FY 2004 CAFR (2)
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CITY OF EDGEWATER,
FLORIDA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
SEPTEMBER 30, 2004
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City of Edgewater, Florida
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For The Year Ended September 30, 2004
Prepared by: Finance Department
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INTRODUCTORY SECTION
CITY OF EDGEW A TER
COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS
Year Ended September 30, 2004
I.
Introductory Section:
Table of Contents
Letter of Transmittal
GFOA Certificate of Achievement
List of Principal Officials
Organizational Chart
II.
Financial Section:
Independent Auditor's Report
Management's Discussion and Analysis
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement of
Activities
Statement of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual - General Fund
Statement of Net Assets - Proprietary Funds
Statement of Revenues, Expenses and Changes in
Fund Net Assets - Proprietary Funds
Statement of Cash Flows - Proprietary Funds .
Statement of Fiduciary Net Assets - Fiduciary Funds
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds
Notes to Financial Statements
Combining and Individual Fund Statements and Schedules:
Major Governmental Fund:
Schedule of Revenues and Expenditures and Changes in Fund
Balance - Budget and Actual:
Debt Service Fund
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~ CITY OF EDGEWATER
I COMPREHENSIVE ANNUAL FINANCIAL REPORT
TABLE OF CONTENTS - Continued
I Year Ended September 30, 2004
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~ II. Financial Section - Continued:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 61-62
I Combining Statement of Revenues, Expenditures and Changes
In Fund Balances - Nonmajor Governmental Funds 63-64
Schedule of Revenues, Expenditures and Changes in Fund
I Balances - Budget and Actual:
Special Revenue Funds 65-68
Capital Project Fund 69
Nonmajor Proprietary Funds:
I Combining Statement of Net Assets -
Nonmajor Proprietary Funds 70
Combining Statement of Revenues, Expenses and Changes
I In Fund Net Assets - Nonmajor Proprietary Funds 71
Combining Statement of Cash Flows -
Nonmajor Proprietary Funds 72-73
Fiduciary Funds:
I Combining Statement of Fiduciary Net Assets 74
Combining Statement of Changes in Fiduciary Net Assets 75
Capital Assets Used in the Operation of Governmental Funds:
~ Schedule by Function and Activity 76
III. Statistical Section:
General Governmental Expenditures by Function 77-78
I General Governmental Revenues by Source 79-80
Property Tax Levies and Collections 81
Assessed and Estimated Actual Value of Taxable Property, Net of Exemptions 82
I Property Tax Rates, Direct and Overlapping Governments 83
Special Assessment Collections 84
Computation of Overlapping Debt 85
i Demographic Statistics 86
Property Value, Construction, and Bank Deposits 87
Summary of Ten Largest Single Unit Water Users 88
Principal Taxpayers 89
I Miscellaneous Statistical Data 90-91
Water and Sewer Revenue Bond Coverage 92
~ IV. Other Reports:
Report on Compliance and on Internal Control over Financial
Reporting Based on an Audit of Financial Statements Performed
in Accordance With Government Auditing Standards 93-94
i Report on Compliance with Requirements Applicable to the Major Program
and Internal Control over Compliance in Accordance with OMS Circular A-133 95-96
Schedule of Expenditures of Federal Awards 97
~ Notes to Schedule of Expenditures of Federal Awards 98
Schedule of Findings and Questioned Costs - Federal Awards 99
Management Comments 100-103
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THE CITY OF EDGEWATER
POST OFFICE BOX 100, EDGEWATER, FLORIDA 32132-0100
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Honorable Mayor and Members
of the City Council
City of Edgewater, Florida
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State law requires that all general-purpose local governments publish a complete set of financial statements
presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and
that they be audited in accordance with auditing standards generally accepted in the United States of America by a
firm of licensed certified public accountants. Pursuant to that requirement, it is with great pleasure that we present
to you the City of Edgewater, Florida Comprehensive Annual Financial Report (CAFR) for the fiscal year ended
September 30, 2004.
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This report consists of management's representations concerning the finances of the City of Edgewater.
Consequently, management assumes full responsibility for the completeness and reliability of all of the information
presented in this report. To provide a reasonable basis for making these representations, management of the City of
Edgewater has established a comprehensive internal control framework that is designed both to protect the
government's assets from loss, theft, or rnisuse and to compile sufficient reliable information for the preparation of
the City of Edgewater financial statements in conformity with GAAP. Because the cost of internal controls should
not outweigh their benefits, the City of Edgewater's comprehensive framework of internal controls has been
designed to provide reasonable rather than absolute assurance that the financial statements will be free from material
misstatement. As management, we assert that, to the best of our knowledge and belief, this fmancial report is
complete and reliable in all material respects.
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The City of Edgewater's financial statements have been audited by McDirmit Davis & Company, LLC, a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that
the financial statements of the City of Edgewater for the fiscal year ended September 30, 2004, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent auditor concluded, based
upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City of Edgewater's
financial statements for the fiscal year ended September 30, 2004, are fairly presented in conformity with accounting
principles generally accepted in the United States of America. The independent auditor's report is presented as the
first component of the financial section of this report.
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The independent audit of the financial statements of the City of Edgewater was part ofa broader, federally mandated
"Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single
Audit engagements require the independent auditor to report not only on the fair presentation of the financial
statements, but also on the audited government's internal controls and compliance with legal requirements, with
special emphasis on internal controls and legal requirements involving the administration of federal awards. These
reports are available in the Other Reports section of this report.
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GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic
financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is
designed to complement MD&A and should be read in conjunction with it. The City of Edgewater's MD&A can be
found immediately following the report of the independent auditors.
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Honorable Mayor and Members
of the City Council
Page 2 of5
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ECONOMIC CONDITION AND OUTLOOK
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The City is located in southeast Volusia County, east of 1-95 and south of New Smyrna Beach, to Ariel Road, along
the Indian River and two miles west of the Atlantic Ocean. The City is within the economic zone of Central Florida,
which roughly follows Interstate 4 from Tampa to Daytona Beach through Orlando to the communities along the
Atlantic coast in V olusia County.
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Edgewater has experienced a moderate and increasing rate of growth. Edgewater's population in the last year
increased from 20,088 to 20,637, a 2.7 percent increase. Economic factors and residential development interest
within the City indicate these trends will continue to rise. Last year, however the City only issued 209 single-family
residential home permits, a 25 percent decrease from the previous year. This was due primarily to the three
hurricanes that swept through the City and surrounding areas in 2004. Based on early 2005 numbers, this number is
expected to once again increase.
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Coronado Paint, residential home construction, boat building (Boston Whaler, Edgewater Power Boats, RJ.
Dougherty Associates, Inc., Porta Products), ParkTowne Industrial Center and other light manufacturing businesses
provide employment opportunities within the City. NASA and related supporting enterprises at Cape Canaveral also
provide further employment opportunities. Many of the City's residents commute to Daytona Beach, Deland and
Orlando for business employment as well.
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The community currently has a 4.3 percent unemployment rate, below the state average of 4.4 percent. During the
last year, property taxable assessment values have increased 13.3 percent. As the economy grows, recent growth
trends experienced by the City are expected to increase. The City continues exploring several options to increase
economic growth within the City and improve economic development within southeast Volusia County. Toward this
goal, the City's Economic Development Board is continuing its emphasis on result-orientated initiatives. The City
continues to develop man partnerships between various economic development agencies and local businesses.
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The City's economic growth initiative intensified with the purchase and development of the ParkTowne Industrial
Center. Growth within the Park remains strong with the addition of Chipmunk Hardwood, Viking Industries and
NIT holdings. The ongoing development of the property will spur non-residential economic growth for the City and
stimulate additional economic benefits for the Park Avenue corridor. The Daytona Beach Community College,
which has a campus adjacent to the project site, may assist in attracting new jobs through the creation of a marine
industry teclmology center on a portion of the project site.
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The economic condition and outlook for the City is strong. The major initiative toward economic development such
as ParkTowne is shifting the tax burden from primarily residential to a combination of commercial and residential.
This approach has created an atmosphere within southeast Volusia County that is desirable to live and work.
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MAJOR INITIATIVES
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ParkTowne Industrial Center is continuously expanding. As it stands, Phase I is completely sold out. Currently, the
City has eight contracts in the works on 18.24 acres - 1.7 acres at $50,000,5.55 acres at $65,000 and 9.99 acres at
$71,500. Most of these contracts are scheduled to close in 2005. Also, two capital projects "ithin the park include an
$850,000 drainage improvement project, and a $1.5 million road installation (Base Leg Drive). The City has also
completed the planning and design for Phase II of the industrial development.
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The Police Department is pursuing grant funding for two full-time positions to be added to the department. The first
is a VOCA Grant for a full-time Victim's Advocate position that will assist the victims of crime in dealing with the
aftermath of being a victim and seeking redress. The other is a full-time sworn position for a Narcotics Investigator
to be assigned to the South East Narcotic Drug Task Force (SENTF) to fightthe growing problem of illegal drugs in
our area.
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The Fire-Rescue Department constantly strives to make advancements with the quality of care it provides to the
community. In the upcoming year, the department plans to develop and implement a Quality Assurance of services
program. In addition, enhancements to the Standard Operational Procedures will be made in an effort to make sure
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Honorable Mayor and Members
of the City Council
Page 3 of5
all operations in every aspect of the department run more smoothly, as well as enhancements to the City
Comprehensive Emergency Plan, which will prove effective during any large-scale emergencies. Alternative
sheltering for Animal Services will be obtained through a referendum that was approved in 2004. This shelter will
allow for animals to be housed and cared for by Animal Control Officers as well as volunteers when they are picked
up in the City. Other projects in the works for the upcoming year and years to follow include developing and
implementing a capital replacement program, developing a comprehensive plan for future departmental growth,
researching alternative funding methods for the department, acquiring a location for future training grounds and
enhancing the Physical Health Maintenance and Safety Program.
The Personnel Department will revise the City's Personnel Policies and Procedures in 2005 to co-exist with the
collective bargaining agreements. The goal for the next year is to update the a policy and procedure manual for those
employees not covered by a bargaining agreement, as well as separate manuals for management personnel. The
salary range and job position adjustments made to the new broad banding system requires job description revisions.
A thorough review of all the City's job positions needs to be performed and new employee job descriptions
prepared. The manning level in each department also needs to be reviewed to determine if staffing is sufficient to
provide the services to the community. The upcoming year appears to hold some major Personnel Department
activities. For the Personnel Department to become more proactive in the development of personnel, funds need to
be allocated for training, communication and employee recognition. Reacting to the needs of the City employees is
the Personnel Department's primary function; after all, they are the City's most valuable and most expensive
resource.
Leisure Services continues to plan for new and redevelopment of the City's current park system. The plan includes
renovating the old ball fields at Hawks Park into a soccer complex, redeveloping Kennedy Park to benefit area
boaters and sport fishermen, and begin planning and design for new shuffieboard facilities to be located at Rotary
Park. Leisure Services obtained an additional grant from ECHO and will be constructing a roof over the new Hawks
Park Amphitheater. Beautification with landscape themes along S.R. 442 (W. Indian River Boulevard) and U.S.
Highway 1 (Ridgewood Avenue) will be under construction and mostly completed in 2005.
The City's Department of Environmental Services is designing and permitting two new water production wells on
City-owned property at the Alan R. Thomas Water Treatment Plant Wellfield. The Department is also constructing
Phase I of the Reclaimed Water System Trunkline Project to provide better service to existing customers as well as
to accommodate future customers. The City is doing a system-wide potable water meter conversion to a radio read
system to provide for more accurate water accountability and reduce manpower needs. Additionally, radio read
water meters are being installed in the reclaimed water system connections to encourage conservation and ensure a
fair supply to all users.
DEPARTMENT FOCUS
The Police Department's focus on reducing crime over the past year has paid off with a 9.5 percent decrease in the
overall crime rate. A successful departmental reorganization and improved training program has led to more
aggressive approaches in dealing with identified community problems. Officers also made 67 percent more offender
arrests than in the previous year and the Criminal Investigations Division (CID) has increased its successful
prosecutions resulting in greater jail times for offenders than before. Expansion of the Traffic Unit has also led to a
decrease in motor vehicle accidents and a reduction of community complaints of vehicular safety.
The Fire-Rescue Department continues to provide superior Advanced Life Support (ALS) and Emergency Medical
Services (EMS) with 2,701 requests for assistance during 2004. The request for assistance has increased by nearly
19 percent since 2003 and as the City continues to annex and develop, that percentage is expected to rise even
higher. An additional two-person rescue became staffed in 2004, enabling the department to handle the increasing
number of emergency calls. An additional five crewmembers were added on shift to staff this unit for all three shifts.
Two other divisions that now fall under the Fire-Rescue Department are Code Compliance and Animal Services. A
total of 1,363 cases were worked through the Code Compliance Division in 2004. That number is also expected to
increase as the division grows along with the City. In addition, Animal Services had a total of 2,694 animal-related
calls in 2004.
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Honorable Mayor and Members
of the City Council
Page 4 of 5
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In the PersOlmel Department, it was noted that the City made strives this year working with the broad banding
classification system. The directors gained confidence in the system and employees have benefited from it. Salary
range and job position adjustments were administered to keep the City competitive with this area's market. The
employee collective bargaining agreements were negotiated and ratified in 2004. This is always a stressful
undertaking for the City and the past year was no exception. The Police Dep~rtment held a representation election in
the middle of the negotiations. Both PEA and FOP contracts were ratified and adopted by the City Council and
distributed to all departments. During the hurricanes, employees' needs increased. Though only a handful of
employees suffered injuries, many others suffered personal property damage. Arrangements were made with the
City's deferred compensation company for financial assistance. While these employees were trying to get their
homes back in living conditions, many of them were putting in several extra hours at work in an effort to get
the City back in order. The Personnel Department staff made the transition into a temporary location due to the
storm damage in their previous offices. Prioritizing employees' needs has caused some other personnel projects,
such as employee recognition, newsletters and informational workshops, to be on the dO\\llslide in 2004. Due to the
unpredictable nature of personnel issues, there remains a definite lack of time to devote on planning and training.
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Leisure Services completed development of Phase III of Hawks Park Recreation Complex and held the grand
opening in January 2005. The opening showcased four new, lighted baseball fields, nature trails and an outdoor
amphitheater. The project was funded with recreation impact fees and $648,500 in grants from V olusia County
ECHO and FRDAP. The playground system at Rotary Park was replaced in the amount of 528,000.
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FINANCIAL INFORM A nON
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The information presented in the financial statements is perhaps best understood when it is considered from the
broader perspective of the specific environment within which the City of Edgewater operates.
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Budgeting Controls. The annual budget serves as the fow1dation for the City of Edgewater's financial planning and
control. All departments of the City of Edgewater are required to submit requests for appropriation to the City
Manager. The City Manager then uses these requests as the starting point for developing a proposed budget. The
City Manager then presents this proposed budget to the council for review. The City Commission is required to
hold public hearings on the proposed budget and to adopt a final budget by no later than September 30, the close of
the City of Edgewater's fiscal year. The appropriated budget is prepared by fund (e.g., general fund), department
(e.g., fire department) and division (e.g., ems). The City Manager may make transfers of appropriations within and
between divisions and departments, however, any revisions that alter the total appropriations of any fund must be
approved by City Commission. Original and final amended budget-to-actual comparisons are provided in this report
for each individual governmental fund. The General fund is presented on page 19 as part of the basic financial
statements for the governmental funds. For other governmental funds these comparisons are presented in the
governmental fund subsection of this report, which starts on pages 60-68.
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Long-term financial planning. The City Commission updated and adopted a 5-year Capital Improvements Plan (ClP)
during fiscal year 2004. The CIP is a multi-year prioritized schedule of improvements that lists each capital
improvement by year it is intended to be purchased or commenced; the amount to be spent per year; and, the method of
fmancing such improvement. Each year during the annual budget process the CIP is reviewed to ensure incorporation
of all necessary capital improvements. It should be noted; however, that the CIP is not a fixed document but a flexible,
evolutionary document that may change to reflect changing priorities, opportunities, costs, or different fmancing
approaches.
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Cash management policies and practices. The City administers a cash management and investment program that
seeks to maximize, in order of priority, the preservation of funds, liquidity and interest earnings over its cash and
investments. Cash resources of the individual funds are combined to form a pool of cash and investments. The City's
cash and investment pool balance at September 30, 2004 (not including pension funds) \vas $7,268,432. Investment
income includes the change in the fair value of investments. During the year monies were invested in U.S. Agencies
and Treasuries and the State Board Administration Local Government Investment Pool in accordance with the City's
Investment Policy. Pension fund assets were invested mainly in equity and bond funds in accordance with the City's
Investment Policy for Retirement Funds. The total pension fund assets at September 30, 2004 were $18,712,877.
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Honorable Mayor and Members
of the City Council
Page 5 of5
Risk Management. During the ordinary course of its operations, the City is exposed to various risks of losses. The
City maintains commercial insurance coverage in amounts management feels is adequate to protect and safeguard the
assets of the City. In the opinion of the City's management and legal counsel, legal claims and litigation are not
anticipated to have a material impact on the fmancial position of the City.
Pension and other postretirement benefits. The City of Edgewater sponsors three single-employer defmed benefit
pension plans for its employees. Each year, an independent actuary engaged by the pension plan calculates the amount
of the Annual Required Contribution (ARC) that the City of Edgewater must make to the pension plan to ensure that
the plan will be able to fully meet its obligations to retired employees on a timely basis. In addition, police and
firefighters are required to contribute 6% of their salary to the plan. General employees must contribute 2.5% of their
salary to the plan.
AWARDS AND ACKNO\VLEDGEMENTS
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in
Financial Reporting to the City of Edgewater for its CAFR for the fiscal year ended September 30, 2003. The City
of Edgewater has received a Certificate of Achievement for the last nineteen consecutive years. In order to be
awarded a Certificate of Achievement, the government published an easily readable and efficiently organized
CAFR. This report satisfied both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to
meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its
eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services of the entire
staff of the finance department. We would like to express our appreciation to all members of the department who
assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City
Commission for their unfailing support for maintaining the highest standards of professionalism in the management
of the City of Edgewater's fmances.
Respectfully submitted,
~rAc/? -tt-r----
Kenneth R. Hooper
City Manager
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Jon C. Williams
Finance Director
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Edgewater,
Florida
For its Comprehensive AImual
Financial Report
for the Fiscal Year Ended
September 30, 2003
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in governn1ent accounting
and [mancial reporting.
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President
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Executive Director
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James P. Brown - District 1
Dennis A. Vincenzi - District 2
CITY MANAGER
Kenneth Hooper
CITY ATTORNEY
Foley and Lardner
CITY OF EDGEWATER, FLORIDA
LIST OF PRINCIPAL OFFICIALS
Year Ended September 30, 2004
MAYOR
Donald A. Schmidt
CITY COUNCIL
IX
Harriet E. Rhodes - District 3
Judith R. Lichter - District 4
CITY CLERK
Susan J. Wadsworth
FINANCE DIRECTOR
Jon C. Williams
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CITY OF EDGEWATER
ORGANIZATIONAL CHART
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FINANCIAL SECTION
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MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and City Council
City of Edgewater, Florida
Edgewater, Florida
We have audited the accompanying financial statements. of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
City of Edgewater, Florida, as of and for the year ended September 30, 2004, which collectively
comprise the City's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the City's management. Our responsibility is to express an
opinion 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 of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City of Edgewater, Florida, as of
September 30, 2004, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparison for the general fund for the year then
ended in conformity with accounting principles generally accepted in the United States of America.
MCDlRMIT DA VIS & COMPANY, LLC
605 E. ROBIt\SOt\ STREET. SL'ITE 635. ORLA'iDO. FLORIDA 32801
TEI.EPHO"iE 407-843-5406. FAX 407-649-9339 . EMAIL: It'FO@:VICDIRMITDAVIS.COM
i\1E\lBERS: PRI\'.\ Tl C'OMP.\l'\;IES PR';'CTlCT SECTIO)\; . Ai\1F.RIC\N I~ST[TUTE OF CERTIFIED PL:SLlC A('COU1\TA!'\ TS . FLORIDA I~STITL: rE Or CERTIFIED PL1BUC ACCOU!\. T:~Nl ~
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In accordance with Government Auditing Standards, we have also issued a report dated March
23, 2005 on our consideration of the City of Edgewater, Florida's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts
and grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
The Management's Discussion and Analysis on pages 3 through 13 is not a required part of the
basic financial statements but is supplemental information required by the Governmental
Auditing Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation
of the supplemental information. However, we did not audit the information and express no
opinion on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the City of Edgewater's basic financial statements. The introductory section,
combining and individual nonmajor fund financial statements and schedules and statistical section
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The accompanying schedule of expenditures of federal awards is presented for
purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a
required part of the basic financial statements of the City of Edgewater, Florida. The combining
and individual nonmajor fund financial statements and schedules and the schedule of
expenditures of federal awards have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly stated in all material respects
in relation to the basic financial statements taken as a whole. The introductory section and the
statistical section have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
1Jtc/lWnit f:Xw.i4 8, ~CUUf LLt
McDIRMIT DAVIS & COMPANY, LLC
March 23, 2005
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of the City of Edgewater, Florida we offer readers of the City of Edgewater's financial
statements this narrative overview and analysis of the financial activities of the City of Edgewater for
the fiscal year ended September 30, 2004. We encourage readers to consider the information
presented here in conjunction with additional information that we have furnished in our letter of
transmittal.
Financial Highlights
· The assets of the City of Edgewater exceeded its liabilities at the close of the most recent
fiscal year by $44,890,143 (net assets). Onhis amount, $12,558,626 (unrestricted net
assets) may be used to meet the government's ongoing obligations to citizens and
creditors.
· The government's total net assets decreased by $102,307.
· As of the close of the current fiscal year, the City of Edgewater's governmental funds
reported combined ending fund balances of $2,417,683, a decrease of $534,764 in
comparison with the prior year. Most of this total amount is available for spending at the'
government's discretion (unreserved fund balance).
· At the end of the current fiscal year, unreserved fund balance for the general fund was
$503,911, or 4% of total general fund expenditures.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City of Edgewater's (the
City) basic financial statements. The City's basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to 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 City of Edgewater's finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The statement of activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Both of the government-wide financial statements distinguish functions of the City of Edgewater 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 City of Edgewater include
general government, public safety, transportation/public works and leisure services. The business-
type activities of the City of Edgewater include water and sewer, refuse collection, stormwater
management, development fees and renewal and replacement.
The government-wide financial statements include only the City of Edgewater itself (known as the
primary government). The City of Edgewater has no component units.
The government-wide financial statements can be found on pages 14 - 15 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 City of Edgewater, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City of Edgewater 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 evaluating 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 City of Edgewater maintains seven individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures, and changes in fund balances for the general fund, and the debt service
fund, both of which are considered to be major funds. Data from the other five governmental funds
are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Edgewater adopts an annual appropriated budget for all of its governmental funds.
Budgetary comparison statements have been provided for the general fund to demonstrate
compliance with this budget at page 19. Budgetary comparison schedules have been provided for the
debt service fund and the nonmajor funds at pages 60 and 65 - 69.
4
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
The basic governmental fund financial statements can be found on pages 16 - 19 of this report.
Proprietary funds. The City of Edgewater maintains one type of proprietary fund. Enterprise funds
are used to report the same functions presented as business-type activities in the government-wide
financial statements. The City of Edgewater uses enterprise funds to account for water and sewer,
refuse collection, stormwater management, development fees and renewal and replacement.
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 water
and sewer, refuse collection and stormwater management, which are all considered to be major
funds. Data for the other 2 proprietary funds are combined into a single aggregated presentation.
Individual fund data for each of these nonmajor proprietary funds is provided in the form of combining
statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 20 - 24 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the government. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support the City of Edgewater's
own programs. The accounting used for fiduciary funds is much like that used for the proprietary
funds.
The basic fiduciary fund financial statements can be found on pages 25 - 26 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a
full understanding of the data provided in the government-wide and fund financial statements. The
notes to financial statements can be found on pages 27 - 59 of this report.
Other information. The combining statements referred to earlier in connection with nonmajor
governmental and proprietary funds are presented immediately following the Notes to Financial
Statements. Combining and individual fund statements and schedules can be found on pages 61 -75
of this report.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Edgewater, assets exceeded liabilities by $45,013,666 at the close
of the most recent fiscal year. The following table reflects the condensed statement of net assets for
the current and prior years. For more detail see the Statement of Net Assets on page 14.
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
City of Edgewater
Statement of Net Assets
As of September 30,
Assets:
Current and other assets
Capital Assets
Total Assets
Governmental Activities Business-Type Activities Total Primary Government
2004 2003 2004 2003 2004 2003
$ 6,765,287 $ 7,291,026 $ 20,244,390 $21,917,794 $27,009,677 $29,208,820
19.619.433 18.393.432 50.232.897 48.733.463 69.852.330 67.126.895
26,384,720 25,684,458 70,4 77 ,287 70,651,257 96,862,007 96,335,715
Liabilities:
Long term liabilities
Other liabilities
Total Liabilities
12,397,810
1.213.957
13,611,767
13,239,919
954.643
14,194,562
33,811,574
4.548.523
38,360,097
34,258,318
2.890.385
37,148,703
46,209,384
5.762.480
51,971,864
47,498,237
3.845.028
51,343,265
Net Assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total Net Assets
8,207,197 6,010,568 16,796,965 13,185,840 25,004,162 19,196,408
4,168,822 5,309,445 3,158,533 4,627,937 7,327,355 9,937,382
396.934 169.883 12.161 .692 15.688.777 12.558.626 15.858.660
$12772 953 511 489896 $ 32 117 190 $33 50? 554 $44 890 143 $44 992 450
Fifty-six percent (56%) of the City's net assets reflects its investment in capital assets (e.g., land,
buildings, improvements, infrastructure and equipment) less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City of Edgewater'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 City of Edgewater's net assets (16%) represents resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted net
assets ($12,558,626) may be used to meet the government's ongoing obligations to citizens and
creditors.
At the end of the current fiscal year, the City of Edgewater is able to report positive balances in all
categories of net assets.
The City's net assets decreased by $102,307 during the current fiscal year. The reasons for this
decrease are detailed below. The following table reflects the condensed Statement of Activities for
the current and prior years. For more detail see the Statement of Activities on page 15.
6
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Revenues:
Program revenues -
Charges for services
Operating grants and
contributions
Capital grants and
contributions
General revenues -
Property taxes
Franchise and utility
taxes
Intergovernmental
Investment income
and miscellaneous
Total revenues
Expenses:
General government
Public safety
Transportation/public works
Leisure services
Interest on long-tenm debt
Water and sewer
Refuse collection
Stonmwater management
Development fees
Renewal and replacement
Total expenses
Increase (Decrease) in Net
Assets Before Transfers
Transfers
Increase (Decrease) in
Net Assets
Net Assets - Beginning
Net Assets - Ending
City of Edgewater
Chanqes in Net Assets
For The Year Ended September 30,
Governmental Activities
2004 2003
Business-Type Activities
2004 2003
$ 1,419,760 $ 1,259,220
951,863 401,116
487,060 192,861
3,884,932 3,403,304
2,615,188 2,555,819
1,746,746 1,627,439
359.091 298.967
11.464,640 9,738.726
2,227,242 2,478,672
6,212,610 5,670,853
1,257,545 2,765,177
1,572,699 1,573,582
324,137 356,159
$ 8,237,855
2,303,189
989,665
$ 7,370,234
3,047,057
637,063
12.167.772
661.124
11.078.415
6,681,657 6,253,322
4,288,882 1,565,664
929,433 882,456
68,515 31,180
171,999 650
11.594.233 12.844.443 12.140.486 8,733.272
(129,593) (3,105,717) 27,286 2,345,143
1.412.650 751.758 (1.412.650) 1751.758)
1,283,057 (2,353,959) (1,385,364) 1,593,385
11.489,896 13.843.855 33,502.554 31.909.169
$12772 953 $11 489896 $32 117 190 $33 502 554
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Total Primary Government
2004 2003
$ 9,657,615
3,255,052
1,476,725
3,884,932
2,615,188
1,746,746
996.154
23.632.412
2.227,242
6,212,610
1,257,545
1,572,699
324,137
6,681,657
4,288,882
929,433
68,515
171.999
23.734.719
(102,307)
(102,307)
44.992.450
$44 890 143
$ 8,629,454
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401,116
3,239,918
~
3,403,304
2,555,819
1,627,439
960,091
I
20.817.141
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2,478,672
5,670,853
2,765,177
1,573,582
356,159
6,253,322
1,565.664
882,456
31,180
650
21.577,715
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(760,574) 0
45.753.024
$44 992 450
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Governmental activities - Governmental activities increased the City of Edgewater's net assets
by $1,283,057. Key elements of this increase are as follows:
. Property taxes increased by almost $482,000 (14%) during the year.
. Operating grants and contributions increased $550,747 primarily because of accrual of
reimbursement due from FEMA relating to the three hurricanes that occurred in 2004. Also
capital grants increased almost $300,000 due to several grants received by the City.
. Transfers in from business-type activities increased from $751,758 in 2003 to $1,412,650 in
2004, an increase of $660,892.
Business-type activities - Business-type activities decreased the City of Edgewater's net assets
by $1,385,364. Key elements of this decrease are as follows:
. Expenses increased around $3,400,000 from 2003. Approximately $2,400,000 of this
increase was due to hurricane expenses, however FEMA revenue was accrued to offset
this. The remaining $1,000,000 increase in expenses is due to increase in salaries and
other expenses. .
. As mentioned above, business-type activities transferred $1,412,650 to governmental
activities in 2004, an increase of $660,892 from 2003.
8
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$1,000.000
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Expenses and Program Revenues - Governmental Activities
$6,212,610
General go'Vemment
Public safety
Transportation/PubliC worts
Leisure sel"Aces
I iii Expenses II Program revenues
Revenues by Source. Governmental Activities
Intergovernment
15%
Properly taxes
34%
Program revenues
25%
Other taxes
23%
Investment income &
miscellaneous
3%
$324,137
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IlIlntergovemment III Program revenues 0 Investment income & miscellaneous 0 Other taxes II Properly taxes I
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$6,000,000
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$2,000,000-
$1,000,000
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Expenses and Program Revenues - Business-Type Activities
$6,681.657
$630,975
-Cl.~
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$0
Renewal and replace
Water and sewer
Refuse collection
Stonnwater management
Development fees
II!! Expenses. Program revenue I
Revenues by Source - Business-Type Activities
. Charges for services 0 Capital grants and contributions 0 Operating grants and contributions
. Investment income & miscellaneous
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19%
Investment income &
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5%
Capital grants and
contributions
8%
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Financial Analysis of the Government's Funds
As noted earlier, the City of Edgewater used fund accounting to ensure and demonstrate
compliance with finance-related requirements.
Governmental Funds - The focus of the City's governmental funds is to provide information on
near-term inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the City of Edgewater's financing requirements. In particular, unreserved fund
balance may serve as a useful measure of a government's net resources available for spending
at the end of the fiscal year.
As of the end of the current fiscal year, the City of Edgewater's governmental funds reported
combined ending fund balances of $2,417,683, a decrease of $534,764 in comparison with the
prior year. Approximately 89% of this amount ($2,155,596) constitutes unreserved fund
balance, which is available for spending at the City's discretion. The remainder of fund balance
is reserved to indicate that it is not available for new spending because it has already been
committed to (1) pay debt service ($234,909) or (2) for other purposes ($27,178).
The general fund is the chief operating fund of the City of Edgewater. At the end of the current
fiscal year, unreserved fund balance of the general fund was $503,911, while total fund balance
was $531,089. As a measure of the general fund's liquidity, it may useful to compare both
unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund
balance represents 4.1 percent of total general fund expenditures, while total fund balance
represents 4.3 percent of that same amount.
The fund balance of the general fund decreased by $252,560 during the current fiscal year.
This decrease was due primarily to over $280,000 in hurricane expenditures charged to the
general fund for emergency protective measures. This amount is due from FEMA at September
30,2004 but was not recorded as revenue since it was not available within 60 days of year end.
Proprietary Funds - The City Edgewater's proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
Unrestricted net assets of the proprietary funds at the year end amounted to $12,161,691. The
total decrease in net assets for these funds was $1,385,364. Other factors concerning the
finances of these funds have already been addressed in the discussion of the City of
Edgewater's business-type activities.
General Fund Budgetary Highlights
There were no differences between the original budget and the final amended budget. During
the year, actual revenues were $359,693 less than budgeted revenue and actual expenditures
were $698,384 less than budgeted expenditures. However, actual expenditures did exceed
budgeted expenditures in the following functions: transportation/public works and public safety.
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Capital Asset and Debt Administration
Capital Assets - The City of Edgewater's investment in capital assets for its governmental and
business-type activities as of September 30, 2004, amounts to $69,852,330 net of accumulated
depreciation). This investment in capital assets includes land, buildings, improvements,
machinery and equipment and infrastructure. The total increase in the City's investment in
capital assets for the current fiscal year was 4%. Major capital asset events during the current
fiscal year included the following:
. Construction in progress for governmental activities increased primarily because of
additions to FIND Project Phase II totaling $768,560 and additions of $547,095 to the
Hawks Park Cultural Center.
. The State Road 442 expansion costing $812,958 was completed.
. Construction in progress increased for business-type activities primarily because of over
$2,000,000 spent on the Western Utilities expansion and about $560,000 spent on Terra
Mar Village Utilities improvements.
City of Edgewater
Capital Assets
As of September 30,
Governmental Activities Business-type Activities Total Primary Government
2004 2003 2004 2003 2004 2003
$ 3,779,436 $ 3,779,436 $ 676,827 $ 676,827 $ 4,456,263 $ 4,456,263
2,756,434 2,894,093 14,320,213 15,068,149 17,076,647 17,962,242
8,906,546 9,375,323 31,025,138 30,806,397 39,931,684 40,181,720
1,224,226 851,622 1,300,376 1,094,150 2,524,602 1,945,772
792,740 609,823 792,740 609,823
2,160.051 883.135 2,910,343 1,087.940 5,070.394 1.971 ,075
$19619433 $18393432 $50 232 897 $48 733 463 $69 852 330 $67 126 895
Land
Buildings
Improvements
Machinery and
equipment
I nfrastructu re
Construction in
progress
Total
Additional information on the City of Edgewater's capital assets can be found in Note 6 on
pages 41 - 42 of this report.
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MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Long-Term Debt - At the end of the current fiscal year, the City of Edgewater had total debt
outstanding of $44,956,956. This debt includes bonds payable, notes payable, the state
revolving loan and capital leases. Additional information on long-term debt can be found in
Notes 7 and 8 on pages 43 - 51 of this report.
City of Edgewater
Lonq-Term Debt
As of September 30,
Governmental Activities Business-type Activities Total Primary Government
2004 2003 2004 2003 2004 2003
Bonds Payable $ $ $11,535,000 $11,940,000 $11,535,000 $11,940,000
Notes Payable 10,959,416 12,382,864 7,039,543 7,922,467 17,998,959 20,305,331
State Revolving
Loan 14,574,225 15,804,864 14,574,225 15,804,864
Capital Leases 452.820 395.952 848.772
$11 412 236 $12382864 $33 544 720 $35 667 331 $44 956 956 $48 050 195
The City of Edgewater's total debt decreased by $3,093,239 (6 percent) during the current fiscal
year. This is net of the following increases:
· City entered into a capital lease agreement for $1,089,947 for the acquisition of
computer equipment and various other vehicles and equipment.
Next Year's Budget and Rates
During the current fiscal year, the unreserved fund balance in the general fund decreased to
$503,911. The City has not appropriated any of this amount for spending in the 2005 fiscal year
budget since the plan is to increase the unreserved fund balance so that it at least 10-20% of
general fund operating expenditures.
Requests for Information
This financial report is designed to provide a general overview of the City of Edgewater's
finances for all those with an interest in the government's finances. Questions concerning any
of the information should be addressed to the office of the Finance Director, City of Edgewater,
P.O. Box 100, Edgewater, Florida 32132-0100.
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BASIC FINANCIAL STATEMENTS
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~ CITY OF EDGEWATER, FLORIDA
I STATEMENT OF NET ASSETS
September 30, 2004
U Primary Government
~ Governmental Business-type
Activities Activites Total
~ Assets:
Cash and cash equivalents $ 2,190,020 $ 913,655 $ 3,103,675
Receivables, net 243,647 2,498,959 2,742,606
~ Inventories and prepaid costs 27,178 7,257 34,435
Due from other governments 706,072 2,303,189 3,009,261
Internal balances 337,328 (337,328)
I Restricted assets:
Cash and cash equivalents 5,074,682 5,074,682
Investments 1,133,024 1,133,024
Special assessments receivable 2,734,803 8,383,089 11,117,892
~ Bond issuance costs 267,863 267,863
Land held for resale 406,473 406,473
Investment in joint venture 119,766 119,766
i Capital assets not being depreciated 5,939,487 3,587,170 9,526,657
Capital assets being depreciated, net of
accumulated depreciation 13,679,946 46,645,727 60,325,673
~ Total Assets 26,384,720 70,477,287 96,862,007
Liabilities:
~ Accounts payable and other current liabilities 760,533 3,537,812 4,298,345
Due to other governments 12,305 12,305
Unearned revenue 441,119 441 ,119
i Liabilities payable from restricted assets 1,010,711 1,010,711
Noncurrent liabilities:
Due within one year 1,655,004 2,737,818 4,392,822
Due in more than one year 10,742,806 31,073,756 41,816,562
I Total Liabilities 13,611,767 38,360,097 51,971,864
I Net Assets:
Invested in capital assets, net of related debt 8,207,197 16,796,965 25,004,162
Restricted for:
Capital projects 1,199,110 2,025,509 3,224,619
I Debt service 2,969,712 1,133,024 4,102,736
Unrestricted 396,934 12,161,692 12,558,626
I Total Net Assets $ 12,772,953 $ 32,117,190 $ 44,890,143
~
U The accompanying Notes to Financial Statements are an integral part of these statements.
14
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CITY OF EDGEWATER, FLORIDA
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BALANCE SHEET
GOVERNMENTAL FUNDS
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September 30, 2004
II
Other Total
Debt Governmental Governmental
General Service Funds Funds
Assets:
Cash and cash equivalents $ 289,751 $ 234,909 $ 1,665,360 $ 2,190,020
Receivables, net 243,647 243,647
Inventories, at cost 21,317 21,317
Due from other governments 706,072 706,072
Due from other funds 337,328 337,328
Prepaid costs 5,861 5,861
Special assessments receivable 2,734,803 2,734,803
Land held for resale 406,4 73 406,473
Total Assets $ 2,010,449 $ 2,969,712 $ 1,665,360 $ 6,645,521
Liabilities and Fund Balances:
Accounts payable $ 593,600 $ 13,675 $ 607,275
Retainage payable 150,528 150,528
Due to other governments 12,305 12,305
Deferred revenue 279,078 2,734,803 3,013,881
Unearned revenue 441 ,119 441 ,119
Deposits 2,730 2,730
Total Liabilities 1,479,360 2,734,803 13,675 4,227,838
Fund balances:
Reserved:
Inventories and prepaid costs 27,178 27,178
Debt service 234,909 234,909
Unreserved, reported in:
General fund 503,911 503,911
Special revenue funds 452,575 452,575
Capital projects funds 1,199,110 1,199,110
Total fund balances 531,089 234,909 1,651,685 2,417,683
Total Liabilities and Fund
Balances $ 2,010,449 $ 2,969,712 $ 1,665,360
Amounts reported for governmental activities in the statement of net
assets are different because:
Capital assets used in governmental activities are not financial resources
and, therefore are not reported in the funds 19,619,433
Investment in joint venture is not a financial asset and therefore is not
reported in the funds 119,766
Other long-term assets are not available to pay for current period
expenditures and, therefore, are deferred in the funds 3,013,881
Long-term liabilities are not due and payable in the current
period and therefore are not reported in the funds (12,397,810)
Net assets of governmental activities $ 12,772,953
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CITY OF EDGEWATER, FLORIDA I
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES I
IN FUND BALANCES - GOVERNMENTAL FUNDS
For The Year Ended September 30, 2004 I
Other Total ~
Debt Governmental Governmental
General Service Funds Funds
Revenues: ~
Taxes $ 6,500,120 $ $ $ 6,500,120
Licenses and permits 508,609 508,609
Intergovernmental revenues 2,678,916 2,678,916
Charges for services 128,751 128,751 I
Fines and forfeitures 140,726 4,689 145,415
Impact fees/special assessments 54,307 405,844 239,818 699,969
Investment income 32,431 184,941 18,919 236,291
Miscellaneous 349,691 784 350,475 I
Total revenues 10,393,551 590,785 264,210 11,248,546
Expenditures: ~
Current:
General government 2,838,695 2,838,695
Public safety 5,828,786 49,326 5,878,112
Transportation/public works 890,755 890,755 ~
Leisure services 1,892,481 85,735 1,978,216
Debt service:
Principal retirement 912,965 639,150 1,552,115 I
Interest and fiscal charges 49,939 274,198 324,137
Capital outlay:
General government 213,398 213,398
Public safety 345,786 345,786 ~
Transportation/public works 99,093 99,093
Total expenditures 12,413,621 913,348 793,338 14,120,307
Excess (Deficiency) of I
Revenues Over Expenditures (2,020,070) (322,563) (529,128) (2,871,761)
Other Financing Sources (Uses) i
Transfers in 1,424,650 1,424,650
Transfers out (12,000) (12,000)
Capital leases 581,487 581,487
Sale of land held for resale 342,860 342,860 i
Net other financing sources
(uses) 1,767,510 569,487 2,336,997
Net Change in Fund Balances (252,560) (322,563) 40,359 (534,764) I
Fund Balances - Beginning 783,649 557,472 1,611,326 2,952,447
Fund Balances - Ending $ 531,089 $ 234,909 $ 1,651,685 $ 2,417,683 I
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CITY OF EDGEWATER, FLORIDA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended September 30, 2004
Amounts reported for the governmental activities in the statement of
activities (page 15) are different because:
Net change in fund balances - total governmental funds (page 17)
$ (534,764)
Governmental funds report capital outlays as expenditures. However, in
the statement of activities the cost of those assets is allocated over
their estimated useful lives and reported as depreciation expense.
This is the amount by which capital outlays exceeded depreciation
in the current period.
1,314,967
The net effect of various transactions involving capital assets(Le. sales,
trade-ins and transfers to proprietary funds) is to decrease net assets.
(88,966)
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds.
279,078
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 assets. This
amount is the net effect of these differences in the treatment of
long-term debt and related items.
970,628
Special assessment revenue reported in the funds in the current
year must be eliminated from the statement of activities since
revenue was recognized in a prior year.
(405,844)
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.
(252,042)
Change in net assets of governmental activities (page 15)
$ 1,283,057
The accompanying Notes to Financial Statements are an integral part of these statements.
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~ CITY OF EDGEWATER, FLORIDA
GENERAL FUND
I STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
I For The Year Ended September 30, 2004
Variance With
Final Budget
I Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
a Taxes $ 6,566,413 $ 6,566,413 $ 6,500,120 $ (66,293)
Licenses and permits 446,600 446,600 508,609 62,009
Intergovernmental revenues 3,275,723 3,275,723 2,678,916 (596,807)
i Charges for services 179,208 179,208 128,751 (50,457)
Fines and forfeitures 145,500 145,500 140,726 (4,774)
Impact fees/special assessments 12,000 12,000 54,307 42,307
Investment income 53,000 53,000 32,431 (20,569)
i Miscellaneous 74,800 74,800 349,691 274,891
Total revenues 10,753,244 10,753,244 10,393,551 (359,693)
I Expenditures:
Current:
General government 3,909,758 3,909,758 2,838,695 1,071,063
I Public safety 5,438,986 5,438,986 5,828,786 (389,800)
Transportation/public works 812,073 812,073 890,755 (78,682)
Leisure services 1,966,575 1,966,575 1,892,481 74,094
Debt service:
i Principal retirement 907,255 907,255 912,965 (5,710)
Interest and fiscal charges 77 ,358 77 ,358 49,939 27,419
Total expenditures 13,112,005 13,112,005 12,413,621 698,384
I Excess (Deficiency) of Revenues
Over Expenditures (2,358,761 ) (2,358,761 ) (2,020,070) 338,691
~ Other Financing Sources (Uses)
Transfers in 1,405,000 1,405,000 1,424,650 19,650
Transfers out (353,429) (353,429) 353,429
~ Sale of land held for resale 1,827,000 1,827,000 342,860 (1,484,140)
Net other financing sources (uses) 2,878,571 2,878,571 1,767,510 (1,111,061)
~ Net Change in Fund Balance 519,810 519,810 (252,560) (772,370)
Fund Balances - Beginning 783,649 783,649 783,649
I Fund Balances - Ending $ 1,303,459 $ 1,303,459 $ 531,089 $ (772,370)
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Other
Water and Refuse Business- Type
Sewer Collection Funds Total
Assets
Current assets:
Cash and cash equivalents $ 566,684 $ 343,253 $ 3,718 $ 913,655
Receivables, net 985,4 70 106,027 44,462 1,135,959
Special assessments receivable 1,363,000 1,363,000
Due from other governments 2,303,189 2,303,189
Prepaid costs 7,142 115 7,257
Restricted cash and cash equivalents 2,225,874 2,225,874
Total current assets 5,148,170 2,752,584 48,180 7,948,934
Noncurrent assets:
Restricted cash and cash equivalents 2,848,808 2,848,808
Restricted investments 1,133,024 1,133,024
Special assessments receivable 8,353,643 29,446 8,383,089
Bond issuance costs 263,300 4,563 267,863
Capital assets:
Land, buildings and equipment 58,480,092 986,149 6,216,282 65,682,523
Construction in progress 2,910,343 2,910,343
Less accumulated depreciation (16,329,914 ) (669,332) (1,360,723) (18,359,969)
Total capital assets (net of
accumulated depreciation) 45,060,521 316,817 4,855,559 50,232,897
Total noncurrent assets 54,810,488 316,817 7,738,376 62,865,681
Total assets 59,958,658 3,069,401 7,786,556 70,814,615
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CITY OF EDGEWATER, FLORIDA
STATEMENT OF NET ASSETS. PROPRIETARY FUNDS
September 30, 2004
The accompanying Notes to Financial Statements are an integral part of these statements.
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Liabilities
Current liabilities:
Accounts payable
Accrued liabilities
Retainage payable
Compensated absences
Due to other funds
Capital Lease
Notes payable-current
Total current liabilities
Current liabilities payable from restricted
assets:
Customer deposits payable
Revenue bonds payable
State revolving loan
Accrued interest payable
Total current liabilities payable
from restricted assets
Noncurrent liabilities:
Revenue bonds payable
State revolving loan
Capital Lease
Notes payable
Total noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of
related debt
Restricted
Unrestricted
Total net assets
Other
Water and Refuse Business-Type
Sewer Collection Funds Total
214,772 2,446,875 753,245 3,414,892
3,994 867 4,861
118,059 118,059
241 ,488 73,046 61,108 375,642
337,328 337,328
11,656 77 ,855 16,903 106,414
614,000 278,526 892,526
1,081,916 2,601,770 1,566,036 5,249,722
645,585
425,000
1,275,879
365,126
2,711,590
11,001,212
13,298,345
31,716
4,512,000
28,843,273
32,636,779
211,832
45,991
1,635,017
1,681,008
3,247,044
211,832
2,813,602
13,890,713
1,133,024
12,298,142
$ 27,321,879 $
27,130
2,879,122
2,025,509
(365,119)
4,539,512
228,668
255,799
$
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645,585
425,000
1,275,879
365,126
2,711,590
11,001,212
13,298,345
289,539
6,147,017
30,736,113
38,697,425
16,796,965
3,158,533
12,161,691
$ 32,117,190
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CITY OF EDGEWATER, FLORIDA
STATEMENT OF REVENUES. EXPENSES AND CHANGES
IN FUND NET ASSETS - PROPRIETARY FUNDS
For The Year Ended September 30, 2004
Other
Water and Refuse Business-type
Sewer Collection Funds Total
Operating Revenues
User charges $ 5,403,409 $ 1,946,298 $ 888,148 $ 8,237,855
Operating Expenses
Salaries and benefits 2,226,035 945,386 455,132 3,626,553
Materials and supplies 1,290,182 125,180 87,557 1,502,919
Depreciation and amortization 1,628,515 73,212 231 ,454 1,933,181
Contractual Services 230,824 3,134,335 279,885 3,645,044
Total operating expenses 5,375,556 4,278,113 1,054,028 10,707,697
Operating income (loss) 27,853 (2,331,815) (165,880) (2,469,842)
Nonoperating Revenue (Expenses)
Grant revenue 2,303,189 2,303,189
Investment income 579,410 1,115 44,470 624,995
Interest expense (1,306,101 ) (10,769) (115,919) (1,432,789)
Gain (loss) on disposal of capital assets 6,959 13,628 (8,519) 12,068
Total nonoperating revenue (expense) (719,732) 2,307,163 (79,968) 1,507,463
Loss before contributions and transfers (691,879) (24,652) (245,848) (962,379)
Capital contributions:
Fees and assessments 358,690 630,975 989,665
Transfers in 2,190,959 278,649 2,469,608
Transfers out (1,428,649) (206,000) (2,247,609) (3,882,258)
Change in net assets 429,121 (230,652) (1,583,833) (1,385,364 )
Total Net Assets - Beginning 26,892,758 486,451 6,123,345 33,502,554
Total Net Assets - Ending $ 27,321,879 $ 255,799 $ 4,539,512 $32,117,190
The accompanying Notes to Financial Statements are an integral part of these statements.
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CITY OF EDGEWATER, FLORIDA ~
STATEMENT OF CASH FLOWS ~
PROPRIETARY FUNDS
For The Year Ended September 30, 2004 U
Other
Water and Refuse Business-type D
Sewer Collection Funds Total
Cash Flows from Operating Activities:
Receipts from customers $ 5,233,489 $ 1,934,922 $ 855,511 $ 8,023,922 ~
Payments to suppliers (1,352,855) (858,405) 397,469 (1,813,791)
Payments to employees (2,229,427) (937,603) (455,839) (3,622,869)
Net cash provided (used) by operating
activities 1,651,207 138,914 797,141 2,587,262 i
Cash Flows from Non-Capital
Financing Activities:
Increase in due from other funds 115,924 115,924 U
Increase due to other funds (275,167) 337,328 62,161
Net operating transfers in 2,190,959 278,649 2,469,608
Net operating transfers out (1,428,649) (206,000) (2,247,609) (3,882,258)
Net cash provided (used) by non- ~
capital financing activities 603,067 (206,000) (1,631,632) (1,234,565)
Cash Flows from Capital and Related U
Financing Activities:
Proceeds from sale of capital assets 118,087 13,628 131,715
Acquisition of capital assets (3,323,857) (102,211 ) (86,805) (3,512,873)
Proceeds from capital lease 55,696 371,999 80,765 508,460 U
Principal paid on long-term debt (2,265,059) (83,179) (282,833 ) (2,631,071 )
Interest paid on long-term debt (1,323,110) (6,777) (114,909) (1,444,796)
Fees and assessments received 1,277 ,687 630,975 1,908,662
Net cash provided (used) by capital ~
and related financing activities (5,460,556) 193,460 227,193 (5,039,903)
Cash Flows from Investing Activities:
Purchase of investments (6,917) (6,917) ~
Investment income 579,410 1,115 43,460 623,985
Net cash provided by investing activities 572,493 1,115 43,460 617,068
Net Increase (Decrease) in Cash and U
Cash Equivalents (2,633,789) 127,489 (563,838) (3,070,138)
Cash and Cash Equivalents - Beginning 5,426,348 215,764 3,416,364 9,058,476 D
Cash and Cash Equivalents - End $ 2,792,559 $ 343,253 $ 2,852,526 $ 5,988,338
Classified As:
Cash and cash equivalents $ 566,684 343,253 $ 3,718 $ 913,655 Q
Restricted cash and cash equivalents 2,225,875 2,848,808 5,074,683
Total $ 2,792,559 $ 343,253 $ 2,852,526 $ 5,988,338
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Reconciliation of Operating Income
(Loss) to Net Cash Provided (Used)
By Operating Activities
Operating income (loss)
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Adjustments Not Affecting Cash:
Depreciation and amortization
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Change in Assets and Liabilities:
(Increase) in accounts receivable
Increase in prepaid costs
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Decrease in inventory
Increase in customer deposits
Increase (decrease) in accrued
compensated absences
Total adjustments
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Net Cash Provided by Operating
Activities
$ 1,651,207 $ 138,914 $ 797,141
$ 2,587,262
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Water and
Sewer
Refuse
Collection
Other
Business-type
Funds
Total
$
27,853 $(2,331,815) $ (165,880) $ (2,469,842)
1,628,515
(229,998)
(1,770)
126,094
(16,871)
43,827
60,078
13,479
1,623,354
73,212
(11,376)
2,401,110
(5,637)
13,420
2,470,729
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231 ,454 1,933,181
(32,637) (274,011 )
(1,770)
756,057 3,283,261
(3,116) (25,624 )
8,854 52,681
60,078
2,409 29,308
963,021 5,057,104
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CITY OF EDGEWATER, FLORIDA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
September 30, 2004
Total Employee
Pension Funds
Assets:
Cash and cash equivalents $ 74,704
Investments, at fair value:
Debt mutual funds 9,571,577
Equity mutual funds 8,339,611
Other mutual funds 356,670
Total investments 18,267,858
Receivables 370,315
Total assets 18,712,877
Liabilities:
Accounts payable 1,034
Net Assets:
Held in trust for pension benefits $ 18,711,843
The accompanying Notes to Financial Statements are an integral part of these statements.
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CITY OF EDGEWATER, FLORIDA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
For The Year Ended September 30, 2004
Total Employee
Pension Funds
Additions:
Contributions:
Employer
Plan members
State
Total contributions
$
1,212,828
219,272
183,079
1,615,179
Investment income:
Net increase in fair value of investments
Less investment expense
Net investment income
1,394,039
(14,505)
1,379,534
Total additions
2,994,713
Deductions:
Benefits/distri butions
Administrative expenses
Total deductions
595,293
48,690
643,983
Change in Net Assets
2,350,730
Net Assets - Beginning
16,361,113
Net Assets - End
$
18,711,843
The accompanying Notes to Financial Statements are an integral part of these statements.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS
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September 30, 2004
Note 1 - Summary of Significant Accounting Policies:
A. Reporting Entity
The City of Edgewater, Florida (the City) is a political subdivision of the state of Florida located
in Volusia County. The City of Edgewater was originally incorporated under the general law
on October 20, 1924, "Municipal Charters" Volume 4, page 117. The City became the City of
Edgewater when its initial charter was adopted by Chapter 275.32 Special Acts of 1951. The
legislative branch of the City is composed of a Mayor and four (4) member elected Council.
The City Council is responsible for the establishment and adoption of policy. The execution of
such policy is the responsibility of the Council appointed City Manager.
In evaluating how to define the government, for financial reporting purposes, the City has
considered all potential component units. The definition of the reporting entity is based
primarily on the notion of financial accountability. A primary government is financially
accountable for the organizations that make up its legal entity. It is also financially
accountable for legally separate organizations if its officials appoint a voting majority of an
organization's governing body, and either 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 to impose
specific financial burdens on, the primary government. A primary government may also be
financially accountable for governmental organizations that are fiscally dependent on it.
A primary government has the ability to impose its will on an organization if it can significantly
influence the programs, projects or activities of, or the level of services performed or provided
by, the organization. A financial benefit or burden relationship exists if the primary
government (a) is entitled to the organizations' resources; (b) is legally obligated or has
otherwise assumed the obligation to finance the deficits of, or provide financial support to, the
organization; or (c) is obligated in some manner for the debt of the organization. In applying
the above criteria, management has determined that there are no components units to be
included within the reporting entity.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the
statement of changes in net assets) report information on all of the nonfiduciary activities of
the City. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which
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 to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
(Continued)
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 government considers revenues
to be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments, are recorded only when payment is
due.
Property 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. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of
the current period. All other revenue items are considered to be measurable and available
only when cash is received by the City.
The government reports the following funds:
Maior Governmental Funds
The General Fund is the government's primary operating fund. It accounts for all
financial resources of the general government, except those required to be
accounted for in another fund.
The Debt Service Fund was established to account for the accumulation of
resources for, and the payment of principal and interest on certain long-term debt.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
(Continued)
Non-Maior Governmental Fund Types
Special Revenue Funds account for specific revenue sources that are restricted by
law or administrative action to expenditures for specific purposes.
Capital Projects Fund account for financial resources segregated for the acquisition
or construction of major capital facilities.
Maior Proprietary Funds
Water and Sewer Fund is used to account for the operations of the City's water and
wastewater systems, which are financed in a manner similar to private business
enterprises, where the costs, including depreciation, of providing services to the
general public on an ongoing basis are financed primarily through user charges.
Refuse Collection Fund is used to account for the fiscal activities of the City's refuse
collection and disposal operation.
Non-Maior Proprietary Fu nds
Storm water Management Fund is used to account for the fiscal activities of the City's
stormwater drainage operation, as well as the funding and payment of related debt.
Water and Sewer Development Fee Fund and the Renewal and Replacement Fund
account for amounts reserved for specific enterprise activities.
Fiduciary Funds
Pension Trust Funds account for activities of police officers, firefighters and general
employees retirement plans which accumulate resources for pension benefit
payments to qualified employees.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government-wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of
the Governmental Accounting Standards Board. Governments also have the option of
following subsequent private-sector guidance for their business-type activities and
enterprise funds, subject to this same limitation. The government has elected not to follow
subsequent private-sector guidance.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation -
(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 other charges between the
City's water and sewer function 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.
Amounts reported as program revenues include 1) charges to customers or applicants for
goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions, including special assessments. Internally dedicated resources are
reported as general revenues rather than as program revenues. Likewise, general
revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 City's water, sewer and stormwater utility funds are
charges to customers for sales and services. The City 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 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 nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the government's
policy to use restricted resources first, then unrestricted resources as they are needed.
D. Assets, Liabilities, and Net Assets or Equity
1. Deposits and Investments
The City'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.
Investments of the City are reported at fair value. The City's investments consist
of investments authorized per their investment policy adopted in accordance with
Section 218.415, Florida Statutes.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
D. Assets, Liabilities, and Net Assets or Equity - (Continued)
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing
arrangements outstanding at the end of the fiscal year are referred to as either
"due to/from other funds" (i.e., the current portion of interfund loans) or
"advances to/from other funds" (i.e., the non-current portion of interfund loans).
All other outstanding balances between funds are reported as "due to/from other
funds." Any residual balances outstanding between the governmental activities
and business-type activities are reported in the government-wide financial
statements as "internal balances".
Advances between funds, as reported in the fund financial statements, are offset
by a fund balance reserve account in applicable governmental funds to indicate
that they are not available for appropriation and are not expendable available
financial resources.
All receivables are shown net of an allowance for uncollectibles. The County
bills and collects property taxes and remits them to the City. City property tax
revenues are recognized when levied to the extent that they result in current
receivables.
All property is reassessed according to its fair value on the lien date, or January
1 of each year. Taxes are levied on October 1 of each year. Discounts are
allowed for early payment at the rate of 4% in the month of November, 3% in the
month of December, 2% in the month of January, and 1 % in the month of
February. The taxes paid in March are without discount. All unpaid taxes
become delinquent on April 1 following the year in which they are assessed. On
or around May 31 following the tax year, certificates are sold for all delinquent
taxes on real property.
3. Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method.
Inventories of governmental funds are recorded as expenditures 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 government-wide and fund financial
statements.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
D. Assets, Liabilities, and Net Assets or Equity - (Continued)
4. Restricted assets
Certain proceeds of the City's enterprise fund revenue bonds, as well as certain
resources set aside for their repayment, are classified as restricted assets on the
balance sheet because they are maintained in separate bank accounts and their
use is limited by applicable bond covenants. Assets so designated are identified
as restricted assets on the balance sheet.
5. Capital assets
Capital assets, which include property, plant, equipment, and infrastructure
assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the
applicable governmental or business-type activities columns in the government-
wide financial statements. Capital assets are defined by the City, in accordance
with Chapter 274.02, Florida Statutes, as assets with an initial, individual cost of
$750 or more and an estimated useful life in excess of one year. Such assets
are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value
at the date of donation.
Pursuant to GASB Statement No. 34, an extended period of deferral (FY 2007)
is available before the requirement to record and depreciate infrastructure assets
(e.g. roads, bridges, sidewalks and similar items) acquired before the
implementation date becomes effective. The City currently intends an early
implementation of this requirement. Infrastructure acquired prior to October 1,
2002 has not been recorded for governmental activities.
The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of
business-type activities is included as part of the capitalized value of the assets
constructed.
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CITY OF EDGEW A TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
D. Assets, Liabilities, and Net Assets or Equity - (Continued)
5. Capital assets (Continued) -
Capital assets of the City are depreciated using the straight line method over the
following estimated useful lives:
Assets
Buildings
Improvements
Infrastructure
Equipment
Years
1 0-50
15-50
30-50
3-15
6. Compensated absences
It is the City's policy to permit employees to accumulate earned but unused
vacation and sick pay benefits. Since the City's policy is to pay both vacation
and sick pay when employees separate from service, all vacation and sick pay is
accrued when incurred in the government-wide and proprietary fund financial
statements. A liability for these amounts is reported in governmental funds only
if they have matured, for example, as a result of employee resignations and
retirements. For governmental activities, compensated absences are generally
liquidated by the general fund.
7. Long-term obligations
In the government-wide financial statements, and proprietary fund types in the
fund financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities, business-type
activities, or proprietary fund type statement of net assets. Bond premiums and
discounts, as well as issuance costs, are deferred and amortized over the life of
the bonds using the effective interest method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are reported
as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond
premiums and discounts, as well as bond issuance costs, during the current
period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses.
Issuances costs, whether or not withheld from the actual debt proceeds received,
are reported as debt service expenditures.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 1 - Summary of Significant Accounting Policies (Continued):
D. Assets, Liabilities, and Net Assets or Equity - (Continued)
8. Fund equity
In the fund financial statements, governmental funds report reservations of fund
balance for amounts that are not available for appropriation or are legally
restricted by outside parties for use for a specific purpose. Designations of fund
balance represent tentative management plans that are subject to change.
Note 2 - Reconciliation of Government-Wide and Fund Financial Statements:
A. Explanation of Certain Differences Between the Governmental Fund Statement of
Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide
Statement of Activities
The governmental fund statement of revenues, expenditures, and changes in fund
balances includes a reconciliation between net changes in fund balances - total
governmental funds and changes in net assets of governmental activities as reported in
the government-wide statement of activities. One element of that reconciliation explains
that "Governmental funds report capital outlays as expenditures. However, in the
statement of activities the cost of those assets is allocated over their estimated useful lives
and reported as depreciation expense." The details of this $1,314,967 difference are as
follows:
Capital outlay
Depreciation expense
Net adjustment to increase net changes in fund balances -
total governmental funds to arrive at changes in net
assets of governmental activities
$ 2,353,759
(1,038.792)
$ 1.314.967
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 2 - Reconciliation of Government-Wide and Fund Financial Statements (Continued):
A. Explanation of Certain Differences Between the Governmental Fund Statement of
Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide
Statement of Activities (Continued)
Another element of that reconciliation states that "the issuance of long-term debt (e.g.,
bonds, leases) 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 assets." The
details of this $970,628 difference are as follows:
Debt issued or incurred:
Capital leases
Principal repayment
$ 581,487
(1.552.115)
Net adjustment to increase net changes in fund balances - total
governmental funds to arrive at changes in net assets of
governmental activities
$ 970.628
Another element of that reconciliation states that "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 this difference are
as follows:
Compensated absences
Decrease in investment in joint venture
$(128,519)
(123.523)
Net adjustment to decrease net changes in fund balances -
total governmental funds to arrive at changes in net assets of
governmental activities
$(252.042)
Note 3 - Stewardship, Compliance, and Accountability:
A. Deficit Fund Equity - The stormwater management proprietary fund had a deficit fund
equity of $365,119. Management intends to increase the stormwater fee in order to
provide additional revenue.
B. Excess of Expenditures over Appropriations - For the year ended September 30,
2004, expenditures exceeded appropriations in the following special revenue funds:
Special Law Enforcement Trust, $21,836; Police Impact Fees. $5,245; and Fire Impact
Fees, $20,245. These overexpenditures were funded by either greater than anticipated
revenues or by available fund balance.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 3 - Stewardship, Compliance, and Accountability (Continued):
c. Budgetary Information -
The City follows these procedures in establishing the budgetary data reflected in the
financial statements:
(1) Prior to the end of the fiscal year, the City Manager submits to the City Council a
proposed operating budget for the fiscal year commencing the following October
1. The operating budget includes proposed expenditures and the means of
financing them.
(2) Budget workshops are scheduled by the City Manager as needed.
(3) The general summary of the budget and notice of public hearing is published in
the local newspaper.
(4) Public hearings are conducted to obtain taxpayer comments.
(5) Prior to October 1, the budgets are legally enacted through passage of a
ordinance.
(6) The City Manager is authorized to transfer budgeted amounts within and
between divisions and departments; however, any revisions that alter the total
appropriations of any fund must be approved by the City Council.
(7) The level of classification detail at which expenditures may not legally exceed
appropriations is the fund level.
(8) Appropriations lapse at the close of the fiscal year to the extent they have not
been expended.
(9) Budgets are adopted for the General Fund, Special Revenue Funds, Debt
Service Funds and the Capital Projects Fund on a basis consistent with generally
accepted accounting principles. Budgets are also adopted for the enterprise
funds: however, these data are not presented under generally accepted
accounting principles.
(10) The City Council, by ordinance or resolution, may make supplemental
appropriations in excess of those originally estimated for the year up to the
amount of available revenues. Budgeted amounts presented in the
accompanying financial statements have been adjusted for legally authorized
revisions.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 4 - Deposits and Investments:
Deposits
At year-end, the carrying amount of the City's deposits was $2,041,249 and the bank
balance was $2,538,279. Petty cash fund of $1,700 are not on deposit with a financial
institution, and fiduciary fund cash of $74,704 held by the pension funds are not in the
City's bank. All bank deposits were covered by Federal Depository Insurance or held in
banks that are members of the State of Florida's Collateral Pool as specified under Florida
law. This limits local government deposits to "qualified public depositories." The State of
Florida Collateral Pool is a multiple financial institution pool with the ability to assess its
members for collateral shortfalls if a member institution fails. For this reason, the City
considers its deposits insured or collateralized.
Investments
Investments in all fund types are stated at fair value, which is the amount for which an
investment could be exchanged in a current transaction between willing parties, other than
in a forced liquidation sale. Fair value is based on quoted market prices. Changes in the
fair value of investments are recognized as revenue and included in investment income.
The City's investment policies are governed by state statute and city ordinance.
Authorized investments are:
(a) The Local Government Surplus Funds Trust (SBA)
(b) SEC registered money market funds
(c) Interest-bearing time deposits or savings accounts
(d) Direct obligations of the U.S. Treasury
(e) Federal agencies and instrumentalities
(f) Securities of, or other interests in, any open-end or closed-end management-type
investment company or investment trust registered under the Investment Company
Act of 1 940
(g) Other investments authorized by ordinance
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 4 - Deposits and Investments (Continued):
Investments (Continued)
Investments of the Municipal Police Officers' Retirement Trust and General Employees'
Pension were managed by Principal Mutual Life Insurance Company. Investments
consist principally of debt and equity mutual funds, all of which are authorized by the
City. The Firefighters' Pension Fund's investments are governed by an investment policy
adopted by the Fund's Board of Trustees. Investments consist of debt and equity mutual
funds, all of which are allowed by the policy.
Most of the City's investments besides pension funds are invested in the SBA, an
investment pool administered by the State of Florida.
Investment held in the State Board Administration Fund consist of short-term federal
agency obligations, treasury bills, repurchase agreements and commercial paper. The
SBA is not a registrant with the Securities and Exchange Council (SEe); however, the
SBA has adopted operating procedures consistent with the requirements for a 2a-7 like
pool and the fair value of the position in the pool is equal to the fair value of the pool
shares. Such investments are stated at amortized cost in the accompanying financial
statements. Investment income is recognized as earned and is allocated to the
participating funds based on their equity participation.
The following levels of credit risk apply to the investments of the City:
Cateqorv 1
Insured or registered, held by the City or its agent in the City's name.
Cateqorv 2
Uninsured or unregistered, held by a counterparty's trust department or agent in the City's
name.
CateQorv 3
Uninsured and unregistered, held by a counterparty or its trust department or agent, but
not in the City's name.
39
CITY OF EDGEW A TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 4 - Deposits and Investments (Continued):
Investments (Continued)
Investments in the State Board of Administration Local Government Investment Pool and
Mutual Funds are not required to be categorized since these investments are in pooled
investment funds and therefore not evidenced by securities that exist in physical or book
entry form. The following schedule shows the City's investments at September 30, 2004,
classified where appropriate as to their respective level of credit risk:
State Board of Administration Fund
U.S. Government Securities
Pension Mutual Funds
Note 5 - Receivables:
Fair Value
$ 6,135,408
1,133,024
18,267,858
$25.536.290
Credit
Risk
Cateqorv
N/A
1
N/A
Receivables as of year end for the City's individual major funds, including the applicable
allowances for uncollectible accounts, are as follows:
Water and
Sewer
Fund
General
Fund
Receivables:
Accounts
Less allowance for
uncollectible accounts
$291,632
(47,985)
$243.647
$1,065,157
(79,687)
$ 985.470
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Refuse
Collection
Fund
$106,027
$1 06.027
Total
$1,462,816
(127.672)
$1.335.144
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CITY OF EDGEW A TER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 6 - Capital Assets:
Capital asset activity for the year ended September 30, 2004 was as follows:
Beginning
Balance Ending
(Restated) Increases Decreases Balance
Governmental activities:
Capital assets, not being
depreciated:
Land $ 3,779,436 $ $ $ 3,779,436
Construction in progress 883.135 1 ,475.541 ( 198.625) 2.160.051
Total capital assets, not being
depreciated 4.662.571 1 ,475.541 (198.625) 5.939.487
Capital assets, being depreciated:
Buildings 4,370,864 2,720 (15,972) 4,357,612
Improvements 14,443,235 124,017 (29,863) 14,537,389
Machinery and equipment 3,408,935 682,185 (470,239) 3,620,881
Infrastructure 625.460 203.766 829.226
Total capital assets, being
depreciated 22.848.494 1 ,012.688 (516.074) 23.345.108
Less accumulated depreciation for:
Buildings (1,476,771) (140,379) 15,972 (1,601,178)
Improvements (5,067,912) (585,900) 22,969 (5,630,843)
Machinery and equipment (2,557,313) (293,750) 454,408 (2,396,655)
Infrastructure (15.637) (20,849) (36.486)
Total accumulated depreciation (9.117.633) (1.040.878) 493.349 (9.665.162)
Total capital assets, being
depreciated, net 13.730.861 (28.189) (22.724) 13.679.946
Governmental activities capital
assets, net $18.393.432 $ 1.447.352 $(221.349) $19.619.433
41
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
Note 6 - Capital Assets (Continued):
Business-type activities:
Capital assets, not being
depreciated:
Land
Construction in progress
Total capital assets, not being
depreciated
Capital assets, being depreciated:
Buildings
Improvements
Machinery and equipment
Total capital assets, being
depreciated
Less accumulated depreciation for:
Buildings
Improvements
Machinery and equipment
Total accumulated depreciation
Total capital assets, being
depreciated, net
Business-type activities capital
assets, net
September 30, 2004
Beginning
Balance
Increases
Decreases
$ 676,827 $ $
1 ,087,940 2,911 ,562 (1 ,089,159)
1 ,764,767 2,911 ,562 (1.089,159)
22,333,070
38,690,755 1,089,159
2,688.139 603.627 (399.054 )
63.711 ,964 1 ,692.786 (399.054 )
(7,264,921 ) (747,936)
(7,884,358) (870,418)
(1.593,989) (277,755) 279 ,408
(16.743,268) ( 1 ,896,109) 279 ,408
46,968,696 (203.323) (119.646)
$ 48.733.463 $ 2.708.239 $(1.208.805)
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government
Public safety
Transportation/public works
Leisure services
Total depreciation expense - governmental activities
Business-type activities:
Water and sewer
Refuse collection
Stormwater management
Total depreciation expense - business-type activities
42
Ending
Balance
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676,8271
2.910,343 .
3.587,170 I
22,333,070 [I
39,779,914 I
2.892,712
65,005,6961
(8,012,857)~
(8,754,776)
(1,592,336)(1
(18,359.969)1
46,645,7271.
$ 50.232.8971
$ 32,583
249,862
528,333
228.014
$1.038.792
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73,212
229.975
$1.894.564
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 7 - Leases:
Capital Leases - The City has entered into lease agreements as lessee for financing the
acquisition of several light and heavy vehicles such as a fire truck, police cars, refuse trucks,
tractors and trailers, as well as computer equipment. These lease agreements qualify as capital
leases for accounting purposes and, therefore, have been recorded at the present value of their
future minimum lease payments as of the inception date.
The assets acquired through capital leases are as follows:
Governmental
Activities
Assets -
Machinery and equipment
Less: accumulated depreciation
Total
$532,795
(28,692)
$504.103
Business-type
Activities
$229,367
(21,536)
$207.831
The future minimum lease obligations and the net present value of these minimum lease
payments as of September 30,2004 were as follows:
Year EndinQ September 30.
2005
2006
2007
2008
Total minimum lease payments
Less: amount representing interest
Governmental
Activities
$139,216
139,216
107,772
107,772
493,976
(41,156)
$452.820
Business-type
Activities
$121,732
121,732
94,238
94,238
431,940
(35,988)
$395.952
At September 30, 2004, $331,053 of the total lease proceeds of $1,089,947 had not yet been
spent and is included in cash and cash equivalents.
43
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt:
Revenue Bonds
The City issues bonds where the City pledges revenue derived from the acquired or
constructed assets to pay debt service. Revenue bonds have been issued for business-type
activities. The original amount of amounts of revenue bonds issued in prior years is described
below. Revenue bonds outstanding at year end are as follows:
Business- Type Activities Balance
Interest Rates Original September 30,
and Dates Maturity Amount 2004
Water and Sewer 2.75 - 5.5%
Revenue Bonds - Series 1993 (4/1&10/1) 10/1/21 $12.460.000 $10,880,000
Water and Sewer 5.4 - 7.0%
Revenue Bonds - Series 1991 (4/1 & 10/1) 10/1/21 $13.580.000 655,000
Total $11.535.000
These Water and Sewer Revenue Bonds are secured by a first lien on and pledge of the net
revenues of the water and sewer system and a first lien on and pledge of allowable impact
fees imposed on new users of the system.
The Water and Sewer Revenue Bonds resolution provide for:
(1) Establishment and maintenance of various funds and accounts
(2) Restrictions on the use of cash from operations in order of priority -
(a) Deposits are made to the operations and maintenance fund each month
in an amount which will pay the costs of operation and maintenance for
the next month;
(b) Deposits to the sinking fund are made monthly in an amount equal to
one-sixth (1/6) of the interest coming due on the next semi-annual
interest payment date and one-twelfth (1/12) of the bond amortization
installment coming due during the next year:
(c) Deposits to the reserve fund are required to make up any deficiency in
its balance as compared to the reserve equipment;
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
Revenue Bonds (Continued)
(d) Deposits to the Renewal and Replacement Fund are required each
month in an amount equal to one-twelfth (1/12) of five per centum (5%)
of the gross revenues of the system for the previous fiscal year;
provided, however, that so long as there shall be on deposit in the
renewal and replacement fund a balance of at least five per centum
(5%) of the value of the fixed assets of the system, no additional
deposits shall be required;
(e) Deposits will next be made into the rate stabilization fund for the amount
budgeted for the then current period; and
(f) Thereafter for any lawful purposes.
(3) Early redemption:
The bond resolution provides for early redemption of outstanding bonds at call rates
varying from 100% to 102% of the instruments' face value, dependent upon the call
date.
Annual requirements to amortize water and sewer revenue bonds outstanding as of
September 30,2004 are as follows:
Year endinq September 30.
Business -Type Activities
Principal Interest
2005
2006
2007
2008
2009
2010-2014
2015-2019
2020-2023
$ 425,000
450,000
470,000
500,000
530,000
3,115,000
4,075,000
1.970.000
$ 641,968
619,143
594,480
568,763
540,950
2,229.638
1,257,825
166.600
Total
$11.535.000 $6.619.367
45
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
State Revolving Fund Loans
The City financed a portion of its wastewater improvements for the Florida Shores
capital improvement projects with two loans from the State of Florida Revolving Fund
loan program. The City received the loans on a reimbursement basis as costs were
incurred. The City executed agreements with the State for these loans in the amount of
$25,809,428.
The State Revolving Fund (SRF) loans are secured by a junior lien on and pledge of the
net revenues of the water and sewer system and the special assessment revenues
levied against the benefiting property owners in Florida Shores. The assessments are
payable over 20 years with interest of 6.007% until December 1, 1994 and of 5.35%
thereafter. Since many taxpayers take advantage of prepayment discounts, actual
interest rates paid may be less than the stated amounts.
The SRF loans consist of the following:
Treatment Loan
Interest rates:
Payment frequency:
Payment amount:
Maturity date:
3.16% to 3.78%
20 annual payments
$516,458
September 30,2013
Collections Loan
3.57% to 3.78%
20 annual payments
$1,294,980
October 31, 2013
Annual debt service requirements to maturity on the State Revolving Fund Loan are as
follows:
Year endinq September 30.
2005
2006
2007
2008
2009
2010-2014
Total
46
Business -Type Activities
Principal Interest
$ 1,275,879
1,322,786
1,371,417
1,421,839
1,474,117
7.708.188
$14.574.226
$ 535,558
488,653
440,021
389,599
337,321
832.545
$3.023.697
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
Notes Payable
During 2002, the City issued the following revenue notes:
Water and Sewer
Revenue Note. Series 2002
General Long-term Debt
Revenue Note. Series 2002A
Original amount issued
Issue date
Final maturity
Interest due
Interest rate
$5,140,000
March 13, 2002
October 1, 2012
Monthly
Adjusted Libor
$2,540,000
March 13, 2002
October 1, 2012
Monthly
Adjusted Libor
The Water and Sewer Revenue, Series 2002, notes are secured by all water and sewer
revenues of the City. Water and sewer revenues include revenue from the operation of the
water and sewer system as well as the special assessments payable to the City with respect
to water service to be provided by the City to the residents of Waterway Park.
The Revenue Note, Series 2002A, is secured by a covenant to budget and appropriate from
Non-Ad Valorem funds.
Debt service requirements for these revenue notes using interest rate of 1.957% at
September 30, 2004 are:
Year Ending Governmental Activities Business Type Activities
September 30 Principal Interest Principal Interest
2005 $ 254,000 $ 32,654 $ 514,000 $ 66,080
2006 254,000 28,572 514,000 57,820
2007 254,000 24,491 514,000 49,560
2008 254,000 20,409 514,000 41,300
2009 254,000 19,812 514,000 40,092
2010-2013 1 ,016,000 29.718 2.056.000 60.138
Total: $2.286.000 $155.656 $4.626.000 $314.990
The City also entered into an agreement to borrow money from Florida Inland Navigation
District (FIND) for land and improvements in a business/industrial park. The final amount of
the note payable is $5,056,567 and shall be paid in ten equal installments of $505,657 each
starting August 26, 2003. For the first five years, no interest shall accrue on the outstanding
principal balance. Starting August 26, 2007, interest shall begin to accrue on the outstanding
principal balance at an interest rate equal to interest available from the State Board
Administration (SBA).
47
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
Notes Payable (Continued)
Debt service requirements for the FIND note payable are as follows:
Year Ending
September 30.
Governmental Activities
Principal Interest
2005
2006
2007
2008
2009
2010-2012
$ 505,657 $
505,657
505,657
505,657 33,373
505,657 26,699
1 .516.968 40,048
$4.045.253 $100.120
The City also incurred notes payable relating to paving and stormwater improvements at
Florida Shores. The original amount of these notes issued in prior years is described below.
A portion of these notes are secured by a pledge of assessments levied on property within the
assessed area. In the event that a deficiency exists because of unpaid or delinquent
assessments, the City must provide resources to cover the deficiency until other resources, for
example, foreclosure proceeds, are received.
The special assessment and stormwater notes payable consist of the following:
Series 1995A
Series 19958
Interest rates:
Interest dates:
Final maturity:
Original amount issued:
5.22%
April 1, October 1
October 1, 2010
$9,234,660
5.58%
April 1, October 1
October 1, 2010
$3,964,740
The 1995 Notes are secured by the revenues pledged in order of priority; (1) assessment
revenues, (2) Stormwater Revenues, (3) Utility Taxes, (4) All Non-Advalorem Revenues
(except Franchise Taxes).
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
Notes Pavable (Continued)
The Special Assessment and Stormwater Revenue Notes resolutions provide for:
1. Establishment and maintenance of Special Assessment Improvement Notes
Sinking Fund and related accounts.
2. Restrictions on the use of cash from operations in order of priority.
(a) All Special Assessments shall be applied and deposited only into the 1995
subaccounts listed above. Moneys and Authorized Investments on deposit at
any time in the 1995 subaccounts may be used only for the payment of Debt
Service on, or redemption of the price of, the 1995 Bonds.
(b) All Stormwater Fees shall be deposited into the Stormwater Utility Management
Fund (the Utility Fund). After the provision for the payment of operating
expenses of the City's Stormwater Utility, the City shall transfer to the 1995
Notes subaccount Stormwater Utility Fees until the aggregate amount
transferred is equal to the amount certified by the City's Director of Finance as
the portion of that fiscal year's debt service necessary to be paid out of the
Stormwater Utility Fees.
(c) All Non-Advalorem Revenues (except Franchise Taxes) shall make up for any
deficiency in meeting the debt service requirement after all of the
aforementioned pledged revenues have been exhausted.
3. Early redemption:
The City may prepay up to 10% without penalty. Should the prepayments
exceed the amount allowed by the bank, the prepayments are subject to a
penalty using a predetermined formula based on certain interest factors.
49
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
Notes Payable (Continued)
Annual requirements to amortize the special assessment and stormwater notes are as follows:
Year Ending Governmental Activities Business Type Activities
September 30 Principal Interest Principal Interest
2005 $ 673,650 $237,721 $ 278,526 $ 98,287
2006 710,012 201,358 293,560 83,253
2007 748,340 163,030 309,407 67,406
2008 788,738 122,632 326,110 50,703
2009 831,320 80,050 343,715 33,097
2010 876.102 35,168 362.225 14.540
Total: $4.628.162 $839.959 $1.913.959 $347 .286
During 2003 the City purchased from Terra Mar Utilities a utility consisting of water supply
treatment and distribution system and a sewage collection, treatment and disposal system for
$750,000. A down payment of $150,000 was made in July 2003 and the balance of $600,000
is to be paid annually in six payments of $100,000. All annual payments are interest free.
Annual debt service requirements are as follows:
Year Ending
September 30
Business-Type Activities
Principal Interest
2005
2006
2007
2008
2009
$100,000
100,000
100,000
100,000
100,000
$500.000
$
$
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 8 - Long-Term Debt (Continued):
ChanQes in LonQ-Term Liabilities
Long-term liability activity for the year ended September 30, 2004 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Capital lease $ $ 581.487 $ (128,667) $ 452,820 $ 121 ,698
Notes payable -
Revenue note,
Series 2002A 2,540,000 (254,000) 2,286,000 254,000
FIND Note 4,550,910 (505,657) 4,045,253 505,657
Special assessment
note with
government
commitment 5,267,313 (639,150) 4,628,163 673,649
800 MHZ Note 24,641 (24,641 )
Total notes
payable 12,382,864 (1.423.448) 10,959.416 1.433,306
Compensated absences 857,055 128,519 985,574 100,000
Governmental activity
long-term liabilities $13239.919 $ 71 0.006 $(1 552 115) $12.397.810 $1.655.004
Business-type activities:
Bonds payable -
Revenue bonds $11,940,000 $ $ (405,000) $11,535,000 $ 425,000
Less deferred amount:
Issuance discount (119,708) 10,920 (108,788)
Total bonds
payable 11,820,292 (394,080) 11.426,212 425,000
State revolving loan 15,804,864 (1,230,639) 14,574,225 1,275,879
Capital lease 508.460 (112,508) 395,952 106,414
Notes payable -
Revenue note,
Series 2002 5,140,000 (514,000) 4,626,000 514,000
Stormwater note 2,177,805 (264,262) 1,913,543 278,525
800 MHZ Note 4,662 (4,662)
Terra Mar Note 600,000 (100,000) 500,000 100,000
Total notes
payable 7,922,467 (882,924 ) 7,039,543 892,525
Compensated absences 346,334 29,308 375,642 38,000
Business-type activity
long-term liabilities $35 893.957 $ 537.768 $(2.620.151 ) $33.811.574 $2.737.818
51
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 9 -Interfund Receivables, Payables and Transfers:
The composition of due to/from other funds at September 30, 2004 is as follows:
Receivable Fund
Payable Fund
Amount
General
Stormwater management
$337,328
$337.328
Interfund transfers for the year ended September 30, 2004 consisted of the following:
General
Fund
Transfer In
Water
and Sewer
Fund
Total
Nonmajor
Business-type
Transfer Out:
Nonmajor governmental
funds $ 12,000 $
Water and sewer
fund 1,150,000
Refuse collection
fund 206,000
Nonmajor business-
type funds 56,650 2,190,959
$
$ 12,000
278,649
1,428,649
206,000
2,247,609
Total
$1.424.650 $2.190.959
$3.894.258
$278.649
Transfers are used to (1) move revenues from the fund that statute or budget requires to
collect them to the fund that statute or budget requires to expend them and (2) move
receipts restricted to debt service from the funds as debt service payments become due.
The purpose of the $337,328 balance due by the stormwater management fund to the
general fund is a temporary loan to help with cash flow.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 10 - Defined Benefit Retirement Plans:
Plan Descriptions:
Police Officers' Retirement Trust Fund - The Police Officers' Retirement Trust Fund
is a single employer defined benefit retirement system established pursuant to state
statute. The funding methods and determination of benefits payable are provided in the
various acts of the Florida Legislature, the Board of Trustees, and the City Council. The
statutes provide, in general, that funds are to be accumulated from employee
contributions, City contributions, state appropriations and income from investment of
accumulated funds. Actuarial deficiencies, as determined by the state are funded by the
City. The investments of the fund are administered, managed and operated by its Board
of Trustees using the services of the Finance Department and Principal Mutual Life
Insurance Company. Investments are reported at fair value.
Full-time police officers are eligible to participate in the Police Officers' Retirement Trust
Fund on the first of the month following the completion of three months of continuous
service with vesting beginning upon their first day of employment with the City.
Participating police employees contribute 6% of their salary to the plan. The City is
required by statute to contribute remaining amounts necessary based upon actuarial
valuations to the fund as performed in accordance with State Statute. Employees vest
for full benefits after five years of service. Benefit amounts are calculated based on the
three years which give the highest average out of the last five years. Members will
receive a benefit amount equal to 2% of that average multiplied by years of actual
service up to October 1, 1987, and 3% of that average multiplied by years of actual
service after October 1, 1987.
General Employees' Pension Fund - The General Employees' Pension Fund is a
single employer defined benefit retirement system and contains the assets of the
General Employees' Pension Fund. The funding methods and determination of benefits
payable are provided by various acts of the City Council, including subsequent
amendments thereto. The code provides, in general, that funds are to be accumulated
from City contributions, and income from investment of accumulated funds. Investments
are reported at fair value.
The General Employees' Pension Fund includes all full-time City employees, except
police, firefighters and City Manager.
53
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 10 - Defined Benefit Retirement Plans (Continued):
Plan Descriptions (Continued):
General Employees' Pension Fund (Continued) - Employees become eligible for the
plan after three months of continuous employment with vesting beginning as of the first
day of employment. Active members are required to contribute 2.5% to the plan. The
City's policy is to contribute amounts as determined by actuarial valuations. Employees
vest for full benefits after five years of service. Benefit amounts are calculated based on
the three consecutive years which give the highest average out of the last ten years.
Members will receive a benefit amount equal to 2% of that average multiplied by years of
accrual service.
The General Employees' Pension Fund was amended in October 1996, which closed off
the plan to any new employees hired by the City after October 1, 1996. Employees hired
after October 1, 1996, however, are eligible for the City's 401 (a) Defined Contribution
Plan. Employees hired prior to October 1, 1996, and not vested in the General
Employees' Pension Fund as of September 30, 1997, may elect to participate in the
401 (a) Defined Contribution Plan.
Firefighters' Pension Fund - The Firefighters' Pension Fund is a single employer
defined benefit retirement system established pursuant to state statute in July 1990, with
an effective date of November 1989. The funding methods and determination of benefits
payable are provided in the various acts of the Florida Legislature, Firefighters' Pension
Board and the City Council!. The statutes provide in general, that funds are to be
accumulated from employee contributions, City contributions, state appropriations and
income from investment of accumulated funds. Investments are reported at fair value.
Full-time firefighters are eligible to participate in the Firefighters' Pension Fund upon
their first day of employment with the City. Participating fire employees contribute 6% of
their salary to the plan. The City is required by statute to contribute remaining amounts
necessary based upon actuarial valuations to the fund as performed in accordance with
State Statute. Employees vest for full benefits after five years of service. Benefit
amounts are calculated based on the five years which give the highest average out of
the last ten years. Members will receive a benefit amount equal to 3% of that average
multiplied by years of accrual service.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 10 - Defined Benefit Retirement Plans (Continued):
Plan Descriptions (Continued):
Membership data of the Pension Plans are summarized as follows:
Police General
Officers Emplovees Firefiqhters
Retirees and beneficiaries currently
receiving benefits and vested
terminated employees 18 85 1
Active employees:
Fully vested 21 68 9
Nonvested 11 0 11
Significant Accounting Policies - City of Edgewater's financial statements for the three
pension funds are prepared using the accrual basis of accounting. Employer and plan
member contributions are recognized in the period that contributions are due.
Investments in the three pension funds are reported at fair value according to the
independent custodian for each plan using various third party pricing sources.
Publicly available financial reports for each plan, that include detailed actuarial data, can be
obtained from the City's Finance Department.
In 1997 the City adopted GASB Statement No. 25 on pension accounting and reporting.
This Statement requires the disclosure of any investments in anyone organization that
represents 5% or more of plan net assets. All investments in the Police Officers' Retirement
Trust Fund and the General Employees Pension Fund are invested in the Principal Financial
Group's various investment portfolios. There are no investments in anyone organization in
the Firefighters' Pension Fund that exceeds 5% of plan net assets. None of the plans held
securities issued by the employer.
Contribution Requirements and Contributions Made - The Florida Legislature, City
Council and each Pension Board governs the City and employee contribution requirements
for the Police Officers' Retirement Trust Fund and Firefighters' Pension Fund. The City's
contribution to the General Employees' Pension Fund is an actuarially determined periodic
amount that increases gradually over time so that sufficient assets will be available to pay
benefits when due. The employees' contribution is 2.5% of their salary.
The City's contribution to the Police Officers' Retirement Trust Fund and Firefighters'
Pension Fund is an actuarially determined periodic amount. The employees' contribution for
these plans is 6% of their salary. Contributions provided by the State of Florida are in
accordance with State statutes.
55
CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 10 - Defined Benefit Retirement Plans (Continued):
Annual Pension Cost and Net Pension Obligation - The City has contributed the Annual
Required Contribution (ARC) each year since plan inception and thus has not had, or had
need to report, a Net Pension Obligation (NPO). In accordance with GASB Statement No.
27 the City calculated the potential for a net pension liability (asset) and reaffirmed that
none existed at September 30, 2004.
Required supplementary information is as follows:
Schedule of Contributions from the Emplover
General Emplovees Police Officers
Firefi~hters
Annual Percentage Annual Percentage Annual Percentage
Year Ended Required of ARC Required of ARC Required of ARC
September 30 Contribution Contributed Contribution Contributed Contribution Contributed
1999
268,589
2000
301,864
2001
360,769
2002
439,160
2003
436,006
2004
564,582
100%
100%
100%
100%
100%
100%
181,224
350,071
351,770
329,225
410,431
461 ,163
100%
71,331
100%
100%
100%
100%
100%
100%
Schedule of FundinQ ProQress - Police Officers' Retirement Trust Fund
Unfunded
(Assets in
Excess of) AAL
as a Percentage
of Covered
Payroll
((b-a)/c)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
10/01/98 2,344,955
10/01/99 2,672,255
10/01/00 3,307,503
10/01/01 3,868,547
10/01/02 4,514,711
10/01/03 4,995,272
Actuarial
Accrued
Liability (AAL) -
Frozen Entry
Age
(b)
2,694,072
4,313,393
4,861,764
5,334,718
6,339,886
6,954,686
Unfunded
(Assets in
Excess of) AAL
(b-a)
349,117
1,641,138
1,554,261
1,466,171
1,825,175
1,959,414
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100%
99,161
100%
140,163
100%
140,163
100%
146,735
100%
187,083
Funded Covered
Ratio Payroll
(b-a) (c)
87.0 1,049,925
61.0 995,602
68.0 1,041,134
72.5 980,382
71.0 1,074,297
71.9 1,042,103
33.3
164.8
149.2
149.5
170.0
188.1
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 10 - Defined Benefit Retirement Plans (Continued):
Notes to the Required Supplementary Information - The information presented in the
required supplementary schedule was determined as part of the actuarial valuation at
October 1, 2003. Additional information applies as follows:
General Police
Emplovees Officers FirefiQhters
Valuation date 10/01/03 10/01/03 10/01/03
Actuarial cost method Aggregate Cost Frozen Entry Age Aggregate Cost
Amortization method N/A Level Percentage N/A
Remaining amortization period N/A 28 open N/A
4 Year Smoothed
Asset valuation method Market Value Market Market Value
Actuarial assumptions:
Investment rate of return 7.5% 7.25% 7.5%
Projected salary increases
(including inflation of 3.0%) 7.5% 7.5% 7.5%
Retirement age 55 and 5 years of 55 with 5 years of 55 with 5 years
plan participation or accrued service of accrued
20 years of plan or after 25 years service or after
participation. of accrued 25 years of
whichever is service accrued service
earliest
As noted above, the General Employees and Firefighters Plan use the aggregate actuarial
cost method, which does not identify or separately amortize unfounded actuarial liabilities.
Therefore, presentation of a schedule of funding progress is not required. Since the Police
Officers Plan uses the frozen entry age actuarial cost method, a schedule of funding
progress has been presented above.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2004
Note 11 - Defined Contribution Pension Plans:
General Employees - The City adopted a defined contribution plan effective October 1,
1996. The plan is a money purchase plan administered for the City by the Principal
Financial Group. Eligible employees are employees hired effective October 1, 1996, or
thereafter that would otherwise qualify for the General Employees' Pension Plan.
Employees hired prior to October 1, 1996, and not vested in the General Employees'
Pension Plan may also elect, instead, to participate in the defined contribution plan. The
plan provides for an employer contribution equal to 12% of employee earnings. Employees
who elect to participate in this plan that were hired prior to October 1, 1996 will have the
following contributions made:
Term of
Employment Prior
to October 1, 1996
% Contributed for
Earnings Prior to
October 1, 1996
% Contributed for
Earnings After
October 1, 1996
3 months - 2 years
2 years - 4 years
4 years - 5 years
10%
11
12
12%
12
12
Employees are 100% vested immediately upon participation. Employees direct the
investment of funds contributed to the plan on their behalf. Employer contributions made
during the year amounted to $203,423.
Note 12 - Commitments and Contingencies:
Litigation - The City is engaged in various liability claims incidental to the conduct of its
general government operations at September 30, 2004. While the ultimate outcome of the
litigation cannot be determined at this time, management believes that any amounts not
covered by insurance, if any, resulting from these lawsuits would not materially affect the
financial position of the City.
Risk Management - The City is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets; errors and omissions; and natural disasters for which
the City carries commercial insurance. Liability limits are in excess of $39.1 million and
terms associated with property insurance include total deductibles of approximately
$11,000, with a 90% coinsurance provision. The City has obtained excess insurance
coverage with varying retentions and limits to further limit exposure to large losses. There
have been no significant reductions in insurance coverage from the prior year and
settlements have not exceeded insurance coverage during the past three years.
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CITY OF EDGEWATER, FLORIDA
NOTES TO FINANCIAL STATEMENTS - Continued
September 30, 2003
Note 13 - Joint Venture:
On January 11, 2003 the Cities of Port Orange, New Smyrna and Edgewater entered into
an interlocal agreement to provide a consolidated (Dispatch) communications and record
system servicing law enforcement, fire, rescue and emergency communications for each of
the Cities. This entity, know as Communications Interlocal Agency (CI Agency) was
established pursuant to Florida Statute Section 163.01 (7). The CI Agency operates as a
public entity using a fiscal year ending September 30. The interlocal agreement expires on
January 1, 2007, unless renewed by the three cities. On dissolution of the CI Agency, the
net assets will be distributed in the same proportional share to the financial contribution
made by the cities.
The CI Agency is an instrumentality of the municipal parties and is entitled to sovereign
immunity except where waived by general law. It operates pursuant to direction from its
governing board. The governing board is comprised of three mayors for the respective
Cities, mentioned above. Operating guidelines, procedures, designations and restrictions
are determined by this governing body.
All operating cost of the CI Agency is allocated to Port Orange, New Smyrna and
Edgewater in the respective amounts of 50%, 25% and 25%. Allocated costs may be at a
different percentage rate due to direct expenditures for specific goods or services requested
by an individual City. These expenditures generally reflect items that are unique to the
operations of the City and do not provide an overall benefit to the interlocal agency.
Therefore, the City of Edgewater has an ongoing financial responsibility to pay its share of
the cost of operations.
The majority of initial, first year charges to the respective Cities were for the acquisitions of
capital purchases. These initial charges were not in accordance with the above allocations,
as some Cities owned certain pieces of equipment prior to the inception of the Entity. The
different proportions of existing equipment and other capital already owned by the three
participating Cities gives rise to a disproportionate allocation of net assets. The City of
Edgewater's net investment in the joint venture is reported in the government-wide
statement of net assets and totals $119,766 at September 30,2004. The net investment in
the joint venture decreased $123,523 from September 30, 2003. Complete financial
statements for the CI Agency are available upon request.
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COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
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MAJOR GOVERNMENTAL FUNDS
Debt Service
Debt Service Fund
- This fund was established to account for the accumulation
of principal and interest for certain general long-term debt.
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CITY OF EDGEWATER, FLORIDA
DEBT SERVICE FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2004
Variance With
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
Impact fees! special assessments $ 396,850 $ 396,850 $ 405,844 $ 8,994
Investment income 223,105 223,105 184,941 (38,164)
Total revenues 619,955 619,955 590,785 (29,170)
Expenditures:
Debt service:
Principal retirement 640,771 640,771 639,150 1,621
Interest and fiscal charges 275,840 275,840 274,198 1,642
Total expenditures 916,611 916,611 913,348 3,263
Excess (Deficiency) of
Revenues Over Expenditures (296,656) (296,656) (322,563) (25,907)
Other Financing Sources (Uses)
Transfers in 353,429 353,429 (353,429)
Net other financing sources (uses) 353,429 353,429 (353,429)
Net Change in Fund Balance 56,773 56,773 (322,563) (379,336)
Fund Balances - Beginning 557,472 557,472 557,472
Fund Balances - Ending $ 614,245 $ 614,245 $ 234,909 $ (379,336)
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Special Law Enforcement
Trust Fund
Police Impact Fees Fund
Fire Impact Fees Fund
Recreation Impact Fees
Fund
Capital Projects Fund
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
This fund was established to receive revenues derived
from confiscated property obtained during the
enforcement of illegal operations. Proceeds are utilized
strictly for law enforcement purposes, exclusive of
salaries and vehicles. Such purposes may include drug
education programs such as DARE.
- This fund was established to account for police impact
fees collected from new developments constructed in the
City.
- This fund was established to account for fire impact fees
collected from new developments constructed in the City.
- This fund was established to account for recreation
impact fees collected from new developments constructed
in the City.
Capital Projects Funds
- This fund was established to account for the acquisition of
fixed assets or construction of major capital projects not
being financed by proprietary funds.
CITY OF EDGEWATER, FLORIDA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
September 30, 2004
Special Revenue
Special Law Police Fire Recreation
Enforcement Impact Impact Impact
Trust Fees Fees Fees
Assets:
Cash and cash equivalents $ 5,320 $ 53,730 $ 244,934 $ 159,216
Total Assets $ 5,320 $ 53,730 $ 244,934 $ 159,216
Liabilities and Fund Balances:
Liabilities:
Accounts payable $ $ 1,913 $ 8,413 $ 299
Total Liabilities 1,913 8,413 299
Fund Balances:
Reserved
Unreserved 5,320 51,817 236,521 158,917
Total Fund Balances 5,320 51,817 236,521 158,917
Total Liabilities and Fund Balances $ 5,320 $ 53,730 $ 244,934 $ 159,216
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0 Special
Revenue Total
Nonmajor
~ Capital Governmental
Total Projects Funds
U $ 463,200 $ 1,202,160 $ 1,665,360
U $ 463,200 $ 1,202,160 $ 1,665,360
I $ 10,625 $ 3,050 $ 13,675
10,625 3,050 13,675
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452,575 1,199,110 1,651,685
~ 452,575 1,199,110 1,651,685
~ $ 463,200 $ 1,202,160 $ 1,665,360
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CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended September 30, 2004
Special Revenue
Special Law Police Fire Recreation
Enforcement Impact Impact Impact
Trust Fees Fees Fees
Revenues:
Fines and forfeitures $ 4,689 $ $ $
Impact fees/special assessments 44,079 77,510 118,229
Investment income 31
Other revenues 784
Total revenues 5,504 44,079 77,510 118,229
Expenditures:
Current:
Public safety 23,836 5,245 20,245
Leisure services 85,735
Capital outlay:
General government
Public safety
Transportation/public works
Total expenditures 23,836 5,245 20,245 85,735
Excess(Deficiency) of Revenues
Over Expenditures (18,332) 38,834 57,265 32,494
Other Financing Sources(Uses):
Transfers out (4,000) (4,000) (4,000)
Capital leases
Net other financing sources(uses) (4,000) (4,000) (4,000)
Net Change in Fund Balances (18,332) 34,834 53,265 28,494
Fund Balances - Beginning 23,652 16,983 183,256 130,423
Fund Balances - Ending $ 5,320 $ 51,817 $ 236,521 $ 158,917
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Revenue Total
Nonmajor
U Capital Governmental
Total Projects Funds
$ 4,689 $ $ 4,689
I 239,818 239,818
31 18,888 18,919
784 784
245,322 18,888 264,210
~
g 49,326 49,326
85,735 85,735
213,398 213,398
I 345,786 345,786
99,093 99,093
135,061 658,277 793,338
~ 110,261 (639,389) (529,128)
Ii (12,000) (12,000)
581,487 581,487
(12,000) 581,487 569,487
I 98,261 (57,902) 40,359
354,314 1,257,012 1,611,326
II $ 452,575 $ 1,199,110 $ 1,651,685
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CITY OF EDGEW A TER, FLORIDA 0
SPECIAL LAW ENFORCEMENT TRUST SPECIAL REVENUE FUND I'
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2004 U
Variance with ~
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative) D
Revenues:
Fines and forfeitures $ 12,950 $ 12,950 $ 4,689 $ (8,261) I
Impact fees/special assessments
Investment income 170 170 31 (139)
Other income 784 784
Total revenues 13,120 13,120 5,504 (7,616) I,
Expenditures:
Current:
Public safety 2,000 2,000 23,836 (21,836) a
Leisure services
Capital outlay:
General government ~
Public safety
Transportation/public works
Total expenditures 2,000 2,000 23,836 (21,836)
Excess(Deficiency) of Revenues I
Over Expenditures 11 ,120 11,120 (18,332) (29,452)
Other Financing Sources(Uses): ~
Transfers out
Capital leases
Net other financing sources(uses) I
Net Change in Fund Balance 11,120 11 ,120 (18,332) (29,452)
Fund Balances - Beginning 23,652 23,652 23,652 I
Fund Balances. Ending $ 34,772 $ 34,772 $ 5,320 $ (29,452)
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I POLICE IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
a For The Year Ended September 30, 2004
g Variance with
Budgeted Amounts Final Budget-
i Actual Positive
Original Final Amounts (Negative)
Revenues:
U Fines and forfeitures $ $ $ $
Impact fees/special assessments 45,000 45,000 44,079 (921)
Investment income 500 500 (500)
Other income
I Total revenues 45,500 45,500 44,079 (1,421)
Expenditures:
I Current:
Public safety 5,245 (5,245)
Leisure services
Capital outlay:
g General government
Public safety
Transportation/public works
Total expenditures 5,245 (5,245)
U Excess(Deficiency) of Revenues
Over Expenditures 45,500 45,500 38,834 (6,666)
I Other Financing Sources(Uses):
Transfers out (4,000) (4,000)
Capital leases
I Net other financing sources(uses) (4,000) (4,000)
Net Change in Fund Balance 45,500 45,500 34,834 (10,666)
I Fund Balances. Beginning 16,983 16,983 16,983
Fund Balances - Ending $ 62,483 $ 62,483 $ 51,817 $ (10,666)
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FIRE IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
For The Year Ended September 30, 2004
Variance with
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative)
Revenues:
Fines and forfeitures $ $ $ $
Impact fees/special assessments 72,000 72,000 77,510 5,510
Investment income
Other income
Total revenues 72,000 72,000 77,510 5,510
Expenditures:
Current:
Public safety 20,245 (20,245)
Leisure services
Capital outlay:
General government
Public safety
Transportation/public works
Total expenditures 20,245 (20,245)
Excess(Deficiency) of Revenues
Over Expenditures 72,000 72,000 57,265 (14,735)
Other Financing Sources(Uses):
Transfers out (4,000) (4,000)
Capital leases
Net other financing sources(uses) (4,000) (4,000)
Net Change in Fund Balances 72,000 72,000 53,265 (18,735)
Fund Balances - Beginning 183,256 183,256 183,256
Fund Balances - Ending $ 255,256 $ 255,256 $ 236,521 $ (18,735)
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D. RECREATION IMPACT FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES. EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
~ For The Year Ended September 30, 2004
I Variance with
Budgeted Amounts Final Budget-
I Actual Positive
Original Final Amounts (Negative)
Revenues:
g Fines and forfeitures $ $ $ $
Impact fees/special assessments 119,500 119,500 118,229 (1,271 )
Investment income 1,500 1,500 (1,500)
Other income
e Total revenues 121,000 121,000 118,229 (2,771)
Expenditures:
Current:
I Public safety
Leisure services 240,020 240,020 85,735 154,285
Capital outlay:
D General government
Public safety
Transportation/public works
Total expenditures 240,020 240,020 85,735 154,285
~ Excess(Deficiency) of Revenues
Over Expenditures (119,020) (119,020) 32,494 151,514
Q Other Financing Sources(Uses):
Transfers out (4,000) (4,000)
Capital leases
~ Net other financing sources(uses) (4,000) (4,000)
Net Change in Fund Balances (119,020) (119,020) 28,494 147,514
I. Fund Balances. Beginning 130,423 130,423 130,423
Fund Balances - Ending $ 11 ,403 $ 11 ,403 $ 158,917 $ 147,514
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CAPITAL PROJECTS FUND ~
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended September 30, 2004 I
Variance with I
Budgeted Amounts Final Budget-
Actual Positive
Original Final Amounts (Negative) I
Revenues:
Fines and forfeitures $ $ $ $ ~
Impact fees/special assessments
Investment income 18,888 18,888
Other income
Total revenues 18,888 18,888 I
Expenditures:
Current:
Public safety ~
Leisure services
Capital outlay:
General government 1,224,184 1,224,184 213,398 1,010,786 a
Public safety 345,786 (345,786)
Transportation/public works 99,093 (99,093)
Total expenditures 1,224,184 1,224,184 658,277 565,907
Excess(Deficiency) of Revenues m
Over Expenditures (1,224,184) (1,224,184) (639,389) 584,795
Other Financing Sources(Uses): I
Transfers out
Capital leases 581,487 581,487
Net other financing sources(uses) 581,487 581,487 0
Net Change in Fund Balances (1,224,184) (1,224,184) (57,902) 1,166,282
Fund Balances - Beginning 1,257,012 1,257,012 1,257,012 I
Fund Balances. Ending $ 32,828 $ 32,828 $ 1,199,110 $ 1,166,282
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Stormwater Management
Fund
Water and Sewer
Development Fee Fund
Renewal and Replacement
Fund
NONMAJOR PROPRIETARY FUNDS
Enterprise Funds
- This fund is used to account for the fiscal activities of the
City's stomwater drainage operation, as well as the
funding and payment of related debt.
- This fund was established at October 1, 2002 with net
assets of the water and sewer fund that were reserved for
development. Water and sewer development fees
received each year are deposited into this fund to be used
primarily for capital improvements to the water and sewer
system.
- This fund was established at October 1, 2002 with net
assets of the water and sewer fund that were reserved for
renewal and replacement. Bond covenants require that
transfers be made to the renewal and replacement fund
equivalent to 5% of the gross revenues of the system for
the previous fiscal year.
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~ CITY OF EDGEWATER, FLORIDA
~ COMBINING STATEMENT OF NET ASSETS
NONMAJOR PROPRIETARY FUNDS
i September 30,2004
D Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
i Assets
Current assets:
Cash and cash equivalents $ 3,718 $ $ $ 3,718
I Receivables, net 44,462 44,462
Total current assets 48,180 48,180
Noncurrent assets:
m Restricted cash and cash
equivalents 1,875,216 973,592 2,848,808
Special assessments receivable 29,446 29,446
D Bond issuance costs 4,563 4,563
Capital assets:
Land, buildings and equipment 6,216,282 6,216,282
Less accumulated depreciation (1,360,723) (1,360,723)
I Total capital assets (net of
accumulated depreciation) 4,855,559 4,855,559
Total noncurrent assets 4,860,122 1,904,662 973,592 7,738,376
D Total assets 4,908,302 1,904,662 973,592 7,786,556
Liabilities
Current Iiablities:
I Accounts payable 18,559 172,984 561,702 753,245
Accrued liabilities 867 867
Retainage payable 118,059 118,059
I Compensated absences 61,108 61,108
Due to other funds 337,328 337,328
Notes payable, current 278,526 278,526
Capital leases payable, current 16,903 16,903
i Total current liabilities 713,291 172,984 679,761 1,566,036
Noncurrent liabilities:
Ii Notes payable 1,635,017 1,635,017
Capital leases payable 45,991 45,991
Total noncurrent liabilities 1,681,008 1,681,008
i Total liabilities 2,394,299 172,984 679,761 3,247,044
Net Assets
Invested in capital assets, net
i of related debt 2,879,122 2,879,122
Restricted 1,731,678 293,831 2,025,509
Unrestricted (365,119) (365,119)
II Total net assets $ 2,514,003 $ 1,731,678 $ 293,831 $ 4,539,512
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CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET ASSETS
NONMAJOR PROPRIETARY FUNDS
For the Year Ended 9/30/2004
Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary
Fund Fee Fund Fund Funds
Operating Revenues
User Charges $ 886,848 $ $ 1,300 $ 888,148
Operating Expenses
Salaries and benefits 455,132 455,132
Materials and supplies 87,557 87,557
Depreciation and amortization 231 ,454 231 ,454
Contractual services 40,381 68,515 170,989 279,885
Total operating expenses 814,524 68,515 170,989 1,054,028
Operating income(loss) 72,324 (68,515) (169,689) (165,880)
Nonoperating Revenue
Investment income 242 34,170 10,058 44,470
Interest expense (114,909) (1,010) (115,919)
Gain (loss) on disposal of capital assets (8,519) (8,519)
Total nonoperating revenue (123,186) 34,170 9,048 (79,968)
Income before contributions
and transfers (50,862) (34,345) (160,641) (245,848)
Capital contibutions:
Development fees 630,975 630,975
Transfers in 278,649 278,649
Transfers out (56,650) (1,373,222) (817,737) (2,247,609)
Change in net assets (107,512) (776,592) (699,729) (1,583,833)
Total Net Assets - Beginning 2,621,515 2,508,270 993,560 6,123,345
Total Net Assets - Ending $ 2,514,003 $ 1,731,678 $ 293,831 $ 4,539,512
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CITY OF EDGEWATER, FLORIDA I
COMBINING STATEMENT OF CASH FLOWS i
NONMAJOR PROPRIETARY FUNDS
For The Year Ended September 30, 2004 I
Stormwater Water and Sewer Renewal and Total Nonmajor
Management Development Replacement Proprietary I
Fund Fee Fund Fund Funds
Cash Flows from Operating Activities:
Receipts from customers $ 883,657 $ (29,446) $ 1,300 $ 855,511
Payments to suppliers (185,314) 97,229 485,554 397,469 I
Payments to employees (455,839) (455,839)
Net cash provided (used) by operating
activities 242,504 67,783 486,854 797,141 I
Cash Flows from Non-Capital
Financing Activities:
Increase in due to other funds 337,328 337,328 I
Net operating transfers in 278,649 278,649
Net operating transfers out (56,650) (1,373,222) (817,737) (2,247,609)
Net cash provided (used) by non-capital
financing activities 280,678 (1,373,222) (539,088) (1,631,632) i
Cash Flows from Capital and Related
Financing Activities: I
Acquisition of capital assets (86,805) (86,805)
Proceeds from capital lease 80,765 80,765
Principal paid on long-term debt (282,833) (282,833)
Interest paid on long-term debt (114,909) (114,909) I
Development fees received 630,975 630,975
Net cash provided by capital and
related financing activities (403,782) 630,975 227,193
Cash Flows from Investing Activities: I
Investment income 242 34,170 9,048 43,460
Net cash provided by investing activities 242 34,170 9,048 43,460 I
Net Increase in Cash and
Cash Equivalents 119,642 (640,294 ) (43,186) (563,838)
Cash and Cash Equivalents - Beginning (115,924) 2,515,510 1,016,778 3,416,364 I
Cash and Cash Equivalents - End $ 3,718 $ 1,875,216 $ 973,592 $ 2,852,526
Classified As: I
Cash and cash equivalents $ 3,718 $ $ $ 3,718
Restricted cash and cash equivalents 1,875,216 973,592 2,848,808
$ 3,718 $ 1,875,216 $ 973,592 $ 2,852,526 I
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Reconciliation of Operating Income
(Loss) to Net Cash Provided By
Operating Activities
Operating income (loss)
~
Adjustments Not Affecting Cash:
Depreciation and amortization
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Change in Assets and Liabilities:
(Increase) in accounts receivable
Increase (decrease) in accounts payable
(Decrease) in accrued liabilities
Decrease in inventory
Increase in accrued compensated absences
Total adjustments
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Net Cash Provided(Used) by Operating
Activities
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Stormwater
Management
Fund
Water and Sewer Renewal and
Development Replacement
Fee Fund Fund
$
72,324 $
231,454
(3,191 )
(66,230)
(3,116)
8,854
2,409
170,180
$ 242,504 $
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Total Nonmajor
Proprietary
Funds
(68,515) $ (169,689) $ (165,880)
(29,446)
165,744
136,298
67,783
656,543
656,543
$ 486,854 $
231 ,454
(32,637)
756,057
(3,116)
8,854
2,409
963,021
797,141
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FIDUCIARY FUNDS
Pension Trust Funds
Police, Firefighter and
General Employees'
Pension Funds
- These funds are used to account for the accumulation of
resources to be used for retirement annuity payments at
the appropriate amounts and times in the future.
Resources are contributed by employees at rates fixed by
law and by the City and the State at amounts determined
by an annual actuarial study.
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CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
September 30, 2004
General
Employees
Pension Trust
Police Totals
Officers Firefighters Employee
Pension Trust Pension Trust Pension Funds
Assets:
Cash and short-term investments $
$
$
74,704 $
74,704
Investments, at fair value:
Debt mutual funds 5,569,449 3,169,183 832,945 9,571,577
Equity mutual funds 4,911,042 2,136,872 1,291,697 8,339,611
Other mutual funds 167,994 160,775 27,901 356,670
Total investments 10,648,485 5,466,830 2,152,543 18,267,858
Receivables 117,158 229,919 23,238 370,315
Total assets 10,765,643 5,696,749 2,250,485 18,712,877
Liabilities:
Accounts payable 1,034 1,034
Net Assets Held in Trust for
Pension Benefits $ 10,764,609 $ 5,696,749 $ 2,250,485 $ 18,711,843
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CITY OF EDGEWATER, FLORIDA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
For The Year Ended September 30, 2004
General
Employees
Pension Trust
Police
Officers
Pension Trust
Firefighters
Pension Trust
Total
Employee
Pension Funds
Additions:
Contributions:
Employer
Plan members
State
Total contributions
$ 564,582
68,774
$ 461,163
82,720
108,375
652,258
$
$
187,083
67,778
74,704
329,565
1,212,828
219,272
183,079
1,615,179
633,356
Investments income:
Net increase in fair value
Less investment expense
Net investment income
Total additions
874,100 341,984 177,955 1,394,039
(14,505) (14,505)
874,100 341,984 163,450 1,379,534
1,507,456 994,242 493,015 2,994,713
382,086 202,4 76 10,731 595,293
27,793 20,897 48,690
409,879 223,373 10,731 643,983
1,097,577 770,869 482,284 2,350,730
Deductions:
Benefits/distri butions
Administrative expenses
Total deductions
Change in Net Assets
Net Assets Held in Trust for
Pension Benefits:
Beginning of Year
9,667,032
4,925,880
1,768,201
16,361,113
End of Year
$10,764,609 $ 5,696,749 $ 2,250,485 $ 18,711,843
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CAPITAL ASSETS USED IN THE
OPERATION OF GOVERNMENTAL FUNDS
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CITY OF EDGEWATER, FLORIDA
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY FUNCTION AND ACTIVITY
For The Year Ended September 3D, 2004
General
Government
Public
Safety
Public
Works
leisure
Services
Total
land $ 1,934,540 $ 105,591 $ 6,906 $ 1,732,399 $ 3,779,436
Buildings 178,538 1,225,060 58,268 2,895,746 4,357,612
Improvements 74,943 25,905 12,810,510 1,626,031 14,537,389
Machinery & equipment 502,901 2,333,696 238,532 545,752 3,620,881
Infrastructure 829,226 829,226
Construction in
progress 1,312,472 847,579 2,160,051
Total $ 2,690,922 $ 3,690,252 $15,255,914 $ 7,647,507 $ 29,284,595
Deletions
Balance and Balance
09-30-03 Additions Transfers 09-30-04
General Government $ 2,513,646 $ 196,069 $ 18,793 $ 2,690,922
Public Safety 3,586,363 465,796 361,907 3,690,252
Public Works 14,345,545 1,040,549 130,180 15,255,914
leisure Services 7,065,511 783,408 201,412 7,647,507
Total $ 27,511,065 $ 2,485,822 $ 712,292 $ 29,284,595
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STATISTICAL SECTION
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STATISTICAL INFORMATION
Comments Relative to Statistical Section
The following statistical tables that are recommended for inclusion by the Government Finance
Officers Association are not included for the reasons stated below:
A. Ration of Net General bonded Debt to Assessed Value and Net Bonded Debt per
Capita - Last Ten Fiscal Years - The City has not had any general bonded debt over
the past ten fiscal years.
B. Ratio of Annual Debt Service for General bonded Debt to Total General Expenditures -
Last Ten Fiscal Years - The City has not had any general bonded debt over the past
ten fiscal years.
C. Florida Statutes and the Charter of the City of Edgewater, Florida, set no legal debt
margin.
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CITY OF EDGEWATER, FLORIDA
GENERAL GOVERNMENTAL EXPENDITURES
BY FUNCTION (1)
Last Ten Fiscal Years
Fiscal Year General
Ended Total Government Public Safety Trans portation
1995 $ 5,965,527 $1,475,527 $2,774,643 $484,726
1996 12,357,998 1,496,667 2,762,925 429,734
1997 11,563,627 1,578,623 2,979,253 400,222
1998 7,177,744 1,871,415 3,012,478 328,927
1999 7,720,056 1,194,392 3,283,992 301,660
2000 10,163,707 1,423,439 4,164,037 667,425
2001 10,508,931 1,633,024 4,395,867 949,445
2002 15,749,026 2,133,671 5,362,820 986,671
2003 11,212,699 2,033,442 5,308,937 359,916
2004 14,120,307 2,838,695 5,878,112 890,755
(1) Includes General, Special Revenue, Capital Projects and Debt Service Funds.
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Services Outlav Service
~ $ 599,877 $ 557,493 $ 73,261
623,604 6,054,969 990,099
U 590,121 5,061,279 954,129
I 601,396 414,808 944,559
i 616,686 1,375,499 943,649
728,209 2,241,616 938,981
i 925,987 1,665,678 936,940
U 1,335,748 4,967,147 962,969
1,609,971 409,383 1,491,050
~ 1,978,216 658,277 1,876,252
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CITY OF EDGEWATER, FLORIDA
GENERAL GOVERNMENTAL REVENUES
BY SOURCE (11
Last Ten Fiscal Years
Licenses
Fiscal Year and Intergovernmental
Ended Total Taxes Permits Revenues
1995 $ 6.830,328 $4,386,811 $160,758 $ 549,529
1996 7,547,035 5,016,151 181,459 574,174
1997 7,293,444 5,147,962 179,136 688,286
1998 7,468,670 5,484,239 185,503 667,988
1999 7,672,589 5,516,973 220,890 806,787
2000 7.718,669 5,648,694 267,252 663,079
2001 9,117,174 6,189,561 297,863 1,382,955
2002 9,152,993 5,130,474 326,793 2,566,811
2003 9,876,614 5,959,123 445,741 2,221,416
2004 11,248,546 6,500,120 508,609 2,678,916
(1) Includes General, Special Revenue, Capital Projects and Debt Service Funds.
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Services Forfeitures Income Assessments Revenue
U $1,380,438 $ 96,340 $ $ $256,452
~ 146,434 97,328 813,149 298,767 419,573
111,478 83,247 547,977 288,851 246,507
~ 123,692 75,309 24,910 609,286 297,743
U 141 ,439 91,658 27,973 595,790 271,079
139,931 77,659 39,121 577,464 305,469
Q 205,982 115,608 36,420 598,314 290,471
U 57,137 77,508 293,050 577,998 123,222
112,985 193,962 254,253 644,420 44,714
~ 128,751 145,415 236,291 699,969 350,475
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CITY OF EDGEWATER, FLORIDA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years (1)
Fiscal Total Total Tax Percent of Levy
Year Ended Tax Levv Collections Collected
1995 $2,113,146 $2,040,928 96.58%
1996 2,608,024 2,516,081 96.47
1997 2,528,985 2,440,210 96.49
1998 2,576,393 2,491,303 96.70
1999 2,538,138 2,443,445 96.27
2000 2,463,013 2,376,413 96.48
2001 2,647,837 2,599,328 98.17
2002 2,794,043 2,704,707 96.80
2003 3,516,953 3,388,208 96.34
2004 4,014,168 3,863,278 96.24
(1) Each fiscal year contains data from the ad valorem assessment roll of the preceding year
(i.e., fiscal year 2004 contains the 2003 assessment roll tax collections).
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CITY OF EDGEWATER, FLORIDA
ASSESSED AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY (1)
Last Ten Fiscal Years (1)
(In Thousands)
Ratio of Total Ratio of Total
Assessed to Assessed
(2) Total (3) Taxable Value
Fiscal Year Assessed Estimated Estimated Assessed to Estimated
Ended Value Actual Value Actual Value Taxable Value Actual Value
1995 $499,443 $499,443 100.00% $361,840 72.45%
1996 516,875 516,875 100.00 367,272 71.06
1997 542,399 542,399 100.00 383,761 70.75
1998 561,103 561 ,1 03 100.00 400,061 71.29
1999 572,804 572,804 100.00 403,519 70.44
2000 589,101 589,101 100.00 413,951 70.26
2001 632,205 632,205 100.00 445,014 70.39
2002 694,658 694,658 100.00 469,587 67.59
2003 842,981 842,981 100.00 539,238 63.97
2004 974,165 974,165 100.00 577,578 59.29
(1) Obtained from the Revised Recapitulation of the Ad Valorem Assessment Rolls of
Edgewater, Florida provided by Volusia County, Florida Finance Department.
(2) Each fiscal year contains the ad valorem assessment roll of the preceding year (i.e., fiscal
year 2002, contains data on the 2001 assessment roll).
(3) Assessed taxable values for all fiscal years presented are stated net of the constitutional
homestead exemption of $25,000 and the additional senior homestead exemption of
$25,000.
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CITY OF EDGEWATER, FLORIDA
PROPERTY TAX RATES - ALL DIRECT
AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years (1)
Southeast Florida StJohns
Edgewater Volusia Inlet and Inland Water
FISC3I Year General School Volusia Hospital Mosquito Port Navigation Management
Ended Fund District County District Control Aulhoritv District District Total
1995 5.840 10.277 5.716 2.292 0.287 0.094 0.049 0.482 25.037
1996 7.101 10.887 6.172 2.285 0.262 0.094 0.040 0.482 27.323
1997 6.590 10.821 6.217 2.247 0.238 0.093 0.038 0.482 26.726
1998 6.440 10.487 6.381 2.132 0.238 0.090 0.050 0.482 26.300
1999 6.290 10.376 6.378 2.052 0.238 0.090 0.047 0.482 25.953
2000 5.950 9.158 6.367 2.528 0.238 0.090 0.041 0.472 24.844
2001 5.950 9.158 6.367 2.528 0.238 0.090 0.041 0.472 24.844
2002 5.950 8.899 6.604 2.320 0.238 0.090 0.039 0.462 24.602
2003 6.950 8.699 6.604 2.320 0.238 0.090 0.039 0.462 25.402
2004 6.950 8.699 6.204 2.320 0.238 0.090 0.039 0.462 25.002
Tax rates per $1,000 of assessed taxable values
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CITY OF EDGEWATER, FLORIDA
SPECIAL ASSESSMENTS COLLECTIONS
Last Ten Fiscal Years
Water and Sewer
Fund Since Levy Road Improvement Assessments
Current Current Current Current
Fiscal Assessments Assessments Assessments Assessments
Year Ended Due Collected Due Collected
1995 $473,499 $586,927 $771,418 $1,366,243
1996 529,579 608,631 238,813 298,767
1997 554,850 644,377 251 ,480 288,851
1998 580,364 624,088 265,575 293,139
1999 608,750 655,258 281,544 299,546
2000 638,209 684,687 297,401 310,973
2001 670,901 762,235 315,347 341,279
2002 731 ,162 823,170 352,167 383,260
2003 762,155 834,005 369,351 399,888
2004 795,000 845,063 390,000 402,421
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CITY OF EDGEWATER, FLORIDA
COMPUTATION OF OVERLAPPING DEBT
September 30, 2004
Overlappinq Governments
Net Debt
Outstandinq
Vol usia County School District
$37,460,455
Total overlapping debt
(1) Data provided by above agencies.
Percentage
Applicable to
the City of
Edqewater
2.76
City of
Edgewater
Share of
Debt
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$1,033,909
(2) The City does not have any general obligation long-term debt outstanding.
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CITY OF EDGEWATER, FLORIDA
DEMOGRAPHIC STATISTICS
Last Ten Fiscal Years
(1 ) (2) (3) Per (4) County (5) School (6)
Fiscal Estimated Registered Capita Unemployment Percent Median
Year Population Voters Income Rate Enrollment Attendance AQe
1995 17 ,484 10,942 $18,730 4.9 1,534 95
1996 17,820 11 ,158 18,815 4.2 1,524 95
1997 18,077 11 ,196 19,455 4.0 1,546 95
1998 18,761 11,821 19,787 3.2 1 ,495 96
1999 18,865 11,786 20,309 3.0 1 ,484 95 47
2000 19,343 12,839 21,920 2.9 1 ,491 95
2001 19,390 12,484 22,520 4.0 1,457 95
2002 19,515 12,406 23,195 5.3 1,603 93
2002 19,515 12,406 23,195 5.3 1,603 93
2003 20,088 12,753 23,832 5.2 1,412 95 42
2004 20,637 14,079 19,460 4.5 1,349 95
(1) Obtained from University of Florida, Bureau of Economics and Business Research.
Census Bureau estimate for April 2000 and City of Edgewater Planning Dept.
(2) Obtained from Vol usia County Supervisor of Elections.
(3) Obtained from U.s. Department of Commerce, Bureau of Economic Analysis.
(4) State of Florida, Department of Labor and Employment Security.
(5) Volusia County School Board - includes grades K-5, Edgewater Elementary School and
Indian River Elementary School.
(6) Volusia County - Census Bureau (2000)
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CITY OF EDGEWATER, FLORIDA
PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS
Last Ten Fiscal Years
(In Thousands)
(1 ) (2)
Commercial Residential (1 ) Assessed
Fiscal Construction Construction Deposits Savings Value
Year Units Value Units Value Banks and Loan ill
1995 8 $1,987 70 $5,799 $93,927 $95,542 $499,443
1996 13 2,379 124 10,068 96,342 87,419 516,875
1997 20 2,224 105 7,626 190,381 542,399
1998 35 2,465 116 9,944 209,575 561,103
1999 11 1,755 201 15,834 201,653 572,804
2000 23 6,743 195 19,077 201,494 589,101
2001 9 1,159 285 28,892 206,981 632,205
2002 17 3,953 226 23,495 206,960 694,658
2003 17 4,052 281 29,628 215,130 842,981
2004 11 2,378 226 27,002 216,213 974,165
(1) Provided by Florida Bankers Association.
(2) Obtained from revised recapitulation of the ad valorem assessment rolls of the City of
Edgewater.
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CITY OF EDGEWATER, FLORIDA
SUMMARY OF TEN LARGEST
SINGLE UNIT WATER USERS
September 30, 2004
Customers
Average
Consumption
Per Month
(Gallons) (1)
Percent of
Total Gallons
Consumed
County of Vol usia
Eastern Shores Mobile Village
Coronado Paint Company
Halifax Court (Hendry)
Vol usia County Schools
Blue Gables, Inc.(Naco, Inc.)
Pyramid Park
Friendly Shores HOA
Publix Supermarket, Inc.
Winn Dixie
6,565,660
755,725
377,148
140,303
136,391
113,667
97,358
105,760
79,750
56,542
8,428,304
12.65%
1.46
.73
.27
.26
.22
.19
.20
.15
.11
16.24%
FY-2004 average monthly consumption: 53,725,851gallons.
(1) Based on individual meter connections per City of Edgewater, Florida, records.
(2) The total average monthly consumption for the ten largest water users decreased from
the previous year by a total of 999,334 gallons.
(3) Water restrictions implemented by the St. Johns River Water Management District,
Volusia County, and the City of Edgewater continue to be in effect. Reclaimed water has
been available to the Florida Shores area since 1994.
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CITY OF EDGEWATER, FLORIDA
PRINCIPAL TAXPAYERS
September 30, 2004
Customers
Assessed
Valuation
Percent of
Total Assessed
Valuation
Florida Power & Light
Coronado Paint Company, Inc.
BellSouth Communications, Inc.
Edgewater Commons
Laramie Florida Shores, LP
Twean Subsidiary, LLC
Sea Edge Partners, LLC
Bel Aire Investments, Inc.
Carder, James and Rosemary
Florida East Coast Railway Company
$10,631,694
7,192,189
3,700,860
3,490,379
2,897,412
2,698,480
2,655,698
2,397,000
2,217,597
1,893,608
$39,774,917
1.09%
.74
.38
.36
.30
.28
.27
.25
.23
.19
4.09%
Source: 2003 ad valorem tax rolls of the City of Edgewater, Florida. DR-403AM
FY -2004 total assessed valuation $974,165,071
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CITY OF EDGEWATER, FLORIDA
MISCELLANEOUS STATISTICAL DATA
September 30, 2004
The City of Edgewater lies just south of New Smyrna Beach, along the Atlantic coastline.
Beginning as the small village of Hawk's Park with 115 permanent residents in 1871, the name
was formally changed to Edgewater in 1925. The apiaries of the early days evolved into a large
honey company which exports internationally. A large paint factory, a thriving building industry,
boat building, garment factories and other light manufacturing provide employment. A friendly
city with a small town flavor, Edgewater has a wide variety of residential options.
City Operations:
Police Department:
Sworn Officers
Civilian Employees
Reserve Officers
33
4
4
Fire Department:
Insurance rating
Number of stations
Full-time firefighters
Volunteer firefighters
Civilian employees
Animal Control
Reserves
City Parks (Active and Open Space)
Park acreage
Class 5/9
2
25
7
2
2
1
84 Passive
67 Active
151
Community Facilities
Financial Institutions
Churches
Libraries
Post office locations
Nearest commercial airport
Electric service:
Telephone Service:
Cable TV Service:
2
14
1
1
Daytona Beach International
Florida Power & Light
BellSouth
Time Warner Communications, Inc.
Source: City of Edgewater Finance Department
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$16.40
$16.40
$1.60
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CITY OF EDGEWATER, FLORIDA
MISCELLANEOUS STATISTICAL DATA - CONTINUED
September 30, 2004
GarbagelTrash Collection:
Type:
Residential service
Commercial/Industrial service
Recycling
Pickups/wk
Water Service:
Source
Plant capacity
Average daily demand
Treatment
Monthly Residential and Commercial Rates:
Florida Upper Aquifer
5.0 mgd
1.706 mgd
Lime softening
Effective 10/1/94
Sewer Service:
System Type:
Average Daily Flow
Plant Capacity
Avg. Capacity Used Daily
Avg. Daily Reclaimed Water
Advanced Wastewater Treatment
1.086 mgd
2.750 mgd
39.5%
1.188 mgd
Consumption
Minimum
Additional 1 ,000 gallons
Water
$8.00
$1.25
Reclaimed
Sewer
$9.55
$3.18
Stormwater Management Fee
Per Equivalent Drainage Unit (EDU)
Without site mitigation
With site mitigation
Effective 10/1/94
$6.00
$2.92
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CITY OF EDGEWATER, FLORIDA
I WATER AND SEWER SYSTEM
HISTORICAL DEBT SERVICE COVERAGE SUMMARY
U September 30,2004
U FY 2000 FY2001 FY 2002 FY2003 FY 2004
Operating Revenues:
User Charges 4,319,521 4,428,520 4,530,617 4,808,221 5,403,409
i Interest Income (1) 1,118,804 353,547 166,687 113,998 41 ,169
Connection Fees 137,282 167,357 200,994 186,772 213,326
Total 5,575,607 4,949,424 4,898,298 5,108,991 5,657,904
Operating Expenses 2,593,721 2,901,684 3,047,196 3,300,405 3,7 4 7,041
C Net Revenues 2,981,886 2,047,740 1,851,102 1,808,586 1,910,863
Available Impact Fees 502,569 502,881 502,468 503,182 503,182
I Total Revenues Available for Debt Service 3,484,455 2,550,621 2,353,570 2,311,768 2,414,045
Sr. Lien Debt Service
a Total Series 1991 , 1993 1,067,025 1,067,687 1,066,812 1,068,328 1,068,328
Rate Coverage
Net Revenues Only (1.20x Required) 2.79 1.92 1.74 1.69 1.79
U Net Revenues WI Impact Fees 3.27 2.39 2.21 2.16 2.26
Available Net Revenues & Impact Fees For
SRF Debt 2,417,430 1,482,934 1,286,758 1,243,440 1,345,717
I Special Assessments 684,687 762,235 823,170 834,005 845,063
Total Revenues Available for SRF Debt 3,102,117 2,245,169 2,109,928 2,077,445 2,190,780
~O SRF Bonds 1,811,437 1,811,437 1,811,437 1,811,437 1,811,437
Coverage (1.15x Req) 1.71 1.24 1.16 1.15 1.21
~ Net Revenues For BOA Loan 1,290,680 433,732 298,491 266,008 379,343
~ Special Assessments 144,592
Impact Fees 500,000 500,000 500,000
I Total Revenes for Jr. Lien
BOA Bank Loan 1,290,680 433,732 798,491 766,008 1,023,935
Junior Lien Bonds 588,340 588,340 588,340 588,340 588,340
I Coverage (1.10x Required) 2.19 0.74 1.36 1.30 1.74
Surplus Revenues 702,340 (154,608) 210,151 177,668 435,595
g R & R Fund Transfers 267,969 278,780 276,222 270,809 270,809
City Transfers (outside of 0 & M Expenses above) 500,000 1,150,000
i Balance 434,371 (433,388) (66,071 ) (593,141) (985,214)
(1) Excludes interest earned on construction and impact fees.
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MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STA TEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
City Commission
City of Edgewater, Florida
We have audited the basic financial statements of the City of Edgewater, Florida, as of and for the
year ended September 30,2004, and have issued our report thereon dated March 23, 2005. 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.
Compliance - As part of obtaining reasonable assurance about whether the City of Edgewater,
Florida's basic financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and grants, 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 that are required to be reported under Government Auditing
Standards. However, we noted certain immaterial instances of noncompliance that we have
reported to management of the City of Edgewater, Florida in a separate letter dated March 23,
2005.
Internal Control Over Financial Reporting - In planning and performing our audit, we
considered the City of Edgewater, Florida's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinion on the basic financial
statements and not to provide assurance on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all
matters in the internal control over financial reporting that might be material weaknesses. A
material weakness is a condition in which the design or operation of one or more of the internal
control components does not reduce to a relatively low level the risk that misstatements in
amounts that would be material in relation to the basic financial statements being audited may
occur and not be detected within a timely period by employees in the normal course of performing
their assigned functions. We noted no matters involving the internal control over financial reporting
and its operation that we consider to be material weaknesses. However, we noted other matters
involving the internal control over financial reporting that we have reported to management of the
City of Edgewater, Florida in a separate letter dated March 23, 2005.
MCDIRMIT DAVIS & COMPANY, LLC
605 E. RORll\:SOI\: STREET. SL'ITE 635 . ORLA\iDO. FLORIDA 3280 I
TELEPHO\iE 407-843-5406 . FAX 407-649-9339 . EMAIL: I:-;F00~.M(,DIRMITDA VI5.CO\1
:'>.lH1BERS: PRI\' -\ Tl COt>.IP.\'IES PR -\('TI("[ SECTION . A~lF.RIL\!'\i I!\.'STITUTE OF CERTIFIED PliBLlC ACCQUNT.-\1\ TS . FLORIDA INSTITl: TE OF CERTIF!ED PUBLIC A(TOUNT.-\Nl ~
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This report is intended solely for the information and use of management, the City Commission
and the Auditor General of the State of Florida and is not intended to be, and should not be used I
by anyone other than these specified parties.
1Jtc/liuniZ lXwi4 & ~CtIUf LLt I
March 23, 2005 I
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MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE MAJOR
PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
OMB CIRCULAR A-133
The Honorable Mayor and City Commissioners
City of Edgewater, Florida
Edgewater, Florida
Compliance
We have audited the compliance of the City of Edgewater, Florida with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement, that are applicable to the major federal program for the year ended
September 30, 2004. The City of Edgewaters' major federal program is identified in the summary
of auditor's results section of the accompanying Schedule of Findings and Questioned Costs.
Compliance with the requirements of laws, regulations, contracts and grants applicable to its
major state project is the responsibility of the City of Edgewater, Florida management. Our
responsibility is to express an opinion on the City of Edgewater, Florida compliance based on our
audit.
We conducted our audit of compliance 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
OMS Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those
standards, and OMS Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about City of Edgewater, Florida
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination on the City of Edgewater, Florida
compliance with those requirements.
In our opinion, the City of Edgewater, Florida, complied, in all material respects. with the
requirements referred to above that are applicable to its major federal program for the year ended
September 30,2004.
MCDIRMIT DAVIS & COMPANY, LLC
605 E. ROBll'SOJ\: STREET. Sl'lTE 635 . ORLA~DO. FLORIDA 3280 I
TELEPHONE 407-843-5406' FAX 407-649-9339' EMAIL: II'FO(~::'vICDIRMITDA VIS.COM
i\10lBl:RS: PRI\'.\ Ti:. CUMP.\!'\IES PRACTICE SECTION. AMERICA': INSTITUTE OF CERTIFIED PUBLIC AC'('OUNTA1\TS . f'LORIOA I:'\STITL: TE OF CERTIFIED PUBLIC ACCOllNTAN1S
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Internal Control Over Compliance
The management of the City of Edgewater, Florida is responsible for establishing and maintaining
effective internal control over compliance with requirements of laws, regulations, contracts and
grants applicable to federal programs. In planning and performing our audit, we considered the
City of Edgewater, Florida internal control over compliance with requirements that could have a
direct and material effect on a major federal program in order to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on
internal control over compliance in accordance with OMS Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control that might be material weaknesses. A material weakness is a
condition in which the design or operation of one or more of the internal control components does
not reduce to a relatively low level the risk that noncompliance with applicable requirements of
laws, regulations, contracts and grants that would be material in relation to a major state program
being audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving the internal control
over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management of the City, the Auditor
General of the State of Florida and federal awarding agencies and is not intended to be and
should not be used by anyone other than these specified parties.
1Jtc/liAmit ~ & ~CV1Af LLt
March 23, 2005
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CITY OF EDGEWATER, FLORIDA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended September 30, 2004
Federal Grantor/Pass-throuqh
Grantor/Proqram title
Federal
CFDA No.
Pass-throuqh
Entity
Number
Federal
Expenditures
u. S. Department of Homeland Security:
Federal Emergency Management Agency
Public Assistance Grants
97.036
$2.498,724
Total expenditures of federal awards
$2.498.724
See accompanying notes to schedule of expenditures of federal awards
97
CITY OF EDGEWATER, FLORIDA
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended September 30, 2004
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards includes the federal grant activity
of the City of Edgewater, Florida and is presented on the accrual basis of accounting. The
information in this schedule is presented in accordance with the requirements of OMB Circular A-
133. Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some
amounts presented in this schedule may differ from amounts presented in, or used in the
preparation of, the basic financial statements.
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CITY OF EDGEWATER, FLORIDA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS-
FEDERAL AWARDS
Year Ended September 30, 2004
A. Summary of Auditor's Findings
1. The auditor's report expresses an unqualified opinion on the financial statements of the
City of Edgewater, Florida.
2. No instances of noncompliance material to the financial statements of the City of
Edgewater, Florida were disclosed during the audit.
3. The auditor's report on compliance for the major federal award for the City of Edgewater,
Florida, expresses an unqualified opinion.
4. The program tested as major program included the following:
Federal Program
CFDA No.
u.S. Department of Homeland Security Public
Assistance Grant
97.036
5. The threshold for distinguishing Type A and Type B programs/projects was $500,000 for
major federal awards.
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MANAGEMENT LETTER
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MCDIRMIT III DAVIS
CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS
MANAGEMENT LETTER
Honorable Mayor and City Council
City of Edgewater, Florida
In planning and performing our audit of the basic financial statements of the City of Edgewater,
Florida for the year ended September 30, 2004, we considered its internal control to determine our
auditing procedures for the purpose of expressing our opinion on the financial statements and not to
provide assurance on internal control. The following findings and recommendations, which resulted
from our consideration of internal control, are submitted to assist in improving procedures and
controls. In addition, this report includes other disclosures required by Rules of the Auditor General,
State of Florida.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. We have issued our Report on
Compliance and Internal Control over Financial Reporting, in accordance with Government Auditing
Standards, Report on Compliance and Internal Control over Compliance in accordance with OMS
Circular A-133, and Schedule of Findings and Questioned Costs. Disclosures in those reports and
schedule, which are dated March 23, 2005, should be considered in conjunction with this
management letter.
This management letter is intended solely for the information of the City of Edgewater, Florida and
management, and the State of Florida Office of the Auditor General and federal awarding agencies
and is not intended to be and should not be used by anyone other than those specified parties.
1Jtc/liunit t:>:wi4 & ~tvUf LLt
March 23, 2005
MCDIRMlT DAVIS & COMPANY, LLC
605 E. ROBINSON STREET. SL'ITE 635 . ORLANDO. FLORIDA 3280 I
TELEPHONE 407-843-5406' FAX 407-649-9339' EMAIL: I:"FO@\IC'DIRMITDAVIS.C'O\l
:\ 1E\1BERS: PRI\' -\ Tf: CO.~lP.\;-';IES PR-\CT1Cc SECTION . A~lERJCA"i IXSTlTVTE OF CERTIFIED PUBLIC ACCQU\lTAt\TS . FLORIDA INSTITl: TE OF CERTIFIED PUBLIC ACCOUIST.-\sr s
100
Management Comments
City of Edgewater, Florida
March 23, 2005
Page Two
A. Status of Prior Year Recommendations
1. Financial Condition Assessment
The City continued to have some unfavorable ratios when compared to
benchmarks for the Auditor General financial conditions assessment procedures.
For example, the City's ratio of unreserved general fund balance to operating
expenditures of the general fund for 2003 is 7.9%. This percentage is low
compared to other cities the size of Edgewater. However, this is the second year
in a row that Edgewater had a small excess of revenue over expenditures, which is
a favorable trend which the City should continue.
Recommendation
We continue to recommend the City set some goals to increase the ratio of
unreserved general fund balance to general fund operating expenditures to at least
10-20%.
Corrective Action
The ratio of unreserved general fund balance to operating expenditures of the
general fund for 2004 declined to 4%. Even if the revenue due from FEMA for
reimbursement of hurricane expenditures had been recorded at September 30,
2004, the ratio of unreserved general fund balance to operating expenditures of
the general fund would have been 6.5%. Therefore we continue to recommend
the City set some goals to increase this ratio.
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Management Comments
City of Edgewater, Florida
March 23, 2005
Page Three
B. Current Year Recommendations
1. Financial Condition Assessment
The City continues to have several unfavorable ratios as discussed above under
status of prior year recommendations. The general fund had a deficit of revenue
over expenditures of approximately $2,000,000 before transfers in from other
funds and sale of land held for resale. The transfers in from the water and sewer
fund increased from $500,000 in 2003 to $1,150,000 in 2004.
Recommendation
We recommended the City take steps to balance the general fund budget without
relying on such large transfers in from the water and sewer fund. The City must
set goals to increase the ratio of unreserved general fund balance to general fund
operating expenditures to at least 15%. The City Charter requires the City
maintain reserves of at least 15% of general fund expenditures.
2. Deficit Find Equity
The stormwater management fund has a deficit fund equity balance of $365,119.
Recommendation
We recommend the City carefully review the budget for this fund and determine
what must be done to increase revenues or decrease expenditures.
3. Excess Expenditures Over Appropriations
Actual expenditures exceeded appropriations in the following funds: Special Law
Enforcement Trust Special Revenue Fund, $21,836; Police Impact Fees Special
Revenue Fund, $5,245; and Fire Impact Fees Special Revenue Fund, $20,245.
Recommendation
We recommend the City amend the budget as allowed by Florida statutes within
60 days of year end so that expenditures do not exceed appropriations.
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Management Comments
City of Edgewater, Florida
March 23, 2005
Page Four
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C. Comments Required bv the Rules of the Auditor General
1. The financial report filed with the Department of Banking and Finance pursuant to
Section 218.32(1 )(b), Florida Statutes, is in agreement in all material respects with
the annual financial audit report for the same period.
2. The City has not met any of the conditions described in Section 218.503(1) Florida
Statutes.
3. The City of Edgewater, Florida, has complied with Section 218.415, Florida
Statutes, regarding the investment of public funds, except as note above.
4. As required by the Rules of the Auditor General Section 10.554(g)(6)c and
10.556(8), we applied financial condition assessment procedures.
103