The URL can be used to link to this page

CAFR_FY Ending_09-30-2015M VILLAGE OF TEQUESTA COUNCIL MEMBERS 2015 From left to right; Council Member Thomas Paterno, Vice -Mayor Vince Arena, Mayor Abby Brennan, Council Member Frank D'Ambra, Council Member Steve Okun VILLAGE OF TEQUESTA, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Prepared By Finance Department The Village of Tequesta, Florida VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS L INTRODUCTORY SECTION Letterof Transmittal ................................................................................................................................. 1-111 Certificate of Achievement for Excellence in Financial Reporting............................................................. iv OrganizationChart ....................................................................................................................................... v Listof Principal Officials............................................................................................................................ vi IL FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT................................................................................................1-3 MANAGEMENT'S DISCUSSION AND ANALYSIS (Required Supplementary Information) ..........4-19 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements Statementof Net Position.................................................................................................................... 20 Statementof Activities........................................................................................................................ 21 Fund Financial Statements 110 Balance Sheet — Governmental Funds................................................................................................. 22 Reconciliation of the Balance Sheet of Governmental Funds to the 112 Statementof Net Position................................................................................................................. 23 Statement of Revenues, Expenditures and Changes in Fund Balances — 113 GovernmentalFunds........................................................................................................................ 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund 115 Balances of Governmental Funds to the Statement of Activities..................................................... 25 Statement of Net Position — Proprietary Funds................................................................................... 26 Statement of Revenues, Expenses and Changes in Net Position — Proprietary Funds ........................ 27 Statement of Cash Flows — Proprietary Funds.................................................................................... 28 Statement of Fiduciary Net Position — Fiduciary Funds...................................................................... 29 Statement of Changes in Fiduciary Net Position — Fiduciary Funds ................................................... 30 Notes to Basic Financial Statements................................................................................................31-107 120 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule — General Fund................................................................................108 Note to the Budgetary Comparison Schedule....................................................................................... 109 Firefighters' Pension Trust Fund Schedule of Changes in the Village's Net Pension Liability and Related Ratios .............................. 110 Schedule of Village Contributions.....................................................................................................111 Schedule of Investment Returns........................................................................................................ 112 Police Officers' Pension Trust Fund Schedule of Changes in the Village's Net Pension Liability and Related Ratios .............................. 113 Schedule of Village Contributions.....................................................................................................114 Schedule of Investment Returns........................................................................................................ 115 General Employees' Pension Trust Fund Schedule of Changes in the Village's Net Pension Liability (Asset) and Related Ratios..................116 Schedule of Village Contributions.....................................................................................................117 Schedule of Investment Returns........................................................................................................ 118 Schedule of Funding Progress - Other Post Employment Benefits...................................................... 119 Schedule of Village's Proportionate Share of the Net Pension Liability — Florida Retirement System Pension................................................................................................... 120 Schedule of the Village's Proportionate Share of the Net Pension Liability — Retiree Health Insurance Subsidiary Program................................................................................... 121 Schedule of the Village's Contributions — Florida Retirement System Pension Plan ...........................122 Schedule of the Village's Contributions — Retiree Health Insurance Subsidy Program .......................123 VILLAGE OF TEQUESTA, FLORIDA TABLE OF CONTENTS IL FINANCIAL SECTION (CONTINUED) SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules Combining Balance Sheet — Nonmajor Governmental Funds........................................................... 124 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds...................................................................................................... 125 Budgetary Comparison Schedule — Special Law Enforcement Trust Fund ...................................... 126 Budgetary Comparison Schedule — Capital Improvement Fund ....................................................... 127 Budgetary Comparison Schedule — Capital Projects Fund................................................................ 128 Combining Statement of Fiduciary Net Position............................................................................... 129 Combining Statement of Changes in Fiduciary Net Position............................................................ 130 III. STATISTICAL SECTION NetPosition by Component..................................................................................................................... 131 Changesin Net Position....................................................................................................................132-133 Fund Balances, Governmental Funds....................................................................................................... 134 Changes in Fund Balances, Governmental Funds.................................................................................... 135 Assessed and Estimated Actual Value of Taxable Property ..................................................................... 136 Property Tax Rates — All Direct and Overlapping Governments............................................................. 137 Principal Property Taxpayers................................................................................................................... 138 Property Tax Levies and Collections....................................................................................................... 139 Ratios of Outstanding Debt by Type........................................................................................................ 140 Ratio of Net Outstanding Debt to Assessed Value and Net Bonded Debt PerCapita.............................................................................................................................................. 141 Computation of Legal Debt Margin......................................................................................................... 145 Direct and Overlapping Governmental Activities Debt........................................................................... 143 Pledged -Revenue Coverage — Revenue Bonds - 1994............................................................................. 144 Demographic and Economic Statistics..................................................................................................... 145 Principal Employers — Palm Beach County............................................................................................. 146 Full -time -Equivalent Village Government Employees by Function/Program......................................... 147 Operating Indicators by Function/Program.............................................................................................. 148 Capital Asset Statistics by Function/Program.......................................................................................... 149 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................................150-151 Management Letter in Accordance with the Rules of the Auditor General of the Stateof Florida...............................................................................................................................152-153 Independent Accountants' Report On Compliance Pursuant To Section 218.415 FloridaStatutes...................................................................................................................................... 154 INTRODUCTORY SECTION iii,- i ,� ,� i 345 Tequesta Drive Tequesta, Florida 33469-0273 eyrCedt� (561) 768-0424 www.Tequesta.org June 30, 2016 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, 2015. 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, 2015. 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. 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. According to the Bureau of Labor Statistics, U.S. Department of Labor, over the past year, 37 states, including Florida had unemployment rate decreased from a year earlier. The largest significant over -the - year job increase occurred in California (444,300) followed by Florida (235,700) and Texas (224,800). The national unemployment rate for September 2015 was 5.1% with the unemployment rate in Florida at 5.2% which was 0.6% lower than the prior year. The unemployment rate for Palm Beach County at the fiscal year end was 5.2%, down from 5.9% the previous year. We have seen a continued decline as the rate fell to 4.7% in February 2016. According to analysis by Florida TaxWatch and CareerSource Palm Beach County, "...candidates are leaving existing jobs for better positions and those who have been out of the labor force are returning to employment' which indicates economic growth. According to the US Census Bureau, as of October 14, 2015, median household income for Tequesta was $59,192 which continues to be significantly higher than Florida as a whole ($46,956). Tequesta continues to see a positive change in the housing market as property values continue to increase, another indicator of a growing economy. Per the Palm Beach County Property Appraiser's Office, gross taxable value for calculating ad valorem proceeds increased from $817 million duringfiscal 2014 to $864 million used to calculate 2015 revenues. Property values continued to increase and the gross taxable value used to calculate FY 2016 ad valorem tax revenue is $932 million. Based upon these indicators, the Village of Tequesta is developing its operating budget with the expectation that the economy will continue to improve and that there will be a steady increase in property values over the next few years. Long -Term Financial Planning and Major Initiatives Unassigned fund balance in the general fund at year end was 19.54% 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%), however it is lower than the prior year (20.8%). To protect the investments our residents have made in their community, the Village increased the millage rate to 6.2920 from 6.0500 which was a 9.64% percent change of the rolled -back rate (the rate required to bring in the same amount of revenue as the prior period). The continued goal of the Village is to maintain a consistently high quality of services to the residents, while protecting the assets, the level of service and the quality of life that the residents have come to expect. It is the result of hard work by the Village staff, and fiscally sound, responsible decisions by the Village Council that allows the Village to meet service demands while minimizing the financial burden on its residents. The Village is very fortunate to have a citizenry that is active on many boards and committees, a working staff that has shown its willingness to take on additional responsibilities, an expanded workload and 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. 11 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 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 fmd ways to reduce the cost of health care and post-retirement costs. • Finalize new bargaining unit contracts with the PBA and the CWA. • Implement a 6 -year capital improvement/capital replacement plan. • To keep on track with maintenance and improvements outlined in a utility revenue sufficiency and rate adequacy study 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. 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, 2014. This was the thirty-first 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. Respectfully submitted, Michael R.Couzzo, Jr. Village Manager J an Forsythe, Finance Director ui 1V VILLAGE OF TEQUESTA, FLORIDA ORGANIZATION CHART SEPTEMBER 30, 2015 VILLAGE OF TEQUESTA, FLORIDA Abby Brennan Vince Arena Frank D'Ambra Steve Okun Thomas Paterno LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2015 VILLAGE COUNCIL VILLAGE OFFICIALS Michael R. Couzzo, Jr. Corbett, White, Davis & Ashton, PA Lori McWilliams, MMC JoAnn Forsythe, CPA James M. Weinand Christopher L. Elg NZ Consultants, Inc. Timothy English Michael R. Couzzo, Jr. Greg Corbitt Merlene Reid, MS, SPHR Mayor Vice -Mayor Councilmember Councilmember Councilmember Village Manager Village Attorney Village Clerk Finance Director Fire Chief Police Chief Planning and Zoning Director Director/Building Official Utilities/Public Works Director Parks and Recreation Director Human Resources Director VILLAGE INDEPENDENT AUDITORS Marcum LLP vi FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT MARCUM ACCOUNTANTS ADVISORS INDEPENDENT AUDITORS' REPORT To The Honorable Mayor, Village Council and Village Manager Village of Tequesta, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida (the Village) as of and for the fiscal year ended September 30, 2015 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 and 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 MARCUMGROUP MEMBER Marcum LLP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach, Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 marcumllp.com We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Village of Tequesta, Florida as of September 30, 2015 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 changed its method of accounting and financial reporting for pensions as a result of the adoption of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB No. 68, both effective October 1, 2014, which resulted in the Village restating net position for recognition of the Village's pension related activity prior to October 1, 2014. 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, budgetary comparison information, schedules of net pension liability (asset) and related ratios, contributions, investment returns, funding progress for other post -employment benefits and proportionate share of the net pension liability — Florida Retirement System Pension and Retiree Health Insurance Subsidy Program on pages 4-19 and 108- 123 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 by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2016 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. PY 0&&tk ccP West Palm Beach, Florida June 30, 2016 3 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) Management's Discussion and Analysis 2015 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, 2015. 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 iii of this report. Financial Highlights The Village implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27, for the fiscal year ended September 30, 2015. The significance and impact of implementing GASB No. 68 is explained well by Connie Spinelli, BDK Advisors, "The changes brought about by Statements No. 67 and 68 are substantial and complex, involving comprehensive disclosures and time -sensitive, subjective computation. GASB has aligned pension accounting to its economic resources measurement focus and U.S. GAAP's conceptual framework. Namely, financial statements should provide decision -useful, transparent information that supports assessments of accountability. For governmental financial statements, these principles are particularly useful for municipal investors and lender decisions -making. The updates require recognition of the entire net pension liability and a more comprehensive measure of pension expense. Some observers believe the changes will help financial statements users more clearly see the consequences of future proposed benefit increases and understand the extent to which the total pension liability is covered by resources held by the pension plan." o Implementing GASB Statement No. 68 changed the amount that the Village reports as pension assets, deferred outflows of resources from pensions, pension liability and deferred inflows of resources from pensions in its financial statements as well as the amount the Village reports as pension expense. o Implementation of GASB No. 68 required restating the beginning balance of net position in the governmental and business -type activities. The unadjusted beginning balances, the amount of the adjustments and the restated beginning balances are shown on the face of the financial statements. The Governmental Accounting Standards Board (GASB) also issued GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. GASB No 71 modified guidance in Statement No. 68 eliminating a potential source of understatement of beginning net position and expense in the first year of implementation and addresses mainly contributions made by the Village to a defined benefit pension plan after the measurement date of the Village's beginning net pension liability (the Village uses a measurement date of September 30, 2014 for fiscal year ended September 30, 2015) for the single -employer defined benefit plans and June 30, 2015 for the cost sharing multiple employer plan. The provisions of Statement No.71 are required to be applied simultaneously with the provisions of Statement No.68. • 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. Of total net position, 23.4% ($7,420,212) is unrestricted and may be used to meet the ongoing obligations to the citizens and creditors. 4 Management's Discussion and Analysis 2015 • The Village of Tequesta's total net position increased during the current period. Governmental activities increased net position by $978,059, while business -type activities decreased net position by $422,842. • At the close of the current fiscal year, the Village of Tequesta's governmental funds reported an increase in combined fund balances of $385,907 from the prior year. • At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) reported in the general fund was $3,035,528. • The Village of Tequesta's total outstanding noncurrent liabilities increased $1,069,623. • The Village did not expend $500,000 or more in Federal and/or State financial assistance in the fiscal year ended September 30, 2015 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. 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. The statement of net position presents financial information on all of the Village of Tequesta's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Village of Tequesta is improving or deteriorating. The statement of activities presents information showing how the Village of Tequesta's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related 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 20-21 of this report. Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Village of Tequesta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- Management's Discussion and Analysis 2015 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 governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Village of Tequesta maintains 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. 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 22-25 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 -type activities in the government -wide financial statements. The Village of Tequesta uses enterprise funds to account for its water, stormwater, and refuse and recycling funds. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water fund and the Stormwater Fund, major funds, as well as the Refuse and Recycling fund, a nonmajor fund. The basic proprietary fund financial statements can be found on pages 26-28 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the Village. Fiduciary funds are not reported in the government -wide financial statement because the resources of those funds are not available to support the Village's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. 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 29-30 of this report. Management's Discussion and Analysis 2015 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 31-107 of this report. Other information: In addition to the basic financial statements and accompanying notes, this report also presents certain requiredsupplementary 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 and related ratios, contributions and pension investment returns. Required supplementary information can be found on pages 108-123 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 124-130 of this report. Government -wide Overall Financial Analysis Net position over time, may serve as a useful indicator of a government's financial position. In the case of the Village of Tequesta, assets and deferred outflows of resources exceeded liabilities and deferred inflows by $13,269,813 at the close of the most recent fiscal year. This decreased $579,362 from the prior year. The majority of this decrease is due to the implementation of GASB No. 68 and No. 71 and new reporting requirements (i.e. reporting of Net Pension Liability) explained below and in the Notes to the Financial Statements that begins on page 41. Village of Tequesta's Total Net Position The Village of Tequesta's total assets and deferred outflows exceeded total liabilities and deferred inflows by approximately $32 million at the close of the 2015 fiscal year. Governmental activities recorded a change of -4.1% in total net position while the Village's business -type activities recorded a -2.78% change in total net position. and other assets 'apital assets, net Total assets otal deferred outflows of resources loncurrent liabilities Ither liabilities Total liabilities otal deferred inflows of resources et position et investment in capital assets mestricted Total net position $5,539,176 $4,910,701 $6,282,205 $6,086,581 $11,821,381 $10,997,283 12,869,677 13,189,543 17,418,458 18,345,747 30,288,135 31,535,290 18,408,853 18,100,244 23,700,663 24,432,328 42,109,516 42,532,572 788,437 - 369,925 302,367 1,158,362 302,367 4,834,544 3,578,906 5,243,486 5,429,500 10,078,030 9,008,406 698,597 421,431 246,332 278,752 944,929 700,183 5,533,141 4,000,337 5,489,818 5,708,252 11,022,959 10,439,146 394,336 134,593 117,299 - 511,635 134,593 10,058,956 10,284,849 12,681,505 13,402,412 22,740,460 23,687,261 1,572,614 959,704 - - 1,572,614 959,704 1,638,243 2,720,761 5,781,968 5,632,617 7,420,212 8,353,378 $13,269.813 $13,965,314 18.463.473 $19,035,029 $31,733,286 $33,000,343 7 Management's Discussion and Analysis 2015 The largest portion of the Village's total net position (71.3%) 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 (4.9%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $7,420,212 is unrestricted and may be used to meet the government's ongoing obligations to its citizens and creditors. At the end of the current fiscal year, the Village of Tequesta is able to report positive balances in all categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. The same situation held true for the prior fiscal year. Village of Tequesta, Net Position Unrestricted assets Restricted ■ 2014 23,687,261 Net Investments in capital assets 8,372,343 ■ 2015 22,740,460 9/30 7,420,212 Net Investments in Restricted Unrestricted capital assets ■ 2014 23,687,261 959,704 8,372,343 ■ 2015 22,740,460 1,572,614 7,420,212 Program Revenues: Charges for Services Operating Grants & Contributions General Revenues: Ad valorem Taxes Other Taxes Franchise fees on gross receipts Unrestricted intergovernmental Unrestricted investment earnings Other Miscellaneous Total Revenue Expenses: General government Public safety Transportation Leisure Services Interest expense/other fiscal charges Water utility services Stormwater services Refuse & recycling services Total Expenses Management's Discussion and Analysis Village of Tequesta's Changes in Net Position 2015 $ 2,417,944 $ 2,526,790 $ 5,220,639 $ 4,960,023 $ 7,638,583 $ 7,486,813 48,300 63,148 - - 48,300 63,148 5,275,411 4,767,948 5,275,411 4,767,948 1,304,313 1,216,100 1,304,313 1,216,100 462,312 401,859 462,312 401,859 811,044 770,616 811,044 770,616 7,139 13,184 9,986 14,976 17,125 28,160 30,811 In Q';'71/A 53,406 0417 nc1 20,431 35,415 51,242 1;7c1 ncA cnln AIA lc An477n 88,821 1A 477 AA; 1,714,572 1,770,326 112,781 (422,842) 1,714,572 1,770,326 5,812,114 6,222,408 $ 12,291,754 $ 13,852,533 $ 5,812,114 6,222,408 1,161,613 1,009,693 Net position - ending 9/30 $ 13,269,813 1,161,613 1,009,693 566,585 583,445 $ 33,000,343 566,585 583,445 124,331 114,398 234,356 244,317 358,687 358,715 - - 4,677,460 4,537,705 4,677,460 4,537,705 262,413 279,051 262,413 279,051 - - 499,670 489,977 499,670 489,977 9,379,215 9,700,270 5,673,899 5,551,050 15,053,114 15,251,320 Increase (decrease) in net position 978,059 112,781 (422,842) (540,636) 555,217 (427,855 Net position -beginning (2015 Restated) $ 12,291,754 $ 13,852,533 $ 18,886,315 $ 19,575,665 $ 31,178,069 $ 33,428,198 Net position - ending 9/30 $ 13,269,813 $ 13,965,314 $ 18,463,473 $ 19,035,029 $ 31,733,286 $ 33,000,343 For fiscal year ending September 30, 2015, the Village of Tequesta's overall net position decreased $1,267,057 from the prior fiscal year. As mentioned earlier, the Village restated beginning net position due to the implementation of GASB No. 68 and No. 71 and recorded a Net Pension Liability (NPL) of $1,389,770. The Village also recorded, and reports separately on the Statement of Net Position, a net pension asset of $586,104 (GASB No. 68 prohibits netting the net pension asset and net pension liability of two different pension trusts). The recording of the NPL and the restatement of beginning net position had the largest effect on the change in ending net position from the prior year. The change resulted in the Village recording an increase in net position from activities for the fiscal year ending September 3, 2015 while showing a decrease in net position from the prior year. Some other changes in activities that affected net position are: 1) revenue from ad valorem taxes increased due to an increase in the millage rate from 6.050 to 6.292 and increases in property values; 2) other taxes increased $88,213 with the major portion due to an extra supplemental payment of insurance premium taxes; 3) franchise fees increased as a new franchise agreement with Florida Power and Light came into effect during the year and 4) revenues from charges for services decreased $108,846, due mainly to a decrease in revenues from permit fees. I Management's Discussion and Analysis 2015 Governmental Activities — Expenses and Program Revenues Governmental activities. Overall program revenues decreased from the prior year ($123,694) with the largest portion ($100 thousand) due to decreased revenues from permit fees. Net expenses decreased $197,392 from the prior period with the largest decrease ($202,794) recorded in the public safety function. The function of general government also recorded a decrease in net expenses ($148,325) due to increased revenues from charges for services combined with a savings in election expenses as no one opposed the incumbents and no election was necessary. Transportation expenses increased $151,920, due mainly to additional public works projects performed during the year. Expenses and Program Revenues - Governmental Activities $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 win Al v�ti 7 ■ Revenues ■ Expenses The Village's programs/functions include General Government, Public Safety, Transportation and Leisure Services. The net cost shows the extent to which the Village's general revenues support each of the Village's programs/functions. The net cost of all governmental activities this year was $6.9 million — a 3% reduction from the prior period. As shown on the Statement of Activities, the functions directly benefiting from the programs generated revenue of approximately $2.5 million towards this cost and the remainder was financed through general revenues ($7.9 million). 10 Management's Discussion and Analysis 2015 The following is a comparison of revenues by source for governmental activities for fiscal year 2015 and 2014. 6000 5000 4000 3000 2000 1000 Revenues by Source - Governmental Activities in Thousands �Z5 ZS �CP 1 Business -type Activities. The Village of Tequesta's business -type activities reported operating expenses exceeding revenue by $422,842. Non-operating expenses exceeded non-operating revenues by $203,939. Additionally, beginning net position was reduced $148,714 due to the implementation of GASB No. 68. The total result was a decrease in net position of $571,557 from the prior year. 11 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Management's Discussion and Analysis 2015 2015 Total Revenues/Expenses - Business Tyne Activities Water Utility Refuse & Recycling Stormwater Utility ■ Revenue ■ Expenses As shown in the chart below, revenues from charges for services reported in business type activities increased $260,617 from the prior year, with the Water Utility increasing 6.4% and Refuse and Recycling and Stormwater Utility reporting a small decrease in revenues. Non-operating income includes investment earnings, as well as miscellaneous revenue from payments for the construction portion of the Tropic Vista water extension. Revenues by Source - Business Tvpe Activities $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 2015 2014 Charges for Services Non-operating 12 Management's Discussion and Analysis 2015 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, 2015 the Village of Tequesta's governmental funds reported total combined fund balances of $4,290,552. Approximately $2.02 million (48%) of the combined governmental fund balances is unassigned and is available for spending at the Village's discretion. Approximately 24% is assigned with the largest portion ($1 million) assigned for hurricane/disaster emergency. Approximately $l.lmillion is restricted for a particular purpose (i.e. debt service, etc.). And $161,037 is in nonspendable form (i.e. inventories, prepaid items, etc.). Total combined find balances have increased 9.8% from the prior year with the largest increase, $310,542 reported in total unassigned fund balances. Governmental Funds Components of Fund Balance September 30, 2015 and 2014 2014 ■ Nonspendable w Restricted ■ Assigned 2015 ■ Unassigned $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 13 Management's Discussion and Analysis 2015 The General Fund is the chief operating fund of the Village of Tequesta. At the end of the current fiscal year total fund balance was $3,987,146, an increase of $383,619 from the prior year. Unassigned fund balance was $2,024,550 million, an increase of $345,207 from the prior year. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents approximately 19.54% of fiscal year 2015 General Fund expenditures and total fund balance represents of expenditures. The Village of Tequesta has adopted a policy to keep unassigned fund balance at a minimum of two months (17%) of expenditures. As shown by the graph below, overall fund balance in the General Fund has increased from the prior year. Additionally, for the first time in six years the Village has not relied on appropriating fund balance to support its operations. This positive movement is due mainly to positive changes in the economy (increasing property values) along with budgetary polices that were put into place to reduce the use of existing fund balance to support activities. General Fund Components of Fund Balance September 30, 2015 and 2014 ■ Nonspendable 1114 ■ Restricted ■ Assigned ■ Unassigned 2010 $0 $500.000 $1.000.000 $1.500.000 $2.000.000 $2.500.000 14 Management's Discussion and Analysis 2015 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 Taxes $ 5,275,411 51.3% $ 507,463 10.64% $ 4,767,948 Othertaxes 1,304,312 12.7% 88,212 7.25% 1,216,100 Charges for services 1,192,142 11.6% 89,646 8.13% 1,102,496 Intergovernmental 841,950 8.2% 25,627 3.14% 816,323 Intragovernmental 534,416 5.2% 15,228 2.93% 519,188 Franchise fees 462,312 4.5% 60,453 15.04% 401,859 Licenses and permits 346,529 3.4% (86,899) -20.05% 433,428 Rents and Royalties 192,256 1.90/0 55,350 40.43% 136,906 Fines and forfeitures 89,715 0.90/0 57,738 180.56% 31,977 Miscellaneous 37,411 0.4% (48,610) -56.51% 86,021 Investment earnings 7,140 0.1% (6,044) -45.84% 13,184 Total Revenue S 10283.595 100% S 758J64 7.96% S 9.525.430 As noted in the table above, total General Fund revenue has increased $758,164 (7.96%). The largest increase was due to an increase in the tax rate as well as increased property values. The decrease in revenue from licenses and permits is indicative of the cyclical nature of this revenue in a small community that is almost completely built out. Expenditures in the General Fund are shown in the following schedule: Public Safety $ 6,185,916 61.4% $ 284,938 4.8% $ 5,900,978 General government 1,615,339 16.0% 1,048 0.1% 1,614,291 Transportation 931,841 9.3% 73,054 8.5% 858,787 Leisure services 527,223 5.2% 20,154 4.0% 507,069 Debt service 458,962 4.6% 25,417 5.9% 433,545 Capital outlay 349,425 3.5% (481,815) -58.0% 831,240 Total expenditures $ 10,068,706 1000/0 $ (77,204) -0.8% $10,145,910 15 Management's Discussion and Analysis 2015 Total General fund expenditures decreased slightly from the prior year ($77,204) due to a decrease in capital outlay and an overall increase in other expenditures. Part of the decrease in capital outlay ($481,815) was due to; 1) less funding towards capital projects during the fiscal year and 2) more capital projects funded and recorded in the capital projects fund rather than the general fund. The decreases were offset by increases in expenditures in the functions of. public safety, general government, transportation and leisure services ($379,194). The cost of debt has remained fairly stable increasing 3.5% from the prior year due to a capital lease entered into during the year. Below is a graphic presentation of how the Village expends funds and how they compare to the prior period. General Fund - Expenditures by Source in Thousands $7,000 $6,000 $5,000 $4,000 2015 $3,000 $2,000 2014 $1,000 $0 S 10 s - � ro Ending fund balances for the Capital Projects Fund is $4,313 and the Capital Improvement fund is $12,128 at September 30, 2015. 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 roadway improvements of $8,000 encumbered in the Capital Improvement fund at the end of fiscal year ending 9/30/2015. General Fund Budgetary Highlights The General Fund original budget was increased $474,285. The most significant items that were added to the budget during the year were; the purchase of police department vehicles; $244,778 and the write off of $62,995 in bad debt related to transport fees. Proprietary funds: The Village's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. 16 Management's Discussion and Analysis 2015 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 $18,463,473, a decrease of $422,842 from the prior period (adjusted balances). Other factors concerning the finances of this major fund have already been addressed in the discussion of the Village's business -type activities. Change in Net Position (not including restatement of rating Income 2015 2014 2015 2014 Water $ (255,429) $ (381,840) $ (439,714) $ (577,408) Storm -water 57,580 44,312 38,097 45,573 Refuse and Recycling (21,054) (9,182) (21,225) (8,801) $ (218,903) $ (346,710) $ (422,842) $ (540,636) Capital Assets and Debt Administration Capital assets: The Village's capital assets for its governmental and business -type activities total $30,197,098 (net accumulated depreciation) as of September 30, 2015. The Village acquired $750 thousand in assets during the year and disposed of $321thousand during the year. Additional information on the Village's capital assets can be found in Note 3 D., Capital Assets, starting on page 53 of this report. Land $ 634,017 $ 83,335 $ 717,352 Construction in progress 107,226 34,220 141,446 Buildings 8,043,526 979,512 9,023,038 Improvements 2,385,930 58,720 2,444,650 Infrastructure 4,544,072 32,596,845 37,140,917 Machinery & Equipment 4,165,556 1,761,820 5,927,376 Intangibles 201,377 - 201,377 Other - K-9 25,763 - 25,763 Total capital assets 20,107,467 35,514,452 55,621,919 Less accumulated depreciation (7,237,790) (18,187,031) (25,424,821) Total capital assets, net $ 12,869,677 $ 17,327,421 $ 30,197,098 17 Management's Discussion and Analysis 2015 Noncurrent liabilities: At the end of the current fiscal year, the Villages had a total of $10,078,031 of noncurrent liabilities. The largest portion are debt instruments in the form of promissory notes with Bank of America that are secured by general revenue sources. The table below summarizes the Village's debt position. In implementing GASB No. 68 the Village recognized a net pension liability (NPL) of $1,389,770. The Village is presenting the NPL as a separate component of the noncurrent liabilities on the face of the financial statements to present more clearly the Village's long-term pension obligations. A more detailed explanation can be found in Note 3.K — Noncurrent Liabilities starting on page 103. Notes payable $2,249,720 $2,519,635 Capital leases 561,001 385,059 Compensated absences 532,958 484,212 Net OPEB Obligation 222,700 190,000 Noncurrent Liabilities 3,566,379 3,578,906 Net Pension Liability 1,268,165 - $4,925,818 $5,245,703 $ 159,764 156,798 36,300 27,000 5,121,882 5,429,501 121,605 - 7,175,538 $7,765,338 561,001 385,059 692,722 641,010 259,000 217,000 8,688,261 9,008,407 1,389,770 - Total Noncurrent Liabilities $4,834,544 $ 3,578,906 $ 5,243,487 $ 5,429,501 $ 10,078,031 $ 9,008,407 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. • There has been a positive move in the housing market, new home construction is increasing and inventory of homes has decreased significantly from the prior period. According to the Associated General Contractors of America, Florida was second only to California in new construction jobs over the past year (+6.5%). • Millennials emerged as a dominant force in 2015, representing almost 2 million sales, which is more than one-third of the total in the State. (Jeannie M. Ferrara, Water Pointe Realty Group) • Interest rates remained low as the Federal Reserve has been slow in taking any action to raise rates significantly. • Revenues from sales taxes increased from the prior year and the State of Florida continues to work to capture online sales taxes. • The CPI remains lower than 2%, (the number the Fed is looking for). • The U.S. Gross domestic Product has been growing at a rate slightly over 2%. • The Village of Tequesta's water rates increased 7% during the year and will increase another 7% on October 1, 2016 to fund capital needs. 18 Management's Discussion and Analysis 2015 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. 19 BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET POSITION SEPTEMBER 30, 2015 Liabilities Business - Accounts payable Governmental type 553,407 Accrued liabilities Activities Activities Total Assets 4,011 32,763 36,774 Cash and cash equivalents $ 4,407,525 $ 5,695,063 $ 10,102,588 Investments 187,344 129,820 317,164 Receivables, net 288,204 372,374 660,578 Inventories 42,260 43,504 85,764 Prepaid items 118,777 41,444 160,221 Net pension asset 495,067 91,037 586,104 Capital assets not being depreciated 741,243 117,555 858,798 Capital assets being depreciated, net 12,128,434 17,209,866 29,338,300 Total Assets 18,408,854 23,700,663 42,109,517 Deferred Outflows of Resources 54,960 -- 54,960 Deferred outflows - pensions 788,437 90,025 878,462 Deferred charge on refunding -- 279,900 279,900 Total Deferred Outflows of Resources 788,437 369,925 1,158,362 Liabilities Accounts payable 358,973 194,434 553,407 Accrued liabilities 230,008 19,021 249,029 Customer deposits 4,011 32,763 36,774 Unearned revenue 103,849 -- 103,849 Due to other governments 1,757 115 1,872 Noncurrent liabilities: Due within one year 399,959 351,898 751,857 Due in more than one year 3,166,420 4,769,984 7,936,404 Net pension liability 1,268,165 121,605 1,389,770 Total Liabilities 5,533,142 5,489,819 11,022,961 Deferred Inflows of Resources Deferred inflows - pensions 339,376 117,299 456,675 Deferred inflows - taxes collected in advance 54,960 -- 54,960 Total Deferred Inflows of Resources 394,336 117,299 511,635 Net Position Net investment in capital assets 10,058,956 12,681,504 22,740,460 Restricted: Debt Service 399,959 -- 399,959 Building 340,623 -- 340,623 Law Enforcement 336,965 -- 336,965 Pension benefits 495,067 -- 495,067 Unrestricted 1,638,243 5,781,969 7,420,212 Total Net Position $ 13,269,813 $ 18,463,473 $ 31,733,286 The accompanying notes are an integral part of these financial statements. 20 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF ACTIVITIES FOR TIE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Business -type Activities Water Stormwater utility Refuse and recycling Total business -type activities Total primary government 4,911,816 4,422,031 262,413 319,993 499,670 478,616 5,673,899 5,220,639 $ 15,053,113 $ 7,638,583 $ 48,300 General Revenues Ad valorem taxes Utility taxes Communication service tax Insurance premium taxes Business taxes Franchise fees based on gross receipts Unrestricted intergovernmental revenues Unrestricted investment earnings Sale of capital assets Miscellaneous revenues Total general revenues Change in net position Net Position - beginning of year previously reported adjustment to restate net position (see Note 3) Net Position - Beginning (restated) Net Position - Ending (489,785) (489,785) 57,580 57,580 (21,054) (21,054) (453,260) (453,260) (6,912,970) (453,260) (7,366,230) 5,275,411 5,275,411 707,243 Net (Expense) Revenue and 707,243 317,979 Program Revenues Changes in Net Position 189,010 90,081 Charges Operating Primary Government 462,312 811,044 for Grants and Governmental Business -type Total Functions/Programs Expenses Services Contributions Activities Activities 20,431 Primary Government 7,891,030 30,418 7,921,447 978,059 (422,842) Governmental activities: 13,965,314 19,035,029 33,000,343 (1,673,560) (148,714) General government $ 1,714,572 $ 786,792 31,178,069 $ (927,781) $ $ (927,781) Public safety 5,812,114 1,563,375 40,800 (4,207,939) (4,207,939) Transportation 1,161,613 (1,161,613) (1,161,613) Leisure services 566,585 67,777 7,500 (491,307) (491,307) Interest on long-term debt 124,331 -- (124,331) (124,331) Total governmental activities 9,379,214 2,417,944 48,300 (6,912,970) (6,912,970) Business -type Activities Water Stormwater utility Refuse and recycling Total business -type activities Total primary government 4,911,816 4,422,031 262,413 319,993 499,670 478,616 5,673,899 5,220,639 $ 15,053,113 $ 7,638,583 $ 48,300 General Revenues Ad valorem taxes Utility taxes Communication service tax Insurance premium taxes Business taxes Franchise fees based on gross receipts Unrestricted intergovernmental revenues Unrestricted investment earnings Sale of capital assets Miscellaneous revenues Total general revenues Change in net position Net Position - beginning of year previously reported adjustment to restate net position (see Note 3) Net Position - Beginning (restated) Net Position - Ending (489,785) (489,785) 57,580 57,580 (21,054) (21,054) (453,260) (453,260) (6,912,970) (453,260) (7,366,230) 5,275,411 5,275,411 707,243 707,243 317,979 317,979 189,010 189,010 90,081 90,081 462,312 462,312 811,044 811,044 7,139 9,986 17,126 13,073 13,073 17,739 20,431 38,170 7,891,030 30,418 7,921,447 978,059 (422,842) 555,217 13,965,314 19,035,029 33,000,343 (1,673,560) (148,714) (1,822,274) 12,291,754 18,886,315 31,178,069 $ 13,269,813 $ 18,463,473 $ 31,733,286 The accompanying notes are an integral part of these financial statements. 21 VILLAGE OF TEQUESTA, FLORIDA BALANCESHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 Assets Cash and cash equivalents Investments Receivables, net Inventories Prepaid items Total Assets Liabilities Accounts payable Accrued liabilities Unearned revenue Due to other governments Other current liabilities Total Liabilities Deferred Inflows of Resources Deferred inflows - taxes collected in advance Total Deferred Inflows of Resources Fund Balances Nonspendable: Inventories Prepaid items Restricted: Debt Service Building Law Enforcement Assigned to: Subsequent year's budget Hurricane/disaster emergency Capital Projects Unassigned: General Fund Total Fund Balances Total Liabilities, Deferred Inflows of Resources and Fund Balances Other Total General Governmental Governmental Fund Funds Funds $ 4,080,119 $ 327,406 $ 4,407,525 187,344 -- 187,344 288,204 -- 288,204 42,260 -- 42,260 118,777 -- 118,777 $ 4,716,704 $ 327,406 $ 5,044,110 $ 334,973 $ 24,000 $ 358,973 230,008 -- 230,008 103,849 -- 103,849 4,011 -- 4,011 1,757 -- 1,757 674,598 24,000 698,598 54,960 -- 54,960 54,960 -- 54,960 42,260 -- 42,260 118,777 -- 118,777 399,959 -- 399,959 340,623 -- 340,623 50,000 286,965 336,965 10,978 -- 10,978 1,000,000 -- 1,000,000 -- 16,441 16,441 2,024,549 -- 2,024,549 3,987,146 303,406 4,290,552 $ 4,716,704 $ 327,406 $ 5,044,110 The accompanying notes are an integral part of these finaancial statements. 22 VILLAGE OF TEQUESTA, FLORIDA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2015 Amounts reported for governmental activities in the statement of net position are different because: Total Fund Balances - Governmental Funds Net pension asset is not considered to represent a financial asset in the governmental funds. Capital assets used in the governmental activities are not financial resources and, therefore are not reported in the governmental funds. Deferred outflows of resources related to pension transactions not reported in the governmental funds. Deferred inflows of resources related to pension transactions not reported in the governmental funds. Long-term liabilities, including notes payable, are not due and payable in the current period and, therefore, are not reported in the governmental funds. Net pension liability is not due and payable in the current period and, therefore, not reported in the funds. Net Position of Governmental Activities $ 4,290,552 495,067 12,869,677 788,437 (339,376) (3,566,379) (1,268,165) $ 13,269,813 The accompanying notes are an integral pant of these financial statements. 23 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF REVENUES, EXPENDITURES AND CHARGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Revenues Ad valorem taxes Other taxes Charges for services Intergovernmental Intragovernmental Licenses and permits Franchise fees Rents and royalties Miscellaneous Fines and forfeitures Grants, contributions and donations Investment earnings Total Revenues Expenditures Current: General government Public safety Transportation Leisure services Capital outlay Debt service: Principal Interest Fiscal Charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers in Transfers out Sale of capital assets Capital lease Total other financing sources (uses) Total Total General Nonmajor Governmental Fund Funds Funds $ 5,275,411 $ -- $ 5,275,411 1,304,312 -- 1,304,312 1,192,142 -- 1,192,142 841,950 -- 841,950 534,416 -- 534,416 346,529 -- 346,529 462,312 -- 462,312 192,256 -- 192,256 20,017 -- 20,017 89,715 60,607 150,323 17,395 -- 17,395 7,140 -- 7,140 10,283,595 60,607 10,344,202 1,615,339 -- 1,615,339 6,185,916 15,264 6,201,180 931,841 78,285 1,010,126 527,223 -- 527,223 349,425 50,032 399,457 334,631 -- 334,631 113,986 -- 113,986 10,345 -- 10,345 10,068,706 143,581 10,212,287 214,889 (82,974) 131,915 85,000 85,000 (85,000) -- (85,000) 13,072 -- 13,072 240,658 -- 240,658 168,730 85,000 253,730 Net change in fund balances 383,619 2,026 385,645 Fund Balances- Beginning 3,603,527 301,380 3,904,907 Fund Balances - Ending $ 3,987,146 $ 303,406 $ 4,290,552 The accompanying notes are an integral part of these financial statements. 24 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, 2015 Amounts reported for governmental activities in the statement of activities (Page 19) are different because: Net change in fund balances - total governmental funds (Page 24) $ 385,645 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 outlay 399,457 Depreciation expense (719,310) Net Adjustment (319,853) 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 (240,658) Repayment of notes payable principal 269,915 Repayment of capital lease principal 64,716 93,973 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: The details of the difference are as follows: Compensated absences (48,746) Net OPEB obligation (32,700) Net pension expense 899,740 818,294 Change in net position of governmental activities (Page 21) $ 978,059 The accompanying notes are an integral part of thesefinancial statements. 25 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2015 Deferred Outflows of Resources Business -type Activities Deferred outflows - pensions Nonmajor 4,673 Water Deferred charge on refunding Refuse & -- Fund Stormwater Recycling Total Assets 369,925 Liabilities Current Assets: Current Liabilities: Cash and cash equivalents $ 4,481,507 $ 1,091,508 $ 122,048 $ 5,695,063 Investments 117,060 6,300 6,460 129,820 Receivables, net 366,697 1,927 3,750 372,374 Inventories 43,036 468 18,500 43,504 Prepaid items 41,133 311 115 41,444 Total Current Assets 5,049,433 1,100,514 132,258 6,282,206 Non-current Assets: 333,398 Total Current Liabilities 555,224 1,988 Net pension asset 84,898 6,139 91,037 Capital assets not being depreciated 117,555 Compensated absences 140,413 117,555 Capital assets being depreciated, net 15,773,274 1,436,592 4,592,420 17,209,866 Total Non -Current Assets 15,975,727 1,442,731 121,605 17,418,458 Total Assets 21,025,160 2,543,245 132,258 23,700,663 Deferred Outflows of Resources Deferred outflows - pensions 85,352 4,673 90,025 Deferred charge on refunding 279,900 -- 279,900 Total Deferred Outflows of Resources 365,252 4,673 369,925 Liabilities Current Liabilities: Accounts payable 151,428 1,988 41,018 194,434 Accrued liabilities 19,021 19,021 Customer deposits 32,763 32,763 Compensated absences 18,500 18,500 Due to other governments 115 115 Notes payable - current 333,398 -- -- 333,398 Total Current Liabilities 555,224 1,988 41,018 598,230 Noncurrent liabilities Compensated absences 140,413 850 141,264 Notes payable 4,592,420 4,592,420 Net Pension liability 121,605 121,605 Net OPEB obligation 35,000 1,300 36,300 Total Noncurrent Liabilities 4,889,438 2,150 4,891,589 Total Liabilities 5,444,662 4,139 41,018 5,489,819 Deferred Inflows of Resources Deferred inflows - pensions 115,577 1,722 117,299 Total Deferred Inflows of Resources 115,577 1,722 117,299 Net Position Net investment in capital assets 11,244,912 1,436,592 12,681,504 Unrestricted 4,585,261 1,105,467 91,241 5,781,969 Total Net Position $ 15,830,173 $ 2,542,059 $ 91,241 $ 18,463,473 The accompanying notes are an integral part of these financial statements. 26 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Business -type Activities Water Nonmajor Refuse and Fund Stormwater Recycling Total Operating Revenues Charges for services: Metered water sale $ 4,331,169 $ Tap fees 90,862 Stormwater fees -- Refuse & recycling fees -- Total Operating Revenues Operating Expenses Cost of sales and services: Plant production Distribution Stormwater Purchased services Management services Administration Depreciation Total Operating Expenses Operating Income (Loss) Before Transfers Non -Operating Revenues (Expenses) -- $ - $ 4,331,169 -- -- 90,862 319,993 319,993 -- 478,616 478,616 4,422,031 319,993 478,616 5,220,640 1,965,469 -- -- 1,965,469 688,129 -- -- 688,129 -- 144,667 9,659 498 144,667 -- -- 492,400 492,400 -- 12,340 7,270 19,610 957,151 -- -- 957,151 1,066,711 105,406 -- 1,172,117 4,677,460 262,413 499,670 5,439,543 (255,429) 57,580 (21,054) (218,903) Transfer -out -- (19,981) -- (19,981) Transfer -in 19,981 -- -- 19,981 Miscellaneous revenue 20,431 20,431 Investment earnings (losses) 9,659 498 (171) 9,986 Interest expense (215,128) (215,128) Other fiscal charges (19,228) -- -- (19,228) Total Non -Operating Revenues (Expenses) Change in Net Position Net Position- beginning as previously reported Adjustment to restate net position Net Position - Beginning (restated) Net Position - Ending (204,266) 498 (171) (203,939) (439,714) 38,097 (21,225) (422,842) 16,422,969 2,499,594 112,466 19,035,029 (153,082) 4,368 -- (148,714) 16,269,887 2,503,962 112,466 18,886,315 $ 15,830,173 $ 2,542,059 $ 91,241 $ 18,463,473 The accompanying notes are an integral part of these financial statements. 27 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Cash Flows from Operating Activities Cash received from customers, governments and other funds Cash received from other funds Cash paid to other funds Cash paid to suppliers Cash paid to employees Net Cash Provided by Operating Activities Cash Flows from Capital and Related Financing Activities Business -type Activities Nonmanor Water Nonmajor Refuse Fund Funds Funds Totals $ 4,430,527 $ 319,934 $ 480,110 $ 5,230,571 19,981 -- -- 19,981 -- (19,981) -- (19,981) (1,679,482) (67,904) (458,355) (2,205,741) (1,961,513) (90,084) -- (2,051,597) 809,513 141,965 21,755 973,233 Acquisition and construction of capital assets (205,677) -- -- (205,677) Principal payments on long-term debt (334,631) -- -- (334,631) Interest and fiscal charges paid (211,889) -- -- (211,889) Net Cash Used in Capital and Related Financing Activities (752,197) -- -- (752,197) Cash Flows from Investing Activities -- -- 1,434 5,000 Interest received on investments 9,659 498 (171) 9,986 Net Increase in Cash and Cash Equivalents 66,975 142,463 21,584 231,022 Cash and Cash Equivalents- Beginning 4,414,532 949,045 100,464 5,464,041 Cash and Cash Equivalents- Ending $ 4,481,507 $ 1,091,508 $ 122,048 $ 5,695,063 Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Changes in operating assets, liabilities and deferred inflows/ outflows of resources: (Increase) decrease in: Accounts receivable Inventories Deferred outflow of resources Prepaid items and other assets Increase (decrease)in: Accounts payable Accrued liabilities Customer deposits Compensated absences Deferred inflows of resources Net pension liability (asset) Net OPEB obligation Net Cash Provided by Operating Activities $ (255,429) $ 57,580 $ (21,054) $ (218,903) 1,066,711 105,406 -- 1,172,117 8,496 (59) 1,494 9,931 12,696 34 -- 12,730 (85,352) (4,673) -- (90,025) 26,244 2,059 297 28,600 62,857 9,879 41,018 113,754 1,434 -- -- 1,434 5,000 -- -- 5,000 (4,182) 1,217 -- (2,965) 115,577 1,722 -- 117,299 (135,739) (30,700) -- (166,439) (8,800) (500) -- (9,300) $ 809,513 $ 141,965 $ 21,755 $ 973,233 The accompanying notes are an integral part of these financial statements. 28 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 Pension Trust Funds Assets Cash and cash equivalents $ 229,090 Investments, at fair value Corporate stocks 4,742,878 Corporate bonds 857,180 Government backed securities 3,395,608 Mutual funds 5,841,958 Total investments 14,837,624 Prepaid items 4,294 Contributions receivable 29,827 Accrued interest receivable 32,078 Total Assets 15,132,913 Liabilities Accounts Payable 28,539 Due to Broker 7,459 Total Liabilities 35,998 Net Position Restricted for Pension Benefits $ 15,096,915 The accompanying notes are an integral part of these financial statements. 29 VILLAGE OF TEQUESTA, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Pension Trust Funds Additions Contributions: Employer (including State) $ 799,939 Employee 200,554 Total Contributions 1,000,493 Investment Earnings Net decrease in fair value of investments (296,839) Interest earnings 476,730 Loss on sale of investments (37,830) 142,061 Less investment expenses (82,442) Net Investment Earnings 59,619 Total Additions 1,060,112 Deductions Benefits paid 104,143 Refunds of contributions 5,958 Administrative expenses 91,180 Total Deductions 201,281 Change in Net Position 858,831 Net Position Restricted for Pension Benefits Beginning 145238,084 Ending $ 15,096,915 The accompanying notes are an integral part of these financial statements. 30 NOTES TO BASIC FINANCIAL STATEMENTS VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. DESCRIPTION of GOVERNMENT -WIDE FINANCIAL STATEMENTS The government -wide financial statements (i.e. the statement of net position and the statement of activities) report information on all non -fiduciary activities of the primary government and any component units (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. REPORTING ENTITY 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, 2015. C. BASIS of PRESENTATION - GOVERNMENT -WIDE FINANCIAL STATEMENTS While separate government -wide and fund financial statements are presented, they are interrelated. Both sets of statements distinguish between the governmental and business -type activities of the Village. The governmental activities column incorporates data from governmental funds while business -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. 31 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. BASIS OF PRESENTATION - GOVERNMENT -WIDE FINANCIAL STATEMENTS (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. BASIS OF PRESENTATION - FUND FINANCIAL STATEMENTS The fund financial statements provide information about the Village's funds, including its fiduciary funds. Separate statements for each fund category — governmental, proprietary and fiduciary — are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Fiduciary funds are presented apart from major and nonmajor funds. The Village reports the following major governmental fund: The General Fund is the Village's primary operating fund. It accounts for all financial resources of the general government, except those accounted for in another fund. The Village reports the following major enterprise funds: The Water Fund, which accounts for the activities of the water utility, which includes the processing and distribution of potable water to Village residents and some surrounding communities, and the Stormwater Utility Fund, which accounts for the construction and maintenance of the Village's stormwater system. 32 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. BASIS OF PRESENTATION - FUND FINANCIAL STATEMENTS (CONTINUED) Additionally, the Village reports the following fund type: The pension 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. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 33 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (CONnNuED) The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 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 funds are reported using the economic resources measurement focus and the accrual basis of accounting for reporting its assets and liabilities and deferred inflows and outflows of resources (as described above). The pension trustfunds 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 were reported on that date are valued at the last reported bid price. Securities without an established fair value are reported at estimated fair value. Purchases and sales of securities are recorded on a trade -date basis. 34 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. BUDGETARYINFORMATION 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. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE 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 is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes. 35 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE (CONnNUED) 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. 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 and is not applied to the governmental funds or the government -wide financial statements. There was no interest capitalized in 2015. W VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE (CONnNUED) 4. Capital Assets (continued) Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the primary government are depreciated using the straight line method over the following estimated useful lives: Buildings 20 — 40 years Improvements 20 — 50 years Infrastructure 20 — 50 years Machinery and equipment 5 — 15 years Intangibles 5 — 20 years 5. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The Village has two items that qualify for reporting in this category. They are; 1) Deferred outflows related to Pensions and; 2) Deferred charge on refunding resulting from the difference in the carrying value of refunded debt and its reacquisition price, and is amortized over the shorter of the life of the refunded or refunding debt. These items are reported in the government -wide statement of net position and the statement of net position of the proprietary funds. In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The Village has two types of items that qualify for reporting in this category; 1) Deferred inflows related to pensions and; 2) deferred inflows of resources from local business taxes received in advance. These amounts will be recognized in the period in which they become earned. 37 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE (CONnNUED) 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. 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. 38 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE (CONnNUED) 8. Fund Balance Policies (continued) 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. K REVENUES AND EXPENDITURES/EXPENSES 1. Program Revenues Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions (including special assessments) that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues. 2. Property Taxes Property tax collections are governed by Chapter 197, Florida Statutes. Property taxes are based on assessed property value at January 1St as determined by the Palm Beach County Property Appraiser. The Village 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 2015 was 6.2920 mills. Tax bills are mailed out November I st and discounts are available for payment made in the following months; November 4%, December 3%, January 2% and February 1%. Taxes become delinquent on April 1St. The owner of a tax certificate may at any time after taxes have been delinquent (April 1), for two years, file an application for a tax deed sale. Tax deeds are 39 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K REVENUES AND ExPENDITURES/EXPENSES (CONnNuED) 2. Property Taxes (continued) 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. 4. Proprietary Funds Operating and Non -Operating Revenues and Expenses Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the water fund, refuse and recycling fund and stormwater fund are charges to customers for sales and services. The water fund also recognizes as operating revenue, the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for the enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non- operating revenues and expenses. 40 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and deferred outflows and liabilities and deferred inflows and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. J IMPLEMENTATION OF GOVERNMENTAL ACCOI7NTING STANDARDS BOARD STATEMENTS In accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions An Amendment of GASB Statement No. 27, the Village is now required to record its relative share of pension related amounts in its Statement of Net Position and Statement of Activities. This statement includes the definitions of balances to be included in deferred inflows and deferred outflows of resources. Those definitions include the following: Net Pension Liability. Previous standards defined pension liabilities in terms of the annual required contribution. GASB Statement No. 68 defines the pension asset or liability as the portion of the actuarial present value of projected benefit payments that is attributed to past periods of employee service, net of the pension plan's fiduciary net position. Deferred Inflows and Deferred Outflows of Resources Related to Pensions. GASB Statement No. 68 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB No. 68, include recognition of deferred inflows and deferred outflows of resources associated with the difference between projected and actual earnings on pension plan investments. These differences are to be recognized in pension expense using a systematic and rational method over a closed five-year period. The Village's net pension liability (asset), deferred inflows and outflows related to pensions, and pension expense have been determined on the basis reported by the Village's defined benefit pension plans and the Florida Retirement System (FRS) and are now reflected in the Village's Statement of Net Position and Statement of Activities for the fiscal year ended September 30, 2015. This new guidance requires the restatement of the prior year net position. 41 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 2 - RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OF NET POSITION The governmental fund balance sheet includes a reconciliation between fund balance total governmental funds and net position governmental activities as reported in the government -wide statement of net position. One element of that reconciliation explains that "capital assets used in governmental activities are not financial resources and, therefore are not reported in the funds." The amount of this reconciling element is $12,869,677 as explained in the following detail (additional details shown in Note 3.D.): Capital assets not being depreciated: Land $ 634,017 Construction in progress 107,226 Capital assets being depreciated: Buildings, net 5,719,432 Improvements other than buildings, net 1,278,236 Infrastructure, net 3,929,063 Machinery and equipment, net 1,130,991 Intangible, net 50,470 Other K-9,net 20,242 Net Adjustment to Increase Fund Balance - Total Governmental Funds to Arrive at Net Position - Governmental Activities $ 12,869,677 42 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 2 - RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE GOVERNMENT -WIDE STATEMENT OFNET POSITION (CONTINUED) Another element of that reconciliation explains that "long-term liabilities, including bonds/notes payable, are not due and payable in the current period and therefore are not reported in the funds." The details of this $3,566,379 difference are as follows: Note payable $ 2,249,720 Capital leases 561,001 Compensated absences 532,958 Other post -employment benefits 222,700 Net Adjustment to Reduce Fund Balance - Total Governmental Funds to Arrive at Net Position — Governmental Activities $ 3,566,379 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS A. CASH DEPOSITS WITH FINANCIAL INSTITUTION Custodial credit risk -deposits. In the case of deposits, this is the risk that in the event of a bank failure, the government's deposits may not be returned to it. All of the Village's deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280, Florida Security for Public Deposits Act. Under the Act, every qualified public depository shall deposit with the Treasurer eligible collateral of the depository to be held subject to his or her order. The pledging level may range from 25% to 200% of the average monthly balance of public deposits depending upon the depository's financial condition and establishment period. All collateral must be deposited with an approved financial institution. Any potential losses to public depositors are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessments against other qualified public depositories of the same type as the depository in default. At September 30, 2015, none of the Village's primary bank balances were exposed to custodial credit risk. 43 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS The Village has adopted an investment policy in accordance with Florida Statutes and is authorized to invest in obligations of the U.S. Treasury, its agencies and instrumentalities, certificates of deposit, the State Board of Administration Investment Pool, any intergovernmental investment pools authorized pursuant to Chapter 163 of the Florida Statutes, SEC registered money market funds with the highest credit quality rating from a nationally recognized rating agency, and securities of any interest in any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio is limited to obligations of U.S. government, its agencies and instrumentalities and to repurchase agreements fully collateralized by such U.S. government obligations and provided that such investment company or investment trust takes delivery of such collateral either directly or through an authorized custodian. The State Board of Administration (SBA) administers the Florida PRIME investment pool which is governed by Chapter 19-7 of the Florida Administrative Code and Chapters 218 and 215 of the Florida Statutes. The Florida PRIME is not a registrant with the Securities and Exchange Commission (SEC); 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. As of September 30, 2015, 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 deposits SBA -Florida PRIME Total Investments Total Deposits and Investments $10,100,839 97.0% 317,163 29 days AAAm 3.0% 317,163 $10,418,002 100% LII VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Interest Rate Risk — the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer to maturity the greater the exposure. 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. Credit Risk- 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 — the risk of loss attributed to the magnitude of an investment in a single issuer. At this time the Village is invested in the SBA investment pool which represents 3% of total deposits and investments. Custodial Credit Risk -Investments - the risk that, in the event of the failure of the counterparty, the Village will not be able to recover the value of its investments 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 Public Safety Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board's intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the Investment Manager feels that the specific objectives defined in the statement cannot be met, or the guidelines constrict performance, the Investment Manager will present a formal modified investment policy statement to the Board of Trustees at a meeting for the Board's review. Once the Board has adopted, the new investment policy goes into effect 31 days after it has been filed with the State of Florida and the Village of Tequesta. The Investment Policy Statement was changed to include a core real estate investment class and investments of the Public Safety Pension Trust Fund were in compliance with the investment policy for the fiscal year ending September 30, 2015. 45 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) As of September 30, 2015, the Village of Tequesta's Public Sa eoy Pension Trust Fund had the following demand deposits and investments: Weighted Credit Average Rating Percent Percent of Fair Value Maturity (Moody) Distribution Net Position Cash Short -Term Investments Corporate Bonds: Bonds Bonds Bonds Bonds Bonds Bonds U.S. Agencies/Treasuries Mutual Funds -Fixed income Corporate Stocks ETF - Exchange Traded Fund Total $ 305 0.000/0 0.000/0 169,225 1.47% 1.47% 7.18 years 82,166 Al 0.71% 0.71% 251,945 A3 2.19% 2.18% 41,234 Aal 036% 036% 30,799 Aa2 0.27% 0.27% 41,218 Aa3 036% 036% 35,201 Baa3 0.31% 0.31% 2,961,210 14.66 years Aaa 25.74% 25.68% 5,091,808 4426% 44.15% 2,780,084 24.16% 24.10% 19,323 0.17% 0.17% S 11,504,518 100.000/0 99.76% Interest Rate Risk - the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer the time to maturity the greater the exposure. The Plan does not have a formal policy relating to interest rate risk, however; • The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. • At September 30, 2015, there were no direct investments in debt instruments. However, there were investments in mutual funds that included debt instruments in their portfolio. Credit Risk - the risk that a debt issuer will not fulfill its obligations. The investment policy limits credit risk by requiring that: • Fixed income investments must hold a rating in one of the four highest classifications by a major rating service. • Equities must be traded on a national exchange. • Money market investments must hold a minimum rating of Standard & Poor's Al or Moody's P 1. MA VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Concentration of Credit Risk - the risk of loss attributed to the magnitude of an investment in a single issuer. The investment policy limits exposure to this risk by: • Limiting investments in common stock, capital stock or convertible stock of any one issuing company or aggregate of any one issuing company to 5% of the outstanding capital stock of the company. • Limiting the value of corporate bonds issued by any single corporation to not more than 5% of the total fund. • Limiting investments in corporate common stock and convertible bonds (not 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 25% of the value at cost of the fund). Custodial Credit Risk - the risk that, in the event of the failure of the counterparty, the 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. • Requiring security transactions between a broker/dealer and the custodian involving the purchase or sale of securities by transfer of money or securities are made on a "delivery vs. payment" basis to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. Foreign Currency Risk - is the risk of an investment's value changing due to changes in currency exchange rates. Exposure to foreign currency risk is low as: Foreign investments are through ADR's (shares listed in the U.S.), Mutual funds (registered in the U.S.), or Yankee bonds (denominated in U.S. dollars should not exceed 5% of total fund). The investment policy permits a maximum of 25% of the fair value of the fund securities to be invested in foreign securities. At September 30, 2015, 0.2% of the fair value of the fund was invested in foreign securities 47 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Money Weighted Rate of Return and Target Allocation For the fiscal year ended September 30, 2015, the overall annual money -weighted rate of return (long-term expected real rate of return) on the Public Safety Pension Plan investments (both Police Officers' and Firefighters') was 0.38%. The money -weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested. The long-term expected rate of return on pension plan investments, shown below by asset class, is developed using best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation). These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as well as the long-term expected real rate of return as of September 30, 2015 are as follows: Long -Term Target Expected Real Asset Class Allocation Range Rate of Return Domestic Equity 50% 45%-55% 100/0 International Equity 15% 10%-20% 11% Total Equities 65% 60%-70% Domestic Core Fixed Income 20% 15%-25% 5% Diversified Fixed Income 5% 00/0-100/0 6% Total Fixed Income 25% 200/4-30% Core Real Estate 10% 5%-15% 7% Investments — General Employees' Pension Trust Fund Investment Policy Statement The General Employees' Pension Board of Trustees, as fiduciaries, adopts an Investment Policy Statement and directs that it applies to all assets under their control. It is the Board's intention to review the policy at least annually subsequent to the actuarial report and to amend this statement to reflect any changes in philosophy, objectives, or guidelines. When the 48 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Investments — General Employees' Pension Trust Fund (continued) Investment Policy Statement (continued) 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. The Investment Policy Statement was changed to include a core real estate investment class and investments of the General Employees' Pension Trust Fund were in compliance with the investment policy for the fiscal year ending September 30, 2015. At September 30, 2015, the Village of Tequesta's General Emplovees ' Pension Trust Fund had the following demand deposits and investments: Cash Short Term Investments Corporate Bonds: Bonds Bonds Bonds Bonds Bonds Bonds ETF - Exchange Traded Fund U.S. Agencies/Treasuries Mutual Funds Corporate Stocks Total Weighted Credit Percent Average Rating Percent of Net Fair Value Maturity (Moody) Distribution Position $ 3,058 0.08% 0.09% 56,502 1.59% 1.59% 1.27 years 66,516 Al 1.87% 1.87% 78,688 A3 2.21% 2.21% 25,938 Ba2 0.73% 0.73% 110,194 Baal 3.09% 3.09% 38,309 Baa2 1.08% 1.07% 54,972 Baa3 1.54% 1.54% 313,513 8.800/0 8.800/0 434,399 1.64 years Aaa 12.19% 12.19% 750,149 21.06% 21.05% 1,629,958 45.76% 45.73% $ 3,562,196 100.00% 99.94% 49 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Investments — General Employees' Pension Trust Fund (continued) Investment Policy Statement (continued) Interest Rate Risk - the risk that changes in interest rates will adversely affect the fair value of an investment in debt securities. Generally, the longer the time to maturity, the greater the exposure. The Plan does not have a formal policy relating to interest rate risk, however; • The established performance objectives require investment maturities to provide sufficient liquidity to pay obligations as they become due. • At September 30, 2015, the weighted average maturity in years for each investment type is included in the preceding table and ranges from 1.27 to 1.64 years. Credit Risk - the risk that a debt issuer will not fulfill its obligations. The Plan limits exposure that a debt issuer will not fulfill its obligations by limiting investments made or held in the fund to: Obligations issued by the U.S. Government or obligations guaranteed as to principal and interest by the U.S. government or by an agency of the U.S. Government; Bonds, stocks, or commingled funds administered by national or state banks, or other evidences or indebtedness, issued or guaranteed by a corporation organized under the laws of the United States, any state or organized territory of the United States, or District of Columbia provided that the securities meet the following ranking criteria: o Fixed income investments holding a rating in one of the four highest classifications by a major rating service. o Equities that are traded on a National Exchange. Concentration of Credit Risk - the risk of loss attributed to the magnitude of an investment in a single issuer. The Plan's investment policy limits exposure by: • Limiting investments in common stock or capital stock of any one issuing company or aggregate of any one issuing company to 5% of the outstanding capital stock of the company. • Limiting the value of bonds issued by any single corporation not 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. 50 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Investments — General Employees' Pension Trust Fund (continued) Investment Policy Statement (continued) Custodial Credit Risk — the risk of loss attributed to the magnitude of an investment in a single issuer. 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, 2015, the Plan's investment portfolio was held with a third -party custodian. Requiring securities transactions between a broker-dealer and the custodian involving purchase or sale of securities by the transfer of money or securities to be made on a "delivery vs. payment' basis to ensure that the custodian will have the security or money in hand at the conclusion of the transaction. Foreign Currency Risk - is the risk of an investment's value changing due to changes in currency exchange rates. Exposure to foreign currency risk is low as: • Foreign investments are through ADR's (shares listed in the U.S.), Mutual funds (registered in the U.S.), or Yankee bonds (traded in U.S. dollars). • The investment policy permits a maximum of 25% of the fair value of the fund securities to be invested in foreign securities. • At September 30,2015,4.4% of the fair value of the fund was invested in foreign securities. Money Weighted Rate of Return and Target Allocation For the fiscal year ended September 30, 2015, the overall annual money -weighted rate of return (long-term expected real rate of return) on the General Employees' Pension Plan investments was -2.11%. The money -weighted rate of return expresses investment performance, net of investment manager and consultant expenses adjusted for the changing amounts actually invested The long-term expected rate of return on pension plan investments, shown below by asset class, is developed using best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation). These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 51 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) B. INVESTMENTS (CONTINUED) Investments — General Employees' Pension Trust Fund (continued) Money Weighted Rate of Return and Target Allocation (continued) Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as well as the long-term expected real rate of return as of September 30, 2015 are as follows: * See Note 3F. Pension obligations, for additional information on the Village's pension plans. C. RECEIVABLES Below is the detail of receivables for the general, water, and nonmajor fund including the applicable allowances for uncollectible accounts: Long -Term Nonmajor Target Expected Real Asset Class Allocation Range Rate of Return Domestic Equity 50% 45%-55% 100/0 International Equity 15% 10%-20% 11% Total Equities 65% 600/4-70% 111,302 Domestic Core Fixed Income 20% 15%-25% 5% Diversified Fixed Income 5% 00/0-100/0 6% Total Fixed Income 25% 200/4-30% 680,737 Core Real Estate 100/0 5%-15% 7% * See Note 3F. Pension obligations, for additional information on the Village's pension plans. C. RECEIVABLES Below is the detail of receivables for the general, water, and nonmajor fund including the applicable allowances for uncollectible accounts: Net Total Receivables $ 288,204 $ 366,697 $ 1,927 $ 3,750 $ 660,578 52 Storm- Nonmajor General Water water Funds Total Accounts $ 148,798 $ 369,321 $ -- $ 1,570 $ 519,689 Intergovernmental 106,940 255 1,927 2,180 111,302 Other taxes 49,746 -- -- -- 49,746 Gross receivables 305,484 369,576 1,927 3,750 680,737 Less: allowance for uncollectibles (17,280) (2,879) -- -- (20,159) Net Total Receivables $ 288,204 $ 366,697 $ 1,927 $ 3,750 $ 660,578 52 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) D. CAPITAL ASSETS Capital assets activity for the fiscal year ended September 30, 2015, was as follows: Governmental Activities Capital assets not being depreciated: Land Cons truction-in-pro gre s s Total Capital Assets Not Being Depreciated Capital assets being depreciated: Buildings Improvements other than buildings Infrastructure Machinery and equipment Intangibles Other K-9 Total Capital Assets Being Depreciated Less accumulated depreciation for: Buildings Improvements other than buildings Infrastructure Machinery and equipment Intangibles Other K-9 Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Governmental Activities Capital Assets, Net Beginning Ending Balance Additions Deductions Balance $ 634,017 $ -- $ -- $ 634,017 67,604 107,226 (67,604) 107,226 701,621 107,226 (67,604) 741,243 (107,594) -- 8,043,526 -- -- 8,043,526 2,385,930 -- -- 2,385,930 4,544,085 -- (13) 4,544,072 3,862,270 437,329 (134,043) 4,165,556 201,377 -- -- 201,377 25,763 -- -- 25,763 19,062,951 437,329 (134,056) 19,366,224 (2,123,006) (201,088) -- (2,324,094) (1,017,725) (89,969) -- (1,107,694) (507,415) (107,594) -- (615,009) (2,807,782) (360,826) 134,043 (3,034,565) (117,261) (33,646) -- (150,907) (1,840) (3,681) -- (5,521) (6,575,029) (796,804) 134,043 (7,237,790) 12,487,922 (359,475) (13) 12,128,434 $ 13,189,543 $ (252,249) $ (67,617) $ 12,869,677 53 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) D. CAPITAL ASSETS (CONTINuED) Depreciation expense was charged to the functions/programs of the governmental activities of the primary Village as follows: Governmental Activities General government Public safety Transportation Leisure services Total Depreciation Expense - Governmental Activities Business -type Activities: Capital assets not being depreciated: Land Construction in progress Total Capital Assets Not Being Depreciated Capital assets being depreciated Beginning Balance $ 118,731 379,270 170,278 51,031 $ 719,310 Ending Additions Deductions Balance $ 83,335 $ -- $ -- $ 83,335 -- 34,220 -- 34,220 83,335 34,220 -- 117,555 Buildings 979,512 -- 979,512 Improvements other than buildings 58,720 -- -- 58,720 Infrastructure 32,596,833 12 -- 32,596,845 Machinery & Equipment 1,709,903 171,445 (119,528) 1,761,820 Total capital assets being depreciated 35,344,968 171,457 (119,528) 35,396,897 Less accumulated depreciation for: Buildings (630,724) (20,429) (651,153) Improvements other than buildings (17,616) (2,349) -- (19,965) Infrastructure (15,370,421) (980,395) -- (16,350,816) Machinery & Equipment (1,063,795) (200,849) 99,547 (1,165,097) Total Accumulated Depreciation (17,082,556) (1,204,022) 99,547 (18,187,031) Total Capital Assets Being Depreciated, Net 18,262,412 (1,032,565) (19,981) 17,209,866 Business -type Activity Capital Assets, Net $ 18,345,747 $ (1,032,565) $ (19,981) $ 17,327,421 Depreciation expense charged to functions of the business -type activities was $1,172,117. 54 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 E. ACCRUED LIABILITIES Accrued liabilities reported by governmental funds at September 30, 2015, were as follows: Salary and employee benefits Other Total Accrued Liabilities F. PENSION OBLIGATIONS Total General Governmental Fund Funds $ 174,842 $ 174,842 55,166 55,166 $ 230,008 $ 230,008 Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirement System (SLGERS) General Information. Full time employees hired before January 1, 1996 are eligible to participate in the Florida Retirement System (FRS), as provided by Chapters 121 and 112, Florida Statutes, a cost sharing, multiple employer defined benefit plan administered by the State Board of Administration ("SBA"). The FRS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members and beneficiaries. A post -employment health insurance subsidy is also provided to eligible employees. Benefits are established by Chapter 121, Florida Statutes and Chapter 22B, Florida Administrative Code. Amendments to the law can only be made by an act of the Florida Legislature. The State of Florida issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000 or visiting the website at www.dms.myflorida.com/workforce_ operations/retirement/publications. Plan Description: The FRS is a cost-sharing multiple -employer defined benefit pension plan, with a Deferred Retirement Option Program ("DROP") for eligible employees. 55 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirement System (SLGERS) Benefits Provided — Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011: Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with a least six years of credited service of 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers' class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. Ot VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirement System (SLGERS) (continued) As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost -of -living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost -of -living adjustment. The annual cost -of -living adjustment is a proportion of three percent determined by dividing the sum of the pre -July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost -of -living adjustment after retirement. In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Contributions — Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015, respectively, were as follows: Regular— 7.37% and 7.26%; special Risk Administrative Support — 42.07% and 32.95%; Special Risk — 19.82% and 22.04%; Senior Management Service — 21.14% and 21.43%; Elected Officers' — 43.24% and 42.27%; and DROP participants — 12.28% and 18.78%. These employer contribution rates include 1.20% and 1.26% Health Insurance Subsidy (HIS) and 0.04% fee for administration of the FRS Investment Plan, for the periods October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015, respectively. The Village's contributions to the Pension Plan totaled $52,929 for the fiscal year ended September 30, 2015. 57 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirelnent System (SLGERS) (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources The total pension liability for the FRS was determined by an actuarial valuation as of the valuation date July 1, 2015, calculated based on the discount rate and actuarial assumptions below. The total pension liability is calculated using the Individual Entry Age Normal cost allocation method, which differs from the Ultimate Entry Age Normal cost allocation method used in the funding valuation for the plan. The net pension liability was measured as of June 30, 2015. At September 30, 2015, the Village reported a liability of $287,876 for its proportionate share of the Pension Plan's net pension liability. The Village's proportionate share of the net pension liability was based on the Village's 2014-2015 fiscal year contributions relative to the 2013-2014 fiscal year contributions of all participating members. At June 30, 2015 Measurement Date, the Village's proportionate share was 0.002228771%, which was a decrease of 0.000680644% from its proportionate share measure as of June 30, 2014. For the fiscal year ended September 30, 2015, the Village recognized pension expense of ($20,581) as follows: Service Cost $ 47,117 Interest Cost 261,247 Effect of Plan Changes -- Effect of economic/demographic gains or losses (difference between expected and actuarial experience) 4,146 Effect of assumptions changes or inputs 4,444 Member contributions (15,564) Projected investment earnings (249,849) Changes in proportion and differences between contributions and proportionate share of contributions Net difference between projected and actual investment earnings (31,363) Administrative expenses 403 Total $ 20,581 58 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirelnent System (SLGERS) (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources (continued) In addition, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Deferred Inflows/Outflows of Resources Inflows Outflows Effect of economic/demographic gains or losses (differences between expected and actual experience) Effect of assumptions changes or inputs Changes in proportion and differences between contributions and proportionate share of contributions Net differences between projected and actual investment earnings Village Pension Plan contributions subsequent to the measurement date Total $ (6,828) $ 30,391 -- 19,107 (214236) -- (68,740) -- -- 13,423 $ (289,804) $ 62,921 The deferred outflows of resources related to the Pension Plan contributions subsequent to the measurement date, totaling $13,423 will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows: Fiscal Year Ending Amount 2016 $ (68,676) 2017 (68,676) 2018 (68,676) 2019 (11,964) 2020 (18,978) Thereafter (3,336) 59 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Florida Retirement System (FRS) - a Statewide Local Government Employees' Retireuzent System (SLGERS) (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources (continued) Discount Rate The discount rate used to measure the total pension liability was 7.65%. The Pension Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return. Discount rate 7.65% Long-term expected rate of return, net of investment expense 7.65% Municipal bond rate N/A Actuarial Assumptions The actuarial assumptions that determined the total pension liability as of June 30, 2015, were based on the results of an actuarial experience study for the period July 1, 2008 — June 30, 2013. Valuation Date Measurement date Inflation Salary increases including inflation Mortality Actuarial cost method July 1, 2015 June 30, 2015 2.60% 3.25% Generational RP -2000 with Projection Scale BB Individual Entry Age Sensitivity Analysis The following presents the Village's portion of the net pension liability of the FRS, calculated using the discount rate of 7.65 %, as well as what the FRS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65 %) or one percentage point higher (8.65 %) than the current rate. Current 1% Decrease Discount Rate 1% Increase 6.65% 7.65% 8.65% Village's proportionate share of net pension liability (asset) $ 745,951 $ 287,876 $ (93,318) CZ VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (coNnNuED) Florida Retirement System (FRS) - a Statewide Local Government Employees' Retirement System (SLGERS) (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources (continued) Long -Term Expected Rate of Return The long-term expected rate of return on Pension Plan investments was not based on historical returns, but instead is based on a forward -look capital market economic model. The allocation policy's description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimated of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Pension Plan Fiduciary Net Position — Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State - Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan — At September 30, 2015 the Village reported a payable in the amount of $2,407 for outstanding contributions to the Pension Plan, both FRS and Retiree Health Insurance Subsidy (HIS), required for the fiscal year ended September 30, 2015. 61 Compound Annual Annual Target Arithmetic (Geometric) Standard Asset Class Allocation Return Return Deviation Cash 1% 3.2% 3.1% 1.7% Fixed income 180/0 4.8% 4.7% 4.7% Global equity 53% 8.5% 7.2% 17.7% Real estate (property) 100/0 6.8% 6.2% 12.0% Private equity 6% 11.9% 8.2% 30.0% Strategic investments 12% 6.7% 6.1% 11.4% Assumed Inflation - Mean 2.6% 1.9% Pension Plan Fiduciary Net Position — Detailed information regarding the Pension Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State - Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan — At September 30, 2015 the Village reported a payable in the amount of $2,407 for outstanding contributions to the Pension Plan, both FRS and Retiree Health Insurance Subsidy (HIS), required for the fiscal year ended September 30, 2015. 61 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Retiree Health Insurance Subsidy (HIS) Program Plan Description — HIS Program is a cost-sharing multiple -employer defined benefit pension plan established under Section 112.363, Florida Statutes. The Florida Legislature establishes and amends the contribution requirements and benefit terms of the HIS Program. The benefit is a monthly payment to assist retirees of state -administered retirement systems in paying their health insurance costs and is administered by the Department of Management Services, Division of Retirement. Benefits Provided — For the fiscal year ended June 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a state -administered retirement system must provide proof of health insurance coverage, which can include Medicare. Contributions — For the fiscal year ended June 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement multiplied by $5. The payments are at least $30 but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS benefit, a retiree under a state -administered retirement system must provide proof of health insurance coverage, which can include Medicare. The Village's contributions to the HIS Plan totaled $6,489 for the fiscal year ended September 30, 2015. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Actuarial valuations for the HIS Program are conducted biennially. The July 1, 2014, HIS valuation is the most recent actuarial valuation which was used to develop the liabilities for the June 30, 2015. Liabilities originally calculated as of the actuarial valuation date have been recalculated as of a later GASB measurement date using a standard actuarial roll -forward technique. GL VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Retiree Health Insurance Subsidy (HIS) Program (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources (continued) At September 30, 2015, the Village reported a liability of $171,031 for its proportionate share of the Pension Plan's net pension liability. The Village's proportionate share of the net pension liability was based on the Village's 2014-15 fiscal year contributions relative to the 2013-14 fiscal year contributions of all participating members. At June 30, 2015, the Village's proportionate share was 0.001677035%, which was a decrease of 0.000462417% from its proportionate share measured as of June 30, 2014. The total pension liability was determined by an actuarial valuation as of the valuation date, calculated based on the discount rate and actuarial assumptions below, and was then projected to the measurement date. Any significant changes during this period have been reflected as prescribed by GASB No.67. For the fiscal year ended September 30, 2015, the Village recognized pension expense of $12,742 as follows: Service Cost $ 3,649 Interest Cost 6,799 Effect of Plan Changes -- Effect of economic/demographic gains or losses (difference between expected and actuarial experience) -- Effect of assumptions changes or inputs 2,315 Member contributions -- Projected investment earnings (52) Changes in proportion and differences between contributions and proportionate share of contributions -- Net difference between projected and actual investment earnings 28 Administrative expenses 3 Total $ 12,742 63 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Retiree Health Insurance Subsidy (HIS) Program (continued) Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources (continued) In addition, the Village reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Deferred Inflows/Outflows of Resources Inflows Outflows Effect of economic/demographic gains or losses (differences between expected and actual experience) Effect of assumptions changes or inputs Changes in proportion and differences between contrbutions and proportionate share of contributions Net differences between projected and actual investment earnings Village Pension Plan contributions subsequent to the measurement date Total -- 13,456 (56,471) -- -- 93 -- 2,054 $ (56,471) $ 15,603 The deferred outflows of resources related to the HIS Plan, totaling $2,054 resulting from Village contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows: Fiscal Year Ending Amount 2016 $ (7,404) 2017 (7,404) 2018 (7,404) 2019 (7,423) 2020 (7,432) Thereafter (5,856) 64 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Retiree Health Insurance Subsidy (HIS) Program (continued) Discount Rate The discount rate used to measure the total pension liability was 3.80%. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20 -Bond Municipal Bond Index was adopted as the applicable municipal bond index. Discount rate 3.80% Long-term expected rate of return, net of investment expense N/A Bond Buyer General Obligation 20 -Bond Municipal Bond Index 3.80% Actuarial Assumptions The actuarial assumptions that determined the total pension liability as of June 30, 2015, were based on certain results of an actuarial experience study of the FRS for the period July 1, 2008 - June 30, 2013. Valuation Date July 1, 2015 Measurement date June 30, 2015 Inflation 2.60% Salary increases including inflation 3.25% Mortality Generational RP -2000 with Projection Scale BB; details in valuation report Actuarial cost method Individual Entry Age 65 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Retiree Health Insurance Subsidy (HIS) Program (continued) Sensitivity Analysis The following presents the net pension liability of the HIS, calculated using the discount rate of 3.80 %, as well as what the HIS's net pension liability would be if it were calculated using a discount rate that is one percentage point lower (2.80%) or one percentage point higher (4.80%) than the current rate. Current 1% Decrease Discount Rate 1% Increase 2.80% 3.80% 4.80% Village's proportionate share of net pension liability $ 194,882 $ 171,031 $ 151,143 Pension Plan Fiduciary Net Position - Detailed information regarding the HIS Plan's fiduciary net position is available in the separately issued FRS Pension Plan and Other State - Administered Systems Comprehensive Annual Financial Report. The Village of Tequesta Single Employer Defined Benefit Pension Plans Overview: The Village maintains two single -employer defined benefit pension plans, the Public Safety Officers ' Pension Trust Fund and the General Employees ' Pension Trust Fund. The Public Safety Officers' Pension Trust Fund receives contributions that may not be used to pay benefits of all employee classes, therefore, two separate trust funds, the Firefighters' Pension Trust Fund (FPTF) and the Police Officers' Pension Trust Fund (PPTF) are reflected separately in the financial statements, as well as the General Employee's Trust Fund (GPTF). Effective February 1, 2013, the PPTF was not available to new employees, however, Police officers, who began work with the Village after February 1, 2013 are able to participate in a defined contribution plan (described in note 3F below). .. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Tequesta Single Employer Defined Benefit Pension Plans (continued) Membership in the Village of Tequesta's defined benefit pension plans as of the actuarial valuation date of October 1, 2014: FPTF PPTF GPTF Number of: Retirees and beneficiaries 3 -- 1 Inactive, nonretired members 1 4 2 Active members 16 9 37 Total 20 13 40 Funding Policies are presented below under each of the plans. Actuarial Assumptions and Net Pension Liability (NPL) The actuarial valuation of the liabilities for the FPTF, PPTF and GPTF as of the September 30, 2014 measurement date was determined as of the beginning of the year, October 1, 2013 (based on actuarial valuation results as reported in the October 1, 2013 actuarial valuation). Using a measurement date of September 30, 2014 allows for timelier reporting at the end of the year. The GPTF report was dated January 29, 2014 and the FPTF and PPTF reports were dated January 30, 2014. These liabilities are used for GASB Statement No. 68 reporting for the reporting period ending September 30, 2015. The total pension liability for the Village of Tequesta's defined benefit pension plans was determined using the following actuarial methods and assumptions, applied to all prior periods included in the measurement period. Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. If significant changes occur during the year, such as benefit changes or changes in assumptions or methods, these would be noted in the footnotes. Actuarial Valuation Date Measurement Date of the net pension liability Village's Fiscal Year Ended Date for Reporting Purposes Date of the Actuarial Report FPTF PPTF GPTF Oct. 1, 2013 Oct. 1, 2013 Oct. 1, 2013 Sep. 30, 2014 Sep. 30, 2014 Sep. 30, 2014 Sep. 30, 2015 Sep. 30, 2015 Sep. 30, 2015 Jan. 29, 2014 Jan. 30, 2014 Jan. 30, 2014 67 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Tequesta Single Employer Defined Benefit Pension Plans (continued) Pension Expense and Deferred Inflows/Outflows of Resources Related to Pensions Fiscal Year Ended September 30, 2015 Based On Measurement Period Ending September 30, 2014 FPTF PPTF GPTF Change in Net Pension Liability (Asset) Deferred Outflows of Resources Net difference between projected and actual earnings on pension plan investments due to (gains) or losses Deferred Inflows of Resources Net difference between projected and actual earnings on pension plan a. First year set-up b. Current year amortization Recognized in future pension expense Total Pension Expense $ (141,398) $ (6,912) $ (73,670) (524,781) (80,782) (194,376) 40261 8,076 89,662 (8,052) (1,615) (17,932) 32209 6,461 71,730 $ (633,970) $ (81233) $ (196,316) Deferred Inflows of Resources Year Ending September 30, FPTF 2016 $ (7,995) 2017 (7,995) 2018 (7,995) 2019 (7,995) 2020 (229) Total $ (32,209) $ (1,615) (1,615) (1,615) (1,616) $ (6,461) GPTF $ (17,932) (17,932) (17,932) (17,934) $ (71,730) .: VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Tequesta Single Employer Defined Benefit Pension Plans (continued) Net Pension Liability (Asset) Below is a summary of components of the net pension liability, by plan, at September 30, 2015. Fire Police General Measurement Year Ended September 30, 2014 2014 2014 Total pension liability $ 8,755,066 $ 2,736,489 $ 3,091,288 Plan net position 7,824,203 3,066,944 3,346,937 Net pension liability (asset) $ 930,863 $ (330,455) $ (255,649) Plan Net Position as a % of Total Pension Liability 89.37% 112.08% 108.27% VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Tequesta Single Employer Defined Benefit Pension Plans (continued) Net Pension Liability (Asset) (continued) Below is a detail of the net changes in pension liability (asset): FIREFIGHTERS' PENSION TRUST CHANGES IN NET PENSION LIABILITY Balances at September 30, 2014 Changes for the year: Service cost Interest Benefit changes Differences between expected and actual experience Contributions - employer Contributions - state Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other (increase in State reserves) Net changes Balances at September 30, 2015 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability $ 8,755,066 $ 7,824,203 $ 930,863 334,559 -- 334,559 679,400 -- 679,400 318,787 -- -- 108,010 -- 108,010 -- 335,771 (335,771) 189,010 -- 64,721 (64,721) -- 77,213 (77213) (61,913) (61,913) -- (27290) 27,290 118,555 -- -- 1,497,398 577,512 671,554 $ 10,252,464 $ 8,401,715 $ 1,850,749 70 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Teduesta Single Employer Defined Benefit Pension Plans (continued) Net Pension Liability (Asset) (continued) POLICE OFFICERS' PENSION TRUST CHANGES IN NET PENSION LIABILITY (ASSET) Balances at September 30, 2014 Changes for the year: Service cost Interest Benefit changes Differences between expected and actual experience Contributions - employer Contributions - state Contributions - members Net investment income Benefit payments, including refunds of employee contributions Administrative expense Net changes Balances at September 30, 2015 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) -(b) $ 2,736,489 $ 3,066,944 $ (330,455) 126,703 -- 126,703 213,603 -- 213,603 (39,467) -- -- (391,613) -- (391,613) -- 80,782 (80,782) -- 20,545 (20,545) -- 20,718 (20,718) (30,312) (30,312) -- (27,967) 27,967 (121,086) 63,766 (57,320) $ 2,615,403 $ 3,130,710 $ (515,307) 71 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) The Village of Teduesta Single Employer Defined Benefit Pension Plans (continued) Net Pension Liability (Asset) (continued) GENERAL EMPLOYEES' PENSION TRUST CHANGES IN NET PENSION LIABILITY (ASSET) 72 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) Balances at September 30, 2014 $ 3,091288 $ 3,346,937 $ (255,649) Changes for the year: Service cost 300,325 -- 300,325 Interest 253,701 -- 253,701 Differences between expected and actual experience (157,539) -- (157,539) Contributions - employer -- 194,376 (194,376) Contributions - member -- 115,288 (115288) Net investment income -- (36,136) 36,136 Benefit payments, including refunds of employee contributions (17,877) (17,877) -- Administrative expense -- (38,098) 38,098 Net changes 378,610 217,553 161,057 Balances at September 30, 2015 $ 3,469,898 $ 3,564,490 $ (94,592) 72 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Sensitivity of the Net Pension Liability (Asset) to Changes in the 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 table below 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 (amounts in parenthesis represent a net pension asset). Current Single Discount Rate 1% Decrease Assumption 1% Increase 6.60% 7.50% 8.50% Firefighters' $ 2,045,475 $ 930,863 $ (1,423) Police Officers' 62212 (330,455) (653,552) General Employees' 181,729 (255,649) (616,133) 73 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) Summary of Plan Provisions A. Ordinances The Plan was established under the Code of Ordinances for the Village of Tequesta, Florida, Chapter 2, Article III, Division 1, Section 2-61 (b), and was most recently amended under Ordinance No. 15-15, passed and adopted on August 13, 2015. The Plan is also governed by certain provisions of Chapter 175, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code B. Effective Date Not currently available C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time police officers hired before February 1, 2013 and all full-time firefighters are eligible for membership on the date of employment. F. Credited Service Service is measured as the total number of years and completed months of a year as a police officer or firefighter with the Village of Tequesta. No service is credited for any periods of employment for which the member received a refund of their contributions. 74 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Teduesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) G. Compensation Total cash remuneration for services rendered as a police officer or firefighter. For firefighters and police officers hired before October 1, 2010, overtime hours are limited to 300 hours per year, effective October 1, 2013 for firefighters and October 1, 2014 for police officers. For firefighters and police officers hired before October 1, 2010, payments for unused leave earned after October 1, 2013 for firefighters and October 1, 2014 for police officers are excluded from pensionable salary. For firefighters hired on or after October 1, 2010, fixed monthly remuneration including regular earnings, vacation pay and sick pay but excluding lump sum payments, overtime, bonuses, incentives and longevity. H. Average Final Compensation (AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service. L Normal Retirement Eligibility - A member may retire on the first day of the month coincident with or next following the earlier of (1) age 55 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015), or (2) age 52 and 25 years of Credited Service. Benefit - For police officers and firefighters hired before August 14, 2015 (firefighters: Credited Service only prior to September 1, 2015) (this section is being clarified to state, "for police officers hired before February 2013 and firefighters hired before August 14, 2015. 3.0% of AFC multiplied by the first 6 years of Credited Service, plus 3.5% of AFC multiplied by the next 4 years of Credited Service, plus 4.0% of AFC multiplied by the next 5 years of Credited Service, plus 3.0% of AFC multiplied by the next 6 years of Credited Service, plus 2.0% of AFC multiplied by the next 4 years of Credited Service, plus 3.0% of AFC multiplied by all years of Credited Service over 25 years 75 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) L Normal Retirement For firefighters hired before August 14, 2015, Credited Service on or after September 1, 2015: 3.0% of AFC multiplied by years of Credited Service For firefighters hired on or after August 14, 2015: 2.0% of AFC multiplied by the first 10 years of Credited Service 2.5% of AFC multiplied by all years of Credited Service over 10 years Normal Form of Benefit - 10 Years Certain and Life thereafter; other options are also available. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. J. Early Retirement Eligibility - A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The Normal Retirement Benefit is reduced by 3.0% for each year by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit - 10 Years Certain and Life thereafter; other options are also available. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. Wo VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) K. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. L. Service Connected Disability Eligibility - Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village as a result from an act occurring in the performance of service for the Village is immediately eligible for a disability benefit. Benefit - The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 42% of AFC. Normal Form of Benefit - 10 Years Certain and Life thereafter. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. M. Non -Service Connected Disability Eligibility - Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village is immediately eligible for a disability benefit. Benefit - The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 25% of AFC. Normal Form of Benefit - 10 Years Certain and Life thereafter. COLA: None 77 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) M. Non -Service Connected Disability (continued) Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. N. Death in the Line of Duty Eligibility - Members are eligible for survivor benefits regardless of Credited Service. Benefit - The member's spouse or dependent child will receive the 50% of the member's AFC as of the date of death. Normal Form of Benefit - Payable for the life of the beneficiary. COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. O. Other Pre -Retirement Death Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The beneficiary will receive the actuarial equivalent of the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. Normal Form of Benefit - Payable for the life of the beneficiary. 78 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) O. Other Pre -Retirement Death (continued) COLA: None Supplemental Benefit - All retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. The beneficiary of a plan member with less than 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015) at the time of death will receive a refund of the member's accumulated contributions. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. Q. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are the Life Annuity option or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options. R Vested Termination Eligibility - A member has earned a non -forfeitable right to Plan benefits after the completion of 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015). Benefit - The benefit is the member's accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the member's Normal Retirement date. Alternatively, members can elect a reduced Early Retirement benefit any time after age 50. Normal Form ofBenefit - 10 Years Certain and Life thereafter; other options are also available. COLA: None 79 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) R Vested Termination (continued) Supplemental Benefit - Once in pay status, all retirees and beneficiaries receiving pension benefits will be paid a supplemental benefit equal to $20 for each year of the member's Credited Service up to a maximum of $600. The supplemental benefit ceases upon the later of the death of the retired member or beneficiary. Members terminating employment with less than 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015) will receive a refund of their own accumulated contributions. S. Refunds Eligibility - All members terminating employment with less than 6 years of Credited Service (10 years of Credited Service for firefighters on or after August 14, 2015) are eligible. Optionally, vested members (those with 6 or more years of Credited Service — 10 years of Credited Service for firefighters hired on or after August 14, 2015) may elect a refund in lieu of the vested benefits otherwise due. Benefit - Refund of the member's contributions. T. Member Contributions 5% of Compensation for police officers and for firefighters through the fiscal year ending September 30, 2016; 5.5% of Compensation for firefighters beginning in the fiscal year ending September 30, 2017; thereafter, 6% of Compensation for firefighters. Employee contributions for firefighters would revert back to 5% of Compensation if the Village opts out of participation in Chapter 175. U. State Contributions Chapter 185 Premium Tax Revenue: None. Chapter 175 Premium Tax Revenue: The Village is permitted to use all annual Chapter 175 revenue as a credit toward the Required Employer Contribution and to apply the Chapter 175 reserve of $545,142 to reduce the Required Employer Contributions for the fiscal years ending September 30, 2016 through September 30, 2018, as determined by the Village. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) V. Employer Contributions Any additional amount determined by the actuary needed to fund the plan properly according to State laws. W. Cost of Living Increases Not Applicable X. 13th Check Not Applicable Y. Deferred Retirement Option Plan Eligibility - Plan members who have met one of the following criteria are eligible for the DROP: (1) age 55 and 6 years of Credited Service (10 years of Credited Service for firefighters hired on or after August 14, 2015), or (2) age 52 and 25 years of Credited Service. Members must make a written election to participate in the DROP before the 27th year of employment. Benefit - The member's Credited Service and AFC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and AFC. Firefighters have the optional sell back of vacation and sick leave when entering the DROP. Maximum DROP Period - The earlier of 5 years of participation in the DROP or 30 years of employment. 81 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) Y. Deferred Retirement Option Plan Interest Credited - The member's DROP account is credited on September 30 of each year with investment earnings or losses at the same rate earned by the pension fund less any administrative expenses. The interest rate will not be less than 0% nor greater than 7.5%. Normal Form of Benefit - Lump Sum; other options are also available. COLA: None Z. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a Village of Tequesta Public Safety Officers' Pension Trust Fund liability if continued beyond the availability of funding by the current funding source. AA. Changes from Previous Valuation The results as of October 1, 2014 reflect Ordinance No. 1-15 (adopted March 12, 2015) and Ordinance No. 15-15 (adopted August 13, 2015) as summarized on the next page. Chances under Ordinance No. 1-15 Payments for unused leave earned after October 1, 2013 for fighters and October 1, 2014 for police officers are excluded from pensionable salary. Effective October 1, 2013 for firefighters and October 1, 2014 for police officers, overtime hours are limited to 300 hours per year. The Actuarial Impact Statement dated February 12, 2015 measured the financial effect of this Ordinance. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) Summary of Plan Provisions (continued) Changes under Ordinance No. 15-15 For Firefighters: • The benefit multiplier for current active members is changed to a flat 3% prospectively. • The benefit multiplier for future new members is changed to 2% for the first ten years of service and 2.5% thereafter. • The vesting period is changed to ten years for future new members. • The employee contribution rate is increased from 5% to 5.5% for the fiscal year ending September 30, 2017 and to 6% thereafter. The employee contribution rate would revert back to 5% if the Village opts out of participation in Chapter 175. • The optional sell back of vacation and sick leave is allowed upon entering the DROP. For sick leave, 25% of the available balance could be sold back for members with less than ten years of service and 50% of the available balance could be sold back for members with at least ten years of service. The maximum accrual of sick leave is 1,600 hours. For vacation leave, 100% of the available balance could be sold back, with a maximum accrual of 320 hours. • The Village is permitted to use all annual Chapter 175 reserve of $545,142 to reduce the Required Employer contributions for the fiscal years ending September 30, 2016 through September 30, 2018, as determined by the Village. • The interest rate credited to DROP accounts continues to be the same as the net Pension Plan rate of return; however, the rate credited cannot be less than 0% nor greater than 7.5%. The Actuarial Impact Statement dated June 28, 2015 measured the financial effect of this Ordinance. Funding Policy. The contribution requirements of plan members and the Village are established and may be amended by the Village Council. As explained above, plan members, with the exception of DROP participants, are required to contribute a percentage of their annual covered salary, the Village is permitted to use Chapter 175 revenue and the Village is required to contribute at an actuarially determined rate. The employer contribution rate for the measurement year ending September 30, 2014 is 21.47% for police officers and 26.72% for firefighters. The amount of insurance premium taxes collected and remitted to the plan totaled $100,617 for the measurement year ending September 30, 2014 and $189,010 for fiscal year ended September 30, 2015. 83 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) The Firefighters' Pension Trust Fund (part of the PSEPP) does not issue separate stand- alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2015. FIREFIGHTERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 Assets Cash and cash equivalents $ 123,291 Investments, at fair value Corporate stocks 2,038,292 Corporate bonds 351,362 Government backed securities 2,156,103 Mutual Funds 3,707,426 Total investments 8,253,183 Prepaid items 1,644 Contributions receivable 16,273 Accrued interest receivable 15,552 Total Assets 8,409,943 Liabilities Accounts payable 8,228 Total Liabilities 8,228 Net Position Restricted for Pension Benefits $ 8,401,715 M VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Teduesta 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, 2015 Additions Contributions: Employer (including State) $ 524,781 Employee 64,721 Total Contributions 589,502 Investment earnings Net (decrease) in fair of investments value of investments (170,394) Loss on sale of investments (3,518) Interest earnings 278,237 Total investment earnings 104,325 Less investment expenses (27,667) Net investment earnings 76,658 Total Additions 666,160 Deductions Benefits paid 61,913 Administrative expenses 26,735 Total Deductions 88.648 Change in Net Position 577,512 Net Position Restricted for Pension Benefits Beginning 7,824,203 Ending $ 8,401,715 85 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Public Safety Employees' Pension Plan (PSEPP) (continued) The Police Officers' Pension Trust Fund (part of the PSEPP) does not issue separate stand- alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2015. POLICE OFFICERS' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 Assets Cash and cash equivalents $ 46,239 Investments, at fair value Corporate stocks 761,115 Corporate bonds 131,201 Government backed securities 805,106 Mutual Funds 1,384,383 Total investments 3,081,805 Prepaid items 1,644 Contributions receivable 3,279 Accrued interest receivable 5.940 Total Assets 3.138.907 Liabilities Accounts payable 8,197 Total Liabilities 8,197 Net Position Restricted for Pension Benefits $ 3,130,710 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Teduesta 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, 2015 Additions Contributions: Employer $ 80,782 Employee 20,545 Total Contributions 101,327 Investment earnings Net (decrease) in fair value of investments (61,169) Loss on sale of investments (1,314) Interest earnings 107,448 Total investment earnings 44,965 Less investment expenses (24,802) Net investment earnings 20,163 Total Additions 121.490 Deductions Benefits paid 30,312 Administrative expenses 27,412 Total Deductions 57.724 Change in Net Position 63,766 Net Position Restricted for Pension Benefits Beginning 3,066,944 Ending $ 3,130,710 87 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) S. Ordinances Plan established under the Code of Ordinances for The Plan was established under the Code of Ordinances for the Village of Tequesta, Florida, Chapter 2, Article III, Division 1, Section 2-61 (a), and was most recently amended under Ordinance No. 11-1 I passed and adopted on June 9, 2011. The Plan is also governed by certain provisions of Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. T. Effective Date December 11, 2003 U. Plan Year October 1 through September 30 V. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. W. Eligibility Requirements All full-time general employees who are not classified as police officers or firefighters are eligible for membership on the date of employment. X. Credited Service Service is measured as the total number of years and completed months of a year as a general employee with the Village of Tequesta. No service is credited for any periods of employment for which the member received a refund of their contributions. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) Y. Compensation Base compensation including regular earnings, vacation pay, sick pay, plus all tax-deferred items of income, but excluding any lump sum payments, overtime, bonuses and longevity bonus. Z. Average Final Compensation (AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service; does not include lump sum payments of unused leave. AA. Normal Retirement Eligibility - A member may retire on the first day of the month coincident with or next following the earlier of - (1) £ (1) age 62, or (2) 30 years of Credited Service regardless of age. Benefit - 2.0% of AFC multiplied by Credited Service with a maximum benefit equal to 100% of AFC. Normal Form of Benefit - 10 Years Certain and Life thereafter; other options are also available. COLA: None BB. Early Retirement Eligibility - A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 6 years of Credited Service. Benefit - The Normal Retirement Benefit is reduced by 5.0% for each year by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit - 10 Years Certain and Life thereafter; other options are also available. r VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) BB. Early Retirement (continued) COLA: None CC. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. DD. Service Connected Disability Eligibility - Any member who becomes totally and permanently disabled and unable to render useful and efficient service to the Village as a result from an act occurring in the performance of service for the Village is immediately eligible for a disability benefit. Benefit -The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 42% of AFC. Normal Form of Benefit - 10 Years Certain and Life thereafter. COLA: None EE. Non -Service Connected Disability Eligibility - Any member who has 6 years of Credited Service and becomes totally and permanently disabled and unable to render useful and efficient service to the Village is immediately eligible for a disability benefit. Benefit -The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 25% of AFC. Normal Form of Benefit - 10 Years Certain and Life thereafter. COLA: None K1 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) FF. Death in the Line of Duty Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service. Benefit - The beneficiary will receive the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. The benefit is payable at the member's Normal Retirement date. Normal Form of Benefit - 10 Years Certain COLA: None The beneficiary of a plan member with less than 6 years of Credited Service at the time of death will receive a refund of the member's accumulated contributions with interest. GG. Other Pre -Retirement Death Eligibility - Members are eligible for survivor benefits after the completion of 6 or more years of Credited Service. Benefit - The beneficiary will receive the member's accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. The benefit is payable at the member's Normal Retirement date. Normal Form of Benefit - 10 Years Certain COLA: None The beneficiary of a plan member with less than 6 years of Credited Service at the time of death will receive a refund of the member's accumulated contributions with interest. 91 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) HH.Post Retirement Death Benefit determined by the form of benefit elected upon retirement. 11. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are the Life Annuity option or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options. JJ. Vested Termination Eligibility - A member has earned a non -forfeitable right to Plan benefits after the completion of 6 years of Credited Service. Benefit - The benefit is the member's accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the member's Normal Retirement date. Alternatively, members can elect a reduced Early Retirement benefit any time after age 50. Normal Form of Benefit - 10 Years Certain and Life thereafter; other options are also available. COLA: None Members terminating employment with less than 6 years of Credited Service will receive a refund of their own accumulated contributions with interest. KK. Refunds Eligibility - All members terminating employment with less than 6 years of Credited Service are eligible. Optionally, vested members (those with 6 or more years of Credited Service) may elect a refund in lieu of the vested benefits otherwise due. Benefit - Refund of the member's contributions with interest. Interest is currently credited at a rate of 3%. '� VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan Summary of Plan Provisions (continued) LL. Member Contributions 5% of Compensation MM. Employer Contributions Any additional amount determined by the actuary needed to fund the plan properly according to State laws. NN. Cost of Living Increases Not Applicable 00.13t' Check Not Applicable PP. Deferred Retirement Option Plan Not Applicable QQ. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a Village of Tequesta General Employees' Pension Trust Fund liability if continued beyond the availability of funding by the current funding source. RR. Changes from Previous Valuation There have been no changes since the last valuation. 93 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan The General Employees' Pension Trust Fund does not issue separate stand-alone financial statements. Included below are the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position as of and for the fiscal year ended September 30, 2015. GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 Assets Cash and cash equivalents $ 59,560 Investments, at fair value: Corporate stocks 1,943,471 Corporate bonds 374,617 Government backed securities 434,399 Mutual Funds 750,149 Total investments 3,502,636 Prepaid items 1,006 Contributions receivable 10,275 Accrued interest receivable 10,586 Total Assets 3,584,063 Liabilities Accounts payable 12,114 Due to broker 7.459 Total Liabilities 19.573 Net Position Restricted for Pension Benefits $ 3,564,490 94 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) General Employees' Pension Plan GENERAL EMPLOYEES' PENSION TRUST FUND STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Additions Contributions: Employer (including State) $ 194,376 Employee 115,288 Total Contributions 309,664 Investment earnings 11,918 Net (decrease) in fair 5,958 value of investments (65,276) Loss on sale of investments (32,998) Interest earnings 91,045 Total investment earnings/(expenses) (7,229) Less investment expenses (29,973) Net investment expenses (37,202) Total Additions 272,462 Deductions Benefits paid 11,918 Refunds of contributions 5,958 Administrative expenses 37,033 Total Deductions 54,909 Net Increase 217,553 Net Position Restricted for Pension Benefits Beginning 3,346,937 Ending $ 3,564,490 95 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) 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. 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, 2015 was $130,089. Employee contributions to the Plan for fiscal year ended September 30, 2015 were $30,329; the City's contribution was $39,319. u, VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) F. PENSION OBLIGATIONS (CONnNuED) Village of Tequesta Defined Contribution Pension Plan (continued) 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. G. OTHER POSTEMPL 0 YMENT BENEFIT (OPEB) OBLIGATIONS Village of Tequesta's Other Postemployment Benefits Plan 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, 2015 is as follows: Required Contribution Rates Employer Plan members Pay-as-you-go N/A 97 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) G. OTHER POSTEMPL 0 YMENT BENEFIT (OPEB) OBLIGATIONS (CONnNuED) Village of Tequesta's Other Postemployment Benefits Plan (continued) Annual OPEB Cost FY 2015 Annual Required Contribution (ARC) $ 66,000 Interest on Net OPEB Obligation 9,000 Adjustment to ARC (19,000) Total Annual OPEB Cost $ 56,000 Net OPEB Obligation Annual OPEB Cost $ 56,000 Employer Contributions (14,000) Increase in the Net OPEB Obligation 42,000 Net OPEB Obligation (beginning of year) 217,000 Net OPEB Obligation (End of Year) $259,000 * reflects a contribution credit for the implied subsidy The funded status of the Plan as of October 1, 2014, the most recent actuarial valuation date is as follows: Actuarial Unfunded UAAL As % Actuarial Accrued AAL Funded of Covered 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 7.30% W VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) G. OTHER POSTEMPL 0 YMENT BENEFIT (OPEB) OBLIGATIONS (CONnNuED) Village of Tequesta's Other Postemployment Benefits Plan (continued) Three -Year Trend Information Fiscal Annual Year End OPEB Cost 2013 N/A* 2014 $ 55,000 2015 56,000 Valuation date Actuarial cost method Amortization method Investment return Healthcare cost trend rate(s): Select rates Ultimate rate Percentage of Annual OPEB Cost Contributed 0%* 25% 22% Net OPEB Obligation $ 176,000* 217,000 259,000 October 1, 2014 Projected unit credit 15 -year open period; level -dollar payment 4.01/o per annum (includes inflation at 2.75% per annum) 7.501/o for 2014/15 graded to 5.50% for 2018/19 5.001/o per annum * In fiscal year ending September 30, 2013, the Village offered a high deductible health plan resulting in retirees declining to purchase the Village's health insurance and consequently the Village recognized no annual OPEB cost in those years. Beginning in fiscal year 2014, the Village offered 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, 2015. K CONSTR umoN COMMITMENTS The Village had no significant construction commitments as of September 30, 2015. VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) K CONSTR umoN COMMITMENTS(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. L 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. J RISK MANAGEMENT The Village is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, injuries to employees and natural disasters. While the Village cannot anticipate the areas in which potential claims may arise, 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. 100 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) J RISK MANAGEMENT (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 $11,126 in fiscal year 2015 related to policy year 2012/2013 and $1,081 in related to policy year 2013/2014. 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 2014/2015 resulted in the Village being refunded a total of $6,299, of which $5,044 was workers' compensation related. This was due to actual employee wages being lower than estimated for the Trust term, which also impacted our general liability which experienced a refund of $2,832. Property and auto both experienced increases, accounting for an additional $462 and $2,905, respectively. The noticeable increase to the auto policy audit premium is due directly to the addition of 14 items to the vehicle schedule. 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. K. LEASE OBLIGATIONS Capital Lease- Fire Pumper The Village entered into a capital lease with SunTrust in the amount of $432,844 with funding on October 29, 2013 for the financing of a fire pumper. The applicable interest rate is 2.423% and interest and principal payments are due annually on November 11th. This is a nine (9) year lease with ten (10) payments. 101 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) K LEASE OBLIGATIONS (CONnNuED) Capital Lease- Fire Pumper (continued) The following is a schedule of the future minimum lease payments under this capital lease arrangement at September 30, 2015: Fiscal Year Ending September 30: Amount 2016 $ 48,135 2017 48,135 2018 48,135 2019 48,135 2020 48,135 2021-2023 144,404 Total minimum lease payments 385,079 Less amount representing interest (38,820) Present Value of Future Minimum Lease Payments $ 346259 Capital Lease —Police Vehicles The Village entered into a 36 -month capital lease with First Capital Leasing in the amount of $240,657.82 with funding on May 15, 2015 for the financing of seven (7) Ford Police Interceptors with up -fitting. The applicable interest rate is 3.007% (effective rate 3.049%) and interest and principal payments are due on the first of each month. The lease was subsequently assigned to KS StateBank. The following is a schedule of the future minimum lease payments under the capital lease arrangement at September 30, 2015: Fiscal Year Ending September 30: Amount 2016 $ 83,902 2017 83,902 2018 55,934 Total minimum lease payments 223,738 Less amount representing interest (8,994) Present Value of Future Minimum Lease Payments $ 214,744 102 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 — DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) L. LONG-TERMLIAmLmEs 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, 2015 are as follows: Outstanding Signed Original Interest Final September 30, Promissory Notes Payable Date Borrowing Rate Maturity 2015 Gove rnme nt Activities Public Improvements/P.S. Building 9/13/2002 $ 5,000,000 4.28% 9/13/2022 $ 2,249,720 Business -Type Activities Water Plant Expansion 6/30/2004 $ 645,170 4.96% 4/1/2021 $ 221,895 Public Improvement (Refunding) 7/14/2008 6,554,935 3.69% 3/1/2028 4,703,923 Total Business -Type Activities $ 5,553,570 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, 2015 was $86,393,707. As of September 30, 2015 the Village of Tequesta did not exceed the debt limit of $8,639,371. 103 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) L. LONG-TERM LIABILITIES (CONnNuED) Changes in Long -Term Liabilities Changes in the Village of Tequesta's long-term liabilities for the fiscal year ended September 30, 2015 are as follows: Governmental Activities Beginning Ending Due Within Balance Additions Deletions Balance One Year Governmental Activities Beginning Ending Note Payable - 2002 $ 2,519,635 $ 269,915 $ 2,249,720 $ 281,697 Capital leases 385,059 240,658 64,716 561,001 118,262 Compensated absences 484,212 76,838 28,092 532,958 -- Other post -employment benefits 190,000 32,700 -- 222,700 Net pension liability 1,349,773 59,790 (141,397) 1,268,165 -- Total Governmental Activities $ 4,928,679 $ 409,986 $ 221,326 $ 4,834,544 $ 399,959 * For governmental activities, the liability for compensated absences and any other postemployment benefit obligations is liquidated by the general fund. Business -type Activities 104 Beginning Ending Due Within Balance Additions Deletions Balance One Year Business -type Activities Note Payable (2004) $ 253,895 $ -- $ 32,000 $ 221,895 $ 33,000 Note Payable (2008) 4,991,808 -- 287,885 4,703,923 300,398 Compensated absences 156,798 27,125 24,159 159,764 18,500 Other post -employment benefits 27,000 9,300 -- 36,300 Net pension liability 100,049 21,556 -- 121,605 -- Total Business -type Activities $ 5,529,550 $ 57,981 $ 344,044 $ 5,243,487 $ 351,898 104 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) L. LONG-TERMLIAmLmEs (CONnNuED) The debt service requirements for the Village's notes are as follows: Governmental Activities Year Ending Promissory Notes September 30: Principal Interest Total 2016 $ 281,697 $ 90,805 $ 372,501 2017 293,993 78,509 372,501 2018 306,826 65,676 372,502 2019 320,218 52,283 372,501 2020 334,196 38,306 372,501 2021-2022 712,790 32,212 745,002 Total $ 2,249,720 $ 357,791 $2,607,510 Business -type Activities Total $ 4,925,819 $1,252,312 $ 6,178,131 105 Promissory Notes Year Ending Business -Type Activities September 30: Principal Interest Total 2016 $ 333,398 $ 191,748 $ 525,146 2017 347,859 179,573 527,432 2018 361,778 153,956 515,734 2019 375,203 152,121 527,324 2020 388,466 125,366 513,832 2021-2025 1,994,021 397,893 2,391,914 2026-2028 1,125,094 51,655 1,176,749 Total $ 4,925,819 $1,252,312 $ 6,178,131 105 VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) L. LONG-TERMLIAmLmEs (CONnNuED) Total Primary Government Debt Year Ending Total Primary Government Debt September 30: Principal Interest Total 2016 $ 615,095 $ 282,553 $ 897,647 2017 641,852 258,082 899,933 2018 668,604 219,632 888,236 2019 695,421 204,404 899,825 2020 722,662 163,672 886,333 2021-2015 2,706,811 430,105 3,136,916 2016-2028 1,125,094 51,655 1,176,749 Total $ 7,175,539 $ 1,610,103 $ 8,785,641 M. FvND BALANCE Minimum Fund Balance Policy The Village Council has adopted a financial policy to maintain a minimum level of unassigned fund balance in the general fund. The target level is set at two months of general fund 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. N. INTERFuND TRANSFERS The composition of interfund transfers for the fiscal year ended September 30, 2015 is as follows: Interfund Transfers Transfers In Capital Improvement water Transfers Out Fund Utility Total General Fund $ 85,000 $ -- $ 85,000 Stormwater -- 19,981 19,981 Total Interfund Transfers $ 85,000 $19,981 $104,981 1: VILLAGE OF TEQUESTA, FLORIDA NOTES TO FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE 3 - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS (CONTINUED) 0 JOINT VENTURES The Village, in conjunction with six other municipalities, organized a consortium to provide mutual fire and emergency aid. The consortium is known as the Northern Area Mutual Aid Consortium (NAMAC). During 1999, the consortium purchased equipment and supplies as well as collected contributions. The consortium does not issue separate financial statements. The Village has not been obligated to contribute any funds to the consortium since its inception in 1999. P. CHANGE IN ACCOUNTING PRINCIPLES -ADJUSTMENT TO BEGINNING NET POSITION The Village implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions for fiscal year ended September 30, 2015. The implementation of GASB Statement No. 68 required removing long term liability/asset (NPO) balances as defined in GASB Statements No. 27 & 50 and recording a net pension liability (asset) (NPL), as defined by GASB Statement No. 68 at the beginning of the fiscal year, by restating the beginning balances of net position for both government -wide and business -type activities. The unadjusted beginning balances, the amount of the adjustments and the restated beginning balances are shown on the face of the Statement of Activities. Deferred outflows and deferred inflows defined in GASB Statement No. 68 were recorded during the fiscal year ended September 30, 2015. A detail of the adjustment to the beginning net position is shown below: Governmental Activities • Remove NPO as defined in GASB Statement No. 27 $ (449,770) • Add NPL as defined in GASB Statement No. 68 o General employee's pension plan — asset 117,176 o Police officer's pension plan — asset 323,543 o Firefighter's pension plan — liability (1,072,261) • FRS/HIS — record liability, deferred inflows and deferred outflows (592,248) Total Adjustments to Beginning Net Position (1.673.560) Business -type Activities • Add NPL as defined in GASB Statement No. 68 o General employee's pension plan — asset — Water utility $ 64,804 • FRS/HIS — record liability, deferred inflows and deferred outflows (213,518) Total Adjustments to Beginning Net Position 148 714) 107 REQUIRED SUPPLEMENTARY INFORMATION VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 See note to budgetary comparison schedule. 108 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Ad valorem taxes $ 5,235,800 $ 5,235,800 $ 5,275,411 $ 39,611 Othertaxes 1,178,600 1,243,040 1,304,312 61,272 Charges for services 1,089,876 1,159,876 1,192,142 32,266 Intergovernmental 789,920 789,920 841,950 52,030 Intragovernmental 534,390 534,390 534,416 26 Licenses and permits 377,740 377,740 346,529 (31,211) Franchise fees 414,000 414,000 462,312 48,312 Rents and royalties 192,523 192,523 192,256 (267) Miscellaneous 30,650 30,650 20,017 (10,633) Fines and forfeitures 7,300 33,690 89,715 56,025 Grants, contributions and donations 12,450 12,450 17,395 4,945 Investment earnings 17,000 17,000 7,139 (9,861) Total Revenues 9,880,249 10,041,079 10,283,595 242,516 Expenditures Current: General government 1,698,580 1,689,203 1,615,339 73,864 Public safety 6,148,570 6,357,413 6,185,916 171,497 Transportation 862,860 982,002 931,841 50,161 Leisure services 546,080 546,080 527,223 18,857 Capital outlay 98,600 354,637 349,425 5,212 Debt service: -- Principal 319,800 370,222 334,631 35,591 Interest 114,150 118,388 113,986 4,402 Fiscal Charges 13,800 13,800 10,345 3,455 Total Expenditures 9,802,440 10,431,745 10,068,706 363,040 Excess (Deficiency) of Revenues Over (Under) Expenditures 77,809 (390,666) 214,889 (120,524) Other Financing Sources (Uses) Transfers out (85,000) (85,000) (85,000) -- Sale of capital assets - vehicles 90,000 90,000 13,072 (76,928) Capital lease 60,000 295,000 240,658 (54,342) Total Other Financing Sources (Uses) 65,000 300,000 168,730 (131,270) Net Change in Fund Balances 142,809 (90,666) 383,619 474,285 Fund Balances- Beginning 3,603,527 3,603,527 3,603,527 -- Fund Balances - Ending $ 3,746,336 $ 3,512,861 $ 3,987,146 $ 474,285 See note to budgetary comparison schedule. 108 VILLAGE OF TEQUESTA, FLORIDA NOTE TO THE BUDGETARY COMPARISON SCHEDULE FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 NOTE I - BUDGETS AND BUDGETARY ACCOUNTING The Village is required to present a budget to actual comparison for the general fund and any major special revenue fund with a legally adopted annual budget. The Village may not include nonmajor special revenue funds, or funds of other fund types. This fiscal year, the Village presents this schedule for the general fund only. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. For budgeting purposes, current year encumbrances are not treated as expenditures. All budgets are legally enacted through passage of a resolution. Although the Village Council requires all inter -department budget amendments to go before the Village Council for approval, the budget was adopted on a fund basis 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. The original budget is the budget in place at the start of the fiscal year, which includes all of the following The budget passed by the Village Council +Subsequent amendments made prior to the start of the fiscal year +Carryovers from the previous year (encumbrances) =Original budget The final budget includes all adjustments to the budget applicable to the fiscal year, even if they take place after the close of the fiscal year. During the year, total supplemental appropriations of $566,210 were approved and adopted for the General Fund. Of this amount, $170,480 was appropriated for fund balance. Appropriations are legally controlled at the fund level and expenditures may not legally exceed budgeted appropriations at that level. Appropriations lapse at year end. 109 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS FIREFIGHTERS' PENSION TRUST FUND Fiscal Year Ended September 30, 2015 2014 Total Pension Lability 7,824,203 6,810,903 Service cost $ 334,559 $ 312,030 Interest 679,400 582,897 Changes of benefit terms 318,787 -- Difference between expected and actual experience 108,010 450 Changes of assumptions -- 1,402,781 Benefit payments, including refunds of member contributions (61,913) (53,637) Refunds -- -- Other 118,555 30,162 Net Change in Total Pension Liability 1,497,398 871,902 Total Pension Liability - Beginning 8,755,066 7,883,164 Total Pension Liability - Ending (a) $ 10,252,464 $ 8,755,066 Plan Fiduciary Net Position Contributions - employer $ 335,771 $ 351,652 Contributions - non -employer contributing entity 189,010 100,617 Contributions - member 64,721 65,803 Net Investment income 77,213 567,786 Benefit payments (61,913) (53,637) Refunds -- -- Administrative expense (27,290) (18,921) Net Change in Plan Fiduciary Net Position 577,512 1,013,300 Plan Fiduciary Net Position - Beginning 7,824,203 6,810,903 Plan Fiduciary Net Position - Ending $ 8,401,715 $ 7,824,203 Net Pension Liability - Ending (a) - (b) $ 1,850,749 $ 930,863 Plan Fiduciary Net Position as a Percentage of 81.95% 89.37% Total Pension Liability Covered Employee Payroll* $ 1,380,379 $ 1,402,781 Net Pension Liability as a Percentage of Employee Payroll 134.08% 66.36% *Actual covered payroll for the fiscal year ending September 30th The Village of Tequesta implemented GASB No. 68 in fiscal year ending 9/30/2015. Accordingly, this schedule is presented as required under GASB No. 68, however, until a full 10 -year trend is compiled, the Village is only presenting information for those years for which information is available. 110 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS FIREFIGHTERS' PENSION TRUST FUND Net Pension Fiscal Year Actuarially Contribution Covered Liability as a % of Ending Determined Actual Deficiency Employee Covered September 30, Contribution Contribution (Excess) Payroll Employee Payroll 2014 $ 416,665 $ 422,107 $ (5,442) $ 1,402,781 30.09% 2015 403,211 406,226 (3,015) 1,380,379 29.43% Notes to Schedule Valuation Date 10/1/2013 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Retirement age Mortality Entry age normal Level dollar, closed 20 years 5 -year smoothed market 3.00% 6.0% including inflation 7.50% 100% upon reaching normal retirement age. Probability of early retirement is 5% or each year eligible. RP -2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years using Scale AA This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10 -year trend is compiled, information is presented for those years available. 111 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS FIREFIGHTERS' PENSION TRUST FUND Annual money -weighted rate of return, net of investment expenses The Village of Tequesta implemented GASB No. 68 in fisca Accordingly, this schedule is presented as required under GASB No. year trend is compiled, the Village is only presenting information information is available. 2015 2014 0.38% 7.46% 1 year ending 9/30/2015. 68, however, until a full 10 - for those years for which 112 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 Fiscal Year Ended September 30, 2015 2014 Total Pension Liability Service cost $ 126,703 $ 161,156 Interest 213,603 169,526 Changes in benefit terms (39,467) -- Differences between expected and actual experience (391,613) -- Changes of assumptions -- -- Benefit payments (30,312) (10,073) Refunds -- (43,331) Other (increase in state reserve) -- Net Change in Total Pension Liability (121,086) 277,278 Total Pension Liability - Beginning 2,736,489 2,459,211 Total Pension Liability - Ending (a) $ 2,615,403 $ 2,736,489 Plan Fiduciary Net Position Contributions - employer $ 80,782 $ 111,164 Contributions - non -employer contributing entity -- 25,888 Contributions - member 20,545 Net Investment income 20,718 219,219 Benefit payments (30,312) (10,073) Refunds -- (43,331) Administrative expense (27,967) (18,677) Net Change in Plan Fiduciary Net Position 63,766 284,190 Plan Fiduciary Net Position - Beginning 3,066,944 2,782,754 Plan Fiduciary Net Position - Ending (b) $ 3,130,710 $ 3,066,944 Net Pension Asset - Ending (a) - (b) $ (515,307) $ (330,455) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability (Asset) 119.70% 112.08% Covered Employee Payroll* $ 418,699 $ 517,765 Net Pension Liability (Asset) as a Percentage of Covered -Employee Payroll (123.07%) (63.82%) * Actual covered payroll for the fiscal years ending September 30th The Village of Tequesta implemented GASB No. 67 in fiscal year ending 9/30/2014 and GASB No. 68 in 9/30/2015. Accordingly, this schedule is presented as required, however, until a full 10 -year trend is compiled, the Village is only presenting information for those years for which 113 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS POLICE OFFICERS' PENSION TRUST FUND Net Pension Liability asa%of Fiscal Year Actuarially Contribution Covered Covered Ending Determined Actual Deficiency Employee Employee September 30, Contribution Contribution (Excess) Payroll Payroll 2014 $ 111,164 $ 111,164 $ -- $ 538,942 20.63% 2015 80,782 80,782 -- 418,699 19.29% Notes to Schedule Valuation Date 10/1/2013 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Entry age normal Amortization method Level dollar, closed Remaining amortization period 20 years Asset valuation method 5 -year smoothed market Inflation 3.00% Salary increases 6.0% including inflation Investment rate of return 7.50% Retirement age 100% upon reaching normal retirement age. Probability of early retirement is 5% for each year eligible. Mortality RP -2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years using Scale AA Other Information: See discussion of valuation results in the October 1, 2013 Notes This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10 -year trend is compiled, information is presented for those years available. 114 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS POLICE OFFICERS' PENSION TRUST FUND 2015 2014 Annual money -weighted rate of return, net of investment expenses 0.38% 7.46% The Village of Tequesta implemented GASB No. 67 in fiscal year ending 9/30/2014 and GASB No. 68 in 9/30/2015. Accordingly, this schedule is presented as required, however, until a full 10 -year trend is compiled, the Village is only presenting information for those years for which information is available. 115 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 Fiscal Year Ended September 30, 2015 2014 Total Pension Liability $ 194,376 $ 184,627 Service cost $ 300,325 $ 278,029 Interest 253,701 216,124 Benefit changes -- -- Difference between actual & expected experience (157,539) -- Assumption changes -- -- Benefit payments (11,918) (8,534) Refunds (5,959) (4,454) Other (increase in state reserve) -- 2,792,102 Net Change in Total Pension Liability 378,610 481,165 Total Pension Liability - Beginning 3,091,288 2,610,123 Total Pension Liability - Ending (a) $ 3,469,898 $ 3,091,288 Plan Fiduciary Net Position Contributions - employer and state $ 194,376 $ 184,627 Contributions - non -employer contributing entity -- -- Contributions - member 115,288 100,560 Net investment income (36,136) 308,314 Benefit payments (11,918) (8,534) Refunds (5,959) (4,454) Administrative expense (38,098) (25,678) Net Change in Plan Fiduciary Net Position 217,553 554,835 Plan Fiduciary Net position - Beginning 3,346,937 2,792,102 Plan Fiduciary Net Position - Ending $ 3,564,490 $ 3,346,937 Net Pension Asset - Ending (a) - (b) $ (94,592) $ (255,649) Plan Fiduciary Net Position as a Percentage of Total Pension Liability 102.73% 108.27% Covered Employee Payroll* $ 2,305,760 $ 2,011,200 Net Pension Liability as a Percentage of covered Employee Payroll -4.10% -12.71% *Actual covered payroll for the fiscal year ending September 30, 2014 The Village of Tequesta implemented GASB No. 67 in fiscal year ending 9/30/2014 and GASB No. 68 in 9/30/2015. Accordingly, this schedule is presented as required, however, until a full 10 -year trend is compiled, the Village is only presenting information for those years for which information is available. 116 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF VILLAGE CONTRIBUTIONS GENERAL EMPLOYEES' PENSION TRUST FUND Net Pension Liability asa%of Actuarially Contribution Covered Covered Fiscal Year Ending Determined Actual Deficiency Employee Employee September 30, Contribution Contribution (Excess) Payroll Payroll 2014 $ 184,627 $ 184,627 $ -- $ 2,011,200 9.18% 2015 194,376 194,376 -- 2,305,760 8.43% Notes to Schedule Valuation Date 10/1/2014 Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determined contribution rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Rate of retirement Mortality Aggregate N/A N/A 5 -year smoothed market 3.00% 6.0% including inflation 7.50% 100% when first eligible for normal retirement; 5% for each year eligible for early retirement. RP -2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected total future years after 2000 using Scale AA The Village of Tequesta implemented GASB No. 67 in fiscal year ending 9/30/2014 and GASB No. 68 in 9/30/2015. Accordingly, this schedule is presented as required, however, until a full 10 -year trend is compiled, the Village is only presenting information for those years for which information is available. 117 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS GENERAL EMPLOYEES' PENSION TRUST FUND 2015 2014 Annual money -weighted rate of return, net of investment expenses -2.11% 9.73% This schedule is presented as required by accounting principles generally accepted in the United States of America, however, until a full 10 -year trend is compiled, information is presented for those years available. 118 VILLAGE OF TEQUESTA, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF FUNDING PROGRESS - OTHER POST -EMPLOYMENT BENEFITS Note: See Note 3.G Other Post -Employment Benefit (OPER) Obligations 119 Unfunded (a) Actuarial Actuarial Actuarial Unfunded Accrued Actuarial Value of Accrued Actuarial Funded Covered Liability as of Valuation Date Assets Liability (AAL) Liability Ratio Payroll % 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 (OPER) Obligations 119 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION FLORIDA RETIREMENT SYSTEM (FRS) SCHEDULE OF PROPORTIONAL CHANGES IN THE NET PENSION LIABILITY LAST 3 FISCAL YEARS 2015 2014 2013 Proportion of the net pension liability (asset) 0.002228771% 0.002909415% 0.003972483% Proportionate share of the net pension liability (asset) $ 287,876 $ 177,517 $ 683,841 Covered -employee payroll 484,772 569,299 651,093 Proportionate share of the net pension liability (asset) as a percentage of its covered -employee payroll 59.38% Plan fiduciary net position as a percentage of the total pension liability 92.00% * The amounts presented for each fiscal year were determined as of 6/30. 31.18% 105.03% 96.09% 88.54% (1) GASB No. 68 requires information for 10 years. However, until a full 10 -year trend is compiled, information is presented for only those years for which information is available. (2) Refer to GASB No. 68, § 81b - the information in this schedule determined as of the Village's most recent fiscal year. 120 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION HEALTH INSURANCE SUBSIDY PROGRAM (HIS) SCHEDULE OF PROPORTIONAL CHANGES IN THE NET PENSION LIABILITY LAST 3 FISCAL YEARS Proportion of the net pension liability (asset) Proportionate share of the net pension liability (asset) $ Covered -employee payroll Proportionate share of the net pension liability (asset) as a percentage of its covered -employee payroll Plan fiduciary net position as a percentage of the total pension liability 2015 2014 2013 0.001677035% 0.002139452% 0.002466781% 171,031 $ 200,044 $ 214,766 484,772 569,299 651,093 35.28% 35.14% 32.99% 0.50% 0.99% 1.78% * The amounts presented for each fiscal year were determined as of 6/30. (1) GASB No. 68 requires information for 10 years. However, until a full 10 -year trend is compiled, information is presented for only those years for which information is available. (2) Refer to GASB No. 68, § 81b - the information in this schedule determined as of the Village's most recent fiscal year. 121 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION FLORIDA RETIREMENT SYSTEM (FRS) SCHEDULE OF VILLAGE OF TEQUESTA CONTRIBUTIONS LAST 3 FISCAL YEARS Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) Covered -employee payroll Contributions as a percentage of covered - employee payroll 2015 2014 2013 $ 43,642 $ 58,404 $ 72,698 (43,642) (58,404) (72,698) $484,772 $569,299 $651,093 9.00% 10.26% 11.17% * The amounts presented for each fiscal year were determined as of 6/30. (1) GASB No. 68 requires information for 10 years. However, until a full 10 -year trend is compiled, information is presented for only those years for which information is available. (2) Refer to GASB No. 68 ,§ 81b - the information in this schedule determined as of the Village's most recent fiscal year. 122 VILLAGE OF TEQUESTA REQUIRED SUPPLEMENTARY INFORMATION HEALTH INSURANCE SUBSIDY PROGRAM (HIS) SCHEDULE OF VILLAGE OF TEQUESTA CONTRIBUTIONS LAST 3 FISCAL YEARS Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) Covered -employee payroll Contributions as a percentage of covered - employee payroll 2015 2014 2013 $ 5,381 $ 6,832 $ 8,204 (5,381) (6,832) (8,204) $484,772 $569,299 $651,093 1.11% 1.20% 1.26% * The amounts presented for each fiscal year were determined as of 6/30. (1) GASB No. 68 requires information for 10 years. However, until a full 10 -year trend is compiled, information is presented for only those years for which information is available. (2) Refer to GASB No. 68, § 81b - the information in this schedule determined as of the Village's most recent fiscal year. 123 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 Fund are used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays including the acquisition or construction of capital facilities and other capital assets. The use of the capital projects fund type is permitted rather than mandated for financial reporting purposes. Capital projects funds can be a valuable management tool for multi-year projects. Capital Improvement Fund — This fund is used to account for the maintenance and upkeep of the Village's general infrastructure (such as roads, bridges, sidewalks and storm water drainage systems) and streetscape beautification projects. Capital Projects Fund — This fund accounts for the acquisition or construction of major capital projects, other than those financed by proprietary fund types. VILLAGE OF TEQUESTA, FLORIDA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30 2015 Special Revenue Capital Projects Total Special Law Capital Capital Nonmajor Enforcement Improvement Projects Governmental Fund Fund Fund Funds Assets Cash and cash equivalents $ 286,965 $ 36,128 $ 4,313 $ 327,406 Inventory Total Assets $ 286,965 $ 36,128 $ 4,313 $ 327,406 Liabilities and Fund Balances Liabilities Accounts payable -- 24,000 -- 24,000 Total Liabilities -- 24,000 -- 24,000 Fund Balances Restricted for: Law Enforcement 286,965 -- -- 286,965 Assigned to: Capital Projects -- 12,128 4,313 16,441 Total Fund Balances 286,965 12,128 4,313 303,406 Total Liabilities and Fund Balances $ 286,965 $ 36,128 $ 4,313 $ 327,406 124 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHARGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Other Financing Sources Transfers in -- 85,000 -- 85,000 Net Change in Fund Balances (4,689) 6,716 (1) 2,026 Fund Balances - Beginning of Year 291,654 5,412 4,314 301,380 Fund Balances - End of Year $ 286,965 $ 12,128 $ 4,313 $ 303,406 125 Special Revenue Capital Projects Total Special Law Capital Capital Nonmajor Enforcement Improvement Projects Governmental Fund Fund Fund Funds Revenues Forfeitures/confiscations $ 60,607 $ -- $ -- $ 60,607 Total Revenues 60,607 -- -- 60,607 Expenditures Current: Public Safety 15,264 -- -- 15,264 Transportation -- 78,284 1 78,285 Capital Outlay 50,032 -- -- 50,032 Total Expenditures 65,296 78,284 1 143,581 Excess (Deficiency) of Revenues Over Expenditures (4,689) (78,284) (1) (82,974) Other Financing Sources Transfers in -- 85,000 -- 85,000 Net Change in Fund Balances (4,689) 6,716 (1) 2,026 Fund Balances - Beginning of Year 291,654 5,412 4,314 301,380 Fund Balances - End of Year $ 286,965 $ 12,128 $ 4,313 $ 303,406 125 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE SPECIAL LAW ENFORCEMENT TRUST FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues Forfeitures/Confiscations $ -- $ -- $ 60,607 $ 60,607 Expenditures Current: Public Safety 1,000 19,975 15,264 4,711 Capital Outlay -- 51,025 50,032 993 Total Expenditures 1,000 71,000 65,296 3,718 Excess (Deficiency) of Revenues Over Expenditures (1,000) (71,000) (4,689) 56,889 Other Financing Sources Capital lease 240,000 -- -- Net Change in Fund Balance 239,000 (71,000) (4,689) 66,311 Fund Balance - Beginning 291,654 291,654 291,654 -- Fund Balance - Ending $ 530,654 $ 220,654 $ 286,965 $ 66,311 126 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) Revenues $ -- $ -- $ -- $ -- Expenditures Transportation 85,000 86,300 78,285 8,015 Deficiency of Revenues Over Expenditures (85,000) (86,300) (78,284) (8,015) Other Financing Sources Transfers In 85,000 85,000 85,000 -- Net Change in Fund Balance -- (1,300) 6,716 8,016 Fund Balance - Beginning 5,412 5,412 5,412 -- Fund Balance - Ending $ 5,412 $ 4,112 $ 12,128 $ 8,016 127 VILLAGE OF TEQUESTA, FLORIDA BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Revenues Expenditures Transportation Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Uses Transfers out Net Change in Fund Balance Fund Balance - Beginning Fund Balance - Ending Variance with Final Budget Budgeted Amounts Actual Positive Original Final Amounts (Negative) 4,314 4,314 4,314 -- $ 4,314 $ 4,314 $ 4,313 $ (1) 128 FIDUCIARY FUNDS FIDUCIARY FUNDS Fiduciary funds are used to report assets held in a trustee or agency capacity for others and therefore cannot be used to support the government's own programs. Pension trust funds are fiduciary funds that are used to report resources required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post -employment benefit plans, or other employee benefit plans. The Village accounts for two defined benefit plans (Public Safety reports separate trust funds for Police Officers and Firefighters) and a separate fund is reported for each individual trust fund. The three trust funds are as follows: Firefighters' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the firefighter employees. Police Officers' Pension Trust Fund — This fund accounts for the accumulation of resources and for contributions and benefits of the police employees 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, 2015 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Assets Cash and cash equivalents $ 123,291 $ 46,239 $ 59,560 $ 229,090 Investments, at fair value: Corporate stocks 2,038,292 761,115 1,943,471 4,742,878 Corporate bonds 351,362 131,201 374,617 857,180 Government backed securities 2,156,103 805,106 434,399 3,395,608 Mutual Funds 3,707,426 1,384,383 750,149 5,841,958 Total investments 8,253,183 3,081,805 3,502,636 14,837,624 Prepaid items 1,644 1,644 1,006 4,294 Contributions receivable 16,273 3,279 10,275 29,827 Accrued interest 15,552 5,940 10,586 32,078 Total Assets 8,409,943 3,138,907 3,584,063 15,132,913 Liabilities Accounts payable 8,228 8,197 12,114 28,539 Due to broker -- -- 7,459 7,459 Total Liabilities 8,228 8,197 19,573 35,998 Net Position Restricted for Pension Benefits $ 8,401,715 $ 3,130,710 $ 3,564,490 $ 15,096,915 129 VILLAGE OF TEQUESTA, FLORIDA COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2015 Net Position Restricted for Pension Benefits Beginning 7,824,203 3,066,944 3,346,937 14,238,084 Ending $ 8,401,715 $ 3,130,710 $ 3,564,490 $ 15,096,915 130 Police General Firefighters' Officers' Employees' Pension Pension Pension Trust Fund Trust Fund Trust Fund Total Additions Contributions: Employer (including State) $ 524,781 $ 80,782 $ 194,376 $ 799,939 Employee 64,721 20,545 115,288 200,554 Total Contributions 589,502 101,327 309,664 1,000,493 Investment earnings Net (decrease) in fair value of investments (170,394) (61,169) (65,276) (296,839) Loss on sale of investments (3,518) (1,314) (32,998) (37,830) Interest earnings 278,237 107,448 91,045 476,730 Total investment earnings (loss) 104,325 44,965 (7,229) 142,061 Less investment expenses (27,667) (24,802) (29,973) (82,442) Net investment earnings (loss) 76,658 20,163 (37,202) 59,619 Total Additions 666,160 121,490 272,462 1,060,112 Deductions Benefits paid 61,913 30,312 11,918 104,143 Refunds of contributions -- -- 5,958 5,958 Administrative expenses 26,735 27,412 37,033 91,180 Total Deductions 88,648 57,724 54,909 201,281 Change in Net Position 577,512 63,766 217,553 858,831 Net Position Restricted for Pension Benefits Beginning 7,824,203 3,066,944 3,346,937 14,238,084 Ending $ 8,401,715 $ 3,130,710 $ 3,564,490 $ 15,096,915 130 STATISTICAL SECTION STATISTICAL SECTION This part of the Village of Tequesta's Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Village's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the Village's financial performance and well-being have changed over time. 131-135 Revenue Capacity These schedules contain information to help the reader assess the Village's most significant local revenue source, the property tax. 136-139 Debt Capacity These schedules present information to help the reader assess the affordability of the Village's current levels of outstanding debt and the Town's ability to issue additional debt in the future. 140-144 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Village's financial activities take place. 145-146 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Village's financial report relates to the services the Village provides and the activities it performs. 147-149 Sources: Unless other wise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. Governmental Activities Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position Business -Type Activities: Net invested in capital assets Restricted Unrestricted Total Business -Type Activities Net Position Primary government: Net investment in capital assets Restricted Unrestricted Total Governmental Activities Net Position VILLAGE OF TEQUESTA, FLORIDA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ 4,515,096 $ 6,679,855 $ 6,959,332 $ 7,330,897 $ 7,525,570 $10,730,256 $10,591,778 $10261,476 $10284,849 $10,058,956 143,370 140,990 579,809 579,320 940,739 1,572,614 5,570,447 5,402,774 6,459,522 6218,462 5,306,661 4,442,410 3,510,237 3,011,737 2,739,726 1,638,243 $10,228,913 $12223,619 $13,418,854 $13,549,359 $12,832,231 $15,172,666 $14,681,824 $13,852,533 $13,965,314 $13269,813 $11,722,188 $14,513,500 $14,082,989 $13,713,525 $13,037,012 $14,673,046 $14,718,841 $14,167,067 $13,402,412 $12,681,504 396,369 328,544 4,867,905 3,046229 3,581,512 3,997271 4,975,318 4,315,056 4,884,793 5,408,598 5,632,617 5,781,969 $16,986,462 $17,888,273 $17,664,501 $17,710,796 $18,012,330 $18,988,102 $19,603,634 $19,575,665 $19,035,029 $18,463,473 $16,237284 $21,193,355 $21,042,321 $21,044,422 $20,562,582 $25,403,302 $25,310,619 $24,428,543 $23,687,261 $22,740,460 539,739 469,534 579,809 579,320 940,739 1,572,614 10,438,352 8,449,003 10,041,034 10,215,733 10,281,979 8,757,466 8,395,030 8,420,335 8,372,343 7,420212 $27,215,375 $ 30,111,892 $ 31,083,355 $ 31,260,155 $ 30,844,561 $ 34,160,768 $ 34,285,458 $ 33,428,198 $ 33,000,343 $ 31,733,286 Note: The Village implemented GASB Statement No.63 during the fiscal year ended September 30, 2013 and utilized the new terminology for all years presented. 131 Expenditures Governmental activities: General government Public safety Transportation Leisure, services Interest on long-term debt Total Governmental Activities Expenditures Business -type activities: Water I Refuse and recycling Total Business -Type Activities Expenses Total Primary Government Program Expenses Program Revenues Governmental activities: Charges for services: General government Public safety Transportation Leisure, services Operating grants and contributions Capital grants and contributions Total Governmental Activities Program Revenues Business -Type Activities Charges for services: Water St -water Refuse and recycling Community development Operating grants and contributions Capital grants and contributions Total Business -Type Activities Program Revenues Total Primary Government Program Revenues Net (Expense) Revenue Governmental activities Business -type activities Total Primary Government Net Expense VILLAGE OF TEQUESTA, FLORIDA CHANGES IN NET POSEITON LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ 1,402,535 $ 1,391,654 $ 1,344,038 $ 1,501,344 $ 1,503,750 $ 1,591,575 $ 1,629,115 $ 1,642,948 $ 1,770,326 $ 1,714,571 5,577,243 5,634,834 5,784,245 5,807,477 6,313,835 5,989,357 6,210,365 6,207,866 6,222,408 5,812,114 837,441 766,226 736,844 774,966 843,960 857,456 898,458 1,049,062 1,009,693 1,161,613 756,224 559,583 539,450 639,590 710,685 635,671 635,110 640,513 583,445 566,585 243,871 229,074 206,126 180,770 169,792 158,685 146,868 135,204 114,398 124,331 8,817,314 8,581,371 8,610,703 8,904,147 9,542,022 9,232,744 9,519,916 9,675,593 9,700,270 9,379,214 4,187,257 4,139,784 3,760,426 3,907,950 3,989,517 3,829,330 4,017,097 4,204,955 4,782,022 4,911,816 198,993 188,709 215,163 226,498 223,421 194,331 207,526 221,283 279,051 262,413 270,887 306,347 420,081 444,449 431,156 444,302 468,637 484,165 489,977 499,670 4,657,137 4,634,840 4,395,670 4,578,897 4,644,094 4,467,963 4,693,260 4,910,403 5,551,050 5,673,899 $13,474,451 $13,216,211 $13,006,373 $13,483,044 $14,186,116 $13,700,707 $ 14,213,176 $ 14,585,996 $ 15,251,320 $ 15,053,113 $ 270,137 $ 278,215 $ 475,244 $ 302,182 $ 316,816 $ 568,452 $ 742,438 $ 695,801 $ 694,220 $ 786,792 1,121,642 1,006,947 863,391 783,774 899,639 1,283,728 1,270,308 1,142,593 1,755,652 1,563,375 - -- 12 -- -- -- - 4,480 - - 57,261 54,364 50,219 72,487 92,003 77,955 71,939 86,349 76,918 67,777 365,183 20,350 18,711 67,842 24,354 58,746 60,260 95,145 63,148 48,300 535,000 54,764 57,736 -- 100,000 2,689,626 119,200 -- -- -- 2,349,223 1,414,640 1,465,313 1,226,285 1,432,812 4,678,507 2,264,145 2,024,368 2,589,938 2,466,244 4,090,268 3,850,508 3,463,564 3,863,439 4,076,132 4,585,287 4,436,958 4,018,755 4,155,865 4,422,030 301,993 303,273 299,729 314,569 313,126 314,264 323,193 323,513 323,363 319,993 283,821 285,917 402,439 414,312 414,657 436,142 487,392 482,422 480,795 478,616 42,471 7,827 -- -- 51,511 - - -- -- -- 484,000 430,000 -- -- -- - - -- -- 5,202,553 4,877,525 4,165,732 4,592,320 4,855,426 5,335,693 5,247,543 4,824,690 4,960,023 5,220,639 $ 7,551,776 $ 6,292,165 $ 5,631,045 $ 5,818,605 $ 6,288,238 $10,014,200 $ 7,511,688 $ 6,849,058 $ 7,549,961 $ 7,686,883 $ (6,468,091) $ (7,166,731) $ (7,145,390) $ (7,677,862) $ (8,109,210) $ (4,554,237) $ (7,255,771) $ (7,651,225) $ (7,110,332) $ (6,912,970) 545,416 242,685 (229,938) 13,423 211,332 867,730 554,283 (85,713) (591,027) (453,260) $ (5,922,675) $ (6,924,046) $ (7,375,328) $ (7,664,439) $ (7,897,878) $ (3,686,507) $ (6,701,488) $ (7,736,938) $ (7,701,359) $ (7,366,230) Nae: The Village implemented GASB Statement No.63 during the fiscal year ended September 30, 2013 and utilized the new terminology for all years presented 132 General Revenues Governmental activities: Taxes: Property taxes Other taxes Franchise fees based on gross receipts Unrestricted intergovernmental Unrestricted investment earnings Miscellaneous revenues Gain on sale of capital assets Transfers Total Governmental Revenues and transfers Business -Type Activities Unrestricted Investment earnings Miscellaneous revenues Gain (loss) on sale of capital assets Transfers Total Business -Type Activities Total Primary Government VII.LAGE OF TEQUESTA, FLORIDA CHANGES IN NET POSITION (CONTINUED) LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ 5,166,754 $ 6,139,007 $ 5,661,200 $ 5,173,808 $ 4,643,816 $ 4,341,668 $ 4,268,732 $ 4,339,215 $ 4,767,948 $ 5,275,411 1,087,759 1,157,128 1,123,272 1,285,063 1,315,006 1,266,681 1,235,941 1,266,929 1,216,100 1,304,312 419,929 477,711 462,296 466,541 435,766 412,441 393,734 380,160 401,859 462,312 679,001 815,828 783,034 702,616 717,673 724,400 718,277 735,924 770,616 811,044 392,961 404,816 152,602 8,725 71,067 32,775 49,173 22,316 13,184 7,139 173,362 106,647 37,621 171,614 208,754 116,707 99,072 77,390 53,406 17,739 1,981 13,073 60,300 60,300 120,600 7,982,047 9,161,437 8,340,625 7,808,367 7,392,082 6,894,672 6,764,929 6,821,934 7,223,113 7,891,030 280,665 321,718 86,811 (9,208) 49,973 28,074 30,448 20,727 14,976 9,986 479,145 397,708 39,955 42,080 40,229 79,968 30,801 37,017 35,415 20,432 4,820 (60,300) (60,300) (120,600) 704,330 659,126 6,166 32,872 90,202 108,042 61,249 57,744 50,391 30,418 8,686,377 9,820,563 8,346,791 7,841,239 7,482,284 7,002,714 6,826,178 6,879,678 7,273,504 7,921,448 Change in net position: Governmental activities 1,513,956 1,994,706 1,195,235 130,505 (717,128) 2,340,435 (490,842) (829,291) 112,781 978,059 Business -Type activities 1,249,746 901,811 (223,772) 46,295 301,534 975,772 615,532 (27,969) (540,636) (422,842) Total Primary Government $ 2,763,702 $ 2.896.517 $ 971.463 $ 176,800 $ 415,594 $ 3,316,207 $ 124,690 $ 857,260 $ 427,855 $ 555,217 Note: The Village implemented GASB Statement No.63 during the fiscal year ended September 30, 2013 and utilized the new terminology for all years presented. 133 VILLAGE OF TEQUESTA, FLORIDA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Total Other Governmental Funds $1,997,965 $1,016,893 $1,207,790 $1,554,484 $1,505,029 $ 692,748 $ 639,152 $ 163,759 $ 301,380 $ 303,406 Note: In fiscal year 2007, started a breakdown of unreserved of other governmental funds. The Village implemented GASB Statement No. 54 for the fiscal year ended September 30, 2011 134 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 General Fund Reserved $ 176,410 $ 47,493 $ 82,197 $ 383,766 $ 129,394 $ $ $ $ $ Unreserved 3,221,390 4,456,247 5,180,611 4,296,418 3,846,418 Nonspendable -- -- -- -- -- 228,049 178,478 144,581 207,869 161,036 Restricted 419,591 549,034 575,287 668,050 790,582 Assigned 1,372,125 1,481,792 1,000,000 1,013,600 1,010,978 Unassigned 2,009,180 1,487,198 1,921,295 1,714,008 2,024,550 Total General Fund $3,397,800 $4,503,740 $5,262,808 $4,680,184 $3,975,812 $ 4,028,945 $ 3,696,502 $ 3,641,163 $3,603,527 $ 3,987,146 All Other Governmental Funds Reserved 143,370 196,426 12,752 29,508 117,838 -- -- -- Unreserved, reported in: Special revenue fund 255,179 362,582 391,527 22,037 21,072 Capital Projects funds 1,599,416 457,885 803,511 1,502,939 1,366,119 -- -- -- -- -- Restricted -- -- -- -- -- 45,771 30,775 4,033 291,654 286,965 Assigned 646,977 608,377 159,726 9,726 16,441 Total Other Governmental Funds $1,997,965 $1,016,893 $1,207,790 $1,554,484 $1,505,029 $ 692,748 $ 639,152 $ 163,759 $ 301,380 $ 303,406 Note: In fiscal year 2007, started a breakdown of unreserved of other governmental funds. The Village implemented GASB Statement No. 54 for the fiscal year ended September 30, 2011 134 Revenues Taxes Intergovernmental Franchise fees Charges for services Intragovemmental Grants, contributions and donations Licenses and pemilts Interest Fines and forfeitures Miscellaneous Rents and royalties Impact fees Total Revenues Expenditures Current: General government Public safety Transportation Leisure services Capital outlay Debt service: Principal Interest Fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over Expenditures Other Financing Sources (Uses) Transfers in Transfers -out Capital lease at inception Other proceeds Total Other Financing Sources (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures VILLAGE OF TEQUESTA, FLORIDA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ 6,254,513 $ 7,296,135 $ 6,871,639 $ 6,458,871 $ 5,958,822 $ 5,608,349 $ 5,504,673 $ 5,606,144 $ 5,984,048 $ 6,579,723 679,001 815,828 783,034 724,375 839,110 776,500 755,792 752,728 816,323 841,950 419,929 477,711 462,296 466,541 435,766 412,441 393,734 380,160 401,859 462,312 507,702 526,922 574,937 597,269 687,332 888,639 948,395 901,659 1,102,496 1,192,142 262,700 273,150 280,100 292,990 307,740 323,110 503,163 503,709 519,188 534,416 900,183 90,398 76,448 37,583 -- -- 126,944 61,185 21,166 17,394 631,521 401,704 299,059 211,371 279,835 332,913 417,702 330,569 433,428 346,529 392,961 404,816 152,602 8,725 71,067 32,775 49,173 22,316 13,184 7,139 34,825 111,080 40,779 34,877 21,721 204,273 57,539 42,187 319,598 150,323 175,343 52,899 38,242 80,603 62,009 141,902 86,064 98,341 64,855 20,017 -- 108,628 103,627 120,596 161,492 162,651 167,636 147,303 136,906 192,256 12,292 3,858 2,575 851 18,257 10,270,970 10,563,129 9,685,338 9,034,652 8,824,894 8,883,553 9,029,072 8,846,301 9,813,051 10,344,201 1,391,612 1,371,148 1,220,238 1,373,158 1,341,475 1,410,417 1,469,615 1,528,314 1,614,291 1,615,339 5,233,807 5,291,398 5,439,202 5,411,745 5,830,734 5,565,091 5,902,568 5,902,479 5,900,978 6,201,180 807,651 736,436 692,552 710,384 738,323 714,934 725,833 879,169 858,787 1,010,126 692,408 495,767 467,740 562,714 619,340 548,729 552,002 561,938 507,069 527,223 3,162,034 1,892,075 257,373 752,980 594,224 973,810 335,689 120,399 831,240 399,457 382,687 482,665 572,742 278,831 284,833 271,035 282,537 247,809 306,411 334,630 243,871 222,938 200,236 171,297 159,506 148,186 137,027 125,054 114,398 113,986 6,136 5,890 9,473 10,286 10,499 9,841 11,870 12,736 10,345 11,914,070 10,498,563 8,855,973 9,270,582 9,578,721 9,642,701 9,415,112 9,377,032 10,145,910 10,212,286 (1,643,100) 64,568 829,364 (235,930) (753,827) (759,148) (386,040) (530,731) (332,859) 131,915 2,023,368 685,644 924,300 1,642,813 273,549 250,000 251,300 420,440 150,000 85,000 (1,963,068) (625,344) (803,700) (1,642,813) (273,549) (250,000) (251,300) (420,440) (150,000) (85,000) -- -- -- -- -- -- -- - 432,844 253,730 136,789 -- -- -- - 197,089 60,300 120,600 -- -- -- -- -- 432,844 253,730 $ 1,446,011 $ 124,868 $ 949,964 $ 235,930 $ 753,827 $ 759,148 $ (386,040) $ (530,731) $ 99,985 $ 385,645 7.16% 8.20% 8.99% 528% 4.95% 4.84% 4.62% 4.03% 4.52% 4.57% 135 VILLAGE OF TEQUESTA, FLORIDA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS 2006 $804,692,586 $ Centrally $20,372,762 $23,286,106 $340,839 Real Property Personal Property Assessed Property Total 70% 2007 Estimated Estimated Estimated 21,925,090 Estimated Assessed Actual "Just" Actual "Just" Actual "Just" 71% Actual "Just" Value as a Taxable Value of Taxable Value of Taxable Value of Taxable Direct Value of Percentage of Fiscal Year Ended Assessed Taxable Assessed Taxable Assessed Taxable Assessed Tax Taxable Actual September 30 Value Property Value Property Value Property Value Rate Property Value 2006 $804,692,586 $ 1,159,686,579 $20,372,762 $23,286,106 $340,839 $ 340,839 $ 825,406,187 6.4980 $1,183,313,524 70% 2007 959,650,125 1,369,028,275 21,925,090 21,925,090 385,284 385,284 981,960,499 6.4980 1,391,338,649 71% 2008 992,309,662 1,410,466,330 24,589,752 27,733,698 489,214 489,214 1,017,388,628 5.7671 1,438,689,242 71 2009 905,243,765 1,263,380,924 20,238,412 26,800,875 724,859 730,883 926,207,036 5.7671 1,290,912,682 72% 2010 813,253,151 1,087,782,592 19,867,770 25,872,707 713,541 718,791 833,906,426 5.7671 1,114,374,270 75% 2011 759,663,152 990,741,690 20,087,425 26,205,842 471,680 476,546 780,222,257 5.7671 1,017,424,078 77% 2012 746,532,525 972,735,340 17,997,653 23,646,754 487,407 491,873 765,017,585 5.7671 996,873,967 77% 2013 760,886,279 985,098,719 17,464,955 23,010,389 1,559,808 1,564,811 779,911,042 5.7671 1,009,673,919 77% 2014 797,213,933 1,036,624,755 17,442,002 22,943,347 1,675,609 1,680,227 816,331,544 6.0500 1,061,248,329 77% 2015 844,999,610 1,154,086,000 17,344,269 22,968,598 1,593,192 1,832,732 863,937,071 6.2920 1,178,887,330 73% Source: Palm Beach County Property Appraiser's office: Form DR -403V Revised Recapitulation of the Ad Valorem Rolls of Tequesta, Palm Beach County Florida 136 VILLAGE OF TEQUESTA, FLORIDA PROPERTY TAX RATES - ALL DIRECT AND OVERLAPPING GOVERNMENTS (Per $1,000 of Assessed Value) LAST TEN FISCAL YEARS Direct Rates Overlapping Rates (1) S. Florida Jupiter Fl. Island Children's County Fiscal Year Ending Village County Everglades School County Water Mgmt. Inlet Nay. District Services Health Care September 30 Rate County Debt Construction District Library District District (FIND) Council District 2006 6.4980 4.4500 0.2692 0.1000 8.1060 0.6250 0.5970 0.0916 0.1000 0.6887 1.0800 2007 6.4980 4.2800 0.1975 0.1000 7.8720 0.5989 0.5970 0.0916 0.0385 0.6199 0.9700 2008 5.7671 3.7811 0.2002 0.0894 7.3560 0.5441 0.5346 0.0909 0.0345 0.5823 0.8900 2009 5.7671 3.7811 0.1845 0.0894 7.2510 0.5427 0.5346 0.1000 0.0345 0.6009 0.9975 2010 5.7671 4.3440 0.2174 0.0894 7.9830 0.5518 0.5346 0.1253 0.0345 0.6898 1.1451 2011 5.7671 4.7500 0.2460 0.0894 8.1540 0.6069 0.5346 0.1364 0.0345 0.7513 1.1451 2012 5.7671 4.7815 0.2110 0.0624 8.1800 0.6081 0.1785 0.1364 0.0345 0.7475 1.1250 2013 5.7671 4.7815 0.2087 0.0613 7.7780 0.6066 0.1757 0.1364 0.0345 0.7300 1.1220 2014 6.0500 4.7815 0.2037 0.0587 7.5860 0.6065 0.1685 0.1364 0.0345 0.7025 1.0800 2015 6.2920 4.7815 0.1914 0.0548 7.5940 0.6024 0.1577 0.1285 0.0345 0.6745 1.0800 (1) Overlapping rates are those of local and county governments that apply to property owners within the Village of Tequesta. Sources: Palm Beach County Property Appraiser's office 137 VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2015 2006 Source: Palm Beach County Tax Collector's System, tax year 2015 138 Percentage of Percentage of Taxable Total Village Taxable Total Village Assessed Taxable Assessed Taxable Taxpayer Value Rank Value Value Rank Value Tamwest Realty, Inc (County Line Plaza) $ 18,387,403 1 2.13% $ 11,088,923 1 1.34% GHM Tequesta Holdings, LLC 13,787,586 2 1.60% DDR S.E. Tequesta, LLC (Teq. Shoppes) 11,368,315 3 1.32% 8,500,000 2 1.03% Florida Power & Light Co. 9,064,824 4 1.05% Tequesta Investors, LP 9,058,220 5 1.05% Terrace Communities Tequesta, LLC 7,827,815 6 0.91% 8,071,236 3 0.98% ALS North America, Inc. 5,501,857 7 0.64% SLO ML LLC 4,313,502 8 0.50% Taylor William B. 4,056,872 9 0.47% Elliot Edward W JR 3,788,611 10 0.44% Cohen Square, LLC -- 0.00% 7,875,208 4 0.95% JMZ Tequesta Properties, INC 0.00% 4,856,184 5 0.59% AHC Purchaser Inc 0.00% 4,700,000 6 0.57% Royal Tequesta LLC 0.00% 4,447,320 7 0.54% Tequesta Country Club 0.00% 4,442,767 8 0.54% Cornerstone Tequesta 0.00% 4,307,046 9 0.52% Hersey Harry -- 3,833,638 10 0.46% Total $ 87,155,005 10.09% $ 62,122,322 7.53% Source: Palm Beach County Tax Collector's System, tax year 2015 138 VILLAGE OF TEQUESTA, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Taxes Collected within the Collections 96.3% Fiscal Year Levied for Fiscal Year of the Levy in Total Collections to Date (2) Ended for the Fiscal Percentage Subsequent Percentage September 30, Year (1) Amount of Levy Years Amount of Levy 2006 $ 5,363,489 $ 5,164,292 96.3% $ 5,298 $ 5,169,590 96.4% 2007 6,355,149 6,134,038 96.5% 9,589 6,143,627 96.7% 2008 5,863,796 5,663,439 96.6% 10,314 5,673,753 96.8% 2009 5,341,529 5,162,044 96.6% 23,068 5,185,112 97.1% 2010 4,809,222 4,627,732 96.2% 12,037 4,639,769 96.5% 2011 4,513,447 4,338,395 96.1% 12,406 * 4,350,801 96.4% 2012 4,425,793 4,254,037 96.1% 10,389 4,264,426 96.4% 2013 4,502,727 4,337,570 96.3% 13,558 4,351,128 96.6% 2014 4,946,692 4,755,463 96.1% 2,980 4,758,443 96.2% 2015 5,437,423 5,237,859 96.3% -- 5,237,859 96.3% (1) The tax levied in a fiscal year is based on the taxable value of the prior year (2) Includes discounts taken by property taxpayers. *Break down by the years for this amount was not available. Source: Palm Beach County Tax Collector's office. 139 VILLAGE OF TEQUESTA, FLORIDA RATIOS OF OUTSTANDING DEBT BY TYPE IAR11W0no IIU0.1aldW.1"Ri Fiscal Year Ending September 30 Governmental Activities Revenue Notes Capital Bonds Payable Leases Business -type Activities Revenue Notes Bonds Payable Total Primary Government Percentage of Personal Income Per Capita 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 2015 2,249,720 561,001 4,925,818 7,736,539 2.37% 1,366 Note: Details regarding the Village's outstanding debt can be found in the notes to the financial statements. 140 VILLAGE OF TEQUESTA, FLORIDA RATIO OF NET OUTSTANDING DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (2) 5,702 $ 825,406,187 $ 12,553,565 $ 378,680 $ 12,174,885 1.48% 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 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 2015 5,665 863,937,071 7,736,539 7,736,539 0.90% 1,366 (1) Florida Estimates of Population - Bureau of Economic and Business research, University of Florida (2) Form DR -422 "Certificate of Final Taxable Value" 141 VILLAGE OF TEQUESTA, FLORIDA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Total Assessed Value (1) $ 863,937,071 Legal Debt Margin Debt limitation - 10% of total assessed value (2) 86,393,707 Total bonded debt outstanding -- Less amount in debt service fund Total Debt Applicable to Limitation -- Legal Debt Margin $ 86,393,707 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Debt Limit $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 $ 86,393,707 Total Set Debt Applicable to Limit 1,023 -- -- -- -- -- -- -- -- -- Legal debt margin $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 $ 86,393,707 Total Net Debt Applicable to Limit as a Percentage of Debt Limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (1) Form DR -422 "Certificate of Final Taxable Value" (2) Village of Tequesta Charter Section 5.02 Limitations 142 VILLAGE OF TEQUESTA, FLORIDA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2015 (a) Sources: Palm Beach County and PBC School Board Note: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Village taxable assessed value and dividing it by the PBC taxable assessed value. (Data provided by the PBC Property Appraiser's Office) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village of Tequesta. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Tequesta. This process recognizes that, when considering the Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government. 143 Estimate Estimate Share of Net Percentage Direct and Debt Applicable to Overlapping Governmental Unit Outstanding Tequesta Debt (a) (b) OVERLAPPING Palm Beach County $ 141,605,000 0.62% $ 877,951 P.B.C. School Board 17,430,000 0.62% 108,066 Subtotal, overlapping debt 986,017 DIRECT DEBT Village of Tequesta 2,810,721 100% 2,810,721 Total direct and overlapping debt $ 3,796,738 (a) Sources: Palm Beach County and PBC School Board Note: For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the Village taxable assessed value and dividing it by the PBC taxable assessed value. (Data provided by the PBC Property Appraiser's Office) Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the Village of Tequesta. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Village of Tequesta. This process recognizes that, when considering the Village's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt of each overlapping government. 143 VILLAGE OF TEQUESTA, FLORIDA PLEDGED- REVENUE COVERAGE LAST TEN FISCAL YEARS 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. 144 Net Fiscal Pledged Less: Available Debt Service (2) Year Revenues (1) Expenditures Revenue Principal Interest Coverage 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 2015 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. 144 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) 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% 2015 5,665 379,067,810 66,914 49.9 5.3% Sources: (1) Florida Estimates of Population - Bureau of Economic and Business research, University of Florida. (2) US Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System. (3) U.S. Census Bureau, 2010 Census (4) U.S. Department of Labor, Bureau of Labor Statistics, Labor Market Statistics Center, Local Area Unemployment Statistics Program 145 VILLAGE OF TEQUESTA, FLORIDA PRINCIPAL EMPLOYERS - PALM BEACH COUNTY CURRENT YEAR AND NINE YEARS AGO Source: Business Development Board of Palm Beach County Employment information for the Town is not available 146 2015 2006 Percentage of Percentage of Total County Total County Employer Employees Rank Employment Employees Rank Employment Palm Beach County School Board 22,000 1 3.21% 21,616 1 3.47% Tenet Healthcare Corporation 6,100 2 0.89% 4,794 4 0.80% Palm Beach County Government 5,507 3 0.80% 6,594 2 1.02% NextEra Energy / Florida Power & Light 3,854 4 0.56% 2,850 5 0.47% Hospital Corporation of America (HCA) 2,714 5 0.40% Florida Atlantic University 2,655 6 0.39% 2,825 6 0.47% Bethesda Memorial Hospital 2,600 7 0.38% Boca Raton Regional Hospital 2,500 8 0.36% Veterans Health Administration 2,500 9 0.36% Jupiter Medical Center 2,000 10 0.29% Columbia PB Healthcare System 5,200 3 1.46% Boca Raton Resort & Club 2,200 7 1.01% City of Boca Raton 1,880 8 0.43% The Breakers 1,800 9 0.35% City of West Palm Beach 1,784 10 0.34% 52,430 7.64% 51,543 9.82% Source: Business Development Board of Palm Beach County Employment information for the Town is not available 146 Governmental Activities General government Public safety Transportation Leisure services Total Governmental Activities Business -Type Activities Water Stormwater Total Business -Type Activities Total Primary Government VILLAGE OF TEQUESTA, FLORIDA FULL-TEVIE EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10.5 9.5 15.0 15.0 10.0 10.5 10.5 11.5 10.5 10.3 46.0 51.0 50.0 49.0 50.0 49.0 50.0 53.0 51.0 51.0 3.0 4.0 4.0 4.0 4.0 4.0 4.0 5.0 5.0 5.9 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 62.5 67.5 72.0 71.0 67.0 66.5 67.5 72.5 69.5 70.2 15.0 15.5 15.0 16.0 15.0 14.5 14.5 16.5 16.5 18.6 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.2 16.0 16.5 16.0 17.0 16.0 15.5 15.5 17.5 17.5 19.8 78.5 84.0 88.0 88.0 83.0 82.0 83.0 90.0 87.0 90.0 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. 147 Governmental Activities General government Registered voters Public safety: No. of full-time certified police officers No. of calls received No. of arrests No. of parking violations No. of incident numbers issued Fire department: No. of full-time certified firefighters No. of emergency responses No. of transports No. of fires extinguished/alarms No. of inspections Building, zoning: No. of building permits issued No. of building inspections conducted Leisure services: No. of Spring Classes No. of Summer Classes No. of Movies Business -Type Activities Water: No. of customers Average daily consumption Sources: Various Village departments VILLAGE OF TEQUESTA, FLORIDA OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 4,007 4,007 4,439 4,612 4,505 4,543 4,676 16 19 17 18 17 19 11 3,300 3,500 3,535 3,533 3,178 3,266 3,272 199 238 224 251 296 204 129 162 148 171 131 124 82 149 817 853 965 887 881 595 622 16 19 20 21 21 22 21 1,254 1,122 1,143 1,189 1,043 1,096 1,155 622 521 621 651 562 622 695 632 601 522 538 481 474 460 326 412 435 476 480 462 495 1,049 998 906 784 812 800 883 2,214 2,581 2,039 1,771 1,579 1,728 1,931 8 8 10 10 10 4 5 4 4 4 4 4 3 3 3 4,854 4,702 4,634 18 20 19 3,571 3,548 3,853 136 168 174 328 120 207 691 725 552 21 18 22 1,372 1,197 1,291 675 693 1,006 697 504 285 539 713 499 914 929 960 2,176 2,201 1,697 10 8 8 4 4 4 3 4 3 4,612 4,722 4,968 4,983 4,982 5,019 4,996 5,037 5,039 5,038 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 2.500 mg * 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. 148 VILLAGE OF TEQUESTA, FLORIDA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Governmental Activities General government: Municipal center 0 0 1 1 1 1 1 1 1 1 Public safety Police: No. of stations 1 1 1 1 1 1 1 1 1 1 No. of patrol units 12 12 7 9 15 15 11 10 11 10 Fire: No. of stations 1 1 1 1 1 1 1 1 1 1 No. of ambulances 2 2 2 2 3 3 3 3 3 2 No. of pumpers 3 3 2 2 3 3 3 3 3 3 Transportation: Miles of street lane miles 48 43 43 *24 24 24 24 24 24 24 No. of bridges 1 1 1 1 1 1 1 1 1 1 Leisure services No. of parks 3 3 3 4 4 5 5 5 6** 6 No. of park acreage 48 48 48 50 53 54 54 54 62 * * 62 No. of playgrounds 3 3 2 2 2 2 2 2 2 2 No. of baseball/softball diamonds 3 3 3 3 3 3 3 3 3 3 No. of skate -parks 1 1 1 1 1 1 1 1 1 1 Business -type activities: Water: Miles of water mains 50 75 72 72 73 72 72 73 73 73 No. of fire hydrants 550 430 430 430 430 430 430 433 409 430 Storage capacity (thousands of gallons) 3,250 3,250 3,250 3,250 3,250 3,250 3,250 2,750 2,750 2,750 Sources: Various Village departments * 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) 149 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 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 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, 2015 and the related notes to the financial statements, which collectively comprise the Village's basic financial statements, and have issued our report thereon dated June 30, 2016. 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. © 150 MARCUMGROUP 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. vYk «P West Palm Beach, FL June 30, 2016 151 MARCUM ACCOUNTANTS A 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, 2015, and have issued our report thereon dated June 30, 2016. 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 June 30, 2016, 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. © 152 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. and 10.556 (7), Rules of the Auditor General, require that we apply appropriate procedures and report the results of our determination as to whether or not the Village has met one or more of the conditions described in Section 218.503(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, 2015. Annual Financial Report Section 10.554(1)(i)5.b. and 10.556 (7), Rules of the Auditor General, requires that we apply appropriate procedures and report the results of our determination as to whether the annual financial report for the Village for the fiscal year ended September 30, 2015, 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, 2015. 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, require 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. `Ya&ta'k c c P West Palm Beach, FL June 30, 2016 153 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, 2015. 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, 2015. 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. ?�waw— L- L West Palm Beach, FL June 30, 2016 M7ARCUM GROUP MEMBER 154 Marcum LLP ■ 525 Okeechobee Boulevard ■ Suite 750 ■ West Palm Beach, Florida 33401 ■ Phone 561.653.7300 ■ Fax 561.653.7301 ■ marcumllp.com