,405,528 9,985,171 3.04% 1,774 2011 -- 3,263,515 45,092 -- 6,132,618 9,441,225 2.92% 1,677 2012 -- 3,026,070 -- -- 5,849,788 8,875,858 2.94% 1,572 2013 -- 2,778,261 -- -- 5,553,570 8,331,831 2.65% 1,474 2014 -- 2,519,635 385,059 -- 5,245,703 8,150,397 2.50% 1,448 Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements. 111 VILLAGE OF TEQUESTA, FLORIDA RATIO OF NET OUTSTANDING DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (2) 5,686 $ 715,993,712 $ 12,989,463 $ 294,444 $ 12,695,019 Assessed (A) (B) (A - B) Ratio of Net Net Value of Gross Debt Service Net O/S Debt to Outstanding Fiscal Year Ending (1) Taxable Outstanding Funds Outstanding Value of Debt September 30, Population Property Debt Available (O/S) Debt Taxable Property Per Capita 2005 5,686 $ 715,993,712 $ 12,989,463 $ 294,444 $ 12,695,019 1.77% $ 2,233 2006 5,702 825,406,187 12,553,565 378,680 12,174,885 1.48% 2,135 2007 5,942 981,960,499 11,824,001 482,726 11,341,275 1.15% 1,909 2008 5,898 1,017,388,628 11,072,946 369,490 10,703,456 1.05% 1,815 2009 5,872 926,207,036 10,532,937 -- 10,532,937 1.14% 1,794 2010 5,629 833,906,426 9,985,171 -- 9,985,171 1.20% 1,774 2011 5,629 780,222,257 9,441,225 -- 9,441,225 1.21% 1,677 2012 5,646 765,017,585 8,875,858 -- 8,875,858 1.16% 1,572 2013 5,652 779,911,042 8,331,831 -- 8,331,831 1.07% 1,474 2014 5,629 816,331,544 8,150,397 -- 8,150,397 1.00% 1,448 (1) Florida Estimates of Population - Bureau of Economic and Business research, University of Florida (2) Form DR -422 "Certificate of Final Taxable Value" 112 VILLAGE OF TEQUESTA, FLORIDA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Total Assessed Value (1) $ 816,331,544 Legal Debt Margin Debt limitation - 10% of total assessed value (2) 81,633,154 Total bonded debt outstanding -- -- Less amount in debt service fund -- Total Debt Applicable to Limitation -- Legal Debt Margin $ 81,633,154 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Debt Limit $82,565,448 $98,162,738 $101,695,653 $93,130,772 $83,442,520 $83,390,643 $78,022,226 $ 76,501,759 $ 77,991,104 $ 81,633,154 Total Net Debt Applicable to Limit 195,556 1,023 -- -- -- -- -- -- -- -- Legal debt margin $82,369,892 $98,161,715 $ 101,695,653 $93,130,772 $83,442,520 $83,390,643 $78,022,226 $ 76,501,759 $ 77,991,104 $ 81,633,154 Total Net debt Applicable to Limit as a Percentage of Debt Limit 0.24% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (1) Form DR -422 "Certificate of Final Taxable Value" (2) Village of Tequesta Charter Section 5.02 Limitations 113 VILLAGE OF TEQUESTA, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2014 Estimate Estimate Share of Subtotal, overlapping debt DIRECT DEBT Village of Tequesta Total direct and overlapping debt (a) Sources: Palm Beach County and PBC School Board 1,168,745 2,904,694 2,904,694 $ 4,073,439 Note: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Village taxable assessed value and dividing it by the PBC taxable assessed value. (Data provided by the PBC Property Appraiser's Office) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village of Tequesta. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Tequesta. This process recognizes that, when considering the Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government. 114 Net Percentage Direct and Debt Applicable to Overlapping Governmental Unit Outstanding Tequesta Debt (a) (b) OVERLAPPING Palm Beach County $ 163,630,000 0.63% $ 1,030,869 P.B.C. School Board 21,885,000 0.63% 137,876 Subtotal, overlapping debt DIRECT DEBT Village of Tequesta Total direct and overlapping debt (a) Sources: Palm Beach County and PBC School Board 1,168,745 2,904,694 2,904,694 $ 4,073,439 Note: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Village taxable assessed value and dividing it by the PBC taxable assessed value. (Data provided by the PBC Property Appraiser's Office) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village of Tequesta. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Tequesta. This process recognizes that, when considering the Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government. 114 VILLAGE OF TEQUESTA, FLORIDA PLEDGED- REVENUE COVERAGE LAST TEN FISCAL YEARS Net Fiscal Pledged Less: Available Debt Service (2) Year Revenues (1) Expenditures Revenue Principal Interest Coverage 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 -- -- -- -- -- - 2010 -- -- -- -- -- - 2011 -- -- -- -- -- - 2012 -- -- -- -- -- - 2013 -- -- -- -- -- - 2014 -- -- -- -- -- - 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. 115 VILLAGE OF TEQUESTA, FLORIDA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Palm Beach Capita County Fiscal Population Personal Personal Median Unemployment Year (1) Income (2) Income (2) Age (3) Rate (4) 2005 5,686 $ 198,862,164 $ 34,974 47.5 3.1% 2006 5,702 199,421,748 34,974 47.5 3.7% 2007 5,942 256,397,300 43,150 47.5 3.3% 2008 5,898 326,224,278 55,311 47.5 7.3% 2009 5,872 347,311,184 59,147 47.5 9.7% 2010 5,629 328,497,182 58,358 47.5 11.4% 2011 5,629 323,447,969 57,461 49.9 11.0% 2012 5,646 302,061,000 53,500 49.9 9.2% 2013 5,652 314,409,456 55,628 49.9 7.1% 2014 5,629 326,397,565 57,985 49.9 6.0% Sources: (1) Florida Estimates of Population - Bureau of Economic and Business research, University of Florida. (2) US Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System, April 2011 (3) U.S. Census Bureau, 2010 Census (4) U.S. Department of Labor, Bureau of Labor Statistics, Labor Market Statistics Center, Local Area Unemployment Statistics Program 116 VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL EMPLOYERS - PALM BEACH COUNTY CURRENT YEAR AND NINE YEARS AGO 2013 2005 Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment School Board of Palm Beach County Palm Beach County Tenet Healthcare Corporation Florida Power & Light (Headquarters) G4S (Headquarters) Florida Atlantic University Hospital Corporation of America (HCA) Veterans Health Administration Bethesda Memorial Hospital Boca Raton Regional Hospital Columbia PB Healthcare System Office Depot (Headquarters) Boca Raton Resort & Club U.S. Sugar Corporation Florida Crystals City of Boca Raton 21,449 1 3.55% 11,010 2 1.82% 6,100 3 1.01% 3,804 4 0.50% 3,000 5 0.63% 2,980 6 0.49% 2,714 7 0.45% 2,700 8 0.45% 2,643 9 0.44% 2,250 10 0.37% 58,650 Source: Business Development Board of Palm Beach County Employment information for the Town is not available Notes: 2014 numbers were not available at time of publication 21,618 1 3.72% 10,432 2 1.80% 5,000 3 0.86% 2,924 5 0.50% 3,750 2,680 2,200 2,100 2,000 1,991 9.71% 54,695 4 0.65% 6 0.46% 7 0.38% 8 0.36% 9 0.34% 10 0.34% 9.41% 117 VILLAGE OF TEQUESTA, FLORIDA FULL-TIME EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Governmental Activities General government 11.5 10.5 9.5 15.0 15.0 10.0 10.5 10.5 11.5 10.5 Public safety 45.0 46.0 51.0 50.0 49.0 50.0 49.0 50.0 53.0 51.0 Transportation - 3.0 4.0 4.0 4.0 4.0 4.0 4.0 5.0 5.0 Leisure services 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Total Governmental Activities 58.5 62.5 67.5 72.0 71.0 67.0 66.5 67.5 72.5 69.5 Business -Type Activities Water 14.0 15.0 15.5 15.0 16.0 15.0 14.5 14.5 16.5 16.5 Stormwater - 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Total Business -Type Activities 14.0 16.0 16.5 16.0 17.0 16.0 15.5 15.5 17.5 17.5 Total Primary Government 72.5 78.5 84.0 88.0 88.0 83.0 82.0 83.0 90.0 87.0 Source: Village of Tequesta Human Resource Department Notes: 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. 118 VILLAGE OF TEQUESTA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST NINE FISCAL YEARS Sources: Various Village departments Note: The Village began to report this information in fiscal year 2006, as prior information is not available * The number is much lower than the year before due to increased number of reserve officers to cover for the full-time officers that left the department during the FY 2012. 119 2006 2007 2008 2009 2010 2011 2012 2013 2014 Governmental Activities General government Registered voters 4,007 4,007 4,439 4,612 4,505 4,543 4,676 4,854 4,702 Public safety: No. of full-time certified police officers 16 19 17 18 17 19 11 * 18 20 No. of calls received 3,300 3,500 3,535 3,533 3,178 3,266 3,272 3,571 3,548 No. of arrests 199 238 224 251 296 204 129 136 168 No. of parking violations 162 148 171 131 124 82 149 328 120 No. of incident numbers issued 817 853 965 887 881 595 622 691 725 Fire department: No. of full-time certified firefighters 16 19 20 21 21 22 21 21 18 No. of emergency responses 1,254 1,122 1,143 1,189 1,043 1,096 1,155 1,372 1,197 No. of transports 622 521 621 651 562 622 695 675 693 No. of fires extinguished/alarms 632 601 522 538 481 474 460 697 504 No. of inspections 326 412 435 476 480 462 495 539 713 Building, zoning: No. of building permits issued 1,049 998 906 784 812 800 883 914 929 No. of building inspections conducted 2,214 2,581 2,039 1,771 1,579 1,728 1,931 2,176 2,201 Leisure services: No. of Spring Classes 8 8 10 10 10 10 8 No. of Summer Classes 4 5 4 4 4 4 4 No. of Movies 4 4 3 3 3 3 4 Business -Type Activities Water: No. of customers 4,612 4,722 4,968 4,983 4,982 5,019 4,996 5,037 5,039 Average daily consumption 2.782 mg 2.349 mg 2.351 mg 2.175 mg 2.175 mg 2.698 mg 2.550 mg 2.454 mg 2.422 mg Sources: Various Village departments Note: The Village began to report this information in fiscal year 2006, as prior information is not available * The number is much lower than the year before due to increased number of reserve officers to cover for the full-time officers that left the department during the FY 2012. 119 VILLAGE OF TEQUESTA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST NINE FISCAL YEARS Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 Governmental Activities General government: Municipal center 0 0 1 1 1 1 1 1 1 Public safety Police: No. of stations 1 1 1 1 1 1 1 1 1 No. of patrol units 12 12 7 9 15 15 11 10 11 Fire: No. of stations 1 1 1 1 1 1 1 1 1 No. of ambulances 2 2 2 2 3 3 3 3 3 No. of pumpers 3 3 2 2 3 3 3 3 3 Transportation: Miles of street lane miles 48 43 43 *24 24 24 24 24 24 No. of bridges 1 1 1 1 1 1 1 1 1 Leisure services No. of parks 3 3 3 4 4 5 5 5 6 ** No. of park acreage 48 48 48 50 53 54 54 54 62 ** No. of playgrounds 3 3 2 2 2 2 2 2 2 No. of baseball/softball diamonds 3 3 3 3 3 3 3 3 3 No. of skate -parks 1 1 1 1 1 1 1 1 1 Business -type activities: Water: Miles of water mains 50 75 72 72 73 72 72 73 73 No. of fire hydrants 550 430 430 430 430 430 430 433 409 Storage capacity (thousands of gallons) 3,250 3,250 3,250 3,250 3,250 3,250 3,250 2,750 2,750 Sources: Various Village departments 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 * * The green area has been identified as a park (Linear/Green Mile park) 120 rJ��ce�l� �� REPORTING SECTION MARCUM ACCOUNTANTS A 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 GO VERNMENTA UDITING STANDARDS To the Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta (the Village), as of and for the fiscal year ended September 30, 2014 and the related notes to the financial statements, which collectively comprise the Village's basic financial statements, and have issued our report thereon dated May 1, 2015. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Village's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Village's internal control. Accordingly, we do not express an opinion on the effectiveness of the Village's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. © 121 M7ARCUM GROUP MEMBER Marcum LLP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach, Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com Compliance and Other Matters As part of obtaining reasonable assurance about whether the Village's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Village's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. PYa4,N,k LLf West Palm Beach, FL May 1, 2015 122 MARCUM ACCOUNTANTS ® ADVISORS MANAGEMENT LETTER IN ACCORDANCE WITH THE RULES OF THE AUDITOR GENERAL OF THE STATE OF FLORIDA To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements We have audited the financial statements of the Village of Tequesta, Florida (the Village), as of and for the fiscal year ended September 30, 2014, and have issued our report thereon dated May 1, 2015. Auditors' Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards and Independent Accountants' Report on an examination conducted in accordance with AICPA Professional Standards, Section 601, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated May 1, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The Village was incorporated in 1957 by laws of Florida 57-1915. There are no component units related to the Village. © 123 MARCUMGROUP MEMBER Marcum LLP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach, Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com Financial Condition Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results of our determination as to whether or not the Council 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. Pursuant to Sections 10.554(1)(i)5.c. and 10.556(8), 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. This assessment was done as of the fiscal year ended September 30, 2014. Annual Financial Report Section 10.554(1)(i)5.b., Rules of the Auditor General, requires that we report the results of our determination as to whether the annual financial report for the Council for the year ended September 30, 2014, 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, 2014. In connection with our audit, we determined that these two reports were in agreement. Other Matters Section 10.554(1)(i)2., 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)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, Village Council, and management, and is not intended to be and should not be used by anyone other than these specified parties. %yak LLP West Palm Beach, FL May 1, 2015 124 MARCUM ACCOUNTANTS A ADVISORS INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE PURSUANT TO SECTION 218.415 FLORIDA STATUTES To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida We have examined the Village of Tequesta's (the Village) compliance with Section 218.415 Florida Statutes for the fiscal year ended September 30, 2014. Management is responsible for the Village's compliance with those requirements. Our responsibility is to express an opinion on the Village's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Village's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Village's compliance with specified requirements. In our opinion, the Village complied, in all material respects, with the aforementioned requirements for the fiscal year ended September 30, 2014. This report is intended solely for the information and use of management, Village Council, others within the Village and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. -,'Y0&&t,/ c l - P West Palm Beach, FL May 1, 2015 MARCUMGROUP MEMBER Marcum LLP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach, Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 125 marcumllp.com